[00:00:06]
UM, ARE THE FOLKS IN THE BACK READY TO GO ON THE RECORD? ALL RIGHT.
I CAN SEE BACK THERE FOR SOME REASON.
UM, WE ARE ON THE RECORD TODAY IS, UH, JULY 13TH, 2022.
THIS IS DAY ONE OF THE, UH, FINAL CONFERENCE IN THE AUSTIN ENERGY, 2022 BASE RATE PROCEEDING.
MY NAME IS TRAVIS VICKERY ON THE INDEPENDENT HEARING EXAMINER I'M I'M HERE TODAY WITH A TEAM, UH, FROM MY LAW FIRM, WHICH CONSISTS OF ANDREW EDGE TO MY RIGHT WITH CEL CLARK, AUSTIN JONES AND LINDA RADFORD, UH, WILL BE, THERE'LL BE ASSISTING ME WITH PRESIDING, BUT ALSO ASSISTING WITH THE WRITING OF THE FINAL REPORT.
UM, ALL RIGHT, WE'RE READY TO GET STARTED WITH APPEARANCES AND I'D LIKE TO GO PRETTY QUICKLY THROUGH APPEARANCES OF PARTICIPANTS AND REPRESENTATIVES FOR PARTICIPANTS STARTING WITH AUSTIN ENERGY.
THOMAS MERCATO, TAYLOR DENISON, TAMMY COOPER HERE FOR AUSTIN ENERGY.
BEN HALLMARK, UH, FOR TEXAS INDUSTRIAL ENERGY CONSUMERS WITH ME AS JOHN HUBBARD.
UH, WE MAY BE JOINED DURING THE HEARING BY KATIE COLEMAN, UH, AND TIC REPRESENTATIVE JASON MOSS FROM SAMSUNG IS ALSO HERE.
AND YOUR HONOR TO TALK TO YOUR BRO ON BEHALF OF DATA BOUNDARY.
GOOD MORNING, YOUR HONOR, TOD KIMBRO ON BEHALF OF DATA FOUNDRY.
GOOD MORNING, YOUR HONOR, CHRIS HUGHES ON BEHALF OF NXP AND AS WELL AS WITH ME AS A ELENA'S ARMINO OF, UH, REPRESENTING AN XP AND CHRIS READER REPRESENTING AN XP.
HI, ASHLEY FISHER, REPRESENTING SOLAR AND STORAGE COALITION MIGHT BE JOINED LATER BY ERIC GOFF.
BORGELT REPRESENTING HOMEOWNERS UNITED FOR RATE FAIRNESS.
THANK YOU FOR
THANK YOU, MR. KAUFMAN, JAMES BRAZELLE AND DREW SPILLER FOR SIERRA CLUB PUBLIC CITIZEN.
AND WITH US TODAY ARE TEVA WHITE CYRUS REED, AND, UH, ADRIAN SHELLEY.
THERE MAY BE OTHERS JOINING US THIS WEEK.
ALRIGHT, THANK YOU, MR. BRAZIL, ANY OTHER APPEARANCES? OKAY.
UM, LET'S GET STARTED WITH, UH, WHAT WE WENT OVER BRIEFLY BEFORE WE WENT ON THE RECORD, BASICALLY YESTERDAY DURING THE PRELIMINARY CONFERENCE, WE ESSENTIALLY ADMITTED ALL OF THE EXHIBITS, WHICH WERE FILED, NOT AS EXHIBITS, BUT WE CONVERTED EVERYTHING THAT WAS FILED IN TERMS OF STATEMENTS OF POSITION AND, UH, ESSENTIALLY WITNESS TESTIMONY INTO EXHIBITS YESTERDAY.
AND WE'RE WORKING ON A, FOR THE RECORD, WE'RE WORKING ON A, UH, UNIFIED EXHIBIT LIST THAT WE'RE GOING TO CIRCULATE LATER IN THE PROCEEDING.
UH, WE ALSO AGREED TO BASICALLY EVERY MORNING, IF YOU THINK YOU'RE GOING TO HAVE CROSS EXAMINATION EXHIBITS AND CROSS EXAMINATION, EXHIBITS ARE EXHIBITS THAT ARE JUST USED FOR CROSS, ESSENTIALLY.
THEY'RE NOT YOUR DIRECT CASE NECESSARILY.
UH, WE AGREED TO HAVE CROSS EXAMINATION EXHIBITS UP AT THIS FRONT TABLE.
FOLKS CAN LAY THEM OUT IN THE MORNING AND THEN THOSE WHO WANT TO TAKE A LOOK AT THEM TO SEE IF THEY HAVE ANY OBJECTIONS CAN TAKE A LOOK AT THEM.
IT'S MY UNDERSTANDING THAT AUSTIN ENERGY MAY HAVE SOME OBJECTIONS TO, OR AT LEAST SOME CLARIFICATION'S ON POTENTIAL CROSS-EXAMINATION EXHIBITS, WHICH WERE PUT ON THE TABLE THIS MORNING.
AND YOU'LL EXCUSE ME, BECAUSE WE'VE BEEN GETTING SOME OF THESE, UH, EXHIBIT LIST OVER EMAILS LAST NIGHT AND THIS MORNING, AS WELL AS, UM, BEING PLACED ON THE TABLE.
SO I'LL TRY TO MOVE THROUGH THIS AS QUICKLY AND EFFICIENTLY AS I CAN.
SO I'LL START WITH THE ICA EXHIBITS AND AS I UNDERSTAND IT, THEY'VE GOT WHAT LOOKS LIKE.
I BELIEVE FIVE EXHIBITS, THREE ARE RESPONSES TO OUR, TO THEIR DISCOVERY REQUESTS.
I HAVE NO OBJECTIONS TO ANY OF THOSE.
UM, THEN THERE IS AN EXPERT THAT LOOKS LIKE IT'S OFF OF THE ORPHAN ENERGY, UH, WEBSITE AND DON'T HAVE ANY OBJECTION TO THAT EITHER.
ALTHOUGH WE MIGHT NEED OPTIONAL COMPLETENESS, UM, RESERVED, UH, AND THEN FINALLY THERE'S AN EXCERPT FROM PRINCIPLES OF PUBLIC UTILITY RATES.
AGAIN, UM, I DON'T HAVE AN OBJECTION, BUT WE WOULD RESERVE OPTIONAL COMPLETENESS.
DID I MISS ANYTHING? WE MIGHT HAVE TO INCLUDE ALL, BUT CLARENCE, ANY, ANY, UH, DID I MISS ANYTHING? DID I MISS ANY ICA EXHIBIT? OKAY.
SO THAT'S WHERE WE ARE ON THEIR EXHIBITS.
SO A TOTAL OF FIVE EXHIBITS FOR CROSS
[00:05:01]
OR YEAH, THOSE ARE POTENTIAL CROSS EXHIBITS.POTENTIAL CROSS EXHIBITS, PLEASE.
UM, AND THIS GOES FOR EVERYONE, PLEASE MAKE SURE THAT IF YOU ENDED UP USING THEM THAT YOU HAVE THEM, I MEAN, THEY NEED TO BE MARKED, I'D LIKE TO REFER TO THEM ON THE RECORD.
THIS IS ICA EXHIBIT SIX, YOU KNOW, LET'S MARK THEM AND MAKE SURE THAT, THAT YOU PROVIDE THEM TO US.
UM, I WANT TO ADMIT THOSE, ARE YOU READY TO OFFER THOSE EXHIBITS OR DO YOU KNOW WHEN NOT YOU'RE GONNA BE USING THEM? UM, YES.
I MEAN, I, YEAH, I COULD OFFER THEM NOW IF THAT LET'S JUST DO IT AND, UM, AND MAKE SURE I GET THE RIGHT NUMBERS, I DON'T HAVE, UM, I WOULD, UM, SUGGEST THAT, UH, THE RESPONSE TO ICA FOR DASH EIGHT WOULD BE EXHIBIT ICA SIX.
AND THEN THE RESPONSE TO ICA FOR 11 WOULD BE EXHIBIT ICA SEVEN.
THE RE AM I GOING TOO FAST? NO.
THE RESPONSE TO ICA FOUR DAYS 12 WOULD BE ICA EXHIBIT ICA EIGHT, THE, UM, THE EXCERPT FROM THE AUSTIN ENERGY, UH, WEBSITE, WHICH IS THAT SHOWING THE, UH, RESIDENTIAL RATES THAT WOULD BE ICA EXHIBIT ICA NINE TWO PAGES, AND DO NOT OBJECT TO ADDING MORE FOR CONTEXT, IF THAT'S WHAT MR. MERCATO WOULD LIKE.
AND THEN FINALLY, THE EXCERPT FROM THE BOND, BRIGHT PRINCIPLES OF PUBLIC UTILITY RATES PAGES TWO 90 AND 2 91 THAT WOULD BE EXHIBIT ICA 10, ALL RIGHT.
SUBJECT TO, UH, AUSTIN ENERGY'S RIGHT.
TO, UH, PROVIDE THE REST OF THOSE DOCUMENTS AND HAD A REAL OPTIONAL COMPLETENESS.
UH, THAT'S ICA EXHIBITS, SIX THROUGH 10.
UH, NEXT WE HAVE TIC EXHIBITS AND I WAS GIVEN THIS NOTEBOOK WITH 18 EXHIBITS.
UM, THE ONLY ONES THAT I WOULD MAKE OBSERVATIONS ON, UM, EXHIBIT 14 ARE, ARE SOME COMMENTS FROM SIERRA CLUB AND A PROJECT OVER AT THE PC.
UM, OBVIOUSLY THAT'S, YOU KNOW, HEARSAY TO OUR WITNESSES.
I DON'T KNOW IF YOU'RE USING THEM FOR OUR WITNESSES.
UH, THEN THERE'S A COUPLE OF, UM, REFERENCES TO PURA AND, AND AN ORDER, UH, WHICH WE COULD TAKE JUDICIAL NOTICE OF, BUT I HAVE NO PROBLEM WITH THESE SMALL EXCERPTS COMING HERE.
SO ON EXHIBIT 14, LET'S SEE HOW IT'S GOING TO BE USED.
AND IF A WITNESS CAN BASICALLY CHAT ABOUT IT, IT'LL, IT'LL GET THE WEIGHT THAT IT DESERVES.
SO IF IT'S ALL RIGHT, THAT WE JUST ADMITTED UNDER THOSE CONDITIONS.
SO TIA, YOU SEE A ONE THROUGH 18, UH, LET THE RECORD REFLECT, I'VE BEEN ADMITTED, UM, NOW IN TERMS OF ANYTHING THAT IS OUT OF, UH, UH, PUC DOC NUMBER OR A REFERENCE TO PURE UP, WHEN I SAY ADMITTED, JUST PLUG IN THE IDEA THAT I'M TAKING NOTICE OF IT.
SO I THINK YOUR HONOR, ONE CLARIFICATION ON THAT WOULD THAT ALSO APPLY TO PUC RULES? YES.
YEAH, WE MARKED THEM JUST SO THE WITNESS WOULD HAVE EASY ACCESS.
THAT IS SO MUCH FASTER TO DO IT THAT WAY.
NXP HAS 15 EXHIBITS THAT THEY'VE PRESENTED TO US.
UM, GOT A COUPLE OF COMMENTS, UM, ON SIX AND SEVEN, THOSE ARE SCHEDULES FROM, UH, BROWNSVILLE, PUBLIC UTILITY BOARD OR LCRA, UM, UH, RELATED TO CASHFLOW METHOD.
UM, YOU KNOW, AGAIN, WE DON'T HAVE A PROBLEM WITH THEM USING THESE DOCUMENTS.
UM, BUT I WOULD NOTE THAT THESE ARE HEARSAY AS TO OUR WITNESSES AND IT'S, IT'S, UH, NOT CLEAR, UM, WHETHER THEY WILL BE ABLE TO SPEAK TO THOSE OR DEFEND THEM IN ANY WAY.
UM, NORMALLY I WOULD PROBABLY BE OBJECTING TO THEM, BUT WE'LL SEE HOW IT GOES.
UM, THEN THEY'D GOT, UM, WHAT, WHAT MAY BE AN XR OR THE ENTIRE PC NON IOU TRANSMISSION COSTS, THE SERVICE RATE, FALLING PACKAGE INSTRUCTIONS.
AND WE, WE WOULD RESERVE OPTIONAL COMPLETENESS TO THE EXTENT THAT THEY'RE NOT INCLUDING THE ENTIRE DOCUMENT AND IT WOULD BE APPROPRIATE TO HAVE ADDITIONAL EXPERTS INCLUDED FOR FAIRNESS.
UH, THE SAME WOULD BE TRUE ON EXHIBIT 14, WHICH IS LABELED AS THE BOOK ON DISTRIBUTION COST ALLOCATION.
SO, UM, I WOULD SAY AGAIN, OPTIONAL COMPLETENESS, UH, WOULD BE RESERVED ON THAT ITEM.
UH, THAT'S IT WITH RESPECT TO NXP EXHIBITS.
[00:10:01]
OKAY, YOUR HONOR.I CAN SPEAK TO MR.
ON THE FIRST TWO, WHICH WERE NXP SIX AND AN XP SEVEN, NOT OFFERING THOSE TO PROVE ANY OF THE FACTS THAT ARE IN THOSE DOCUMENTS IS PRIMARILY GOING TO BE FOR PURPOSES OF CROSS.
I CAN EITHER OFFER IT AS A DEMONSTRATIVE, OR I CAN ASK YOU TO TAKE NOTICE OF THE FILING OF THOSE AT THE PUC, UH, BUT NOT FOR THE TRUTH OF ANY, UH, OF THE INFORMATION CONTAINED THERE IN HOWEVER, Y'ALL WANT TO HANDLE IT AS FINE.
AND AS TO OPTIONAL COMPLETENESS, WE HAVE NO PROBLEM WITH THAT.
WE'LL ALWAYS, I MEAN, WE'RE ALWAYS GOING TO GRANT THAT IF YOU WANT TO, IF YOU WANT TO COMPLETE A DOCUMENT, UM, FOR EXHIBIT SIX AND SEVEN, I AGREE WITH YOUR APPROACH.
AND THEN IN MR. BROCADE, I WOULD HOPE THE AUSTIN ENERGY WOULD AGREE WITH THAT, BUT BASICALLY IT'S GOING TO FACILITATE A TESTIMONY AND, UM, WE CAN TAKE NOTICE OF IT.
WE'LL TAKE NOTICE OF THOSE TWO DOCUMENTS TO THE EXTENT THAT THEY'VE BEEN FILED, NOT NECESSARILY THAT ANYTHING WITHIN THOSE DOCUMENTS IS, IS, UH, TRUE.
IT'S NOT BEING OFFERED TO SHOW THAT WHATEVER BROWNSVILLE OR LCRA SAID IS THE TRUTH.
IT'S BEING OFFERED TO SHOW THAT IT WAS FILED WITH THE PUC.
UM, IT LOOKS LIKE AUSTIN ENERGY IS OKAY WITH THE ADMISSION, UH, ONE THROUGH 14, OR IS IT ONE THROUGH, I MEAN, THEY'RE ALREADY ATTENDING PER YESTERDAY ONE OR TWO, ONE THROUGH 15 SINCE WE'RE TALKING ABOUT THEM.
I KNOW THAT YOU PUT THEM ON THE TABLE AND I THINK I EVEN TOOK A COPY, BUT I CAN'T FIND IT.
UH, I CAN EITHER GO OVER THERE OR DID YOU GIVE ME A COPY? UH, I DID NOT HAND YOU A COPY OF ALL YOUR OWN.
THERE SHOULD BE A COUPLE UP THERE.
UH WE HAVE NO OBJECTIONS TO ANY OF THESE, UH, EXHIBITS, WHICH ARE LABELED ONE THROUGH 10 DATA FOUNDRY EXHIBITS, ONE THROUGH 10 ARE ADMITTED, UH, AND THEN TO W R THEY PROVIDED US 17 EXHIBITS YESTERDAY.
AND THEN TWO MORE, I BELIEVE THIS MORNING IS THAT THE TOTALITY OF, OKAY.
AND SO, UH, EXHIBIT THREE, UH, MS. COOPER'S OFFERING HER OWN DISCOVERY RESPONSE TO AUSTIN ENERGY'S DISCOVERY.
UH, AND WE WOULD OBJECT TO THAT MICROPHONE.
THIS IS LINETTA WITH TWO WR, UH, IN THE REBUTTAL TESTIMONY OF MR. BONE AND HIS, HE ATTACHED THE, UH, MY, MY RESPONSE THAT I HAVE INCLUDED AS EXHIBIT NUMBER THREE, AND IT LOOKED LIKE IT WASN'T THE COMPLETE EXHIBIT.
AND SO TO THE EXTENT, UNDER THE TEXAS RULES OF EVIDENCE, 1 0 6 AND 1 0 7, I'M ASKING FOR OPTIONAL COMPLETENESS, AND IT IS SOMETHING THAT SHOULD BE CONSIDERED AT THE SAME TIME.
THE ATTACHMENT THAT'S IN MR. RAMONE'S REBUTTAL TESTIMONY SHOULD BE CONSIDERED.
ANY RESPONSE TO THAT FROM AUSTIN ENERGY IN TERMS OF OPTIONAL COMPLETENESS, I DON'T HAVE THE DOCUMENTS IN FRONT OF ME.
I DON'T HAVE A CONCERN ABOUT OPTIONAL COMPLETENESS IF IT IS ADMISSIBLE.
UH, AND IF WE INCLUDED IT IN OUR REBUTTAL TESTIMONY, THEN OBVIOUSLY IT'S IN THE RECORD AND WE HAVE NO OBJECTION TO IT.
I'D LIKE AN OPPORTUNITY AND IT DOESN'T HAVE TO BE RIGHT NOW JUST TO CONFIRM THAT BECAUSE I'M LOOKING AT MR. RAVEN AND HE'S NOT ABLE TO CONFIRM IT EITHER.
UH, DO YOU HAVE THE REBUTTAL TESTIMONY HERE NOW? AND I CAN QUICKLY CHECK ON, OKAY.
CAN YOU GIVE ME THE EXHIBIT NUMBER ONE MORE TIME OR EXHIBIT RIVERS? IT'S TWO WR THREE.
LET'S GO OFF THE RECORD FOR JUST A MINUTE.
YOU WANT ME TO DO THAT NOW? LET'S GO BACK ON THE RECORD.
ALL RIGHT, MR. BROOKLYN, IT IS INCLUDED, UH, AS PART OF, UM, AUTHOR ENERGY'S REBUTTAL CASE AS AN ATTACHMENT, THEREFORE IT'S ALREADY IN THE RECORD AND WE DO NOT HAVE AN OBJECTION, AND I DON'T HAVE A CONCERN ABOUT OPTIONAL COMPLETENESS, RIGHT? TWO WR THREE IS ADMITTED ANY OTHER.
AND IN THAT SAME, UH, VAIN, UM, UH, EXHIBITS FOUR, FIVE, AND SEVEN, ALL APPEAR TO BE, UM, EXCERPTS FROM A LARGER DOCUMENT.
AND AS WE'VE SAID BEFORE, WE WOULD RESERVE OPTIONAL COMPLETENESS FOR THOSE ITEMS.
[00:15:02]
OKAY.SUBJECT TO THAT, THEY ARE ADMITTED.
SO THAT'S TWO WR ONE THROUGH WHERE ARE WE? YEAH.
YOU DON'T HAVE ONE THROUGH 17 NUMBER W W UH, WE DO NOT HAVE AN OBJECTION TO EITHER OF THESE EXHIBITS THAT OUR OWN DISCOVERY RESPONSES.
UM, IF WE MAY, COULD WE JUST LABEL THEM NOW? YOU'VE GOT THE RESPONSE TO TWO
DO YOU WANT TO MAKE THAT 18 OR 19? OKAY.
AND THEN THE RESPONSE TO FFC ONE DASH FIVE WILL BE TWO W OUR EXHIBIT NUMBER 19, IS THAT ALRIGHT? AND WE HAVE NO OBJECTION TO THOSE.
THEY ARE ADMITTED, UH, 1, 3 19 ARE ADMITTED SUBJECT TO WHAT WE'VE JUST SPOKEN ABOUT IN TERMS OF OPTIONAL COMPLETENESS.
THAT'S EVERYTHING WE'VE RECEIVED THAT I'M AWARE OF.
I REMEMBER WHEN YOU, UH, IF YOU COULD JUST ANNOUNCE YOUR, UM, PAUL ROBBINS, MR.
UH, I BROUGHT IN, UH, POSSIBLE, UH, EXHIBITS, UH, WHEN I, UH, ARRIVED.
I DON'T KNOW IF YOU LOOKED AT THEM.
I GAVE THEM TO THE JUDGE'S CLERK.
UH, IF YOU HAVE RESERVATIONS, I'D RATHER DEBATE THEM NOW THAN LATER.
IF I CAN GET A COPY OR HAVE AN OPPORTUNITY TO LOOK AT THEM, I'M HAPPY TO RESPOND, YOUR HONOR.
LET'S GO OFF THE RECORD FOR JUST A SECOND.
UM, LET'S GO BACK ON THE RECORD.
SO, UM, JUST TO CLEAN SOMETHING UP, UH, NXP, AS I UNDERSTAND, IT HAS TWO ADDITIONAL EXHIBITS, 16 AND 17, WHICH I DID NOT REFERENCE, AND ACTUALLY WASN'T AWARE OF, UH, BUT WE'VE LOOKED AT THOSE AND WE DO NOT HAVE OBJECTIONS TO EITHER ONE OF THOSE EXHIBITS.
SO NOW SHIFTING OVER TO MR. ROBBINS, UM, HE HAS TWO DOCUMENTS.
THE FIRST IS ROBIN'S DISCOVERY THREE DASH ONE A AND THREE DASH ONE B.
UH, I'M NOT SURE WHAT THE EXHIBIT NUMBER IS.
I DON'T, I DON'T HAVE THE EXHIBIT LIST IN FRONT OF ME.
UM, DO WE KNOW, UM, LET'S GO OFF THE RECORD FOR A MINUTE.
THERE WAS ONE POSITION STATEMENT THAT I SENT IN A TIMELY MANNER, AND THEN I'M TRYING TO, UH, DO WHAT THE JUDGE SUGGESTED YESTERDAY, WHICH IS TO PRESENT TWO COPIES OF WHAT I MIGHT DISCUSS TODAY.
UH, THE FIRST THING THAT MR
SO THAT, THAT IS LET'S LET THE RECORD REFLECT THAT.
I THINK YOU'RE REFERRING TO ROBBINS DISCOVERY, THREE DASH ONE A AND THREE DASH ONE B.
I'M GOING TO MARK THAT AS ROBIN'S EXHIBIT TWO.
LET'S DEAL WITH ROBIN'S EXHIBIT TWO FIRST, MR. BROOKE HEDO.
THE COVER SHEET SAYS THIS IS DISCOVERY THREE
IT'S NOT CLEAR TO ME IF THIS IS A DISCOVERY RESPONSE.
IT SEEMED LIKE THE BEST WAY TO DOCUMENT IT.
WELL, HERE'S ONE WAY TO DEAL WITH THAT.
UM, YOU KNOW, IF HE, IF HE WANTS TO CROSS EXAMINE A WITNESS ON THIS DOCUMENT, OKAY.
IF AUSTIN ENERGY CAN LOCATE AND CONFIRM THAT THESE ARE IN FACT FROM DISCOVERY, UM, THEN IT'LL, WE CAN ADMIT IT, BUT IN TERMS OF JUST USING IT FOR CROSS EXAMINATION, LET'S SEE WHERE THAT GOES.
UM, SAME THING FOR ROBIN'S EXHIBIT.
WHAT IS ROBIN'S EXHIBIT THREE? IT LOOKS LIKE IT'S A, IT'S A, IT'S A POWER POINT THAT, THAT I WILL BE PRESENTING, UH, DURING CROSS.
[00:20:01]
YOUR POWERPOINT.AND I DO WANT TO SPEAK TO THAT.
UM, SO YES, UH, WITH RESPECT TO ROBBINS, EXHIBIT TWO, UH, IF IT'S OUR DISCOVERY RESPONSE, OBVIOUSLY WE HAVE NO CONCERNS ABOUT THAT.
I TRUST THAT MR. ROBINSON'S ASSERTION IS CORRECT.
ALTHOUGH WE ARE SUBJECT TO CHECK SUBJECT TO CHECK, AND IF WE NEED TO OPTIONALLY COMPLETE IT WITH THE REST OF THAT RESPONSE, WE WOULD REQUEST THAT WE BE ABLE TO DO THAT.
SO, SO THAT'S WHERE WE ARE ON TO UNPACK ROBIN'S EXHIBIT THREE.
SO FOR, FOR SEVERAL YEARS, MR. ROBBINS HAS PRESENTED BEFORE AUSTIN ENERGY AND THE CITY OF AUSTIN ALLEGATIONS, THAT THERE ARE CUSTOMERS WHO HAVE INAPPROPRIATELY BEING BEEN INCLUDED IN THE CAP PROGRAM, BASICALLY THAT THERE ARE INDIVIDUALS WHOSE INCOME LEVELS EXCEED THE REQUIREMENTS FOR BEING ON THE CAP PROGRAM.
WE ARE NOT CHANGING THE CAP PROGRAM.
IN THIS CASE, WE ARE NOT CHANGING THE CAP RATES IN THIS CASE, AS WE HAVE STATED REPEATEDLY, THIS IS A BASE RATE CASE.
WHAT MR. ROBBINS HAS DONE HAS BEEN, IT APPEARS GO TO THESE INDIVIDUALS HOMES AND TAKE PHOTOGRAPHS OF THEM AND PRESENTED THEM HERE ALONG WITH THEIR ADDRESS.
AND I GUESS THE VALUE OF THEIR HOMES, WHICH WE BELIEVE IS OUT OF SCOPE, INAPPROPRIATE AND HEARSAY TO OUR WITNESSES.
MOREOVER, IF MR. ROBBINS HAD WANTED TO INCLUDE THIS IN HIS POSITION STATEMENT, HE COULD HAVE DONE SO WE MAY HAVE OBJECTED, BUT HE COULD HAVE DONE.
SO THEN, SO WE DO HAVE AN OBJECTION TO THE, REALLY, TO THE ADMISSIBILITY AND EVEN THE USE OF THIS IN CROSS EXAMINATION.
UM, IF MR. POTATO HAD THOROUGHLY READ MY POSITION STATEMENT, HE WOULD HAVE SEEN ONE OF THOSE PICTURES IN IT, AND HE DID NOT.
AUSTIN ENERGY DID NOT OBJECT, YOUR HONOR.
UH, LET ME REPEAT WHAT I HAVE SAID IN WRITING PROBABLY SEVERAL TIMES THAT IS THAT I AM NOT DISPUTING THE PASS THROUGH COSTS OF CUSTOMER ASSISTANCE.
I AM DISPUTING THE PRUDENCE OF THE ADMINISTRATIVE COSTS GIVEN TO PEOPLE WHO DO NOT DESERVE THIS DISCOUNT.
I THINK I DESERVE TO BE ABLE TO APPROVE MY CASE AND IF AUSTIN ENERGY OBJECTS, THEY CAN SAY SO IN THEIR CLOSING BRIEF, ALL RIGHT.
ANY, ANY RESPONSE ADMINISTER ADMINISTRATIVE COSTS FOR THE CAP PROGRAM ARE INCLUDED IN BASE RATES, WHICH IS WHY I DID NOT OBJECT TO EXHIBIT NUMBER ONE.
I DID SEE THE PHOTOGRAPH THAT HE INCLUDED IN HIS TESTIMONY.
UH, AND FRANKLY, WE TRIED TO BE ACCOMMODATING.
WE ACTUALLY DID NOT FOLLOW A MOTION TO STRIKE.
WE DID ADDRESS THESE ISSUES, UH, IN OUR REBUTTAL.
ALTHOUGH WE DO NOTE THAT WE BELIEVE THAT IT'S, IT'S BEYOND THE SCOPE OF THIS PROCEEDING.
SO WE STILL HAVE OUR, OUR OBJECTION.
UM, TELL YOU HOW I WANT TO HANDLE THIS, MR. ROBBINS.
UM, AND WE ARE, WE ARE ON THE RECORD.
UM, YOU KNOW, YOU'VE GOT ONE HOUR TOTAL FOR EVERYTHING AFTER WE GET PAST THIS STAGE, WHICH I HOPE WILL HAPPEN VERY SOON.
AND SO HERE'S WHAT I'M GOING TO DO.
UM, YOU CAN USE ROBIN'S EXHIBIT THREE AS A DEMONSTRATIVE.
YOU CAN ASK QUESTIONS ABOUT IT, BUT JUST KEEP IN MIND THAT WHEN WE FIGHT, WRITE THE FINAL REPORT, IF WE THINK THAT YOU'VE GONE INTO TERRITORY, THAT WE DON'T THINK IS RELEVANT TO THE BASE RATE REVIEW, WE'RE LIMITED THAT THIS TRIBUNAL INDEPENDENT HEARING EXAMINER POSITION IS LIMITED TO THE POWERS THAT ARE WITHIN THE PROCEDURAL GUIDELINES.
AND BASICALLY I DON'T HAVE UNLIMITED POWER TO REVIEW THINGS THAT ARE NOT RELEVANT.
SO IF WE FIND, YOU KNOW, PERHAPS YOU SPEND 30 MINUTES OF YOUR 60 MINUTES OF TIME ON THIS ISSUE, AND THEN WE LATER FIND, YOU KNOW WHAT, WE JUST DON'T THINK MUCH OF THAT WAS RELEVANT.
WE MAY SAY THAT, BUT I'LL TELL YOU WHAT WE'RE GOING TO LET YOU GO INTO IT AS MUCH AS YOU WANT.
I'M NOT SAYING THAT IT'S NOT RELEVANT YET BECAUSE OF WHAT MR. BUKIDO JUST SAID AND WHAT YOU ALSO SAID, BUT IN TERMS OF ADMITTING IT AS EVIDENCE AT THIS MOMENT, LET'S HOLD OFF, BUT YOU CAN DEFINITELY USE IT AS A DEMONSTRATIVE FOR NOW.
IT'LL BE ADMITTED AS A DEMONSTRATIVE.
[00:25:01]
ANY PROBLEM WITH THAT? I HAVE NO PROBLEM WITH THAT.I GO BY THE OLD MAXIM THAT BREVITY IS REWARDED.
UH, I WROTE MY SPEECH OUT LAST NIGHT TO EXPEDITE IT.
UH, SO I UNDERSTAND COMPLETELY AND SECOND, UH, YOUR PROVISO, YOUR WARNING ABOUT THIS MAY OR MAY NOT BE CONSIDERED, GOES FOR ANY PIECE OF EVIDENCE FROM ANY OF THE PARTIES.
OF COURSE, THAT'S ALWAYS, THAT'S ALWAYS THE CASE, BUT I AGREE.
ARE WE READY TO GET STARTED? UH, YOUR HONOR, MR. COOPER, UM, JUST ONE MORE THING, UH, FROM OUR TECHNOLOGY FOLKS, THEY'RE ASKING ONCE AGAIN TO PLEASE USE THE MICROPHONE WHEN YOU ARE SPEAKING.
ALSO, IF YOU ARE NOT SPEAKING, SPEAKING, PLEASE IMMEDIATELY TURN IT OFF.
IF WE HAVE A ROUND THREE OF THE MICROPHONES IN USE, THEN THAT'S WHEN WE'RE GETTING THE FEEDBACK.
AND SO WE RECOGNIZE THAT YOURS WILL LIKELY BE ON PERHAPS MOST OF THE TIME, UH, AND THEN WE'LL HAVE WITNESSES AND THEN AN ATTORNEY.
SO JUST KEEP THAT IN MIND IF EVERYONE WILL CAUSE WE'RE TRYING TO GET THE BEST QUALITY VIDEO WE CAN.
CAUSE I KNOW EVERYONE WANTS THAT TRANSCRIPT.
UM, AND THANK YOU FOR IT'S A TOUGH JOB.
THANK YOU FOR STAYING ON TOP OF EVERYONE.
IT MAKES ME SEEM A LITTLE BIT NICER.
UM, YOUR HONOR CAME READY TO HAVE A PANEL, YOUR HONOR, JAMES BRAZIL FOR SIERRA CLUB.
I WAS CURIOUS WHETHER, UH, A, HE WAS GOING TO ADDRESS OBJECTIONS TO THE EXHIBITS THAT WE JUST WERE ABLE TO HAND THEM BEFORE WE GET STARTED, OR IF THAT'S GOING TO BE SOMETHING WE'LL ADDRESS LATER ON.
UM, I WAS, DID, SO DID YOU HAVE MR. BRAZELLE, DO YOU HAVE CROSS EXHIBITS THAT YOU PROVIDED THIS MORNING? JUST THIS MORNING? UH HUH.
LET'S DO YOU WANT TO TALK ABOUT A COUPLE OF MORE THINGS? OKAY.
GOING BACK TO ROBIN'S EXHIBIT TWO, WE DID LOOK AT OUR DISCOVERY RESPONSE AND WE, WE CAN'T CONFIRM THAT WE PROVE THAT WHAT IS IN EXHIBIT TWO MATCHES WHAT WE PROVIDED IT.
MOST OF IT MATCHES, BUT THERE'S AT LEAST ONE COLUMN OF NUMBERS I SAW.
I DON'T KNOW IF MR. ROBINS, IF HE ADDED ANYTHING TO IT OR CHANGED IT IN ANY WAY, PLEASE RUN THAT BY ME AGAIN, SIR.
THE FINAL, UM, COLUMN ON PAGE TWO OF THE EXHIBIT HAS A COLUMN TITLED TOTAL WITH TOM ADJUSTMENT DID AD THAT I WAS TRYING TO MAKE IT EASY FOR THE READER.
WELL, HERE'S HOW I WOULD LIKE TO TREAT IT.
UM, GIVE US A SECOND, MR. BUKITO.
WHAT I WAS THINKING IS, UH, YOU KNOW, IF HE'S ADDED A COLUMN OBVIOUSLY, AND WE'VE DONE IT AND YOU'VE IDENTIFIED IT FOR US, I'M GOING TO TREAT THAT AS DEMONSTRATIVE IT'S, YOU KNOW, HE CAN, HE CAN DEVELOP A DEMONSTRATIVE AND WALK US THROUGH IT, WHATEVER HE WANTS TO DO WITH IT, THE MONSTER I'M GOING TO TREAT THAT AS DEMONSTRATIVE.
UM, IF THE CITY I'M SORRY, BOSTON ENERGY, UH, LATER DETERMINES THAT THERE'S OTHER STUFF IN EXHIBIT TWO, THAT WAS NOT PART OF YOUR DISCOVERY RESPONSE.
LET'S JUST LET ME KNOW ON THE RECORD AND WE'LL MAKE NOTE OF THAT.
BUT WHAT I'D REALLY LIKE TO DO IS MOVE THIS ALONG.
AND I, I UNDERSTAND THE IDENTIFICATION OF THAT.
IT'S NOT SOMETHING THAT AUSTIN ENERGY PROVIDED, WHICH IS IMPORTANT, UH, BUT I'M GOING TO TREAT IT AS DEMONSTRATIVE.
IF I MAY JUST FOR EASE, UH, ASKED MR. ROBBINS, ARE THERE ANY OTHER ADDITIONS OR CHANGES THAT WE, THAT YOU MADE TO THIS? IF I AM RECALLING CORRECTLY? CAUSE SOME OF THIS WAS DONE LATE AT NIGHT.
I BELIEVE THAT, UM, I ADJUSTED THE SALARIES, UH, INTO A COLUMN TO ACCOUNT FOR 2080 HOURS OF WORK A YEAR, UH, MULTIPLIED BY THE HOURLY SALARY.
AND IN THREE OF THOSE, I DIVIDED IT BY HALF BECAUSE AUSTIN ENERGY SAID IN THEIR DISCOVERY THAT THOSE THREE PEOPLE WERE HALF TIME ON THE PROGRAM.
IF PART OF EXHIBIT TWO IS IN THE RECORD AS RESPONSES TO YOUR DISCOVERY FROM AUSTIN ENERGY, IT'S ALREADY THERE.
SO I'M GOING TO TREAT EXHIBIT TWO, ROBIN'S EXHIBIT TWO, THE WHOLE DOCUMENT AS A DEMONSTRATIVE.
BUT WHAT I WOULD LIKE YOU TO DO IS POINT OUT TO US IF YOU'VE
[00:30:01]
ADDED A COLUMN OR YOU'VE TOTALED SOMETHING TO HELP US UNDERSTAND THE ISSUE BETTER.JUST NOTE THAT FOR US, DO YOUR BEST TO NOTE THAT FOR US, BUT LET ME JUST TREAT THE DOCUMENT AS A DEMONSTRATIVE BECAUSE IT'S ACTUALLY CUMULATIVE OF, OF STUFF THAT'S ALREADY AT LEAST BEEN ON THE, UH, BEEN FILED ON THE AWESOME ENERGY INTERCHANGE.
SO IT'S ALREADY, IT'S ALREADY OUT THERE AND IT'S ALREADY SOMETHING THAT YOU COULD RELY ON.
IS THAT, HOW DOES THAT SOUND WORKS? I APPRECIATE YOUR PATIENCE, YOUR HONOR.
UM, WE WERE JUST HANDED A MOMENT AGO, FIVE EXHIBITS FROM FCPC.
IF I MAY GO THROUGH THOSE, LET'S DO CPC ONE THROUGH FIVE.
WELL, THEY ARE LABELED FIVE THROUGH NINE AND I BELIEVE THAT'S BECAUSE ONE THROUGH FOUR ARE THEY'RE DIRECT CASE.
SO, UM, SEPC FIVE IS ONE OF OUR DISCOVERY RESPONSES FROM MR. RAVEN TO SON ONE DASH 12.
SCPC SIX APPEARS TO BE A DISCOVERY RESPONSE FROM TIC.
UM, SO I MEAN WE HAVE NO OBJECTION TO IT.
IT'S IT'S A RESPONSE FROM MR. POLLOCK TO ONE OF THEIR DISCOVERY CORE CLASS.
NO OBJECTION TO ONE OF OUR DISCOVERY RESPONSES.
I'M GOING TO SKIP OVER TO SEPC NINE, UH, APPEARS TO BE, UM, A RESIDENTIAL ELECTRIC TARIFF THAT'S CURRENTLY IN USE FOR AUSTIN ENERGY.
WE DON'T HAVE AN OBJECTION FOR US TO, TO OUR OWN TARIFF.
UM, AND THEN THAT LEAVES AAICPC EXHIBITS SEVEN AND EIGHT SEVEN APPEARS TO BE A NATIONAL STANDARD PRACTICE MANUAL FOR BENEFIT COST ANALYSIS OF DISTRICT DISTRIBUTED ENERGY RESOURCES, POWERPOINT FROM MARCH OF 2022 AND THEN EIGHT APPEARS TO BE IT'S THIS NOTEBOOK THAT IS A NATIONAL STANDARD PRACTICE MANUAL.
AGAIN FOR BENEFIT COST ANALYSIS OF DISTRIBUTED ENERGY RESOURCES.
WE WOULD OBJECT TO THE INCLUSION OF THESE DOCUMENTS FOR THE FOLLOWING REASONS.
NUMBER ONE, THEY'RE HEARSAY AS TO OUR WITNESSES.
NUMBER TWO, THEY WERE NOT RELIED UPON BY OUR WITNESSES.
NUMBER THREE, MR RABAGO AND PERHAPS OTHER AAICPC WITNESSES REFER TO THESE DOCUMENTS AND COULD HAVE, UM, ATTEMPTED TO, TO, UH, TO ADMIT THEM.
SO, YOU KNOW, IF, IF THEY WANT TO ASK QUESTIONS ABOUT THESE STANDARDS, UM, THEY CAN DO SO.
I DON'T KNOW WHAT OUR WITNESSES WILL SAY, BUT AS FAR AS ADMISSIBILITY, WE WOULD OBJECT.
UH, W W WE WANT OUR INTENT IS TO USE THEM AS A DEMONSTRATIVE DEMONSTRATIVE EXHIBIT OR DEMONSTRATIVE EXHIBITS TO ASK QUESTIONS FROM, BUT WITHOUT SEEKING TO OFFER THEM AT THIS EXHIBIT FOR THE TRUTH OF THE MATTERS CONTAINED THERE IN, OKAY.
AND MR. ROCKAUTO S CPC FIVE, SIX, AND NINE ARE ADMITTED AS CPC SEVEN AND EIGHT ARE ADMITTED AS DEMONSTRATIVE ONLY AT THIS TIME.
AND THERE IS ONE OTHER, UH, SUPC EXHIBIT THAT'S ITEM 10.
AND IT'S JUST A COPY OF THE 2030 PLAN.
UM, I'VE NOT SEEN THAT, BUT I'M FAMILIAR WITH IT AND WE WOULD HAVE NO OBJECTION TO THAT.
UH, AND I GUESS WE'RE SORT OF OPTIONAL COMPLETENESS, ALTHOUGH I THINK WE COULD TAKE JUDICIAL NOTICE OF IT AS WELL SINCE IT'S A COUNCIL APPROVED PLAN, BUT NO OBJECTION.
UM, SEPC 10 IS ADMITTED SUBJECT TO OPTIONAL COMPLETENESS AND SUBJECT TO CHECK BY AND ENERGY.
UH, YOUR HONOR, BEN HALLMARK FOR TIC APOLOGIES.
UM, IF WE COULD JUST REVISIT THAT THE ONE THAT'S A TIC RESPONSE SIMPLY ON THE BASIS THAT I HAVEN'T SEEN THE EXHIBIT, UM, YES.
SUBJECT, ALL OF THIS IS SUBJECT TO CHECK.
IF IT, WHEN I ADMIT SOMETHING AND SOMEONE LATER CATCHES SOMETHING IN THE DOCUMENT, LET'S JUST TALK ABOUT IT.
LET'S RAISE IT ON THE RECORD, ADDRESS IT AND MOVE ON.
WE CAN TAKE UP WHENEVER IT'S CONVENIENT.
DO YOU THINK, UM, HERE'S THE THING WE ALL KNOW THIS.
WE NEED TO GET STARTED ON WITNESSES ON THIS PANEL.
UH, DO YOU THINK THAT IT CAN HOLD OFF? ARE YOU GOING TO NEED IT FOR THE, FOR THE PANEL? OKAY.
WE'RE MAKING SOME, BUT LET ME FINISH WITH MR. HALLMARK REAL QUICK AND SEE IF HE HAS ANY OBJECTIONS.
UH, IT APPEARS TO JUST BE OUR DISCOVERY RESPONSE.
IF YOU CATCH ANYTHING, JUST LET US SMELL.
UH, OUR EXHIBIT TWO IS OUR CROSS REBUTTAL STATEMENT OF POSITION.
MR. DANIEL'S TESTIMONY IS WHAT IT IS ESSENTIALLY.
HE'S NOTICED A FEW VERY MINOR CLEANUP TYPE THINGS THAT HE NEEDS TO CHANGE.
MY QUESTION IS HOW SHOULD WE PRESENT THAT WEEK? WE ARE PREPARING A COMPLETELY IN A REVISED
[00:35:01]
VERSION, WHICH WE CAN JUST MOVE TO SUBSTITUTE, OR WE CAN JUST ADMIT THE NEW PAGES IS LIKE EXHIBIT TWO, A OR WE CAN DO ANYTHING YOU WANT TO DO.I JUST WANT TO MAKE SURE THAT WHEN WE LABEL ALL THIS STUFF, IT DOESN'T GO IN THE TRASHCAN.
UM, WELL, WOULDN'T YOU WANT TO RECYCLE IT? UH, SO SORRY.
SO, UM, YES, THE FIRST OPTION IS ALWAYS THE BEST OPTION.
HAVING SEPARATE PAGES FLOATING AROUND OUT THERE THAT WE NEED TO GO BACK AND LOOK AT.
I KNOW THAT THEY'RE JUST ONE EXHIBIT AWAY FROM THE ACTUAL EXHIBIT, BUT IF YOU COULD GET IT ALL INTO THE EXHIBIT, YOU CAN HAND, IT CAN BE HAND CORRECTIONS DOESN'T MATTER MATTER, JUST AS LONG AS WE GET THE CORRECTED VERSIONS HERE AND WE'LL SWAP THEM OUT.
AND EVERYONE WHO HAS A COPY WE'LL WE'LL GET THE CORRECTED VERSION.
THAT'S IT WE'LL HANDLE IT THAT WAY.
AND I'LL, UM, WHEN IT COMES TIME, WE'LL HANDLE IT IN THAT WAY.
AND IN THAT REGARD, WE HAVE A FEW OF THOSE AS WELL, WHICH I WOULD CONSIDER TYPICAL APPROPRIATE AND IT'S THAT ARE MADE ON THE STAND JUST HAPPENS.
JUST TO MAKE SURE THAT WE END UP WITH THE CORRECTED VERSION SO THAT WE DON'T MISQUOTE SOMETHING LATER.
ARE WE READY FOR, UH, AWESOME ENERGY PANEL? UH, I DID PREPARE AN OPENING THAT WE'D LIKE TO PROVIDE AND THEN PRESENT OUR WITNESSES IF THAT'S ACCEPTABLE.
SO LET'S START THE COUNT FOR AUSTIN ENERGY.
UM, MS. RADFORD, ARE YOU READY? I'M ON THE CLOCK.
THE REASON THAT WE ARE HERE TODAY IS BECAUSE AUSTIN ENERGY AND THE CITY OF AUSTIN ARE DEEPLY COMMITTED TO PROVIDING A THOROUGH AND COMPREHENSIVE EXAMINATION OF ITS BOOKS AND RECORDS BEFORE CHANGING HIS BASE RATES.
IT WELCOMES PARTICIPATION IN THE OPINIONS OF ITS CUSTOMERS.
OFTEN ENERGY'S RIGHTS ARE COMPRISED OF TWO COMPONENTS BASE RATES AND PASS THROUGH OR CHARGES BASE RATES ARE THE RATES AT ISSUE IN THIS PROCEEDING WITH THE EXCEPTION OF VALUE OF SOLAR TARIFF, WHICH I'LL ADDRESS LATER.
THIS CASE IS BASED UPON A COST OF SERVICE STUDY THAT COMPARES THE BASE REVENUE REQUIREMENT FOR THE TEST YEAR ENDING SEPTEMBER 30TH, 2021, ADJUSTED FOR KNOWN AND MEASURABLE CHANGES TO THE REVENUE GENERATED BY ITS CURRENT BASE RATES, WHICH WERE PREVIOUSLY SET IN 2014 WITH A 2014.
TEST YOUR, EXCUSE ME, AUSTIN ENERGY THEN CALCULATED THE DIFFERENCE BETWEEN THOSE TWO BALANCES TO DETERMINE THE PROPOSED CHANGES IN AUTHON ENERGIES BASE RATES.
THE COST OF SERVICE STUDY CONFIRMED THAT OFTEN ENERGIES RATES AND RATE STRUCTURES ARE NOT MEETING THE COST OF SERVING THE COMMUNITY.
IN PARTICULAR, CURRENT RESIDENTIAL BASE RATES DO NOT APPROPRIATELY RECOVER COST AUSTIN ENERGY INITIALLY PROPOSED TO INCREASE ITS BASE RATES BY $48.2 MILLION.
BUT AFTER REVIEWING THE PARTY'S POSITION STATEMENTS, OFTEN ENERGY HAS MADE ADJUSTMENTS, TOTALING $12.5 MILLION.
AND AS A RESULT OF THESE CHANGES HAS REDUCED ITS REQUEST TO 35.7 MILLION.
ADDITIONALLY, THE COST OF SERVICE STUDY RESULTS SUGGEST THAT CHANGES TO THE CURRENT RATE CLASS STRUCTURE ARE NOT ONLY WARRANTED, BUT NECESSARY TO ADDRESS THESE FINDINGS AND BRING BASE RATE FINANCIALS BACK INTO BALANCE.
OFTEN ENERGY IS PROPOSING TO NOT ONLY INCREASE ITS PAYS RATES TO ACCOUNT FOR HIGHER ONM COSTS, BUT ALSO TO UPDATE AN OUTDATED RESIDENTIAL BASE RATE STRUCTURE, WHICH DOES NOT ACCURATELY RECOVER THE COST TO SERVE CUSTOMERS.
THEY'VE ALSO PROPOSED IN THIS CASE TO BETTER RECOVER, FIXED COSTS BY RELYING LESS ON ENERGY SALES AND TO BRING CUSTOMERS CLOSER TO WHAT IT COSTS ACTUALLY SERVED THEM ESTABLISHING MORE EQUITABLE CHARGES.
AS THE COMMUNITY CONTINUES TO GROW BASE RATE CHANGES WILL ENSURE THAT OFTEN ENERGY'S FINANCIAL STABILITY ALLOWING THE UTILITY TO CONTINUE TO DELIVER AFFORDABLE, RELIABLE ELECTRIC SERVICE TO ITS CUSTOMERS.
NOW AS DISCUSSED BY AES WITNESSES, THESE CHANGES ARE NEEDED FOR SEVERAL REASONS.
OFTEN ENERGY IS LOST TO COMBINE $90 MILLION IN THE PAST TWO YEARS.
FURTHERMORE, THE CURRENT FINANCIAL CONDITION HAS RESULTED IN LESS THAN 150 DAYS OF CASH ON HAND IN VIOLATION OF THE CITY'S FINANCIAL POLICIES IN RESPONSE TO AMY'S DETERIORATING FINANCIAL CONDITION ON JUNE 28TH, JUST TWO WEEKS AGO, FITCH CREDIT RATINGS DOWNGRADED AUSTIN ENERGY FROM AA TO AA MINUS AND FITCH SIDED.
OFTEN ENERGIES ELEVATED LEVERAGE, WHICH HAS STEADILY INCREASED DURING THE PAST THREE YEARS AND WEAKER OPERATING CASH FLOWS PRIMARILY DRIVEN BY LOWER BASE RATE REVENUES THAT CONTRIBUTED TO THE UTILITIES RISING LEVERAGE, NOTABLY THIS DOWNRIGHT, EXCUSE ME, DOWNGRADE ASSUMES AT $48 MILLION INCREASES APPROVED.
DESPITE THIS, SOME PARTICIPANTS RECOMMEND LOWERING THE AMOUNT OF INTERNALLY GENERATED FUNDS, AND THIS WOULD RESULT IN EVEN MORE DEBT TO PRESERVE OFTEN ENERGY'S FINANCIAL HEALTH AUSTIN ENERGY'S BASE RATE POLL PROPOSAL SHOULD BE ADOPTED.
NOW I WANT TO PROVIDE SOME CONTEXT TO THIS RATE REQUEST.
THIS IS THE THIRD BASE RATE CASE.
[00:40:01]
ENERGY HAS HAD SINCE 1990 FOR A PERIOD OF 28 YEARS.IT HASN'T INCREASED ITS BASE RATES SINCE 2012 IT'S MOST RECENT BASE RATE CASE WAS IN 2016.
AND AT THAT TIME OFTEN ENERGY DECREASED RATES BY 42 AND A HALF MILLION DOLLARS.
NOW SIX YEARS LATER, AUSTIN SEEKS TO INCREASE THEM BY 35.7 MILLION STARTING IN 2023, SINCE AUSTIN ENERGY'S LAST RATE MAKING TEST YOUR PRICES AS MEASURED MONTHLY BY THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS, FUELS AND UTILITIES HAVE INCREASED BY 16 AND A HALF PERCENT WHILE RATES HAVE REMAINED UNCHANGED.
THERE ARE 14 PARTICIPANTS IN THIS CASE AND 10 OF THEM FILED STATEMENTS OF POSITION OR TESTIMONY.
SIX OF THEM HAVE TAKEN EXCEPTION TO AUSTIN.
ENERGY'S PROPOSED REVENUE REQUIREMENTS.
THESE ADJUSTMENTS RANGE BETWEEN 11 AND 41.7 MILLION ACCEPTANCE OF THE MAJORITY OF THE PARTICIPANTS ADJUSTMENTS TO THE REVEREND REQUIREMENT WOULD ACCELERATE THE DETERIORATION OF AUSTIN ENERGY'S FINANCIAL POSITION, DECREASE AUSTIN ENERGY'S OPERATING CASHFLOW AND FORCE OFF AND ENERGY TO EXPEND ITS CASH RESERVES AS WELL AS INCREASED DEBT.
AUSTIN IS REQUESTING ADJUSTMENTS TO HIS BASE RATES FOR REALLY THREE PRIMARY REASONS.
FIRST, THE UTILITIES FINANCIAL HEALTH IS DETERIORATING.
AS I MENTIONED, DUE TO INCREASES IN COSTS.
SECOND AUSTIN ENERGY NEEDS TO REVISE ITS RIGHT DESIGN, ESPECIALLY FOR RESIDENTIAL CUSTOMERS TO STABILIZE REVENUES AND MORE EQUITABLY RECOVER ITS COSTS.
