WEBVTT 00:00:00.000 --> 00:00:03.680 >> Okay, it's nine o'clock, and we do have a quorum. 00:00:03.680 --> 00:00:10.200 So I'll call to order the Public Utilities Board for the City of Denton on Monday, November 18th, 2024. 00:00:10.200 --> 00:00:17.120 We do have someone that wishes to speak this morning, Mr. Lee, and he's speaking in opposition, of course, scientific. 00:00:17.120 --> 00:00:20.440 So Mr. Lee, you have the floor. 00:00:20.440 --> 00:00:27.400 >> Yes, how are you doing? 00:00:27.400 --> 00:00:29.200 Yes, my name is Charles Lee. 00:00:29.200 --> 00:00:36.840 I live on, I live on North Elm Street, and I just want to say that me personally, myself, 00:00:36.840 --> 00:00:46.400 I've been here for three years, and I'm actually using less energy than I ever had, and my bills keep skyrocketing. 00:00:46.400 --> 00:00:54.640 And I have some questions, because, and a lot of people in the town have the same feelings as me. 00:00:54.640 --> 00:01:00.680 But my thing is about this company, what is it, Core Scientific. 00:01:00.680 --> 00:01:05.360 Now, I'm not personally against cryptocurrency, or data mining, or anything like that. 00:01:05.360 --> 00:01:07.640 I have nothing against the industry at all. 00:01:07.640 --> 00:01:09.360 I just have some questions. 00:01:09.360 --> 00:01:15.680 I don't see how integrating a residential electric company, 00:01:15.680 --> 00:01:23.760 and with this company that uses a tremendous amount of power, they use a lot of power, power of the whole cities, and stuff like that. 00:01:23.760 --> 00:01:30.120 And I'm just very concerned about how this would benefit residential customers. 00:01:30.120 --> 00:01:35.400 I think, really do think they should have their own infrastructure separate from residential customers, 00:01:35.400 --> 00:01:42.600 because I just don't, I would like somebody to explain to me how this benefits residential customers in any type of way, 00:01:42.600 --> 00:01:47.520 especially when they're getting all kind of tax breaks and incentives and things of that nature. 00:01:47.520 --> 00:01:52.080 And it's basically just a question, and I would like somebody to explain this to me. 00:01:52.080 --> 00:01:53.800 >> Thank you very much, and have a nice day. 00:01:53.800 --> 00:01:54.300 >> Thank you. 00:01:54.300 --> 00:02:07.100 All right, the next is the consent agenda. 00:02:07.100 --> 00:02:09.560 And I know that Lee wanted to pull a few items. 00:02:09.560 --> 00:02:14.720 That was an A, E, and F. 00:02:14.720 --> 00:02:19.200 Does any other board members wish to pull any items? 00:02:19.200 --> 00:02:20.320 All right, seeing none. 00:02:20.320 --> 00:02:31.740 Do we have a motion to approve B, C, D, G, H, and I? 00:02:31.740 --> 00:02:35.240 >> Yeah, move. 00:02:35.240 --> 00:02:36.120 >> So moved. 00:02:36.120 --> 00:02:38.200 >> Okay, Aaron moved, Devin seconds. 00:02:38.200 --> 00:02:39.520 All in favor say aye. 00:02:39.520 --> 00:02:40.600 >> Aye. >> Aye. 00:02:40.600 --> 00:02:42.200 Okay, next item is item A. 00:02:50.320 --> 00:02:58.540 >> Good morning, Randy Klingle, Treasury Manager. 00:02:58.540 --> 00:03:02.120 And if you would like to pose your question, I will do my best to answer. 00:03:02.120 --> 00:03:08.040 >> I just wanted to have you refresh our memories about the uses of this $300 million bonding. 00:03:08.040 --> 00:03:12.240 >> Yes sir, I'd be happy to if you'll let me set the stage a little bit about the commercial paper program. 00:03:12.240 --> 00:03:14.640 >> Please do. >> The city has two programs. 00:03:14.640 --> 00:03:22.880 One for the voter geo approved programs for those 2019-2023 bond sales, that was the latest one. 00:03:22.880 --> 00:03:30.200 And then the utility commercial paper program, it supports the utility system's capital projects only. 00:03:30.200 --> 00:03:38.200 And so what that does, our intent when we created this in 2021 is to use it for contract appropriation authority. 00:03:38.200 --> 00:03:42.600 So when we go into contracts, we must have all the funding sources identified and 00:03:42.600 --> 00:03:48.800 the backing of this program helps us get to sign some of those contracts, even if we don't have all the cash in hand. 00:03:48.800 --> 00:03:53.960 So the $300 million in very general banking terms is a line of credit. 00:03:53.960 --> 00:03:58.880 We don't have the cash, it sits out there available for us, and we can get it any time. 00:03:58.880 --> 00:04:03.880 Thankfully we had it in place during Storm Uri, because we did issue those notes that year. 00:04:03.880 --> 00:04:09.640 Never really our intent, like I said, we only wanted contract appropriation, but we sure were blessed that we had it. 00:04:09.640 --> 00:04:15.080 We were able to issue those funds, $140 million, and get those in place within 24 hours. 00:04:15.080 --> 00:04:20.080 And what you have in front of you today is the actual refunding ordinance that comes in annually. 00:04:20.080 --> 00:04:23.160 And so we have to re-up our authority. 00:04:23.160 --> 00:04:29.760 If we do decide to issue notes, they have to be returned and paid back in full in 270 days. 00:04:29.760 --> 00:04:36.400 So the refunding ordinance allows us to issue long-term debt for those and go put them in a bond sale for 20 or 30 years. 00:04:36.400 --> 00:04:38.440 That is what this item here is for. 00:04:39.680 --> 00:04:48.040 Okay, so this covers capital projects, which we're in theory mostly aware of what's coming through the design monies that we've already appropriated. 00:04:48.040 --> 00:04:51.960 And this is just the rolling line of credit. 00:04:51.960 --> 00:04:55.520 Correct, giving us the authority that if we do issue notes and grab the cash. 00:04:55.520 --> 00:04:58.800 Just as we did during the wonderful event two years ago. 00:04:58.800 --> 00:05:00.360 Yes. 00:05:00.360 --> 00:05:05.600 Okay, well I just wanted to be reminded of what had happened with them, you know, I saw that much money and I went. 00:05:05.600 --> 00:05:06.320 It's a large number. 00:05:06.320 --> 00:05:07.880 I know it's for something, but what's it for? 00:05:07.880 --> 00:05:09.000 Yes, sir. 00:05:09.000 --> 00:05:11.000 Well, thank you. That's all I had. 00:05:11.000 --> 00:05:14.200 All right, do we have a motion then to approve item A? 00:05:14.200 --> 00:05:15.040 So moved. 00:05:15.040 --> 00:05:16.920 In a second? 00:05:16.920 --> 00:05:17.600 Second. 00:05:17.600 --> 00:05:19.640 Second, all in favor say aye. 00:05:19.640 --> 00:05:20.600 Aye. 00:05:20.600 --> 00:05:22.680 Carries item E. 00:05:22.680 --> 00:05:36.040 Good morning, Cody Tenorio, DME Engineering here for item E. 00:05:40.000 --> 00:05:47.360 Yes, I just wanted to get a few more details about what had caused the increase in that budget. 00:05:47.360 --> 00:05:55.840 Yes, sir, so only I asked there's three, four, five items that all had values next to them. 00:05:55.840 --> 00:06:03.240 The riser pole termination that was caused to a manufacturing issue with the poles. 00:06:03.240 --> 00:06:13.000 Since beta had to install things, beta's the contractor there, since beta had to install things on the pole and they were delayed, 00:06:13.000 --> 00:06:19.800 it required a change order for lost time and production for the exploratory underground work. 00:06:19.800 --> 00:06:27.720 Let's go back to the pole, you said they had to do some field modifications to the pole, so it wasn't manufactured incorrectly. 00:06:27.720 --> 00:06:28.280 Yes, sir. 00:06:28.280 --> 00:06:30.600 So do those costs go back to the manufacturer? 00:06:30.600 --> 00:06:34.920 We are working with legal to recoup those costs, yes, sir. 00:06:34.920 --> 00:06:39.400 But we do not yet know what share they're going to participate in? 00:06:39.400 --> 00:06:41.320 I do not believe so. 00:06:41.320 --> 00:06:50.560 OK, so you're asking essentially to have this money expended, whereas some of it may come back as a refund from the manufacturer? 