- Okay, it is nine o'clock and we do have a quorum.
So it's called to order the public utilities board
for the city of Denton on March 11th, 2024.
Did anybody register to speak?
No, all right.
Then we'll go right into the consent agenda.
Does anybody wish to pull an item?
I know Mr. Chief is pulling item E.
- Not me.
- Okay, so just item E.
So then do we have a motion to approve items A through D?
- So moved.
- Okay, and a second?
- Second.
- All in favor say aye.
- Aye.
- Motion carries, item E.
- Hello, I'm Katie Koch.
I'm the project manager for the project
that this is pertaining to.
Yeah.
- There is no presentation on it.
There's no presentation on this item that you put together?
- No, this is just for the approval
to submit a full application.
We'll have to go back through PUB for another resolution
and a draft bond ordinance when we get approval.
- Okay.
- Well, I don't want to go into any details
because there are no details for me to go into.
- I can--
- I think it's just asking for approval
to submit the application.
- Yeah, I can provide high level if you'd like.
- $195 million worth of no detail.
- That is the current OPCC for the whole expansion project
including design, CMR, which we are seeking
to ask approval for, and the full construction cost.
And for the full five year project,
they escalated the numbers.
- There are other disciplines in this matter as well.
- Well, just Stephen Gay, director of water utilities.
So high level is this is, we have to do like
a pre-application, so just I guess declaring our intent
to apply for the funds.
This project is in our five year CIP.
It's been planned for quite some time.
This is the process, the process we're going through
right now is we just have to demonstrate
that we've shared and we have PUB approval to apply.
Once we, our application, our pre-application is accepted,
we'll be invited back for an actual application,
and then that'll have all of the information highlighted.
You know, we'll dig down into the details,
do a nice little presentation for you
about the development board, the loan,
and the project, so this is essentially our,
like our letter of intent, if that makes sense.
- I have a question.
Does this include the entire cost of the project,
or is this only a portion?
- This is the entire cost of the project,
including design. - Okay, so we're gonna
get a loan for the entire project through these means.
- Yes. - Yes.
- Thank you.
- Go ahead, Devin.
- Is the fixed rate interest rate known,
or will it be known?
- We'll know when they...
- Oh, I'm sorry. - I'm sorry,
we're agreeing here. - So the Texas Water,
sorry, Jessica Williams, CFO for the city.
So the Texas Water Development Board provides loan funding
for particular entities that are approved
to move forward with water projects,
so it's a combination of state and federal funding
that allows us to go forward to apply for the loans.
Texas Water Development Board then issues
the actual debt to the market,
and then we are responsible for the repayment of that debt.
Right now, they're running about two basis points
under the market, so for us, this would be a benefit
in that we can borrow this money with less expense
to the city through the Texas Water Development Board
than we can sell it on the market right now.
- Yeah.
There's just nothing for me to explain to my neighbor
when I said, "Oh, what was this shit you voted for?"
Excuse me.
What was the stuff you voted for $195 million to approve on?
I don't know, they're just applying for something.
I mean, I know what it reads here, I can see that,
but anyway, we gotta have expansion.
- Yes.
- Is there a ceiling level for that fixed rate?
- The rate will vary based on when we actually
get to the market, but what we would be looking at
is closing in December.
There is no ceiling on the rate,
but the Texas Water Development Board
does run competitively to the market
and generally under market.
- So the rates the rate, we take it no matter what?
- Correct.
- And it's best to go this route
if the rate gets too high versus out into the public,
is that right?
- Yes, at this time it is.
When we were looking at rates back during COVID
where we could go out for 2%,
it didn't make sense to go through
Texas Water Development Board
because we could go to the market for less.
However, with rates where they are right now,
we can't beat the Texas Water Development Board.
- And as time proceeds, we have the flexibility though
to be able to pivot at any time
in case all hell breaks loose, pardon the pun.
- We could call the debt when it becomes callable.
So at 10 years, we could call the debt
if we are in a place where we could refund it
for say a 2% rate again.
Although, I mean, I hope we see those days again,
but I highly doubt it.
- And I'm referring to before we even pull the trigger
if you see the rates take off.
