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THE GREAT, OKAY.AND ROBIN, YOU READY? ALL RIGHT.
[CALL MEETING TO ORDER]
MEETING OF THE ELECTRIC UTILITY COMMISSION.IT'S AUGUST 8TH, 2020 TO 6:01 PM.
WE'RE IN THE SHUDI FATH CONFERENCE ROOM AT THE AUSTIN ENERGY HEADQUARTERS, AND ALSO APPEARING VIRTUALLY, UH, IN ATTENDANCE FOR THE RECORD.
WE HAVE COMMISSIONERS TUTTLE AND COMMISSIONER TRUSSELL VIRTUALLY THAN WE HAVE COMMISSIONERS READ CHAPLAIN HOPKINS, MCKENNA, AND VIRTUAL IN PERSON.
[PUBLIC COMMUNICATION: GENERAL]
UH, PUBLIC COMMUNICATION.AND I KNOW WE HAVE A COUPLE OF FOLKS SIGNED UP.
ROBIN, WILL YOU? WE HAVE THREE SPEAKERS TONIGHT.
MR. ROBBINS, YOU HAVE THREE MINUTES COMMISSION ON PAUL ROBBINS.
I'M AN ENVIRONMENTAL WRITER AND ACTIVIST CONSUMER ADVOCATE, AND I'M ALSO A MEMBER OF THE RESOURCE MANAGEMENT COMMISSION THOUGH.
I'VE BEEN WATCHING AUSTIN ENERGY SINCE 1977, STARTING IN THE LATE 1990S AND MORE FORMALLY IN 2001, AUSTRIAN ENERGY DEVISED, A METHOD OF HIDING VAST AMOUNTS OF INFORMATION THAT WAS FORMERLY PUBLIC, EVEN THOUGH THE UTILITY WAS NOT IN RETAIL COMPETITION WITH AIR CAUGHT, UH, IT CLAIMED THAT THE AIR-CON WHOLESALE MARKET TRUMPED TRANSPARENCY.
IF ANY OF YOU KNOW ME, I'M A DATA-DRIVEN INDIVIDUAL THAT LIKES TO GO ON EVIDENCE RATHER THAN HUNCHES AND UTILITY SECRECY OFFENDS ME.
THE FORMAL NAME FOR THIS IS QUOTING COMPETITIVE MATTERS, UNQUOTE, EXCUSE ME.
CAN YOU TAKE THE REVERB OUT OF THIS MICROPHONE PLEASE? UH, THE FORM FORMAL NAME FOR THIS IS COMPETITIVE MATTERS IN 2001, AUSTIN ENERGY RELENTED, SOMEWHAT FOR PERMITS, DRACONIAN SECRECY THROUGH STAKEHOLDERS MEETINGS WITH ACTIVISTS, INCLUDING MYSELF, WE DEVISED A SET OF RULES.
WE COULD BETTER LIVE WITH IT WAS PASSED BY THE CITY COUNCIL AS A RESOLUTION, BUT AUSTIN ENERGY HAS LET THE RESOLUTION EXPIRE HAS NOT BROUGHT IT BACK FOR UPDATE AND HAS BROKEN PROMISES THAT IT MADE THEM CORRESPONDENCE RELATED TO THE RECENT DOWNGRADING OF AUSTIN'S CREDIT IS BEING WITHHELD.
SIMPLE INFORMATION ON FUEL COSTS FOR FORMERLY PROVIDED IN PUBLIC PRESENTATIONS IS BEING HIDDEN.
CAN YOU IMAGINE A UTILITY SO DRACONIAN THAT IT WILL NOT DEVOTE INFORMATION DISPLAYED BY THE FEDERAL GOVERNMENT ON THE INTERNET BECAUSE THAT'S WHAT YOU HAVE.
SIMPLE ROUTINE INFORMATION SUCH AS MONTHLY UTILITY STATISTICS AND THE EFFICIENCY OF THE AUSTIN SHINES BATTERY PROJECT DEMAND, RIDICULOUS FEES, FURTHER AUSTIN ENERGY PROMISED TO PRODUCE AN ANNUAL REPORT.
HOWEVER, IF YOU GO TO THE UTILITIES, UH, DATA LIBRARY, AS IT'S SO-CALLED ON THE INTERNET, YOU WILL FIND THAT MOST DATA IS TWO OR MORE YEARS OUT OF DATE COMMISSION.
I'M ASKING YOU TO SUPPORT THE RECREATION OF THE COMPETITOR MATTERS POLICY THAT PROVIDES THE GREATEST POSSIBLE LATITUDE IN DISCLOSING PUBLIC INFORMATION.
YOU HAVE THE PURVIEW TO RECOMMEND THIS TO COUNCIL.
A TRANSPARENT UTILITY IS ONE DIFFERENCE BETWEEN A TRUSTED INSTITUTION AND A ROGUE AGENCY.
THANK YOU, MR. ROBERT, CAN I ASK A QUICK QUESTION? COULD YOU TELL US ONE MORE TIME WHEN THE POLICY YOU'RE REFERRING TO IS ACTUALLY IN PLACE? UH, THE ONE THAT I'D LIKE YOU TO UPDATE WAS IN PLACE PASSED BY CITY COUNCIL IN 2011, AND I CAN SEND YOU A LINK TO THAT CYRUS, OR IF YOU COULD SEND IT TO ROBIN OTTO AND SHE COULD SHARE IT.
I MEAN, YOU CAN SEND IT TO ME AS WELL.
[00:05:02]
THE NEXT SPEAKER IS DALE BEULAH.MY NAME IS DALE BEULAH, AND I'D LIKE TO MAKE SOME SUGGESTIONS ON HOW AUSTIN ENERGY COULD BE MORE AGGRESSIVE IN PROMOTING ELECTRIC VEHICLES WHILE CLEANING OUR AIR AND HELPING OUR CLIMATE.
UH, BEFORE I MENTIONED THOSE, I'D LIKE TO SAY, I DID TRY TO GIVE FEEDBACK ON THE RATE CASE ONLINE AND WAS TOTALLY UNSUCCESSFUL.
WHAT I WAS MAINLY GOING TO SAY IS THAT, UH, IT WOULD SEEM TO ME THAT ANYBODY THAT USES USES LESS THAN 500 KILOWATTS A MONTH SHOULD NOT HAVE A RATE CHANGE AT ALL.
ONLY PEOPLE THAT ARE USING MORE THAN THAT, BECAUSE I THINK PEOPLE THAT ARE CONSERVING SHOULD BE REWARDED FOR THAT.
ANYWAY, LET ME ABOUT, UH, RENEWABLE ENERGY STORAGE.
THE AUSTIN AMERICAN STATESMAN RECENTLY, UH, STATED THAT RENEWABLE ENERGY IN TEXAS HIT ALMOST A 30% OF GENERATION HIT ALMOST 30% OF GENERATION THIS YEAR IN APRIL VEHICLE TO GRID TECHNOLOGY IS BEING USED IN OTHER PARTS OF THE WORLD.
AND WHEN YOU DRIVE AN ELECTRIC VEHICLE, YOU'RE REALLY DRIVING A BATTERY ON WHEELS.
I MENTIONED AT PREVIOUS MEETINGS OF ELECTRIC UTILITY SCHOOL BUSES, ELECTRIC SCHOOL BUSES FOR ENERGY STORAGE, ESPECIALLY IN THE SUMMER WHEN THEY ARE NOT BEING USED FOR TRANSPORTATION.
SO UNTIL THESE BUSES ARE AVAILABLE, PERHAPS PROMOTING EVIE DRIVERS TO DO THE SAME WOULD BE A GOOD IDEA IN A RECENT ARTICLE THAT I SENT YOU PACIFIC GAS AND ELECTRIC HAS LAUNCHED A PROGRAM TO DO JUST THAT USING TESLA POWER WALLS, PROVIDING FOR CUSTOMERS TO FILL UP THEIR BATTERIES AT NIGHT WHEN WIND ENERGY IS CHEAP AND RELEASING THEM DURING THE DAY WHEN NEEDED WOULD BE LESS EXPENSIVE THAN BUILDING A BATTERY UTILITY STORAGE, SINCE CUSTOMERS WOULD ALREADY HAVE THE STORAGE.
OF COURSE, I THINK WE SHOULD DO BOTH.
THEY COULD BE COMPENSATED FOR THAT AND MAKE SOLAR INSTALLATIONS MUCH MORE FEASIBLE AS AN ENERGY SOURCE FOR THE UTILITY.
AS REGARD TO MUNICIPAL VEHICLES IN A RECENT ARTICLE THAT I SHARED WITH YOU, SAN ANTONIO IS NOW TESTING FORD AND TESLA FOR THEIR POLICE DEPARTMENTS.
IT IS NOT ONLY FOR THEIR SUPERIOR PERFORMANCE, BUT SAVING TONS OF MONEY ON OPERATION AND MAINTENANCE TO TRANSITION.
ALL MUNICIPAL VEHICLES TO EVIE SHOULD BE A HIGH PRIORITY.
AND AUSTIN ENERGY SHOULD SUPPORT THAT ELECTRIC TRUCKS ARE BECOMING MORE AVAILABLE AND E AN AUSTIN ENERGY, UH, SHOULD BE AT THE FOREFRONT OF DEMONSTRATING THE BENEFITS OF OWNING THESE VEHICLES WITH THE FORMALIZING OF THE MCS, WHICH IS THE MEGAWATT CHARGING SYSTEM, UH, 3.75 MEGAWATT CHARGER WITH BI-DIRECTIONAL CHARGING CAPABILITIES BEING NOW TESTED IN THE U S WITH DAIMLER TRUCKS, NORTH AMERICA, AS WELL AS UPCOMING TESLA, SEMI WILL AUSTIN ENERGY BE READY TO PROVIDE THE SUPPORT FOR THESE CLASS SIX, SEVEN, AND EIGHT COMMERCIAL HEAVY VEHICLES AT TRUCK STOPS IN OUR SERVICE AREA.
THE WEST COAST CLEAN TRANSPORTATION CORRIDOR IS DOING THAT RIGHT NOW IN CALIFORNIA.
WHAT ARE WE DOING? TRAVIS COUNTY IS, HAS ALMOST 20,000 EVS WITH THE LARGEST NUMBER IN TEXAS.
IT SEEMS TO ME THAT THERE'S MUCH WE CAN DO TO TAKE ADVANTAGE OF THIS ENERGY SOURCE THAT'S ALREADY HERE AND PROVIDE BETTER GRID, SPELT STABILITY WHILE SAVING CUSTOMERS AND UTILITY MONEY IN THE LONG RUN.
THANK YOU FOR LISTENING TO MY GRIPES.
THANK YOU, MR. BUELLER, SARAH BLACK.
HI, MY NAME IS SARAH BLACK, AND I DON'T KNOW IF THIS FALLS UNDER NUMBER TWO OR NOT BECAUSE, UM, I HAVE A BIG QUESTION ABOUT MY ELECTRICITY BILL.
I LIVE AT COMMUNITY FIRST VILLAGE WHERE ALL OF US ARE DISABLED AND IN MAY FOR THE MAY BILL, I PAID ONLY $8 AND 24, 20 3 CENTS FOR MY BILL.
BUT, UM, ON JULY THE 21ST, I GOT A LITTLE NOTE ON MY APP FOLLOW, WHICH TELLS ME UPCOMING CHARGES.
AND THEY SAID, MY BILL WAS NOW GOING TO BE 65, 14 PAYABLE ON AUGUST THE FIRST.
AND, YOU KNOW, I YELLED AND SCREAMED ABOUT THAT.
AND THEN JULY THE 25TH, I WENT TO THE OFFICE TO SEE WHAT MY KILOWATT
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HOURS WERE FOR THAT FOR, UM, MAY THE 23RD THROUGH JUNE THE 20TH.AND SO THEY WOULDN'T GIVE ME MY COLORED WATER HOURS.
THEY WOULDN'T GIVE ME ANY KIND OF PRINT OUT THE BEGINNING AND HINDI.
AND THEY JUST ORALLY TOLD ME THAT I HAD 304 KILOWATT HOURS FOR THAT PERIOD OF TIME.
AND THAT THEY CHARGED ME A RATE A 0.0 9 8, 9.
SO WHEN I ACTUALLY DID THE MATH, IT SHOWED THAT HE HAD ACTUALLY ROUNDED IT UP.
IT WAS ACTUALLY 3 0 4 0.84 KILOWATT HOURS.
UM, BUT THAT WAS PRETTY, THAT'S LIKE FOUR TIMES WHAT THE CITY OF BOSTON CHARGES FOR THE LOWEST RUNG OF ENERGY USAGE, UM, I'M USING UNDER 500 KILOWATT HOURS.
SO WHY AM I PAYING FOUR TIMES WHAT THE RATE IS? SO IT WASN'T UNTIL TODAY WHEN I EMAILED THEM AGAIN, THAT THEY ACTUALLY GAVE ME MY BEGINNING AND ENDING.
SO I HAD TO PAY MY RENT WITHOUT EVEN KNOWING WHAT MY BEGINNING AND ENDING WAS AND HOW IT WAS REALLY CALCULATED.
I SAID, I DIDN'T REALLY LIKE YOU JUST TELLING ME ORALLY.
I WANT SOMETHING IN WRITING BECAUSE OTHERWISE JUST MY WORD AGAINST YOURS.
SO I'M ACTUALLY, SO WHEN I WENT THERE ON THE 25TH, THEY TOLD ME, WELL, YOU'RE AN ELECTRICITY HUB AND PATRIOT, THEY DIDN'T KNOW HOW MANY HOUSES WERE IN MY ELECTRIC HUB.
THEY SAID, PRETEND THERE'S 25 HOUSES.
AND THEN WE LOOK AT THE USAGE FOR THE 25 HOUSES.
AND THEN BASED ON THAT, WE LOOK, WE GET YOUR RATE.
OKAY, WELL, THAT'S, THAT'S RIDICULOUS.
UM, AND THEN THEY PUT THE STATEMENT OUT.
THIS IS THEIR ACTUAL STATEMENT.
IT SAYS YOUR BILL IS BASED ON YOUR INDIVIDUAL ELECTRIC USE AT THE RATE PROVIDED BY AUSTIN ENERGY, WHICH IS SET BY THE OVERALL USAGE ON EACH OF THE MASTER METERS.
