WEBVTT 00:00:00.000 --> 00:00:07.240 Good morning. I'd like to welcome you and call to order the Public Utility Board meeting 00:00:07.240 --> 00:00:13.720 for the City of Denton of Monday, May 19th, 2025. Are there any presentation for members 00:00:13.720 --> 00:00:18.800 of the public? There does not appear to be any. We'll move straight on to the consent 00:00:18.800 --> 00:00:23.240 agenda. Would any member like to pull one of these items? 00:00:23.240 --> 00:00:25.120 I have a quick question on item A. 00:00:25.120 --> 00:00:33.040 Okay, let's pull item A, please. Any others? No. Then we'll entertain a motion for items 00:00:33.040 --> 00:00:35.160 B and C of the consent agenda. 00:00:35.160 --> 00:00:36.160 So moved. 00:00:36.160 --> 00:00:37.160 We have a motion. 00:00:37.160 --> 00:00:38.160 Second. 00:00:38.160 --> 00:00:41.040 We have a second. All those in favor, please say aye. 00:00:41.040 --> 00:00:42.040 Aye. 00:00:42.040 --> 00:00:48.480 Any opposed, sign the same. All right, it passes unanimously. Item A. What is your question, 00:00:48.480 --> 00:00:49.480 Mr. Taylor? 00:00:49.480 --> 00:00:54.440 So notice the majority of this contract is for that initial study, and then it has a 00:00:54.440 --> 00:01:01.600 small amount kind of for maintenance on the study. Does that mean that it'll provide 00:01:01.600 --> 00:01:07.160 annual cost of service updates for the five-year period? 00:01:07.160 --> 00:01:12.520 That's correct. The additional amount is for maintaining the model. So the upfront cost 00:01:12.520 --> 00:01:16.960 is to develop the model, and then the ongoing contract is for the maintenance. 00:01:16.960 --> 00:01:21.560 Okay. So then basically every year we'll have a new cost of service. Okay. Thank you. 00:01:21.560 --> 00:01:24.960 The update refreshed. Yeah. 00:01:24.960 --> 00:01:25.960 Move approval on item A. 00:01:25.960 --> 00:01:30.600 We have a motion to approve item A. Do we have a second? 00:01:30.600 --> 00:01:31.600 Second. 00:01:31.600 --> 00:01:35.240 Second. We got a second. All those in favor, please say aye. 00:01:35.240 --> 00:01:36.240 Aye. 00:01:36.240 --> 00:01:42.920 Any opposed, sign the same. It passes unanimously. Moving on to items for individual consideration. 00:01:42.920 --> 00:01:45.880 Consider approval of the minutes of April 28th. 00:01:45.880 --> 00:01:47.640 So moved. 00:01:47.640 --> 00:01:48.640 Move approval. 00:01:48.640 --> 00:01:49.640 Second. 00:01:49.640 --> 00:01:52.360 Second. All those in favor, please say aye. 00:01:52.360 --> 00:01:53.360 Aye. 00:01:53.360 --> 00:01:58.200 Passes unanimously. Item B. Consider approval of the May 5th minutes. 00:01:58.200 --> 00:01:59.200 So moved. 00:01:59.200 --> 00:02:02.680 We got a motion. Mr. Rainer, we got a second. 00:02:02.680 --> 00:02:03.680 Yes. 00:02:03.680 --> 00:02:07.120 Mr. Vermeer and over here, Newquist. All those in favor, please say aye. 00:02:07.120 --> 00:02:08.120 Aye. 00:02:08.120 --> 00:02:13.840 Any opposed, sign the same. Passes unanimously. Item C. Consider recommending adoption of an 00:02:13.840 --> 00:02:20.320 ordinance directing the publication of notice of intention to issue $46,535,000 in principal 00:02:20.320 --> 00:02:23.120 amounts of COs for the City of Denton. 00:02:23.120 --> 00:02:26.320 Good morning. I also need the next item called. I have one presentation. 00:02:26.320 --> 00:02:29.200 Oh, these two go together. It says that here. I'm sorry. 00:02:29.200 --> 00:02:30.200 No problem. 00:02:30.200 --> 00:02:39.120 This is items C and D also. So the items are PUB 25-039 and PUB 25-040. 00:02:39.120 --> 00:02:44.600 Good morning, Randy Klingle, Treasury Manager. I'm here for the Notice of Intent for this 00:02:44.600 --> 00:02:50.280 year's Certificates of Obligation, which as mentioned are both items for one presentation, 00:02:50.280 --> 00:02:53.840 but will be voted on separately, please. 00:02:53.840 --> 00:02:59.240 The Notice of Intent is required by state law for Certificates of Obligation only, and 00:02:59.240 --> 00:03:05.160 we will post the notices in the Denton Record Chronicle, which is required to be in a printed 00:03:05.160 --> 00:03:10.800 paper of local variety in your municipal government. I will also post it on the city's website 00:03:10.800 --> 00:03:16.160 for the length of the duration until the bond sale actually happens in the late summer. 00:03:16.160 --> 00:03:22.000 And then the bond ordinance cannot come to you or to the council until 46 days after 00:03:22.000 --> 00:03:27.560 that first posting in the local paper. So the majority of the information I have is 00:03:27.560 --> 00:03:31.800 also in your backup. It's in your AIS. It's a list of the projects, and I will not be 00:03:31.800 --> 00:03:34.880 going over the list of those projects, but if you have any questions, we probably have 00:03:34.880 --> 00:03:39.000 some friends here in the audience that will help us out on those details. But I will just 00:03:39.000 --> 00:03:47.480 go through the funds themselves and show you the totals that will be on the Notice of Intent. 00:03:47.480 --> 00:03:53.440 So the first fund is the Solid Waste Fund, which the Notice of Intent is at their reimbursement 00:03:53.440 --> 00:04:00.960 status, the same, nothing has changed, with $11.1 million. 00:04:00.960 --> 00:04:08.160 The water utility has a long list of projects, very detailed, as is normal for the utilities. 00:04:08.160 --> 00:04:13.520 And again, like I said, it's in the backup, and I won't go through all of these, but you 00:04:13.520 --> 00:04:20.960 will see the changes from the reimbursement ordinance that was in October. So for your 00:04:20.960 --> 00:04:32.960 water fund, we have $80,614,615. $80,614,615, I think I said that right. Wastewater, we 00:04:32.960 --> 00:04:42.160 also have two slides for this fund. The $77.1 million for the wastewater fund. And last, 00:04:42.160 --> 00:04:52.000 we have electric utility, $47,900,000 for the utility. For the solid waste, you have 00:04:52.000 --> 00:04:58.840 $11.1, you have the total utility system there at the $207,515, and some of those totals 00:04:58.840 --> 00:05:05.000 include the issuing cost and some price flexibility once we get to the bond sale in July. 00:05:05.000 --> 00:05:10.800 Our next steps is we'll go to council tomorrow for them to review this Notice of Intent after 00:05:10.800 --> 00:05:15.760 your recommendation today, and then we'll come back to PUB on June 23rd for the full 00:05:15.760 --> 00:05:22.000 bond ordinance. And July 15th, council members will review that as well. And then July 23rd, 00:05:22.000 --> 00:05:29.280 we'll have the bond sale and we should expect the funds in late August. Any questions? 00:05:29.280 --> 00:05:47.160 It doesn't appear to be any. Okay. Fantastic. I guess that's it. Go ahead. 00:05:47.160 --> 00:05:55.240 This is a substantial amount of debt, $250 million approximately. And of course, it represents 00:05:55.240 --> 00:06:00.540 a lot of necessary growth, you know, or necessary infrastructure to support the growth that 00:06:00.540 --> 00:06:10.920 is occurring in Denton. I have the Ray Roberts Water Treatment Plant expansion, up rate. 00:06:10.920 --> 00:06:17.880 That's I think if you total all of those $30 or $40 million total, the Milam Creek Wastewater 00:06:17.880 --> 00:06:25.280 Lift Station, you know, lots of expansion of landfill cells, you know, so these are 00:06:25.280 --> 00:06:31.040 all, a lot of this is related to the continued growth that we're experiencing as a city. 00:06:31.040 --> 00:06:36.320 And then there's also kind of mixed in just the maintenance, the replacing water lines 00:06:36.320 --> 00:06:43.440 that are 30 or 40 years old, replacing wastewater lines, you know, so it is a significant list 00:06:43.440 --> 00:06:50.880 of projects here, but, you know, I think we all know that they're all necessary. So with 00:06:50.880 --> 00:06:57.120 that, I will, do we need to call them? Do we need a motion yet for the note to publish 00:06:57.120 --> 00:07:01.880 the notice of intent? Each one. Yes. Yes. I guess I'll wait to see if there's any further 00:07:01.880 --> 00:07:12.120 discussion. Okay. I'll call it. Anybody? Doesn't appear to be any others, any other discussion. 00:07:12.120 --> 00:07:24.520 So we'll entertain a motion for item C for the notice of intent for $46,535,000 and COs. 00:07:24.520 --> 00:07:29.520 I move we recommend adoption of the ordinance for the COs. We have a motion for item C. 00:07:29.520 --> 00:07:36.880 Second. We have a second. All those in favor, please say aye. Aye. Any opposed, sign the 00:07:36.880 --> 00:07:47.920 same. Passes unanimously. Now entertain a motion for item D. I move. I have a motion. 00:07:47.920 --> 00:07:52.800 Second. We have a second. All those in favor, please say aye. Aye. Any opposed, sign the 00:07:52.800 --> 00:08:00.240 same. They both pass unanimously. Moving on to management reports. Good morning. Members 00:08:00.240 --> 00:08:05.440 of PEB, Stephen Gay, General Manager, Water Utilities and Street Operations. You have been 00:08:05.440 --> 00:08:11.340 provided in your packets the three memos. We have staff here if you have any questions. 00:08:11.340 --> 00:08:17.320 And then beyond that, I don't believe there's any future items and/or any new business. I 00:08:17.320 --> 00:08:24.400 think those were Lee questions. Yeah. But thank you for the memos. Thank you for the 00:08:24.400 --> 00:08:33.200 research. You're welcome. Anything else you got there? Future agenda items? No, sir. No. 00:08:33.200 --> 00:08:38.120 Anybody else got any future agenda items? Doesn't appear to be. New business action 00:08:38.120 --> 00:08:44.960 items? I guess you're passing on that, too. Yes, sir. We will move on to the work session. 00:08:44.960 --> 00:08:48.520 Item A. Receive a report, hold a discussion, give staff direction regarding updates to 00:08:48.520 --> 00:09:05.800 the Denton Renewable Resource Plan. Would you please ask someone who knows something 00:09:05.800 --> 00:09:14.480 to get up there and make the presentation, please? I'll try to find you someone. We've 00:09:14.480 --> 00:09:18.960 been knocking him down all morning. We should continue, I think. We'll let everybody clear 00:09:18.960 --> 00:09:29.680 out. So Mr. Chair, members of the PEB, Tony Puente, the DME General Manager. Appreciate 00:09:29.680 --> 00:09:33.800 your time this morning. I'm going to try to run through this presentation as efficiently 00:09:33.800 --> 00:09:38.640 as I can. I do want to kind of open up with a couple of things real quick for you. First 00:09:38.640 --> 00:09:44.240 of all, legislative session is still in the session. They still got about two more weeks. 00:09:44.240 --> 00:09:49.880 There are a number of bills that are under consideration that we're tracking. Certainly 00:09:49.880 --> 00:09:57.600 I referenced some of those within the confines of this presentation. Know that some of the 00:09:57.600 --> 00:10:06.320 requirements that may be coming down the pike may dictate for our community, for our utility, 00:10:06.320 --> 00:10:14.840 what must be done. So we certainly try to put this together within the context of what's 00:10:14.840 --> 00:10:20.320 happening at the state level, but also at the federal level as well. So we'll talk a 00:10:20.320 --> 00:10:27.680 little bit about that and about the availability of new renewable resources going forward in 00:10:27.680 --> 00:10:35.640 the state of Texas and frankly probably across the country. And then finally, locally, we 00:10:35.640 --> 00:10:41.480 continue to have some challenges that are related to our purchase power agreements, 00:10:41.480 --> 00:10:48.240 delivery of projects, uncertainty that's there as well. So we'll talk about that. The presentation 00:10:48.240 --> 00:10:57.160 overall recommends preservation of the 100 percent renewable goal that has been our mandate 00:10:57.160 --> 00:11:04.000 for a number of years now. We just try to define that, which based on an internal audit 00:11:04.000 --> 00:11:08.360 that was done, we found that there was not a very good definition of what that 100 percent 00:11:08.360 --> 00:11:13.080 renewable goal was. And so we try to define that here. I think going forward, it would 00:11:13.080 --> 00:11:17.360 be the definition that we certainly would recommend for our community going forward. 00:11:17.360 --> 00:11:23.400 So with that, this is a two-part presentation. The first part will be really an update to 00:11:23.400 --> 00:11:28.160 the renewable resource plan. I've outlined out here for you the objectives. We'll provide 00:11:28.160 --> 00:11:32.280 a staff recommendation in part one. Part two is related to what's called an integrated 00:11:32.280 --> 00:11:37.280 resource plan that is part of our recommendation. We'll cover regulatory market, some of our 00:11:37.280 --> 00:11:43.520 load forecasts, also provide recommendations. And then I'll wrap that up with a recap of 00:11:43.520 --> 00:11:49.800 the two recommendations that we're making today and would appreciate your direction. 