1 00:00:00,000 --> 00:00:08,480 Okay, it is nine o'clock and we do have a quorum, so we'll call to order the Public 2 00:00:08,480 --> 00:00:12,680 Utilities Board for the City of Denton on Monday, April 11th. 3 00:00:12,680 --> 00:00:15,760 The first item is presentations from the members of the public. 4 00:00:15,760 --> 00:00:19,000 Is there anyone from the public who wishes to speak? 5 00:00:19,000 --> 00:00:22,720 Nope, it looks like it's all staff. 6 00:00:22,720 --> 00:00:24,880 Next is the consent agenda. 7 00:00:24,880 --> 00:00:29,280 We have three items, A, B, and C. Does any board member wish to pull an item? 8 00:00:29,280 --> 00:00:30,280 Lee? 9 00:00:30,280 --> 00:00:36,240 Okay, item A. Any others? 10 00:00:36,240 --> 00:00:39,520 Do we have a motion to approve items B and C? 11 00:00:39,520 --> 00:00:41,160 Larry Beck moved. 12 00:00:41,160 --> 00:00:43,400 Do we have a second? 13 00:00:43,400 --> 00:00:44,400 Ben seconds. 14 00:00:44,400 --> 00:00:45,840 All in favor say aye. 15 00:00:45,840 --> 00:00:46,840 Aye. 16 00:00:46,840 --> 00:01:08,760 I'm going to recuse myself from item A so I'll turn it over to Billy. 17 00:01:08,760 --> 00:01:12,320 Okay is there any discussion about consent agenda item A? 18 00:01:12,320 --> 00:01:15,680 Yes, I asked to remove it from the consent agenda. 19 00:01:15,680 --> 00:01:20,880 I was curious, it seems that we are preparing to spend some money and make some changes 20 00:01:20,880 --> 00:01:30,040 to the retirement of this facility in order to accommodate some additional work and I 21 00:01:30,040 --> 00:01:40,160 thought it might be nice to have a little further discussion about that before we proceed. 22 00:01:40,160 --> 00:01:45,760 The lift station or the reclamation facility is actually being repurposed. 23 00:01:45,760 --> 00:01:52,160 So we're converting it from a water reclamation facility into a peak flow station. 24 00:01:52,160 --> 00:01:57,260 So the investment that we're making, we're still going to be able to leverage those assets 25 00:01:57,260 --> 00:01:59,360 for quite some time. 26 00:01:59,360 --> 00:02:06,000 Ah, I see, well based on my reading of the material I didn't quite get that so I thought 27 00:02:06,000 --> 00:02:10,440 we were spending money on a facility that we were planning to take out of service. 28 00:02:10,440 --> 00:02:15,320 Not for, the east lift station won't go out of service for at least 20 more years and 29 00:02:15,320 --> 00:02:16,320 that's where we're installing the pumps. 30 00:02:16,320 --> 00:02:18,600 And that's plenty of time to make some improvements. 31 00:02:18,600 --> 00:02:20,040 Yes sir, yes sir. 32 00:02:20,040 --> 00:02:23,920 I thought it was going to be gone in a few years based on a prior discussion that we 33 00:02:23,920 --> 00:02:24,920 had about it. 34 00:02:24,920 --> 00:02:25,920 No sir. 35 00:02:25,920 --> 00:02:26,920 Okay, well very good. 36 00:02:26,920 --> 00:02:27,920 In that case, thank you. 37 00:02:27,920 --> 00:02:28,920 Appreciate it. 38 00:02:28,920 --> 00:02:30,720 You're very welcome sir. 39 00:02:30,720 --> 00:02:31,720 Any other questions? 40 00:02:31,720 --> 00:02:32,720 Further discussion? 41 00:02:32,720 --> 00:02:36,120 If not, we'll entertain a motion. 42 00:02:36,120 --> 00:02:37,120 Move approval. 43 00:02:37,120 --> 00:02:38,120 Move to approve item A. 44 00:02:38,120 --> 00:02:39,120 Second. 45 00:02:39,120 --> 00:02:41,280 Okay, we've got Lee and Barbara seconded. 46 00:02:41,280 --> 00:02:42,760 All those in favor please say aye. 47 00:02:42,760 --> 00:02:43,760 Aye. 48 00:02:43,760 --> 00:02:44,760 Any opposed? 49 00:02:44,760 --> 00:02:45,760 Okay. 50 00:02:45,760 --> 00:03:10,560 Okay, next item is consider approval of the March 28th minutes. 51 00:03:10,560 --> 00:03:12,480 We already have a change. 52 00:03:12,480 --> 00:03:17,640 Instead of Ben being the deputy city attorney, it was Marcella, so that's already been changed. 53 00:03:17,640 --> 00:03:20,240 Are there any other changes or corrections? 