WEBVTT 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 00:00:08.480 --> 00:00:12.680 Utilities Board for the City of Denton on Monday, April 11th. 00:00:12.680 --> 00:00:15.760 The first item is presentations from the members of the public. 00:00:15.760 --> 00:00:19.000 Is there anyone from the public who wishes to speak? 00:00:19.000 --> 00:00:22.720 Nope, it looks like it's all staff. 00:00:22.720 --> 00:00:24.880 Next is the consent agenda. 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? 00:00:29.280 --> 00:00:30.280 Lee? 00:00:30.280 --> 00:00:36.240 Okay, item A. Any others? 00:00:36.240 --> 00:00:39.520 Do we have a motion to approve items B and C? 00:00:39.520 --> 00:00:41.160 Larry Beck moved. 00:00:41.160 --> 00:00:43.400 Do we have a second? 00:00:43.400 --> 00:00:44.400 Ben seconds. 00:00:44.400 --> 00:00:45.840 All in favor say aye. 00:00:45.840 --> 00:00:46.840 Aye. 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. 00:01:08.760 --> 00:01:12.320 Okay is there any discussion about consent agenda item A? 00:01:12.320 --> 00:01:15.680 Yes, I asked to remove it from the consent agenda. 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 00:01:20.880 --> 00:01:30.040 to the retirement of this facility in order to accommodate some additional work and I 00:01:30.040 --> 00:01:40.160 thought it might be nice to have a little further discussion about that before we proceed. 00:01:40.160 --> 00:01:45.760 The lift station or the reclamation facility is actually being repurposed. 00:01:45.760 --> 00:01:52.160 So we're converting it from a water reclamation facility into a peak flow station. 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 00:01:57.260 --> 00:01:59.360 for quite some time. 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 00:02:06.000 --> 00:02:10.440 we were spending money on a facility that we were planning to take out of service. 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 00:02:15.320 --> 00:02:16.320 that's where we're installing the pumps. 00:02:16.320 --> 00:02:18.600 And that's plenty of time to make some improvements. 00:02:18.600 --> 00:02:20.040 Yes sir, yes sir. 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 00:02:23.920 --> 00:02:24.920 had about it. 00:02:24.920 --> 00:02:25.920 No sir. 00:02:25.920 --> 00:02:26.920 Okay, well very good. 00:02:26.920 --> 00:02:27.920 In that case, thank you. 00:02:27.920 --> 00:02:28.920 Appreciate it. 00:02:28.920 --> 00:02:30.720 You're very welcome sir. 00:02:30.720 --> 00:02:31.720 Any other questions? 00:02:31.720 --> 00:02:32.720 Further discussion? 00:02:32.720 --> 00:02:36.120 If not, we'll entertain a motion. 00:02:36.120 --> 00:02:37.120 Move approval. 00:02:37.120 --> 00:02:38.120 Move to approve item A. 00:02:38.120 --> 00:02:39.120 Second. 00:02:39.120 --> 00:02:41.280 Okay, we've got Lee and Barbara seconded. 00:02:41.280 --> 00:02:42.760 All those in favor please say aye. 00:02:42.760 --> 00:02:43.760 Aye. 00:02:43.760 --> 00:02:44.760 Any opposed? 00:02:44.760 --> 00:02:45.760 Okay. 00:02:45.760 --> 00:03:10.560 Okay, next item is consider approval of the March 28th minutes. 00:03:10.560 --> 00:03:12.480 We already have a change. 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. 00:03:17.640 --> 00:03:20.240 Are there any other changes or corrections? 00:03:20.240 --> 00:03:24.640 Okay, do we have a motion to approve the minutes as amended? 00:03:24.640 --> 00:03:25.640 So moved. 00:03:25.640 --> 00:03:26.640 Lee moves. 00:03:26.640 --> 00:03:27.640 Thank you. 00:03:27.640 --> 00:03:28.640 Larry seconds. 00:03:28.640 --> 00:03:29.640 All in favor say aye. 00:03:29.640 --> 00:03:30.640 Aye. 00:03:30.640 --> 00:03:31.640 Carries. 00:03:31.640 --> 00:03:32.640 Management reports. 00:03:32.640 --> 00:03:36.600 Madam Chair, members of the PUB, thank you for being here this morning. 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 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 00:03:44.040 --> 00:03:51.160 team, but DME did recently receive an award through Association of Public Power and we're 00:03:51.160 --> 00:03:53.080 very proud of that award. 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 00:03:58.720 --> 00:04:03.120 the investment that certainly this community and certainly you as a board have allowed 00:04:03.120 --> 00:04:04.120 us through the budget. 