Apr 08, 2019 Public Utilities Board on 2019-04-08 9:00 AM

>> It's 9 o'clock, we'll call the Public Utilities Board of April 8th, 2019 to order. We do have a quorum. I'm going to suggest we move the closed meeting to the end of the meeting for efficiency. So the first item on the agenda is to receive a report and hold a discussion and give staff direction regarding the 2019 Water Conservation Plan and Drought Contingency Plan. >> Good morning, everybody. The presentation today was previously provided to council last Tuesday due to some scheduling changes to the last minute for their work session items, so you'll get to see what they saw last week. And at that time, the council didn't make any formal changes or recommendations to change the plan. But please consider it and we'll take all feedback you've got for us. And with that, I think there's also a consent agenda item for the ordinance to adopt the Water Conservation and Drought Contingency Plan if you choose to accept that today. With that in mind, I'll go ahead and introduce Tyler Dawson, our Field Services Technical Manager, to run through the presentation. >> Good morning, my name is Tyler Dawson. As Frank introduced me, I'm a Field Services Tech Manager coming to discuss Water Conservation and Drought Contingency Plan. Again, we will have an ordinance. We have an ordinance to approve this item that we'll request approval on at the end of this presentation for consent agenda. This is a document that's about 19 years in the making. This was first introduced in its current form in the year 2000 under TCEQ, Texas Commission on Environmental Quality Rules. It is advised in framework published by the Texas Water Development Board. We've revised this over the years. We have a required five year update at this point. So we've gone through and we've kind of scoured the plan, looked to see what we're doing well, what we may need to do differently or do better. This is the sixth iteration of that plan. We did go to hold a public meeting on March 14th to request public feedback on this. And as Frank mentioned, we went to council yesterday, I'm sorry, last week, on Tuesday. The plan consists of two primary components. The Water Conservation Plan is our approach to long term water resource management. We all know Texas is growing, DFW Denton is growing. We want to make sure we have water resources in the future. And the Water Conservation Plan is the way we try to manage our resources better. The Drought Contingency Plan only comes into play in times of drought or emergency. So it's something we don't do every day. It's plans we make for the future, just in case that's something that's needed for an emergency or to mitigate very short term drought. To start with the Water Conservation Plan, I've given you a look at how we've done, how the city has done on water conservation since the year 2000. We measure our effectiveness on a gallons per capita per day, five year rolling average. So every five years we'll roll in the data, see what it looks like. You can see we've come down from about 189 in the year 2000 down to 140 in the current five year average. This is all due to basically public response to conservation efforts, a conservation message, and items in the conservation plan. The blue line you see here is our goal of 152 gallons per capita per day. You will, I'm sure, notice that the orange line has dipped below our goal. That's, one, it's a great thing. It shows that our community has responded very well to any conservation messages we've put out. But also, we've had five years that have been very rainy. If you remember, the drought ran from about 2010 to 2014, broke in 2014, lakes flooded, Trinity River flooded in 2015, and we've continued to have some mild and rainy summers. So that's really suppressed water use in the last five years, driven this number down, and so we don't think that's long term sustainable. We feel a goal of 152 GPCD is long term sustainable with average weather for the area. The conservation plan itself is built around BMPs, or Best Management Practices, published by the Water Development Board. Every utility that publishes a conservation plan looks through these BMPs and chooses the ones that are a best fit for that utility. So we've picked several. Here's a long list of components within our plan. Most of these have been in the plan for a decade or more and are part of the reason for our success so far. Here on the next slide, I'll talk through some of the changes. But the things we've done that are successful range anywhere from simply metering and accurately meeting our customer connections for accountability, to finding and repairing leaks, to offering customer water audits. If somebody's not sure if they're using water efficiently, we offer a service for that. These are the five changes to the plans. You can see some are checked as simply updates. These are very minor and there are a couple of additions. Section 3.3 in the plan deals with metering of water at the two water treatment plants. We have one water treatment plant on Spencer Road that pulls from Lake Louisville, and one at Ray Roberts that pulls from the other side of the dam. Raw water is water that's pulled from the lake, untreated water. We want to measure what we take from the lake, and then treated water is what we push out to the system. The reason this becomes so important is it's the biggest piece in the puzzle to understanding where our water is used. We had some concerns about the accuracy of these meters over the last two years. We've actually replaced the two meters at the Ray Roberts plant last year in May and December. And we're looking to replace the two meters at the Lake Louisville plant on Spencer Road in 2020. That'll improve our ability to understand our water use and continue to put effective measures in place. Section 3.5 deals with our water loss audit, which is an annual program. You'll actually hear a report from me here in a couple of weeks about our 2018 water loss audit. The plan was updated to be consistent with modern