54 00:03:20,240 --> 00:03:24,640 Okay, do we have a motion to approve the minutes as amended? 55 00:03:24,640 --> 00:03:25,640 So moved. 56 00:03:25,640 --> 00:03:26,640 Lee moves. 57 00:03:26,640 --> 00:03:27,640 Thank you. 58 00:03:27,640 --> 00:03:28,640 Larry seconds. 59 00:03:28,640 --> 00:03:29,640 All in favor say aye. 60 00:03:29,640 --> 00:03:30,640 Aye. 61 00:03:30,640 --> 00:03:31,640 Carries. 62 00:03:31,640 --> 00:03:32,640 Management reports. 63 00:03:32,640 --> 00:03:36,600 Madam Chair, members of the PUB, thank you for being here this morning. 64 00:03:36,600 --> 00:03:40,120 The first time that we have on the agenda here and I wanted to ask Jeff Brown and his 65 00:03:40,120 --> 00:03:44,040 team if they can come up here to the podium, I wanted to make sure we recognize our safety 66 00:03:44,040 --> 00:03:51,160 team, but DME did recently receive an award through Association of Public Power and we're 67 00:03:51,160 --> 00:03:53,080 very proud of that award. 68 00:03:53,080 --> 00:03:58,720 The last time that DME received this award was in 2004 and so, you know, really shows 69 00:03:58,720 --> 00:04:03,120 the investment that certainly this community and certainly you as a board have allowed 70 00:04:03,120 --> 00:04:04,120 us through the budget. 71 00:04:04,120 --> 00:04:09,760 You know, we continue to add additional funding into that business unit at DME and, you know, 72 00:04:09,760 --> 00:04:13,280 one of the things that we tell our folks is that, you know, we want them to go home every 73 00:04:13,280 --> 00:04:18,320 single day just the way that they came to work that morning, if not, in some cases maybe 74 00:04:18,320 --> 00:04:24,960 even better, right, but we certainly take safety as a number one concern for us when 75 00:04:24,960 --> 00:04:25,960 it comes to our people. 76 00:04:25,960 --> 00:04:31,200 So Jeff, if you'll come up here and Jeff's going to come up and he's our manager over 77 00:04:31,200 --> 00:04:36,600 safety and he'll introduce himself and his two guys and just going to say a little bit 78 00:04:36,600 --> 00:04:39,080 about the award and what that means. 79 00:04:39,080 --> 00:04:40,080 Jeff. 80 00:04:40,080 --> 00:04:41,080 Good morning, board. 81 00:04:41,080 --> 00:04:42,080 My name is Jeff Brown. 82 00:04:42,080 --> 00:04:44,240 I'm the electric safety and training division manager. 83 00:04:44,240 --> 00:04:50,000 I brought with me today my senior safety specialist, Sal Spinelli, and our safety specialist, 84 00:04:50,000 --> 00:04:51,840 David Burrs. 85 00:04:51,840 --> 00:04:58,480 With the APPA safety award, as Tony mentioned, 2004 was the last time we received first place 86 00:04:58,480 --> 00:05:01,080 for a power plant our size. 87 00:05:01,080 --> 00:05:04,160 They used a couple factors to determine that. 88 00:05:04,160 --> 00:05:09,240 The primary one was the number of employees with hours worked with injuries. 89 00:05:09,240 --> 00:05:13,720 DMA did not have any recordable injuries last year, which is a huge accomplishment for the 90 00:05:13,720 --> 00:05:15,400 number of hours we worked. 91 00:05:15,400 --> 00:05:20,880 They also look at the current state of our safety program, the practices and policies 92 00:05:20,880 --> 00:05:26,480 we have in place, and then they also have a small category for current culture. 93 00:05:26,480 --> 00:05:31,000 So with that, for a power plant our size, we received first place for 2021, and we're 94 00:05:31,000 --> 00:05:32,480 very excited about that. 95 00:05:32,480 --> 00:05:34,720 Are there any questions? 96 00:05:34,720 --> 00:05:37,200 Thank you. 97 00:05:37,200 --> 00:05:42,840 Well done. 98 00:05:42,840 --> 00:05:46,360 So the next item that we have for you is our feature agenda. 99 00:05:46,360 --> 00:05:49,920 I think we've talked about this before, the items that are going to come to you here in 100 00:05:49,920 --> 00:05:55,400 the next couple of months will be the budget, and as I mentioned before, that will include 101 00:05:55,400 --> 00:05:59,440 electric water, wastewater, solid waste, and also utility customer service, which is our 102 00:05:59,440 --> 00:06:04,960 utility billing component, primarily because they're primarily funded by the utilities. 