FINALLY, WITHOUT BASE RATES, AUSTIN ENERGY WILL BE IN RISK OF CONTINUING TO VIOLATE FINANCIAL POLICIES ADOPTED BY CITY COUNCIL WITH RESPECT TO ITS RATE STRUCTURE.
AUSTIN ENERGY IS PROPOSING IN THIS CASE TO REDUCE THE NUMBER OF RESIDENTIAL RATE TIERS FROM FIVE TO THREE, AS WELL AS FLATTENING THE TIERS.
THEY'RE ALSO PROPOSING ELIMINATION OF THE BASE RATE DIFFERENTIAL BETWEEN INSIDE AND OUTSIDE CITY OF AUSTIN CUSTOMERS, AS WELL AS ELIMINATING THE BILLING UNIT ADJUSTMENT THAT CURRENTLY BENEFITS, LOW LOAD FACTOR COMMERCIAL CUSTOMERS, AND FINALLY INCREASING THE FIXED CHARGES FOR REVENUE RE STABILITY BY INCREASING THE RESIDENTIAL CUSTOMER CHARGE FROM $10 TO $25 PER MONTH, THERE ARE SEVERAL FACTORS CAUSING THE NEEDS FOR THESE CHANGES, UNPRECEDENTED CUSTOMER GROWTH COMBINED WITH HIGH INFRASTRUCTURE INVESTMENT.
AND DESPITE THE INCREASED NUMBER OF CUSTOMERS LOAD GROWTH HAS NOT KEPT PACE.
CUSTOMER GROWTH BRINGS INCREASED UTILITY INFRASTRUCTURE, INVESTMENT AND COSTS, BUT BASE REVENUES HAVE LAGGED.
THE DISPARITY IS DUE IN PART TO CUSTOMER DEMOGRAPHIC TRENDS, INCLUDING INCREASING SHARE OF MULTIFAMILY UNITS, SUCH AS DOWNTOWN CONDOS AND APARTMENTS AS COMPARED TO SINGLE FAMILY HOMES, THE HOUSING MIX BECOMING SMALLER AND MORE EFFICIENT AND AN INCREASE IN ENERGY EFFICIENCY DUE TO A VARIETY OF FACTORS.
THE DECLINING AVERAGE CONSUMPTION KEEPS ENERGY SALES FLAT.
DESPITE CUSTOMER GROWTH REVENUE GROWTH IS HAMPERED BY OUTDATED RATE DESIGNS THAT RELY TOO HEAVILY ON ENERGY SALES, PARTICULARLY IN THE RESIDENTIAL CLASS ACCORDINGLY, OFTEN ENERGY PROPOSES MOVING THESE CLASSES CLOSER TO COST OF SERVICE.
NOW, DESPITE THESE IMBALANCES AUSTIN ENERGY IS MINDFUL OF RATE IMPACTS AND THE NEED FOR GRADUALISM AND AS SUCH, ALL OF A SUDDEN HAS PROPOSED MOVING THE RESIDENTIAL CLASS 50% TO COST RATHER THAN ELIMINATION OF THE ENTIRE SUBSIDY IN RESPONSE TO AES PROPOSED RESIDENTIAL RATE DESIGN CHANGES.
PARTICIPANTS HAD PRESENTED TWO BASIC ARGUMENTS EITHER TO LEAVE THE RIGHT DESIGN UNCHANGED OR TO MAKE MINOR CHANGES.
THESE POSITIONS ARE NOT ACCEPTABLE.
AUSTIN ENERGY'S CURRENT RESIDENTIAL BASE RATE DESIGN IS BASED ON A 2009 TEST YEAR.
AND RESIDENTIAL COST CONSUMPTION HAS CHANGED GREATLY OVER THE PAST 13 YEARS.
AS I NOTED IN THIS PERIOD, THE NUMBER OF CUSTOMERS WITH KWH CONSUMPTION IN LOWER TIERS PRICED BELOW COST OF SERVICE HAS INCREASED MORE THAN 40% OF RESIDENTIAL CUSTOMERS ARE BEING SUBSIDIZED BY OTHER RESIDENTIAL CUSTOMERS.
AMY'S RESIDENTIAL FAITH RATE PROPOSAL IS COMPLIANT WITH ITS FINANCIAL POLICIES AND BOND COVENANTS, AND IS CONSISTENT WITH RAINMAKING PRINCIPLES, INCLUDING GRADUALISM FINALLY SEPARATE FROM THE BASE RATE REVIEW.
OFTEN ENERGY IS PROPOSING A NEW APPROACH THAT PROVIDES GREATER TRANSPARENCY AND FLEXIBILITY.
AS WE SEEK TO ACHIEVE A VALUE SOLAR RATE DESIGN THAT FAIRLY COMPENSATE CUSTOMERS FOR THEIR ONSITE, RENEWABLE ENERGY PRODUCTION AND ADEQUATELY STIMULATES CUSTOMER SIDED, SOLAR ADOPTION TO HELP MEET THE CITY'S RESOURCE GENERATION CLIMATE PROTECTION GOALS.
AUSTIN HAS IDENTIFIED THAT SOME COMPONENTS USE TO CALCULATE THE VALUE OF SOLAR RATE ARE BASED ON ASSUMPTIONS THAT NO LONGER ALIGN WITH THE UNDERLYING COSTS AND IS THEREFORE PROPOSING A NEW METHODOLOGY THAT MORE ACCURATELY ALLOCATES COSTS IN ACCORDANCE WITH STANDARD UTILITY RATE MAKING PRACTICES
[00:45:01]
WITH THESE CHANGES, AG WILL CONTINUE TO BE A NATIONAL LEADER IN THE DEVELOPMENT OF SOLAR DEMAND, SIDE MANAGEMENT AND RENEWABLE ENERGY INITIATIVES.I'D LIKE TO SPEAK BRIEFLY ABOUT THE PROCESS IN THIS BASE RATE REVIEW.
THIS IHG PROCESS IS UNIQUE AMONG
THE ABILITY TO ANALYZE AUSTIN ENERGY'S PROPOSALS WITH THE EXCEPTION OF THE VALUE OF SOLAR TARIFF, WHICH A IS REQUIRED TO ADDRESS IN THIS MATTER.
AND TO THOSE FAMILIAR WITH THE LAW AND THE STATE REGULATORY SCHEME, THIS APPROACH IS NOT UNUSUAL.
AUSTIN ENERGY ENTERED INTO A DELIBERATIVE PROCESS IN ORDER TO RECEIVE PUBLIC INPUT IN THE SETTING OF ITS BASE RATES AND TO BETTER SERVE ITS CUSTOMERS IN TOTAL, AUSTIN ENERGY HAS RESPONDED TO OVER 500 DISCOVERY QUESTIONS, HELD MULTIPLE TECHNICAL CONFERENCES AND HOSTED NUMEROUS PUBLIC MEETINGS.
NO OTHER UTILITY IN THE STATE HAS AN UNDERGONE, SUCH A COMPREHENSIVE AND TRANSPARENT PROCESS.
AND MOREOVER, THAT TRANSPARENCY EXISTS ONLY BECAUSE HE REMAINS COMMITTED TO SUCH GOALS IN CONCLUSION, AUSTIN ENERGY AS A PUBLIC POWER UTILITY AND IS OWNED BY THE COMMUNITY.
IT SERVES ITS MISSION IS TO PROVIDE CLEAN, RELIABLE, AFFORDABLE ENERGY, AND EXCELLENT CUSTOMER SERVICE.
AUSTIN ENERGY TAKES PRIDE IN SERVING THE COMMUNITY FOR OVER 125 YEARS, BUT TO CONTINUE TO MEET ITS MISSION, IT MUST REMAIN FINANCIALLY STRONG.
AND THAT IS WHAT AUSTIN ENERGY IS SEEKING IN THIS CASE TO ENSURE FINANCIAL STRENGTH.
IT EXTENDS ITS APPRECIATION TO THE IHG FOR THOUGHTFUL CONSIDERATION OF THE EVIDENCE AND PATIENTS WITH THIS PROCESS, YOUR REPORT WILL PROVIDE GUIDANCE TO AUSTIN ENERGY AND THE CITY COUNCIL ON PROVIDING BETTER SERVICE AND REACHING THE PROPER OUTCOME IN THIS CASE.
UM, ALL RIGHT, WE'VE BEEN ON THE RECORD ON AND OFF FOR AN HOUR.
ARE WE READY TO, UH, HAVE THE PANEL UP OR DO WE NEED TO TAKE A SHORT BREAK WHILE THE PANELS GETTING, UH, GETTING SET UP? IT'S UP TO IT'S UP TO THE PARTIES.
ARE YOU READY TO START WITH THE PANEL OR DO WE WANT TO TAKE A SHORT BREAK FIVE MINUTES OR SO? OKAY.
LET'S TAKE A FIVE MINUTE BREAK.
WELL, IN THE MEANWHILE WE'D ASKED THAT PANEL NUMBER ONE, GATHER THEM, WE'LL GO OFF THE ITEMS AND UM, LET'S GO ON THE RECORD AND THIS IS THE WE'RE READY TO START THE IN JUST A SECOND.
SO THIS IS THE AUSTIN ENERGY PANEL PRESENTATION.
UM, I'LL NOTE THAT, UH, BEFORE GOING ON THE RECORD, I ASKED ABOUT THE ORDER OF CROSS-EXAMINATION WAS VICTOR MARTINEZ, NATIONAL INSTRUMENTS, AND ARMA DID NOT DO NOT APPEAR TO BE HERE OR REPRESENTATIVES FOR THEM.
SO WE'RE GOING TO START OUT WITH CWR BEFORE WE DO THAT, UH, VERY BRIEFLY AT THE PANEL MEMBERS WOULD EACH, UH, JUST INTRODUCE YOURSELF, STARTING TO MY LEFT YOUR RIGHT, IF YOU WOULD PLEASE.
I AM THE VICE PRESIDENT OF FINANCE HERE AT AUSTIN ENERGY.
I'M PRINCIPAL ACCOUNTING MANAGER HERE AT AUSTIN ENERGY.
THANK YOU, HERNANDO OR JERRY GALVAN.
UH VICE-PRESIDENT OF CUSTOMER CARE SERVICES, AUSTIN ENERGY.
UM, UH, FOR, TO WR ACTUALLY, YOUR HONOR, WE HAVE ONE HOUSEKEEPING MATTER, UM, AND THAT IS, UM, A CORRECTION TO BE MADE TO THE, UM, RIGHT FILING PACKAGE.
GIVE ME, LET'S GO OFF THE RECORD FOR JUST ONE SECOND.
WE'RE BACK ON THE RECORD AND MR. BROOKE CATO.
UH, MR. MANUS, ARE THERE ANY CHANGES THAT YOU NEED TO MAKE TO THE BASE RATE FILING PACKAGE THAT'S BEEN ADMITTED AS AUSTIN ENERGY EXHIBIT ONE? YES, SIR.
UH, ON PAGE EIGHT UNDER THE RIGHT FILING PACKAGE AND THE PARAGRAPH TITLED MARGINAL LOAD GROWTH.
I BELIEVE IT IS THE THIRD SENTENCE.
THE SENTENCE READS THE NUMBER OF CUSTOMERS GREW AT A COMPOUNDED RATE OF 3.2% FROM FISCAL YEAR 2014 TO 2021.
IN THAT SENTENCE, STRIKE THE 3.2 AND REPLACE IT WITH 2.4.
THE NEXT SENTENCE SAYS DURING THE SAME PERIOD, AUSTIN ENERGY'S NORMALIZED RETAIL ENERGY SALES EXPERIENCED A POINT TO 9% COMPOUNDED GROWTH RATE IN THAT SENTENCE, STRIKE THE WORD NORMALIZED
[00:50:01]
AND REPLACED THE 0.9% WITH 0.6.ARE THERE ANY OTHER CHANGES THAT YOU NEED TO MAKE AT THIS TIME? NO, SIR.
YOUR HONOR, TYPICALLY I WOULD ASK THE WITNESS TO MAKE CHANGES TO THE RECORD COPY, BUT JUST GIVEN THE CIRCUMSTANCES WE'LL JUST DO AS YOU INSTRUCTED EARLIER AND MAKE SURE THAT THESE CHANGES ARE REFLECTED IN WHATEVER COPIES THAT YOU ALL ARE GOING TO RELY UPON.
THE TWO, UH, HARD COPIES THAT WE HAVE HERE, IF WE COULD MAKE CHANGES TO THAT.
UM, AND WE MAY BE ABLE TO DO IT RIGHT HERE AND LET YOU CHECK IT OR WE CAN HAND THEM TO YOU.
WHAT, HOWEVER YOU WANT PERFECT IMPACT.
UH, AND WITHOUT WE WOULD TENDER THE WITNESSES, UH, FOR CROSS EXAMINATION.
JUST ONE MORE TECHNICAL MATTER.
WE WERE THINKING THAT MAYBE WE MIGHT TAKE THIS, BUY BACK MIKE AND ADD IT TO THE WITNESS TABLE, UM, TO MAKE IT MORE EFFICIENT.
Y'ALL IT'S BEEN A LONG TIME AND I'VE, I'VE SEEN A COUPLE OF Y'ALL BEFORE IN PREVIOUS CASES AND IT'S NICE TO SEE YOU AGAIN.
NICE TO SEE Y'ALL ARE STILL WITH US AND ENERGY.
UH, DO ALL OF YOU ALL SPONSOR, UH, THE COST OF THE REPORT AND THE COST OF SERVICE WORK PAPERS WE EACH WANT TO REPORT SHOW THEM? YES.
AND COULD YOU TELL ME THE PORTIONS THAT YOU SPONSOR? SO I'M MARK DEBRASKI, WE'LL BE SPONSORING, UM, SECTION ONE INTRODUCTION, SECTION TWO, OVER YOU, A BASE RATE FILING SECTION THREE BASE RATE REVIEW PROCESS, AND ON SECTION 7.3, PROPOSED RESIDENTIAL RATES, RUSTY AND GENIUS, VICE PRESIDENT OF FINANCE.
I WILL BE, UH, SPONSORING, UM, UH, SECTION 1.1 NEED FOR, UH, 20, 20, 22 AUSTIN ENERGY BASED RATE REVIEW, UM, SECTION FOR THE APPROACH, UH, 4.1 4.2 4.3, EXCUSE ME, NOT 4.3.
UM, THE APPROACH AND THE CASHFLOW METHODOLOGY.
UH, BUT I WILL NOT BE SPEAKING TO THE NUMBERS EMBEDDED INTO THE COST OF SERVICE.
UH, I WILL DEFER TO, UH, WITNESS RAVEN ON, IN THAT REGARD.
I ALSO, UH, SPONSOR, UM, SECTION 9.1 AND 9.2 OF THE VALUE OF SELLER AS WELL AS SECTION 10 AFFORDABILITY, DESIGN AFFORDABILITY GO AND BENCHMARK AGAINST OTHER UTILITIES AND I'M MONICA GONZALES.
I'LL BE COVERING PORTIONS OF THE REVENUE REQUIREMENT, INCLUDING 4.2 0.1, OPERATION AND MAINTENANCE EXPENSE, 4.2 0.2 DEPRECIATION EXPENSE AND AMORTIZATION OF CONTRIBUTIONS, 4.2 0.3 CAPITAL EXPENDITURES AND 4.2
[00:55:01]
0.1 OTHER REVENUE.JERRY GALVAN, VICE-PRESIDENT CUSTOMER CARE.
I'M SPONSORING THE THREE ONE, ONE CALL CENTER PIECE AND THE CUSTOMER ASSISTANCE PROGRAM.
IF YOU WANT ME TO, I CAN TAKE THE TIME TO GIVE YOU A SPECIFIC, WELL, THANK YOU.
UM, NOW MR HAS SAID THAT HE, UH, IS NOT SPONSORING THE, THE ACTUAL DATA THAT'S IN THE COST OF SERVICE.
WOULD THAT BE TRUE? IF I WERE TO ASK EACH OF THE OTHER THREE THAT'S TRUE.
UH, WITNESS RAVEN IS THE SUBJECT MATTER EXPERT ON THE COST OF SERVICE MODEL ITSELF.
AND SO SAY YOU MISS MS. GONZALEZ AND MR. GALVIN.
UH, NOW DID YOU ALL REVIEW, UH, THE RIGHT FILING PACKAGE AND IN TOTAL AND NOT JUST YOUR PARTS OR WERE YOU JUST GIVEN YOUR PART AND GAVE YOUR PART AND LET SOMEBODY ELSE DO IT? I HAVE REVIEWED THE ENTIRE RIGHT FILING PACKAGE.
I AS WELL HAVE REVIEWED THE ENTIRE RATE FILING PACKAGE.
I'M ACQUAINTED WITH MORE PORTIONS, BUT MOSTLY CONCERNING JUST MY PORTIONS, MINE SPECIFIC TO THE PIECES THAT I MENTIONED.
AND THEN AS TO MR. MARTINEZ AND MR.
SO IF I WERE TO ASK YOU TO, I HAD A DATA POINT THAT I'VE RECEIVED IN, IN, UH, RFS AND WERE TO ASK YOU TO IDENTIFY IT IN THE COST OF SERVICE, TO TELL ME WHERE IT IS, YOU WOULD NOT BE THE PEOPLE TO ASK.
IS THAT CORRECT? IT WOULD BE POSSIBLE, BUT I MAY DEFER TO ANOTHER WITNESS.
WELL, LET ME JUST GO AHEAD AND ASK IT, CAUSE I'M ALMOST THROUGH, WE'RE ALMOST OUT OF HERE.
IF YOU COULD LOOK AT WHAT'S BEEN MARKED FOR IDENTIFY, WELL, I'M SORRY, I'M JUST BEING ROUTE.
WHAT'S BEEN INTRODUCED AS, UH, TWR EXHIBIT NUMBER 19 AND THERE IS A WHOLE THING AND IT'S THE LAST ONE.
SO IT SHOULD BE AT THE BOTTOM YES, SIR.
ENERGY'S RESPONSE TO S S S FIRST RFI ONE DASH ONE FIVE.
SO IF WE LOOK AT, UH, G YOUR ANSWER TO SUBPART G IT STATES AUSTIN ENERGY'S ANNUAL COST FOR OPERATIONS AND MAINTENANCE OF THE UTILITY BILLING SYSTEM IS APPROXIMATELY $8.2 MILLION.
NOW I LOOKED AND THE COST OF SERVICE, AND I CAN'T FIND IT LOCATED IN THE COST OF SERVICE.
AND SO I WOULD LIKE YOU ALL TO POINT OUT IN THE COST OF SERVICE WHERE THAT NUMBER IS UH, YES, I'LL, I'LL DEFER TO A WITNESS, RAVEN.
AND SO SAY YOU MR. DEL ROSKI, THAT'S CORRECT.
AND THANK YOU ALL SO MUCH FOR TALKING WITH ME TODAY.
I PASS THE WITNESS, YOUR HONOR.
UM, MR. ROBBINS, MAY I HAVE MY FIRST SLIDE, PLEASE? I HOPE MY TIME ISN'T CLIPPED.
I HAVE MY FIRST, UH, POLICE WENT UP PLEASE, UH, FOOT TO THE NEXT SIDE, PLEASE.
[01:00:10]
THANK YOU.UH, MR. GALVIN, ACCORDING TO INFORMATION THAT YOU PREPARED FOR THIS RATE CASE IN 2021, WHICH A JUDGE HAS ADVISED THAT I DESCRIBE AS DEMONSTRATIVE, UH, AND IT IS DEMONSTRATIVE BECAUSE, UH, I ADDED CALCULATIONS TO MAKE IT EASIER FOR THE READER TO UNDERSTAND.
BUT ACCORDING TO THIS INFORMATION, IN THE RIGHT CASE, ABOUT $2.8 MILLION WAS USED TO ADMINISTER THE CUSTOMER ASSISTANCE PROGRAM IN 2021, THAT'S FUNDED BY AUSTIN UTILITY RATES, INCLUDING THE RIGHT CASE THAT WE ARE DISCUSSING TODAY.
IS THIS CORRECT? CAN YOU SPECIFY, CAN YOU CLARIFY, UH, THE CON THE QUESTION, I, I KNOW WHAT YOU'RE TALKING ABOUT IN TERMS OF WHAT I SEE HERE, BUT WHAT IS SPECIFIC, WHAT IS THE SPECIFIC QUESTION HERE? UM, I CALCULATE THAT BETWEEN SALARIES AND ADMINISTRATIVE COSTS AND BENEFITS TO EMPLOYEES, THE CUSTOMER ASSISTANCE PROGRAM SPENDS ABOUT $2.8 MILLION A YEAR ON ADMINISTRATIVE COSTS.
I WOULD DEFER TO MR. RAVEN, WHO HAS, SO ALL THOSE NUMBERS, YOU WOULD, UH, REFER THIS TO WHOM, TO MR. RAVEN THAT HAS ALL OF THE, UH, FINANCIAL, UH, DATA, UH, AND HE'LL BE UP LATER.
UH, I'M GOING TO NOTE, UH, THAT, UH, UH, WHILE I CAN FOLLOW UP, THESE ARE MY CALCULATIONS.
UM, CAP IS INTENDED TO SERVE ABOUT PEOPLE AT, OR BELOW 200% OF POVERTY.
AND AS YOU CAN SEE, HERE ARE HERE'S A HOME WHOSE OWNER IS RECEIVING CAP MEANT FOR THE POOR 2020, UH, TO CORRECT MR. RICARDO, I DID NOT DRIVE THROUGH AND GET A FRONTAL SHOT OF THIS HOME.
UH, I TRIED, BUT THE GUARD WOULDN'T LET ME IN THE GATED COMMUNITY.
SO I HAD TO USE A SATELLITE PHOTO, UH, BY APPEARANCES.
THAT'S A TENNIS COURT IN THE FAR LEFT CORNER.
UM, EVEN IF I'M WRONG TO HAVE SUCH AN EXPENSIVE ASSET, UH, THAT THE TRULY POOR DO NOT HAVE MAKES IT QUESTIONABLE THAT THIS CUSTOMER SHOULD RECEIVE ASSISTANCE SAUCE.
OH, WAIT A MINUTE, YOUR HONOR.
UM, THERE WAS A LOT TO UNPACKAGE THERE.
IF HE, IF HE HAS QUESTIONS FOR THE PANELISTS, THEN CERTAINLY WE'RE AMENABLE TO THAT.
BUT IF HE'S JUST GOING TO GO THROUGH AND MAKE STATEMENTS ABOUT, NO, I DO HAVE A QUESTION, SIR, AND I HOPE THAT THIS DOESN'T COME OFF MY TIME.
UH, HERE'S ANOTHER, UH, AND I'LL HAVE A THIRD EXAMPLE AS WELL.
UH, HERE'S ANOTHER, AN OLD WEST AUSTIN, UH, THAT, UH, IS A HIGH END HOME RECEIVING CUSTOMER ASSISTANCE.
AND HERE'S THE THIRD ONE IN NORTHWEST AUSTIN, AN EXPENSIVE HOME RECEIVING CUSTOMER ASSISTANCE.
SO MY QUESTION IS WHAT PERCENTAGE OF YOUR ADMINISTRATIVE COSTS, HOW MUCH IN IMPROVEMENT EXPENDITURES ARE SPENT ON PEOPLE IN SUCH HOMES, A FOLLOW UP QUESTION, UH, YOU HAVE A FAIRLY LARGE ADMINISTRATIVE STAFF FOR THIS PROGRAM.
HAVE YOU EVER TRIED TO PROACTIVELY RESEARCH THIS? UM, MR. ROBBINS, ONE THING REAL QUICK, YOU DO WANT IT, YOU NEED TO ASK THE QUESTION AND THEN LET LET A PANELIST ANSWER, AND THEN YOU HAVE YOUR FOLLOWUP QUESTION, BUT THEY, YOU JUST ASKED TWO QUESTIONS.
I APOLOGIZE THAT MY FIRST QUESTION AGAIN IS WHAT PERCENTAGE OF YOUR ADMINISTRATIVE COSTS, HOW MUCH IN IMPRUDENT EXPENDITURES ARE SPENT ON PEOPLE WHO LIVE IN SUCH HOMES? WELL, LET ME ASK, UH, ADD A LITTLE BIT OF CLARITY HERE.
UH, IF MEMORY SERVES ME, THIS IS FROM A LIST OF A HUNDRED AND TWENTY THREE, A HUNDRED AND TWENTY FOUR PROPERTY, SIR, UH, THAT YOU IDENTIFIED BACK IN 2020, UH, MAYBE EVEN EARLY 2021.
UH, AND, UH, THAT WAS FROM A LIST OF 13,000, UH, WATER WASTEWATER ACCOUNTS THAT WERE
[01:05:01]
RECEIVING THE CAP DISCOUNT.UH, SO WE ARE TALKING ABOUT LESS THAN, UH, WHAT IS IT? 9, 9, 1 THOUSANDS OF 1%.
UM, AND, UM, MOREOVER ALL OF THOSE ACCOUNTS WERE REVIEWED BY THE CITY OF AUSTIN, UH, AUDITOR IN A SPECIAL PROJECT IN LATE 2021.
UH, AND IF MEMORY SERVES ME, IT WAS FOUND THAT AUSTIN ENERGY WAS, UH, ADEQUATELY DETERMINING ELIGIBILITY.
UM, AND THE, ALSO THE SAMPLE SIZE THAT WAS USED AND REVIEWED WAS 80% HOMEOWNERS, 18%, MULTIPLE PROPERTY OWNERS.
UH, IT IS NOT CONSISTENT WITH A TYPICAL CUSTOMER IN THE CUSTOMER ASSISTANCE DISCOUNT PROGRAM.
UM, W MOST OF THEM ARE RENTERS, UH, AND IT WAS A, UH, NON, UH, IT WAS NOT A STATISTICALLY, UM, UH, SINCE THIS IS THE LEAST SIGNIFICANT SAMPLE.
SO JUST TO ADD CLARITY TO THAT, IT'S 124, I BELIEVE OUT OF, UH, 35,000 ACCOUNTS THERE, 13,000 ACCOUNTS.
UH, HAVE YOU EVER PROACTIVELY TRIED TO RESEARCH THIS QUESTION? I'VE STAYED UP MANY NIGHTS TRYING TO FAIR IT OUT, THESE INEFFICIENCIES, UH, A MIDDLE SCHOOL STUDENT COULD, IT DOESN'T REQUIRE SOPHISTICATION OF MORE THAN A MIDDLE SCHOOL STUDENT TO DO IT.
HAS YOUR STAFF EVER TRIED TO TROUBLESHOOT THIS THEMSELVES? ABSOLUTELY.
UH, WE'VE WORKED ON THIS AS YOU, AS YOU MAY BE AWARE YEAR OVER YEAR.
UM, IN 2018, I THINK WE IMPLEMENTED A SECONDARY INCOME VERIFICATION PROCESS FOR PROPERTIES THAT HAVE A VALUE OF 250,000 OR MORE.
UM, WHAT HAPPENS WITH THOSE CUSTOMERS THAT, UM, ARE WE, WE SEE THIS WITH SENIOR CITIZENS, ONE OF THE UNINTENDED CONSEQUENCES OF AN EFFICIENT PROGRAM, UM, THAT, UM, THEY'D RECEIVE A MEDICAID BENEFIT AND THEY ARE LOW INCOME AND MEDICAID INCOME VERIFY THEM.
UM, UH, AND AUSTIN ENERGY TAKES THOSE CUSTOMERS THAT MEDICAID AND OTHER SOCIAL SERVICE PROGRAMS PAID FOR THEIR INCOME VERIFICATION.
UH, WE TAKE THOSE CUSTOMERS AND WE AUTOMATICALLY ENROLL THEM BECAUSE WE KNOW THEY WERE INCOME VERIFIED, HOWEVER, BECAUSE THEY ARE NUANCES IN EVERY PROGRAM AND WE HAVE SENIOR CITIZENS THAT NEED, AS THEY AGE MOVE INTO WITH THEIR FAMILY.
UH, WE CREATED THIS SECONDARY INCOME VERIFICATION PROCESS WHERE WE LOOK AT THE IMPROVEMENT VALUE OF THE HOMES.
I CAN TELL YOU THAT THAT WAS 2020 DATA, UH, BY 2021.
NONE OF THOSE CUSTOMERS WERE RECEIVING AT THE DATA WITH THE EXCEPTION OF MAYBE, UH, THE DISCOUNT WITH THE EXCEPTION OF, UH, YOU KNOW, W WHAT INFORMATION THE CITY OF AUSTIN AUDITOR PROVIDED IN THE SPECIAL PROJECT.
YOU ACTUALLY, THE CITY AUDITOR DID FIND FAULT WITH SEVERAL DOZEN, BUT, UH, THERE'S, UH, ANOTHER ISSUE HERE IS THAT, UM, KNOW, LET ME PHRASE THIS IN THE FORM OF A QUESTION, UH, YOU ONLY SCREEN OUT PEOPLE WITH HIGH PROPERTY WEALTH.
UH, DO YOU SCREEN PEOPLE FOR THEIR SALARIES OR, UH, IF THEY OWN STOCKS OR S OR JEWELRY OR SOMETHING OF HIGH VALUE? YEAH.
THE, THE PROGRAM IS DESIGNED, UH, FOR THOSE OF YOU THAT HAVE NOT, UH, OR HEARD ABOUT THIS PROGRAM AT THE DISCOUNT PROGRAM IS DESIGNED YOU, IF YOU ARE A RECEIVING A BENEFICIARY OF BENEFITS LIKE MEDICAID SNAP, WHICH IS THE OLD TERM I USED TO USE IN THE OLD, IN THESE FOOD STAMPS, WHAT IS NUTRITION ASSISTANCE PROGRAM, UM, MEDICAID, UM, MEDICAL PROGRAM, TRAVIS COUNTY, COMPREHENSIVE ENERGY ASSISTANCE.
THERE ARE SEVERAL PROGRAMS THAT ARE PROVIDERS TO OUR CUSTOMERS, UH, AND THEY INCOME SCREEN THE CUSTOMERS.
SO WE HAVE AN EFFICIENT PROCESS.
WE DON'T PAY FOR A SECOND INCOME VERIFICATION.
IF THE COUNTY, THE STATE, THE FEDERAL GOVERNMENT ALREADY DETERMINED THAT THE PERSON IS LOW INCOME.
HAVING SAID THAT THERE IS THAT UNINTENDED CONSEQUENCE OF A CHILD BEING ADOPTED BY SOMEBODY WEALTHY OR A SENIOR CITIZEN MOVING IN WITH THEIR KID THAT IS WELL OFF.
[01:10:01]
AND WE HAVE THAT SECONDARY INCOME VERIFICATION PROCESS TO CATCH THOSE.AND WE HAVE CONTINUED TO TWEAK THE PROGRAM TO JUST MAKE IT EVEN TIGHTER.
AND LET ME JUST ADD ONE LAST PIECE HERE.
IF WE WERE TO INCOME, VERIFY EVERY ONE OF THOSE 35,000 CUSTOMERS THAT THE STATE, THE COUNTY ALREADY, UM, INCOME VERIFIED, WE WOULD BE INCREASING ONM, NOT DECREASING IT.
WASN'T THERE, WASN'T THE PERSON WHO LIVING IN THIS HOME INCOME VERIFIED.
AND I COULDN'T TALK SPECIFICALLY ABOUT ANY ONE INDIVIDUAL BECAUSE OF PRIVACY CONCERNS.
WELL, YOU JUST SAID, BUT WHAT I CAN TELL YOU IS THAT IF THIS PROPERTY WAS PART OF THE 124, YOU PROVIDED, UH, THE CITY OF AUSTIN, UM, THE OFFICE OF THE AUDITOR, UH, THEY'RE NOT, THEY'RE NO LONGER IN THE PROGRAM.
UH, YOU MENTIONED A MOMENT AGO THAT, UH, YOUR COSTS WOULD INCREASE IF EVERYONE WAS INCOME VERIFIED.
ARE YOU AWARE THAT IN THE SACRAMENTO MUNICIPAL UTILITY DISTRICT, THEY HAVE A LOW-INCOME DISCOUNT DISCOUNT PROGRAM THAT IS COMPLETELY INCOME VERIFIED? ABSOLUTELY.
UH, I UNDERSTAND, BUT, BUT TO BE FAIR, UM, AND, AND I KNOW THIS IS NOT NECESSARILY PERTINENT TO THIS PROCEEDINGS, UH, BUT TO ANSWER THE QUESTION, UH, SACRAMENTO, UH, AS, UM, IF YOU GO TO THE WEBSITE OF THE CITY OF SACRAMENTO AND THE UTILITY, YOU'LL FIND THAT SACRAMENTO HAS OVER 50% OF THE POPULATION ARE LOW INCOME.
UH, IF MEMORY SERVES ME, IT'S ABOUT 13% OF THE POPULATION HERE IN AUSTIN.
SO SACRAMENTO WOULD NATURALLY HAVE A LARGER PROGRAM.
UM, BUT THEY ONLY INCOME VERIFY EVERY TWO YEARS OR ONCE EVERY OTHER YEAR.
UM, SO, UM, JUST, JUST TO CLARIFY, THAT MAY NOT BE A GOOD, A GOOD UTILITY TO COMPARE THIS TO.
UM, YOU MAY KNOW THAT I RECENTLY FILED A MOTION TO COMPEL TO HAVE A THIRD PARTY DERM THIRD PARTY FROM ANALYZE CAP PARTICIPANTS.
UH, AND THE JUDGE HAS NOT RULED ON THAT, BUT MY QUESTION IS, UM, WHY HAVEN'T YOU DONE THIS PROACTIVELY IT WOULD SEEM IN THE BEST INTEREST OF THE PROGRAM, UH, THAT YOU FIND OUT IF MY SUSPICIONS ARE CORRECT OR NOT.
THIS IS DATA AGAIN FROM 2020, NONE OF THE IN, IN LATE 2020, I THINK IT WAS FROM A REPORT YOU GOT FROM, UH, OCTOBER, UH, AND EARLY 2021.
UH, THOSE CUSTOMERS WERE NO LONGER RECEIVING THAT DISCOUNT FOR THE MOST PART.
NO, NO, YOU'RE MISUNDERSTANDING MY QUESTION.
UH, I AM TALKING ABOUT SUBMITTING THE ENTIRE CUSTOMER ASSISTANCE PROGRAM DATABASE TO, I GUESS MAYBE MR.
HAVEN'T HAVE YOU CONSIDERED HIRING SUCH A DATA FROM, UM, SO WE DO, WE DO HAVE A COMPANY THAT WORKS FOR US MANAGING THE ENROLLMENT OF THE CAP DISCOUNT, BUT TO ANSWER YOUR SPECIFIC QUESTION, NO, IF WE DID, THAT WOULD INCREASE, UH, OUR COST OF DOING BUSINESS, BUT YEAH, THAT'S, THAT'S AN IDEA.
IT MIGHT INCREASE YOUR, SINCE I PRICED THIS MYSELF, IT MIGHT INCREASE YOUR COSTS BY ABOUT $350.
UM, I'M GOING TO, UH, STOP THIS LINE OF QUESTIONING HERE.
UH, YOU'RE FREE FOR THE DAY JURY.
I HAVE A FEW QUESTIONS FOR YOU.
UH, COULD YOU FLIP THE SLIDE PLEASE? UH, AGAIN, UH,
[01:15:01]
KEN.UH, THIS IS AN EXHIBIT IN THE AUSTIN ENERGY, RIGHT? FILING, UH, AND IT SHOWS, UH, CUSTOMER ASSISTANCE PROGRAM USES MORE THAN THE AVERAGE AUSTIN ENERGY CUSTOMER, UH, IN THE AUSTIN ENERGY RATE CASE.
WE'RE DISCUSSING THE UTILITY ESTIMATED THAT 7% OF TOTAL RESIDENTIAL CUSTOMERS ARE ENROLLED IN CAP.
THE CAP TARGET IS HOUSEHOLDS THAT EARN UNDER 200% OF POVERTY.
CAN YOU ESTIMATE THE NUMBER OF HOUSEHOLDS IN AUSTIN THAT ARE UNDER 200% OF POVERTY? I CANNOT IT'S ABOUT 28%.
UM, SO WHAT HAPPENS WITH THE OTHER 21%? IT'S NOT REPRESENTED HERE, YOUR HONOR, MR.
AND THEN MR. ROBBINS OF COURSE STATED WHAT HE BELIEVES THAT IT IS.
SO WE WOULD JUST OBJECT TO HIM TESTIFYING AS TO WHAT THE APPROPRIATE NUMBER IS WHEN MR. DOMBROSKI SAID THAT HE DIDN'T.
WOULD YOU CONSIDER MR. ROKITA? WOULD YOU CONSIDER IT DEMONSTRATIVE? NOT IN THIS CONTEXT THOUGH.
LET'S UH, CAN WE STOP THE COUNT FOR MR. ROBBINS FOR JUST A SECOND, MR. ROBBINS, ONE THING I DO WANT TO GO OVER WITH YOU IS, OKAY, SO THIS IS Q AND A.
THIS IS SUPPOSED TO BE Q AND A.
IN OTHER WORDS, YOU ASK A QUESTION, THEY ANSWER, YOU ASK A QUESTION, THEY ANSWER, AND YOU ARE PROVIDING BASICALLY WHAT SOME WOULD CONSIDER TESTIMONY.
UM, UH, YOU'RE PROVIDING YOUR OWN FACTS AND YOU'RE PROVIDING YOUR OWN PRESENTATION.
SHOULD THAT'S IT? LET ME FINISH.
AND YOU HAVE TO LET EVERYONE FINISH BEFORE YOU SPEAK.
UM, BUT ONE THING I WANT TO MAKE YOU AWARE OF IS YOU STARTED AT 10 25 AND WE STOPPED AT 10 42, THE CLOCK, AND YOU'VE ONLY GOT AN HOUR TOTAL.
UM, YOU KNOW, EVERYONE HAS CARVED OUT THE AMOUNT OF TIME THAT THEY GET DURING THIS PROCEEDING.
AND IF YOU GO OVER YOUR HOUR AND SOMEONE ELSE WOULD NECESSARILY HAVE TO LOSE SOME TIME, WHICH I DON'T, I DON'T WANT TO DO.
SO I JUST, IT WOULD BE, IF YOU WANT TO GET THROUGH YOUR PRESENTATION OR YOUR QUESTIONS, YOU MAY WANT TO FOCUS ON QUESTIONS WHEN YOU SAY SOMETHING.
AND AGAIN, NONE OF THIS TIME IS COUNTING AGAINST YOU, BUT I'M JUST TRYING TO GIVE YOU SOME GUIDANCE FROM OUR POINT OF VIEW.
UM, IT WOULD BE MORE EFFECTIVE PROBABLY IF YOU WOULD TRY TO FOCUS ON QUESTIONS FOR THESE FOLKS, WHEN YOU SAY SOMETHING LIKE IT WOULD COST $350, WELL, THAT ISN'T NECESSARILY SOMETHING THAT'S GOING TO MAKE IT INTO THE RECORD AS A FACT, UNLESS IT WAS IN YOUR POSITION STATEMENT OR SOMETHING ALONG THOSE LINES.
SO I'M JUST TRYING TO HELP YOU GET THROUGH THIS AS EFFICIENTLY, AS POSSIBLE TO NOT BURN THROUGH TOO MUCH OF YOUR TIME.
I WANT YOU TO BE COGNIZANT OF HOW MUCH TIME YOU'VE SPENT YOUR HONOR.
UH, I WAS GOING TO SPEND ABOUT 15 MINUTES ON MY PRESENTATION, BUT YOU ARE SUGGESTING THAT I BRING SUCH THINGS AS 28% IN $350 INTO MY PRESENTATION AS OPPOSED TO QUESTIONS.
NO, WHAT I'M SAYING IS THE POINT OF THE PANEL SITTING HERE IS THAT THEY GET ASKED QUESTIONS AND THEY RESPOND TO QUESTIONS THAT, THAT THE, THE, THE PERIOD FOR PROVIDING YOUR POSITION IN THIS CASE WAS DURING THE POSITION STATEMENT PERIOD, WHEN FOLKS WERE FILING TESTIMONY AND SO ON AND SO FORTH.
AND WE HAVE THAT, YOU YOU'VE PROVIDED A POSITION STATEMENT, SO WE HAVE IT, BUT I'M JUST TRYING TO HELP YOU STAY FOCUSED ON WHAT WE'RE DOING WITH THE PANEL HERE, WHICH IS IT'S A TIME FOR QUESTIONS.
IT'S A QUEUE, IT'S A Q AND A, YOU GET A, YOU GET A CHANCE TO ASK THEM QUESTIONS AND YOU'VE BEEN DOING THAT.
IT'S JUST, WHEN YOU START TO DIVERGE, I'M CONCERNED ABOUT YOU GETTING THROUGH EVERYTHING THAT YOU WANT TO GET THROUGH.
I VERY MUCH APPRECIATE YOUR ADVICE AND I WILL TRY TO DO BETTER.
UM, WITH THAT, UM, WHEN, UM, I HAVE A HARD TIME HEARING, UH, MR. GALVIN, AND, UH, I WAS TRYING TO, YOU KNOW, TRUE.
I'M GOING TO GET HER UP ON THE CALL.
SO IF THERE'S SOMETHING THAT WE CAN DO TO ALERT THE WHIP, BECAUSE I KNOW Y'ALL ARE NOT INTENDING, NOT THE LEFT EAR.
SO IF THERE'S SOME WAY THAT WE COULD CREATE A SYSTEM, YOU KNOW, I REALLY WANTED TO HEAR THE SCALP AND MAKE IT MORE OF IT.
AND THAT, I MEAN, THAT COULD I'M ON NOW.
[01:20:01]
I THINK SO JUST, I DON'T KNOW WHAT THE ANSWER IS, BUT IT DOES CAUSE ME CONCERN THAT I MISSED ABOUT A QUARTER OF WHAT HE SAID ON, ON THE CAT PROGRAM, TESTING 1, 2, 3, AM I COMING THROUGH? LIKE, I'M NOT HEARING UNIT.UM, MAYBE IF YOU TAKE THE BIG MIC, WENT FOR WHICHEVER WITNESSES SPEAKING, PERHAPS SHARING THE BIG ONE.
AND JUST IN TERMS OF THEM NOT WORKING, IF THERE'S TOO MANY ON, AT THE SAME TIME, THEY WON'T TURN ON.
SO THAT MEANS YOU NEED TO LOOK AROUND TO YOUR NEIGHBOR AND SEE WHO MIGHT NEED TO TURN THOSE OFF.
YOUR HONOR, WHENEVER YOU'RE READY.
UH, MR. ROBBINS, WHENEVER YOU START BACK UP, WE'LL START THE CLOCK AGAIN.
UH, MR. DOMBROWSKI, IS IT POSSIBLE THAT SOME OF THE WEALTHY HOMES ON THE CUSTOMER ASSISTANCE PROGRAM THAT I JUST SHOWED, UH, A FEW MINUTES AGO, UH, CREATE, UH, W W CREATE A HIGHER AVERAGE FOR CUSTOMER ASSISTANCE PROGRAM PARTICIPANTS REFLECTED IN THIS CHART? I CAN'T ATTEST TO A SPECIFIC CUSTOMER, BUT THESE REPRESENT THE NUMBER OF BILLS IN EACH TIER.
SO IF THAT CUSTOMER IS SENT A BILL IN THAT TIER, THEN THEY WOULD APPEAR IN THIS CHART.
UH, IN MY FIRST, UH, SET OF DISCOVERY QUESTIONS, AUSTIN ENERGY PROVIDED ME WITH ENERGY USE BY ZIP CODE AND HOUSING TYPE.
I CROSSED, REFERENCED THIS WITH CENSUS INCOME DATA BY ZIP CODE, EXCEPT UNLIKE AUSTIN ENERGY'S, UH, EXHIBIT HERE.
UH, I USE THE ENTIRE CUSTOMER DATABASE.
WOULD YOU PLEASE FLIP THE SLIDE? AND HERE'S WHAT I CAME UP WITH.
UNLIKE YOUR EXHIBIT, THIS SHOWS THAT CONSUMPTION TRACKS INCOME, UH, WHEN I QUESTIONED YOU ABOUT THIS IN REBUTTAL TESTIMONY, WHICH I RECEIVED AT THE TIMELY HOUR OF 6:00 PM LAST NIGHT, UH, YOU REPLIED THAT ZIP CODES ALONE ARE NOT GRANULAR ENOUGH, AND THAT ONE NEEDED TO ALSO INCLUDE HOUSING TYPE TWO FOR SUCH AN ANALYSIS TO BE ACCURATE.
AND I DID JUST THAT, UH, THIS DATA, UH, WAS SENT TO AUSTIN ENERGY, UH, FOR WHEN THEY REQUESTED IT.
UM, SO THE QUESTION IS, PLEASE EXPLAIN WHY YOU DIDN'T USE THIS DATA FOR THE ENTIRE, UH, DATA, UH, THE ENTIRE CUSTOMER BASE, INSTEAD OF JUST THE 7% OR SO OF CUSTOMERS FOR THE CUSTOMER ASSISTANCE PROGRAM.
I CAN'T ATTEST TO MR. ROBBINS DATA I DON'T THINK THAT WAS A QUESTION.
I SAID, WELL, I GUESS IT WAS, I SAID, PLEASE EXPLAIN WHY YOU DID NOT USE THIS DATA, BUT THIS DATA CAME FROM AUSTIN ENERGY.
AUSTIN ENERGY USES DATA FROM ITS CAT PROGRAM AS A PROXY FOR ITS LOW INCOME POPULATION.
THAT'S THE ONLY DATA WE HAVE TO ASSOCIATE AN INCOME LEVEL WITH A SPECIFIC CUSTOMER'S CONSUMPTION.
ZIP CODE IS NOT GRANULAR ENOUGH, AND IT CREATES TOO MUCH DISTORTION IN THE RESULTS THAT CAN BE USED.
I'M GOING TO MOVE ON TO MY NEXT QUESTION, BUT FOR THE RECORD, I DON'T BELIEVE THE WITNESS HAS BEEN RESPONSIVE.
UM, MR. DON ROSKI HAS AUSTIN ENERGY EVER ATTEMPTED, UH, TO ANSWER WHY CAP CUSTOMERS USE MORE ELECTRICITY THAN AVERAGE? HAS IT EVER CONDUCTED A STATISTICALLY VALID SAMPLE OF DEMOGRAPHICS? I WAS QUITE THAT'S TWO QUESTIONS.
UH, HAS AUSTIN ENERGY EVER ATTEMPTED TO ANSWER WHY CAP CUSTOMERS USE MORE ELECTRICITY THAN AVERAGE? WE HAVE ANECDOTAL INFORMATION ABOUT WHY KEPT CUSTOMERS USE MORE ENERGY.
IT'S MORE ALONG THE BASIS OF SIZE, AGE OF THE HOME AND THE NUMBER OF OCCUPANTS IN THE HOME, UH, THAN IT IS TO DO WITH INCOME LEVEL.
[01:25:02]
HAS IT EVER CONDUCTED A STATISTICALLY VALID SAMPLE OF DEMOGRAPHICS AND HOUSING STRUCTURE CHARACTERISTICS, UH, TO ANALYZE IT? I CAN'T ANSWER.I HAVE TO DO SOME RESEARCH FROM OTHER WE'VE DONE THAT ANALYSIS.
I KNOW WE HAVE LOOKED AT THE CHARACTERISTICS OF THE CAP CUSTOMERS THEMSELVES AND MEASURED THAT AGAINST THEIR CONSUMPTION.
I DON'T HAVE THAT ANALYSIS WITH ME.
UM, WHO WOULD I CONTACT TO GET THAT ANALYSIS UNDER PUBLIC INFORMATION, AUSTIN ENERGY? UM, IT'S ABOUT 1600 EMPLOYEES.
MIGHT YOU BE A LITTLE MORE SPECIFIC? ALL PUBLIC INFORMATION REQUESTS ARE ADDRESSED TO AUSTIN ENERGY.
ONCE THEY COME IN THE DOOR, WE FIGURE OUT WHICH STAFF MEMBERS MOST APPLICABLE TO ANSWER THAT PUBLIC INFORMATION REQUEST NEXT IN A RESPONSE TO MY REBUTTAL TESTIMONY THAT I RECEIVED ONLY LAST EVENING, I ASKED FOR UTILITY, IF IT DETERMINED HOW MANY CUSTOMERS WOULD LOSE SERVICE DUE TO ITS RIGHT RESTRUCTURING PROPOSAL, THE UTILITY STATED IT DID NOT KNOW, BUT STATED CAP CUSTOMERS OR A PROXY, AND THAT THESE CUSTOMERS WOULD ONLY RECEIVE A MINOR BILL INCREASE OR AN ACTUAL DECREASE.
AND I WAS REFERRED TO TABLES IN THE REIT FILING, UH, DIDN'T THESE TABLES IN THE RIGHT FILING REFLECT AN INCREASED CUSTOMER ASSISTANCE PROGRAM DISCOUNT, WHICH HAS NOT BEEN APPROVED THE RATES REFLECTED IN, UH, TABLE, UH, EIGHT, UM, OUR PROPOSED RATES, UH, BOTH WHAT WE'RE PROPOSING FOR THE RESIDENTIAL RATE, AS WELL AS THE ASSUMPTION THAT, UH, THE CAP PROGRAM CONTINUES.
AND SO THE CURRENT CAP PROGRAM, UH, APPROVES WAVING OF THE CUSTOMER CHARGE, WHICH CURRENTLY IS $10.
IT WILL BE 25 IN OUR PROPOSED RATE AND ALSO A 10% DISCOUNT ON ALL OTHER BENEFITS OF THE BILL AND WAVING OF THE CUSTOMER ASSISTANCE PROGRAM CHARGED WITHIN THE CBC.
NEXT QUESTION, ACCORDING TO THESE TABLES IN CITY BILLS WOULD GO UP 18 TO 84% FOR MORE THAN THREE QUARTERS OF AUSTIN ENERGY CUSTOMERS.
CAN YOU PLEASE TELL ME WHEN OR IF AUSTIN ENERGY IS GOING TO CALCULATE THE NUMBER OF CUSTOMERS WHO WILL LOSE SERVICE BECAUSE OF THESE HIGH RATE INCREASES? I HAVE NO WAY OF CALCULATING THAT NUMBER.
UH, YOUR ARGUMENT STATING THAT STEEPED TEARS DO NOT CAUSE BILL REDUCTIONS GO AGAINST EVERY OTHER STUDY ON PRICE ELASTICY THAT I HAVE EVER SEEN.
UM, THEY ALSO IGNORE THAT PRICE ELASTICITY BECOMES MORE SEVERE.
THE LONGER THE HIGH PRICES CONTINUE, UH, A ONE-YEAR, UH, PRICE INCREASE MAY DRIVE A REDUCTION IN CONSUMPTION WHILE A MULTIPLE YEAR PRICE INCREASE, MAY DRIVE A CHANGE OUT IN APPLIANCES OR MOTIVATE HOME WEATHERIZATION.
UH, WHY DID YOU ALL NOT CONDUCT A LONG-TERM PRICE ELASTICITY STUDY? THE RATES WE ESTABLISHED AT AUSTIN ENERGY ARE USED IN THE SHORT TERM.
UH, WE CONDUCT A RATE REVIEW EVERY FIVE YEARS.
AND SO WE LOOK AT THE SHORT-TERM IMPACTS OF OUR RATES AND WE HAVE, UH, IN CHAPTER SEVEN OF OUR REPORT, WE ADDRESS, UM, THOSE SHORT-TERM, UH, ELASTICITY ISSUES.
I HAVE ONE LAST QUESTION FOR YOU, SIR.
MAYBE IT DIDN'T MAKE IT BACK, PLEASE.
UM, AGAIN AGAIN, THERE, UH, THIS IS, UM, FROM THE AUSTIN ENERGY, RIGHT? FILING CHARTS SEVEN 14 AND BY APPEARANCE, UH, I MEAN, YOU'RE TRYING TO, NO, THIS IS NOT THE SLIDE I WANT, YOU HAD IT A MOMENT AGO, SIR.
[01:30:01]
THERE? THANK YOU.THIS IS SLIDE SEVEN FOR CHARTS, SEVEN 14, UH, AND IT APPEARS THAT IN TRYING TO ANALYZE, UH, YOUR YOU'RE APPROVED THAT PRICE TIERS DO NOT DRAMATICALLY INCREASE CONSUMPTION.
IT DOESN'T LOOK LIKE MONTHLY FEES, FUEL REGULATORY CHARGES AND WRITERS ARE IN THIS CHART.
THE ONLY THING THAT APPEARS ON THIS CHART ARE THE BASE RATES.
SO THIS DOESN'T SEEM TO INDICATE THE REAL PRICE ELASTICITY.
UH, AM, AM I CORRECT THAT THIS ANALYSIS DOES NOT INCLUDE, UH, MONTHLY FEES, FUEL REGULATORY CHARGES AND WRITERS, OR DO I MISUNDERSTAND THIS? THAT IS THE BASE RATES AND THOSE STEPS ARE THE BASE RATE TIERS.