water audit language. We've kind of evolved at the state level how we do the audit. And we want to make sure we're consistent with that in our conservation plan that that continues. Section 3.6 deals with outreach, public education information. The orange part is what we've added, partnership with nonprofits. Now, this is not something that we've put in the plan because we want to do it. We actually put it in the plan because we're already doing it. We update this plan every five years. And since the last time we revised the plan, these partnerships have been put in place, including master gardeners and other gardening, irrigation, environmentally focused groups. So you'll see those come into play with the classes we offer. Some of the outreach programs are actually driven by nonprofits and we join with them on those. So we wanted to codify that into the plan. We feel that's a successful addition and so we want to continue. Section 3.7 is our non-promotional rate structure. You may have also heard this is our declining block rate structure, deals with water irrigation. So for residential customers in the summer, over 15,000 gallons a month, you see the price of water increase for an individual residential user. We have updated the rates in the plan to show what we're currently charging for those services. And it's something that's a very critical component to the water conservation plan because it helps residential customers that using an excess of water at your home. It can be a cost to everybody. So it's an accountability factor that helps everybody get on board with conservation. Section 5.6, park athletic field and golf course conservation. We have added golf course conservation to the plan. We have focused on park and athletic field already. We've decided to expand that. The reason this is in the plan is because those are very large landscaped areas. So any impact you can make, any changes you can make to those could have very large savings. We've already worked with our parks department on park and athletic field. And we want to continue offering help to any golf course managers or owners to try to find ways to use water efficiently. We don't want to change the use of their property. We want to make sure that landscaped property is put to the use that it was intended. But we want to improve the water use at those places if possible. And to change gears into the drought plan, the drought contingency plan. Again, this is not a day-to-day program. This is a plan that sits on the shelf and waits until a time when it's needed. The plan can be enacted in three stages and increasing severity. Starting with one, increasing up to three. And it's triggered in three different ways. You can see an A, B, and C triggering condition under each one of these. Typically, we talk about a drought plan based on a type A trigger, which is how much water is left in the lakes. So for a stage one, if our lakes are 65% full or 35% depleted, then we can enact the drought plan to put extra measures in place to start saving water in the short term. Stage two increases that to 50%. In stage three, if the lakes get down to 35% of their capacity, we would continue increasing those restrictions. You can see that 35% marked in orange, that has changed from 30%. We felt that was not significant enough. We felt it was too much risk to wait until 30% full and decided to up that standard just a little bit. Dallas has done the same. As you're probably aware, we share rights in our two lakes with Dallas, so we try to partner with them and try to keep our plans consistent. A type B condition deals with how much water is needed by our customers. We have the ability to treat and pump out about 49 million gallons per day. So far, we have not come close to that, but we're looking into the future and trying to see when we might get to the point when that might become an issue, that the community would need more water than this. So we have a type B condition. If we exceed 85% of our delivery capacity for four days, we go to next stage one, 90% for three days at stage two and 95% for two days at stage three. A type C is kind of an all other, it's a catch all situation and basically discusses emergencies. We have over 600 miles of water main in the city. We have two plants, two additional pump stations, six water storage tanks. We do our best to maintain these, but if the worst happens and the wrong part fails, then we have the ability to enact the drought plan as a response to that. Now this plan, as I said, has been in existence since the year 2000. It has never been enacted in this form. So far, we've been able to avoid ever having to use this plan to mitigate water shortages, but it is there in case the need arises. And when we enact these stages, kind of the headline is that under stage one, we would ask all irrigation users, or we would require all irrigation users to water two days per week or less. Stage two would reduce that to one day a week per less and stage three would prohibit irrigation. There are some, you can see a few of the details here, more specific rules that would come into play in stage two and three especially. Again, this does increase with the severity of the circumstance that require the drought plan to be triggered. There are some other resources on our website. I would encourage anybody who's interested to look through the sustainabledenton.com or through the water utilities page on the city website for more information on what we do to conserve water, to help the community have the water they need. And at this time, I'll take any questions. >> I had a question. >> Yes, ma'am. >> I was just, I was curious if gas drillers use city water? >> They can be. It's on a site-by-site basis, wherever the water is available for them. They have the ability to ask for it. >> Have they in the last year? >> I'm hearing we don't believe so. >> Okay. Where would they otherwise get their water? >> It would depend on the location. They have the ability to bring in water anywhere, but they're obviously going to find