1
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 (indistinct)

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 - Okay, it is nine o'clock and we do have a quorum.

3
00:00:05,360 --> 00:00:08,500
 So we'll call to order the public utilities board

4
00:00:08,500 --> 00:00:12,260
 for the city of Denton on Monday, July 8th, 2024.

5
00:00:12,260 --> 00:00:14,620
 We do have a presentation from the public today.

6
00:00:14,620 --> 00:00:18,380
 Mr. Ed Soph has requested to speak on the work item

7
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 for the value of solar.

8
00:00:20,300 --> 00:00:22,960
 So if you'd like to step up.

9
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 He's a former PUB board member.

10
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 - Is this mic working?

11
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 - It should.

12
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 (papers rustling)

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 - And you have four minutes.

14
00:00:35,200 --> 00:00:36,040
 - Okay.

15
00:00:36,040 --> 00:00:37,840
 Thanks.

16
00:00:37,840 --> 00:00:38,680
 Good morning.

17
00:00:38,680 --> 00:00:39,520
 My name's Ed Soph.

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 I live at 1620 Victoria Drive here in Denton.

19
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 Lived here about over 30 years.

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00:00:45,000 --> 00:00:48,860
 I'm sure you know that by 2050,

21
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 Denton County's population is projected to exceed two million

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 and the electricity demand is expected to double by 2050.

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 Texas's energy output must increase 26 to 59% by 2050.

24
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 We are in a dire situation.

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 Long-term decisions driven by societal,

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 environmental and economic interests are essential

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 if we are to have a livable and stable future.

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 The value of solar study before you

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 does not adequately address the long-term.

30
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 It does not factor in the long-term societal benefits

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 of rooftop solar for the environment,

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 our health and wellbeing,

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 and for the resilience of Denton's infrastructure and economy.

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 By such omissions, it tacitly endorses current policies,

35
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 gutting greensense incentives for solar installations,

36
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 and future policies, should you endorse this study,

37
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 that will kill net metering

38
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 and further drastically discourage

39
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 residential distributed generation.

40
00:02:00,760 --> 00:02:04,780
 In 2023, 60% of ERCOT's power

41
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 was generated with fossil fuels.

42
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 Renewable energy returned to the grid

43
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 by Denton's rooftop solar owners

44
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 contributes to that remaining 40% of non-fossil fuel power.

45
00:02:17,740 --> 00:02:23,280
 A grid-tied system is an investment in the grid itself.

46
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 It's an investment in a livable future.

47
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 The more solar distributed generation,

48
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 the less DME will have to spend

49
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 on infrastructure and electricity.

50
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 Solar can reduce the economic impact of peak demand

51
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 when electricity is most expensive,

52
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 and the more solar power returned to the grid,

53
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 the greener the grid becomes.

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 The short-sighted solar compensation policies

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 of non-competitive monopoly utilities

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 have limited ERCOT's total installed rooftop solar capacity

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 to less than 3% of its technical potential.

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 To ensure that rooftop solar continues,

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 pardon me, to contribute

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 to ERCOT's reliability,

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 utilities must provide fair compensation

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 for the societal benefits that rooftop solar provides

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 to the grid and the community.

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 The VOS study before you denies any societal benefits

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 of rooftop solar energy generation on the premise

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 that DME already provides 100% renewable energy

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 because it purchases renewable energy certificates

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 and power purchase agreements to cover Denton's load.

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 That renewable generated power is not directly transmitted

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 to DME's customers from a solar or wind installation,

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 but from the 60% fossil-fueled ERCOT grid.

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 Do those recs and PPAs actually make

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 Denton's air cleaner and healthier?

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 Do they really combat the climate change

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 that is costing us more and more to live?

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 No, they don't.

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 Not when the 12 natural gas-fired reciprocating generators

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 of the DEC, the Denton Energy Center, are fired up.

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 The DEC has admitted into our air between 2018,

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 when it started, and 2023, over 1.5 billion,

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 that's with a B, 1.5 billion pounds of CO2e emissions.

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 That's the equivalent of emissions from 166,000

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 gasoline-powered vehicles driven for one year.

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 You'd have to burn 767 million pounds of coal

85
00:04:47,020 --> 00:04:50,420
 to match the DEC's CO2e emissions.

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00:04:50,420 --> 00:04:54,780
 DME's rooftop solar customers are consistently reducing

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 greenhouse gas emissions.

88
00:04:56,460 --> 00:04:58,740
 - Excuse me, Mr. Sulf, that was the timer.

89
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 - Pardon me?

90
00:04:59,560 --> 00:05:00,580
 - That was the timer going off.

91
00:05:00,580 --> 00:05:01,500
 - Oh, I didn't hear it.

92
00:05:01,500 --> 00:05:02,620
 Can I have 30 seconds?

93
00:05:02,620 --> 00:05:03,460
 - You can have 30 seconds.

94
00:05:03,460 --> 00:05:04,280
 - Thank you.

95
00:05:04,280 --> 00:05:06,220
 These massive emissions don't go away.

96
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 They will continue to warm the planet

97
00:05:07,820 --> 00:05:10,100
 for tens of thousands of years.

98
00:05:10,100 --> 00:05:12,100
 That's the real long-term.

99
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 And this VOS study in discounting the societal,

100
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 economic, and environmental benefits

101
00:05:17,380 --> 00:05:20,520
 of rooftop solar in Denton does not expedite

102
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 what should be done.

103
00:05:21,980 --> 00:05:25,860
 More equitably incentivized and fairly compensated

104
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 residential, community, and commercial distributed

105
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 generation, as well as battery storage.

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 I urge you to recommend to the City Council

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 that net metering be maintained for all customers,

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 and that the societal benefits of solar be recognized

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 and included in the computation of a value of solar rate

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 based upon the policy, neutral, and non-biased

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 National Standard Practice Manual

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 for Benefit Cost Analysis of Distributed Energy Resources.

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00:05:57,180 --> 00:05:58,540
 Thank you for your time.

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 - Thank you.

115
00:05:59,380 --> 00:06:05,060
 All right, then we'll move into the consent agenda.

116
00:06:05,060 --> 00:06:08,580
 Does any board member wish to pull agenda items A through E?

117
00:06:11,380 --> 00:06:13,740
 Okay, which one would you like to pull, Billy?

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00:06:13,740 --> 00:06:18,460
 E as in Edward.

119
00:06:18,460 --> 00:06:21,300
 All right, any others?

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00:06:21,300 --> 00:06:23,760
 Do we have a motion to approve items A through D?

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 - So moved.

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 - Second.

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 - All in favor say aye.

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 - Aye.

125
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 - Opposed?

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 Motion carries.

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 Item E.

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 Here she comes.

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 (dial tone)

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 - Good morning.

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 (dial tone)

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 - And your question.

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 - And if you have a question,

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 I'm Tracy Beck, project manager,

135
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 and would love to hear.

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 I was gonna prep in case you needed a presentation.

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00:07:08,740 --> 00:07:10,220
 - I'd like to see that.

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00:07:10,220 --> 00:07:11,300
 - Excellent.

139
00:07:11,300 --> 00:07:13,860
 And do you have a specific question while I pull it up?

140
00:07:13,860 --> 00:07:15,540
 Might be able to answer the question

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 and pull it up at the same time.

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 - You first.

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 - All right, you are very welcome.

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 I might be able to pull it up at the same time.

145
00:07:22,000 --> 00:07:22,840
 Let's see.

146
00:07:22,840 --> 00:07:26,320
 There we go.

147
00:07:26,320 --> 00:07:27,140
 Yeah, I did that twice,

148
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 but I think I had something overlaying.

149
00:07:28,860 --> 00:07:31,060
 All right, good morning, everybody.

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 I'm Tracy Beck.

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 I am the project manager for the CMAR Mingo project.

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 And about a month or so ago,

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 maybe two months at this point, time's flying.

154
00:07:40,780 --> 00:07:42,880
 You have also seen the presentation

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 for the design contract for Kimley-Horn.

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 And this is for the pre-construction services

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 for that project.

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 This is the Mingo Riddell Quiet Zone project.

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 It's a mouthful to say,

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 so we're just kind of blending all the words together.

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 The project background.

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 It's a railroad quiet zone.

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 It's an old bond program that you've seen before.

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 We're adding one new railroad crossing,

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 which is at Riddell.

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 And then we're also impacting six additional

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 existing railroad crossings.

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 That includes removing two crossings more than likely.

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 We'll take the direction of UPRR,

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 the Union Pacific Railroad,

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 and then improving the other ones

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 for quiet zone components.

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 The road, pedestrian, bike drainage portion of the project

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 includes approximately 1,500 linear feet of roadway,

175
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 bicycle, pedestrian facilities,

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 as well as some photometric studies

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 for lighting installation.

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 Drainage study improvements for the area,

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 because we also have some impacts to the service center.

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 And we also have a service center project that's ongoing.

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 So we want to watch what we're doing

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 with the roadway projects overlapping with the other CIPs.

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00:08:44,740 --> 00:08:46,980
 And then utilities for what we're here for today

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 is a public utilities board,

185
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 is the 8,600 linear feet of water main replacement,

186
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 about 5,000 linear feet of sanitary sewer.

187
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 And part of what you're seeing here on the graphic is,

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 let's see if I've got a pointer.

189
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 We have roughly four components to the project.

190
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 The Riddell widening, which is adjacent to TWU.

191
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 The Riddell extension,

192
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 which comes around the service center,

193
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 if you're familiar from Texas,

194
00:09:11,580 --> 00:09:13,980
 it's gonna be a new extension realignment

195
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 that'll go around the new service center.

196
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 And that's going to eliminate the withers crossing

197
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 that currently gets you into the service center

198
00:09:20,860 --> 00:09:24,100
 and make a really nice four-legged intersection.

199
00:09:24,100 --> 00:09:27,500
 And then the green is going to be the mingo widening.

200
00:09:27,500 --> 00:09:28,620
 And that's gonna be where you're gonna see

201
00:09:28,620 --> 00:09:31,080
 the pedestrian improvements, water, utilities,

202
00:09:31,080 --> 00:09:32,700
 are throughout all of these sections.

203
00:09:32,700 --> 00:09:35,440
 And then the dots are gonna be the railroad crossings.

204
00:09:35,440 --> 00:09:39,140
 The contract that we have for the pre-construction services

205
00:09:39,140 --> 00:09:41,020
 is approximately, is not approximately,

206
00:09:41,020 --> 00:09:44,100
 it's exactly now, $495,000.

207
00:09:44,100 --> 00:09:46,540
 And this is for the lump sum services

208
00:09:46,540 --> 00:09:48,480
 that come through cost modeling

209
00:09:48,480 --> 00:09:51,200
 and the background work that the CMRs provide.

210
00:09:51,200 --> 00:09:53,860
 That's an assistance with the engineering contract.

211
00:09:53,860 --> 00:09:55,500
 So we take a look at the project,

212
00:09:55,500 --> 00:09:57,320
 understand better of what can be designed,

213
00:09:57,320 --> 00:09:58,660
 and then we work with the contractor

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00:09:58,660 --> 00:10:01,200
 to better understand how that construction

215
00:10:01,200 --> 00:10:02,220
 can make more sense.

216
00:10:02,220 --> 00:10:04,420
 And just do it wisely.

217
00:10:04,420 --> 00:10:07,800
 See how their suggestions from construction frequently

218
00:10:07,800 --> 00:10:09,260
 is we wouldn't have built it that way.

219
00:10:09,260 --> 00:10:13,180
 So how would we build it better in cost savings?

220
00:10:13,180 --> 00:10:14,900
 The additional hourly service,

221
00:10:14,900 --> 00:10:16,260
 typically when you have a CMR,

222
00:10:16,260 --> 00:10:19,660
 you have a GMP, the guaranteed maximum price.

223
00:10:19,660 --> 00:10:22,460
 And several of our CMRs that you've seen come through

224
00:10:22,460 --> 00:10:25,560
 and that are ongoing will have multiple packages.

225
00:10:25,560 --> 00:10:27,540
 And this particular project,

226
00:10:27,540 --> 00:10:29,600
 we're not sure how many packages we want.

227
00:10:29,600 --> 00:10:31,080
 In order to look at cost savings,

228
00:10:31,080 --> 00:10:34,740
 what we've asked is to reduce the main contract

229
00:10:34,740 --> 00:10:37,580
 that originally came in at $585,000

230
00:10:37,580 --> 00:10:40,540
 back out at GMP and save $90,000

231
00:10:40,540 --> 00:10:42,540
 if we didn't need that GMP.

232
00:10:42,540 --> 00:10:44,060
 So this additional services

233
00:10:44,060 --> 00:10:45,900
 is just kind of a cost savings effort.

234
00:10:45,900 --> 00:10:48,820
 If we decide to build it all in one package,

235
00:10:48,820 --> 00:10:50,940
 we've saved the $90,000.

236
00:10:50,940 --> 00:10:53,940
 Otherwise, the whole contract will be $585,000.

237
00:10:53,940 --> 00:10:58,120
 To date, we're on schedule.

238
00:10:58,120 --> 00:11:00,300
 We selected the design firm back in May.

239
00:11:00,300 --> 00:11:01,740
 Today is the bolded area.

240
00:11:01,740 --> 00:11:03,900
 We're here asking Public Utilities Board

241
00:11:03,900 --> 00:11:05,140
 for the approval to move forward

242
00:11:05,140 --> 00:11:06,900
 with the pre-construction project.

243
00:11:06,900 --> 00:11:09,300
 We'll be taking it to city council as well.

244
00:11:09,300 --> 00:11:11,100
 The design is gonna start

245
00:11:11,100 --> 00:11:13,180
 as soon as we have approval for the engineering.

246
00:11:13,180 --> 00:11:15,020
 We have not started with the engineering services.

247
00:11:15,020 --> 00:11:17,300
 We did contract them earlier.

248
00:11:17,300 --> 00:11:20,660
 They're out doing pre-data collection.

249
00:11:20,660 --> 00:11:22,260
 So if you see any activity out there,

250
00:11:22,260 --> 00:11:25,260
 just get in survey right away, things, but no design.

251
00:11:25,260 --> 00:11:27,460
 And then we'll move into the real estate construction

252
00:11:27,460 --> 00:11:28,620
 and then final closeout.

253
00:11:28,620 --> 00:11:31,340
 We're looking at it taking approximately three years.

254
00:11:31,340 --> 00:11:32,700
 No telling because we are working

255
00:11:32,700 --> 00:11:34,220
 with Texas Women's University

256
00:11:34,220 --> 00:11:36,180
 as well as the Union Pacific Railroad.

257
00:11:36,180 --> 00:11:38,700
 Both of those can be a little complicated,

258
00:11:38,700 --> 00:11:40,200
 but not impossible.

259
00:11:40,200 --> 00:11:42,420
 So today's request would be the approval

260
00:11:42,420 --> 00:11:47,420
 to take this to council for the amount of $585,000.

261
00:11:47,420 --> 00:11:48,940
 And the team that we selected

262
00:11:48,940 --> 00:11:52,780
 through our procurement review was Sunt Construction.

263
00:11:52,780 --> 00:11:53,980
 We've worked with them in the past.

264
00:11:53,980 --> 00:11:56,000
 There were four groups that applied

265
00:11:56,000 --> 00:11:58,780
 and they came out on top with our evaluation.

266
00:11:58,780 --> 00:12:02,500
 Questions?

267
00:12:02,500 --> 00:12:03,820
 - Questions, Mr. Chief.

268
00:12:03,820 --> 00:12:06,940
 - Okay, so I was hoping we had some detail

269
00:12:06,940 --> 00:12:11,940
 of the 490, was it 490, 495, whatever it was.

270
00:12:11,940 --> 00:12:17,600
 - What would you like to know?

271
00:12:17,600 --> 00:12:22,020
 - The breakdown? - The breakdown, yeah.

272
00:12:22,020 --> 00:12:24,240
 - I do not have that today,

273
00:12:24,240 --> 00:12:25,980
 but I'll be glad to share that with you.

274
00:12:25,980 --> 00:12:29,580
 But is it based on hours and people?

275
00:12:29,580 --> 00:12:32,500
 And I guess probably pickups

276
00:12:32,500 --> 00:12:35,100
 would be your only equipment cost.

277
00:12:35,100 --> 00:12:37,700
 - Yeah, so Seth Garcia, Deputy Director of Capital Projects.

278
00:12:37,700 --> 00:12:41,020
 So in the RFP, we do request their estimated hours

279
00:12:41,020 --> 00:12:41,860
 for each phase.

280
00:12:41,860 --> 00:12:44,500
 So at each deliverable, they'll give us hours

281
00:12:44,500 --> 00:12:46,880
 estimated for their pre-construction team,

282
00:12:46,880 --> 00:12:48,940
 for estimating, scheduling,

283
00:12:48,940 --> 00:12:51,100
 putting together the construction management plan,

284
00:12:51,100 --> 00:12:52,320
 quality plan.

285
00:12:52,320 --> 00:12:54,320
 We've got all that broken out in the RFP

286
00:12:54,320 --> 00:12:55,420
 that we could provide.

287
00:12:56,820 --> 00:13:00,300
 - Okay, it's not in here, in our backup.

288
00:13:00,300 --> 00:13:03,300
 - Correct, so our RFPs have two pieces.

289
00:13:03,300 --> 00:13:06,100
 It's the cost proposal and the technical proposal.

290
00:13:06,100 --> 00:13:07,380
 In the cost proposal,

291
00:13:07,380 --> 00:13:10,140
 we get a breakout of those pre-construction services,

292
00:13:10,140 --> 00:13:13,300
 we get a breakout of estimated general conditions costs,

293
00:13:13,300 --> 00:13:15,180
 and then we get our construction fee.

294
00:13:15,180 --> 00:13:18,020
 Two of those things are tied into the contract.

295
00:13:18,020 --> 00:13:20,860
 Of course, this pre-con fee and our construction fee,

296
00:13:20,860 --> 00:13:23,460
 the general conditions cost is just their early estimate

297
00:13:23,460 --> 00:13:26,580
 that we work through and negotiate during our pre-construction

298
00:13:26,580 --> 00:13:27,420
 process.

299
00:13:27,420 --> 00:13:29,660
 - Okay.

300
00:13:29,660 --> 00:13:34,460
 Yeah, I like to see those things, but

301
00:13:34,460 --> 00:13:37,660
 I don't know why they're not part of it,

302
00:13:37,660 --> 00:13:39,220
 they were part of the bid package that could have been

303
00:13:39,220 --> 00:13:40,660
 attached to this, right?

304
00:13:40,660 --> 00:13:44,460
 - I would leave that to procurement if,

305
00:13:44,460 --> 00:13:46,740
 I don't know that historically we've ever attached

306
00:13:46,740 --> 00:13:50,540
 portions of the cost proposal to our presentations.

307
00:13:50,540 --> 00:13:52,340
 We do receive that information.

308
00:13:52,340 --> 00:13:54,940
 I know specifically for Sunt,

309
00:13:54,940 --> 00:13:56,300
 I believe there was almost,

310
00:13:56,300 --> 00:14:00,700
 there were hundreds if not thousands of hours

311
00:14:00,700 --> 00:14:03,460
 that they were not billing us that they call free con.

312
00:14:03,460 --> 00:14:05,500
 So basically we were covering the cost of a couple

313
00:14:05,500 --> 00:14:08,300
 estimators and their senior project manager

314
00:14:08,300 --> 00:14:10,140
 for the duration of the project,

315
00:14:10,140 --> 00:14:12,140
 but that breakout does show.

316
00:14:12,140 --> 00:14:14,620
 - I would imagine that cost is in there.

317
00:14:14,620 --> 00:14:15,460
 - Yes, sir.

318
00:14:15,460 --> 00:14:19,140
 - They'll recoup that at some point.

319
00:14:21,020 --> 00:14:23,100
 - Hi, Lori Hill, purchasing manager.

320
00:14:23,100 --> 00:14:24,620
 Yeah, we have not included that.

321
00:14:24,620 --> 00:14:27,780
 We would just include what's in the contract,

322
00:14:27,780 --> 00:14:30,380
 but we can easily send it to you.

323
00:14:30,380 --> 00:14:32,020
 - It doesn't matter today.

324
00:14:32,020 --> 00:14:34,540
 I mean, it's going to the council after us,

325
00:14:34,540 --> 00:14:37,900
 so there's no reason to supply it now.

326
00:14:37,900 --> 00:14:44,540
 Back to the engineering side of it,

327
00:14:44,540 --> 00:14:46,460
 qualifications and experiences.

328
00:14:46,460 --> 00:14:48,820
 You got experience of the firm.

329
00:14:49,740 --> 00:14:54,740
 You've got Sunt at 17.6, Arch Western at 20,

330
00:14:54,740 --> 00:14:58,940
 McCarthy at 15, Flatiron at 12.8.

331
00:14:58,940 --> 00:15:04,620
 These are all four large companies,

332
00:15:04,620 --> 00:15:07,260
 which I am confident have the experience

333
00:15:07,260 --> 00:15:09,940
 and qualification to perform this project.

334
00:15:09,940 --> 00:15:14,100
 I'm curious as to how a company like Flatiron

335
00:15:14,100 --> 00:15:16,580
 gets a 12.8.

336
00:15:16,580 --> 00:15:19,500
 You don't have the details, so I have to ask you.

337
00:15:19,500 --> 00:15:20,340
 - Yeah, absolutely.

338
00:15:20,340 --> 00:15:21,380
 So when we look at these,

339
00:15:21,380 --> 00:15:23,140
 we're looking at the specific information

340
00:15:23,140 --> 00:15:24,220
 provided in the RFP.

341
00:15:24,220 --> 00:15:25,860
 So qualifications and experience

342
00:15:25,860 --> 00:15:28,580
 also ties to the proposed personnel.

343
00:15:28,580 --> 00:15:30,860
 A lot of those folks that were on,

344
00:15:30,860 --> 00:15:33,060
 for instance, say the Flatiron or the Sunt,

345
00:15:33,060 --> 00:15:37,020
 had much more significant at grade crossing

346
00:15:37,020 --> 00:15:39,220
 and work with Union Pacific Railroad,

347
00:15:39,220 --> 00:15:41,420
 which was one of the key items that we pointed out

348
00:15:41,420 --> 00:15:43,820
 that we wanted to see in the RFP.

349
00:15:43,820 --> 00:15:46,060
 - You said Flatiron, did you mean Sunt?

350
00:15:46,060 --> 00:15:47,140
 - No, Flatiron.

351
00:15:47,140 --> 00:15:48,740
 - You said Flatiron had more experience

352
00:15:48,740 --> 00:15:50,140
 working with the railroad?

353
00:15:50,140 --> 00:15:51,820
 - I'm sorry, Sunt did.

354
00:15:51,820 --> 00:15:53,860
 Flatiron did not have the experience

355
00:15:53,860 --> 00:15:55,540
 of Sunt and Archer-Western.

356
00:15:55,540 --> 00:15:59,100
 I think Archer-Western's RFP had over 200 at grade crossings

357
00:15:59,100 --> 00:16:02,220
 that they had worked on with that proposed project team.

358
00:16:02,220 --> 00:16:03,980
 Sunt was right behind that.

359
00:16:03,980 --> 00:16:05,740
 Flatiron's proposed project team

360
00:16:05,740 --> 00:16:08,340
 did not have near the experience or qualification

361
00:16:08,340 --> 00:16:09,540
 working with the railroad.