THIS MEANS NEIGHBORHOODS CAN HELP LOWER THEIR RATES BY LOWERING OVERALL CONSUMPTION.
SO, YEAH, I JUST, I'M JUST STILL CONFUSED ABOUT HOW THEY CAME UP WITH IT.
CAN SOMEBODY FROM OSTEON ENERGY COME OVER TO COMMUNITY FIRST AND ACTUALLY HELP US WITH THIS ELECTRIC CAUSE THIS IS THIS A LITTLE TOO HIGH.
DO YOU HAVE, UH, ANY INFORMATION ABOUT WHAT THE OTHER RESIDENTS BILLS LOOK LIKE WHERE THEY ALSO SIGNIFICANTLY ADELINE WITH EARLIER MONTHS? ARE YOU AWARE OF THAT, RIGHT? YES.
THEY WERE, PEOPLE WERE GOING CRAZY.
UM, BECAUSE WE HAVE OUR OWN INDIVIDUAL MESSAGE BOARDS AND SOMEBODY HAD POSTED ABOUT THEIR, YOU KNOW, THEIR BILLS BEING OVER A HUNDRED DOLLARS, THINGS LIKE THAT.
UM, IN FACT, WHEN I WAS IN THE OFFICE, UM, THE PERSON IN PROPERTY MANAGEMENT, ONE OF THE PEOPLE IN PROSECUTING MANAGER SAYS, OH, THIS PERSON'S BILL IS $150.
WE'RE SUPPOSED TO BE THE GROUP THAT PAYS LIKE THE LEAST AMOUNT.
AND WHY AM I PAYING FOUR TIMES THE RATE? ALL RIGHT.
CAN, IS THERE A WAY WE CAN FIND OUT, UM, WHO HAD AUSTIN ENERGY FOR THIS PARTICULAR CASE OF COMMUNITY FIRST SHE SHOULD BE REACHING OUT TO? IS THAT SOMETHING WE CAN REACH OUT TO AUSTIN ENERGY FOLKS LATER? OKAY.
SHE'S GOING TO CONNECT WITH YOU.
SO, MS. BLACK, IT SOUNDS LIKE, UM, SOMEONE FROM AUSTIN ENERGY IS GOING TO TALK TO YOU DIRECTLY.
UM, IF, IF YOUR CONCERNS AREN'T RESOLVED, WE PLEASE COME BACK AND VISIT US AGAIN.
IF YOUR CONCERNS AREN'T RESOLVED, WE'VE COME BACK.
[1. Approve the minutes of the Electric Utility Commission Regular meeting on July 18, 2022.]
ON TO APPROVAL OF THE MINUTES.SO APPROVAL OF THE JULY 18TH MINUTE 18TH, YOU SEE MEETING MINUTES, A DRAFT OF THE MINUTES WAS CIRCULATED WITH YOUR MATERIALS.
ARE THERE ANY CORRECTIONS HEARING? NONE.
I'LL ENTERTAIN A MOTION TO APPROVE THE JULY 18TH EUC MEETING MINUTES.
AND COMMISSIONER TRUSSELL AND COMMISSIONER HADDON.
I CAN'T SEE YOU OR HEAR YOU W WE MAY HAVE THEM.
UM, SO I'LL, I'LL, UH, ALL THOSE OPPOSED, NONE OPPOSED MOTION PASSES, AND WE CAN PUT TRUSSELL AND HADN'T
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AS ABSTAINING.IF WE CAN'T GET A VOTE FROM THEM OR I'LL PUT THEM AS OFF THE DIOCESE.
NOW MOVING ON TO DISCUSSION AND POSSIBLE ACTION ON RECOMMENDATIONS.
FIRST, I'D LIKE TO TAKE UP ITEM NUMBER.
I'D LIKE TO TAKE ITEM NUMBER TWO UP OUT OF ORDER.
WE WILL DISCUSS THIS ITEM AFTER THE BUZZER BUDGET PRESENTATION LATER IN THE MEETING.
UH, SO THEN WITH REGARD TO ITEMS, NUMBER THREE THROUGH NINE, ARE THERE ANY THAT COMMISSIONERS WOULD LIKE TAKEN UP? I'D LIKE A DISCUSSION ON ITEMS FOUR, SIX, AND NINE PLACE.
CAN YOU HEAR ME NOW? YES, WE CAN.
I WAS PRESENT AND I WOULD VOTE AYE, ON APPROVAL.
ANY OTHER ITEMS FOLKS WOULD LIKE TO TAKE UP FOR DISCUSSION? I THINK I'D LIKE TO DISCUSS ITEM NUMBER THREE AS WELL.
HEARING NO OTHER ITEMS, I WILL ENTERTAIN A MOTION TO APPROVE FOR RECOMMENDATION ITEMS. NUMBER 2, 5, 7, AND NO, EXCUSE ME.
YEAH, I FEEL A LITTLE TOO BAD.
[Items 5, 7, & 8]
KNOW NUMBERS FIVE, SEVEN AND EIGHT.AND I STILL COULDN'T HEAR COMMISSIONER HADN'T BOUGHT AS OFF THE DYESS OR NOTE HER AS OFF THE DYESS.
UH, ANY OPPOSED MOTION PASSES.
[3. Recommend authorizing an amendment to a contract with Altec Industrial Inc., to provide customized utility vehicles, to increase the amount by $3,000,000, for a revised total contract amount not to exceed $33,500,000.]
NUMBER THREE JUST QUICKLY.IS THERE ANYONE FROM AUSTIN ENERGY STUFF THAT COULD ANSWER A QUESTION ABOUT THIS ONE? YES.
LET ME MOVE ROBIN CAPELLA OVER GOOD EVENING COMMISSIONERS.
I'M THE DIRECTOR OF CORPORATE SUPPORT SERVICES FOR AUSTIN ENERGY.
AND HERE TO ANSWER ANY QUESTIONS YOU MIGHT HAVE ABOUT ITEM NUMBER THREE.
I JUST HAD A COUPLE OF QUESTIONS.
I'M TRYING TO UNDERSTAND, UH, THE SIX DELIVERY PHASES.
SO IN OUR BACKUP INFORMATION, THIS IS A CONTRACT FOR A UTILITY TRUCKS AND IT SAYS IT'S LEASE PAYMENTS IN PHASES.
AND THEN ONE AND TWO OF THESE COMMERCIAL COMMERCIAL CUSTOMIZED UTILITY VEHICLES THAT ARE CURRENTLY IN USE BY AUSTIN ENERGY.
BUT THE CURRENT CONTRACT IS COMPOSED OF SIX DELIVERY PHASES WITH EACH PHASE REPRESENTING A SEPARATE FIVE-YEAR TERM.
SO I'M JUST, I'M JUST TRYING TO UNDERSTAND WE'RE IN PHASE ONE AND TWO, AND THAT IS, IS NOW WE'VE INCREASED.
WE'RE WE'RE SEEKING AN INCREASE IN THE BUDGET TO 33.5 MILLION, UH, OR THAT 33.5 MILLION IS FOR THE ENTIRE SIX PHASES.
UM, YEAH, THAT, THAT'S WHAT I'M TRYING TO UNDERSTAND.
SO THIS WAS AN ALTEC LEASE FOR OUR BUCKET TRUCK VEHICLES.
IT IS A FULL SERVICE LEASE AGREEMENT WITHOUT TECH FEE CONTRACT THAT'S BEFORE YOU IS FOR THE FIRST SIX PHASES.
SO THE $33.5 MILLION IS FOR THE ENTIRE CONTRACT PERIOD.
WE ARE, ARE ACTUALLY COMPLETED THROUGH THE SIXTH, SIX PHASES, BUT KEEP IN MIND THAT EACH PHASE ENCOMPASSES A 60 MONTH LEASE.
SO PHASES ONE AND TWO ARE SET TO SUNSET AT THE END OF OCTOBER.
AND, UM, THE INTENT IS THAT WE ARE ASKING TO EXTEND THAT LEASE ON PHASES ONE AND TWO DUE TO EXTENDED MANUFACTURING DELAYS, UM, FROM ALTEC TO ENSURE THAT WE HAVE VEHICLES ONSITE TO, TO OPERATE UNTIL SUCH TIME AS THE NEW LEASE VEHICLES CAN BE REPLACED.
SO WHAT THE $3 MILLION COVERS IS THE EXTENSION OF THE LEASE.
IT ALSO ACCEPTS IT COVERS ANY UNPLANNED MAINTENANCE AND REPAIRS ON THOSE VEHICLES UNTIL SUCH TIME AS THE NEW VEHICLES CAN BE BROUGHT INTO A PLACE, THOSE LEASE VEHICLES THAT ARE AT EXPIRATION.
UH, MS. CAPELLO, UM, WHAT ARE THESE UTILITY
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VEHICLES? CAN YOU, ARE THEY, ARE THEY THE TRUCKS WITH THE T FOR A LINE TO FIX LINES? YES, THEY ARE OUR BUCKET TRUCKS.THEY'RE HIGHLY SPECIALIZED VEHICLES THAT WE, UM, MOVED TOWARDS A LEAST BUSINESS MODEL TO ENSURE THAT THOSE VEHICLES CAN REMAIN IN SERVICE.
AND WE HAVE A FULL SERVICE DATE ON THE CONTRACT WITHOUT ALL TECH, THEY WILL PROVIDE US A REPLACEMENT VEHICLES WHEN THOSE VEHICLES GO OUT OF SERVICE OR THEY REQUIRE REPAIRS.
AND SO IT'S BEEN A VERY SUCCESSFUL CONTRACT THAT WE'VE HAD, UH, FOR THE PAST, UM, 10 YEARS.
AND NOW WE'RE SEEKING TO CONTINUE THAT EFFORT.
AND THIS IS, THIS IS A QUESTION SPURRED BY A PREVIOUS SPEAKER, ARE THESE KINDS OF VEHICLES, ONES THAT WOULD, UH, WHERE YOU GUYS HAVE LOOKED AT THE POTENTIAL FOR ELECTRIC VEHICLES OR, OR, OR, OR THEY'RE ELECTRIC VEHICLES FOR THESE KIND OF BUCKET TRUCKS OR DON'T, YOU KNOW, SO SHORT ANSWER IS YES, WE'RE ALWAYS EXPLORING THE OPPORTUNITY TO EXPAND INTO ELECTRIC VEHICLES IN ALL OF OUR FLEET.
THESE PARTICULAR VEHICLES, UH, ARE MOVING TOWARDS A HYBRID.
AND WE'RE LOOKING AT THAT AS A PART OF A HYBRID MODEL MOVING INTO THE NEXT PHASE OF THE CONTRACTS, WHICH YOU'LL BE SEEING IN A FUTURE ECE MEETING FOR CONSIDERATION, BUT CURRENTLY WE'RE USING, UM, JUST GAS VEHICLES FOR NOW WITH THE EXPLORATION OF A HYBRID IN OUR FUTURE FUTURE PHASE LEASES.
UH, WITH THAT, I'LL ENTERTAIN A MOTION TO APPROVE ITEM NUMBER THREE SECOND.
UM, NONE OPPOSED THE MOTION PASSES.
[4. Recommend authorizing negotiation and execution of a multi-term contract with Enertech Resources LLC to provide moonlight towers maintenance, inspection, restoration, and repair for up to five years for a total contract amount not to exceed $5,500,000]
ITEM NUMBER FOUR.I'M CRAIG BROOKS, JUST GIVE ME ONE MOMENT.
THANK YOU, PLEASE, PLEASE GO AHEAD.
UM, WHO, WHO PULLED OUT? REMEMBER FORT RANDY, EXCUSE ME, COMMISSIONER CHAPMAN.
MY, MY W W W WE ALL LOVED THE MOONLIGHTS.
THEY'D HAVE A RICH PART OF AUSTIN'S HISTORY.
UH, THEY'RE NOT PART OF STREET LIGHTING.
THEY'RE SEPARATE AND APART IN THE BUDGET.
UH, MY QUESTION REALLY HAS TO DO WITH, UH, WHY IS THIS PART OF AUSTIN ENERGY'S BUDGET, AS OPPOSED TO THE GENERAL BUDGET? THESE ARE NOT ON OTHER WORDS.
WHY IS THIS $5 MILLION? IF I RECALL, RIGHT.
UH, BEING COMING OUT FROM RIGHT PAYERS, AS OPPOSED TO THE GENERAL FUND OR PARKS AND RECREATION DEPARTMENT, SOMETHING, SOMETHING, UH, BECAUSE HONESTLY THEY DON'T GIVE OUT MUCH, LIKE THEY'RE, THEY'RE VALUABLE.
WE'D LOVE THEM, BUT WHY, WHY IS THIS, WHY ARE RIGHT PAYERS, UH, BEING SADDLED WITH THIS COST? SAY THAT IS A GOOD QUESTION.
YOU'D LIKE TO RUN IT FOR THAT ONE.
GOOD EVENING COMMISSIONERS I'M STUART RILEY WITH AUSTIN ENERGY.
AND, UM, ONE THING TO REMEMBER IS THAT AUSTIN ENERGY DOES PERFORM THE STREET LIGHTING FUNCTIONS FOR THE CITY OF AUSTIN, BUT THAT IS PAID UNDER THE SERVICE AREA LIGHTING COMPONENT OF THE COMMUNITY BENEFIT, CHARGED, NOT UNDER BASE RATES, RIGHT.
UH, MAYBE I WASN'T PLAYER THE, WHY ARE THE MOON TOWERS BEING PAID FOR BY RATE PAYERS AS PART OF AUSTIN ENERGY BY AUSTIN ENERGY? YES, THEY'RE MAINTAINED BY AUSTIN ENERGY, SUBCONTRACT IT THROUGH A SUBCON THROUGH CONTRACTORS.
THE QUESTION I HAVE HAS TO DO WITH WHY IS THIS BEING CHARGED TO RIGHT PAYER TO AUSTIN ENERGY, RIGHT.
PAYERS AS OPPOSE TO BEING PART OF THE GENERAL CITY OF AUSTIN BUDGET OR IN A MORE APPROPRIATE DEPARTMENT, UH, SUCH AS SWIMMING POOLS, OTHER OTHER PROGRAMS THAT ARE OF GENERAL INTEREST AND BENEFIT TO THE PUBLIC.