whatever's most expedient for them. >> And maybe shed a little bit more light on this. There's several ways that a gas well can use water. For example, if there's a surface pond for agricultural purposes, they could actually use it there. Oftentimes, they will either access an existing groundwater well or drill one of their own to access the water. Or they can get a meter from the meter shop and basically meter the water out through city usage through accessing basically a fire hydrant. So they have definitely, as a industry, used water from the city before. Here recently, we haven't had a lot of drilling and fracturing operations, and so they haven't had a need to. However, at the time that we had the most gas wells coming in to the city in any given year, they only represented a couple of percent of our overall water use. So it's a large volume, but percentage wise, compared to the city, not huge. >> All right, thank you. Other questions? >> Yeah, I do. Since this plan has been enacted, I remember a few times that some drought plan water scheduling was enacted. And I just was able to read how it's enforced. I was wondering if you had any information about if the plans that we make actually have the impact, actually reach those reduction goals. When you ask people to not water or rinse off their pavement or only water before six and after ten or the other way around. Do you have any data that says that works? >> We would have to research with other nearby communities. I know there have been utilities in the area that have had to enact their drought plan back in 2013, 2014, that time frame. That's a question we could ask. I don't know right now. >> I remember it in 2014. >> I just wonder, I mean, when you make a plan, when you set goals, you have to have some kind of realistic expectation that you can actually meet the goals that you're trying to hit, and I was just wondering if. So you just kind of looked around and seen what other people done and used our historic plan to come up with this plan, basically? >> Those are big pieces of it, absolutely. We do look to other cities and see what success they've had. Again, we do try to team up with Dallas as well as we can. They're pretty robust in their conservation program, so they're a pretty good guide for it. >> Yeah, yeah, okay. Thank you. >> Any questions? All right, thank you. The next item is, receive a report and hold a discussion and give staff direction regarding Solid Waste Department's enhanced liquids recirculation program. >> Good morning, Madam Chair, members of the board. My name's Brian Burner, I am the Deputy Director of Solid Waste for the city of Denton. I appreciate the opportunity to come today to talk about our enhanced liquids recirculation program. With me here today, I have Ethan Conks, who is the Director of Solid Waste here at the city of Denton. I also have Kevin Yard and David Mezacapa, who are engineers with SCS Engineering. They are our partners in this evaluation. We've hired them, they're probably some of the best people in the country. Come out and look and evaluate the operations of systems like this to determine, are they effective? Are they meeting our goals? And they've run, earlier this year they completed an in-depth review of our process here. And based on their findings, we bring those before you today. You may remember last year about this time, Blue Ridge consultants brought forth a litany of recommendations. Regarding the evaluation of our solid waste service over the past year, we've actually been doing some in-depth business case analysis over the past six months. Y'all been seeing some of those and with related to concrete recycling. We're going to have other programs coming before you here in the near future. This is just the next one in the series that we're looking at here today. This is a very technical issue, so I'm going to try to keep it as high level as I possibly can. But we are going to get down in the weeds on a couple things. So please bear with me as we go through these and as you have questions arise, please ask them. Either myself, David, Kevin, Ethan will be able to respond back. So when we talk about landfills in particular, they're not just holes in the grounds and dumps. They are highly engineered units that are extremely regulated through both the state, the Texas Commission on Environmental Quality, as well as the Environmental Protection Agency. And everything we do in there has a consequence. It's important for us to be in compliance to ensure that first of all, we're not impacting the environment, but also meeting the needs of the community, ensuring the landfill capacity that we have. Having a very environmentally friendly, yet cost effective place to put our garbage. So one of the first regulatory things that we have to do is maintain a gas collection and monitoring system. All landfills generate gas. It's just a matter of fact. With the exception of those that are inert, basically except only dirt and rock, every other landfill in the United States of America will generate landfill gas. That is a fact, regardless of what we do to it. Now, a lot of times, as part of our landfill gas mitigation system, we will put in pipes, we'll collect this gas, and we'll either flare it off to help destroy some of the non beneficial aspects of it. Or we'll put it into some other mechanism, whether it be a landfill gas to energy, run an engine off of it, generate electricity, convert it to pipeline quality gas, send it to homes, send it to vehicles, some of those things. Many landfills use this, just given the amount of gas that they have. And since 2004, City of Denton's landfill, we've actually been in a contract with DTE to operate one of these engines that generates electricity. The electricity that we produce is actually purchased by DME and goes out to power about 1,000 households plus or minus in the system. The third piece, when we talk about landfill component, is our enhanced leachate recirculating system. The best way I can equate this, let's say I've got a car. It goes