Monday, December 11th, 2023, we're going to just jump right into this.
Are there any members of the public that would like to speak at this point?
We're full of City of Denton folks, all right.
This is the regular meeting.
There are no presentations from the members of the public.
We'll move straight into the consent agenda.
I've already had a request.
Go ahead, Mr. Ryback.
I would like to remove items A, C and E from the consent agenda.
Any others?
Seeing that there be none, I will entertain a motion to approve of the consent agenda
items B, D, F, G, H, I, J and K.
We have a motion.
Second.
And a second from Mr. Plotk.
All those in favor, please say aye.
Aye.
Any opposed?
Passes unanimously.
Mr. Ryback, item A, and I believe Mr. Rayner may have had a question on that as well.
Yes, I was just curious about the sudden appearance of nearly a million dollars in charges.
I'm sure there's an obvious and excellent reason for it, but it just seemed unusual
and I would like to get some further information about it.
Good morning, Vispa Pantabong, ADF Finance.
So when we calculate these T-cost expenses, we actually net them.
So there's revenue coming in from the city, which are other TSP providers that are using
our assets.
And then the expenses that are going out, that's other TSP basically or that's us using
other TSP's assets.
So when we do the billing, it's net of revenue and expenses.
So with the ongoing rate case, so basically that affected the calculations and those two
particular TSP's were the one that basically changed.
Okay.
So these were simply the result of a recalculation based on ongoing charges and expenses.
If you recall Mr. Rybeck, we had already brought the majority of those forward about a month
ago or so.
Yes, sir.
And yeah, these were as a result of a recalculation basically.
Okay.
It's not necessarily a change in budget, it's a change in who gets the money from the T-cost,
correct?
Yes, correct.
Yes.
Not a change in budget.
And for some context in total, we're spending about 25, 26 million dollars now a year in
transmission costs to others that we pay out on an annual basis.
Okay.
So will this continue to happen then throughout the year as the last time there'll be an adjustment
since it's December?
Yeah.
There's ongoing rate cases that happen and so there's adjustments throughout the year,
certainly not as big as these, but yeah, those can happen and they're normal.
All right.
So we may continue to see these as the year goes on then.
Yeah, if they exceed the staff's authority that's been allocated -- not allocated, but
what's the word that I'm using for -- delegated to staff.
Okay.
What is that authority, just for my information?
I think that's 50,000.
Okay.
Very good.
State law, correct?
Yes, correct.
50,000.
Thank you.
Mr. Chair, I move that we accept item A from the consent agenda.
We have a motion to approve by Mr. Ryback.
Second.
Second by Mr. Taylor.
All those in favor, please say aye.
Aye.
Any opposed?
Passes unanimously.
Item C is in cat, Mr. Ryback.
Thank you.
So I was concerned about this not so much that it does exist or that it has a pretty
big dollar amount and I thought perhaps would be of value for us to learn a little more
about it.
Yes, sir.
Just about the credit card processing contract in general?
Sure.
This is a credit card contract for the entire city for all 25 locations, some odd give or
take, on the day that take credit cards over the phone, in person, or over the Internet.
We went out for bid in 2020.
We go out for bid every five years along with our depository contract.
We had three bids at that time and we started the contract in 2021 and it will end in 2026.
Historically, you know, we look at our past actuals and see what those have been and we
based our numbers for the contract on that.
And it just seems this year, in the last couple of years, we have increased our volumes across
the board from the city.
Customer service alone, we share these costs across the city based on their own volumes.
Customer service going from payment to invoice cloud allowed your customers to have a lot
of bells and whistles and other options to pay so it increased their adoption to their
credit card rate.
Also building safety.
They have a lot of construction and building going on so the permits have increased.
Also the landfill has seen a high increase in volume.
So our actual cost to the credit card processor stayed the same through the contract.
Our volumes have increased and it's the actual card brands and their interchange rates that
are increasing as well because they're allowed to increase every two times a year.
So it's just that volume just kept growing and growing.
So the last year of the contract, I am just not had enough money.
So we went ahead through the regular process and increased this as allowed by the purchasing
contract.
Okay.
So is this a new provider or is it the same provider with a different rate structure?
It is the same provider we've had the same provider for almost 10 years and Wells Fargo
Merchant Services and their rate stays the same.
It's the card brand interchange rates that go up and down.
So as a card holder, I can come one day and use my debit card and that's one rate and
I can come another day and use my reward card and that's another rate.
So all those variables playing in.
So our providers rate is the same.
It's just the cards that your card user actually using pushes through and that's a straight
pass through to the card brands.
So what we pay Wells Fargo Merchant Services is consistent, but what we pay the card brand
is based on their own interchange rates.
Okay.
So this is a net increase to our cost of doing business as a city.
Yes.
And each department budgets these.
So they have everybody has a bucket in there for their banking services, if you will.
So that's whether they put in cash in the bank, they're doing checks or they're doing cards.
So this will impact all departments budgets to some extent.
Yes.
But they've already budgeted for that slightly.
They look every year and do what they can to see what's coming.
Okay.
Yes, sir.
I don't have any further questions.
Okay.
Mr. Rainer.
So you said, good morning, you said that you look at this twice a year or is that when
they.
The card brands come out with new pricing structures twice a year.
And so we may be looking for a another price change of some sort the middle of next year.