00:11:49.800 --> 00:11:54.480 We do plan to present this to the Council on June 3rd. And so certainly, we want to 00:11:54.480 --> 00:12:00.840 be able to have enough time to provide them your feedback on these recommendations. So 00:12:00.840 --> 00:12:08.040 with that, the renewable resource plan, the current plan was adopted back in 2018. That 00:12:08.040 --> 00:12:15.280 goal was done through a study. And so some of the things that I'll kind of touch on 00:12:15.280 --> 00:12:23.880 here is that obtaining the goal really depended on how we accounted for certain resources 00:12:23.880 --> 00:12:31.600 that would have reached that goal by 2020 or 2024. The acquisition of diversified set 00:12:31.600 --> 00:12:37.000 of power purchase agreements, that was really the goal, right, is to not necessarily build 00:12:37.000 --> 00:12:46.000 our own renewable energy plant, but to acquire those two power purchase agreements. It did 00:12:46.000 --> 00:12:51.600 list out a number of objectives, one of those being the fact that always cognizant of the 00:12:51.600 --> 00:12:56.640 least cost supplies, right? And so certainly always be cognizant of what the ultimate impact 00:12:56.640 --> 00:13:02.480 is to rate payers. It did recognize that the debt and energy center was a cost hedge. And 00:13:02.480 --> 00:13:06.720 I think that is consistent with what we've communicated, certainly since I've been the 00:13:06.720 --> 00:13:12.400 general manager, but even before that time, of what the debt was intended to do. And we 00:13:12.400 --> 00:13:17.160 certainly believe that it's been successful in that. And acknowledge that the greatest 00:13:17.160 --> 00:13:21.120 challenge is balancing the supply portfolio around intermittent resources. And that's 00:13:21.120 --> 00:13:25.960 something that continues to be seen across the states, certainly in California. The infamous 00:13:25.960 --> 00:13:30.320 duck curve, if you're familiar with that, in that in the evening hours, between the 00:13:30.320 --> 00:13:36.520 hours of 6 and 10 during the summers, when you tend to see scarcity, right, when the 00:13:36.520 --> 00:13:44.320 wind doesn't show up and the sun is gone, that tends to be those hours of uncertainty 00:13:44.320 --> 00:13:50.520 or scarcity. In a winter, it's actually a double situation, because you also have the 00:13:50.520 --> 00:13:57.320 morning hours, around 8 o'clock to about 10 o'clock as well. And then finally, and 00:13:57.320 --> 00:14:03.520 we have implemented some hedge plan and strategies that have gone into trying to manage this 00:14:03.520 --> 00:14:09.480 portfolio. Do share with you here the current resources that we have. So we do have one 00:14:09.480 --> 00:14:16.080 resource at 150 megawatts, and then the remaining resources that we have under contract currently 00:14:16.080 --> 00:14:22.400 are solar. We have a total of 455 megawatts of capacity. I will just mention that the 00:14:22.400 --> 00:14:28.760 Yellow Viking, that is still not online. And we continue to work with them on that particular 00:14:28.760 --> 00:14:34.320 contract. And it just goes to some of the PPA challenges that we're seeing. In addition 00:14:34.320 --> 00:14:40.480 to that, we also have issued an RFP that we're currently evaluating for up to 300 megawatts 00:14:40.480 --> 00:14:47.760 of solar, wind, and battery. We are working through those proposals now and do plan to 00:14:47.760 --> 00:14:55.080 be in front of you in the coming weeks with some recommendations regarding some additional 00:14:55.080 --> 00:15:03.800 resources for your consideration. So this provides you just a timeline and some history 00:15:03.800 --> 00:15:11.080 of the evolution of this goal. I went back to 2009. 2009, the goal was 40 percent. And 00:15:11.080 --> 00:15:19.240 you can see here that in 2021, we achieved that goal. I do have an asterisk here for 00:15:19.240 --> 00:15:25.720 you because I do want to make sure that you understand how we've attained that. So back 00:15:25.720 --> 00:15:32.920 in 2021, we served a little bit over 1.5 million megawatt hours to our customers. The contracts 00:15:32.920 --> 00:15:40.680 that we had in place at the time actually generated 1.3 million megawatt hours of power. 00:15:40.680 --> 00:15:49.520 And then we were able to utilize 262,000 megawatt hours. So it's equivalent of 30 megawatts 00:15:49.520 --> 00:15:55.120 that was tied to one contract called the Whitetail contract. We did go to the Council at the 00:15:55.120 --> 00:16:01.400 time, also the PUB, and recommended that while the dead renewable resource plan and discussions 00:16:01.400 --> 00:16:06.760 at the time was that we were not to count recs towards this goal, we certainly believe 00:16:06.760 --> 00:16:10.680 that there was a misunderstanding of what a rec is. And certainly, I'll try to touch 00:16:10.680 --> 00:16:16.520 base a little bit today on what that is. So the Council did give us direction in 2020 00:16:16.520 --> 00:16:23.860 to begin counting those 30 megawatts of recs towards our goal. And so in 2021, we actually 00:16:23.860 --> 00:16:29.280 were able to achieve that goal, actually exceeded it a little bit by 1 percent, 101 percent. 00:16:29.280 --> 00:16:35.160 And I've given you here, kind of since that time, what we've done. Certainly, in '22 00:16:35.160 --> 00:16:42.320 and '23, we counted the 30 megawatts of renewable -- or recs from the Whitetail contract, but 00:16:42.320 --> 00:16:48.080 we actually had to buy additional recs out in the open market to attain that goal. And 00:16:48.080 --> 00:16:56.080 in 2024, the Whitetail contract did expire December 31st of 2023. And so in 2024, we 00:16:56.080 --> 00:17:02.800 bought 400 -- a little bit over 400,000 megawatt hours of recs in the open market to round 00:17:02.800 --> 00:17:09.960 out our goal of 100 percent. Just to rehash a little bit of what we communicated 00:17:09.960 --> 00:17:15.960 to the PV and the Council at the time was not counting the Whitetail recs would have 00:17:15.960 --> 00:17:22.120 cost the city an additional, you know, $5 million -- $5.1 million to go out there and 00:17:22.120 --> 00:17:29.320 acquire that renewable energy out in the open market with short-term contracts, along with 00:17:29.320 --> 00:17:36.440 recs, right? And so the Council decided, since we had already used -- had already paid for 00:17:36.440 --> 00:17:41.360 the 30 megawatts within the PPA contract that we had, to not spend that money, instead go 00:17:41.360 --> 00:17:49.880 ahead and utilize those recs. In 2024, again, you know, we anticipate that that energy that 00:17:49.880 --> 00:17:54.160 would have been equivalent to the 400,000 megawatts would have cost us about $2 million, 00:17:54.160 --> 00:18:03.840 right? Instead, we bought 400,000 megawatt hours of recs at about $1.50 a megawatt hour. 00:18:03.840 --> 00:18:09.440 So we spent about $600,000, right? So $600,000 versus $2.5 million is really a differential, 00:18:09.440 --> 00:18:17.200 right? And ultimately, what we did not spend on behalf of our ratepayers. 00:18:17.200 --> 00:18:23.840 Some of the challenges associated with the current plan, and certainly some of the findings 00:18:23.840 --> 00:18:28.760 that I'll cover from an internal audit that was done. We worked very closely with the 00:18:28.760 --> 00:18:33.600 city's internal auditor on this. But some of the challenges, right, is, you know, associated 00:18:33.600 --> 00:18:37.520 with counting a rec, right? So let me talk to you just a little bit about what's called 00:18:37.520 --> 00:18:45.080 the Texas Renewable Portfolio Standard. So that standard, RPS -- understand that RPSs 00:18:45.080 --> 00:18:49.560 exist throughout various states across the country, so this isn't anything that's new 00:18:49.560 --> 00:18:58.240 to just the state of Texas or DME. But that RPS program was established back in 1999, 00:18:58.240 --> 00:19:03.960 after deregulation, you know, the infamous SB7 that you may be familiar with. And it 00:19:03.960 --> 00:19:09.960 created this renewable energy credit program. The intent was to identify resources. So the 00:19:09.960 --> 00:19:15.880 plan identified a specific number of resources -- solar, wind, geothermal, hydroelectric, 00:19:15.880 --> 00:19:22.580 wind, tidal, and biomass -- as the types of facilities that would be counted as renewable 00:19:22.580 --> 00:19:29.600 in the state, and that would be awarded recs, right? And so the rec became kind of the supporting 00:19:29.600 --> 00:19:36.380 evidence or the evidentiary document that a megawatt hour of renewable energy from these 00:19:36.380 --> 00:19:43.240 resources was actually produced and generated. And the goals was to incentivize renewables 00:19:43.240 --> 00:19:49.040 in the state of Texas, and the goals were, at the time, you know, very high, lofty goals, 00:19:49.040 --> 00:19:56.560 right? 5,000 megawatts by 2015, 10,000 by 2025. And I'll tell you, the state has certainly 00:19:56.560 --> 00:20:01.400 built far more, right? So today -- and this is a little bit dated because I put this presentation 00:20:01.400 --> 00:20:07.640 in a couple months ago -- but at the time, wind -- there was over 39,000 megawatt hours 00:20:07.640 --> 00:20:14.920 of installed capacity, making Texas the leader in the nation for wind resources. Solar was 00:20:14.920 --> 00:20:22.720 at over 25,000 megawatts of installed capacity. And while Texas was slightly behind California 00:20:22.720 --> 00:20:28.000 from installed capacity, actually, instead of Texas, those resources actually generated 00:20:28.000 --> 00:20:33.920 more power than in California. And so certainly, Texas became a leader. For retail electric 00:20:33.920 --> 00:20:41.080 providers -- and understand that there's retail electric providers in the -- and the investor-owned 00:20:41.080 --> 00:20:47.560 and so the private -- the private utilities, DME, and all MOUs are also REPs, and then 00:20:47.560 --> 00:20:53.880 you have your cooperatives that are also REPs. But this particular standard and the requirements 00:20:53.880 --> 00:21:00.180 spelled out in the standard that mandated, right, that REPs, right, buy a certain amount 00:21:00.180 --> 00:21:04.560 of renewable energy credits, right? The state would tell them and allocate to them, this 00:21:04.560 --> 00:21:10.440 is the number that you have to go out there and buy to continue to incentivize renewable 00:21:10.440 --> 00:21:16.040 energy in the state. Again, DME was exempt from those requirements, along with all other 00:21:16.040 --> 00:21:22.200 MOUs that have not opted in, right? There's a fancy acronym called a NOE, right? It's 00:21:22.200 --> 00:21:29.480 a non-opt-in entity, right, and that describes DME and a lot of other 72 counterparts that 00:21:29.480 --> 00:21:35.720 we have across the state. And then, again, whether or not we count RECs towards our goal 00:21:35.720 --> 00:21:43.320 is certainly a local decision, but the RPS certainly provides some guidance as to how 00:21:43.320 --> 00:21:47.960 RECs are viewed, not just in the state of Texas, but really across the country. 00:21:47.960 --> 00:21:54.160 So what is a REC? So a REC is simply a title document, right, if you think about it like 00:21:54.160 --> 00:21:59.120 that. It's a property rights document that gives the owner of that document, whether 00:21:59.120 --> 00:22:06.880 or not you own the energy, the right to claim that you are renewable by that evidence, right? 00:22:06.880 --> 00:22:14.520 And so one REC is awarded for every one megawatt hour of energy that's actually generated from 00:22:14.520 --> 00:22:21.800 just those resources that I outlined for you in the RPS. And so, for example, rooftop solar 00:22:21.800 --> 00:22:27.720 locally does not get RECs, right, primarily because those tend to be behind the meter, 00:22:27.720 --> 00:22:32.480 right? So they're tied into our distribution system. There is no way for ARCOT to track 00:22:32.480 --> 00:22:37.120 that. Same thing with, to a large extent, from community solar. So if there was a community 00:22:37.120 --> 00:22:41.480 solar one megawatt installation, generally we would be looking at tying that into our 00:22:41.480 --> 00:22:46.720 distribution system, not into transmission. So it wouldn't necessarily be seen as a statewide 00:22:46.720 --> 00:22:53.520 resource. And so that would not also be, would not be eligible and receive a REC. RECs do 00:22:53.520 --> 00:23:00.080 have a three-year life. So whether they're produced on January 1st or December 31st, 00:23:00.080 --> 00:23:05.020 that's considered year one, and then it has two more years, right? And so RECs will either 00:23:05.020 --> 00:23:09.860 be retired, which is something that DME has not done, and it'll be part of our recommendations 00:23:09.860 --> 00:23:16.320 here today, or they just simply mature out, right? And so, but they do have a three-year 00:23:16.320 --> 00:23:22.360 life and there is a market in the wholesale market for those, something that we've tried 00:23:22.360 --> 00:23:31.080 to do. And it was part of the internal audit discussion was that when we buy RECs, we only 00:23:31.080 --> 00:23:37.080 buy RECs in the year, that are produced in the year in which we're going to count them, 00:23:37.080 --> 00:23:43.720 and so if we're 2024, we only bought RECs that were generated in 2024. We didn't buy 00:23:43.720 --> 00:23:50.120 RECs that were produced in 2022 or 2023, right? And I think that's just part of, part of my 00:23:50.120 --> 00:23:53.640 training, right? If you're familiar on the treasury side, there's, you know, new treasury 00:23:53.640 --> 