IT DOES NOT INCLUDE PASSERS, THE POWER SUPPLY ADJUSTMENT, THAT REGULATORY CHARGE OR THE COMMUNITY BENEFITS CHART.
ALRIGHT, THANK YOU, MR. ROBBINS.
NEXT UP IS, UH, IS A DATA FOUNDRY, NO QUESTIONS, YOUR HONOR.
UH, AND I'M, UH, I'M GOING TO DIRECT THESE QUESTIONS TO, UH, MR. DOMBROWSKI BASED ON HIS REBUTTAL AND HIS REPRESENTATIONS THAT HE MADE EARLIER.
BUT IF ANY OF THE OTHER WITNESSES HAVE ANSWERS, THAT'S FINE.
BUT I'M ASSUMING THAT YOU WILL BE ANSWERING THESE, UH, UNDER THE CURRENT AUSTIN ENERGY RATES, UH, AS ESTABLISHED, UH, IS THERE A DIFFERENTIAL BETWEEN INSIDE AND OUTSIDE CITY RATES? YES.
AND IN 2016, DID AUSTIN PROPOSED AND THE CITY COUNCIL ADOPT, UH, DIFFERENTIAL RATES SHOWING A DIFFERENT RATE STRUCTURE FOR INSIDE AND OUTSIDE CITY CUSTOMERS? YES.
AND IN 2012, DID THE PUBLIC UTILITY COMMISSION APPROVE DIFFERENTIAL RATES FOR INSIDE AND OUTSIDE CITY CUSTOMERS? I WAS NOT WITH AUSTIN ENERGY IN 2012.
MY UNDERSTANDING IS THAT DID APPROVE, UM, A BLACK BOX SETTLEMENT THAT ESTABLISHED A DIFFERENT RATE STRUCTURE BETWEEN INSIDE AND OUTSIDE CITY CUSTOMERS.
UH, ONCE THAT MONEY IS TRANSFERRED, THAT'S BEEN COLLECTED BY AUSTIN ENERGY AND IS TRANSFERRED TO THE CITY'S GENERAL FUND.
AS I UNDERSTAND THAT PROCESS WORKS, UH, ARE ANY OF THESE FUNDS THAT ARE, THAT ARE TRANSFERRED THROUGH THE GENERAL FUND TRANSFER AVAILABLE FOR USE TO PROVIDE SERVICES TO AUSTIN ENERGY CUSTOMERS ABOUT 85% OF AUSTIN ENERGY SERVICE TERRITORY IS THE CITY OF AUSTIN.
SO THERE WAS AN OVERLAP OF JURISDICTIONS THERE.
UH, I'M NOT SURE YOU UNDERSTOOD.
MY QUESTION IS IN TERMS OF THE GENERAL FUND TRANSFER, DOES ANY OF THAT MONEY GO TO PROVIDE ELECTRIC UTILITY SERVICES TO AUSTIN ENERGY CUSTOMERS ONCE IT'S TRANSFERRED OUT OF AUSTIN ENERGY? I APOLOGIZE.
UM, THE CITY'S GENERAL FUND DOES NOT PROVIDE ELECTRIC SERVICE.
THANK YOU, DREW, UH, UM, WE'LL SPILL OR WE'LL ASK A COUPLE OF QUESTIONS THEN I'LL PROCEED WITH THE REST.
YOU'LL YOU'LL YEAH, YOU'LL HAVE TO GET ON THAT MIC.
IS IT TRUE THAT THE PROPOSED P R I T H L F RATE WOULD BE WHAT EXTENDED EXEMPTION FROM PAYING THE ENERGY EFFICIENCY SERVICES
[01:35:01]
PORTION OF THE COMMUNITY BENEFIT CHARGE THE QUALIFYING CUSTOMERS WITHIN THE PRIMARY TO RATE CLASS? YES, THAT'S MY UNDERSTANDING THAT THOSE CO THOSE CUSTOMERS OPTING INTO THAT, UH, UH, RIGHT STRUCTURE WOULD NOT BE, UM, WOULD NOT PAY THE EES.AND WHEN MOST OF THESE CUSTOMERS QUALIFY AS HIGH LOAD CUSTOMERS, I'M SORRY.
WOULD YOU MIND REPEATING THAT PLACE WHEN MOST OF THE CUSTOMERS IN THIS RATE CLASS QUALIFY AS HIGH LOAD CUSTOMERS? YES.
AND WOULD THESE CUSTOMERS BE ABLE TO TAKE ADVANTAGE OF THE VALUE OF SOLAR PAYMENTS? IF THEY GENERATE SOLAR ONSITE? I WILL DEFER TO A WITNESS, UH, TIM HARVEY.
WOULD YOU SAY THAT STAKEHOLDERS HAD AN ADEQUATE OPPORTUNITY TO PROVIDE INPUT ON THE VOS TERROR PROPOSAL PRIOR TO AUSTIN ENERGY'S FILING OF THIS CASE OR ANY OF THIS AND HAS AUSTIN ENERGY REVISITED, OR DO THEY HAVE ANY PLANS TO REVISIT ANY PART OF ITS CURRENT RATE PROPOSAL AS A RESULT OF DISCUSSIONS OR CRITICISMS FROM COMMENTARIES? UH, ONCE AGAIN, I'LL DEFER TO A WITNESS, TIM HARVEY.
AND I'LL PASS IT OVER TO MR. PRINCIPAL.
UM, I HAVE SOME QUESTIONS FROM THE RIGHT FILING PACKAGE AND FROM THE DEPENDENCIES.
SO, UH, THE FIRST COUPLE OF QUESTIONS HAVE TO DO WITH, UM, PRIMARILY SOME ISSUES IN CHAPTER ONE, BUT FIRST OF ALL, TO CLEAR SOMETHING UP, IF YOU COULD LOOK AT PAGE ONE OR PAGE SEVEN OF THE RIGHT FILING PACKAGE, AND THEN ALSO PAGE A ONE 14 AND ONE 15, I'M SORRY, MR. ROZELLE, DID YOU SAY ONE OR SEVEN? UH, PAGE SEVEN AND PAGES ONE, A ONE 14 AND ONE 15.
AND I'M LOOKING KIND OF IN THE MIDDLE OF THAT BULLETED LIST THERE ON PAGE SEVEN AND ALSO ITEM NUMBER FOUR ON PAGE ONE 15.
UM, FIRST OF ALL, AM I CORRECT THAT THESE ARE, UM, AN IDENTIFICATION OF RIGHT MAKING PRINCIPLES THAT AES GOING TO APPLY OR HAS APPLIED IN ITS ANALYSIS? IS THAT CORRECT? THAT IS CORRECT.
AND JUST TO BE CLEAR AND CLEAR IT UP, UM, RIGHT.
W ONE OF THOSE PRINCIPLES INCLUDES RATE STRUCTURES TO PROVIDE INCENTIVES FOR ENERGY CONSERVATION PRO PROMOTE EFFICIENT USE OF RESOURCES, ENCOURAGED CONSUMER INVESTMENT AND ENERGY EFFICIENCY ON PAGE SEVEN, AND THEN ON PAGE ONE 15, IT ALSO THAT PROVIDING INCENTIVES FOR ENERGY CONSERVATION, PROMOTING EFFICIENT USE OF RESOURCES AND ENCOURAGING CONSUMER INVESTMENT, THOSE ARE PRINCIPLES THAT YOU AGREE ARE APPLIED, OR THAT YOU DID APPLY IN YOUR ANALYSIS IN THIS CASE, CORRECT? THAT IS CORRECT.
NEXT LOOKING AT PAGE, UM, STARTING AT PAGE 85, AND THEN THERE ARE A COUPLE OTHER REFERENCES.
THERE'S A, DO YOU SEE THE REFERENCE DOWN AT THE BOTTOM OF PAGE 85? AND I'LL GIVE YOU A FEW MINUTES TO GET THERE.
DOWN AT THE BOTTOM, DO YOU SEE THE SENTENCE THAT SAYS THE REMARKABLE ENERGY EFFICIENCY EXHIBITED BY AUSTIN ENERGY'S CUSTOMERS IS ALSO ATTRIBUTE TO THE EFFECTIVENESS OF AUSTIN ENERGY'S INDUSTRY LEADING ENERGY EFFICIENT PROGRAMS, CORRECT? THAT'S CORRECT.
AND THAT'S STILL CORRECT, RIGHT? THAT'S CORRECT.
AND ON PAGE 86, ALL AT THE BOTTOM OF THE PAGE, THE COMPANY SAYS THAT FROM 2015 TO 2019, CUSTOMERS CAN SERVE 640 GIGAWATT HOURS OF ENERGY THAT OTHERWISE WOULD HAVE BEEN CONSUMED.
IF CUSTOMERS DID NOT TAKE AN ADVANTAGE OF THE ENERGY EFFICIENCY PROGRAMS. CORRECT.
AND THEN ON PAGE 96 OF THE RIGHT FALLING PACKAGE, ITEM, NUMBER THREE IS STATED THAT AUSTIN ENERGY IS INDUSTRY LEADING ENERGY EFFICIENCY PROGRAMS FOR EXISTING CONSTRUCTION.
UH, WE'RE PART OF A, UH, OF THE, UH, THE BASIS FOR THIS FILING, CORRECT.
COULD YOU STATE AGAIN, WHAT YOU'RE READING FROM, UH, ITEM NUMBER THREE AT THE TOP OF PAGE 96, IT READS AUSTIN ENERGY'S INDUSTRY, LEADING ENERGY EFFICIENCY PROGRAMS FOR EXISTING CONSTRUCTION.
AND SO THAT'S ONE OF THE OTHER THINGS THAT HAS BEEN WROUGHT US TO WHERE WE ARE CORRECT.
[01:40:01]
YES.AND THEN, UH, ON PAGE 1 0 2, YOU HAVE THE TABLE AT THE TOP.
YOU HAVE THE TABLE AT THE TOP OF THE PAGE THAT SHOWS THE SHIFT IN, IN, IN YOUR LOAD, CORRECT.
THAT SHOWS THE CONSUMPTION DURING THE SUMMER MONTHS COMPARING 2009 TO 2020 21.
SO IT SHOWS THE DIFFERENCE BETWEEN THE, THE CONSUMPTION PATTERNS AND THE, AND THE WAY THE LOAD WAS CONFIGURED DISTRIBUTED IN THOSE YEARS VERSUS NOW, CORRECT? THAT'S CORRECT.
AND THEN ON THE, THE, UM, STATEMENT RIGHT BELOW THAT SAYS THAT THE ENERGY EFFICIENCY GAINS ACHIEVED BY RESIDENTIAL CUSTOMERS SINCE 2009, HAVE RECALIBRATE CALIBRATED, WHAT A HIGH USE CUSTOMER IS FOR AUSTIN ENERGY, MORE CUSTOMERS ARE USING LESS.
IS THAT CORRECT? THAT'S CORRECT.
SO IT DOES THIS NOT SHOW THAT IT'S THE ENERGY EFFICIENCY.
WELL, FIRST OF ALL, DOES IT NOT SHOW THAT AUSTIN ENERGY HAS BEEN VERY SUCCESSFUL IN ITS PROGRAMS AND ITS POLICIES REGARDING ENERGY EFFICIENCY? YES.
WE'VE HAD A SIGNIFICANT DECREASE IN AVERAGE CONSUMPTION FOR OUR RESIDENTIAL CUSTOMERS BETWEEN 2009 AND 21 AND ENERGY EFFICIENCY IS A LARGE PART OF THAT.
AND ONE OF THOSE PROGRAMS THAT IS PART OF THAT POLICY IS THE VALUE OF SOLAR PROGRAM, CORRECT? I'LL DEFER THAT TO MR. HARVEY.
UM, THE TH THE, THE POLICIES THAT, UM, THESE ENERGY EFFICIENCY POLICY POLICIES THAT YOU'VE REFERRED TO IN THE RATE FILING PACKAGE HAVE BEEN IN PLACE FOR, SINCE WHEN APPROXIMATELY I DON'T KNOW THE EXACT ANSWER.
HAVE THEY BEEN IN PLACE FOR AT LEAST A DECADE? I WOULD, UM, I CAN CONCEDE THAT, THAT, THAT MOST OF THOSE POLICIES HAVE YOU BEEN PLACED? YES.
AND WHEN IT COMES TO THE VALUE OF SOLAR POLICY, THAT ONE HAS BEEN UNIQUE AS FAR AS AUSTIN ENERGY AND ITS SUCCESS.
WOULD YOU AGREE WITH THAT? I THINK I'LL DEFER TO MR. HARVEY QUESTION, BUT IT'S, IT'S NOT OVERSTATING IT TO SAY THAT AUSTIN ENERGY AND THE CITY OF AUSTIN HAVE GAINED A REPUTATION AS A LEADER IN ENERGY EFFICIENCY, POLICIES AND SUCCESS.
I WOULD CONSIDER US AN INDUSTRY LEADER.
AND IT'S ALSO PROBABLY CORRECT.
OR WOULD YOU AGREE WITH ME THAT AUSTIN ENERGY HAS BECOME A LEADER IN THIS AREA BY, AND I THINK WHAT THIS ARE, THESE REFLECT IS THAT I'VE BECOME A LEADER BY BEING ESSENTIALLY, I GUESS, THE BEST WAY TO SAY IT IS JUST AGGRESSIVE ABOUT ENERGY EFFICIENCY.
IS THAT CORRECT? WE HAVE A LOT OF PROGRAMS AND WE HAVE MANY CUSTOMERS THAT PARTICIPATE IF THAT'S WHAT YOU MEAN BY AGGRESSIVE.
I MEAN, ARE THEY, ARE THEY MORE INTENSE AND MORE, UM, UH, IS THERE MORE, UM, ARE THEY MORE, UM, ARE THEY STRONGER, MORE INTENSE, MORE, UM, UH, MORE EFFECTIVE THAN OTHER, UH, PROGRAMS, UH, BY OTHER UTILITIES? DO YOU GO AHEAD? I'M SORRY.
I KNOW WE HAVE A ROBUST PROGRAMS. I CAN ATTEST TO PROGRAMS OF OTHER UTILITIES.
I HAVE NOT STUDIED THAT, BUT REGARDLESS, AUSTIN ENERGY'S PROGRAMS ARE ROBUST AS YOU PUT IT AND AGGRESSIVE THEY'RE ROBUST.
NOW WHAT YOU'RE PROPOSING TO DO IN THIS CASE IS TO ADDRESS AT LEAST FIVE OF THOSE.
LET ME BACK UP THE ENERGY EFFICIENCY, SUCCESSES THAT YOU, UH, HAVE SPOKEN OF IN THE RIGHT FILING PACKAGE, THOSE INCLUDE SOME OF THE THINGS THAT YOU'RE TALKING ABOUT CHANGING IN THIS CASE.
I DON'T BELIEVE WE'RE CHANGING ANY ENERGY EFFICIENCY POLICIES.
WELL, THE $10 CUSTOMER CHARGE CHANGING IT TO $25 DOLLARS.
THAT'S THAT RIGHT? THAT'S PART OF THE RIGHT DESIGN THAT AUSTIN ENERGY HAS IN PLACE THAT IS PART OF ITS ENERGY EFFICIENCY PROGRAM.
IT? I DON'T, I DON'T KNOW IF THERE'S A DIRECT LINK.
YOU COULD MIGHT SAY IT'S AN INDIRECT LINKED IN.
UM, THE TIER STRUCTURE IS BY HAVING A $10 CUSTOMER CHARGE AND FIVE TIERS.
YOU HAVE TO HAVE VERY STEEP TIERS, UM, IN ORDER TO MAKE THAT MATHEMATICALLY WORK.
SO THERE'S AN INDIRECT CONNECTION BETWEEN THE TIERED PRICING
[01:45:01]
AND THE CUSTOMER CHARGE.WELL, LET ME JUST, MAYBE I NEED TO ASK IT A DIFFERENT WAY THEN.
AND THAT IS THAT DURING THE PERIOD THAT AUSTIN ACHIEVED AUSTIN AND AUSTIN ENERGY ACHIEVED DISREPUTABLE REPUTATION FOR BEING ROBUST AND, AND SUCCESSFUL IN ITS ENERGY EFFICIENCY PROGRAM, YOU HAD A $10 CUSTOMER CHARGE, NOT A $25 CUSTOMER CHARGE, CORRECT? THAT'S CORRECT.
AND HOW FAR BACK DOES THAT $10 CUSTOMER CHARGE GO? UH, I BELIEVE THAT'S 20 12, 20 12.
SO SINCE THEN ANOTHER, UH, SAME QUESTION, DIFFERENT ITEMS. SO DURING THE PERIOD THAT AUSTIN ENERGY GAINED ITS REPUTATION FOR BEING A ROBUST AND AGGRESSIVE ENERGY EFFICIENCY UTILITY, YOU HAD THE FIVE TIERED RATE DESIGN THAT'S CURRENTLY IN PLACE IN PLACE, CORRECT? UH, THE FIVE TIERS IS FOR INSIDE CITY CUSTOMERS.
I'M NOT GONNA FOCUS ON THE OUTSIDE, BUT YOU HAD THE INSIDE FIVE TIERS IN PLACE DURING THAT PERIOD, CORRECT? I BELIEVE THAT BEGAN IN JANUARY OF 2013.
CAUSE THAT WAS MY NEXT QUESTION.
UM, DURING THE PERIOD THAT AUSTIN ENERGY GAINED THE REPUTATION FOR BEING AS ROBUST AND AGGRESSIVE ENERGY EFFICIENCY UTILITY, YOU HAD THE CURRENT VALUE OF SOLAR PROGRAM IN PLACE, CORRECT.
I'LL DEFER TO MR. HARVEY ON THE VALUE OF SOLAR PROGRAM.
DO YOU NOT KNOW WHEN IT WAS IN, IN EFFECT? I DON'T, BUT YOU KNOW THAT IT HAS BEEN AN EFFECT FOR SOME TIME, CORRECT? YES.
AND IT'S BEEN IN EFFECT DURING THE PERIOD IN WHICH IF AN ENERGY EFFICIENCY GAINS HAVE BEEN MADE.
UM, DURING THE, THAT AUSTIN ENERGY GAINED THIS REPUTATION THAT WE'RE TALKING ABOUT, THE STELLAR OR ROBUST, AGGRESSIVE REPUTATION, YOU PAID THE VALUE OF SOLAR OUT OF THE PSA, NOT OUT OF THE EEC, CORRECT? THAT'S CORRECT.
ALSO DURING THE PERIOD THAT YOU GAINED A REPUTATION FOR, UM, BEING ROBUST AND AGGRESSIVE, YOU ISSUED, OR AUSTIN ENERGY ISSUED, OR ULTIMATELY THE CITY APPROVED, WHAT'S CALLED THE 2030 PLAN, CORRECT.
THAT'S OUR RESOURCING GENERATION PLAN.
IS THAT WHAT YOU'RE REFERRING TO? THAT'S CORRECT.
AND YOU'RE FAMILIAR WITH THAT PLAN.
AND YOU WOULD AGREE WITH ME WOULDN'T YOU THAT ON PAGE THREE OF THAT PLAN, THE CITY RESTATES ITS COMMITMENT TO EXIT FAYETTE POWER PROJECT BY 2022? CORRECT.
UM, I RECALL THAT WAS A STATEMENT AND A RESOURCE IN GENERATION PLAN.
AND ALSO IN THE OTHER PARTS OF THE 20, 30 PLAN, THE CITY AND AUSTIN ENERGY STAY THAT THEY'RE NOT GOING TO BUY ANY MORE COAL, I'M SORRY.
ANY MORE CARBON GENERATION AND THEY'RE GOING TO GET OUT OF CARBON GENERATION.
I CAN'T ATTEST THAT SPECIFIC STATEMENT YOU MADE.
THEY MAY NOT BE PRECISELY ACCURATE.
BUT IN GENERAL, IS IT CORRECT IN GENERAL POLICY IS THAT WE'RE NOT INVESTING IN ANY NEW FOSSIL FUEL GENERATION.
AND THAT POLICY WAS IN PLACE DURING THE PERIOD THAT AUSTIN ENERGY ACQUIRED THIS REPUTATION FOR BEING AGGRESSIVE, ROBUST, CORRECT.
SO DO YOU UNDERSTAND THE CONCERN OF SIERRA CLUB AND OTHER PARTIES IN THIS CASE WHEN IT LOOKS AS THOUGH FOR PURPOSES OF, WELL, LET ME BACK UP TO ONE OF THE QUICK QUESTION.
SO THE CHANGES THAT YOU'RE PROPOSING IN THIS RE CASE ARE KIND OF, YOU KIND OF BLAME THEM ON OR FOCUS THEM ON JUST MONEY.
WERE LACK OF FUNDS RUNNING OUT, RUNNING LOW ON FUNDS.
IT'S ONE OF OUR PRINCIPLES THAT HAVE FINANCIAL STABILITY FOR THE UTILITY.
AND YOU'RE PRETTY CLEAR ABOUT THE FACT THAT, UM, IT'S THIS, THIS, UM, UH, INSUFFICIENCY OF REVENUES, IT'S THE BASIS FOR THE CURRENT INSUFFICIENCY OF REVENUE, THAT'S THE BASIS FOR THE PROBLEM, RIGHT? YES.
THAT'S WHAT FACE RATES ARE FOR, TO PROVIDE FUNDING.
AND YOU'RE KIND OF ALSO PRETTY CLEAR ABOUT THE FACT THAT YOU THINK THAT THE RESIDENTIAL CUSTOMER CLASS IS A BIG PART OF THE PROBLEM, RIGHT? THE MONEY PROBLEM THAT'S CORRECT.
THAT IS THE RESIDENTIAL CLASS IS CURRENTLY BELOW ITS COST OF SERVICE AND THE FIVE TIERS, UM, NEEDS TO BE UPDATED SO THAT WE, UM, COLLECT THE REVENUE FROM THE CUSTOMERS.
[01:50:01]
EVEN THOUGH MAYBE THERE WAS SOME DISPUTE ABOUT THIS AT SOME POINT, IT'S PRETTY CLEAR THAT YOU, YOU THINK THAT THE REASON FOR THAT IS BECAUSE OF THE SHIFT AND LOAD THAT'S BEEN THE PRODUCT OF THE ENERGY EFFICIENCY SUCCESSES.WELL, I THINK THERE'S A LOT OF THINGS THAT CONTRIBUTE TO THAT.
UM, THE SHIFT IN LOAD, SO IT'S NOT ENERGY, ENERGY EFFICIENCY.
IT'S ALSO THINGS LIKE, UH, THE HOUSING STOCK THEMSELVES.
SO, UM, UH, MUCH SMALLER HOMES, UM, NEWER HOMES.
AND OF COURSE THOSE DO HAVE, UH, UH, NEW CODE APPLIED TO, WHICH IS PART OF THE ENERGY EFFICIENCY.
SO THEY USE LESS ENERGY THAN OLDER HOMES.
SO AUSTIN CUSTOMERS, I MEAN, YOU, YOU MAKE IT PRETTY CLEAR.
AUSTIN CUSTOMERS HAVE BECOME MUCH MORE EFFICIENT IN THEIR USE OF ELECTRICITY THAN THEY USED TO BE SAY FIVE OR 10 YEARS AGO.
WELL, A COMPARISON BETWEEN 2009 AND 2021 ON FIGURE 7 24 SHOWS THAT.
SO THEN TO SOME EXTENT, YOU'RE SAYING THAT YOU HAVE, YOU NEED MORE MONEY BECAUSE THE ENERGY EFFICIENCY PROGRAMS HAVE BEEN SUCCESSFUL.
WE NEED TO COLLECT OUR COSTS FROM THE CUSTOMERS AND WITH THE FIVE TIERS, UM, THAT CUSTOMER SERVED IN TIERS ONE AND TWO, OR SIGNIFICANTLY BELOW THE COST OF SERVICE.
SO WE ARE NOT COLLECTING THE REVENUE FROM THE CUSTOMERS WHO ARE CAUSING THE COST.
FILING PACKAGE SHOWS THESE DIAGRAMS THAT SHOW THAT THE REASON FOR THAT IS BECAUSE THERE'S BEEN THIS SHIFT IN CONSUMPTION PATTERN BECAUSE OF THE EFFICIENCY, THE NEW EFFICIENCY THAT OF THE, OF THE AUSTIN CUSTOMERS, CORRECT.
THE AVERAGE CUSTOMER IS USING LESS ENERGY.
AND WHEN YOU HAVE YOUR FIRST TWO TIERS BELOW THE COST OF SERVICE, YOU'RE NOT GOING TO COLLECT THAT REVENUE.
IS IT? SO DOESN'T AUSTIN ENERGY SEE AN IRONY IN COMING TO ASK FOR MORE MONEY TO MAKE UP FOR ITS LOSSES THAT ARE THE RESULT OF ITS SUCCESS AND ITS ENERGY EFFICIENCY PROGRAM.
NO, I DON'T SEE ANY IRONY IN IT.
YOU DON'T SEE ANY IRONY IN THAT AT ALL.
NO BASE RATES DO NOT RECOVER ENERGY COSTS.
THOSE ARE IN THE POWER SUPPLY ADJUSTMENT.
UH, THE BASE RATE COSTS IN THE SHORT TERM ARE FIXED.
AND THE TIERED PRICING, THE FIVE TIERED PRICING REQUIRES US TO PUT A STEEP SLOPE ON THOSE RATES.
SO AS MORE CUSTOMERS JOIN AUSTIN ENERGY AND THEY'RE MORE EFFICIENT USING LESS ENERGY.
WE'RE NOT RECOVERING SHORT RUN, FIXED COSTS WITH THE FIVE TIERS.
AND I APPRECIATE YOUR TECHNICAL RESPONSE ABOUT THE RIGHT MAKING AND TIERED ISSUE.
BUT WHAT I'M ASKING IS DOES AUSTIN ENERGY AS A COMPANY, THAT'S A PUBLIC ENTITY SERVING THE PUBLIC, DOES IT NOT SEE THE IRONY AND ASKING FOR MORE MONEY THAT YOU NEED BECAUSE OF THE SUCCESS OF YOUR ENERGY EFFICIENCY PROGRAMS? I DON'T SEE THAT AS IRONY THOUGH.
MANAGEMENT HAS NOT EVEN MENTIONED THAT IT'S KIND OF IRONIC.
I'VE TESTIFIED THAT I, I DON'T SEE THE IRONY IN THAT.
I DON'T KNOW HOW MANY MORE TIMES I CAN ANSWER.
NO, BUT THAT'S YEAH, THAT'S FINE.
GO AHEAD AND GIVE ME MORE, SO LET ME, LET ME MOVE ON TO RESPONSE.
BUT I THINK HIS RESPONSE HAS BEEN CLEAR.
SO LET ME MOVE ON AND I NEED TO KEEP IN MIND THAT WE'VE GOT ONLY A SHORT AMOUNT OF TIME.
SO LET ME MOVE ON TO CHAPTER FOUR ISH, SOME CHAPTER FOUR ISSUES AND A FE A QUESTION, A FEW QUESTIONS ABOUT FAYETTE AGAIN.
AND I DON'T KNOW IF YOU HAVE IN FRONT OF YOU OR AVAILABLE TO YOU.
I DON'T THINK IT'S ONE OF YOUR APPENDICES.
SO I DON'T KNOW IF IT'S IN THE RIGHT FILING PACKAGE.
DO YOU? I DO NOT HAVE A COPY OF IT.
CAN I JUST HAND YOU A COPY OUT? AND THIS IS OH, I'M JUST HANDING IT TO, BUT I'M HANDING IT TO HIM BECAUSE I'M GOING TO ASK HIM TO READ A PART OF IT.
SO, BUT, UH, IT'S OUR, IT'S OUR EXHIBIT 10 SIERRA CLUB.
I DON'T HAVE A COPY OF IT, BUT IF THE WITNESS CAN IDENTIFY IT AS SUCH, THEN I'M OKAY WITH THIS.
I CAN STIPULATE THAT THIS CAME TO MY WEBSITE AND THE CHARTER DOCUMENT.
SO CHAPTER FOUR OF THE RIGHT FILING PACKAGE IS THE PART THAT IS THE, UM, ACTUAL RIGHT MAKING PART.
CASE METHODOLOGY AT THE BEGINNING PART.
AND THEN IN THE BACK AND THE SCHEDULES, UM, IT'S UM, MAINLY,
[01:55:01]
UM, APPENDIX C THAT HAS ALL THE ENERGY THERE, THE WORK THAT'S BEING DONE, I MEAN, ALL THE ALLOCATIONS AND THE, AND THE, AND THE REVIEW OR THE NUMBER CRUNCHING REGARDING THE RIGHT.THAT'S THE COST OF SERVICE MODEL.
SO TO THE EXTENT THAT, UM, WELL, FIRST, FIRST OF ALL, IN OUR EXHIBIT NUMBER 10, THE 2030 PLAN, COULD YOU TURN TO PAGE THREE OF THAT HANDOUT OR THAT PLAN I'M ON PAGE THREE.
AND WOULD YOU AGREE WITH ME THAT AT THE TOP OF THE PAGE, IT SAYS FAYETTE POWER PROJECT AUSTIN WILL MAINTAIN ITS CURRENT TARGET TO CEASE OPERATION OF AUSTIN ENERGY'S PORTION OF THE FAYETTE POWER PLANT FPP COAL PLANT BY YEAR END 2022.
IS THAT CORRECT? THAT'S WHAT IT STATES CORRECT.
IS THAT POLICY STILL, HAS IT BEEN CHANGED? THE POLICY REMAINS IN PLACE, BUT WE HAVE NOT BEEN SUCCESSFUL TO DATE OF EXITING OUR SHARE OF FAYETTE.
AND HERE WE ARE IN JULY OF 2022 AND YOU'RE NOT OUT THAT'S CORRECT.
WE STILL HAVE A OWNERSHIP INTEREST IN UNITS ONE AND TWO 50% OWNERSHIP INTEREST.
SO WHAT I WANT TO ASK YOU ABOUT IS IN, AND JUST KIND OF LOOKING AT THE RIGHT FILING PACKAGE, BREAKING IT INTO TWO HALVES, THE PARTS IT'S THE, WHAT DO YOU CALL IT? THE NARRATIVE PART IS THAT KIND OF HOW Y'ALL REFER TO IT? I'LL AGREE TO THAT.
AND THEN THERE'S THE PART, THAT'S THE DEPENDENCIES PARTS.
THAT'S GOT THE SCHEDULES IN THE WORKPAPERS IN THE BACK, CORRECT? THE COST OF SERVICE MODEL.
WOULD YOU AGREE WITH ME THAT THERE IS NOT A SINGLE MENTION OF THE FAYETTE POWER PROJECT ANYWHERE IN THE RIGHT FILING PACKET IN THE FIRST PAT IN THE FIRST HALF OF THE RATE FILING POP PACKET, THE NARRATIVE PART, NOT A SINGLE MENTION.
WOULD YOU AGREE WITH ME ABOUT THAT? I WOULD HAVE TO REVIEW EACH PAGE.
SO SUBJECT TO CHECK, IF, IF I DID A WORD SEARCH ON MY COMPUTER, I HAD YOUR RIGHT FILING PACKAGE IN THERE AND DID A SEARCH AND IT DIDN'T COME UP WITH, HAVE YOU INDICATE THAT Y'ALL DIDN'T, IT DIDN'T INCLUDE IT.
THAT'D BE ONE WAY TO SEARCH FOR IT YET.
SO LET ME JUST ASK IT ANOTHER WAY.
CAN YOU TELL ME WHETHER OR NOT THERE IS A SECTION IN THE NARRATIVE THAT TALKS ABOUT THE FAYETTE POWER PROJECT, EXIT ISSUE? NO, THERE IS NOT.
DO YOU, WOULD YOU AGREE WITH ME THAT THE, UH, THE CITY OF AUSTIN'S IN AUSTIN, ENERGY'S INCLUSION OF THIS STATEMENT AND THE 2030 PLAN, FIRST OF ALL, IT'S AN INDICATION OF ITS IMPORTANCE OF THE IMPORTANCE OF THE, UH, EXITING PLAN, BUT ALSO IT HAS THIS KIND OF SCHEDULE BUILT INTO IT THAT SAYS IT'S SUPPOSED TO HAPPEN BY THE END OF 20 OR BY 2022.
UH, THAT WE, UM, WE ENTERED INTO NEGOTIATIONS WITH LCRA, WHICH ARE NOT SUBJECT TO THIS AND THEY'RE SUBJECT TO A NONDISCLOSURE AGREEMENT AND THAT, UM, THOSE DISCUSSIONS, UM, DID NOT RESULT IN US EXITING OPERATIONS BY THE YEAR END 2022.
ALSO, LET ME ASK SOMETHING THAT I'M WANT TO MAKE SURE, I DON'T FORGET TO ASK.
IT IS JUST LIKE OVER AT THE PUC HERE, LEGALLY, THE UTILITY BEARS, THE BURDEN OF PROVING THE REASONABLENESS JUSTNESS AND REASONABLE.
THIS OF ITS OF ALL OF ITS RATES.
YOU HONOR, IT ASKS FOR A LEGAL CONCLUSION, NONE OF THE PANELISTS OR ATTORNEYS, WELL, AS PART OF THEIR, UH, WORK, THEY CERTAINLY KNOW THAT I BELIEVE.
I MEAN, THAT'S WHAT THEY'RE HERE FOR.
I DON'T KNOW THAT THEY KNOW THAT.
DO ANY NEED A PANELISTS KNOW THE ANSWER TO THAT QUESTION? I HAVEN'T APPEARED BEFORE THE PUC.
I CAN'T TEST IT WITH THE PDC HAS, LET ME LIMIT IT THEN.
DO YOU, DO YOU BELIEVE THAT IT'S YOUR JOB? DOES YOUR, DID THE AEE HAS THE BURDEN OF PROOF IN THIS CASE? OKAY.
DO ANY OF THE PANELISTS UNDERSTAND WHAT HE'S TALKING ABOUT? I BELIEVE BURDEN OF PROOF HAS A LEGAL CONNOTATION THAT I'M NOT CLEAR ON.
I'LL UH, I'LL, I'LL STOP AND JUST LEAVE IT FOR BRIEFING THEN.
UM, IF THE 2030 PLAN SAYS THAT THE COMPANY SHOULD BE OUT OF FED BY 2022, THIS RATE FILING IS MADE IN 2022.
AND HERE WE ARE IN HEARING IN 2022, DID YOU NOT CONSIDER IT SUFFICIENTLY IMPORTANT AN ISSUE TO INCLUDE IN THE, IN THE, IN
[02:00:01]
THE, UH, NARRATIVE PART OF THE RIGHT FILING PACKAGE? NO, BECAUSE IT'S NOT IN THERE.I MEAN THAT YOU DIDN'T CONSIDER IT IMPORTANT ENOUGH TO INCLUDE IT.
SO DO YOU, DID YOU NOT THINK THAT AUSTIN ENERGY NOT THINK THAT SOME EXPLANATION OF WHY? WELL, FIRST OF ALL, AN ACKNOWLEDGEMENT THAT IN SPITE OF THE PLAN, THE 2030 PLAN, YES, IT'S TRUE.
WE'RE NOT OUT DID AUSTIN ENERGY NOT THINK THAT THAT WAS SUFFICIENTLY IMPORTANT TO STATE THAT, TO COMMUNICATE THAT TO THE CITY AND TO ITS CITIZENS, WE IDENTIFY ALL OF OUR GENERATION COSTS AND OUR COST, THE SERVICE MODEL.
AND THAT'S WHERE THOSE COSTS ASSOCIATED WITH, WITH FAYETTE.
DID YOU NOT THINK IT WAS IMPORTANT ENOUGH SINCE YOU DIDN'T GET OUT BY 2022 TO EXPLAIN WHAT YOU'D BEEN DOING TO TRY TO GET OUT? I DON'T THINK THAT'S PERTINENT FOR OUR COST OF SERVICE STUDY.
YOU DON'T THINK THAT ITEMS THAT ARE IN THE PLAN WERE PERTINENT FOR YOUR COST OF SERVICE ANALYSIS? NO.
DID YOU, UH, NOT THINK THAT IT WAS IMPORTANT TO INCLUDE SOME DISCUSSION OF WHAT YOU WERE GOING TO DO TO CONTINUE TRYING TO GET OUT AND WHEN YOU WERE EXPECTING TO GET OUT THAT'S THE PURPOSE OF THE RESOURCE IN GENERATION PLAN? THE PURPOSE OF THE COST OF SERVICE STUDY IS TO LOOK AT ACTUAL COST AND NOTRE MEASURABLE ADJUSTMENTS THAT ARE RELEVANT.
SO TO THE EXTENT THAT A GENERATION, UH, OPERATION WOULD CHANGE THE FIRST TWO, I WOULD AGREE TO, BUT FAYETTE DID NOT.
SO, AND THEN TO KIND OF WRAP THIS UP IN THE SECOND HALF OF THE RIGHT FILING PACKAGE, FAYETTE IS MENTIONED IN THE SCHEDULES, CORRECT? IT'S IT APPEARS AS LINE ITEMS IN THE SCHEDULES, CORRECT? THAT'S CORRECT.
UH, THE OPERATIONAL COSTS AND CAPITAL COSTS ASSOCIATED WITH FAYETTE ARE IN THE COST OF, SO FAYE WAS IN THE RIGHT MAKING, INSIDE THE RIGHT FILING, BUT THERE WAS NO EXPLANATION ABOUT WHY, WHEN, WHAT YOU'VE DONE TO TRY TO GET OUT.
NO, BECAUSE THOSE COSTS REFLECT TEST YOU'RE 21 AND THAT'S THE ACTUAL COST.
AND I HAVE NO BASIS TO MAKE A NOTE OR A MEASURABLE CHANGE TO THAT.
LET ME MOVE ON, UM, CHAPTERS FIVE AND SIX AND ALSO A LITTLE BIT OF SEVEN AT THE SAME TIME CHAPTERS FIVE AND SIX CHAPTER FIVE.
IS YOUR RATE, UM, UH, YOUR, YOUR COSTS, YOUR ACTUAL ALLOCATION STUDY OR COST OF SERVICE STUDY CHAPTER, CORRECT? THAT'S OUR COST ALLOCATION NEAR.
AND CHAPTER SIX, IS YOUR CLASS REVENUE DISTRIBUTION, UH, CHAPTER, CORRECT? THAT'S CORRECT.
AND THE ACTUAL NUMBER-CRUNCHING RELATED TO THESE CHAPTERS IS ALSO BACK IN APPENDIX C, CORRECT? CORRECT.
AND JUST IN CHAPTER FIVE AND SIX, WOULD YOU AGREE WITH ME THAT WHAT YOU'RE DOING IS ACTUALLY ALLOCATED YOU'RE YOU'RE DETERMINING THE COST OF SERVICE DOWN TO THE RATE CLASS LEVEL? CORRECT.
WELL, WE HAVE ANOTHER WITNESS WHO WILL BE TESTIFYING ON CHAPTER FIVE, THE COST ALLOCATION IN A DIFFERENT PANEL.
BUT BASED ON YOUR UNDERSTANDING, UH, YOUR, YOUR, AND IN FACT, I THINK YOU'VE TESTIFIED TO THIS ON, ON THIS ISSUE IN YOUR REBUTTAL, BUT IN CHAPTER FIVE AND SIX, YOU'RE NOT ALLOCATING COSTS DOWN TO THE TEAR LEVEL, CORRECT? THAT'S CORRECT.
IT GOES TO THE CLASS OF CUSTOMERS.
AND IN FACT, JUST FOR A COUPLE OF QUICK REFERENCES, IF WE WERE TO LOOK IN, UM, IN THE, UH, ATTACHMENTS OR THE APPENDICES THAT SCHEDULED
[02:05:01]
GET DONE.SCHEDULE G SIX COST OF SERVICE BY CUSTOMER CLASS.
AND IF, AS IF WE LOOK ACROSS THE TOP ROW THERE, THE LABELS ON THE TOP ROW, THOSE ALL SHOW CUSTOMER CLASSES, CORRECT? THAT'S CORRECT.
IT DOES NOT SHOW ANY KIND OF ALLOCATION DOWN TO THE TIER LEVEL, CORRECT? THAT'S CORRECT.
AND IF WE WERE TO LOOK AT OTHER SCHEDULES IN THE FILING AND WE'LL TRY TO NOT GO INTO THEM IN TOO GREAT.
A DETAIL, BECAUSE I NEED TO GO AHEAD AND KIND OF WRAP IT UP.
UM, IF WE WERE TO LOOK FOR EXAMPLE AT SCHEDULE, WELL, NO, THAT'S FINE.
SO, SO YOU'RE, YOU'RE ALLOCATING DOWN TO THE, OR TO THE CLASS LEVEL, NOT TO THE CHEER LEVEL, CORRECT? THAT'S CORRECT.
SO, ONE THING I'D LIKE TO ASK YOU TO CLARIFY THROUGHOUT YOUR TESTIMONY OR THROUGHOUT TESTIMONY ON THE ISSUE OF THE, UH, TIERS, YOU HAVE SAID AUSTIN ENERGY HAS SAID, OR YOU'VE SAID THAT THE COST OF SERVICE OF THE TEARS IS WHAT'S THAT THE TEARS ARE NOT RECOVERING THEIR COST OF SERVICE, THE TEARS COST OF SERVICE, OR AT LEAST IT APPEARS TO SAY THAT THAT'S ACTUALLY INCORRECT, ISN'T IT? SO THE TEARS ARE PART OF THE RATE DESIGN FOR THE RESIDENTIAL CLASS, RIGHT? THE RESIDENTIAL CLASS AS A WHOLE, WE ARE NOT RECOVERING THE COST OF SERVICE.
SO JUST TO MAKE IT BE REALLY CLEAR, THE TEARS AS THEY'RE ESTABLISHED RIGHT NOW, IT'S AUSTIN ENERGY'S POSITION THAT THE FIVE TIERS AS THEY'RE CURRENTLY SET UP ARE NOT ALLOWING THE RESIDENTIAL CLASS TO RECOVER ITS COST TO SERVICE.
BUT THERE IS NOT A COST OF SERVICE FOR THE FIVE TIERS FOR EACH OF THE FIVE TIERS, CORRECT? NO.
NOW, ONE LAST ISSUE ON THAT REAL QUICKLY, COULD YOU LOOK@WORKPAPERHDOTFIVE.ONE ON PAGE.
I THINK IT'S ON PAGE THREE, C3 15 H H Y H.FIVE.ONE OR DASH ONE.
I IT'S TOO SMALL FOR ME TO ABSOLUTELY.
H WHAT AT WORK PAPER, H DOT FIVE OR H-FIVE.ONE.
THAT MUST BE, WHAT IS ACTUALLY, DO YOU KNOW THE PAGE OF THE C3? 15, I BELIEVE IS THE PAGE.
OH, ACTUALLY IT'S RAID FILING PACKAGE PAGE 3 37.
UH, THIS, THIS PACKAGE STOPS AT, UH, PAGE 2 89.
OH, DO WE NEED TO GIVE THEM LET'S LET'S GO OFF THE RECORD FOR JUST A SECOND, BECAUSE LET'S FIGURE OUT EXACTLY WHAT PAGE WE'RE TALKING ABOUT.
SO IF YOU COULD LOOK AT THE PORTION OF THAT, THAT LAYS OUT, I'M SORRY.
AT THE PORTION OF IT AT LINES, 24, 25, 26, 27, 28 AND 29.
SO BEFORE I ASK THE QUESTIONS ABOUT THIS, YOU, AUSTIN ENERGY HAS PROPOSED THREE TIERS AS ITS PROPOSED CHANGE TO THE SYSTEM THAT IS CURRENTLY IN PLACE THREE TIERS FOR INSIDE CITY CUSTOMERS THAT ARE GOING TO BE CURRENTLY AT FIVE.
THE TIER STRUCTURE, AS WE'VE TALKED TO MANY TIMES IS FIVE, FIVE TIERS, CORRECT? FOR INSIDE CITY OF AUSTIN, RESIDENTIAL CUSTOMERS.
AND AUSTIN ENERGY HAS NOT PROPOSED JUST TAKING THOSE FIVE TIERS AND SHIFTING THEM OVER A LITTLE BIT TO MATCH THE NEW CURVE.
SO I DO WANT TO GO ASK YOU ABOUT YOUR THREE TIERS, BECAUSE IF WE LOOK ON THE VERY FIRST COLUMN, THE DESCRIPTION COLUMN OF THIS WORK PAPER, WE SEE THE CURRENTLY EXISTING FIVE TIERS INSIDE, CORRECT? THAT'S WHAT THE SCHEDULE SHOWS.
AND IF WE LOOK, BUT THEN IF WE LOOK OVER TO ABOUT COLUMN, GOSH, THIS IS SMALL H J CO I THINK IT'S COLUMN.
J COULD YOU LOOK OVER THERE? YES.
IT'S THE COLUMN RIGHT IN FRONT OF COLUMN.
J THAT'S LABELED PROPOSED TEARS.
SO WHAT WE SEE THERE IS THAT YOU HAVE ACTUALLY NOT PROPOSED THREE TIERS.
YOU ACTUALLY, YOUR WORK, OR AT LEAST IN YOUR WORK PAPERS, BREAKS IT DOWN INTO A DIFFERENT FIVE TIERS.
I'M GOING TO REFER TO OUR WITNESS GRANT RAVEN ON THE COST OF SERVICE VOLUNTEER.
BUT YOU'VE ADDRESSED THIS IN YOUR TESTIMONY, CORRECT? THE TIERS, THE TIER STRUCTURE, CORRECTLY TIER STRUCTURE.
SO JUST LOOK AND TELL ME THOUGH, IF
[02:10:01]
YOU SEE THOSE FIVE TIERS THAT ARE LISTED AS PROPOSED TIERS IN THIS WORK PAPER THAT ARE THE FOLLOWING ZERO TO 300, IS THE FIRST TIER 300 TO 500 IS THE SECOND TIER 500 TO A THOUSAND.IS THE THIRD TIER A THOUSAND TO 1200 IS THE FIFTH, THE FOURTH TIER AND GREATER THAN 1200 IS THE FIFTH TIER.
DO YOU SEE THOSE IN YOUR WORK PAPER? THOSE ARE HOW IT WAS THE FIVE LINES ARE IDENTIFIED.
AND THEN TO WHAT YOU'VE DONE, YOU'VE SET THE TIER, THE PRICE FOR THOSE MIDDLE THREE TIERS AT THE SAME PRICE, CORRECT? THAT'S WHAT THE SCHEDULE SHOWS.
BUT THE SCHEDULE SHOWS THAT STRUCTURALLY THERE ARE FIVE TIERS IN YOUR PROPOSAL, CORRECT? THERE ARE FIVE LINES I'LL DEFER TO WITNESS GRANT RAVEN ON HOW THE SPREADSHEET IS ESTABLISHED AND SET UP.
I STIPULATE THAT'S YOU'RE, YOU'RE READING THAT CORRECTLY.
SO LET ME TRY TO WRAP THAT UP BY ASKING YOU THIS, THOSE THREE MIDDLE TIERS, BUT LET ME BACK UP THE FIRST TIER AND THE MIDDLE GROUP AND THE LAST YEAR THEY, YOU HAVE DIFFERENTIATED IN THE PRICE BETWEEN THOSE HAVEN'T YOU, THEY HAVE DIFFERENT RATES.
SO THOSE ARE STILL ACKNOWLEDGING THAT THE LOGIC OF TIER RIGHT MAKING, WHICH IS THAT AS YOU CHANGE THE PRICE, YOU SEND PRICE SIGNALS TO CUSTOMERS FOR ENERGY EFFICIENCY AND CONSERVATION, CORRECT.
THOSE THREE GROUPS OF PRICES ARE ACKNOWLEDGING THAT THEORY, CORRECT? THAT'S CORRECT.
THE MIDDLE ONES THOUGH, WHERE YOU'VE NOT DONE THAT AND YOU'VE USED THE SAME PRICE FOR ALL THREE TIERS, THEY APPEAR TO DISPUTE THAT THEORY.
CORRECT? I WOULD DISAGREE WITH THAT.
YOU WANT TO EXPLAIN, I'LL DEFER TO WITNESS RAVEN ON THE STRUCTURE.
SO, SO MY QUESTION IS HERE WE ARE IN AUSTIN.
I DON'T KNOW HOW HOT IT'S GOING TO BE TODAY.
IT WAS WHAT, 106, SOMETHING LIKE THAT, CORRECT? IT WAS HOT AND ERCOT AND AUSTIN ENERGY, I BELIEVE, ALTHOUGH MAYBE IT WAS ONLY ERICA, WE'RE ASKING CUSTOMERS TO, TO CONSERVE THEIR USE OF THEIR AIR CONDITIONING BECAUSE OF THE HEAT.
CORRECT? I BELIEVE I CAUGHT SOUND ON CONSERVATION NOTICE.
I DON'T RECALL IF A MADE SPECIFIC REQUESTS ON CERTAIN APPLIANCES.
SO WHAT SENSE DOES IT MAKE TO REMOVE DIFFERENTIATION BETWEEN THESE THREE MIDDLE TIERS THAT WOULD DO EXACTLY THAT IT WOULD SEND A PRICE SIGNAL TO ALL THE PEOPLE IN THESE MIDDLE THREE TIERS.
IF YOU TURN ON YOUR AIR CONDITIONER, IT'S GOING TO COST YOU MORE, RIGHT? THAT'S WHAT THE SIGNAL WOULD BE CORRECT? THAT'S THE THEORY.
WHAT SENSE DOES IT MAKE FOR AUSTIN ENERGY TO REMOVE THOSE SIGNALS THAT ARE APPLICABLE TO THE BIG BULK OF CUSTOMERS IN THE, IN THE SYSTEM? SURE.
WE HAVE EXTENSIVE DISCUSSION AND ANALYSIS AND CHAPTER SEVEN OF OUR NARRATIVE THAT, UH, AUSTIN ENERGY CUSTOMERS DO NOT RESPOND TO THE TIERED IN TERMS OF ENERGY CONSUMPTION.
UM, LET ME TRY TO MOVE AND TRY TO WRAP UP ON THE $25 CUSTOMER CHARGE ISSUE.
UM, THE $10 CUSTOMER CHARGE HAS BEEN IN PLACE DURING THE PERIOD THAT ENERGY EFFICIENCY SAVINGS WERE WERE REALIZED BY THAT UTILITY.
WE TALKED ABOUT BEFORE, CORRECT.
THEY'VE BEEN IN PLACE SINCE JANUARY OF 2013.
SO JUST TO BE CLEAR, IF I USE 300 WITH THE NEW 20, THE PROPOSED $25 CUSTOMER CHARGE, IF I USE 300 KWH, I'M GOING TO GET CHARGED $25, CORRECT.
YOU'LL GET CHARGED $25 IF YOU'RE A RESIDENTIAL CUSTOMER, REGARDLESS ANOTHER KWH, RIGHT.
SO IF I USE 5,000 KWH AND I'M A RESIDENTIAL CUSTOMER, I STILL GET CHARGED $25, CORRECT? THAT'S CORRECT.
I'M STILL GOING TO GET CHARGED $25, CORRECT? I WILL STIPULATE AND THERE'S NO SIGNAL ASSUMPTION YOU USE, YOU WILL GET A $25 CUSTOMER CHARGE.
UM, YOU SAY IN CHAPTER SEVEN THAT YOU DETERMINE THAT THE TEARS AREN'T WORKING WELL, FIRST OF ALL, THE TIER TIER RAINMAKING HAS A LONG HISTORY IN ELECTRIC UTILITY RATE MAKING DOESN'T IT MANY UTILITIES, UH, DO USE TEARS AND MANY DO NOT.
UH, I, I DON'T KNOW WHEN THEY FIRST BECAME
[02:15:02]
FASHIONABLE.SO IT'S AUSTIN ENERGY'S BELIEF THAT THE TEARS AND THE RATE MAKING AND THE RESIDENTIAL RATE MAKING ARE IGNORED BY THEIR CUSTOMERS.
I THINK WE PROVIDE A SUBSTANTIAL ANALYSIS IN CHAPTER SEVEN OF OUR BUNCHING ANALYSIS AND THE COMPARISON OF THE TIERS THAT CUSTOMERS DO NOT RESPOND TO THE TIERED PRICING.
SO DO IS THAT, SO IS THE ANSWER YES.
YOU THINK THAT THE CUSTOMER IS REALLY JUST IGNORE THE TIERED PRICING? IS THAT YOUR ANSWER? I THINK I OBJECT TO YOUR WORD IGNORE.
SO, UM, ONLY ABOUT 4% OF OUR CUSTOMERS HAVE THE APP TO KNOW, EVEN KNOW IT'S HERE, THEY'RE IN, AND EVEN THOSE CUSTOMERS DON'T RESPOND TO THE PRICE SIGNAL.
SO I DON'T HAVE THE INFORMATION TO IGNORE.