362
00:16:09,540 --> 00:16:11,420
 - Okay, neither did,

363
00:16:11,420 --> 00:16:13,740
 well, Archer looks like they had the most.

364
00:16:13,740 --> 00:16:14,580
 - Correct.

365
00:16:14,580 --> 00:16:18,420
 - But their price was crazy.

366
00:16:18,420 --> 00:16:20,380
 I appreciate you looking at the price.

367
00:16:20,380 --> 00:16:22,140
 - Yes, sir.

368
00:16:22,140 --> 00:16:24,060
 And that is something that we talked through significantly

369
00:16:24,060 --> 00:16:29,060
 with Archer-Western during their interview.

370
00:16:29,060 --> 00:16:31,980
 And for them, it was the personnel

371
00:16:31,980 --> 00:16:33,220
 that they felt they needed

372
00:16:33,220 --> 00:16:37,140
 to be able to manage the project adequately.

373
00:16:37,140 --> 00:16:39,140
 That was really driving up that cost.

374
00:16:39,140 --> 00:16:42,300
 They had a third party or a subcontractor

375
00:16:42,300 --> 00:16:43,180
 that they were gonna bring in

376
00:16:43,180 --> 00:16:45,900
 to help with the railroad coordination.

377
00:16:45,900 --> 00:16:48,700
 - Does some of that item, when it says experience

378
00:16:48,700 --> 00:16:51,820
 of the firm have something to do with our,

379
00:16:51,820 --> 00:16:54,940
 the city's experience with the firm?

380
00:16:54,940 --> 00:16:56,420
 - So currently we don't have anything

381
00:16:56,420 --> 00:16:59,660
 that allows us to bring in that direct,

382
00:16:59,660 --> 00:17:01,420
 to tie it to points, if you will.

383
00:17:01,420 --> 00:17:05,180
 So we're specifically basing it off of the proposed RFP.

384
00:17:05,180 --> 00:17:07,580
 - Gotcha.

385
00:17:07,580 --> 00:17:12,260
 Okay, so it's what they put on the RFP.

386
00:17:13,420 --> 00:17:16,980
 - That is correct, is what we're basing it off of.

387
00:17:16,980 --> 00:17:19,180
 And so we do have different page limits

388
00:17:19,180 --> 00:17:21,220
 that go into those RFPs.

389
00:17:21,220 --> 00:17:24,780
 I think for this one, we were at 25 or 30 pages.

390
00:17:24,780 --> 00:17:27,140
 So again, that's what we're using to evaluate.

391
00:17:27,140 --> 00:17:28,660
 And then we go through the interview process

392
00:17:28,660 --> 00:17:30,660
 with up to the top three firms.

393
00:17:30,660 --> 00:17:34,580
 - So it's all based on what they've submitted?

394
00:17:34,580 --> 00:17:35,420
 - Correct.

395
00:17:35,420 --> 00:17:41,340
 - I guess it's hard to verify some of those things, right?

396
00:17:41,340 --> 00:17:43,140
 - It is, so we do call references.

397
00:17:43,140 --> 00:17:43,980
 We do check around.

398
00:17:43,980 --> 00:17:46,380
 And of course we do use the interview process

399
00:17:46,380 --> 00:17:48,820
 to be able to ask questions.

400
00:17:48,820 --> 00:17:51,660
 I believe for your son and Archer Western,

401
00:17:51,660 --> 00:17:54,180
 we had an hour and a half long interview process

402
00:17:54,180 --> 00:17:55,940
 that we went through these technical proposals

403
00:17:55,940 --> 00:17:57,500
 and were able to ask questions

404
00:17:57,500 --> 00:17:59,180
 with the full evaluation team.

405
00:17:59,180 --> 00:18:03,020
 - And who's on the evaluation team?

406
00:18:03,020 --> 00:18:05,420
 Is it engineering, procurement?

407
00:18:05,420 --> 00:18:07,540
 - Yeah, so typically we make it up

408
00:18:07,540 --> 00:18:11,580
 of capital project staff and then other stakeholders.

409
00:18:11,580 --> 00:18:13,820
 So for this one, we had CIP staff

410
00:18:13,820 --> 00:18:18,020
 as well as some streets traffic folks and utilities.

411
00:18:18,020 --> 00:18:20,980
 - Other questions?

412
00:18:20,980 --> 00:18:21,820
 Oh, yes, Mr. Williams.

413
00:18:21,820 --> 00:18:25,300
 - If I could ask on, and it might've been discussed,

414
00:18:25,300 --> 00:18:26,700
 as you said two months ago,

415
00:18:26,700 --> 00:18:30,460
 the water and the sewer lines,

416
00:18:30,460 --> 00:18:33,100
 are they gonna be the same size they are now?

417
00:18:33,100 --> 00:18:34,780
 Are they gonna be larger?

418
00:18:34,780 --> 00:18:38,260
 Do you, is it too early to ask for that number?

419
00:18:38,260 --> 00:18:39,940
 - It's not too early to ask for that.

420
00:18:39,940 --> 00:18:42,780
 We reached out to our stakeholders asking

421
00:18:42,780 --> 00:18:46,220
 what utilities are out there do you need replaced, upsized?

422
00:18:46,220 --> 00:18:48,700
 And we worked closely with our utilities department.

423
00:18:48,700 --> 00:18:50,940
 They went through, scrutinized what they have internally

424
00:18:50,940 --> 00:18:52,100
 in their long range plans,

425
00:18:52,100 --> 00:18:54,780
 and then they came back and provided us with the limits

426
00:18:54,780 --> 00:18:56,460
 of what those utilities,

427
00:18:56,460 --> 00:18:59,260
 what ones they wanted to be included in this project,

428
00:18:59,260 --> 00:19:02,700
 as well as any upsizing and any abandonments.

429
00:19:02,700 --> 00:19:05,500
 So that was part of our scoping with the project.

430
00:19:05,500 --> 00:19:08,060
 And that's where these numbers came from.

431
00:19:08,060 --> 00:19:10,540
 - And what was the size if I could recall?

432
00:19:10,540 --> 00:19:12,620
 - A variety of sizes.

433
00:19:12,620 --> 00:19:14,380
 All four roads have different sizes.

434
00:19:14,380 --> 00:19:15,940
 The majority of the sewer lines are eight inches.

435
00:19:15,940 --> 00:19:17,540
 - But I'm thinking the residential would be lower,

436
00:19:17,540 --> 00:19:19,500
 but I was wondering if eight or larger,

437
00:19:19,500 --> 00:19:20,340
 that's what I was curious.

438
00:19:20,340 --> 00:19:22,220
 - Correct, there's some that are 12 inches

439
00:19:22,220 --> 00:19:23,700
 that are going through there.

440
00:19:23,700 --> 00:19:25,540
 It's their master plan is what they were looking at

441
00:19:25,540 --> 00:19:27,060
 is to see what their long-term vision,

442
00:19:27,060 --> 00:19:29,060
 it wasn't just replacing like with like,

443
00:19:29,060 --> 00:19:31,300
 they took a look at what they needed

444
00:19:31,300 --> 00:19:32,620
 and then partnered with us.

445
00:19:32,620 --> 00:19:35,820
 And those fees will be part of the utilities project

446
00:19:35,820 --> 00:19:38,300
 is us working with them to design it,

447
00:19:38,300 --> 00:19:39,940
 as well as other utilities

448
00:19:39,940 --> 00:19:41,100
 that we're gonna be working with.

449
00:19:41,100 --> 00:19:42,460
 - Wonderful, and then one other thing.

450
00:19:42,460 --> 00:19:43,300
 - Yes, sir.

451
00:19:43,300 --> 00:19:44,120
 - And I know it's not really ours,

452
00:19:44,120 --> 00:19:47,100
 but I was just curious as you cross the railroad Ruedel,

453
00:19:47,100 --> 00:19:49,060
 is it gonna stay a two lane all the way down

454
00:19:49,060 --> 00:19:50,740
 to be connected or?

455
00:19:50,740 --> 00:19:51,940
 - Crossing the road.

456
00:19:51,940 --> 00:19:52,780
 - And the railroad that--

457
00:19:52,780 --> 00:19:55,060
 - On the south side of the service center.

458
00:19:55,060 --> 00:19:57,580
 The intention is to make it as wide as possible

459
00:19:57,580 --> 00:19:59,420
 so that we get into the railroad crossing

460
00:19:59,420 --> 00:20:01,620
 with an ultimate crossing section.

461
00:20:01,620 --> 00:20:03,540
 So it'll probably more than likely be four lanes.

462
00:20:03,540 --> 00:20:04,740
 Nothing's designed at this point.

463
00:20:04,740 --> 00:20:05,820
 We're gonna see what we can fit

464
00:20:05,820 --> 00:20:07,900
 and what makes the best sense in drainage.

465
00:20:07,900 --> 00:20:10,860
 But the intent is to have it widened out to be four lanes,

466
00:20:10,860 --> 00:20:13,340
 two lanes in each direction, or turn lanes,

467
00:20:13,340 --> 00:20:15,820
 or whatever we need to use those extra lanes for.

468
00:20:15,820 --> 00:20:18,500
 And then it'll feather back into a two lane section

469
00:20:18,500 --> 00:20:20,580
 as it continues back to the Texas

470
00:20:20,580 --> 00:20:24,220
 existing Ruedel intersection.

471
00:20:24,220 --> 00:20:26,060
 - Okay, so if you're coming--

472
00:20:26,060 --> 00:20:26,900
 - Going south--

473
00:20:26,900 --> 00:20:28,460
 - You're going south, it's two lane.

474
00:20:28,460 --> 00:20:31,340
 Once we cross Mingo, then it's gonna go to a four lane.

475
00:20:31,340 --> 00:20:34,180
 And then it's gonna feather back down to a two lane

476
00:20:34,180 --> 00:20:36,060
 when it gets to McKinney?

477
00:20:36,060 --> 00:20:38,860
 - We won't go all the way to McKinney.

478
00:20:38,860 --> 00:20:39,700
 - Okay.

479
00:20:39,700 --> 00:20:41,580
 - We're just getting around the service center

480
00:20:41,580 --> 00:20:44,220
 at this point, so right to about Texas Avenue.

481
00:20:44,220 --> 00:20:45,780
 - But then it'll be pinched back down to a two lane.

482
00:20:45,780 --> 00:20:47,620
 - Correct, because we're meeting like with like

483
00:20:47,620 --> 00:20:49,020
 at that point.

484
00:20:49,020 --> 00:20:50,660
 No, that's fine, it's a good question.

485
00:20:50,660 --> 00:20:51,660
 - Thank you.

486
00:20:51,660 --> 00:20:53,180
 Thank you, Madam Chair.

487
00:20:53,180 --> 00:20:54,180
 - Further questions?

488
00:20:54,180 --> 00:20:59,860
 All right, do we have a motion to approve item E?

489
00:21:04,460 --> 00:21:06,300
 - A motion to approve item E?

490
00:21:06,300 --> 00:21:07,460
 - Oh, well I will.

491
00:21:07,460 --> 00:21:08,300
 Ralph second.

492
00:21:08,300 --> 00:21:12,180
 - Okay, all right, so it's gonna be Mr. Neuquist motioning

493
00:21:12,180 --> 00:21:14,060
 and Mr. Rayner seconding.

494
00:21:14,060 --> 00:21:15,860
 All in favor, say aye.

495
00:21:15,860 --> 00:21:16,700
 - Aye.

496
00:21:16,700 --> 00:21:17,540
 - Opposed?

497
00:21:17,540 --> 00:21:19,340
 - Aye.

498
00:21:19,340 --> 00:21:20,460
 - Okay, one opposed.

499
00:21:20,460 --> 00:21:24,740
 Next item is consider the approval of the June 24th,

500
00:21:24,740 --> 00:21:26,340
 2024 minutes.

501
00:21:26,340 --> 00:21:28,300
 Were there any changes or corrections?

502
00:21:28,300 --> 00:21:33,420
 Okay, seeing none, do we have a motion to approve the minutes?

503
00:21:35,180 --> 00:21:36,460
 - So moved.

504
00:21:36,460 --> 00:21:37,540
 - Mr. Pluck moved.

505
00:21:37,540 --> 00:21:38,580
 Do we have a second?

506
00:21:38,580 --> 00:21:40,500
 - Second.

507
00:21:40,500 --> 00:21:41,460
 - Mr. Cheek second.

508
00:21:41,460 --> 00:21:42,820
 All in favor say aye.

509
00:21:42,820 --> 00:21:43,660
 - Aye.

510
00:21:43,660 --> 00:21:44,820
 - Opposed?

511
00:21:44,820 --> 00:21:45,660
 Carries.

512
00:21:45,660 --> 00:21:50,220
 Okay, the next item, consider recommending the adoption

513
00:21:50,220 --> 00:21:51,940
 of an ordinance for the city of Denton,

514
00:21:51,940 --> 00:21:54,580
 establishing the schedule of rates for electric service

515
00:21:54,580 --> 00:21:58,540
 to be effective August 1st, 2024 and the ECA.

516
00:22:04,180 --> 00:22:05,020
 - Okay.

517
00:22:05,020 --> 00:22:21,740
 - Good morning.

518
00:22:21,740 --> 00:22:22,580
 - Good morning.

519
00:22:22,580 --> 00:22:23,900
 - Good morning, PEB.

520
00:22:23,900 --> 00:22:25,860
 This is the Pantamong ADF Finance

521
00:22:25,860 --> 00:22:30,020
 and I'm here to talk about Corley Energy Cost Adjustment.

522
00:22:35,020 --> 00:22:40,020
 So just to recap, I wanted to talk about

523
00:22:40,020 --> 00:22:41,380
 kind of what happened in the past.

524
00:22:41,380 --> 00:22:44,620
 So March 19th, we went to city council

525
00:22:44,620 --> 00:22:47,300
 with the ordinance that gave DME

526
00:22:47,300 --> 00:22:49,860
 or the DME General Manager Authority

527
00:22:49,860 --> 00:22:53,220
 to move up and down the ECA rate.

528
00:22:53,220 --> 00:22:55,780
 And that balance can go basically up and down

529
00:22:55,780 --> 00:22:58,100
 plus our $5 million.

530
00:22:58,100 --> 00:23:01,820
 Changes to the ECA rate will be effective

531
00:23:01,820 --> 00:23:05,940
 the following month once notified by two city council

532
00:23:05,940 --> 00:23:08,420
 by consent agenda item.

533
00:23:08,420 --> 00:23:11,060
 So what we looked at this time around

534
00:23:11,060 --> 00:23:13,140
 was two months worth of actuals

535
00:23:13,140 --> 00:23:17,180
 and projected seven months of projected energy costs.

536
00:23:17,180 --> 00:23:21,780
 So here's, so this next slide here is a discussion

537
00:23:21,780 --> 00:23:26,780
 or a graph of what the rates would look like.

538
00:23:26,780 --> 00:23:31,180
 And the first one we looked at was 0.0515

539
00:23:31,180 --> 00:23:34,860
 with the projected of $2.7 million under collected

540
00:23:34,860 --> 00:23:37,300
 if you look at the next few months.

541
00:23:37,300 --> 00:23:40,500
 And we also looked at 0.0495

542
00:23:40,500 --> 00:23:44,300
 with the projected of under collection of 4.3 million.

543
00:23:44,300 --> 00:23:47,540
 So looking at these two charts,

544
00:23:47,540 --> 00:23:51,780
 the current rate is at 0.0447 cents per kilowatt.

545
00:23:51,780 --> 00:23:56,700
 We recommend going up to 0.0515 cents per kilowatt,

546
00:23:56,700 --> 00:23:59,460
 which will get us to about $2.8 million

547
00:23:59,460 --> 00:24:01,060
 under collected by December.

548
00:24:01,060 --> 00:24:06,860
 And again, here is kind of the same picture

549
00:24:06,860 --> 00:24:08,740
 of at the two different rates

550
00:24:08,740 --> 00:24:11,260
 that we looked at earlier in the previous slide.

551
00:24:11,260 --> 00:24:16,260
 So when you look at residential at a thousand kilowatt,

552
00:24:16,260 --> 00:24:18,300
 for average user, it's gonna increase

553
00:24:18,300 --> 00:24:21,420
 about their monthly bill about $6.80.

554
00:24:21,420 --> 00:24:23,580
 And there's some other non-residential,

555
00:24:23,580 --> 00:24:26,720
 small, medium and large just for y'all to see there also.

556
00:24:28,580 --> 00:24:30,460
 And that's it, any questions?

557
00:24:30,460 --> 00:24:35,380
 Mr. Rayner first.

558
00:24:35,380 --> 00:24:36,980
 - Could you go back one slide?

559
00:24:36,980 --> 00:24:37,820
 - Yes, sir.

560
00:24:37,820 --> 00:24:40,020
 - Could you give me a definition of,

561
00:24:40,020 --> 00:24:42,420
 is that, oh my goodness, sorry.

562
00:24:42,420 --> 00:24:44,180
 Just wonder who's obnoxious phone.

563
00:24:44,180 --> 00:24:49,260
 So could you give me a breakdown on the,

564
00:24:49,260 --> 00:24:52,920
 what is a non-residential, small, medium and large?

565
00:24:52,920 --> 00:24:57,880
 - So I think I'll have to defer that to Bill.

566
00:24:57,880 --> 00:24:58,720
 - Great.

567
00:24:58,720 --> 00:25:06,140
 - Good morning, Madam Chair,

568
00:25:06,140 --> 00:25:08,420
 PB members, Bill Sheppard, GME.

569
00:25:08,420 --> 00:25:11,180
 So the small, medium and large breaks down

570
00:25:11,180 --> 00:25:15,140
 as a small as 20 KW or smaller in size.

571
00:25:15,140 --> 00:25:19,140
 So think of June's Beauty Supply or Barber, okay.

572
00:25:19,140 --> 00:25:26,760
 And then a medium customer goes up to 200 KW.

573
00:25:26,760 --> 00:25:31,760
 So think of that as a auto parts store or a convenience store.

574
00:25:31,760 --> 00:25:35,380
 And then above 200 KW,

575
00:25:35,380 --> 00:25:39,920
 think of that as a Walmart Supercenter or a hospital or a UNT.

576
00:25:39,920 --> 00:25:43,860
 - So question, so where would a bank fall in?

577
00:25:43,860 --> 00:25:46,620
 - Either in the small or the medium,

578
00:25:46,620 --> 00:25:48,460
 most likely the medium if it's a large bank.

579
00:25:48,460 --> 00:25:50,180
 - And offices and such, pretty much,

580
00:25:50,180 --> 00:25:52,340
 I'm just trying to get an idea on.

581
00:25:52,340 --> 00:25:55,340
 Small retail centers of 15,000 square feet

582
00:25:55,340 --> 00:25:57,540
 probably fall within the medium and small,

583
00:25:57,540 --> 00:25:59,040
 closer to the small maybe.

584
00:25:59,040 --> 00:25:59,880
 - Yes.

585
00:25:59,880 --> 00:26:00,700
 - Okay, thank you.

586
00:26:00,700 --> 00:26:04,260
 - Mr. Cheek, you had a question?

587
00:26:04,260 --> 00:26:05,780
 - No, not Bill.

588
00:26:05,780 --> 00:26:06,620
 - Okay.

589
00:26:06,620 --> 00:26:12,340
 - Could we go to the, you have this price projection here.

590
00:26:12,340 --> 00:26:16,780
 I don't know that we have enough information yet

591
00:26:16,780 --> 00:26:19,980
 as we've just started this process in, I think, March.

592
00:26:19,980 --> 00:26:24,060
 I noticed that the chart plunges pretty rapidly

593
00:26:24,060 --> 00:26:27,900
 in the third quarter from June with a positive balance

594
00:26:27,900 --> 00:26:31,620
 of about two million to August, September,

595
00:26:31,620 --> 00:26:33,100
 a negative balance of about seven million.

596
00:26:33,100 --> 00:26:37,700
 So we have seven million excess cost

597
00:26:37,700 --> 00:26:40,860
 above what we collect in that three month period.

598
00:26:40,860 --> 00:26:43,260
 And then it turns flat.

599
00:26:43,260 --> 00:26:45,980
 It's kind of flat through September, through December.

600
00:26:45,980 --> 00:26:49,740
 It was rising from April through June at a lower rate.

601
00:26:50,660 --> 00:26:55,660
 So are we expecting to see this seasonality every summer?

602
00:26:55,660 --> 00:27:00,940
 - Yes, I think Terry is coming up with that question.

603
00:27:00,940 --> 00:27:01,780
 - Crystal Ball.

604
00:27:01,780 --> 00:27:08,140
 - Good morning, Terry Nolte, Assistant General Manager, DME.

605
00:27:08,140 --> 00:27:12,380
 Yeah, so what you see, Mr. Taylor,

606
00:27:12,380 --> 00:27:15,500
 is the fact that the prices are seasonal.

607
00:27:15,500 --> 00:27:18,540
 So we have much higher prices in the summer

608
00:27:18,540 --> 00:27:21,820
 than we do in the rest of the year.

609
00:27:21,820 --> 00:27:26,820
 And consequently, as we hold our ECA rate flat,

610
00:27:26,820 --> 00:27:29,100
 we're going to under-collect in the summer

611
00:27:29,100 --> 00:27:33,040
 the high demand, high price periods.

612
00:27:33,040 --> 00:27:36,140
 The reason why we use a seven month forecast

613
00:27:36,140 --> 00:27:40,420
 is to try to average out those costs

614
00:27:40,420 --> 00:27:44,060
 so we don't see a lot of fluctuation in the ECA cost.

615
00:27:44,060 --> 00:27:49,060
 Yes, we will expect to see fluctuations like this.

616
00:27:49,060 --> 00:27:50,900
 Excuse me.

617
00:27:50,900 --> 00:27:54,860
 However, our recommendation here is to set a rate

618
00:27:54,860 --> 00:27:58,860
 that as we look forward, it should be pretty flat.

619
00:27:58,860 --> 00:28:03,260
 As part of the budget process that we're working on now

620
00:28:03,260 --> 00:28:06,060
 that will be for you in the next month,

621
00:28:06,060 --> 00:28:09,300
 this is about the rate that we expect it to stay at

622
00:28:09,300 --> 00:28:11,540
 for at least the next year or so.

623
00:28:12,500 --> 00:28:14,300
 Hopefully that answers your question.

624
00:28:14,300 --> 00:28:15,180
 - Yeah, I think so.

625
00:28:15,180 --> 00:28:17,860
 And so just think this through,

626
00:28:17,860 --> 00:28:20,640
 we could either try and aim for a seasonal rate,

627
00:28:20,640 --> 00:28:23,340
 which means, and this is kind of a decision for the board,

628
00:28:23,340 --> 00:28:25,740
 would be rates are higher in the summer

629
00:28:25,740 --> 00:28:29,980
 and then lower in off seasons, winter and spring,

630
00:28:29,980 --> 00:28:34,980
 or we will probably have a path where come August,

631
00:28:34,980 --> 00:28:38,540
 the fund is negative five million,

632
00:28:38,540 --> 00:28:42,100
 and then we wanna be positive five million or so by April

633
00:28:42,100 --> 00:28:43,660
 for the next summer

634
00:28:43,660 --> 00:28:47,140
 where we're gonna spend eight or 10 million extra dollars.

635
00:28:47,140 --> 00:28:48,980
 So just kind of thinking through this

636
00:28:48,980 --> 00:28:51,340
 is our first time seeing this.

