WEBVTT

00:00:00.000 --> 00:00:03.460
 >> Okay, it's 9 o'clock.

00:00:03.460 --> 00:00:08.300
 We do have a quorum, so we'll call the Denton Public Utilities Board

00:00:08.300 --> 00:00:12.060
 of Monday, January 27th, 2020 to order.

00:00:12.060 --> 00:00:15.100
 The first -- oh, we're going to have a change in the agenda.

00:00:15.100 --> 00:00:18.940
 We're going to move the closed meeting to the end of the agenda.

00:00:18.940 --> 00:00:24.340
 It will allow for the staff that doesn't need to be here to leave.

00:00:24.340 --> 00:00:27.060
 So the first item is receive a report and hold a discussion

00:00:27.060 --> 00:00:32.580
 and give staff direction regarding the pay as you go prepaid metering program.

00:00:32.580 --> 00:00:34.740
 Oh, there you are.

00:00:34.740 --> 00:00:44.620
 >> Good morning.

00:00:44.620 --> 00:00:48.620
 I'm Krista Foster with customer service, Madam Chair, board members.

00:00:48.620 --> 00:00:50.900
 Thank you for allowing me to be in this morning.

00:00:50.900 --> 00:00:54.820
 This work -- some of you will be a little bit of a recap.

00:00:54.820 --> 00:01:00.420
 This is a presentation we brought in August and then we're taken from the council agenda.

00:01:00.420 --> 00:01:04.700
 So I'm coming back in to bring in some updates.

00:01:04.700 --> 00:01:09.220
 So all we're doing is looking at the pay as you go prepaid metering program.

00:01:09.220 --> 00:01:16.620
 A basic overview of the program is it is open to all customers with electric service and an AMI meter.

00:01:16.620 --> 00:01:22.720
 We require a $50 service prepayment that just pays for their first several days of service.

00:01:22.720 --> 00:01:28.300
 When they start the program, they can certainly -- customers can pay more if they choose to do so at that time.

00:01:28.300 --> 00:01:32.140
 The highlights of benefits for the customer are there are no deposits.

00:01:32.140 --> 00:01:34.380
 There are no late fees or interest.

00:01:34.380 --> 00:01:36.100
 We have no delinquency fees.

00:01:36.100 --> 00:01:41.180
 So if a customer is interrupted, they're restored for simply their outstanding balance,

00:01:41.180 --> 00:01:47.500
 whatever they went into the negative, plus a $25 prepayment to ensure that their service isn't scheduled

00:01:47.500 --> 00:01:50.960
 for interruption within the next several days after that.

00:01:50.960 --> 00:01:53.360
 We also offer a debt recovery portion.

00:01:53.360 --> 00:01:59.020
 So if a customer does have outstanding previous debt with the city, they can pay a portion of that debt

00:01:59.020 --> 00:02:06.060
 and we can place the rest into an account like what you see on the screenshot, the unpaid balance of $44.

00:02:06.060 --> 00:02:08.820
 That would be a debt recovery amount.

00:02:08.820 --> 00:02:15.500
 So when a customer makes their payment, 25% of the payment they make goes to help pay that outstanding balance.

00:02:15.500 --> 00:02:23.680
 So it allows the customer a little more flexibility in taking care of past due balances without the financial burden being all at once.

00:02:23.680 --> 00:02:31.620
 >> Can we -- excuse me, can we turn off the lights right in front of the screen or not?

00:02:31.620 --> 00:02:32.860
 >> Does that make it a little bit better?

00:02:32.860 --> 00:02:34.700
 >> That's better.

00:02:34.700 --> 00:02:38.500
 >> Yeah, and any of the screenshots that you see are actual pieces of information

00:02:38.500 --> 00:02:43.060
 like the customer would be able to see as they're on the program.

00:02:43.060 --> 00:02:50.060
 So what happens is each day the customer will receive a deduction from their prepaid balance

00:02:50.060 --> 00:02:57.460
 to reflect their actual electric cost and the prorated -- not prorated, but the spread out cost

00:02:57.460 --> 00:03:01.540
 of all of their set services and their most recent water consumption.

00:03:01.540 --> 00:03:04.460
 And then they also receive usage and balance alerts.

00:03:04.460 --> 00:03:07.020
 I'm also a customer for our prepaid program.

00:03:07.020 --> 00:03:12.980
 Every morning at 10 a.m. I receive a push alert on my phone that shows me my current balance

00:03:12.980 --> 00:03:14.540
 in my prepaid account.

00:03:14.540 --> 00:03:21.020
 I can click on it, go in and see more detail about any of those transactions.

00:03:21.020 --> 00:03:26.020
 Benefits for the customer is if that customer has a deposit on file, we are going to apply

00:03:26.020 --> 00:03:32.900
 that to any balances that they may have and/or prepayment toward their pay as you go service.

00:03:32.900 --> 00:03:38.780
 If the customer is scheduled to pay a deposit or has been interrupted and would require additional deposit,

00:03:38.780 --> 00:03:42.820
 we would not require that as they move into the pay as you go program.

00:03:42.820 --> 00:03:47.540
 It helps them to manage some of that debt accrual so that they're not always paying in arrears.

00:03:47.540 --> 00:03:48.420
 You're now caught up.

00:03:48.420 --> 00:03:52.380
 You have no outstanding balances and you're always paying forward.

00:03:52.380 --> 00:03:57.860
 So without the late and delinquent fees, it allows all of the funds that that customer is paying

00:03:57.860 --> 00:04:01.500
 to actually be toward the cost of their services.

00:04:01.500 --> 00:04:03.860
 And it helps them with increased conservation awareness.

00:04:03.860 --> 00:04:09.380
 When you can see each day the dollar impact of your electrical usage,

00:04:09.380 --> 00:04:13.140
 it helps you be able to manage those costs more effectively.

00:04:13.140 --> 00:04:17.300
 For the city, it decreases our financial burden to our customers

00:04:17.300 --> 00:04:19.980
 by allowing the removal of those deposits.

00:04:19.980 --> 00:04:25.860
 And it helps the customers get out of debt while not helping the city to accrue greater amounts of debt.

00:04:25.860 --> 00:04:32.700
 So it helps us to control debt growth while allowing the customers to be debt free.

00:04:32.700 --> 00:04:35.060
 So we have two primary customer bases.

00:04:35.060 --> 00:04:38.980
 The first is customers who are needing financial flexibility.

00:04:38.980 --> 00:04:41.140
 The customer may be on a set income.

00:04:41.140 --> 00:04:43.740
 They may have inconsistent paydates.

00:04:43.740 --> 00:04:50.660
 They may need to just be able to pay small amounts more frequently than a one time a month large payment.

00:04:50.660 --> 00:04:54.820
 The second are people who are worried about consumption of electric usage.

00:04:54.820 --> 00:05:03.940
 They want greater control over how they're using their electricity and they're wanting to do things with conservation in mind.

00:05:03.940 --> 00:05:13.940
 So as an example for a customer who needs a little more financial flexibility, an actual customer who was being disconnected for past due balances,

00:05:13.940 --> 00:05:19.580
 in order for that customer to have restored, it would have been almost $700.

00:05:19.580 --> 00:05:24.900
 The customer still would have had current charges that would have been due within the next month.

00:05:24.900 --> 00:05:31.420
 And they still have unbilled consumption that would have been billing before the next payments were due.

00:05:31.420 --> 00:05:36.980
 In order to get that customer on in a much more cost effective manner,

00:05:36.980 --> 00:05:41.180
 that customer is able to move to prepay for a payment of $50.

00:05:41.180 --> 00:05:45.460
 The $50 payment will give them service for about three to five days,

00:05:45.460 --> 00:05:52.060
 which if necessary gives the customer time to come up with additional funds to be able to keep moving forward.

00:05:52.060 --> 00:06:00.780
 They had a deposit that we were able to apply to their outstanding balance and the remaining portion of their bill could be placed in debt recovery.

00:06:00.780 --> 00:06:11.780
 So instead of a $700 outstanding balance that would have to be paid in order to restore, that customer could restore for as little as $50.

00:06:11.780 --> 00:06:24.340
 For our consumption conscious customers, you're actually going to be able to see charts that give you your actual daily electric cost with the high and low temperature for the day.

00:06:24.340 --> 00:06:29.220
 So it helps you to better forecast what your costs may be.

00:06:29.220 --> 00:06:32.540
 It helps you to better see changes that you've made today.

00:06:32.540 --> 00:06:35.380
 How does that impact my bill tomorrow?

00:06:35.380 --> 00:06:43.940
 So it gives more realistic meaning to what you're doing in your home.

00:06:43.940 --> 00:06:55.180
 So you guys will have a little bit of a benefit because I was here with July 1st results and now we can see what's happened as of January 1st.

00:06:55.180 --> 00:06:59.220
 As of January 1st, we have 563 customers.

00:06:59.220 --> 00:07:11.980
 We have been able to take for those customers in place $117,000 into debt recovery and have already regained 66% of that at $77,000.

00:07:11.980 --> 00:07:23.940
 For customers who have refunded deposits, we've refunded $84,000 in deposits and not required $147,000 in either new or additional deposits for those customers.

00:07:23.940 --> 00:07:34.180
 The average customer at 70% of our customers are debt free in less than 60 days, so it helps them to be able to get ahead.

00:07:34.180 --> 00:07:42.540
 When we came in July, the difference of what we've seen since July, we've added 205 customers to the program.

00:07:42.540 --> 00:07:52.580
 We've added $46,000 to that total of debt, but we've collected $48,000 of the outstanding debt that's been in recovery.

00:07:52.580 --> 00:07:59.100
 And just since July 1st, between refunded and deposits not required,

00:07:59.100 --> 00:08:06.060
 we've saved customers $113,000 in deposits without increasing risk to the city.

00:08:06.060 --> 00:08:14.300
 What we have going on is we have the postpaid electric usage monitoring.

00:08:14.300 --> 00:08:17.820
 I know when I was here in August, I brought some basic information about that.

00:08:17.820 --> 00:08:20.060
 We were still doing some test piloting.

00:08:20.060 --> 00:08:21.500
 That has been concluded.

00:08:21.500 --> 00:08:29.220
 We now have 98 customers who are on a postpaid account that have set up with the My Usage so they can log in.

00:08:29.220 --> 00:08:34.260
 And daily, they can see their electric consumption with the high and low temperatures.

00:08:34.260 --> 00:08:39.540
 They only see that in a kilowatt hours because they are not billed in that program.

00:08:39.540 --> 00:08:44.580
 So it's a little less impactful than being able to see it in a dollar amount.

00:08:44.580 --> 00:08:50.940
 But it's still very useful information for those customers who prefer to stay in a postpaid environment.

00:08:50.940 --> 00:08:55.740
 We are moving toward having a full public push later this spring.

00:08:55.740 --> 00:09:00.260
 We also are still finishing up the testing on the Pay Near Me program.

00:09:00.260 --> 00:09:06.380
 Pay Near Me is a partnership that we have so that a customer can go into their prepaid account,

00:09:06.380 --> 00:09:11.180
 look for local area businesses like a CVS or a 7-Eleven,

00:09:11.180 --> 00:09:17.940
 where they can make a cash payment that will post real time to their Pay As You Go account.

00:09:17.940 --> 00:09:21.180
 So if they need to make a payment on the weekend, in the middle of the night,

00:09:21.180 --> 00:09:26.300
 maybe it's a college kid that realized, I'm going to be short, hey mom, who's in New York.

00:09:26.300 --> 00:09:33.540
 Mom can go to that same CVS or Walgreens or whatever in New York and post that payment real time to the account.

00:09:33.540 --> 00:09:41.220
 Then finally, we're looking at creating an educational video library to help customers be able to see some of the changes

00:09:41.220 --> 00:09:46.500
 and see how things work within the program so that they can take better control of their account.

00:09:46.500 --> 00:09:47.980
 We're still working on those right now.

00:09:47.980 --> 00:09:58.140
 We've created a couple of walk-through paper guides that we have on our website to allow customers that information.

00:09:58.140 --> 00:10:01.740
 And with that, I'll take any questions.

00:10:01.740 --> 00:10:03.180
 >> Questions?

00:10:03.180 --> 00:10:09.500
 >> I'm assuming that your customer service representatives will be trained in all this and be able to explain it to--

00:10:09.500 --> 00:10:11.820
 >> Yes, they already are and have been.

00:10:11.820 --> 00:10:12.580
 >> Okay, okay.

00:10:12.580 --> 00:10:13.780
 >> Yeah.

00:10:13.780 --> 00:10:21.180
 >> If I can make an observation, in this morning's newspaper, Denton Record Chronicle, there's a letter to the editor.

00:10:21.180 --> 00:10:22.500
 I don't know if anybody's seen it.

00:10:22.500 --> 00:10:31.340
 This person was upset because he had to mail his DME bill payment to Dallas.

00:10:31.340 --> 00:10:38.340
 So I just tell you this because I think the educational aspect of this will be very valuable

00:10:38.340 --> 00:10:43.500
 because there's still folks who think that they have to mail it in and it goes through Dallas

00:10:43.500 --> 00:10:45.500
 and then why doesn't it just go to Denton?

00:10:45.500 --> 00:10:50.900
 I mean, it's really silly, but this sort of thing will dispel a lot of this misinformation.

00:10:50.900 --> 00:10:53.540
 >> Yeah. We will work on continuing with that.

00:10:53.540 --> 00:10:59.740
 I think right now, 35-- more than 35% of our customers are actually on electronic billing,

00:10:59.740 --> 00:11:04.220
 but we do still have a lot of customers who resort back to that paper.

00:11:04.220 --> 00:11:05.340
 >> Thanks.

00:11:05.340 --> 00:11:11.660
 >> What's the relationship between the electric bill and the water bill?