No, sir.
They fluctuate.
So each card brand just kind of gives and takes, they may offer more rewards on a different
card or whatever.
So again, it's based on the card user use.
So the card brands go up and down twice a year.
They add more programs, they take away others.
So it really our fees are based on what our card holders are using day to day.
Okay.
Thank you.
Thank you, Mr. Chair.
Thank you, Mr. Rainer.
Any other questions for item C. Seeing there are none, I'll entertain a motion to approve
item C of the consent agenda.
So moved.
Motion.
Second.
We have a second.
All those in favor, please say aye.
Aye.
Any opposed?
Passes unanimously.
Move on to item E, Edward, E isn't Edward.
My question regarding item E is I was, it caught my eye that there are two different
departments, one of which is Parks and Rec, where the Public Utility Board, and I'm just
curious about the implications between our civic duty and that of the Parks and Rec Board.
This equipment's going to them.
Hello, Tom Grammer, Director of Facilities and Fleet.
I don't know the answer to that question.
That seems like a financial question.
I'll be happy to get that answer and bring it back to the board.
Well, I think the reality is that when it comes to items that are not utility related,
the PUB does not have authority on that.
That usually goes straight to the City Council.
The Park Board does not have oversight of that either, so those expenditures go.
Just for ease of documentation, these were aggregated together.
Obviously, there's synergies in buying these diggers together in multiple quantities, but
that's really the only purpose.
And so really what's in front of the PUB is that they're diggers specific to DME only.
Okay.
But again, I just asked that question about if this equipment goes to Parks and Rec in
part or do the utilities own and operate the equipment?
There actually will be the Parks and Rec folks will have their own digger tool, if you will.
Yes.
Parks will have their own, I believe that.
We've set up two different accounts funded in one, so DME is paying for two, Parks is
paying for one.
But again, as Tony said, it's to buy three at the same time is easier and cheaper.
I think it's always useful to aggregate and get a better deal.
I'm just curious about our authority to suggest to the City Council that Parks and Rec buy
equipment and we're the ones doing the approving.
If it doesn't make any difference, that's fine, but I'm just curious about that.
I think this is the first time I've seen something where something's come before us that also
had to do with equipment for a different department or a different group.
Yeah.
This is not unlike what you've seen Public Works come out and they show you what they're
going to be doing in a neighborhood area for streets and sidewalks, but within those project
costs, you also have water, wastewater costs, you may have electric costs, and so this is
a very similar, it's all being brought at the same time.
There's economies of scale for why those are done at the same time.
There's also kind of an administrative component here, right, for us to have to separate out
just the DME component, now you're talking about a separate item, a separate agenda.
There's separate things that go with that, right?
So this is just from an administrative standpoint to make it a little bit easier for staff, right?
We bring to the PVB exactly what we're taking to the Council, even though some items may
not necessarily be within the authority of the Council, but it's just a little bit administrative,
a little bit easier for us to do it that way.
But all of the other things you've talked about with the sidewalks all still fall within
the utilities, wastewater, power, water, you know, those are all wastewater functions,
not all public utility functions, I'm sorry.
They're probably worse functions, but the funding is different.
So the funding for the sidewalks, the funding for the streets is not coming for water and
wastewater.
It's only the water/wastewater components that are coming for water/wastewater, of which
the Board has authority over.
Right, and the roads, of course, are roads and transportation, not utilities, so, okay.
Yeah, but streets is not considered a utility for purposes of the Board's authority.
Okay, I don't think that answered my question, but I have a better understanding, thank you.
Mr. Rayner?
So, if I understand it, we're buying in bulk, which is fine.
Two departments, pardon, just to keep it simple, you're gonna get two, we get one, and we get
one, you get, or we get two and you get one, is that kind of how that works?
Correct.
Okay, and who keeps it, you know, my neighbor borrowed my weed whacker and I'm still waiting
for it to come back, so, you understand my point?
Absolutely, so when we purchase these vehicles, they're allocated to the departments through
our work order system and asset tracking.
The department takes responsibility throughout the life cycle of the vehicle or the asset,
so when we get this on site, it's identified as a DME asset, or the two DME assets would
be put under their purview and capitalized and everything else with DME, and then the
one would be put with parks and identified as a parks asset, so there would be no interchanging
of the assets.
So, let's say you wear yours out, would it be, it seemed like it would be natural that
you would maybe contact us to borrow one of our diggers, would that be kind of how that
would work?
There's potential for that, obviously, however we can get the job done as fast as possible
to limit the impact of the operation, we would do that, but we don't make a common practice
to flip-flop assets on the long term.
Yes.
If we do, we'd have to make sure the financial implications of the backside are handled.
Thank you, appreciate it, thank you, Mr. Chairman.
Okay, thank you, that's just a follow-up question based on their questions, the account
numbers that are listed here for the fiscal information, where do they fall under?
One under public utilities and two under parks, is that correct?
It should be two under DME and then one under parks, right Dave?
That's correct.
Two to one.
Okay, it's the opposite of that.
Okay, that answers my question, all right, any other questions?
Seeing there is none, thank you.
All those in favor of approving item E as in Edward?
No.
Oh, that's true, entertain a motion to approve item E.
Move we approve item E.
You have a motion?
Second.
We have a second.
All those in favor, please say aye.
Aye.
Any opposed?