- If we make a decision prior to December,
we can pull out of the deal.
There is a deadline though that will pass
at which point we can't pull back out of the deal.
- If rates go crazy as we hope it will not.
- Correct.
- I just wanted to know what the precaution
and what safeguards we have at that point.
'Cause is this project such that if the rates
just go out of the way, we just put it on hold?
- Yes, we could, absolutely.
We could turn down the funding if we chose to
prior to the Texas Water Development sale of the debt.
Once they have sold the debt, we are committed.
- I imagine it'd be a rather extreme rate
because this is rather important.
I understand that, yeah.
Thank you.
- Other questions?
- Yeah, I--
- You're still on, you're green.
- I am.
Yeah, well hers was echoing so I was being careful,
but yeah.
I'm just gonna abstain for lack of information,
not that it matters, but thank you.
- All right, do we have a motion to approve item E?
Mr. Rybak moves.
Do we have second?
Mr. Taylor, all in favor say aye.
- Aye.
- Opposed?
- Abstain.
- Abstain, okay.
Thank you.
- Thank you.
- Next item is approval of the minutes.
Were there any changes to the February 26th, 2024 minutes?
Okay, do we have a motion to approve?
Mr. Taylor motions, second?
- Sure.
- Mr. Rybak, all in favor?
- Aye.
- All right.
Consider recommending the adoption of an ordinance
for the city of Denton, Texas,
establishing the schedule of rates for electric service,
providing for repealer,
and providing for severability clause,
and providing for an effective date.
That's a motion.
- Good morning, Madam Chair, PUB members.
I'm Bill Shepherd with Dent Municipal Electric,
and I'm here today to talk to you a little bit
about electric rate ordinance adjustment
that we mentioned last time, the PUB meeting.
Unfortunately, you all didn't have quorum,
but Mr. Puente did submit information
talking about our midyear budget adjustments,
as well as the updated pro forma.
So I'm gonna go one step beyond that.
Part of the elements of that discussion
were to request adjustment to the energy cost adjustment,
the ECA, as well as the transmission cost recovery factor
that has been suspended since October of 2017.
So we'll jump right in it.
So what we're requesting is to make an adjustment
to the ECA starting effective April 1st, so next month,
and that adjustment would bring our ECA from .0341
up to .0447 per kilowatt hour.
The impact on a residential bill
is about $10.60 a month for that adjustment.
The other adjustment that we're requesting is that,
or reinstatement, I should say,
is the transmission cost recovery factor.
This was a portion of the bill that has been suspended
since October of 2017, and it was built to recover
our transmission costs that we pay out to ERCOT.
So reinstatement of that, it'll go from zero,
which it is right now, up to .0135 dollars per kilowatt hour,
or roughly a $13.50 per month impact to the residential bill.
So both of those are what we're proposing
for going into effect April 1st.
- Excuse me, before we move on?
- Yes, sir.
- So the total of that was like 23.50?
- 24.10.
- 24.10 per month per client, so that's about $300 a year
to the average residential user.
- Okay, and since I wasn't here for the meeting
without a quorum, can you tell us a little bit
about the reason for the adjustments, the background?
- Yeah, sure.
So part of that reasoning rationale is the fact
that we have not had a rate increase in almost seven years,
and everything around us has been going up.
So we have made every change that we can
and squeezed out every efficiencies we can
within our operations, and at this point,
with the cost of fuel continuing to go up,
we had a large unexpected cost of fuel last year
that part of that presentation from last time
discussed a $31 million bond issuance
to finance that amount of the overage for the fuel.
But really it's just trying to correct our rates
to more reflect what we're paying in the market.
- Okay, thank you.
- Yes, go ahead, Mr. Randolph.
- Could you go back to that one?
- Yes, sir.
- Thank you.
So the increases average per resident,
so is it possible to tell me what is the,
not the impact, but what would be the average cost
per on your residence?
Is it a monthly fee?
Are we talking that in Denton, you've got an average
of let's say $200 a month per resident on an average,
and then we add the $10 to that, is that?
- Our average for the residential right now is $106.
- Okay.
- That's the total bill for electric,
so it'll be 2410 on top of that.
- Oh, thank you, that's helpful, appreciate it.