103 00:06:04,960 --> 00:06:06,840 And so that's what's on your agenda. 104 00:06:06,840 --> 00:06:11,240 Obviously there'll be a number of other items during that period. 105 00:06:11,240 --> 00:06:14,240 And then the next item is the new business action items. 106 00:06:14,240 --> 00:06:19,760 We still have the two items that we've had on here for a little while, but we know that 107 00:06:19,760 --> 00:06:26,320 we are working on those, and we will be planning to bring those to you here before too long. 108 00:06:26,320 --> 00:06:31,680 And then the one item that's not on here, it's a work session today, will be a presentation 109 00:06:31,680 --> 00:06:38,320 by one of our EMO guys, Seth DeLeon, and he'll be presenting today just a little bit about 110 00:06:38,320 --> 00:06:42,680 RECs and what they mean in the whole electric market, and hopefully you find that information 111 00:06:42,680 --> 00:06:43,680 helpful. 112 00:06:43,680 --> 00:06:47,880 Certainly he's here, and Steven Johnson, who's the manager of that area, is here, and of 113 00:06:47,880 --> 00:06:49,240 course Mr. Nolte is here as well. 114 00:06:49,240 --> 00:06:52,600 If you have any questions, they'll be more than happy to dig into whatever questions 115 00:06:52,600 --> 00:06:53,600 you may have. 116 00:06:53,600 --> 00:06:56,480 So with that, Madam Chair, that's the management report. 117 00:06:56,480 --> 00:07:00,480 Happy to answer any questions that anyone may have. 118 00:07:00,480 --> 00:07:01,480 Questions? 119 00:07:01,480 --> 00:07:02,480 Nope. 120 00:07:02,480 --> 00:07:03,480 All right. 121 00:07:03,480 --> 00:07:05,320 Then we move into concluding items. 122 00:07:05,320 --> 00:07:11,480 Does any board member wish to add something to a future agenda or have anything to say 123 00:07:11,480 --> 00:07:13,680 to the public? 124 00:07:13,680 --> 00:07:14,680 I see nothing. 125 00:07:14,680 --> 00:07:15,680 All right. 126 00:07:15,680 --> 00:07:16,680 Work session. 127 00:07:16,680 --> 00:07:17,680 Seth? 128 00:07:17,680 --> 00:07:37,960 Good morning, members of the PUB. 129 00:07:37,960 --> 00:07:43,120 My name is Seth DeLeon, and I'm a senior energy market analyst with Energy Management Organization. 130 00:07:43,120 --> 00:07:46,960 Also here with me today is my supervisor, Steven Johnson, manager of the Energy Management 131 00:07:46,960 --> 00:07:49,520 Organization, or EMO. 132 00:07:49,520 --> 00:07:53,760 Today's presentation will provide information to DME's renewables, renewable market, and 133 00:07:53,760 --> 00:07:58,120 RECs. 134 00:07:58,120 --> 00:08:02,880 The goal for today is to leave you with a better understanding of our energy portfolio 135 00:08:02,880 --> 00:08:08,960 and renewable energy, but also to answer any questions that you may have. 136 00:08:08,960 --> 00:08:16,120 DME's current supply diversification consists of solar totaling a possible 205 megawatts, 137 00:08:16,120 --> 00:08:19,240 and wind totaling a possible 180 megawatts. 138 00:08:19,240 --> 00:08:25,040 There's also a future solar project scheduled, Samson Solar, providing an additional 75 megawatts. 139 00:08:25,040 --> 00:08:29,600 Denton Energy Center is our natural gas unit with a capacity of 225 megawatts. 140 00:08:29,600 --> 00:08:34,880 Using 2022 as an example, the city of Denton's total renewable portfolio equals 1.7 million 141 00:08:34,880 --> 00:08:40,240 megawatt hours, credited towards our demand of 1.5 million megawatt hours. 142 00:08:40,240 --> 00:08:43,960 With these renewables mentioned and shown later in the presentation, the city of Denton 143 00:08:43,960 --> 00:08:48,000 is clearly meeting our renewable objective. 