There being none, it passes unanimously, so we can move on to item three, items for individual
consideration.
Consider approval of the November 13th, 2023 minutes.
Move a motion for Mr. Plot?
Second.
Second, Mr. Taylor?
All those in favor, please say aye.
Aye.
Any opposed?
Passes unanimously.
All right, item B, I believe there's gonna be some questions on this.
We did take this up last week in a risk management team meeting and decided to take it from the
consent to individual consideration, so we'll go ahead and start with board members with
any questions.
Billy, actually, we have a quick presentation, if you don't mind, and then we can have questions
after that.
Harry?
From Mr. Terry Nolte.
Good morning, Terry Nolte, Assistant General Manager, DME.
So first question is what is outage insurance, and basically it's insurance that covers
mechanical failures of the Denton Energy Center.
The way that this has worked in the past is that in order to have a valid claim, you have
to have an outage of at least one unit, and the second unit starts the claim process.
It pays the difference between the hourly wholesale price and the generation cost, so
if the generation cost was $40 and the wholesale energy price was $100, it would pay $60 times
the number of megawatt hours that were affected by the outage.
And the premium is charged based on the payout limit.
You know, the limits can be anywhere from -- yeah, usually the policy limits are anywhere
from 10 to 25 million for the two-month winter period.
So the energy risk management policy is a policy that we follow in managing the overall
portfolio risk of the supply.
The energy risk management policy does require us to purchase this insurance for the winter.
We have noticed through our procurement efforts that the premiums have gone up considerably,
and the coverage has gone down.
So as we look at this winter, we view this winter as we see here on today, you know,
December 11th.
It's going to be 62 degrees today.
As we look at the weather forecast out the next month, we don't see any significant weather.
And it's El Nino winter, so we expect winter temperatures to be on average a little bit
warmer than normal.
We don't -- we don't discount the potential for really, really cold weather.
There could be -- as we are in Texas, it could be a couple days of extremely cold weather.
And -- but we estimate that probability.
We do regression analysis down at less than 10 percent for those events that would cause
us significant concern.
When we have experienced a unit outage, there have been very -- it's really not well correlated
with price.
So it's not like when prices go to $100, that's when we have problems.
There's really -- it's very random.
There have been a number of changes in the market since URI that mitigate our risk.
The provision and the risk policy was put in place after URI to avoid the kind of catastrophic
event that happened.
So we've seen the Texas pipeline weatherization effect, those -- all the gas compressor stations
on the line, all the dehydration units that feed into this particular line have been weatherized
and inspected by the -- by the Railroad Commission.
Same thing on power generation units.
The wholesale energy cap was reduced from $9,000 a megawatt hour down to $5,000, still
a very steep price, but significant reduction.
And there have been other wholesale generation market changes that bring additional standby
generation into play.
So based on this, we are not recommending -- we purchased the winter outage insurance.
We require a waiver of the provision of the energy risk management policy.
And we discussed this with the energy -- with the Energy Risk Committee last week, and they
agreed with our recommendation.
And so with that, I'll be glad to have any questions, and I'd ask Marcella to explain
exactly what the action is that we're asking you for today because we have an item on there
to approve a spending authority.
Yes, so consistent with Robert's rules and our parliamentary requirements, we'll actually
have someone motion in the affirmative, so just like you would normally motion for an
IC item, you'll move to approve item B. That'll get seconded.
And then if you agree with staff's recommendation, the motion would fail, which would mean that
the item would not be recommended to city council.
At city council, there's a second item that goes with this that's the actual waiver ordinance
that would allow that waiver of those terms of the energy risk management policy.
But in terms of this item, it would be a motion in the affirmative that would then fail.
Motion in the affirmative that would then fail.
You know what you said?
Yep.
I'm going to write that down.
Is it a motion and a vote in the affirmative?
It's not the vote.
No, the vote against.
And then discussion.
And then we vote.
Yeah, so the motion would be just to approve item B. There would be a second for that to
allow for discussion.
Obviously, if you have staff questions before the motion, that could be handled before the
motion.
Discussion would happen normally.
And then if you agree with staff's recommendation, you would vote no on approval of the item.
We can't just have the recommendation be against.
Okay, that's fine.
Yeah, so it's a quirky part of parliamentary procedure where motions have to be in the
affirmative.
Okay.
Mr. Rainer, do you have a question?
No.
You want to get your button?
No.
Okay.
So in my understanding, the discussion should be done after the motion has been seconded,
correct?
So there can be staff questions before the motion and the second, but discussion just
of the board members would be after motion and second.
But I could ask staff during -- after the motion has been made, though.
Yeah.
Okay, thank you.
Or now.
Or yeah, you can ask your staff questions now as well.
So I can ask a question at this time.
You first.
You may.
Thank you.
I was wondering if you could tell us a little bit more about these changes to the wholesale
market that would make this an appealing thing for us to --
Sure.
So in the wholesale market, we have what's called ancillary services, which are the services
that are required in order to keep the grid stable.
These are things like frequency, stability, non-spinning reserves, and we actually have
a new one this year called ECRS, emergency reserve -- emergency capacity reserve service.
That is a new product.
It is an online product that makes available about 1,900 megawatts of additional generation
at all times during the winter months.