YES, I, I, MY ANSWER WAS INTENDED TO CONVEY THAT LIKE ALL OF THE CITY'S ILLUMINATION, UH, PROJECTS FOR A ROADWAY AND IN GENERAL CITY OWNED, UH, STREET LIGHTING AND WOULD FALL UNDER AUSTIN ENERGY.
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IT'S BEEN DONE AT THE CITY OF AUSTIN.IT'S PART OF OUR HISTORY AT AUSTIN ENERGY.
AND THAT'S ONE THAT I THINK YOU'RE ASKING MORE OF A PHILOSOPHICAL QUESTION ABOUT WHAT, WHAT THE MOST APPROPRIATE PLACE FOR THAT FUNCTION WOULD BE FOR THAT TO RESIDE.
AND ALL I CAN TELL YOU IS THAT IT RESIDES AT AUSTIN ENERGY AND HAS FOR QUITE SOME TIME, PROBABLY SINCE, SINCE THE VERY BEGINNING.
I, I, I WILL NOT IT BECAUSE THIS IS COMING OUT OF BEING PAID FOR BY RIGHT PAYERS.
AND THERE'S CERTAINLY QUESTIONS OUT, OUT THERE AS PART OF THE OVERALL RATE CASES.
IS THIS, AGAIN, IT PHILOSOPHICAL, BUT THAT'S MY QUESTION, NOT THE KNEE, NOT THE NEED.
AND I DO WANT TO JUST POINT OUT THAT IT'S NOT SOMETHING THAT'S UP FOR, YOU KNOW, AS PART OF THE RATE CASE, BECAUSE THAT'S ONLY CONSIDERING THE BASE RATES AND THIS WOULD JUST BE, IT WOULD, THIS WOULD BE SERVICE AREA LIGHTING AS A PASS THROUGH CHARGE UNDER THE COMMUNITY BENEFIT CHARGE COMPONENT.
SO, SO, UM, JUST WANTED TO CLARIFY THAT, AND THAT MAY BE TO FIND THAT DISTINCTION, BUT WHEN YOU SAID IT'S PART OF WHAT'S BEING ADDRESSED IN THE, IN THE RATE REVIEW, IT'S BASE RATES ARE WHAT'S WHAT, WHAT ARE BEING CONSIDERED THERE RATHER THAN NOT THE COMMUNITY BENEFIT CHARGE PASS THROUGHS.
SO THEY APPEAR ON OUR, MY ELECTRIC BILL AS PART OF THE COMMUNITY BENEFIT CHARGE, NOT, NOT AT THE TOP OF THE BILL, BUT AT THE BOTTOM OF THE BILL.
SO WHEN YOU SAID RATE PAYERS, YOU WERE CORRECT, BUT THEN WHEN YOU SAID THE UNDER PART OF THE RATE REVIEW, I JUST WANTED TO CLARIFY THAT YOU'RE RIGHT.
IT'S NOT BEING REVIEWED WITHIN, WITHIN THAT, WITHIN THAT, LIKE I SAY, I JUST QUESTION, UH, WHICH DEPARTMENT IT SHOULD BE, WHO SHOULD BE PAYING FOR IT.
I'LL ENTERTAIN A MOTION FOR, UH, APPROVAL OF ITEM NUMBER FOUR.
THANK YOU, COMMISSIONER SECOND.
COMMISSIONER CHAPMAN, OPPOSED? UH, THAT IS 1, 2, 3, 7 MOTION CARRIES.
[6. Recommend authorizing award and execution of a construction contract with Muniz Concrete & Contracting, Inc., for the Justin Lane Demolition and Site Preparation project in the amount of $ 1,658,248.00 plus a $ 165,824.80 contingency, for a total contract amount not to exceed $ 1,824,072.80.]
ITEM NUMBER SIX, WE HAVE ROBYN CAPELLO AGAIN, TO ANSWER YOUR QUESTIONS.I MISS COMPANY, I'M ROBIN KABBALAH, DIRECTOR OF CORPORATE SPORTS SERVICES.
HAPPY TO ANSWER ANY QUESTIONS YOU MIGHT HAVE COMMISSIONERS COMMISSIONER CHAPMAN.
I BELIEVE THIS WAS YOURS AS WELL.
UH, THIS, AS I UNDERSTAND AS JUSTIN LANE, UH, ALL OF THIS IS PROPERTY THAT IS OWNED NOW BY THE CITY AND IS BEING CONVEYED.
IS THAT CORRECT? TRYING TO GIVE US A LITTLE BACKGROUND THAT IS CORRECT.
SO THIS IS A PIECE OF PROPERTY THAT HAD BEEN CHAMPIONED BY COUNCIL MEMBER, UH TOVO AND COUNCIL MEMBER POOL.
IT IS PART OF A LONG-TERM PLAN FOR, UM, AFFORDABLE HOUSING.
AND, UM, THIS IS PROPERTY THAT IS SURPLUS FOR AUSTIN ENERGY, BUT IT'S BEING TRANSFERRED TO THE ECONOMIC DEVELOPMENT DEPARTMENT FOR, FOR, FOR, UM, FURTHER DEVELOPMENT.
THIS IS THE LAST PIECE OF OUR EFFORTS TO TRANSFER THAT PROPERTY.
IT IS A, UM, DEMOLITION OF THE REMAINING BUILDINGS THAT ARE ON SITE SO THAT WE CAN TRANSFER IT IN A CLEAN AND ORIGINAL FORM REASON.
I ASKED, UH, MY QUESTION, MY QUESTION, UH, REALLY HAS TO DO WITH, UH, TYPICALLY WHEN A DEVELOPER BUYS A PROPERTY, THEY, UH, FOR DEMOLITION, THE DEVELOPER PAYS FOR THE DEMOLITION.
AND WHY IS IT, WHY IS THE DEVELOPER NOT PAYING FOR THIS AS OPPOSED TO AUSTIN ENERGY BEING, UH, REQUIRED, UH, AGAIN, THROUGH, THROUGH, UH, RIGHTS, UH, PAID BY PAID BY ALL OF US, BUT WHY, WHY WAS THIS NOT A CHARGE TO THE DEVELOPER AS OPPOSED TO, UH, AS OPPOSED TO THE SELLER AUSTIN ENERGY? GREAT
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QUESTION COMMISSIONER.UM, PART OF THAT AGREEMENT WITH THE ECONOMIC DEVELOPMENT DEPARTMENT HAD TO DO WITH THE CONDITION OF THE LAND.
UM, WE NEEDED TO GO THROUGH ENVIRONMENTAL STUDIES TO MAKE SURE THAT THE FIGHT WAS CLEAN.
UM, THE DEMOLITION WAS A PART OF THAT AGREEMENT WITH ECONOMIC DEVELOPMENT DEPARTMENT TO TRANSFER THE PROPERTY.
WE ALSO IDENTIFIED WHAT THE ACTUAL VALUE OF THE LAND WAS, AND THAT IS A PART OF THE AGREEMENT TO TRANSFER THE PROPERTY WAS THAT AUSTIN ENERGY'S RIGHT THERE WOULD BE MADE WHOLE, I, AS I RECALL CORRECTLY, THE FEE WAS ABOUT $2.8 MILLION FOR THE VALUE OF THE LAND, UH, TO MAKE US WHOLE AS REPAIRS TO ENSURE THAT, UM, THERE WAS NO FINANCIAL IMPACT TO AUSTIN ENERGY'S REPAIRS.
SO THIS IS THE LAST PIECE OF THAT.
UM, THERE IS AN EXCLUSIVE NEGOTIATION AGREEMENT THAT ECONOMIC DEVELOPMENT DEPARTMENT IS CURRENTLY UNDER CONTRACT WITH AN AFFORDABLE HOUSING DEVELOPER THAT HAD SOME LONG-TERM PLANS OR A LAND LEASE FOR THIS PROPERTY THAT WILL BENEFIT THE CITY.
LONG-TERM I GUESS THAT ANSWERS MY QUESTION.
BUT IF I'M, IF I MAY, THIS IS CONSIDERED, THIS IS COMMISSIONER TRUSSELL.
UM, UH, SO IS THE 2.8 MILLION THAT AI IS GOING TO RECEIVE, UM, NET OF THE 1.8 MILLION THAT THEY'RE GOING TO SPEND ON THIS, UM, UH, DEMOLITION AT THE SITE.
SO OBVIOUSLY, UM, THAT WOULD BE OBVIOUSLY OFFSET BY THE, THE VALUE OF THE LAND THAT WE'LL BE RECEIVING AS A PART OF THAT TRANSFER, BUT THIS WOULD BE THE TOTAL COST TO CLEAR THE SITE.
AND THAT WAS A PART OF OUR ORIGINAL AGREEMENT THAT, UM, COUNCIL MEMBER POOL ON TOBO, UM, HAD REQUESTED THAT AUSTIN ENERGY COMPLETE AS A PART OF THIS FUTURE, UH, AFFORDABLE HOUSING PROJECT.
FULLY UNDERSTANDING THE IMPORTANCE OF PR FOR AFFORDABLE HOUSING.
I'M JUST TRYING TO FIGURE OUT THE, THE, THE NET IMPACT AUSTIN ENERGY.
AND IN SOUNDS LIKE IT'S GOING TO BE A NET BENEFIT OF A MILLION DOLLARS.
ANY OTHER QUESTIONS ON ITEM NUMBER SIX? OKAY.
I'LL ENTERTAIN A MOTION TO APPROVE ITEM NUMBER SIX.
IS THERE A SECOND? SECOND? I HAVE A SECOND.
OH, UH, COMMISSIONER, UH, CHATMAN ABSTAINS MOTION CARRIES.
[9. Recommend authorizing an amendment to a cooperative contract with CDW LLC dba SIRIUS COMPUTER SOLUTIONS, INC. providing Palo Alto Network products, maintenance and support services, to increase the amount by $1,814,950, for a revised total contract amount not to exceed $7,871,350.]
TAKING UP ITEM NUMBER NINE.I'M GREG FLAY, VICE PRESIDENT OF TECHNOLOGY AND DATA HERE TO ANSWER YOUR QUESTIONS AND IT'S PLAY.
IS THAT WHAT YOU SAY? OKAY, GREAT.
AND COMMISSIONER CHAPMAN, GO AHEAD.
UH, MY QUESTION IS THIS, UH, IF I UNDERSTAND IT WELL, WHY DON'T YOU TELL US WHAT JUST BRIEFLY WHAT THIS CONTRACT IS IT WHY IT'S REQUIRED? SURE.
IT'S FOR THE, UM, ENTERPRISE SERVICE AGREEMENT, ENTERPRISE LICENSE AGREEMENT ASSOCIATED WITH THE PALO ALTO NETWORKS EQUIPMENT THAT WE'VE GOT.
SO WE HAVE A COMBINATION OF, UH, NEXT GENERATION FIREWALLS, UH, SECURITY SUBSCRIPTIONS, AND SOME CONSOLES THAT, UM, THAT ARE COVERED BY THIS, UH, PROCUREMENT AS WELL AS, UM, AN ADDITIONAL 600 K FOR, UM, PLAN CAPACITY INCREASES IN PALO ALTO.
MAYBE I MAY BE, I, I'M NOT CLEAR, THIS DOES NOT HAVE TO DO THIS.
IT IS NOT ABOUT UPGRADING TO PREVENT HACKING AND TO ALLOW PEOPLE TO WORK OFFSITE, ET CETERA.
IS IT, OR IS IT WELL, YEAH, I MEAN, PALO ALTO IS OUR, UH, PRIMARY FIREWALL THAT WE HAVE FOR PROTECTION AGAINST, YOU KNOW, THREATS FROM, UH, THE INTERNET.
UM, SO WHAT WE HAVE HERE IS, UH, I NEED TO EXPAND THE, UM, CONTRACT IN ORDER TO ACCOUNT FOR THE INCREASE BASICALLY IN A CAPACITY THAT WE'VE REQUIRED SINCE THE BEGINNING OF COVID AND THE CHANGE TO WORK ARRANGEMENTS, ET CETERA.
SO THAT'S WHAT THIS IS FOR IT'S 1.2 MILLION FOR THOSE, UH, THE ENTERPRISE AGREEMENTS, THE, UH, SERVICE AGREEMENTS AND LICENSE AGREEMENTS, AND THEN AN EXTRA,
[00:35:01]
UH, 600 K TO COVER, UH, CAPACITY INCREASES.AND, AND, UH, WHY, UH, WHY IS, WHY IS THIS UNIQUE TO AUSTIN ENERGY? WHY IS IT AS OPPOSED TO THE REST OF THE CITY? WHY AREN'T MAYOR CITY COUNCIL, EVERYBODY COVERED BY COVERED BY THIS CONTRACT? SO WE HAVE, UH, AUSTIN ENERGY HAS ITS OWN CONTRACT FOR PALO ALTO SERVICES.
SO THIS IS THE, JUST THE AUSTIN ENERGY, UH, PIECE OF IT.
IT'S NOT THE CITY OF AUSTIN PIECE.
I, I, I GUESS WHAT I'M ASKING IS IF IT'S GOOD ENOUGH FOR AUSTIN ENERGY, WHY, WHY IS THE CITY NOT EMPLOYING THIS TECHNOLOGY? THE R D YOU DON'T KNOW? I DON'T KNOW FOR SURE.
THEY MAY HAVE ALSO PALO ALTO NETWORKS, UH, CONTRACTS.
I JUST DON'T HAVE VISIBILITY TO THAT FROM MY CAPACITY.
ANY OTHER QUESTIONS WITH THAT? I WILL ENTERTAIN A MOTION TO APPROVE ITEM NUMBER NINE.
UH, LIKE MOTION CARRIES UNANIMOUSLY.
[10. Staff briefing of the Third Quarter Operations Report by Stuart Reilly, Acting Deputy General Manager and Chief Operations Officer.]
UH, ARE THE STAFF BRIEFING AND REPORTS? WE HAVE A FULL AGENDA HERE AS, AS EVERYONE KNOWS.SO FIRST UP WE'VE GOT THE THIRD QUARTER OPERATIONS REPORT, UH, FROM MR. RILEY.
GOOD EVENING AGAIN, COMMISSIONERS.