637
00:28:51,340 --> 00:28:56,340
 - And we did purposely when we adjusted the ECA last time,

638
00:28:56,340 --> 00:28:58,740
 we didn't move it up all the way

639
00:28:58,740 --> 00:29:01,900
 to where we thought the true cost would be

640
00:29:01,900 --> 00:29:06,640
 in order to minimize the amount of rate shock immediately.

641
00:29:06,640 --> 00:29:10,460
 So this level that we're recommending here

642
00:29:10,460 --> 00:29:12,860
 is really a good approximation of where we think

643
00:29:12,860 --> 00:29:16,980
 a good baseline is gonna be for at least the next 12 months.

644
00:29:16,980 --> 00:29:20,180
 - And so if this forecast were to continue out,

645
00:29:20,180 --> 00:29:21,860
 we would expect it to recover back

646
00:29:21,860 --> 00:29:24,580
 into a positive fund balance by next spring,

647
00:29:24,580 --> 00:29:25,420
 and then next summer--

648
00:29:25,420 --> 00:29:28,140
 - Yeah, that's the goal is to stay right around zero.

649
00:29:28,140 --> 00:29:28,980
 - Yeah, okay.

650
00:29:28,980 --> 00:29:31,580
 Thank you.

651
00:29:31,580 --> 00:29:32,560
 - Other questions?

652
00:29:32,560 --> 00:29:38,160
 All right, do we have a motion to approve the ECA adjustment?

653
00:29:39,300 --> 00:29:41,420
 Mr. Cheek moved, do we have a second?

654
00:29:41,420 --> 00:29:43,980
 Mr. Pluck seconds, all in favor say aye.

655
00:29:43,980 --> 00:29:46,260
 - Aye. - Opposed?

656
00:29:46,260 --> 00:29:47,940
 Carries, management reports.

657
00:29:47,940 --> 00:29:52,360
 - Madam Chair, members of the PV,

658
00:29:52,360 --> 00:29:56,020
 no changes to the future agenda items or the new business.

659
00:29:56,020 --> 00:29:58,740
 So if there's any questions about what's on there

660
00:29:58,740 --> 00:30:01,020
 or anything else, happy to respond.

661
00:30:01,020 --> 00:30:04,220
 - Budget manager handed us a piece of paper

662
00:30:04,220 --> 00:30:06,500
 that explained the first year budget

663
00:30:06,500 --> 00:30:09,080
 for the miscellaneous item under wastewater.

664
00:30:09,080 --> 00:30:15,380
 Like to see something on a memo

665
00:30:15,380 --> 00:30:18,100
 that shows that entire five year projection

666
00:30:18,100 --> 00:30:20,500
 and what those dollar amounts are.

667
00:30:20,500 --> 00:30:24,320
 We were told that these are all related to the same items.

668
00:30:24,320 --> 00:30:27,500
 Also like to see something on the memo

669
00:30:27,500 --> 00:30:31,080
 that says what these items fall under our budget.

670
00:30:31,080 --> 00:30:34,020
 - Yeah, we can get on the schedule

671
00:30:34,020 --> 00:30:35,540
 and get that to you for the next meeting.

672
00:30:35,540 --> 00:30:37,220
 - Okay, I realize it's going to council,

673
00:30:37,220 --> 00:30:38,920
 but I'd like to see them.

674
00:30:38,920 --> 00:30:40,180
 - Sure, we can do that.

675
00:30:40,180 --> 00:30:44,720
 - Brings us to concluding items.

676
00:30:44,720 --> 00:30:47,220
 Does a board member wish to have something added

677
00:30:47,220 --> 00:30:50,720
 to a future agenda item or have anything to say to the public?

678
00:30:50,720 --> 00:30:56,640
 All right, seeing none, we will go into work session.

679
00:30:56,640 --> 00:30:59,360
 The first item is to receive a report, hold a discussion

680
00:30:59,360 --> 00:31:02,540
 and give staff direction regarding the value of solar study.

681
00:31:05,540 --> 00:31:06,380
 Okay.

682
00:31:06,380 --> 00:31:16,020
 - I don't recall the answer,

683
00:31:16,020 --> 00:31:19,100
 but are we using that microphone now or, okay.

684
00:31:19,100 --> 00:31:23,420
 Good morning, Madam Chair, Bill Sheppard again,

685
00:31:23,420 --> 00:31:25,820
 DME and POV members.

686
00:31:25,820 --> 00:31:29,540
 So we've been discussing our solar net billing program

687
00:31:29,540 --> 00:31:33,800
 for quite some time now, starting last February.

688
00:31:35,140 --> 00:31:39,980
 And we've brought the conversation to the SFAC,

689
00:31:39,980 --> 00:31:42,520
 the Sustainability Framework Advisory Committee,

690
00:31:42,520 --> 00:31:45,540
 this body, as well as the city council.

691
00:31:45,540 --> 00:31:48,980
 And now we're coming back to you after some comments

692
00:31:48,980 --> 00:31:53,260
 and conversation about conducting a value of solar study.

693
00:31:53,260 --> 00:31:58,180
 So we've engaged with NUGEN,

694
00:31:58,180 --> 00:32:00,420
 who is the company that did the value of solar study

695
00:32:00,420 --> 00:32:02,020
 for Austin Energy.

696
00:32:02,020 --> 00:32:05,500
 And I've got Jill Schupach here that's gonna present

697
00:32:05,500 --> 00:32:07,340
 her findings from that study.

698
00:32:07,340 --> 00:32:09,500
 And then I'll come back at the end of that presentation

699
00:32:09,500 --> 00:32:11,780
 for staff's recommendations.

700
00:32:11,780 --> 00:32:18,220
 - Good morning, thank you for having me.

701
00:32:18,220 --> 00:32:23,340
 So I'm gonna walk through the presentation.

702
00:32:23,340 --> 00:32:25,580
 We'll talk about the methodology we used.

703
00:32:25,580 --> 00:32:27,660
 Like Bill said, this is parallel to the methodology

704
00:32:27,660 --> 00:32:29,220
 we used with Austin Energy.

705
00:32:29,220 --> 00:32:31,920
 We'll talk about the findings of the study

706
00:32:31,920 --> 00:32:33,620
 and our recommendations.

707
00:32:33,620 --> 00:32:36,900
 We'll talk about billing impacts and how these changes

708
00:32:36,900 --> 00:32:38,860
 and rates will affect customers.

709
00:32:38,860 --> 00:32:41,800
 And then Bill will come up to discuss

710
00:32:41,800 --> 00:32:43,220
 his recommendation again.

711
00:32:43,220 --> 00:32:48,500
 So before we jump in, I just wanna talk about terminology

712
00:32:48,500 --> 00:32:49,340
 a little bit.

713
00:32:49,340 --> 00:32:53,820
 So for Austin Energy, they use a value of solar methodology.

714
00:32:53,820 --> 00:32:55,580
 They use a value of solar rate.

715
00:32:55,580 --> 00:33:00,000
 It includes an avoided cost and they also include

716
00:33:00,000 --> 00:33:02,260
 additional compensation for the customers

717
00:33:02,260 --> 00:33:04,040
 for societal benefits.

718
00:33:04,040 --> 00:33:10,180
 They do a buy all, sell all billing and metering structures.

719
00:33:10,180 --> 00:33:12,860
 So the customer buys all of their energy

720
00:33:12,860 --> 00:33:14,380
 as if they didn't have solar.

721
00:33:14,380 --> 00:33:17,500
 And then the utility buys back whatever energy

722
00:33:17,500 --> 00:33:19,900
 the customer generates at this value of solar rate.

723
00:33:19,900 --> 00:33:22,300
 So most often when you hear value of solar,

724
00:33:22,300 --> 00:33:24,940
 it's usually associated with this buy all, sell all

725
00:33:24,940 --> 00:33:27,820
 metering and billing model.

726
00:33:27,820 --> 00:33:30,460
 There's a lot of different rate designs out there

727
00:33:30,460 --> 00:33:34,220
 when it comes to distributed generation.

728
00:33:34,220 --> 00:33:36,340
 And that's the one Austin Energy uses.

729
00:33:36,340 --> 00:33:40,820
 Denton uses a net billing, metering and billing model.

730
00:33:40,820 --> 00:33:45,100
 The net billing model is not changing.

731
00:33:45,100 --> 00:33:47,140
 We're keeping the same model.

732
00:33:47,140 --> 00:33:51,120
 What's changing or the information that's presented

733
00:33:51,120 --> 00:33:55,660
 is the rate that customers are compensated for their energy.

734
00:33:55,660 --> 00:33:58,660
 But the actual billing and model structure is not changing.

735
00:33:58,660 --> 00:34:00,020
 It's still net billing.

736
00:34:00,020 --> 00:34:03,420
 It's just what rate is the utility paying the customers

737
00:34:03,420 --> 00:34:04,260
 for their energy.

738
00:34:04,260 --> 00:34:11,260
 So for the value of solar study,

739
00:34:11,260 --> 00:34:13,220
 the methodology includes three components.

740
00:34:13,220 --> 00:34:15,340
 That's these three columns here.

741
00:34:15,340 --> 00:34:17,740
 If you're avoided costs, your societal benefits

742
00:34:17,740 --> 00:34:19,700
 and your policy driven incentives.

743
00:34:19,700 --> 00:34:23,420
 The avoided cost is just what it says.

744
00:34:23,420 --> 00:34:25,260
 Every time a customer generates energy,

745
00:34:25,260 --> 00:34:27,420
 the utility does not have to buy that energy

746
00:34:27,420 --> 00:34:29,740
 from the market or generate that energy.

747
00:34:29,740 --> 00:34:31,980
 So there's a cost savings to the utility.

748
00:34:31,980 --> 00:34:35,820
 It's the cost avoided by the customer generating.

749
00:34:35,820 --> 00:34:39,020
 There's a lot of different ways to measure that.

750
00:34:39,020 --> 00:34:42,600
 You can use the market if you're in a market like ERCOT.

751
00:34:42,600 --> 00:34:45,300
 If you have power purchase agreements or you've gone out

752
00:34:45,300 --> 00:34:47,340
 for a request for power purchase agreements,

753
00:34:47,340 --> 00:34:49,240
 you can use that methodology.

754
00:34:50,580 --> 00:34:55,580
 You know, five, 10 years ago, utilities used to use

755
00:34:55,580 --> 00:34:57,980
 like a peaker methodology where you would say,

756
00:34:57,980 --> 00:35:00,380
 oh, well, if we had to build a natural gas plant,

757
00:35:00,380 --> 00:35:01,860
 here's the cost that we're avoiding.

758
00:35:01,860 --> 00:35:04,320
 And so that's the cost the customer gets paid.

759
00:35:04,320 --> 00:35:08,160
 So we did it two different ways.

760
00:35:08,160 --> 00:35:10,920
 We did it based on Denton's power purchase agreements

761
00:35:10,920 --> 00:35:14,700
 because they're actually purchasing solar contracts.

762
00:35:14,700 --> 00:35:17,700
 And then we also did it based on ERCOT

763
00:35:17,700 --> 00:35:20,260
 because you guys are in an organized market.

764
00:35:20,260 --> 00:35:23,540
 And that analysis was an hourly analysis

765
00:35:23,540 --> 00:35:26,820
 to capture the value of solar when it is generating.

766
00:35:26,820 --> 00:35:30,520
 Societal benefits.

767
00:35:30,520 --> 00:35:35,520
 This one, this is the estimated savings

768
00:35:35,520 --> 00:35:40,920
 for reducing emissions.

769
00:35:40,920 --> 00:35:43,220
 You're avoiding greenhouse gases.

770
00:35:43,220 --> 00:35:45,140
 And there's multiple different ways

771
00:35:45,140 --> 00:35:48,300
 that that has been estimated.

772
00:35:48,300 --> 00:35:50,860
 The federal government has an estimate that they use.

773
00:35:50,860 --> 00:35:53,620
 There's a market in the Northeast that they use.

774
00:35:53,620 --> 00:35:55,460
 There's a lot of different markets

775
00:35:55,460 --> 00:35:57,540
 and ways to estimate that.

776
00:35:57,540 --> 00:36:01,720
 There is not a market in Texas for this,

777
00:36:01,720 --> 00:36:05,980
 but there are different ways to estimate it.

778
00:36:05,980 --> 00:36:09,640
 And so in the report, it includes all the different ways

779
00:36:09,640 --> 00:36:11,940
 that it's estimated and what those amounts are.

780
00:36:11,940 --> 00:36:15,540
 Generally, it varies from one cent to eight cents

781
00:36:15,540 --> 00:36:17,760
 depending on whose study you're looking at.

782
00:36:17,760 --> 00:36:19,660
 You know, the higher end is the EPA.

783
00:36:19,660 --> 00:36:22,100
 They recently came out with an estimate

784
00:36:22,100 --> 00:36:24,820
 that averages about eight cents kilowatt hour.

785
00:36:24,820 --> 00:36:28,820
 But as I said, there's no federal or state market

786
00:36:28,820 --> 00:36:30,880
 for greenhouse gases in Texas.

787
00:36:30,880 --> 00:36:34,260
 And the greenhouse gases,

788
00:36:34,260 --> 00:36:36,100
 because of prior city council policy,

789
00:36:36,100 --> 00:36:38,060
 Denton is already 100% renewable.

790
00:36:38,060 --> 00:36:41,580
 So they have already balanced out the greenhouse gases

791
00:36:41,580 --> 00:36:44,460
 that they would be producing to serve their customer load.

792
00:36:44,460 --> 00:36:46,900
 And then the last one is policy-driven incentives.

793
00:36:46,900 --> 00:36:49,340
 There's federal policies, state policies

794
00:36:49,340 --> 00:36:52,580
 all to promote renewables.

795
00:36:52,580 --> 00:36:56,420
 Local policy, this third component is,

796
00:36:56,420 --> 00:37:00,640
 is there a local policy to support rooftop solar?

797
00:37:00,640 --> 00:37:02,740
 In Denton right now, there is not.

798
00:37:02,740 --> 00:37:06,500
 And so for this one, you know,

799
00:37:06,500 --> 00:37:10,140
 the value of solar rate is not being adjusted

800
00:37:10,140 --> 00:37:11,600
 to promote rooftop solar,

801
00:37:11,600 --> 00:37:14,440
 but there are other incentives offered by the utility.

802
00:37:15,780 --> 00:37:17,280
 All right, so the first, this first,

803
00:37:17,280 --> 00:37:18,580
 that first column, this first component,

804
00:37:18,580 --> 00:37:19,860
 avoid a cost findings.

805
00:37:19,860 --> 00:37:24,580
 As I said, we did an hourly analysis.

806
00:37:24,580 --> 00:37:27,100
 So on this graph, the green line represents

807
00:37:27,100 --> 00:37:28,460
 when solar is generating.

808
00:37:28,460 --> 00:37:31,080
 It peaks around noon, which makes sense.

809
00:37:31,080 --> 00:37:32,940
 That's when the sun is the strongest, right?

810
00:37:32,940 --> 00:37:36,340
 The blue line represents ERCOT,

811
00:37:36,340 --> 00:37:39,060
 the Organized Energy Market that Denton is in.

812
00:37:39,060 --> 00:37:41,060
 That represents when the market is peaking.

813
00:37:41,060 --> 00:37:42,860
 And you can see it tends to peak

814
00:37:44,220 --> 00:37:46,460
 late afternoon and early evening, which makes sense.

815
00:37:46,460 --> 00:37:48,460
 Everybody comes home, they turn on their air conditioner,

816
00:37:48,460 --> 00:37:50,500
 they make dinner, right?

817
00:37:50,500 --> 00:37:52,120
 And so we did an hourly analysis

818
00:37:52,120 --> 00:37:54,220
 to look at how much solar is producing

819
00:37:54,220 --> 00:37:56,260
 at the time of those ERCOT peaks

820
00:37:56,260 --> 00:37:57,860
 and what the value of solar is

821
00:37:57,860 --> 00:37:59,940
 in all those different hours.

822
00:37:59,940 --> 00:38:03,900
 So on this table, the left column is the,

823
00:38:03,900 --> 00:38:05,540
 if you calculate the avoided costs

824
00:38:05,540 --> 00:38:07,740
 based on ERCOT market pricing,

825
00:38:07,740 --> 00:38:10,980
 you can see it totals about seven cents,

826
00:38:10,980 --> 00:38:13,020
 seven cents kilowatt hour.

827
00:38:13,020 --> 00:38:18,020
 If you look at the amount that Denton pays

828
00:38:18,020 --> 00:38:22,980
 for their solar purchase power agreements,

829
00:38:22,980 --> 00:38:25,340
 that averages out to about four cents,

830
00:38:25,340 --> 00:38:27,180
 which you can see in that bottom line.

831
00:38:27,180 --> 00:38:29,900
 So the avoided cost, depending on how you wanna measure it

832
00:38:29,900 --> 00:38:33,840
 or your point of view, is between four cents and seven cents.

833
00:38:33,840 --> 00:38:37,860
 This does account for ancillary services

834
00:38:37,860 --> 00:38:39,740
 in the ERCOT market that you're avoiding.

835
00:38:39,740 --> 00:38:41,660
 It also accounts for line losses

836
00:38:41,660 --> 00:38:43,660
 when the customers are generating,

837
00:38:43,660 --> 00:38:46,380
 they're generating the power at the source.

838
00:38:46,380 --> 00:38:47,940
 It's not being generated somewhere else

839
00:38:47,940 --> 00:38:49,860
 and transmitted across transmission lines

840
00:38:49,860 --> 00:38:51,740
 and distribution lines because there are losses,

841
00:38:51,740 --> 00:38:53,860
 energy losses for that.

842
00:38:53,860 --> 00:38:56,760
 So these numbers have been adjusted to account for losses.

843
00:38:56,760 --> 00:39:01,460
 For societal benefits, as I said,

844
00:39:01,460 --> 00:39:04,360
 there's a lot of different ways it's been measured.

845
00:39:04,360 --> 00:39:07,820
 It's about $15 to $190 per ton of carbon,

846
00:39:07,820 --> 00:39:10,000
 depending on the study that you look at.

847
00:39:10,000 --> 00:39:11,780
 When you convert that into energy,

848
00:39:11,780 --> 00:39:14,740
 it's about one cent to eight cents per kilowatt hour.

849
00:39:14,740 --> 00:39:18,760
 So Denton, as I said, already is 100% renewable

850
00:39:18,760 --> 00:39:22,120
 based on prior city council policy.

851
00:39:22,120 --> 00:39:25,020
 So the cost of carbon for Denton is already being mitigated

852
00:39:25,020 --> 00:39:27,300
 just with that power supply strategy.

853
00:39:27,300 --> 00:39:31,560
 So as far as moving forward with the value of solar rate,

854
00:39:31,560 --> 00:39:34,580
 because the carbon has already been balanced,

855
00:39:34,580 --> 00:39:38,900
 we've recommended that it be set at $0 per kilowatt hour

856
00:39:38,900 --> 00:39:41,180
 as part of the value of solar rate.

857
00:39:41,180 --> 00:39:44,700
 Now, city council can change that, they can increase it.

858
00:39:44,700 --> 00:39:47,800
 That is a policy decision by them,

859
00:39:47,800 --> 00:39:51,360
 but as far as a cost basis,

860
00:39:51,360 --> 00:39:54,220
 this requirement for balancing your carbon

861
00:39:54,220 --> 00:39:55,320
 has already been met.

862
00:39:55,320 --> 00:40:00,380
 Policy-driven incentives, like I said,

863
00:40:00,380 --> 00:40:02,220
 there's federal policy, state policy,

864
00:40:02,220 --> 00:40:06,100
 state has some property tax exemptions and things like that.

865
00:40:06,100 --> 00:40:08,500
 Right now, the city and Denton policies

866
00:40:08,500 --> 00:40:11,140
 do not require local solar.

867
00:40:11,140 --> 00:40:14,060
 So we have not recommended any inclusion

868
00:40:14,060 --> 00:40:15,340
 in the value of solar for that,

869
00:40:15,340 --> 00:40:17,700
 because there's not a policy to support it.

870
00:40:17,700 --> 00:40:21,300
 Obviously that can change, city council can change policies.

871
00:40:21,300 --> 00:40:27,360
 Other ways that you can support local solar,

872
00:40:27,360 --> 00:40:30,020
 it doesn't have to be through a value of solar rate

873
00:40:30,020 --> 00:40:31,540
 that the customer is paid every month.

874
00:40:31,540 --> 00:40:34,980
 You can also support it by streamlining

875
00:40:34,980 --> 00:40:38,260
 the installation process, permits, inspections,

876
00:40:38,260 --> 00:40:40,780
 waive some of the fees to help customers

877
00:40:40,780 --> 00:40:43,260
 be able to afford it.

878
00:40:43,260 --> 00:40:47,420
 You can provide grants or rebates to customers,

879
00:40:47,420 --> 00:40:50,380
 and I've also seen some utilities provide low-cost loans.

880
00:40:50,380 --> 00:40:54,900
 So in summary, the range of avoided costs,

881
00:40:54,900 --> 00:40:57,100
 like I said, is about 4 cents to 7 cents.

882
00:40:57,100 --> 00:41:00,620
 That's the actual real cost that the utility can avoid.

883
00:41:00,620 --> 00:41:05,620
 The societal benefits and policy-driven benefits,

884
00:41:05,620 --> 00:41:08,580
 we have set at zero, but that can be adjusted

885
00:41:08,580 --> 00:41:10,340
 or changed by city council.

886
00:41:10,340 --> 00:41:14,000
 Those are policy decisions that city council can make.

887
00:41:14,000 --> 00:41:16,200
 The actual avoided measurable costs

888
00:41:16,200 --> 00:41:19,980
 that Denton saves immediately is the 4 to 7 cents.

889
00:41:19,980 --> 00:41:26,220
 So what does this look like for customers?

890
00:41:26,220 --> 00:41:29,560
 So this first column, well, so on the left

891
00:41:29,560 --> 00:41:31,740
 is the title of all the different rates.

892
00:41:33,940 --> 00:41:36,380
 And you have a facility charge and energy charges,

893
00:41:36,380 --> 00:41:39,500
 and then you also have your fuel pass through the ECA,

894
00:41:39,500 --> 00:41:42,500
 which you guys just discussed, and then RCA,

895
00:41:42,500 --> 00:41:45,860
 which is an additional compensation

896
00:41:45,860 --> 00:41:47,760
 to the customer for solar.

897
00:41:47,760 --> 00:41:49,820
 So the first column is a non-solar customer.

898
00:41:49,820 --> 00:41:54,820
 Let's say you're using 1,365 kilowatt hours a month.

899
00:41:54,820 --> 00:41:57,180
 Your bill would be about $181.

900
00:41:57,180 --> 00:42:01,380
 This does have the, this does have a 5.8 cent

901
00:42:02,680 --> 00:42:04,940
 ECA and TCRF.

902
00:42:04,940 --> 00:42:07,940
 It has not been updated for the 5.15 that just passed.

903
00:42:07,940 --> 00:42:15,020
 And that billing customer under the current rates

904
00:42:15,020 --> 00:42:17,140
 is that second column over.

905
00:42:17,140 --> 00:42:20,940
 And so you can see the rates that are included in there,

906
00:42:20,940 --> 00:42:24,860
 and the rate that the customer is paid

907
00:42:24,860 --> 00:42:29,080
 for the energy they produce is that 6.8 cents

908
00:42:29,080 --> 00:42:30,620
 and that 3.8 cents.