144 00:08:48,000 --> 00:08:52,680 Looking at megawatt hours, which are the total expected output for the given year from a 145 00:08:52,680 --> 00:08:58,440 specific resource, we meet or exceed the current goal of being 100% renewable for the 2022 146 00:08:58,440 --> 00:09:00,600 and 2023 calendar year. 147 00:09:00,600 --> 00:09:06,600 We do recognize the need to fill our renewable short position starting 2024 as our Wolf Ridge 148 00:09:06,600 --> 00:09:11,280 resource contract ends, and we will continue to assess various technologies and resource 149 00:09:11,280 --> 00:09:16,160 types to procure renewable resources to always be 100% renewable. 150 00:09:16,160 --> 00:09:20,920 Recently, to help address this need, we have entered into a fixed renewable agreement to 151 00:09:20,920 --> 00:09:23,460 provide short-term temporal diversity. 152 00:09:23,460 --> 00:09:27,960 Due to recent inflation and supply chain issues, we felt this was the better option that allows 153 00:09:27,960 --> 00:09:33,880 us to continue to meet the city of Denton's goal. 154 00:09:33,880 --> 00:09:37,920 I present to you one resource in our energy portfolio, Santa Rita Wind. 155 00:09:37,920 --> 00:09:41,860 While we assume a delivered quantity from Santa Rita, there does remain a large amount 156 00:09:41,860 --> 00:09:50,560 of uncertainty in actual megawatts being delivered, depending on the season and mother nature. 157 00:09:50,560 --> 00:09:55,040 The chart above illustrates these types of output projections to actual delivered quantities 158 00:09:55,040 --> 00:09:58,960 that the EMO manages and plans for on a daily basis. 159 00:09:58,960 --> 00:10:04,760 EMO's forecasting tools play a vital role in dealing with these renewable projections. 160 00:10:04,760 --> 00:10:09,120 Looking at the chart, the black line represents DME's load over the first three days of the 161 00:10:09,120 --> 00:10:11,680 second week of March 2022. 162 00:10:11,680 --> 00:10:18,000 As you can see, the 7th of March was a low wind projected day, but we did receive a high 163 00:10:18,000 --> 00:10:20,120 wind output at Santa Rita. 164 00:10:20,120 --> 00:10:24,220 The very next day on the 8th, we received a higher projection, but little to no actual 165 00:10:24,220 --> 00:10:25,720 wind output. 166 00:10:25,720 --> 00:10:30,760 On the last day of the same week, the 9th, we forecasted low projected output at Santa 167 00:10:30,760 --> 00:10:41,400 Rita the entire day, but did receive strong wind output in the late hours. 168 00:10:41,400 --> 00:10:43,800 ERCOT is a wholesale market facilitator. 169 00:10:43,800 --> 00:10:49,040 While DME is in the wholesale market, ERCOT's main goal is system reliability. 170 00:10:49,040 --> 00:10:53,560 One graph I'd like to point out is a 2021 generating capacity breakdown, reflecting 171 00:10:53,560 --> 00:11:00,840 operational installed capacity of 51% natural gas, 25% wind, and 4% solar. 172 00:11:00,840 --> 00:11:05,240 There is a substantial projected growth for wind and solar, with solar renewables seeing 173 00:11:05,240 --> 00:11:14,700 the largest amount of growth over the next couple years, as the next slide represents. 174 00:11:14,700 --> 00:11:19,280 This chart represents the installed, but not guaranteed projected resource output in ERCOT 175 00:11:19,280 --> 00:11:21,640 through 2024. 176 00:11:21,640 --> 00:11:27,240 Considering wind as an example, on average, only 49% of this renewable segment is expected 177 00:11:27,240 --> 00:11:29,840 as the actual output. 178 00:11:29,840 --> 00:11:35,640 Referencing the Santa Rita slide and its impact on DME, the uncertainty created by the intermittency 179 00:11:35,640 --> 00:11:39,760 of these resources also applies to ERCOT as a whole. 180 00:11:39,760 --> 00:11:45,160 As mentioned in the ERCOT slide, natural gas generating resources still play a large role 181 00:11:45,160 --> 00:11:50,440 as they are reliable and easier to dispatch, with the ability to generate at set amounts. 182 00:11:50,440 --> 00:11:55,120 I would like to highlight both wind and solar installed and projected capacity in ERCOT. 