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, 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 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 00:04:18.320 --> 00:04:24.960 even better, right, but we certainly take safety as a number one concern for us when 00:04:24.960 --> 00:04:25.960 it comes to our people. 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 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 00:04:36.600 --> 00:04:39.080 about the award and what that means. 00:04:39.080 --> 00:04:40.080 Jeff. 00:04:40.080 --> 00:04:41.080 Good morning, board. 00:04:41.080 --> 00:04:42.080 My name is Jeff Brown. 00:04:42.080 --> 00:04:44.240 I'm the electric safety and training division manager. 00:04:44.240 --> 00:04:50.000 I brought with me today my senior safety specialist, Sal Spinelli, and our safety specialist, 00:04:50.000 --> 00:04:51.840 David Burrs. 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 00:04:58.480 --> 00:05:01.080 for a power plant our size. 00:05:01.080 --> 00:05:04.160 They used a couple factors to determine that. 00:05:04.160 --> 00:05:09.240 The primary one was the number of employees with hours worked with injuries. 00:05:09.240 --> 00:05:13.720 DMA did not have any recordable injuries last year, which is a huge accomplishment for the 00:05:13.720 --> 00:05:15.400 number of hours we worked. 00:05:15.400 --> 00:05:20.880 They also look at the current state of our safety program, the practices and policies 00:05:20.880 --> 00:05:26.480 we have in place, and then they also have a small category for current culture. 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 00:05:31.000 --> 00:05:32.480 very excited about that. 00:05:32.480 --> 00:05:34.720 Are there any questions? 00:05:34.720 --> 00:05:37.200 Thank you. 00:05:37.200 --> 00:05:42.840 Well done. 00:05:42.840 --> 00:05:46.360 So the next item that we have for you is our feature agenda. 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 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 00:05:55.400 --> 00:05:59.440 electric water, wastewater, solid waste, and also utility customer service, which is our 00:05:59.440 --> 00:06:04.960 utility billing component, primarily because they're primarily funded by the utilities. 00:06:04.960 --> 00:06:06.840 And so that's what's on your agenda. 00:06:06.840 --> 00:06:11.240 Obviously there'll be a number of other items during that period. 00:06:11.240 --> 00:06:14.240 And then the next item is the new business action items. 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 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. 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 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 00:06:38.320 --> 00:06:42.680 RECs and what they mean in the whole electric market, and hopefully you find that information 00:06:42.680 --> 00:06:43.680 helpful. 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 00:06:47.880 --> 00:06:49.240 course Mr. Nolte is here as well. 00:06:49.240 --> 00:06:52.600 If you have any questions, they'll be more than happy to dig into whatever questions 00:06:52.600 --> 00:06:53.600 you may have. 00:06:53.600 --> 00:06:56.480 So with that, Madam Chair, that's the management report. 00:06:56.480 --> 00:07:00.480 Happy to answer any questions that anyone may have. 00:07:00.480 --> 00:07:01.480 Questions? 00:07:01.480 --> 00:07:02.480 Nope. 00:07:02.480 --> 00:07:03.480 All right. 00:07:03.480 --> 00:07:05.320 Then we move into concluding items. 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 00:07:11.480 --> 00:07:13.680 to the public? 00:07:13.680 --> 00:07:14.680 I see nothing. 00:07:14.680 --> 00:07:15.680 All right. 00:07:15.680 --> 00:07:16.680 Work session. 00:07:16.680 --> 00:07:17.680 Seth? 00:07:17.680 --> 00:07:37.960 Good morning, members of the PUB. 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. 