00:06:50.560 --> 00:06:51.560 Yes, sir. 00:06:51.560 --> 00:07:00.120 OK, so can we look forward to a deductive change order in the future? 00:07:00.120 --> 00:07:02.080 Yeah, I believe so, it will. 00:07:02.080 --> 00:07:04.960 That's a possibility, not a probability? 00:07:04.960 --> 00:07:06.880 Hopefully, probability. 00:07:06.880 --> 00:07:09.760 OK, thank you. 00:07:09.760 --> 00:07:11.320 Do you want me to go through the other ones too, sir? 00:07:11.320 --> 00:07:12.200 Yeah, carry on. 00:07:12.200 --> 00:07:13.440 Yes, sir. 00:07:13.440 --> 00:07:20.040 CT installation on the riser poles and the removal of the 15 kV underground feeders. 00:07:20.040 --> 00:07:23.440 Both of those items, it was just more efficient to have beta perform the work. 00:07:23.440 --> 00:07:28.400 It was going to be work that needed to be done regardless, so those aren't a new cost. 00:07:28.400 --> 00:07:30.600 They were going to happen anyway. 00:07:30.600 --> 00:07:33.680 OK, well, you just said they were going to have to be done regardless. 00:07:33.680 --> 00:07:34.600 Right. 00:07:34.600 --> 00:07:37.240 So why weren't they in the costs? 00:07:37.240 --> 00:07:46.160 We didn't, with the changes in schedule for the project and everything that's happened, it was just more efficient since beta was already on site. 00:07:46.160 --> 00:07:52.560 At the beginning of the project, we didn't see the delays and everything, so having them there already decreased wait time. 00:07:52.560 --> 00:07:55.560 So it decreased the wait time, but it increased their scope? 00:07:55.560 --> 00:07:56.120 Yes, sir. 00:07:56.120 --> 00:07:59.600 So were these funds going to originally come from somewhere else? 00:07:59.600 --> 00:08:00.080 Yes, sir. 00:08:00.080 --> 00:08:05.920 I mean, they were all going to be part of the Hickory project, the Hickory costs. 00:08:05.920 --> 00:08:07.440 Would it have been a different contractor? 00:08:07.440 --> 00:08:10.080 It would have been a different contractor, most likely, yes, ma'am. 00:08:10.080 --> 00:08:15.400 OK, so this is covering the work another contractor was supposed to do, but they did not do. 00:08:15.400 --> 00:08:24.000 We had plans to do that, but we didn't get around to getting another contractor to doing it since beta was already there. 00:08:24.000 --> 00:08:24.360 OK. 00:08:24.360 --> 00:08:26.080 And it was decided that they could do it. 00:08:26.080 --> 00:08:28.280 I'm sorry, carry on. 00:08:28.280 --> 00:08:36.760 Convenience store service, all the overhead facilities in that area are converted to underground, so that customer had to be reconnected. 00:08:36.760 --> 00:08:42.000 That service is a three-phase service that wasn't in beta's contract or in their scope of work. 00:08:42.000 --> 00:08:42.680 I'm sorry. 00:08:42.680 --> 00:08:45.840 So we asked them to do it, which created-- 00:08:45.840 --> 00:08:50.560 Well, it was known that the client was going to have to be reconnected, yes? 00:08:50.560 --> 00:08:51.320 Yes, sir. 00:08:51.320 --> 00:08:52.280 OK. 00:08:52.280 --> 00:08:54.000 Yeah. 00:08:54.000 --> 00:08:56.760 And would that have been a different contractor again? 00:08:56.760 --> 00:08:57.440 Possibly. 00:08:57.440 --> 00:08:58.280 OK. 00:08:58.280 --> 00:08:58.960 Most likely. 00:08:58.960 --> 00:09:05.960 And the same for the next item, or is that the customer, the convenience store? 00:09:05.960 --> 00:09:07.520 That was the convenience store, yes, sir. 00:09:07.520 --> 00:09:19.480 Well, the reason I asked for it is I looked at all this, and I was like, well, does all this really belong to this contract? 00:09:19.480 --> 00:09:21.240 And apparently, it did not. 00:09:21.240 --> 00:09:27.080 Some of it belonged to other contracts who were not executed or because of delays. 00:09:27.080 --> 00:09:28.640 Yes, it just wasn't in their scope. 00:09:28.640 --> 00:09:31.240 It wasn't in beta's scope, yes, sir. 00:09:31.240 --> 00:09:33.120 Well, it's over a million bucks. 00:09:33.120 --> 00:09:37.080 It's on a $43 million project, I suppose, percentage-wise. 00:09:37.080 --> 00:09:41.000 That's not a lot, but it caught my eye, and it might catch the council's eye. 00:09:41.000 --> 00:09:45.920 So I think you should be prepared to answer these questions. 00:09:45.920 --> 00:09:46.920 Yes, sir. 00:09:46.920 --> 00:09:48.720 That's all I have. 00:09:48.720 --> 00:09:49.840 Thank you. 00:09:49.840 --> 00:09:52.960 All right, do we have a motion to approve item E? 00:09:52.960 --> 00:09:54.280 It's all moved. 00:09:54.280 --> 00:09:56.240 And a second? 00:09:56.240 --> 00:09:57.360 Mr. Neuquist, second? 00:09:57.360 --> 00:09:58.760 All in favor, say aye. 00:09:58.760 --> 00:09:59.680 Aye. 00:09:59.680 --> 00:10:00.400 Opposed? 00:10:00.400 --> 00:10:00.840 Carries. 00:10:00.840 --> 00:10:01.400 Thank you. 00:10:01.400 --> 00:10:01.920 Thank you. 00:10:01.920 --> 00:10:10.040 And the last item is item F. 00:10:10.040 --> 00:10:13.080 Good morning, Madam Chair, PB members, Bill Sheppard, DME. 00:10:13.080 --> 00:10:21.520 And I am here to address member Ryback's question on the invoice cloud, item F. All right, 00:10:21.520 --> 00:10:25.840 so invoice cloud is our provider that allows customers to do self-service 00:10:25.840 --> 00:10:27.720 and online payment transactions. 00:10:27.720 --> 00:10:33.080 And when we issued that RFP back in '21, we had to estimate a certain uptake 00:10:33.080 --> 00:10:35.440 of our customers to utilize those services. 00:10:35.440 --> 00:10:37.680 And we estimated a little low, obviously, 00:10:37.680 --> 00:10:40.960 because we have more customers using that than ever before. 00:10:40.960 --> 00:10:49.120 Our credit card payment has increased from 44% to 64% of payments are now credit card payments. 00:10:49.120 --> 00:10:53.960 The amount of transactions per year have gone up 175,000 transactions per year. 00:10:53.960 --> 00:10:55.160 So that's really the core. 00:10:55.160 --> 00:11:01.280 So the driver of this cost increase is customers using the system. 00:11:01.280 --> 00:11:02.640 Yes, sir. 00:11:02.640 --> 00:11:04.240 More than you had anticipated. 00:11:04.240 --> 00:11:04.920 Correct. 00:11:04.920 --> 00:11:10.720 It's not that we had a time of material service contract with the company to support this, 00:11:10.720 --> 00:11:14.920 and we had this overrun of the use of their service. 00:11:14.920 --> 00:11:18.840 Right. And we're going to be going back out to RFP here very soon. 00:11:18.840 --> 00:11:22.280 And we're hoping to use the volumes that we are seeing now 00:11:22.280 --> 00:11:25.000 to even leverage a lower cost in the future. 00:11:25.000 --> 00:11:28.480 Okay. Well, I kind of misunderstood that from the information sheet, so thank you. 00:11:28.480 --> 00:11:29.840 You're welcome. 00:11:29.840 --> 00:11:30.840 Thank you. 00:11:30.840 --> 00:11:31.360 All right. 00:11:31.360 --> 00:11:34.680 Do we have a motion to approve item F, Mr. Ryback? 00:11:34.680 --> 00:11:36.000 So moved. 00:11:36.000 --> 00:11:36.880 And a second? 00:11:36.880 --> 00:11:37.520 Second. 00:11:37.520 --> 00:11:42.080 Devin seconds. All in favor say aye. Aye. Carries. Thank you. 00:11:42.080 --> 00:11:47.040 Okay. The next item is approval of the October 28th, 2024 minutes. 00:11:47.040 --> 00:11:50.560 Were there any changes or corrections? 00:11:50.560 --> 00:11:54.720 Seeing none. Do we have a motion to approve? 00:11:54.720 --> 00:11:58.240 Mr. Newquist moved approval. And a second? 00:11:58.240 --> 00:12:01.040 Mr. Tape. Mr. Ryback. 00:12:01.040 --> 00:12:04.320 All in favor say aye. Aye. Carries. 00:12:04.320 --> 00:12:09.760 I think what we'll do is we'll skip down to management reports and then we'll go into closed session. 00:12:09.760 --> 00:12:13.000 So, go ahead. 00:12:13.000 --> 00:12:17.080 >> Yes ma'am, Madam Chair, members of the PUB, I have a few items for you today. 00:12:17.080 --> 00:12:21.200 The first item that we provided to you is the PUB roster, right? 