MY NAME IS STUART RILEY, AND I'M HERE ACTING AS DEPUTY GENERAL MANAGER AND CHIEF OPERATING OFFICER I'M COVERING FOR SIDNEY JACKSON WHILE HE'S ON EXTENDED LEAVE, DUE TO A FAMILY EMERGENCY.
JUST WAIT FOR THE SLIDES TO COME UP WHILE WE'RE WAITING ON THAT.
I'LL JUST SAY THAT I WILL, I'LL GO THROUGH OUR STANDARD, UM, OPERATIONS REPORT TONIGHT.
UM, I'LL COVER COVERING THE THIRD QUARTER.
AND AS A REMINDER, OUR FISCAL YEAR, THIRD QUARTER COVERS THE MONTHS OF APRIL, MAY AND JUNE.
I'LL START OUT WITH AN EXECUTIVE SUMMARY.
DO I HAVE A REMOTE ROBIN OR OKAY.
SO I'LL START OUT WITH AN EXECUTIVE SUMMARY, THEN PROVIDE AN UPDATE ON OUR RELIABILITY, PERFORMANCE, ENVIRONMENTAL PERFORMANCE, AND AN UPDATE ON SOME OF OUR GRID RESILIENCE, STRATEGIC GOAL PROJECTS.
AND THEN LASTLY, AS AN ADDITION TO THESE ITEMS, I'LL PROVIDE YOU WITH AN UPDATE ON OUR HOT WEATHER PREPAREDNESS THAT WAS PROVIDED RECENTLY TO CITY COUNCIL.
SO AS A HIGH LEVEL SUMMARY, WE HAVE OVERALL GOOD NEWS TO REPORT GENERATOR GENERATOR AVAILABILITY WAS VERY GOOD.
OUR SERVICE RELIABILITY IS STILL HOVERING RIGHT AROUND THAT TOP CORE TILE BENCHMARK IN OUR RENEWABLE ENERGY PRODUCTION.
AS A PERCENTAGE OF OUR CUSTOMER CONSUMPTION WAS 61% FOR THE QUARTER WITH OUR OVERALL CARBON FREE GENERATION STANDING OUT IN APRIL AT 97%.
CARBON-FREE AS A PERCENTAGE OF OUR LOAD FOR THAT MONTH.
NEXT SLIDE, GETTING INTO A LITTLE BIT MORE DETAIL, I'LL START WITH OUR RELIABILITY PERFORMANCE.
THIS IS OUR STANDARD TABLE SHOWING OUR GENERATOR COMMERCIAL AVAILABILITY.
I'D LIKE TO HIGHLIGHT THAT YOU CAN SEE HERE, THE DECKER STEAM UNITS, COMMERCIAL AVAILABILITY IS BLANK FOR THE QUARTER THAT'S BECAUSE THE SECOND OF THE TWO DECKER STEAM UNITS WAS RETIRED AT THE END OF QUARTER TWO LAST QUARTER.
ALSO, I BELIEVE SYDNEY MENTIONED THAT THE SANDHILL COMBINED CYCLE HAD A SEASONAL OUTAGE THAT WAS EXTENDED INTO PART OF THE WINTER FOR MAINTENANCE, BUT FOR APRIL MAY AND JUNE, IT WAS AT ONE HEIGHT, IT WAS AVAILABLE 100% OF THE TIME.
UM, ALSO STP WAS AVAILABLE 100% OF THE TIME AS WELL.
THE FAYETTE UNITS YOU'LL SEE HOW THE COMMERCIAL AVAILABILITY OF 79%.
THIS WAS DUE TO SOME MAINTENANCE THAT HAD TO BE JUST SOME ROUTINE MAINTENANCE AND PREPARATION FOR THE SUMMER.
WE ALSO HAD A HUNDRED PERCENT START SUCCESS ON OUR SIMPLE CYCLE UNITS AND NOT SHOWN HERE.
I JUST WANT TO MENTION THAT THE NACODOCHES BIOMASS PLANT, UM, IT'S ROUGHLY 100 MEGAWATTS HAS BEEN ECONOMIC TO DISPATCH INTO ARCOT OVER THE PAST COUPLE OF MONTHS, AND IT HAS BEEN CONSISTENTLY AVAILABLE TO DO SO AS WELL.
NEXT SLIDE, PLEASE, HERE ON THE TOP LEFT, YOU'LL SEE OUR THIRD QUARTER POWER GENERATION COSTS BY FUEL TYPE ON THE TOP, RIGHT? OUR GENERATION BY FUEL SOURCE AND ON THE BOTTOM RIGHT.
GENERATION TYPE AS A PERCENT OF CONSUMPTION.
BUT I'LL POINT OUT THAT ON THE BOTTOM LEFT,
[00:40:01]
YOU CAN SEE OUR THIRD QUARTER, OR I'M SORRY.SECOND QUARTER THIRD QUARTER PEAK DEMAND WAS HIGHER THAN A RECENT YEARS DUE TO THE HOTTEST JUNE ON RECORD.
PLEASE CONFUSING IT WITH SECOND QUARTER, BECAUSE THESE ARE 12 MONTH ROLLING AVERAGE SYSTEM RELIABILITY NUMBERS, WHICH ARE TRACKED ON A CALENDAR YEAR BASIS.
SO ON THIS SLIDE, YOU'LL SEE THE QUARTER TWO CORRELATES TO APRIL, MAY AND JUNE ON THIS SLIDE.
SO, UM, APRIL, MAY AND JUNE ARE THE YELLOW BAR ON THE FAR RIGHT SIDE OF EACH GRAPH.
SADIE ON THE TOP, RIGHT, IS THE SYSTEM AVERAGE INTERRACIAL INTERRUPTION DURATION INDEX, OR THE TOTAL DURATION OF OUTAGES FOR THE AVERAGE CUSTOMER.
CURRENTLY, THIS IS AROUND 63 MINUTES ANNUALLY SAFETY ON THE BOTTOM, RIGHT? IS THE SYSTEM AVERAGE INTERRUPTION FREQUENCY INDEX, OR HOW OFTEN THE CUSTOMER EXPERIENCES A SUSTAINED OUTAGE.
THIS IS CURRENTLY 0.8 OUTAGES ANNUALLY.
FOR ALL OF THESE, WE'RE VERY CLOSE TO THE TOP CORE TILE INDUSTRY BENCHMARK.
WE KEEP A VERY CLOSE EYE ON THIS DATA WITH TEAMS THAT LOOK AT WHERE IMPROVEMENTS CAN BE MADE.
AND THE TAKEAWAY HERE IS THAT OVERALL WE HAVE, UM, STRONG SYSTEM RELIABILITY WITH SOME POCKETS OF UNDERPERFORMANCE, OUR PROJECTS, UH, TO ADDRESS VEGETATION MANAGEMENT AND UNDERPERFORMING FEEDERS ARE AIMED AT MOVING THE NEEDLE, STARTING WITH PROBLEM AREAS TO HAVE US WITHIN THAT TOP CORE TILE OF UTILITIES ON A MORE CONSISTENT BASIS.
NOW I'LL SPEAK TO OUR THIRD QUARTER ENVIRONMENTAL PERFORMANCE IN APRIL, AS I MENTIONED, WE ACHIEVED 97% CARBON-FREE GENERATION AS A PERCENTAGE OF OUR LOAD OR CUSTOMER'S CONSUMPTION IN MAY.
IT WAS 89% CARBON-FREE AND IN JUNE 71% CARBON-FREE AS A PERCENTAGE OF LOAD IN THE HOTTER MONTHS AS DEMAND INCREASES, MORE DISPATCHABLE, THERMAL GENERATION IS CALLED UPON TO MEET DEMAND IN ERCOT.
HOWEVER, AS YOU CAN SEE DURING AUSTEN'S HOTTEST MAY AND JUNE ON RECORD, WE'RE STILL ACHIEVING A HIGH AMOUNT OF CARBON FREE GENERATION TO OFFSET OUR CUSTOMER'S NEEDS.
AND WE'RE ALWAYS LOOKING TO AFFORDABLY EXPAND OUR RENEWABLE PORTFOLIO, AND WE HAVE A SMALL ADDITION.
WE'RE HAPPY TO REPORT PREVIOUSLY.
OUR ARAGORN SOLAR PROJECT AGREEMENT PROVIDED UP TO 180 MEGAWATTS.
THAT PROJECT WENT TO COMMERCIAL OPERATION ON DECEMBER 31ST, 2021.
WE HAD AN OPPORTUNITY TO ADD AN EXTRA SEVEN MEGAWATTS TO THAT PPA AND WE'RE ABLE TO DO SO WITHIN THE SPENDING AUTHORIZATION PREVIOUSLY APPROVED.
NOW I'LL PROVIDE A FEW HIGHLIGHTS ON HOW WE'RE COMING ALONG ON STRATEGIC PROJECTS, AIMED AT IMPROVING SERVICE RELIABILITY TO IMPROVE DISTRIBUTION RELIABILITY.
WE IDENTIFIED AND RANKED FEEDERS BASED ON OUTAGE PERFORMANCE AND WILDFIRE RISK.
WE'RE WORKING TO ADDRESS OUR TOP 10 FEEDERS GREATEST IN NEED.
WE'RE MAKING GOOD PROGRESS AND LOOK TO HAVE THESE FEEDERS ADDRESSED BY THE END OF THE CALENDAR YEAR FOR SUBSTATIONS, WE'VE COMPLETED OUR SUBSTATION EQUIPMENT EVALUATION AND REMEDIATED ALL OUR SLOW BREAKERS TO IMPROVE PERFORMANCE IN TERMS OF OUR DOWNTOWN NETWORK.
WE'RE CONTINUING TO MODEL THE NETWORK IN OUR ADVANCED DISTRIBUTION MANAGEMENT SYSTEM FOR GREATER VISIBILITY.
AND LASTLY, OUR TRANSMISSION STUDY IS UNDERWAY TO, TO ASSESS WAYS TO ACHIEVE OUR GENERATION PLAN GOALS.
THIS STUDY IS EXPECTED TO BE COMPLETE IN THE SECOND QUARTER OF 2023.
AND LASTLY, I'D LIKE TO GIVE AN OVERVIEW ON THE RECENT HOT WEATHER AND ITS IMPACTS.
SYDNEY JACKSON PRESENTED INFORMATION TO CITY COUNCIL A COUPLE OF WEEKS AGO AS PART OF AN EMERGENCY MANAGEMENT PRESENTATION.
AND I WANTED THE EEC TO GET THIS PRESENTATION AS WELL.
SO THIS SLIDE PROVIDES AN OVERVIEW OF THE ERCOT ENERGY EMERGENCY ALERT SYSTEM.
AS A REMINDER, OUR MARKET OPERATIONS REALTIME DESK AND OUR ENERGY CONTROL CENTER ARE READY TO RESPOND TO ERCOT INSTRUCTIONS AT ALL TIMES SO FAR THIS YEAR, CUT HAS SEEN SOME VERY TIGHT DAYS WHEN EXTREME HEAT HAS COMBINED WITH LIMITED WIND RESOURCES AND ERCOT HAS USED SEVERAL TOOLS TO NAVIGATE THESE TYPES OF DAYS, INCLUDING CONSERVATION ALERTS.
HOWEVER, ERCOT HAS NOT ORDERED ANY CONTROLLED OUTAGES THIS YEAR.
SO STARTING ON THE LEFT WHEN CONDITIONS ARE TIGHT, BUT PRIOR TO RESERVES DIPPING BELOW 3000 MEGAWATTS, ERCOT MAY CALL FOR A CONSERVATION ALERT.
THIS HAPPENED ON JULY 10TH AND JULY 13TH, WHICH HAPPENED TO BE NEW PEAK DEMAND RECORDS FOR OUR CUT.
OVERALL, THERE HAVE BEEN 11 TIMES THIS SUMMER THAT ERCOT PEAK DEMAND HAS SET A NEW RECORD AND THEN CONTINUING THROUGH THE EMERGENCY LEVELS.
IF, IF RESERVES DIP BELOW 2300 MEGAWATTS AND ARE NOT EXPECTED
[00:45:01]
TO RECOVER IN 30 MINUTES OR CUT, UM, UH, AN EEA ONE IS ISSUED CALLING FOR ADDITIONAL CONSERVATION.THIS IS WHEN AUSTIN ENERGY'S INCIDENT COMMAND STRUCTURE IS ACTIVATED AND OUR LOCAL EMERGENCY MANAGEMENT PARTNERS WITHIN THE CITY ARE FORMALLY NOTIFIED AS WELL THAT WE DO KEEP IN TOUCH WITH THEM ON A, ON A CONSTANT BASIS.
AND THEN ON THE FAR RIGHT IN EEA THREE, THIS IS WHEN ERCOT CAN ORDER CONTROLLED OUTAGES.
BUT AGAIN, THIS HAS NOT OCCURRED THIS YEAR.
AT AUSTIN ENERGY, WE ALSO WORK CLOSELY WITH THE ERCOT GRID COMMUNICATORS GROUP.
WE PUSH MESSAGES TO SUPPORT OR CUTS CALLS FOR CONSERVATION.
AND HERE YOU CAN SEE THE CONSERVATION NOTICES WE SENT EARLIER THIS SUMMER IN SEVERAL DIFFERENT LANGUAGES.
WE ALSO CONTINUE MAKING ENHANCEMENTS AND IMPROVEMENTS TO OUR OUTAGE MAP.
I TOOK THIS SCREENSHOT HERE LAST SUNDAY AT AROUND 11:30 AM, JUST BEFORE SOME PLANNED MAINTENANCE WAS COMPLETE.
AND 100% OF OUR CUSTOMERS WERE RESTORED HERE.
YOU CAN SEE A BETTER VISUAL LAYOUT, CLEAR LEGEND AND ADDITIONAL TOOLS AND VIEWS.
WE ALSO PROVIDE THE BEST INFORMATION WE HAVE REGARDING THE ESTIMATED TIME OF RESTORATION.
WE ALSO HAVE OVER 135,000 CUSTOMERS ENROLLED IN OUR OUTAGE ALERTS, BUT YOU CAN NOW GET THOSE MESSAGES VIA TEXT MESSAGE OR EMAIL, AND WE'LL CONTINUE WORKING ON GETTING THE MOST USEFUL INFORMATION TO OUR CUSTOMERS VIA THE MOST CONVENIENT COMMUNICATION CHANNELS.