COUPLE OF QUICK QUESTIONS ABOUT THE BUNCHING AND THE OTHER ANALYSIS THAT YOU MADE TO, UH, THAT YOU BELIEVE IS PROOF THAT THEY IGNORE IT, RIGHT? YOU, I THINK I'M INJECTING THE WORD IGNORE BECAUSE THEY'RE NOT, THEY DON'T HAVE THE INFORMATION TO IGNORE IT.
THEY DON'T HAVE THE INFORMATION AND THOSE THAT DO HAVE IT DON'T RESPOND TO IT.
WELL, THERE'S THE LACK OF INFORMATION, THEIR FAULT, OR IS THAT AUSTIN ENERGY'S FAULT.
UM, ANYONE CAN DOWNLOAD THE APP AND HE ALSO KNOWS YOUR CUSTOMER AND GET THAT INFORMATION.
AN AUSTIN ENERGY COULD CONDUCT PUBLIC OUTREACH TO MAKE SURE THAT PEOPLE ARE AWARE OF THE TIERED STRUCTURE AND WHY IT'S IMPORTANT.
UM, ON THE BUNCHING, THE BUNCHING IS THE THEORY THAT, AND YOU ACKNOWLEDGE THAT IT'S THEORETICAL AND HYPOTHETICAL, CORRECT? YOU YOU'RE PRETTY CLEAR ABOUT THAT.
WELL, IT'S NO IT'S USING OUR OWN CUSTOMER DATA, SO IT'S NOT HYPOTHETICAL.
IT'S A THEORY THAT CUSTOMERS WILL BEHAVE WHEN THEY HIT THE TIER AND NOT CROSSING INTO THE HIGHER TIER.
THAT'S THE THEORY THAT DATA IS NOT HYPOTHETICAL.
BUT THE BUNCHING IS A THEORY THAT CUSTOMERS WHO ARE PAYING ATTENTION TO THEIR BILL AS THE MONTH PROGRESSES AT THE VERY END OF THE 30 DAYS OR WHATEVER, UH, WHEN THEY SEE THAT THEY'RE ABOUT TO GO OVER FROM ONE TIER INTO ANOTHER THEY'LL ALL OF A SUDDEN THEY WILL THEY'LL CUT OFF USAGE.
THE ONLY PROBLEM WITH THAT THEORY THOUGH, IS WOULDN'T YOU AGREE WITH ME THAT IT APPLIES ONLY TO THOSE CUSTOMERS THAT ARE AFFECTED SHORT-TERM BY TIER STRUCTURE.
IT DOESN'T APPLY TO CUSTOMERS THAT MAKE DECISIONS OVER THE LONGER TERM CUSTOMERS THAT ARE NOT LOOKING AT THEIR TIER, UH, FOR THE TIER CONSUMPTION FOR THE MONTH, BUT OVER THE LONGTERM REALIZE THAT THEIR BILL GETS HIGHER.
IF THEY KEEP USING MORE ELECTRICITY.
AND THAT'S CONSISTENT WITH OUR THEORY THAT CUSTOMERS REACT TO UTILITY BILLS AND NOT TEARS, THAT THEY WILL MAKE A DECISIONS, UH, ON THEIR ENERGY USE BASED UPON THE BILLS, BUT TO THE EXTENT THAT THEY MAKE DECISIONS IN THE LONGER-TERM, THE BUNCHING DOESN'T APPLY AS A, AS A TEST, CORRECT.
THE BUNCHING ANALYSIS IS USED TO DETERMINE WHETHER THE CUSTOMERS ARE REACTING TO THE TIERED PRICING WITHIN A MONTH, RIGHT? NO, THE BUNCHING OCCURS AT THE END OF EACH MONTH.
NO, THE, THE TEARS, UM, OCCUR ON ANY DAY, DEPENDING ON YOUR, YOUR, YOUR LEVEL OF CONSUMPTION.
UM, IT CAN HAPPEN ON DAY FIVE ACROSS FROM TIER ONE TO TIER TWO OR, UM, IT'S REGARDLESS, IT'S NOT AN END OF THE MONTH ISSUE.
IT'S A CUMULATIVE, WELL, LET ME, MR. BRAZIL, I'M SORRY.
I DON'T KNOW IF YOU HAVE A GOOD STOPPING POINT.
I'M SORRY TO INTERRUPT YOUR, YOUR CROP.
THIS IS A GOOD STOPPING POINT.
AND IT'LL ALSO ALLOW ME TO TRY TO USE THE LUNCH TO GET READY TO WRAP IT UP.
UH, D DID YOU HAVE ANY FOLLOW-UP TO THAT? OR ARE YOU, WERE YOU FINISHED FOR NOT FINISHED? NO.
I MEAN, WITH, WITH YOUR, YOU KNOW, YOU'RE ASKING QUESTIONS AND YOU, I WANT YOU TO GET TO A GOOD STOPPING POINT ON THIS LINE OF QUESTIONS.
THIS IS A GOOD STOPPING POINT BECAUSE I WAS ABOUT TO MOVE TO THE NEXT CHAPTER.
ALL RIGHT, LET'S GO OFF THE RECORD.
ARE WE, UH, READY TO GO BACK ON THE RECORD? UM, CHURCH VIGUERIE? YES.
KEEP HOUSEKEEPING, UH, QUESTION, UH, I MEAN, MAY OR MAY NOT BE HERE TILL THE END OF THE DAY AND I WON'T BE HERE TOMORROW.
SO I'D LIKE TO KNOW IF THERE'S A TIME CERTAIN FOR MY PRESENTATION, IF THERE ISN'T.
I UNDERSTAND THAT I DO NEED TO ASK, UH, I THINK WHAT WE SHOULD DO IS, IS WHAT I PROPOSE IS DOING IT ON FRIDAY, MR. BROOKE CATO.
IS THAT WITH YOU FRIDAY AFTERNOON? YES, SIR.
UH, WE'VE SPOKEN, TALKING PREVIOUSLY WITH MR. ROBINSON.
[02:20:01]
IS WHAT WE WERE PLANNING ON.DO YOU HAVE A TIME CERTAIN, UH, WHERE WE COULD, UH, TAKE MR. ROBINSON, UH, FIRST UP ON, ON A FRIDAY IF EVERYONE ELSE IS IN AGREEMENT WITH THAT FRIDAY MORNING? YES, SIR.
HOW, WHAT TIME? WELL, WE DON'T HAVE A START TIME, BUT WE DO NOT.
WHAT WE COULD DO IS DO THIS FOR 1245 BECAUSE WE, WE KNOW THAT WE'LL GO TO LUNCH 1145 AND 1245.
SO WE'LL TRY 1245 WORK FOR YOU.
UH, WE READY TO GO BACK ON THE RECORD, THOMAS, IS THAT PRESENTATION SUPPOSED TO OCCUR? SORRY.
IS THAT PRESENTATION IS SUPPOSED TO OCCUR, BUT YOU KNOW, JUST AT THE TIME CERTAIN AND WHATEVER WE HAVEN'T GOTTEN, GOTTEN TO WE'LL DO AFTERWARDS.
FOR INSTANCE, OR WAS IT, OR IS IT GOING TO BE LAST? NO, I, WELL, I DON'T KNOW IF IT'S GOING TO BE LAST.
IF WE'RE EFFICIENT, WE MOVE ALONG.
IT'LL BE LAST, BUT I DOUBT IT.
UM, SO WHAT I MEAN IS I DOUBT THAT WE'LL BE ABLE TO, YOU KNOW, IT'LL BE THE LAST THING IS JUST THAT, UM, MR. ROBBINS WOULD LIKE A TIME CERTAIN AND, AND THAT'S A GOOD TIME CERTAIN, UM, SO 1245.
ALL RIGHT, I'LL BE READY TO GO BACK ON THE RECORD.
UH, WE ARE BACK ON THE RECORD AND JUST WANT TO NOTE THAT MR. ROBBINS IS GOING TO PROVIDE HIS PRESENTATION ON FRIDAY AT 1245, FRIDAY THE 15TH AT 12:45 PM, WHICH WILL BE RIGHT AFTER WE RETURNED FROM LUNCH.
SAME TIME AS WE HAVE RIGHT NOW.
UM, MR. BRAZIL, THANK YOU, YOUR HONOR.
UM, SO NOW LET'S SWITCH FOR JUST A BRIEF COUPLE OF QUESTIONS TO CHAPTER EIGHT AND CHAPTER 10 OF THE RIGHT FILING PACKAGE.
UM, YOU'D AGREE WITH ME THAT IT PROVIDES A PROVISION THAT, UH, SAYS THAT AUSTIN ENERGY REQUIRES THAT IT MUST ASSURE THAT THE COST OF ELECTRIC SERVICE REMAINS AFFORDABLE.
AND IT HAS A HISTORY OF PROVIDING ELECTRIC SERVICE.
THAT'S AFFORDABLE, CORRECT? THAT IS CORRECT.
BUT IF WE TURN BACK TO CHAPTER EIGHT TO PAGE 1 32, AND BY THE WAY THAT WAS ON CHAPTER OR PAGE 1 50, 1 OF THE RIGHT FILING PACKAGE, IF WE GO BACK TO PAGE 1 32, WE SEE YOUR TABLES IN CHAPTER EIGHT, WHERE YOU'VE SHOWN THE DIFFERENCES IN THE RATE IMPACT ON THE CUSTOMER, NOT THE CUSTOMER TIERS, BUT JUST ON DIFFERENT GROUPS OF CUSTOMERS DIVIDED UP IN 250 KWH GROUPS.
THAT'S WHAT THE, THAT'S WHAT THE TABLE SHOWS.
AND IF WE LOOK OVER THE LAST COLUMNS OVER ON THE RIGHT, WHAT WE SEE IS THAT WHAT THIS TABLE SHOWS IS, AND THIS HAS BEEN MENTIONED ALREADY IN THIS CASE A LOT IS THAT THE LOWER USAGE CUSTOMERS WILL RECEIVE SUBSTANTIAL RATE INCREASES WHILE THE HIGHER USAGE CUSTOMERS WILL RECEIVE SUBSTANTIAL RATE DECREASES UNDER THE PROPOSED RATES.
CORRECT? THAT IS WHAT THE TABLE SHOWS.
ACKNOWLEDGING THOUGH THAT THE, THE OBJECTIVE, THE OVERALL OBJECTIVE IS FOR THE RESIDENTIAL CLASS TO RECOVER ITS FULL COST TO SERVICE.
CAN YOU REPEAT THE CLAIM? THE OVERALL OBJECTIVE IS FOR THE RESIDENTIAL CLASS TO RECOVER ITS FULL COST OF SERVICE.
WE'RE ALL OBJECTIVE IS, IS TO RECOVER, UH, THAT PORTION, UH, ASSIGNED TO GET THEM TO UNITY.
AND IN THIS CASE IS THE 50% RULE.
THAT'S THE CLASS AS A WHOLE CORRECT.
BUT THESE GROUP WITH, AS FAR AS THE IMPACT ON THE GROUPS, IT'S THE LOWER USAGE CUSTOMERS THAT ARE IMPACTED AT LEAST AS FAR AS INCREASES, THE HIGHER CUSTOMERS RECEIVE A DECREASE.
THAT THIS TABLE DOES SHOW THAT LOWER USAGE CUSTOMERS WOULD PAY SOMEWHERES BETWEEN 15 TO $19 A MONTH INCREASE.
SO COULD YOU UNDERSTAND WHY SOME IN THE COMMUNITY MIGHT HAVE CONCERNS THAT THAT PARTICULAR DESIGN DOES NOT MEET THE AFFORDABILITY CRITERIA OR STANDARDS OF THE CITY'S OWN, UM, UH, POLICIES? CAN YOU REPEAT THAT QUESTION ONE MORE TIME? WE'LL MAKE SURE I UNDERSTAND HOW SOME IN THE COMMUNITY MIGHT BE CONCERNED THAT THAT STRUCTURE THAT YOU'RE TALKING ABOUT IN PUTTING IN PLACE FAILS UNDER THE AFFORDABILITY DESIGN CRITERIA.
NO, YOU DON'T AGREE THAT THAT, THAT SOME IN THE COMMUNITY COULD HAVE CONCERNED ABOUT IT, WHETHER YOU AGREE WITH IT OR NOT DO SOME IN THE, CAN YOU UNDERSTAND WHY SOME IN THE COMMUNITY WOULD, I CAN'T GUESS WHAT SOME OF THE COMMUNITY MIGHT PERCEIVE AS THE IMPACT ON THEIR BELLS WOULD BE
[02:25:01]
WELL AS AN OFFICER, YOU WOULDN'T BE IN THE BUSINESS OF GUESSING THAT YOU'D WANT TO KNOW THAT WOULDN'T YOU, WHAT THE COMMUNITY'S RESPONSE IS TO YOUR PROPOSAL.I BELIEVE IF I'M NOT MISTAKEN, I THINK YOUR QUESTION OR YOUR, YOUR ORIGINAL QUESTION WAS, DOES THIS RATE OF IMPACT GO AGAINST THE GRAIN FOR LACK BETTER WORDS TO OUR AFFORDABILITY GOALS, RIGHT.
SO LET'S MOVE ON TO CHAPTER NINE, THE VALUE OF SOLAR SOLAR ISSUES.
AND I'M GOING TO TRY TO WRAP UP AS QUICKLY AS I CAN REALIZING THAT THERE'S A LOT TO COVER HERE, BUT I'M JUST GOING TO HAVE TO TOUCH ON A COUPLE OF THINGS.
UM, DO YOU, WOULD YOU AGREE WITH ME THAT THE VALUE OF SOLAR PROGRAM AUSTIN ENERGY'S VALUE OF SOLAR PROGRAM HAS BEEN A SUCCESS UH, I WOULD DEFER YOU TO A WITNESS, TIM HARVEY.
BUT YOU HAVE NO INFORMATION ABOUT THIS, MR. DOMBROWSKI, DO YOU HAVE ANY INFORMATION ON THIS? I DON'T KNOW THE CRITERIA TO USE, TO DETERMINE WHETHER IT'S AT SUCCESS, BENCHMARKS AND TYPE.
I THINK WITNESS HARVEY WOULD, WOULD BE THE BEST POSITION TO ANSWER THAT.
UM, IS THIS PANEL ABLE TO ADDRESS ANY ISSUES ON VALUE OF SOLAR? W I HAVE FILED, UH, SOME REBUTTAL TESTIMONY ABOUT THE METHODOLOGY OF MOVING TO AN AVOIDED COST, UH, UM, ON AN EMBEDDED COSTS BASIS.
SO LET'S TALK ABOUT THAT FOR JUST A FEW MINUTES.
THEN IF YOU CAN SWITCH TO PAGE ONE 40 OR MOVE TO PAGE ONE 40 OF THE, UM, RATE FILING PACKAGE ON THAT PAGE, YOU SHOWN A DIAGRAM OF WHAT YOU'RE PROPOSING TO BE THE NEW COST RECOVERY METHODOLOGY FOR THE VALUE OF SOLAR, UH, CREDIT.
AND JUST SO THAT IT'S CLEAR, BECAUSE IT'S TAKEN ME A WHILE TO KIND OF GET THROUGH ALL OF THIS, BUT THE VALUE OF SOLAR WILL BE CALCULATED USING THREE, WHAT YOU'VE CALLED, UH, PILLARS.
AND ONE OF THOSE IS THE AVOIDED COST PILLAR, CORRECT? THAT IS CORRECT.
AND THAT AVOIDED COST PILLAR HAS WITHIN IT, THE THREE ITEMS THAT ARE SHOWN OVER HERE ON THE NEXT PAGE, PAGE 1 41, CORRECT? YES.
THE AVOIDED COSTS THAT'S PROPOSED IN THIS RIGHT CASE INCLUDES, UM, A MARKET PRICED AVOIDED COSTS FOR ENERGY SAVINGS, TRANSMISSION SAVINGS AND ANCILLARY SERVICES.
AND THEN THE SOCIETAL BENEFITS COSTS ARE A PILLAR OF THIS VALUE OF SOLAR RATE INCLUDES A, UH, CALCULATION OF CARBON COSTS, CORRECT? YES.
I'LL DEFER THAT TO TIM, UH, TO WITNESS TIM HARVEY.
AND THEN, BUT IT DOESN'T HAVE ANYTHING ELSE IN IT BESIDES THAT CARBON CALCULATION.
ONCE AGAIN, I'LL DEFER THE QUESTION TO WITNESS TIM HARVEY.
THE POLICY-DRIVEN INCENTIVES HAS, UH, IT, A PARTICULAR POLICY-BASED PROGRAM.
THAT'S GOING TO PROVIDE INCENTIVES, CORRECT.
ONCE AGAIN, I'LL DEFER TO, UH, WITNESS TIM HARVEY.
UM, SO IF WE LOOK AT THEM WHAT YOU'VE DONE, YOU'RE, YOU'RE ESSENTIALLY SAYING WE'RE GOING TO USE THREE COMPONENTS OVER HERE IN AVOIDED COSTS AND ONE IN SOCIETAL BENEFITS.
UM, REPEAT YOUR QUESTION ONE MORE TIME, SIR.
YOU'RE PROPOSING TO DO, AND THE NEW METHODOLOGY IS TO INCLUDE THREE ITEMS OR COSTS IN THE AVOIDED COST PILLAR AND ONE, UH, COST OR ITEM IN THE SOCIETAL BENEFITS COLUMN OR PILLAR.
I I'LL TESTIFY TO THE D THE EMBEDDED COST, AND THAT IS CORRECT.
THERE'S THREE, THREE COST RECOVERING THE BED AT COST.
AND THIS IS A, THIS IS A TOTAL CHANGE IN METHODOLOGY FROM THE METHODOLOGY THAT'S BEEN USED BY AUSTIN ENERGY IN THE CITY OF AUSTIN UP UNTIL NOW.
I THINK THAT THE, THE, UM, COST OF DETERMINING THE V OR THE METHODOLOGY TO DETERMINE THE AVOIDED COST, UH, IS, IS, UH, IS IT CHANGED FROM WHAT CURRENTLY EXISTS AND SO THAT WE, AND BY THE WAY, LET'S TAKE JUST A BRIEF DETOUR FOR A MOMENT YOU'VE POINTED OUT AUSTIN ENERGY HAS POINTED OUT IN A SENSE, THEY SAY, WHAT'S THE PROBLEM WE'RE PROPOSING AN INCREASE TO THE VALUE OF SOLAR CREDIT.
AND IF WE WANT TO SEE THAT INCREASE, WE CAN LOOK OVER ON PAGE 1 48 OF THE RIGHT FILING PACKAGE.
SO WHAT WE'RE SEEING THERE IN TABLE 90 ON ONE, ON PAGE 1 48, AND BY THE WAY, I'M JAMES BRAZIL FOR THE RECORD FOR SIERRA
[02:30:01]
CLUB, I SHOULD HAVE SAID THAT EARLIER.UH, THE SECOND TO THE LAST COLUMN THERE SHOWS THAT THE CURRENT RESIDENTIAL CREDIT IS 9.70 CENTS, CORRECT? THAT IS THE CURRENT.
AND IT'S BEEN 9.70 CENTS FOR A WHILE, CORRECT.
AND WHAT THE RE AND THE RESULT, THE NEW CREDIT WILL BE AS A RESULT OF YOUR NEW CALCULATION WILL BE 9.91 CENTS SHOWN IN THE FINAL COLUMN, CORRECT.
AND SO YOUR POINT IS WE'RE INCREASING THE COST, SO THERE SHOULD BE NO PROBLEM.
I THINK THAT RESPONSE WAS, UM, THE, TO A SPECIFIC RFI, UH, IN MY REBUTTAL TESTIMONY.
I DON'T NECESSARILY KNOW THAT I RECALL THAT OFF THE CUFF.
UM, NO, I'LL LEAVE IT AT THAT.
SO WHEN DID THE T THE VALUE OF SOLAR PROGRAM FIRST GO INTO EFFECT? I'LL DEFER TO WITNESS TIM HARVEY.
UH, DO YOU, DO YOU KNOW WHETHER IT'S CORRECT THAT MR. RABAGO WHO'S ONE OF OUR WITNESSES WHO WILL TESTIFY LATER WAS AT THE TIME OF THE CREATION OF THE VALUE OF SOLAR PROJECT OR PROGRAM A, AN EMPLOYEE AND AN ACTUALLY AN, OF AUSTIN ELECTRIC I'LL CONCEDE THAT, UH, HE WAS EMPLOYED HERE AND WAS, UH, AN EXECUTIVE, DO YOU RECOGNIZE, DO YOU AGREE THAT HE ALSO CREATED, OR WAS INSTRUMENTAL IN THE CREATION OF THE VALUE OF SOLAR PROGRAM THAT HAD NOT EXISTED BEFORE? I CAN'T SPEAK TO THAT? CAUSE I DON'T KNOW.
WOULD YOU AGREE WITH ME THAT THE VALUE OF SOLAR PROGRAM THAT'S IN EFFECT RIGHT NOW THAT YOU'RE PROPOSING TO CHANGE IS THE PROGRAM THAT MR. RABAGO PUT IN PLACE? W ONCE AGAIN, I THINK I ASKED HIM, ARE YOU ASKING, I ANSWERED THAT QUESTION THAT I'M NOT AWARE OF MR. RABAGO DESIGN, THAT, THAT VALUE OF SOLAR WOULD A, ONE OF THE OTHER PANELISTS KNOW THAT AND THE OTHER PANEL, UM, I W I W I'LL JUST DEFER TO EITHER WITNESS TIM HARVEY OR, OR RICHARD GENESEE.
SO NOW, JUST TO TURN FOR JUST A MOMENT TO, TO TWO PAGES, WELL, ONE MORE QUESTION, ARE YOU AWARE OF, WOULD YOU AGREE WITH ME THAT MR. ROBERT GO'S PROPOSAL IN THIS CASE IS, OR NOT PROPOSAL, BUT HIS RECOMMENDATION IS THAT THE SAME METHODOLOGY SHOULD BE RETAINED FOR DETERMINING THE CREDIT.
AND THAT METHODOLOGY IS A FORWARD-LOOKING MARGINAL COST BASED, UM, UH, LONG-TERM 30 YEAR CALCULATION, UH, OF THE PROJECTED COSTS OF, AND BENEFITS, THE BENEFITS AND COSTS OF THE, UH, VALUE OF SOLAR OF SOLAR GENERATION BEING PLACED ON ROOFTOPS BY CUSTOMERS.
AND I'M SORRY, I, I MADE THAT TOO LONG.
DO YOU AGREE WITH ME, OR DO YOU RECOGNIZE THAT MR. ROBERT GO'S RECOMMENDATION IN THIS CASE IS THAT WE CONTINUE TO USE THE FORWARD-LOOKING LONG-TERM COST BENEFIT OR BENEFIT COST METHODOLOGY? MY REGULAR RECOLLECTION OF MR. ROBERT GO'S TESTIMONY, UH, WAS THAT, THAT, UH, HIS RECOMMENDATION WAS NOT TO CHANGE THE VALUE OF SOLAR, RIGHT.
ALTHOUGH HE DOES MAKE RECOMMENDATIONS THAT RESULT IN A VALUE OF SOLAR CREDIT HIGHER THAN WHAT THE COMPANY IS PROPOSING.
DID YOU SEE THE PORTION OF MR. RODRIGUEZ TESTIMONY WHERE HE RECOMMENDED THAT THE VALUE OF SOLAR CREDIT BE 16 CENTS, 16.8, SIX, 6 CENTS.
IF YOUR PROPOSED CALCULATION IS USED OR 13.63 CENTS, IF THE CURRENT METHODOLOGY IS RETAINED, DID YOU SEE THAT? I DON'T RECALL THOSE NUMBERS.
UM, IF HIS PROPOSAL IS THESE NUMBERS, THEN HE'S PROPOSING A VALUE OF SOLAR CREDIT THAT'S HIGHER THAN GREATER THAN THE ONE THAT YOU'VE PROPOSED THE 0.9, NINE ONE OR THE 9.99 CENTS.
ONCE AGAIN, I DON'T RECALL WHAT MR. ROBERT GO'S RECOMMENDATION WAS OTHER THAN TO NOT CHANGE THE, THE CURRENT TARIFF.
SO IF THE, IF YOUR PROPOSAL IS TO INCREASE IT, BUT THE CORRECT AMOUNT SHOULD BE HIGHER, THEN YOUR PROPOSAL DOESN'T RAISE IT TO THE LEVEL THAT IT SHOULD DOES IT WELL, THAT SUPPOSES THAT MR. ROBIN GOES NUMBER, WHICH YOU TELLING ME IS SOMETHING HIGHER IS THE CORRECT ANSWER.
[02:35:01]
AND, AND I DISAGREE WITH THE NOTION THAT THAT AVOIDED COST VALUE SHOULD BE BASED ON SOME TYPE OF SOME TYPE OF FORWARD-LOOKING, UM, A MARGINAL COST BASIS.THAT THAT NUMBER IS BETTER CALCULATED USING THE MARKET THAT BAKES IN ALL OF THOSE COSTS TO DETERMINE THE AVOIDED COST OF THAT, THAT ENERGY ERCOT MARKET HAS ALREADY DETERMINED WHAT THE VALUE OF THAT ENERGY WOULD BE WORTH.
AND THAT, IN MY OPINION, IS A BETTER METHODOLOGY TO COME UP WITH THAT VALUE.
THEN SOME FORECASTED, UH, UH, METHODOLOGY BASED ON CERTAIN ASSUMPTIONS THAT MAY OR MAY NOT BE CORRECT, BUT YOU'LL AGREE WITH ME.
WILL YOU, NOT THAT THE METHODOLOGY THAT MR. ROB GOES PROPOSING IS THE METHODOLOGY THAT'S IN PLACE CURRENTLY.
UH, I'LL CONCEDE THAT THE CURRENT METHODOLOGY, I ACTUALLY I'LL DEFER TO, UH, WITNESS TIM HARVEY ON THAT.
BUT TO THE EXTENT THAT IT IS MR. ROBERT GOES FORWARD, LOOKING 30 YEAR MARGINAL COST METHODOLOGY, THAT THAT'S WHAT WAS PUT IN PLACE WHEN THIS PROGRAM WAS STARTED.
THAT, THAT POLICY, THAT CALCULATION IS WHAT GOT US TO WHERE WE ARE TODAY WITH A PROGRAM THAT IS SUCCEEDING.
ONCE AGAIN, I'LL DEFER TO WITNESS, UH, TIM HARVEY.
JUST A COUPLE MORE QUESTIONS ON THIS SUBJECT, AND I'LL TRY TO GET OFF OF IT.
IF YOU COULD LOOK AT PAGE 1 39 AND ALSO PAGE ONE 40 WHEN 1 39 YES, SIR.
ON PAGE ONE 40, THERE'S A DIAGRAM OF YOUR PROPOSED NEW METHODOLOGY, CORRECT? THAT'S CORRECT.
IF WE TURN BACK TO PAGE 1 39, THAT'S NOT A DIAGRAM, BUT THAT'S AN OUTLINE OR A REPRESENTATION OF THE EXISTING CURRENT METHODOLOGY, CORRECT? YES.
IT SHOWS THE COMPONENTS THAT ARE INCLUDED, RIGHT.
SO ON PAGE 1 39, THAT WOULD BE AN, AN, A REPRESENTATION THAT DEPICTS THE MR. ROBERT GOES LONG-TERM MARGINAL COST, COST BENEFIT.
FORWARD-LOOKING METHODOLOGY, CORRECT? YES.
CAN YOU ASK THE QUESTION ONE MORE TIME ON PAGE 1 39? THAT IS THE DEPICTION OF MR. ROBERT GOES LONG-TERM MARGINAL COST BENEFIT COSTS, UM, METHODOLOGY.
I'LL DEFER TO WITNESS TIM HARVEY ON THAT.
BUT YOU THINK IT'S CORRECT? THAT, THAT I'LL DEFER TO WITNESS TIM HART.
UM, AND THAT MEANT THAT, UH, DIAGRAM THAT SHOWS UP ON PAGE 1 39, WOULD YOU AGREE WITH ME THAT THAT'S THE SAME DIAGRAM, ESSENTIALLY, AS WHAT'S SHOWN ON THE NEW GEN STUDY, ARE YOU AWARE OF THE NEW GEN STUDY? I'M AWARE THAT NEW GEN HAS CONDUCTED A STUDY AND THE STUDY, ARE YOU AWARE THAT THE STUDY WAS CONDUCTED TO ASSIST AUSTIN INJURE ENERGY IN DETERMINING WHETHER OR NOT TO CHANGE THE METHODOLOGY? UM, IT'S MY UNDERSTANDING, IT WAS TO DETERMINE THE NEW AVOIDED COST UNDER CURRENT, UH, UH, UH, UM, MARKET.
DO YOU OR ANY MEMBERS OF THE PANEL KNOW WHETHER OR NOT THE NEW GYM, NEW GEN PERSONNEL THAT PERF PERSONNEL THAT PERFORMED THIS STUDY HAD EVER DONE A VALUE OF SERVICE STUDY BEFORE? OH, I'LL, I'LL DEFER TO, UH, UM, TO NEW GEN ON THAT.
DO YOU KNOW WHETHER THEY HAD EXPERIENCE AS A, AS A, UH, AN ENTITY OR A COMPANY, A CONSULTING COMPANY IN DOING VALUE OF SERVICE ANALYSES? ONCE AGAIN, I'LL DEFER TO NEW GEN TWO AS TO WHAT STUDIES THEY HAVE AND HAVEN'T DONE, BUT YOU WILL CONCEDE WILL YOU, NOT THAT MR. RABAGO HAS EXTENSIVE EXPERIENCE IN VALUE OF SERVICE DETERMINATIONS.
I'M NOT AWARE OF, UM, MR. ROBIN GOES, UM, UH, UH, EFFORTS OUTSIDE OF THE TIME THAT HE WAS HERE, BUT HE'S ALSO, HE'S DESCRIBED IT IN HIS, UH, ATTACHMENTS TO HIS TESTIMONY.
I'LL DEFER TO WITNESS TIM HARVEY.
SO BACK TO THE QUESTION THOUGH, WOULD YOU AGREE WITH ME THAT THE TABLE THAT'S SHOWN ON PAGE 1 39 THAT'S REPRESENTATIVE OF MR. ROBERT GO'S METHODOLOGY IS THE SAME INFORMATION AND TABLE AND BREAKDOWN
[02:40:01]
AS THE TABLE THAT'S SHOWN IN THE NEW GEN STUDY, WHICH IS INCLUDED IN APPENDIX M OF THE RATE FILING PACKAGE AND SHOWS UP ON PAGE 6 0 3 OF THE RAID FILING PACKAGE 99, I'M SORRY.PAGE 603 OF THE RIGHT FILING PACKAGE.
603 THERE IT'S DOWN AT THE BOTTOM, RIGHT.
IS THE LITTLE PAGE NUMBER AND IT'S GOING TO BE ON AND THE RIGHT FILING PACKAGE OR IN THE APPENDIX, THE APPENDICES.
THEY'RE ALL NUMBERED SEQUENTIALLY.
SO YOU SHOULD BE ABLE TO FIND THAT 6, 6 0 3, 603.
DO YOU HAVE IT THE OTHER HOME? SHIT.
I MEAN, ALL RIGHT, WE'LL TRY IT.
SO DO YOU HAVE THE TABLE IN FRONT OF YOU? I DO, UH, THE, THE NEW GEN TABLE.
DO YOU SEE TABLE ONE IN THE NEW GEN STYLE? IS THAT THE SAME INFORMATION, SAME REPRESENTATION AS THE INFORMATION ON PAGE 1 39 OR THE RIGHT FILING PACKAGE.
IT APPEARS TO BE, BUT ONCE AGAIN, I'LL, I'LL DEFER TO NEW GEN AS TO WHAT'S IN THEIR REPORT.
AND AGAIN, THIS IS THE CARL, THIS IS THE CALL RABAGO METHODOLOGY, CORRECT.
JUST A COUPLE MORE ITEMS, COMPANIES PROPOSING TO RECOVER ONE PORTION OF ITS, UM, COSTS IT'S VOID OR IT'S, UM, CREDIT THROUGH THE E S RATHER THAN THROUGH THE PSA.
THAT IS, THAT IS OUR PROPOSED METHODOLOGY.
AND THE REASON FOR THAT IS, IS ACTUALLY, COULD YOU JUST EXPLAIN THE REASON YEAH, YEAH.
SO, UH, WE HAVE A NUMBER OF PASS THROUGHS.
ONE IS THE COMMUNITY BENEFITS CHARGE, AND THAT COMMUNITY BENEFITS CHARGE HAS THREE COMPONENTS.
AND ONE OF THOSE ARE THE ENERGY EFFICIENCY SERVICES.
AND WITHIN THAT ARE OUR COLLECTION OF MONIES USE FOR REBATES AND OTHER SUBSIDIES, WHICH IS MOST AKIN TO WHAT SOCIETAL BENEFITS ARE.
SO IN ORDER TO BE CONSISTENT WITH HOW WE ASSESS RATES AND COLLECT REVENUE, WE'RE IT TO MOVING IT TO THE ENERGY EFFICIENCY SERVICES CHARGED WITHIN THE CBC.
UM, LET ME HAND THIS TO YOU, THIS A SIERRA CLUB, EXHIBIT SEVEN.
HAVE YOU EVER SEEN THAT BEFORE? ARE YOU FAMILIAR WITH, IT APPEARS TO BE THE SAME TITLE OF A HANDOUT THAT I SAW FROM THE SIERRA CLUB, ALTHOUGH I HAVE NOT SEEN THIS POWERPOINT FORMAT.
UH, WHEN DID YOU REVIEW MR. ROBERT GO'S TESTIMONY? I DID NOT.
WE'LL COME BACK TO THAT LATER THEN, UH, IN DETERMINING THE, UM, POLICY THAT YOU WERE GOING TO PUT IN PLACE AND THE CHANGE THAT YOU WERE GOING TO PROPOSE, DID YOU CONSULT WITH THE RESOURCE MANAGEMENT COMMITTEE? NOT F I'M GOING TO DEFER THAT QUESTION TO MR. TIM HARVEY.
I BELIEVE HE MADE A PRESENTATION TO THEM, BUT I DON'T REMEMBER THE CONTENT OF THAT PRESENTATION.
WHAT IS THE VALUE OF SOLAR, UH, PROGRAM A MATTER THAT IS WITHIN THEIR JURISDICTION OR AREA OF INTEREST? I BELIEVE THE RESOURCE MANAGEMENT COMMISSION PROVIDES, UH, ADVICE AND GUIDANCE TO CITY COUNCIL ON THE OVERSIGHT OF THAT, OF THE PROGRAM YES.
AND YET, I GUESS I'M NOT SURE.
DID YOU, OR DID YOU NOT CONSULT WITH THEM BEFORE PROPOSING THE CHANGES IN THIS RATE CASE?
[02:45:02]
I DON'T BELIEVE WE PROPOSE ANY PROGRAM CHANGES IN OUR, UH, TARIFFS, JUST HOW WE COLLECT THOSE, UH, THOSE, THOSE CHARGES, HOW YOU CALCULATE THE CHARGES TO BE COLLECTED, CORRECT? THAT'S CORRECT.DID YOU CONSULT WITH HIM THOUGH? NOT, NOT IN THE CALCULATION OF THE, UM, WITH THE PROPOSAL? NO.
JUST GIVE ME IF I COULD HAVE ONE SECOND MORE, NO PORTION OF JUST TO BE CLEAR, NO PORTION OF THE CURRENTLY, UH, THE CURRENT VALUE OF SILVER SOLAR CREDIT THAT'S IN PLACE IS COLLECTED CURRENTLY THROUGH THE EES.
I'M GOING TO DEFER TO MR. HARVEY, UM, ON IT.
I'VE NOT STUDIED, UM, OTHER THAN NET-METERING WHAT OTHER UTILITIES DO IN TERMS OF VALUE OF SOLAR.
THEN JUST MORE GENERALLY, ARE YOU AWARE THAT AUSTIN'S VALUE OF SOLAR PROGRAM HAS A VERY HIGH, A REPUTATION, A VERY FAVORABLE REPUTATION? AGAIN, I THINK I'LL DEFER TO MR. HARVEY ON THAT.
DO YOU BELIEVE IT'S BEEN A SUCCESS? I'M GOING TO ASSUME? SO WE HAVE A LOT OF CUSTOMERS ON VALUE OF SOLAR IS A VALUABLE ASSET TO HAVE AND UTILITY.
AND ARE YOU CONTINUING TO ADD, UH, SOLAR POWER, SOLAR ROOFTOP, SOLAR, UH, UNDER THE, UNDER THE EXISTING PROGRAM, I BELIEVE THE PROGRAM'S GROWN, BUT MR. UH, WITNESSED TIM HARVEY CAN GIVE YOU A BETTER RESPONSES TO THE RATE OF GROWTH.
UM, MR. BRAZIL, I THINK THAT WAS, IF I'M, IF MY CALCULATION IS CORRECT 72 MINUTES, UM, WHAT WE'LL TRY TO DO AT THE END OF THE DAY IS I'LL GET WITH MISS RADFORD AND GO OVER WHERE EVERYONE IS AND ON THEIR, ON THEIR TIME, SINCE WE STILL HAVE A COUPLE OF DAYS LEFT TO GO.
IN XP, THANK YOU, YOUR HONOR, CHRIS READER, I HAVE A FEW NON-IRONIC QUESTIONS, HOPEFULLY, UM, WHICH I THINK MR. DOMBROSKI IS PROBABLY THE RIGHT WITNESS TO ASK THESE QUESTIONS, BUT MR. DOMBROSKI, IF YOU'RE NOT ABLE TO ANSWER, YOU'VE SHOWN THAT YOU'RE MORE THAN ABLE TO IDENTIFY THAT FACT.
AND I WOULDN'T HOPE THAT YOU COULD IDENTIFY IF THERE'S ANY OTHER AUSTIN ENERGY WITNESS THAT IS ABLE TO ANSWER THESE QUESTIONS.
IS THAT ALL RIGHT WITH YOU? I'LL DO MY BEST.
UM, AND THESE ARE ALL INTENDED TO BE REALLY TREE TOPS TIME.
THIS RATE FILING PACKAGE THAT WE'RE HERE DISCUSSING TODAY, UM, IT SOUGHT AS FILED A BASE RATE REVENUE INCREASE OF $48 MILLION, CORRECT? THAT'S APPROXIMATELY TAGGED SOME DECIMAL POINTS APPROXIMATELY, CORRECT? YUP.
AND ATTACHED TO IT ARE TABLES AND, UH, CLASS COST OF SERVICE STUDY AND WORK PAPERS THAT ALL SUPPORT OR REFLECT THE REQUEST FOR A $48 MILLION, UM, BASE RATE REVENUE INCREASE.
IN THE REBUTTAL TESTIMONY, WHICH I'M NOT GOING TO GET INTO HERE, BUT, UH, MR. BROOKE, HEDO MENTIONED IN HIS OPENING STATEMENT, AUSTIN ENERGY NOW SEEKS A $35.7 MILLION BASE RATE REVENUE INCREASE.
[02:50:01]
DOES THAT, RIGHT? THAT IS CORRECT.SO THAT'S YOUR FINANCE PERSON? UH, 25% LOWER THAN THE AS FILED CASE, CORRECT.
WELL, DON'T LOOK, UH, ABOUT A QUARTER, LESS THAN AS FILED, RIGHT? APPROXIMATELY YES.
SUBJECT TO YOU DOING THE MATH.
AND I DON'T DO MATH IN PUBLIC.
I THINK WE ALL CAN APPRECIATE THAT.
UM, SO I HAVEN'T SEEN, AND IF I'VE MISSED IT, I'M HOPING YOU CAN TELL ME WHERE AUSTIN ENERGY HAS FILED REVISED VERSIONS OF THE CLASS COST OF SERVICE STUDY REVENUE, REQUIREMENT, TABLES, WORK PAPERS, ET CETERA, THAT ARE WITHIN THE ORIGINAL RATE FILING PACKAGE, REFLECTING THE REDUCED ASK ON A BASE RATE REVENUE INCREASE.
DID I MISS THAT OR HAS THAT NOT HAPPENED? THAT HAS NOT YET BEEN PRODUCED.
SO I I'M INFERRING AND PERHAPS I SHOULDN'T THAT THERE'S SOME PLAN TO PRODUCE THOSE AT SOME FUTURE TIME.
CAN YOU EXPLAIN WHAT AUSTIN ENERGY'S INTENTION IS WITH RESPECT TO UPDATING ALL OF THESE, UH, TABLES AND WORK PAPERS? AND IN PARTICULAR, THE CLASS COST OF SERVICE STUDY, WE WAS IN 10 IS AFTER THESE HEARINGS AND WE HEAR ALL THE EVIDENCE TO DETERMINE WHETHER ANY ADJUSTMENTS MIGHT BE APPROPRIATE BEFORE WE PRODUCE THAT FINAL REPORT.
SO AM I CORRECT THAT AUSTIN ENERGY HAS NOT MADE A DECISION OF HOW MUCH, IF ANY OF THESE TABLES AND IN PARTICULAR, THE COST OF SERVICE STUDY, IT WILL UPDATE AND RELEASE PUBLICLY WAS PROVIDED.
UPDATE WILL PROVIDE THE ENTIRE UPDATED COST OF SERVICE MODEL, ALL SCHEDULES AND ALL PAGES.
LET ME ASK AGAIN, OR PERHAPS DIFFERENTLY, HAS AUSTIN ENERGY FINALLY DECIDED, REACHED A DECISION, WHETHER IT INTENDS TO DISCLOSE OR PRODUCE AN UPDATED CLASS COST OF SERVICE STUDY, REFLECTING THE REVISED REVENUE REQUIREMENT, UH, PROPOSAL.
AND THE TIMING ON THAT WOULD BE AT LEAST AFTER THIS HEARING, CORRECT? THAT'S CORRECT.
UM, HAS AUSTIN ENERGY ALREADY INTERNALLY REVISED THE CLASS COST OF SERVICE STUDY? YES, THAT'S HOW WE CALCULATED THE $35.7 MILLION NUMBER.
I THOUGHT THAT THE 35.7 MILLION REFLECTED A REVENUE REQUIREMENT INCREASE AS OPPOSED TO THE CLASS COST OF SERVICE STUDY THAT ALLOCATES THAT REVENUE REQUIREMENT HAS, HAS AUSTIN ENERGY REVISED THE CLASS COST OF SERVICE STUDY OR WHAT COULD BE CALLED THE ALLOCATION STUFF.
NOW, UH, TO MY KNOWLEDGE, WE HAVE NOT, UH, UH, RERUN THE COST OF SERVICE WITHIN, WITH THE REVISED CHANGES IN THE REVENUE REQUIREMENT.
I DO AGREE WITH YOU THAT, YOU KNOW, WE WE'VE ADJUSTED, WE KNOW WHAT WE'VE ADJUSTED OUR ASS FROM 48 TO 35 7.
UM, SO WITH THAT KIND OF, YOU KNOW, MODIFICATION OR ADDITIONAL GRANULARITY IN MIND, MR. DOMBROSKI, IS IT AUSTIN ENERGY'S INTENT TO PRODUCE PUBLICLY THIS REVISE CLASS COST OF SERVICE STUDY THAT, UM, IN LINE WITH THE, THE TESTIMONY WE JUST HEARD, CORRECT.
AT THE CONCLUSION OF THIS HEARING, WE WILL RERUN THE FULL COST OF SERVICE MODEL THAT WILL INCLUDE REVISED REVENUE REQUIREMENT, COST OF SERVICE ALLOCATION AND THE RATE DESIGN COMPONENT.
AND NOT TO CONTINUE HARPING, BUT HAS AUSTIN ENERGY ALREADY RERUN THE MODEL OR, UH, IS THAT SOMETHING THAT'S GOING TO DO AT THE CONCLUSION OF THE HEARING AND THEN PRODUCE THE RESULTS? I DON'T KNOW IF I DON'T BELIEVE THAT OUR CONSULTANT HAS RUN THAT ALL THE WAY THROUGH THE RATE DESIGN COMPONENT AT THIS POINT.
I WANT TO MOVE ON TO A DIFFERENT SUBJECT, WHICH HAS TO DO WITH THE PROCESS AND MR. DOMBROSKI, UH, I DON'T WANT TO GET INTO YOUR REBUTTAL TESTIMONY, BUT YOU DID SPEAK TO SOME OF THE ISSUES RELATED TO THE PROCESS.
SO I'M GOING TO ADDRESS THESE FIRST TO YOU.
AND AGAIN, IF YOU'RE NOT THE RIGHT WITNESS, I HOPE THAT YOU'LL LET ME KNOW QUICKLY.
UM, THE RATE FILING PACKAGE HAS A NARRATIVE, A FAIRLY LENGTHY NARRATIVE THAT REFLECTS THE PROPOSAL AND THE RATIONALE FOR THAT TABLE'S FACTS FIGURES.
BUT IT ALSO HAS A SECTION ON THE RATE REVIEW PROCESS.
AND THAT SECTION THREE, WHO IS THE RIGHT PERSON TO ADDRESS THAT, BECAUSE I SEE YOU POINTING TO
[02:55:01]
YOUR LEFT, I ADDRESS THAT SECTION.WELL, I DON'T HAVE A LOT OF DETAILED QUESTIONS, BUT IT DOES THE RIGHT FILING PACKAGE DOES CONTAIN A SECTION ON THE PROCESS TO BE USED.
AND IN PARTICULAR IT CONTAINS THE, UM, RATE REVIEW PROCEDURES AND THAT'S APPENDIX APPENDIX A CORRECT.
LET ME BREAK IT INTO TWO QUESTIONS.
THE RIGHT FILING PACKAGE CONTAINS SECTION THREE, WHICH IS AN OVERVIEW OF THE PROCESS THAT THE RATE REVIEW WILL FOLLOW, CORRECT? THAT IS CORRECT.
AND APPENDED TO THE RATE FILING PACKAGE ARE THE AUSTIN ENERGY BAIT BASE RATE REVIEW PROCEDURAL GUIDELINES AS APPENDIX A ALSO, CORRECT.
AND IN THE CASE OF PROCEDURE, AS REFLECTED IN SECTION THREE IS REFLECTED IN THE GUIDELINES.
AM I CORRECT THAT AUSTIN ENERGY DEVELOPED ALL OF THOSE PROCEDURES? THAT'S CORRECT.
AUSTIN ENERGY IN CONJUNCTION WITH OUTSIDE COUNSEL.
AND I WANT TO ASK YOU ABOUT THOSE COMMUNICATIONS DON'T REALLY CARE.
THE POINT IS, OR THE NEXT QUESTION IS, AS I READ OUR SCHEDULE, AUSTIN ENERGY FILED THESE PROCEDURAL GUIDELINES AND THE, THE DESCRIPTION OF THE PROCEDURE THAT WOULD BE FOLLOWED IN ADVANCE OF THE PUBLIC OUTREACH MEETINGS THAT ARE REFLECTED ON OUR SCHEDULE.
IS THAT TRUE STATEMENT? I DON'T RECALL THE EXACT DATE THAT WERE FILED DUE TO LOOK AT 'EM AND I'D BE HAPPY TO SHARE WITH YOU THE NXP EXHIBIT, UM, 13 THAT HAS THE LATEST VERSION OF THE SCHEDULE.
UH DON'T KNOW IF THAT HELPED YOU OUT, BUT HOW ABOUT IF WE JUST ASK MORE GENERALLY, ISN'T IT TRUE THAT THE PUBLIC OUTREACH MEETINGS WITH ALL THE VARIOUS CUSTOMER CLASSES AND INTEREST GROUPS, THOSE WERE ALL SCHEDULED TO HAPPEN DID HAPPEN AFTER AUSTIN ENERGY FILED ITS BASE RATE REVIEW REQUEST? THAT'S CORRECT.
UH, THOSE OCCURRED AFTER WE, UH, UH, PUBLICLY RELEASED OUR BASE RATE FILING PACKAGE.
AND SO THE PARTIES THAT INTERVENED IN THIS CASE DID NOT HAVE THE ABILITY TO, TO SECURE CHANGES TO THE PROCEDURES THAT WERE REFLECTED IN THE AUSTIN ENERGY RATE FILING PACKAGE TO YOUR KNOWLEDGE? NOT TO MY KNOWLEDGE, NO.
AND, UM, IN FACT, I THINK IN YOUR REBUTTAL TESTIMONY, YOU, YOU MENTIONED THAT A NUMBER OF THE PARTIES TO THE CASE HAS HAD VARIOUS COMPLAINTS ABOUT THOSE PROCEDURES, CORRECT? THAT'S CORRECT.
AND WE'LL LEAVE THAT FOR REBUTTAL FOR REMODEL.
IF, IF EVER I DO WANT TO HIGHLIGHT A FEW OF THE, UM, OF, OF THE, UH, REQUIREMENTS IN OUR PROCEDURAL GUIDELINES AND JUST KIND OF GO OVER THOSE, UH, IF YOU'RE NOT FAMILIAR WITH THE DETAILS, TELL ME, AND WE CAN JUST KIND OF SAVE IT FOR SOME OTHER TIME, BUT I'M ASSUMING THAT YOU'VE GOT SOME FAMILIARITY WITH THOSE GENERAL.
WELL, I'VE GOT LOTS OF GENERAL QUESTIONS.
WHY HAVE YOU NOT LOTS? UH, THE FIRST ONE IS I WANT YOU TO CONFIRM THAT AUSTIN ENERGY DID NOT MAKE AVAILABLE ANY INFORMATION THAT IT DECLARED TO BE CONFIDENTIAL TO ANY OF THE PARTIES IN THIS RATE PROCEEDING.
IS THAT CORRECT? THERE IS CERTAIN INFORMATION THAT IS SUBJECT TO, UM, COMPETITIVE, UH, MEASURES AS WELL AS CUSTOMER CONFIDENTIAL INFORMATION THAT WE DID NOT MAKE A PUBLIC THAT'S CORRECT.
AND AUSTIN ENERGY MADE THE DETERMINATION OF WHETHER INFORMATION THAT MIGHT'VE BEEN REQUESTED FELL INTO THAT CATEGORY.
CORRECT? I BELIEVE WE UTILIZED, UH, THE CITY OF AUSTIN CITY ATTORNEY'S OFFICE TO MAKE THAT TERMINATION.
AND SO AUSTIN ENERGY DID NOT OFFER TO PRODUCE OR MAKE AVAILABLE THAT INFORMATION UNDER THE TERMS OF A PROTECTIVE ORDER.
AS A MUNICIPAL UTILITY, WE'RE NOT, UH, WE DON'T HAVE THE, UH, WE CAN'T ENJOY A PROTECTIVE ORDER.
WELL, I DON'T THINK ANYBODY ENJOYS PROTECTIVE ORDERS, BUT, UM, THEY EXIST.
ARE YOU FAMILIAR WITH OTHER RATE PROCEEDINGS THOUGH, IN WHICH MUNICIPAL UTILITIES CAN AND DO MAKE AVAILABLE CONFIDENTIAL INFORMATION UNDER PROTECTIVE ORDERS? I CAN'T TEST IT THAT I DON'T KNOW OF THAT.
UM, SO THE ONLY RECOURSE, IF YOU KNOW, A PARTY WOULD HAVE
[03:00:01]
TO TRY AND SEEK TO REVIEW SUCH CONFIDENTIAL INFORMATION WOULD BE TO REQUEST, UH, THROUGH THE PUBLIC INFORMATION ACT PROCESS, WHICH WOULD, UH, REQUIRE THE ATTORNEY GENERAL TO EVALUATE AUSTIN ENERGY'S CLAIMS, CORRECT? THAT'S CORRECT.AND AS SOMEBODY WHO'S BEEN IN GOVERNMENT FOR QUITE A LONG TIME, WHAT'S YOUR, UH, WHAT'S YOUR GENERAL OPINION ON HOW FAST THE ATTORNEY GENERAL TURNS AROUND THOSE KINDS OF REQUESTS? IT CAN TAKE A WHILE IT'S NOT IMMEDIATE WEEKS, WEEKS AND MONTHS.
UH, ANOTHER FEATURE I WANT TO JUST ASK YOU TO CONFIRM IS THAT THE PROCEDURAL GUIDELINES ESTABLISH THE SCOPE OF THE PROCEEDING.
AND IN FACT, THERE ARE SOME PROVISIONS THAT SAY THAT, UH, FOR EXAMPLE, THE POWER SUPPLY ADJUSTMENT IS NOT PART OF THE PROCEEDING, IS THAT CORRECT? THAT'S CORRECT.
UM, AND AGAIN, THE PARTIES TO THE CASE DID NOT THE ABILITY TO, UH, ADJUST THE SCOPE OF THE PROCEEDING.
LIKEWISE, THERE'S NOT, THERE WAS NOT SPONSORING TESTIMONY ATTACHED TO THE RIGHT FILING PACKAGE.
THERE WAS NO, UH, ENUMERATION OF AUSTIN ENERGY EMPLOYEES OR CONSULTANTS THAT SPONSORED, UH, PARTICULAR WORK PAPERS OR STUDIES OR SECTIONS OF THE, OF THE FILING SET, CORRECT.