00:23:57.640 issues, right, that are, that you don't have to go out and buy from broker. You can go 00:23:57.640 --> 00:24:03.720 to the treasury window, or you used to. I don't know if that's still even around, but 00:24:03.720 --> 00:24:08.840 that's what we kind of equated this to, right? And, and I think, I think it just holds more 00:24:08.840 --> 00:24:14.480 true to, I think what ultimately the community's goal has been. And then finally, I will also 00:24:14.480 --> 00:24:20.040 mention that certain solar resources actually also receive what's called compliance premiums, 00:24:20.040 --> 00:24:26.160 right? And that's just, that's just another document, another instrument that, that, that, 00:24:26.160 --> 00:24:32.240 that shows that that particular resource met certain requirements. In our view, for renewable 00:24:32.240 --> 00:24:38.440 resource that we have, if we get RECs and CP, while there is a CP market as well, we 00:24:38.440 --> 00:24:41.520 won't uncouple those, right? That's part of our recommendation that if, if we're going 00:24:41.520 --> 00:24:47.160 to retire the REC and we have a CP, a corresponding CP, we will retire that as well, right? And, 00:24:47.160 --> 00:24:52.040 and then finally, there is a guiding document that I provided to you in your backup that 00:24:52.040 --> 00:24:57.800 was produced by the, by the EPA and the Green Power Partnership that also explains what 00:24:57.800 --> 00:25:02.520 a REC is, right? And so much of the information that I'm providing to you, Dan, and I know 00:25:02.520 --> 00:25:07.840 I'm summarizing quite a bit, but you do, you did receive this particular document. I will 00:25:07.840 --> 00:25:12.740 mention to you that in this document, it does recognize that the RECs are legal property 00:25:12.740 --> 00:25:20.840 rights to the renewableness of a resource. It also verifies, I think, what the RPS said 00:25:20.840 --> 00:25:28.040 in that one REC equals one megawatt hour of renewable energy. And then electricity cannot be considered 00:25:28.040 --> 00:25:36.120 renewable without a REC to substantiate the renewableness of that, of that energy. Yes, sir. 00:25:36.120 --> 00:25:44.120 I'm curious with all of the discussions and votes and changes in Washington on the Green 00:25:44.120 --> 00:25:54.520 Power and such, is the EPA Green Power Partnership, is it affected by the ways and, and views 00:25:54.520 --> 00:26:00.320 and voting of Congress in Washington or is this, I'm just curious, is our guidelines 00:26:00.320 --> 00:26:06.360 stable all the way through regardless of what, who's in the offices? 00:26:06.360 --> 00:26:10.120 Yeah, I think, I think the way, what I would catch that with is it's, it's uncertain, 00:26:10.120 --> 00:26:17.400 you know, and so, yeah, and I mean, everything from, you know, 3000 percent tariffs on certain 00:26:17.400 --> 00:26:21.920 solar panels that are coming from, from Asia are certainly, and that goes to, to what's 00:26:21.920 --> 00:26:28.400 happening at the federal level that's, that's trickling down and, and frankly, already straining 00:26:28.400 --> 00:26:36.240 a supply chain that's, that's already, you know, several years behind in providing, you 00:26:36.240 --> 00:26:42.320 know, everything from, from raw materials to engines, right, that, that is also impacting 00:26:42.320 --> 00:26:50.440 development of new renewable resources across the country. 00:26:50.440 --> 00:26:55.920 So some of the other, you know, challenges, as I mentioned back in 2021, the internal 00:26:55.920 --> 00:27:01.040 auditor came in and some of the recommendations she made, some findings she had was one that 00:27:01.040 --> 00:27:08.120 the goal, the goal calculation was not defined within that 2018 study. 00:27:08.120 --> 00:27:15.360 We did work with her, and so how we count, how we account for that goal at the end of 00:27:15.360 --> 00:27:19.620 the year is something that was done in concert with the internal auditor. 00:27:19.620 --> 00:27:25.000 We provide annually an ISR, I think, I think we already provided, we're getting ready to 00:27:25.000 --> 00:27:30.180 send out the one for 2024 that spells out exactly how we do that. 00:27:30.180 --> 00:27:35.080 Basically it's an end of year calculation, right, what was our total load that was served, 00:27:35.080 --> 00:27:41.960 what was the total number of RECs that we had in our REC account at ERCOT, and then 00:27:41.960 --> 00:27:46.400 if we are, if we are short, then we try to then, then we go out in the open market and 00:27:46.400 --> 00:27:51.180 we acquire the differential and RECs to meet that gap. 00:27:51.180 --> 00:27:53.120 And that's basically the, the accounting. 00:27:53.120 --> 00:27:57.000 We certainly believe that that needs to be memorialized. 00:27:57.000 --> 00:28:04.880 And then no formal reporting of that goal, and so, so immediately after 2021 and 2022, 00:28:04.880 --> 00:28:09.520 we began to send out that ISR and we plan to continue to do that annual reporting back 00:28:09.520 --> 00:28:15.040 to the Council and the community of where we are with that goal. 00:28:15.040 --> 00:28:19.960 Certainly the need to update load increases and regulatory changes, we'll go through that 00:28:19.960 --> 00:28:24.460 and evaluate the cost benefits of RECs and CP retirements. 00:28:24.460 --> 00:28:29.240 And that there is a market for these RECs and these CPs. 00:28:29.240 --> 00:28:35.880 And so while we could monetize every single REC that we had, after we've counted it, we 00:28:35.880 --> 00:28:38.980 don't think that that certainly meets the spirit of what the community would want. 00:28:38.980 --> 00:28:43.360 And so part of our recommendation will be that once we count a REC towards that hundred 00:28:43.360 --> 00:28:46.000 percent renewable goal, that we retire it. 00:28:46.000 --> 00:28:49.040 Now if there are excess RECs, again, there is a market. 00:28:49.040 --> 00:28:54.600 And so if there is a situation where we have more, more RECs than we needed, then our recommendation 00:28:54.600 --> 00:28:59.160 would be to go out and monetize those on behalf of our ratepayers. 00:28:59.160 --> 00:29:09.160 And then finally, the large load issue, SB6 is currently at the legislature that will 00:29:09.160 --> 00:29:12.480 try to address a lot of issues regarding large loads. 00:29:12.480 --> 00:29:18.520 We're certainly working on some strategies and once SB6 is determined, whether it passes 00:29:18.520 --> 00:29:23.580 or not, then we're going to be brushing up some of the requirements and strategies for 00:29:23.580 --> 00:29:25.280 large loads. 00:29:25.280 --> 00:29:29.680 Currently we've targeted 5 megawatts as a large load. 00:29:29.680 --> 00:29:33.320 SB6, I think, has it a little bit higher, right? 00:29:33.320 --> 00:29:38.840 So we certainly want to make sure that we're in concert with SB6. 00:29:38.840 --> 00:29:48.500 But large loads do pose a risk to our ratepayers when it comes to not just potential bankruptcy 00:29:48.500 --> 00:29:53.740 and failures, but certainly when you've entered into a long-term contract, like a winter solar 00:29:53.740 --> 00:30:02.120 contract for 15 or 20 years, it does expose you to additional challenges, right, and that 00:30:02.120 --> 00:30:05.960 you may end up with very long position, more than you need. 00:30:05.960 --> 00:30:11.600 And so you're familiar with the City of Georgetown, that's part of the challenges that they had. 00:30:11.600 --> 00:30:17.240 They went out and procured over 200% more in renewable energy than they needed. 00:30:17.240 --> 00:30:21.000 Their forecast did not come in, so they were very long energy, and they're still trying 00:30:21.000 --> 00:30:23.280 to uncouple many of those contracts. 00:30:23.280 --> 00:30:26.040 And certainly we'd like to avoid that. 00:30:26.040 --> 00:30:30.120 And so taking a reasonable and prudent strategy when it comes to large loads is also part 00:30:30.120 --> 00:30:34.000 of the recommendation that we're going to make today. 00:30:34.000 --> 00:30:39.040 And so again, to kind of staff recommendations for part one, and then I'll certainly stop 00:30:39.040 --> 00:30:47.940 after that, see if you have any questions, we certainly believe that having a city policy 00:30:47.940 --> 00:30:52.680 that we'd like to call the renewable energy policy, that really outlines what the purpose 00:30:52.680 --> 00:30:54.760 is here. 00:30:54.760 --> 00:30:58.080 One that this is really an offset goal, right? 00:30:58.080 --> 00:31:04.080 Again, those resources, whether it's a winter solar resource or it's a thermal resource 00:31:04.080 --> 00:31:08.800 or whatever, all of those are interconnected into the ERCA grid. 00:31:08.800 --> 00:31:14.760 And so that power doesn't necessarily flow directly into our homes here in Denton, right? 00:31:14.760 --> 00:31:18.160 We're all part of one large pool. 00:31:18.160 --> 00:31:24.960 And so now if we have a local resource, community solar project, I think we can certainly make 00:31:24.960 --> 00:31:29.520 that argument that those just physically, right, that that energy flows to our homes 00:31:29.520 --> 00:31:34.720 just like rooftop solar on a business or a residence. 00:31:34.720 --> 00:31:40.800 And then we would also recommend that we tie the allowable resources that can be recognized 00:31:40.800 --> 00:31:45.400 within the city policy to those that are outlined within the RPS. 00:31:45.400 --> 00:31:50.880 And then we would like to also then outline the treatment of renewable energy credits, 00:31:50.880 --> 00:31:52.920 one that we will retire them, right? 00:31:52.920 --> 00:31:54.720 We're not going to be holding those to maturity. 00:31:54.720 --> 00:31:58.240 We'll not be monetizing those up to our 100% goal. 00:31:58.240 --> 00:32:06.600 Now, I understand that the possibility of that happening where we end up with excess 00:32:06.600 --> 00:32:13.640 recs from our PPAs and renewable resources is very unlikely unless we adopt a strategy 00:32:13.640 --> 00:32:21.760 like Georgetown where we're now going to have more than 100% or 200% more renewable energy 00:32:21.760 --> 00:32:25.160 than what we actually anticipate that we would need. 00:32:25.160 --> 00:32:30.560 But that if we are in a situation where we do have excess recs, that we'd be allowed 00:32:30.560 --> 00:32:36.440 to sell those on the open market and not to necessarily let those roll over, right? 00:32:36.440 --> 00:32:41.880 Again, our recommendation here is that we count recs that are generated in the same 00:32:41.880 --> 00:32:45.400 year in which we're counting it towards our goal. 00:32:45.400 --> 00:32:51.320 So now if I have a rollover rec from 2024 to 2025, now I've kind of violated that particular 00:32:51.320 --> 00:32:52.320 principle. 00:32:52.320 --> 00:32:55.760 But certainly, again, that is our recommendation. 00:32:55.760 --> 00:32:59.760 And then when needed to meet the 100% renewable goal that we go out there and we purchase 00:32:59.760 --> 00:33:05.040 recs with CP, depending on the resource, and only those that are generated in the same 00:33:05.040 --> 00:33:06.920 year that were counted. 00:33:06.920 --> 00:33:11.520 And then for large loads, our recommendation is that we take a reasonable, prudent approach, 00:33:11.520 --> 00:33:12.520 right? 00:33:12.520 --> 00:33:18.600 Not all these resources or these loads, certainly those that we're seeing and we continue to 00:33:18.600 --> 00:33:23.680 see interest in large loads wanting to come into the city. 00:33:23.680 --> 00:33:26.600 Some may be real, some may not be real. 00:33:26.600 --> 00:33:34.040 Some may be legitimate and backed by very large corporations, whether they be financial 00:33:34.040 --> 00:33:38.960 or business entities, they have very high ratings, or they may be very speculative, 00:33:38.960 --> 00:33:39.960 right? 00:33:39.960 --> 00:33:45.560 Let me kind of equate them to the wildcatters, if you're familiar with the oil and gas industry. 00:33:45.560 --> 00:33:50.720 There's a number of speculators that go out there and enter into contracts for mineral 00:33:50.720 --> 00:33:53.280 rights with the hope that they're going to hit something, right? 00:33:53.280 --> 00:33:57.840 And so the same thing here, we're seeing data centers that want to come to Denton, want 00:33:57.840 --> 00:34:03.440 to build 100 megawatts, 300 megawatts, get me energized, and then I'll market it to people 00:34:03.440 --> 00:34:04.440 that may be interested. 00:34:04.440 --> 00:34:06.120 Those are very speculative. 00:34:06.120 --> 00:34:11.600 For us to go out there and enter into a 15-, 20-year contract on a speculative type of data 00:34:11.600 --> 00:34:16.820 center really poses a very big risk to the utility and to our ratepayers. 00:34:16.820 --> 00:34:21.920 And so our recommendation is to kind of take a prudent approach, let us evaluate each resource, 00:34:21.920 --> 00:34:27.560 and even if they're legitimate, maybe we don't do a long-term 15-, 20-year PPA. 00:34:27.560 --> 00:34:32.320 Maybe we do a short-term two- or three-year deal out in the open market that's also tied 00:34:32.320 --> 00:34:34.400 with renewable energy credits. 00:34:34.400 --> 00:34:39.480 And then within this policy, we would anticipate that we would spell out how that goal is supposed 00:34:39.480 --> 00:34:44.880 to be calculated, that there would be an annual reporting requirement back to the PAB and 00:34:44.880 --> 00:34:49.440 the council, and of course, a glossary of all the wonderful acronyms that we use in 00:34:49.440 --> 00:34:50.440 the industry. 