So there are those changes, and then there are also some very detailed -- which I don't
want to go into because we could spend hours discussing it -- changes to the overall, what
we call the ORDIC, which is an adder for during price spikes, a certain adder.
Okay.
So how is this additional dispatchable power made available?
It's actually purchased in the day ahead market as are other of the ancillary services.
What's that cost, Terry?
Well, it has traded up as high as $3,000, $4,000 a megawatt hour, but on average it's
been running this winter so far probably $10 to $25 a megawatt hour.
And that's just generation capacity that's held out of the market, of the real-time market
because it clears in the day ahead market, so it's a reserve that ERCOT has to call on
if they run into a period where there's not enough capacity.
So it's ERCOT's reserve, not DME's and other utilities' reserves?
That's correct.
Yeah, and then I guess, Mr. Rybeck, the other big change is that we now have, since Jury,
a firm fuel program where there are 32 units that have qualified that have backup fuel
oil to generate with instead of relying 100% on gas.
Not ours.
Not ours, right, correct.
The deck is not configured to run on fuel oil.
So overall, there's just been a lot of changes made over the last three years to avoid that
Jury scenario.
Okay.
Mr. Taylor, I believe that's a follow-up.
Just trying to understand, will not purchasing this policy affect the planned operation for
January, February?
No.
So it won't change operational or forward purchase or any of that kind of stuff?
No, sir.
Okay, so we just think the risk is not as big as the cost?
Really?
Yes, sir.
We don't believe it's a cost-effective purchase.
Okay, cost-effective.
We've had the policy in place for three years, three winter, actually two winters since Jury,
and we've never had a claim.
And as you can see, the amount that we were requesting was over $900,000.
So we believe that's a good savings for customers and we can manage the risk in the real time
and into the balance of the month, balance of the week markets.
Okay, so does the DEC participate in ECRS right now or just--
Yes, we have in the past.
It's an online product.
So if the units are running, we can participate and we do when we see that to be a premium
product.
Okay.
And can we self-provide?
We can.
Okay.
We don't normally, but we can.
And as a reminder, you may recall that for the summer months, we also did not purchase
outage insurance for a lot of the same reasons.
And if you saw in this first slide, the biggest coverage that's no longer there is the loss
of fuel, right, which was the number one issue that we had during the year.
That's no longer covered, right?
That was really the incentive for us to want to have the outage insurance to begin with.
But I just want to point those out.
Thank you.
Another thing, since the event, I know there was a plan to weatherize the DEC or improve
its weather withstanding capabilities.
Has that been implemented and completed?
As it relates to this, yes.
I don't want to get off posting, but yes, we have-- in fact, we're constructing that
equipment now, we've put in some temporary systems to achieve the same goals that that
overall program, and we'll have it actually completed sometime in the first quarter of
next year.
Okay.
So we've significantly reduced our risk regarding the DEC as well.
The few-- yeah.
The risk as it relates to a loss of fuel, correct?
Yes.
Thank you.
Okay.
I think y'all have asked the two questions I was going to ask, but let me clarify.
And there are two very simple items to me that make me think this may not be worth it,
the insurance.
And one of them is the cause of the last outage, the initial cause of it, granted, that did
for some other actions or some other consequences, was the loss of gas by another party.
That's correct.
It's not covered.
Yes, sir.
So if that loss of gas causes the equipment failures at the plant, that's not covered
either.
That's correct.
Okay.
Number two, you have done-- as Mr. Rebick just asked, you have done the upgrades that
have given us a larger temperature range on the negative side, correct?
We're not completed with the total capital program, but we have put in place a temporary
solution for this winter that achieves the same objectives.
Which is what temperature?
I can't divulge that.
Estimated.
Okay.
It's a--
Is it proprietary, I guess?
Yeah, it's a competitive matter that's protected, but it is much better.
Okay.
Yeah.
All right.
Yes, Mr. Rainey.
Now that I know what we're going to do, I still want to ask my question.
On the chart that I got, I was just curious when we-- 2017 when we had that cold and all,
how many-- first of all, do we have 12 units, or was this just a chart showing two through
12 units that-- what the cost would be and such?
Yes, sir.
We-- the deck is configured with 12, 18.75 megawatt units.
So back when everything froze up, how many units did we have affected?
Well, when we lost gas, we had no fuel, so we couldn't run any of the units.
Everybody was.
Yeah, so we lost fuel for about 24 hours.
That when we recovered the fuel back, because of the damage, we were only able to run about
8 of the 16 units-- or the 12 units, I'm sorry, 8 of 12 units.
Just historical.
I was just curious.
Yeah, and just as a reminder, the damage that we were talking about was really primarily
to the radiators that were outside, so there was some minor damage to the engines themselves
too, but it was really the radiators that froze up that were the big issue for us.
So by not getting this-- excuse me-- when we vote, if we choose whatever we're going
to choose--
Very good.
--then if this should happen again, we're going to pull money somewhere to take care
of that then.
Yes, we carry a reserve balance, fund balance that we hate to draw on, but if we had to,
we could draw on that fund balance to cover any cover damages.
Yes.
Fair enough.
Thank you for your time.
We've got it.
Yeah, something else?
Nope.
Oh, OK.
I move approval of item C, B. I'm sorry, item B.
Second.
Very precarious motion affirmative in a second for item B.
Discussion.