well, but I want it to do just a little bit better. So what am I going to do? I'm going to put a turbocharger or supercharger on it, and it's going to give it more power, it's going to be more effective. And that's what this is. A lot of landfills, there are about 3,000 permitted landfills in the United States right now. Roughly 38 of them have some sort of enhanced leachate recirculation bioreactor type system. There's two different terms that are used interchangeably, depending on what state you're in. State of Texas, they recognize the terminology, enhanced leachate recirculating system, okay? If your supercharger or your turbocharger is working well, you've got something that's going down the pike. But every now and then, it just doesn't work right, and you have to take it in the mechanic, determine whether it's efficient for you to continue to operate that system. And that's the point we're at right now. We've gone in, we've looked at the ELR, and we've asked the questions, does it make sense to continue operating it? And we'll come to that here in a little bit. So some definitions, when we talk about leachate, that's that liquid part of the gas. We went to the Committee on the Environment here last week, and Councilman Meltzer effectively used the term garbage juice. And that's really the best way, is that liquid portion of the garbage that comes out, it's the leachate. It's liquids that are already in the trash, it's rain, it's anything else that touches trash that's inside that regulated area. So when we talk about leachate recirculation, we're taking that liquid portion, we put it back in the top, let it go back down through the garbage, it enhances the microbes, it destroys that organic waste just so much better, allows for settling, produces landfill gas. And at the end of the day, you try to meet some certain goals. When we talk about landfill gas, again, every landfill produces methane. And again, it's just due to that normal decay of trashed organic material. ELRs, though, again, it supercharges it. We're recirculating, we get those bugs active, it destroys the organic matter, hopefully in a much quicker manner. So back in 2005, excuse me, when the leadership of the Solid Waste Department at that time came forward to the council, they proposed and had approved the inaction of an ELR type system. And the anticipated benefits of those, first of all, when you decay material, it compresses. They were trying to generate or acquire landfill space without expanding it via permits. So again, if you can get 20 or 30% of that space back in the first part of the operation, again, it's much less expensive for the city and its users. It produces methane, which potentially has a beneficial reuse. The goal when bioreactors and ELR systems were first inactive was potentially reducing liability. One of the most expensive parts of operating a landfill is not in the landfill operation itself. But once it's closed, we still have a 30 year obligation to maintain the cap, manage the liquids in it, look at the landfill gas and on and on and on. If we can produce all the landfill on the first years as opposed to the end years, potentially we can cut that 30 years down or theoretically we could cut that 30 years down to 20 years, 15 years and save a tremendous amount of money. To date, neither the EPA nor the TCEQ have allowed us to take advantage of that regulatory relief. So that still hangs over our head. So again, we're looking forward to some of those benefits. So again, how does the ELR system work? You take landfill liquids off the bottom of the liner itself. What it's done is it goes into the leachate plant, it's put into pipes where it's allowed to go back down through the garbage, landfill gas wells, pull the gas back out of it and they take it either to a flare or some other additional benefit reuse. Again, it's a circular type system, but at the end of the day, the only thing in ELR system is a supercharger. We're always going to maintain landfill gas wells, header pipes and some sort of end use, whether it be a flare or a beneficial reuse in the facility. So the question is, is our ELR working? Does it impact us the way that we want to? Well, from an environmental risk standpoint, we're not seeing the reduction in the risk that we thought. Again, the EPA, TCEQ have not enacted those regulations which allow us to cut that 30 years down to something else. Additionally, by producing more gas, we have the potential increase of landfill gas methane migration outside the landfill. Similarly, with as much liquid as we have in the landfill and it continues to recirculate, there's potential seats and outbreaks that occur. So there's additional effort that we have to put in to maintain that. From an enhanced landfill generation standpoint, we are seeing a moderate benefit on that. The landfill gas production is increasing, but the potential is not fully being utilized. Currently, our landfill gas equipment is at full operational capacity and it's taking about 64% of the gas that we have. The remainder of that gas that we're producing right now is flared. And you can see some emission comparisons over here related to the engine's operation versus what we're seeing in the flare. When we look at the incremental landfill settlement, we're going to say that that's marginally successful. In 27 and 2018, and again, we did not operate the ELR in 2017 and 2018 for a couple of reasons. First of all, there was some improvements, repairs that needed to be made to the system. But secondarily, and it was presented in the previous presentation, the last five years have been extremely wet here in the state of Texas and our landfill has a lot of water in it. And we really couldn't manage putting additional liquids and recirculating those liquids in the system, so we have not operated it. But if you look at the settlement that we realized in 27 and 2018, we only had about 15,000 cubic yards. And again, cubic yardage and airspace, that is the key thing that we try to get in the landfill. >> What would we have