UM, MEANING THAT THERE WERE SPONSORING EMPLOYEES, BUT THERE THAT WAS NOT PUBLICLY DISCLOSED.
WE'RE AWARE OF, UH, WHICH EMPLOYEE, WHICH WORK GROUP, UH, IS RESPONSIBLE FOR CERTAIN SECTIONS OF THE BASE RATE BOTTLING PACKAGE.
SO, UM, NONE OF YOU ARE TESTIFYING UNDER OATH.
NONE OF THE RIGHT FILING PACKAGE IS SUBMITTED UNDER OATH OR WITH SOME SORT OF VERIFICATION, RIGHT.
UM, I THINK THAT'S ABOUT, UH, I GUESS THE ONLY OTHER THING, UH, TO COVER WOULD BE THAT, UM, YOU, YOU KNOW, THAT THIS PROCEEDING COULD POTENTIALLY BE APPEALED TO THE PUBLIC UTILITY COMMISSION.
IS THAT SOMETHING THAT YOU'RE AWARE OF, I'M AWARE THAT CERTAIN GROUPS OF OUTSIDE CITY CUSTOMERS, UM, HAVE THE ABILITY TO APPEAL TO THE PUBLIC UTILITY COMMISSION, UH, THEIR RATES.
AND I GUESS YOU'RE NOT FAMILIAR ENOUGH TO KNOW WHETHER THESE SAME PROCEDURES WOULD APPLY IN AN APPEAL TO THE COMMISSION, OR IS THAT SOMETHING YOU KNOW, ABOUT, UM, JOHNNY FAMILIAR WITH PUC GUIDELINES, AND I KNOW THAT THERE ARE SOME DIFFERENCES BETWEEN A MUNICIPALLY-OWNED UTILITY AND THOSE THAT ARE REGULATED UTILITIES UNDER THE TEXAS PUBLIC UTILITY COMMISSION.
WELL, FOR EXAMPLE, WOULD YOU KNOW WHETHER OR NOT THESE RESTRICTIONS ON DISCOVERY THAT ARE REFLECTED IN HERE, WOULD THOSE APPLY? I THINK I'D HAVE TO DEFER TO THE ATTORNEYS ON THAT.
WELL, WE CERTAINLY DON'T WANT THAT.
UM, THANK YOU VERY MUCH, MR. DOMBROSKI AND MR. MANY MENU.
I DON'T KNOW HOW TO PRONOUNCE YOUR NAME, MAN.
THANK YOU, MR. READER, O T I C.
I WAS GOING TO JUST PASS IT TO THE WITNESSES IF THAT'S ALL RIGHT.
AND WE'LL HOLD OFF ON STARTING YOUR TIME UNTIL, OKAY.
UH, BEN HALLMARK FOR TIBC GOOD AFTERNOON.
UM, I'D LIKE TO START, UH, MR. MANUS, IF I'M SAYING THAT CORRECTLY, UM, ON, JUST WITH A CLARIFICATION ON YOUR ERRATA ON PAGE EIGHT OF THE BASE RATE PILING PACKAGE.
UM, ON THE SENTENCE ABOUT THE NORMALIZED RETAIL ENERGY SALES, UH, LET ME KNOW WHEN YOU'RE THERE, I'M THERE.
SO YOU CHANGED THAT FROM NORMALIZED RETAIL ENERGY SALES EXPERIENCED A 0.9% COMPOUNDED GROWTH RATE AT TWO DELETING NORMALIZED AND CHANGING IT TO 0.6, RIGHT? THAT'S CORRECT.
DO YOU HAVE, WELL, FIRST LET ME ASK, WHAT DO YOU MEAN BY NORMALIZED OR WHAT DID YOU MEAN? I GUESS THAT, UH, THE ACTUAL CONSUMPTION WOULD BE ADJUSTED FOR, UH, FOR WEATHER, HENCE NORMALIZED WEATHER RESULTING IN DIFFERENT KWL COULD REP COULD, UH, COULD
[03:05:01]
RESULT IN A DIFFERENT KWH SALES LEVEL LEVEL THAN, THAN ACTUAL SALES LEVEL.SO IT WAS A WEATHER NORMALIZATION.
WERE THERE ANY OTHER NORMALIZATION ADJUSTMENTS? NO, THERE WERE NOT, THEY WERE HISTORICAL SALES.
AND I WOULD JUST WANT TO, I WAS CURIOUS, DO YOU KNOW WHAT THE NORMALIZED, UM, NUMBER IS? UH, NO, SIR.
BUT IT'S NOT 0.9 THAT I DON'T KNOW WHAT THE NUMBER IS.
UH, THOSE ARE MY ONLY QUESTIONS ON, ON THAT.
UH, I HAVE A SERIES OF QUESTIONS ABOUT THE GENERAL FUND TRANSFER, WHICH I THINK ARE PROBABLY BEST DIRECTED TO YOU, MR. DUMB PROSECUTOR, BUT IF, IF I'M WRONG ABOUT THAT, FEEL FREE TO PASS THEM OFF.
UM, JUST TO PROVIDE CONTEXT, COULD YOU TELL, UH, THE EXAMINER AND ALL OF US, WHAT EXACTLY IS THE GENERAL FUND TRANSFER? SO GENERAL FUND TRANSFER.
IT IS A TRANSFER OF REVENUES FROM A UTILITY TO THE GENERAL FUND DEPARTMENT.
THAT'S PERMITTED UNDER STATE STATUTE.
UH, THERE IS NO PRESCRIBED, UH, AMOUNT OR METHODOLOGY USED IN THAT FOR A CITY OF AUSTIN.
IT'S 12% OF OUR REVENUES, LESS POWER SUPPLY, ADJUSTMENT, REVENUE, LESS DISTRICT COOLING REVENUE.
WE USE TWO ACTUAL YEARS PRIOR YEARS, AND THE CURRENT YEAR ESTIMATE IT'S CALCULATED AT THE TIME OF BUDGET AND SUBMITTED, AND IT SURROUNDED THE CLOSEST MILLION DOLLARS.
WE DIVIDE IT BY 12 AND WE TRANSFER THAT AMOUNT OF MONEY EACH MONTH FROM THE AUSTIN ENERGY FUND TO THE CITY OF AUSTIN GENERAL FUND.
AND DO YOU HAVE THE APPENDICES TO THE BASE RATE FILING PACKAGE UP THERE? I DO.
UM, IF YOU COULD TURN TO PAGE 90, UH, IN THOSE APPENDICES SHOULD BE WORK PAPER C 3, 2 1.
WHAT DOES THE PAGE AGAIN? 91 91 TO 91 91 91.
DOES YOUR VERSION HAVE WHAT? I'M GOING TO CALL LIKE A BAIT STAND, BUT YEAH, I'VE GOT IT AS WELL.
YOU WANT ME TO JUST BRING IT REAL QUICK? WHAT'S THE SCHEDULE? WELL, IT'S A WORK PAPER.
SO YOU'RE, YOU'RE LOOKING AT THE GENERAL FUND TRANSFER K AND M ADJUSTMENT WORK PAPER.
UM, SO I GUESS TO START WITH, WE SEE THERE AT THE BOTTOM THAT THE, THE METHOD BY WHICH THE GENERAL TRANSFER IS CALCULATED, RIGHT.
SO JUST TO BE CLEAR, SO THIS GENERAL FUND IS CALCULATED BASED UPON THE TEST YEAR.
BUT, BUT THE, THE POLICY, THE CITY OF AUSTIN, I'M SORRY, AUSTIN ENERGY'S FINANCIAL POLICY WITH RESPECT TO THE GENERAL FUND TRANSFER IS, IS REPRODUCE, REPRODUCE THERE AT THE BOTTOM OF THIS CHART.
RIGHT? SO THE CITY OF AUSTIN'S POLICY IS TO USE FOR THE ACTUAL GENERAL FUND TRANSFER, UM, TO PRIOR, ACTUAL YEARS IN THEIR CURRENT YEAR ESTIMATE.
AND FOR THE TEST YEAR WHERE YOU'RE USING THE TEST, YOUR REVENUE'S ONLY, OKAY, WELL, WE'RE GOING TO GET THERE, BUT, BUT FIRST OF ALL, I JUST, I JUST WANT TO CLARIFY, TO MAKE SURE I UNDERSTAND THE, THE, THE STATEMENT THERE IN BOLD AT THE BOTTOM OF THIS CHART IS SETTING OUT THE FINANCIAL POLICY AS TO HOW THE GFT IS CALCULATED.
AND, AND I THINK YOU SAID THAT THE GFT IS CALCULATED AS 12% OF THE, OF THE ENUMERATED REVENUES, BUT IN FACT, THE POLICY IS THAT IT SHALL NOT EXCEED 12%, CORRECT? THAT'S CORRECT.
AND LET'S GO, GO UP TO THE, THE ACTUAL NUMBERS HERE.
UH, WE SEE THAT THE TEST YEAR 20, 21 AMOUNT OF THE GFT WAS 114 MILLION, RIGHT.
AND THEN WE ALSO SEE THAT THAT IS THE SAME AMOUNT THAT WAS APPROVED IN THE FISCAL YEAR 20, 22 BUDGET.
IS THAT RIGHT? THAT'S CORRECT.
AND WHEN WE TALK ABOUT APPROVE THERE, WE'RE TALKING ABOUT COUNCIL APPROVAL, IS THAT RIGHT? THAT'S CORRECT.
BUT THEN THE TEST, YOUR AMOUNT THAT YOU'VE HERE IS 121 MILLION, YOU SEE THAT? YES.
AND THEN IN THE LAST COLUMN IT SAYS, I
[03:10:01]
THINK KNM MEANS KNOWN AND MEASURABLE ADJUSTMENT, RIGHT? THAT'S CORRECT.SO YOU'VE MADE A KNOWN AND MEASURABLE ADJUSTMENT OF $7 MILLION, RIGHT? YES.
THE DIFFERENCE BETWEEN 121,114.
AND, AND THE WAY YOU CALCULATED THAT, UH, TELL ME IF I HAVE THIS CORRECTLY IS BASED ON YOUR REVENUE REQUIREMENT, ASK IN THIS CASE, IS THAT RIGHT? THAT'S CORRECT.
AND SO THAT RESULTS IN THE, THE NUMBER IN LINE SEVEN THERE, WHICH IS A, APPROXIMATELY 1,000,000,009 MILLION OF ELIGIBLE REVENUE, RIGHT.
AND THEN YOU JUST TAKE THE 12% OF THAT, AND THAT GETS YOU THE $121 MILLION FIGURE ROUNDED DOWN.
AND SO THE, THE AMOUNT OF THE GENERAL FUND TRANSFER THAT YOU BUILT INTO YOUR REVENUE REQUIREMENT IN THIS CASE IS NOT CALCULATED IN COMPLIANCE WITH YOUR FINANCIAL POLICIES, RIGHT? THAT'S CORRECT.
BECAUSE WE UTILIZE TEST YOUR DATA ONLY.
WELL, CAN YOU TURN WITH ME TO TIBC EXHIBIT FOUR? JUST LET ME KNOW WHEN YOU'RE THERE.
I HAVE AN OPEN-END I'M READING IT.
AND THIS WAS SPONSORED BY MS. GONZALEZ.
SO SHE'S THE BETTER WITNESS TO ASK.
YOU CAN ASK THE QUESTION, IF I CAN ANSWER I'LL DEFER TO MS. GONZALES.
UM, SO WE SEE THERE, UM, THE, THE GFT, UH, BY YEAR FROM 2018 TO 2020, UH, AS A PERCENTAGE OF REVENUE, NET OF POWER SUPPLY IN DISTRICT COOLING, RIGHT.
AND, AND THIS IS THE CORRECT WAY TO CALCULATE THE GFT UNDER THE FINANCIAL POLICIES, RIGHT? CORRECT.
MS. GONZALEZ HAD LOOKED, YOU LOOKED LIKE YOU WANTED TO ADD.
SO SINCE THESE ARE BASED ON ACTUAL REVENUE FOR THE FISCAL YEAR, IT'S SIMILAR TO THE TEST YEAR WHERE YOU WERE JUST TAKING THAT ONE YEAR AND THAT ONE YEAR'S GFT TRANSFER AND COMING UP WITH WHAT THE PERCENT WAS.
SO IT'S VERY SIMILAR TO HOW THE COST OF SERVICE, UH, CALCULATES IT.
UM, BUT IT'S NOT BASED ON THE TWO YEAR PRIOR, CURRENT YEAR ESTIMATE.
I GUESS WHAT I MEAN IS WHEN YOU'RE, WHEN YOU'RE LOOKING AT WHAT TYPES OF REVENUE TO INCLUDE, UH, IN THE 12% CALCULATION, THIS IS, THIS INCLUDES THE RIGHT TYPES OF REVENUE, RIGHT? THAT'S CORRECT.
SO WHAT WE SEE HERE IS THAT IN 2018, IT WAS 109 MILLION, RIGHT? YES.
AND 2019, IT WAS 110,000,020 20.
IT WAS 111 MILLION, RIGHT? YES.
SO THESE NUMBERS ARE ALL SIGNIFICANTLY LOWER THAN THE 121 MILLION.
THAT'S A PART OF YOUR REVENUE REQUIREMENT, RIGHT? YES.
AND IF WE WERE TO APPLY THE, THE THREE YEAR APPROACH SET OUT IN YOUR FINANCIAL POLICIES TO THE TEST YEAR, WE WOULD USE THE 2019 NUMBER, THE 2020 NUMBER.
AND THEN I SUPPOSE YOUR 2021 NUMBER IS SHOWN IN THE WORK PAPER, RIGHT? NOT NECESSARILY, IF YOU THINK ABOUT THE TWO YEAR WORTH OF ACTUALS AND ONE YEAR WORTH OF ESTIMATE, YOU'D PROBABLY BE LOOKING HYPOTHETICALLY AT 20 20, 20, 21 AND AN ESTIMATE FOR 2022.
AND WOULD THE ESTIMATE FOR 2022 BE THE, THE, UM, THE AMOUNT AND THE WORK PAPER WE WERE JUST GOING OVER? NO.
WELL, WHAT, WHAT IS THE ESTIMATE FOR 2022? THAT WOULD BE BASED ON OUR BUDGETED, UH, REVENUES FOR FY 22.
WELL, IF WE WERE TO LOOK AT THE NUMBERS HERE FOR 20 19, 20, 20, AND 2021, THAT CALCULATION, AND I KNOW YOU HAVEN'T MADE IT WOULD, WOULD CERTAINLY YIELD A LOWER NUMBER THAN 121 MILLION, RIGHT? SURE.
UM, LET'S TURN TO TIC EXHIBIT, UM, FIVE, UH, AND I BELIEVE THIS IS SPONSORED BY YOU MR. JIM DOMBROWSKI.
AND SO WE ASKED YOU HERE, UM, WELL, LET ME BACK UP THAT THE CALCULATIONS THAT WE'VE BEEN GOING OVER ASSUME 12%, RIGHT? CORRECT.
THAT'S THE NUMBER THAT WE USE.
BUT IN FACT, THE FINANCIAL POLICY IS ACTUALLY DID TO DO NO MORE THAN 12%, RIGHT? CORRECT.
I BELIEVE IT ACTUALLY SAYS NOT TO EXCEED 12%
[03:15:01]
FAIR POINT.AND SO WE ASKED YOU HERE, UM, YOU KNOW, FOR A COPY OF ANY ORDINANCES APPROVING THE USE OF 12% FOR FISCAL YEAR 21 AND 22.
DO YOU SEE THAT THAT'S CORRECT.
AND WHAT YOU CITED US TO WAS THE ANNUAL BUDGET DOCUMENT.
UM, AND IF YOU'LL TURN WITH ME TO TIBC EXHIBIT SIX.
UH, AND IF YOU GO TO THE SECOND PAGE OF THE EXHIBIT, WHICH IS PAGE 2 0 3 IN THE ORIGINAL, THIS IS THE PAGE THAT YOU, US TO FOR THE PROPOSITION THAT THE THERE'S AN ORDINANCE APPROVING THE USE OF 12%, RIGHT.
AND YOU CAN GO BACK TO TIC EXHIBIT NUMBER FIVE, IF YOU NEED TO REFRESH YOURSELF ON THAT, UH, THAT, THAT IS CORRECT.
THE BUDGET ITSELF IS ATTACHED TO IT ORDINANCE.
AND, UH, I'M LOOKING HERE AT, DOWN ON, ON PAGE 2 0 3 UTILITY TRANSFER TO THE GENERAL FUND.
WELL, LET ME JUST ASK YOU THIS.
WHAT, WHAT, WHAT PART OF THIS PARAGRAPH, UM, SHOWS THAT THE CITY OF AUSTIN APPROVED THE USE OF 12% ITSELF FOR FISCAL YEAR 21, 22? IF YOU GO TO YOUR PAGE 3 77.
UM, THE BOTTOM THIRD OF THE PAGE, IT SAYS TRANSFERS OUT, RIGHT? YOU'LL SEE.
GENERAL FUND THAT'S THE GENERAL FUND TRANSFER.
SO THAT IS THE APPROVED AMOUNT AND THAT'S BASED UPON 12%.
AND THAT AMOUNT THAT WAS ACTUALLY APPROVED AS 114 MILLION, THE 20, 21 22 BUDGET.
AND, BUT WHAT, I GUESS WHAT I'M ASKING YOU, AND IF YOU'LL TURN BACK, I GUESS THE TIC EXHIBIT FIVE YOU CITED US THERE TO THIS ANNUAL BUDGET DOCUMENT, AND YOU SAID FOR FISCAL YEAR 22, SEE PAGES 2 0 3 AND 5 84, RIGHT.
AND SO IF WE GO BACK TO PAGE 2 0 3, I'M TRYING TO FIGURE OUT WHERE EXACTLY THIS, THIS PAGE SHOWS THAT THE COUNCIL SAID USE 12% AND NOT, NOT AN AMOUNT NOT TO EXCEED 12%.
TH THE PARAGRAPH ITSELF JUST GIVES A BRIEF, UM, HISTORY OF THE GENERAL FUND TRANSFER.
IT DOES NOT STATE THAT CITY COUNCIL IS DIRECTING US TO USE 12%.
UM, AND IN ANY EVENT THAT THIS BUDGET IS, IS CONCERNED WITH THE AMOUNT OF MONEY THAT THE GFT WILL BRING IN, YOU KNOW, AS A FORECASTING TOOL, RIGHT.
IT'S A SOURCE OF INCOME TO THE GENERAL FUND.
AND SO IT'S ALSO AN ESTIMATE, RIGHT? THE GENERAL FUND TRANSFER.
NO, IT'S, IT'S A, IT'S A CALCULATED NUMBER THAT USES, UH, THE ACTUAL REVENUE OF TWO YEARS AND THE CURRENT YEAR ESTIMATE SINCE WE'RE DOING IT BEFORE THE YEAR ENDS.
UM, AND THEN THAT BECOMES AN ABSOLUTE DOLLAR VALUE, SO THAT THE GENERAL FUND TRANSFER IS NOT AN ESTIMATE.
SO WHAT GETS APPROVED IN THE BUDGET IS AN ACTUAL AMOUNT THAT'S BASED ON THE CALCULATION.
AND WHAT GOT APPROVED IN THIS BUDGET WAS 114 MILLION THAT'S CORRECT.
AND YOU'LL AGREE WITH ME THAT THE COUNCIL HAS DISCRETION TO ORDER A GFT OF A LOWER PERCENTAGE THAN 12%, IF IT SO CHOOSES TO DO SO IN THIS CASE THAT'S CORRECT.
I BELIEVE THAT THE CITY COUNCIL'S DISCRETION.
UH, I'M GOING TO SWITCH GEARS A LITTLE BIT, UM, TALK A LITTLE BIT ABOUT INTERNALLY GENERATED, UH, CASH.
UM, YOU PROPOSE TO LIMIT THE PRODUCTION.
YOU PROPOSE TO LIMIT THE PROPORTION OF INTERNALLY GENERATED CASH USED TO FUND CAPITAL INVESTMENTS TO 50%,
[03:20:01]
RIGHT? THAT IS CORRECT.AND THE FINANCIAL POLICIES THAT, THAT GOVERN YOUR OPERATIONS SAY THAT THE AMOUNT OF CASH CAN BE ANYWHERE FROM 35% TO 60%, RIGHT? THAT IS CORRECT.
UM, HOWEVER, THERE IS A 2012 ORDINANCE, UH, FROM CITY COUNCIL DIRECTING US, UH, TO, UM, TO USE 50% A DEBT TO EQUITY FOR, UH, CAPITAL FINANCING.
BUT YOU'LL AGREE WITH ME THAT THE 2012 COUNCIL CAN'T BIND THE 20 TO 2022 COUNCIL, UH, IN THAT IF THE COUNSEL IN THIS CASE DECIDED THEY WANT TO ORDER A DIFFERENT CAPITAL STRUCTURE, THEY HAVE THAT DISCRETION, DON'T THEY? IT IS, IT IS WITHIN THE CITY COUNCIL'S DISCRETION TO, TO, TO CHANGE THAT 50%.
AND THE 2012 COUNCIL, OF COURSE WOULDN'T HAVE HAD A GOOD IDEA OF WHAT FINANCIAL MARKETS WERE GOING TO BE IN 2022.
I, I CAN'T SPEAK FOR WHAT THE 2012 COUNCIL DID OR DIDN'T KNOW FAIR ENOUGH.
UH, THAT'S ALL THE QUESTIONS I HAVE FOR NOW.
ICA, GOOD AFTERNOON, JOHN KAUFMAN FOR THE INDEPENDENT CONSUMER ADVOCATE.
UM, I'M GOING TO START WITH SOME QUESTIONS ABOUT THE, UM, GENERAL FUND TRANSFER, JUST BECAUSE WE'RE ALREADY ON THAT TOPIC.
UM, I A IT'S, IT'S DIFFICULT TO KNOW EXACTLY WHETHER, WHICH QUESTION IS WHETHER TO ASK THESE DIRECT OR REBUTTAL, BUT, UM, TELL ME IF, IF IT'S MORE APPROPRIATE TO SOMEONE ELSE OR LATER IN THE, IN THE PROGRAM.
UH, AND I'M NOT SURE EXACTLY WHO TO, WHO TO ADDRESS THIS TOO, BUT I THINK IT WAS ADDRESSED BY MR. DOMBROWSKI IN REBUTTAL, AND THAT IS, UH, THE REVISED REVENUE REQUIREMENT CALCULATIONS, UH, WHERE YOU, UM, PRESENTED THE SUPPORT FOR REDUCING IT FROM 121 MILLION TO 120 MILLION.
ARE YOU FAMILIAR WITH THAT? YES, I AM.
WHICH WE'VE BEEN TALKING ABOUT.
I DID NOT SEE ANY, UM, UH, LIKE WORK PAPERS OR CALCULATIONS BEHIND THE CALCULATION OF THAT $1 MILLION.
UH, COULD YOU EXPLAIN, OR, OR HAVE YOU ALREADY EXPLAINED IN QUESTIONS TO MR. HALLMARK, HOW THAT, HOW YOU GOT TO THAT 1 MILLION? SO IT IS BASED UPON THAT TEST YEAR AND THE ADJUSTMENTS WE MADE THAT WERE ENUMERATED IN MY REBUTTAL TESTIMONY, UH, REDUCED THE OVERALL REVENUE REQUIREMENT FROM 48.2 TO 35.7 MILLION.
AND SINCE GENERAL FUND TRANSFER IS A FUNCTION OF REVENUE.
IF WE, YOU DO SO REVENUE YOU'LL REDUCE THE GENERAL FUND TRANSFER.
SO YOU LE YOU, YOU STATED THAT THE, THAT THIS A $1 MILLION ADJUSTMENT TAKES INTO ACCOUNT THE, UM, ARGUMENTS FROM C CARE, HER TWO WR NXP, AND T I C UH, FIVE OTHER PARTIES, BUT YOU DIDN'T LIST THE INDEPENDENT CONSUMER ADVOCATE.
IS, IS THAT ON PURPOSE? I'LL I'LL CAN SEE THAT IT DOES NOT SAY THE INDEPENDENT CONSUMER ADVOCATE.
UM, THERE WAS NO, UH, IF YOU HAD AN ISSUE WITH IT, I DON'T RECALL.
AND IT WASN'T KNOWN WITH MALICE.
MR. F RON, MR. DAYTON, DAVE F ON BEHALF OF ICA DID ADDRESS IT, UH, THE GFT ARGUMENT.
YES, I BELIEVE I DO RECALL MR.
UM, HE, UM, DO YOU RECALL THE AMOUNT THAT HE, UM, UH, SUGGESTED HE, AND, AND OF COURSE, DO YOU RECALL THE NATURE OF HIS ARGUMENT THAT IT WAS, AGAIN, A FALLOUT NUMBER, NOT A SUBSTANTIVE ARGUMENT, BUT BASED ON A CHANGE IN THE REVENUE REQUIREMENT? SO THE, THE ITEMS THAT MADE UP, UM, THE REDUCTION TO OUR, UH, REVENUE REQUIREMENT OR ENUMERATED IN MY REBUTTAL TESTIMONY AND THOSE THAT WE HAVE ACCEPTED, AND THAT WE'VE PROPOSED OURSELVES OR INCLUDING REBUTTAL TESTIMONY.
SO, UH, THAT PERHAPS WHY WE DID NOT ADDRESS MR. EPHRON'S SINCE WE DID NOT ACCEPT HIS ARGUMENTS.
UM, DO YOU RECALL THAT, UH, HIS RECOMMENDATION, MR. EPHRON'S RECOMMENDATION WAS THAT THE GFT SHOULD BE REDUCED A $1.7 MILLION? UM, IF YOU DON'T, I DON'T RECALL THAT ARGUMENT.
[03:25:02]
DO YOU RECALL THAT IT'S ARGUMENT? I'M SORRY.UH, DO YOU RECALL MR. EPHRON'S ARGUMENT WAS BASED ON YOUR UPDATED REVENUE REQUIREMENT NUMBER? DO YOU, DO YOU RECALL THAT? I DON'T RECALL THAT SPECIFICALLY.
I'M GOING TO SHIFT TO THE ISSUE OF THE, UM, UM, LET'S SEE, I'M GOING TO SKIP OVER THAT ONE.
AND, UM, UH, I'M GONNA TALK ABOUT THE NUCLEAR, NON, NON NUCLEAR DECOMMISSIONING.
LET'S SEE, ACTUALLY, I THINK I, I'M GOING TO, I'M GOING TO SAVE THAT FOR, FOR LATER AS WELL.
UM, MR. MR. GALVIN, I SUPPOSE THIS IS, THIS IS TO YOU, THIS ISSUE, THIS IS ABOUT THE CALL CENTER STAFFING.
UM, YOU, UM, YOU, YOU SUPPORTED, UH, THAT PART OF THE, THE INITIAL PACKAGE, IS THAT CORRECT? CORRECT.
AND, UM, UH, IN, IN YOUR, IN YOUR TESTIMONY, BUT DIRECT AND REBUTTAL, YOU, YOU STATED THAT AUSTIN ENERGY ANTICIPATES MEETING THE FULL STAFFING LEVEL OUTLINED IN THE CONTRACT FOR 2023, BUT, UH, AUSTIN ENERGY IS ACTUALLY FAR BEHIND ACTUALLY ITS GOAL OF A FULL, UH, FULLY, UM, EMPLOYING THAT STAFFING LEVEL, YOUR HONOR, UM, THESE QUESTIONS JUST LIKE THE ONES A MOMENT AGO, OR ARE DIRECTED TOWARDS STATEMENTS IN THE REBUTTAL TESTIMONY.
AND MR. COFFIN WANTS TO ASK THOSE ON REBUTTAL.
THAT'S FINE, BUT, BUT IT SEEMS AS THOUGH IT'S APPROPRIATE FOR THAT TIME.
UM, I THINK I CAN, UM, I CAN, I CAN WRAP THIS UP WITH JUST TWO MORE QUESTIONS IF THAT'S OKAY.
I JUST, UM, PINS ON WHAT THEY ARE, BUT GO AHEAD.
UM, AUSTIN ENERGY GAVE US A RESPONSE TO, UM, SOME REQUESTS FOR INFORMATION, UH, LATE LAST NIGHT.
AND IN THAT, UH, THE QUESTION WAS ABOUT UPDATING THE STAFFING LEVELS AND THE RESPONSE THAT YOU SAW THAT YOU SPONSORED SAID THAT THERE IS NO UPDATE AVAILABLE, IS THAT CORRECT? RIGHT.
UH, WE, UH, WE GOT THE REQUEST, I THINK IT WAS LATE AND WE JUST DIDN'T HAVE TIME TO PUT IT TOGETHER, UH, WITH, UH, WITH A VENDOR AND WITH THE BREAKDOWN THAT WAS REQUESTED BEFORE.
AND, UH, SO AT THIS POINT THERE REALLY ISN'T ANY EVIDENCE IN THE RECORD THAT'S MEASURABLE AS TO WHAT THE ACTUAL STAFFING LEVEL IS, IS THAT CORRECT? I THINK WE DID PROVIDE A RESPONSE EARLIER ON THE STAFFING LEVEL.
UM, THE FIRST HALF OF THE YEAR WE WERE SIGNIFICANTLY UNDER PLAN.
I THINK I'VE MAY HAVE MENTIONED THAT IN ONE OF THE PREVIOUS TECHNICAL CONFERENCES, UM, AND THAT'S JUST THE FUNCTION OF THE AUSTIN LABOR MARKET, BUT ALSO THE PAY, UH, FOR THE WAGES WE PAID, UH, TO REPRESENTATIVES FOR THE CONTACT CENTER IN THE OLD CONTRACT.
UM, AS YOU ALL MAY KNOW, UH, LOCAL WAGES FROM, FROM LANE LABOR HERE IN AUSTIN, IT HAS ESCALATED IN THE LAST YEAR OR TWO.
UH, AND THE PAY THAT WE WERE PROVIDING TO THOSE REPRESENTATIVES WAS JUST NOT COMPETITIVE.
AND IT WAS ONLY AS A RESULT OF THE NEW CONTRACT THAT IN MY TESTIMONY, UM, STATES THAT IT WAS APPROVED BY COUNCIL IN FEBRUARY AND EXECUTED IN MARCH ONLY AS A RESULT OF THE NEW CONTRACT, UH, WHERE THE WAGES TO THE CSRS SIGNIFICANTLY INCREASED TO BE MORE COMPETITIVE, UH, TO THE TUNE OF LIKE 17 OR $18 AN HOUR, UH, DIRECTLY TO THE REPRESENTATIVES.
UM, WE ARE SEEING A VERY SIGNIFICANT UPTICK IN OUR RECRUITMENT EFFORTS.
AND I THINK THAT WAS IN THE EARLIER TESTIMONY, ONE OF THE ATTACHMENTS, UM, FROM A FEW WEEKS BACK, PERHAPS NOT FROM LAST NIGHT, UM, AND IT SHOWS THAT WE ARE AT 185 CONTRACTORS AND ONLY THE, UH, BEFORE MARCH, WE, WE WERE LIKE 60 PEOPLE SHORT.
UH, SO WE'VE, WE'VE SEEN A VERY SIGNIFICANT UPTICK IN OUR RECRUITMENT.
I, YOU SUSPECT THAT, UM, BY AUGUST, UM, AS LONG AS THE TREND CONTINUES, I SHOULD BE OVER 200.
SO I HAVE CONFIDENCE THAT WE WILL BE AT STAFF, UH, AT COMPLIMENT, UH, WHICH IS A PSEUDO BY AUGUST.
THE RECORD IS GOING TO BE CLOSED IN THIS CASE, IS IT NOT? WELL, OF COURSE, THAT HAS TO DO WITH THE SEASONALITY OF THE CONTACT CENTER AND THE FACT THAT WE ARE, WE HAVE BEEN RAMPING UP FOR THE SUMMER AND IT HAS NOTHING TO DO WITH THE, FOR THE PURPOSES OF RIGHT MAKING.
WE HAVE TO CUT THE KNOWN AND MEASURABLE OFF AT SOME POINT DON'T WE, WELL, I THINK THE, IF, IF I UNDERSTOOD YOUR CONCERN CORRECTLY, YOU WANT IT TO REDUCE THE OWNER MEASURABLE BY $2.8 MILLION
[03:30:02]
PER YEAR.UH, AND WHAT I'M SAYING IS I DISAGREE WITH THAT, UH, AS EVIDENCED BY THE FACT THAT WE ARE NOW STAFFING UP OUR CONTACT CENTER, UH, AND IT'S A FUNCTION OF THE WAGES AND THE LABOR MARKET.
WELL, WOULDN'T YOU AGREE WITH ME THAT WE, THAT WE, UH, TO BASE THE RATES IN THIS CASE AS TO WHERE THE STAFFING LEVEL IS AT THIS MOMENT.
AND I DISAGREE BECAUSE IF MEMORY SERVES ME, UM, THE, THE STAFFING AND THE, UM, THIS RATES, UH, STARTED 20, 23, NOT 20, 22 CURRENT YEAR, BUT IF WE, UH, IF WE'RE GOING TO DO THAT, SHOULDN'T, WE ALSO BE UPDATING OTHER PARTS OF THE RIGHT CASE, INCLUDING REVENUES AND, AND OTHER LIKE EXPENSE REDUCTIONS THAT MAY OCCUR BY 2023.
THAT QUESTION WOULD PROBABLY BE BEST HANDLED BY THE FINANCE GROUP.
ALL I'M SAYING IS WE'RE STAFFING UP IN THE CONTACT CENTER.
I WILL NEED THOSE PHONES BETWEEN 23 AND 28.
AND EVERYTHING YOU SAID IS REASONABLE ABOUT THE, ABOUT THE LABOR MARKET AND THE DIFFICULTY IN WRAPPING UP.
I'M JUST SAYING, UH, W W WE NEED EVIDENCE OF WHAT'S KNOWN IN THE MEASURABLE AND, AND YOU HAVEN'T PROVIDED THAT AS TH AS OF TODAY, HAVE YOU, I THOUGHT WE DID IN ONE OF THE EARLIER, UM, RFI FROM LIKE A MONTH AGO OR THREE WEEKS AGO, AND IT HAD, UH, ANYWAYS.
OKAY, WELL, MAYBE WE CAN ADDRESS THIS AGAIN ON ROBOT AT THEN THAT'S ALL I HAVE ON THAT TOPIC.
UM, AND THEN I HAVE A COUPLE OF QUESTIONS, UM, FROM MS. GONZALEZ ON THE ISSUE OF, UM, FACILITIES RENTALS AND THE DISPUTE DISPUTED FEES, UM, YOU STATE THAT, UM, UM, THE, UM, THE, THAT OUR ADJUSTMENT IS RELATED TO THE, UM, UH, FACILITIES RENTALS DISPUTE, AND YOU DON'T STAY WHAT THE, UH, WHAT THE COMPANY OR ENTITY IS, BUT I'M ASSUMING THAT IT HAS SOMETHING TO DO WITH, UH, RENTING, UH, POLE ATTACHMENTS.
IS THAT CORRECT? AGAIN, YOUR HONOR, THESE QUESTIONS ARE DIRECTLY RELATED TO STATEMENTS AND MS. GONZALEZ IS REBUTTAL TESTIMONY, AND IT SEEMS AS THOUGH THAT WOULD BE THE TIME TO ADDRESS.
UM, MR. KAUFMAN, ARE YOU ALL RIGHT HOLDING OFF ON? THAT'S FINE.
I CAN HOLD OFF ON THAT ONE AS WELL.
I'LL MOVE ALONG AND WE'LL, UM, WE'LL COME BACK TO THIS.
UM, DOES ANYONE ON THE PANEL, UM, DISAGREE WITH THE INDEPENDENT CONSUMER ADVOCATES CALCULATION OF WHAT THE PERCENTAGE RATE IMPACT IS OF AUSTIN ENERGY'S PROPOSAL ON THE RESIDENTIAL CLASS AT A 17% RATE INCREASE? NOW THAT WOULD HAVE BEEN TO THE ORIGINAL PACKAGE.
REPEAT THE QUESTION ONE MORE TIME.
UM, WE BELIEVE THAT THE, UM, THAT THE 7% RATE AND OVERALL SYSTEM-WIDE RATE INCREASE IS ACTUALLY, UH, DESIGNED TO IMPACT THE RESIDENTIAL CLASS AT ABOUT A 17% RATE INCREASE.
UM, THE ORIGINAL PACKAGE, CORRECT.
UM, AND, UH, I'M GOING TO REFER NOW TO THE, UM, THE CITY COUNCIL, UM, RESOLUTION REGARDING AFFORDABILITY.
UH, THE, THE COMPONENT OF THAT, THAT, UH, UH, SAYS THAT THE DESIRE IS TO RATE INCREASES UNDER 2% A YEAR.
ARE YOU FAMILIAR WITH THAT? YES, I AM.
FROM THE 20, 30 RESEARCH, 2% COMPOUNDED FROM THE, FROM THE RIGHT ESTABLISHED IN 2013.
AND IS IT AUSTIN ENERGY'S INTERPRETATION AT THAT APPLIES SYSTEM WIDE? IT DOESN'T APPLY TO THE RESIDENTIAL CLASS EXCLUSIVELY, CORRECT.
THAT'S SYSTEM WIDE CALCULATION.
AND, UM, SO YOU DON'T THINK THAT THE CITY COUNCIL HAS A CONCERN ABOUT WHETHER OR NOT THAT IS, IS, UM, IS, IS PLACED ON ANY ONE PARTICULAR CUSTOMER.
I CAN'T SPEAK TO WHAT CITY COUNCIL WILL SAY OR THINK.
AND, BUT YOU DON'T THINK THAT THAT WAS THAT, THAT, THAT AFFORDABILITY GUIDELINE WAS NOT DIRECTED AT RESIDENTIAL CUSTOMERS.
THE AFFORDABILITY GUIDELINE WAS ON A SYSTEM WIDE BASIS.
AND AM I READING THAT RIGHT? THAT, THAT GUIDELINE OR RESOLUTION OF THE CITY COUNCIL STATES 2%, EACH YEAR, 2% COMPOUNDED FROM COMMENCING IN 2013.
AND IS IT YOUR BELIEF THAT, UH, THE, UM, THE INITIAL PACKAGE IN THIS CASE COMPLIES WITH THAT? CORRECT.
UH, AND AS TO THE SECOND COMPONENT OF THAT AFFORDABILITY GUIDELINE, UH, WHICH IS THAT, UH, AUSTIN ENERGY IS, IS, UM, HOPEFULLY KEEPING ITS RATES BELOW 50% OF THE, UM,
[03:35:01]
THE UTILITIES IN TEXAS.THE, UM, THE, THE SECOND COMPONENT OF THAT AFFORDABILITY RELATES TO KEEPING AUSTIN ENERGY'S RATES BELOW 50% OF, OF SIMILAR UTILITIES IN TEXAS, IS THAT ACCURATE? OKAY.
AND IF IN THE, UM, IN THE INITIAL PACKAGE, UM, YOU DO SITE, YOU, YOU DO PUT A, A CHART OF OTHER WHAT YOU CONSIDER COMPARABLE UTILITIES.
AND MY FIRST QUESTION IS, IS THAT, DOES THAT SHOW AUSTIN ENERGY IN A, UH, DOES IT PLACE ITS CURRENT RATES, OR IS IT THE PROPOSED RATES IN THAT CHART ON PAGE 1 52? ARE YOU SPEAKING ABOUT FIGURE TEN ONE? I BELIEVE SO.
AND I'M HAVING TROUBLE FINDING YES.
AND THAT'S THE ONE WHERE THERE'S BAR CHARTS.
HORIZONTALLY IS THAT, IS THE BAR CHART THERE FOR AUSTIN ENERGY? IS THAT THE CURRENT RATES OR IS THAT THE PROPOSED PACKAGE, RIGHT? THAT GRAPH SHOWS, UH, USING EIA 8 61 DATA FOR CALENDAR YEAR 2020, UH, THAT AUSTIN BILL IS THE SECOND LOWEST BILL IN THE STATE, AND THAT IS CALCULATED, UH, ON HISTORICAL RATES.
UH, SO IT DOES NOT INCLUDE THE RATE INCREASE, THE PROPOSED BASE RATE INCREASE.
I BELIEVE IF THAT PROPOSED BASE RATE INCREASE, THE RATES ARE OUR PROPOSED THAT WE PROPOSED WERE IMPLEMENTED, UH, AND, AND CHART IT IN THIS GRAPH, THE RESULTING BILL WOULD BE $99 AND WOULD STILL BE THE SECOND LOWEST IN THE STATE.
LET ME GO BACK TO THE FIRST COMPONENT, THE 2% COMPONENT, UM, THE, UM, AUSTIN ENERGY IS CALCULATING IT'S, UM, CALCULATION FROM, UH, 2012.
IS THAT RIGHT? WHY WOULDN'T YOU BE CALCULATING THAT FROM, FROM THE PREVIOUS RATE CASE THAT THAT WENT INTO EFFECT IN 2017 BECAUSE THE AFFORDABILITY GO SET OUT THAT WE CALCULATE IT FROM, UH, THOSE RATES ESTABLISHED, UH, FOR FISCAL YEAR 2013.
WELL, IF THAT SAME GUIDELINE WAS APPLIED TO THE MO YOU KNOW, FROM THE LAST TIME RATES WERE CHANGED, UH, WOULD IT STILL COMPLY? I HAVEN'T CALCULATED THAT, BUT CERTAINLY IF THAT WAS THE POLICY, AUSTIN ENERGY WOULD HAVE NO INCENTIVE TO REDUCE RATES LIKE IT DID IN 2014 TEST YEAR.
I HAVE SEVERAL QUESTIONS ABOUT THE ALLOCATION OF COSTS.
I'M ASSUMING THOSE WILL BE BETTER PLACED TO THE SECOND PANEL.
IS THAT IF YOU EXPECT ME TO ANSWER THEM, THE ANSWER, THE ANSWER IS YES, SIR.
UM, LET ME ASK YOU, DO YOU HAVE A COPY OF THE EXHIBITS THAT WERE DISTRIBUTED THE ICA EXHIBITS FOR TODAY? WOULD YOU LIKE A COPY OF THE, YEAH, I, I, I'M NOT SURE THAT THERE'S A SET UP HERE.
IT'S A STACK OF THEM THAT STICK.
I WAS GOING TO ASK YOU ABOUT THE LAST ONE THAT GETS THERE.
THE, UM, THE EXCERPT FROM THE BOND BRIGHT BOOK, THIS ANCIENT TREATISE.
UM, I HAVE EXCERPTED THERE PAGES 290 AND 291, WHICH INCLUDE SOME CRITERIA FOR RATE MAKING.
AND SOME OF THESE ARE, UM, ON PAGE 2 91, SOME OF THESE ARE NOT INCLUDED IN THE LIST OF RAINMAKING PRINCIPLES THAT AUSTIN ENERGY PUT IN ITS INITIAL PACKAGE.
UM, ARE, HAVE YOU REVIEWED THAT PARTICULAR, THIS, THIS PARTICULAR PAGE FROM THE PRINCIPLES OF PUBLIC UTILITY RATES BY BRONCHITIS? I HAVE NOT.
THEN, ARE YOU FAMILIAR WITH, UM, MR. BOND BRIGHT WHO HE WAS? YES.
AND, UM, HOW WOULD YOU DESCRIBE HIM OR HER AND THIS WORK OF RIGHT.
I THINK HE IS GENERALLY CONSIDERED AN AUTHORITATIVE FIGURE ON RIGHT.
MAKING DECIDED BY SEVERAL PARTIES IN THIS CASE.
UM, YOUR, I THINK IT'S ON PAGE SEVEN AND THEN AGAIN LATER, UH, WHERE AUSTIN ENERGY AND ITS PACKAGE LISTS THE, UM,
[03:40:01]
UM, THE PRINCIPLES THAT IT IS, UM, TRYING, TRYING TO FOLLOW IN THIS PARTICULAR CASE.IS THAT, AND, UM, ARE YOU FAMILIAR WITH THOSE? DO YOU HAVE THOSE HANDY? I THINK PAGE SEVEN IS PERHAPS I HAVE THEM IN FRONT OF ME.
UM, AND KEEPING THOSE IN MIND, LET ME JUST LET MYSELF AND, UM, YEAH, LET ME, I WANTED TO FIRST ASK YOU ABOUT THESE, THE FOURTH BULLET POINT THERE, AND, AND THIS GOES TO QUESTIONS WE HEARD EARLIER FROM OTHER PARTIES.
THE RATE STRUCTURE SHOULD PROVIDE INCENTIVES FOR ENERGY CONSERVATION, PROMOTE EFFICIENT USE OF RESOURCES AND ENCOURAGE CONSUMER INVESTMENT IN THE ENERGY EFFICIENCY.
AND I ASSUME THAT AUSTIN ENERGY BELIEVES THAT ITS RATE PACKAGE WOULD STILL PROVIDE INCENTIVES FOR ENERGY CONSERVATION.
EVEN THOUGH THERE IS A, THERE IS A PROPOSED RADICAL SHIFT TOWARDS, UH, AWAY FROM PRICING USAGE TO, UM, COLLECTING MORE REVENUE FROM IN A, IN A FIXED MANNER.
IS THAT FAIR? I WOULD NOT CHARACTERIZE IT AS A RADICAL CHANGE, BUT I DO DO NOTE THAT AUSTIN ENERGY HAS PROPOSED A RATE STRUCTURE, UM, DOES, UH, INCENTIVIZE, UH, ENERGY CONSERVATION AND EFFICIENT USE.
AND I MIGHT ADD THAT EVEN WITH THE INCREASE IN CUSTOMER CHARGE, THAT A VAST MAJORITY OF THOSE, UH, THOSE COSTS ARE STILL RECOVERED ON A KWH BASIS, BUT WOULDN'T, YOU HAVE TO AGREE WITH ME THOUGH THAT THE REWARDS FOR ENERGY CONSERVATION AND THE REWARDS FOR ENERGY EFFICIENCY WILL BE LESS.
IF THE PACKAGE IS APPROVED, I'LL DEFER TO WITNESS MURPHY.
I MEAN, BUT I MEAN, THIS IS SOMETHING YOU WOULDN'T HAVE TO BE AN EXPERT TO UNDERSTAND, RIGHT? I MEAN, IF YOU, UH, IF SOMEONE CONSERVES THE SAME AMOUNT NEXT YEAR AS THEY DO THIS YEAR AND YOU, AND YOU HAVE YOUR WAY WITH WHAT THE RATES ARE, THEY WILL RECEIVE LESS OF LESS VALUE FOR THEIR CONSERVATION, UH, THAN THEY WOULD UNDER THE CURRENT RATE STRUCTURE.
CAN YOU GIVE ME ONE MOMENT PLEASE? I THINK WHAT AUSTIN ENERGY'S RIGHT STRUCTURE, UH, UH, PROPOSED RATE STRUCTURE CERTAINLY DOES A BETTER JOB IN BALANCING, UM, THESE PRINCIPLES HERE WITH, UH, NOT ONLY, UH, INCENTIVIZING ENERGY CONSERVATION, BUT ALSO INCENTIVIZING THE LONG-TERM FINANCIAL STABILITY OF THE UTILITY.
UH, WE WENT TO GREAT LENGTHS IN THE RIGHT FILING PACKAGE TO SHOW THAT AS, UH, CONSUMPTION LEVELS HAVE CHANGED, UH, AND THAT THIS OVER-RELIANCE AND THE STEEP TIER STIR, UH, STEEP TIER STRUCTURE IN THE INSIDE RESIDENTIAL RIGHTS, NO LONGER ALLOW THE UTILITY TO RECOVER THEIR APPROPRIATE AMOUNT OF REVENUE TO SUPPORT ITSELF.
QUITE FRANKLY, THERE'S BEEN A SHIFT TO A SIGNIFICANT DEGREE WHERE THE MAJORITY, THE VAST MAJORITY OF NOT ONLY BILLS, BUT ENERGY SOLD, CURRENTLY EXISTS IN THE TIERS THAT ARE SIGNIFICANTLY BELOW COST OF SERVICE.
AND SO, UH, AUSTIN ENERGY'S, UH, PROPOSAL BALANCES ALL OF THESE OBJECTIVES BY LENDING REVENUE, STABILITY, CREATING REVENUE STABILITY, AND YET STILL SENDS A CONSERVATION SIGNAL.
I APPRECIATE ALL OF THAT, MR. MANIS.
AND, AND I DON'T KNOW IF I, I DON'T DISPUTE THAT IT, THAT, THAT YOU'RE TRYING TO BALANCE THESE ISSUES, BUT MY DIRECT QUESTION WAS IF THERE IS, UM, IF THERE IS GOING TO BE MORE RECOVERY FROM A FIXED CHARGE AND LESS RECOVERY FROM THE VOLUME METRIC COMPONENTS IN THE BASE RATES, IS THAT NOT LOGICALLY PROVIDING LESS INCENTIVIZING INCENTIVIZATION OR INCENTIVE, LESS INCENTIVE FOR CONSERVATION AND ENERGY EFFICIENCY, NO MATTER HOW SMALL IT'S SOMEWHAT LESS, IS IT NOT? WELL, IT, I DON'T NECESSARILY AGREE WITH YOU IN THE SENSE THAT IF KEEPING A FIXED CHARGE, THE CUSTOMER CHARGE ARTIFICIALLY LOW DISINCENTIVIZES, A LOWER KWH CONSUMER FROM INVESTING, BECAUSE
[03:45:01]
YOU'RE SENDING A PRICE SIGNAL, AN ARTIFICIALLY LOW PRICE SIGNAL THAT I DON'T HAVE TO INVEST.I HAVE A SIGNIFICANTLY LOWER TIER CHARGE.
SO IF I'M A LOW USE CUSTOMER, REGARDLESS OF MY WEALTH, I HAVE NO INCENTIVE TO INVEST IN ENERGY EFFICIENCY BECAUSE THE SIGNALS ARE WRONG.
MY QUESTION IS OVERALL OVERALL, THIS RATE PACKAGE IS PROVIDING SOMEWHAT LESS INCENTIVE FOR ENERGY EFFICIENCY, AS OBJECTION ASKED AND ANSWERED.
HE JUST ANSWERED YOUR QUESTION.
HE ANSWERED IT AS TO A HYPOTHETICAL, A LOW USE CUSTOMER.
I'M ASKING ABOUT THE SYSTEM-WIDE.
I BELIEVE HE ANSWERED IT MORE BROADLY THAN JUST THAT.
I'M GOING TO GO BACK TO THE, UM, WHAT IS, UH, BEEN ADMITTED AS ICA 10 FROM THE BOND BRIGHT TREATISE PRINCIPLES OF PUBLIC UTILITY RATES.
IF YOU'LL NOTICE ON PAGE 2 91, THE FIRST, UM, UH, LISTED CRI CRITERIA OF A SOUND RATE STRUCTURE IS, UH, IN, IN DR.
BRAUN BRIGHT'S WORDS, THE RELATED PRACTICAL ATTRIBUTES OF SIMPLICITY, UNDERSTANDABILITY, PUBLIC ACCEPTABILITY, AND THE FEASIBILITY OF APPLICATION.
NOW, WHAT, UH, WHAT, IF ANY CONSIDERATION DID AUSTIN ENERGY PUT INTO PROPOSING ITS INITIAL PACKAGE AS TO THE PUBLIC ACCEPTABILITY OF THE RATE DESIGN IN THERE? I'LL DEFER TO WITNESS BRIAN MURPHY.
UM, DID, UM, DO YOU, HAS, UM, WHO ON THE PANEL HERE HAS REVIEWED THE, UH, PUBLIC COMMENTS, UH, IN RESULT TO THE FEEDBACK FORMS THAT POLLINATORS YOU DID? I'VE REVIEWED SOME, BUT NOT ALL IN FACT, PROBABLY A SMALL SAMPLE.
HAS ANYONE ELSE READ THE PUBLIC COMMENTS THAT HAVE BEEN FILED IN THIS CASE? IT'S AN ICA EXHIBIT, A FIVE WAS THAT PRODUCED? I DON'T HAVE ICA.
I'M FAMILIAR WITH THE EXHIBIT.
I HAVE NOT READ ALL OF THOSE COMMENTS.
I'M FAMILIAR WITH SOME OF THEM.
WOULD YOU AGREE THAT, UM, REVIEWING THAT THOSE FEEDBACK FORMS AND THAT THOSE PUBLIC COMMENTS WOULD BE RELEVANT TO DETERMINING PUBLIC ACCEPTABILITY OF THE PROPOSED RATE INCREASE AND THE MANNER IN WHICH IT'S BEING PROPOSED? I AGREE THAT THAT IS ONE, UH, FEEDBACK FROM THE PUBLIC, UH, ALSO IS THAT ALL OF THE, UM, PUBLIC OUTREACH, UH, IN PERSON OR ONLINE AT EACH OF THEM AS WELL.