909
00:42:30,620 --> 00:42:32,220
 It's around 11 cents.

910
00:42:33,180 --> 00:42:36,520
 So remember, like we said, the actual cost avoided,

911
00:42:36,520 --> 00:42:38,740
 if you're looking at a purchase power agreement is 4 cents,

912
00:42:38,740 --> 00:42:40,780
 if you're looking at the market is 7 cents.

913
00:42:40,780 --> 00:42:44,740
 And currently the customers are being paid around 11 cents.

914
00:42:44,740 --> 00:42:48,820
 And so if city council decides to go with an approach

915
00:42:48,820 --> 00:42:50,620
 that's more related to avoided costs,

916
00:42:50,620 --> 00:42:52,740
 the cost the utility is actually avoiding,

917
00:42:52,740 --> 00:42:55,300
 then the 11 cents will go down,

918
00:42:55,300 --> 00:42:58,040
 somewhere between 7 cents and 4 cents.

919
00:42:58,040 --> 00:43:00,780
 If city council decides they want to incentivize

920
00:43:00,780 --> 00:43:03,780
 people building solar and support solar,

921
00:43:03,780 --> 00:43:05,540
 then they can make that decision

922
00:43:05,540 --> 00:43:07,740
 as to how much they want to increase it.

923
00:43:07,740 --> 00:43:10,520
 But right now the customer is receiving about 11 cents

924
00:43:10,520 --> 00:43:12,420
 for every kilowatt hour they produce.

925
00:43:12,420 --> 00:43:18,660
 If the rate that the customer is compensated

926
00:43:18,660 --> 00:43:21,940
 is set at the avoided cost

927
00:43:21,940 --> 00:43:25,540
 using the power purchase agreements, that 4 cents,

928
00:43:25,540 --> 00:43:30,540
 you can see that currently the bill would be $139.94,

929
00:43:31,540 --> 00:43:36,060
 moving forward, it would be the $166.70.

930
00:43:36,060 --> 00:43:40,060
 And then if you use the ERCOT market price, excuse me,

931
00:43:40,060 --> 00:43:42,740
 their bill would be about $154.

932
00:43:42,740 --> 00:43:44,660
 So that is how it would affect a customer

933
00:43:44,660 --> 00:43:47,540
 that uses about 1,400 kilowatt hours a month.

934
00:43:47,540 --> 00:43:50,980
 The very last line, this is annual savings

935
00:43:50,980 --> 00:43:53,500
 from the current rate.

936
00:43:53,500 --> 00:43:57,740
 So because the customers are paying more money

937
00:43:57,740 --> 00:43:58,620
 for their total bill,

938
00:43:58,620 --> 00:44:02,700
 because they're being compensated less for their energy,

939
00:44:02,700 --> 00:44:07,400
 that brings in another $463,000

940
00:44:07,400 --> 00:44:09,260
 if we use the purchase power agreement rate,

941
00:44:09,260 --> 00:44:11,220
 the solar purchase power agreement rate.

942
00:44:11,220 --> 00:44:16,500
 And then for the ERCOT market rate, it's about $236,000.

943
00:44:16,500 --> 00:44:18,980
 And the recommendation, these numbers will come up again

944
00:44:18,980 --> 00:44:21,420
 because the recommendation from staff is gonna be

945
00:44:21,420 --> 00:44:24,900
 to take that difference in revenue that Denton is receiving

946
00:44:24,900 --> 00:44:28,100
 'cause the utility is receiving more revenue now

947
00:44:28,100 --> 00:44:30,300
 and put that into their green sense program.

948
00:44:30,300 --> 00:44:38,060
 - Thank you, Jill.

949
00:44:38,060 --> 00:44:40,260
 So we've made this same presentation to ESFAC

950
00:44:40,260 --> 00:44:44,580
 and you'll see in your AIS that ESFAC came back

951
00:44:44,580 --> 00:44:48,720
 and asked us to, or recommended a blended rate

952
00:44:48,720 --> 00:44:53,020
 between that PPA rate of DME and the ERCOT market rate.

953
00:44:53,020 --> 00:44:56,080
 Staff, however, is continuing with our recommendation

954
00:44:56,080 --> 00:45:01,080
 that we made to them, which is to make the value of solar

955
00:45:01,080 --> 00:45:05,740
 the same as the avoided PPA cost of DME,

956
00:45:05,740 --> 00:45:10,740
 which is the 3.79 cents and take the offset, that savings,

957
00:45:10,740 --> 00:45:14,060
 and apply that to what we're already funding

958
00:45:14,060 --> 00:45:16,620
 for energy incentives of the million dollars.

959
00:45:16,620 --> 00:45:18,140
 So that'll bring the million dollars

960
00:45:18,140 --> 00:45:21,260
 up to 1.46 million moving forward.

961
00:45:21,260 --> 00:45:24,580
 So that is staff's recommendation to this body.

962
00:45:27,080 --> 00:45:29,600
 - All right, questions?

963
00:45:29,600 --> 00:45:35,140
 - Remind me of ESFAC.

964
00:45:35,140 --> 00:45:37,740
 - Sustainability Framework Advisory Committee.

965
00:45:37,740 --> 00:45:39,660
 - And that's ours?

966
00:45:39,660 --> 00:45:40,500
 - Yes. - City of Denton.

967
00:45:40,500 --> 00:45:42,220
 - They just asked for it, right?

968
00:45:42,220 --> 00:45:43,060
 - Correct.

969
00:45:43,060 --> 00:45:48,340
 - Which side are we gonna start on?

970
00:45:48,340 --> 00:45:49,780
 Mr. Newquist, you go first.

971
00:45:49,780 --> 00:45:53,220
 - What do we have or use to measure up

972
00:45:53,220 --> 00:45:55,820
 and monitor engagement with green sense

973
00:45:55,820 --> 00:45:57,460
 and the money that we have in there

974
00:45:57,460 --> 00:46:00,580
 and how people use it and how we let them know to use it

975
00:46:00,580 --> 00:46:01,580
 and things like that?

976
00:46:01,580 --> 00:46:05,100
 - Sure, so the sustainability group tracks those rebates,

977
00:46:05,100 --> 00:46:09,700
 how they give rebates based on air conditioning upgrades,

978
00:46:09,700 --> 00:46:12,500
 installation upgrades, window upgrades.

979
00:46:12,500 --> 00:46:15,660
 It is going very well this year, is my understanding.

980
00:46:15,660 --> 00:46:17,300
 That's a different group than DME.

981
00:46:17,300 --> 00:46:18,700
 We just provide the funding source,

982
00:46:18,700 --> 00:46:23,100
 but they do track the efficacy of those programs.

983
00:46:23,100 --> 00:46:25,620
 As a matter of fact, I do have a slide

984
00:46:25,620 --> 00:46:28,820
 that shows, so one of the things that have come up

985
00:46:28,820 --> 00:46:31,540
 in the past is on a dollar for dollar,

986
00:46:31,540 --> 00:46:34,220
 which is sort of the better bang for the buck,

987
00:46:34,220 --> 00:46:39,220
 and we did some analysis on that last year,

988
00:46:39,220 --> 00:46:43,540
 and this will give you that, sort of the bottom line is,

989
00:46:43,540 --> 00:46:47,620
 for every dollar spent in energy efficiency programs,

990
00:46:47,620 --> 00:46:50,740
 there's about a 19 kilowatt hour reduction

991
00:46:50,740 --> 00:46:53,040
 of usage across the city,

992
00:46:53,040 --> 00:46:57,660
 versus every dollar spent for solar rebates at that time,

993
00:46:57,660 --> 00:47:00,900
 it was 3.5 kilowatt hours per dollar spent.

994
00:47:00,900 --> 00:47:04,120
 So again, from a bang for the buck,

995
00:47:04,120 --> 00:47:06,660
 we felt that the Green Sense programs

996
00:47:06,660 --> 00:47:10,620
 are a much wiser avenue to spend those dollars.

997
00:47:10,620 --> 00:47:13,360
 So we took that to the next level,

998
00:47:13,360 --> 00:47:15,500
 and the savings that we're recommending

999
00:47:15,500 --> 00:47:16,740
 coming back from this change

1000
00:47:16,740 --> 00:47:20,420
 also fund those energy efficiency programs.

1001
00:47:20,420 --> 00:47:22,840
 - And Mr. Newquist, just because you're new,

1002
00:47:22,840 --> 00:47:25,540
 but so right now, it's about a million dollars,

1003
00:47:25,540 --> 00:47:29,460
 a million dollars that DME's sending to these programs

1004
00:47:29,460 --> 00:47:31,160
 used to be half a million.

1005
00:47:31,160 --> 00:47:33,380
 Once we eliminated the solar rebates,

1006
00:47:33,380 --> 00:47:35,900
 that additional half a million went to energy programs,

1007
00:47:35,900 --> 00:47:39,080
 so it's a total of a million dollars currently.

1008
00:47:39,080 --> 00:47:41,740
 Certainly, depending on the recommendation here,

1009
00:47:41,740 --> 00:47:44,140
 if the board, certainly also if the council

1010
00:47:44,140 --> 00:47:45,580
 wants to shift any of those savings,

1011
00:47:45,580 --> 00:47:47,540
 that would be added to that million dollars.

1012
00:47:47,540 --> 00:47:49,860
 And just as a reminder, that million dollars

1013
00:47:49,860 --> 00:47:53,900
 is available to all residents, all DME customers

1014
00:47:53,900 --> 00:47:55,180
 in our service territory,

1015
00:47:55,180 --> 00:47:57,100
 not just those that have rooftop solar.

1016
00:47:57,100 --> 00:48:02,820
 - Other questions?

1017
00:48:02,820 --> 00:48:05,780
 Billy?

1018
00:48:05,780 --> 00:48:11,760
 - Okay, so we don't do the solar rebate program anymore,

1019
00:48:11,760 --> 00:48:13,620
 right?

1020
00:48:13,620 --> 00:48:14,460
 - Correct.

1021
00:48:14,460 --> 00:48:18,360
 - So how long ago did we start the solar rebate program?

1022
00:48:20,340 --> 00:48:23,740
 - I believe it was 2009, is when that program started.

1023
00:48:23,740 --> 00:48:24,940
 Kat, do you remember?

1024
00:48:24,940 --> 00:48:26,460
 - About 15 years ago.

1025
00:48:26,460 --> 00:48:28,180
 - It was quite--

1026
00:48:28,180 --> 00:48:29,020
 - Yeah.

1027
00:48:29,020 --> 00:48:30,900
 Was it closer?

1028
00:48:30,900 --> 00:48:32,800
 Yeah, I thought we did it real early, but.

1029
00:48:32,800 --> 00:48:39,420
 I'm gonna kick myself for asking this question.

1030
00:48:39,420 --> 00:48:41,940
 Has any consideration been given to the fact

1031
00:48:41,940 --> 00:48:43,860
 that we've made a commitment to some of these people

1032
00:48:43,860 --> 00:48:45,220
 that have already done this?

1033
00:48:45,220 --> 00:48:48,060
 - So that has come up.

1034
00:48:48,060 --> 00:48:51,260
 Grandfathering is the terminology for that.

1035
00:48:51,260 --> 00:48:56,260
 So there is no guarantee that those customers received

1036
00:48:56,260 --> 00:48:58,400
 when they signed their interconnection agreement

1037
00:48:58,400 --> 00:49:00,500
 that rates were gonna stay level forever,

1038
00:49:00,500 --> 00:49:04,460
 or their incentive, or our programs were not gonna change.

1039
00:49:04,460 --> 00:49:08,660
 It's just not feasible for the utility to do that.

1040
00:49:08,660 --> 00:49:11,740
 However, those customers that did install back when

1041
00:49:11,740 --> 00:49:16,140
 have been taking advantage of a very lucrative program,

1042
00:49:16,140 --> 00:49:19,660
 a very lucrative credit they received for that generation

1043
00:49:19,660 --> 00:49:21,420
 that they had, as well as most likely

1044
00:49:21,420 --> 00:49:23,020
 a rebate for their system.

1045
00:49:23,020 --> 00:49:26,700
 So that certainly factors into their economics,

1046
00:49:26,700 --> 00:49:28,940
 but we cannot make a guarantee in anybody

1047
00:49:28,940 --> 00:49:31,300
 that signs back then or now, moving forward,

1048
00:49:31,300 --> 00:49:32,180
 that nothing's gonna change.

1049
00:49:32,180 --> 00:49:33,020
 - Well, of course, yeah.

1050
00:49:33,020 --> 00:49:35,100
 I mean, they made a decision,

1051
00:49:35,100 --> 00:49:38,100
 and it was kind of a business decision, if you will.

1052
00:49:38,100 --> 00:49:41,700
 They're probably not in business.

1053
00:49:43,780 --> 00:49:46,340
 But you are cutting, basically you're looking at their

1054
00:49:46,340 --> 00:49:49,580
 savings or their refund, however you wanna look at it.

1055
00:49:49,580 --> 00:49:51,460
 You're cutting it in less than half,

1056
00:49:51,460 --> 00:49:55,000
 about 40% of what they were being refunded.

1057
00:49:55,000 --> 00:50:00,700
 - Yeah, so what we really need to keep in mind is,

1058
00:50:00,700 --> 00:50:03,660
 out of the 1,200 systems that we have rooftop currently,

1059
00:50:03,660 --> 00:50:06,500
 and they're still moving forward, by the way.

1060
00:50:06,500 --> 00:50:10,340
 They haven't stopped, and we're not stopping them

1061
00:50:10,340 --> 00:50:13,380
 from putting rooftop solar on their homes.

1062
00:50:13,380 --> 00:50:16,540
 But we also have to think of the other 64,000 customers

1063
00:50:16,540 --> 00:50:18,580
 that we have and the amount of money

1064
00:50:18,580 --> 00:50:20,260
 that we spend for energy.

1065
00:50:20,260 --> 00:50:21,740
 And we need to spend it wisely,

1066
00:50:21,740 --> 00:50:24,700
 and to keep their rates as reasonable as possible.

1067
00:50:24,700 --> 00:50:28,340
 And to Mr. So's comment about growth in the city,

1068
00:50:28,340 --> 00:50:29,900
 I mean, we just signed a PPA

1069
00:50:29,900 --> 00:50:31,940
 for another 100 megawatts of solar,

1070
00:50:31,940 --> 00:50:34,860
 which is much more cost effective

1071
00:50:34,860 --> 00:50:36,640
 than the rate that we're paying now,

1072
00:50:36,640 --> 00:50:41,020
 or even the rate moving forward, if this is to get approved.

1073
00:50:41,020 --> 00:50:45,500
 But again, it's an effort to try to make an equitable payment

1074
00:50:45,500 --> 00:50:47,780
 for that energy coming back to us.

1075
00:50:47,780 --> 00:50:50,540
 Quite honestly, every kilowatt hour that they use

1076
00:50:50,540 --> 00:50:52,700
 on their side of the meter is 100% offset.

1077
00:50:52,700 --> 00:50:55,500
 So if you think about it, that's 100% retail credit

1078
00:50:55,500 --> 00:50:57,140
 for that amount of energy they're using.

1079
00:50:57,140 --> 00:50:59,420
 So it may encourage customers

1080
00:50:59,420 --> 00:51:01,600
 to maybe look into a battery system.

1081
00:51:01,600 --> 00:51:03,620
 So instead of sending that energy to us,

1082
00:51:03,620 --> 00:51:04,940
 they're storing it and using it back.

1083
00:51:04,940 --> 00:51:06,920
 - We've already had a discussion about battery system.

1084
00:51:06,920 --> 00:51:08,940
 I didn't think you liked it.

1085
00:51:08,940 --> 00:51:12,780
 - Oh, no, it's perfectly fine for the battery.

1086
00:51:12,780 --> 00:51:16,580
 So there's nothing that DME has proposed

1087
00:51:16,580 --> 00:51:18,500
 and move it forward other than paying

1088
00:51:18,500 --> 00:51:20,340
 a more equitable rate for that energy.

1089
00:51:20,340 --> 00:51:22,740
 - I agree that the money is better,

1090
00:51:22,740 --> 00:51:25,140
 more sensibly spent in the Greensense program.

1091
00:51:25,140 --> 00:51:27,040
 I don't think there's any question about that.

1092
00:51:27,040 --> 00:51:31,500
 I'm just worried about maybe the past, like I said,

1093
00:51:31,500 --> 00:51:36,340
 sort of a commitment that we might have ethically made

1094
00:51:36,340 --> 00:51:37,800
 to them, and I don't mean you.

1095
00:51:37,800 --> 00:51:40,500
 I mean the city as a whole.

1096
00:51:40,500 --> 00:51:43,940
 Anyway, okay, well, that answers my question.

1097
00:51:43,940 --> 00:51:44,780
 Thanks, Phil.

1098
00:51:44,780 --> 00:51:47,140
 - Yeah, and if I may add one more thing to that too,

1099
00:51:47,140 --> 00:51:51,160
 and back in 2009, again, I think it was around that time,

1100
00:51:51,160 --> 00:51:54,660
 DME wasn't 100% renewable.

1101
00:51:54,660 --> 00:51:55,500
 - No.

1102
00:51:55,500 --> 00:51:56,720
 - A lot has changed.

1103
00:51:56,720 --> 00:51:58,100
 There's been a lot of investment

1104
00:51:58,100 --> 00:52:01,420
 to make us 100% renewable and the city's

1105
00:52:01,420 --> 00:52:03,320
 in a different spot right now than it was then.

1106
00:52:03,320 --> 00:52:06,420
 So again, we don't wanna disincentivize folks

1107
00:52:06,420 --> 00:52:08,960
 from putting rooftop solar on, they can still do that.

1108
00:52:08,960 --> 00:52:10,340
 And if they do it properly,

1109
00:52:10,340 --> 00:52:13,660
 then they use the energy inside their four walls.

1110
00:52:13,660 --> 00:52:17,620
 But our portfolio looking forward is 100% renewable.

1111
00:52:17,620 --> 00:52:21,140
 So that's a huge thing we need to be proud of.

1112
00:52:21,140 --> 00:52:23,900
 - Like you said, paying them 11 cents

1113
00:52:23,900 --> 00:52:26,900
 when our avoided cost isn't even close

1114
00:52:26,900 --> 00:52:27,740
 - Correct.

1115
00:52:27,740 --> 00:52:31,080
 - Is not fair to the other 60,000 customers that we have.

1116
00:52:31,080 --> 00:52:33,380
 Mr. Taylor.

1117
00:52:33,380 --> 00:52:34,220
 - Thank you.

1118
00:52:34,220 --> 00:52:35,040
 Thank you, Madam Chair.

1119
00:52:35,040 --> 00:52:40,040
 I'm trying to think of how to put all this.

1120
00:52:40,040 --> 00:52:45,140
 I have a few, I guess I'll start with your grandfathered,

1121
00:52:45,140 --> 00:52:49,220
 question about grandfathering and people who made a 20 year,

1122
00:52:49,220 --> 00:52:52,540
 perhaps got a 20 year loan to do a home improvement

1123
00:52:52,540 --> 00:52:55,580
 with an expected kind of return.

1124
00:52:55,580 --> 00:52:59,980
 And I'm sure anybody that did that got a 20 or 30

1125
00:52:59,980 --> 00:53:02,900
 or $40,000 solar array, they did the math

1126
00:53:02,900 --> 00:53:05,100
 on what it would cost them

1127
00:53:05,100 --> 00:53:07,220
 and how it would pencil out payback.

1128
00:53:07,220 --> 00:53:11,560
 COSR, for example, has a grandfathered rate.

1129
00:53:11,560 --> 00:53:16,220
 I think they, 2022, if you installed before like June 2022,

1130
00:53:16,220 --> 00:53:19,100
 you have your solar buyback is one rate.

1131
00:53:19,100 --> 00:53:23,100
 If it's after that, it has a different dollar value.

1132
00:53:23,100 --> 00:53:27,120
 And I know other rural utilities in Texas do.

1133
00:53:27,120 --> 00:53:30,620
 You know, I was just looking at the benchmarks

1134
00:53:30,620 --> 00:53:34,940
 in the value of solar report on page five dash four.

1135
00:53:34,940 --> 00:53:38,300
 You know, we're showing this staff is recommending

1136
00:53:38,300 --> 00:53:43,300
 about a three and a half cent value for energy generated,

1137
00:53:43,300 --> 00:53:47,740
 but Austin energy is 9.9 cents.

1138
00:53:47,740 --> 00:53:51,660
 Pet analysis, 6.96, six, seven point,

1139
00:53:51,660 --> 00:53:52,500
 just running through these.

1140
00:53:52,500 --> 00:53:56,880
 They're all somewhere between six and a half and 10 cents

1141
00:53:56,880 --> 00:54:00,620
 except Georgetown and DME.

1142
00:54:00,620 --> 00:54:04,340
 And DME's recommendation of 3.8

1143
00:54:04,340 --> 00:54:07,300
 is the lowest pretty substantially.

1144
00:54:07,300 --> 00:54:12,420
 And this doesn't show that COSR

1145
00:54:12,420 --> 00:54:15,060
 and several of these others have a grandfathered rate.

1146
00:54:15,060 --> 00:54:20,940
 I think that it would be best for our rate payers

1147
00:54:20,940 --> 00:54:23,860
 who followed our green sense program

1148
00:54:23,860 --> 00:54:27,900
 and made this commitment, this 20 year commitment potentially

1149
00:54:27,900 --> 00:54:34,300
 to not have a sudden shock going from 11 cents to 3 cents

1150
00:54:34,300 --> 00:54:37,380
 or 3.8 or whatever it is.

1151
00:54:37,380 --> 00:54:42,060
 But it would be more correct to have a grandfathered rate

1152
00:54:42,060 --> 00:54:44,420
 maybe with a taper down over five years

1153
00:54:44,420 --> 00:54:46,060
 or something like that.

1154
00:54:46,060 --> 00:54:49,360
 So that existing systems before a date,

1155
00:54:49,360 --> 00:54:52,420
 whether that's today or, you know, I don't know.

1156
00:54:52,420 --> 00:54:55,460
 I don't know how retroactively we could go.

1157
00:54:55,460 --> 00:54:58,300
 I don't know when the last solar installs were

1158
00:54:58,300 --> 00:55:03,460
 that they have a five year period of adjustment

1159
00:55:03,460 --> 00:55:08,340
 down to whatever this value of solar rate is.

1160
00:55:08,340 --> 00:55:11,380
 I think that would be fair, more fair

1161
00:55:11,380 --> 00:55:13,780
 so that they can adjust their, you know,

1162
00:55:13,780 --> 00:55:16,880
 they can realize their bill is basically gonna be going up

1163
00:55:16,880 --> 00:55:19,480
 slowly for the next five years as opposed to a shock.

1164
00:55:20,660 --> 00:55:25,540
 The second, this, I understand that we have signed

1165
00:55:25,540 --> 00:55:30,200
 some really good PPAs with a really good effective rate.

1166
00:55:30,200 --> 00:55:34,420
 Just looking at this comparison,

1167
00:55:34,420 --> 00:55:39,300
 and these are all munis or regulated co-ops.

1168
00:55:39,300 --> 00:55:44,300
 They're valuing, they're kind of sore at the high end,

1169
00:55:44,300 --> 00:55:49,080
 like at the basically the ERCOT market rate.

1170
00:55:50,480 --> 00:55:53,420
 Or very similar or a little bit higher even.