AND ON THE RIGHT SIDE ARE SOME COMMON CAUSES OF OUTAGES OTHER THAN STORM RELATED OUTAGES, CAR CRASHES, VEGETATION, ANIMAL CONTACT, EQUIPMENT ISSUES, AND CONSTRUCTION INCIDENTS LIKE THIRD-PARTY DIGGINS THIS SUMMER.
SOME CUSTOMERS EXPERIENCING LOCALIZED OUTAGES ASSUMED THAT ERCOT HAD ENTERED INTO AN EEA THREE.
SO WE'RE WORKING TO EDUCATE CUSTOMERS ON THIS.
UH, WE KNOW THERE'S A LOT OF ANXIETY OUT THERE IN THIS HEAT.
AND SO WE ENCOURAGE EVERYONE TO USE THE, TO SIGN UP FOR THE OUTAGE ALERTS AND USE THE OUTAGE MAP OR CALL US ALSO THE ERCOT APP IS VERY HANDY AS WELL.
UM, THAT'S ALL I HAVE FOR YOU TONIGHT.
I'M HAPPY TO ANSWER ANY QUESTIONS YOU HAVE, UM, ON YOUR SLIDE ABOUT THE ERCOT PROCESS OF, UH, CALLING FOR CONSERVATION AND THEN DIFFERENT OPERATING RESERVES.
AND IF YOU CAN'T TELL ME THIS, YOU DON'T HAVE TO, BUT THE QUESTION IS, DOES US, DOES AUSTIN ENERGY ITSELF, UM, PROVIDE ANY MORE EMERGENCY RESPONSE SERVICES? DO YOU KNOW? UM, I BELIEVE WE DO HAVE SOME ERS CUSTOMERS AND NOT A LOT, BUT THEY, THEY HAVE PULL ERCOT HAS PULLED ERS OUT OF THE EEA UMBRELLA TO WHERE THEY CAN USE THAT TOOL OUTSIDE OF AN EA AS WELL TO MANAGE AN IN A, IN AN EXTREMELY TIGHT DAY.
AND ARE THOSE CUSTOMERS, ARE THEY OPERATING THROUGH YOU GUYS AS THE QUEASY OR THEY HAVE SEPARATE? YES, THEY WOULD BE THAT IT WOULD BE SAY YOU GUYS, I SAY WE DO HAVE SOME IN OUR PORTFOLIO.
THAT WOULD BE WHEN WE'RE THE QUEASY.
YEAH, I WOULD BE INTERESTED JUST TO KNOW IF YOU'RE A, I DON'T KNOW IF IT'S A COMPETITIVE AD OR NOT, BUT IF I'D BE INTERESTED JUST TO KNOW HOW, YOU KNOW, HOW, HOW MANY MEGAWATTS OF ERS ARE WE CONTRACTED FOR, UH, FOR THE DIFFERENT, YOU KNOW, PERIODS.
THE ARAGON SOLAR, IS THAT THE PFLUGERVILLE SOLAR? WHERE IS THAT LOCATED? UM, THAT IS, UH, IN WEST TEXAS.
UM, ON THE FAYETTE POWER PLANT, ALL OF THE OUTAGES, THOSE WERE PLANNED OUTAGES FOR REFUELING.
YES, IT WAS, IT WAS, UM, SOME PLANNED MAINTENANCE IN PREPARATION FOR THE SUMMER.
SO, AND WHEN WE GET THESE, UM, OPERATIONS UPDATES, WHEN WE SEE THIS, THE AVAILABILITY PERCENTAGES, UM, IS THERE ANY WAY TO DISTINGUISH IF THE OUTAGES ARE PLANNED OR UNPLANNED OR WOULD YOU JUST KIND OF VERBALLY TELL US IN, IN SOME OF IF THAT WERE TO HAPPEN? YEAH.
SO, UM, IF I WAS GIVING THE REPORT, I WOULD KIND OF GET, TRY TO GIVE YOU AN OVERVIEW OF IF, IF IT WAS PLANNED OR UNPLANNED.
UM, GENERALLY, YOU KNOW, SOMETIMES THERE'S, THERE COULD BE A MIXTURE OF BOTH IN THERE, BUT GENERALLY WE'LL, WE'LL KIND OF BE ABLE TO GIVE YOU A HIGH LEVEL IF YOU'RE CURIOUS, IF YOU LOOK AT THOSE NUMBERS AND SEE, UM, ON ANY GIVEN MONTH OR QUARTER.
[00:50:01]
NOW WE'RE GOING TO TAKE UP ITEM NUMBER 12, WHICH IS STAFF'S PRESENTATION ON THE FISCAL YEAR 20 22, 20 23 AUSTIN ENERGY BUDGET.AND I BELIEVE WE HAVE SEVERAL SPEAKERS, ACTUALLY.
[11. Staff briefing of the Third Quarter Financial Report by Adam McInroy, Finance Director.]
WE'RE GOING TO DO THE ITEM ITEM 11, WHICH IS THE QUARTERLY FINANCIAL REPORT.I KNOW ITEM NUMBER 11, GOOD AFTERNOON COMMISSIONERS.
ENERGY'S FINANCE DIRECTOR FOR RISK MANAGEMENT.
AND IT'S MY PLEASURE TODAY TO INTRODUCE TO YOU THE QUARTERLY FINANCIAL REPORT FOR THE THIRD QUARTER.
AND AS STEWART SAID, THAT'S MONTHS, APRIL, MAY, AND JUNE OF THIS YEAR, WE'LL GO TWO SLIDES.
SO IN OUR DISCUSSION TODAY, ONE MORE.
CAN WE DO EVENTS, ONE MORE SLIDE.
SO IN OUR DISCUSSION TODAY, I'LL BE HAPPY TO WALK YOU THROUGH AN EXECUTIVE SUMMARY OF HIGH-LEVEL POINTS, SOME FINANCIAL COMP POLICY COMPLIANCE METRICS, FINANCIAL PERFORMANCE MEASURES, SOME ACTUAL TO BUDGET ANALYSES HIGHLIGHTS OF OUR FINANCIAL STATEMENTS AND A MARKET ANALYSIS AROUND A CREDIT ACTION TAKEN BY FITCH, A CREDIT RATING AGENCY AROUND AUSTIN, ENERGY CREDIT, JUST THIS JUNE LET'S.
WE COULD GO TWO SLIDES, TWO SLIDES FORWARDS, PLEASE.
SO AS WE LOOK AT THE HIGHEST LEVEL RESULTS, UH, IN OUR EXECUTIVE SUMMARY, I THINK YOU'LL SEE A FEW KEY THEMES THROUGHOUT THIS PRESENTATION.
AND IN THE SUMMARY, ONE IS AS STEWART MENTIONED OF A VERY HOT QUARTER AND IN FINANCIAL TERMS THAT LEADS TO HIGH SALES VOLUMES, AS WELL AS REVENUES AND EXPENSES.
THOSE KINDS OF ALL MOVED TOGETHER.
SOMETHING ELSE THAT YOU'LL NOTICE IS A CONTINUING FINANCIAL STRESS, WHICH WE'VE BEEN TALKING ABOUT IN THE RATE REVIEW, AND WHICH IS, UH, HAS CONTRIBUTING FACTORS OF LOW MARGINS.
AND THAT FLOWS THROUGH INTO MANY OF THE FINANCIAL METRICS.
YOU'LL SEE HERE, AS FAR AS BULLET POINTS, WE'D SAY THAT AUSTIN ENERGY IS IN PARTIAL COMPLIANCE WITH ITS FINANCIAL POLICIES.
OUR DEBT SERVICE COVERAGE RATIO IS BELOW 2.0 TIMES A, WHICH IS A POLICY MINIMUM AND IS CURRENTLY AT 1.9 TIMES, WHICH IS OUT OF POLICY.
OUR CONTINGENCY AND CAPITAL RESERVE BALANCES ARE TWO BUCKETS WITHIN AN OVERALL CASH BALANCE, UH, POLICY.
THOSE ARE BELOW MINIMUMS, BUT THE TOTAL CASH BALANCE REMAINS ABOVE ITS MINIMUM OF $480 MILLION.
WHEN THINKING ABOUT THAT CASH BALANCE, WE NOTE THAT WORKING CAPITAL HAS DECREASED BY $159 MILLION IN YEAR OVER YEAR TERMS. THIS IS PRIMARILY DUE TO KNOWN FACTORS LIKE DECREASED MARGINS, SCHEDULED FUNDING OF CIP AND THE REDUCTION IN THE POWER SUPPLY RATE, LEADING TO LOWER RECOVERIES IN POWER SUPPLY ADJUSTMENT BALANCES IN TERMS OF OPERATING REVENUE.
WE SEE $1.1 BILLION IN OPERATING REVENUE, UH, IN FISCAL YEAR TO DATE, THAT'S ABOUT 11% OVER THE BUDGET.
AND AGAIN, WE'D MOSTLY ATTRIBUTE THAT TO A WARMER YEAR WHICH LEADS TO INCREASES IN USAGE BASE REVENUE AND POWER SUPPLY REVENUE WITH THOSE KINDS OF ALL MOVED TOGETHER.
AND WHEN WE LOOK THERE'S A MIRROR THERE IN EXPENSES WHERE WE SEE A $1.2 BILLION IN EXPENSES WITH OUR TRANSFERS.
AND AGAIN, THAT'S ABOUT 10% OVER BUDGET, VERY SIMILAR TO THE 11% IN REVENUES.
AND THAT'S LARGELY DUE TO THE SAME DRIVERS OF HOT WEATHER.
UH, FINALLY LOOKING AT SOME RATING AGENCY METRICS, AUSTIN ENERGY IS MEETING ITS TARGET OF ITS S AND P BOND RATING BEING DOUBLE A, BUT OUR FINANCIAL METRICS SHOW THIS TO BE UNDER STRESS AND AT-RISK AND S AND P WE'LL BE REVIEWING US IN SEPTEMBER.
AND THAT'S SOMETHING TO KEEP AN EYE ON.
ANOTHER RATING AGENCY FITCH ACTUALLY TOOK ACTION AND DOWNGRADED ITS RATING FOR AUSTIN ENERGY'S CREDIT FROM AA TO AA MINUS.
AND THAT OCCURRED JUST IN JUNE QUICK, VERY QUICK QUESTION.
UM, SO S AND P FITCH, THESE ARE OUTFITS THAT REVIEW UTILITIES OR OTHER PUBLIC ENTITIES.
ARE YOU GUYS JUST PAYING ATTENTION TO THOSE TWO OR ARE THERE MORE LIKE, WHAT, HOW DO YOU FIGURE OUT? SURE.
YEAH, SO WE HAVE SOME SLIDES LATER ON THIS, BUT I'LL, I'LL SKIP RIGHT TO THE POINT.
UH, THEY ARE, UH, S AND P FITCH AND MOODY'S ARE WHAT WE CALL THE BIG THREE.
THEY'RE SORT OF A SECRET FOURTH.
UM, BUT THERE ARE 10 NATIONALLY RECOGNIZED ORGANIZATIONS THAT REGISTER WITH THE SEC AS SORT OF GOOD ENOUGH TO HAVE THEIR RESULTS THOUGHT ABOUT THEY'RE CALLED NSR ROSE OR NATIONALLY RECOGNIZED STATISTICAL ORGANIZATIONS.
HAVING SAID THAT ALMOST EVERYONE THINKS ABOUT THE BIG THREE AND WE'LL SHOW YOU LATER OUR EXACT RATINGS WITH ALL THREE.
SO WITH THAT, IF WE'LL MOVE FORWARD TWO SLIDES.
SO IN MORE GRANULAR METRICS, WE'RE SEEING STRESS AND COMPLYING WITH OUR FINANCIAL POLICY.
AND THEN SOME OF THE KPIS HERE, WE CAN THINK OF OUR FINANCIAL POLICIES AS FITTING INTO THREE LARGE BUCKETS, DEBT POLICIES, RESERVES POLICIES, AND OPERATING POLICIES.
WHEN WE LOOK WITHIN THOSE, WE SEE PARTIAL COMPLIANCE WITH OUR DEBT POLICIES.
THERE ARE MORE THAN ONE, BUT ONE OF THE KEY POLICIES THERE IS OUR DEBT SERVICE
[00:55:01]
COVERAGE RATIO.HIGHER NUMBERS ARE BETTER HERE.
WE HAVE A MINIMUM OF 2.0 IN POLICY.
AND CURRENTLY, AS WE MEASURE TODAY, WHERE AT 1.9 TIMES AS A DEBT SERVICE COVERAGE RATIO IN RESERVE POLICIES, WE ALSO SEE PARTIAL COMPLIANCE.
AS I SAID BEFORE, THERE'S A TOTAL CASH BUCKET THAT HAS A MINIMUM OF $480 MILLION.
AND OF COURSE FOR CASH, HIGHER NUMBERS ARE BETTER.
WE ARE MEETING THAT TARGET, BUT TWO OF THE SMALLER BUCKETS FOR CONTINGENCY AND CAPITAL RESERVE BALANCES ARE BELOW THEIR POLICY MINIMUMS. WE HAVE ANOTHER SET.
ON THE PREVIOUS SLIDE, UH, UH, THE FITCH RATING WAS A AS OPPOSED AS A MINUS, AS OPPOSED TO A CORRECT.
UH, HOW DOES, DO YOU KNOW HOW THAT COMPARES TO THIS CITY AS A WHOLE GOT THAT SPECIFIC COST AND ENERGY, RIGHT? CORRECT.
AND I DON'T HAVE, WHICH IS THE CITY IS NOT A GUARANTOR OF AUSTIN MANOR WHEN AUSTIN ENERGY ISSUES BONDS.
IS THAT CORRECT? UM, I'M SORRY, I ASK YOU THE QUESTION AGAIN.
IT REALLY HAS TO DO WITH HOW AUSTIN ENERGY IS, IS RIGHTED AS COMPARED TO THE CITY AS A WHOLE.
UM, UH, I'M NOT FAMILIAR WITH WHAT THE CITY'S CREDIT RATING IS THERE, BUT IT IS SEPARATE AND APART FROM AUSTIN ENERGY'S, I THINK YOU HAD A QUESTION ABOUT WHETHER THE CITY GUARANTEES OUR BOND.