NUMBER FIVE IN THE BOMB BRIGHT BUTTON, UH, WHICH IS LISTED AS THE STABILITY OF THE RATES THEMSELVES WITH A MINIMUM OF UNEXPECTED CHANGES, SERIOUSLY, ADVERSE TO EXISTING CUSTOMERS.
AND, UM, IS, IS THAT A FACTOR THAT WAS CONSIDERED WHEN, UM, THIS PARTICULAR PROPOSAL IN, AND A RATE STRUCTURE HAS BEEN, WAS PROPOSED? SO THAT'S BILL STABILITY AND GRADUALISM, I BELIEVE THE TWO CONCEPTS WOULD BE ROLLED INTO THAT.
AND, UM, IT'S A 17% INCREASE TO THE RESIDENTIAL CLASS, UH, COMPLIANT WITH THE CONCEPT OF GRADUALISM IN YOUR MIND.
AND THAT, UH, CURRENTLY, UH, RESIDENTIAL CUSTOMERS ARE SIGNIFICANTLY BELOW THE COST OF SERVICE.
UM, AND WHAT THAT MEANS IS OTHER CUSTOMERS HAVE TO BE SIGNIFICANTLY ABOVE THE COST OF SERVICE.
SO IN OUR APPROACH, WE'RE REMOVING THOSE RESIDENTIAL CUSTOMERS, 50% TO UNITY OR 50% OF THEIR COSTS OF SERVICE.
WE BELIEVE THAT AS A GRADUAL APPROACH FROM THE STARTING POINT, WELL, SHOULDN'T GRADUALISM BE, UM, VIEWED FROM A CUSTOMER CLASS BY CUSTOMER CLASS PERSPECTIVE.
AND IS IT IN THAT A RESIDENTIAL CUSTOMER DOES, YOU KNOW, IS, IS ONLY GOING TO SEE THE, UM, THE INCREASE TO THEIR BILL.
YOU WOULD ALWAYS LOOK AT EACH CLASSIC CUSTOMER AND APPLY THOSE, UM, THOSE PRINCIPLES TO EACH CLASS OF CUSTOMERS YOU'RE, AS YOU'RE SHAPING RATES, WOULD IT BE POSSIBLE FOR AUSTIN ENERGY TO MOVE IN THE DIRECTION THAT IT WOULD LIKE TO GO TOWARDS, UM, MORE, UH, STABLE RECOVERY FROM FIXED PORTIONS OF THE RATES, BUT DO IT IN A LESS, UH, IN, UM, UH, LESS OF A, A LARGE STEP.
COULD IT, COULD IT GO HALFWAY OR PARTWAY TO THE DIRECTION IT WANTED TO GO IN THIS PARTICULAR CASE? WELL, IN THIS CASE
[03:50:01]
WE HAVE GONE HALFWAY, WE'D GONE 50% TO UNITY.SO YOU'D, YOU'D LIKE TO RAISE RESIDENTIAL RATES BY 34% OR SO IF YOU, I DON'T, I DON'T GET ANY ENJOYMENT.
UM, THE, THE NUMBERS ARE WHAT THEY ARE.
UM, DO YOU, UH, DO YOU HAVE A SENSE OF THE CONCEPT OF RATE SHOCK AS IT RELATES TO UTILITY RATE MAKING? YES, I DO.
HOW WOULD YOU DEFINE RATE SHOCK? WELL, IT'S GOING TO BE A PRETTY SUBJECTIVE, UM, ON CLASSES, THE CUSTOMERS AND THE CUSTOMERS THEMSELVES, UM, THAT IF THEIR ENERGY COSTS BECAME UNAFFORDABLE, UM, I THINK THAT WOULD BE A RATE SHOCK.
SO YOU THINK AS LONG AS YOU'RE COMPLYING WITH THE SYSTEM-WIDE, UH, AFFORDABILITY GUIDELINES, RATE SHOCK SHOULD BE TAKEN CARE OF OR NOT, OR AVOIDED? NO.
I THINK RATE SHOCK IS, UM, ASSESSED AT, UM, CLASSES OF CUSTOMERS.
THE CONCEPT OF AVOIDING RATE SHOCK IS, IS, WOULD YOU SAY IT'S RELATED TO GRADUALISM SIMILAR CONCEPT? YES, IT IS.
ARE YOU FAMILIAR THE RATE MAKING PRINCIPLE THAT NO CUSTOMER CLASS SHOULD EXPERIENCE A RATE INCREASE WHILE ANOTHER CUSTOMER CLASS IS EXPERIENCING A RATE DECREASE? IS THAT ON THE PAGE HERE? NO, IT'S NOT.
HAVE YOU EVER HEARD OF THAT CONCEPT? NO, I HAVEN'T.
DO YOU HAVE THAT? UM, WHICH IS, YEAH, IT WOULD BE THE, UH, ICA FOUR DASH EIGHT FOUR DASH, I THINK WE WENT PAST IT, WHICH HAS BEEN ADMITTED AS ICA EXHIBITS.
MS. GONZALES, DO YOU RECOGNIZE THAT AND AS SOMETHING THAT YOU, UM, PREPARED? YES.
UM, AND, AND AS TO THE UNCOLLECTABLE, UM, AMOUNT FIGURED INTO THE RATE PROPOSAL, YOU MADE A, AN ADJUSTMENT OF APPROXIMATELY $6 MILLION OR FIVE POINT $99 MILLION.
THAT NUMBER DOESN'T SOUND APPROPRIATE.
I THINK IT WAS PART OF THE REBUTTAL THOUGH.
DOES THE $6 MILLION DOESN'T RING A BELL? NO.
SO LOOKING AT YOUR ANSWER HERE, WHERE THE, UM, UH, THE AMOUNT OF BAD DEBT EXPENSE FOR EVERY YEAR FROM 2017 TO 2020 WAS BETWEEN FOUR AND $5 MILLION THAT BAD ED EXPENSE.
AND THEN IN 2021, WHICH IS THE TEST YEAR IN THIS CASE, UH, IT WAS $13.8 MILLION.
AND HOW DO YOU EXPLAIN THAT? SURE.
SO WE DID DO A KNOWN AND MEASURABLE, UM, TO REDUCE THAT 13.8 MILLION BECAUSE A LARGE PORTION OF THAT WAS DUE TO ONE CUSTOMER.
SO WE, WE DID A KNOWN AND MEASURABLE TO TAKE THAT OUT OF THE COST OF SERVICE STUDY.
DID THE PANDEMIC HAVE AN IMPACT ON THIS NUMBER OR WAS IT JUST ONE LARGE CUSTOMERS? BILL? IT IS LIKELY THAT THE PANDEMIC HAS AND CONTINUES TO AFFECT BAD DEBT EXPENSE.
SO THE ADJUSTMENT TO REDUCE IT DOWN TO $6 MILLION OR SO WAS THE RELAY WAS RELATED TO ONE DISPUTED ACCOUNT? THAT IS CORRECT.
WAS THAT A RESIDENTIAL ACCOUNT? NO, IT WAS NOT.
DO YOU AGREE THAT $6 MILLION UNCOLLECTABLE EXPENSE IS STILL CONSIDERABLY LARGER THAN ANY OF THE FOUR YEARS PRIOR? UM, I DO AGREE THAT IT IS HIGHER THAN THE PRIOR FOUR YEARS.
[03:55:01]
UM, A COUPLE OF QUESTIONS ABOUT, UM, I SEE, UH, THIS WOULD BE, UH, THE RESPONSE TO ICA FOUR DASH 12.I BELIEVE THAT'S FOR MR. MANIS.
UH, MR. KAUFFMAN, WHAT EXHIBIT ARE YOU? IT'S EXHIBIT IT'S ICA EXHIBIT EIGHT, WHICH IS THE RESPONSE TO ICA FOUR DASH 12.
UH, DO YOU, DO YOU IDENTIFY THAT AS SOMETHING YOU PREPARED MR. MANIS YESTERDAY? I AM THE SPONSOR, YES.
YOU NOW WINTER STORM YURI OCCURRED IN FEBRUARY OF 2021.
IS, IS THAT A TYPO IN THERE? YES.
UH, TELL ME HOW THAT, WHAT THAT SHOULD STATE, SO THE ANSWER THAT, SO FOR THE RECORD, THE ICA FOUR 12 SAYS, PLEASE QUANTIFY THE AMOUNT OF OVERTIME PAY AND OTHER WINTER STORM ERIE RESTORATION COSTS DURING FEBRUARY 21.
AND COMPARED TO FEBRUARY 20 AND 19 ANSWER WAS, ARE OVERTIME ASSOCIATED WITH WINTER STORM YURI, WHICH OCCURRED IN FEBRUARY 20, WHICH SHOULD BE FEBRUARY, 2021 WAS BOOKED IN MARCH AS THE ANSWER SAYS MARCH, 2020, WHICH, UH, SHOULD BE PROPERLY REFLECTED AS MARCH, 2021.
HAS THAT, IS THAT ENOUGH? COULD YOU GO AHEAD AND YEAH, SO AUSTIN ENERGY INCURRED THE FOLLOWING MAJOR COST COMPONENTS RELATED TO WINTER STORM URI, UH, 4.3 MILLION RELATED TO LABOR AND BENEFITS 1.2 MILLION RELATED TO OVERTIME.
1.3 MILLION RELATED TO CONTRACT LABOR.
NO WINTER STORM ERIE COSTS WERE INCURRED IN FEBRUARY OF 2012.
WERE THERE OTHER COSTS FOR AUSTIN ENERGY THAT WERE, THAT WERE INVOLVED IN RESPONDING TO WINTER STORM YURI, OTHER THAN THESE LISTED HERE IN THIS PARAGRAPH? I, I BELIEVE SO.
UH, DO YOU KNOW WHAT THOSE, IF THEY WERE I'M SORRY, GO AHEAD.
TELL ME WHAT, I DON'T KNOW THAT THEY'RE HOW MATERIAL THEY ARE.
THESE WERE THE MAJOR COST COMPONENTS THAT THE RFI SAYS QUANTIFY OVER TIME AND OTHER WINTER STORM YURI RESTORATIONS.
THE RESPONSE WAS, THESE WERE THE MAJOR COST OF DRIVING COST.
DRIVERS WERE MAJOR COST COMPONENTS.
DID AUSTIN ENERGY INCUR EXTRA COSTS SUCH AS OVERTIME FOR CALL CENTER OPERATIONS DURING THE STORM PERIOD? THERE WAS OVERTIME.
I DON'T RECALL EXACTLY WHO, BUT THERE WAS OVERTIME.
DID, UM, MR. GALVIN, DO YOU KNOW THE SPECIFIC AMOUNTS NOW, BUT ABSOLUTELY.
WE HAD SIGNIFICANT OVERTIME DURING THAT TIME.
DO YOU HAVE A, WHAT WOULD BE THE MAGNITUDE OF THAT SIGNIFICANT OVERTIME? WOULD IT BE IN THE MILLIONS? YEAH, MAYBE YOU, ONE OF THE UPCOMING PANEL MEMBERS THAT HAS THE, UH, THE FINANCES ON INFORMATION ON THAT.
WOULD YOU BE ABLE TO FIND THAT INFORMATION AND NOT NOW, BUT SURE.
WE CAN LOOK IT UP BY REBUTTAL.
UH, DID AUSTIN ENERGY INCUR COSTS FOR OPERATING ITS EMERGING EMERGENCY MANAGEMENT CENTER DURING STORM URI? YOU KNOW, I DON'T KNOW IF I CAN ANSWER THAT.
MY ANALYSIS TO YOUR RFI WAS TO LOOK FOR THE MAJOR COST COMPONENTS, WHICH AS AN IN RESPONSE WAS OVERTIME, UH, LABOR AND BENEFITS AND, UH, CONTRACT LABOR.
BUT THERE MIGHT'VE BEEN A DISH.
UM, THERE MIGHT'VE BEEN ADDITIONAL COSTS FOR THE EMERGENCY MANAGEMENT CENTER.
WAS THERE A, UM, DURING, DURING THE STORE, WAS THERE A CALL CENTER THAT WAS DISRUPTED DURING THE STORM? OH, CUSTOMER SERVICE CENTER? WE, WE LIKE ANYTIME WE HAVE AN EVENT, UH, WE'RE, WE'RE A UTILITY, UH, YOU KNOW, WEATHER RELATED OUTAGES IS UNFORTUNATELY A WAY OF LIFE SOMETIMES.
AND, UH, ABSOLUTELY WE'RE READY TO, UM, UM, BRING ADDITIONAL FOLKS AND OVERTIME ON SO THAT WE CAN TAKE CARE OF OUR CUSTOMERS.
UM, IS THERE ANY WAY THAT WE COULD FIND A TOTAL, UH, THAT WE COULD RECEIVE A TOTAL ACCOUNTING OF THE TOTAL IMPACT OF STORM YURI ON, ON US AND ENERGY? THAT WOULD BE AN ACCOUNTING QUESTION.
I'M SURE THAT THOSE NUMBERS COULD BE DRIVED.
WHO COULD I ADDRESS THAT TO YOUR HONOR? UM, IT SOUNDS LIKE MR. KAUFFMAN'S TRYING TO TAKE THIS OPPORTUNITY TO DO SOME ADDITIONAL DISCOVERY.
AND AS YOU ALL KNOW THE TIME FOR THAT, IS IT OVER, YOU KNOW, WE WANT TO BE ACCOMMODATING, BUT IT SEEMS AS THOUGH HE COULD HAVE ASKED THIS QUESTION IN HIS REBUTTAL DISCOVERY AND FOR WHATEVER REASON CHOSE
[04:00:01]
NOT TO.SO AM I, AM I BEING TOLD THAT THAT INFORMATION DOESN'T EXIST HERE TODAY? NO.
YOU'RE BEING TOLD THAT, UM, WE'RE NOT GOING TO PROVIDE IT TO YOU VERY WELL.
OKAY, MR. KAUFMAN, UH, LET ME JUST, UH, FIRST ONE QUESTION IS YOUR MIC ON, I MEAN, I CAN HEAR YOU, BUT IT IS ON, YEAH.
I MIGHT JUST NOT SPEAK IT JUST WASN'T BUT I COULD HEAR YOU FINE.
I JUST WASN'T SURE IF IT WAS ON, CAUSE IT DOESN'T SEEM SOMEBODY THAT'S COMING IN OVER THE SYSTEM TESTING.
UM, I WANT TO STOP FOR JUST A SECOND ON YOUR TIME.
COULD YOU STOP LIVE TO 29? SO THIS TO ME, THE, THE, THE CONUNDRUM IS, IS WHAT YOU'RE GETTING INTO TO ME SEEMS RELEVANT AT THE SAME TIME.
IT SEEMS LIKE YOU ALSO COULD HAVE GONE INTO THIS IN DISCOVERY.
UM, WELL, UH, LET ME ASK YOU THIS, HAVE YOU NOT ASKED FOR THIS INFORMATION BEFORE ABOUT A WINTER STORM EERIE BECAUSE I I'M INTERESTED IN IT, BUT, UM, IT WOULD HAVE HELPED TO HAVE ASKED FOR THIS IN DISCOVERY.
UH, HOWEVER, UM, WHY DON'T WE TALK, UM, OFF THE RECORD, WE'RE ON THE RECORD STILL, LET'S TALK OFF THE RECORD AND, UM, SEE IF WE COULD POSSIBLY GET YOU SOME ANSWERS ALSO, BUT THE CITY HAS THE RIGHT TO OBJECT.
I KEEP SAYING THE CITY AUSTRIAN ENERGY HAS THE RIGHT TO OBJECT AND I NEED TO ADDRESS THOSE, BUT LET'S SEE IF WE CAN'T REACH SOME KIND OF RESOLUTION ON THE INFORMATION THAT YOU'RE SEEKING, BECAUSE IT MAY OR MAY NOT MEAN A LOT OF WORK FOR AUSTIN ENERGY.
AND IN YOUR HONOR, WE'RE WILLING TO DO THAT.
TALK WITH DESPERATE KAUFMAN BEATS WITNESSES.
LET'S GO BACK ON SAVE A COUPLE OF MINUTES ALSO, JUST REAL QUICK.
JUST WANT TO PUBLISH THAT WE ARE GOING TO HAVE A BREAK WHEN YOU'RE DONE.
UM, LET ME JUST ASK ONE MORE QUESTION.
AND THIS RELATES TO THE PROCESS.
UM, THIS CASE WAS DIFFERENT THAN THE PREVIOUS RATE CASES IN THAT, UH, PARTIES WERE, UM, STRICTLY LIMITED AS TO, AS FAR AS THE NUMBER OF REQUESTS FOR INFORMATION THAT THEY COULD APPLY.
DOES THAT, IS THAT YOUR UNDERSTANDING OF YOUR CORRECT? I BELIEVE WE PUT A, A LIMIT ON THE NUMBER OF QUESTIONS PER INTERVENER AND, UM, THERE WERE OTHER RESTRICTIONS IN THE PROCEDURAL GUIDELINES THAT WERE NOT IN PLACE IN PREVIOUS RATE REVIEWS.
SO THE ONLY OTHER TIME I RECALL US USING THIS PROCEDURE WAS IN 2016.
AT THAT TIME, I DON'T RECALL IF THERE WAS A RESTRICTION ON THE NUMBER OF QUESTIONS.
AND YOU DID RESPOND TO SEVERAL CRITICISMS FOR THE VARIOUS PARTIES AS TO THE PROCESS, THE PROCESS HERE AND AS TO THE TIMEFRAME, CORRECT.
WE RESPONDED AND I THINK WE SOME RESOLUTIONS THERE TO, AND W WOULD YOU SAY THAT THAT MANY OF THE COMPLAINTS HAD TO DO WITH THE COMPRESSED TIME TIMEFRAME AND COMPLAINTS ABOUT NOT HAVING ENOUGH TIME TO PREPARE? SOME OF THEM WERE ABOUT THE TIMEFRAME? YES.
COULDN'T THAT PROBLEM HAVE BEEN ADDRESSED, UM, ALLEVIATED IF AUSTIN ENERGY HAD FILED ITS INITIAL PACKAGE EARLIER THAN IT DID IN, IN APRIL.
IT'S CERTAINLY IF WE EXTENDED THE TIMEFRAME OF THE PROCESS, YOU COULD HAVE PUT MORE TIME ON EACH OF THE STAGES.
UH, BUT YOU'LL HAVE TO REMEMBER THAT WE HAVE TO WAIT UNTIL WE HAVE, UM, OUR FINANCIAL RESULTS FROM THE YEAR AND WE CLOSED THE BOOKS BEFORE WE CAN BEGIN THE MODELING PROCESS.
AND SO THAT'S WHAT REALLY DROVE WHEN WE SUBMITTED THE PACKAGE TO THE PUBLIC.
UM, I GUESS AFTER MARCH OF 2021, IN ORDER TO HAVE THE BOOKS CLOSED, IS THAT RIGHT? THE 20, 22 TO HAVE THE 2021 BOOKS CLUB AT THE END OF OUR FISCAL YEAR IS THE END OF SEPTEMBER.
AND THEN WE CONTINUE TO MAKE ADJUSTMENTS THROUGH, UM, NOVEMBER.
IS IT, UM, THROUGH JANUARY TO JANUARY? UM, BUT WE DID NOT YET.
WE DID NOT USE AUDITED RESULTS, BUT WE WERE CONFIDENT IN OUR, UH, UH, OUR FINANCIAL STATEMENTS THAT WE USE, THOSE UNAUDITED STATEMENTS, UM, PRIOR TO THE AUDITOR WAS, IS IN MARCH.
IT WILL, IF THE PACKAGE HAD BEEN FILED IN SAY, SAY FEBRUARY OF 15, THE PARTIES WOULD HAVE HAD, UM, UM, A COUPLE MORE MONTHS OF TIME TO PREPARE WITHIN NOT IF WE HAD USED THAT TIME IN THE FRONT END.
[04:05:01]
THAT'S ALL I HAVE.UM, LET'S, UH, GO OFF THE RECORD AND TAKE A 10 TO 15 MINUTE BREAK.
AND, UH, JUST ONE QUESTION BEFORE EVERYONE LEAVES.
SO THE PROCEDURAL GUIDELINES DO NOT ACTUALLY, AT LEAST AS I READ THEM ADDRESS WHETHER WE'RE DOING REDIRECT AND RECROSS, OR ARE WE JUST HAVING, HOW ARE, HOW ARE WE GOING TO HANDLE THIS, WHATEVER YOUR PLEASURE OR WHATEVER, MY PLEASURE.
UM, LET ME, LET ME, UH, THINK ABOUT IT AND LET'S TALK ABOUT IT BECAUSE WE'VE GOTTA BE EFFICIENT.
UM, OBVIOUSLY I WOULD THINK THAT AUSTIN ENERGY HAS A RIGHT TO DO REDIRECT, RIGHT.
BUT, UM, MY EXPECTATION IS IT PARTIES WITH ALL PARTIES, NOT JUST AUSTIN ENERGY WOULD HAVE AN OPPORTUNITY TO DO REDIRECT, WHICH SEEMS APPROPRIATE AND FAIR WHEN THE OTHER SIDE IS DOING CROSS-EXAMINATION BEYOND THAT.
UM, YOU KNOW, WHETHER THERE'S ADDITIONAL ROUNDS OF CROSS, THAT IT SEEMS LIKE THAT MIGHT BE UNNECESSARY, BUT IT'S, BUT IT DOES SEEM THAT REDIRECT, IT KIND OF GOES HAND IN HAND WITH CROSS-EXAMINATION.
I WOULD PROPOSE JUST ONE ROUND OF REDIRECT AND ONE ROUND OF RE CROSS.
NO MORE THAN ONE ROUND OF RECROSS ISN'T YOU GOT REREAD DIRECT OR WHATEVER IT IS.
I GET THE SENSE THAT LOOK YOU'RE, YOU'RE, YOU'RE, YOU'RE ALL EATING INTO YOUR TIME THAT YOU'VE AGREED TO ALLOCATIONS YOUR TIME ALLOCATIONS AND SOME OF YOU USE MORE TIME THAN OTHERS.
UM, SO YOU HAVE TO KEEP THAT IN MIND, BUT I ALSO HAVE A FEELING THAT THERE WON'T BE A WHOLE LOT OF ADDITIONAL CROSS.
I THINK IT'S JUST ONE OF THOSE THINGS.
IF YOU HAVE ANOTHER COUPLE OF QUESTIONS, BUT REMEMBER THESE FOLKS ARE GOING TO BE BACK UP HERE FOR REBUTTAL.
WE WANT UP HERE, WE WANT TO HAVE A FULL AND FAIR HEARING.
AND SO IF WE GET INTO A FEW QUESTIONS IN THE REBUTTAL STAGE, JUST TO WRAP THINGS UP, WE WILL PROBABLY ALLOW THAT.
BUT AGAIN, KEEP YOU HAVE TO KEEP AN EYE ON YOUR TIME AND I'LL GO OVER THAT LATER.
ALL RIGHT, LET'S GO ON THE RECORD.
LET'S START WITH SOME QUESTIONS THAT WERE ASKED BY MR. BRAZELLE.
UM, AND I THINK THESE WERE MR. DOMBROSKI, BUT IF I'M WRONG, UM, LET THE APPROPRIATE WITNESS SPEAK UP.
UM, HAS AUSTIN ENERGY'S COMMITMENT TO ENERGY EFFICIENCY CHANGED SINCE THE LAST RATE CASE? NO, IT IS NOT.
UH, ARE ANY OF THE PROGRAMS, THE ENERGY EFFICIENCY PROGRAMS BEING CHANGED IN THIS, UH, PER RIGHT PROPOSAL? NO.
THERE WAS NO PROGRAMMATIC CHANGES AS A RESULT OF THE RATE REVIEW.
DO THOSE PROGRAMS, UH, PREDATE THE 2012 CASE? UH, SOME OF THEM DO, YES.
ARE THE ENERGY EFFICIENCY GAINS THAT MR. BRAZIL, UM, DISCUSSED WITH YOU? UH, ARE THEY DUE TO A $10 CUSTOMER CHARGE OR TIERED RATES? I DON'T SEE A DIRECT CONNECTION.
WHAT ARE THOSE ENERGY EFFICIENCY GAINS ATTRIBUTABLE TO ENERGY-EFFICIENT AND TOUCHES A NUMBER OF ISSUES.
SO IT'S, UM, UH, BUILDING CODES, THE SIZE OF HOMES.
UM, THE AGE OF THE HOME, UH, THE APPLIANCES, UH, UH, UPDATES.
WE DO BOTH IN OUR WEATHERIZATION PROGRAM, UH, AUSTIN ENERGY WEATHERIZATION PROGRAM FOR LOW-INCOME CUSTOMERS OR MULTIFAMILY HOME WEATHERIZATION PROGRAMS. UM, ALL OF THOSE CAN CONTRIBUTE TO, UH, THE OVERALL EFFECT.
AND MR. BRAZELLE ASKED YOU SEVERAL TIMES, UH, WHETHER YOU BELIEVED IT WAS IRONIC THAT AUSTIN ENERGY NEEDED A RATE CUT.
IT NEEDS A RATE INCREASE AT THIS TIME, UH, AT THE TIME THAT, UH, ENERGY EFFICIENCY PROGRAMS HAVE BEEN SUCCESSFUL IN HIS WORDS.
UM, DO YOU RECALL THAT DISCUSSION? I DO.
WHY IS IT IN YOUR OPINION THAT IT'S NOT IRONIC THAT THOSE TWO THINGS ARE HAPPENING SIMULTANEOUSLY BECAUSE THAT'S WHAT THE DESIGN OF ENERGY EFFICIENCY IS, IS TO HAVE EACH CUSTOMER USE ENERGY MORE EFFICIENTLY.
AND THAT'S WHAT HAS RESULTED IS CUSTOMERS THAT USED TO BE AT AVERAGING 1100 KILOWATT HOURS A MONTH ARE NOW AT, UH, 860 KILOWATT HOURS ON AVERAGE.
AND MR. ROZELLE ALSO ASKED YOU SOME QUESTIONS ABOUT THE FA POWER PLANT.
DO YOU RECALL THOSE DISCUSSIONS? I DO, OR THAT DISCUSSION? UM, OUR, OUR
[04:10:01]
GENERATION COSTS INCLUDED IN BASE RATES.WE HAVE O AND M COSTS AND THAT SERVICE ASSOCIATED GENERATION.
AND IS THERE, UM, EVIDENCE IN, UH, EITHER THE RIGHT FILING PACKAGE OR THE REBUTTAL TESTIMONY THAT SUPPORTS THE INCLUSION OF THOSE COSTS AND BASE RATES? IT WILL BE IDENTIFIED IN OUR CROSS, THE SERVICE MODEL, UM, WHEREAS THE FUNCTIONALIZATION COST REGENERATION.
AND, UM, AND THAT INCLUDE, OR DOES THAT INCLUDE COSTS ASSOCIATED WITH, WITH FAYETTE, FAYETTE AS WELL AS OUR OTHER THERMAL GENERATION UNITS? YES.
AND WHAT ARE THOSE OTHER UNITS? IT'S FAYETTE? SANDHILL DECKER WAS EXCLUDED SINCE WE'VE CLOSED THAT UNIT THAT WAS A KNOWN OR MEASURABLE, UM, IN SOUTH TEXAS NUCLEAR PLANT.
AND DID YOU, UH, UH, DISCUSS IN, IN THE, IN THE NARRATIVE OR ANY ARE ELSEWHERE? UM, WHETHER UNITS WERE, UM, RETIRED OR WHETHER THEY WERE STILL INCLUDED, UH, IN RATES, RIGHT.
WE HAD A KNOWN AND MEASURABLE THAT REMOVED, UM, UH, DECKER COSTS SINCE WE CLOSED DECKER STEAM UNIT TWO IN MARCH OF 2022 AT STEVE UNIT NUMBER ONE IN OCTOBER OF 2020.
UM, SO THOSE COSTS ARE EXCLUDED FROM THE MODEL.
BUT IT IS STILL OPERATING, IS STILL OPERATING.
UM, AND WE'RE STILL ALLOCATED COSTS FROM THE FAYETTE.
NOW I WANT TO ASK YOU LASTLY, ABOUT A COUPLE OF QUESTIONS THAT TIC HIS ATTORNEY ASKED YOU RELATED TO INTERNALLY GENERATED FUNDS.
UM, OTHER THAN COUNSEL'S PREROGATIVE TO CHANGE, UH, THE 2012 ORDINANCE.
ARE THERE ANY OTHER RAMIFICATIONS THAT COULD OCCUR ASSOCIATED WITH AUSTIN ENERGY TAKING ON MORE DEBT AS THEY HAVE PROPOSED? YES, THERE'LL BE TWO DIRECT EFFECTS VERSUS OUR CREDIT RATING IN WHICH, UM, THE AMOUNT OF DEBT, UH, TO OUR, OR DEBT TO EQUITY THAT WE CARRY, UH, IS AN INDICATOR OF CREDIT WORTHINESS.
UM, TO THE EXTENT WE CARRY ON MORE DEBT, UM, IT ADDS MORE RISK, UH, TO THE INVESTORS THAT BUY OUR BONDS.
IN ADDITION, WE HAVE A DEBT SERVICE COVERAGE RATIO OR A BOND COVENANCE IN AGREEMENT WITH OUR INVESTORS THAT IF, UM, OUR DEBT SERVICE COVERAGE DROPPED BELOW A CERTAIN LEVEL, THAT WE WILL ADJUST RATES UPWARDLY.
SO AS WE INCREASE DEBT, WE INCREASE OUR DEBT SURFACE, AND THAT MEANS WE HAVE TO INCREASE OUR DEBT SERVICE COVERAGE IN THE FUTURE.
THANK YOU, MR. DOMBROWSKI, THOSE ARE ALL THE REDIRECT QUESTIONS THAT I HAVE.
DOES ANYONE HAVE RECROSS LIMITED TO THOSE QUESTIONS? OKAY.
I THOUGHT I SAW A HAND OVER THERE, MR. HALLMARK.
UH, DID MR. PRESENT TWO QUESTIONS? OKAY.
UM, WHEN YOU WERE ANSWERING THE QUESTIONS ON REDIRECT, UH, YOU WERE ADDRESSING ECONOMIC EFFICIENCY OR ENERGY EFFICIENCY FROM THE TECHNICAL STANDPOINT OF THE PROGRAMS THAT, UH, HAD ACHIEVED, UH, ENERGY EFFICIENCY, BUT YOU WOULD ADMIT, WOULD YOU NOT THAT THE TIERED STRUCTURE PLUS THE LOW CUSTOMER CHARGE ACTUALLY HAVE A, AN IMPACT ON ENERGY EFFICIENCY AS WELL, NOT MAYBE AS ONE OF THE PROGRAMMATIC ENERGY EFFICIENCIES, BUT BECAUSE THEY TENDED TO KEEP THE, THE PURPOSE OF THE, THE TIERS PLUS THE LOW CUSTOMER CHARGE WAS TO KEEP USAGE DOWN.
DO YOU UNDERSTAND THAT? I MEAN, WOULD YOU AGREE WITH THAT? I WOULD NOT AGREE WITH THAT.
YOU WOULD NOT AGREE THAT THE FIVE TIERS PLUS THE RIGHT STRUCTURE THAT WAS USED WAS NOT INTO, WAS INTENDED TO KEEP USAGE DOWN.
I BELIEVE THAT WAS A, I WOULD AGREE THAT THAT WAS PERHAPS ONE OF THE INTENTS WHEN THEY DEVELOPED THE FIVE TIERS BACK IN 2012.
SO ARE YOU SAYING THAT FOR THE PAST NUMBER OF 10 YEARS, HOWEVER MANY IT'S BEEN THAT WE'VE HAD THE FIVE TIERS IN EFFECT THAT THAT'S BEEN A WASTE.
Y I'D SAY IT HAS, UM, IT HASN'T RESULTED IN WHAT THEY INTENDED WHEN THEY DESIGNED THE RATES.
LET ME JUST SAY, YOU'RE SAYING THAT FOR 10 YEARS, WE'VE HAD UNREASONABLE RATES.
I'M NOT SAYING WE HAVE AN UNREASONABLE RATES.
NEXT QUESTION IS ON THE FAYETTE ISSUE, OUR QUESTIONS, YOU UNDERSTAND THAT OUR QUESTIONS DIDN'T HAVE ANYTHING TO DO NECESSARILY WITH WHETHER OR NOT
[04:15:01]
THERE WERE COMPONENTS OF THE COST OF FAYETTE IN THE, IN THE COST OF SERVICE.WE ACKNOWLEDGED THAT THEY'RE IN THERE, BUT THEN OUR WAS THAT IF FE IT WAS SUPPOSED TO BE CLOSED OUT ACCORDING TO CITY POLICY UNDER THE 2030 PLAN.
WHY WAS THERE NO MENTION OF IT IN THE APPLICATION, IN THE RATE APPLICATION? I DON'T BELIEVE THERE IS A CITY POLICY DIRECTING US TO CLOSE FAYETTE.
UH, OUR CITY COUNCIL UNDERSTOOD THAT, UH, WE HELD A NUMBER OF DISCUSSIONS WITH OUR PARTNER, UH, LCA ON THAT, BUT WE WERE UNABLE TO REACH A CONCLUSION.
DO YOU NOT BELIEVE THAT THE CITY 2030 PLAN IS ONE TO ELIMINATE CARBON PRODUCTION FROM THE GENERATION MIX? I DO THAT.
AND, UM, AND, AND JUST TO BE CLEAR THAT THE WORDS THAT COUNCILS ARE THE WORDS OF THE 2030 PLAN ARE AUSTIN ENERGY WILL MAINTAIN ITS CURRENT TARGET TO CEASE OPERATION OF THE AUSTIN ENERGY'S PORTION OF THE FAYETTE POWER PROJECT, COAL PLANT BY YEAR END 2022, RIGHT? YEAH.
THAT WAS OUR TARGET, BUT WE WEREN'T ABLE TO ACHIEVE IT.
AND, UH, THAT DESERVES SOME EXPLANATION IN THE RAID FILING.
DIDN'T IT? I DON'T BELIEVE SO.
UM, ANYONE ELSE BEFORE WE GET TO TIC THAT'S MS. COOPER? YES.
UH, EARLIER YOU TALKED ABOUT THAT YOU HAVE DEBT SERVICE COVERAGE RATIOS AS A BOND, COVENANT.
WHAT ARE YOUR, WHAT ARE YOUR DEBT SERVICE COVERAGES THAT YOU'RE TALKING ABOUT? WHAT'S THE RANGE THAT YOU HAVE IN YOUR BOND, COVENANT COVENANTS AT THIS TIME? PERFECT.
IT'S A 1.5 THAT'S DEBT SERVICE COVERAGE.
YOU DON'T HAVE A CAPITALIZATION REQUIREMENTS THEN IN A BOND, COVENANT DEBT CASH, YOU DON'T HAVE ANY, YOU DON'T HAVE THAT AS A BOND BOND COVENANT.
NO, THAT WOULD BE, UH, A TOOL THAT WE USE, UM, INTERNALLY, BUT THE BOND COVENANTS REQUIRE 1.5 DEBT SERVICE COVERAGE RATIO.
IT USED TO BE 1.25 HAS CHANGED.
I'M NOT TRYING TO GIVE YOU A HARD TIME.
I'M JUST TRYING TO GET THIS CLEAR ON THE RECORD.
AND, AND MAYBE I JUST WAS MISHEARING.
IT IS LATE FOR ME, BUT SO YOU DON'T HAVE ANY REQUIREMENTS IN YOUR BONDING FOR DEBT THAT DEAL WITH A DEBT CASH, YOU KNOW, HOW MUCH CASH YOU NEED FOR YOUR INTERNAL CASH GENERATION IN TERMS OF DEBT CASH.
I WOULD HAVE TO LOOK AT THE BOND COVENANT IN FRONT OF ME TO SEE THERE IS A DISCUSSION ABOUT HOW WE WILL SET RATES, BUT THERE IS NOT A RATIO OF HOW MUCH CASH WE MUST CONTRIBUTE TOWARDS OUR CAPITAL.
SO AT LEAST YOU ARE NOT AWARE OF IT SITTING HERE OF THAT.
IT'S IN YOUR CUP, THAT IT'S IN YOUR BOND COVENANTS.
SO WHAT, WHAT IS, IS YOUR DEBT SERVICE COVERAGE? THAT'S CORRECT.
AND I THINK THE LAST WAS MR. HALLMARK OR RESTAURANT, OR THANK YOU.
UH, MR. DOMBROWSKI, UM, FOLLOWING UP ON THE DEBT SERVICE COVERAGE ISSUE, UH, WHAT IS THE SOURCE OF THE BOND COVENANT SPECIFICALLY, IS THAT YOUR MA MASTER BOND OBLIGATIONS OR MASTER BOND ORDINANCE.
AND YOUR FINANCIAL POLICIES MANDATE A 2.0 DEBT SERVICE COVERAGE, RIGHT.
IS THAT RIGHT? THEY REQUIRE THAT WE SET RATES TO ACHIEVE A 2.0 SET RATES TO ACHIEVE A 2.0, UH, A MINIMUM OF 2.0.
OUR RIGHTS ARE PRESCRIBED TO BE SET OUT AS, AS SUCH, BUT THEY SHOULD PRODUCE AT A MINIMUM TWO POINT D S C.
AND IF YOU'LL, I JUST WANT TO, I HAVE A QUESTION ABOUT HOW THAT'S CALCULATED.
DO YOU HAVE THAT IN FRONT OF YOU? UM, AND I JUST WANTED TO MAKE SURE IS THIS, THIS CALCULATION IS THE TYPE OF CALCULATION THAT IS PERFORMED TO SEE IF THE RATES THAT YOU ARE SET SETTING WOULD EQUAL THE 2.0 MINIMUM.
IS THAT RIGHT? THAT'S CORRECT.
I KNEW THE ANSWER WAS UPDATED BY MR. GRANT.
UM, ANYTHING FROM ENERGY? NO, YOUR HONOR.
[04:20:01]
ALL RIGHT.LET'S GO OFF THE RECORD FOR JUST A SECOND SO THAT WE COULDN'T GET THE NEXT PANEL SET UP OFF THE RECORD.
UM, WE ARE BACK ON THE RECORD.
UM, MR. BOCCATO, UH, I I'M READY.
AND DO YOU HAVE ANY PRESENTATION OTHER THAN THE WITNESSES IDENTIFYING THEMSELVES OR NO, WE HAVE NO CHANGES TO BE MADE TO MY KNOWLEDGE, CORRECT.
THEN, UH, WE WILL PROCEED WITH, UH, OFFERING PANEL NUMBER TWO, MR. GRANT RAVEN, MR. SCOTT BURNHAM, MR. BRIAN MURPHY AND MR. TIM HARVEY, TIMOTHY HARVEY.
UM, MS. COOPER, I THINK YOU GET TO GO FIRST.
UH, I JUST HAVE A COUPLE QUESTIONS IF YOU COULD.
UH, IF YOU COULD TAKE THE, WHAT'S BEEN INTRODUCED AS, UH, TO, UH, W OUR EXHIBIT NUMBER FIVE, IT SHOULD BE, I LEFT A PACKET OF EXHIBITS FOR YOU GUYS UP THERE.
MAYBE THE OTHER PANEL TOOK IT, BUT, UH, HOPEFULLY THEY DID.
DID YOU, YOU'RE ASKING THEM TO LOOK AT EXHIBITS YES.
AND IF YOU COULD TURN TO PAGE 16, AND IT'S MY PAGE 16, A HANDWRITTEN NUMBER AND THE BOTTOM RIGHT-HAND CORNER, IF YOU'RE HOLDING THE EXHIBIT UP, I BELIEVE WE HAVE IT.
AND WHAT I'D REALLY LIKE TO KNOW IS, UH, GIVE ME A LITTLE EXPLANATION.
THIS IS, THIS IS FOR FISCAL YEAR 2021.
I WANT, I'D LIKE TO HAVE THAT VERIFIED.
WELL, UH, THE PERSON WHO SPONSORED THIS IS, UH, WAS MR. MURPHY.
SO, UM, I'M JUST WANTING TO KIND OF GET SOME VERIFICATION AND SOME EXPLANATIONS OF SOME OF THESE COLUMNS ON THIS, ON THIS CHART THAT WAS ATTACHED TO THE RFI ANSWER.
SO, UH, THIS IS FOR FISCAL YEAR 2021.
IT'S NOT JUST LABELED, BUT YOU CAN VERIFY THAT THIS IS FOR FISCAL YEAR 2021.
I CAN'T TELL YOU A HUNDRED PERCENT.
WELL, WHEN YOU SPONSOR EXHIBIT A, DO YOU ALWAYS REVIEW THE EXHIBIT BEFORE IT GETS, UH, OKAY.
SO THEN IF WE COULD LOOK LIKE, FOR INSTANCE, LOOK UNDER THE TOTAL SYSTEM SIZES SALES, I MEAN, FOR ENERGY SALES, AND THERE IS A COLUMN, A VERTICAL COLUMN CALLED BUDGET, THE VERTICAL COLUMN CALLED ACTUAL AND A VERTICAL COLUMN CALLED FORECAST WITH ACTUAL WEATHER.
AND COULD YOU TELL ME, AND THEY HAVE DIFFERENT NUMBERS? AND COULD YOU TELL ME, EXPLAIN TO ME WHAT THE DIFFERENCES ARE BESIDES THE TITLE? OF COURSE, BUT WHAT THE TITLE MEANS? WELL, FIRST I HAVE TO ADMIT THAT I'M HAVING A LITTLE BIT OF TROUBLE READING IT.
UM, MY EYES AREN'T QUITE AS GOOD AS THEY USED TO BE.
UM, SO ONE COLUMN SAYS BUDGET.
ANOTHER SAYS ACTUAL, IT LOOKS LIKE THERE'S GROUPINGS FOR ENERGY SALES, GIGAWATT HOURS, AND THEN BASE REVENUES AND MILLIONS OF DOLLARS.
WELL, LET'S, LET'S LOOK AT THE TOP, THE TOP BOX AND IT'S GOT, IT'S DIVIDED INTO TWO PARTS.
AND SO WE'RE LOOKING AT THE, THE ONE THAT'S CALLED ENERGY SALES, AND THERE'S A SERIES OF NUMBERS SET OUT VERTICALLY BY MONTH.
AND THE TITLE OF THE FIRST ONE IS CALLED THE SECOND VERTICAL COLUMN OF NUMBERS IS CALLED ACTUAL.
THE THIRD VERTICAL COLUMN IS CALLED FORECAST WITH ACTUAL WEATHER.
AND WHAT I'D LIKE TO KNOW IS WHAT'S THE DISTINCTION BETWEEN THESE THREE CHARACTERISTICS.
WHAT MAKES THESE NUMBERS THAT DIFFERENT FROM EACH OTHER BUDGET WOULD BE THE BUDGET WAS DEVELOPED FOR THIS TIME PERIOD, RIGHT? WHICH I THINK IS THAT 20, 20, 20, 21 BUDGET CYCLE ACTUAL WOULD BE THE ACTUAL GIGAWATT HOUR SALES DURING THE FISCAL YEAR 2021.
AND FORECAST WITH ACTUAL WEATHER WOULD BE, I'M PRETTY SURE WHAT THE FORECAST
[04:25:01]
WOULD HAVE, THAT THE MODEL THAT WE USE TO FORECAST SALES GENERATED BASED ON, UH, ACTUAL WEATHER.SO YOU COULD COMPARE ACTUAL TO FORECAST WITH ACTUAL WEATHER TO GET SOME KIND OF A SENSE OF HOW ACCURATE THE FORECAST WAS, RIGHT.
OH, YOU MEAN COMPARE THE BUDGET AND THE ACTUAL TO SEE HOW, UH, HOW TRUE THE FORECAST WITH THE FORECAST WAS.
IS THAT WHAT YOU'RE SAYING? I'M SORRY.
COULD YOU REPEAT THE QUESTION? OKAY.
LIKE THE FORECAST, I HEARD YOUR ANSWER, AND THE LAST PHRASE THAT YOU SAID IS TO SEE HOW ACCURATE YOUR FORECAST WAS, BUT WOULD IT BE COMPARING THE BUDGET TO THE ACTUAL TO SEE HOW TRUE YOUR FORECAST WAS, OR I DON'T UNDERSTAND YOUR ANSWER, I GUESS IF YOU COULD REPHRASE THAT ANSWER, WHAT FORECASTS WITH ACTUAL WEATHER MEANS AND WHAT ITS PURPOSE IS.
AND THESE THREE, UH, IN THESE CON IN THIS GRAPH CALLED MONTHLY ENERGY SALES AND REVENUES, THE THIRD COLUMN REPRESENTS WHAT THE, UH, WHAT THE LEVEL OF SALES THAT WOULD HAVE BEEN EXPECTED BASED ON THE ACTUAL WEATHER THAT OCCURRED IN 2020 FISCAL YEAR, 2021.
SO IT'S KIND OF A FORECAST, BUT IT'S LOOKING BACK AT WHAT ACTUALLY HAPPENED AND USING A FORECAST MODEL AND APPLYING THE WEATHER.
SO, UH, THEN, THEN THE FOURTH COLUMN IS CALLED COVID IMPACT.
AND CAN YOU TELL ME WHAT COVID IMPACT MEANS AND WHAT THOSE NUMBERS REPRESENT? UH, IT LOOKS LIKE THOSE NUMBERS REPRESENT, UH, THE DIFFERENCE BETWEEN TWO ADJACENT COLUMNS TO THE LEFT.
WELL, WHAT DOES THE TERM COVID IMPACT MEAN FOR PURPOSES OF THIS GRAPH? I THINK AN ASSUMPTION HAS BEEN MADE HERE THAT, UM, THAT THE DIFFERENCE BETWEEN THE SALES THAT ACTUALLY OCCURRED AND THE ONES THAT WOULD HAVE BEEN PREDICTED BASED ON THE WEATHER AND THE, AND THE FORECAST MODEL THAT WE USE IS IT'S USING A COLUMN HEADER, WHICH ATTRIBUTES THAT ENTIRE DIFFERENCE, UH, ASSUMES THAT IT WAS A COVID IMPACT.
AND SO AUSTIN ENERGY PREPARED THIS GRAPH.
DID THEY PREPARE THIS GRAPH IN RESPONSE TO THE RFI OR WAS IT FOR SOME OTHER PURPOSE? IT WAS ALL THE ANALYSIS HAD ALREADY BEEN PERFORMED AT THE TIME.
THIS, AND DO YOU EVER JUST START WHAT WAS MADE, SORRY, I DIDN'T MEAN TO INTERRUPT.
UH, DO YOU KNOW WHAT PURPOSE THIS GRAPH WAS PREPARED FOR? UM, I, NO, I DON'T.
IT'S, IT'S, UH, SOMETHING HAVING TO DO WITH OUR BUDGETING AND FORECASTING PROCESS, WHICH IS OUTSIDE MY SHOP.
BUT YOUR UNDERSTANDING IS THAT COVID, COVID IMPACT MEANS THAT THE, UH, THAT THERE WAS AN EFFECT THAT AFFECTED THE SALES BY THESE AMOUNTS CAUSED BY COVID.
I WOULD NOT SAY THAT I WOULD SAY THE COLUMN THAT SAYS COVID IMPACT REPRESENTS THE DIFFERENCE BETWEEN THE TWO ADJACENT COLUMNS AND THE WAY THIS IS LABELED AND ASSUMPTION IS BEING MADE.
THAT THAT DIFFERENCE WAS BASED ON COVID IT FOR THE PURPOSES OF LABELING THAT COLUMN.
UH, SO FOR THE PURPOSES OF THE LABELING, ONE OF THE COMMON, WHY WOULD SOMEONE LAID, WHAT WOULD BE THEIR PURPOSE OF LABELING IT FOR COVID IMPACT? EXCEPT TWO, IT SAYS WHAT IT SAYS THAT WE ARE TRYING TO IDENTIFY WHAT THE COVID IMPACT IS.
AND SO THEY LAID OUT THIS GRAPH.
I CAN'T SPEAK TO WHAT THE INTENT WAS.
WELL, BUT YOU ARE AWARE THAT THE RFI ASKED FOR ALL ANALYSIS AND ASSESSMENTS REGARDING THE IMPACT OF COVID.
IS THAT CORRECT? IF YOU COULD LOOK AT THE PAGE 15, IS THE QUESTION? YES.
SO THE DIFFERENCE, BUT, AND I JUST WANT TO BE CLEAR CAUSE IT DOESN'T LOOK LIKE MATHEMATICALLY THAT'S NECESSARILY, BUT SO WHAT YOU DO IS YOU TAKE THE ACTUAL AND SUBTRACT IT FROM THE FORECAST TO GET THE COVID IMPACT.
IS THAT CORRECT? YOU SUBTRACT THE FORECAST, ACTUAL WEATHER FROM THE
[04:30:01]
ACTUAL, ALL RIGHT.SO IT'S THOSE LAST TWO COLUMNS.
WHAT, HOWEVER, MATHEMATICALLY FIGURED THAT.
THANK YOU SO MUCH, MR. MURPHY.
NOW I HAVE ANOTHER QUESTION ON THIS AND IF WE COULD TURN TO, I ACTUALLY DON'T HAVE AN EXHIBIT, YOUR HONOR.
I'M NOT GOING TO WALK UP AND SPEND THAT TIME.
AND I HAVE NO MORE QUESTIONS, YOUR HONOR.
I PASS THE WITNESSES, RIGHT? THANK YOU, MS. COOPER, MR. ROBBINS, MR. ROBBINS, STILL HERE.
HE COMES BACK IN I'LL UH, AND THE PANEL STILL UP THEN WE'LL TRY TO, WE'LL TRY TO GET HIM A CHANCE TO ASK QUESTIONS.
UM, NEXT UP IS DATA FOUNDRY, NO QUESTIONS, YOUR HONOR.
HER F NO QUESTIONS, YOUR HONOR.
S S C NO QUESTIONS.
MR. BRAZELLE, I BET YOU HAVE SOME QUESTIONS, JAMES BRAZELLE FOR SIERRA CLUB.
AND WOULD MR. BRAZELLE MIND IDENTIFYING WHAT HE HANDED TO THE WITNESSES? UH, NO.
I HANDED THE WITNESS PANEL, UH, SIERRA CLUB EXHIBIT EXHIBIT NUMBER 7, 5 7 IS THE, UH, NSPM MANUAL.
THIS ONE SON HE'S ANSWERED THE SON ONE DASH 12.
UM, FOR THE PANEL, MAYBE MR. HALL HARVEY, ISN'T IT FOR HARVEY.
AND WHICH ONE IS HIS TOMORROW? OH, I'M SORRY.
AUSTIN ENERGY HIRED NEW GEN STRATEGIES TO CONDUCT A STUDY REGARDING THE VALUE OF SERVICE.
THE VALUE OF SOLAR, UH, CHANGES, CORRECT? THAT'S CORRECT.
AND DID, UM, AND THAT, THAT STUDY IS ATTACHED TO THE APPENDIX PORTION OF THE RATE FILING PACKAGE AS APPENDIX M CORRECT.
I'M NOT AWARE OF WHAT APPENDIX IT IS, BUT THE STUDY WAS ATTACHED.
I KNOW IT WAS FILED LATE, RIGHT.
I'M NOT AWARE OF WHEN IT WAS FILED.
UM, THAT STUDY DOES NOT HAVE ANY PARTICULAR EXPERTS NAME ON IT AND DOESN'T HAVE ANY KIND OF ATTACHMENTS THAT INDICATE, UH, THE QUALIFICATIONS OR THE EXPERIENCE OF THE CONSULTANTS TO CONDUCT VALUE OF SOLAR, UH, ANALYSIS.
CORRECT? IS THAT CORRECT? YES.
UH, IF YOU'D LOOK AT EXHIBIT NUMBER FIVE, WHICH IS IN MAYBE IN FRONT OF YOU THERE, THIS IS A RESPONSE BY THE COMPANY TO SUN DEBT ONE DASH TWO, I'M SORRY, ONE DASH 12.
AND IT ASKS FOR DETAIL OF NEW JEN'S PRIOR EXPERIENCE WITH VALUE SOLAR ANALYSIS, WHETHER FOR AUSTIN ENERGY OR ANY OTHER CLIENT, UH, DO YOU SEE THE ANSWER THERE THAT SAYS WHILE OTHER UTILITIES USE THE TERM VALUE OF SOLAR, NEW GEN HAS NOT BEEN INVOLVED IN A PROJECT WHERE THE CONSTRUCT OF THE VALUE OF SOLAR WAS EXACTLY AS IT HAS BEEN DEVELOPED FOR AUSTIN ENERGY? IS THAT THE CORRECT ANSWER? THAT'S THE ANSWER THAT WAS GIVEN.
DID, ARE YOU AWARE OF ANY ADDITIONAL EXPERIENCE OR, UH, UH, QUALIFICATIONS OF THE NEW GEN PERSONNEL THAT CONDUCTED THE STUDY FOR VALUE OF SOLAR ANALYSIS? I LET NEW JAN ANSWER THAT WE HAVE A NEW GEN PERSON HERE.