1171
00:55:53,420 --> 00:55:57,620
 And I think it's, if we are really able

1172
00:55:57,620 --> 00:56:01,580
 to keep signing PPAs for three and a half cents solar

1173
00:56:01,580 --> 00:56:06,020
 and sell it for seven cents, then, you know,

1174
00:56:06,020 --> 00:56:09,700
 we wouldn't be having the discussion we had 30 minutes ago

1175
00:56:09,700 --> 00:56:12,780
 about having a $10 million seasonality

1176
00:56:12,780 --> 00:56:14,660
 and needing to raise our ECA

1177
00:56:16,580 --> 00:56:21,300
 because we, 5.5 cents per the energy rate

1178
00:56:21,300 --> 00:56:25,060
 when we're saying we can buy it at 3.7 or whatever it was.

1179
00:56:25,060 --> 00:56:28,600
 So I think, I really feel like this is,

1180
00:56:28,600 --> 00:56:34,800
 this is pushing for the conclusion of a 3.8 cent rate.

1181
00:56:34,800 --> 00:56:40,480
 But we see evidence on this board

1182
00:56:40,480 --> 00:56:45,380
 that that's a artificially low rate for energy in ERCOT.

1183
00:56:47,580 --> 00:56:49,140
 - You look like you have a response.

1184
00:56:49,140 --> 00:56:50,300
 - Yeah, so a couple of things

1185
00:56:50,300 --> 00:56:53,680
 that I'm gonna defer to Marcella here in a second.

1186
00:56:53,680 --> 00:56:56,860
 I think when you're looking at those comparative utilities,

1187
00:56:56,860 --> 00:56:57,880
 I think it's important to understand

1188
00:56:57,880 --> 00:57:00,980
 that they don't have a 100% mandate

1189
00:57:00,980 --> 00:57:03,780
 that we have here in the city of Denton, right?

1190
00:57:03,780 --> 00:57:06,340
 That makes it inherently different.

1191
00:57:06,340 --> 00:57:08,360
 And so I would just point that out

1192
00:57:08,360 --> 00:57:10,880
 when you're looking at those, just kind of remember,

1193
00:57:10,880 --> 00:57:12,260
 I think at the end of the day--

1194
00:57:12,260 --> 00:57:15,220
 - As a former Georgetown electric customer,

1195
00:57:15,220 --> 00:57:17,340
 Georgetown's 100% renewable as well.

1196
00:57:17,340 --> 00:57:20,500
 - Yeah, and that's the other exception is Georgetown,

1197
00:57:20,500 --> 00:57:21,940
 and I think he pointed that out,

1198
00:57:21,940 --> 00:57:24,580
 and that's why the rate is where there is.

1199
00:57:24,580 --> 00:57:28,820
 And so again, I would just kind of float that out there.

1200
00:57:28,820 --> 00:57:31,060
 Staff's making a recommendation, ultimately.

1201
00:57:31,060 --> 00:57:32,780
 We know that the board's gonna make a recommendation

1202
00:57:32,780 --> 00:57:35,460
 to the council, just like the SFAC did as well.

1203
00:57:35,460 --> 00:57:38,540
 We'll communicate it to the council.

1204
00:57:38,540 --> 00:57:42,060
 Again, this is purely based on our consultants'

1205
00:57:42,060 --> 00:57:45,700
 recommendations and how they look at our total energy

1206
00:57:45,700 --> 00:57:49,060
 portfolio and how we arrive to the recommendation.

1207
00:57:49,060 --> 00:57:52,340
 Ultimately, the council will set the final priority.

1208
00:57:52,340 --> 00:57:55,460
 So, but you had some questions about grandfathering.

1209
00:57:55,460 --> 00:57:56,660
 I'll kind of defer to Marcella to see

1210
00:57:56,660 --> 00:57:58,460
 how she wants to answer that.

1211
00:57:58,460 --> 00:58:00,820
 - Yeah, so we're happy to send you a memo

1212
00:58:00,820 --> 00:58:02,900
 with some more information on this, confidentially,

1213
00:58:02,900 --> 00:58:05,620
 but we did receive an opinion from our legal council

1214
00:58:05,620 --> 00:58:07,780
 that grandfathering in our circumstance

1215
00:58:07,780 --> 00:58:09,820
 and not making a comment on anyone else

1216
00:58:09,820 --> 00:58:12,180
 who does potentially use grandfathering

1217
00:58:12,180 --> 00:58:15,140
 is a discriminatory rate for our rate payers.

1218
00:58:15,140 --> 00:58:17,740
 So their opinion is that we would be unable

1219
00:58:17,740 --> 00:58:20,060
 to implement a grandfathered rate

1220
00:58:20,060 --> 00:58:21,380
 because of the legal restrictions.

1221
00:58:21,380 --> 00:58:24,300
 So again, I'll send a memo with some more details on that,

1222
00:58:24,300 --> 00:58:27,020
 but there is that opinion that we have

1223
00:58:27,020 --> 00:58:28,860
 from our outside council.

1224
00:58:28,860 --> 00:58:29,940
 - That's good to know.

1225
00:58:29,940 --> 00:58:31,300
 - Appreciate that, but you know,

1226
00:58:31,300 --> 00:58:32,940
 sometimes when you shake somebody's hand

1227
00:58:32,940 --> 00:58:34,660
 and say you're gonna do something, you gotta do it,

1228
00:58:34,660 --> 00:58:36,660
 and I don't really care what y'all say.

1229
00:58:39,540 --> 00:58:42,220
 - Two more points I just wanted to cover.

1230
00:58:42,220 --> 00:58:44,820
 So we do say we have 100% renewable.

1231
00:58:44,820 --> 00:58:47,140
 We have a 100% renewable plan,

1232
00:58:47,140 --> 00:58:51,940
 but we also at the same time buy energy from ERCOT,

1233
00:58:51,940 --> 00:58:54,820
 which is, you know, has emissions portion,

1234
00:58:54,820 --> 00:58:57,620
 and we overproduce green energy.

1235
00:58:57,620 --> 00:59:00,140
 I don't know if it's exactly 110, 115%

1236
00:59:00,140 --> 00:59:02,860
 of our total debt and load is,

1237
00:59:02,860 --> 00:59:06,220
 we buy that in wind and solar and put it into ERCOT,

1238
00:59:06,220 --> 00:59:09,220
 and then we take back what our 100% we need,

1239
00:59:09,220 --> 00:59:11,780
 and then we also run the Denton Energy Center,

1240
00:59:11,780 --> 00:59:13,420
 which emits as well.

1241
00:59:13,420 --> 00:59:15,940
 So we keep saying, oh, it's 100%,

1242
00:59:15,940 --> 00:59:17,620
 but there's 100% with an asterisk,

1243
00:59:17,620 --> 00:59:19,580
 and I understand why the asterisk is there.

1244
00:59:19,580 --> 00:59:21,860
 We don't currently have the capability

1245
00:59:21,860 --> 00:59:24,540
 of 100% minute per minute matched,

1246
00:59:24,540 --> 00:59:27,420
 but there's still that asterisk.

1247
00:59:27,420 --> 00:59:30,060
 So saying that like, it's the same,

1248
00:59:30,060 --> 00:59:32,820
 it's clean energy, it's not necessarily

1249
00:59:32,820 --> 00:59:37,940
 a behind the meter renewable generator

1250
00:59:37,940 --> 00:59:42,940
 does, is 100% of that generation is greenhouse gas,

1251
00:59:42,940 --> 00:59:45,460
 where whenever it's coming off of the ERCOT grid,

1252
00:59:45,460 --> 00:59:46,620
 it may or may not be.

1253
00:59:46,620 --> 00:59:50,620
 And finally, this isn't, I wish

1254
00:59:50,620 --> 00:59:53,860
 that this could have included,

1255
00:59:53,860 --> 00:59:55,300
 and Greensense could include

1256
00:59:55,300 --> 00:59:59,580
 behind the meter storage as a value.

1257
00:59:59,580 --> 01:00:01,780
 That's, it's its own topic,

1258
01:00:01,780 --> 01:00:05,180
 but it's often interwoven with solar,

1259
01:00:05,180 --> 01:00:08,420
 because a lot of times you get solar and a battery,

1260
01:00:08,420 --> 01:00:11,980
 a storage unit to go with your solar unit.

1261
01:00:11,980 --> 01:00:16,980
 And I think we know DME has looked at grid scale storage

1262
01:00:16,980 --> 01:00:19,180
 and the prices are not there yet.

1263
01:00:19,180 --> 01:00:21,140
 It's not cost effective.

1264
01:00:21,140 --> 01:00:24,020
 But for customers that wanna have solar

1265
01:00:24,020 --> 01:00:28,460
 and their own storage, that does benefit.

1266
01:00:28,460 --> 01:00:32,460
 It doesn't have the same peak distribution expectation,

1267
01:00:32,460 --> 01:00:37,140
 perhaps, it has, if we look at

1268
01:00:37,140 --> 01:00:39,860
 the more forward thinking REPs,

1269
01:00:39,860 --> 01:00:41,780
 which not in the regulated side,

1270
01:00:41,780 --> 01:00:44,060
 but in the deregulated market,

1271
01:00:44,060 --> 01:00:46,900
 they are, they have agreements with their customers

1272
01:00:46,900 --> 01:00:50,100
 to manage those storage resources.

1273
01:00:50,100 --> 01:00:53,740
 They pay the customers to use the energy

1274
01:00:53,740 --> 01:00:56,660
 out of those batteries at much less than

1275
01:00:56,660 --> 01:00:59,260
 whatever the ERCOT price is, but much more than,

1276
01:00:59,260 --> 01:01:03,060
 like it's enough of a reward that customers willingly

1277
01:01:03,060 --> 01:01:05,940
 let their utilities cycle their batteries

1278
01:01:05,940 --> 01:01:09,660
 to save them money or get a check or things like that.

1279
01:01:09,660 --> 01:01:13,060
 And so I think the next phase of this,

1280
01:01:13,060 --> 01:01:15,180
 and currently Greensense has no incentives at all

1281
01:01:15,180 --> 01:01:16,420
 for battery storage.

1282
01:01:16,420 --> 01:01:19,820
 So I think the next phase of this would be

1283
01:01:19,820 --> 01:01:21,500
 battery storage in Greensense.

1284
01:01:21,500 --> 01:01:26,060
 And then is DME capable of implementing their own

1285
01:01:26,060 --> 01:01:27,420
 or partnering with somebody to do

1286
01:01:27,420 --> 01:01:29,460
 some of this smart resource,

1287
01:01:29,460 --> 01:01:34,460
 smart demand reduction, storage management?

1288
01:01:34,460 --> 01:01:39,620
 - Yeah, I think the short answer is yes to all that, right?

1289
01:01:39,620 --> 01:01:42,740
 So the sustainability group is looking at

1290
01:01:42,740 --> 01:01:45,540
 how to incorporate incentivizing batteries

1291
01:01:45,540 --> 01:01:46,700
 within the dollars that they have.

1292
01:01:46,700 --> 01:01:49,300
 Certainly, any additional dollars that go there

1293
01:01:49,300 --> 01:01:52,660
 can certainly help that, but I think what they've seen

1294
01:01:52,660 --> 01:01:56,100
 is they've seen a lot of interest in HVAC systems

1295
01:01:56,100 --> 01:01:59,780
 and weatherization, you know, insulation.

1296
01:01:59,780 --> 01:02:01,140
 I think that's where a lot of the dollars

1297
01:02:01,140 --> 01:02:03,380
 are going to currently, and there's a lot of people

1298
01:02:03,380 --> 01:02:04,940
 in the community that have that need

1299
01:02:04,940 --> 01:02:06,780
 versus people that need battery storage, right?

1300
01:02:06,780 --> 01:02:08,860
 But again, that is something that's there.

1301
01:02:08,860 --> 01:02:10,180
 As far as using battery storage

1302
01:02:10,180 --> 01:02:12,260
 in a demand side type of program,

1303
01:02:12,260 --> 01:02:14,460
 it is something that we're looking at.

1304
01:02:14,460 --> 01:02:17,660
 Bill's working on an RFP to try to implement

1305
01:02:17,660 --> 01:02:20,340
 some type of program that targets some level

1306
01:02:20,340 --> 01:02:23,380
 of our total load to try to reduce.

1307
01:02:23,380 --> 01:02:26,180
 So those are ongoing projects that we have,

1308
01:02:26,180 --> 01:02:28,220
 and we hope to bring that back to the board

1309
01:02:28,220 --> 01:02:29,420
 here in the near future.

1310
01:02:29,420 --> 01:02:34,900
 - I'm probably the biggest advocate

1311
01:02:34,900 --> 01:02:37,380
 for green energy that there is.

1312
01:02:37,380 --> 01:02:40,140
 However, the main problem that we have with green energy

1313
01:02:40,140 --> 01:02:42,780
 and even the programs that we had in the past

1314
01:02:42,780 --> 01:02:44,820
 is that everybody, regardless of income,

1315
01:02:44,820 --> 01:02:48,740
 is subsidizing the program for those that may not need

1316
01:02:48,740 --> 01:02:50,940
 or may not see the benefits.

1317
01:02:52,060 --> 01:02:54,380
 Wealthier customers tend to be the ones that get solar,

1318
01:02:54,380 --> 01:02:55,940
 tend to be the ones that get EVs,

1319
01:02:55,940 --> 01:02:58,580
 and they're often subsidized through programs

1320
01:02:58,580 --> 01:02:59,860
 that all of us are paying for,

1321
01:02:59,860 --> 01:03:01,700
 even those that can't afford it.

1322
01:03:01,700 --> 01:03:07,460
 So I understand the importance of solar energy.

1323
01:03:07,460 --> 01:03:10,060
 I think it's a good thing to have,

1324
01:03:10,060 --> 01:03:11,220
 but we have to do it correctly.

1325
01:03:11,220 --> 01:03:13,100
 And I think that the Greensense program

1326
01:03:13,100 --> 01:03:16,820
 is capable of benefiting more customers

1327
01:03:16,820 --> 01:03:18,620
 at various income levels.

1328
01:03:18,620 --> 01:03:23,620
 And until we can properly democratize the distribution

1329
01:03:23,620 --> 01:03:27,420
 of the green energy savings,

1330
01:03:27,420 --> 01:03:29,420
 I think that we have to be much more considerate

1331
01:03:29,420 --> 01:03:30,260
 of that fact.

1332
01:03:30,260 --> 01:03:32,300
 Who's benefiting from solar?

1333
01:03:32,300 --> 01:03:34,100
 And it's not our customers

1334
01:03:34,100 --> 01:03:35,460
 who need to benefit from it the most.

1335
01:03:35,460 --> 01:03:37,940
 It's the wealthier customers who don't see the benefits,

1336
01:03:37,940 --> 01:03:40,500
 or who don't see as much of a benefit

1337
01:03:40,500 --> 01:03:42,580
 as our lower income customers would.

1338
01:03:42,580 --> 01:03:44,700
 Just my two cents.

1339
01:03:47,620 --> 01:03:49,700
 - Yes, go ahead. - To dovetail with that.

1340
01:03:49,700 --> 01:03:52,460
 Well put, my concern was,

1341
01:03:52,460 --> 01:03:54,740
 so it's a net billing, so everybody's paying.

1342
01:03:54,740 --> 01:04:00,660
 What savings do the non-solar people get?

1343
01:04:00,660 --> 01:04:02,260
 Are they subsidizing those?

1344
01:04:02,260 --> 01:04:03,900
 So the question I have is,

1345
01:04:03,900 --> 01:04:05,820
 right now we're looking at about a million dollars,

1346
01:04:05,820 --> 01:04:10,820
 roughly, so that's with this number of solars.

1347
01:04:10,820 --> 01:04:14,500
 Do you have a projection, or is that fair to say?

1348
01:04:14,500 --> 01:04:18,740
 This is my concern, a projection for five years from now,

1349
01:04:18,740 --> 01:04:20,860
 I doubt if it'll be a million dollars,

1350
01:04:20,860 --> 01:04:22,300
 because to offset that,

1351
01:04:22,300 --> 01:04:23,900
 we're gonna have to have rate increases,

1352
01:04:23,900 --> 01:04:25,700
 or am I wrong with that?

1353
01:04:25,700 --> 01:04:28,300
 Possibly. - 1.46.

1354
01:04:28,300 --> 01:04:33,580
 - That's what I'm asking, is that number

1355
01:04:33,580 --> 01:04:34,420
 going to stay the same?

1356
01:04:34,420 --> 01:04:35,260
 Is it going to increase?

1357
01:04:35,260 --> 01:04:39,700
 And if it does, does that mean more cost for the,

1358
01:04:39,700 --> 01:04:43,500
 that's my question.

1359
01:04:43,500 --> 01:04:46,060
 It's a caveat, let's look at the crystal ball.

1360
01:04:46,060 --> 01:04:47,980
 What are we looking at further down the road?

1361
01:04:47,980 --> 01:04:48,980
 This looks nice now,

1362
01:04:48,980 --> 01:04:52,300
 but are we gonna have to increase it because of all of this?

1363
01:04:52,300 --> 01:04:57,300
 And if we do, we've gotta be careful how we do that.

1364
01:04:57,300 --> 01:04:58,580
 - Right.

1365
01:04:58,580 --> 01:05:01,700
 - So, give me a crystal ball, please.

1366
01:05:01,700 --> 01:05:04,100
 - Well, I can't give you the crystal ball,

1367
01:05:04,100 --> 01:05:06,980
 but I can tell you when we came back last year

1368
01:05:06,980 --> 01:05:09,340
 having this conversation, we did have some projections

1369
01:05:09,340 --> 01:05:11,860
 on what continuing down the path we were on

1370
01:05:11,860 --> 01:05:13,220
 was gonna cost us.

1371
01:05:13,220 --> 01:05:16,420
 We can retool that now with these new assumptions in there

1372
01:05:16,420 --> 01:05:18,980
 and come back to you with some information,

1373
01:05:18,980 --> 01:05:20,940
 but I can tell you anecdotally,

1374
01:05:20,940 --> 01:05:22,740
 we sort of draw the line in the sand

1375
01:05:22,740 --> 01:05:27,580
 with giving this differential to the Greensense programs,

1376
01:05:27,580 --> 01:05:30,860
 and it socializes that benefit across more customers

1377
01:05:30,860 --> 01:05:33,260
 versus just a small amount for the solar customers.

1378
01:05:33,260 --> 01:05:36,180
 So, to answer your question specifically,

1379
01:05:36,180 --> 01:05:40,580
 right now, it doesn't benefit our current rate payers

1380
01:05:40,580 --> 01:05:41,940
 by doing this shift.

1381
01:05:41,940 --> 01:05:44,660
 What it does benefit is those future systems

1382
01:05:44,660 --> 01:05:47,820
 that come online that we're paying more equitably

1383
01:05:47,820 --> 01:05:50,820
 will no longer have an upward impact on their rates.

1384
01:05:50,820 --> 01:05:51,820
 Does that make sense?

1385
01:05:51,820 --> 01:05:52,660
 - Yes, I think.

1386
01:05:52,660 --> 01:05:54,300
 So, to come back with you,

1387
01:05:54,300 --> 01:05:56,740
 we were doing 0.3 cents versus the nine

1388
01:05:56,740 --> 01:05:58,580
 or whatever the number is,

1389
01:05:58,580 --> 01:06:00,620
 is that the conservative, and I'll call it that,

1390
01:06:00,620 --> 01:06:03,540
 the conservative number that you're using

1391
01:06:03,540 --> 01:06:06,580
 help keep the, I'll use the term inflation number

1392
01:06:06,580 --> 01:06:10,660
 of going up every year, even though it's not profitable now,

1393
01:06:10,660 --> 01:06:14,580
 but it could be something that we are being due diligent on

1394
01:06:14,580 --> 01:06:19,580
 in protecting our other clients with this low number,

1395
01:06:19,580 --> 01:06:23,620
 only because as we increase it, which we will have to,

1396
01:06:23,620 --> 01:06:28,620
 at least we'll be adult about it.

1397
01:06:28,620 --> 01:06:31,380
 - Yes, it's--

1398
01:06:31,380 --> 01:06:33,860
 - Does that make sense, what I said?

1399
01:06:33,860 --> 01:06:34,700
 - I think so, yeah.

1400
01:06:34,700 --> 01:06:36,420
 - 'Cause sometimes my wife just doesn't know,

1401
01:06:36,420 --> 01:06:37,820
 and it's encouraging.

1402
01:06:37,820 --> 01:06:40,300
 All right, thank you very much.

1403
01:06:40,300 --> 01:06:42,700
 And I'm in the same boat with Mr. Plotkin.

1404
01:06:42,700 --> 01:06:45,180
 You know, exact same boat.

1405
01:06:45,180 --> 01:06:47,940
 - So, can we get that projected, then?

1406
01:06:47,940 --> 01:06:48,980
 You said that.

1407
01:06:48,980 --> 01:06:50,260
 - Yes, I'll work on it.

1408
01:06:50,260 --> 01:06:54,580
 - All right.

1409
01:06:54,580 --> 01:06:57,220
 - Yes, so just a matter of chairman of the board.

1410
01:06:57,220 --> 01:07:00,700
 So, what the SFAC recommended

1411
01:07:00,700 --> 01:07:03,260
 was about a five cent blended rate

1412
01:07:03,260 --> 01:07:05,020
 is what they recommended.

1413
01:07:05,020 --> 01:07:07,980
 In addition to that, they also recommended

1414
01:07:07,980 --> 01:07:09,700
 shifting the savings bill.

1415
01:07:09,700 --> 01:07:13,660
 It was about, what, 250 at that to half a million?

1416
01:07:13,660 --> 01:07:15,380
 Or 350?

1417
01:07:15,380 --> 01:07:16,620
 - It was 350, yes.

1418
01:07:16,620 --> 01:07:19,380
 - So, shifting that to energy programs.

1419
01:07:19,380 --> 01:07:21,300
 And of course, they also had,

1420
01:07:21,300 --> 01:07:24,500
 the other recommendation was to give some consideration

1421
01:07:24,500 --> 01:07:26,500
 to some type of grandfathering.

1422
01:07:26,500 --> 01:07:28,900
 They didn't necessarily specify what that needed to be,

1423
01:07:28,900 --> 01:07:30,980
 but those were really their three recommendations.

1424
01:07:30,980 --> 01:07:32,340
 And what we're asking the board today,

1425
01:07:32,340 --> 01:07:35,060
 certainly you have staff's recommendation.

1426
01:07:35,060 --> 01:07:36,260
 You have the SFAC's recommendation.

1427
01:07:36,260 --> 01:07:38,340
 We're looking for the board's recommendation

1428
01:07:38,340 --> 01:07:40,060
 to provide that to the council.

1429
01:07:40,060 --> 01:07:42,220
 - Yes.

1430
01:07:42,220 --> 01:07:45,580
 - To ask the attorney, and you can stop me in mid-sentence.

1431
01:07:45,580 --> 01:07:48,500
 When we talk about grandfather clause,

1432
01:07:48,500 --> 01:07:53,020
 how is that different from a grandfather clause

1433
01:07:53,020 --> 01:07:54,300
 on zoning issues?

1434
01:07:54,300 --> 01:07:59,780
 - So, there's just two different bodies that review those.

1435
01:07:59,780 --> 01:08:02,260
 So, rates are reviewed by the PUCT

1436
01:08:02,260 --> 01:08:06,380
 and by kind of that regulatory body,

1437
01:08:06,380 --> 01:08:10,020
 whereas zoning is under a statutory program,

1438
01:08:10,020 --> 01:08:12,780
 under Chapter 212, under the local government code.