OUR BONDS ARE SECURED BY OUR REVENUES, THEIR REVENUE, BONDS REVENUE ONLY.
SO, ANY OTHER QUESTIONS ON THE FINANCIAL POLICIES? I THINK WE WERE ENDING WITH OPERATING POLICIES, AND THOSE ARE THE SET OF POLICIES IN WHICH WE'RE IN FULL COMPLIANCE AT THIS TIME.
SO IF YOU GO TO MORE SIDES, SO THESE METRICS AND OTHERS, BOTH QUANTITATIVE AND QUALITATIVE, UH, INFORM OUR CREDIT RATINGS AS WE'VE BEEN DISCUSSING, UH, OUR TARGET CREDIT RATING, UH, IS AROUND S AND P.
SO AMONG THOSE, WE THINK WE PICKED ONE TO SORT OF HAVE EXPLICITLY IN THE TARGETS, ALTHOUGH ALL ARE IMPORTANT.
AND OUR TARGET IS FOR A DOUBLE, A BOND RATING FROM S AND P.
WE DO HOLD THAT AT THIS TIME, AND WE HAVE HELD IT SINCE NOVEMBER OF 2018, BUT THIS RATING IS AT RISK GIVEN OUR CURRENT FINANCIAL METRICS THAT AND OTHER OUTLOOK, UH, FOR THE SECTOR AND FOR AUSTIN ENERGY, SOME METRICS AGAIN, THE, UH, THE RATING AGENCIES THINK ABOUT QUANTITATIVE AND QUALITATIVE FACTORS FOR US AND FOR THE INDUSTRY.
AND THEY THINK ABOUT MANY DIFFERENT THINGS.
FOUR KEY AREAS OF METRICS THAT ARE, THEY DO CONSIDER OUR LIQUIDITY COVERAGE EFFICIENCY AND LEVERAGE SOME OF THESE WE'VE ALREADY DISCUSSED, UH, ONE AROUND LIQUIDITY AS DAY'S CASH ON HAND, HIGHER NUMBERS ARE BETTER HERE.
AND WE TARGET A MINIMUM OF 150 DAYS.
OUR ACTUAL, UH, NUMBER OF DAYS, CASH ON HAND IS 141.
NOW SHOWING SOME FINANCIAL STRESS AND BELOW OUR TARGET THAT DEBT SERVICE COVERAGE RATIO IS IMPORTANT TO US AND TO RATING AGENCIES LIKE S AND P HIGHER NUMBERS ARE BETTER HERE.
AND WE SEE, WE'D LIKE TO HAVE A MINIMUM OF 2.0 TIMES, AND WE HAVE AN ACTUAL OF 1.9 TIMES.
SO BEFORE 2018, WHAT WAS THE AUSTIN ENERGY RATING? UH, I DON'T HAVE THAT METRIC, BUT I BELIEVE OUR CFO KNOWS.
IS HE THERE? SO WAS IT BETTER OR WORSE BEFORE 2018? RIGHT.
SO, UH, MARK NEBRASKA, THE CFO.
SO, UM, PRIOR TO 2018, WE HIT A DOUBLE A MINUS.
AND AT ONE TIME IT WAS, UH, AS LOW AS A, UM, A PLUS I BELIEVE, UH, GOING BACK ABOUT MORE THAN A DECADE, UH, ONE, UM, AUSTIN ENERGY, UH, DID IT SLASH RATE REVIEW AND, UM, OR LAST RATE INCREASE, WHICH WAS IN 2012.
AND SO AS A RESULT OF THAT, OFFICER ANDREW WAS ABLE TO BUILD UP SOME CASH RESERVES AND BEGAN TO SEE ITS RATINGS INCREASE AGAIN UNTIL THE AA WE RECEIVED IN 2018, UH, WHERE IT'S BEEN SINCE THAT TIME, UNTIL THIS, THIS DOWNGRADE, UH, FOR MUCH THE SAME REASONS THAT WE'RE EXPLAINING HERE TODAY.
WELL, IT'S HARD, I GUESS, TO, TO ASSESS, BUT WITH EACH HIGHER RATING YOU GET LOWER INTEREST RATES.
AND SO HOW DO YOU GET A GOOD FEEL FOR HOW MUCH EACH IMPROVED LEVEL SAVES AN INTEREST COSTS WHEN INTEREST RATES BOUNCE AROUND THEMSELVES? SO THERE'S SOME WAY TO DISCERN CHANGING INTEREST RATES IN THE MARKETPLACE VERSUS THE DIFFERENT RATINGS OVER TIME.
YES, WE, I MEAN, WE CAN SEE IN THE MARKET WHAT VARIOUS, UH, BONDS ARE SELLING FOR WITH, UH, FROM, UH, ISSUERS FOR DIFFERENT CREDIT RATINGS.
SO GET A SENSE OF, UH, WHAT THE MARKET WILL AWARD FOR A HIGHER CREDIT RATING, BUT THERE'S MORE THAN JUST A BOND
[01:00:01]
MARKET.THERE'S ALSO, UM, WE TRADE ABOUT, UM, SAID ABOUT 800, 900 MILLION IN POWER THROUGH ON $600 MILLION THROUGH ERCOT AND COUNTERPARTY CREDIT.
SO THE CREDIT OF AUSTIN ENERGY IS VERY IMPORTANT FOR US, SO WE CAN REMAIN LIQUID IN THAT MARKET.
SO, UH, THERE'S, UH, ANOTHER BENEFIT THERE.
OTHERWISE WE'D HAVE TO PUT UP CASH COLLATERAL, UM, AND THEN THERE'S A TERMS AND CONDITIONS ON OUR VENDORS FOR OBVIOUSLY, UM, IF YOU HAVE BETTER CREDIT, FOLKS ARE MORE LIKELY TO EXTEND YOU CREDIT ON OUR CONTRACTS.
SO THERE'S A LOT OF DYNAMICS TO THAT CREDIT RATING THAN JUST, UH, TH TH THE DEBT ISSUANCE, BUT YOU CAN SEE IN THE BOND MARKET, WHAT THOSE HIGHER RATINGS ARE WORTH.
UM, I, I'M SORT OF ASKING THE SAME THING AS RANDY, AND I'M NOT SURE IF IT FULLY GOT ANSWERED.
AND THE LAST QUESTION, UM, BUT HOW, UM, HOW MUCH DOES IT MATTER IF YOU GO FROM AA TO AA MINUS, I THINK OF THOSE AS NOT A LOT OF DIFFERENCE IN THE TOTAL OUTCOME OF WHAT IT DOES IN TERMS OF BONDS AND, AND, UM, INTEREST THAT WE WOULD PAY.
CAN YOU EXPLAIN FURTHER HOW MUCH IMPACT THAT IS? I KNOW WE WANT AA, BUT I THINK A MINUS IS CONSIDERED A REALLY GOOD RATING AS WELL.
I THINK I DON'T HAVE NUMBERS HERE FOR YOU, BUT AS MARK MENTIONED, UM, YOU KNOW, LOWER CREDIT DOES INVOLVE HIGHER RATES ON NEW DEBT.
UM, AS WELL AS, UH, CHANGES IN CONTRACT TERMS AND ANOTHER AREA I'D HIGHLIGHT IS PRICING IN OUR LONGEST TERM CONTRACTS IN PARTICULAR, OUR POWER PURCHASE AGREEMENTS.
SO MANY OF THOSE ARE 20 TO 25 YEAR AGREEMENTS THAT RELY ON AUSTIN ENERGY CREDIT, WORTHINESS TO PERFORM, UH, IN THE 20 AND 25TH YEAR.
AND THOSE ARE AFFECTING AS WELL.
I WOULD CHARACTERIZE, UH, THE ONE NOTCH CHAIN CHANGE AS THAT.
THAT'S HOW IT'S REFERRED TO IN THE INDUSTRY AS WELL, THE INDUSTRY AS ONE NOTCH.
UH, SO YOU HAVE, UM, SO IT'S STILL, FOR EXAMPLE, A AA MINUS IS INVESTMENT GRADE, UH, BY QUITE A MARGIN.
UM, AND THE OTHER THING TO CONSIDER IS THAT A CHANGE BY ONE AGENCY DOES NOT NECESSARILY MEAN A CHANGE BY ALL OF THEM.
AND THE AGENCIES ACTUALLY HAVE SOME, UH, DIFFERENT PHOTO SIZE.
SO FITCH IN PARTICULAR TENDS TO BE VERY AWARE OF THE UTILITY INDUSTRY, WHEREAS S AND P JUST HAS SOME DIFFERENT POSTS.
AND THAT'S PART OF WHY MANY PEOPLE USE THE MULTIPLE RATINGS TO EVALUATE INVESTMENTS AS WELL AS CREDIT TERMS, TO MY KNOWLEDGE.
UH, SO AGAIN, I DON'T HAVE AN INTEREST COST, UM, SORT OF A EQUATION FOR YOU.
I CAN TELL YOU THAT, UM, AS PART OF MY SHOP WITHIN AUSTIN ENERGY, I MONITOR THOSE COLLATERAL AND CREDIT AGREEMENTS WITH COUNTER PARTIES QUITE CLOSELY.
AND THE ONE NOTCH DOWNGRADE DOES NOT IMMEDIATELY REQUIRE AUSTIN ENERGY TO POST ADDITIONAL CAPITAL.
UH, SO IT DOESN'T HAVE THAT KIND OF IMMEDIATE EFFECT.
UH, ONE MORE NOTCH WOULD BE PROBLEMATIC IN THAT FASHION, BUT A W TWO W MINUS DOES NOT.
SO I APOLOGIZE FOR NOT HAVING A NUMBER FOR YOU, UM, AS FAR AS THE DOLLAR IMPACT, BUT THOSE ARE SOME OF THE IMPACTS THAT I SEE FOR THAT NOTCH, THAT, THAT MAKES SENSE.
RELATED, RELATED QUESTION, UH, HOW D WITH AA MINUS, UH, UH, YOU KNOW, UH, WHAT'S AN A, BUT, UH, HOW DOES THAT COMPARE TO OTHER, UH, MUNICIPALITIES, UH, UH, PARTICULARLY IN TEXAS, THE, YOU KNOW, I BELIEVE IN TERMS OF UTILITIES, WHICH IS, UH, KIND OF OUR SECTOR.
UH, SO FOR MUNICIPAL UTILITIES, I BELIEVE IT IS, IT REMAINS QUITE STRONG IN THAT PEER GROUP.
UH, FINISHING OFF JUST SOME OF THE METRICS THAT THEY WILL BE LOOKING AT.
ONE OF THE KEY ONES IS OPERATING MARGINS, AND I THINK YOU'VE HEARD A LOT ABOUT THAT THROUGH THE RATE REVIEW PROCESS, OPERATING MARGINS IN OUR TARGETS FOR POLICY AND, AND IN, UH, RATINGS EVALUATIONS ARE FOR A POSITIVE NUMBER OF AT LEAST 10%.
AND OUR CURRENT METRIC IS A NEGATIVE NUMBER AND IS MINUS 2.8%.
THE LAST METRIC IS MORE OF A BALANCE SHEET METRIC VERSUS A CURRENT SPEND METRIC.
AND WE CALL IT LEVERAGE, UH, OUR IN OUR DEBT TO CAPITALIZATION RATIO HERE FOR THE FIRST TIME, LOWER NUMBERS ARE BETTER, AND WE'D LIKE TO HAVE A MAXIMUM THERE A 50%.
WE'RE ACTUALLY ABOVE THAT AT 55%.
SO JUST A BIT OUT OF BOUNDS THERE.
SO AS WELL AS METRICS FOR RATING AGENCIES AND OTHER KINDS OF PERFORMANCE, WE ALSO TRACK OUR AFFORDABILITY GOALS AND OUR COMPETITIVE GOALS.
SO WITHIN THESE TWO CATEGORIES, WE ARE WELL WITHIN THE GOAL AND WE'VE HAD FULL COMPLIANCE ON AFFORDABILITY SINCE 2013.
WHAT THAT MEANS TO US IS THAT WE'VE HAD SYSTEM AVERAGE RATES THAT GROW LESS THAN 2% A YEAR
[01:05:01]
ON AVERAGE, SINCE THAT DATE, OR ACTUALLY SINCE 2012.SO WE'RE WITHIN POLICY COMPLIANCE ON THE AFFORDABILITY METRIC FOR COMPETITIVENESS.
WE'D LIKE TO MAINTAIN SYSTEM AVERAGE ANNUAL RATES IN THE LOWER 50% OF ALL TEXAS UTILITIES WHO HAVE ALL THE CUSTOMER CLASSES LIKE WE DO.
AND WE HAVE THAT IN FULL COMPLIANCE SINCE 2019, AND WE'RE IN COMPLIANCE AS OF THIS QUARTER.
SO IF WE CAN ADVANCE ONE SLIDE, OUR NEXT SECTION WILL BE AN ACTUAL TO BUDGET ANALYSIS OF A FEW KEY PERFORMANCE QUANTITIES.
AND IF WE GO ONE MORE SLIDE, UH, SO WE'LL START WITH SORT OF, UH, THE, THE QUANTITY THAT DRIVES THE REST, WHICH IS CONSUMPTION.
SO AS WE LOOK AT ACTUAL TO BUDGET HERE, WE'LL SHOW YOU A SERIES OF CHARTS THAT LOOK MUCH LIKE THIS ARE BUDGETED AMOUNTS ARE IN GRAY, AND THEY ARE BROKEN OUT BY MONTH.
AND THEN THE ACTUAL AMOUNTS THAT ARE COMING IN THIS FISCAL YEAR ARE IN THE GOLD BARS THERE.
AND AGAIN, WHAT WE SEE HERE IS LARGELY INDICATIVE OF A WARMER THAN AVERAGE YEAR, UH, QUITE A BIT WARMER THAN AVERAGE.
AND WE SEE THAT THE GIGAWATT HOURS OF SALES OR CONSUMPTION OR ENERGY THAT WE DELIVER, UH, ARE LARGER THAN THE GRAY.
SO ACTUAL IS LARGER THAN BUDGET.
IF WE LOOK JUST AT JUNE, FOR EXAMPLE, WE SEE THAT WE DELIVERED A 1,345 GIGAWATT HOURS OF ENERGY.
WHEREAS WE HAD BUDGETED FOR 1,184.