00:34:50.440 --> 00:35:06.800 So I'm going to stop here and see if you have any questions on part one. 00:35:06.800 --> 00:35:24.280 So just want to review, could we go back to the slide that showed the 2021 to 2024? 00:35:24.280 --> 00:35:32.320 So we had 262,800 RECs coming from the Whitetail Wind Project, which we were buying physical 00:35:32.320 --> 00:35:42.040 power from, and then we were also buying RECs, additional RECs, tied to that physical facility. 00:35:42.040 --> 00:35:48.600 When did we buy the additional RECs in '22, '23, '24? 00:35:48.600 --> 00:35:50.840 We bought them in that particular year. 00:35:50.840 --> 00:35:56.800 Actually, we tend to buy them after the calendar year once we've reconciled, and if we're short, 00:35:56.800 --> 00:36:00.900 we go out in the open market and we buy those RECs, but we're making sure that they're RECs 00:36:00.900 --> 00:36:02.640 that were generated in that same year. 00:36:02.640 --> 00:36:06.760 So kind of like spring 2023, we would have bought the RECs in '24, '23? 00:36:06.760 --> 00:36:07.760 That's correct. 00:36:07.760 --> 00:36:08.760 That's correct. 00:36:08.760 --> 00:36:09.760 Okay. 00:36:09.760 --> 00:36:18.800 So in 2016, we had this 70% goal, and there was public outcry that it was a 70% goal and 00:36:18.800 --> 00:36:24.320 not 100% goal, and so in two years, less than two years, there was enough political will 00:36:24.320 --> 00:36:27.400 to change to 100% goal. 00:36:27.400 --> 00:36:34.760 And at the time, there were lots of concerns because solar was basically non-existent. 00:36:34.760 --> 00:36:43.440 We were looking at wind farms, and the discussion then was of buying RECs, and Denton actually 00:36:43.440 --> 00:36:49.600 had the Green Sense energy program where you could pay an extra 0.3 cents per kilowatt 00:36:49.600 --> 00:36:56.800 hour, and DME would green up that energy just like Green Mountain did or some of those other 00:36:56.800 --> 00:36:59.840 providers by purchasing RECs. 00:36:59.840 --> 00:37:07.280 And at the 100% goal discussions, the concept of just buying RECs was offered, and the alternative 00:37:07.280 --> 00:37:15.000 was that DME was going to have to generate 120% or 130% of the power needed for the city 00:37:15.000 --> 00:37:24.920 and then still run the deck or purchase from real-time market another 10% or 15%. 00:37:24.920 --> 00:37:30.360 And it was going to cost about one cent per kilowatt hour, that was 2018 discussions. 00:37:30.360 --> 00:37:38.720 And the city approved it, the voters elected council members who supported it and councils 00:37:38.720 --> 00:37:41.440 targeted that goal. 00:37:41.440 --> 00:37:48.680 When we get to 2021, 2020, the whitetail wind resources was just seen as like, oh, they've 00:37:48.680 --> 00:37:52.160 offered this opportunity to buy these RECs at a pretty low cost. 00:37:52.160 --> 00:37:59.960 And it was maybe the camel's nose in the tent on using RECs because up until that point, 00:37:59.960 --> 00:38:02.080 none of that 100% goal was REC-based. 00:38:02.080 --> 00:38:06.440 It was, we're going to overbuy power and we're going to have to sell some of that power back 00:38:06.440 --> 00:38:12.080 onto the system, and we're still going to have to have fossil fuels support us because 00:38:12.080 --> 00:38:18.600 there isn't yet long-term storage in our cot, but the city was committed to it. 00:38:18.600 --> 00:38:23.280 And then we started with, well, we have physical RECs tied to a physical generator that we're 00:38:23.280 --> 00:38:27.840 already buying power from, so we're still supporting this wind farm that we're also 00:38:27.840 --> 00:38:31.640 buying power from, and that was the camel's nose. 00:38:31.640 --> 00:38:35.320 And then it's like, oh, well, we need another 70,000 megawatts of RECs. 00:38:35.320 --> 00:38:40.880 We can buy them for a buck 50 on the market, and so we'll do that. 00:38:40.880 --> 00:38:47.360 And I feel like now we're, this document seems to be veering more and more toward, well, 00:38:47.360 --> 00:38:54.480 we can just spend a buck 50 a megawatt and buy RECs for everything, and large loads do 00:38:54.480 --> 00:38:55.600 present a risk. 00:38:55.600 --> 00:39:02.840 If we have a 300 megawatt load and that company closes up shop for any reason, moves down 00:39:02.840 --> 00:39:09.080 the road, ceases to exist, changes their technology and doesn't need the power, if we've bought 00:39:09.080 --> 00:39:14.360 20 years of power for them, then we have to sell that power on the market and hope that 00:39:14.360 --> 00:39:19.520 prices stay at the level we purchased that power from. 00:39:19.520 --> 00:39:28.240 But what we found with our renewables is our renewables are cheaper than market prices. 00:39:28.240 --> 00:39:33.320 And I don't know if that's true this year, but I know last year y'all presented that 00:39:33.320 --> 00:39:40.680 our wind farm, our PPA, our solar PPAs were so-called in the money. 00:39:40.680 --> 00:39:47.680 They were cheaper than, on an annual basis, than buying real-time or long-term power. 00:39:47.680 --> 00:39:54.580 So I feel the same pessimism that was brought up in 2018 about how we're going to overbuy 00:39:54.580 --> 00:40:01.960 and we're going to be selling at a loss, and so it would be simpler if we just buy RECs. 00:40:01.960 --> 00:40:03.920 But that isn't what we've experienced. 00:40:03.920 --> 00:40:06.040 Now I know it's a lot harder to plan. 00:40:06.040 --> 00:40:12.120 It's much more complicated because you have to predict, and wind and solar, wind especially 00:40:12.120 --> 00:40:20.200 is not accurate until you're maybe 72 to 48 hours ahead, so you have to either purchase 00:40:20.200 --> 00:40:25.640 way too much energy and try and sell back the excess, or you have to be very responsive 00:40:25.640 --> 00:40:29.520 in your planning. 00:40:29.520 --> 00:40:42.080 And I would gladly support expanding an energy office to do that work, do that hard work 00:40:42.080 --> 00:40:49.360 above just buying RECs, because RECs are, every solar and wind project and hydro project 00:40:49.360 --> 00:40:54.400 in Texas just kind of dumps their excess RECs from last year. 00:40:54.400 --> 00:41:03.120 And they're $1.50 a megawatt, which is a tiny, tiny fraction of the value of the energy. 00:41:03.120 --> 00:41:06.720 You mentioned buying, if we hadn't bought $600,000 in RECs, we would have had to buy 00:41:06.720 --> 00:41:08.280 $5 million in energy. 00:41:08.280 --> 00:41:09.280 $2 million. 00:41:09.280 --> 00:41:10.360 Or $2 million, I'm sorry. 00:41:10.360 --> 00:41:14.200 But then we would have had $2 million in energy that we may not have needed to consume, but 00:41:14.200 --> 00:41:18.280 we then could have also, it would have had a value because it would have been sold. 00:41:18.280 --> 00:41:22.900 So maybe it wouldn't have netted out a profit, but it might have broken even. 00:41:22.900 --> 00:41:29.320 And so we could have been supporting, I think sticking with the citizen goal of supporting 00:41:29.320 --> 00:41:39.840 renewable energy in Texas by directly supporting a solar farm, a wind farm, a battery or hybrid 00:41:39.840 --> 00:41:42.080 or hydro installation. 00:41:42.080 --> 00:41:51.020 Yeah, so certainly a lot there, board member. 00:41:51.020 --> 00:41:57.560 We acknowledge that since 2018, a lot of things have evolved, right? 00:41:57.560 --> 00:42:06.480 And so while yes, you're right in that our current PPAs may very well be in the money. 00:42:06.480 --> 00:42:13.720 The reality is that when we're looking to serve our load and we're looking and planning 00:42:13.720 --> 00:42:20.880 for when do we need to mitigate the most risk to our repairs, the renewables just aren't 00:42:20.880 --> 00:42:26.920 sufficient and that's why they're considered intermittent resources. 00:42:26.920 --> 00:42:27.920 You don't control them. 00:42:27.920 --> 00:42:28.920 You don't push a button. 00:42:28.920 --> 00:42:32.640 You don't turn on an engine when you need it. 00:42:32.640 --> 00:42:36.040 It produces when it produces and you get what you get. 00:42:36.040 --> 00:42:40.440 The other thing, too, that I will tell you is that while those resources that we executed 00:42:40.440 --> 00:42:49.080 10 years ago may be in the money, where we're seeing them today, where they're being priced, 00:42:49.080 --> 00:42:51.120 they're out of the money, right? 00:42:51.120 --> 00:42:57.320 And so to enter into a 15, 20 year wind and solar contract today means you're going to 00:42:57.320 --> 00:42:59.640 pay more, right? 00:42:59.640 --> 00:43:06.400 And again, I can't go into the proposals that we're seeing, but I can tell you that's what 00:43:06.400 --> 00:43:07.400 you're going to see, right? 00:43:07.400 --> 00:43:12.120 And so what the council, what the POB is going to have to decide is are we willing to pay 00:43:12.120 --> 00:43:20.200 more for those resources that may be in the money 10 years from today, but today we're 00:43:20.200 --> 00:43:22.720 paying more, right? 00:43:22.720 --> 00:43:28.800 In light of the fact that we've already raised rates for our customers, right, 25%, right, 00:43:28.800 --> 00:43:29.800 for the energy. 00:43:29.800 --> 00:43:34.100 So now you're going to be adding additional cost to our repairs. 00:43:34.100 --> 00:43:38.880 So the other thing, too, that I'll mention to you is that while we certainly understand 00:43:38.880 --> 00:43:45.600 and we've certainly been supportive of this renewable, 100% renewable goal, if the resources 00:43:45.600 --> 00:43:53.200 aren't there to contract with them, then the goal isn't, I mean, it's just a goal on paper, 00:43:53.200 --> 00:43:54.200 right? 00:43:54.200 --> 00:43:55.200 And we'll continue to not meet that goal. 00:43:55.200 --> 00:44:03.040 And that's what we're seeing today, both with PPAs that we already had in place that have 00:44:03.040 --> 00:44:07.520 been subjected to things like force majeure because they can't get panels or they can't 00:44:07.520 --> 00:44:08.520 get engines, right? 00:44:08.520 --> 00:44:14.640 So we're having to work with those resources, and in many cases they're looking to pass 00:44:14.640 --> 00:44:22.100 on additional costs back to us that then makes that PPA out of the money as well, right? 00:44:22.100 --> 00:44:24.680 And then the other thing that I'll mention to you is that, and I'll talk a little bit 00:44:24.680 --> 00:44:30.560 about it in a little bit when it comes to things like firming requirements, right? 00:44:30.560 --> 00:44:38.400 And so if these renewable resources are required to firm their energy, that additional cost 00:44:38.400 --> 00:44:40.480 will come back to us in a PPA. 00:44:40.480 --> 00:44:44.240 I mean, we're looking at a PPA today that's already telling us that we're going to be 00:44:44.240 --> 00:44:50.600 looking at probably an additional seven cents on top of the PPA contract that we had, right? 00:44:50.600 --> 00:44:56.360 That seven cents potentially makes that resource, takes that resource out of the money, right? 00:44:56.360 --> 00:45:00.040 And so that's also the reality, right, of what we're seeing. 00:45:00.040 --> 00:45:06.800 And we certainly understand kind of your position and what others are saying in the community, 00:45:06.800 --> 00:45:11.160 but if I can't go get those resources, then I'm never going to be at 100% renewable. 00:45:11.160 --> 00:45:16.960 Even if I tried to go out there and contract for 200% more, which I'll just be honest with 00:45:16.960 --> 00:45:21.160 you, that's not something that myself and my staff will be recommending to you. 00:45:21.160 --> 00:45:24.960 So we would have to get that direction from you and the council to go out there and contract 00:45:24.960 --> 00:45:31.200 for more than 200% because that is going to be additional price risk, right, on our countries. 00:45:31.200 --> 00:45:34.160 Are you done? 00:45:34.160 --> 00:45:36.360 No, when you're done. 00:45:36.360 --> 00:45:45.960 So a question, as you talked about the renewable versus the rec, and we're buying these recs, 00:45:45.960 --> 00:45:50.480 and there's a concern you have on some of these renewables are lagging, whatever the 00:45:50.480 --> 00:45:57.160 reason is, is there a percentage that's in your head or on paper that if the renewables 00:45:57.160 --> 00:46:02.280 go to a certain level, then we're going to be buying these recs regardless? 00:46:02.280 --> 00:46:09.640 Because if we've made a commitment to the citizens, we need to, I think I need a little 00:46:09.640 --> 00:46:14.760 bit more verbiage to defend the recs versus the amount of recs that we're going to be 00:46:14.760 --> 00:46:20.320 buying, realizing there's just so much that you can pull on the renewables. 00:46:20.320 --> 00:46:30.200 But are the renewables in a situation that gives you grave concern that we need to be 00:46:30.200 --> 00:46:34.240 looking at additional recs than what we've been doing? 00:46:34.240 --> 00:46:35.540 Yeah, absolutely. 00:46:35.540 --> 00:46:41.600 I think across the state, the issue of reliability is a real issue, right? 00:46:41.600 --> 00:46:48.680 And so the ERCOT grid has to maintain a certain level of energy, right, 60 hertz, right? 