00:11:11.660 --> 00:11:17.260
 >> So currently, we allow AMI-- we have AMI meters for the electric services,

00:11:17.260 --> 00:11:20.820
 but water meters are still read manually once a month.

00:11:20.820 --> 00:11:27.260
 So we can't give you an update on your daily water usage unless we had somebody physically read your meter every day.

00:11:27.260 --> 00:11:35.540
 So the water usage, what happens is we look at it today and when we get your read

00:11:35.540 --> 00:11:41.420
 and see what you used last month, we set your daily average for the next month based on that

00:11:41.420 --> 00:11:43.900
 and charge you as of 30 days.

00:11:43.900 --> 00:11:47.700
 So we do at the end of a month, we do what's called reconciliation.

00:11:47.700 --> 00:11:52.660
 And in reconciliation, I'll actually show you a little bit about that.

00:11:52.660 --> 00:11:57.060
 With reconciliation, we actually true up the account.

00:11:57.060 --> 00:12:01.980
 So your solid waste, your drainage, your waste water, those are set fees.

00:12:01.980 --> 00:12:08.300
 So in order to do your proration for each day, we say, "Oh, your next month of service is going to cost X dollars."

00:12:08.300 --> 00:12:12.180
 We divide it by 30 and that's what you're charged each day.

00:12:12.180 --> 00:12:17.740
 At the end of the month, if that billing cycle was only 28 days, you overpaid.

00:12:17.740 --> 00:12:21.300
 If that billing cycle was 32 days, you underpaid.

00:12:21.300 --> 00:12:25.260
 If your water consumption, you used a little less or a little more water,

00:12:25.260 --> 00:12:28.500
 then we have to kind of balance that out and we'll true that up.

00:12:28.500 --> 00:12:34.180
 If the cost of your reconciliation is greater than $10, then we're going to give you a call

00:12:34.180 --> 00:12:38.340
 and give you an option to either have it deduct from your balance or we'll place that into debt recovery

00:12:38.340 --> 00:12:41.300
 so you can just pay it out through the next month.

00:12:41.300 --> 00:12:46.060
 >> But that's part-- the $50 prepayment is-- goes towards water as well.

00:12:46.060 --> 00:12:47.380
 >> Correct, correct.

00:12:47.380 --> 00:12:52.260
 So each day, as you can see over here, the miscellaneous charges,

00:12:52.260 --> 00:12:58.860
 miscellaneous charges will generally show you what your prorated is and it's the same every single day.

00:12:58.860 --> 00:13:02.100
 When we do a reconciliation-- oh, when we do--

00:13:02.100 --> 00:13:03.260
 >> You need to get closer to the mic.

00:13:03.260 --> 00:13:04.020
 >> Sorry about that.

00:13:04.020 --> 00:13:11.300
 When we do the reconciliation, the miscellaneous charges for that day will increase or decrease slightly,

00:13:11.300 --> 00:13:16.300
 but the miscellaneous charges cover all of those set fees and your water service.

00:13:16.300 --> 00:13:18.940
 >> Okay.

00:13:18.940 --> 00:13:19.700
 >> Charlie.

00:13:19.700 --> 00:13:22.100
 >> What's the cost of this program?

00:13:22.100 --> 00:13:23.260
 Briefly, I know it's--

00:13:23.260 --> 00:13:24.180
 >> Sure.

00:13:24.180 --> 00:13:25.540
 >> You're talking about the cost of it to the city.

00:13:25.540 --> 00:13:28.060
 >> What does the city spend on?

00:13:28.060 --> 00:13:35.540
 >> The-- actually, the facility fee for being on the Pay As You Go program is about $7.35 a month higher,

00:13:35.540 --> 00:13:40.300
 which covers the cost of their enrollment fee to the program as well as the increased levels

00:13:40.300 --> 00:13:42.300
 of communication for the program.

00:13:42.300 --> 00:13:47.340
 >> So there's a $7.50 additional charge to the customer to participate.

00:13:47.340 --> 00:13:47.780
 >> It's part of the regular--

00:13:47.780 --> 00:13:50.820
 >> Does that cover the city's cost of implementing this program?

00:13:50.820 --> 00:13:50.820
 >> It does.

00:13:50.820 --> 00:13:51.060
 >> Thank you.

00:13:51.060 --> 00:13:52.340
 >> It does.

00:13:52.340 --> 00:13:56.620
 >> Any questions?

00:13:56.620 --> 00:13:57.340
 All right.

00:13:57.340 --> 00:13:58.100
 Thank you.

00:13:58.100 --> 00:13:58.780
 >> You're welcome.

00:13:58.780 --> 00:14:00.420
 Thank you.

00:14:00.420 --> 00:14:03.940
 >> And I think I saw Phil did make it.

00:14:03.940 --> 00:14:04.820
 Okay. All right.

00:14:04.820 --> 00:14:08.460
 So our second item is to receive a report and hold a discussion

00:14:08.460 --> 00:14:14.060
 and give staff direction regarding updating the existing Denton Municipal Electricity Energy

00:14:14.060 --> 00:14:16.380
 Risk Management Policy.

00:14:16.380 --> 00:14:18.340
 >> Is this closed session?

00:14:18.340 --> 00:14:18.860
 >> No.

00:14:18.860 --> 00:14:19.380
 >> Okay.

00:14:19.380 --> 00:14:35.220
 We'll hold the report session.

00:14:35.220 --> 00:14:36.940
 >> Good morning.

00:14:36.940 --> 00:14:42.900
 My name is Philip DePastina and I'm a risk control analyst at DME.

00:14:42.900 --> 00:14:50.980
 I'm here to provide an update on our energy risk management policy.

00:14:50.980 --> 00:14:59.100
 Just by way of background, the energy risk management policy is the set of internal rules

00:14:59.100 --> 00:15:03.980
 that DME uses to manage the acquisition and manage the risk

00:15:03.980 --> 00:15:07.780
 that go with buying energy for our retail customers.

00:15:07.780 --> 00:15:17.140
 It was last updated in May of 2019 and our current risk policy requires that we come annually

00:15:17.140 --> 00:15:26.700
 in January to review and provide updates to the policy for the PUB and council.

00:15:26.700 --> 00:15:32.060
 And just for your information, since it was last updated in May,

00:15:32.060 --> 00:15:40.660
 we've hired an outside consultant which is Deloitte to provide feedback and review our policy

00:15:40.660 --> 00:15:45.660
 and some of the comments that are proposed recommendations

00:15:45.660 --> 00:15:50.540
 that we're making will be reflected in that.

00:15:50.540 --> 00:15:58.180
 The main change in this version of the risk policy is the incorporation of a hedge plan.

00:15:58.180 --> 00:16:04.180
 The last version required that the EMO develop a hedge plan.

00:16:04.180 --> 00:16:11.900
 And since May, they have and they presented it to the risk committee in September

00:16:11.900 --> 00:16:19.620
 and they approved it and we've added a summary of that plan to this policy in Appendix F.

00:16:19.620 --> 00:16:27.340
 And going along with that, we've made some changes to the energy transaction limit tables

00:16:27.340 --> 00:16:30.700
 in Appendix B to reflect those changes.

00:16:30.700 --> 00:16:40.100
 A few other changes we've made to this risk policy is we've added a list of key risks

00:16:40.100 --> 00:16:44.300
 or key objectives in Section 1.2.

00:16:44.300 --> 00:16:49.540
 We've proposed some greater flexibility in scheduling meetings

00:16:49.540 --> 00:16:55.260
 and providing a report to the council.

00:16:55.260 --> 00:16:59.300
 In the current version of the risk policy, there's a requirement

00:16:59.300 --> 00:17:08.420
 that an outside consultant provide a quarterly benchmark analysis of the EMO and their activities.

00:17:08.420 --> 00:17:17.220
 And Deloitte said this is far more frequent than their clients or--

00:17:17.220 --> 00:17:25.900
 than they usually do with their clients and they recommended a health check every three to five years

00:17:25.900 --> 00:17:30.820
 as being a little bit more appropriate.

00:17:30.820 --> 00:17:39.700
 We've updated the list of responsibilities for the three groups that work together as the EMO.

00:17:39.700 --> 00:17:46.340
 They provide checks and balances to each other and we've updated the list of their responsibilities

00:17:46.340 --> 00:17:52.400
 and the-- clarified the supervisory responsibility for each group.

00:17:52.400 --> 00:17:58.100
 We've made some clarifications to how these three groups interact with each other to document

00:17:58.100 --> 00:18:04.340
 and record the energy transactions that we execute.

00:18:04.340 --> 00:18:12.500
 We've updated the credit limit section to reflect our current practices.

00:18:12.500 --> 00:18:23.420
 We've updated the reports and the organizational-- org chart to reflect current job titles

00:18:23.420 --> 00:18:26.860
 and operating structure and reporting structure.

00:18:26.860 --> 00:18:35.300
 And finally, we've got in Appendix A, a list of the risks that the EMO is trying to manage.

00:18:35.300 --> 00:18:40.220
 And to that list, we've added deck outage risk.

00:18:40.220 --> 00:18:47.500
 And I believe later today, you'll receive a report on some preventive maintenance programs we have

00:18:47.500 --> 00:18:52.460
 to try to better manage that outage risk.

00:18:52.460 --> 00:19:00.220
 We've added some language talking about the risk that goes with renewable energy

00:19:00.220 --> 00:19:09.600
 and the uncertainty in when it actually gets delivered as well as the impact on the ECA account

00:19:09.600 --> 00:19:16.860
 of changes in market prices and the seasonality of DME load

00:19:16.860 --> 00:19:22.820
 and renewables and resources delivery patterns.

00:19:22.820 --> 00:19:28.580
 Now with that, we-- in the package that I've-- we provided you today is a red line

00:19:28.580 --> 00:19:35.060
 of all the changes no matter how minute we've made to the risk policy and I'd be happy to go

00:19:35.060 --> 00:19:42.500
 into any of those or answer questions you have or receive any feedback you might have for us today.

00:19:42.500 --> 00:19:45.900
 >> The light keeps coming on.

00:19:45.900 --> 00:19:50.340
 Could you check and make sure that the mic is active?

00:19:50.340 --> 00:19:55.140
 >> Is there a button?

00:19:55.140 --> 00:19:57.460
 >> Okay. No?

00:19:57.460 --> 00:19:58.020
 >> No.

00:19:58.020 --> 00:19:58.580
 >> Still on.

00:19:58.580 --> 00:20:01.260
 Okay. Questions?

00:20:01.260 --> 00:20:06.700
 Yes, I have a question about the frequency of doing a health-- economic health check.

00:20:06.700 --> 00:20:14.900
 I think you said Deloitte recommended you extend that to a period of 3 to 5 years or review.

00:20:14.900 --> 00:20:20.780
 It seems to me that the energy markets change pretty quickly

00:20:20.780 --> 00:20:25.620
 and a lot can happen in even 2 years.

00:20:25.620 --> 00:20:28.500
 Did you have any back and forth about that frequency?

00:20:28.500 --> 00:20:33.540
 I mean if we wait 5 years to have another look at this,

00:20:33.540 --> 00:20:40.900
 the whole world can be different significantly than it was 5 years ago.

00:20:40.900 --> 00:20:42.540
 >> Good question.

00:20:42.540 --> 00:20:50.380
 We actually generate reports every day and the kind of health check they're talking

00:20:50.380 --> 00:20:57.700
 about is reassessing whether the way we measure our risk is still appropriate.

00:20:57.700 --> 00:21:05.860
 The way we-- the kinds of risks we have and how we're managing them doesn't change every day.

00:21:05.860 --> 00:21:10.500
 It's the kind of absolute market impact of those.

00:21:10.500 --> 00:21:15.900
 And so, they say that most of their clients have them come in

00:21:15.900 --> 00:21:22.700
 and review the overall framework they're using about every 3 to 5 years.

00:21:22.700 --> 00:21:29.460
 >> So, it's the overall risk management plan not the day-to-day or quarterly economic?

00:21:29.460 --> 00:21:31.180
 >> That's correct.

00:21:31.180 --> 00:21:32.380
 >> I have another question.

00:21:32.380 --> 00:21:39.540
 Can you give us an example of some kind of a procedural violation that was reported

00:21:39.540 --> 00:21:43.860
 by the middle office each quarter?

00:21:43.860 --> 00:21:45.380
 Are there any?

00:21:45.380 --> 00:21:48.860
 I mean there's language in there that talks about violating procedure.

00:21:48.860 --> 00:21:50.020
 Does that happen?

00:21:50.020 --> 00:21:53.860
 What's an example of that instance?

00:21:53.860 --> 00:22:02.220
 >> An example would be one of the requirements is that the people

00:22:02.220 --> 00:22:10.100
 that execute trades report them by 5 o'clock on the day they've executed them.

00:22:10.100 --> 00:22:19.980
 And we've had a few times when they've done it late in the day and they haven't notified me

00:22:19.980 --> 00:22:23.500
 until the next morning.

00:22:23.500 --> 00:22:32.740
 That's about the only violations that I've seen in the 5 years that we've been doing this program.

00:22:32.740 --> 00:22:38.140
 >> And it also mentions-- discusses disciplinary action.

00:22:38.140 --> 00:22:42.540
 Was there any disciplinary action taken in 2019?

00:22:42.540 --> 00:22:44.060
 >> No.

00:22:44.060 --> 00:22:49.660
 >> Another question.

00:22:49.660 --> 00:22:58.060
 Can you give me an example of an actual stress test that was used in 2019?

00:22:58.060 --> 00:23:10.980
 Stress tests are modeling our-- taking our models and putting extreme assumptions on them.

00:23:10.980 --> 00:23:20.580
 So to answer the question of what would the rate impact be if natural gas prices tripled

00:23:20.580 --> 00:23:31.460
 or if the Denton Energy Center broke and wasn't able to run during July and August of the year.