previous years using it? Did we see any larger reductions? >> No, we did not. >> No, no, no. >> I mean, it's basically consistent. >> So we're getting five days worth of- >> Yeah, basically we're getting five days, and this is a settlement that we probably would have seen anyway. So again, not significant impacts, and that's why we say it's marginally beneficial. I'm trying to separate out the two between what would have happened and what additional the ELR is having. We can't make that determination specifically. And again, the liability reduction, there is no benefit at this point. >> And why did we think we were going to get that? The way I remember the rules by the EPA, they were never going to let you get out inside of 30 years. >> Well, the speculation was, again, this was enacted back in 2002, so we are a long way down the road. But in 2002, there was a program that was called Project Excel, which turned into the RDD program, which basically allowed people to come forward and said, if we can meet these certain goals, can we get regulatory relief at the back end, and if we can show that it works. And that was the hope at that point in time. There's been several programs that have been amazingly successful. Fortunately, this, at least as we're looking at it here, has not been one of those. So again, EPA in the last 16 years have not taken the opportunity to even start to say, yeah, it looks like we're going to reduce that liability. So again, that's where we find ourselves today. Looking from a financial standpoint, we actually suspended our ELR operations in 2018. We are getting some revenue from our gas to energy DTE at about $155,000 a year. If we were to go back in and repair the ELR, bring it up to speed, operate it the way that, from a regulatory standpoint, needs to be operated, we would anticipate that we would actually cost us about $935,000 additional a year over what we're receiving in revenue. Now again, as we look at potentially transferring out of a gas to energy and into some other potential use, the revenue side will be fairly consistent within about $100,000 per recon to that end. So again, this is money that's not currently in our budget, and we're not budgeting it for it in this next year. And if it's something we want to continue with, we're going to have to go back in and create a supplemental package for that. Talking a little bit about our landfill gas to energy, DTE Biomass has a long-term agreement with the city of Denton and expires in 2024. They have the right to purchase, collect the gas, as well as to produce power and sell it to DME. They have one engine on site is currently running at capacity, and there's not enough gas to bring on a second engine. Even if there were to bring on a second engine, I'm not sure DME's appetite to purchase the power would be there. Right now, it is the most expensive form of power in their portfolio, costing about five times as much as the renewables. And it could be as close to a million dollars a year more in their portfolio if they were to bring on this additional energy. So again, that's questionable. If you look at other energy alternatives that we could undertake at the end of 2024, there are a couple more out there. It's not like we have 100 different options. There's only a handful of things to look at. And again, it goes back to either flaring, which again, there's no beneficial reuse on that, landfill gas to energy. Again, we could, by 2024, we might have enough energy just from the natural degradation to bring on an additional engine. But again, there's some, depending on future conditions, as well as the regulatory requirement in renewable energy credits and RENS and other things that are out there that are way above my understanding as far as the way the finances on this work may make it more expensive or less expensive. From a pipeline quality gas standpoint, we can actually take this gas, we can condense it down. Right now, landfill gas is about 50% methane, 50% other stuff. To put it in a pipeline, you basically need to strip out that other stuff, make it right at 100% methane, be able to put it into a high pressure gas line. It could service our fleet, our CNG fleet out there, it could go to homes to heat water and showers and things of that nature. But again, that would require additional gas production. We don't have enough minimum standpoint to even consider one of these. And from an emissions standpoint, there's pros and cons in each of these. We've actually looked at project comparison based on about 1,000 standard cubic feet a minute. And this is what we're seeing from a NOC, CO, and VOC standpoint between the three. Again, our landfill gas to energy is probably our most inefficient from an environmental standpoint. But again, it gives us probably some of the most immediate use of the gas that we can see. To that end, and based on our study and SES's help with this, the primary objectives over the past 12 years have not been realized. And based on the study and the potential cost in the future, we would recommend discontinuing the ELR at this time. However, we would continue to look at other options to beneficially reuse the landfill gas that's currently being produced at the landfill. Working with DTE trying to bring on potential energy greater and also get us the right back to use some of that excess that we're currently flaring to use in alternative measures in the short term. So with that, I appreciate your time this morning. We'll be able to respond to any questions or discussion that you might have. >> Questions? >> You say the program, I guess initially started in 2002? >> 2002 is when the concept was thrown out there. City of Denton actually, I think, started undertaking it about 2005. >> Okay, honestly the presentation kind of paints it as a disastrous project, frankly. Seems like that's kind of what you're saying. How come it took us 17 years to figure it out? >> That's a really good question, one that I'm not ready to answer at this point. I'm relatively new to the city of Denton. I'm looking