00:07:43.120 --> 00:07:46.960 Also here with me today is my supervisor, Steven Johnson, manager of the Energy Management 00:07:46.960 --> 00:07:49.520 Organization, or EMO. 00:07:49.520 --> 00:07:53.760 Today's presentation will provide information to DME's renewables, renewable market, and 00:07:53.760 --> 00:07:58.120 RECs. 00:07:58.120 --> 00:08:02.880 The goal for today is to leave you with a better understanding of our energy portfolio 00:08:02.880 --> 00:08:08.960 and renewable energy, but also to answer any questions that you may have. 00:08:08.960 --> 00:08:16.120 DME's current supply diversification consists of solar totaling a possible 205 megawatts, 00:08:16.120 --> 00:08:19.240 and wind totaling a possible 180 megawatts. 00:08:19.240 --> 00:08:25.040 There's also a future solar project scheduled, Samson Solar, providing an additional 75 megawatts. 00:08:25.040 --> 00:08:29.600 Denton Energy Center is our natural gas unit with a capacity of 225 megawatts. 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 00:08:34.880 --> 00:08:40.240 megawatt hours, credited towards our demand of 1.5 million megawatt hours. 00:08:40.240 --> 00:08:43.960 With these renewables mentioned and shown later in the presentation, the city of Denton 00:08:43.960 --> 00:08:48.000 is clearly meeting our renewable objective. 00:08:48.000 --> 00:08:52.680 Looking at megawatt hours, which are the total expected output for the given year from a 00:08:52.680 --> 00:08:58.440 specific resource, we meet or exceed the current goal of being 100% renewable for the 2022 00:08:58.440 --> 00:09:00.600 and 2023 calendar year. 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 00:09:06.600 --> 00:09:11.280 resource contract ends, and we will continue to assess various technologies and resource 00:09:11.280 --> 00:09:16.160 types to procure renewable resources to always be 100% renewable. 00:09:16.160 --> 00:09:20.920 Recently, to help address this need, we have entered into a fixed renewable agreement to 00:09:20.920 --> 00:09:23.460 provide short-term temporal diversity. 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 00:09:27.960 --> 00:09:33.880 us to continue to meet the city of Denton's goal. 00:09:33.880 --> 00:09:37.920 I present to you one resource in our energy portfolio, Santa Rita Wind. 00:09:37.920 --> 00:09:41.860 While we assume a delivered quantity from Santa Rita, there does remain a large amount 00:09:41.860 --> 00:09:50.560 of uncertainty in actual megawatts being delivered, depending on the season and mother nature. 00:09:50.560 --> 00:09:55.040 The chart above illustrates these types of output projections to actual delivered quantities 00:09:55.040 --> 00:09:58.960 that the EMO manages and plans for on a daily basis. 00:09:58.960 --> 00:10:04.760 EMO's forecasting tools play a vital role in dealing with these renewable projections. 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 00:10:09.120 --> 00:10:11.680 second week of March 2022. 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 00:10:18.000 --> 00:10:20.120 wind output at Santa Rita. 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 00:10:24.220 --> 00:10:25.720 wind output. 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 00:10:30.760 --> 00:10:41.400 Rita the entire day, but did receive strong wind output in the late hours. 00:10:41.400 --> 00:10:43.800 ERCOT is a wholesale market facilitator. 00:10:43.800 --> 00:10:49.040 While DME is in the wholesale market, ERCOT's main goal is system reliability. 00:10:49.040 --> 00:10:53.560 One graph I'd like to point out is a 2021 generating capacity breakdown, reflecting 00:10:53.560 --> 00:11:00.840 operational installed capacity of 51% natural gas, 25% wind, and 4% solar. 00:11:00.840 --> 00:11:05.240 There is a substantial projected growth for wind and solar, with solar renewables seeing 00:11:05.240 --> 00:11:14.700 the largest amount of growth over the next couple years, as the next slide represents. 00:11:14.700 --> 00:11:19.280 This chart represents the installed, but not guaranteed projected resource output in ERCOT 00:11:19.280 --> 00:11:21.640 through 2024. 00:11:21.640 --> 00:11:27.240 Considering wind as an example, on average, only 49% of this renewable segment is expected 00:11:27.240 --> 00:11:29.840 as the actual output. 00:11:29.840 --> 00:11:35.640 Referencing the Santa Rita slide and its impact on DME, the uncertainty created by the intermittency 00:11:35.640 --> 00:11:39.760 of these resources also applies to ERCOT as a whole. 