00:12:21.200 --> 00:12:26.720 That way you know one who appointed you with seat you're in, just as a reminder, 00:12:26.720 --> 00:12:32.640 the seat you're in corresponds with the council seat, whomever might be filling that. 00:12:32.640 --> 00:12:36.840 And so we just wanted to provide that to you for informational purposes. 00:12:36.840 --> 00:12:44.720 And then we've also have a follow up memo from the water department on a question that was brought up at the last meeting. 00:12:44.720 --> 00:12:51.120 So I think Steven's here and his folks are here in case someone has any questions about that particular memo. 00:12:51.120 --> 00:12:57.320 >> I'm sorry to say, I think you all misunderstood my question. 00:12:57.320 --> 00:12:59.240 >> Okay. >> Which is fine. 00:12:59.240 --> 00:13:04.040 I was wanting to know more about the problem with the filters and 00:13:04.040 --> 00:13:09.920 there was a discussion from the director about a change in the maintenance procedure. 00:13:09.920 --> 00:13:16.000 And that is what I had wanted to ask about or get more information on. 00:13:16.000 --> 00:13:21.120 >> Steven Gay, General Manager, Water Utilities. 00:13:22.560 --> 00:13:29.840 >> So we haven't done any major maintenance on the existing filters at Lake Ray Roberts since they were installed. 00:13:29.840 --> 00:13:33.960 So we have two projects going on right now, one's called a capacity improvement. 00:13:33.960 --> 00:13:39.800 So part of that, we're actually replacing the filter media and we're changing it out from granular. 00:13:39.800 --> 00:13:44.480 I think we're doing, we're at anthracite is what we're using right now, anthracite and sand. 00:13:44.480 --> 00:13:50.320 And we're changing it out to granular activated carbon, which is a more effective filter media. 00:13:50.320 --> 00:13:55.000 And then moving forward, we're implementing a filter surveillance program. 00:13:55.000 --> 00:13:58.360 We'll be checking the filter, the quality of the filters. 00:13:58.360 --> 00:14:02.880 Periodically, we'll annually, we'll be pulling samples and evaluating that. 00:14:02.880 --> 00:14:07.920 Historically, what you'll do is you'll see some type of rotation on your filter media throughout the years. 00:14:07.920 --> 00:14:10.280 In this case, we haven't done anything in 20 years. 00:14:10.280 --> 00:14:13.200 >> Well, that's sad. 00:14:13.200 --> 00:14:13.720 >> Yes, sir. 00:14:13.720 --> 00:14:19.920 >> Well, I got the impression from your comments that you were going to get on to some kind of regular rotating. 00:14:19.920 --> 00:14:22.160 >> Yeah. >> Maintenance program with that? 00:14:22.160 --> 00:14:27.280 >> Yes, and then the filter media project or program will dictate that. 00:14:27.280 --> 00:14:33.120 And so we'll be able to gauge the health and the efficiency of the filters. 00:14:33.120 --> 00:14:39.800 And then based off of that data, we'll then either add media to it or change it out on a regular basis. 00:14:39.800 --> 00:14:42.160 >> So do you anticipate- >> It'll be on a rotation. 00:14:42.160 --> 00:14:48.280 >> Okay, so do you anticipate over some period of time that you'll be changing out all of the filter media? 00:14:48.280 --> 00:14:52.920 >> Yes, we're going to start with this, the rerate project that we're doing right now, the capacity improvements. 00:14:52.920 --> 00:14:57.200 We're going to be starting out with fresh media throughout the whole plan. 00:14:57.200 --> 00:14:59.280 So all of our filters will be changed. 00:14:59.280 --> 00:15:03.520 And then beginning with the new media, we'll start the filter surveillance program. 00:15:03.520 --> 00:15:08.160 So in the future, we do foresee some type of rotation where we'll say, okay, 00:15:08.160 --> 00:15:13.440 we probably need to change the media out on one filter a year for the next five years. 00:15:13.440 --> 00:15:16.200 >> So how many filters are there to change the media again? 00:15:16.200 --> 00:15:19.320 >> You'll have to get that exact number for you. 00:15:19.320 --> 00:15:25.840 >> It's gotta be more than- >> Well, over Lake Louisville, we have 16 filters. 00:15:25.840 --> 00:15:26.720 >> That makes more sense. 00:15:26.720 --> 00:15:29.440 >> Yeah, Ray Roberts is a little bit, it's different. 00:15:29.440 --> 00:15:33.920 I want to say it's around eight to ten, but don't quote me on that, I'll get back to you on that. 00:15:33.920 --> 00:15:36.880 >> But just our general idea that there would be basins of filtration. 00:15:36.880 --> 00:15:39.880 >> Multiple, yeah, because what we have to do is we have to backwash them. 00:15:39.880 --> 00:15:42.200 So we have to clean them periodically. 00:15:42.200 --> 00:15:44.960 And so we'll take them out of service while we're cleaning them. 00:15:44.960 --> 00:15:46.400 We still need to treat water. 00:15:46.400 --> 00:15:50.080 >> Right, so speaking of being out of service, we had this problem this past summer, 00:15:50.080 --> 00:15:54.360 where we had the one, then we went to the next one, and we were down to one day a week. 00:15:54.360 --> 00:15:57.720 And I know when it went on, but I was never notified when it went off. 00:15:57.720 --> 00:16:00.480 So how long was that restriction in place? 00:16:00.480 --> 00:16:05.320 >> That, I had to give you the exact date, but we did post it on our website. 00:16:05.320 --> 00:16:07.680 And we sent out notification to the community. 00:16:07.680 --> 00:16:10.200 So I apologize that you didn't receive anything. 00:16:10.200 --> 00:16:14.280 >> If you notified our community, they didn't notify us, at least that I was aware of. 00:16:14.280 --> 00:16:16.360 >> Yeah. 00:16:16.360 --> 00:16:18.640 >> I knew, but I think maybe I saw it on the website. 00:16:18.640 --> 00:16:20.960 >> Maybe, yeah. 00:16:20.960 --> 00:16:25.080 But we got those, I have to look for the date, but we can follow up with you on the dates 00:16:25.080 --> 00:16:26.000 of when it was restored. 00:16:26.000 --> 00:16:27.640 >> That would be great, I'd appreciate it. 00:16:27.640 --> 00:16:28.400 Thank you. 00:16:28.400 --> 00:16:30.320 >> Thank you. 00:16:30.320 --> 00:16:32.840 >> Thank you. 00:16:32.840 --> 00:16:38.480 >> So the only other item that we have for you is the, I just want to point out to you 00:16:38.480 --> 00:16:43.400 that we have one meeting left this year, which will be on December 9th. 00:16:43.400 --> 00:16:51.440 And then the meeting after that won't be until January 13th, so part of the process that we established with the chair 00:16:51.440 --> 00:16:58.600 was if we have certain items that are either going to bypass the PUB or there's a back to back kind of approval process. 00:16:58.600 --> 00:17:02.320 We have some items today that will be considered by the council tomorrow. 00:17:02.320 --> 00:17:07.040 We coordinate with the chair to make sure she's comfortable with that in her absence as the vice chair. 00:17:07.040 --> 00:17:12.520 So there will be some items on the 9th that will be coming back to you retroactively through the management report. 00:17:12.520 --> 00:17:17.040 And certainly we'll provide you all the backup and if there's questions we'll be answering those for you. 00:17:17.040 --> 00:17:18.600 Same thing likely on the 13th. 00:17:18.600 --> 00:17:21.840 I just want to give you the heads up on that particular process. 00:17:21.840 --> 00:17:25.080 So with that, happy to answer any questions that you may have. 00:17:25.080 --> 00:17:27.600 >> Questions? 00:17:27.600 --> 00:17:32.960 All right, then I guess it's time to go into closed session. 00:17:32.960 --> 00:17:42.200 So the public utilities board will now at 917 AM convene into a closed meeting to deliberate the closed meeting item. 00:17:42.200 --> 00:17:48.320 Set forth on the agenda, which includes the following, PUB 24243, 00:17:48.320 --> 00:17:53.120 deliberations regarding certain public power utilities competitive matters. 00:17:53.120 --> 00:17:57.600 Under Texas government code section 551.086, 00:17:57.600 --> 00:18:02.600 consultation with attorneys under Texas government code 551.071. 