00:46:48.680 --> 00:46:53.920 And so for you to be able to maintain that, you have to have resources that are not necessarily 00:46:53.920 --> 00:46:56.900 intermittent, but that you know you're going to be able to count on, right? 00:46:56.900 --> 00:47:02.800 And so as more and more of these resources have come into the market, that then has posed 00:47:02.800 --> 00:47:03.960 just physical, right? 00:47:03.960 --> 00:47:07.280 But I've got two engineers that are sitting right there that can come explain to you better 00:47:07.280 --> 00:47:09.000 than I can, right? 00:47:09.000 --> 00:47:13.280 But being able to maintain those 60 hertz and be able to keep the power on for all the 00:47:13.280 --> 00:47:18.340 state of Texas, right, is something that is very, very critical, right, and why the state 00:47:18.340 --> 00:47:22.280 is actually looking, right, one of the bills that they're looking at, as capping the amount 00:47:22.280 --> 00:47:27.840 of new generation going forward, right, that they would cap renewable resources to more 00:47:27.840 --> 00:47:32.200 than 50 percent of the total resources that come into, that are allowed to come into the 00:47:32.200 --> 00:47:33.880 market going forward, right? 00:47:33.880 --> 00:47:38.680 So there is a natural cap, because again, what the state is looking at and seeing is 00:47:38.680 --> 00:47:43.360 that these resources are, from a reliability standpoint, are making it difficult to continue 00:47:43.360 --> 00:47:47.440 to manage and maintain that grid at the 60 hertz, right? 00:47:47.440 --> 00:47:54.000 And so the other thing, too, is that as these resources continue to come into play -- and, 00:47:54.000 --> 00:47:58.840 Mr. Taylor, I -- you know, listen, we think storage is important, and we think there's 00:47:58.840 --> 00:48:04.680 a place for storage, and I think storage can certainly provide some of that reliability, 00:48:04.680 --> 00:48:06.320 some of that stability. 00:48:06.320 --> 00:48:11.280 But what's in the market today, really, and what's economical, is two-hour batteries. 00:48:11.280 --> 00:48:14.520 There are some four hours and there's some six hours, but, you know, the economics on 00:48:14.520 --> 00:48:17.600 those are just not there quite yet, right? 00:48:17.600 --> 00:48:23.660 And so two-hour battery, you know, for summer of '23, when we saw price spikes that lasted 00:48:23.660 --> 00:48:28.600 for four hours and we incurred, you know, $31 million, right, a two-hour battery would 00:48:28.600 --> 00:48:30.280 have cut that in half, right? 00:48:30.280 --> 00:48:35.600 And it's something that we're looking at, right, but again, those resources are just 00:48:35.600 --> 00:48:41.000 not fully developed and they continue to pose challenges. 00:48:41.000 --> 00:48:45.000 What I would tell you is that, you know, our recommendation is to really separate these 00:48:45.000 --> 00:48:46.000 goals out, right? 00:48:46.000 --> 00:48:53.160 So you have the 100 percent renewable goal that is predicated on renewable energy if 00:48:53.160 --> 00:48:59.240 it's available, if it's there, right, and then you meet the gap with RECs, but then there's 00:48:59.240 --> 00:49:04.960 this other conversation of, right, what is the right generation mix for our utility, 00:49:04.960 --> 00:49:05.960 right? 00:49:05.960 --> 00:49:11.260 And what I would tell you is I equate it to taking your entire life savings and putting 00:49:11.260 --> 00:49:14.520 it all in Coca-Cola stock, right? 00:49:14.520 --> 00:49:18.480 It poses a huge risk, right, to your future well-being, right? 00:49:18.480 --> 00:49:24.760 And what we've done here, right, what we tried to do here is to place our entire generation 00:49:24.760 --> 00:49:28.780 in one type, and that's all intermittent, it's all renewable, right? 00:49:28.780 --> 00:49:34.720 And so, yes, we have a power plant, 225 megawatts, that is woefully insufficient. 00:49:34.720 --> 00:49:39.680 And so looking at, you know, what is the right mix, right, to your point, you know, what 00:49:39.680 --> 00:49:45.200 is the right mix of renewable energy within our total portfolio, you know? 00:49:45.200 --> 00:49:48.480 I would tell you today, I don't believe it's 100 percent. 00:49:48.480 --> 00:49:50.920 You know, I also don't believe it's zero, right? 00:49:50.920 --> 00:49:55.360 And so part of the recommendation will be to go out there and do an integrated resource 00:49:55.360 --> 00:50:00.520 plan that will do that, will tell us what should that percentage be and what other resources 00:50:00.520 --> 00:50:02.240 should you have, right? 00:50:02.240 --> 00:50:07.200 And within those additional resources, there's an abundant number of resources, right? 00:50:07.200 --> 00:50:12.520 There's geothermal, you know, there's small modular reactors that are currently being 00:50:12.520 --> 00:50:15.760 prototyped, you know, there's nuclear as well, you know? 00:50:15.760 --> 00:50:18.760 And so there's a number of other resources out there that we really should be looking 00:50:18.760 --> 00:50:26.960 at and looking at how do we manage the generation needs, right, for this utility, not for the 00:50:26.960 --> 00:50:31.760 next five years, but for the next 20 or 30 years, right? 00:50:31.760 --> 00:50:35.760 A nuclear facility today, whether it's an – whether it's an SMR or it's a traditional 00:50:35.760 --> 00:50:41.400 nuke, right, a 10-year permitting process, right, just to get it permitted, and then 00:50:41.400 --> 00:50:44.680 you're looking at another 10 years to develop that, right? 00:50:44.680 --> 00:50:49.120 And let me tell you, nobody builds a traditional nuke by themselves, right? 00:50:49.120 --> 00:50:54.520 And so you generally have to be party with other people on a project like that, on top 00:50:54.520 --> 00:50:59.400 of the fact that today we don't have, even with our projected load, we don't have the 00:50:59.400 --> 00:51:03.720 load to substantiate a nuclear facility by ourselves, right? 00:51:03.720 --> 00:51:07.520 So it would – it would require us to partner with someone to do that. 00:51:07.520 --> 00:51:13.000 And let me tell you, today, while there's growing interest in nuclear in the state, 00:51:13.000 --> 00:51:16.840 there's nobody out there that said, "Yeah, we want to be the first ones out the gate," 00:51:16.840 --> 00:51:17.840 right? 00:51:17.840 --> 00:51:21.600 But looking for those opportunities is certainly something that we think we'll continue to 00:51:21.600 --> 00:51:22.600 need. 00:51:22.600 --> 00:51:25.560 And the other thing that I'll mention to you is that, you know, while we have a quickstart 00:51:25.560 --> 00:51:31.000 generation facility, and we think that that facility has been great for backing up when 00:51:31.000 --> 00:51:33.560 the wind doesn't – you know, blowing, the sun doesn't shine – I said I would 00:51:33.560 --> 00:51:38.720 never say that, but I just did – you know, the reality is that as our load continues 00:51:38.720 --> 00:51:42.800 to grow, even a quickstart generation facility will not be sufficient. 00:51:42.800 --> 00:51:47.880 We will be looking at and needing a base load unit, right, something that is on all the 00:51:47.880 --> 00:51:58.240 time, so. 00:51:58.240 --> 00:52:11.040 I don't know the rules. 00:52:11.040 --> 00:52:12.040 Sounds interesting. 00:52:12.040 --> 00:52:16.320 So does that fall in line with what you had mentioned earlier about having an electric 00:52:16.320 --> 00:52:19.840 oversee type office or administrators? 00:52:19.840 --> 00:52:30.520 It sounds like that that would create that type of need, or am I – have I missed that? 00:52:30.520 --> 00:52:31.520 Yeah. 00:52:31.520 --> 00:52:36.960 So we currently, I believe, have a – I don't know the exact name – Energy Trade – 00:52:36.960 --> 00:52:38.960 Energy Management Organization. 00:52:38.960 --> 00:52:43.840 Energy Management Organization, which has a group of folks that are – they're balancing 00:52:43.840 --> 00:52:49.220 the next three years and the next three months and the next, you know, week. 00:52:49.220 --> 00:52:55.460 And so, you know, and then three-year planning, one-year planning, you know, they're using 00:52:55.460 --> 00:53:02.280 different tools at all those depths, you know, and I think – and I don't know if they 00:53:02.280 --> 00:53:05.280 schedule the deck or if the deck is strictly ERCOT scheduled. 00:53:05.280 --> 00:53:10.520 No, the deck is scheduled by us, based on market signals. 00:53:10.520 --> 00:53:16.480 Yeah, so then – so they do everything from forecasting, you know, what all the intermittents 00:53:16.480 --> 00:53:21.640 are going to do to buying short and medium term, you know, in between and then turning 00:53:21.640 --> 00:53:23.920 on the power plant. 00:53:23.920 --> 00:53:29.480 You know, I think there's – there were a lot of ifs in what you brought up. 00:53:29.480 --> 00:53:33.840 If the legislature passes a bill, you know, and honestly, if the legislature passes a 00:53:33.840 --> 00:53:38.320 bill that makes it harder to build renewable, it'll – you know, a recent study came 00:53:38.320 --> 00:53:43.400 out of UT that said it's going to increase power costs by 50% to 70% in Texas, and anybody 00:53:43.400 --> 00:53:48.680 that owns a long-term PPA with renewables is going to be printing money, because they 00:53:48.680 --> 00:53:54.120 bought it at 30% and they're going to sell it at 50% to 70% higher than it is now. 00:53:54.120 --> 00:54:00.240 So until that law passes, you know, we won't know the impacts, but it won't actually 00:54:00.240 --> 00:54:03.720 – it wouldn't be a negative for owning renewable, it would be a negative for building 00:54:03.720 --> 00:54:04.720 future renewable. 00:54:04.720 --> 00:54:09.880 Well, I would just say it could be a negative, Mr. Taylor, in that, you know, the current 00:54:09.880 --> 00:54:14.720 iteration of that particular bill doesn't grandfather existing resources, and so even 00:54:14.720 --> 00:54:19.320 existing resources would have to firm up, right, and if they have to firm up, they will 00:54:19.320 --> 00:54:20.680 not be in the money any longer. 00:54:20.680 --> 00:54:24.960 Yeah, and I think there are, you know, a lot of other ifs about, like, if renewables are 00:54:24.960 --> 00:54:25.960 available. 00:54:25.960 --> 00:54:30.640 Well, there are 40,000 megawatts of wind and there's 25,000 megawatts of solar and there's 00:54:30.640 --> 00:54:33.800 10,000 megawatts of battery. 00:54:33.800 --> 00:54:38.320 And you know, we're – well, we've got, like, 500 or something, 500 megawatts. 00:54:38.320 --> 00:54:42.680 And so now I think it's if they're available at a price we're willing to pay, you know, 00:54:42.680 --> 00:54:47.960 or if we think that's a competitive rate, you know, more than – like, I completely 00:54:47.960 --> 00:54:53.200 agree with we set a goal and then we try and execute the goal and we adjust as that goal 00:54:53.200 --> 00:54:55.040 goes forward. 00:54:55.040 --> 00:55:02.720 On the goal, I – you know, my understanding was 100% renewable was the goal and 100% renewable 00:55:02.720 --> 00:55:06.520 meant we were going to overpurchase and we still needed a quick start plan for financial 00:55:06.520 --> 00:55:10.280 backstop and we still – like, this was the 2018 goal. 00:55:10.280 --> 00:55:15.360 I don't know if the will of the people has changed or, you know, if council no longer 00:55:15.360 --> 00:55:18.080 thinks that's the goal. 00:55:18.080 --> 00:55:25.800 So I think if whatever we bring forward, moving forward, you know, we might need, you know, 00:55:25.800 --> 00:55:36.040 resident input or, you know, some way to make sure that if we think that they're like – that 00:55:36.040 --> 00:55:41.060 the goal has shifted that, you know, then we need to make sure that that's correct. 00:55:41.060 --> 00:55:46.240 Now I do agree separating the goal from – because then there's this tactical thing of, well, 00:55:46.240 --> 00:55:50.040 this year there's some crazy, you know, thing at the legislature. 00:55:50.040 --> 00:55:57.400 This year solar panels from wherever have, you know, a tariff or this year gas turbines, 00:55:57.400 --> 00:56:01.840 you know, plant shut down in Brazil or whatever. 00:56:01.840 --> 00:56:05.240 So I think we separate the goal from the implementation. 00:56:05.240 --> 00:56:07.960 I think that actually is your next part of your presentation. 00:56:07.960 --> 00:56:13.200 So the 2018 plan actually had three options. 00:56:13.200 --> 00:56:19.860 The first option was to go out there and secure additional solar contracts, right, immediately 00:56:19.860 --> 00:56:22.120 to reach that goal by 2020, right? 00:56:22.120 --> 00:56:23.920 That was kind of option one. 00:56:23.920 --> 00:56:30.120 Option two was to reach the goal by 2024 with what the plan identified as coastal wind, 00:56:30.120 --> 00:56:31.120 right? 00:56:31.120 --> 00:56:32.120 And we attempted to do that. 00:56:32.120 --> 00:56:34.440 It just was not available, right? 00:56:34.440 --> 00:56:41.920 And so you could have gotten coastal wind and reached that goal by 2024 or option two 00:56:41.920 --> 00:56:46.080 B was utilize the recs, right? 00:56:46.080 --> 00:56:52.200 Now in a final decision by this board, obviously a different board, and by the council was 00:56:52.200 --> 00:56:56.720 to not count those recs, right? 