All right, so this is just a blow up of the performance.
It might be a little hard to see,
or maybe you can see better from there.
So the oval that I've circled that purchase power
on the second, the red oval, $189 million,
that's the portion that we're trying to recover.
Now, not all of that is recovered straight
through our customers, part of that is our core expenses
and core recovers all of that on its own.
So that's the component that we're trying to recover,
and another thing I failed to mention too
is this mid-year correction is intended to correct
for expenses for the last part of the year,
not the entire year, so we're not collecting
six months of revenues to account for 12,
we're just gonna try to true up for the last six months.
So that equates to about $70 million
that we'd be collecting for ECA,
and then the square below the $189, the $26,881 million,
that is what we're projecting to pay to ERCOT
for transmission costs this year.
So half of that is the $13,440 that we're proposing
to collect with the .0135, yes sir.
- But these adjustments will continue
into next year, I'm presuming.
- Yes sir, yeah, so next year for the TCRF,
we'll be recovering that full amount for the year,
which is projected to be the 27,284,
right next to it to the right,
and then we'll propose an ECA that we'll try to collect
for the entire ECA throughout the year too,
but on the next slide, we'll talk a little bit more
about that strategy and how we levelize
that through the year.
- Question, Bill. - Yes sir.
- Well, I don't understand, here's a personnel.
The projected is, forgive my eyesight here,
is 25, is that right, 25873?
- The one right here?
- The projected, well, that is the mid-year,
that's your now new estimate for personnel,
is that correct?
- Yes, I don't see the 24, there's 26090 for the personnel.
- That's because I can't see it.
- Yes sir, I'm sorry.
- That's why I'm asking.
- Oh, there we go, right there, right?
- Yeah. - Yeah.
- What's the fluctuation there between actual and projected?
- Actual, 2023.
- So, yeah, so that was 2023 actuals,
and then we have the projected for 2024.
If you recall, we had a pay plan study that was done
and we adjusted our salaries across the city,
and that reflects part of that.
- So that's like almost, is that almost $2 million,
is that correct?
- Yes sir, and then there's some other.
- Yeah, for '23, there's also salary savings,
so we don't usually spend all our budget
when it comes to personnel.
There's a turnover and what have you, so.
- It was a pretty big fluctuation from what I can tell
with my eyes from here, but okay, that's it, thanks.
- Good.
All right, so I wanna walk you a little bit
through the process here that we're proposing.
We are proposing to have the ordinance delegate
that authority for adjusting the ECA and the TCRF
to this board.
Part of that would be quarterly balancing of the ECA
within plus or minus $5 million, so we would come to you
on a regular basis, preferably the month before the quarter,
and ask you for any kind of adjustments that are necessary.
Ideally, we'll try to keep those to a minimum
throughout the year, but it will give us that option
to come to you with those adjustment requests.
When we do make an adjustment request,
it'll be designed to go into effect the following month,
which will ideally be that first month of the quarter,
and the city council will have the opportunity
to pull that item and have a discussion if necessary.
I think we already talked about the quarter.
Yeah, so moving forward, we're gonna come to you
on a quarterly basis, and I'll let you know
how we're doing on this fund, and make sure we stay
within that plus or minus $5 million.
- Okay.
- Thank you for the detail on that, appreciate it.
- Yes, sir. - Questions?
Go ahead.
- First, I just wanna say the floating ECA,
I think makes a lot of sense.
Denton forever has had for, I don't know,
seven, eight years or something, has had this flat rate,
and even before that, I think they had a flat rate
for another five or six years previously,
but with volatility and electricity cost,
it probably makes more sense to have this float.
Instead of a single shock where we've been flat
for six years, and we have a 15 or 20% jump
to move up and down every quarter,
I think is a pretty reasonable, a better way to manage that.
If we go back, going back one slide to the ordinance
regarding the ECA, so if we're doing this
before the calendar quarter, so May will approve
for June through August, and then August will approve
September through December, something like that.
- Yeah, the quarters will be the October,
November, December, January, February, March,
April, May, June, July, August, September.
- Okay, do we, yeah, like fiscal calendar.