I know what this costs is, but this is a million dollars for a few months policy when we've
mitigated most of the risk, and this doesn't address the biggest risk that we've experienced
in the past of fuel outage and potential damage after fuel outage.
So for those reasons, it doesn't seem like a cost-effective option.
I agree.
After such a thorough discussion of explanation, even though I did second it, I probably will
be voting against the motion.
OK.
Is there any further discussion on this item?
Because if you-- let's be clear, if we vote affirmative on this item, we pass the existing--
we vote to recommend that council passes with the insurance policy in effect, correct?
If we vote against it, if we vote nay, then we're voting to not pass this, and there is
another choice for council to pass that gives that option.
Correct.
OK.
Can we have a flowchart back there?
I need an AI bot to retype that sentence.
OK.
All those in favor of passing the current item, please say aye.
Any opposed?
Vote nay.
Nay.
It fails unanimously.
OK.
Oh.
Such a message.
I know it.
And Mr. Wendel.
Mr. Chair, we'll notify the council tomorrow as part of the presentation to let them know
the PB's recommendations, just like we did to you with the risk committee.
So the council will be informed.
Play the tape.
Yeah.
OK, so what are we saying here?
Gosh.
OK.
Well, that is B. We have item C, which are management reports.
Mr. Puente.
Mr. Chair, members of the PB, I'm going to try not to confuse you all too much here.
So the first item that you have per management report is just your upcoming 2024 schedule.
So our hope is that you don't have any issues with those dates, but if you do, please let
us know so we can look for alternate dates.
I don't think there's any action that the board needs to take there.
We just want to make you aware of what those dates are for this coming year.
OK.
There was an email that came out that Kim sent out about changing to the first and the third
from the second and the fourth.
Just for May only?
Is that because Memorial-- I mean, Labor-- which one is it?
What?
Memorial Day?
Labor Day?
Memorial Day.
Sorry.
Sorry, veterans.
Because those are listed as May 6th and May 20th.
Those dates are OK, but yeah.
OK.
Well, if you do have some issues with those dates, please let Kim and myself know at this
point.
This should be the schedule.
I think Kim will send out calendar appointments, I believe, for that.
So the next item that we have, this is a request from Mr. Rybak regarding Proposition 7, what's
called the Texas Energy Fund.
Terry and Andrew Keifer, that's kind of our legislative person, helped put this together.
Certainly, if you have any questions, Terry's here, or I'll try to respond as well.
If there's any questions on that memo.
Since I requested the memo, I read it, and I am satisfied that I better understand it.
Thank you.
I have a question.
Mr. Rybak?
I was reading the portion about potential impact to the City of Denton and Denton Municipal
Electricity question mark, and I read in here where the event that the DME determines the
need for and achieves approval to construct additional dispatchable generation, our analysis
is acceptable to the program, yada, yada, yada.
My question was, though, and achieve approval to consent.
So this is not a given that we would get any portion of the $1.8 billion.
So the intention of that paragraph was to let you know that before we would make any
commitment to even apply to the fund for funding, or for the early completion bonus, we would
need to have your approval and City Council's approval.
So that is the consent that we're referring to.
Oh, I thought you were...
I do have a question, but I'm just...
Oh, okay.
So we need to initiate the request, obviously, unless you're going to pass it on to everybody,
but then we have...
So there's procedures and such that we would need to follow.
Now, does that come before us before that money is asked for?
Yes, sir.
So later this early next quarter, sometime in the first quarter of 2024, we'll be bringing
to this body and to the City Council a revised Denton Renewable Resource Plan.
That plan will discuss our future power supply portfolio, which may or may not include additional
dispatchable generation.
If it does include dispatchable generation, is that our recommendation?
It would require approval of both the PUB and the council before we would make any application
to this fund.
And is it a grant type thing and we pay it back?
No, it's a loan.
It's a loan.
Yes, sir.
And is it at the 3% such as the other?
Yes, sir.
Okay.
So the capital program, let's just say it was a $200 million investment, you could borrow
the $200 million at 3% and then under the provisions of the law, House Bill 2627, there
would be an early completion bonus if you were able to complete the unit by, I believe
it's the middle of 2027.
Yes.
Six.
Six, yeah, that's right.
That would be paid back, that completion bonus is actually paid back over time.
So it would be actually after the units had been on for a year or better, then you would
receive funds, just a cash disbursement from the energy fund to cover a portion of that
capital investment.
You'd then restructure your loan because your loan value would be significantly lower
and you'd owe the fund than that interest and principal payment on the remaining balance.
Thank you.
Thank you, man.
I just want to point out real quick, so we were trying to respond to the question.
This is still hypothetical, right?
If we were to do this, we would qualify, I think that we were trying to satisfy the question
that was asked.
At this point, we're not making a recommendation to invest in additional dispatchable generation
and, again, we're still looking at that as part of the Denver Renewable Resource Plan.
We will bring back to the PAB, to the council, different options and kind of a menu of things
that we could potentially do going forward.
But as you guys know, we are in a very fast-growing community with a lot of different needs.
We have increasing electric load that we're serving in a very unstable market.
So, again, I just want to make that very clear that this does not mean that we're going
to go and construct a new generation facility.
Yeah, I'll also point out, Tony, that there are a number of regulatory changes that are
coming down the road.
Those regulations are being developed right now to try to restructure the market in order
to respond to the fact that we now are a heavily dominated market by wind and solar.