00:18:09.360 --> 00:18:17.760 >> Okay, the Public Utility Board has now at 953 AM reconvened from closed session and no official action was taken. 00:18:17.760 --> 00:18:21.880 He's back in the room, okay. 00:18:21.880 --> 00:18:31.720 All right, we're going to call all items B, C, D, and E for the presentation, and then we'll vote on them individually. 00:18:31.720 --> 00:18:32.360 So go ahead, Tony. 00:18:32.360 --> 00:18:40.360 >> Hi, Chair. [INAUDIBLE] 00:18:40.360 --> 00:18:50.480 It involves a number of agreements that the chair has just read, and we're happy to answer questions as we go, or if you want to wait till the end. 00:18:50.480 --> 00:18:56.600 So just as a reminder, this is the existing facility that we have. 00:18:56.600 --> 00:19:04.640 And based on amendment three to the PPA, where CORE has had proposed and 00:19:04.640 --> 00:19:10.880 was approved to build out the north side, which we're calling phase three, 00:19:10.880 --> 00:19:17.440 as a high performance computing facility, no longer crypto mining within this facility. 00:19:17.440 --> 00:19:24.000 If you remember when CORE went into bankruptcy, this particular phase had not been developed. 00:19:24.000 --> 00:19:32.440 There are some shell buildings out there, but that was, again, already approved to conversion to HPC. 00:19:32.440 --> 00:19:40.360 And then the south side, which is really two phases, phase one and phase two, this continues to operate as crypto mining. 00:19:40.360 --> 00:19:48.720 And so these phases, phase two, is still partially being developed, 00:19:48.720 --> 00:19:59.800 but would anticipate that they will continue to develop that, barring some approval in today's agreements. 00:19:59.800 --> 00:20:02.560 So what is being proposed? 00:20:02.560 --> 00:20:09.800 So what CORE is actually proposing is to move away completely from crypto mining on this site. 00:20:09.800 --> 00:20:14.520 I just want to be clear that by moving away from crypto mining, 00:20:14.520 --> 00:20:21.800 we're converting what is a variable load that is very price sensitive to a firm load. 00:20:21.800 --> 00:20:26.920 And so being a firm load, that will be a constant load that would stay. 00:20:26.920 --> 00:20:31.040 We'll talk a little bit about what the impacts are from a load shed standpoint, 00:20:31.040 --> 00:20:38.240 in the event that ERCOT called for power reductions or cuts in our area. 00:20:38.240 --> 00:20:48.800 So phases one and phases two, which again are currently crypto mining, would be shut down and converted. 00:20:48.800 --> 00:20:53.400 They would anticipate that that would take about a nine to 10 month time frame, 00:20:53.400 --> 00:20:57.720 where no energy would be flowing through that facility or minimal energy, 00:20:57.720 --> 00:21:06.320 but that they would shut that down to convert that all to high performance computing, which is artificial intelligence. 00:21:06.320 --> 00:21:17.880 The north side, as I already mentioned, was already approved for HPC conversion and they're actually beginning some work in that area. 00:21:17.880 --> 00:21:26.880 Additionally, they do plan to put in an additional phase four that would also be HPC. 00:21:26.880 --> 00:21:35.440 And so then all this entire facility would be all high power computing, high performance computing, excuse me, no longer crypto mining. 00:21:35.440 --> 00:21:38.640 They would also build an office complex. 00:21:38.640 --> 00:21:48.480 They would anticipate 130 to 300 full time employees on this site to operate this site. 00:21:48.480 --> 00:21:55.240 In addition, there's some additional land that they also are proposing to lease from the city. 00:21:55.240 --> 00:21:57.920 We'll talk a little bit about that. 00:21:57.920 --> 00:22:09.000 That lease is predominantly DME owned or what we call DEC facility land that was purchased when the DEC was constructed. 00:22:09.000 --> 00:22:17.880 There's an additional 6.7 acres of solid waste property that will also be incorporated into this property, into this facility. 00:22:17.880 --> 00:22:21.000 And we'll talk a little bit about that here shortly. 00:22:21.000 --> 00:22:33.480 Phase four will only be constructed once DME goes through a process with RCOP to build some transmission system improvements and upgrades. 00:22:33.480 --> 00:22:43.280 We did find that once this facility comes online, there will be some system overloads that need to be corrected. 00:22:43.280 --> 00:22:50.080 And so core understands that that was probably going to take us two to three years to go through that process and construct them. 00:22:50.080 --> 00:22:56.280 This phase four will not come online until all of that is completed. 00:22:56.280 --> 00:22:59.880 So that's the proposal, what the future state would be. 00:22:59.880 --> 00:23:04.960 It's going to take a couple of years to a few years to get there. 00:23:04.960 --> 00:23:11.440 But certainly, core is ready to start mobilizing some people to get that done. 00:23:11.440 --> 00:23:20.200 There's also some temporary construction easements in this particular development where there are going to be staging equipment, personnel, that sort of thing. 00:23:20.200 --> 00:23:25.920 It's a short term, 48 month period that they anticipate that we need that particular property. 00:23:25.920 --> 00:23:29.080 So of that, you mentioned they're expanding the lease. 00:23:29.080 --> 00:23:31.240 Is it all of the hashed area? 00:23:31.240 --> 00:23:32.400 It is, yeah. 00:23:32.400 --> 00:23:40.080 So this entire hashed area all the way around the DEC and back around will all be one perimeter. 00:23:40.080 --> 00:23:45.480 It will be all fenced off with security around that particular site. 00:23:45.480 --> 00:23:54.080 Certainly, as part of the process, we'll have access to our assets that are there, both the DEC, two substations or two substation sites. 00:23:54.080 --> 00:23:55.920 Encore also has a facility there as well. 00:23:55.920 --> 00:24:00.240 So there'll be ample ability for them to service those locations. 00:24:00.240 --> 00:24:09.600 But this site will all be contiguous and controlled by core scientific. 00:24:09.600 --> 00:24:16.920 And then there will be a fair amount of extra land there that is not currently planned for development, that they will lease. 00:24:16.920 --> 00:24:20.040 Yeah, so there's some temporary easement areas. 00:24:20.040 --> 00:24:24.000 I think it's about 12 acres that they're going to be leasing. 00:24:24.000 --> 00:24:25.040 So, yeah. 00:24:25.040 --> 00:24:36.040 Now, just understand that there's additional property that DME owns that's to the west of what eventually will be loop 288 that's going to come through here, right? 00:24:36.040 --> 00:24:47.360 Currently, there are no plans for that site other than a future city service center annex that that's currently under proposal. 00:24:47.360 --> 00:24:53.840 But still, again, we're talking about a number of years before that gets developed. 00:24:53.840 --> 00:25:03.480 So in this in this PPA for this phase four number of provisions that I wanted to go through really quick. 00:25:03.480 --> 00:25:08.560 So all of the the rates that are being charged are based on cost of service. 00:25:08.560 --> 00:25:17.280 We've worked journal consultant to help us develop that all the energy that that's purchased will be recovered through the energy cost adjustment. 00:25:17.280 --> 00:25:22.200 That's based on the current existing rate that we have or whatever the rate is that's in the ordinance. 00:25:22.200 --> 00:25:32.600 As we bring that back to you on a quarterly basis, we'll be making adjustments to incorporate core within the recovery of that through that energy cost adjustment. 00:25:32.600 --> 00:25:41.480 Currently, it's at five point one five, although you recently approved a slight decrease of that that the council will be considering tomorrow. 