00:11:39.760 --> 00:11:45.160 As mentioned in the ERCOT slide, natural gas generating resources still play a large role 00:11:45.160 --> 00:11:50.440 as they are reliable and easier to dispatch, with the ability to generate at set amounts. 00:11:50.440 --> 00:11:55.120 I would like to highlight both wind and solar installed and projected capacity in ERCOT. 00:11:55.120 --> 00:11:59.840 Solar projections, which is the gray bar, are expected to grow substantially through 00:11:59.840 --> 00:12:03.840 2023, reaching 35 million megawatt hours. 00:12:03.840 --> 00:12:08.640 Wind still sees strong growth, projected to reach 40 million megawatt hours. 00:12:08.640 --> 00:12:12.860 As you can see, renewable growth in Texas continues at a rapid pace, but there have 00:12:12.860 --> 00:12:16.000 been challenges due to supply chain issues. 00:12:16.000 --> 00:12:35.960 How long is that good for, I guess is what I'm asking? 00:12:35.960 --> 00:12:37.760 As far as the battery capacity? 00:12:37.760 --> 00:12:39.760 The storage capacity. 00:12:39.760 --> 00:12:44.480 Depending on the type of battery, two to four hours. 00:12:44.480 --> 00:12:49.280 So that gets us through part of the night. 00:12:49.280 --> 00:12:52.440 My understanding is more towards a peak type situation. 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 00:12:56.640 --> 00:12:57.640 help there. 00:12:57.640 --> 00:12:58.640 Okay, good. 00:12:58.640 --> 00:12:59.640 Thank you. 00:12:59.640 --> 00:13:00.640 Any more questions? 00:13:00.640 --> 00:13:01.640 Yeah, following up on that. 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 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 00:13:14.200 --> 00:13:15.760 power at ERKON. 00:13:15.760 --> 00:13:17.000 That is correct, yeah. 00:13:17.000 --> 00:13:21.320 So is there a cost barrier to putting in these batteries? 00:13:21.320 --> 00:13:25.080 Is there a materials barrier to increasing this? 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 00:13:29.400 --> 00:13:35.600 need some way to store when you go from peak production to peak use. 00:13:35.600 --> 00:13:36.880 Great question. 00:13:36.880 --> 00:13:39.920 My understanding is pretty much all the above. 00:13:39.920 --> 00:13:44.380 Renewables and definitely the cost of installing batteries. 00:13:44.380 --> 00:13:53.120 Any more questions? 00:13:53.120 --> 00:13:56.880 Renewable energy credits represent the energy generated by renewable energy sources, such 00:13:56.880 --> 00:14:02.320 as solar and wind power facilities, and represent the clean energy attribute of renewable electricity. 00:14:02.320 --> 00:14:07.200 A REC is produced when a renewable energy source generates one megawatt hour of electricity 00:14:07.200 --> 00:14:09.440 and delivers it to the grid. 00:14:09.440 --> 00:14:13.840 Here are examples of DME's RECs using resource from the previous slides. 00:14:13.840 --> 00:14:21.160 The first example, Wolfridge, is a firm renewable contract producing 525,600 megawatt hours, 00:14:21.160 --> 00:14:25.200 or RECs, that are credited towards our 100% renewable goal. 00:14:25.200 --> 00:14:29.880 Santorini is different, as DME only receives a percentage of the site capacity, but is 00:14:29.880 --> 00:14:31.760 also used to meet a renewable goal. 00:14:31.760 --> 00:14:41.040 DME does maintain a REC account with RCOT. 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. 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 00:14:50.880 --> 00:14:53.200 the City of Denton's renewable goal. 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 00:14:58.800 --> 00:15:00.580 our renewable goal. 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 00:15:09.160 --> 00:15:10.960 demand. 00:15:10.960 --> 00:15:15.520 Looking at the expected capacity factor of the second chart, wind tends to average 40% 00:15:15.520 --> 00:15:16.520 or higher. 00:15:16.520 --> 00:15:21.320 Santorini, for example, was solar averaging slightly higher than 30% total output of these 00:15:21.320 --> 00:15:25.320 resources as long draw shows. 00:15:25.320 --> 00:15:30.120 Due to the seasonal capacity factors, DME will continue to procure renewable supply 00:15:30.120 --> 00:15:35.160 in order to continue in meeting our long term 100% renewable goal. 00:15:35.160 --> 00:15:39.200 Are there any questions? 