at this fresh, with a fresh set of eyes, just like everybody else. Ethan might be able to respond to that just a little bit better. I guess prices were a heck of a lot higher. >> Thanks for that introduction, Mayor. >> You're welcome. >> I think probably the best way we can answer that is, as you all are aware and as Brian alluded to, we brought Blue Ridge consultants in last year. Because this isn't the only project or program we've been dealing with like this. And so they kind of gave us the 30,000 foot view. If you'll rewind to about June last year, it was their recommendation to pull the plug on this program then. Like Brian said, we are in a climate where we get our fair share of rainfall. And in a lot of cases, businesses or landfills will take this on, because they're having to transport their wastewater a long way. And there's heightened risk with that, heightened cost. Fortunately for us, our wastewater treatment facility is right next door. And so I think when you look back at what was contemplated in 2005, there were a number of aspirational goals that were set out. I think to answer your question, Mr. Carroll, we should have been more closely monitoring this each year to see, is it having the desired impact? What's our settlement looking like? Are we making beneficial use of all the gas? To me, I think the real kicker on this is once you start hitting that point to where we're no longer beneficially reusing the gas, we're having to flare excess. That should have been the red alert that says we need to turn this thing off because we're making more gas than we can use. And that was really our decision about January 2017 was cut the gas off or cut the recirculation off and let's try to get that gas curve down to a controllable level. So it's really what you have up here in terms of recommendations. When we talk about the ELR, by all intents and purposes, we haven't operated it for the better part of two years. So I think the real decision before the board and the council tomorrow is gonna be, do you want to turn this back on and try to get gas to a level that we could maybe try to reach one of these other facilities? Staff's position is, that's not a great idea because again, it's speculative. You'd need to take on extra waste. You'd need to add extra water into it. And as you know, that's gonna generate more gas. And so we'll flare more before we're able to hit one of those other facilities. Just the reality of it. So I hope that helps that kind of answer the question. >> Sure, sure, sure. >> And I know back then that was all the rage. All the landfills were doing it, including the landfill that I worked with back then. >> We're not the only ones re-evaluating this and I forget who said it. But the gas prices a few years ago, this looked like a very sweet deal. >> And renewable energy, everybody thought it was a great renewable energy. >> Sure. >> Well, let me also add too that Ethan and his team, they've been working in that operation since what, early 2017. So for the last two years, they're going through a process of reviewing programs that may have been established in the past and going through it with a level of analysis to bring to you all and the council to determine whether or not we want to continue these programs. >> I guess a level of analysis that we weren't using before. >> That's correct. >> Okay, okay. I do have one more question that you're probably gonna want to stay with. >> Okay. >> On slide eight, there's a financial overview. This is kind of in the same vein as the last question. Is this a single year? It says annual, which suggests to me a single year. >> Yeah, and what we've done, so the system design cost is actually about $100,000. So we've broken that out over about a ten year period, but the remainder of those costs are annual. Now, looking in the rear view mirror, were we expending this level every year? The answer is no. And I think Kevin and David, their work has basically said, they've come through a couple of times over the last few years and said you really need to reinvest in this system if you're going to get the maximum benefit out of it. I think we've been somewhat hit or miss in terms of funding and operational improvements over the last few years. I think the question might be is, if we operated this thing efficiently, would we be seeing a better outcome? Financially, I think the answer to that's no. So I think the big limiter right now on gassed energy revenue is we have one engine. So to get to the next engine, we've got to increase gas output. So you may be adding another $300,000 or another $155,000. A high BTU facility may get you a little bit more revenue than that, but not enough to offset the additional cost of the ELR. To Brian's point earlier, I think the idea is we will generate gas as we move along. The more waste that goes into that facility, we'll be adding gas wells and pulling that off. We may be able to reach one of those more beneficial facilities like high BTU just naturally without having to operate the ELR. >> But that may be years down the road. >> That may be years down the road, correct. And we mentioned earlier some alternative uses for the gases. Are there some facilities we could heat with this if we clean it up? Are there some other things that we can do that doesn't require a huge capital investment while still trying to get some beneficial use out of this? >> So just to more to my point, we're not, we haven't been losing that kind of money over the last 17 years. >> We've been losing an amount of money. I think just being completely candid with the board, it would be very difficult for us to break out and say this was expended toward the ELR versus something else. I think our capital plan was in a state that it would be very hard for me to tell you exactly what was spent on this. >> So go back to slide eight then. I want to make sure I understand this. So we weren't, the system construction, is that like the depreciation of the system? >> No, it's what we'd have to invest. >> Right. >> All right. >> Horizontal, lateral