So the, will that include, it's working on balancing
from the previous quarter, but I think we're all
pretty familiar that Q3 calendar, Q4 fiscal
is probably where 40 or 50% of the cost is going to be.
- Right, so we'll use some forward-looking, too,
for those projections, as well as when we do look back
to see what we've collected, we're only gonna
realistically have the first two months of that quarter
we're looking back at, and then we're gonna project
that third month of that quarter, along with our
forward-looking projections to get that ECA.
So we'll be tuning, it'll be a tuning process.
We're all the time improving our models
that we're gonna be looking at this for.
- Yeah, I think Bill's right.
So we're still looking through that ECA calculator,
and so the next quarter when we come to you,
we'll be happy to kind of walk you through that,
hopefully not get a whole lot of minutiae,
but we'll try to walk you through that
and make sure that we set that.
That may require some adjustments to the ordinance
based on whatever forward-looking basis we wanna do.
Currently, it's just in the following three months.
We're considering maybe looking at six months,
and that way we try to flatten that out over the year,
maybe not have to do as many adjustments.
But again, we'll be prepared to bring that to you
in the next quarter where we're working
through that process now.
- Okay.
Yes, like I said, I think this is a logical thing to do,
and it's gonna be a change for all the citizens
and residents and so forth,
but I think it's the right thing to do.
- It's an industry standard.
- So we're looking at about a 20 to 25% rake height overnight.
Is that, I mean, if I'm a payer of our electric
in the city of Denton,
I'm going to receive a bill that's 20 to 25% higher
overnight with no notice.
I'm just curious.
- Well, we have, again, we've,
we attempted to do a public meeting here with the PUB.
We didn't have quorum.
We did go in front of the council.
We did do a press release on that.
We're gonna continue to try to inform our council,
our customers.
The RECA Chronicle and others on social media
have already kind of picked this up, and it's out there.
I'm getting questions from customers about it.
The reality is, is that our current customer rate,
which is about 10.7 cents per kilowatt hour,
compares very favorable to what's out in the open market.
And so I think people out there understand that,
and they know that,
and they know that we haven't raised rates
in over seven years.
And so, you know, one of the things that we tried to do
was to try to ease into this, if you will,
by not trying to recover the whole year.
So we're just looking at half year,
that way we ease into it in the next year.
We'll go ahead and start recovering 100% of that.
So we certainly understand the impact to customers,
but I think at the end of the day,
we're trying to ensure that this fund
is financially sound going forward.
And unfortunately, this is where we are,
and I think the alternative
is just really not an alternative.
And we'll continue to try to educate
and inform our customers the best we can.
- Yeah, I understand that.
And that's, no one's more concerned
about financial solvency than I am.
What I'm concerned about is,
we're increasing personnel costs by 15%.
I guarantee you're gonna get a lot more calls
than 15% of an increase in personnel for this.
25% is dramatic, and it will happen.
So are we prepared for an influx of maybe less than informed
and less than happy customers?
- Yeah, I think looking at that number,
we could certainly kind of break that out
and give you some more detail.
I think it's important to understand
is that in this particular fund,
salaries, as much as I don't wanna minimize them,
but salaries make up less than 10% of the year-old fund.
And so the larger impact to this fund
is our capital program.
And that's what we're looking at now.
As an example, part of this process,
we pulled out the campus project that we had proposed.
So we've taken $75 million,
and we reduced it to $10 million
to do land acquisition and design.
We've also reduced our overall bond sale
for the current year from 82 million down to 60 million.
And we're now in the process, just completed the process
of looking at our five-year CIP,
and what project can we delay?
What projects can we cash flow a little bit better?
And so we're doing that.
And so what you're gonna see when we come to you
in the budget is gonna be a reduced capital program
that'll have a positive impact on the fund
that's much bigger than anything we're gonna do
on the salary side.
But again, I think what's important to look at
is that the actuals versus the budget
are two different things, right?
And so we really need to give you a better comparison,
and we're certainly happy to follow up with you
with a memo on the details of that.
- Thank you.
- It's good, good.
Sorry, I was just gonna say that was a good point
to pull out of here,
because it is gonna be something that people go,
what are we doing here?