00:23:31.460 --> 00:23:39.780
 So those are the kind of stress tests we do just to see if things went really bad,

00:23:39.780 --> 00:23:46.460
 how bad would they go and develop a plan for how we'd mitigate those risks.

00:23:46.460 --> 00:23:51.540
 Not that anything did happen.

00:23:51.540 --> 00:24:01.300
 >> I'm curious who is in-- who originates these sequence series of events, these what if scenarios?

00:24:01.300 --> 00:24:02.500
 How often does that happen?

00:24:02.500 --> 00:24:10.300
 How often do you have people conceiving of situations that may develop?

00:24:10.300 --> 00:24:10.780
 Yes.

00:24:10.780 --> 00:24:11.460
 >> Good morning.

00:24:11.460 --> 00:24:13.460
 Terry Nolte, NEME.

00:24:13.460 --> 00:24:18.980
 To answer your question, we-- every year when we do our budgets,

00:24:18.980 --> 00:24:23.140
 we run a number of scenarios looking at all the variables that we have.

00:24:23.140 --> 00:24:31.060
 So that would be high and low gas price cases, high and low electric price cases,

00:24:31.060 --> 00:24:36.540
 outage rate analysis to see what the impact to the portfolio might be

00:24:36.540 --> 00:24:42.300
 if we had forced outages of the deck at inconvenient times.

00:24:42.300 --> 00:24:46.980
 Those are run annually as part of the budget process.

00:24:46.980 --> 00:24:52.820
 We do update them and run them periodically just within the EMO.

00:24:52.820 --> 00:25:00.580
 It's not something that we normally share with risk management with the middle office

00:25:00.580 --> 00:25:02.500
 but it can be done at any time.

00:25:02.500 --> 00:25:10.580
 The risk committee has the authority to request it at any time and in the quarterly reports

00:25:10.580 --> 00:25:15.700
 with the risk committee, we do keep them up to date on changes in market conditions

00:25:15.700 --> 00:25:20.260
 and we would, if we saw a big change in a market parameter,

00:25:20.260 --> 00:25:24.260
 provide that analysis to the risk committee at that time.

00:25:24.260 --> 00:25:28.780
 We also have ongoing the work with Deloitte.

00:25:28.780 --> 00:25:32.940
 They are currently assessing, completing an assessment

00:25:32.940 --> 00:25:43.220
 of the last actually the calendar fiscal year '17-'18 and the comprehensively looking

00:25:43.220 --> 00:25:52.300
 at how we manage the EMO, whether we comply with every risk policy that we have

00:25:52.300 --> 00:25:58.300
 and so we are doing these kind of health checks and risk assessments periodically.

00:25:58.300 --> 00:26:03.740
 It's just a part of the business that we do on a day-to-day basis.

00:26:03.740 --> 00:26:06.460
 >> So I think I heard you say there's probably a dozen

00:26:06.460 --> 00:26:14.460
 or so different stress tests that you run annually, maybe in that neighborhood.

00:26:14.460 --> 00:26:19.020
 >> Well, we run, I think the number of variables that we have

00:26:19.020 --> 00:26:23.700
 in our equation is 75 or 72 variables.

00:26:23.700 --> 00:26:29.300
 So we'll run various stress tests on those.

00:26:29.300 --> 00:26:36.460
 Again, during the budgeting process, we're just coming on up to that budgeting process now.

00:26:36.460 --> 00:26:41.220
 You recall a couple weeks ago when we were before you, we had an item

00:26:41.220 --> 00:26:43.740
 which was an advanced forecasting model.

00:26:43.740 --> 00:26:48.900
 That model will give us the ability to do these stress tests in real time

00:26:48.900 --> 00:26:54.740
 and it will run automatically every day so that we can see what the distribution

00:26:54.740 --> 00:27:00.260
 of potential outcomes would be during these market upset conditions.

00:27:00.260 --> 00:27:04.220
 >> Charlie, did you have some questions?

00:27:04.220 --> 00:27:12.460
 >> I do. One little one on B3, it looks like you talk about consumer risk tolerances

00:27:12.460 --> 00:27:18.820
 and in the policy it says a consumer risk tolerance in excess of 1% per kilowatt hour outside

00:27:18.820 --> 00:27:20.660
 the 12-month rolling average.

00:27:20.660 --> 00:27:23.580
 I'm not sure how one measures a tolerance.

00:27:23.580 --> 00:27:28.700
 I'm wondering if that's a rate impact or assumed rate impact, but not a question,

00:27:28.700 --> 00:27:33.140
 just a note for some time.

00:27:33.140 --> 00:27:42.180
 And then my question is if you go to B51, the transaction limits,

00:27:42.180 --> 00:27:47.620
 you've got the city manager with a limit of greater than three years.

00:27:47.620 --> 00:27:52.900
 Does that mean that he can't engage in a hedge transaction less than three years

00:27:52.900 --> 00:27:58.940
 or is that a typo?

00:27:58.940 --> 00:28:01.380
 >> That's the length of the--

00:28:01.380 --> 00:28:06.180
 >> Yeah, everyone else is up to a month, up to a week, up to a year, up to three years

00:28:06.180 --> 00:28:12.820
 and then the city manager is-- his limit is greater than three years of term of a hedge.

00:28:12.820 --> 00:28:16.140
 >> Okay. I think that might be a typo.

00:28:16.140 --> 00:28:16.500
 >> Okay.

00:28:16.500 --> 00:28:17.220
 >> I'll confirm that.

00:28:17.220 --> 00:28:23.580
 >> That just seems odd to me that he would have to hedge for a term at least three years.

00:28:23.580 --> 00:28:26.420
 >> I believe it's for more than--

00:28:26.420 --> 00:28:27.780
 >> Not more than three years.

00:28:27.780 --> 00:28:34.340
 >> Yes. If it's more than three years, we'd have to go to the city manager for approval.

00:28:34.340 --> 00:28:39.420
 That's what it's intended to say.

00:28:39.420 --> 00:28:45.420
 >> So, it shows no limit for the council and then it shows greater

00:28:45.420 --> 00:28:48.780
 than three limit-- three years for the city manager.

00:28:48.780 --> 00:28:53.780
 So, it seems like a typo to me or you wouldn't have a limit that he has

00:28:53.780 --> 00:28:57.620
 to hedge at least a certain length if he's in the supervisor.

00:28:57.620 --> 00:28:58.500
 So, that seems weird.

00:28:58.500 --> 00:28:59.980
 >> We'll clarify that.

00:28:59.980 --> 00:29:03.860
 >> The other question I had was on the volume limits.

00:29:03.860 --> 00:29:13.780
 I'm not sure I know exactly what they mean but if we're talking about 30 million megawatt hours

00:29:13.780 --> 00:29:22.540
 for the city manager and you're assuming let's grab a price of $20 per megawatt hour,

00:29:22.540 --> 00:29:27.340
 would that be-- he would be allowed 30 million times 20,

00:29:27.340 --> 00:29:33.940
 is that $600 million worth of notional principle that he could?

00:29:33.940 --> 00:29:36.500
 That seems like an awful lot of--

00:29:36.500 --> 00:29:41.940
 >> It appears that you did your reading.

00:29:41.940 --> 00:29:45.180
 Sorry, I'll never do it again.

00:29:45.180 --> 00:29:49.660
 >> No, it's a great question actually and we put the volume limits in it.

00:29:49.660 --> 00:29:53.860
 The volume limits were not in the plan prior to this year.

00:29:53.860 --> 00:29:54.340
 >> Okay.

00:29:54.340 --> 00:30:02.100
 >> And the issue there is without putting a volume limit for each level of authority,

00:30:02.100 --> 00:30:07.020
 there's effectively an open-ended amount of volume that could be done.

00:30:07.020 --> 00:30:10.700
 So, the reason why the numbers are-- appear to be high, you have to remember

00:30:10.700 --> 00:30:16.900
 that we're managing the portfolio with various-- we call them trade books.

00:30:16.900 --> 00:30:23.140
 So, we're buying the load from the market in the forward market, so three years out.

00:30:23.140 --> 00:30:31.100
 We're also selling deck and selling renewable assets into the market on a three-year basis.

00:30:31.100 --> 00:30:38.460
 So, the numbers are actually reflective of the fact that within the authority limits,

00:30:38.460 --> 00:30:43.460
 there may be a buy and a sell multiple times of that same volume.

00:30:43.460 --> 00:30:52.060
 And so, notional value, you're correct in your calculation that $20 times 60 million,

00:30:52.060 --> 00:30:55.700
 I think that's what you said, 30 million.

00:30:55.700 --> 00:30:58.380
 >> 30 million times 20 was--

00:30:58.380 --> 00:31:03.620
 >> Yeah. So, that is-- your analysis is correct but you have to remember that--

00:31:03.620 --> 00:31:05.820
 >> These are three-year and five-year and 10-year agreements.

00:31:05.820 --> 00:31:07.580
 >> Correct and they're buy and sell.

00:31:07.580 --> 00:31:15.140
 >> So, the buy and the sell would offset in terms of the risk position that we would be in.

00:31:15.140 --> 00:31:22.700
 >> I just-- I would-- would have a little concern if you've got market operations manager

00:31:22.700 --> 00:31:31.620
 and I don't know who that person is but 6 million, those numbers get enormous

00:31:31.620 --> 00:31:36.700
 if we had a-- I assume what we're trying to do is prevent a rogue trader from coming

00:31:36.700 --> 00:31:39.780
 and making speculative positions or doing something he

00:31:39.780 --> 00:31:43.700
 or she shouldn't be doing within the scope of their work.

00:31:43.700 --> 00:31:49.020
 Those seem like awfully big numbers relative to the size of the city's operation.

00:31:49.020 --> 00:31:50.580
 I understand.

00:31:50.580 --> 00:31:55.980
 >> Yeah. The market operations manager is the primary person that is doing--

00:31:55.980 --> 00:31:57.980
 [ Inaudible Remark ]

00:31:57.980 --> 00:32:02.500
 So, they need to have a significantly high enough level.

00:32:02.500 --> 00:32:06.920
 The volume limits are here just for the purpose that you've mentioned.

00:32:06.920 --> 00:32:10.260
 We don't want people to be-- we call churning trades.

00:32:10.260 --> 00:32:17.780
 So, you sell a position in the morning and you buy it back in the afternoon

00:32:17.780 --> 00:32:23.580
 and you generate a positive income or a gain in that trade

00:32:23.580 --> 00:32:26.500
 and the next day you do the same thing and you have a loss

00:32:26.500 --> 00:32:29.520
 and the next day you do the same thing and you have a gain.

00:32:29.520 --> 00:32:31.940
 We're not in the business of speculating.

00:32:31.940 --> 00:32:34.980
 We're in the business of hedging and managing risk.

00:32:34.980 --> 00:32:41.860
 So, that is exactly why the volume limits are put in there and they were calculated based

00:32:41.860 --> 00:32:52.040
 upon our projected level of activity, trading activity in the hedge plan with a bit

00:32:52.040 --> 00:32:57.220
 of a safety margin because as you'll see or if you read through the hedge plan,

00:32:57.220 --> 00:33:03.780
 you saw there was these optimization trades as well that could increase the volumes

00:33:03.780 --> 00:33:06.500
 for the benefit of rate payers.

00:33:06.500 --> 00:33:15.900
 >> For the same-- I'm not trying to be adversarial, I'm just trying to raise concerns.

00:33:15.900 --> 00:33:19.780
 On the natural gas side, those numbers look even larger in terms

00:33:19.780 --> 00:33:23.140
 of the notional principle of the hedge.

00:33:23.140 --> 00:33:25.140
 >> And that's because of the term.

00:33:25.140 --> 00:33:26.220
 >> It's a longer term.

00:33:26.220 --> 00:33:29.620
 >> Long term gas hedge is a lot of volume.

00:33:29.620 --> 00:33:36.780
 >> Okay. I was seeing notional principles of like 450 million which, again,

00:33:36.780 --> 00:33:39.980
 I realized that reversing trades--

00:33:39.980 --> 00:33:46.500
 >> Yeah, you might be doing a 10-year transaction or something to get to those levels.

00:33:46.500 --> 00:33:49.580
 >> And I think this one may be for you as well.

00:33:49.580 --> 00:33:56.100
 I noticed on the work charts that it looks like everything kind of eventually runs

00:33:56.100 --> 00:34:04.340
 at the city manager level, the front office, the back office and the mid office all have the city manager

00:34:04.340 --> 00:34:11.140
 as being the ultimate stop for that or is it manager of DMA?

00:34:11.140 --> 00:34:12.660
 >> Well, I mean our structure is--

00:34:12.660 --> 00:34:17.100
 >> I'm sorry, DMA general manager is where all three of those.

00:34:17.100 --> 00:34:17.780
 >> Yeah, so that is--

00:34:17.780 --> 00:34:24.060
 >> Have you considered having another stop for that like the city manager or some other

00:34:24.060 --> 00:34:29.140
 if the middle office or the back office had a concern with something the front office was doing,

00:34:29.140 --> 00:34:37.540
 the highest limits go to the DME general manager and that's potentially problematic.

00:34:37.540 --> 00:34:39.100
 Is that you?

00:34:39.100 --> 00:34:39.500
 >> No.

00:34:39.500 --> 00:34:40.380
 >> Oh, okay.

00:34:40.380 --> 00:34:45.060
 >> Miss-- Tony Puente is the interim general manager.

00:34:45.060 --> 00:34:54.660
 The issue here is that because of the-- you know, it's not a vast staff of traders.

00:34:54.660 --> 00:35:00.380
 There's only a limited number of folks that are involved in commercial transactions

00:35:00.380 --> 00:35:03.100
 on a day-to-day basis in the front office.