00:56:56.720 --> 00:57:02.800 As myself and Terry Nolte at the time, you know, came to DME and started looking at that 00:57:02.800 --> 00:57:03.800 entire discussion. 00:57:03.800 --> 00:57:09.200 We had a discussion with the consultants and they agreed that maybe the information that 00:57:09.200 --> 00:57:13.440 had gone to the council, to the PAV hadn't been 100 percent accurate, right, or as clear, 00:57:13.440 --> 00:57:14.440 right? 00:57:14.440 --> 00:57:18.680 That's why I've attached to you a letter, right, that I attached in your backup from 00:57:18.680 --> 00:57:25.440 the consultants, right, making clear that counting recs is a viable option, right? 00:57:25.440 --> 00:57:31.440 And it is a standard option, right, that companies out there, entities utilize, right? 00:57:31.440 --> 00:57:38.120 So counting, using recs to count towards 100 percent renewable goals is actually the standard 00:57:38.120 --> 00:57:41.960 and not the exception, right? 00:57:41.960 --> 00:57:47.440 There was, I think, within some in our community, that the goal was going to be achieved with 00:57:47.440 --> 00:57:49.960 energy only, right? 00:57:49.960 --> 00:57:54.840 But there was still a misunderstanding that those energy contracts, the evidence behind 00:57:54.840 --> 00:57:58.920 that energy isn't the energy, it is the rec, right? 00:57:58.920 --> 00:58:03.160 It is the rec that we count, right, as the evidence that that was produced, right? 00:58:03.160 --> 00:58:11.160 And so if a rec is the evidence for the energy for our PPAs, it's also the evidence for other 00:58:11.160 --> 00:58:15.960 generation of renewable energy in other places where we don't have PPAs, right? 00:58:15.960 --> 00:58:17.840 So it's the same thing, right? 00:58:17.840 --> 00:58:21.680 You just don't own the energy and you're not paying for the energy you're paying for 00:58:21.680 --> 00:58:22.680 the recs. 00:58:22.680 --> 00:58:29.760 I appreciate the education for the explanation because it, sometimes I look at this almost 00:58:29.760 --> 00:58:35.920 as in recs are credit cards and cash is what we're getting from the renewables and we just 00:58:35.920 --> 00:58:42.000 have a balance which you have a good grasp on and I appreciate that and, you know, Las 00:58:42.000 --> 00:58:46.240 Vegas is our next stop because, like you say, everything is uncertain, isn't it? 00:58:46.240 --> 00:58:50.600 I think if we were able to buy all renewables, we'd be buying all renewables. 00:58:50.600 --> 00:58:52.960 When we're able, like what does able mean? 00:58:52.960 --> 00:58:54.480 I mean, they're for sale. 00:58:54.480 --> 00:58:59.480 Yeah, but, okay, just give me two million, I'm only going to use a million. 00:58:59.480 --> 00:59:06.240 Right, so, and that's the balance, it's a cost risk balance. 00:59:06.240 --> 00:59:10.960 It's not like they're unavailable at any cost, you know, it's more like it is a cost risk 00:59:10.960 --> 00:59:11.960 balance. 00:59:11.960 --> 00:59:12.960 Absolutely. 00:59:12.960 --> 00:59:13.960 Yeah. 00:59:13.960 --> 00:59:15.400 Yeah, that's, I think that's... 00:59:15.400 --> 00:59:20.280 So sometimes when you say they're not available, that makes it sound like you can't buy, like 00:59:20.280 --> 00:59:25.000 nuclear is not available, like we can't buy nuclear at any dollar amount. 00:59:25.000 --> 00:59:29.120 Yeah, we don't have the psychic ability to make them available at the time that we need 00:59:29.120 --> 00:59:30.120 them. 00:59:30.120 --> 00:59:31.120 Okay. 00:59:31.120 --> 00:59:32.120 And then cut it off. 00:59:32.120 --> 00:59:33.120 Yeah. 00:59:33.120 --> 00:59:39.480 That may be better for the, and I'm, you know, remember, I'm all about renewable, I think 00:59:39.480 --> 00:59:45.760 most people are, it's just the reality of trying to get it exact is just, is the difficult 00:59:45.760 --> 00:59:46.760 part, right? 00:59:46.760 --> 00:59:47.760 I mean... 00:59:47.760 --> 00:59:49.600 And here's the other reality, right? 00:59:49.600 --> 00:59:55.680 The other reality is that, and again, I don't want to over dramatize this, but this is the 00:59:55.680 --> 01:00:02.720 reality, this was certainly our experience during Winter Storm Uri when there was few 01:00:02.720 --> 01:00:05.600 little renewables, right? 01:00:05.600 --> 01:00:11.480 The phone calls that I got in my cell phone, right, at home at night, nobody ever said 01:00:11.480 --> 01:00:15.360 I want the power, but only if it's wind and solar, right? 01:00:15.360 --> 01:00:20.520 And so certainly I think that Winter Storm Uri, I'll talk a little about the Texas Energy 01:00:20.520 --> 01:00:24.760 Fund that was overwhelmingly approved across the state and even here, right, is that people 01:00:24.760 --> 01:00:31.020 recognize that while we might want renewables, we also need reliability, right, and we need 01:00:31.020 --> 01:00:36.240 that power to be there when we need it, whether I'm a, you know, a homeowner or whether I'm 01:00:36.240 --> 01:00:37.360 a business, right? 01:00:37.360 --> 01:00:41.320 I need that power there to continue to operate and to continue to live. 01:00:41.320 --> 01:00:46.240 And so, unfortunately, renewables have introduced this intermittency, right, that you don't 01:00:46.240 --> 01:00:47.240 know when it's going to hit you. 01:00:47.240 --> 01:00:48.240 Yep. 01:00:48.240 --> 01:00:51.000 I mean, we have some very, you know, we have some very good people in the EMO that have 01:00:51.000 --> 01:00:55.080 some very good predictive models, right, on everything from weather to cloud cover to, 01:00:55.080 --> 01:01:01.000 you know, is there going to be a solar flutter day or not, right, that could have an impact 01:01:01.000 --> 01:01:04.240 on the market, right, and they're trying to react to it. 01:01:04.240 --> 01:01:10.320 What I will tell you, Mr. Kelly, too, is that we currently have five vacancies in that particular 01:01:10.320 --> 01:01:12.360 EMO. 01:01:12.360 --> 01:01:16.240 It continues to be a challenge, right, with all the different uncertainty and changes 01:01:16.240 --> 01:01:23.200 in the market, individuals that do that work are in high, high demand, right? 01:01:23.200 --> 01:01:30.520 And so, certainly, recruitment and even retention of these individuals is a challenge as well, 01:01:30.520 --> 01:01:31.520 right? 01:01:31.520 --> 01:01:32.520 I think they do a fantastic job. 01:01:32.520 --> 01:01:37.360 You know, we're moving forward with filling those five FTEs. 01:01:37.360 --> 01:01:41.960 We're hopeful that we're going to be able to attract some good people, maybe some people 01:01:41.960 --> 01:01:45.120 internally into the operation. 01:01:45.120 --> 01:01:49.520 We think that that gets us what we need for the time being, but remember, I will point 01:01:49.520 --> 01:01:55.680 out that the QSE, right, this Qualifying Scheduling Entity, which is what the EMO is officially 01:01:55.680 --> 01:01:58.040 known as, was started in 2013. 01:01:58.040 --> 01:02:02.000 In 2013, they were managing about $50 million of power. 01:02:02.000 --> 01:02:09.320 Today, actually, let me say, in three years, they're going to be managing $400 million 01:02:09.320 --> 01:02:14.840 of power, pretty much the same number of people, right? 01:02:14.840 --> 01:02:19.960 So, again, so creativity is not something that those individuals lack. 01:02:19.960 --> 01:02:20.960 They do. 01:02:20.960 --> 01:02:21.960 They're professional. 01:02:21.960 --> 01:02:22.960 They're creative. 01:02:22.960 --> 01:02:24.280 They're doing a fantastic job for us. 01:02:24.280 --> 01:02:28.960 What I'm hearing from them is, "Hey, it's going to get very, very hard here, and you're 01:02:28.960 --> 01:02:32.960 going to continue to see a bump up in your energy costs," right? 01:02:32.960 --> 01:02:33.960 We're at $0.046. 01:02:33.960 --> 01:02:37.960 Let's call it $0.05 is our ECA today. 01:02:37.960 --> 01:02:46.840 We're looking at power prices in the future, and we're looking at $0.06, $0.07, right? 01:02:46.840 --> 01:02:54.160 So yeah, that's one component of three components within a customer's bill, but it could easily 01:02:54.160 --> 01:02:57.560 be the largest component before too long. 01:02:57.560 --> 01:03:03.240 So, unless you have any questions, can I move to part two? 01:03:03.240 --> 01:03:13.040 Okay, so part two is, you know, our recommendation here is going to be to create what's called 01:03:13.040 --> 01:03:14.480 an integrated resource plan. 01:03:14.480 --> 01:03:21.640 Actually, in 2018, we had a consultant, did a management study, and actually made that 01:03:21.640 --> 01:03:22.640 recommendation. 01:03:22.640 --> 01:03:26.880 At the time, we felt that the debt and renewable resource plan, again, given the context of 01:03:26.880 --> 01:03:30.380 everything at the time, really kind of met that definition. 01:03:30.380 --> 01:03:36.160 We don't believe it meets that today, and certainly our recommendation, right, is to 01:03:36.160 --> 01:03:38.060 create an integrated resource plan. 01:03:38.060 --> 01:03:39.060 So what is it? 01:03:39.060 --> 01:03:45.820 It's basically just a strategy document that considers your total future electric demand, 01:03:45.820 --> 01:03:48.120 and also looks at the supply side, right? 01:03:48.120 --> 01:03:54.280 And options like potentially building new generation resources, and it could be a variety 01:03:54.280 --> 01:03:56.160 of those resources. 01:03:56.160 --> 01:04:02.000 There's not just natural gas, there's geothermal, certainly there's nuclear, hydrogen is probably 01:04:02.000 --> 01:04:06.880 not too far off, there's small modular reactors, there's a number of things that we can look 01:04:06.880 --> 01:04:07.880 at. 01:04:07.880 --> 01:04:12.940 For some context, Austin Energy just did this very thing. 01:04:12.940 --> 01:04:21.840 And they opted to build a geothermal facility. 01:04:21.840 --> 01:04:23.640 It is five megawatts. 01:04:23.640 --> 01:04:27.280 Their peak load is 2,000 megawatts, right? 01:04:27.280 --> 01:04:30.160 So it's a very, very small portion. 01:04:30.160 --> 01:04:32.760 Their plan is to build that in Nacogdoches, Texas. 01:04:32.760 --> 01:04:37.080 And I'll tell you, there's folks in Nacogdoches today that aren't very supportive, because 01:04:37.080 --> 01:04:41.800 they think that that facility is going to create earthquakes in their community, right? 01:04:41.800 --> 01:04:48.280 And so again, no resource is going to be without its detractors, or folks that may not be 01:04:48.280 --> 01:04:50.840 supportive of it. 01:04:50.840 --> 01:04:56.040 Really this plan is really a longitudinal plan that will look at what are the needs 01:04:56.040 --> 01:04:57.720 at 15 to 20 years. 01:04:57.720 --> 01:05:02.440 I will tell you, I woke up one morning, I was here now 25 years with the city, it goes 01:05:02.440 --> 01:05:03.960 by quick, right? 01:05:03.960 --> 01:05:07.480 15, 20 years will go by quick, right? 01:05:07.480 --> 01:05:12.460 And so that is a 15 or 20 year plan that you set the day, and then every five years you're 01:05:12.460 --> 01:05:15.520 revamping it, you're adding additional timeframes, right? 01:05:15.520 --> 01:05:22.040 And it's just a living document that continues to set your generation needs going forward 01:05:22.040 --> 01:05:24.840 as the community continues to evolve, right? 01:05:24.840 --> 01:05:29.660 And so whether it's data centers, or it's additional residential, or commercial development, 01:05:29.660 --> 01:05:34.640 that will continue to put pressure on their utility. 01:05:34.640 --> 01:05:38.080 So let me go through a little bit of the regulatory market, and we've kind of peppered through 01:05:38.080 --> 01:05:39.080 this. 01:05:39.080 --> 01:05:40.520 But here's the good news, right? 01:05:40.520 --> 01:05:44.080 We have not had any forced outages in ERCOT since 2021, right? 01:05:44.080 --> 01:05:45.960 Have we gotten close? 01:05:45.960 --> 01:05:46.960 Yeah, absolutely. 01:05:46.960 --> 01:05:51.080 There's been a few days in the winter and summer that I've been sweating bullets, right? 01:05:51.080 --> 01:05:56.080 Because I'm not sure if we're going to have to start doing rolling brownouts, right? 01:05:56.080 --> 01:06:01.720 And so certainly I would categorize the market as uncertain. 01:06:01.720 --> 01:06:08.280 Since yearly, the scarcity cap, the highest price at which energy could go was basically 01:06:08.280 --> 01:06:09.280 cut in half. 01:06:09.280 --> 01:06:11.600 It went from 9,000 to 5,000. 01:06:11.600 --> 01:06:15.760 And even though my AMO guys tell me, well, Tony, that's not exactly right, here's the 01:06:15.760 --> 01:06:17.480 way I look at it. 01:06:17.480 --> 01:06:23.440 Had the scarcity price has been 5,000 during winter storm Uri, instead of $140 million worth 01:06:23.440 --> 01:06:27.280 the debt, it would have been 70 million, right? 01:06:27.280 --> 01:06:29.760 And that's the difference, right? 01:06:29.760 --> 01:06:37.080 Likewise, in 2023, when the cap was 5,000, and we incurred $31 million in the summer 01:06:37.080 --> 01:06:40.840 of '23, had it been 9,000, we would have been looking at $60 million, right? 01:06:40.840 --> 01:06:45.560 And so certainly we think that reducing the cap has been a good thing. 