And would that reflect,
I mean, that personnel number I know
is just gonna be a big deal.
It's an obvious thing to look at,
although it's a lower percentage of our rate.
But I mean, are we taking less consulting work
and putting it more in permanent personnel?
- Well, what I can tell you is this,
is that if you go back to fiscal year 2019-20,
fiscal year 2019-20,
where we were in personnel, we were at 189 FTEs.
Where we are today is 187 FTEs.
So we've actually reduced FTEs during that period
and slowly added them back in, right?
And so we've done a lot of work on the personnel side
to minimize and streamline things as best as we can.
And so, again, let us go back and get you the details
on that so that you're a little bit better informed.
- I just wanna, I want a generalization of it.
I mean, if you don't have that today, that's fine.
But just why don't we start spending more money here
on this line item that it's just,
to me, it's an obvious number that comes up.
- Yeah, I think Terry had a good point.
The other thing is as we're looking at the ECA and TCRF,
there are no personal expenses associated
with any of those rates.
All that is on the base rate side.
Bill, if you go back to the five-year forecast,
in the five-year forecast,
we are looking at an additional 5.5% base rate increase
for next year.
And again, that's where we believe
that some of the work we're doing on the CIP side
and other things will reduce that going forward.
But again, the personal expenses have nothing to do
with the TCRF or the ECA.
But I understand the question.
Let us go back.
We'll get you a memo on details on personnel.
- Yeah, and I might have failed to mention,
but the ECA and the TCRF are complete pass-through costs.
Those are costs we incur.
- I get that.
That's a big change and a big number
that people are going to be, oh, what are we doing here?
Is everybody getting a raise
and we're spending this many more million dollars?
It's just a generalization, I think, is all I need.
I don't need a detail of every person.
- I have a question about process.
You're actually asking the City Council
to delegate the authority to approve
these interim quarterly changes to the Public Utility Board.
- Yes, sir.
- Okay.
So are we comfortable with that?
- Hell yeah.
- Yeah.
- Okay.
- Why are we volunteering?
And I know we don't show up a lot,
but that kind of dictates why we don't show up a lot,
'cause it really doesn't make any difference.
And that's been my gripe all the time to the Council.
Why are we asking these boards to show up?
- Well, we're concerned about public low back,
and now we're accepting responsibility for that.
- In the past.
- There's something to keep in mind.
- In the past, this was our task.
- Oh, it was?
- Yes.
- Okay, well, that's good information.
I didn't have that.
Thank you.
- Yeah, Mr. Rebeck, so the current ordinance
already delegates that to the PUB.
I think because we haven't made these changes
in quite some time, we wanna revisit that with the Council.
I think at the end of the day,
ultimately the Council's deal retains final authority.
So this delegation is only as good
as the Council wants it to be.
And so if they decide that the board's
taking some action that they wanna talk about,
they always retain that right.
- I saw that in the write-up for the ordinance,
but I was just curious 'cause it seemed like a change to me,
but if that's the way it used to be,
then that's good to know, good information.
Thank you.
- To piggyback on your statement,
it's unfortunate we're in the economic times that we are.
And for that 25% increase, it will.
It will be a pocket hitter that we need to be prepared for.
And as it, rightfully so, comes back to this committee,
my suggestion is from the past that we used to have,
our meetings will be longer than 30 minutes
and be prepared for that.
And we'll be to the one that makes the motion
and seconds it because they will be the target.
Being facetious, of course.
But I appreciate that.
And I like the idea that it's a pass-through.
So I think that helps.
It's not going into anyone's pocket.
It's a pass-through cost.
We understand pass-through costs.
It's just unfortunate that it catches us here,
but it is what it is and we'd be prepared for it.
- We all know about our $39 phone plan that cost us $80
because of pass-through fees and everything else.
Yeah, so it doesn't matter that it's a $39 phone.
- That was that creeping effect.
And I appreciate that we're gonna be able to look at that.
- Exactly.
- And we will be holding somebody's feet to the fire
versus the council, and I think that's important that we,
because we're right up here.
We're the front line, so why not be able to do that?
- And let me reiterate.
I think DME is the best-run utility we have in the city,
okay, and because of this information,
we get to ask these questions, you know?