00:35:03.100 --> 00:35:09.980
 And so because of our organizational structure, the division of responsibilities is back office,

00:35:09.980 --> 00:35:12.620
 middle office, front office.

00:35:12.620 --> 00:35:19.540
 In a large trading organization, you may have the risk management function reporting

00:35:19.540 --> 00:35:27.260
 to a different functional area but ultimately, those positions all report

00:35:27.260 --> 00:35:30.540
 up to a CEO or a general manager.

00:35:30.540 --> 00:35:37.580
 So it is consistent with what I'd say best practices are for risk management.

00:35:37.580 --> 00:35:39.420
 Does that answer your question?

00:35:39.420 --> 00:35:41.060
 Okay.

00:35:41.060 --> 00:35:45.020
 >> And the internal auditor is also someone that if someone was concerned,

00:35:45.020 --> 00:35:49.820
 they could report directly to the city's internal auditor, correct?

00:35:49.820 --> 00:35:50.260
 >> Correct.

00:35:50.260 --> 00:35:54.820
 And there is a whistleblower policy as well.

00:35:54.820 --> 00:35:57.020
 >> And he's also part of the risk management committee, isn't he?

00:35:57.020 --> 00:35:57.540
 >> Yes.

00:35:57.540 --> 00:35:57.780
 >> Yes.

00:35:57.780 --> 00:35:59.100
 >> Official member.

00:35:59.100 --> 00:36:00.020
 >> Yes.

00:36:00.020 --> 00:36:02.860
 >> I have one question.

00:36:02.860 --> 00:36:04.380
 >> Go ahead.

00:36:04.380 --> 00:36:16.140
 >> On page 28, carbon cost, have you all run any numbers of what that might,

00:36:16.140 --> 00:36:23.780
 what that potential cost might be if carbon costs became reality?

00:36:23.780 --> 00:36:27.420
 There's quite a bit of discussion about that now.

00:36:27.420 --> 00:36:29.140
 >> We have not.

00:36:29.140 --> 00:36:36.700
 It's a little premature, we think, until we see a good paradigm, a good model

00:36:36.700 --> 00:36:43.700
 that might be used such as a carbon tax or various other market models.

00:36:43.700 --> 00:36:49.460
 It's very difficult for us to put a price on that carbon.

00:36:49.460 --> 00:36:56.940
 But certainly, it's in the policy for a reason that we want to be able to look at it when

00:36:56.940 --> 00:37:02.180
 and if it becomes a economic factor in the decisions we're making.

00:37:02.180 --> 00:37:06.060
 >> Are you familiar with the carbon fee and dividend proposal?

00:37:06.060 --> 00:37:07.220
 >> I am not.

00:37:07.220 --> 00:37:14.780
 >> Where the, I just wondered how this would fit in with something like this where,

00:37:14.780 --> 00:37:22.460
 under that program, which is getting bipartisan scrutiny, believe it or not,

00:37:22.460 --> 00:37:33.340
 the money that is collected, the tax, is redistributed through social security to the rate payers

00:37:33.340 --> 00:37:41.220
 to enable them to, first of all, pay for any increase in their rate because of this carbon fee

00:37:41.220 --> 00:37:48.340
 and also to give them a financial leg up in purchasing renewable energy.

00:37:48.340 --> 00:37:54.220
 So I think that that might be something that we would want to look at simply

00:37:54.220 --> 00:37:57.900
 because of all the things that have been out there.

00:37:57.900 --> 00:38:02.700
 That seems to be the one approach that is getting some traction

00:38:02.700 --> 00:38:06.020
 and may end up becoming policy someday.

00:38:06.020 --> 00:38:08.940
 The Citizens' Climate Lobby is the main proponent of that.

00:38:08.940 --> 00:38:10.060
 >> I'll take a look at that.

00:38:10.060 --> 00:38:10.620
 >> Yeah, thanks.

00:38:10.620 --> 00:38:12.540
 >> Appreciate that information.

00:38:12.540 --> 00:38:18.540
 I have a question about the consumer risk tolerance that's mentioned in the documentation,

00:38:18.540 --> 00:38:20.700
 and I'm trying to understand that better.

00:38:20.700 --> 00:38:27.260
 As I read it, it's defined as one cent, a change in one cent per kilowatt hour

00:38:27.260 --> 00:38:31.600
 over a 12-month rolling window time frame.

00:38:31.600 --> 00:38:35.420
 Is that what we're trying to, the whole purpose of all these hedges

00:38:35.420 --> 00:38:38.860
 and all this future stuff is to bring stability,

00:38:38.860 --> 00:38:41.820
 relative stability to the rate payers, correct?

00:38:41.820 --> 00:38:43.020
 >> That is correct.

00:38:43.020 --> 00:38:47.820
 >> And is the one cent per kilowatt hour the target we're trying to stay within?

00:38:47.820 --> 00:38:54.140
 >> There's actually two trigger levels, and I'm glad to let you speak to it, Phil.

00:38:54.140 --> 00:38:58.340
 One is we're trying to manage the ECA account within $5 million.

00:38:58.340 --> 00:39:06.140
 So when we look at the rolling 12-month average movement in the ECA account,

00:39:06.140 --> 00:39:10.540
 we're trying to manage that within plus or minus $5 million.

00:39:10.540 --> 00:39:13.740
 The second one is the one cent.

00:39:13.740 --> 00:39:18.740
 And that becomes a trigger that we would go to the risk committee with if we saw changes

00:39:18.740 --> 00:39:24.180
 in the market or poorly performing hedges that would result in a one cent.

00:39:24.180 --> 00:39:30.980
 So one cent would be little less than a 10% impact on the rate payer.

00:39:30.980 --> 00:39:36.660
 >> Other questions?

00:39:36.660 --> 00:39:40.940
 All right, thank you.

00:39:40.940 --> 00:39:46.820
 As I said earlier, we're going to move the closed session to the end of the meeting.

00:39:46.820 --> 00:39:49.060
 We're on to the consent agenda.

00:39:49.060 --> 00:39:52.620
 Does any board member wish to pull any-- oh, I'm sorry.

00:39:52.620 --> 00:39:57.580
 >> I think we were looking for your direction on that policy as well.

00:39:57.580 --> 00:39:59.060
 >> Oh, of course you were.

00:39:59.060 --> 00:40:06.340
 Well, I actually-- and I know that Billy Cheek attended a risk management meeting for me

00:40:06.340 --> 00:40:10.260
 when I was gone in September.

00:40:10.260 --> 00:40:13.740
 So we've both been pretty well informed on this.

00:40:13.740 --> 00:40:15.500
 I'm in support of it.

00:40:15.500 --> 00:40:16.340
 I--

00:40:16.340 --> 00:40:16.820
 >> Yeah, I am too.

00:40:16.820 --> 00:40:22.380
 I think staff's done a really good job of looking forward and trying to minimize our risk.

00:40:22.380 --> 00:40:25.900
 >> I think people get nervous with the word hedge.

00:40:25.900 --> 00:40:29.780
 We're not-- as Mr. Nalti said, we're not in speculation.

00:40:29.780 --> 00:40:34.060
 We're looking at our risks and trying to mitigate those through hedging.

00:40:34.060 --> 00:40:39.700
 So it's a little bit different than derivatives and hedging.

00:40:39.700 --> 00:40:44.100
 >> They're keeping-- this department is keeping their eye on the boards constantly.

00:40:44.100 --> 00:40:49.220
 >> Constantly, so other board members?

00:40:49.220 --> 00:40:56.860
 >> I'm also impressed with the effort and the-- I got involved in the details but only because--

00:40:56.860 --> 00:40:57.180
 >> You should.

00:40:57.180 --> 00:40:59.180
 >> -- it's important that I care about it.

00:40:59.180 --> 00:41:00.540
 I think they're doing great work.

00:41:00.540 --> 00:41:02.900
 >> Yes.

00:41:02.900 --> 00:41:05.740
 >> I move we approve this proposed revision.

00:41:05.740 --> 00:41:06.740
 >> I'll second that.

00:41:06.740 --> 00:41:08.700
 >> Oh, there's no action item.

00:41:08.700 --> 00:41:10.380
 They're just giving direction.

00:41:10.380 --> 00:41:16.620
 >> We'll be coming back to you in a few weeks to ask for approval.

00:41:16.620 --> 00:41:19.500
 We're going to brief the city council tomorrow.

00:41:19.500 --> 00:41:26.180
 >> And maybe the one item that wasn't too clear about where the city manager's authority lands.

00:41:26.180 --> 00:41:29.340
 >> Right, we'll take a look at that and address that.

00:41:29.340 --> 00:41:29.700
 Thank you.

00:41:29.700 --> 00:41:31.420
 >> All right, thank you.

00:41:31.420 --> 00:41:41.580
 Thank you, Mr. Nalti for-- consent agenda, any board members wish to pull any items of A through F?

00:41:41.580 --> 00:41:45.420
 >> I had a quick question on A, I don't know if we need to pull it.

00:41:45.420 --> 00:41:47.020
 >> You have to pull it if you have a quick question.

00:41:47.020 --> 00:41:48.180
 >> Just a quick question.

00:41:48.180 --> 00:41:50.700
 >> No question on item F, the last one.

00:41:50.700 --> 00:41:55.620
 >> Okay. All right, so item A first.

00:41:55.620 --> 00:42:05.860
 I guess you have to be by the mic, but I was wondering what sort of gas is being extracted, is this the methane flare-off?

00:42:05.860 --> 00:42:12.580
 >> This is the landfill gas, so it's methane and other gases that are produced as the waste mass decays.

00:42:12.580 --> 00:42:18.700
 That gas is collected by DTE and then it's either run through the engine to generate electricity or flared off if there's excess.

00:42:18.700 --> 00:42:21.380
 >> So it's a mix of?

00:42:21.380 --> 00:42:26.060
 >> It's mostly methane but then there's oxygen and oxygen, carbon dioxide and other things.

00:42:26.060 --> 00:42:31.860
 >> Okay. I was just trying to get my head around what this sort of thing is coming out of the landfill.

00:42:31.860 --> 00:42:32.380
 >> Okay.

00:42:32.380 --> 00:42:33.020
 >> Thank you.

00:42:33.020 --> 00:42:35.580
 >> You're welcome.

00:42:35.580 --> 00:42:41.860
 >> I forgot to say we needed to approve items B through E.

00:42:41.860 --> 00:42:43.100
 >> I'll move approval.

00:42:43.100 --> 00:42:44.180
 Let's check it.

00:42:44.180 --> 00:42:45.460
 >> All in favor say aye.

00:42:45.460 --> 00:42:46.580
 >> Aye.

00:42:46.580 --> 00:42:47.220
 >> Motion carries.

00:42:47.220 --> 00:42:50.180
 Okay, now item A, do you wish to move approval?

00:42:50.180 --> 00:42:53.100
 >> Yes, I'll move approval of item A.

00:42:53.100 --> 00:42:54.340
 >> Second.

00:42:54.340 --> 00:42:56.580
 >> Okay. All in favor say aye.

00:42:56.580 --> 00:42:57.780
 >> Aye.

00:42:57.780 --> 00:42:58.460
 >> That carries.

00:42:58.460 --> 00:43:03.740
 Item F. That is also you.

00:43:03.740 --> 00:43:07.100
 >> Good morning, Brian Burner, Director of Solid Waste.

00:43:07.100 --> 00:43:13.620
 >> This pertains to getting the environmental approvals through the state formally, right?

00:43:13.620 --> 00:43:16.780
 >> Correct. This is for our permit modification.

00:43:16.780 --> 00:43:22.740
 >> And as I read this, this is really for continuing to hire a legal firm.

00:43:22.740 --> 00:43:24.140
 >> Correct.

00:43:24.140 --> 00:43:26.620
 >> For their interaction with the state agencies.

00:43:26.620 --> 00:43:34.660
 Is there a reason that the technical people that do these revisions can't do the same thing?

00:43:34.660 --> 00:43:41.020
 The reason I'm asking is I used to do in a previous life a lot of these permits.

00:43:41.020 --> 00:43:41.460
 >> Correct.

00:43:41.460 --> 00:43:46.380
 >> And we almost never needed a legal firm to handle the permit.

00:43:46.380 --> 00:43:52.340
 As I read what this legal company is going to do is it's going to be the interface

00:43:52.340 --> 00:43:55.980
 between the agency and the technical firm.

00:43:55.980 --> 00:43:59.220
 Is that true?

00:43:59.220 --> 00:44:00.100
 >> That is true.

00:44:00.100 --> 00:44:05.900
 And in addition, they are going to be working with the state to respond to comments and really focus

00:44:05.900 --> 00:44:10.340
 on the legal aspects of the permit, what's within state law, what's required,

00:44:10.340 --> 00:44:15.860
 moving us forward to hopefully getting our permit as we move through this process.

00:44:15.860 --> 00:44:22.340
 This is a contract that just recently expired and due to the fact that we're still working

00:44:22.340 --> 00:44:29.740
 on getting our permit expansion, all we are actually seeking is an extension of the contract.

00:44:29.740 --> 00:44:34.420
 It's not any new services, any new task, any new monetary outlay.

00:44:34.420 --> 00:44:38.340
 It's just extending the current task that they're currently --

00:44:38.340 --> 00:44:42.700
 or that they were currently contracted to do an additional 18 months.

00:44:42.700 --> 00:44:48.740
 >> I guess my question is, so this is a function that the technical --

00:44:48.740 --> 00:44:54.780
 whoever you're using to do the technical aspect of the permit, they're not able to do that as well?

00:44:54.780 --> 00:44:59.620
 >> It was not tasked within the technical piece of that to do it.

00:44:59.620 --> 00:45:05.980
 Normally when a landfill goes out to do like this, you have your technical folks that focus

00:45:05.980 --> 00:45:09.940
 on the engineering and then you have your legal team that will focus

00:45:09.940 --> 00:45:13.580
 on the legal aspect of the submittal.