1439
01:08:12,780 --> 01:08:16,100
 So, they're just, they're two very different concepts,

1440
01:08:16,100 --> 01:08:19,540
 legally, and the statute allows for grandfathering

1441
01:08:19,540 --> 01:08:22,420
 in the zoning case, but it does not,

1442
01:08:22,420 --> 01:08:24,260
 from our legal council's opinion,

1443
01:08:24,260 --> 01:08:28,860
 allow for that in the case of rates.

1444
01:08:28,860 --> 01:08:29,700
 - What a shame.

1445
01:08:29,700 --> 01:08:31,820
 - I have a question.

1446
01:08:31,820 --> 01:08:35,700
 If they recommended the five cents,

1447
01:08:35,700 --> 01:08:40,700
 the blended rate, why is staff opposed to that?

1448
01:08:40,700 --> 01:08:50,420
 - So, what we had was a target window.

1449
01:08:50,420 --> 01:08:55,180
 We had the amount that we already know is equitable

1450
01:08:55,180 --> 01:08:58,100
 from what we pay for our PPAs.

1451
01:08:58,100 --> 01:09:01,020
 So, we have a clear avoided cost for that.

1452
01:09:01,020 --> 01:09:03,460
 Now, our whole portfolio isn't solar.

1453
01:09:03,460 --> 01:09:06,540
 We have wind, we work in the market.

1454
01:09:06,540 --> 01:09:11,540
 We do what's best to be an overall value for our customers,

1455
01:09:11,540 --> 01:09:15,620
 but we do exactly know what we pay for PPAs for solar.

1456
01:09:15,620 --> 01:09:17,340
 So, we had that mark.

1457
01:09:17,340 --> 01:09:20,660
 Then, the other extreme is that ERCOT market,

1458
01:09:20,660 --> 01:09:22,740
 which is everything together blended.

1459
01:09:22,740 --> 01:09:25,580
 So, it would make sense to have a middle line there

1460
01:09:25,580 --> 01:09:27,300
 just for conversation purposes,

1461
01:09:27,300 --> 01:09:31,300
 but we feel, as DME, that the most equitable part

1462
01:09:31,300 --> 01:09:36,300
 to pay solar for solar is to use the PPA avoided cost.

1463
01:09:36,300 --> 01:09:38,100
 - I agree.

1464
01:09:38,100 --> 01:09:40,540
 - And just Madam Chair,

1465
01:09:40,540 --> 01:09:45,540
 so that avoided PPA is all of our PPAs together, right?

1466
01:09:45,540 --> 01:09:50,220
 Where we were, if we look at when our latest contract was,

1467
01:09:50,220 --> 01:09:52,300
 then that five cents probably closer

1468
01:09:52,300 --> 01:09:55,220
 to the latest contract that we signed.

1469
01:09:55,220 --> 01:09:58,780
 So, again, we're not opposed to that

1470
01:09:58,780 --> 01:10:00,260
 or any recommendation the council makes,

1471
01:10:00,260 --> 01:10:02,060
 but again, our recommendation is based

1472
01:10:02,060 --> 01:10:04,460
 on what our total portfolio is at currently

1473
01:10:04,460 --> 01:10:06,220
 and it's closer to that four cents.

1474
01:10:06,220 --> 01:10:09,020
 - Okay, go ahead.

1475
01:10:09,020 --> 01:10:15,700
 - So, my inclination is to go with the ERCOT market price

1476
01:10:15,700 --> 01:10:18,700
 simply because DME exists today.

1477
01:10:18,700 --> 01:10:20,700
 DME has 64,000 customers.

1478
01:10:20,700 --> 01:10:22,500
 They've made their power planning.

1479
01:10:22,500 --> 01:10:26,700
 Now, a single customer installs solar.

1480
01:10:26,700 --> 01:10:31,700
 They self-generate some and then they sell back excess.

1481
01:10:31,700 --> 01:10:37,380
 Just the counterfactual of that customer

1482
01:10:37,380 --> 01:10:40,940
 not installing solar versus installing solar for DME

1483
01:10:40,940 --> 01:10:44,980
 is now there's an extra 4KW or something

1484
01:10:44,980 --> 01:10:48,820
 coming back onto the grid for a few hours every afternoon.

1485
01:10:48,820 --> 01:10:53,820
 The net benefit is that approximately seven cents.

1486
01:10:55,740 --> 01:11:00,260
 So, and then allowing that 100% of that benefit

1487
01:11:00,260 --> 01:11:02,260
 to flow back to that customer

1488
01:11:02,260 --> 01:11:06,300
 is encourages that solar installation.

1489
01:11:06,300 --> 01:11:07,980
 If we go with the five cents

1490
01:11:07,980 --> 01:11:12,980
 and that customer adds that additional solar panel

1491
01:11:12,980 --> 01:11:16,420
 like the new customer installs that solar array,

1492
01:11:16,420 --> 01:11:18,660
 then DME is effectively collecting

1493
01:11:18,660 --> 01:11:20,620
 a little bit of additional profit there.

1494
01:11:20,620 --> 01:11:23,220
 Now, I understand there are other charges

1495
01:11:23,220 --> 01:11:26,220
 to having a customer,

1496
01:11:26,220 --> 01:11:31,220
 but to just ERCOT is not 100% renewable.

1497
01:11:31,220 --> 01:11:36,420
 So, even having that customer add their little 4KW array

1498
01:11:36,420 --> 01:11:40,900
 does have a benefit for the ERCOT system.

1499
01:11:40,900 --> 01:11:43,620
 So, that's why I think my recommendation

1500
01:11:43,620 --> 01:11:47,340
 would be to go with the ERCOT avoided cost.

1501
01:11:47,340 --> 01:11:50,620
 I also feel if we cannot have

1502
01:11:50,620 --> 01:11:55,620
 a separate customers installed before a date rate,

1503
01:11:55,620 --> 01:12:00,700
 then we apply a taper for a few years

1504
01:12:00,700 --> 01:12:04,940
 to bring existing customers down to that rate.

1505
01:12:04,940 --> 01:12:07,940
 And that'd be all customers, all solar.

1506
01:12:07,940 --> 01:12:10,980
 If we can't separate the rate cases

1507
01:12:10,980 --> 01:12:15,620
 of those installed before July 1st, 2024.

1508
01:12:15,620 --> 01:12:17,460
 - And with that, you think that would help?

1509
01:12:17,460 --> 01:12:18,580
 Oh, if I may.

1510
01:12:18,580 --> 01:12:19,540
 - Microphone, please.

1511
01:12:19,540 --> 01:12:22,020
 - So, you think that will help with the,

1512
01:12:22,020 --> 01:12:23,900
 what we were talking about, the grandfather,

1513
01:12:23,900 --> 01:12:28,100
 so that they understand the decrease is gradual?

1514
01:12:28,100 --> 01:12:30,300
 Is that what you're referring to, then?

1515
01:12:30,300 --> 01:12:32,020
 - Yeah, and so, like, if we're going,

1516
01:12:32,020 --> 01:12:33,860
 go one cent less per year.

1517
01:12:33,860 --> 01:12:36,380
 So, if we're currently at 11 and go 10, nine, eight, seven,

1518
01:12:36,380 --> 01:12:37,460
 I don't know, something like that.

1519
01:12:37,460 --> 01:12:40,660
 - Would council think that's within the boundaries

1520
01:12:40,660 --> 01:12:43,300
 of one of those committees?

1521
01:12:43,300 --> 01:12:46,260
 - I think the answer is that

1522
01:12:47,220 --> 01:12:50,020
 we can certainly try to set an ordinance,

1523
01:12:50,020 --> 01:12:52,940
 a rate ordinance that sets that out.

1524
01:12:52,940 --> 01:12:55,060
 But remember, today's council

1525
01:12:55,060 --> 01:12:56,700
 cannot bind a future council, right?

1526
01:12:56,700 --> 01:12:59,500
 So, that plan could be there, but it could change.

1527
01:12:59,500 --> 01:13:00,740
 So, yeah, so just be aware.

1528
01:13:00,740 --> 01:13:02,500
 But I think Terry did want to respond

1529
01:13:02,500 --> 01:13:04,540
 to a comment you made about the solar.

1530
01:13:04,540 --> 01:13:05,380
 Go ahead, Terry.

1531
01:13:05,380 --> 01:13:07,220
 - Yes, Terry Nalte, DME.

1532
01:13:07,220 --> 01:13:12,220
 So, I just want to remind the board here

1533
01:13:12,220 --> 01:13:15,060
 that one of the aspects of the study

1534
01:13:15,060 --> 01:13:19,900
 was to look at the avoided costs, excuse me.

1535
01:13:19,900 --> 01:13:22,860
 And I think, Mr. Taylor, one of the things that you said

1536
01:13:22,860 --> 01:13:25,620
 that kind of heightened my awareness

1537
01:13:25,620 --> 01:13:26,700
 was the fact that, you know,

1538
01:13:26,700 --> 01:13:31,140
 if someone builds another rooftop solar unit,

1539
01:13:31,140 --> 01:13:36,140
 that it lowers the cost to DME and to the ERCOT market,

1540
01:13:36,140 --> 01:13:38,220
 and it helps with the emission profile.

1541
01:13:38,220 --> 01:13:41,860
 I'm not disputing it reduces the emission profile.

1542
01:13:41,860 --> 01:13:44,220
 However, I would just remind you

1543
01:13:44,220 --> 01:13:47,020
 that if you build a home in Denton today,

1544
01:13:47,020 --> 01:13:53,100
 you must connect that home to the distribution system of DME.

1545
01:13:53,100 --> 01:13:57,100
 You can't get an occupational permit

1546
01:13:57,100 --> 01:14:00,180
 unless you're connected to the DME system.

1547
01:14:00,180 --> 01:14:04,220
 We, as a utility, have a fiduciary responsibility

1548
01:14:04,220 --> 01:14:07,220
 to provide energy to that home at all time

1549
01:14:07,220 --> 01:14:09,540
 based upon the demand of the home.

1550
01:14:09,540 --> 01:14:13,940
 So, when that solar unit is not running,

1551
01:14:13,940 --> 01:14:16,900
 during the peak, which Jill showed in one of her slides,

1552
01:14:16,900 --> 01:14:19,500
 which takes place three or four hours

1553
01:14:19,500 --> 01:14:23,460
 after the peak surplus energy generation

1554
01:14:23,460 --> 01:14:26,420
 that's taking place at around noon or one o'clock,

1555
01:14:26,420 --> 01:14:29,100
 and it's seven or eight o'clock at night,

1556
01:14:29,100 --> 01:14:34,100
 that solar facility has no value to the overall ERCOT grid

1557
01:14:34,100 --> 01:14:37,980
 because we still have to meet that demand.

1558
01:14:37,980 --> 01:14:39,980
 We still have that cost.

1559
01:14:39,980 --> 01:14:43,980
 And so, I think rightfully so, the study says,

1560
01:14:43,980 --> 01:14:48,220
 let's value solar for the true value that it provides.

1561
01:14:48,220 --> 01:14:50,700
 And it is not providing value to us

1562
01:14:50,700 --> 01:14:55,700
 from a power supply perspective when we need it the most.

1563
01:14:55,700 --> 01:14:59,380
 And we have to then go out and buy more energy,

1564
01:14:59,380 --> 01:15:03,300
 whether it's market energy or whether it's running the deck,

1565
01:15:03,300 --> 01:15:06,540
 which we do in what I'll characterize

1566
01:15:06,540 --> 01:15:11,540
 as the most responsible way to back up our renewable portfolio

1567
01:15:11,540 --> 01:15:14,100
 with the lowest emission profile

1568
01:15:14,100 --> 01:15:17,860
 of any type of fossil fuel generator that we can.

1569
01:15:17,860 --> 01:15:22,860
 And so, I think we all read a lot of stuff in the media,

1570
01:15:22,860 --> 01:15:28,140
 and we hear that, hey, this solar resource

1571
01:15:28,140 --> 01:15:31,660
 is going to avoid additional generation

1572
01:15:31,660 --> 01:15:33,660
 that would emit carbon.

1573
01:15:33,660 --> 01:15:35,740
 And that's just not the truth.

1574
01:15:35,740 --> 01:15:39,140
 I can tell you from someone who operates the system

1575
01:15:39,140 --> 01:15:41,260
 that it just doesn't work that way.

1576
01:15:41,260 --> 01:15:46,020
 - So, I just wanna, you've said,

1577
01:15:46,020 --> 01:15:53,180
 you said that this solar array doesn't have this value,

1578
01:15:53,180 --> 01:15:57,980
 but if the solar array, if you just ignore in your planning

1579
01:15:57,980 --> 01:16:00,300
 that there's a solar array on that roof,

1580
01:16:00,300 --> 01:16:04,660
 and you just, you buy power for it, you buy PPAs for it,

1581
01:16:04,660 --> 01:16:05,980
 you do all those things,

1582
01:16:05,980 --> 01:16:10,140
 and then it is, and you let those extra generation

1583
01:16:10,140 --> 01:16:14,420
 just be sold back on our COTS market, it's worth seven cents.

1584
01:16:14,420 --> 01:16:19,020
 So that's, I understand that there's more to a grid

1585
01:16:19,020 --> 01:16:21,860
 than just that net generation,

1586
01:16:21,860 --> 01:16:25,220
 and that you need to have the capability

1587
01:16:25,220 --> 01:16:27,980
 to meet those demands in off hours.

1588
01:16:27,980 --> 01:16:30,140
 - Yeah, those-- - But you just said,

1589
01:16:30,140 --> 01:16:34,100
 like, if you just plan as if that's not there,

1590
01:16:34,100 --> 01:16:37,380
 and then you sell back the excess to ERCOT,

1591
01:16:37,380 --> 01:16:39,300
 which in the past has been like the worst,

1592
01:16:39,300 --> 01:16:42,460
 least efficient, lowest value thing you could do,

1593
01:16:42,460 --> 01:16:44,220
 it's still worth seven cents.

1594
01:16:44,220 --> 01:16:46,220
 So, because that's the average price

1595
01:16:46,220 --> 01:16:48,460
 during a solar curve in ERCOT.

1596
01:16:48,460 --> 01:16:52,100
 Because, sure, in October, the peak's at eight p.m.

1597
01:16:52,100 --> 01:16:55,260
 In July, August, and September,

1598
01:16:55,260 --> 01:16:57,860
 the peak's at five p.m. or four p.m.

1599
01:16:57,860 --> 01:16:59,700
 And so that curve that shows that 50--

1600
01:16:59,700 --> 01:17:01,260
 - Except seven p.m., seven or eight p.m.

1601
01:17:01,260 --> 01:17:03,700
 - Peak price, perhaps, not peak load.

1602
01:17:03,700 --> 01:17:05,380
 - Peak load. - And peak price.

1603
01:17:05,380 --> 01:17:08,380
 - The last four CPs for the last five years

1604
01:17:08,380 --> 01:17:11,660
 have all been between like four 30 and five 30 p.m.

1605
01:17:11,660 --> 01:17:14,900
 And that's the coincident peaks in the ERCOT grid.

1606
01:17:14,900 --> 01:17:19,900
 So, while the annual average hourly peak might be at eight p.m.,

1607
01:17:19,900 --> 01:17:25,180
 the true peaks in summer are in daytime hours.

1608
01:17:25,180 --> 01:17:30,180
 - And fair enough, but that's because large industrials

1609
01:17:31,220 --> 01:17:34,980
 reduce their load during those peak demand times

1610
01:17:34,980 --> 01:17:37,300
 because the prices are so high.

1611
01:17:37,300 --> 01:17:41,420
 And so, you as a homeowner, a rooftop solar owner,

1612
01:17:41,420 --> 01:17:44,540
 you're not necessarily reducing your demand

1613
01:17:44,540 --> 01:17:47,940
 unless you own a battery and you've stored that energy

1614
01:17:47,940 --> 01:17:49,780
 for later use.

1615
01:17:49,780 --> 01:17:52,620
 So, I understand what you're saying.

1616
01:17:52,620 --> 01:17:55,700
 I'm just saying from a practical perspective,

1617
01:17:55,700 --> 01:17:59,380
 I still have to have sufficient resources

1618
01:17:59,380 --> 01:18:01,700
 that I've purchased.

1619
01:18:01,700 --> 01:18:04,620
 And so, it's not worth seven cents

1620
01:18:04,620 --> 01:18:06,940
 at one or two o'clock in the afternoon.

1621
01:18:06,940 --> 01:18:11,500
 It's worth probably one cent or two cent.

1622
01:18:11,500 --> 01:18:14,820
 I can show you the hourly curves that we,

1623
01:18:14,820 --> 01:18:18,340
 if we sell that back into the ERCOT market,

1624
01:18:18,340 --> 01:18:19,180
 that's what it'd be.

1625
01:18:19,180 --> 01:18:22,060
 So, if we have, let's just say we have a four cent

1626
01:18:22,060 --> 01:18:25,540
 average solar price from our long-term PPAs.

1627
01:18:25,540 --> 01:18:28,100
 At one or two o'clock in the afternoon,

1628
01:18:28,100 --> 01:18:30,500
 if we're in a surplus situation,

1629
01:18:30,500 --> 01:18:33,500
 we're selling that energy back for one cent.

1630
01:18:33,500 --> 01:18:37,260
 We're losing three cents on that energy.

1631
01:18:37,260 --> 01:18:40,420
 That's the reality of how the market works.

1632
01:18:40,420 --> 01:18:43,100
 So, when these rooftop solar units

1633
01:18:43,100 --> 01:18:45,900
 are producing surplus energy,

1634
01:18:45,900 --> 01:18:47,420
 pushing it back into our grid,

1635
01:18:47,420 --> 01:18:51,420
 it's worth the lease to us

1636
01:18:51,420 --> 01:18:54,140
 at any other time of the day.

1637
01:18:54,140 --> 01:18:56,540
 Now, we don't reflect that.

1638
01:18:56,540 --> 01:18:59,860
 Jill's analysis did look at hourly prices,

1639
01:18:59,860 --> 01:19:01,060
 but at the end of the day,

1640
01:19:01,060 --> 01:19:04,020
 it's looking at what the, as you compare it,

1641
01:19:04,020 --> 01:19:09,020
 to the price of our portfolio of solar resources,

1642
01:19:09,020 --> 01:19:13,540
 which benefits every customer in the service territory.

1643
01:19:13,540 --> 01:19:17,260
 And so, just from an economic perspective,

1644
01:19:17,260 --> 01:19:21,420
 if I'm debating on whether to build a solar resource

1645
01:19:21,420 --> 01:19:24,980
 on the top of my home or to buy it from DME,

1646
01:19:24,980 --> 01:19:27,220
 on a dollar per KW hour,

1647
01:19:27,220 --> 01:19:30,780
 DME can do it much cheaper

1648
01:19:30,780 --> 01:19:34,380
 than that resource can do it on its own.

1649
01:19:34,380 --> 01:19:39,380
 That homeowner still gets the full value

1650
01:19:39,380 --> 01:19:43,260
 of the 12 1/2 cents avoided payment

1651
01:19:43,260 --> 01:19:45,860
 it would have made to DME.

1652
01:19:45,860 --> 01:19:48,820
 But the surplus that it's pushing back to us

1653
01:19:48,820 --> 01:19:53,420
 is only worth one or two cents when it's pushing back.

1654
01:19:53,420 --> 01:19:55,780
 - So, it was my understanding the seven cents rate

1655
01:19:55,780 --> 01:19:59,500
 was the hour per hour matched, or caught price.

1656
01:19:59,500 --> 01:20:02,060
 - I don't know. - Was that not correct?

1657
01:20:02,060 --> 01:20:03,460
 - Yeah, it's an hourly,

1658
01:20:03,460 --> 01:20:08,380
 it's a full year's hourly analysis,

1659
01:20:08,380 --> 01:20:12,900
 and it looks at how much the solar's producing,

1660
01:20:12,900 --> 01:20:16,180
 and it ties it to the, or caught market price every hour,

1661
01:20:16,180 --> 01:20:19,500
 plus it accounts for ancillary services,

1662
01:20:19,500 --> 01:20:22,700
 plus it accounts for any credit

1663
01:20:22,700 --> 01:20:27,700
 for not being on peak for transmission at that time,

1664
01:20:27,700 --> 01:20:30,020
 and then it is adjusted for losses

1665
01:20:30,020 --> 01:20:32,580
 because there's the savings and losses

1666
01:20:32,580 --> 01:20:34,580
 'cause it's not going across the system.

1667
01:20:34,580 --> 01:20:39,700
 And also to follow up on your comment earlier,

1668
01:20:39,700 --> 01:20:42,540
 looking at that table five one,

1669
01:20:42,540 --> 01:20:45,820
 a lot of those avoided costs are right in that seven cent

1670
01:20:45,820 --> 01:20:49,460
 range because a lot of it is based on the or caught market.

1671
01:20:50,620 --> 01:20:52,900
 And Austin Energies is the same thing.

1672
01:20:52,900 --> 01:20:55,580
 It's a similar six, seven cent rate,

1673
01:20:55,580 --> 01:20:57,540
 and then they did include it in addition

1674
01:20:57,540 --> 01:20:59,060
 on their first societal benefits

1675
01:20:59,060 --> 01:21:01,500
 'cause they're not 100% renewable.

1676
01:21:01,500 --> 01:21:03,380
 - And we are. - Yes, and you are.

1677
01:21:03,380 --> 01:21:06,420
 And so, and again, so yes, so like on average,

1678
01:21:06,420 --> 01:21:09,780
 these utilities that are doing just the avoided costs

1679
01:21:09,780 --> 01:21:12,620
 are looking at or caught average of around seven cents.

1680
01:21:12,620 --> 01:21:17,580
 For Denton, the solar generating,

1681
01:21:17,580 --> 01:21:21,900
 if we go back to that graph,

1682
01:21:21,900 --> 01:21:25,900
 the power purchase agreements Denton's buying

1683
01:21:25,900 --> 01:21:28,300
 is this exact green profile.

1684
01:21:28,300 --> 01:21:31,940
 They're producing the most at noon around lunch.

1685
01:21:31,940 --> 01:21:36,140
 And so from an avoided cost perspective,

1686
01:21:36,140 --> 01:21:37,580
 that is the most comparable

1687
01:21:37,580 --> 01:21:39,180
 because it's the exact same resource.

1688
01:21:39,180 --> 01:21:40,220
 It produces the same way.

1689
01:21:40,220 --> 01:21:42,340
 It's all dependent on the sun.

1690
01:21:42,340 --> 01:21:44,080
 But these larger solar,

1691
01:21:46,620 --> 01:21:47,500
 not community solar,

1692
01:21:47,500 --> 01:21:49,660
 but like these larger solar installations

1693
01:21:49,660 --> 01:21:53,620
 are definitely much more economical than rooftop solar.

1694
01:21:53,620 --> 01:21:56,180
 So that's why it comes out to about four cents.

1695
01:21:56,180 --> 01:21:57,220
 - Thank you.

1696
01:21:57,220 --> 01:21:59,220
 - I'm not sure we're gonna come to consensus.

1697
01:21:59,220 --> 01:22:02,380
 So what direction do we want to go?

1698
01:22:02,380 --> 01:22:09,500
 I know for me, I wanna go with the cost of service

1699
01:22:09,500 --> 01:22:11,460
 for the PPAs.