And it's really nice to have the respect of,
or y'all to have the respect of the board,
or anyway, y'all go into detail
and be able to explain things, and I appreciate that.
So let me make sure that's clear.
- I'd also be remiss if I didn't give you
a little bit more context.
So the $106, that's our average customer bill right now,
that makes us the second-lowest cost provider in the state.
- And that means we'll get to sell that.
- Yeah, that's the sizzle we need.
- Well, that's the first part of the story.
The second part is once we make this adjustment,
it'll bring us to the middle of the pack,
which I would argue is a little bit more appropriate
for a utility such as DME, who's constantly growing,
constantly expanding, constantly looking
at new and better ways to do things.
- And more than just distribution.
- Yes, sir.
- And this is an industry standard type of rate
that every utility has this on their bill.
I'm served by CoServe.
They're passing it through, my bill went way up.
- And I'll steal a little bit of Mr. Nalti's thunder,
but also don't forget, we're 100% renewable.
- Yes. - That comes with a cost.
None of those compares, I'm telling you about,
that we're middle in the pack of, can make that claim.
So as a fact, in fact, after we make the adjustment,
we're still gonna be the second lowest provider
for a retail 100% product.
- But correct me if I'm wrong,
that 31 million was for natural gas.
- That 31 million was a fuel offset, yeah.
- So again, I'm just an uninformed citizen.
They're gonna say, well, for 100% renewable,
why am I paying $31 million for natural gas?
Now, of course, we all know how that works.
But it's 31 million for natural gas
when we're 100% renewable.
So that will be a talking point.
- Yeah, absolutely, and we'll rely on you all
to take those talking points forward,
and we'll certainly continue to try to educate our customers.
- Well, I think it's great that we are going
to take the gloves off and do what we should be doing.
And we should have a mindset of,
be prepared to ask questions, and ask a bunch,
because they'll be ready to answer it.
- Yeah.
- Thank you. - Any further questions?
Oh, here comes Mr. Nalti.
- Sorry, I stole some of that thunder.
- Did we recognize you?
- I just apologize.
Terry Nalti, Assistant General Manager.
I just wanna correct the record.
The 31.5 million was not for natural gas.
Bill refers to it as a fuel adjustment factor.
It's actually an energy cost adjustment factor.
It's the cumulative cost of supplying market-based energy
to serve the load.
And in this past summer, as you know, it was very hot.
And our demand was significantly higher than we forecasted.
So the cost that we're talking about,
the 31.5 million, was extra wholesale electric cost
that we had to purchase energy
to meet the demands of our customers.
Yes, we do burn natural gas, but we do that
in order to protect our rate payers
from the volatility associated with the intermittency
of our renewable resources.
Were it not for that natural gas
and the cost associated with it,
that 31.5 million would have been more like 100 million.
So that's why we have the DEC,
and it's been referred to as an insurance policy.
It is a mitigant to the intermittency
of the renewable energy.
I hope that clarifies it for you.
- Well, in terms of that offset,
it's kind of, we use that energy center,
the gas plant, if you will,
to offset the high costs of the volatility
from the renewable energy.
- That's correct.
- So it's almost a--
- It's actually not the high cost of the renewable energy,
it's the fact that when the renewable energy
doesn't show up in the marketplace,
the resulting prices in the wholesale market are much higher.
And so, if you lose 10,000 megawatts of wind generation
on a very hot day, you gotta replace that
with very high cost, older generation resources
that aren't dependent upon Mother Nature
to provide the energy.
So, that's what causes the volatility
and the prices to go up.
- Right.
- Now, one last point I'd make is that
there have been a number of changes in the ERCOT market.
And last year, let me say last year, last fiscal year,
the independent market monitor
calculated that the cost of market changes
to the market was eight to $12 billion of additional cost.
And so, if you just take a load ratio share
of our percentage of energy that we consume out of the market,
that's in excess of the 31.5 billion,
or 31.5 million that we're trying to recover here.
So, all utilities in the market
experienced the same phenomenon.
And all utilities, Bill said, we look at comparables.
We wanna make sure that we're being cost effective
and that our rates are competitive.