lines. >> These are more move forward numbers basically with the ELR. >> Yes. >> Question, I'm going to give you, go ahead, you finish yours. >> But we were spending the $120,000, the $85,000. All of those costs are true annual costs to operate the ELR. >> No, I think we weren't expending all of those either. >> Okay. >> And so I think what SCS has given us is if you really want to do this operation efficiently, you want to do it right, this is the level of investment that you're probably looking at. I think we were falling short of this. >> Okay. >> And so essentially, just kind of as an example, you install a line in there to recirculate the leachate in the waste, eventually that waste is going to, around that line, is going to start to degrade such that that water, that leachate has nowhere to move. And so you are constantly having to refresh and update your system. Because as you take on new waste, you're installing new lines. And so it's a pretty heavy investment. >> So one is a projection and one. >> One is what we're doing right now, that non-ELR. I think that's exactly what we're spending today. >> I think also going back to Mr. Cheek's statement earlier. When this was first visualized, gas was at what, 1250 and MMFCF. I think spot market right now is slightly above 265. Again, that $10 difference in there, I mean, when this was proposed, is to be cost neutral because of all the gas sales and everything else. And when the bottom drops out of the gas market, those savings have to come from somewhere, so again, that's where we see the 935,000 estimated potential loss. >> Okay, my question is along the same lines as what you were asking about as well. Because those, that $600,000 and several of the other items, what's the depreciated value of those capital investments? I mean, what's the depreciated life of those capital investments? >> A lot of it depends on what the piece is involved that we're doing. Over the life of this, as Ethan was saying, sometimes waste gets so tightly packed around the leachate lines that the leachate can't flow through them. Sometimes, I mean, landfills get warm. Because basically it's a big compost pile for lack of anything else. But depending on how they were installed, they could basically flatten. So again, could be anywhere from five years to 25 years, depending on the component that's put in. But again, you continue to evaluate, you continue to upgrade, you continue to ensure that the- >> Maintain. >> Well, you maintain, but you have to ensure that the infrastructure is viable. Because the minute one piece stops working, you lose all that efficiency. You gotta keep it operational. >> Okay, well, I think I'm just trying to make sure I understand that the ELR columnar's, you're not spending $600,000 a year on system construction, correct? >> No, you would be. >> You would be. >> Because it's enhancing additional material that has gone to waste, but it's also- >> I thought maybe I was looking at that incorrectly. >> You were hoping that wasn't the number. >> Yeah, that is a very big number. But again, it's either retrofitting stuff that needs to be repaired or installing new systems that have to go into, okay. >> I have one question, too, the environmental impact of not collecting the methane gas. Is that going to be negative? Is it going to be, what is it? >> I mean, right now, regulatorily, we are required to collect this and manage that. So again, we're going to do that anyway, outside of whether we operate an ELR or not. >> Okay. >> So again, we've got to separate those two questions. >> Okay. >> The issue is, do we try to supercharge it, produce more, but not be able to use it beneficially? Or do we let the landfill work like it's going to, and manage that material as beneficial as we can in the time that's present. >> Okay, so I want to go back, I'm piggybacking on that one. On slide six, you're talking about emissions comparison between the engine and the flaring. >> Correct. >> So as we move forward, we're always going to also incorporate that as a part of the analysis, right? >> Correct, we will always be looking at emissions in our cost-benefit analysis. Because again, there's a cost standpoint, there's an environmental standpoint. But at some point in time, you've got that Venn diagram where the two pieces cross, and that's what we're looking at here. At a minimum, we will always flare, which again, according to this chart, is our least emissions as a result of it. But at some point in time, rather than just burn it, we want to try to have, whether it's heat, electricity, or something else coming from it. And we want to try to gain some of that impact. >> Okay, I have a couple more things, I have a couple more things. >> Go ahead. >> It's kind of back to that page eight, the financial overview. And you mentioned that if we move forward, that some of the changes that we would make, perhaps in the monitoring and record keeping, we might have to enhance those due to regulations. >> Correct. >> Okay, so up to operating it up to January 2018, have we exposed ourselves to any regulation liability by not operating it clearly, properly? >> No, no, we currently, given the amount of gas that we're producing, given the amount of regulatory requirements that are currently on us, we are compliant with all the aspects of TCEQ and the EPA. So we are compliant, we are doing what we have to do. But as gas increases, that thus enhances also our regulatory and the effort that we have to expend to maintain that compliance. >> Okay, and this really isn't an ELR question, it's kind of a landfill regulation question. We have another landfill east of town that we used to use a long time ago. Last we heard about it, it had a cap that was collapsing, and we were supposed to come in and fix the cap. And I was wondering if somebody could tell us how that landfill is doing right now. >> Well, we continue to monitor it, but we are currently working on a couple of presentations to bring back to you in July. So it's not off our radar, we continue to look at