01:06:45.560 --> 01:06:48.800 I would tell you there's some in the market, some especially on the private side, private 01:06:48.800 --> 01:06:54.120 generators that are saying, hey, that scarcity cap really needs to go back up to 9,000. 01:06:54.120 --> 01:06:57.240 And there's some generators that are saying it should be completely uncapped. 01:06:57.240 --> 01:07:02.920 And that will then send the right signals to the market on the private equity side to 01:07:02.920 --> 01:07:06.320 come into the state of Texas and build the generation that's needed. 01:07:06.320 --> 01:07:09.440 And what we're talking about, the generation that they would build, right, it would not 01:07:09.440 --> 01:07:11.000 be renewable resources. 01:07:11.000 --> 01:07:15.980 It would be dispatchable generation, very likely natural gas, right? 01:07:15.980 --> 01:07:21.560 Since that time, there's now been a fifth ANSLE service, and I could probably talk to 01:07:21.560 --> 01:07:24.680 you for a couple hours about ANSLE services. 01:07:24.680 --> 01:07:32.040 But certainly ANSLE services, you know, number six was this ERCOT contingency reserve. 01:07:32.040 --> 01:07:36.120 There's an independent market monitor that monitors what ERCOT does and reports back 01:07:36.120 --> 01:07:37.440 to the PUCT. 01:07:37.440 --> 01:07:43.280 And they estimated that that ANSLE service alone added an additional $8 to $10 billion 01:07:43.280 --> 01:07:46.320 of cost to rate payers in the state of Texas. 01:07:46.320 --> 01:07:49.760 Now, the DEC is eligible for that ANSLE services. 01:07:49.760 --> 01:07:54.400 We're eligible for all five ANSLE services today, and we are active in the market in 01:07:54.400 --> 01:07:58.600 selling those services and making ourselves available. 01:07:58.600 --> 01:08:03.800 One interesting thing about the ECRS that's been reported is that the ECRS has actually 01:08:03.800 --> 01:08:10.440 sidelined the newer, more efficient generation, and so now the market is even more dependent 01:08:10.440 --> 01:08:13.920 on some of the older, dirtier generation, right? 01:08:13.920 --> 01:08:20.080 And again, because it's far more lucrative for these newer generators to stand the sidelines 01:08:20.080 --> 01:08:26.360 and collect ANSLE service dollars and preserve their facility, right, and extend the life 01:08:26.360 --> 01:08:28.360 of their facility. 01:08:28.360 --> 01:08:37.400 FFFSS, that is a real acronym, Firm Fuel Supply Service is another one that's added $51 million 01:08:37.400 --> 01:08:38.400 into the market. 01:08:38.400 --> 01:08:39.400 The DEC is not eligible. 01:08:39.400 --> 01:08:43.640 As you guys know, we don't have a firm fuel contract for the DEC, so we're not eligible 01:08:43.640 --> 01:08:44.720 for that. 01:08:44.720 --> 01:08:51.920 And then in November of '23, voters approved, I think it was Proposition 7 or 9, but they 01:08:51.920 --> 01:08:57.480 approved a proposition to create what's called the Texas Energy Fund. 01:08:57.480 --> 01:09:04.520 This fund allocated $7.2 billion in ERCOT for loans and completion bonus grants to build 01:09:04.520 --> 01:09:12.600 10,000 megawatts of dispatchable generation, with 100 megawatts as the minimum. 01:09:12.600 --> 01:09:18.200 A number of projects submitted in its first tranche of applications, DME did not submit 01:09:18.200 --> 01:09:23.360 an application, and we did not submit an application because the primary requirement is that you 01:09:23.360 --> 01:09:27.600 had to have a shovel-ready project to submit. 01:09:27.600 --> 01:09:31.000 And so those are being reviewed today. 01:09:31.000 --> 01:09:35.700 Only two have been awarded up to this point. 01:09:35.700 --> 01:09:40.840 A large number of them have actually dropped out of the program, but there is growing interest 01:09:40.840 --> 01:09:46.840 in the completion bonus, again, because there is no red tape for -- red tape, I'm probably 01:09:46.840 --> 01:09:51.160 sorry about this, red tape, but there's a lot of requirements, right? 01:09:51.160 --> 01:09:56.880 What I will tell you is that the interest cost of that loan that's backed by the state 01:09:56.880 --> 01:10:01.800 is about 3%, you know, and I think based on our credit ratings, I think we're pretty competitive 01:10:01.800 --> 01:10:02.800 to that. 01:10:02.800 --> 01:10:08.360 I think a lot of MOUs -- there's only one MOU, that's Kerrville, that submitted an application, 01:10:08.360 --> 01:10:13.200 and they're still going through the process -- excuse me -- there was a legal issue that 01:10:13.200 --> 01:10:16.900 came up, and we think the legislature is going to solve that particular issue when it comes 01:10:16.900 --> 01:10:22.200 to MOUs being eligible for this loan program. 01:10:22.200 --> 01:10:25.480 Had to do with subordinate liens and a whole bunch of other stuff that we probably don't 01:10:25.480 --> 01:10:27.840 have time to talk about today. 01:10:27.840 --> 01:10:34.340 And then the other issue is that 10,000 megawatts is actually -- it's actually 20,000 megawatts, 01:10:34.340 --> 01:10:40.520 so it's up to 10,000 megawatts on the loan program and 10,000 megawatts on the grant 01:10:40.520 --> 01:10:41.520 program. 01:10:41.520 --> 01:10:47.560 I'm hopeful that that particular legislation will get through to make that clarification, 01:10:47.560 --> 01:10:54.520 because under the current guidelines from the PECT, it's 10,000 megawatts total between 01:10:54.520 --> 01:10:56.280 loans and grants, right? 01:10:56.280 --> 01:11:01.960 And so, again, it certainly would expand the availability of those. 01:11:01.960 --> 01:11:07.520 There was another billion dollars for -- believe it or not, ERCAD does not cover all of the 01:11:07.520 --> 01:11:13.840 state of Texas, and so there's a billion dollars for outside of the state of Texas. 01:11:13.840 --> 01:11:18.120 Outside of ERCAD, you have two additional ISOs. 01:11:18.120 --> 01:11:19.120 One is SPP. 01:11:19.120 --> 01:11:23.880 Don't ask me what that means today, because I've forgotten. 01:11:23.880 --> 01:11:29.920 And then there's MISO, as well, on the east side, SPP, Southwest Power Pool, excuse me, 01:11:29.920 --> 01:11:36.800 on the west side, and then MISO, mid something or other, on the east side. 01:11:36.800 --> 01:11:40.620 And then -- a lot of information here. 01:11:40.620 --> 01:11:48.000 And then $1.8 billion is available, PECT still going through all the requirements for backup 01:11:48.000 --> 01:11:49.000 power package. 01:11:49.000 --> 01:11:52.880 Matter of fact, that's something that Stephen and I have had a lot of conversation about, 01:11:52.880 --> 01:11:56.360 especially for his water plants and some of his other critical infrastructure, that I 01:11:56.360 --> 01:11:57.720 think he would be certainly eligible. 01:11:57.720 --> 01:12:04.640 I were hopeful that he would be eligible for those. 01:12:04.640 --> 01:12:07.000 And it just keeps going and going, right? 01:12:07.000 --> 01:12:13.240 So again, proliferation of renewables, you know, more and more renewables continues to 01:12:13.240 --> 01:12:19.720 create additional scarcity periods, both in the summer evening hours, winter, morning 01:12:19.720 --> 01:12:21.480 and evening hours. 01:12:21.480 --> 01:12:26.080 One phenomena that we're certainly looking at and our EMOs is paying close attention 01:12:26.080 --> 01:12:33.680 to is as some of these very large loads are coming online that are 24/7, right, they are 01:12:33.680 --> 01:12:39.720 soaking up a lot of the cheap energy during the day, which is mainly solar, and at night, 01:12:39.720 --> 01:12:40.720 which is mainly wind. 01:12:40.720 --> 01:12:46.320 And so what we're seeing, future prices, those prices are now starting to climb up, right? 01:12:46.320 --> 01:12:51.440 And so additional risk to the entire market from those large loads. 01:12:51.440 --> 01:12:52.440 Yes, sir. 01:12:52.440 --> 01:12:55.680 Could you give me an example of the 24-hour, which you just referred to? 01:12:55.680 --> 01:13:01.760 Yeah, an AI data center, like the one we have that's being constructed here and then. 01:13:01.760 --> 01:13:07.080 So those will continue to soak up some of those low-cost power hours, and again, it's 01:13:07.080 --> 01:13:12.040 a supply and demand, so we're going to see those prices continue to climb up. 01:13:12.040 --> 01:13:19.320 So a specialty type of use versus like a university or something of that magnitude, they're the 01:13:19.320 --> 01:13:22.320 ones that draw the great deal of the power then? 01:13:22.320 --> 01:13:26.560 Yeah, by and large, what we call our native load, right, you know, our non-data center 01:13:26.560 --> 01:13:34.540 load is pretty variable, you know, but yeah, but these data centers, they're 24/7. 01:13:34.540 --> 01:13:38.440 That's why they have backup generation, because they cannot go down. 01:13:38.440 --> 01:13:42.640 So while power can be cut to them, they have to have a backup source to at least keep them 01:13:42.640 --> 01:13:44.240 on for a couple hours. 01:13:44.240 --> 01:13:45.240 Yes, thank you. 01:13:45.240 --> 01:13:46.240 Yes, sir. 01:13:46.240 --> 01:13:52.040 And then a number of other items that I won't necessarily go through, but everything from 01:13:52.040 --> 01:13:58.200 a sixth answerly service, this DRRS, to real-time co-optimization, Jose could probably spend 01:13:58.200 --> 01:14:03.480 three hours talking to you about that, how that interplays with batteries and renewable 01:14:03.480 --> 01:14:04.480 resources. 01:14:04.480 --> 01:14:07.680 Just so long as you have more pages of acronyms, I would... 01:14:07.680 --> 01:14:08.680 You would like some more? 01:14:08.680 --> 01:14:09.680 You've gone all day. 01:14:09.680 --> 01:14:10.680 Yeah, yeah, yeah. 01:14:10.680 --> 01:14:11.680 I can do these all day. 01:14:11.680 --> 01:14:12.680 Yeah. 01:14:12.680 --> 01:14:13.680 So I'll go with other, right? 01:14:13.680 --> 01:14:21.200 So there's, again, both at the state and federal level, lots of regulatory market issues. 01:14:21.200 --> 01:14:23.320 And then let me talk to you a little bit about our load. 01:14:23.320 --> 01:14:26.960 And so this is something that you've seen now a couple of times. 01:14:26.960 --> 01:14:29.040 And so currently, our load is... 01:14:29.040 --> 01:14:36.000 Our peak load, which we achieved in the summer of '23, was 408 megawatts, right? 01:14:36.000 --> 01:14:45.820 That is, in essence, backed up by 225 megawatts from our deck, leaving a shortage of 183. 01:14:45.820 --> 01:14:51.840 So in a situation where the state requires that we firm our load, right? 01:14:51.840 --> 01:15:00.600 We believe that this 183 megawatts today is what we would either have to, one, build, 01:15:00.600 --> 01:15:07.200 two, contract for, or three, what's being discussed is buying some type of credit, whether 01:15:07.200 --> 01:15:11.320 it's a dispatchable credit or it's a performance credit. 01:15:11.320 --> 01:15:15.920 So if you remember, the PCT was looking at creating what's called a performance credit 01:15:15.920 --> 01:15:18.520 mechanism that has been shelled, right? 01:15:18.520 --> 01:15:24.900 They're waiting to see what the legislature does with the dispatchable credit system. 01:15:24.900 --> 01:15:30.440 If that doesn't happen, likelihood the PCT is gonna go back and revive the PCM, right? 01:15:30.440 --> 01:15:37.120 And so based on our load, what we're seeing here, as you can see, our load growth, right? 01:15:37.120 --> 01:15:43.900 We anticipate our native load to continue to grow from 400 to 500, getting near to 600 01:15:43.900 --> 01:15:46.100 by 2044. 01:15:46.100 --> 01:15:52.400 This large load is a number of projects that we have out there. 01:15:52.400 --> 01:15:58.840 And so the total load, we believe, that by 2044, we will be in excess of 900 megawatts. 01:15:58.840 --> 01:16:07.320 And so, again, to look at long-term basis, certainly what we're looking at somewhere 01:16:07.320 --> 01:16:14.760 in the 600 to 700 megawatts of additional generation, and let me just be clear, that 01:16:14.760 --> 01:16:20.280 is dispatchable generation, not renewable generation, again, that will continue to meet 01:16:20.280 --> 01:16:25.000 requirements if they come through fruition. 01:16:25.000 --> 01:16:31.720 Please understand that this forecast does not assume any additional large loads. 01:16:31.720 --> 01:16:36.800 And just like others across the state, we continue to have interest. 01:16:36.800 --> 01:16:43.080 One of the challenges that we have from a transmission system is that we've identified 01:16:43.080 --> 01:16:45.080 these overloads, right? 01:16:45.080 --> 01:16:49.800 And we believe it's gonna take us two to three years to resolve those system overloads. 01:16:49.800 --> 01:16:56.240 Once that's done, then we will have plenty of transmission capacity to support just about 01:16:56.240 --> 01:17:00.600 any large load that would be interested in coming into our service territory. 01:17:00.600 --> 01:17:04.920 But that is the one barrier that we have today. 01:17:04.920 --> 01:17:12.560 But I will tell you that the prospects that we're talking to are not at all afraid of 01:17:12.560 --> 01:17:13.560 two to three years. 01:17:13.560 --> 01:17:16.120 They're saying, "Hey, what can you give me today? 01:17:16.120 --> 01:17:17.560 Can you give me five megawatts? 01:17:17.560 --> 01:17:18.560 Let me get started. 01:17:18.560 --> 01:17:21.920 Give me 20 megawatts, let me get started, and I'll wait two to three years for you to 01:17:21.920 --> 01:17:22.920 build it," right? 