00:15:39.200 --> 00:15:41.400 Any additional questions? 00:15:41.400 --> 00:15:44.840 Go ahead Lee. 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 00:15:52.800 --> 00:15:56.600 in years 2024 going forward. 00:15:56.600 --> 00:16:03.520 So are there any plans to address that, and if so, what are they? 00:16:03.520 --> 00:16:06.600 We are currently looking at multiple plans right now. 00:16:06.600 --> 00:16:10.240 There's discussions, Stephen may have some more information on that. 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 00:16:14.960 --> 00:16:16.960 you have in mind. 00:16:16.960 --> 00:16:23.040 Good morning board members, Madam Chamberlain, Stephen Johnson, manager of the Energy Marketing 00:16:23.040 --> 00:16:31.400 Organization, DME, in answer to your question, we continue to monitor daily if not weekly 00:16:31.400 --> 00:16:38.600 all of the people who are developing projects, whether it be solar, renewable, whether it 00:16:38.600 --> 00:16:43.120 be storage projects, any others, to assess their viability. 00:16:43.120 --> 00:16:47.740 Obviously I think everybody is aware of some of the supply and development shortages that 00:16:47.740 --> 00:16:53.600 have been going on with governmental restrictions on imports, currently an investigation going 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. 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 00:17:09.280 --> 00:17:12.320 as and when the opportunity arises to do so. 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 00:17:17.960 --> 00:17:20.000 the 100% renewable objective. 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, 00:17:25.880 --> 00:17:31.960 so the 100% renewable is a requirement imposed on DME by the city council? 00:17:31.960 --> 00:17:32.960 Correct sir. 00:17:32.960 --> 00:17:39.720 So if this becomes an impossible situation, or improbable from a cost standpoint, then 00:17:39.720 --> 00:17:45.200 it would be incumbent on whom to ask the council to change that requirement. 00:17:45.200 --> 00:17:48.440 Does that fall on you guys, on us, where does that come from? 00:17:48.440 --> 00:17:51.960 Yeah, so let me give you just a little flavor for that. 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 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 00:18:03.280 --> 00:18:09.360 part what the practices should be, right, and what we've been following. 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 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 00:18:20.840 --> 00:18:24.520 long term contracts. 00:18:24.520 --> 00:18:30.040 But there's certainly some clarification that's needed within the debt and renewable resource 00:18:30.040 --> 00:18:31.040 plan. 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 00:18:35.720 --> 00:18:43.680 initiatives that could potentially impact how we take that forward. 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 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 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. 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 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 00:19:18.000 --> 00:19:22.080 large loads like Core Scientific is an example. 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 00:19:27.440 --> 00:19:29.240 the course going forward. 00:19:29.240 --> 00:19:36.480 So for now, as Seth has stated, we're not seeking long term PPAs. 00:19:36.480 --> 00:19:43.520 What we're doing is these short term deals to continue to meet the 100% obligation. 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 00:19:47.920 --> 00:19:49.240 and get good direction. 00:19:49.240 --> 00:19:51.320 And then how do we take that forward? 00:19:51.320 --> 00:19:58.080 Not for the next couple of years, but the next five, 10, 15 years. 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, 00:20:05.960 --> 00:20:11.480 natural gas primarily, are going to go up or down or is there any information about 00:20:11.480 --> 00:20:13.200 the current long term outlook? 00:20:13.200 --> 00:20:18.040 I think Stephen can look at his crystal ball and tell you. 