183 00:11:55,120 --> 00:11:59,840 Solar projections, which is the gray bar, are expected to grow substantially through 184 00:11:59,840 --> 00:12:03,840 2023, reaching 35 million megawatt hours. 185 00:12:03,840 --> 00:12:08,640 Wind still sees strong growth, projected to reach 40 million megawatt hours. 186 00:12:08,640 --> 00:12:12,860 As you can see, renewable growth in Texas continues at a rapid pace, but there have 187 00:12:12,860 --> 00:12:16,000 been challenges due to supply chain issues. 188 00:12:16,000 --> 00:12:35,960 How long is that good for, I guess is what I'm asking? 189 00:12:35,960 --> 00:12:37,760 As far as the battery capacity? 190 00:12:37,760 --> 00:12:39,760 The storage capacity. 191 00:12:39,760 --> 00:12:44,480 Depending on the type of battery, two to four hours. 192 00:12:44,480 --> 00:12:49,280 So that gets us through part of the night. 193 00:12:49,280 --> 00:12:52,440 My understanding is more towards a peak type situation. 194 00:12:52,440 --> 00:12:56,640 Think of the summer when you have your peak hours, your 2 PM, 3 PM, 4 PMs, that would 195 00:12:56,640 --> 00:12:57,640 help there. 196 00:12:57,640 --> 00:12:58,640 Okay, good. 197 00:12:58,640 --> 00:12:59,640 Thank you. 198 00:12:59,640 --> 00:13:00,640 Any more questions? 199 00:13:00,640 --> 00:13:01,640 Yeah, following up on that. 200 00:13:01,640 --> 00:13:06,840 So even though it appears from your chart, there has been and will continue to be significant 201 00:13:06,840 --> 00:13:14,200 growth in the amount of this battery capacity, it's still a tiny fraction of the total available 202 00:13:14,200 --> 00:13:15,760 power at ERKON. 203 00:13:15,760 --> 00:13:17,000 That is correct, yeah. 204 00:13:17,000 --> 00:13:21,320 So is there a cost barrier to putting in these batteries? 205 00:13:21,320 --> 00:13:25,080 Is there a materials barrier to increasing this? 206 00:13:25,080 --> 00:13:29,400 I'm just curious because if you're going to rely more on renewables, then obviously you 207 00:13:29,400 --> 00:13:35,600 need some way to store when you go from peak production to peak use. 208 00:13:35,600 --> 00:13:36,880 Great question. 209 00:13:36,880 --> 00:13:39,920 My understanding is pretty much all the above. 210 00:13:39,920 --> 00:13:44,380 Renewables and definitely the cost of installing batteries. 211 00:13:44,380 --> 00:13:53,120 Any more questions? 212 00:13:53,120 --> 00:13:56,880 Renewable energy credits represent the energy generated by renewable energy sources, such 213 00:13:56,880 --> 00:14:02,320 as solar and wind power facilities, and represent the clean energy attribute of renewable electricity. 214 00:14:02,320 --> 00:14:07,200 A REC is produced when a renewable energy source generates one megawatt hour of electricity 215 00:14:07,200 --> 00:14:09,440 and delivers it to the grid. 216 00:14:09,440 --> 00:14:13,840 Here are examples of DME's RECs using resource from the previous slides. 217 00:14:13,840 --> 00:14:21,160 The first example, Wolfridge, is a firm renewable contract producing 525,600 megawatt hours, 218 00:14:21,160 --> 00:14:25,200 or RECs, that are credited towards our 100% renewable goal. 219 00:14:25,200 --> 00:14:29,880 Santorini is different, as DME only receives a percentage of the site capacity, but is 220 00:14:29,880 --> 00:14:31,760 also used to meet a renewable goal. 221 00:14:31,760 --> 00:14:41,040 DME does maintain a REC account with RCOT. 222 00:14:41,040 --> 00:14:45,960 There are a lot of numbers here, but the biggest takeaway is the capacity factor at each resource. 223 00:14:45,960 --> 00:14:50,880 As I mentioned in the previous slide, capacity factors do play a role in meeting and maintaining 224 00:14:50,880 --> 00:14:53,200 the City of Denton's renewable goal. 225 00:14:53,200 --> 00:14:58,800 Looking specifically at the top chart, DME's RECs meet or exceed DME's projected load at 226 00:14:58,800 --> 00:15:00,580 our renewable goal. 227 00:15:00,580 --> 00:15:09,160 Looking specifically at 2022 and 2023, we can see RECs meet 115% and 120% at DME's projected 228 00:15:09,160 --> 00:15:10,960 demand. 