01:17:22.920 --> 01:17:25.320 And again, they're all across the spectrum, right? 01:17:25.320 --> 01:17:30.480 Some that I would categorize as very sophisticated, well-backed, and others that are more speculative. 01:17:30.480 --> 01:17:36.160 But we are having...continue to have those conversations, none of that is forecasted 01:17:36.160 --> 01:17:37.160 within this. 01:17:37.160 --> 01:17:42.900 Again, it's not real until we have...frankly, we have a PPA with them or some type of negotiated 01:17:42.900 --> 01:17:45.680 contract with them. 01:17:45.680 --> 01:17:50.200 So our staff recommendation when it comes to this is that we go out and we create integrated 01:17:50.200 --> 01:17:56.760 resource plan, preferably for 20 years, that would evaluate a number of different resources 01:17:56.760 --> 01:18:04.720 out there to create what we need within the context of that policy that we've outlined 01:18:04.720 --> 01:18:12.440 for you on the renewable side that looks at what the short-term needs might be and risks, 01:18:12.440 --> 01:18:17.280 incorporate as well any local demand-side management programs. 01:18:17.280 --> 01:18:21.320 I know we've been talking about that for some time, and there's certainly been a number 01:18:21.320 --> 01:18:26.000 of challenges for us to be able to bring that to fruition. 01:18:26.000 --> 01:18:30.120 Understand too that I just participated in a webinar on Friday, the state is actually 01:18:30.120 --> 01:18:37.760 looking at a residential demand-side program, and we're certainly advocating that our customers 01:18:37.760 --> 01:18:40.520 be eligible and be able to participate in that. 01:18:40.520 --> 01:18:47.280 Again, it's still in its infancy, but we certainly believe that ERCOT is interested in rolling 01:18:47.280 --> 01:18:55.720 out additional demand-side programs to continue to manage that load for the entire ERCOT grid. 01:18:55.720 --> 01:19:00.840 And also that this plan be cognizant of the climate action plan goals that the council 01:19:00.840 --> 01:19:03.160 has approved. 01:19:03.160 --> 01:19:08.280 And then we would recommend that we hire an external firm to help us do this. 01:19:08.280 --> 01:19:14.200 Again, the two models that we have, both CPS Energy in San Antonio and Austin Energy in 01:19:14.200 --> 01:19:19.820 Austin followed these processes and we like them. 01:19:19.820 --> 01:19:27.680 One of the things that's central to this process is that there be a stakeholder engagement process 01:19:27.680 --> 01:19:28.680 as well. 01:19:28.680 --> 01:19:33.780 So that we go out there and talk to the community, hear their concerns, share information with 01:19:33.780 --> 01:19:38.860 them as best we can, certainly there's confidential information that we won't be able to share 01:19:38.860 --> 01:19:39.860 with them. 01:19:39.860 --> 01:19:43.280 But again, to try to be as transparent as possible, get their feedback, be able to come 01:19:43.280 --> 01:19:48.120 back to the PB with that feedback and to the council and enroll out that program. 01:19:48.120 --> 01:19:55.360 We anticipate that that would take us 18 to 24 months to do that. 01:19:55.360 --> 01:20:02.400 Understand that even if the council, even the PB recommended that we go forward to build 01:20:02.400 --> 01:20:07.160 another generation facility, and let's say it's a natural gas facility, we're looking 01:20:07.160 --> 01:20:15.000 at probably 2030, 2031 based on the supply chain for engines and other material. 01:20:15.000 --> 01:20:19.800 Certainly we continue to have supply chain challenges on the transformer side. 01:20:19.800 --> 01:20:27.360 And so again, at best we think if we got started today, it would be 2030, 2031 before we got 01:20:27.360 --> 01:20:28.360 to build anything. 01:20:28.360 --> 01:20:34.000 If you add an additional 18 to 24 months there, now you're talking probably seven years from 01:20:34.000 --> 01:20:43.140 today that we would actually have some type of dispatchable generation on the ground operational. 01:20:43.140 --> 01:20:47.680 So during that time, we're going to continue to have to manage our portfolio the best we 01:20:47.680 --> 01:20:49.040 can. 01:20:49.040 --> 01:20:53.520 And if there is need for price increases, rate increases, then we'll certainly be coming 01:20:53.520 --> 01:20:55.320 to you with that. 01:20:55.320 --> 01:21:01.680 So and then just to recap here, again, our recommendation is to create a city renewable 01:21:01.680 --> 01:21:03.440 energy policy. 01:21:03.440 --> 01:21:07.720 Anticipate that would take us six to nine months as our internal process for that, and 01:21:07.720 --> 01:21:13.280 then create a long-term integrated resource plan that would take 18 to 24 months. 01:21:13.280 --> 01:21:15.400 So with that, that is my presentation. 01:21:15.400 --> 01:21:24.440 Happy to answer any other questions you may have. 01:21:24.440 --> 01:21:29.400 This was getting good there for a while, and now you guys are not doing it. 01:21:29.400 --> 01:21:34.560 Mr. Chair, I would say too that the plan is that we would make this same presentation 01:21:34.560 --> 01:21:45.840 to the council on June 3rd, and so I'm asking for your recommendation to submit to the council. 01:21:45.840 --> 01:21:53.480 So I think splitting these two, the goal, the city renewable energy policy, which would 01:21:53.480 --> 01:21:59.520 be probably our stated goals and defining those well and making them like Audit pointed 01:21:59.520 --> 01:22:05.960 out, they weren't well defined, and we weren't necessarily measuring them, at least not until 01:22:05.960 --> 01:22:06.960 2020. 01:22:06.960 --> 01:22:12.560 We waited four years to start measuring them, and even then the definitions were always, 01:22:12.560 --> 01:22:15.600 were not super precise. 01:22:15.600 --> 01:22:17.860 So I think that makes sense. 01:22:17.860 --> 01:22:27.120 I noticed the IRP, you do have community engagement to get citizen input and stakeholder input. 01:22:27.120 --> 01:22:34.280 I think that we need the same in the goal part in the renewable energy policy as well. 01:22:34.280 --> 01:22:40.600 This is, it's complicated, you're talking about wind and solar driving down energy prices 01:22:40.600 --> 01:22:46.400 and data centers are soaking up and driving up the prices, and which one's going to win 01:22:46.400 --> 01:22:53.960 out who's like, renewable energy projects cost more than they did, and they look like 01:22:53.960 --> 01:22:59.800 they wouldn't be in the money now, but then future power prices are going from an average 01:22:59.800 --> 01:23:08.200 of $40 a megawatt to an average of $70 a megawatt, and there are a whole lot of REPs in the deregulated 01:23:08.200 --> 01:23:16.840 areas that are 30 or 40 or 50% more expensive than DME right now, because they have no long 01:23:16.840 --> 01:23:21.120 term power, they maybe have two years worth of power purchased, and they've been facing 01:23:21.120 --> 01:23:29.400 those higher prices now for a few years, and balancing it all, it's big and complicated 01:23:29.400 --> 01:23:31.720 and ever changing. 01:23:31.720 --> 01:23:38.800 I think these two plans, these are a good way to do it, and I think the key is community 01:23:38.800 --> 01:23:39.800 buy-in. 01:23:39.800 --> 01:23:40.800 Yeah? 01:23:40.800 --> 01:23:41.800 Yeah. 01:23:41.800 --> 01:23:42.800 Very good. 01:23:42.800 --> 01:23:43.800 All right. 01:23:43.800 --> 01:23:57.040 Do you need anything from us other than just the conversation and actual-- 01:23:57.040 --> 01:24:04.860 I mean, I know Mr. Taylor introduced the possibility of some type of community engagement with 01:24:04.860 --> 01:24:11.360 the policy, if the recommendation is to move forward with these two, do we add, because 01:24:11.360 --> 01:24:15.880 it's not-- I mean, it's contemplated there in the sense that it's going to come here 01:24:15.880 --> 01:24:20.920 to the PUB for consideration, and certainly the public is eligible to come here. 01:24:20.920 --> 01:24:23.440 Same thing with the council. 01:24:23.440 --> 01:24:29.680 If there's any other recommendation that you would want, I would anticipate that both for 01:24:29.680 --> 01:24:34.120 the PUB and for the council, likely that policy will be put on the agenda as an individual 01:24:34.120 --> 01:24:39.920 consideration item, and not necessarily consent agenda item, so again, that would afford the 01:24:39.920 --> 01:24:44.960 public additional opportunities to provide feedback, but if there's more than that, certainly 01:24:44.960 --> 01:24:50.720 we need that direction from you today as a recommendation to the council. 01:24:50.720 --> 01:24:51.720 I like the idea. 01:24:51.720 --> 01:24:58.960 I know you guys don't, it's okay, but I mean, if the people that want to have a discussion 01:24:58.960 --> 01:25:12.560 about this in a public format, and that might be me too, I think you might invite the PUB 01:25:12.560 --> 01:25:16.520 members to something like that. 01:25:16.520 --> 01:25:23.240 I mean, I know it's the deciding vote in this city, but if we're going to bring up the discussion, 01:25:23.240 --> 01:25:27.080 and we would like a discussion amongst our neighbors, then we could get involved with 01:25:27.080 --> 01:25:28.080 that. 01:25:28.080 --> 01:25:30.080 I bet Devin would. 01:25:30.080 --> 01:25:34.320 I think the magnitude of it would require it, and I appreciate you volunteering, Mr. 01:25:34.320 --> 01:25:35.320 Chairman. 01:25:35.320 --> 01:25:42.920 Well, I think I just said that Devin would do it. 01:25:42.920 --> 01:25:52.880 So hear that, and if you want to have more discussion of this on where to go with that, 01:25:52.880 --> 01:25:54.600 I think that's fine. 01:25:54.600 --> 01:25:56.920 Yeah, I think I would. 01:25:56.920 --> 01:25:59.800 Are you talking about some type of town hall meeting? 01:25:59.800 --> 01:26:04.360 Are you talking about, hey, we're okay with you putting in an IC, or are you talking about 01:26:04.360 --> 01:26:07.720 a public hearing that the council would have? 01:26:07.720 --> 01:26:12.400 Yeah, help me flesh that out a little bit more. 01:26:12.400 --> 01:26:14.640 So the six months process. 01:26:14.640 --> 01:26:19.440 So first, I mean, this is the plan to make a plan right now, it's what we had today. 01:26:19.440 --> 01:26:20.440 Yes. 01:26:20.440 --> 01:26:26.440 Yeah, so taking that to city council, obviously, but then in that six month period, it would 01:26:26.440 --> 01:26:32.880 seem like town hall would be, if you bring a final recommendation to a public hearing 01:26:32.880 --> 01:26:41.840 without any citizen input along the way, some views may get overlooked, and you also might 01:26:41.840 --> 01:26:46.840 lead to a really contentious hearing where a lot of people don't feel heard and show 01:26:46.840 --> 01:26:51.920 up angry at a public hearing when that isn't necessarily the intent. 01:26:51.920 --> 01:26:59.120 So if it was possible in the six to nine month period to have some kind of town hall or some 01:26:59.120 --> 01:27:05.400 kind of meeting, and city council might have a stronger opinion about the format of it, 01:27:05.400 --> 01:27:12.800 to get that input early and get those options early, you know, bringing a menu of options 01:27:12.800 --> 01:27:18.280 and what's supported and what's not, and what the likely risk and cost of each of those 01:27:18.280 --> 01:27:22.400 would be to council might be a better way to go. 01:27:22.400 --> 01:27:28.520 I know that complicates when you're writing a plan, writing 10 sections of a plan and 01:27:28.520 --> 01:27:33.560 trying to piece together how they would interact, I don't know, or maybe that's not appropriate, 01:27:33.560 --> 01:27:38.520 but I think somewhere in that six month process, having citizen input as opposed to just at 01:27:38.520 --> 01:27:41.920 the end in a public hearing. 01:27:41.920 --> 01:27:43.920 Okay. 01:27:43.920 --> 01:27:49.960 So I think the important thing to get across is that we, I think some of us would like 01:27:49.960 --> 01:27:57.120 to see some more public discussion about this and love to be invited, I guess everybody 01:27:57.120 --> 01:28:00.040 would be, if every citizen would be, red payer. 01:28:00.040 --> 01:28:04.720 We can try to communicate with the council and get their direction. 01:28:04.720 --> 01:28:05.720 Yeah. 01:28:05.720 --> 01:28:07.320 I mean, that's all we can do. 01:28:07.320 --> 01:28:13.880 You know, a few years ago we did that, and council asked PUB members to show up because 01:28:13.880 --> 01:28:19.600 we had the long discussions about it, but anyway, I think, I think that's good. 01:28:19.600 --> 01:28:20.600 Anybody got anything else? 01:28:20.600 --> 01:28:21.600 Do you need a motion? 01:28:21.600 --> 01:28:22.600 No. 01:28:22.600 --> 01:28:23.600 I think I have direction. 01:28:23.600 --> 01:28:24.600 Yeah, I was just discussing. 01:28:24.600 --> 01:28:25.600 I didn't quite catch that. 01:28:25.600 --> 01:28:26.600 Yeah. 01:28:26.600 --> 01:28:27.600 Thank you. 01:28:27.600 --> 01:28:28.600 Yeah. 01:28:28.600 --> 01:28:29.600 Okay. 01:28:29.600 --> 01:28:30.600 All right. 01:28:30.600 --> 01:28:31.600 Next we stand adjourned. 01:28:31.600 --> 01:28:32.600 All right. 01:28:32.600 --> 01:28:33.600 Thank you, Tony. 01:28:33.600 --> 01:28:33.600 Thank you.