AND THE LARGEST THING TO UNDERSTAND HERE IS THAT THE BUDGETING PROCESS ESSENTIALLY USES WEATHER NORMALIZED, UH, PROJECTIONS.
AND SO HAVING A HOT YEAR THAT HAS, UH, CONSUMPTION MUCH HIGHER THAN BUDGET IS NOT UNUSUAL, JUST SORT OF VARIES BY THE DEGREE OF HEAT.
ONE OF THE LARGEST COMPONENTS OF REVENUE AND EXPENSE AND CUSTOMER ECONOMICS THAT ARE DRIVEN BY THAT IS THE ACTUAL, IT'S A BUDGET FOR THE POWER SUPPLY ADJUSTMENT.
SO IN THE POWER SUPPLY ADJUSTMENT, WE HAVE THIS SIMILAR PICTURE WHERE, UH, THE BUDGET CONTAINED, UH, A FORECAST FOR THE GRAY BARS BY A MONTHLY BASIS.
AND AGAIN, THEY'RE GREATER THAN THE GRAY BARS BY A SIGNIFICANT AMOUNT.
AND THEN WE ALSO SHOW HERE A LIGHT BLUE LINE FOR THE ACTUAL REVENUE COMING IN.
SO THIS IS POWER SUPPLY REVENUE THAT'S, UH, UH, RETAINED FROM THE POWER SUPPLY RATE THAT WAS SET, UH, IN, UM, IN THE PREVIOUS BUDGET CYCLE AND WAS SET TO RETURN AN OVERCOLLECTION DUE TO WINTER STORM URI TO CUSTOMERS.
AND SO IT IS PARTLY PLANNED THAT THE, UH, BLUE LINE HERE IS BELOW THE ORANGE BARS, BUT WE SEE THE ORANGE BARS QUITE A BIT HIGHER THAN THE BLUE LINE.
FOR EXAMPLE, FOR JUNE OF 22, WE HAVE A 65.4 MILLION IN ACTUAL POWER SUPPLY COSTS.
WHEREAS THE BUDGET SHOULD COST WAS 44.6 MILLION.
SO A DELTA OF ABOUT $21 MILLION THERE, NEXT SLIDE.
SO THE PREVIOUS SLIDES WERE TIME SERIES IN THE NEXT FEW SLIDES.
WE DO MORE OF A BREAKOUT BY BUCKET OR COMPONENT OF SOME OF THE CRITICAL ITEMS FOR YOU.
AND SO IN ACTUAL IT'S A BUDGET ANALYSIS.
WE CAN LOOK AT REVENUE AND THEN JUST LOOK AT THE DRIVERS WITHIN REVENUE OF VARIANCES TO BUDGET.
SO AGAIN, HERE, THIS ISN'T A TIME SERIES, BUT THE VARIOUS GRAY COLUMNS REPRESENT BUDGETED AMOUNTS IN DIFFERENT COMPONENTS OF REVENUE.
AND THE GOLDEN BARS REPRESENT THE ACTUALS.
THE BIGGEST DELTA WE SEE IS THE FOUR 14 FOR ACTUAL POWER SUPPLY ADJUSTMENT REVENUE VERSUS THE 3 24 IN THE GRAY BAR FOR POWER SUPPLY FOR BUDGETED POWER SUPPLY.
THAT'S ABOUT A $90 MILLION DIFFERENCE.
AND AGAIN, THAT STORY IS LARGELY, UM, A HOT WEATHER STORY.
AND THERE'S TWO COMPONENTS THERE.
ONE IS VOLUME METRIC WHERE WE'RE SELLING MORE.
SO THE DOLLARS ARE LARGER AND ANOTHER, IS THAT IN ERCOT, UH, AS, AS CONSUMPTION GOES UP, PRICES TEND TO GO UP.
AND SO THERE'S A PRICE COMPONENT AS WELL.
THERE, WE ALSO SEE AN INCREASE IN THE BUILD BASE REVENUE.
UH, POWER SUPPLY IS, IS LEVIED ON ENERGY USE.
SO IT TENDS TO BE, UH, SIGNIFICANTLY DRIVEN BY WEATHER AND, UH, THE BASE REVENUES, UH, HAVE DIFFERENT COMPONENTS THAT AREN'T PURELY, UH, SORT OF WEATHER BASED OR ENERGY BASED IN TERMS OF A DEMAND CHARGE AND A CUSTOMER CHARGE.
SO THAT GETS SOME INSULATION FROM THE WEATHER EFFECT AND YOU SEE A SMALLER DELTA FROM ACTUAL TO BUDGETED THERE.
THE OTHER VARIANCES ARE FAIRLY SMALL.
SO IF I CAN ADVANCE ONE SLIDE, ONE SLIDE, PLEASE.
UM, SO IT JUST SEEMS LIKE IF WE'RE HEDGED ENOUGH AND WHEN YOU SAY HAVE A LOT OF LOCK-IN WIND AND SOLAR PPA HAZE, THAT WOULD SEEM TO ISOLATE THE, THE COST OF THAT, UH, SUPPLY WOULDN'T IT, OR IT JUST SEEMS LIKE THOSE ARE PRETTY HEFTY INCREASES.
SO HOW MUCH ARE WE GOING INTO THE SPOT MARKET? I IMAGINE THAT THAT'S ERCOT DATA THAT WE COULD FIND THAT 60 DAYS STALE.
SO I'M NOT SURE THAT'S COMPETITIVE MARKET INFORMATION THAT YOU CAN'T TELL US, BUT CAN YOU KIND OF WALK THROUGH WHY THOSE ACTIONS ARE SO MUCH GREATER THAN, THAN THE BUDGET? WHEN, WELL, I'LL JUST STOP THERE.
I GUESS, HAPPY TO PROVIDE SOME COLOR THERE.
I THINK WE'VE BEEN EXAMINING THIS QUITE CLOSELY AS WELL AS YOU CAN IMAGINE.
AND, UH, I THINK SOME OF THE FACTORS THAT YOU MENTIONED ARE INDEED, UH, STRONG MITIGANTS TO PRICE VOLATILITY.
SO HAVING A POWER PURCHASE AGREEMENTS AT FIXED CONTRACT RATES
[01:10:01]
IS A SIGNIFICANT ONE.HAVING OWNED A GENERATION WITH FUEL SOURCES THAT ARE DIVERSIFIED AND DIFFERENT FROM, UH, MAYBE PURE NATURAL GAS, WHICH IS SORT OF THE MARGINAL PRICE DRIVER IN ERCOT ALSO HELPS A LOT.
AND ALL OF THOSE ACTIVITIES DO PROVIDE A SUBSTANTIAL, UH, MITIGATION.
UM, WHAT'S SORT OF BEEN DIFFICULT TO MITIGATE OVER THE LAST FEW MONTHS ARE, UH, QUITE A FEW, UH, QUALITIES OF ERCOT THAT HAVE BEEN, UH, EXACERBATED IN THE SUMMER TO AN EXTENT, UH, NOT SEEN BEFORE, UH, IN MAY, THERE WAS A SIGNIFICANT STORY AROUND CONGESTION.
UH, AND SO THIS IS A FEATURE OF THE ERCOT MARKET WHERE PRICES DIFFER BY LOCATION.
AND SO THE PRICE OF ENERGY IN AUSTIN MAY BE DIFFERENT FROM THE PRICE OF ENERGY IN THE PANHANDLE.
AND, UH, THAT AFFECTS AUSTIN ENERGY'S PORTFOLIO QUITE STRONGLY BECAUSE WE ARE AS RENEWABLE AS WE ARE.
SO, UH, YOU KNOW, OUR RENEWABLE PORTFOLIO IS DIVERSIFIED GEOGRAPHICALLY AND IS BECOMING MORE SO, BUT IT TENDS TO BE AT FAR-FLUNG LOCATIONS FROM LOAD.
UH, SO WE HAVE WEST TEXAS SOLAR.
WE HAVE PANHANDLE WHEN WE'RE INCREASINGLY ADDING LOCAL SOLAR AND COASTAL WIND, BUT NEVERTHELESS, THE LOCATIONS OF WIND FARMS AND SOLAR FIELDS TEND TO BE FAR FROM THE MAJOR CITIES.
AND SO, SO BASICALLY WE'RE SEEING TRANSMISSION THAT ARE DRIVING BASIS DIFFERENTIALS, AND THAT'S A BIG PART OF IT BECAUSE WE DON'T HAVE ENOUGH TRANSMISSION, A NARCOTIC THAT'S A SIGNIFICANT EFFECT.
YES, THAT'S WHAT I'D SAY IS THE MOST SIGNIFICANT EFFECT.
AND SO THE, THE WILL THE STATE OF THE GRID IMM REPORT KINDA SHOW THIS AND THE NEXT ONE WHERE WE CAN SEE AND MAYBE ADVOCATE FOR SOME MORE TRANSMISSION.
SECONDLY, HOW MUCH OF THIS IS NATURAL GAS PRICES TRIPLING? UH, SO WE THINK THAT'S CERTAINLY A COMPONENT ERCOT WIDE.
UH, WE DO THINK OF THE MARGINAL GENERATOR IN ERCOT AS BEING A GAS UNIT.
SO SOME OF IT, UH, IS RELATED TO THAT, UM, TO THE IMM REPORT.
UM, I CAN'T SPEAK TO THE REPORT ITSELF, BUT THERE IS A, A SEPARATE REPORT IN ERCOT ON CONGESTION ITSELF.
AND THAT I THINK WILL BE QUITE ILLUMINATING IN THE NEXT QUARTERS TO COME.
UM, SOME OTHER FEATURES OF THAT ARE JUST OUTAGES.
THERE'VE BEEN A TREMENDOUS AMOUNT OF UNIT OUTAGES, AND THAT'S SOMETHING THAT I'D RAISED AS SOMETHING TO LOOK, LOOK AT AHEAD DURING THE SUMMER, UM, MAY WAS VERY, VERY HOT AND ERCOT DID, UH, ASK GENERATORS TO STAY ONLINE MORE THAN USUAL.
MANY GENERATORS OFTEN HAVE THEIR MAINTENANCE OUTAGES IN MAY, UH, IN ORDER TO PREPARE FOR A SUMMER.
SO INCREASINGLY WE HAVE, UM, OLD MACHINES THAT HAVE BEEN ASKED TO RUN THROUGH SOME OUTAGES.
AND AS WE GET INTO THE END OF THE SUMMER, IT'S SOMETHING TO KEEP AN EYE ON, UH, IN PARTICULAR.
BUT I'D SAY THE, THE F THE REPORTING COMING UP, WE'LL SPEAK TO SOME OF THIS.
AND THEN THE PSA DOES NOT INCLUDE, SAY ERCOT PROCURING A LOT MORE RESERVES THAN THE ESTIMATE.
THERE'S $2 BILLION AND GREATER OVER THE COURSE OF 20, 22.
THAT'S NOT EVEN INCORPORATED IN THE PSA, RIGHT.
THAT WOULD BE IN THE, THE OTHER CHARGE REGULATORY CHARGE, I GUESS.
SO ERCOT HAS TAKEN MANY ACTIONS AFTER URI THAT AFFECT MANY OF OUR LINE ITEMS. UH, SOME OF THEM ARE TO PROCURE ANCILLARY SERVICE RESERVES.
SO THINGS LIKE, UH, NON SPINNING RESERVES, AND THAT HAS ACTUALLY INCREASED COSTS OVERALL FOR THE MARKET.
UH, THEY ARE PROCURING MORE AND, UH, AND ASSESSING THE CHARGE ON LOAD.
IT'S ALSO PART OF THE CONGESTION STORY IN A STRONG WAY.
SO AGAIN, A LOT OF THE RESERVES CAN ONLY BE MET BY SPINNING CONVENTIONAL GENERATION AT THIS TIME.
UH, WE'RE, WE'RE HOPING FOR IMPROVEMENTS, BUT SO WHAT ERCOT HAS BEEN DOING IS RESERVING CAPACITY FOR EXACTLY THAT FOR RESERVES ON SOME OF THE SPINNING MACHINES THAT ARE CLOSE TO LOAD.
AND SO IF YOU THINK ABOUT IT, THEY'RE HOLDING BACK ON ENERGY, BEING PRODUCED NEAR LOAD AND PUSHING THAT ENERGY PRODUCTION IN SO FAR FLUNG PARTS OF THE STATE.
SO ACTUALLY SOME OF OUR COTS RELIABILITY EFFORTS AFTER URI HAVE ACTUALLY ADDED TO SOME OF THIS CONGESTION STORY, HAVING SAID THAT THERE ARE OTHER COSTS, UH, ERCOT HAS CHANGED THE MAXIMUM PRICE.
THEY'VE ALSO CHANGED THE, UH, RESERVE DEMAND CURVE THAT THEY'RE INTRODUCING NEW CHARGES FOR THINGS LIKE AFFIRM FUEL SERVICE.
SO THERE'S SORT OF A PORTFOLIO OF ACTIONS THAT ERCOT IS TAKING IN THE NAME OF RELIABILITY.
AND MANY OF THOSE COSTS WERE NOT CONSIDERED IN THE PREVIOUS BUDGET AND ARE COMING HOME AT THIS TIME.
WHAT'D HE SAY, FUTURE MEETING THE SORT OF BREAKDOWN OF THOSE IN THE NEXT FEW MONTHS? I'M SORRY, I MISSED THE START OF YOUR QUESTION.
DO YOU THINK WE CAN HAVE A READOUT FROM YOU ALL THAT BREAKS DOWN THOSE ADDITIONAL COSTS, DRIVEN BY ERCOT ACTIONS IN SOME FUTURE MEETING? UH, WE CAN CERTAINLY WORK ON THAT.
WE'LL SEE HOW MUCH IS NON-COMPETITIVE AND CAN BE SHARED.
WE'LL TAKE THAT AS AN ACTION ITEM.
I WAS JUST GOING TO ASK DOESN'T DOESN'T THE PSA INCLUDE THE ANCILLARY SERVICES OR THOSE AREN'T A SEPARATE LINE ITEM.