00:25:41.480 --> 00:25:47.040 And then transmission related costs will also be passed through through our transmission cost recovery factor. 00:25:47.040 --> 00:25:55.760 That's also another rate that the PCT the PB reviews, as you might recall, that's actually going to go up a little bit. 00:25:55.760 --> 00:26:03.120 The net if impact to a residential customer from an ECA decrease, TCRF increase is about a one percent decrease. 00:26:03.120 --> 00:26:08.280 But again, we'll be passing this those same costs on to to core. 00:26:08.280 --> 00:26:13.040 And then there'll also be a base rate component that's that's proposed. 00:26:13.040 --> 00:26:15.640 Currently, that's part of the PPA. So it's confidential. 00:26:15.640 --> 00:26:22.920 But once we develop that as a normal tariff, that will be applicable not just for core, but any other large users. 00:26:22.920 --> 00:26:28.600 Currently, we're looking at at about a 20 megawatt or higher type of rate structure. 00:26:28.600 --> 00:26:31.600 But again, we're working with our consultant to bring that to you. 00:26:31.600 --> 00:26:40.080 But ultimately, that that actual rate that will be charged to core will be part of our of our published tariffs. 00:26:40.080 --> 00:26:46.200 So you mentioned if this project goes forward, transmission TCRF rates, 00:26:46.200 --> 00:26:53.880 which is kind of half of our everybody's bill in Denton, is going to decline per per KWH. 00:26:53.880 --> 00:26:56.640 That's likely what will happen again. 00:26:56.640 --> 00:27:08.600 There'll be additional transmission cost to us because right now our load ratio share of transmission costs across the ERCOT market is about point four seven, about half a percent. 00:27:08.600 --> 00:27:13.520 By converting this facility to a firm load, we anticipate that that would go to about one percent. 00:27:13.520 --> 00:27:18.080 So there'll be additional costs. But again, all of those costs are based on usage. 00:27:18.080 --> 00:27:20.720 So the more you use, the more you pay. 00:27:20.720 --> 00:27:26.280 And so we would anticipate that that core would take the lion's share of those increased costs. 00:27:26.280 --> 00:27:31.320 So basically, the transmission costs, DME pays goes up some. 00:27:31.320 --> 00:27:37.720 But core, because they're using so many kilowatt hours, they are paying more of that portion. 00:27:37.720 --> 00:27:50.560 So, like, assuming all those things come true, the average residents, home residents, TCRF line, as opposed to the ECA line, will be reduced by some amount. 00:27:50.560 --> 00:27:54.440 That's what we would anticipate, yes, sir. 00:27:54.440 --> 00:28:05.120 So core responsibilities here that we wanted to point out, there are any investments that need to be made, improvements that need to be made, transmission related within the site. 00:28:05.120 --> 00:28:08.840 There's two substations, some additional relocations and lines. 00:28:08.840 --> 00:28:13.680 Core has agreed through our contract to pay for those 100 percent. 00:28:13.680 --> 00:28:19.400 There are additional costs that may be needed to resolve those system overloads. 00:28:19.400 --> 00:28:28.040 Those costs have to go through a process, both from a selection of what project we will be doing and will be done, because it may not be DME. 00:28:28.040 --> 00:28:35.400 It could be one of these other utilities, whether it's TNPA, Encore, CoServe, so that will be subject to ARCOT approval. 00:28:35.400 --> 00:28:41.760 Those transmission investments are socialized through what's called the transmission cost of service filing. 00:28:41.760 --> 00:28:49.560 So then those are socialized across the entire ARCOT system. 00:28:49.560 --> 00:28:53.480 So the next thing is phase four can only be powered. 00:28:53.480 --> 00:28:57.120 So there is a phase four component. 00:28:57.120 --> 00:29:11.280 That phase four can only be powered once those system overloads are resolved through those investments that we would anticipate would take probably two to three years to go through the approval process, construction and/or connection. 00:29:11.280 --> 00:29:16.760 And so it'll take some time before that phase four component comes online. 00:29:16.760 --> 00:29:29.040 We would anticipate that that would be 2027 at the earliest, 2029 at the latest, again, subject to approval by ARCOT. 00:29:29.040 --> 00:29:35.120 DME implications, certainly we need to modify the purchase power agreement. 00:29:35.120 --> 00:29:43.120 Once converted to APTC, we would anticipate bringing a new tariff rate that would be applicable not just to core, 00:29:43.120 --> 00:29:48.080 but other large load facilities that may not necessarily be data centers. 00:29:48.080 --> 00:30:00.400 And so I just want to be clear that that particular rate will apply based on the amount of energy that's proposed to be used, very similar to the GS small, large and medium that we have today. 00:30:00.400 --> 00:30:02.560 So it would work the same. 00:30:02.560 --> 00:30:08.600 I want to point out that because this will be a firm load, we anticipate that there will be an impact. 00:30:08.600 --> 00:30:11.240 It was called the four coincident peak load. 00:30:11.240 --> 00:30:23.560 So in other words, our pro rata share, our load ratio share of the total ARCOT transmission system would go from roughly half a percent to about one percent as a firm load. 00:30:23.560 --> 00:30:26.840 It is going to be subject to to mandated load shed. 00:30:26.840 --> 00:30:38.040 And so, you know, if there is a call from ARCOT, just like Yuri and since that time, other events core will be treated like every other customer in the city. 00:30:38.040 --> 00:30:50.680 Now, core is anticipating to have some backup generation, some small battery storage on site as well that will help them try to weather some of those outages when and if we were to shut them down. 00:30:50.680 --> 00:31:00.880 Yes, sir. You had mentioned there had been some other incidents or situations where ARCOT had required some mandated shutdowns or pullbacks. 00:31:00.880 --> 00:31:06.360 How many of those have there been since the big winter storm, typically one or two a year? 00:31:06.360 --> 00:31:07.680 No, I think it's been less than that. 00:31:07.680 --> 00:31:10.760 I think since Yuri, we've probably had probably two. 00:31:10.760 --> 00:31:24.520 Now, we've had we've had a couple of instances where we've been we've been close both on both during the summer and in the winter, but they've not resulted in any mandated load shed events. 00:31:24.520 --> 00:31:27.200 Thank you. Yes, sir. 00:31:27.200 --> 00:31:39.680 So from a renewable standpoint, we do anticipate to continue to meet 100 percent renewable mandate because this is such a large load that's coming out so quickly. 00:31:39.680 --> 00:31:54.440 We will not have time to have actual PPA contracts with wind and solar installations, but we do anticipate to issue our fees to to back that load up through that process that we have. 00:31:54.440 --> 00:32:05.160 In the meantime, we do anticipate to do what we've been doing now with core, and that's buying renewable energy credits to meet that ongoing goal. 00:32:05.160 --> 00:32:22.800 And in long term, long term, we'll be having conversations with the PB and also with the city council about the data and renewable resource plan and some of the regulatory challenges that we're seeing that that may require some firming of of the total city load with dispatchable generation. 00:32:24.440 --> 00:32:36.880 So here's kind of what what our load currently looks like and what we would anticipate that we would look like when this facility comes online. 00:32:36.880 --> 00:32:42.880 So currently, we're about 400 or so megawatts, and this is what we call our native load. 00:32:42.880 --> 00:32:47.920 That's everybody else other than than any data center project that we have out there. 00:32:47.920 --> 00:32:55.320 Then we have we anticipate that that would grow by 2044 a little bit over 500 megawatts. 