00:45:13.580 --> 00:45:17.580
 >> And I had a question on this as well.

00:45:17.580 --> 00:45:24.540
 Number one, these were the people that were previously under contract to do this work, correct?

00:45:24.540 --> 00:45:25.660
 >> Correct.

00:45:25.660 --> 00:45:31.540
 >> Okay. Did you go out for bids for any additional work or --

00:45:31.540 --> 00:45:32.260
 >> No, we did not.

00:45:32.260 --> 00:45:36.660
 This -- all we're doing is looking to extend the existing contract that they have

00:45:36.660 --> 00:45:39.780
 to complete the task that are currently within that contract.

00:45:39.780 --> 00:45:43.420
 That have not been approached because we're currently entering

00:45:43.420 --> 00:45:47.860
 into the public meeting phase of this and that is task three under this contract.

00:45:47.860 --> 00:45:51.620
 It's just an additional 18 months for the services.

00:45:51.620 --> 00:45:54.300
 >> And was this already in your budget?

00:45:54.300 --> 00:45:55.420
 >> Yes.

00:45:55.420 --> 00:45:57.060
 >> Okay. Thank you.

00:45:57.060 --> 00:46:00.820
 >> Is the public meeting, the TCEQ public meeting?

00:46:00.820 --> 00:46:01.340
 >> Correct.

00:46:01.340 --> 00:46:03.220
 >> Okay. Do you know when that's going to occur?

00:46:03.220 --> 00:46:04.380
 >> We do not know yet.

00:46:04.380 --> 00:46:05.900
 We're in discussions with them.

00:46:05.900 --> 00:46:07.940
 It will be sometime in the future.

00:46:07.940 --> 00:46:09.020
 We don't know how soon yet.

00:46:09.020 --> 00:46:10.420
 >> Okay. Thanks.

00:46:10.420 --> 00:46:14.260
 >> I guess my only parting comment would be you might consider

00:46:14.260 --> 00:46:20.620
 if there's a more cost effective way to use the tax money than pay these folks.

00:46:20.620 --> 00:46:28.180
 I saw the rates, $375 an hour down to 280 something an hour.

00:46:28.180 --> 00:46:34.260
 There may be some potential savings there for the taxpayers and rate payers

00:46:34.260 --> 00:46:38.620
 to get the same thing done if you approach it a little bit different way.

00:46:38.620 --> 00:46:40.140
 >> That's my only comment.

00:46:40.140 --> 00:46:41.060
 >> Okay.

00:46:41.060 --> 00:46:41.980
 >> And just one question.

00:46:41.980 --> 00:46:43.380
 I know this firm.

00:46:43.380 --> 00:46:45.220
 Who is your ramrod at the firm?

00:46:45.220 --> 00:46:46.580
 >> Jeffrey.

00:46:46.580 --> 00:46:47.660
 >> Okay.

00:46:47.660 --> 00:46:51.220
 >> Okay. Other questions?

00:46:51.220 --> 00:46:53.180
 Do we have a motion to approve?

00:46:53.180 --> 00:46:57.420
 >> I'll move approval.

00:46:57.420 --> 00:46:58.820
 >> Do we have a second?

00:46:58.820 --> 00:47:00.100
 >> I'll second.

00:47:00.100 --> 00:47:01.620
 >> All in favor say aye.

00:47:01.620 --> 00:47:01.860
 >> Aye.

00:47:01.860 --> 00:47:02.140
 >> Aye.

00:47:02.140 --> 00:47:02.420
 >> Aye.

00:47:02.420 --> 00:47:03.100
 >> Opposed?

00:47:03.100 --> 00:47:04.580
 >> Opposed.

00:47:04.580 --> 00:47:06.540
 >> Thank you.

00:47:06.540 --> 00:47:07.460
 >> Thank you.

00:47:07.460 --> 00:47:09.820
 >> All right. Items for individual consideration.

00:47:09.820 --> 00:47:14.540
 Consider the approval of the minutes of January 13th, 2020.

00:47:14.540 --> 00:47:16.580
 Were there any changes?

00:47:16.580 --> 00:47:19.700
 >> I will move approval but I also had one typographical.

00:47:19.700 --> 00:47:20.180
 >> Okay.

00:47:20.180 --> 00:47:21.140
 >> Dementamus.

00:47:21.140 --> 00:47:21.860
 >> All right.

00:47:21.860 --> 00:47:22.940
 >> Change that I noticed that.

00:47:22.940 --> 00:47:26.260
 So I'll move approval with the typo corrected.

00:47:26.260 --> 00:47:32.900
 >> I just have an observation that it frequently says in the minutes

00:47:32.900 --> 00:47:36.500
 that many questions were asked by the board.

00:47:36.500 --> 00:47:41.260
 I wondered in the future if there could be at least some sort

00:47:41.260 --> 00:47:49.580
 of substantive description as to what the question was and what the reply was

00:47:49.580 --> 00:47:53.820
 and I'm simply basing this on a question that I asked the gentleman last time

00:47:53.820 --> 00:47:56.500
 about electric garbage trucks.

00:47:56.500 --> 00:47:57.380
 >> Okay.

00:47:57.380 --> 00:48:02.540
 >> And his reply was that they were looking at it and I think something like that

00:48:02.540 --> 00:48:08.340
 where a commitment is made for future investigation that might come to PUB.

00:48:08.340 --> 00:48:12.140
 I think that might be in better detail than minutes.

00:48:12.140 --> 00:48:12.620
 >> All right.

00:48:12.620 --> 00:48:13.180
 >> Thank you.

00:48:13.180 --> 00:48:14.620
 >> Is that possible?

00:48:14.620 --> 00:48:19.220
 [ Inaudible Remark ]

00:48:19.220 --> 00:48:24.020
 >> So it's pretty much just when they've made a commitment to a question that we've--

00:48:24.020 --> 00:48:24.380
 >> Right.

00:48:24.380 --> 00:48:27.860
 >> Okay. So it's limited.

00:48:27.860 --> 00:48:30.300
 Okay.

00:48:30.300 --> 00:48:31.900
 >> I'll continue my motion to approve.

00:48:31.900 --> 00:48:32.420
 >> Okay.

00:48:32.420 --> 00:48:34.820
 [ Inaudible Remark ]

00:48:34.820 --> 00:48:36.020
 >> All in favor say aye.

00:48:36.020 --> 00:48:36.540
 >> Aye.

00:48:36.540 --> 00:48:37.220
 >> Opposed?

00:48:37.220 --> 00:48:43.660
 Okay. Item B, consider recommending adoption of an ordinance.

00:48:43.660 --> 00:48:47.820
 I'm just going to make it shorter.

00:48:47.820 --> 00:48:52.900
 With Wartzella, North America for the parts and services, the DM&E.

00:49:02.420 --> 00:49:11.500
 [ Pause ]

00:49:11.500 --> 00:49:12.940
 >> Good morning.

00:49:12.940 --> 00:49:14.300
 Terry Nolte, DM&E.

00:49:14.300 --> 00:49:20.580
 I'm going to talk to you this morning about the major maintenance efforts that we have

00:49:20.580 --> 00:49:25.780
 at the DEC and the cost of parts to support that effort.

00:49:25.780 --> 00:49:34.860
 Our objectives in bringing this to you are shown here on this slide but as we know,

00:49:34.860 --> 00:49:41.820
 achieving the highest level of availability on the DEC engines is critical.

00:49:41.820 --> 00:49:48.580
 It's most critical during those high-priced hours because if we're not running the units during

00:49:48.580 --> 00:49:52.220
 those high-priced hours, we're buying from the market at that high price

00:49:52.220 --> 00:49:56.460
 without an offsetting revenue stream coming to us.

00:49:56.460 --> 00:50:04.740
 Summer readiness is absolutely critical now with low reserve margins in the marketplace.

00:50:04.740 --> 00:50:11.380
 We are expecting this summer to have the same level of volatility and price that we've seen

00:50:11.380 --> 00:50:16.180
 and without a change in the market design, the continued reliance

00:50:16.180 --> 00:50:24.140
 on intermittent renewable resources, primarily wind, are likely to continue to drive prices high

00:50:24.140 --> 00:50:29.140
 in certain hours of the peak period in the summer.

00:50:29.140 --> 00:50:32.900
 Despite our best efforts, these are mechanical pieces of equipment just

00:50:32.900 --> 00:50:36.100
 like the engine in your car.

00:50:36.100 --> 00:50:41.500
 They are subject to failure and while we do the best we can to predict that

00:50:41.500 --> 00:50:48.780
 and to perform maintenance pursuant to the manufacturer's specifications,

00:50:48.780 --> 00:50:52.060
 we'll nonetheless experience forced outages.

00:50:52.060 --> 00:51:01.820
 And having these parts on hand will enable us to minimize the duration of those outages.

00:51:01.820 --> 00:51:07.700
 Cost is always a concern and one of the reasons why we're bringing this to you today is

00:51:07.700 --> 00:51:15.260
 because we believe that purchasing these parts today will ultimately save ratepayers money

00:51:15.260 --> 00:51:21.380
 by not having to pay escalation charges in the coming years.

00:51:21.380 --> 00:51:27.260
 And with that, I'm going to turn it over to the real expert, Jason Brown, the plant manager.

00:51:27.260 --> 00:51:34.260
 >> Good morning, Madam Chair.

00:51:34.260 --> 00:51:45.060
 Board. So as Terry stated, we're trying to achieve the highest availability of the facility

00:51:45.060 --> 00:51:51.300
 and the way to achieve this is through preventative maintenance and spare parts.

00:51:51.300 --> 00:51:55.220
 We're requesting the approval of additional parts as the best solution

00:51:55.220 --> 00:52:00.340
 in reducing our outage timeframe during normal routine maintenance

00:52:00.340 --> 00:52:03.980
 and also during forced outage scenarios.

00:52:03.980 --> 00:52:09.020
 And the next few slides I'll briefly be discussing preventative maintenance schedules,

00:52:09.020 --> 00:52:14.900
 parts and the benefits of having these parts.

00:52:14.900 --> 00:52:19.980
 So please feel free to ask any questions as we go through this.

00:52:19.980 --> 00:52:25.180
 The Denton Energy Center equipment is much like your car engine, just like Terry said.

00:52:25.180 --> 00:52:32.220
 It must be maintained routinely as recommended by the manufacturer to operate correctly.

00:52:32.220 --> 00:52:36.140
 This is called the preventative maintenance program where preventative predictive

00:52:36.140 --> 00:52:39.500
 and corrective maintenance activities occur.

00:52:39.500 --> 00:52:47.740
 Many components require routine maintenance to proactively inspect for repair or for wear, sorry.

00:52:47.740 --> 00:52:53.820
 Premature failure and critical items must also be rebuilt or replaced.

00:52:53.820 --> 00:52:56.620
 The preventative maintenance activities are performed consistent

00:52:56.620 --> 00:53:01.820
 with manufacturer's guidelines based on operating hours.

00:53:01.820 --> 00:53:08.220
 This chart depicts our current estimate of when these major maintenance items will occur.

00:53:08.220 --> 00:53:12.540
 Major maintenance activities require shutdown of the individual units,

00:53:12.540 --> 00:53:17.860
 but we want to minimize the length of time that they're unavailable for generation.

00:53:17.860 --> 00:53:24.140
 The first major maintenance outages will take place when the units reach 12,000 hours.

00:53:24.140 --> 00:53:27.900
 We currently estimate that to happen in 2024.

00:53:27.900 --> 00:53:32.860
 However, since the units are dispatched against the aircraft market at 12,000 hours,

00:53:32.860 --> 00:53:36.380
 could either be earlier or later than the current projection.

00:53:36.380 --> 00:53:44.780
 This slide lists the parts that are currently installed on the engines

00:53:44.780 --> 00:53:47.660
 and what we are requesting as swing sets.

00:53:47.660 --> 00:53:51.660
 The swing sets that we're requesting you can see are the requested quantities

00:53:51.660 --> 00:53:55.020
 over here on the right-hand side of the slide.

00:53:55.020 --> 00:53:59.060
 The term swing set recognizes that if the first set of parts are installed,

00:53:59.060 --> 00:54:04.460
 the removed parts are sent back to be rebuilt or reconditioned.

00:54:04.460 --> 00:54:09.020
 When the reconditioned parts return back to the deck, they're placed into the warehouse

00:54:09.020 --> 00:54:12.620
 and then the cycle starts over again once you,

00:54:12.620 --> 00:54:18.780
 once the next engine reaches its hour interval for maintenance, maintenance service.

00:54:18.780 --> 00:54:23.620
 This swapping out of the components is where the term swing set comes from.

00:54:23.620 --> 00:54:26.860
 When we receive these parts, they'll be inspected and placed into a warehouse

00:54:26.860 --> 00:54:29.540
 that will be built at the Denton Energy Center.

00:54:29.540 --> 00:54:38.580
 The swing set parts will be warrantied for 12 months upon installation or 18 months upon arrival,

00:54:38.580 --> 00:54:41.860
 whichever occurs earlier.

00:54:41.860 --> 00:54:46.900
 While it's likely that the swing sets will not be in warranty by the time they're installed

00:54:46.900 --> 00:54:51.580
 in the first round, the parts that are removed during the overhaul will be sent

00:54:51.580 --> 00:54:59.060
 out for refurbishment and come back and thus the warranty will be on the parts for that direction.

00:54:59.060 --> 00:55:00.780
 >> Jason, I have a question about that.

00:55:00.780 --> 00:55:01.140
 >> Yes, sir.

00:55:01.140 --> 00:55:06.220
 >> When you end up with your extra set of parts to take out, will you send those back

00:55:06.220 --> 00:55:09.740
 to Wurziller or will you look for a third party refurbishing?