And so there may be new requirements imposed on all utilities across all generating utilities.
I should get my terminology right.
All load-serving entities like DME to have a level of dispatchable generation to back
up the intermittency associated with that wind and solar.
That is not the case today.
Those regulations are under development.
But should they come into place, that coupled with what Tony talked about, there is a potential
that we could recommend, and again, it's purely hypothetical, but we could recommend additional
dispatchable generation.
And are only dispatchable options natural gas?
Do we have any other alternatives for dispatchable generation?
Depends again on the problem that you're solving for.
So if it's more than a two-hour period that you would need to back up, to back up that
intermittency, then yes, I think cost-effectively, natural gas would be the way to go.
Obviously, there's batteries for a couple hours and there's nuclear energy and all kinds
of other options out there, but conventional wisdom would say gas.
Well, and one final thing in response to your question, even in that situation, you could
still enter into a PPA with a generator without you necessarily having to build your own.
And so it's just a different way to still get there if you need to get there.
Thank you, I just had a few hypothetical questions on timeline.
So there seems to be two steps in the memo references, two deadlines for the completion
bonus.
June 2026 and then June 2029.
If, what would be the expected timeline to install once approved reciprocating dispatchable
generation?
So conventional peaking generation, whether it's resip engines like we have at the deck
or whether it's arrow derivatives, probably a two-year build cycle.
So you'd have to do the engineering design ahead of that, but an expedited build would
be 18 months, but that would be tough.
So June 2026 would be very aggressive for any entity unless they've already designed
it.
We didn't try to go into a lot of detail here, obviously there's a bunch of nuances, but
in the legislation itself, there is the ability to push out that June 2026 date due to equipment,
supply chain issues and other reasons that could be pushed out as well.
The state clearly wants additional dispatchable generation and they want to deploy this money
in order to incentivize either private entities, public entities, whoever wants to build that
generation, that's what the money was allocated for.
Thank you.
Thanks.
You got another one?
Yeah, so I assume that in the event that we should decide in the future to make this decision
that we're competing with the private manufacturers or generators of electricity as well to get
this money that's potentially available to us, we've got limited supply resource availability
and probably a very limited labor market of skilled workers who can do this.
So I'm assuming this is an early bird gets the worm type thing.
Are we moving quickly with the potential idea to make another --
Yeah, I guess --
Yeah, I get what I'm saying here.
To inform the council.
So we will be bringing a definitive recommendation sometime in the first quarter of next year
regarding this.
And that's kind of where I'd prefer to leave it at this point.
Okay.
Yeah, that's maybe another thing that's private to, I guess, that discussion.
Obviously, yeah.
Any decisions that we make about that would be competitive matters and be protected from
public disclosure.
Okay.
So going on to the next item, here is future agenda items.
Just want to make you aware that at our January 8th meeting, we will be looking to elect new
officers for the board.
So kind of please start thinking about that.
As you know, right now we have our chair is Susan, Parker Billy is our vice chair.
And I thought that Barbara was our --
I think so.
Barbara was our secretary.
But so --
Did we put you in places, secretary?
Okay.
I thought we put somebody --
Well --
I thought we put somebody in places.
I think we probably did.
But on January 8th, we will reelect -- we'll elect new PAV officers then.
Okay.
So just kind of be thinking about it.
I wanted to give you -- give you that heads up.
And then on the new business action items, obviously we've provided to you the memo today
on the SB7.
We have on tab to give you a memo for the first meeting in January, I believe, as well,
a response to the third-party software.
And then the only item that we have left, which we committed to do a year from the day
that it was requested, come back with some information on where we are with EVs versus
combustion engine vehicles.
So those are the items that we have left for you.
Mr. Reiner?
I thought it was interesting.
Mr. Rybeck was asking about that third party.
And then shortly after our meeting, in the news, the North Texas Municipal Water District
was hit with ransomware, and over 2 million people didn't have water, and it was due to
a third party.
So I really hope that when we get to this, would you review that as well as to the importance
of, what, keeping it in-house?
Is that how you phrased it last time?
So the plan that we've discussed with our IT directors, we're going to give you a memo.
We hope the memo satisfies the question, but if it doesn't, as part of your agenda, we
will be able to go into closed session if we need to, if you have more specific information
that we don't want to be disclosing in public regarding some of the efforts when it comes
to cybersecurity and just general security of software.
But my hope is that the memo that Alicia will be crafting will satisfy the question.
And I don't mean to-- thank you.
I just thought, since we have an example of it, I'd like for you all to at least review
that to see if there was anything that-- make sure that we're not retracing a potential
problem that they ran into.
Yes, sir.
I'll let Alicia know, but unfortunately, that's not the only example that's gone on.
Oh, I just made my radar, because it happened a week after we talked about this, and here
we are.
It's in Texas.
Thank you.
Yeah.
Appreciate your time.
Thank you, Mr. Chair.
I have a question.
I have a question regarding officers, two parts.
One, Barbara has been on the board, and she had not been reappointed.
Is that correct?
She didn't want to be reappointed.
She did not wish to be reappointed.
I believe that's the case.
So if we're going to elect officers, who else needs to be reappointed?
Because I think I'm up next year, but I'm not 100% sure.
Does anyone know?
We used to carry that on here.
I guess it's not-- and we would just come out with a normal--
Yeah.