229 00:15:10,960 --> 00:15:15,520 Looking at the expected capacity factor of the second chart, wind tends to average 40% 230 00:15:15,520 --> 00:15:16,520 or higher. 231 00:15:16,520 --> 00:15:21,320 Santorini, for example, was solar averaging slightly higher than 30% total output of these 232 00:15:21,320 --> 00:15:25,320 resources as long draw shows. 233 00:15:25,320 --> 00:15:30,120 Due to the seasonal capacity factors, DME will continue to procure renewable supply 234 00:15:30,120 --> 00:15:35,160 in order to continue in meeting our long term 100% renewable goal. 235 00:15:35,160 --> 00:15:39,200 Are there any questions? 236 00:15:39,200 --> 00:15:41,400 Any additional questions? 237 00:15:41,400 --> 00:15:44,840 Go ahead Lee. 238 00:15:44,840 --> 00:15:52,800 In looking at the chart you provided, it appears that there's going to be a bit of a fall off 239 00:15:52,800 --> 00:15:56,600 in years 2024 going forward. 240 00:15:56,600 --> 00:16:03,520 So are there any plans to address that, and if so, what are they? 241 00:16:03,520 --> 00:16:06,600 We are currently looking at multiple plans right now. 242 00:16:06,600 --> 00:16:10,240 There's discussions, Stephen may have some more information on that. 243 00:16:10,240 --> 00:16:14,960 You don't have to give us any details, I just appreciate a little overview, kind of what 244 00:16:14,960 --> 00:16:16,960 you have in mind. 245 00:16:16,960 --> 00:16:23,040 Good morning board members, Madam Chamberlain, Stephen Johnson, manager of the Energy Marketing 246 00:16:23,040 --> 00:16:31,400 Organization, DME, in answer to your question, we continue to monitor daily if not weekly 247 00:16:31,400 --> 00:16:38,600 all of the people who are developing projects, whether it be solar, renewable, whether it 248 00:16:38,600 --> 00:16:43,120 be storage projects, any others, to assess their viability. 249 00:16:43,120 --> 00:16:47,740 Obviously I think everybody is aware of some of the supply and development shortages that 250 00:16:47,740 --> 00:16:53,600 have been going on with governmental restrictions on imports, currently an investigation going 251 00:16:53,600 --> 00:17:00,480 on for labor practices in Southeast Asia where a lot of panels are built for solar farms. 252 00:17:00,480 --> 00:17:09,280 We continue to assess what is the best path forward, and we'll be looking to issue RFPs 253 00:17:09,280 --> 00:17:12,320 as and when the opportunity arises to do so. 254 00:17:12,320 --> 00:17:17,960 So yes, we won't fall short, we continue to do what we need to, to make sure that we meet 255 00:17:17,960 --> 00:17:20,000 the 100% renewable objective. 256 00:17:20,000 --> 00:17:25,880 Well, I just want to ask, and this might be a dumb question, but just for my information, 257 00:17:25,880 --> 00:17:31,960 so the 100% renewable is a requirement imposed on DME by the city council? 258 00:17:31,960 --> 00:17:32,960 Correct sir. 259 00:17:32,960 --> 00:17:39,720 So if this becomes an impossible situation, or improbable from a cost standpoint, then 260 00:17:39,720 --> 00:17:45,200 it would be incumbent on whom to ask the council to change that requirement. 261 00:17:45,200 --> 00:17:48,440 Does that fall on you guys, on us, where does that come from? 262 00:17:48,440 --> 00:17:51,960 Yeah, so let me give you just a little flavor for that. 263 00:17:51,960 --> 00:17:56,600 So we are planning by the end of this year to update the debt and renewable resource 264 00:17:56,600 --> 00:18:03,280 plan, which is the document that really sets that goal for DME and spells out for the most 265 00:18:03,280 --> 00:18:09,360 part what the practices should be, right, and what we've been following. 266 00:18:09,360 --> 00:18:14,480 Because of the time frame that we have here, we'll have plenty of time that if the direction 267 00:18:14,480 --> 00:18:20,840 is to continue down the same path and we'll be issuing an RFP to secure some additional 268 00:18:20,840 --> 00:18:24,520 long term contracts. 