00:55:09.740 --> 00:55:12.340
 >> We'll look for a third party for refurbishment.

00:55:12.340 --> 00:55:13.740
 >> And what does LT mean?

00:55:13.740 --> 00:55:14.820
 Is that low temperature?

00:55:14.820 --> 00:55:15.820
 >> Yes, low temperature.

00:55:15.820 --> 00:55:21.500
 There's two different cooling systems on each engine, low temperature and high temperature.

00:55:21.500 --> 00:55:27.380
 High temperature where all the firing deck is and all the higher temperatures.

00:55:27.380 --> 00:55:35.340
 So to be clear, the initial warranty for the Wurziller engines and this project ended

00:55:35.340 --> 00:55:42.540
 on in April of 2019, so this has nothing to do really with that warranty period.

00:55:42.540 --> 00:55:48.420
 There are still 115 warranty claims remaining from that original warranty period

00:55:48.420 --> 00:55:51.900
 that we're still taking care of at this time.

00:55:51.900 --> 00:55:57.180
 So as Terry stated, our objective is to make the units available as often as possible

00:55:57.180 --> 00:55:59.860
 to generate the most revenue from the market.

00:55:59.860 --> 00:56:07.780
 The swing set enables us to reduce the downtime because we have the parts on hand

00:56:07.780 --> 00:56:14.420
 and because we can schedule maintenance activities during the lowest prices in the market.

00:56:14.420 --> 00:56:19.740
 Also having the parts on hand will minimize downtime in the event of forced outages.

00:56:19.740 --> 00:56:25.540
 The other benefits of purchasing the swing sets now are

00:56:25.540 --> 00:56:30.900
 that we'll be paying 2019 parts prices instead of the projected 5% increase

00:56:30.900 --> 00:56:34.940
 in the coming years with later purchases.

00:56:34.940 --> 00:56:40.220
 Parts will be on hand in the event we have unforeseen outages due to premature failure

00:56:40.220 --> 00:56:45.220
 and most importantly having the swing sets on site will reduce major overhaul timeframes

00:56:45.220 --> 00:56:52.340
 by 20 days as compared to 45 to 65 days without swing sets.

00:56:52.340 --> 00:56:58.060
 So in summary, we're proactively preparing for future outages

00:56:58.060 --> 00:57:01.740
 that are projected to start in 2024.

00:57:01.740 --> 00:57:07.140
 These parts are intended to reduce outage durations to help maximize revenue potential

00:57:07.140 --> 00:57:11.540
 and we are requesting approval of soil source purchase major overhaul swing sets

00:57:11.540 --> 00:57:20.460
 in the amount of $2,228,970 to where it's all led to be funded

00:57:20.460 --> 00:57:28.580
 from the $3.9 million that's remaining in the original revenue bond from the project.

00:57:28.580 --> 00:57:31.340
 And then there's a last bullet point there about some turbos.

00:57:31.340 --> 00:57:35.540
 As you noticed on a couple slides before, we were planning

00:57:35.540 --> 00:57:38.660
 on bringing turbochargers here at the same time.

00:57:38.660 --> 00:57:45.460
 They didn't make it through legal, but we'll be bringing that back to you at a later date.

00:57:45.460 --> 00:57:46.900
 >> It looks like Mr. Parker has a question.

00:57:46.900 --> 00:57:47.100
 No?

00:57:47.100 --> 00:57:48.620
 >> No, no questions.

00:57:48.620 --> 00:57:49.300
 >> I have just a--

00:57:49.300 --> 00:57:50.780
 >> Just a motion.

00:57:50.780 --> 00:57:57.380
 >> Why didn't we-- I mean, I'm going to support you need to have those on hand.

00:57:57.380 --> 00:57:58.740
 Why didn't we do it originally?

00:57:58.740 --> 00:58:03.300
 Is that because we were under warranty and we didn't need to expend the funds yet?

00:58:03.300 --> 00:58:11.500
 >> I-- originally, when I got here, there wasn't any real thought on before future.

00:58:11.500 --> 00:58:15.580
 When I got here, it was-- we only needed six engines.

00:58:15.580 --> 00:58:22.260
 We need 12 engines now, so it was kind of-- you can either go this route or not go this route.

00:58:22.260 --> 00:58:22.900
 It's not really--

00:58:22.900 --> 00:58:23.580
 >> I'm in support.

00:58:23.580 --> 00:58:25.820
 I was just curious why--

00:58:25.820 --> 00:58:30.580
 >> It's definitely-- I would have brought it last year except the mindset was we don't need all

00:58:30.580 --> 00:58:36.180
 of the engines, so why do this if time frame doesn't really matter with the outage.

00:58:36.180 --> 00:58:37.100
 >> Okay.

00:58:37.100 --> 00:58:42.580
 >> Now that we're actually seeing what this equipment can do in this market and what it brings

00:58:42.580 --> 00:58:45.780
 to the table, I think it's time to bring it and--

00:58:45.780 --> 00:58:48.220
 >> Fully in support of it, just curious.

00:58:48.220 --> 00:58:52.140
 Okay. Now, do we have-- other questions?

00:58:52.140 --> 00:58:55.180
 >> I'll move-- oh, excuse me.

00:58:55.180 --> 00:59:02.220
 I think I heard you say 18 months, these two million dollars worth of parts will be spent

00:59:02.220 --> 00:59:05.780
 over that 18-month period or they're going to be sitting here for much longer than that?

00:59:05.780 --> 00:59:11.020
 >> No, these parts will be sitting here up until 2024.

00:59:11.020 --> 00:59:14.380
 I think the part-- the first parts that would come out of this, yeah.

00:59:14.380 --> 00:59:17.780
 Let me-- oh, let me back up to that slide.

00:59:17.780 --> 00:59:20.900
 >> I saw that list but there was no dollar amounts beside it and so that's--

00:59:20.900 --> 00:59:27.340
 >> Correct. So out of the two million dollars, it's swing sets of major parts

00:59:27.340 --> 00:59:32.380
 that will be removed from engine over a long duration.

00:59:32.380 --> 00:59:40.300
 So in 2024, we're going to be removing charge air coolers and turbos.

00:59:40.300 --> 00:59:44.620
 In-- actually in 4,000 hours, we'll be removing pre-chambers.

00:59:44.620 --> 00:59:48.260
 So it's not all the parts coming off at one time.

00:59:48.260 --> 00:59:52.700
 They're sporadic and really all over the place based on the maintenance of the board.

00:59:52.700 --> 00:59:55.220
 >> Yeah, I understand it's a good idea to always keep inventory

00:59:55.220 --> 00:59:56.660
 to be able to keep things running.

00:59:56.660 --> 00:59:57.860
 I don't understand.

00:59:57.860 --> 01:00:02.060
 It's just there was nothing that traced-- I mean, you had the chart that said,

01:00:02.060 --> 01:00:06.180
 "Here's the maintenance hours over at 2022."

01:00:06.180 --> 01:00:06.700
 >> That one, yeah.

01:00:06.700 --> 01:00:08.500
 >> But there's no dollar amount out there beside them.

01:00:08.500 --> 01:00:11.020
 So that's what I was curious about.

01:00:11.020 --> 01:00:17.820
 Are we talking about-- you're not buying parts to replace through 2058, are you?

01:00:17.820 --> 01:00:18.740
 >> No.

01:00:18.740 --> 01:00:19.740
 >> Okay.

01:00:19.740 --> 01:00:24.220
 >> No. So these parts are not actually to replace any parts.

01:00:24.220 --> 01:00:29.100
 These parts are solely to swap out so that we can take the parts that are on there

01:00:29.100 --> 01:00:31.980
 and refurbish them aside from the actual maintenance.

01:00:31.980 --> 01:00:33.380
 >> Yeah, I would just say that.

01:00:33.380 --> 01:00:42.780
 It's just-- there's not a prediction of how the money will be spent over a period of time.

01:00:42.780 --> 01:00:48.900
 And so I guess my concern would be the good-- it's good to have inventory to repair things

01:00:48.900 --> 01:00:52.500
 but sometimes they deteriorate sitting on the shelf or they need--

01:00:52.500 --> 01:00:55.900
 I mean, do you have to maintain cylinders?

01:00:55.900 --> 01:00:57.580
 Do you have to keep oil on them?

01:00:57.580 --> 01:00:58.860
 I mean--

01:00:58.860 --> 01:01:02.940
 >> So as these parts come in from overseas, they have what's called cosmoline on them,

01:01:02.940 --> 01:01:05.580
 so a rust inhibitor.

01:01:05.580 --> 01:01:09.540
 It's actually maintained on there and we have preventative maintenance

01:01:09.540 --> 01:01:12.820
 for long-term storage of components.

01:01:12.820 --> 01:01:18.380
 So if there were-- I think in this list, there were LT pump, HT pump.

01:01:18.380 --> 01:01:25.980
 Those pumps will be turned once a month to keep rust from forming on that one spot on the shaft.

01:01:25.980 --> 01:01:28.180
 That's the only thing that would need to be turned.

01:01:28.180 --> 01:01:32.500
 Everything else is just make sure that they're desiccant in the container

01:01:32.500 --> 01:01:34.260
 and that the cosmoline is intact.

01:01:34.260 --> 01:01:40.460
 >> So I mean, you'll-- I mean, we talked about the turbos coming back here soon, I would assume.

01:01:40.460 --> 01:01:43.900
 It's something that you want to get pretty quickly in here.

01:01:43.900 --> 01:01:50.420
 But I mean, it's not-- how far does this $2 million go out?

01:01:50.420 --> 01:01:50.900
 Do you know?

01:01:50.900 --> 01:01:52.340
 I mean, is it an eight-year period?

01:01:52.340 --> 01:01:55.740
 Is it a four-year period?

01:01:55.740 --> 01:01:57.580
 It's not clear.

01:01:57.580 --> 01:01:58.660
 >> Yeah, let me--

01:01:58.660 --> 01:02:00.860
 >> Because I know you'll be coming back for more money on this--

01:02:00.860 --> 01:02:01.060
 >> Absolutely.

01:02:01.060 --> 01:02:02.700
 >> -- to maintain it and I know you will.

01:02:02.700 --> 01:02:05.660
 So-- and it's necessary, I'm not disagreeing, I'm just curious.

01:02:05.660 --> 01:02:09.860
 >> So the-- these are for these major spares.

01:02:09.860 --> 01:02:16.700
 We have routine maintenance activities and routine parts that we're buying, instrumentation,

01:02:16.700 --> 01:02:22.500
 monitors, things about a million, million and a half a year that we spend for that.

01:02:22.500 --> 01:02:27.980
 When these parts are shipped out, so they put in place, the ones that were taken

01:02:27.980 --> 01:02:35.380
 out are shipped out and rebuilt, in 2024 when we do that first one or whenever it occurs,

01:02:35.380 --> 01:02:40.980
 we'll then incur a rebuild expense for those parts.

01:02:40.980 --> 01:02:45.940
 And once they're rebuilt, they'll come back in and they'll be put into the warehouse,

01:02:45.940 --> 01:02:55.460
 very quickly put on the machine because if you think about it, we operate the deck pretty much

01:02:55.460 --> 01:03:01.100
 if one unit is in the money, so to speak, relative to the market, all units are in the money.

01:03:01.100 --> 01:03:02.140
 >> Crank them all up right now.

01:03:02.140 --> 01:03:07.460
 >> So we crank them all up but we do try to operate them in a way

01:03:07.460 --> 01:03:12.460
 so that we don't have all the maintenance activities coming at the same time on all 12 engines.

01:03:12.460 --> 01:03:12.940
 >> OK.

01:03:12.940 --> 01:03:18.860
 >> So what do you think the rebuild cost would be for the equipment, for the swing set?

01:03:18.860 --> 01:03:28.620
 >> So if we're looking at this current year, we're looking at $418,000 for this year's overall,

01:03:28.620 --> 01:03:32.780
 aside from swing sets or any of that nature that we're trying to buy.

01:03:32.780 --> 01:03:35.420
 >> 20% of what you bought or what you intend to buy?

01:03:35.420 --> 01:03:37.460
 >> Next year, about 100,000 more.

01:03:37.460 --> 01:03:37.780
 >> OK.

01:03:37.780 --> 01:03:41.820
 >> The next year, about 100,000 less.

01:03:41.820 --> 01:03:52.980
 >> We really start seeing a big increase around 12,000, this 24,000 timeframe where it'll get pretty heavy.

01:03:52.980 --> 01:03:54.860
 >> OK. All right, Will.

01:03:54.860 --> 01:04:00.700
 >> How much do you think it costs to rebuild the swing sets that you send out?

01:04:00.700 --> 01:04:02.500
 >> That's included in that price.

01:04:02.500 --> 01:04:03.580
 >> It's in the 400.

01:04:03.580 --> 01:04:06.980
 >> Right, the 418, OK.

01:04:06.980 --> 01:04:12.860
 Well, I deal with a lot of inventory and sometimes I go, what year do we get this?

01:04:12.860 --> 01:04:15.340
 It's been sitting there for 10 years.

01:04:15.340 --> 01:04:19.500
 So that was really what my question was pointed at.

01:04:19.500 --> 01:04:31.540
 >> Yeah, these are really not really going to depreciate as they go through with a 90,000 hour service life.

01:04:31.540 --> 01:04:38.020
 >> We're looking at anywhere from 90,000 to 120,000 operating hour service life on them.

01:04:38.020 --> 01:04:43.020
 So whenever we remove a head, we're not actually doing anything with the body of it.

01:04:43.020 --> 01:04:47.100
 It's replacing the seats and the valves and components within it.

01:04:47.100 --> 01:04:50.540
 The shell stays the same throughout the life of it.

01:04:50.540 --> 01:04:55.300
 So yeah, in a sense, it is going to depreciate to some extent.