We can-- we probably don't have the information right now, but we can certainly get that to
you to let you know who's termed out or needs to be reappointed.
When's our next meeting?
Is it January?
January.
OK.
When we're supposed to vote.
Right.
And if you'd like, we can put a memo together and put that as part of the management update
to make everyone aware.
I'd like to get an update before we have our next meeting, if at all possible.
Yeah, right.
Yeah.
OK.
So we'll send it out to you.
And we still lack a seventh member.
Is that correct?
Correct.
But that person hasn't been appointed yet, correct?
That's correct.
There still hasn't been a nomination for that position.
OK.
Do we know which city council member needs to make that?
I think it's the mayor, I believe.
Yeah.
OK.
Very good.
Thank you.
All right.
There doesn't appear to be any more questions on items for individual consideration, so
we'll move on to concluding items.
Do I need to read this?
No.
OK.
We're going into work session for item A, which is receive a report, hold a discussion,
and give staff direction regarding updates to the city of Denton criteria manuals.
Yeah, Mr. Chair, unfortunately, that item, we're going to have to pull that item.
Today, there's a couple of issues that came up, and so we're asking to pull that item.
We'll have that today for you.
OK.
So we'll just have B.
All right.
Pulled that one.
So now we have B, which is receive a report, hold a discussion, and give staff direction
regarding the final wastewater master plan.
And I love design criteria.
I was hoping we'd get to discuss that.
Morning, I'm Kyle Pettico, I'm the water utilities planning and engineering manager.
So today, I'm going to give the third update on our wastewater master plan project.
This will also be the final update before we bring it forward for approval.
So first, I'm going to go over the phasing and growth, then the five-year capital improvement
projects that we have listed in the Hickory Creek and Clear Creek basins.
And then we'll review the next steps.
So the phasing and growth hasn't changed throughout these updates.
So in our zero to five-year window, we're anticipating an 8.1% growth rate to bring
our population up to around 223,000 people.
In the five-year to 10-year window, we're anticipating right around a 3.5% growth rate
to bring us up to 265,000.
And then in the 10-year to 25-year window, we're anticipating right around a 2% growth
rate to bring us up to 357,000.
Question.
Yes.
The population that you're using here, does that include all customers or just the city
of Dinton?
All customers.
Okay.
Yes.
So in some of these areas, that includes our MUDs and the other development out to the
west of the city.
Okay.
Continuing on, kind of similar vein, if you go back a slide, so you've indicated developments
basically on the map that correspond to the timeline.
So we have five-year.
These are developments probably underway now or starting very soon, then a 10-year to 25-year.
There are likely to be developments that we don't yet know about.
So is that, I assume these are only the developments that have reached planning staff?
Yes.
These are all the developments that we know about on the horizon.
And what we've kind of done throughout this process, the way the growth starts pretty
quickly and tapers off, it shows the initial development and then the fill-in of those
developments.
Like if you see in the southwest portion, the Hunter and Coal area, as those grow out.
So we've included all of them that we do know about.
And I believe there's a small factor of safety in there to accommodate any that we don't.
Okay.
And it's likely that come 2027 or 2028, there will be new developments that are beginning
that process.
So this slowing curve is more likely to be a straight line or linear growth?
It will probably still slow as areas get developed.
The development naturally slows down just because there's less developable land.
So it still will maintain that shape.
It might extend that, you know, that 8% growth rate by another couple of years if there's
developments, you know, like you said, that either happen quicker that we're not aware
of currently.
Okay.
Thank you.
I have a question.
It appears some of those areas you note are outside the city limits.
Yes.
So this includes all of our customers.
So any MUDs, any, you know, not just within the City of Denton, but City of Denton water
utilities customers.
So the city's wastewater and I assume water and power are serving customers who are outside
the actual city limits?
Yes.
They're within the ETJ, but outside of the city limits.
Are we not pooling any of that development on 380, close to the Wise County line?
Big Sky, I think it was, that MUD, it's a MUD district, I'm pretty sure, out there.
I'm not familiar with that name.
I'd have to check with Development Services on that.
You'd know if we were covering it, I'll bet.
So it's not on this map, but it was huge.
Right.
That might be outside of the ETJ.
Okay.
I'd have to check on that.
Gotcha.
No worries.
Okay.
So in May, this is the proposal we made back in May regarding growth in the Hickory Creek
Basin.
So we had included $151 million of conveyance and $423 million of treatment, which would
have included that proposed Hickory Creek water reclamation plant.
So that was a $574 million total for that area.
We've narrowed that down, that Hickory Creek water reclamation plant has pushed outside
of our five-year growth window.
So we've removed that, and we've looked at as the numbers have solidified, we can treat
that through the existing Pecan Creek water reclamation plant.
So that was a big reduction.
How old is that plant now?
What's that?
How old is that plant now?
The Pecan Creek, I think it's around 60 years old.
We've been doing condition assessment improvements on that, and then we also have, currently,
a CMAR project for the expansion of that plant, retrofit and expansion.
Yeah, I remember we expanded that area, predicting that that area would develop.
There was something underway, then it fell, it went belly up in the middle of the recession
in '09.
So we mothballed a lot of it, but it was there and we eventually needed it.
Right.
All right, that was just comments, excuse me.
So here was our May update regarding the Clear Creek Basin.