UH, THIS IS SCOTT BURNHAM WITH NEW JEN.
UM, SO I THINK THE ANSWER THAT WE GAVE IS THAT THE VALUE OF SOLAR CONSTRUCT FOR THE CITY OF AUSTIN IS UNIQUE.
WE ARE FAMILIAR WITH ANALYZING THE, UM, THE, IN A GENERAL SENSE, THE VALUE ASSOCIATED WITH SOLAR ENERGY.
AND WE HAVE DONE STUDIES TO THAT EFFECT, BUT THE AUSTIN SITUATION IS DIFFERENT THAN THOSE, CORRECT.
THE CONSTRUCT OF THE VALUE OF SOLAR IS DIFFERENT THAN THOSE.
AND THAT'S THE CONSTRUCT THAT WAS ADOPTED OR PUT IN PLACE AS A RESULT OF MR. ROBERT GOES WORK
[04:35:01]
BACK WHEN THIS WAS BEGUN, CORRECT.I CAN NOT SPEAK TO MR. ROBERT GOES WORK.
ARE YOU FAMILIAR WITH WHAT DR OR MR. ROBERT GO'S ROLE WAS IN THE INITIATION OF THE VALUE OF SERVICE? I'M SORRY, THE VALUE OF SOLAR, UH, UH, PRO PROGRAM FOR THE CITY BACK IN 2012 OR 13, I'M AWARE THAT HE WAS INVOLVED IN IT.
UM, THE, UM, DID, UH, MR. UH, HARVEY, DID THE, UH, COMPANY SUBMIT THE VALUE OF SOLAR RATE PROPOSALS TO THE RMC, THE RESOURCE MANAGER COMMISSION BEFORE INCLUDING THEM IN THE RIGHT FILING? NO, WE DID NOT.
AND THAT ISSUE THOUGH IS ONE THAT'S WITHIN THE RNCS AUTHORITY AND JURISDICTION, CORRECT.
IT'S MY UNDERSTANDING THAT THE RMC HAS AN ADVISORY ROLE ON EFFICIENCY PROGRAMS AT AUSTIN ENERGY.
THIS HOWEVER, IS NOT A PROGRAM.
SO YOU'RE SAYING THAT THEY DO NOT HAVE AUTHORITY OVER THIS.
UM, I WOULD NEED A DEFINITION OF AUTHORITY IN THIS CONTEXT IS THE RESOURCE MANAGEMENT COMMISSION AS PART OF THEIR FOCUS ON RESOURCES.
IN OTHER WORDS, GENERATION YES.
IS SOLAR GENERATION SOLAR ROOFTOP GENERATION, A FORM OF GENERATION.
UM, TO ANYONE ON THE PANEL, CAN YOU FIND IT IN FRONT OF YOU, UH, SIERRA CLUB EXHIBIT SEVEN? YES.
DO YOU RECOGNIZE THIS FROM ANY OF YOUR WORK IN THE PAST? ANY OF YOU? YES.
COULD YOU DESCRIBE IT? UM, THIS IS A DOCUMENT THAT LAYS OUT AN APPROACH TO VALUE SOLAR, UM, THROUGH FORWARD-LOOKING METHODOLOGY.
AND THIS IS ONE THAT, UH, MR. RABAGO HAS CITED IN HIS TESTIMONY, CORRECT? YES.
AND SO, WOULD IT BE CORRECT TO SAY THAT THIS DESCRIBES THE MISS MR. ROBERT GOES PROPOSED OR SUPPORTED METHODOLOGY, WHICH WOULD BE A FORWARD LOOKING, AS YOU SAID, MARGINAL COST BENEFIT, COST BASED LONG RANGE, UM, TYPE OF APPROACH TO DETERMINING VALUE OF SOLAR? I THINK THAT'S A FAIR ASSESSMENT.
CONTRACTING TO THAT IS WHAT THE CITY IS PROPOSING IN THIS CASE.
SOME, UH, ON SOME AREAS ON SOME BASES OR GROUNDS, THERE MAY ACTUALLY BE SIMILARITIES, CORRECT.
THEY BOTH ATTEMPT TO PROVIDE THE CUSTOMER WITH A FAIR VALUE FOR THEIR CONTRIBUTION OF SOLAR, TO THE DISTRIBUTION GRID.
AND THE CITY'S PROPOSAL THOUGH USES AS INPUTS FOR THAT ONLY FOR THE AVOIDED COST PORTION OF IT.
ENERGY SAVINGS, TRANSMISSION SAVINGS, ANCILLARY SERVICE SAVINGS FROM ERCOT, CORRECT PAST, PAST SAVINGS.
WE ARE PROPOSING AN APPROACH THAT LOOKS AT HISTORICAL METHODOLOGY, OUR HISTORICAL DATA KNOWN AND MEASUREABLES TO DETERMINE WHAT THAT AVOIDED COST IS.
AND IT ALSO LOOKS AT A CO2 COMPONENT AND THE SOCIETAL BENEFITS PILLAR, CORRECT? THAT'S CORRECT.
IT DOES NOT CONSIDER BENEFITS AND COSTS OR WEIGH THEM.
DOES IT? ARE YOU, CAN I CLARIFY THAT QUESTION? SURE.
UM, ARE YOU REFERRING TO BENEFITS AND COSTS TO THE CUSTOMER, TO THE PERSON THAT'S GOING TO PUT THE SOLAR PANELS UP ON THEIR, ON THEIR HOUSE? IT, IT REPRESENTS THE, ONE OF THE BENEFITS THAT THE CUSTOMER RECEIVES FOR DOING THAT, WHICH IS THE PAYMENT CORRECT? THE CREDIT.
YES, BUT IT DOESN'T ANALYZE THE FULL SUITE OF BENEFITS AND COSTS OVER THE NEXT 30 YEARS AT THIS HOMEOWNER IS HAVING TO DETERMINE OR MAKE JUDGEMENTS ON ABOUT IN DECIDING
[04:40:01]
WHETHER OR NOT TO PUT THIS, THESE PANELS ON HIS ROOF.DOES IT, THE PROPOSED METHODOLOGY IS NOT A FORWARD LOOKING METHODOLOGY AND DOESN'T CONSIDER THOSE COSTS.
I LET ME QUALIFY THAT THE AVOIDED COSTS PORTION OF THE PROPOSED METHODOLOGY IS NOT A FORWARD-LOOKING METHODOLOGY.
HOWEVER, THE SOCIETAL BENEFITS PORTION IS FORWARD LOOKING.
THE METHOD THAT YOU'RE PROPOSING DOES NOT CONSIDER THE FULL SUITE IN THE SOCIETAL BENEFITS T UH, PILLAR.
IT DOESN'T CONSIDER THE FULL SUITE OF, OF, UM, POLLUTANTS, UM, UM, AND, UH, AND, UH, UH, AND, UM, AND S AND SUBSTANCES ARE POLLUTING THE POLLUTION.
IT DOESN'T CONSIDER THE FULL SUITE OF A POTENTIAL ENVIRONMENTALLY OR ENVIRONMENTALLY HARMFUL POLLUTANTS THAT ARE CONSIDERED BY THIS FORWARD-LOOKING, UH, METHODOLOGY THAT YOU HAVE IN FRONT OF YOU, CORRECT? THE SOCIETAL, THE SOCIETAL BENEFITS PORTION OF THE VALUE OF SOLAR PROPOSED LOOKS AT THE COST OF CARBON, UM, AS IT RELATES TO THE TEXAS ENERGY MIX.
AND THAT'S CARBON ONLY, NO SULFUR, NO SELENIUM, NO OTHER, NO OTHER CHEMICALS OR POLLUTANTS, CORRECT.
THE FORWARD-LOOKING METHOD DOES CORRECT.
NO DOCTOR OR MR. ROBERT GOES FORWARD, LOOKING METHOD, WOULD, WOULD IT NOT? I DO NOT KNOW, BUT THE CURRENT METHODOLOGY DOES NOT.
SO, AND THAT THEN BRINGS US AROUND TO ONE GOOD POINT.
AND THAT IS THE CURRENT METHODOLOGY IS DR.
ROBIN ROBIN GOES, OR MR. ROB GOES METHODOLOGY, CORRECT? NO, IT'S, WHAT'S LEFT OVER FROM HIS METHODOLOGY, CORRECT? NO, IT'S NOT THE METHODOLOGY YOU'RE PROPOSING IN THIS, IN THIS CASE THOUGH, CORRECT? THAT'S CORRECT.
WHAT YOU'RE REFERRING TO AS DR.
ROBERT GOES AND METHODOLOGY, I THINK IS ACTUALLY CLEAN POWER RESEARCHES METHODOLOGY.
I BELIEVE THAT CLEAN POWER RESEARCH CREATED THE METHODOLOGY APPROACH TO VALUING THE VALUE OF SOLAR AS IT'S USED TODAY.
AND BY THE WAY, I JUST FOR CORRECTION, UH, I MADE THE MISTAKE AND I'LL MENTION IN THE, AND THAT IS A DR.
TO THE EXTENT, WELL, FIRST OF ALL, LET ME, YOUR BACKWARDS LOOKING ANALYSIS HAS ONE PARTICULARLY APPEALING ASPECT OF THAT IS THAT IT'S ARE A COUPLE OF APPEALING ASPECTS.
THERE'S ONLY A FEW ITEMS TO CONSIDER, AND IT'S PRETTY EASILY QUANTIFIABLE, ISN'T IT? YES.
THE FORWARD-LOOKING METHODOLOGIES ARE HARDER BECAUSE YOU HAVE, YOU HAVE A LOT MORE ITEMS TO CONSIDER AND YOU CAN'T JUST GO LOOK THEM UP AND COPY THEM DOWN.
YOU HAVE TO ACTUALLY DO SOME ANALYSIS TO COME UP WITH WHAT THEY SHOULD BE.
WE HAVE RUN THE FORWARD LOOKING METHODOLOGY MANY TIMES, AND IT IS DEFINITELY WITHIN OUR WHEELHOUSE.
YOU'RE PROPOSING TO INCREASE THE VALUE OF SOLAR CREDIT FROM 9.70 CENTS AT ITS CURRENT RATE TO 9.9991 SINCE CORRECT.
I BELIEVE IT'S 9.91 9.91 AS SEEN ON PAGE 1 48 OF THE RIGHT FILING PACKAGE.
WELL, WHAT PAGE WAS THAT AGAIN? 1 48, CORRECT.
AND YOUR POSITION OR THE AUSTIN ENERGY'S POSITION IS WE'RE INCREASING THE NUMBER.
IT SHOULD BE A VERY, IT SHOULD BE A GOOD RESULT, CORRECT? OUR POSITION IS THAT THE, THAT THE NUMBER REFLECTS THE AVOIDED COSTS AND SOCIETAL BENEFITS BASED ON CARBON.
[04:45:01]
YOUR METHOD LEAVES OUT LEAVES ON THE TABLE, LEAVES AS EXTERNAL COSTS THAT ARE NOT INCLUDED TO THE EXTENT IT LEAVES THOSE OUT.AND TO THE EXTENT THAT MR. ROBERT GOES NUMBER, WHICH IS IN THE 13 CENTS OR 16 CENTS RANGE, TO THE EXTENT THAT HIS NUMBER IS CORRECT, THEN AUSTIN ENERGY WOULD BE SHORTING ITS CUSTOMERS.
WHAT THEY'RE DUE FOR PROVIDING THAT SOLAR GENERATION ON THEIR ROOFTOPS.
IN COMPARISON WITH WHAT, UH, MR. ROBERT RABAGO SUGGESTS THAT WE USE AS A MODIFIED APPROACH, YOUR STATEMENT IS CORRECT, BUT WE ALSO, AS PART OF THIS EXERCISE RAN THE NUMBER ON THE CURRENT METHODOLOGY AND THAT NUMBER RESULTED IN A REDUCTION IN THE VALUE OF SOLAR TO 9.50 CENTS.
I DON'T KNOW IF YOU CAN HEAR ME.
SO IT HAS THAT NUMBER IN THAT CALCULATION BEEN INCLUDED IN THE RIGHT FILING PACKAGE OR BEEN PROVIDED TO THE PARTIES IN ANY WAY.
IN SECTION 9.1 9.1 TABLE NINE DASH A.
THE COMPANY IS PROPOSING TO CHANGE THE RECOVERY METHODOLOGY FOR THE VALUE OF SOLAR CREDIT, FROM ALL BEING RECOVERED IN THE PSA TO PART BEING RECOVERED IN THE PSA AND PART BEING THE, UH, SOCIETAL BENEFITS PORTION BEING RECOVERED IN THE EES.
NOW, REGARDLESS OF WHAT YOUR THOUGHTS MAY BE ABOUT WHETHER OR NOT THAT'S MORE PERFECT FROM THE STANDPOINT OF THE TECHNICAL DIFFERENCES IN THE TYPE OF COST, THE FACT THAT YOU'RE SPLITTING IT INTO SEVERAL DIFFERENT SOURCES MAY ADDS COMPLEXITY TO THE, TO THE COMPENSATION METHODOLOGY THAT CUSTOMERS HAVE TO REVIEW.
DOESN'T IT? HOW SO? WELL, I MEAN, WHAT I'M ASKING IS THIS, IN THE PAST, YOU COULD A CUSTOMER WHO WANTED TO SEE WHERE THESE COSTS WERE COMING FROM, COULD GO TO ONE PLACE TO THE PSA.
NOW THEY'LL HAVE TO GO TO THE PSA AND THE EES TO FIND OUT HOW THESE CUSTOMERS TOGETHER, CORRECT.
THE COST RECOVERY WILL BE THROUGH THE PSA AND THE CBC.
WHICH, WHICH INCLUDES THE EES YES.
AND DO YOU ACKNOWLEDGE THAT ONE OF THE PRINCIPLES OF RAINMAKING THAT'S IN THE BOND, BRIGHT BOOK, AND MAY EVEN BE IN THE, IN THE CITIES ON INFORMATION, IS SIMPLICITY AND EASE OF APPLICATION.
THOSE ARE PRINCIPLES OF RIGHT.
COULD YOU REPEAT THE QUESTION, PLEASE? YOU RECOGNIZE THAT SIMPLICITY AND EASE OF APPLICATION, OR ONE OF OUR PRINCIPLES INCLUDED IN THE SUITE OF PRINCIPLES THAT REFLECT WHAT SHOULD BE DONE OR OF APPROPRIATE RATE MAKING PRINCIPLES.
WELL, I CAN'T AGREE WITH THE STATEMENT BEFORE YOU CORRECTED IT.
CAN YOU GIVE ME A NICE CLEAN STATEMENT THAT I CAN AGREE OR DISAGREE WITH THAT SIMPLICITY AND EASE OF APPLICATION ARE RATE MAKING PRINCIPLES ACCEPTED, RIGHT.
THEY ARE RATE MAKING PRINCIPLES.
AND WOULD YOU AGREE THAT THEY APPLY HERE? THEY ARE PRINCIPLES THAT COULD BE CONSIDERED BY A RATE ANALYST, UH, THAT AS THEY GO TO DESIGN THE VALUE OF SOLAR RATE.
MR. HUGHES, I THINK YOU'RE NEXT.
WE'RE GOING TO WAIT TILL REBUTTAL, SIR.
UM, MR. HALLMARK, UH, YES, YOUR HONOR.
UM, I THINK MY FIRST FEW QUESTIONS ARE FOR MR. MURPHY.
UM, GOOD TO SEE YOU AGAIN, MR. MURPHY,
[04:50:01]
HOW'S IT GOING? UM, YOU ARE, UH, YOUR POSITION AT AUSTIN ENERGY AS ENERGY ANALYST, SUPERVISOR FOR RATES.AND WHAT DOES THAT ENCOMPASS? THAT'S HOW I WAS THINKING I HAD MY REGULATORY RESUME.
I WAS GOING TO READ IT TO YOU.
UM, IT ENCOMPASSES, YOU KNOW, UH, RATE MAKING GENERALLY, SO DEVELOPMENT OF COST OF SERVICE STUDIES, UH, RATE DESIGN, ALL THE PHASES OF RATE MAKING THAT, UM, THAT WE'VE BEEN TALKING ABOUT WITH THE EXCEPTION OF TAKING THE ACCOUNTING RECORDS AND USING THOSE TO DEVELOP A TOTAL COMPANY COST THE SURFACE WHERE LARGELY THAT WOULD BE AN ACCOUNTING FUNCTION THAT ALSO HAS TO DEAL WITH, UM, UM, EVALUATING DIFFERENT POLICIES AS THEY MAY IMPACT RATE MAKING, YOU KNOW, INTERNALLY IT, UH, AT AUSTIN ENERGY AND HAVING, UH, AN INFORMED OPINION ON THOSE ISSUES.
UM, AND YOU'VE BEEN A TESTIFYING RATE EXPERT FOR MANY YEARS, RIGHT? UH, I STARTED IN OCTOBER OF 2010.
SO FOR MORE THAN A DECADE, YES.
AND YOU USED TO WORK FOR THE PUC OF TEXAS, THE, UH, LEGAL STAFF, RIGHT.
I WORKED FOR THE, A RATE REGULATION DIVISION AT THE COMMISSION.
AND IN THAT CAPACITY, YOU MADE RECOMMENDATIONS ON COST ALLOCATION PRINCIPLES AMONG OTHER THINGS AND PUC CASES, RIGHT? YES.
AND THE PUC STAFF IS CHARGED WITH REPRESENTING THE PUBLIC INTEREST, RIGHT? YES.
WE TURN WITH ME TO TIC EXHIBIT NINE.
I'M HOPING MY EXHIBITS ARE STILL UP THERE.
AND DO YOU RECOGNIZE THIS AS AN EXCERPT OF YOUR TESTIMONY AND A PUC CASE, UH, IN EL PASO ELECTRIC CASE? YES.
AND IF YOU'LL TURN WITH ME TO PAGE 15, UH, AT, AT THE TOP, RIGHT.
ALTHOUGH I'M NOTICING IT'S ACTUALLY BOTH.
AND YOU SEE, THERE'S A Q A QUESTION IN THE MIDDLE OF YOUR TESTIMONY.
THERE ARE EL PASO'S PROPOSED CLASS COST ALLOCATION TREATMENTS, CONSISTENT WITH THE COMMISSION'S RECENT DECISIONS IN DOCKETS NUMBER 4, 3 6 9 5 4 0 4 4 3 AND 3 9 8, 9, 6, RIGHT? YES.
AND THEN YOU PROVIDED A CHART THERE AND I JUST WANTED TO WALK THROUGH IT.
UH, SO THE FIRST ROW SHOWS PRODUCTION CAPACITY COSTS AND SHOWS THAT EL PASO ELECTRIC WAS PROPOSING TO ALLOCATE THOSE ON AVERAGE AND EXCESS DEMAND FOR CP.
AND THE NEXT THREE COLUMNS, THE NEXT COLUMN IS SPS DOCKET NUMBER 4, 3, 6, 9, 5, RIGHT? YES.
AND SPS IS A NON-NARCOTIC VERTICALLY INTEGRATED UTILITY THAT PROVIDES SERVICE, UH, IN THE PANHANDLE, RIGHT? YES.
AND THEY'RE IN THE SOUTHWEST POWER POOL, NOT IN ARCOT RIGHT.
AND IN 4, 3, 6, 9, 5 WAS A LITIGATED CASE.
FULLY LITIGATED, VERY LITIGATED.
IF I REMEMBER CORRECTLY HAD FIVE HOURS WITH RACKS, LOTS OF FUN.
I'LL LET THEM KNOW THAT YOU REMEMBER.
UM, AND THE, THE, THE RECOMMENDATION FROM THE, OR THE COMMISSION'S DECISION IN THAT CASE WAS ALSO PRODUCTION WAS ALSO TO DO PRODUCTION CAPACITY COSTS ON A AND E FOR CP, RIGHT? YES.
AND IT'S THE SAME FOR THE FIRST SWEPCO AND ETI AND THE TWO CASES YOU SITE THERE.
AND SWEPCO IS ANOTHER SOUTHWESTERN POWER POOL UTILITY OPERATING IN TEXAS VERTICALLY INTEGRATED, RIGHT? YES.
AND ENTERGY, TEXAS IS IN MISO, OPERATING IN TEXAS, RIGHT? I'M NOT SURE IF THAT'S STILL TRUE.
UM, SO THAT, AND IN THIS CASE, HOWEVER, AUSTIN ENERGY IS NOT PROPOSING A AND E FOR CP FOR PRODUCTION CAPACITY COST.
UM, I AM NOT THE WITNESS THAT'S SUPPORTING THE COST ALLOCATION IN THIS CASE.
HE PROBABLY WANT TO DIRECT THAT QUESTION TO WITNESS BURNHAM.
UH, AND, AND I WILL, UM, BUT YOU'RE FAMILIAR THAT, UH, AUSTIN ENERGY IS NOT PROPOSING AUSTIN, SORRY.
AND FOR CP FOR PRODUCTION CAPACITY COST.
I REVIEWED THE ENTIRE FINALLY PACKAGE,
[04:55:01]
BUT I DON'T, I DO NOT SUPPORT THAT PART OF AUSTIN ENERGY'S CASE.UH, WELL, LET'S TURN TO THE NEXT PAGE OF YOUR TESTIMONY, UM, THAT WE WERE JUST LOOKING AT PAGE 16, I'M THERE, AND THE TOP ROW THERE IS FOR DISTRIBUTION PRIMARY.
YOU SEE THAT AND FOR ALL FOUR OF THE COLUMNS IT'S CLASS NCP DEMAND.
AND THEN IN THE NEXT Q AND A, YOU ASKED, DO YOU SUPPORT THE COMPANY'S CLASS COST ALLOCATION TREATMENTS? AND YOU SAY YES, WITH, WITH THOSE TWO EXCEPTIONS, YOU THEN LIST, RIGHT.
SO YOU SUPPORTED THESE ALLOCATION METHODOLOGIES THAT WE JUST WENT OVER IN THIS CASE.
AND YOU WOULD NOT HAVE DONE THAT IF YOU BELIEVED THEY WERE ANYTHING OTHER THAN JUSTIN REASONABLE.
WELL, YOU KNOW, I J I'M JUSTIN REASONABLE, AS I UNDERSTAND IT, IT'S SORT OF A, A LEGAL CONCLUSION THAT THE REGULATOR, UH, REACHES, I DON'T TYPICALLY THINK ABOUT THINGS IN THOSE TERMS. OKAY.
WELL, YOU BELIEVE THAT THESE WERE REASONABLE ALLOCATION METHODOLOGIES THROUGHOUT THIS TESTIMONY, RIGHT? THAT'S RIGHT.
UM, MR. MURPHY, WHY AREN'T YOU PRESENTING THE AUSTIN ENERGY'S PROPOSED ALLOCATION METHODOLOGIES FOR PRODUCTION COST IN THIS CASE? WELL, YOU KNOW, WE HAVE A DIVISION OF LABOR, UM, AND, UH, LUCK OF THE DRAW.
I GOT, GOT ASSIGNED TO THE, UH, REVENUE DISTRIBUTION AND RATE DESIGN AND, UH, BILL AND PACKS SECTIONS.
AND, UM, THE COST ALLOCATION WAS A NEW AGENDA IS GOING TO SUPPORT THE COST ALLOCATION IN THIS CASE, IT'S JUST DIVISION OF LABOR INTERNALLY.
UH, DID YOU HAVE INPUT INTO NEW GENES, ALLOCATION METHODOLOGIES IN THIS CASE? I THINK I'M GOING TO STICK WITH MY STATEMENT THAT I DO NOT SUPPORT THE CUT.
THE I'M NOT THE WITNESS WHO SUPPORTS THE COST ALLOCATION TREATMENTS.
WE HAVE INTERNAL DISCUSSIONS THAT I'LL SEND ENERGY, UM, ABOUT VARIOUS ASPECTS OF THE CASE.
DO YOU STILL BELIEVE THAT A AND E FOR CP IS THE PROPER ALLOCATION METHODOLOGY FOR PRODUCTION CAPACITY COSTS FOR VERTICALLY INTEGRATED UTILITIES IN TEXAS? AT THE TIME THAT I FILED THIS TESTIMONY, I AGREED THAT IT WAS A, A REASONABLE METHODOLOGY FOR EL PASO ELECTRIC COMPANY.
AND ALSO, AS YOU POINTED OUT FOR THE, THE THREE OTHER NONNARCOTIC VERTICALLY INTEGRATED UTILITIES, RIGHT.
I DON'T THINK I SAY THAT HERE, WHAT I SAY IN THIS Q AND A IS THAT EL PASO'S PROPOSAL IS CONSISTENT WITH THE COMMISSION'S DECISIONS AND THOSE FULLY LITIGATED DOCKETS, WHICH ISN'T REALLY THE SAME THING.
BUT MR. MURPHY, IF YOU RECALL, YOU'VE SUPPORTED A AND FOR CP FOR PRODUCTION CAPACITY, COST ALLOCATION IN MULTIPLE CASES AT THE TEXAS PUC, DIDN'T YOU, I REMEMBER TESTIFYING ABOUT THAT IN 4, 3, 6, 9, 5 AT THE JURISDICTIONAL LEVEL, WHICH OF COURSE IS DIFFERENT FROM THE CLASS LEVEL.
I DON'T REMEMBER IF THERE WAS A DISPUTE IN THE CLASS COST ALLOCATION, BUT I DO REMEMBER SUPPORTING THE USE OF, UH, OF THAT METHODOLOGY FOR THE JURISDICTIONAL SPLIT OF THE COSTS.
UM, HAVE YOU CHANGED YOUR OPINION, SIR? ABOUT WHETHER A FOR CP WOULD BE THE PROPER ALLOCATION METHODOLOGY FOR, FOR EXAMPLE, EL PASO ELECTRIC, SINCE 2015, I DON'T HAVE ANY OPINION AT THIS TIME ABOUT THAT.
UM, I'M GOING TO SWITCH, UH, AND I BELIEVE TO TAKE MR. MURPHY'S SUGGESTION.
THESE NEXT QUESTIONS ARE PROBABLY FOR YOU, MR. BURNHAM, WOULD YOU AGREE WITH ME, SIR, THAT AUSTIN ENERGY MUST HAVE ENOUGH AVAILABLE CAPACITY TO COVER ITS LOAD IN ORDER TO PROTECT CUSTOMERS? I WOULD AGREE WITH THAT.
AND YOU WOULD AGREE THAT AUSTIN ENERGY DOES NOT WANT TO PLACE UNDUE RELIANCE ON BUYING POWER FROM THE MARKET AT TIMES OF SYSTEM PEAKS.
RIGHT? I WOULD ASK YOU TO DEFINE, DEFINE UNDUE RELIANCE.
WELL, LET ME ASK YOU THIS AUSTIN ENERGY WANTS TO BE ABLE TO PROVIDE SUFFICIENT CAPACITY TO COVER ITS OWN LOAD AT TIMES OF SYSTEM PEAK.
DO YOU AGREE WITH THAT? I WOULD AGREE WITH THAT.
AUSTIN ENERGY WOULD PREFER TO HAVE SYSTEM CAPACITY TO COVER ITS OWN PEAK AND IN EXCESS
[05:00:01]
OF ITS OWN PEAK.AND FAIR STATEMENT THAT AUSTIN ENERGY DOESN'T WANT TO BE SHORT ON CAPACITY TO SERVE ITS OWN LOAD.
RIGHT? YOU'D HAVE TO ASK AUSTIN ENERGY ABOUT THAT.
WELL, IN YOUR OPINION, SHOULD AUSTIN ENERGY HAVE SUFFICIENT CAPACITY TO SERVE ITS OWN LOAD? IN MY OPINION, UM, IF AUSTIN ENERGY HAS EXCESS CAPACITY, THEN THEY HAVE AN EFFECTIVE HEDGE IN THE MARKET, RIGHT? AND, AND TO HAVE THAT HEDGE, THEY HAVE TO HAVE ENOUGH CAPACITY TO BE AT LEAST EQUAL TO THEIR OWN LOAD, IF NOT EXCEED IT RIGHT.
THAT IS CORRECT EITHER IN A PHYSICAL FORM OR OTHER.
AND IF AUSTIN ENERGY DIDN'T HAVE ENOUGH CAPACITY TO SERVE ITS OWN LOAD AT A TIME OF SYSTEM PEAK, COULDN'T THAT CONTRIBUTE TO ERCOT AS A WHOLE BEING SHORT, THEY DIDN'T HAVE ENOUGH CAPACITY EITHER PHYSICALLY YOU'RE ASKING, OR ARE YOU ASKING IT IF THEY WEREN'T, IF THEY WEREN'T ABLE TO MEET THEIR OWN LOAD AND THEY WERE RELYING ON ERCOT PURCHASES, YOU'RE ASKING ME IF THAT WOULD CAUSE ERCOT TO BE SHORT AT FOR THE ENTIRE SYSTEM.
NO, I'M ASKING IF IT COULD CONTRIBUTE TO IT.
IT DEPENDS ON THE CIRCUMSTANCES.
AND YOU AGREE WITH ME THAT AUSTIN ENERGY IS A SUMMER PEAKING UTILITY.
AND THAT'S ALSO TRUE OF ERCOT, RIGHT? THAT IS CORRECT.
SO IT'S A FAIR STATEMENT THEN THAT AUSTIN ENERGY NEEDS TO ENSURE THAT AS SUFFICIENT CAPACITY TO MEET ITS SUMMER PEAK OR ELSE IT WILL BE EXPOSED TO THE MARKET DURING THE TIME OF THE PEAK.
AND IF AUSTIN ENERGY LET'S SAY HAS SUFFICIENT DEMAND TO MEET ITS SINGLE PEAK DEMAND FOR THE YEAR, THAT WOULD ALSO MEAN THAT IT HAS SUFFICIENT DEMAND TO MEET ITS PEAK IN OTHER MONTHS.
ASSUMING THE OTHER MEAT OTHER MONTHS WHERE YES.
LOWER THAN THE, THAN THAT ONE PEAK.
AND YOU PROPOSE HOWEVER, A 12 CP ALLOCATION METHOD FOR PRODUCTION COST, RIGHT? THAT IS CORRECT.
AND THAT ASSUMES THAT AUSTIN ENERGY'S PRODUCTION DEMAND COSTS ARE CAUSED EQUALLY BY EVERY MONTH OF THE YEAR.
THAT ASSUMES THAT THEY HAVE THE, UH, THE ABILITY TO DISPATCH, UH, AT ANY MONTH IN THE YEAR, UM, IN EXCESS OF PEAK.
WELL, AND IT ALSO ASSUMES THAT THE COSTS ARE CAUSED EQUALLY BY THE NEED TO MEET PEAK DEMAND EQUALLY IN EVERY SINGLE MONTH THE COST TO, TO DEVELOP THE CAPACITY IS WHAT YOU'RE SAYING.
OR MAYBE THE RE LET ME REPHRASE THAT.
ARE YOU, ARE YOU ASKING THAT THE COST TO, TO MEET THAT CAPACITY IS, UH, TO MEET THE PEAK CAPACITY? WELL, LET ME ASK IT THIS WAY.
UH, UH, 12 CP ALLOCATION ASSUMES THAT AUSTIN ENERGY'S PRODUCTION DEMAND COSTS ARE DRIVEN EQUALLY BY CONDITIONS IN ALL 12 MONTHS.
I COULD, I COULD LET ME THINK ABOUT THAT.
THE PRODUCTION DEMAND COSTS, THE INVESTMENT COSTS ARE OUR ONE-TIME COST, RIGHT.
OR I MEAN, AND ONGOING ONM COSTS, OBVIOUSLY.
SO I'M, I'M HAVING A TROUBLE SORT OF CLAIRE, UH, UNDERSTANDING WHAT YOU'RE ASKING RELATIVE TO, ARE YOU ASKING ABOUT WHEN THOSE COSTS ARE INCURRED? WELL, DO YOU BELIEVE THAT AUSTIN ENERGY'S PRODUCTION DEMAND COSTS SHOULD BE ALLOCATED BASED ON COST CAUSATION? I BELIEVE THEY SHOULD BE ALLOCATED BOTH ON COST CAUSATION AND THE BENEFITS THAT THEY PROVIDE.
SO YOU, YOU WOULD NOT ACCEPT IN ISOLATION, THE STATEMENT THAT AUSTIN ENERGY'S PRODUCTION DEMAND COSTS SHOULD BE ALLOCATED BASED ON COST CAUSATION, NOT IN ISOLATION.
UM, WELL, WITH RESPECT TO THE BENEFITS YOU'RE REFERRING TO THE HEDGING BENEFIT WE SPOKE ABOUT EARLIER, IS THAT RIGHT? THAT IS CORRECT.
AND MARKET PRICES TEND TO BE HIGHEST AT TIMES OF PEAK DEMAND, RIGHT? THAT IS CORRECT.
AND THAT ALSO IS THE TIME WHEN AUSTIN ENERGY TENDS TO BE PUTTING THE MOST LOAD ON THE SYSTEM.
SO IT'S KIND OF A DOUBLE WHAMMY IN THAT YOU'RE PAYING THE HIGHEST PRICE AND YOU'RE BUYING THE MOST CAPACITY AT THE SAME TIME.
YOU'RE, YOU'VE INVESTED IN THE MOST CAPACITY IS ADDRESSING, WELL, LET'S SAY YOU'RE SHORT.
IF YOU'RE SHORT AT A TIME OF PEAK, IT'S SORT OF A DOUBLE WHAMMY IN THAT YOU'RE PAYING THE HIGHEST MARKET PRICE BECAUSE IT'S A PEAK TIME.
AND ALSO YOU'RE BUYING THE MOST ELECTRICITY THAT
[05:05:01]
MORE THAN YOU USUALLY WOULD BECAUSE IT'S A PEAK TIME.YEAH, I WOULD, I WOULD AGREE WITH THAT.
NOW AUSTIN ENERGY USED TO ALLOCATE PRODUCTION COSTS BASED ON AVERAGE AND EXCESS FOR CP RIGHT.
AND AS I WENT OVER WITH MR. MURPHY, THAT'S ALSO HOW ALL OF THE VERTICALLY INTEGRATED UTILITIES OUTSIDE OF OUR COT IN TEXAS DO THAT.
UM, AND YOU PROPOSE THE CHANGE TO THIS ERCOT 12 CP METHODOLOGY IN THE 2016 RATE REVIEW.
IS THAT CORRECT? I DID NOT PROPOSE THAT CHANGE.
WELL, DID AUSTIN ENERGY, DID AUSTIN ENERGY MADE THAT CHANGE IN 2016? THAT IS CORRECT.
WELL, AND THAT CASE ENDED IN A SETTLEMENT, RIGHT? I BELIEVE THAT IS CORRECT.
I WAS NOT AWARE I WAS NOT INVOLVED WITH THAT RATE CASE.
SO YOU DON'T KNOW WHETHER IT SETTLED ON A BLACK BOX BASIS? I'M NOT AWARE.
AND, AND IF I UNDERSTAND CORRECTLY, THE RATIONALE FOR CHANGING TO THIS ERCOT 12 CP METHOD WAS THE, THE, THE FACT THAT ERCOT TRANSITIONED TO A NODAL MARKET IN 2010.
IS THAT YOUR UNDERSTANDING? THAT IS MY UNDERSTANDING, YES.
AND WILL YOU TURN WITH ME TO TIBC EXHIBIT 11, UM, THERE, AND YOU RECOGNIZE THIS, SIR, AS A, A EXCERPT FROM THE IMPARTIAL HEARING EXAMINERS REPORT FROM THE 2016 CASE.
AND IF YOU GO TO A PAGE 1 49 IN THE CENTER OF THE BOTTOM OF THE PAGE, WHICH IS THE SECOND PAGE IN THE EXHIBIT, I BELIEVE YOU'LL SEE, UM, THE SECTION ON ALLOCATION OF PRODUCTION COSTS.
AND THE FIRST SENTENCE IS TODAY, HE PROPOSES, ALLOCATING HIS PRODUCTION COSTS ON THE BASIS OF THE 12 CP ALLOCATION METHODOLOGY.
AND THEN IF YOU'LL GO WITH ME TO PAGE ONE 50, THE NEXT PAGE OVER, AND THE FIRST SENTENCE OF THE FULL, THE FIRST PAIR OF FIRST FULL PARAGRAPH IS AA DRAWS A DISTINCTION BETWEEN THE ERCOT MARKET AND FULLY REGULATED MARKETS IN WHICH TRADITIONAL, VERTICALLY INTEGRATED UTILITIES OPERATE.
AND THEN THE NEXT SENTENCE IS A, HE CONTENDS THAT UNLIKE A E VERTICALLY INTEGRATED UTILITIES ARE NOT SUBJECT TO WHOLESALE MARKET FORCES IN WHICH GENERATION COMPANIES MUST COMPETE BASED ON ECONOMIC AND FISH EFFICIENCY IN ORDER TO HAVE THEIR UNITS RUN.
SO THAT STATEMENT IS INCORRECT AS IT APPLIES TO SPS SWEPCO AND ENTERGY, TEXAS, ISN'T IT? ARE WE GOOD? I WAS SAYING MR. HALLMARK'S REFERRING TO THE LANGUAGE IN THE IMPARTIAL HEARINGS EXAMINERS REPORT FROM 2016.
AND HE'S ASKING HIM ABOUT THE MANNER IN WHICH THE IHG CHARACTERIZED AES CASE IN THAT PROCEEDING.
I'M NOT SURE THIS WITNESS ISN'T REALLY IN A POSITION TO KNOW WHETHER THE IHG HAS, HAS, UM, HAS FRAMED THAT PROPERLY.
UH, YOU KNOW, WHETHER HE HAS ACCURATELY REFLECTED WHAT AES POSITION WAS IN THAT CASE.
IF HE WANTS TO ASK HIM ABOUT THAT, PERHAPS HE COULD DO SO, BUT YOUR HONOR, YEAH.
UH, AUSTIN ENERGY HAS RELIED IN PART ON THIS, UH, HEARING EXAMINERS REPORT FROM THE LAST CASE TO JUSTIFY THEIR CHANGE IN ALLOCATION METHODOLOGIES.
I OUGHT TO BE ABLE TO ASK THE WITNESS ABOUT THIS REPORT.
DO YOU NEED ME TO REPEAT THE QUESTION, SIR? CAN YOU PLEASE, THE SECOND SENTENCE OF THAT PARAGRAPH, WE WERE GOING OVER, UH, IT'S INCORRECT AS IT APPLIES TO ENTERGY, TEXAS SPS.
IN WHAT WAY? WELL, UH, ENERGY, TEXAS, FOR EXAMPLE, UH, DOES PARTICIPATE IN A NODAL MARKET, RIGHT? ENTERGY CHECKS IS IN MISO, I BELIEVE.
OR DID YOU SAY THEY'RE IN SPP? I CAN'T RECALL.
DO YOU KNOW WHAT MARKET THEY'RE IN?
[05:10:01]
I, AGAIN, THAT, I THINK THEY'RE IN MY, SO I DON'T KNOW IF MISO IS NODAL OR NOT.WELL, DO YOU KNOW WHETHER ENTERGY, TEXAS, UH, W STRIKE THAT? DO YOU KNOW WHETHER MISO DISPATCHES ENERGY, TEXAS WITH PLANTS BASED ON ECONOMIC MERIT IN THE MISO MARKET? I DO NOT KNOW HOW MY SOUL DISPATCHES INTRODUCED PLANTS.
DO YOU KNOW HOW SPP DISPATCHES PLANTS? I DO NOT KNOW HOW SPP AND DISPATCHES PLANTS.
SO YOU DON'T KNOW WHETHER THE FACT THAT AUSTIN ENERGY PARTICIPATES IN THE NODAL ERCOT MARKET IS ACTUALLY SOMETHING THAT DISTINGUISHES THEM FROM THE TYPE OF MARKET THAT THE OTHER VERTICALLY INTEGRATED UTILITIES IN TEXAS PARTICIPATE IN.
I KNOW THAT THAT THE WAY THAT THEY ARE DISPATCHED IN ERCOT SUPPORTS THE 12 CP METHODOLOGY THAT WE'RE PROPOSING IN YOUR OPINION, IN MY OPINION, THAT IS CORRECT.
YOU DON'T KNOW WHETHER THAT WOULD ALSO BE TRUE FOR ENTERGY, TEXAS SPS AND SWEPCO.
LET'S TURN TO TIBC EXHIBIT 12, UM, THERE, AND DO YOU RECOGNIZE THIS AS AN EXCERPT OF JOSEPH MEN? PROBABLY MANSON ELLIE.
UH, TESTIMONY AND PUC DOCKET 4 6 0 2 4 0 6 2 7 4 AUSTIN ENERGY.
AND AS MR. MANOJ CELLIE MANSON, I APOLOGIZE.
IS HE A COLLEAGUE OF YOURS? HE IS.
AND AT NEW GEN, THAT IS CORRECT.
AND, AND IF WE TURN TO PAGE 39 AT THE BOTTOM, THE THIRD PAGE OF THE EXHIBIT, I'M THERE WE SEE AT THE FIRST Q AND A THAT AT THAT TIME, AUSTIN ENERGY WAS PROPOSING THAT ALL PRODUCTION DEMAND RELATED COSTS ASSOCIATED WITH GENERATION RESOURCES WERE ALLOCATED EACH CUSTOMER CLASS USING THE A AND D FOR CP ALLOCATION METHOD, RIGHT? YES.
I BELIEVE THAT'S CORRECT, BECAUSE THIS WAS A, A, A CASE BEFORE THE, THE SWITCH IN THE LAST CASE, RIGHT.
LET'S GO TO TIBC EXHIBIT 13, I'M THERE.
AND DO YOU RECOGNIZE THIS AS A EXCERPT OF MR. MANSON ELLIE'S REBUTTAL TESTIMONY IN THAT SAME PROCEEDING? THAT'S WHAT IT SAYS.
AND I'D LIKE TO ASK YOU TO TURN TO PAGE 24 AT THE BOTTOM OF THE EXHIBIT BOTTOM CENTER, I'M THERE.
AND DO YOU SEE THE QUESTION OPC ARGUES THAT THE CLASS CONTRIBUTION TO THE ERCOT FOR CPA SHOULD BE USED INSTEAD OF THE AEA SYSTEM FOR CP? DO YOU AGREE WITH THIS RECOMMENDATION? I SEE THE QUESTION.
I'M GOING TO TAKE YOU DOWN TO LINE 21.
AND THERE'S A STATEMENT THERE THAT SAYS, HOWEVER, IN THE CASE OF PRODUCTION FIXED COSTS, THESE COSTS HAVE HISTORICALLY HAVE BEEN HISTORICALLY ENCOURAGED TO SAY, SERVE A EASE LOAD WITH THE PRIMARY CONCERN OF MEETING A E'S PEAK DEMAND.
AND YOU SEE THAT? I SAY THAT, BUT THEN THE NEXT SENTENCE SAYS, EVEN UNDER THE CURRENT ERCOT NODAL MARKET, A EAST GENERATION FLEET ACTS AS A HEDGE AGAINST FLUCTUATIONS IN THE MARKET PRICE.
AUSTIN ENERGY'S EXPOSURE TO MARKET PRICES IS DIRECTLY RELATED TO PURCHASING POWER FROM THE MARKET TO SERVE NATIVE LOAD.
THEREFORE, AEA SYSTEM LOAD IS THE PRIMARY DRIVER OF COSTS TO PRESERVE THE RELATIONSHIP BETWEEN COST CAUSATION AND COST ALLOCATION.
THE AEA SYSTEM PEAK EXPRESSED AS THE FOUR CP MUST BE USED.
DID I READ THAT CORRECTLY? YOU DID.
SO MR. MANSON, ELLIE, IN THIS CASE AT LEAST THOUGHT THAT A FOUR CP METHOD WAS APPROPRIATE EVEN IN THE ERCOT MODE NODAL MARKET, THAT APPEARS TO BE HIS OPINION.
DO YOU KNOW WHY MR. MANSON, ELLIE IS NOT TESTIFYING IN THIS CASE? I DO NOT.
UM, BY THE WAY, THIS RATE CASE THAT, AND I THINK YOU MENTIONED IT EARLIER WAS FILED AND, OR RATE REVIEW WAS FILED IN 2012 ORIGINALLY, RIGHT? THAT'S MY UNDERSTANDING.
BUT BASED ON A, I THINK IT WAS A 2009 TEST YEAR.
IS THAT YOUR UNDERSTANDING? THAT IS MY UNDERSTANDING.
SO THE TEST YEAR WAS BEFORE THE NODAL MARKET, RIGHT? YES.
[05:15:01]
BUT WOULDN'T THE IMPOSITION OF A TOTAL MARKET IN ERCOT BE A KNOWN AND MEASURABLE CHANGE.YOU'D HAVE TO ASK THE ORIGINATORS OF THE RATE CASE.
UH, WANT TO CHANGE GEARS? LET'S TALK ABOUT DISTRIBUTION DEMAND COSTS FOR A MOMENT, AUSTIN ENERGY PROPOSES TO ALLOCATE DISTRIBUTION DEMAND COSTS BASED ON A 12 NCP METHOD.
SO THAT IS EACH CLASSES, NON COINCIDENT PEAK IN EACH OF THE 12 MONTHS, RIGHT.
THAT IS THE AVERAGE OF THAT NUMBER.
SO IT'S A FAIR STATEMENT THAT MOST OF THE TIME, THE AVERAGE OF 12 MONTHS, NON COINCIDENT PEAK FOR A CLASS, IT'S GOING TO BE LOWER THAN THE SINGLE HIGHEST NCP FOR THAT CLASS.
RIGHT? PRESUMABLY, BUT THE DISTRIBUTION SYSTEM HAS TO BE BUILT TO WITHSTAND ITS PEAK USAGE, RIGHT? THAT IS CORRECT.
NOT SOME LOWER AMOUNT THAN ITS PEAK USAGE.
THAT IS, THAT IS HOW IT WAS DESIGNED.
AND IF IT ISN'T BUILT TO ACCOMMODATE ITS PEAK USAGE, IT WILL FAIL AND WE WILL HAVE OUTAGES.
IS THAT FAIR? PRESUMABLY IT NEEDS TO BE DESIGNED TO MEET THE PEAK USAGE.
UM, I'M GOING TO SWITCH GEARS AGAIN.
DO YOU AGREE THAT UNDER PRINCIPLES OF COST CAUSATION COSTS THAT CAN BE DIRECTLY ATTRIBUTED TO A SINGLE CUSTOMER OR CLASS SHOULD BE DIRECTLY ASSIGNED TO THAT CUSTOMER OR CLASS IF, IF FEASIBLE? UM, AND GENERALLY, YES.
NOW AUSTIN ENERGY DOESN'T RECOGNIZE ANY PRIMARY SUBSTATION CUSTOMERS AND IT'S COST OF SERVICE STUDY.
I WANT TO ASK YOU A HYPOTHETICAL, LET'S ASSUME THAT A LARGE INDUSTRIAL CUSTOMER SEEDS, A PORTION OF ITS PROPERTY TO A UTILITY TO BUILD A SUBSTATION ADJACENT TO THE CUSTOMER'S FACTORY.
ARE YOU WITH ME SO FAR? I'M WITH YOU SO FAR, THERE'S A DISTRIBUTION FEEDER LINE THAT GOES DIRECTLY FROM THE SUBSTATION TO THE POINT OF INTERCONNECTION WITH THE CUSTOMER.
STILL WITH ME, I'M WITH YOU SO FAR.
THE FEEDER SERVES NO OTHER CUSTOMERS AND THE CUSTOMER TAKES POWER FROM OTHER SOURCES STILL WITH ME.
SO THERE'S A DIRECT CONNECTION INTO THE SUBSTATION WHO OWNS THAT DIRECT CONNECTION.
WELL, LET'S SAY THAT THE UTILITY OWNS IT.
AND BY YOU'RE REFERRING TO THE FEEDER LINE, RIGHT? YES.
SO LET'S SAY THE UTILITY OWNS IT, ISN'T IT TRUE THAT IN THIS HYPOTHETICAL, THAT CUSTOMER USES THE DISTRIBUTION SYSTEM DIFFERENTLY THAN RESIDENTIAL CUSTOMERS OR HOOKED UP TO A DISTRIBUTION NETWORK? PRESUMABLY IT'S DID YOU SAY WHAT, WHAT LEVEL OF SERVICE THIS CUSTOMER IS TAKING PRIMARY? YEAH.
IF IT'S USING PRIMARY, THEN YES.
IT'S USING IT SEPARATELY THAN THE WAY A RESIDENTIAL CUSTOMER WOULD BE USING THE SYSTEM.
AND WOULDN'T IT BE APPROPRIATE FOR THAT TO BE REFLECTED AND COST ALLOCATION, SIR.
AND GENERALLY IT IS BETWEEN A PRIMARY AND SECONDARY.
THERE'S USUALLY A COST DIFFERENTIATION RECOGNIZING THE FACT THAT CUSTOMERS THAT TAKE PRIMARY GENERALLY DON'T HAVE TO PAY FOR THE SECONDARY SYSTEM.
BUT THE CUSTOMERS THAT TAKE PRIMARY DO PAY FOR PARTS OF THE DISTRIBUTION NETWORK, THOSE FERC ACCOUNTS, THE PRIMARY PORTIONS OF THE DISTRIBUTION NETWORK THAT IS CORRECT.
THAT ARE LOOPED THAT ARE, THAT ARE LOOPED AT, OR, OR GENERALLY, OR, OR, OR EVEN NETWORK.
BUT THIS CUSTOMER DOES NOT ONLY TAKES FROM THIS ONE FEEDER LINE RIGHT.
IN YOUR HYPOTHETICAL SITUATION.
AND SO WOULDN'T THAT DIFFERENTIATE THEM FROM OTHER PRIMARY CUSTOMERS WHO TAKE FROM THE DISTRIBUTION NETWORK, THEY WOULD, UM, CERTAINLY THEY THEY'RE TAKING SERVICE.
THEY'RE STILL TAKING PRIMARY SERVICE.
SO THEY'RE STILL USING THE PRIMARY SYSTEM.
IN MY OPINION, THEY WOULD BE RESPONSIBLE FOR PAYING FOR THE PRIMARY SYSTEM.
EVEN THOUGH THE ONLY PART OF THAT SYSTEM THEY'RE USING IS THIS FEEDER LINE.
IT'S STILL PART OF THE PRIMARY SYSTEM.
WELL, SHOULD THE FEEDER LINE BE DIRECTLY ASSIGNED TO THAT CUSTOMER? THAT WOULD BE A POLICY DECISION.
I WOULD THINK IF THAT HAPPENED, WOULD IT THEN BE APPROPRIATE TO TREAT THAT CUSTOMER DIFFERENTLY THAN PRIMARY CUSTOMERS THAT USE THE DISTRIBUTION NETWORK? IF IT WAS DECIDED THAT THIS ONE CUSTOMER SHOULD ONLY PAY FOR THAT, THAT ONE LINE YOU'RE ASKING, SHOULD THEY BE TREATED DIFFERENTLY? I'M SAYING IF THAT CUSTOMER HAD THAT LINE DIRECTLY ASSIGNED TO THEM DIRECTLY ASSIGNED TO THEM AND THEY WERE RESPONSIBLE FOR THE COST, THE MAINTENANCE, THE CAPITAL COSTS OF THAT LINE,
[05:20:01]
THEN THEY SHOULD BE TREATED DIFFERENTLY.THAT'S YOUR, THAT'S YOUR QUESTION? YES.
THEN, THEN YES, THEY SHOULD BE TREATED DIFFERENTLY.
AND WOULD YOUR ANSWER BE THE SAME IF THE CUSTOMER OWNED THE FEEDER LINE, THEY OWN THE FEEDER LINE AND WE'RE RESPONSIBLE FOR THE MAINTENANCE, THEN THEY, THEN, THEN THAT IS A COST DIFFERENTIATION.
DO YOU BELIEVE THAT THE CUSTOMER, A HYPOTHETICAL CUSTOMER, LIKE THIS SHOULD HAVE THE RIGHT TO PURCHASE THAT LINE? THAT'S A POLICY QUESTION.
THANK YOU, MR. HALLMARK, CAN WE JUST A SECOND PLEASE? OKAY.
COFFIN FIRST, MAYBE THE MICROPHONE IS, I DON'T THINK THESE WERE DESIGNED FOR RAY HEARINGS.
UM, I'M NOT SURE WHO, UM, ANYONE CAN ANSWER THIS QUESTION, BUT ISN'T, UM, ISN'T IT FAIR TO SAY THAT WE, UH, HAVE IN THIS CASE, UH, FOUR DIFFERENT COSTS COMPETING COST STUDIES IS THAT FOUR DIFFERENT PROPOSALS AS TO HOW TO, UM, ALLOCATE COSTS, COST STUDIES OR METHODOLOGY METHODOLOGICAL DIFFERENCES.
I DON'T KNOW, COST STUDY RECOMMENDATIONS, CONSTANTLY PARTIES THAT HAVE FILED THEIR OWN NUMBERS BASED ON HAVING DONE THEIR OWN COST STUDY.