1700
01:22:11,460 --> 01:22:15,540
 And I agree with going into green cents

1701
01:22:15,540 --> 01:22:18,060
 because the vast majority of the public

1702
01:22:18,060 --> 01:22:22,220
 will benefit from that versus the people

1703
01:22:22,220 --> 01:22:24,820
 that can afford to put a solar panel on their house.

1704
01:22:24,820 --> 01:22:27,900
 I'll go over to Aaron.

1705
01:22:27,900 --> 01:22:35,700
 - Yeah, I think that's one item we have to tackle on this.

1706
01:22:35,700 --> 01:22:41,020
 So yes, I feel similar to you on that.

1707
01:22:43,140 --> 01:22:45,700
 - I think I know where you're going.

1708
01:22:45,700 --> 01:22:47,340
 - Yeah, I agree with you.

1709
01:22:47,340 --> 01:22:52,000
 When solar is producing on a rooftop,

1710
01:22:52,000 --> 01:22:54,780
 it's producing everywhere else simultaneously.

1711
01:22:54,780 --> 01:22:56,840
 So the cost of solar,

1712
01:22:56,840 --> 01:23:00,660
 the benefit of solar is only occurring at that point.

1713
01:23:00,660 --> 01:23:04,100
 And that's the point in which the price savings

1714
01:23:04,100 --> 01:23:06,220
 for our perspective comes into play

1715
01:23:06,220 --> 01:23:09,260
 is when is at peak generation.

1716
01:23:09,260 --> 01:23:12,900
 We're not producing solar at 2 a.m. in the morning,

1717
01:23:12,900 --> 01:23:14,700
 but we're still paying people

1718
01:23:14,700 --> 01:23:17,120
 as if they are getting that 2 a.m. in the morning rate.

1719
01:23:17,120 --> 01:23:18,440
 So it doesn't make sense to me.

1720
01:23:18,440 --> 01:23:20,500
 So I have to agree.

1721
01:23:20,500 --> 01:23:25,940
 The model, the three cent model makes the most sense.

1722
01:23:25,940 --> 01:23:26,980
 - Almost four cents.

1723
01:23:26,980 --> 01:23:28,940
 - Yeah, 3.7, yeah.

1724
01:23:28,940 --> 01:23:31,340
 I think it makes the most sense for right now

1725
01:23:31,340 --> 01:23:35,820
 with the hope that more people benefit from green cents

1726
01:23:35,820 --> 01:23:40,360
 at varying income levels as opposed to what it is now.

1727
01:23:40,360 --> 01:23:42,980
 Maybe we could look at ways to lower the cost of solar

1728
01:23:42,980 --> 01:23:45,260
 for people in lower income brackets.

1729
01:23:45,260 --> 01:23:46,780
 That might be nice,

1730
01:23:46,780 --> 01:23:49,060
 but it still doesn't fundamentally solve the problem

1731
01:23:49,060 --> 01:23:51,500
 that we're not making solar at 2 a.m. in the morning.

1732
01:23:51,500 --> 01:23:53,300
 - Mr. Cheek.

1733
01:23:53,300 --> 01:23:58,140
 - Yeah, we talked at consideration about industries running,

1734
01:23:58,140 --> 01:24:00,820
 turning down their usage at peak hours,

1735
01:24:00,820 --> 01:24:02,300
 but we don't charge them any different.

1736
01:24:02,300 --> 01:24:05,060
 We charge them on 12 cents at six,

1737
01:24:05,060 --> 01:24:08,960
 and we charge them 12 cents at six o'clock in the morning.

1738
01:24:08,960 --> 01:24:10,860
 So, I mean, for us,

1739
01:24:10,860 --> 01:24:12,960
 we obviously measure that on our purchase, right?

1740
01:24:12,960 --> 01:24:14,400
 We're trying to get it cheap as we can,

1741
01:24:14,400 --> 01:24:16,060
 and we're always trying to get everything

1742
01:24:16,060 --> 01:24:18,060
 as cheap as we can, but anyway,

1743
01:24:18,060 --> 01:24:20,180
 I think Tony actually summed it up best

1744
01:24:20,180 --> 01:24:22,420
 at the beginning of this last conversation.

1745
01:24:22,420 --> 01:24:24,860
 We'll just, we'll bring forward to them.

1746
01:24:24,860 --> 01:24:27,300
 You know, some of the members of the PUB suggested

1747
01:24:27,300 --> 01:24:29,700
 that we make a consideration for people

1748
01:24:29,700 --> 01:24:32,620
 who have made this commitment 20 years ago,

1749
01:24:32,620 --> 01:24:34,760
 and others didn't.

1750
01:24:37,900 --> 01:24:39,980
 - Tony's sticking with it.

1751
01:24:39,980 --> 01:24:46,100
 - So the value of solar in the ERCOT market is seven cents.

1752
01:24:46,100 --> 01:24:51,340
 So for us to pay solar rooftop owners

1753
01:24:51,340 --> 01:24:53,540
 through three and a half cents

1754
01:24:53,540 --> 01:24:56,180
 means DME is profiting by about, you know,

1755
01:24:56,180 --> 01:24:59,960
 three point whatever cents per kilowatt

1756
01:24:59,960 --> 01:25:03,140
 that a customer chooses to put solar on their rooftop.

1757
01:25:03,140 --> 01:25:05,540
 You could talk about, oh, well, in 2019,

1758
01:25:05,540 --> 01:25:08,740
 we signed this deal for some $20 megawatt solar.

1759
01:25:08,740 --> 01:25:11,080
 Well, you can't buy that in ERCOT today.

1760
01:25:11,080 --> 01:25:13,780
 And so we got a really good price back then,

1761
01:25:13,780 --> 01:25:18,780
 but to offset your new solar roof today

1762
01:25:18,780 --> 01:25:23,420
 based on a PPA from six years ago at a really good price,

1763
01:25:23,420 --> 01:25:25,460
 to me just seems unfair.

1764
01:25:25,460 --> 01:25:30,660
 If we pay the market price, that just seems inherently fair

1765
01:25:30,660 --> 01:25:35,660
 and doesn't have a net added cost to DME.

1766
01:25:35,660 --> 01:25:38,540
 So that's why I stick with the seven cents.

1767
01:25:38,540 --> 01:25:45,700
 - Would you go back to the chart again with the seven foreign?

1768
01:25:45,700 --> 01:25:50,460
 No, next one.

1769
01:25:50,460 --> 01:25:52,460
 One we had broken down with it.

1770
01:25:52,460 --> 01:25:54,700
 - The one that shows the savings.

1771
01:25:54,700 --> 01:25:55,540
 - Oh.

1772
01:25:55,540 --> 01:25:57,420
 - And the blended.

1773
01:25:57,420 --> 01:25:59,180
 - Oh, the blended, hold on, sorry.

1774
01:26:00,900 --> 01:26:01,920
 - This one?

1775
01:26:01,920 --> 01:26:02,760
 - No, one more.

1776
01:26:02,760 --> 01:26:05,540
 - Thank you. - Okay.

1777
01:26:05,540 --> 01:26:06,380
 - That one.

1778
01:26:06,380 --> 01:26:09,220
 - I would agree with going with a PPA,

1779
01:26:09,220 --> 01:26:12,460
 the three cents or four cents has been brought up.

1780
01:26:12,460 --> 01:26:14,980
 But I'd like to ask, I'd like for that to go forward.

1781
01:26:14,980 --> 01:26:17,500
 But then I really would like the idea of,

1782
01:26:17,500 --> 01:26:19,700
 not the grandfather, but some kind of stair step.

1783
01:26:19,700 --> 01:26:22,540
 And I'm curious as to when can that be brought up?

1784
01:26:22,540 --> 01:26:23,820
 Can that be included in this

1785
01:26:23,820 --> 01:26:25,380
 or does it need to be separate?

1786
01:26:28,860 --> 01:26:30,900
 - It kind of depends on the direction

1787
01:26:30,900 --> 01:26:34,860
 the board would like to go and staff and council.

1788
01:26:34,860 --> 01:26:39,060
 I mean, ultimately I can only give, you know,

1789
01:26:39,060 --> 01:26:42,640
 an opinion and it's ultimately up to y'all's decision.

1790
01:26:42,640 --> 01:26:44,260
 - I'm in agreement with chair.

1791
01:26:44,260 --> 01:26:46,940
 - I'd be in agreement with that, yeah.

1792
01:26:46,940 --> 01:26:47,760
 - Thank you.

1793
01:26:47,760 --> 01:26:50,380
 - I think we have consensus on that, right?

1794
01:26:50,380 --> 01:26:51,660
 Yes, okay.

1795
01:26:51,660 --> 01:26:55,380
 Wow, this is the liveliest discussion

1796
01:26:55,380 --> 01:26:56,740
 we've had in a long time.

1797
01:26:56,740 --> 01:26:57,840
 It's been fun.

1798
01:26:59,380 --> 01:27:00,900
 Do you have what you need?

1799
01:27:00,900 --> 01:27:01,740
 - I think we do.

1800
01:27:01,740 --> 01:27:02,560
 - Okay. - Thank you.

1801
01:27:02,560 --> 01:27:03,400
 - All right.

1802
01:27:03,400 --> 01:27:05,820
 - Okay.

1803
01:27:05,820 --> 01:27:08,420
 - Did you have something else to say?

1804
01:27:08,420 --> 01:27:12,980
 - So just for my understanding, we're going with the,

1805
01:27:12,980 --> 01:27:14,220
 oh, sorry.

1806
01:27:14,220 --> 01:27:15,220
 - Microphone, yeah.

1807
01:27:15,220 --> 01:27:21,020
 - From my understanding, we're going with the 3.79

1808
01:27:21,020 --> 01:27:24,700
 with a conversation continuing on the grandfathering.

1809
01:27:24,700 --> 01:27:25,540
 - Yes.

1810
01:27:25,540 --> 01:27:27,500
 - And the savings also going towards--

1811
01:27:27,500 --> 01:27:28,840
 - Green cents. - Green cents.

1812
01:27:28,840 --> 01:27:29,680
 - Yes.

1813
01:27:29,680 --> 01:27:31,440
 - Okay, thank you.

1814
01:27:31,440 --> 01:27:33,960
 - All right, thank you.

1815
01:27:33,960 --> 01:27:35,180
 - We'll get you that projection, thank you.

1816
01:27:35,180 --> 01:27:37,220
 - Yeah, thank you.

1817
01:27:37,220 --> 01:27:40,140
 Okay, next item, receive a report, hold a discussion

1818
01:27:40,140 --> 01:27:43,100
 and give staff direction on the proposed solid waste water,

1819
01:27:43,100 --> 01:27:47,360
 wastewater and electric rates for 2024, 2025.

1820
01:27:47,360 --> 01:27:53,380
 Hopefully it's not as long, but maybe it is.

1821
01:27:53,380 --> 01:27:54,340
 - It may be.

1822
01:27:59,460 --> 01:28:00,900
 - All right.

1823
01:28:00,900 --> 01:28:02,840
 Good morning, Madam Chair, members of the board,

1824
01:28:02,840 --> 01:28:04,940
 Matt Hamilton, Budget Manager.

1825
01:28:04,940 --> 01:28:07,580
 Here to present this morning,

1826
01:28:07,580 --> 01:28:12,260
 the preliminary fiscal year 24, 25 utility rates.

1827
01:28:12,260 --> 01:28:18,740
 So today we'll talk a little bit about

1828
01:28:18,740 --> 01:28:21,620
 the rate change history and then get into

1829
01:28:21,620 --> 01:28:24,600
 the specific proposed utility rates

1830
01:28:24,600 --> 01:28:26,140
 for each of the four utilities

1831
01:28:26,140 --> 01:28:29,340
 and then talk a little bit about next steps

1832
01:28:29,340 --> 01:28:32,080
 and what the calendar looks like going forward.

1833
01:28:32,080 --> 01:28:36,620
 So this is a slide that we had brought forward,

1834
01:28:36,620 --> 01:28:41,620
 I believe last time, showing the history of rate increases

1835
01:28:41,620 --> 01:28:44,860
 for the four utilities and as we discussed,

1836
01:28:44,860 --> 01:28:48,580
 we really haven't had many rate increases

1837
01:28:48,580 --> 01:28:50,540
 over the last several years,

1838
01:28:50,540 --> 01:28:54,980
 in particular for water and solid waste.

1839
01:28:54,980 --> 01:28:58,140
 We haven't had rate increases in over five years.

1840
01:28:58,140 --> 01:29:02,020
 In fact, particularly for solid waste,

1841
01:29:02,020 --> 01:29:07,020
 we saw some significant decreases in 2019, 2020 and 2021.

1842
01:29:07,020 --> 01:29:12,980
 And during this time, as you know,

1843
01:29:12,980 --> 01:29:16,180
 what we've seen in the economy is an increase in prices,

1844
01:29:16,180 --> 01:29:18,380
 an increase in inflation,

1845
01:29:18,380 --> 01:29:21,460
 an increase in the cost of personnel and equipment.

1846
01:29:21,460 --> 01:29:26,460
 So what we are looking at for 2025 are rate increases

1847
01:29:26,460 --> 01:29:33,180
 for each of the four utilities

1848
01:29:33,180 --> 01:29:37,940
 to try and meet the revenue sufficiency requirements

1849
01:29:37,940 --> 01:29:39,420
 that we believe will be necessary

1850
01:29:39,420 --> 01:29:41,900
 going into the next fiscal year.

1851
01:29:41,900 --> 01:29:46,700
 So starting with solid waste and recycling,

1852
01:29:46,700 --> 01:29:50,820
 what we are proposing is a one and a half percent increase

1853
01:29:50,820 --> 01:29:54,660
 to residential service and commercial service.

1854
01:29:54,660 --> 01:29:59,260
 As you'll see the rate increase,

1855
01:29:59,260 --> 01:30:02,140
 whether you have a 65 gallon cart

1856
01:30:02,140 --> 01:30:05,260
 or a more typical 95 gallon cart,

1857
01:30:05,260 --> 01:30:09,340
 a residential bill would increase either 31 cents or 30,

1858
01:30:09,340 --> 01:30:12,020
 oh, sorry, 31 cents or 38 cents.

1859
01:30:12,020 --> 01:30:17,260
 Additionally, we're proposing an increase

1860
01:30:17,260 --> 01:30:22,260
 in the roll-off and compactor rates per poll of $25 for each

1861
01:30:22,260 --> 01:30:25,580
 and then a small increase

1862
01:30:25,580 --> 01:30:29,460
 in the monthly container rentals for each of those.

1863
01:30:29,460 --> 01:30:35,220
 When we did our analysis

1864
01:30:35,220 --> 01:30:38,860
 and we have received some preliminary information

1865
01:30:38,860 --> 01:30:41,580
 from our consultant who is conducting

1866
01:30:41,580 --> 01:30:43,700
 the solid waste cost of service study

1867
01:30:44,580 --> 01:30:48,620
 that the landfill is significantly under recovering.

1868
01:30:48,620 --> 01:30:51,020
 And so part of what we've looked at,

1869
01:30:51,020 --> 01:30:53,140
 not just with solid waste, but all the utilities

1870
01:30:53,140 --> 01:30:58,140
 is really trying to right size the rates

1871
01:30:58,140 --> 01:31:05,540
 to align with full cost recovery.

1872
01:31:05,540 --> 01:31:09,180
 And so when we looked at the landfill in particular,

1873
01:31:09,180 --> 01:31:14,180
 we felt that $1.50 across all utilities

1874
01:31:15,100 --> 01:31:17,780
 rates with the exception of shingles

1875
01:31:17,780 --> 01:31:21,180
 would be appropriate to increase the revenue

1876
01:31:21,180 --> 01:31:25,380
 to meet the expenditures associated with the landfill.

1877
01:31:25,380 --> 01:31:29,460
 One item that we are proposing to add

1878
01:31:29,460 --> 01:31:34,460
 is a non-resident electronics disposal fee.

1879
01:31:34,460 --> 01:31:39,940
 So currently, whether you are a resident or non-resident,

1880
01:31:39,940 --> 01:31:42,820
 you'll pay $10 per item.

1881
01:31:42,820 --> 01:31:47,820
 What we are proposing is a $20 non-resident fee.

1882
01:31:47,820 --> 01:31:55,140
 And then in regard to commercial trash,

1883
01:31:55,140 --> 01:31:57,540
 proposing a 1.5% increase.

1884
01:31:57,540 --> 01:32:03,460
 So in summary, a 1.5% increase

1885
01:32:03,460 --> 01:32:05,660
 for residential and commercial cart service,

1886
01:32:05,660 --> 01:32:09,580
 the $25 increase for the roll-off and compactor rates

1887
01:32:09,580 --> 01:32:14,100
 along with small increases for the rental of the containers

1888
01:32:14,100 --> 01:32:15,120
 and a flat.

1889
01:32:39,580 --> 01:32:41,740
 (silence)

1890
01:33:09,580 --> 01:33:11,740
 (silence)

1891
01:33:39,780 --> 01:33:41,940
 (silence)

1892
01:34:09,580 --> 01:34:11,740
 (silence)

1893
01:34:11,740 --> 01:34:15,260
 - It looks like it's back on.

1894
01:34:15,260 --> 01:34:17,340
 - Oh, looks like we're back on, okay.

1895
01:34:17,340 --> 01:34:21,500
 - Yeah, it doesn't look like it's still, yes.

1896
01:34:21,500 --> 01:34:22,780
 - Yeah, it's still not on.

1897
01:34:22,780 --> 01:34:33,140
 - Are you able to advance the slides?

1898
01:34:33,140 --> 01:34:35,180
 - I believe I am, I think at this point,

1899
01:34:35,180 --> 01:34:37,300
 we may just not be able to get the screen down.

1900
01:34:37,300 --> 01:34:38,140
 - That's okay.

1901
01:34:38,140 --> 01:34:39,220
 - You didn't say it's back on.

1902
01:34:39,220 --> 01:34:42,620
 - Okay, all right, well let's, we can see it just fine.

1903
01:34:42,620 --> 01:34:43,460
 - Okay.

1904
01:34:43,460 --> 01:34:45,700
 - I have a quick question on this slide.

1905
01:34:45,700 --> 01:34:46,540
 - Sure.

1906
01:34:46,540 --> 01:34:49,580
 - Were we on the next slide a second ago?

1907
01:34:49,580 --> 01:34:50,840
 - The previous?

1908
01:34:50,840 --> 01:34:54,380
 - We were on the summary.

1909
01:34:54,380 --> 01:34:57,060
 - We just finished up, yeah.

1910
01:34:57,060 --> 01:34:58,900
 - Does that $1.50 increase,

1911
01:34:58,900 --> 01:35:03,900
 is that expected to cover the cost of the length of operation?

1912
01:35:03,900 --> 01:35:07,820
 - We believe it will,

1913
01:35:09,620 --> 01:35:12,060
 get very close to covering the cost

1914
01:35:12,060 --> 01:35:15,120
 of the landfill operation next fiscal year.

1915
01:35:15,120 --> 01:35:21,260
 Looking forward, I think those details

1916
01:35:21,260 --> 01:35:26,140
 will be part of the full cost of service conclusions,

1917
01:35:26,140 --> 01:35:28,900
 but, yes.

1918
01:35:28,900 --> 01:35:38,180
 Okay, so just taking a look at,

1919
01:35:39,380 --> 01:35:40,860
 the preliminary rates in regard

1920
01:35:40,860 --> 01:35:43,220
 to residential solid waste and recycling bills.

1921
01:35:43,220 --> 01:35:46,860
 So as we look at 96 gallon cart rates

1922
01:35:46,860 --> 01:35:50,420
 for municipal providers in the Metroplex,

1923
01:35:50,420 --> 01:35:54,620
 what you'll see is Denton is kind of middle of the road,

1924
01:35:54,620 --> 01:35:59,620
 and the proposed 36 cent, I believe it was, increase,

1925
01:35:59,620 --> 01:36:03,940
 still keeps us in the middle.

1926
01:36:03,940 --> 01:36:08,900
 These preliminary rates for the other cities

1927
01:36:08,900 --> 01:36:12,000
 do not include any rate increase

1928
01:36:12,000 --> 01:36:17,000
 that they may be proposing in fiscal year 2025.

1929
01:36:17,000 --> 01:36:23,700
 And so we would anticipate that Denton would remain

1930
01:36:23,700 --> 01:36:26,760
 kind of middle of the road for municipal providers.

1931
01:36:26,760 --> 01:36:35,740
 Okay, taking a look at water and wastewater.

1932
01:36:35,740 --> 01:36:39,900
 Starting with water, we're proposing a 3% rate increase

1933
01:36:39,900 --> 01:36:43,300
 for residential water service and commercial water service.

1934
01:36:43,300 --> 01:36:48,060
 This does include the customers

1935
01:36:48,060 --> 01:36:49,580
 that are outside of the corporate limits,

1936
01:36:49,580 --> 01:36:53,040
 which would also see their rates increase 3% as well.

1937
01:36:53,040 --> 01:36:56,100
 You'll see in the percent change column there,

1938
01:36:56,100 --> 01:37:01,100
 2.8% to 3%, and really that's just due

1939
01:37:01,100 --> 01:37:03,160
 to rounding the pennies.

1940
01:37:04,780 --> 01:37:07,680
 But on average, a 3% increase.

1941
01:37:07,680 --> 01:37:13,420
 Additionally, we're proposing an increase

1942
01:37:13,420 --> 01:37:16,620
 in the wholesale raw water rates

1943
01:37:16,620 --> 01:37:19,600
 for the Upper Trinity Regional Water District.

1944
01:37:19,600 --> 01:37:21,460
 The rate is currently 90 cents.

1945
01:37:21,460 --> 01:37:26,020
 However, our agreement contract currently states

1946
01:37:26,020 --> 01:37:31,020
 that the rate should be 85% of Dallas's rate.

1947
01:37:31,020 --> 01:37:33,700
 And so by increasing it to 96 cents,

1948
01:37:33,700 --> 01:37:36,820
 it aligns with the existing contract,

1949
01:37:36,820 --> 01:37:40,860
 which would put the rate at 85% of the city of Dallas's rate.

1950
01:37:40,860 --> 01:37:43,500
 Yep.

1951
01:37:43,500 --> 01:37:45,620
 - So does that all fall within the 3%

1952
01:37:45,620 --> 01:37:47,620
 of what we saw in the slide before?

1953
01:37:47,620 --> 01:37:48,900
 - It does not.

1954
01:37:48,900 --> 01:37:50,940
 This would be-- - An addition.

1955
01:37:50,940 --> 01:37:55,940
 - Yes, yeah, each of these lines are specific rate,

1956
01:37:55,940 --> 01:37:59,220
 rate lines and rate book, yeah.

1957
01:37:59,220 --> 01:38:01,020
 - And just for these Upper Trinity rates,

1958
01:38:01,020 --> 01:38:05,900
 are these per 1,000 gallons to the Upper Trinity?

1959
01:38:05,900 --> 01:38:07,500
 - They are, yep.

1960
01:38:07,500 --> 01:38:11,740
 - And then the, is treated cheaper than--

1961
01:38:11,740 --> 01:38:16,020
 - It is, and that's our next recommendation.

1962
01:38:16,020 --> 01:38:21,020
 And so as we took time and did an analysis

1963
01:38:21,020 --> 01:38:26,460
 of all our rates, what we found is that

1964
01:38:26,460 --> 01:38:31,340
 the current wholesale treated water rates to Upper Trinity

1965
01:38:31,340 --> 01:38:36,340
 is at 61 cents, which is lower than you'll notice,

1966
01:38:36,340 --> 01:38:39,060
 the wholesale raw water.