269 00:18:24,520 --> 00:18:30,040 But there's certainly some clarification that's needed within the debt and renewable resource 270 00:18:30,040 --> 00:18:31,040 plan. 271 00:18:31,040 --> 00:18:35,720 There's also changes in the electric wholesale market in the state of Texas and various other 272 00:18:35,720 --> 00:18:43,680 initiatives that could potentially impact how we take that forward. 273 00:18:43,680 --> 00:18:52,040 And I'll be remiss to say, in my prior life as a finance person, the financial implications 274 00:18:52,040 --> 00:18:57,480 of decisions that are made have to be weighed and they have to be very transparent so that 275 00:18:57,480 --> 00:19:04,960 the decision makers, you first, then the council, has the information on how we take that forward. 276 00:19:04,960 --> 00:19:11,440 And so this issue of recs, recs tied to energy or recs on their own and how we incorporate 277 00:19:11,440 --> 00:19:18,000 them or not incorporate them into this goal that we have, along with what do we do with 278 00:19:18,000 --> 00:19:22,080 large loads like Core Scientific is an example. 279 00:19:22,080 --> 00:19:27,440 Those are good discussions that we need to have with the decision makers and how we chart 280 00:19:27,440 --> 00:19:29,240 the course going forward. 281 00:19:29,240 --> 00:19:36,480 So for now, as Seth has stated, we're not seeking long term PPAs. 282 00:19:36,480 --> 00:19:43,520 What we're doing is these short term deals to continue to meet the 100% obligation. 283 00:19:43,520 --> 00:19:47,920 And that will give us time to sort all these issues out, have a good robust discussion 284 00:19:47,920 --> 00:19:49,240 and get good direction. 285 00:19:49,240 --> 00:19:51,320 And then how do we take that forward? 286 00:19:51,320 --> 00:19:58,080 Not for the next couple of years, but the next five, 10, 15 years. 287 00:19:58,080 --> 00:20:05,960 So do we anticipate, excuse me, do we anticipate that the cost of fossil fuel power production, 288 00:20:05,960 --> 00:20:11,480 natural gas primarily, are going to go up or down or is there any information about 289 00:20:11,480 --> 00:20:13,200 the current long term outlook? 290 00:20:13,200 --> 00:20:18,040 I think Stephen can look at his crystal ball and tell you. 291 00:20:18,040 --> 00:20:22,640 I think the short answer is if I had the answer to that, I probably wouldn't be answering 292 00:20:22,640 --> 00:20:25,440 the question here today. 293 00:20:25,440 --> 00:20:32,760 I think we can safely say that the past six months or so have seen a dramatic increase 294 00:20:32,760 --> 00:20:37,560 in the cost of a lot of things, not the least of which has been energy worldwide. 295 00:20:37,560 --> 00:20:43,000 And I think collectively the world is reassessing how it wishes to try and address energy needs 296 00:20:43,000 --> 00:20:50,240 versus desires to have a more sustainable and environmentally friendly planet. 297 00:20:50,240 --> 00:20:56,400 As to whether that keeps prices where they are or developments of some sort of technology 298 00:20:56,400 --> 00:21:01,560 or some sort of, we saw in natural gas for an example, that different methods of approach 299 00:21:01,560 --> 00:21:06,440 to extraction help reduce costs and help make things more available. 300 00:21:06,440 --> 00:21:08,640 Supply exceeding demand drops price. 301 00:21:08,640 --> 00:21:13,640 I think long term the objective is whatever the answer comes is to provide enough of it, 302 00:21:13,640 --> 00:21:18,480 the solution, to make sure that prices are I'll say affordable, but that's a relative 303 00:21:18,480 --> 00:21:19,480 statement. 304 00:21:19,480 --> 00:21:21,440 >> Mr. Beck, you had a question. 