01:04:55.300 --> 01:05:01.100
 But it's going to be reconditioned and then go on to the next one and then cycle all the way.

01:05:01.100 --> 01:05:03.260
 >> It's just a little bit for my education there.

01:05:03.260 --> 01:05:05.060
 I appreciate it and I'll move approval.

01:05:05.060 --> 01:05:06.340
 >> I hope that answers your question.

01:05:06.340 --> 01:05:06.820
 >> Yes.

01:05:06.820 --> 01:05:07.620
 >> Second.

01:05:07.620 --> 01:05:09.540
 >> Also.

01:05:09.540 --> 01:05:10.860
 >> All in favor say aye.

01:05:10.860 --> 01:05:11.380
 >> Aye.

01:05:11.380 --> 01:05:12.620
 >> Opposed?

01:05:12.620 --> 01:05:14.380
 OK, that carries.

01:05:14.380 --> 01:05:20.940
 The next item is consider recommending adoption of contract between the City of Denton and

01:05:20.940 --> 01:05:28.740
 Range Line Pipeline Services and for Terra Pipe Precast LLC for various types of pipe, water, etc, etc.

01:05:30.460 --> 01:05:33.020
 >> Is that the amount of 11 million?

01:05:33.020 --> 01:05:33.540
 Wow.

01:05:33.540 --> 01:05:36.700
 >> Yep, there's a lot of inventory there.

01:05:36.700 --> 01:05:39.580
 >> Good morning.

01:05:39.580 --> 01:05:40.740
 My name's Rebecca Davini.

01:05:40.740 --> 01:05:43.660
 I'm Deputy Director for Water and Wastewater Utilities.

01:05:43.660 --> 01:05:46.500
 Daniel Kramer, who is also Deputy Director of Public Works.

01:05:46.500 --> 01:05:50.780
 We're going to be sharing this presentation as this was a bid that was done together.

01:05:55.380 --> 01:06:00.980
 So Water and Wastewater Utilities relies on Range Line Pipeline Services for a number of things.

01:06:00.980 --> 01:06:09.460
 Currently we have been issuing declaration of emergencies for issues when these types of things come up.

01:06:09.460 --> 01:06:14.540
 And we worked with the purchasing department and it was recommended that we do a contract

01:06:14.540 --> 01:06:19.100
 that will allow for these types of services to be provided for the water utilities.

01:06:19.100 --> 01:06:23.980
 These services are typically for 14 inch through 54 inch in diameter.

01:06:23.980 --> 01:06:31.700
 It services our concrete cylinder pipeline, our pre-stressed concrete pipeline, also our still pipelines.

01:06:31.700 --> 01:06:40.100
 The information you see before you is not only for just the pipe itself, it's also for any emergency repair.

01:06:40.100 --> 01:06:45.860
 Range Line is on call 24 hours a day, 7 days a week, 365 days out of the year.

01:06:45.860 --> 01:06:47.900
 Any time we have an issue that might arise.

01:06:49.740 --> 01:06:54.860
 Typically this is for the majority of the pipeline, will be for our transmission.

01:06:54.860 --> 01:06:58.220
 But there are some of the pipelines that we consider in our distribution system.

01:06:58.220 --> 01:07:06.980
 What I will mention to you is it's not only for welding services, for all types of materials for pipes and fittings.

01:07:06.980 --> 01:07:13.580
 Such as the diapers and all the different fittings, it's also for taps and line stops.

01:07:13.580 --> 01:07:18.940
 They also assist us with cutting in valves and can come out on a 24 hour basis

01:07:18.940 --> 01:07:23.460
 and do a pipeline assessment to help us with whatever repair needs to be made.

01:07:23.460 --> 01:07:31.060
 In the 8 months I've been here, we've already had them on, I guess on call would be the best way to describe it.

01:07:31.060 --> 01:07:37.500
 In two different instances when they've helped assist with a 27 inch repair we made to our raw water line.

01:07:37.500 --> 01:07:42.740
 And then over Thanksgiving we had a 20 inch water line that also had a failure.

01:07:42.740 --> 01:07:48.900
 The concrete cylinder pipe is not something that our in-house crews have the expertise to do the type of work on.

01:07:48.900 --> 01:07:53.460
 So we're requesting that we move forward with this contract.

01:07:53.460 --> 01:07:58.500
 I'm going to allow Daniel to come up and make a presentation about his drainage pipe.

01:07:58.500 --> 01:08:01.500
 And then we'll take any questions you might have.

01:08:01.500 --> 01:08:09.980
 >> Good morning Madam Chair, Ford.

01:08:11.180 --> 01:08:17.460
 So the drainage department used these precast pipes in order to replace any emergency repairs or

01:08:17.460 --> 01:08:20.060
 any of the small capital projects that we have going on throughout the year.

01:08:20.060 --> 01:08:28.180
 This bid includes 17 different pipe sizes with two different classifications, either class three or four.

01:08:28.180 --> 01:08:34.020
 And seven different sizes for the boxes.

01:08:34.020 --> 01:08:40.060
 Most of this is just for emergencies, this covers everything that we have throughout the city.

01:08:41.340 --> 01:08:42.780
 So that we can get it when we need it.

01:08:42.780 --> 01:08:56.140
 So as this proposal goes through, there's two different proposals.

01:08:56.140 --> 01:09:02.180
 It goes through with 7.3 million, which is for the range line pipe services.

01:09:02.180 --> 01:09:06.420
 And then the four terabyte, which is 11.8 for the drainage department.

01:09:06.420 --> 01:09:09.580
 Any questions or anything that we can answer?

01:09:09.580 --> 01:09:14.500
 >> So in essence, this is a $19 million request for funds, okay.

01:09:14.500 --> 01:09:17.060
 >> But this is a pneumatic seat.

01:09:17.060 --> 01:09:22.620
 So this just gives us the ability to spend what pipes we need, when we need it.

01:09:22.620 --> 01:09:26.580
 And gets us a pricing sheet all the way through so we have those prices locked in for five years.

01:09:26.580 --> 01:09:32.100
 >> So it appears that you really only got one bidder on the water and sewer and one bidder on the precast.

01:09:32.100 --> 01:09:33.100
 >> Correct, yes, sir.

01:09:33.100 --> 01:09:37.620
 >> And you're going to award one for the one bidder for each one, correct?

01:09:37.620 --> 01:09:38.140
 >> Correct.

01:09:38.140 --> 01:09:38.660
 >> Okay. >> Yes, sir.

01:09:39.740 --> 01:09:41.580
 >> And it's really more of a unit price.

01:09:41.580 --> 01:09:44.900
 So whatever we use is what we're going to pay for.

01:09:44.900 --> 01:09:45.420
 >> Yes, ma'am.

01:09:45.420 --> 01:09:46.140
 >> Oh, yeah.

01:09:46.140 --> 01:09:50.140
 >> Yeah, so I actually congratulate you for

01:09:50.140 --> 01:09:53.900
 doing this because you're being a little proactive in emergencies.

01:09:53.900 --> 01:09:58.780
 And you're not then running to see what you're going to pay, so.

01:09:58.780 --> 01:10:00.700
 >> I have a question.

01:10:00.700 --> 01:10:07.660
 Is there really only one person that can make concrete pipe in the DFW area or in the North Texas area?

01:10:07.660 --> 01:10:12.540
 Was there no interest in any other vendor supplying the pipe?

01:10:12.540 --> 01:10:18.620
 >> On that, I'm not sure actually how many bidders that we had that went in or how many we sent it out to.

01:10:18.620 --> 01:10:22.220
 I don't know if- >> I think it's like 344 in your factor.

01:10:22.220 --> 01:10:24.940
 >> There are other concrete pipe and a water pipe.

01:10:24.940 --> 01:10:26.380
 >> I think purchasing is coming up to answer.

01:10:26.380 --> 01:10:28.620
 >> Sometimes they're just not interested in municipal work.

01:10:28.620 --> 01:10:29.120
 >> Yeah.

01:10:29.120 --> 01:10:35.900
 >> Laurie Hill, Purchasing Manager.

01:10:35.900 --> 01:10:40.860
 >> Yeah, we put this out in our electronic bidding software, and we sent it to 344 vendors.

01:10:40.860 --> 01:10:44.780
 And we just got the one response for Terra for the concrete, and

01:10:44.780 --> 01:10:49.100
 then the one response for Rangeline for their services.

01:10:49.100 --> 01:10:52.860
 >> Unfortunately.

01:10:52.860 --> 01:10:55.100
 >> Yeah, we advertise it in the newspaper.

01:10:55.100 --> 01:11:03.740
 >> It's interesting to me that Rangeline never bid on something that Fortera bid on.

01:11:03.740 --> 01:11:06.540
 >> They're two different. >> Two different things.

01:11:06.540 --> 01:11:08.700
 Fortera's just supply the material.

01:11:08.700 --> 01:11:12.620
 Rangeline is the installation service and repair, right?

01:11:12.620 --> 01:11:14.700
 >> And the water pipe. >> One to what, yeah.

01:11:14.700 --> 01:11:16.780
 >> Both water and sewer. >> Sure, yeah.

01:11:16.780 --> 01:11:21.980
 >> So not only does Rangeline provide the repair services or the stoppile services or

01:11:21.980 --> 01:11:28.620
 welding services, they're also providing the joints of pipe to do the repairs or fittings,

01:11:28.620 --> 01:11:31.020
 whatever types of connections are needing to be made.

01:11:34.460 --> 01:11:35.580
 >> Does that answer your question?

01:11:35.580 --> 01:11:39.900
 >> Kind of, yeah. >> If there's no other questions,

01:11:39.900 --> 01:11:43.020
 I'll move approval. >> Do we have a second?

01:11:43.020 --> 01:11:44.940
 >> I'll second. >> All in favor say aye.

01:11:44.940 --> 01:11:46.940
 >> Aye. >> Opposed?

01:11:46.940 --> 01:11:54.860
 Okay, carries. Consider recommending adoption of an ordinance authorizing approval of change order

01:11:54.860 --> 01:12:00.620
 number one to the contract between the City of Denton and Quality Excavation LLC for the Hinkle

01:12:00.620 --> 01:12:10.220
 and Windsor Paving Drainage Project and the amount of change order not to exceed 518,744.21.

01:12:10.220 --> 01:12:17.660
 >> Good morning, my name's Dustin Draper. I'm with Capital Projects.

01:12:17.660 --> 01:12:23.500
 A little about the project is Magnolia phase two drainage. It started out as a drainage project

01:12:23.500 --> 01:12:28.700
 and then became a street project when the road to the excavation was going to be expanded so much.

01:12:31.180 --> 01:12:36.300
 All we're asking for is the replacement additionally, a replacement of more curb, concrete

01:12:36.300 --> 01:12:42.540
 pavement, and a small utility connections for the change order. This is the terms our project was

01:12:42.540 --> 01:12:48.060
 originally only drainage from here, it extended all the way from University to Windsor and all

01:12:48.060 --> 01:12:56.540
 the way to 77 as a road project as well. We're here to recommend adoption of the ordinance for

01:12:57.340 --> 01:13:06.300
 change order 120 quality excavation for 518,744.21. >> Let me start by saying I have no problem with

01:13:06.300 --> 01:13:10.620
 these additional funds, but haven't we already seen this? Didn't this come through this board

01:13:10.620 --> 01:13:15.180
 already? >> No, sir, not that I know of. >> Not the change order. >> Not the change

01:13:15.180 --> 01:13:19.740
 order, the original contract probably did. >> No, no, no. There was something that came

01:13:19.740 --> 01:13:26.140
 through here and about that same amount I thought that added. >> We can check not that I know of,

01:13:26.140 --> 01:13:35.340
 sir. >> Okay. >> Okay. >> Any other questions? >> I move we approve. >> Do we have a second?

01:13:35.340 --> 01:13:41.180
 >> Second. >> All in favor say aye. >> Aye. >> Opposed? Motion carries. >> Okay. >>

01:13:41.180 --> 01:13:49.980
 Consider recommending approval of a resolution to recognize all the renewable energy credits

01:13:49.980 --> 01:13:54.460
 associated with the electric power purchase from the city from the whitetail wind turbine

01:13:54.460 --> 01:14:02.940
 electric generation facility. >> This is formalizing what we talked about previously. >>

01:14:02.940 --> 01:14:07.420
 Correct. We talked about it at the last meeting and we're formalizing it today.

01:14:07.420 --> 01:14:16.220
 >> There's no questions. I'll move approval. >> I have some questions. >> Oh, sorry.

01:14:18.220 --> 01:14:26.300
 >> It gave you 30 seconds. >> It wasn't exactly 30. Do you want to go through the presentation

01:14:26.300 --> 01:14:30.300
 or do you just want to jump to questions? >> I have no problem with what the presentation is.

01:14:30.300 --> 01:14:35.580
 >> Okay. >> Whatever you want to do. >> Madam Chairman, members of the board, Terry Nolte,

01:14:35.580 --> 01:14:45.100
 DME. This is in fact what you said. We were here two weeks ago to talk about the whitetail contract

01:14:45.100 --> 01:14:53.420
 and the potential for inclusion of the whitetail credits. We did present the same work session

01:14:53.420 --> 01:15:01.260
 item to the council two weeks ago and they did give us direction to include all of the renewable

01:15:01.260 --> 01:15:07.180
 energy credits that we have purchased from or under the whitetail contract.

01:15:11.980 --> 01:15:17.820
 We went over this information last time. One change to this, you can see under the whitetail

01:15:17.820 --> 01:15:26.300
 contract, the red line, we purchased 30 megawatts of energy. We also purchased 60 megawatts of

01:15:26.300 --> 01:15:33.900
 renewable energy credits from the -- from the -- under the contract. The additional 30 megawatts

01:15:33.900 --> 01:15:42.460
 of recs above the energy were part of the original renewable dentin plan to achieve 40%. That was

01:15:42.460 --> 01:15:50.140
 authorized by council in 2014 as part of the original contract with whitetail.