So we had $142 million in conveyance and $109 million in treatment for $251 million total
in that area.
Since then, we've had a slight reduction in conveyance and a slight increase in treatment.
It results in an overall net decrease to $233 million.
So those laterals to the south, those were removed from the five-year window and those
can be installed by developers as the need presents itself in that area.
So when we started this effort back in October last year, we were looking at the full 25-year
window, and I believe the number was right around $1.62 billion for that.
We've reduced and narrowed in our focus to the five-year window in May.
So if you look in May of 2023, our update came to a total of $825 million of improvements
by kind of planning it out, studying the numbers, looking at the necessity of the Hickory Creek
plant within the five-year window, or without, we were able to remove that, and our new total
is at $397 million.
So our next steps will be to present this on the consent agenda for approval, for adoption,
and then bring it to city council, and once it's adopted, use this in our impact fee study
and update.
Yes.
So kind of follow-up to Devin's question, I think, and point.
So this plan will be reviewed and revised in three years, five years?
It's a living document, so once it's adopted, we go through kind of a constant revision
process.
As projections change, as projects are completed, we go through annual updates on it with larger
reviews scheduled for those three- to five-year windows.
Thank you.
I'm kind of surprised by the Hickory Creek postponement, because I know there's so much
growth in that basin, and so is that being met by, I know that we approved a small lift
upgrade out, way out on the far south Robson, near Robson, yeah.
Is that helping, are we doing minor projects to avoid that $400 million treatment plant?
So there are minor projects, if you look at the conveyance, the way the conveyance map
here has changed to include some of these areas where we have that known level of growth
within that five-year window, by taking that and calculating where the growth is, when
it's going to happen, we've seen that we can handle that, we should be able to handle
that flow through the Pecan Creek, the existing treatment plant, with some of the retrofitting
that we're doing out there.
We're still going to need a solution at Hickory Creek, it just pushes outside of that really
kind of solid planning window.
Okay, and then on the, what's the one north?
Clear Creek.
Yeah, the Clear Creek Basin.
So this conspicuously absent in the plan maps was a development that was previously called
Hills of Denton North, which is a major development on 2164 Missile Base Road.
And that was thousands of houses, and it might be currently dormant, but my understanding
was that they're, I guess it's not within the five-year window, is that the?
Not that I'm aware of, so that's another one I'd have to check on the name because it's
not familiar top of mind, but that's, yeah, I don't think that's the five-year window.
Yeah, and then I just want to make sure in this 2.5 million gallons a day capacity there,
that does seem, I guess that facility will be able to be expanded as not yet built, not
yet in planning developments to come online.
Correct.
The facility location really with TCEQ determines how much we're able to discharge.
I believe in this area we can discharge higher than this rate, and most of our, the way we
approach planning of plants, we build in expansion capability, so typically we're really going
towards a modular expansion capability in a lot of our efforts so that we can add on
as needed without doing a complete retrofit.
Okay, thank you.
Question if I may.
Mr. Rayner.
So a lot of this is based on permits that have been put in with the city, is that what,
and so you have those, and then as the activity of that corridor looks to be building, then
you kind of do a crystal ball of expansion as to the needs, is that?
Yes, correct, so as the developments progress, we work with the developers on their development
projections, so we incorporate their timelines, their build timelines into our planning to
get a better idea of when the growth will happen.
So initially when we start out, you know, we start out with the entire development,
the number of units, the overall capacity they're going to need, and work that in,
and then as we work through the process with them, we narrow down their build timeline
and plan that out to see how it will impact our wastewater model.
And could you go back to the other basin, please?
So on the Hickory Creek, I would say the biggest user or most expense is the residential for
you all, would it not be?
I believe so.
In this, yes, in this zero to five year window, I believe the biggest impact will be residential.
So along 380, those and possibly along I-35W as we get more industrial building development
coming along, that is somewhat of a saving grace, as it were, because you're betting
on the expense of the residential and yet the industrial warehouses would not be such
a demand, so it's a trade off, or would that be a fair statement?
It can be, depending on the type of industrial use, so for example, warehousing has a much
smaller impact than, for example, food processing or a different industrial use.
So it really depends on the type of use that we see.
Yeah.
Thank you.
Pretty good.
There doesn't appear to be any other questions.
I'm pulling, there are, Mr. Ryback.
I just wish to move approval.
Move approval?
This is not, yeah, I think he's messing with us a little bit there, but right?
We don't have to give it.
There's no action.
No, this is just an update.
We'll bring it forward for approval after, before we review it with council.
It was just a Q&A for us then.
Appreciate your optimism, Mr. Ryback.
I assume we had to recommend, I apologize.
Thank you.
Mr. Chair, can I ask one question?
The meeting tomorrow, city council right away impact fees, and it has, it's talking about
water, wastewater and such, does this come under our preview at all or is this just straight?
So that presentation is specific to roadway impact fees that the board does not have oversight
over when, when the water wastewater impact fees renewal comes forward to you.
Those will come to you, but there should not be any changes to water wastewater impact fees
as part of that conversation.
That's general fund stuff, right?
Yeah.
That's what I was curious about.
I appreciate it.
Thank you.
All right.
Worth the question.
That's for sure.
Any other questions?
If not, we stand adjourned.
Since I don't get to make the motion, we're just going to adjourn.