1967
01:38:39,060 --> 01:38:42,740
 And so the treated water includes the chemical,

1968
01:38:42,740 --> 01:38:46,980
 the energy, the infrastructure needed to treat the water,

1969
01:38:46,980 --> 01:38:50,340
 and we have been selling it at a price

1970
01:38:50,340 --> 01:38:52,220
 lower than the raw water.

1971
01:38:52,220 --> 01:38:55,740
 So our proposal is to raise that to $1.25,

1972
01:38:55,740 --> 01:39:00,100
 which we believe does cover the cost of treating the water,

1973
01:39:00,100 --> 01:39:05,220
 which would be a 64 cent increase to that rate.

1974
01:39:05,220 --> 01:39:09,740
 - Even that seems like a very low rate,

1975
01:39:09,740 --> 01:39:12,780
 especially with our multi-hundred million dollars

1976
01:39:12,780 --> 01:39:14,740
 in planned expenses.

1977
01:39:14,740 --> 01:39:18,060
 There's also a capital cost to deliver treated water,

1978
01:39:18,060 --> 01:39:21,100
 and we're paying a capital cost now to fill out our plan.

1979
01:39:21,100 --> 01:39:26,100
 So I just want to make sure that $1.25 per thousand gallons,

1980
01:39:26,100 --> 01:39:31,100
 I just want to keep an eye on that in the near future,

1981
01:39:31,100 --> 01:39:33,180
 'cause I feel that's a very low rate.

1982
01:39:33,180 --> 01:39:35,460
 - Yeah, and we-- - And is that also included

1983
01:39:35,460 --> 01:39:40,180
 in the cost of service study, the treated wholesale?

1984
01:39:40,180 --> 01:39:43,060
 - It will be reviewed, yeah. - Okay.

1985
01:39:43,060 --> 01:39:46,540
 - Next year. - Next year, okay.

1986
01:39:46,540 --> 01:39:48,380
 Thank you. - Yes.

1987
01:39:48,380 --> 01:39:50,700
 - I mean, the thing is, you have no maintenance on it,

1988
01:39:50,700 --> 01:39:53,500
 they're metering it themselves.

1989
01:39:53,500 --> 01:39:55,260
 - We were treating it, and we've got to--

1990
01:39:55,260 --> 01:39:56,540
 - Well, yeah, but I mean, it's gonna come

1991
01:39:56,540 --> 01:39:59,100
 to all the fire hydrant treatment, unless you go to,

1992
01:39:59,100 --> 01:40:02,900
 it's more difficult to go find wholesale raw, right?

1993
01:40:02,900 --> 01:40:05,860
 For anybody.

1994
01:40:05,860 --> 01:40:08,620
 Yeah, I mean, yeah, if you're, okay, so in construction,

1995
01:40:08,620 --> 01:40:10,500
 you're only gonna use something that geographically

1996
01:40:10,500 --> 01:40:12,660
 makes sense, you're not gonna pump it out of the lake

1997
01:40:12,660 --> 01:40:15,020
 and send it through mouth of the road.

1998
01:40:15,020 --> 01:40:17,620
 - Well, just for the Upper Trinity Water District,

1999
01:40:17,620 --> 01:40:20,580
 which is another water district that purchases water from us.

2000
01:40:20,580 --> 01:40:21,420
 - Right.

2001
01:40:21,420 --> 01:40:23,100
 - So, if they're buying it out of the lake,

2002
01:40:23,100 --> 01:40:23,940
 they're just pumping it out of the lake.

2003
01:40:23,940 --> 01:40:25,260
 - Well, yeah, right.

2004
01:40:25,260 --> 01:40:28,340
 - But then, if they're tied into our system,

2005
01:40:28,340 --> 01:40:31,620
 they're paying a dollar per thousand gallons.

2006
01:40:31,620 --> 01:40:35,180
 It's a very good rate for treated water.

2007
01:40:35,180 --> 01:40:40,900
 - So, we do believe the dollar 20, oops.

2008
01:40:40,900 --> 01:40:43,060
 - They're all on, they won't go off.

2009
01:40:43,060 --> 01:40:44,300
 (audience laughing)

2010
01:40:44,300 --> 01:40:45,140
 - Do they go off now?

2011
01:40:45,140 --> 01:40:45,980
 - All off.

2012
01:40:48,380 --> 01:40:52,020
 - Okay, so we do believe that the dollar 25

2013
01:40:52,020 --> 01:40:56,460
 is sufficient for 2025, but we'll certainly keep an eye on.

2014
01:40:56,460 --> 01:41:02,340
 Additionally, we're recommending an increase

2015
01:41:02,340 --> 01:41:07,340
 in the fire hydrant meter deposit from $1,100 to $3,000.

2016
01:41:07,340 --> 01:41:12,260
 The current cost of replacing a fire hydrant meter

2017
01:41:12,260 --> 01:41:14,620
 is approximately $3,000.

2018
01:41:14,620 --> 01:41:19,180
 We have seen some fire hydrant meters not be returned,

2019
01:41:19,180 --> 01:41:23,580
 and those expenses are then eaten

2020
01:41:23,580 --> 01:41:26,020
 by the utility to replace those.

2021
01:41:26,020 --> 01:41:29,380
 So, we are recommending the $3,000

2022
01:41:29,380 --> 01:41:32,740
 just to be able to fully recover the cost

2023
01:41:32,740 --> 01:41:34,380
 if a meter is not returned.

2024
01:41:34,380 --> 01:41:38,460
 Backflow testing, we're proposing an increase

2025
01:41:38,460 --> 01:41:42,260
 of $9.05 to $25.

2026
01:41:42,260 --> 01:41:45,340
 This is really just to align the cost

2027
01:41:45,340 --> 01:41:49,340
 and labor associated with backflow testing.

2028
01:41:49,340 --> 01:41:55,740
 The backflow service fee is a proposed new monthly fee

2029
01:41:55,740 --> 01:42:00,740
 of $4.16 to those customers with backflow assemblies.

2030
01:42:00,740 --> 01:42:06,980
 And this $4.16 would recover the cost associated

2031
01:42:06,980 --> 01:42:11,740
 with the administration of backflow testing.

2032
01:42:11,740 --> 01:42:16,740
 So, sending notices, reviewing, tracking.

2033
01:42:16,740 --> 01:42:19,700
 - When you're through.

2034
01:42:19,700 --> 01:42:23,740
 - Okay, the backflow service.

2035
01:42:23,740 --> 01:42:29,260
 - So, who would fall into the backflow service fee?

2036
01:42:29,260 --> 01:42:31,460
 Example.

2037
01:42:31,460 --> 01:42:38,500
 - Good morning, Stephen Gay, Director of Water Utilities,

2038
01:42:38,500 --> 01:42:39,780
 not as tall as Matt.

2039
01:42:41,300 --> 01:42:43,780
 It's mainly commercial businesses.

2040
01:42:43,780 --> 01:42:47,540
 Any type of water use on the downstream side of the meter

2041
01:42:47,540 --> 01:42:49,540
 that could potentially cause a threat

2042
01:42:49,540 --> 01:42:51,740
 to the integrity of the water supply.

2043
01:42:51,740 --> 01:42:53,620
 - So, would this be irrigation only or?

2044
01:42:53,620 --> 01:42:54,700
 - Not just irrigation.

2045
01:42:54,700 --> 01:42:56,580
 Say, if you think of a mortuary

2046
01:42:56,580 --> 01:42:58,700
 who uses the water in their processes,

2047
01:42:58,700 --> 01:43:01,940
 we'd want to prevent that from coming back into our system.

2048
01:43:01,940 --> 01:43:03,460
 So, we put this mechanical device

2049
01:43:03,460 --> 01:43:06,740
 at the service connection and it's a requirement

2050
01:43:06,740 --> 01:43:09,420
 that it be tested and maintained on a regular basis.

2051
01:43:09,420 --> 01:43:10,620
 So, we have to monitor that.

2052
01:43:10,620 --> 01:43:12,700
 So, it would be those types of businesses.

2053
01:43:12,700 --> 01:43:15,060
 Chemical manufacturing or things like that.

2054
01:43:15,060 --> 01:43:17,020
 - Great example.

2055
01:43:17,020 --> 01:43:18,340
 - That's the best example I could think of.

2056
01:43:18,340 --> 01:43:20,580
 (laughing)

2057
01:43:20,580 --> 01:43:27,540
 - So, are residential customers impacted by this at all

2058
01:43:27,540 --> 01:43:29,980
 with backflow irrigation systems, things like that?

2059
01:43:29,980 --> 01:43:32,540
 - No, sir, those aren't covered under this currently.

2060
01:43:32,540 --> 01:43:38,780
 - Okay.

2061
01:43:41,620 --> 01:43:44,100
 - And finally, under meters,

2062
01:43:44,100 --> 01:43:49,100
 what we're proposing is a $25 meter test fee

2063
01:43:49,100 --> 01:43:53,940
 for any non-City of Denton water meters.

2064
01:43:53,940 --> 01:43:57,540
 And so, we do receive requests from other municipalities

2065
01:43:57,540 --> 01:44:00,060
 in the Metroplex to test meters

2066
01:44:00,060 --> 01:44:02,900
 because we have the equipment to do the testing.

2067
01:44:02,900 --> 01:44:05,100
 Currently, we provide that service for free.

2068
01:44:05,100 --> 01:44:10,460
 And so, we are proposing the $25

2069
01:44:10,460 --> 01:44:13,700
 to cover the labor associated with testing the meters.

2070
01:44:13,700 --> 01:44:19,380
 Turning to commercial irrigation rates.

2071
01:44:19,380 --> 01:44:24,380
 Currently, the rate is $6.61 for any amount of gallons.

2072
01:44:24,380 --> 01:44:30,900
 And what is being proposed is moving to a tiered structure.

2073
01:44:30,900 --> 01:44:34,500
 So, the 661, we are proposing to increase 3%.

2074
01:44:34,500 --> 01:44:37,940
 However, as you'll see here,

2075
01:44:37,940 --> 01:44:42,940
 adding three additional tiers of 7,000 to 20,000 gallons,

2076
01:44:42,940 --> 01:44:46,060
 20,000 to 40,000 gallons,

2077
01:44:46,060 --> 01:44:50,940
 and then a final tier of over 40,000 gallons,

2078
01:44:50,940 --> 01:44:55,940
 really to encourage conservation and, yeah.

2079
01:44:55,940 --> 01:45:02,140
 - And making sure your irrigation isn't on when it's raining.

2080
01:45:02,140 --> 01:45:03,380
 - Right, yeah.

2081
01:45:08,100 --> 01:45:13,020
 - Okay, meter, I'm sorry, water tap and meter fees.

2082
01:45:13,020 --> 01:45:14,780
 We are proposing an increase.

2083
01:45:14,780 --> 01:45:18,940
 Each of these increases are really just due

2084
01:45:18,940 --> 01:45:22,660
 to the actual costs of tapping.

2085
01:45:22,660 --> 01:45:29,300
 And so, as you'll see here, whether it's paved or unpaved,

2086
01:45:29,300 --> 01:45:32,820
 and the size of the tap, you know,

2087
01:45:32,820 --> 01:45:37,340
 it ranges from $441 up to an increase

2088
01:45:37,340 --> 01:45:39,940
 of $2,400.

2089
01:45:39,940 --> 01:45:41,940
 And then any taps four inches and larger,

2090
01:45:41,940 --> 01:45:44,860
 what we're proposing is to assess it

2091
01:45:44,860 --> 01:45:47,020
 on a per project basis.

2092
01:45:47,020 --> 01:45:49,060
 What we found is that it's very difficult

2093
01:45:49,060 --> 01:45:54,060
 just to assign a flat fee and have it recover the costs

2094
01:45:54,060 --> 01:45:58,420
 when every project may have different environmental

2095
01:45:58,420 --> 01:46:01,420
 conditions, depth of the pipes, groundwater,

2096
01:46:01,420 --> 01:46:06,420
 other factors that influence the expense

2097
01:46:07,060 --> 01:46:10,060
 associated with those larger taps.

2098
01:46:10,060 --> 01:46:18,740
 Okay, turning to wastewater, we're proposing

2099
01:46:18,740 --> 01:46:22,220
 an 11% increase to residential service,

2100
01:46:22,220 --> 01:46:26,020
 as well as an 11% increase for commercial service.

2101
01:46:26,020 --> 01:46:32,660
 We're proposing an increase from $1.67 to $2.50

2102
01:46:32,660 --> 01:46:35,260
 on the sale of treated effluent.

2103
01:46:35,260 --> 01:46:40,020
 And then just as we saw on the water tap fees,

2104
01:46:40,020 --> 01:46:45,020
 to assess the wastewater tap fees for taps greater

2105
01:46:45,020 --> 01:46:48,100
 than, you know, four inches to be assessed

2106
01:46:48,100 --> 01:46:50,860
 on a per project basis, just to be reflective

2107
01:46:50,860 --> 01:46:55,020
 of the actual cost associated with that work.

2108
01:46:55,020 --> 01:46:59,540
 And finally, we're proposing an increase

2109
01:46:59,540 --> 01:47:02,340
 in the waste transportation manifest.

2110
01:47:02,340 --> 01:47:07,340
 This is a printed book that the city produces.

2111
01:47:07,340 --> 01:47:12,300
 We print the books at a cost of $165,

2112
01:47:12,300 --> 01:47:14,340
 and we sell them for $40.

2113
01:47:14,340 --> 01:47:17,380
 And so this proposal would be to remove

2114
01:47:17,380 --> 01:47:21,900
 that $125 subsidy and recover the full cost

2115
01:47:21,900 --> 01:47:24,300
 of the waste transportation manifest books.

2116
01:47:29,380 --> 01:47:32,420
 So taking a look at water and sewer rates

2117
01:47:32,420 --> 01:47:34,540
 as a comparison to other metroplex cities,

2118
01:47:34,540 --> 01:47:38,900
 which you'll see is that we have,

2119
01:47:38,900 --> 01:47:42,260
 even with these increases, some of the lowest rates

2120
01:47:42,260 --> 01:47:46,580
 in the metroplex, both for water and for sewer.

2121
01:47:46,580 --> 01:47:52,740
 And then this is a table which outlines

2122
01:47:52,740 --> 01:47:56,020
 what those dollar amounts look like.

2123
01:47:56,020 --> 01:48:01,020
 So again, you know, based on 9,000 gallons for water

2124
01:48:01,020 --> 01:48:05,100
 and 6,000 gallons for wastewater, you know,

2125
01:48:05,100 --> 01:48:07,740
 we're still very competitive within the metroplex.

2126
01:48:07,740 --> 01:48:12,740
 And again, these comparison cities don't include

2127
01:48:12,740 --> 01:48:17,420
 any potential rate increases or, you know,

2128
01:48:17,420 --> 01:48:20,140
 rate increases for 2025.

2129
01:48:20,140 --> 01:48:22,340
 These are reflective of their current rates.

2130
01:48:26,540 --> 01:48:30,660
 - Any, before we move on to DMA,

2131
01:48:30,660 --> 01:48:32,940
 any questions on water or wastewater?

2132
01:48:32,940 --> 01:48:39,060
 - So who do you think in that, those bar charts,

2133
01:48:39,060 --> 01:48:42,060
 and I know we have a lot of agreements with Dallas, right?

2134
01:48:42,060 --> 01:48:45,700
 Or a lot of our capacity is based on agreements with Dallas.

2135
01:48:45,700 --> 01:48:50,180
 Who else would be a similar community or city

2136
01:48:50,180 --> 01:48:53,220
 that has the same type of agreements, you know,

2137
01:48:53,220 --> 01:48:56,220
 like we do with Louisville and Ray Roberts and?

2138
01:48:56,220 --> 01:48:57,700
 - Yeah.

2139
01:48:57,700 --> 01:49:00,820
 Stephen Gay, Director of Utilities.

2140
01:49:00,820 --> 01:49:02,460
 Can you restate the question?

2141
01:49:02,460 --> 01:49:05,900
 - So we've always kind of based our rates on Dallas' rates.

2142
01:49:05,900 --> 01:49:07,140
 - That's the raw water rate.

2143
01:49:07,140 --> 01:49:09,980
 - Yes, yeah, and well, we have,

2144
01:49:09,980 --> 01:49:12,220
 'cause we have agreement, a lot of agreements with Dallas.

2145
01:49:12,220 --> 01:49:13,500
 I imagine that would be it.

2146
01:49:13,500 --> 01:49:15,820
 - Yes sir, it's woven into the agreement.

2147
01:49:15,820 --> 01:49:18,460
 We have an operating agreement with Dallas,

2148
01:49:18,460 --> 01:49:21,580
 but that doesn't influence the agreement we have

2149
01:49:21,580 --> 01:49:25,900
 with UTRWD, so the rate that we charge UTRWD isn't agreement.

2150
01:49:25,900 --> 01:49:27,500
 - I'm not asking about UTRWD.

2151
01:49:27,500 --> 01:49:29,580
 I'm just saying what other city would you say

2152
01:49:29,580 --> 01:49:32,300
 might be a comparison or a community or city?

2153
01:49:32,300 --> 01:49:36,940
 - I would say that Louisville purchases water.

2154
01:49:36,940 --> 01:49:40,180
 I believe they purchase water from Dallas as well.

2155
01:49:40,180 --> 01:49:45,020
 The distinction is that Dallas and Denton own the rights

2156
01:49:45,020 --> 01:49:47,220
 in Louisville and Ray Roberts

2157
01:49:47,220 --> 01:49:49,900
 and none of the other utilities in the area.

2158
01:49:49,900 --> 01:49:51,340
 - So there's not a good comparison.

2159
01:49:51,340 --> 01:49:53,260
 - There's really not a good comparison.

2160
01:49:53,260 --> 01:49:55,300
 - That's probably a simpler question, thank you.

2161
01:49:55,300 --> 01:49:56,140
 - Thank you, sir.

2162
01:49:56,140 --> 01:50:03,900
 - I'm just curious, the waste transportation manifest,

2163
01:50:03,900 --> 01:50:09,140
 what is that, who buys that in the book?

2164
01:50:09,140 --> 01:50:11,780
 (laughs)

2165
01:50:11,780 --> 01:50:13,060
 That's a good question.

2166
01:50:13,060 --> 01:50:13,900
 How many of these things do you sell?

2167
01:50:13,900 --> 01:50:15,980
 - Jessica just asked that question

2168
01:50:15,980 --> 01:50:18,740
 and it's actually from our industrial pretreatment group

2169
01:50:18,740 --> 01:50:21,660
 and so those are more or less our significant

2170
01:50:21,660 --> 01:50:25,060
 industrial users so they purchase that manifest

2171
01:50:25,060 --> 01:50:27,060
 and that's about all I can tell you about the book.

2172
01:50:27,060 --> 01:50:28,220
 We just knew that the cost,

2173
01:50:28,220 --> 01:50:30,020
 we were significantly under recovering

2174
01:50:30,020 --> 01:50:32,820
 and we asked if we could just include it in the increases.

2175
01:50:32,820 --> 01:50:37,140
 - Not to tie in but it may sound like it.

2176
01:50:37,140 --> 01:50:42,140
 Water oil separators that we have for let's say automotive.

2177
01:50:42,140 --> 01:50:45,220
 Where's the charge for that?

2178
01:50:45,220 --> 01:50:47,540
 How does that fall in wherever it falls in?

2179
01:50:47,540 --> 01:50:49,660
 - That actually would be something that would fall

2180
01:50:49,660 --> 01:50:51,980
 under environmental services and sustainability.

2181
01:50:51,980 --> 01:50:54,180
 They're responsible for managing

2182
01:50:54,180 --> 01:50:56,020
 our industrial pretreatment program

2183
01:50:56,020 --> 01:50:59,740
 and so those fees would fall underneath their purview.

2184
01:50:59,740 --> 01:51:00,700
 - So we won't see that?

2185
01:51:00,700 --> 01:51:01,540
 - No, sir.

2186
01:51:01,540 --> 01:51:02,380
 - Thank you.

2187
01:51:02,380 --> 01:51:05,380
 - How many books do you sell a year?

2188
01:51:05,380 --> 01:51:06,220
 I'm sorry.

2189
01:51:06,220 --> 01:51:09,380
 How many books do you sell a year?

2190
01:51:09,380 --> 01:51:10,700
 - How many do I sell?

2191
01:51:10,700 --> 01:51:11,540
 - Books.

2192
01:51:11,540 --> 01:51:13,380
 - Books, I have no idea, I can find out though.

2193
01:51:13,380 --> 01:51:14,220
 - No, no.

2194
01:51:14,220 --> 01:51:16,740
 - Your microphone wasn't on.

2195
01:51:18,220 --> 01:51:19,780
 (laughing)

2196
01:51:19,780 --> 01:51:21,780
 - Any other questions before he moves on?

2197
01:51:21,780 --> 01:51:31,460
 - Okay, so as we had mentioned at the previous meeting,

2198
01:51:31,460 --> 01:51:35,460
 DME is currently undergoing a cost of service study.

2199
01:51:35,460 --> 01:51:38,900
 We do anticipate that the results of that study

2200
01:51:38,900 --> 01:51:43,740
 will be available here this month

2201
01:51:43,740 --> 01:51:46,860
 and so we intend to bring that back to the board

2202
01:51:47,660 --> 01:51:50,540
 we do anticipate a base rate increase of one and a half

2203
01:51:50,540 --> 01:51:55,500
 percent to be included as part of the study recommendation

2204
01:51:55,500 --> 01:51:59,140
 but we'll bring that forward here in a couple weeks.

2205
01:51:59,140 --> 01:52:03,340
 So taking a look at the calendar,

2206
01:52:03,340 --> 01:52:07,420
 we'll be bringing forward the utility budgets

2207
01:52:07,420 --> 01:52:11,380
 and the rates that the board has seen over the last

2208
01:52:11,380 --> 01:52:13,960
 couple weeks to city council for their feedback

2209
01:52:13,960 --> 01:52:17,580
 on July 23rd and then we'll also discuss the rates

2210
01:52:17,580 --> 01:52:20,540
 on August 10th during the budget workshop

2211
01:52:20,540 --> 01:52:23,540
 and then we'll return to PUB on August 28th

2212
01:52:23,540 --> 01:52:25,740
 for the utility budget and rate approval

2213
01:52:25,740 --> 01:52:28,660
 so that will include any changes or recommendations

2214
01:52:28,660 --> 01:52:32,380
 or discussion that had come out of the meetings

2215
01:52:32,380 --> 01:52:37,140
 with city council and then we'll bring that back

2216
01:52:37,140 --> 01:52:40,580
 to city council and to public hearings on September 10th

2217
01:52:40,580 --> 01:52:43,980
 and September 17th for final adoption.

2218
01:52:43,980 --> 01:52:48,460
 Any questions?

2219
01:52:48,460 --> 01:52:49,660
 - Any further questions?

2220
01:52:49,660 --> 01:52:53,540
 I'm assuming we're all in agreement

2221
01:52:53,540 --> 01:52:54,940
 to just move forward, right?

2222
01:52:54,940 --> 01:52:56,820
 - I have a motion to adjourn please.

2223
01:52:56,820 --> 01:52:59,060
 (laughing)

2224
01:52:59,060 --> 01:53:00,980
 - Okay.

2225
01:53:00,980 --> 01:53:04,300
 1052.