YEAH, I THINK, I THINK THAT'S TRUE THERE, INCLUDING AUSTIN ENERGY.
AND, UM, AND EACH OF THOSE STUDIES IS BASED ON PROFESSIONAL EXPERT JUDGMENT TO SOME DEGREE, CORRECT? I HOPE SO.
AND SO JUST TO BE CLEAR, WHENEVER YOU ARE, OR ANY OTHER WITNESS, UH, STATES THAT SOMETHING IS MOVING AWAY FROM COST IT'S FROM THEIR OWN PERSPECTIVE AND THE STUDY THAT THEY BELIEVE IS THE, IS THE MOST REASONABLE CORRECT? WELL, MOVING AWAY FROM CAUSE CAN MEAN DIFFERENT THINGS IN DIFFERENT PHASES OF RAINMAKING IN COST ALEC AND THE COST ALLOCATION PHASE MOVEMENT AWAY FROM COST.
FROM THE POINT OF VIEW OF THE PERSON WHO'S MAKING THAT CLAIM, THERE WOULD BE, UH, AN ASSERTION THAT SOMEONE ELSE'S METHODOLOGY IS INCORRECT BECAUSE IT'S SHIFTING COSTS AWAY FROM WHERE THEY SHOULD BE.
BUT IN OTHER CONTEXTS IT WOULD HAVE, UH, A DIFFERENT RIGHT.
UM, THE QUESTION I'M ASKING IS, UM, THERE IS AN EYE OF THE BEHOLDER ISSUE HERE, RIGHT? TO SOME PEOPLE MOVING TO COSTS IN THE ALLOCATION TO ONE CLASS OR ANOTHER IS, IS MOVING CLOSER TO COST FOR A DIFFERENT STUDY.
IS THAT FAIR THERE'S DIFFERENCES OF OPINION AS TO THE PROPER COST ALLOCATION METHODOLOGIES, AND THOSE HAVE A MEANINGFUL IMPACT ON THE MEASUREMENT OF CLASS COST OF SERVICE THAT YOU'RE GOING TO GET IN YOUR COST STUDY.
UM, I'M GOING TO ASK A COUPLE OF QUESTIONS ABOUT, UM, AN EXHIBIT AND I DON'T KNOW IF YOU HAVE THE ICA EXHIBIT, SO I'M JUST GOING TO GIVE YOU, I'LL GIVE YOU A COUPLE OF COPIES.
I SEE A SEVEN ICA SEVEN IS THE, UH, AUSTIN ENERGY RESPONSE TO ICA REQUEST FOR INFORMATION FOR DAYS 11.
AND I BELIEVE THIS WAS SPONSORED BY BRIAN MURPHY.
SO TO YOU, MR. MURPHY, UM, IN THIS RESPONSE, IT STATES THAT, UM, IF A CUT, UH, IN ANSWER TO THE QUESTION, IF A CUSTOMER LEAVES THE SYSTEM AND IS NOT REPLACED BY A NEW CUSTOMER AT THE SAME LOCATION, AUSTIN ENERGY ENCOURAGE NO CHANGE TO THE CUSTOMER RELATED COSTS.
THE ANSWER SAYS THAT THEY, AUSTIN ENERGY WERE INCUR NO COST CUSTOMER RELATED COSTS CHANGE IN THE SHORT RUN, BUT WOULD IN THE LONG RUN, IS THAT A FAIR SUMMARY OF THE STATEMENT I MIGHT QUIBBLE WITH THE WAY THAT YOU, I DON'T THINK YOU PHRASED THE QUESTION CORRECTLY, IT ASKED AUSTIN ENERGY TO
[05:25:01]
PLEASE IDENTIFY ANY CUSTOMER RELATED COSTS, WHICH WOULD CEASE TO BE INCURRED TO SERVE, UH, THE CUSTOMER.AND, AND THEN I, I AGREE WITH YOUR PARAPHRASING OF THE RESPONSE.
AND YOU, YOU LIST SEVERAL CUSTOMER RELATED COSTS THAT WOULD CEASE TO BE INCURRED IN THE LONG RUN.
IF A NEW CUSTOMER IS NOT BEGIN SERVICE AT THE LOCATION, CORRECT.
AND WE LEFT OFF THE COST OF THE METER AS WELL.
I, THAT WAS, THAT WAS ONE OF MY QUESTIONS THAT, AND IN ADDITION TO THAT, YOU LIST CUSTOMER ACCOUNTING, CUSTOMER SERVICE, METER READING UNCOLLECTABLE EXPENSE AND KEY ACCOUNTS EXPENSE, CORRECT.
AND AS TO REGARD WITH REGARD TO UNCOLLECTABLE EXPENSE, HOW DOES AUSTIN ENERGY CEASE TO INCUR UNCOLLECTIBLE EXPENSE? IF A CUSTOMER LEAVES THE SYSTEM AND IS NOT REPLACED BY A NEW CUSTOMER AT THAT PREMISE? WELL, THE CUSTOMER CAN'T FAIL TO PAY THE BILL IF THEY'RE NOT ON THE SYSTEM.
UM, BUT THERE WOULD BE LESS OPPORTUNITY FOR MORE UNCOLLECTABLE EXPENSE TO BE INCURRED.
WOULDN'T THAT, DOES THAT MAKE SENSE? IT'S A DOUBLE NEGATIVE, BUT IT'S, THERE WOULD BE LESS.
I THINK I GET WHAT YOU'RE TRYING TO SAY.
IF YOU, FEWER CUSTOMERS, THERE ARE FEWER THAT CAN FAIL TO PAY.
BUT IF THE CUSTOMER LEFT WITHOUT PAYING THEIR BILL, UM, THAT THAT AMOUNT WOULD STILL BE PENDING RIGHT.
TO, FOR THE, THE EXISTING CUSTOMER OR THE CUSTOMER WHO LEFT.
BUT THAT WOULD HAVE BEEN A GOOD QUESTION FOR MONICA GONZALES AND THE PRIOR PANEL.
UM, BUT UH, GENERALLY SPEAKING, YOU WOULD, UM, I THINK YOU QUIBBLED WITH ME A BIT, BUT AS THE ANSWER, TH THE, DOES THIS ANSWER INDICATE THAT CUSTOMER RELATED COSTS, UH, AT LEAST THESE PARTICULAR CUSTOMER RELATED COSTS VARY WITH THE NUMBER OF CUSTOMERS IN THE LONG RUN, IF NOT THE SHORT RUN THAT'S RIGHT.
I THINK THAT'S ALL I HAVE, UH, ALL THE QUESTIONS I HAVE.
THANK YOU, MR. MURPHY, AND THE REST OF THE PANEL.
UM, MR. BARNUM, WILL YOU TAKE A LOOK AGAIN AT TIC EXHIBIT 11? AND WOULD YOU TURN TO PAGE 1 66? I AM THERE.
AND WILL YOU LOOK AT THE BOTTOM OF THE PAGE, THE, UH, TEXTS THEY'RE WRITTEN IN BLUE, AND WILL YOU READ THAT? AND THEN THE NEXT TWO LINES AND THEN GOING ON TO THE NEXT PAGE, CERTAINLY IMPARTIAL HEARING EXAMINERS ANALYSIS AND RECOMMENDATION IS IN BLUE.
THE IHG AGREES WITH AA THAT PRODUCTION COSTS SHOULD BE ALLOCATED ON THE 12 CP ALLOCATION METHODOLOGY.
THE IHG CONCLUDES THAT NXP SLASH SAMSUNG AND D F SLASH ACC PROPOSAL PROPOSALS DO NOT GIVE SUFFICIENT WEIGHT TO THE FACT THAT CAMO WHILE HE IS A VERTICALLY INTEGRATED UTILITY COMMA.
IT OPERATES ON IN A MARKET WHERE THE PRODUCTION OF POWER COMMA THAT IS COMMA GENERATED.
AND WILL YOU CONTINUE AES PROPOSAL PROPOSED USE OF A 12 CP ALLOCATED FOR PRODUCTION COSTS MORE ACCURATELY REFLECTS THE EFFECT OF THE NODAL MARKETS IN ERCOT ON PRODUCTION COSTS.
AND WILL YOU, UM, GO ON AND READ THE NEXT PART.
LIKEWISE COMMA, THE IHE FINDS NXP SLASH SAMSUNGS AND DF SLASH ACC PROPOSAL TO USE THE A AND E FOR CPE METHODOLOGY METHODOLOGY WANTING IN THAT IT GIVES TOO LITTLE WEIGHT TO HOW THE NODAL MARKETS IN ERCOT OPERATE PERIOD CONTINUE.
UM, AND SO IT'S FROM THAT LANGUAGE, UH, WHAT DO YOU CONCLUDE? I CONCLUDE THAT THE IAG FOUND THAT THE 12 CPE ALLOCATOR METHODOLOGY IS APPROPRIATE FOR USE IN THAT RAPE CASE.
SO MR. HALLMARK ASKED YOU, UM,
[05:30:01]
QUITE A FEW ADDITIONAL QUESTIONS ABOUT, UH, PRODUCTION CAPACITY COSTS AND THE APPROPRIATE, UH, ALLOCATOR AND YOUR RECOMMENDATION IS TO USE THE 12 CP ALLOCATOR, AS OPPOSED TO THE A AND D FOR CPE ALLOCATOR.THAT'S PROPOSED BY T I, IS THAT RIGHT? THAT IS CORRECT.
CAN YOU JUST, UH, TELL US IN YOUR OWN WORDS, WHY YOU BELIEVE A 12 CPE ALLOCATOR IS MORE APPROPRIATE IN THIS MATTER, UH, THAT ARE
UM, IT PROVIDES A PHYSICAL AND, UM, FINANCIAL HEDGE, UM, AND IT PROVIDES THAT VALUE THROUGHOUT THE YEAR.
IT ALSO PROVIDES A, AN APPROPRIATE PRICING SIGNAL BY USING THE, THE ERCOT 12 CP TO, UH, TO INCORPORATE THAT PRICING SIGNAL INTO THE, THE RATES.
IT'S THE FACT THAT IT, UH, THERE WAS A HEDGE THROUGHOUT THE YEAR, SIGNIFICANT IN TERMS OF SELECTING 12 CP OVER FOUR CP.
AND WHY IS THAT? BECAUSE THERE'S UNCERTAINTY AND MARKET PRICES.
UM, CERTAINLY MARKET PRICES GO UP IN THE SUMMER, BUT THEY ALSO GO UP, UH, IN NON SUMMER MONTHS.
UM, YOU ALSO HAD A COUPLE OF QUESTIONS ABOUT, UM, FROM MR. HALLMARK ABOUT THE PRIMARY SUBSTATION, A RECOMMENDATION, AND HE GAVE YOU A HYPOTHETICAL IN YOUR OPINION, IS IT APPROPRIATE TO SET RATES BASED UPON A CUSTOMER'S GEOGRAPHICAL LOCATION? NO, IT IS.
IN MY OPINION, IT'S APPROPRIATE TO SET RATE ON A, ON A CLASS AVERAGE BASIS.
AND, UM, IF THE, IF A UTILITY OWNS THE SUBSTATION AND THE FEEDER AND THE CUSTOMER TAKES PRIMARY SERVICE, WHAT COSTS SHOULD BE ALLOCATED TO THAT CUSTOMER, THE SUBSTATION, AND THEN THE COST OF THE PRIMARY SYSTEM.
DOES THAT INCLUDE ANY, UM, DISTRIBUTION LEVEL COST, PRIMARY DISTRIBUTION LEVEL COSTS? YES.
PRO OBVIOUSLY A PRORATED TO THAT CLASS.
THOSE ARE ALL THE REDIRECT QUESTIONS THAT I HAVE HERE ON.
ANY ADDITIONAL CROSS? LET'S SEE.
JUST BRIEFLY, UM, MR. BURNHAM, YOU WERE ASKED SOME QUESTIONS ABOUT, UH, THE
DO YOU RECALL THAT? YES, I DO.
AND YOU WERE ASKED TO READ SECTIONS WHERE, UH, THE IAG CONCLUDED THAT PARTIES OPPOSING 12 CP IN THE LAST CASE GAVE INSUFFICIENT CONSIDERATION TO THE, THE DEREGULATED NATURE OF THE ERCOT MO NODAL MARKET, RIGHT? THAT WAS THE IATS OPINION.
AND, BUT IT'S TRUE THAT ENTERGY, TEXAS SPS, AND SWEPCO ALSO PARTICIPATE IN DEREGULATED WHOLESALE NODAL MARKETS.
ISN'T IT AGAIN, I'M NOT ENTIRELY SURE IF THOSE MARKETS ARE NOTABLE.
THERE ARE CERTAINLY WHOLESALE POWER MARKETS.
UH, YOU WERE ASKED SOME QUESTIONS ABOUT THE, UH, THE NATURE OF THE HEDGE AND IN ALL 12 MONTHS, UH, IN TERMS OF PRODUCTION, RIGHT.
BUT, UH, AS WE DISCUSSED, TEXAS IS A SUMMER PEAKING STATE, ISN'T IT? IT DOES IN THE SUMMER.
DO YOU KNOW HOW ERCOT ITSELF, UH, OR STRIKE THAT? DO YOU KNOW HOW ERCOT TRANSMISSION COSTS ARE ALLOCATED TO DISTRIBUTION SERVICE PROVIDERS? I BELIEVE THE PUC MANDATES A FOUR CP COST ALLOCATION METHOD.
UH, YOU WERE ASKED ABOUT GEOGRAPHIC RAINMAKING WITH RESPECT TO PRIMARY SUBSTATION, RIGHT? THAT'S CORRECT.
BUT SIR, ISN'T IT TRUE IN MY HYPOTHETICAL, THE DISTINGUISHING FACTOR WAS THE ASPECTS OF THE UTILITY SYSTEM THAT THE CUSTOMER USES AND DOESN'T USE.
YOUR HYPOTHETICAL WAS REGARDING A, A SINGLE CUSTOMER THAT OWNED, I BELIEVE AT ONE POINT DURING THE HYPOTHETICAL, YOU INDICATED THAT THEY WOULD OWN THE ENTIRE FEEDER BACK TO THE SUBSTATION.
IS THAT CORRECT? LET'S BACK UP.
MY ORIGINAL HYPOTHETICAL WAS WHERE THE CUSTOMER, THE UTILITY OWNS THE FEEDER.
SO, BUT MY HYPOTHETICAL IS FOCUSED ON THE CUSTOMER'S USE OF THE FACILITIES OF THE UTILITY, NOT ON WHERE THE CUSTOMER IS LOCATED.
YOU INDICATED THAT THAT CUSTOMER WOULD USE THE FEEDER, RIGHT.
AND THE SUBSTATION, THEY WERE BOTH OWNED BY THE UTILITY IN THE HYPOTHETICAL EPITHETICAL.
[05:35:01]
NO, NO.ANYTHING FROM AUSTIN ENERGY? NO, YOUR HONOR.
LET'S UH, GO OFF THE RECORD FOR A MINUTE.
UM, LET'S GO BACK ON THE RECORD.
UH, IT'S GOING TO BE VERY SHORT, YOUR HONOR.
AND, AND FELLOW PARTY MEMBERS.
I WANTED TO MAKE A CORRECTION THAT WAS BROUGHT OUT IN AN RFI, UH, DIRECTED TOWARDS ME FROM AUSTIN ENERGY.
IF WE LOOK AT, UH, YOU KNOW, TWO W R IS MY EXHIBIT AND THE, THE NUMBER, UH, I HAVE A COVER PAGE WITH THE TWR AND IT'S, IT'S GOT A PAGE NUMBER.
THAT WAS MY INTERPRETATION OF THE ORDER.
SO MY PAGE NUMBERS ARE LIKE ONE OFF FROM THE ACTUAL PAGE NUMBER OF THE EXHIBIT THAT I FILED THROUGH THE INTERCHANGE.
BUT IF WE LOOK AT MY EXHIBIT PAGE FIVE, BUT THE INTERCHANGE PAGE FOUR, I HAVE TWO CORRECTIONS.
UH, ONE IS ON THE SECOND LINE FROM THE TOP.
UH, THERE'S THE, THE TERM TEST YEAR 2021.
UH, LYNNETTA WHAT PAGE, IF YOU LOOK, IF YOU'VE GOT IT, IF YOU'VE GOT IT AS MY EXHIBIT WHERE I HAVE AN EXHIBIT COVER PAGE, YOU WOULD BE ONE PAGE PAST THE ORIGINAL PAGE NUMBER.
SO THERE'S TWO PAGE NUMBERS ON MINE, BUT IF YOU HAVE THE ORIGINAL ONE YOU PULLED FROM THE COMPUTER ON THE INTERCHANGE, YOU WOULD LOOK AT THE MIDDLE NUMBER AT THE BOTTOM OF THE PAGE.
AND THAT'S THE TYPEWRITTEN PAGE NUMBER? THIS IS A
PAGE FOUR, LINE TWO FROM THE TOP T Y SHOULD BE F Y YES.
AND THEN ON, AND IT'S ON THE, THIS VERY TOP PARAGRAPH STILL, BUT IF WE COUNT THE LINE NUMBERS FROM THAT FIRST PARAGRAPH FROM THE BOTTOM WOULD BE THE FOURTH LINE FROM THE, FROM THE BOTTOM OF THAT FIRST PARAGRAPH THAT STARTS THE SENTENCE IN THE MIDDLE OF THAT LINE SAYS, IN THIS CASE, AUSTIN ANNE-MARIE ENERGY ADDRESS, THE SUBSIDY ISSUE FOR PURPOSES OF CALCULATING THE TEST YEAR 2021.
IT SHOULD SAY BASE REVENUES, NOT NET REVENUES.
AND I WILL MAKE A PUBLIC PROCLAMATION THAT I'M SURE THAT THERE ARE A BUNCH OF GRAMMATICAL AND SPELLING ERRORS.
AND TO THAT EXTENT I OFFER MY SINCERE APOLOGIES, BUT I WILL SAY THAT I PROBABLY WILL NOT HAVE TIME TO MAKE ANY CORRECTIONS.
OUR GRAMMAR CHANGES THROUGHOUT THIS PROCESS AND GUTS.
THE TIME IS TOO SHORT AND THE DAYS ARE TOO LONG, AND I JUST HAVE LIMITED TIME.
SO I HAVE TO APOLOGIZE FOR THAT RIGHT NOW.
I JUST WANTED TO TAKE THIS TIME TO KIND OF HIGHLIGHT SOME OF, SOME OF THE CONCERNS THAT WE HAVE RAISED AND POINTED OUT IN OUR POSITION STATEMENT.
AND ONE OF THEM WAS TWO DIFFERENT SETS OF DATA THAT WERE USED IN THIS RATE CASE FOR TWO DIFFERENT REASONS.
ONE IS THE RAW DATA, THE FOR FISCAL FISCAL YEAR 2020 AND 2021.
AND IF I JUST TAKE A MOMENT TO BACK UP FOR A LITTLE BIT, A FISCAL YEAR IS NOTHING MORE THAN A CALENDAR YEAR, MOVED BACK A FEW MONTHS BECAUSE GOVERNMENT HAS A CALENDAR YEAR FROM OCTOBER 1ST TO SEPTEMBER 30TH, BUT JUST THINK OF IT AS LIKE A CALENDAR YEAR, BUT YOU JUST START WITH A DIFFERENT MONTH AND THAT'S FOR GOVERNMENTAL PURPOSES.
AND THAT'S WHAT A FISCAL YEAR IS A TEST YEAR.
AT LEAST FOR PURPOSES OF THIS RATE CASE IS THE SAME FISCAL YEAR, BUT THEY'VE INCORPORATED WHAT'S CALLED KNOWN AND MEASURABLE CHANGES.
[05:40:01]
AND WHAT THAT MEANS IS THE CLASSIC ONE IS EMPLOYEES GET A PAY INCREASE.WELL, THAT PAY INCREASE IS A KNOWN AND MEASURABLE CHANGE.
YOU KNOW, THE NEXT TEST, THE NEXT YEAR, WHEN THESE RATES TAKE EFFECT, THEY'RE GOING TO BE PAYING THEM A HIGHER SALARY.
SO YOU REFLECT THAT IN THE FISCAL YEAR.
SO YOU CAN GET AS CLOSE AS YOU CAN, TO WHAT COSTS ARE GOING TO BE INCURRED THE YEAR, THE RACE TAKE EFFECT.
SO THAT'S A KNOWN AND MEASURABLE CHANGE.
SO THAT'S WHAT THE TEST YEAR DOES.
THE TEST YEAR STARTS WITH THE FISCAL YEAR MAKES THE KNOWN AND MEASURABLE CHANGES.
AUSTIN ENERGY USED THE TEST YEAR FOR PURPOSES OF JUSTIFYING A RATE INCREASE FOR THE VARIOUS CUSTOMER CLASSES.
BUT WHEN IT CAME TIME TO PRICE OUT THE SERVICE, PARTICULARLY WITHIN THE RESIDENTIAL CLASS, THE ARGUMENTS THAT THEY RELIED UPON WAS FISCAL YEAR DATA AND FISCAL YEAR DATA IS TAINTED.
IT IS BECAUSE THE FISCAL YEAR STARTS WITH THE LAST MONTH OF CERTAIN PANDEMIC BENEFITS THAT AUSTIN ENERGY PROVIDED ITS CUSTOMERS.
NAMELY, IN THE EVENT OF RATE DISCOUNTS AND WAIVERS HAVE A MULTIPLE SETS OF FEES.
PLUS IF THAT WASN'T BAD ENOUGH, THE FIRST MONTH WE STARTED OFF WITH THE DEPRESSED REVENUE TO BE GATHERED, TO GO AGAINST THE COST.
WE ALL KNOW ABOUT WINTER STORM YURI, WHERE THERE WERE, I THINK, A HALF, A BILLION MINUTES OF, OF INTERRUPTED SERVICE IN WHICH NO KILOWATT HOUR WAS RE WAS REQUIRED, WAS NOT CHARGED TO THE CUSTOMERS.
SO THEY LOST AN AMAZING AMOUNT OF REVENUE.
AND WE THINK THEY ALSO INCURRED A LOT OF COSTS.
SO IN THIS FISCAL YEAR WITH THIS RAW DATA, IT IS CLEARLY TAINTED WITH THOSE KINDS OF COSTS.
PLUS, WE HAVE THE CONCERN, AUSTIN ENERGY HAS WHAT'S CALLED A NON UTILITY BUSINESS.
THAT MEANS YOU DON'T LOOK AT THIS FOR PURPOSES, SETTING RATES, IT'S A BUSINESS.
WE COULD EVEN CALL IT A FURNITURE STORE FOR ALL WE CARE.
WE'RE NOT TALKING ABOUT THE FURNITURE STORE HERE.
WE'RE TALKING ABOUT ELECTRIC RATES.
SO WE WANT TO MAKE SURE THAT ANY COSTS THAT AUSTIN ENERGY MIGHT'VE HAD FOR THIS FURNITURE STORE, UH, IS REMOVED FOR THE BASE RATES BECAUSE BASE RATE PLAYERS ARE NOT SUPPOSED TO PAY FOR FURNITURE FOR THE COST THAT THEY HAVE FOR THE FURNITURE.
AND THAT IS ANOTHER CONCERN THAT WE HAD.
SO SOME OF THE BIGGEST ARGUMENTS THEY HAVE IS THAT THEIR REVENUES ARE DRYING UP.
THEY DON'T EVEN HAVE, THEY'VE GOT A DRY RIVER BED.
THEY USED TO HAVE A BIG FAT RIVER LIKE THE RED RIVER, BUT NOW IT'S JUST A DRY RIVER BED.
AND WHAT WE'RE SAYING IS THAT'S NOT NECESSARILY TRUE BECAUSE WE HAD SOME EXTRAORDINARY CIRCUMSTANCES AND THE TEST HERE.
AND BECAUSE OF THAT, WE NEED TO LOOK VERY CAREFULLY AND WITH A LITTLE JADED FEELING IN TERMS OF WHAT ARE THE REAL COSTS THAT AUSTIN ENERGY IS GOING TO HAVE IN THIS TEST HERE? WAS IT THE REVENUE? WAS IT THE RATE DESIGN THAT CAUSED THIS PLUMMETING REVENUES IN 2020 OR 2021, OR WHERE THESE EXTRAORDINARY EVENTS THAT OCCURRED? UH, AND WE, WE STRONGLY THINK THAT THAT TAINTED TEST YEAR IS NOT A VERY GOOD INDICATOR TO JUSTIFY THE CHANGE IN THE RATE DESIGN.
ALSO, THE PANDEMIC HAS CREATED SOME ECONOMIC DOWNTURN, AND WE ALL KNOW THAT AN ECONOMIC DOWNTURN HOPEFULLY ALWAYS FOLLOWS AN ECONOMIC UPTURN.
WE DON'T KNOW IF I'M SURE 20, 22, WE PROBABLY ARE HAVING AN ECONOMIC UPTURN, BUT I THINK THAT WE WERE STILL IN THE PROCESS OF RECOVERING AND 2021.
AND SO THAT IN ITSELF HAS ANOTHER REASON.
SO THOSE ARE SOME OF OUR OVERARCHING CONCERNS ABOUT HOW WE SHOULD NOT BE MAKING SUCH HUGE CHANGES IN RATE DESIGN.
SINCE THAT'S ONE OF THE STRONGEST ARGUMENTS THAT AUSTIN HANNAH ENERGY HAS BROUGHT FORWARD.
IN ADDITION TO THE TRADITIONAL ADJUSTMENTS, WE HAD RECOMMENDED AND STILL RECOMMEND ADJUSTMENTS TO THE RATE CASE EXPENSE.
THAT'S, THAT'S ONE THAT I ADVOCATED LAST TIME, AND WE'RE ADVOCATING THIS TIME.
IT'S FIVE YEARS BETWEEN THE RATE CASES, AND YET THEY WANT TO RECOVER THE, THE RATE CASE EXPENSE OVER THREE YEARS.
AND THAT'S, THAT JUST MEANS WE'VE GOT TWO YEARS WHERE THERE, WHERE WE'RE PAYING FOR, FOR A RATE CASE EXPENSE.
THAT'S NO LONGER THERE THAT IT'S ALREADY BEEN PAID FOR THE THREE 11 CALL CENTER.
THERE ARE TWO ISSUES IN THE COST.
WELL, THERE'S THREE ISSUES IN THE CALL CENTER, TWO OF WHICH DEAL WITH THE AMOUNT THAT SHOULD BE ALLOCATED
[05:45:01]
AT ALL TO US AND ENERGY, THE THREE 11 CALL CENTER OR SOMETHING THAT IS SHARED BY ALL THE DEPARTMENTS.AND WHEN, I MEAN DEPARTMENTS, I MEAN THE POLICE WATER, THANKS.
AND THE ALLOCATION HAS CREATED.
THEY HAVE A SURCHARGE THAT AUSTIN ENERGY IS, IS CHARGED MORE THAN THEIR PERCENTAGE OF CALLS.
AND WE DON'T THINK THAT THAT IS A REASONABLE AND NECESSARY EXPENSE.
GIVEN ALL OF THE ABUNDANCE OF ALTERNATIVES THAT AUSTIN ENERGY HAS AVAILABLE TO IT CURRENTLY, INCLUDING THE EXPENSIVE, SMART METERS THAT WE PAID FOR, BECAUSE THAT'S WHAT THEY SAID THEY WOULD DO TO PROVIDE THE INFORMATION THAT A CALL CENTER WOULD GIVE.
AND THEN THE SECOND THING IS THE ALLOCATION OF THE THREE 11 CALL CENTER.
WE THINK THAT THAT ALLOCATION SHOULD BE BASED MORE ON REVENUES.
IT'S CLEARLY MORE OF A SOCIAL COST LIKE THE CAP AND THE STATE DISCOUNTS THAT ARE PROVIDED THE MILITARY, THE, THE SCHOOL DISTRICTS.
AND THERE'S, THERE'S A THIRD ONE, BUT THOSE ARE STATE.
THOSE ARE, THOSE ARE ACCOUNTS, THE MILITARY, AND THEY HAVE BEEN HISTORICALLY RECOVERED WITHIN THE CUSTOMER CLASS WHERE THAT BUSINESS HAS OPERATED.
LIKE, LET'S SAY THE STATE HAS AN OFFICE.
THAT'S KIND OF LIKE A SMALL BUSINESS.
IT'S BEEN IN THE SMALL BUSINESS CUSTOMER CLASSIFICATION.
AND THAT DISCOUNT THAT SUBSIDY HAS BEEN SPREAD THROUGHOUT THE SMALL CUSTOMER CLASS.
AND THIS RATE CASE AUSTIN, ENERGY'S WANTING TO TAKE THAT DISCOUNT FOR ALL OF THOSE AND SPREAD IT THROUGH ALL CUSTOMER CLASSES BECAUSE THEY SAY, AND THIS IS JUST LIKE THE THREE 11 AND EVEN THE BAD DEBT THAT IT'S IN TRUCK, CLASS SUBSIDY, OTHERWISE BECAUSE THE PEOPLE WHO PAY FOR THAT DISCOUNT JUST LIKE ALMOST ALL OF THE RESIDENTIAL CUSTOMERS, THEY DON'T PAY FOR THOSE EXPENSE.
AND SO IT SHOULD BE SPREAD MORE AS A CUSTOMER COSTS.
AND WE WOULD RECOMMEND IT BASED ON EITHER REVENUE REQUIREMENT OR REVENUE, JUST AVERAGE ENERGY ON THE RATE DESIGN.
WE THOROUGHLY DISAGREE, AND THIS WILL BE BROUGHT OUT MORE IN THE RATE CASE THAT THE CUSTOMER CHARGE, IT HAS BEEN GROSSLY OVERSTATED.
IT HAS GOT SO MANY COSTS PUMPED UP.
IF WE WERE ON THE HIGHWAY, THOSE TIRES WOULD BUST.
THEY JUST THEY'VE JUST PUT TOO MUCH AIR IN THOSE TIRES TO MAKE IT TO TOWN.
AND THE COST IS SUPPOSED TO CHANGE WHEN YOU, WHEN YOU COME ONTO THE SYSTEM OR LEAVE THE SYSTEM THAT IS HISTORICALLY AND TRADITIONALLY BEEN A CUSTOMER COST HAS ALWAYS BEEN ACCESS TO THE UTILITY SERVICE.
YOU PAY AT A BAR, YOU DON'T PAY FOR THE BAR OWNERS FEE.
YOU DON'T INCLUDE THE COST OF THE DRINKS.
YOU GIVE THEM WHAT THEY THINK THAT, THAT YOU CAN GET THEM INTO THE SYSTEM.
AND SINCE THIS IS AN ESSENTIAL GOOD, NOW IT IS AN IMPORTANT, GOOD.
IT QUALIFIES FOR THE HEALTH AND SAFETY OF PEOPLE.
THEN WE NEED TO KEEP THAT AS LOW AS POSSIBLE.
AND IT HISTORICALLY HAS ONLY BEEN WITH COSTS THAT DIRECTLY, I MEAN, DIRECTLY, VERY, THERE'S BEEN IN THE PAST SOME ATTEMPT TO INCLUDE SOME KIND OF FICTIONAL MINIMUM DISTRIBUTION SYSTEM, BUT EVEN THE PUC HAS DISAGREED WITH THAT BECAUSE THERE IS DIVERSITY IN THE RESIDENTIAL SYSTEM AND IT SHOULD REALLY ONLY BE DEALING WITH THE ACTUAL COST.
AND THE REST OF THIS STUFF I THINK IS, IS AS STATED IN MY BRIEF AS POORLY WRITTEN AS IT IS SPELLED.
AND I APOLOGIZE AGAIN FOR THAT, THE FAT IN YOUR HONOR, I'LL CLOSE AND THANK YOU FOR OUR TIME.
RIGHT? WELL, THANK YOU, MS. COOPER.
UM, I DID WANT TO ASK YOU IN THE, SO IN THE RECORD COPIES THAT WE HAVE BACK HERE BEHIND US IN OUR BOXES, IF I BRING YOUR POSITION STATEMENT OVER TO YOU, UH, DO YOU THINK YOU COULD MAKE THOSE EDITS DIRECTLY IN HERE? BECAUSE I WANT TO MAKE SURE THAT I GET THEM EXACTLY THE WAY THAT YOU HAD THEM.
AND I'LL DO IT AFTER WE BREAK.
AND THEN LET'S SEE ANY QUESTIONS FROM ANYONE FOR MS. COOPER.
NOW, UM, NEXT UP WE HAD DATA FOUNDRY HER F C CARE, WHOEVER IT IS THAT CAN, THAT HAS FOLKS READY TO GO OR PRESENTATION.
READY? CAN WE MOVE ON TO THAT? IT'S AT FIVE O'CLOCK NOW.
IF YOU WOULD LIKE, AND THIS IS TODD KIMBRO FOR DATA FOUNDRY, HAVE A BRIEF OPENING STATEMENT.
[05:50:01]
DO THAT.MAYBE WE'LL BREAK A LITTLE EARLY TODAY, BUT I WOULD LIKE TO HANDLE THAT NOW.
AND ACTUALLY IN APARTMENT, UH, MR. KIMBRO, BUT JUST SO I'M CLEAR TO HER PRESENTED A STATEMENT OF POSITION THAT WAS SIGNED BY MR. BOARD GAL, BUT HE REFERENCED SOME WITNESS OF SOME SORT.
I JUST WANT TO MAKE SURE I'M CLEAR ON WHAT TO EXPECT.
WHAT'S THE PLAN? WELL, I, UH, PROVIDED, UH, MR. MORGAN CV, ALTHOUGH I SIGNED THE STATEMENT OF POSITION, HE PREPARED THE RATES, A PIECE OF IT, THE RENT ANALYSIS PIECE OF IT.
AND I THOUGHT THAT IF PEOPLE HAD QUESTIONS ABOUT THAT, IT WOULD BE GOOD TO HAVE HIM HERE BECAUSE I CAN'T ANSWER ANY QUESTIONS ABOUT IT.
AND WE DISCUSSED THAT EARLIER.
ALL RIGHT, MR. KIMBRO, THANK YOU, YOUR HONOR.
UH, TODD KIMBRO ON BEHALF OF DATA FOUNDRY, OUR INTEREST IN THIS CASE ARE RATHER NARROW.
THEY, THEY SPECIFICALLY RELATE TO THE PRI TO, UM, HIGH LOAD FACTOR TARIFF, UM, THAT AUSTIN ENERGY ADDED TO THEIR RATE PACKAGE AND EARLY JUNE.
UM, OUR, OUR ASK IS RATHER SIMPLE, WHICH IS THAT IT BE APPROVED AND ADOPTED, UH, IT, IT APPEARS SO FAR THAT NO PARTY OPPOSES THE, THE PRI TO, UM, TARIFF AT LEAST AT A RATE DESIGN LEVEL.
THERE ARE A COUPLE WHO OPPOSE, UM, ITS CURRENT TREATMENT OF ENERGY EFFICIENCY.
AND I THINK THERE MAY BE A SLIGHT MISUNDERSTANDING ON HOW ENERGY CHARGES ARE ASSESSED AGAINST IT WANTED TO TAKE A LITTLE BIT OF TIME TO ADDRESS THOSE CONCERNS.
I'D ALSO HIGHLIGHT A POINT THAT AUSTIN ENERGY NOTED, UM, AND IT'S TESTIMONY RELATED TO THE, UH, WELL, I GUESS IT WOULD BE THE AMENDMENT ACTUALLY, I SHOULD SAY, NOT TESTIMONY, BUT WHEN THEY POINTED OUT THAT THERE'D BE NO FINANCIAL IMPACT TO THE OTHER RATE CLASSES, BY ADDING PRI TO, UM, WE'RE, WE'RE VIEWING THIS AS AN OPPORTUNITY TO, TO HELP A SET OF CUSTOMERS, INCLUDING DATA FOUNDRY, BUT NOT LOOKING AT IT, HAVING A, YOU KNOW, AN IMPACT ON OTHER CLASSES.
UM, THE TARIFFS CURRENT TREATMENT, WHICH IS TO SAY AS PROPOSED BY A E, UM, IS APPROPRIATE IN HOW IT DEALS WITH ENERGY CHARGES AND ENERGY EFFICIENCY, THE, AND THAT, IN THAT SENSE, THEY DO NOT REQUIRE MODIFICATION.
I DO WANT TO BRIEFLY DISCUSS THOUGH THOSE, THOSE STATEMENTS FROM SOME OF THE OTHER INTERVENERS, UH, START WITH THE ENERGY CHARGE QUESTION.
AND SPECIFICALLY, MR. ROBIN SEEMS TO HAVE A MISUNDERSTANDING ON THE CHARGE FOR ENERGY, AS IT RELATES TO THE PRI TO IT, IT IS CHARGED THROUGH THE PSA THAT'S APPROPRIATE.
UM, THERE IS NO FREE RIDE ON THE ENERGY AS IT WERE AS THIS TERRORIST DESIGNED AND, AND WE WOULDN'T SUGGEST THAT ONE WOULD BE APPROPRIATE.
UM, THE, THE FACT IS THAT THAT THE PRI TO TARIFF JUST AS A GENERAL MATTER IS, IS BETTER MATCHES TO COST CAUSATION PRINCIPLES THAN WHAT WOULD HAVE BEEN AVAILABLE FOR DATA FOUNDRY IN SIMILAR CUSTOMERS, ABSENT THE ADDITION OF THE, OF THE NEW TARIFFS SERVICE, LIKE TO TURN NOW TO THE ISSUE OR THE PROPOSAL, I SHOULD SAY TO CHARGE ENERGY EFFICIENCY, ASSESSMENTS AGAINST DATA FOUNDRY AND OTHER HIGH LOAD FACTOR CUSTOMERS, WHETHER INTENDED TO, OR NOT.
THIS PRACTICALLY IS AN ASK FOR A CROSS SUBSIDIZATION OF ENERGY EFFICIENCY ACROSS CUSTOMER CLASSES, UH, AS CRAFTED AUSTIN ENERGY WOULD NOT HAVE THE HIGH LOAD FACTOR.
CUSTOMERS PARTICIPATE, NEITHER RECEIVE THE PROCEEDS NOR CONTRIBUTE TOWARDS THE ENERGY EFFICIENCY PROGRAM.
AND, AND WE, WE HAVE NO PROBLEM WITH THAT.
UM, ASKING A CUSTOMER TO HIGH LOAD CUSTOMER, TO, TO PAY FOR A PROGRAM THAT IT'S NOT GOING TO USE BY DEFINITION WOULD BE A CROSS SUBSIDY.
UM, NOW SIERRA CLUB WITNESS, MR. REED PROPOSES A, UH, ON ITS FACE.
I THINK A PROPOSAL THAT WOULD MAKE THE ENERGY EFFICIENCY PROGRAM AVAILABLE BOTH IN TERMS OF RESA RECEIPT OF PROCEEDS FOR HIGH LOAD FACTOR CUSTOMERS, BUT ALSO WOULD ASSESS THE CHARGE.
HOWEVER, AND I THINK MR. RICAN SEEDS OF THIS IN HIS TESTIMONY, HE DOESN'T HAVE A SOLID UNDERSTANDING OF WHAT HIGH LOAD FUCKED ARE CUSTOMERS HAVE ALREADY INVESTED IN ENERGY EFFICIENCY.
UH, CONSEQUENTLY, HE CAN'T REALLY HAVE AN ASSESSMENT OF, YOU KNOW, HOW MUCH THESE HIGH LOAD FACTOR CUSTOMERS ACTUALLY NEED PROCEEDS FROM AN ENERGY EFFICIENCY PROGRAM.
UM, I KNOW THAT HE, HE DID ASK A DISCOVERY QUESTION TIC ON THAT EFFECT, BUT, BUT NO QUESTIONS HAVE BEEN DIRECTED TO DATA FOUNDRY IN THAT REGARD.
UM, BUT I DO WANT TO TAKE THE OPPORTUNITY TO HIGHLIGHT SOME OF DATA FOUNDRIES ENERGY EFFICIENCY EFFORTS, BECAUSE I THINK THEY ARE WORTHWHILE.
AND PART OF THIS CONSIDERATION, UH, NOW SWITCH, UM, BOUGHT DATA FOUNDRY IN 2021.
UM, AND, AND, AND EVEN PRIOR TO THAT PURCHASE DATA FOUNDRY HAD TAKEN A NUMBER OF MEASURES TOWARDS,
[05:55:01]
UM, ENERGY EFFICIENCY AND TOWARDS RENEWABLE EFFORTS.BUT I WASN'T SPENT JUST, JUST A MOMENT OR TWO TALKING ABOUT WHERE THEY SIT TODAY AS WE LOOK TO THE CURRENT TEST YEAR AND, AND LOOK TO THE FUTURE.
SWITCH HAS HUNDREDS, LITERALLY HUNDREDS OF PATENTS RELATED TO ENERGY EFFICIENCY AND HOW YOU CAN SAVE ENERGY IN A DATA CENTER.
AND THEY EMPLOY THEM IN THEIR OWN, IN THEIR OWN DATA CENTERS APPROPRIATELY.
THEY SIMILARLY, UM, SINCE 2016 HAVE HAD A COMMITMENT OF A HUNDRED PERCENT RENEWABLE ENERGY AND THAT SINCE 2021 HAS APPLIED TO DATA FOUNDRY AS WELL, ALL OF THESE INVESTMENTS NECESSARILY MEAN THAT THERE IS LESS NEED FOR FUTURE ENERGY EFFICIENCY INVESTMENT, WHICH IN TURN MEANS THAT THERE IS LESS NEED FOR THE PROCEEDS FROM AN ENERGY EFFICIENCY PROGRAM.
IF YOU ARE SITTING IN THE SHOES OF DATA, FOUNDRY THE NET EFFECT, THEN OF ASKING THE HIGH LOAD FACTOR CUSTOMERS AND PRI TO, TO CONTRIBUTE TO THE ENERGY EFFICIENCY PROGRAM IS TO SAY, WE KNOW YOU'VE ALREADY SPENT ON YOUR OWN.
NOW WE'RE ASKING YOU TO SPEND IT ON SOMEBODY ELSE'S POTENTIALLY ON A DATA CENTER THAT HAS NOT THEMSELVES MADE THOSE INVESTMENTS.
AND, YOU KNOW, YOU LITERALLY COULD BE ASKING THAT A FOUNDRY OR SOMEONE ELSE TO MAKE CONTRIBUTIONS TO THEIR COMPETITION, AND THAT'S NOT APPROPRIATE.
IT'S VERY IMPORTANT ALSO TO REMEMBER THAT THE HIGH LOAD FACTOR CUSTOMERS LIKE DATA FOUNDRY ARE SIGNIFICANT CONTRIBUTORS TO THE AUSTIN ECONOMY.
IN ADDITION TO BEING LARGE AUSTIN ENERGY CUSTOMERS, THEY BRING JOBS, THEY MAKE CON MAJOR CONTRIBUTIONS TO THE TAX BASE BECAUSE ELECTRICITY COSTS ARE SUCH A LARGE FACTOR FOR DATA CENTERS.
IT'S A CRITICAL FACTOR IN DETERMINING WHERE TO EXPAND, SWITCH AND DATA FOUNDRY HAVE DATA CENTERS ALL OVER THE UNITED STATES AND INCLUDING ONE UP IN ROUND ROCK, THAT'S JUST OUTSIDE THE AUSTIN ENERGY SERVICE TERRITORY.
THE ROUND ROCK SITE IS IN A TERRITORY WITH RETAIL COMPETITION.
AND AS MR. REED INDUSTRIAL CUSTOMERS LIKE DATA FOUNDRY IN THOSE PLACES ARE ALREADY EXEMPTED FROM THE ENERGY EFFICIENCY CHARGE.
THAT WOULD BE AKIN TO THE ONE THAT'S IN QUESTION HERE.
AS PARTIES ASK YOU TO ADD ENERGY EFFICIENCY CHARGES TO THE PRI TO TARIFF IN ORDER TO SUBSIDIZE THAT SERVICE TO OTHER RAY CLASSES, I'D URGE YOU TO CONSIDER ALL OF THESE EFFECTS.
UM, NOT ONLY ON DATA FOUNDRY, NOT ONLY ON THEIR PRI TO CUSTOMERS, UM, BUT ALSO ON AUSTIN ENERGY AND, AND FRANKLY THE CITY OF AUSTIN HOLISTICALLY AND APPRECIATE YOUR TIME.
THANK YOU VERY MUCH, MR. KIMBRO.
UM, ANY QUESTIONS ANYONE WANT TO, YES, GOOD MORNING.
THIS IS DREW'S FILLER WITH SIERRA CLUB.
THE FIRST IS, WAS DATA FOUNDRY.
UM, DID DATA FOUNDRY PARTICIPATE IN THE CREATION OF THIS NEW RATE CLASS OR DIRECT THE REQUEST OF THE CREATION OF THE PR I TO HIGH, LOW FACTOR RECLASS? NOT ENTIRELY SURE.
CAN YOU REPHRASE IT SURE WAS THE CREATION OF THIS NEW RATE CLASS, THE PRI TO HIGH LOAD FACTOR, A REQUEST OF DATA FOUNDRY DATA FOUNDRY CERTAINLY WAS EAGER TO SEE IT HAPPEN.
UM, YOU KNOW, AS A CUSTOMER, IT'S NOT IN THE PLACE OF ACTUALLY DOING THE RATE SETTING OR THE DESIGN, THE REAL DESIGN OF THE TARIFF, THAT'S A COST OF SERVICE ACTIVITY.
THAT'S OUTSIDE OF THE SCOPE OF A SCOPE OF A CUSTOMER.
AND UNDER THE NEW PROPOSED RATE CLASS, DOES DATA, DATA FOUNDRY SUPPORT THE IDEA THAT PARTICIPANTS IN THIS NEW RATE CLASS SHOULDN'T PAY THE ENERGY EFFICIENCY SERVICE FEE? WELL, AS I JUST EXPLAINED THAT THE FACT IS THAT CUSTOMERS LIKE DATA FOUNDRY HAVE ALREADY INVESTED IN ENERGY EFFICIENCY, THEY DID IT ON THEIR OWN SIDES.
SO ASKING THEM TO THEN PAY FOR SOMEBODY ELSE'S DUPLICATIVE.
SO TO THE EXTENT THAT YOU'RE ASKING FOR DUPLICATIVE INVESTMENT WITH YOUR PROPOSAL, THEN YES, WE DO TAKE A POSITION OF OPPOSITION TO THAT.
AND HAS THAT A FOUNDRY EVER RECEIVED REBATE FROM AUSTIN ENERGY TO PAY FOR PROJECTS IT HAS IMPLEMENTED AT ITS FACILITIES WITHIN AUSTIN ENERGY SERVICE TERRITORY.
I DO NOT KNOW ARE ANY OF DATA FOUNDRY? THE EMPLOYEES ARE CONTRACTORS, ALSO CUSTOMERS OF AUSTIN ENERGY, I WOULD ASSUME SO, BUT I CAN'T SAY WITH CERTAINTY AND WOULD, YOU KNOW, IF THE ENERGY
[06:00:01]
BILLS FOR THESE CUSTOMERS HAVE IMPACTS ON THE COST OF LIVING FOR EMPLOYEES, OUR COST OF GOODS AND SERVICES FROM CONTRACTORS.I THINK I NEED YOU TO REPHRASE OR ASK THAT QUESTION AGAIN.
ARE, DO THE ENERGY BILLS HAVE IMPACTS ON THE COST OF LIVING FOR EMPLOYEES, OUR COST OF GOODS AND SERVICES FROM CONTRACTORS? ARE YOU ASKING, ARE YOU ASKING, IS THE COST THE COST OF THE BILL TO DATA FOUNDRY, A FACTOR AND THE ECONOMICS THAT ARE AVAILABLE TO DATA FOUNDRY TO THEN PAY THEIR EMPLOYEES AND THEIR CONTRACTORS? ABSOLUTELY.
BECAUSE THEN IF WE HAVE LOWER COSTS THAN WE HAVE MORE WAGES, I MEAN, A MORE MONEY AVAILABLE FOR WAGES.
AND IT'S ALSO GOES TO THE QUESTION OF ECONOMIC DEVELOPMENT AND WHETHER IT OCCURS HERE WITHIN THE TERRITORY OR POTENTIALLY ROUND ROCK, OR EVEN SOMEWHERE ELSE IN THE COUNTRY.
SO YES, KEEPING OUR RATES LOW ARE VITALLY IMPORTANT TO ECONOMIC DEVELOPMENT.
AND DO YOU KNOW OF ANY DATA FOUNDRY EMPLOYEES OR CONTRACTORS HAVE EVER RECEIVED ANY REBATES FROM AUSTIN ENERGY? I DON'T KNOW THAT WE WOULD BE IN A PLACE TO KNOW WHETHER A CONTRACTOR OR WHAT WAS THE OTHER GROUP YOU WANTED EMPLOYEES.
IT IS A MATTER, OF COURSE, I'M NOT AWARE OF ANY BUSINESS WHO GOES INTO DOUBLE CHECKS.
WHAT THE, YOU KNOW, THE EMPLOYEES ELECTRIC BILL LOOKS LIKE, YOU KNOW, I WILL SAY PERSONALLY, AS AN ATTORNEY AT A LARGE LAW FIRM, THEY DON'T ASK ME TO SEND A COPY OF MY ELECTRIC BILL TO THEM.
AND WOULD THAT FOUNDRY AGREE THAT IMPROVED EFFICIENCY BY ANY CUSTOMER CREATES BENEFITS FOR ALL CUSTOMERS OF THE UTILITY? I WOULD AGREE TO THE EXTENT THAT WE'RE TALKING ABOUT THE EFFICIENCY.
I THINK THAT THE REAL QUESTION THEN BECOMES WHO PAYS FOR IT BECAUSE AUSTIN ENERGY AND IN THE CUSTOMERS, FRANKLY, THAT YOU'RE TALKING ABOUT IN YOUR GROUP HAVE ENJOYED THE INVESTMENT THAT DATA HAS MADE IN ITS OWN ENERGY EFFICIENCY FOR YEARS.
AND WE HAVEN'T ASKED ON ENERGY, OR I'M SORRY, AUSTIN ENERGY TO PAY TOWARDS THOSE.
THEN WE KNOW THAT THAT SET OF 500 OR SO, UM, PATENTS THAT I MENTIONED ALSO ENERGY DID NOT CONTRIBUTE TO THE, THE R AND D THAT WENT TOWARDS THOSE.
BUT IN TURN YOU GET THE BENEFITS OF THOSE BECAUSE THERE'S AN ECONOMIC INCENTIVE FOR DATA FOUNDRY AND SIMILARLY SITUATED COMPANIES TO KEEP THEIR ENERGY COSTS LOW.
SO YOU ARE ALREADY ENJOYING A FREE RIDE OF A BENEFIT FROM THE INVESTMENTS THAT SWITCH AND DATA FOUNDRY HAVE MADE.
AND ONE LAST QUESTION, UM, AS WHAT DATA FOUNDRY BE WILLING TO SUBMIT INFORMATION SUCH AS AN ANNUAL REPORT TO AUSTIN ENERGY ON HIS EFFORTS TO REDUCE ENERGY, USE LOWER PEAK DEMAND AND PROVIDE SELF-GENERATION OR STORAGE.
AGAIN, I WOULD COMPARE THIS TO THE QUESTION YOU ASKED ABOUT HAVING EMPLOYEES SENDING THEIR ELECTRIC BILL TO US.
THERE'S A MATTER OF PRIVACY THAT IS INHERENT IN THIS DATA.
YOU KNOW, THERE IS A SIGNIFICANT COMPETITIVE ADVANTAGE IN THE DATA CENTER SPACE.
IN PARTICULAR THAT'S RELATED TO ENERGY COSTS.
ENERGY IS A LARGE, LARGE COST INPUT AND DATA CENTERS.
AND SO ASKING A COMPANY TO DIVULGE THAT VERY SENSITIVE DATA AND IN PARTICULAR, ASKING A COMPANY TO DO IT WHEN YOU'RE NOT ASKING OTHER CUSTOMER CLASSES TO DO THE SAME, UH, IT STRIKES ME AS DISCRIMINATORY AND CERTAINLY INAPPROPRIATE.
THOSE ARE ALL OF OUR QUESTIONS.
ANY OTHER QUESTIONS? ALL RIGHT.
UM, NEXT UP WOULD HAVE BEEN HER FOR GOING TO DEAL WITH HER.
FLEETER UH, CAN SEEK CARE TO SEEK CARE, HAVE A PRESENTATION OF ANY SORT.
ASHLEY FISHER WITH SSC, WE HAD SENT A REQUEST TO DO TOMORROW AFTERNOON, IF THAT STILL WORKS.
SO THEN WE'RE GOING TO LET'S GO OVER THIS CAUSE IT LOOKS LIKE WE MIGHT BE HITTING A, A WALL OF SORTS.
LET'S GO OFF THE RECORD FOR A MINUTE.