01:15:50.140 --> 01:16:00.540
 The results of this decision, if the -- if the resolution is adopted, would be as follows.

01:16:00.540 --> 01:16:10.620
 You can see that we move from 71% in 2021 up to 103% of renewable energy.

01:16:10.620 --> 01:16:17.180
 It does avoid $5.1 million in incremental costs that we would have to spend otherwise

01:16:17.180 --> 01:16:26.220
 to replace this energy with energy that was -- that was like our other contracts,

01:16:26.220 --> 01:16:35.020
 like for instance Santa Rita where we have a wind farm and we get the actual -- whatever the full

01:16:35.020 --> 01:16:42.940
 output of the farm is, we count those recs. This one will give us 60 recs on all hours.

01:16:42.940 --> 01:16:45.260
 May I ask a question about this? Yes, sir.

01:16:45.260 --> 01:16:55.740
 2324 is when the contract expires in '24? It expires at the end of 2023.

01:16:55.740 --> 01:17:05.100
 It bridges the fiscal year 2324. My question is if that drops us down

01:17:05.100 --> 01:17:12.540
 in 2324 to 88%, how do we get it back up to 100? We'll have to do another procurement.

01:17:12.540 --> 01:17:19.340
 We'll add additional resources at that time under either a short term or long term contract.

01:17:19.340 --> 01:17:22.300
 With -- for recs? It will be energy and recs.

01:17:23.020 --> 01:17:27.820
 But I think it will be at the direction of the PUBN council.

01:17:27.820 --> 01:17:31.900
 However, you would like us to proceed at that point in time.

01:17:31.900 --> 01:17:39.580
 We'll take your desires, your wishes into account and that's what we'll go out and procure.

01:17:39.580 --> 01:17:45.980
 I'm not asking you to be a future -- a seer into the future, but I'm going to ask anyway.

01:17:45.980 --> 01:17:52.220
 That's the business we're in. Do you envision a time when

01:17:52.220 --> 01:17:57.740
 Denton will be 100% renewable energy from physical energy rather than --

01:17:57.740 --> 01:18:02.620
 the actual energy itself rather than recs? Impossible.

01:18:02.620 --> 01:18:12.540
 I guess just a clarifying statement about that. If we have a rec in our account, it means physical

01:18:12.540 --> 01:18:18.060
 renewable energy was generated and delivered to the ERCOT grid.

01:18:18.060 --> 01:18:20.380
 We buy all of our power from the ERCOT grid.

01:18:20.380 --> 01:18:27.340
 So are there any of our renewables actual from the source, not a rec,

01:18:27.340 --> 01:18:33.580
 but actually buying megawatt hours directly from a wind farm or solar farm?

01:18:33.580 --> 01:18:38.380
 Yes, sir. All of our contracts, all of our

01:18:38.380 --> 01:18:43.500
 renewable energy contracts are direct purchases from physical resources.

01:18:43.500 --> 01:18:52.140
 The issue here is that the extra 30 that we contracted for here can be provided by this

01:18:52.140 --> 01:18:58.300
 wind farm because it is 110 megawatt capacity. We're only contracted for 60.

01:18:58.300 --> 01:19:04.060
 So because of the way that the recs are serialized, identified in accounts,

01:19:04.060 --> 01:19:09.180
 we know exactly where they were generated and by what resource.

01:19:09.980 --> 01:19:16.700
 And therefore, ERCOT deems those to be renewable megawatts that were delivered into the grid.

01:19:16.700 --> 01:19:24.460
 I think you're speaking of the kind of nuance between, for example, our Santa Rita project,

01:19:24.460 --> 01:19:30.540
 which we have a 150 megawatt contract. The farm is a 150 megawatt farm.

01:19:30.540 --> 01:19:39.340
 And we only are allocated recs based upon the physical output of the farm in each hour.

01:19:40.620 --> 01:19:47.740
 All of those recs, we count. And we don't necessarily count the energy.

01:19:47.740 --> 01:19:54.220
 The rec is the tag, if you will, that demonstrates that it was renewable.

01:19:54.220 --> 01:20:01.340
 And that's the premise for this resolution is to recognize that the renewable energy credit itself

01:20:01.340 --> 01:20:05.820
 is the proof that it was physically delivered as a renewable energy.

01:20:06.460 --> 01:20:13.260
 Okay. Thank you. I want to preface this remark before that I'm a big fan of renewable energy,

01:20:13.260 --> 01:20:20.300
 no doubt. But all electricity that is produced by any source goes onto a grid, correct?

01:20:20.300 --> 01:20:23.660
 Yes, sir. In ERCOT, that is correct.

01:20:23.660 --> 01:20:28.460
 That is correct. It's not connected directly into our system, necessarily.

01:20:28.460 --> 01:20:32.860
 With the exception of the landfill, that is correct.

01:20:34.540 --> 01:20:40.380
 And the rooftop solar facilities that we have about four megawatts of rooftop solar

01:20:40.380 --> 01:20:44.700
 throughout the city that's privately owned by businesses and residents.

01:20:44.700 --> 01:20:48.780
 We're just, once ERCOT says this is what you use and this is what you owe, we say,

01:20:48.780 --> 01:20:53.580
 okay, yeah, we owe it to these different renewable energy sources.

01:20:53.580 --> 01:21:00.700
 We owe the renewable energy sources as a direct result of our contracts with them.

01:21:01.420 --> 01:21:10.860
 We pay for the energy to ERCOT. We sell from Santa Rita and White Tail

01:21:10.860 --> 01:21:14.460
 into the market. We're paying them to run.

01:21:14.460 --> 01:21:17.660
 We're not necessarily getting their energy. That's correct.

01:21:17.660 --> 01:21:32.300
 Okay. All in favor say aye. Aye.

01:21:32.300 --> 01:21:37.900
 Opposed? Motion carries. Assistant City Manager update.

01:21:37.900 --> 01:21:46.700
 Good morning board members. The first item that you have is an ACM update on the landfill

01:21:46.700 --> 01:21:53.100
 expansion. So this is for the 1590B permit that is currently working through the system.

01:21:53.100 --> 01:21:56.220
 Public notice was out on that about mid-December.

01:21:56.220 --> 01:22:01.100
 Public comment, to my knowledge, just ended about 10 days ago.

01:22:01.100 --> 01:22:04.620
 So staff is here to answer any questions if you have any.

01:22:04.620 --> 01:22:12.220
 I will note this was provided to City Council previously, so we're closing with the PEB.

01:22:13.420 --> 01:22:19.340
 Maybe it was in some backup somewhere, but what are the numbers for opposed

01:22:19.340 --> 01:22:21.340
 and in support that you got from public comment?

01:22:21.340 --> 01:22:30.940
 My apologies if it's somewhere buried and you didn't see it.

01:22:30.940 --> 01:22:33.980
 It is not. Brian Burner, Director of Solid Waste.

01:22:33.980 --> 01:22:39.740
 Currently there are about 500 comments on the electronic system.

01:22:39.740 --> 01:22:45.260
 There are several of them that are for the proposal. There are many that are against.

01:22:45.260 --> 01:22:49.980
 There are many that are duplicates in the system. So we're in the process right now

01:22:49.980 --> 01:22:53.100
 working with the state to go through those, remove those that were entered

01:22:53.100 --> 01:22:56.540
 several times, figure out exactly what that variant is.

01:22:56.540 --> 01:23:02.460
 Thank you. No other questions?

01:23:05.980 --> 01:23:11.660
 On our future Public Utility Board agenda items, you'll note on January 27th

01:23:11.660 --> 01:23:15.660
 there's an RFP for Solid Waste Management Strategy.

01:23:15.660 --> 01:23:19.900
 That went out to City Council in the Friday reading pile this Friday

01:23:19.900 --> 01:23:22.860
 and was disseminated to the board via email.

01:23:22.860 --> 01:23:25.660
 And so you should have the same information.

01:23:25.660 --> 01:23:29.980
 And again, staff is here to answer any questions that you might have.

01:23:29.980 --> 01:23:35.740
 I will note that it will be included as an ACM update in the next PEB package.

01:23:35.740 --> 01:23:40.220
 So we'll have it for the record. Staff will be glad to answer any questions if you have them.

01:23:40.220 --> 01:23:47.500
 Okay, for future agenda items, I have a question I'd like answered.

01:23:47.500 --> 01:23:53.020
 How many of these items on our agenda today go directly to City Council of tomorrow?

01:23:53.020 --> 01:24:01.820
 I don't have a number on that. Typically we try to leave a week between the time frame,

01:24:01.820 --> 01:24:05.020
 at least a week between the time frame between when they're presented to the PEB

01:24:05.020 --> 01:24:10.220
 and when they go to the council. But there are some cases where because of timing issues that

01:24:10.220 --> 01:24:16.540
 they will actually be on the next council agenda. We try to avoid that sometimes. It's unavoidable.

01:24:16.540 --> 01:24:18.300
 I understand that.

01:24:18.300 --> 01:24:26.700
 So in the minutes, will they be part of, will they be intact and ready to go

01:24:26.700 --> 01:24:31.020
 when the PEB action is presented to the council?

01:24:31.740 --> 01:24:41.980
 If there is a situation where we have the gap between, we certainly will put the PEB decision

01:24:41.980 --> 01:24:50.940
 or recommendation in there with the council packet. Typically the minutes are not disseminated

01:24:50.940 --> 01:24:57.340
 to the council in that fashion, but the recommendation of the board is. In those

01:24:57.340 --> 01:25:04.060
 instances where because of timing issues, we have to take it to the to the city council.

01:25:04.060 --> 01:25:09.660
 We obviously don't have enough time to place the board's recommendation in terms of the

01:25:09.660 --> 01:25:15.900
 overall vote in the item. What we do though is we will bring that up to the council in

01:25:15.900 --> 01:25:20.380
 the presentation for the item and essentially tell them what the vote for the PEB is.

01:25:20.380 --> 01:25:27.180
 Okay and it goes further with Mr. Soph's comment earlier. He asked specific questions because he

01:25:27.180 --> 01:25:34.380
 wanted council to see his concern about those items and of course they didn't see that.

01:25:34.380 --> 01:25:40.300
 So I guess I don't want to be blunt. Well yeah, I usually am but

01:25:42.620 --> 01:25:50.460
 what sometimes I'm not clear what the use of the PEB is to the city if none of these

01:25:50.460 --> 01:25:55.420
 comments or questions are not given to the city council.

01:25:55.420 --> 01:26:02.140
 Okay. And so I'd like to see the council answer that question.

01:26:02.140 --> 01:26:08.380
 Not for staff. I'm not saying anything against staff. This is for the council

01:26:10.060 --> 01:26:12.700
 and I've asked several council members that question already so

01:26:12.700 --> 01:26:16.620
 no they won't be surprised.

01:26:16.620 --> 01:26:22.700
 All right so then new business.

01:26:22.700 --> 01:26:31.020
 A couple of items that we've taken care of. The tour of the Denton Energy Center has been

01:26:31.020 --> 01:26:39.020
 completed on December the 5th. There was a request from several board members about a tour of the

01:26:39.020 --> 01:26:44.940
 Recycling Center for Pratt. We're trying to time that where the weather will be a little bit more

01:26:44.940 --> 01:26:50.540
 conducive so he will be reaching out to the board members in the next couple of weeks to see about

01:26:50.540 --> 01:26:59.180
 arranging a time for that. Keep in mind depending on the amount of or the participation we may have

01:26:59.180 --> 01:27:05.820
 to end up posting and so that makes more time depending on how many people want to attend.

01:27:06.540 --> 01:27:13.260
 And then the only other item that we have on new business action items is the currently is the

01:27:13.260 --> 01:27:18.780
 work session to identify equipment replacement cost and kind of how that process is is done

01:27:18.780 --> 01:27:24.140
 and that's scheduled to occur in February next month. That's all I have.

01:27:24.140 --> 01:27:28.380
 And you wanted to speak to the minutes.

01:27:28.380 --> 01:27:33.740
 Yeah I just want to address a comment that Mr. Sofen made about the minutes and what I was looking

01:27:33.740 --> 01:27:41.340
 at is I've been emailing Billy Matthews who does the DTV and when they record the meetings and also

01:27:41.340 --> 01:27:46.460
 looking at the most recent city council minutes even the city council minutes are that is talking

01:27:46.460 --> 01:27:54.220
 about discussion ensued and the record is actually the recording itself and so you can go back and

01:27:54.220 --> 01:28:01.180
 see exactly what happened and the PUB video is available within an hour after the meeting

01:28:01.820 --> 01:28:06.540
 and so that's why the detailed minutes aren't it's not kept the way they used to be kept because the

01:28:06.540 --> 01:28:14.220
 recording is the record itself. Does that address your concern or yeah okay okay I just want you to

01:28:14.220 --> 01:28:21.900
 I do know several council people watch the video so and it raised a question that now we're going

01:28:21.900 --> 01:28:27.500
 to address is how long we're going to archive all the videos that's not been addressed so that's

01:28:27.500 --> 01:28:32.780
 something that I've already got down and we're going to not we need direction on how far along we're going to keep that so

01:28:32.780 --> 01:28:39.980
 I just want to bring that forward thanks okay then we're into concluding items does a board

01:28:39.980 --> 01:28:44.620
 member wish to add anything to a future agenda or congratulate a staff member

01:28:44.620 --> 01:28:51.260
 all right congratulations to all the staff members for all the work you did

01:28:51.260 --> 01:28:55.980
 just because I'm asking questions doesn't mean I'm insulting you at all

01:28:57.580 --> 01:29:02.220
 that is our job correct so then do we just adjourn into closed session

01:29:02.220 --> 01:29:07.580
 okay so we are adjourning into closed session