305 00:21:21,440 --> 00:21:22,440 >> Yes. 306 00:21:22,440 --> 00:21:23,440 Thank you. 307 00:21:23,440 --> 00:21:27,640 And if I heard it right, it's not so much that the capability of producing clean energy 308 00:21:27,640 --> 00:21:35,240 from solar and wind, it's the ability to get it from its original source to the consumer 309 00:21:35,240 --> 00:21:40,440 through products that we're having a hard time getting a hold of, the supply chain, 310 00:21:40,440 --> 00:21:41,720 as you mentioned. 311 00:21:41,720 --> 00:21:45,600 It's not a matter so much that we can't produce it as we can't deliver it. 312 00:21:45,600 --> 00:21:46,600 Is that a fair assumption? 313 00:21:46,600 --> 00:21:50,000 Or are we going to have more difficulty? 314 00:21:50,000 --> 00:21:57,840 >> No, it's unfortunately not as simple of that in as much as it isn't just a delivery 315 00:21:57,840 --> 00:21:58,840 challenge. 316 00:21:58,840 --> 00:22:04,200 There's a lot of challenge to intermittent, to supplying them sufficiently to meet grid 317 00:22:04,200 --> 00:22:05,200 demand. 318 00:22:05,200 --> 00:22:11,800 Clearly, I think if any of us have lived in North Texas for a while, we know that the 319 00:22:11,800 --> 00:22:14,880 wind right now the last couple of weeks has been excessively strong. 320 00:22:14,880 --> 00:22:18,720 It is spring, we know it's strong, but it's been very, very strong and we know that on 321 00:22:18,720 --> 00:22:23,000 very hot summer days, one of the reasons it's very hot is wind will drop. 322 00:22:23,000 --> 00:22:27,080 We continue to have those unavoidable challenges. 323 00:22:27,080 --> 00:22:30,000 Equally with solar, nothing happens at night. 324 00:22:30,000 --> 00:22:36,200 I think we've established that from a cost perspective, storage is not sufficient, is 325 00:22:36,200 --> 00:22:41,080 not able to meet the cost challenges at this moment. 326 00:22:41,080 --> 00:22:46,640 So it's not a case of renewables can supply everybody all of the time, they simply can't. 327 00:22:46,640 --> 00:22:51,360 They can't meet a lot of the electrical grid challenges of meeting inertia and frequency 328 00:22:51,360 --> 00:22:53,120 response and controls. 329 00:22:53,120 --> 00:22:58,160 So there's basically a marriage of all of the above that we're using to meet goals. 330 00:22:58,160 --> 00:23:04,280 But yes, to answer your question specifically, I think greater transmission is probably needed 331 00:23:04,280 --> 00:23:11,640 because clearly out west is a more sunny area than central and eastern Texas. 332 00:23:11,640 --> 00:23:15,600 So that says that solar probably needs to locate west, but there are tremendous challenges 333 00:23:15,600 --> 00:23:19,800 with trying to move energy from 500 miles or more away. 334 00:23:19,800 --> 00:23:26,560 Our ability to provide hydro and geothermal, we're not in a good position for that, I take 335 00:23:26,560 --> 00:23:27,560 it. 336 00:23:27,560 --> 00:23:34,720 I look at it this way, God gave us our resources in each area of the United States. 337 00:23:34,720 --> 00:23:38,320 He's given the Pacific Northwest an awful lot of mountains and rain and water. 338 00:23:38,320 --> 00:23:40,400 They are great for hydro. 339 00:23:40,400 --> 00:23:44,280 Texas has an awful lot of open land and an awful lot of clear skies at times and a prevailing 340 00:23:44,280 --> 00:23:45,280 wind. 341 00:23:45,280 --> 00:23:47,480 We're great for solar and wind. 342 00:23:47,480 --> 00:23:49,920 Transporting it from longer areas is just too big of an issue. 343 00:23:49,920 --> 00:23:54,320 If that's what's required, then that's what the solution probably ends up being. 344 00:23:54,320 --> 00:23:55,320 Okay, thank you. 345 00:23:55,320 --> 00:23:56,320 Does that answer your question? 346 00:23:56,320 --> 00:23:57,320 Yes, sir. 347 00:23:57,320 --> 00:24:02,520 Any other questions? 348 00:24:02,520 --> 00:24:03,520 Thank you very much. 349 00:24:03,520 --> 00:24:04,520 Thank you. 350 00:24:04,520 --> 00:24:10,040 All right, that is the agenda. 351 00:24:10,040 --> 00:24:11,680 Do we have a motion to adjourn? 352 00:24:11,680 --> 00:24:12,680 All right, 924. 353 00:24:12,680 --> 00:24:13,680 Second. 354 00:24:13,680 --> 00:24:13,680 Okay, re-adjourned.