that. >> Thank you, thank you. Okay, I'm done. >> Any other questions? All right. >> Okay, so I guess what we're seeking from you today is just direction that we go ahead and discontinue the operation of the ELR. >> Yeah, I don't see any reason why you should spend that kind of money to keep doing something that nobody has much faith in. >> All right, thank you very much for your time today. >> I think it was another one of those feel good plans. >> It's worth a shot. >> All right, the next item will be the consent agenda. We have items A through H. Does any board member wish to pull an item for additional consideration? All right, do we have a motion to approve A through H? >> So moved. >> And a second? >> Second. >> All in favor say aye. >> Aye. >> Opposed? Carries. >> Okay, the next item, that's H. Consider the approval of the public utilities board meeting minutes of March 25th. Were there any changes or corrections? Hearing none, we'll approve as circulated. And then item B, consider recommending adoption of an ordinance of the city of Denton authorizing the city manager to designate to execute confidentiality and nondisclosure agreement between the city and Helena Wind. >> Good morning, George Morrow, general manager of DMA. As you probably recall from our prior discussions, we issued some RFPs for renewable power and we're engaging some of the respondents in more detailed discussions. And the two nondisclosure agreements and confidentiality agreements you have before you today are necessary for those parties to be willing to share more information with us. So we're asking for your recommendation on these two items. >> I'm sorry, he was whispering to me. >> In summary, we're asking for your recommendation on these two items. We expect to move forward to execute the two nondisclosure confidentiality agreements that allows us to get further down the road with a couple of these entities that have responded to our RFP. >> Have other companies asked us to do this before? >> It's very typical, so we have quite a few of these. >> And I guess I don't remember this particular thing coming before us before like this. >> Yeah, yeah. >> The nondisclosure component? >> Yeah, we've brought quite a few of them for different circumstances. Some of them are for their RFPs and some. We do try to put a paragraph or so in our RFPs that some of the respondents have been comfortable with. Others want more detail. We have maybe a paragraph, they prefer six or eight pages. So these are a couple of the six or eight page type entities. >> Okay, so you need a motion to approve. >> Motion to approve would be wonderful. >> I recommend approval. >> And a second? >> Second. >> All in favor say aye. >> Aye. >> Opposed? >> Thank you very much. >> Thank you. >> And we're having a changing of the guard. We're on to the ACM update. >> Change of the guard and on the spot. >> Yeah, and on the spot. >> Good morning board. We just have a few items to go over on the ACM updates. We basically have the matrix. And as noted last time, we completed the report on what we're paying for energy, etc, item number two. We still have to schedule a PUB board meeting and times associated with that meeting, and we'll work on getting that scheduled. Hopefully we can get that on the next meeting agenda. The future public utility board agenda items have been provided to you. We're generally on track with those. On May 6th, we're going to possibly just take the electric budget presentation to you and then on May 20, follow up with water and wastewater. I'm going to circle back with finance and get that verified, but that's what we currently have scheduled on the financial calendar. And that is pretty much all I have. >> All right, so Mr. Coat, do I do concluding items before we close the meeting, because we're not going to re-adjourn? >> Yeah, I'll do it. >> Okay, okay, all right, so concluding items. Are there any items that a board member would like to be brought forward in a future board meeting? All right, so do we adjourn, Larry? I'm sorry. >> You're just going to close the regular meeting. >> We're going to close the regular meeting, okay. >> You already closed, come out and close it. >> Okay, all right, so now we'll go into closed, and bear with me, I'm supposed to read this whole item. We're going to discuss, deliberate, and receive information from staff and provide staff with direction pertaining to the potential acquisition of real property interest generally located in one. The first 800 block of Eagle Drive, two, Avenue H between West Hickory Street and West Prairie Street. Three, West Prairie Street between South Bonnie Bray Street and North Texas Boulevard. Four, Stella Street between South Bonnie Bray Street and North Texas Boulevard. Five, North Texas Boulevard between Stella Street and Eagle Boulevard. Six, Maple Street between South Locust and Avenue C. Seven, Fannin Street between S Avenue B and Bernard Street. Eight, South Avenue B from Maple Street to Underwood Street. Nine, Bernard Street between Eagle Boulevard and Collins Street. Ten, Carroll Boulevard between Eagle Drive and West Collins Street. 11, West Collins Street between S Avenue A and Carroll Boulevard. 11, Myrtle Street between Fort Worth Drive and Maple Street. 13, Pierce Street between Maple Street and Stroud Street. 14, Eagle Drive between South Locust Street and Avenue C. 15, Fort Worth Drive between West Collins Street and Maple Avenue. All in the city of Denton, Denton County, Texas. Consultation with the city's attorneys regarding legal issues associated with the potential acquisition or condemnation of real property interest described above or a public discussion of these legal matters could conflict. With the duty of the city's attorneys to the city of Denton and Denton City Council under Texas. Disciplinary rules of professional conduct of the state of bar of Texas would jeopardize the city's legal position. In any administrative proceedings or potential litigation. This pertains to electric distribution and transmission lines in Eagle Station.