00:32:55.320 --> 00:33:00.320 That's just normal residential commercial development that's coming. 00:33:00.320 --> 00:33:06.000 Certainly, we believe that that additional 100 megawatts of load is conservative. 00:33:06.000 --> 00:33:08.000 We are in a very high growth area. 00:33:08.000 --> 00:33:16.640 And so certainly native the native load could certainly outpace what we projected here, but that's what we forecast at this point. 00:33:16.640 --> 00:33:22.520 With with this data center and other data centers that have already been approved, 00:33:22.520 --> 00:33:29.000 we would anticipate that our peak load would climb probably north of of 800 megawatts. 00:33:29.000 --> 00:33:35.800 And then by 2044, total load would be in excess of 900 megawatts that we'd be looking at. 00:33:35.800 --> 00:33:41.360 I want to point out that while that is a 73 percent increase in load, 00:33:41.360 --> 00:33:51.720 just want to point out that there have been additional there's been additional interest from other data centers to interconnect into DME's grid. 00:33:51.720 --> 00:33:55.360 But I would just point out that that's happening not only across the state of Texas, 00:33:55.360 --> 00:34:06.120 but really across the country where there's been huge developments of data centers from everything from crypto mining to these tier three artificial intelligence, 00:34:06.120 --> 00:34:10.320 high performance computing to an assortment of data centers in between the line there. 00:34:10.320 --> 00:34:17.160 And so it's not anything that's not happening in other parts of the system, certainly not unique to DME. 00:34:17.160 --> 00:34:21.840 But but certainly there's been interest here for context. 00:34:21.840 --> 00:34:25.040 Currently, we serve about one point eight megawatt hours. 00:34:25.040 --> 00:34:28.320 That's what our current load is that we serve. 00:34:28.320 --> 00:34:35.000 We anticipate that that would grow to four point eight million, so certainly a substantial increase in load. 00:34:35.000 --> 00:34:42.360 And so for some context, currently we have the dead energy center that's producing about 225 megawatts. 00:34:42.360 --> 00:34:45.840 That's capacity of dispatchable generation that we have. 00:34:45.840 --> 00:34:51.600 So in the event that we would be mandated to to firm our load, 00:34:51.600 --> 00:35:04.160 then we would be required to have that additional roughly 600 megawatts of of of load that we're serving backed up by some type of dispatchable generation, 00:35:04.160 --> 00:35:07.920 either through it being contracted, owned. 00:35:07.920 --> 00:35:16.640 There will also be performance credit mechanisms potentially that may be available that are also going to be generated by those same types of dispatchable generations. 00:35:16.640 --> 00:35:27.440 We did talk a little bit about the importance of a demand side program that could also be tied into some of the strategies along with an assortment of other things that we're looking at that we'll be bringing forward to you 00:35:27.440 --> 00:35:38.400 through the update to the then renewable resource plan and we'll call our integrated resource plan. 00:35:38.400 --> 00:35:50.880 So just talking a little bit about the load shed implications already mentioned that we would anticipate that we would go from roughly half a percent to about one percent would be our total share. 00:35:50.880 --> 00:36:03.240 Right. And while load shed events are infrequent and they do vary in both the amount that's being requested for us to to power down and the duration. 00:36:03.240 --> 00:36:08.440 And so again, not not not every event is exactly the same. 00:36:08.440 --> 00:36:16.040 We we we do see possibilities during the summer in the late afternoon hours between six and ten o'clock. 00:36:16.040 --> 00:36:32.040 But during the winter, we also see kind of this this double type of of potential event that may happen, not just in the evening as the sun comes down, but certainly early in the morning as as the wind starts blowing that there's possibilities there. 00:36:32.040 --> 00:36:39.720 But again, since Yuri, we've had I think maybe one or two very short duration events that have happened. 00:36:39.720 --> 00:36:52.360 So again, not every event is the same. We do have a load shed plan that is filed with with our cop that is confidential that we lay out our plan for any type of event. 00:36:52.360 --> 00:36:59.240 But again, just like during Yuri, we are able to modify that as the need arises. 00:36:59.240 --> 00:37:06.360 One thing that I want to be clear is that we will never jeopardize or prioritize public health and safety of our customers in those events. 00:37:06.360 --> 00:37:12.360 So they're certainly always on our mind as we're looking at that load shed requirement. 00:37:12.360 --> 00:37:26.000 But but again, it will this this project being converted from a variable load to a firm load will now be part of our load shed plan and will be subject to to load shed events are caught. 00:37:26.000 --> 00:37:37.160 Excuse me. Core is very well aware of that. That's why they've invested in some generation and some battery storage in their facility to try to weather some of those events if they were to happen. I think you just answered my question. 00:37:37.160 --> 00:37:45.640 So they're going to invest in their own generation in the event of a mandated outage. That's correct there for that reason. 00:37:45.640 --> 00:38:06.960 But these types of facilities require that type of of generation backup, which again, the load is has to be constant. Right. And so so they put that in in the event that there's some type of system outage or forced outage that they can rely on variation in the quality of the load power delivered and deviation in the quality of delivered power. 00:38:06.960 --> 00:38:14.240 Absolutely. Absolutely. It's what we call the ride through. So, yes, sir. Thank you, sir. 00:38:14.240 --> 00:38:24.560 So so the example that I wanted to give just really quick just to make sure we're clear here in the event that are covered to call us in the example I have just to try to make the math easy for myself. 00:38:24.560 --> 00:38:44.960 Right. Is that if the aircraft wants a 10,000 megawatt, 10,000 megawatt reduction, our share currently would be about 50 megawatts. So we'd be looking at 50 megawatts to start rotating within our circuits. Just to be clear, if that stays longer than, let's say, an hour, right. 00:38:44.960 --> 00:38:58.680 Our low chip plan duration, about 30 to 45 minutes. Right. So if that goes on longer than that, what we're going to do is we're going to we're going to shut down another 50. So at a given point, you have 100 megawatts that are out. 00:38:58.680 --> 00:39:14.720 Once that 50 is that new 50 is out, then we bring on the other 50. Right. And so then that 50 stays for another 30, 40 minutes. And then we do the same thing again, again, depending on how that how that flows through by going to going to a one percent. 00:39:14.720 --> 00:39:26.920 Now we're looking at 100 megawatts. Right. And so and again, it's the same type of of scenario and we have those circuits identified and that we're working through just like we did during during Yuri. 00:39:26.920 --> 00:39:39.680 And I would just point out that while we understand the impact that that they had on our customers, we're very proud of the fact that we had zero deaths in our community as a result of those outages. 00:39:39.680 --> 00:39:51.080 I thought we did a really good job of managing them, hurt our customers. We initially started with a 30 minute kind of rotation, hurt our customers saying that was enough time to get them to reheat. 00:39:51.080 --> 00:40:01.840 So we increased that that duration to about 45 minutes to give people that had the power back on time to reheat their homes and and do what they need to do. 00:40:01.840 --> 00:40:12.760 And in addition, we were able to work with a number of critical facilities that we didn't know were in town that we were able to to work with them to keep them powered to service their customers. 