I expect all utilities in the state to raise their rates.
And on the competitive side,
if you're in competitive encore areas,
right now you're paying 14 to 16 cents per kilowatt hour.
And even with the rate increase,
we're still gonna be under 12 cents.
So, we're doing everything we can
to try to keep the cost down to customers.
There are just a number of these issues
that we have no control over.
And therefore, we have to pass through those costs.
- Thank you. - Thank you.
- On the TCRF, those are directly tied to the changes
in transmission cost of service?
- Yes, sir.
- So, that's half of this rate change
is due to the PUC and that we've been following
via our appeal and lawsuit against them.
So, I think that's also an important factor.
This isn't just fuel cost.
It is now, ERCOT's energy prices
over the last three years have been crazy.
And we see that all over in rates all over Texas.
I think there's also something to consider the,
my understanding is our renewables are,
I should say in the money.
Like they are generating more value
than we are paying for them.
And the deck is also in the money.
When it runs, it's paying all of its operating cost
and it's capital.
The problem is we don't have enough of either apparently.
So, now part of that was we've designed those
eight years ago and nine years.
I don't remember exactly how many years ago,
almost a decade ago.
And we've had lots of load growth since then.
So, and I think that's why we had a flat rate
for seven years was at the time the deck was constructed,
it could cover our entire load,
take us out of the ERCOT market
when the ERCOT market went crazy
and it can no longer do that.
And same thing on our wind and solar.
It's a challenge to know when to expand those
and they are variable and we buy 120 or something percent
of our entire load from wind and solar,
but it doesn't always come when we need it.
So, do we need to move to 140%
or at some point does it break over
and become a cost instead of a benefit?
Because right now our renewables lower our rates.
- So, Devin threw out a lot of stuff here.
So, one, we are working on an RFP now,
we're evaluating that, we're gonna be bringing that to you
to award additional 100 megawatts,
bring on additional 100 megawatts of solar
and an additional 100 that we're also working on.
So, we're looking at additional 200 megawatts of solar
that we're gonna be bringing to the board
and to the council for consideration.
The other item that you mentioned,
so we are working on updating our den renewable resource plan
to address that sort of question
and certainly that'll be presented to you
and to the council in a kind of a cafeteria plan,
menu plan so that you understand what the options are
and what the costs are as well
to keeping the status quo, making changes to that,
making other investments and what have you
and internally we'll be looking for direction on that.
The other thing that I'll just remind you
and you referenced our ongoing
transmission cost of service case,
that was nexus of $30 million that disappeared overnight.
And so, that certainly has had an impact
and we're trying to react as best we can
to those types of financial issues.
- Any further questions?
Okay, do we have a motion to approve?
Thank you Billy.
Second?
Thank you.
All in favor say aye.
- Aye. - Opposed?
There we go.
- Thank you. - Thank you.
Management reports.
- Madam Chair, members of the board,
so the first item that we have here for you
is a follow up item.
I see that Brett is here.
So Brett kind of helped put that together for us
and so our hope is that that's given you
the information needed on the impact
on all the changes to the criteria manual.
But certainly if there's questions that you have
on any of that, certainly Brett's here
and we have other staff here that can address that.
- I have a question for Brett.
- Brett Bourgeois, Deputy City Engineer.
- Thank you for coming today
and I appreciate you generating a report,
especially since I'm pretty much the one who asked for it.
- Of course.
- One of the things I was wondering is
it seemed that the costs that are mentioned here
are primarily cost to the city?
- So with regards to the stormwater cost you're referring to,
yeah, so currently we do not have a requirement
to mitigate sediment or sediment office development sites
from private developments.
That's a requirement of our MS4 permit with the state
or the federal government and that is a recommendation
that most municipalities and most states already require.
We do not have that requirement.
We're anticipating EPA indicated they're gonna make
that a federal requirement in the next update.
So we want to kind of get in line with the industry
and because we don't have that sediment requirement,
our staff has to clean and maintain the channels
and the culverts currently.
And I think I put a number in there.
We ran about five years of data.
It's about 300 or so thousand dollars a year on average
to clean out sediment from the existing channels
and culverts currently the city has to pay for.