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 00:20:22.640 --> 00:20:25.440 the question here today. 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 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. 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 00:20:43.000 --> 00:20:50.240 versus desires to have a more sustainable and environmentally friendly planet. 00:20:50.240 --> 00:20:56.400 As to whether that keeps prices where they are or developments of some sort of technology 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 00:21:01.560 --> 00:21:06.440 to extraction help reduce costs and help make things more available. 00:21:06.440 --> 00:21:08.640 Supply exceeding demand drops price. 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, 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 00:21:18.480 --> 00:21:19.480 statement. 00:21:19.480 --> 00:21:21.440 >> Mr. Beck, you had a question. 00:21:21.440 --> 00:21:22.440 >> Yes. 00:21:22.440 --> 00:21:23.440 Thank you. 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 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 00:21:35.240 --> 00:21:40.440 through products that we're having a hard time getting a hold of, the supply chain, 00:21:40.440 --> 00:21:41.720 as you mentioned. 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. 00:21:45.600 --> 00:21:46.600 Is that a fair assumption? 00:21:46.600 --> 00:21:50.000 Or are we going to have more difficulty? 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 00:21:57.840 --> 00:21:58.840 challenge. 00:21:58.840 --> 00:22:04.200 There's a lot of challenge to intermittent, to supplying them sufficiently to meet grid 00:22:04.200 --> 00:22:05.200 demand. 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 00:22:11.800 --> 00:22:14.880 wind right now the last couple of weeks has been excessively strong. 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 00:22:18.720 --> 00:22:23.000 very hot summer days, one of the reasons it's very hot is wind will drop. 00:22:23.000 --> 00:22:27.080 We continue to have those unavoidable challenges. 00:22:27.080 --> 00:22:30.000 Equally with solar, nothing happens at night. 00:22:30.000 --> 00:22:36.200 I think we've established that from a cost perspective, storage is not sufficient, is 00:22:36.200 --> 00:22:41.080 not able to meet the cost challenges at this moment. 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. 00:22:46.640 --> 00:22:51.360 They can't meet a lot of the electrical grid challenges of meeting inertia and frequency 00:22:51.360 --> 00:22:53.120 response and controls. 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. 00:22:58.160 --> 00:23:04.280 But yes, to answer your question specifically, I think greater transmission is probably needed 00:23:04.280 --> 00:23:11.640 because clearly out west is a more sunny area than central and eastern Texas. 00:23:11.640 --> 00:23:15.600 So that says that solar probably needs to locate west, but there are tremendous challenges 00:23:15.600 --> 00:23:19.800 with trying to move energy from 500 miles or more away. 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 00:23:26.560 --> 00:23:27.560 it. 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. 00:23:34.720 --> 00:23:38.320 He's given the Pacific Northwest an awful lot of mountains and rain and water. 00:23:38.320 --> 00:23:40.400 They are great for hydro. 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 00:23:44.280 --> 00:23:45.280 wind. 00:23:45.280 --> 00:23:47.480 We're great for solar and wind. 00:23:47.480 --> 00:23:49.920 Transporting it from longer areas is just too big of an issue. 00:23:49.920 --> 00:23:54.320 If that's what's required, then that's what the solution probably ends up being. 00:23:54.320 --> 00:23:55.320 Okay, thank you. 00:23:55.320 --> 00:23:56.320 Does that answer your question? 00:23:56.320 --> 00:23:57.320 Yes, sir. 00:23:57.320 --> 00:24:02.520 Any other questions? 00:24:02.520 --> 00:24:03.520 Thank you very much. 00:24:03.520 --> 00:24:04.520 Thank you. 00:24:04.520 --> 00:24:10.040 All right, that is the agenda. 00:24:10.040 --> 00:24:11.680 Do we have a motion to adjourn? 00:24:11.680 --> 00:24:12.680 All right, 924. 00:24:12.680 --> 00:24:13.680 Second. 00:24:13.680 --> 00:24:13.680 Okay, re-adjourned.