00:40:12.760 --> 00:40:17.880 And in particular, Dallas Center that that that we've built a really good relationship with. 00:40:17.880 --> 00:40:30.840 And so anyway, so the next thing that yes, sir, just while we're on that topic, I want to keep beating my drum on large industrial customers and their ability to demand respond. 00:40:30.840 --> 00:40:45.520 If whether it's core or Peter Biltz or Tetra Pak or any other large customer can can respond during that time, you know, that that if they if somebody can turn off 50 megawatts in their single customer, 00:40:45.520 --> 00:40:50.520 then that's less the rest of the grid has to do or the rest of DME has to respond. 00:40:50.520 --> 00:41:03.800 So that's where some kind of demand response or agreements to pay pay for that value or split the benefit between DME and the customer. 00:41:03.800 --> 00:41:11.240 If it's got a value to reduce that load or anything like that, those are those are really good opportunities and for demand response program. 00:41:11.240 --> 00:41:21.840 So I just keep beating that drum that I know you all you all have been talking about it for a while, but I think it's got a ton of potential value. And I would just say that relationships do matter. 00:41:21.840 --> 00:41:29.200 And so so we worked very closely during that time with both both universities and also then ISD. 00:41:29.200 --> 00:41:34.080 And so much of their load actually disappeared during year as well. 00:41:34.080 --> 00:41:44.440 Now, certainly, you know, they couldn't have students on there. And so so it was natural. But again, how they reacted to that was really in concert with us and the relationship that we have with those institutions. 00:41:44.440 --> 00:41:54.880 So but you're exactly right. Next time I want to just cover real quick is you are going to be considering changes to the lease agreement. 00:41:54.880 --> 00:41:59.960 This would be amendment number three to the lease agreement. 00:41:59.960 --> 00:42:05.760 The initial lease agreement that we had with core back when they first came in was for thirty one acres. 00:42:05.760 --> 00:42:19.360 We did amend amend that in amendment number two, we added additional five point five, six acres for a total of thirty six point five acres that they were leasing with this agreement here. 00:42:19.360 --> 00:42:34.000 That actually jumps up for an additional forty two point nine acres that encompasses six point seven acres of solid waste property for a total of about seventy nine point four acres, almost eighty acres that are being leased to core. 00:42:34.000 --> 00:42:39.200 There is a fair market value payment that they were making for that lease agreement. 00:42:39.200 --> 00:42:50.400 That's about a little bit over almost fifty four thousand dollars per month, so a little bit over six hundred thousand dollars a year that they would be paying for for leasing that property. 00:42:50.400 --> 00:43:04.760 The majority of the property, seventy seventy two, almost seventy three acres are previously DME owned property and in the six point seven acres of land from solid waste. 00:43:04.760 --> 00:43:10.320 And just to be clear, this property was purchased, the solid waste property was purchased for a solid waste transfer station. 00:43:10.320 --> 00:43:12.800 We've worked with Brian Warner and his team. 00:43:12.800 --> 00:43:20.280 They will have to redesign that transfer station as a result of this particular usage change. 00:43:20.280 --> 00:43:23.600 But that transfer station will remain functional. 00:43:23.600 --> 00:43:29.080 No changes or impacts short or long term to that facility as they develop other than they have to reengineering. 00:43:29.080 --> 00:43:38.120 But we'll talk a little bit about an additional agreement concession that that core is made as a result of that particular change. 00:43:38.120 --> 00:43:43.000 So the other agreement that you have is what's being called a value loss consideration agreement. 00:43:43.000 --> 00:43:48.120 Core has agreed to pay the city a little bit in excess of five million dollars. 00:43:48.120 --> 00:43:53.280 This money is a result of some additional negotiation that that fell through. 00:43:53.280 --> 00:44:03.800 And so in consideration of that not happening, core has agreed to pay the city a little bit over five million dollars that would be used for any general government purpose. 00:44:03.800 --> 00:44:18.960 So that money will be going to the general fund and it'll be a one time payment of sixty thousand dollars, which represents the engineering cost that that solid waste had made on the initial property development for the transfer station. 00:44:18.960 --> 00:44:30.040 This gives them back to sixty thousand so they can start all over again and then have no impact on on the solid waste fund. 00:44:30.040 --> 00:44:47.680 In addition to to this lease, there there's also a little bit over twelve and a half acres of property, also a fair market value, almost fifty two hundred dollars per month for some temporary construction easements is pretty standard in the construction world. 00:44:47.680 --> 00:44:50.400 It's about it's a 48 month term. 00:44:50.400 --> 00:44:59.240 They're using that property for staging equipment, personnel, that sort of thing, normal construction as they as they develop the property. 00:44:59.240 --> 00:45:07.360 Standard terms and conditions apply that's pretty standard on our contracts. 00:45:07.360 --> 00:45:09.000 Community impacts just shortly. 00:45:09.000 --> 00:45:11.600 And this will just have one more slide after this. 00:45:11.600 --> 00:45:22.800 So bear with me, community impacts cores anticipating that they would have one hundred and thirty to three hundred full time personnel on site. 00:45:22.800 --> 00:45:28.880 That's, of course, contingent upon full development of all the phases, including phase four average salary. 00:45:28.880 --> 00:45:33.800 They anticipate seventy to seventy five thousand plus plus benefits. 00:45:33.800 --> 00:45:42.200 They do anticipate to work closely with U.N.T. and T.W.U. on some programs to to shore up that labor force. 00:45:42.200 --> 00:45:48.240 Matter of fact, there's a number of U.N.T. students there now that have been working with course since the beginning. 00:45:48.240 --> 00:45:54.760 And then they anticipate a little bit over two hundred spin off jobs with the average salary about thirty seven thousand. 00:45:54.760 --> 00:46:02.920 These are construction type jobs, folks that will be there as they're constructing and servicing the facility. 00:46:02.920 --> 00:46:06.560 Total real property investment. It's about four billion dollars. 00:46:06.560 --> 00:46:12.280 So it's a significant investment that's being made on this facility. 00:46:12.280 --> 00:46:19.440 That's about one hundred ninety four million of property taxes to the city over over the first 10 years of the agreement. 00:46:19.440 --> 00:46:29.440 And I'll be clear here that through this process, there have been no economic incentives offered to core provided to core as part of this agreement. 00:46:29.440 --> 00:46:34.580 They are seeking some incentives and abatements to the state of Texas. 00:46:34.580 --> 00:46:40.320 But that's certainly something that's that's separate and that the economic development department is helping facilitate. 00:46:40.320 --> 00:46:46.880 But no chapter 380 agreements or abatements that are that are being offered as part of this agreement. 00:46:46.880 --> 00:46:55.960 And so the request that we have to for you today is staff recommends approval of amendment four to the purchase power agreement. 00:46:55.960 --> 00:47:07.480 Amendment number three to the lease agreement, approval of a vast value loss consideration agreement and also an agreement for some temporary construction easements. 