So that will still occur because those sites
are not currently being mitigated,
but we're trying to limit any future sites
from having sediment deposits into the system.
- Okay, so in theory there could be some savings then
to the city's operating budget as a result of these changes.
What I was primarily concerned about were costs
to the public, so if it costs more to build culverts
and drainage, then it's gonna put more into the tax base
as a result of higher bond costs,
or it's going to cause developers to have higher costs
to develop property for these kind of changes.
Those are kind of some of the things I was looking for.
So I'm not sure that those were kind of addressed
in your memo to cost to others
as opposed to internal cost to the city.
- So we looked at the cost for others.
They're the only one, there's no way for us to estimate
the stormwater impact cost or the changes
to the stormwater criteria manual to others
because they're so highly dependent upon the site,
the type of development and the type of mitigation measure
they decide to go with.
So about three or four different independent variables
that are all very selective.
We reached out to iSwim, which is our guidance document
that we adopted from the Metroplex,
and we spoke with them about how to get some costs.
We spoke with our consultants about how to estimate costs,
and they directed us to these online tools
we provided links to within their memo
that you can go in there, you can put in the size
of your site, the amount of impervious surface
you're putting in, the type of mitigation measure
you're choosing, and then it'll give you
an approximate installation cost, operating cost,
maintenance cost, et cetera, and the maintenance timeframes.
So they do have online tools.
You can put in all those parameters
for your different sites.
Every site is so dependent, though we didn't feel comfortable
putting up a number into the report
that's so dependent on so many factors.
- Okay, well I think on the stormwater side,
and I certainly understand that.
I think the only one that you're able to
sort of more clearly talk about was street lighting.
So I'm assuming that's increased
is both in the cost of the development
and in the cost of operation.
- I think Mr. Fielder here would be able
to speak more to the streetlight one.
The streetlight one is one that's already been adopted.
- While you're up there.
- Yes.
- Is this coming out, is this,
the mitigation is going to stormwater, et cetera?
Does that come from the drainage budget?
- Correct.
All right.
- Move it down.
- Jerry Fielder, Division Engineering Manager.
Could you repeat your question?
I was looking through my emails, I'm sorry.
- No, I was saying the street lighting
was the thing that was most obvious
to be able to calculate a cost to,
and it's going to increase the cost to 56%.
That's a reasonable number.
You increase the number of lights, drops,
power pole, it's all gonna cost money.
But what about the cost of operation?
Is that passed on to the resident?
Is that passed on to the city budget?
How does that work?
- A little bit different from what Brett talked about,
but the additional cost for street lighting
is typically borne by the developer.
That's the majority of the folks
who put in the streetlights in this,
so we pass that on to the developer.
- But the cost of operating lights.
- Yes, the cost of operating is through the rates
of what the city's component is.
The city has to pay for the energy,
and that's in the rates.
So yes, with a few more lights,
there's gonna be a little bit more on that.
- Okay, so that's just populated
through the entire city rate case,
which you all just covered in great detail.
- Yes. - Okay.
All right, well, thank you for the clarification.
I don't have any other questions, thank you.
- Thank you.
- All right, so the next item that you have in front of you
is just a future agenda.
Obviously, today we've covered the ECA-TCRF.
Coming up on May 20th, we'll start kind of the budget process
and the finance department will bring to you
all of the utility budgets
and with all the detail that you've customarily gotten,
and we'll certainly be able to get into as much detail
as you would like on that.
So just plan accordingly, if you will.
So we certainly would love to make sure
that we have a quorum of these dates.
The most important date is July 8th,
'cause that's when we'll be asking you
to approve rate changes and what have you,
so they can then go to the council for further discussion.
And then for new business items,
today we've knocked out another one,
which is on the criteria manual questions,
and we still have one left regarding fleet,
but we still have some time on that one.
So with that, Madam Chair, that concludes our update.
Any questions, anyone wants to have some?
- Questions?
Mr. Dunn, good job, nobody's asking.
That brings us to concluding items.
Does any board member wish to say something to the public
or have something put on a future agenda?
Okay, seeing none, it is actually 944.
Do we have a motion to adjourn?
- So moved.
- Okay.
(laughing)