00:47:07.480 --> 00:47:14.320 So with that, we'll be happy to answer any questions you may have for the questions. 00:47:14.320 --> 00:47:18.000 I think we asked them all here. You're present. Oh, no, I have one. 00:47:18.000 --> 00:47:25.160 He has one. Procedurally, may we move to approve B, C, D and E in one motion? 00:47:25.160 --> 00:47:27.060 No, we have one at a time. 00:47:27.060 --> 00:47:28.440 We do. Yeah, very well. 00:47:28.440 --> 00:47:30.760 Thank you. All right. 00:47:30.760 --> 00:47:38.920 So then the first item is P.U.B. 24-244, a temporary construction easement between the city and Core Scientific. 00:47:38.920 --> 00:47:41.800 Do we have a motion to approve? 00:47:41.800 --> 00:47:46.040 Mr. Rybak motions. Mr. Taylor second. 00:47:46.040 --> 00:47:49.760 All in favor say aye. Aye. Opposed? 00:47:49.760 --> 00:47:53.960 Okay. Next item is P.U.B. 24-245. 00:47:53.960 --> 00:48:02.480 Consider adopting an ordinance authorizing the city manager to execute a third amendment to the lease agreement between the city and Core Scientific. 00:48:02.480 --> 00:48:04.400 Do we have a motion to approve? 00:48:04.400 --> 00:48:12.560 Yes, I would like to. So I would like to run down for for Mr. Lee's questions, and I'm really sure this is going to get a lot of attention. 00:48:12.560 --> 00:48:20.280 You know, this is a big financial deal. So I just wanted to run through what I understand the financial risks and benefits. 00:48:20.280 --> 00:48:25.760 Sure. Do you want to do it here? Well, I figure may as well do it here. Go ahead. Yep. No. 00:48:25.760 --> 00:48:44.320 We there's obviously the lease land, small amount of income to the city, the the a new business of 100 to 300 employees moving into town with tax base and jobs and all of those those type of economic development benefits. 00:48:44.320 --> 00:48:51.960 But as it applies to D.M.E., this will the increased and steady load will. 00:48:51.960 --> 00:49:09.960 Core Scientific will actually lower the average per kilowatt hour bill of all other meters in tech in in in D.M.E., because they will be carrying a portion of our transmission cost. 00:49:09.960 --> 00:49:14.920 There are some, you know, what are the financial risks? Well, there's building out infrastructure. 00:49:14.920 --> 00:49:20.720 Core pays for all of the infrastructure on their site and then deeds it to D.M.E. 00:49:20.720 --> 00:49:26.480 So that we don't have to take out a loan to build a few million dollars in wires. 00:49:26.480 --> 00:49:34.040 We have to do off site improvements, but those are reimbursed through the transmission cost of service program. 00:49:34.040 --> 00:49:41.520 And those are already those improvements are things that D.M.E. has identified just from natural growth will eventually be needed. 00:49:41.520 --> 00:49:46.520 They just get needed sooner if this project gets built. 00:49:46.520 --> 00:50:00.720 The and then like temporary construction easements and end in the value loss agreement kind of offsetting the the expected revenue from the Bitcoin mining. 00:50:00.720 --> 00:50:05.600 I think those are those are all the I believe the direct benefits to D.M.E. 00:50:05.600 --> 00:50:11.080 But D.M.E. also does collect an ROI return on investment. 00:50:11.080 --> 00:50:25.640 So a portion of the revenue D.M.E. has gets paid back to the city because the city put forth the original capital and effort to create the power company. 00:50:25.640 --> 00:50:35.760 So just like a for profit company would have investors making money and a co-op the cooperative would be collecting an ROI and paying it back to the members. 00:50:35.760 --> 00:50:37.240 D.M.E. pays it to the city. 00:50:37.240 --> 00:50:50.040 So if D.M.E.'s revenues increase, that actually provides a transfer in funds to the city, lowering the total taxes needed by the city. 00:50:50.040 --> 00:50:54.680 So for all these reasons, there's not there's I think the biggest risk I can see. 00:50:54.680 --> 00:51:13.400 Two biggest risks I can see are if we get used to the revenue and core scientific, you know, ceases to exist or moves, you know, that would be the same as a loss of a Peter built or a large another large industrial tech repack. 00:51:13.400 --> 00:51:21.160 Or, you know, one of those, you know, it would it would it would be a hole in our community for employment and and benefit. 00:51:21.160 --> 00:51:24.000 But, you know, we can't we can't control that much. 00:51:24.000 --> 00:51:33.960 And if anything, I feel like the high performance computing is probably a little more consistent than the Bitcoin mining from a long term perspective. 00:51:33.960 --> 00:51:37.280 And it has potential for more employees. 00:51:37.280 --> 00:51:40.880 Yeah. And furthermore, there's more investment in the community. 00:51:40.880 --> 00:51:44.200 High performance computing is the wave of the future. 00:51:44.200 --> 00:51:47.680 It was just going to be more and more and more of it. 00:51:47.680 --> 00:51:55.840 So you have to get used to it because we all want these things to respond when we talk to them. 00:51:55.840 --> 00:52:05.640 Yeah. And I think that the other risk, which is a risk that DME has just in load, is we need to manage purchasing that load and forward. 00:52:05.640 --> 00:52:09.280 And, you know, I think that's already you already have staff that that's their job. 00:52:09.280 --> 00:52:17.280 And so I think they, you know, they'll be adjusting all of their plans and their risk models and so forth to include this. 00:52:17.280 --> 00:52:27.120 I do have one concern is we are already not at our 100 percent renewable right now per the Denton Renewable Resource Plan. 00:52:27.120 --> 00:52:33.040 We're in the 90 percent, somewhere below 100 percent currently renewable. 00:52:33.040 --> 00:52:39.280 And this will add a large new load, which would push us to maybe 50 percent renewable. 00:52:39.280 --> 00:52:43.360 And, you know, that was a hard fought mandate from the citizens. 00:52:43.360 --> 00:52:46.640 And so I want to move us back there and we could start. 00:52:46.640 --> 00:52:50.160 You know, you have a plan, short term, medium term, long term. 00:52:50.160 --> 00:52:54.000 You know, I just want to make sure that we don't that we keep that plan moving forward as load growth. 00:52:54.000 --> 00:53:02.280 We don't we don't have to fall below 100 percent to start planning for three years from now to buy more, you know, renewable energy. 00:53:02.280 --> 00:53:08.560 With all that, I think this is a really good opportunity for DME and for the city and for the residents. 00:53:08.560 --> 00:53:10.400 Very well said. 00:53:10.400 --> 00:53:14.880 I move approve. So I move approval of item C. 00:53:14.880 --> 00:53:17.760 All right. Do we have a second, Mr. Newquist? 00:53:17.760 --> 00:53:19.600 All in favor, say aye. 00:53:19.600 --> 00:53:21.480 Aye. 00:53:21.480 --> 00:53:25.440 Carries. OK, P.U.B. 24246. 00:53:25.440 --> 00:53:35.120 Consider recommending the adoption of an ordinance to execute an amendment number four for the purchase power agreement between the city and Core Scientific. 00:53:35.120 --> 00:53:38.040 Do we have a motion to approve? 00:53:38.040 --> 00:53:45.240 Mr. Ryback's motion and Mr. Taylor's second. All in favor, say aye. Aye. 00:53:45.240 --> 00:53:48.400 Carries. P.U.B. 24247. 00:53:48.400 --> 00:53:59.920 Consider recommending the adoption of an ordinance authorizing the city manager to execute an agreement for value loss consideration with Core Scientific. 00:53:59.920 --> 00:54:03.720 Mr. Newquist moved. Mr. Ryback seconded. 00:54:03.720 --> 00:54:08.080 All in favor, say aye. Aye. Carries. 00:54:08.080 --> 00:54:11.040 That that is it. All right. 00:54:11.040 --> 00:54:12.720 We're on to concluding items. 00:54:12.720 --> 00:54:21.560 Does any board member wish to make a comment to the public or have something put on a future agenda item? 00:54:21.560 --> 00:54:24.680 Seeing none, it's ten twenty nine. 00:54:24.680 --> 00:54:25.280 We're adjourned.