I BELIEVE WE WERE MOVING TO THE EXPENSE, UH, PAGE
[01:15:04]
ACTUALLY, I THOUGHT THAT THE REGULATORY CHARGES THAT ARE ON YOUR BILL OR WHAT, UH, ERCOT CHARGES ARE ROLLED UNDER OR A S AND ERCOT ITSELF, ISN'T IT? UH, SO I CAN MOST SPEAK TO, UH, PARTS AROUND THE RISK MANAGEMENT IDEA SET.AND FOR THAT, UM, CHARGES FOR ANCILLARY SERVICES ARE PAID TO GENERATORS, AND WE DO RECEIVE SOME PAYMENTS FOR THAT.
UH, SO W NON SPIN, WHEN IT'S PROCURED FROM US, WE GET A REVENUE CHARGES ARE UPLIFTED TO LOAD THROUGH THE WHOLESALE MARKET, AND THAT DOES OCCUR IN THE PSA.
AND THERE ARE SOME OTHER COMPONENTS OF ERCOT CHARGES LIKE THEIR ADMINISTRATION FEE, WHICH MAY APPEAR IN OTHER, OTHER PARTS OF OUR INCOME STATEMENT AND OUR CUSTOMER'S BILLS.
IF WE MOVE TO OUR EXPENSES IN OUR ANALYSIS OF ACTUAL TO BUDGET, AGAIN, WE SEE HERE MORE OF THE BUCKETS THAN THE TIME SERIES.
UM, AND THE MAJOR THOUGHT HERE IS A MIRRORING ASPECT OF THE POWER SUPPLY ADJUSTMENT, WHERE THE EXPENSE THAT WAS BUDGETED WAS 288 MILLION.
AND AS WE'VE BEEN DISCUSSING THAT'S OVER BY, UH, A SIGNIFICANT AMOUNT, $90 MILLION, LARGELY DUE TO WEATHER, BUT ALSO TO THESE ARCATA ACTIONS AND NEXT SLIDE.
AND NOW I ALMOST FLIPPED TO THIS SLIDE TO SUPPORT SOME PREVIOUS QUESTIONS HERE.
WE HAVE A BREAKOUT OF THE POWER SUPPLY ADJUSTMENT COST COMPONENTS, AS WE SEE IT IN SOME BUCKETS, UH, NOT QUITE AS GRANULAR AS THE MATERIAL WE'VE BEEN DISCUSSING, BUT ONE INTERESTING LOOK, I THINK SO THE NET POWER SUPPLY ADJUSTMENT, UH, EXPERIENCED BY OUR CUSTOMERS AS FAR TO THE RIGHT AND THE TEAL COLUMN, WHICH IS $487 MILLION.
AND THE LOAD ZONE COST THAT WOULD BE EXPERIENCED IF A CUSTOMER'S FACED ERCOT ALONE WOULD BE $743 MILLION ALL THE WAY ON THE LEFT.
SO I THINK OF THIS PICTURE AS ALMOST A CAUSAL PICTURE OF, FROM THE LOAD ZONE COSTS THROUGH AUSTIN ENERGY ACTIVITIES, TO OUR CUSTOMER'S EXPERIENCE.
SO A LOAD ZONE COST WOULD HAVE THOSE HIGHER COSTS FOR ENERGY, HIGHER QUANTITIES FOR ENERGY, AND ALSO THOSE ERCOT RELIABILITY COSTS IN IT.
AND YOUR TODAY, THOSE WOULD BE $743 MILLION.
UH, AUSTIN ENERGY'S OWNED ASSETS, UH, HAVE BEEN IN THE MONEY AND HAVE BEEN A MITIGANT TO OUR CUSTOMER'S EXPERIENCE OF THAT TO THE TUNE OF $222 MILLION.
AND OUR CONTRACTED ASSETS ARE MEETING RENEWABLE GOALS, UH, AND HAVE, UH, EXPERIENCED IN THAT COSTS OF $21 MILLION.
AND THEN OTHER ACTIVITIES ARE SHOWN THERE AS WELL, INCLUDING THE PIECES OF GREEN CHOICE AND VALUE OF SOLAR AND OUR HEDGING PROGRAM, WHICH HAVE OFFSET SOME CUSTOMER COSTS OVER THE FISCAL YEAR TO DATE.
IF YOU ADD THOSE AUSTIN ENERGY ACTIVITIES TOGETHER, YOU GET A MITIGATION TO THE LOAD ZONE COSTS OF A TOTAL OF $256 MILLION, WHICH IS AROUND 34% OF THOSE COSTS.
CAN YOU EXPLAIN A LITTLE BIT ABOUT, UH, WHY THE CONTRACTED US THAT'S OUR COST HERE, AS THEY'RE NOT, THEY'RE NOT MITIGATING IN THIS INCIDENCE? SURE.
SO THE CONTRACTED ASSET PORTFOLIO IS A PORTFOLIO OF POWER PURCHASE AGREEMENTS, MOSTLY WIND AND SOLAR.
UH, THERE ARE ABOUT 21 OF THEM AT THIS TIME THAT ARE IN FORCE, AND WE'VE BEEN ADDING TO THEM OVER TIME, UH, OVER MANY DECADES.
AND SO ONE ASPECT THAT OCCURS HERE IS WE, UH, SORT OF HAVE A DOLLAR COST AVERAGING EFFECT IN THE PORTFOLIO WHERE WE'VE AVERAGED IN WHEN PRICES FOR THESE TECHNOLOGIES AND OR ERCOT PRICES WERE HIGHER IN THE PAST.
AND SO THAT'S KIND OF THE STORY IS WE HAVE SOME BRAND NEW CONTRACTS, WHICH ARE SORT OF AT THE MONEY OVERALL AND HAVE BEEN IN THE MONEY AND PRODUCING REVENUE DURING THESE STRESS TIMES.
BUT WE HAVE SOME OLDER CONTRACTS THAT WERE INDICATIVE OF PREVIOUS MARKET SCENARIOS IN WHICH HAVE BEEN LOWER.
THERE IS THIS CONGESTION AND CURTAILMENT.
SO FOR ASSETS LIKE WIND AND SOLAR, WHEN THERE'S SIGNIFICANT CONGESTION, ERCOT NEEDS TO MANAGE THE STABILITY OF THE GRID.
AND WHEN LINES, WHEN TRANSMISSION LINES THAT GO OUT TO WEST TEXAS OR TO THE COAST, OR TO THE PANHANDLE ARE AT CAPACITY, THEY'LL ACTUALLY SHUT OFF WIND UNITS FROM THEIR CONNECTION TO THE GRID.
AND SO SOME OF THIS, UH, ASPECT IS THAT, UM, IS THAT EFFECT THAT TENDS TO REDUCE REVENUES FROM SUCH ASSETS DURING CONGESTED TIMES.
SO ANOTHER ACTUAL, IT'S A BUDGET ANALYSIS.
WE CAN LOOK AT IT AS OUR FUND SUMMARY.
UM, WE HAVE THE ACTUALS IN THE FIRST COLUMN.
THERE ARE BUDGETED AMOUNTS IN THE SECOND AND THE VARIANTS IN THE THIRD, UH, IN THE INTEREST OF TIME.
WHAT I MIGHT POINT YOU TO IS, UH, THAT THE VARIANCES ARE LARGELY QUITE SMALL WITH TWO CALL-OUTS, WHICH ARE THE ONES WE'VE BEEN DISCUSSING.
SO THE VARIANCE TO BUDGET, UH, IN TERMS OF OPERATING REVENUES IS A HIGHER AMOUNT BY 112 MILLION.
THAT'S ROUGHLY THAT $90 MILLION OF POWER SUPPLY ADJUSTMENT, PLUS SOME FROM BASE RATES.
AND SIMILARLY, THAT'S ALMOST ENTIRELY OFFSET BY THE OPERATING EXPENSES VARIANCE TO BUDGET, WHICH IS THAT 108.
SO IF YOU READ ALL THE WAY DOWN, YOU'LL HAVE THAT THIRD COLUMN, YOU'LL SEE A VARIANCE TO BUDGET OF JUST $2 MILLION, UH, WHICH IS SORT OF A RESULT OF BEING ON TARGET FOR THE BUDGET.
UNFORTUNATELY, THAT HAS RESULTED IN AN ACTUAL, UH, BUDGETED A DEFICIENCY OF REVENUES OF AROUND $67 MILLION.
[01:20:03]
NEXT SLIDE, PLEASE.AND FINALLY, IN OUR ACTUAL TO BUDGETS, UH, WE HAVE OUR CAPITAL IMPROVEMENT PLAN SUMMARY.
THIS SHOWS ON THE LEFT, THE TYPE OF FINANCING WE'RE USING, AND THIS SHOWS THAT WE'RE LARGELY FUNDING AT A ROUGHLY 50, 50 CASH TO DEBT, WHICH IS OUR TARGET FOR FINANCING OF CAPITAL IMPROVEMENTS.
AND THEN ON THE RIGHT WE'RE SHOWING OUR PROGRESS VERSUS OUR CURRENT YEAR PLAN.
WE'RE ABOUT 53% OF SPEND, AND WE'RE EXPECTING SIGNIFICANT PROGRESS BEFORE THE END OF THE FISCAL YEAR WITH THAT, WE'LL MOVE TO TWO FINANCIAL STATEMENTS, THE BALANCE SHEET AND THE INCOME SUMMARY.
IF WE GO TWO SLIDES FORWARD, HERE'S OUR BALANCE SHEET SNAPSHOT.
UH, WE HAVE THE CURRENT POSITION AS OF 6 30, 20 22 VERSUS A YEAR PREVIOUS, UH, THAT JUNE OF 2021, A LOT OF THE NUMBERS ARE LARGELY SIMILAR.
SO I'LL WALK YOU THROUGH A COUPLE OF DELTAS.
THE CASH NUMBER, AS YOU CAN SEE IS $222 MILLION.
AND THAT'S ROUGHLY THAT $159 MILLION LOWER THAN THE PREVIOUS YEAR OF $381 MILLION.
ANOTHER DELTA THAT YOU MIGHT SEE IS IN THE OTHER RESTRICTED ASSETS AND THE OTHER CURRENT LIABILITIES, THESE EACH SHOW A DIFFERENCE OF $120 MILLION.
AND THIS IS LARGELY REFLECTED OF COLLATERAL.
THAT'S POSTED IN CASH TO AUSTIN ENERGY, UH, FROM TRADING COUNTERPARTIES AS AUSTIN ENERGY DOES MANAGE ITS RISK TO POWER PRICES THROUGH TRADING INSTRUMENTS.
SO THAT APPEARS ON THE BALANCE SHEET AS RESTRICTED ASSETS, BECAUSE THEY ARE REALLY COLLATERAL POSTED BY A COUNTERPARTY WHO IN ALL, UM, UH, EXPECTATION WILL RECEIVE IT BACK.
SO IT APPEARS ON THE ASSETS AND THE LIABILITIES SUMMING IT ALL UP.
UH, WE SEE, UH, ASSETS AND LIABILITIES AT AROUND $6 BILLION VERSUS THE PREVIOUS PRINT OF 5.95 BILLION.
UM, YOU SHOW THE NUCLEAR DECOMMISSIONING ACCOUNT, BUT YOU DON'T SHOW THE NON-NUCLEAR DECOMMISSIONING ACCOUNT.
IS THAT JUST, UM, SUBSUMED IN SOME OTHER NUMBER THAT THIS WAS ON THE PREVIOUS SLIDE, RIGHT? UH, IT IS, YES, IT IS IN THERE IN THE BALANCE SHEET.
I BELIEVE IT IS IN OTHER RESTRICTED ASSETS.
AND THE INCOME STATEMENT AGAIN, WE MIGHT SORT OF HELP YOU THROUGH THIS SLIDE BY SHOWING THE DELTAS FROM THE PREVIOUS 12 MONTHS.
SO WE HAVE THE JUNE 30TH, 2022 NUMBERS IN THE FIRST COLUMN THERE VERSUS A YEAR EARLIER.
UM, AS WE LOOK DOWN, WE SEE THIS STORY AGAIN, OF SOME INCREASE IN OPERATING REVENUES AROUND 46 MILLION, UH, WHICH LANDS US AT THE 9, 9 5 THERE.
AND AGAIN, THAT'S VOLUMETRIC AND HEAT RELATED.
UH, THE POWER SUPPLY REVENUES ARE QUITE STRONGLY GREATER THAN THE PREVIOUS YEAR BY ABOUT 259 MILLION.
AND TWO WAYS THAT I'D HELP YOU THINK ABOUT THAT ARE ONE IS THAT IT'S BEEN A HOT YEAR.
SO BOTH VOLUMES AND PRICES ARE HIGHER.
THE OTHER IS THAT THAT NUMBER ENDED IN THE PREVIOUS YEAR WITH THE, UH, REVENUE SURPLUS DUE TO WINTER STORM URI.
AND SO THE 255 THAT'S THERE, UH, FOR THE POWER SUPPLY EXPENSES FOR THE PREVIOUS YEAR, HAD THAT ASPECT IN IT, UH, THROUGH OUR POWER SUPPLY ADJUSTMENT RATES COMING DOWN, WE ARE NOT RETURNING THAT OVER COLLECTION TO, UH, CUSTOMERS.
AND SO OUR CURRENT POWER SUPPLY EXPENSES AT 513 ARE QUITE A BIT HIGHER THAN THE PREVIOUS YEAR, UH, READING ALL THE WAY DOWN.
WE GET TO A NET LOSS OF $35 MILLION, WHICH AGAIN IS ACTUALLY FAIRLY CLOSE TO THE PREVIOUS 12 MONTHS, ALL IN NUMBER OF A NET LOSS OF $47 MILLION.
BUT OF COURSE WE'D LIKE TO HAVE INCOME RATHER THAN LOSSES ON THE RIGHT.
WE PROVIDE SOME FURTHER BREAKOUT OF THE PAST THROUGHS.
WE'VE TALKED ABOUT THE POWER SUPPLY.
I'LL, UH, MENTION THAT THE PREVIOUS GRAPH AS, UM, COMMISSIONER TUTTLE WAS, UH, EXAMINING W WE SHOWED, UH, SOME DEFICITS IN OUR COLLECTION VERSUS OUR EXPENSE ON POWER SUPPLY.
IF WE ADD THOSE UP FOR, UH, THE CURRENT FISCAL YEAR, WE SEE A DEFICIT, UM, COMING OUT OF THE POWER SUPPLY BALANCES OF $89 MILLION.
SOME OF THAT WAS INTENDED AND WAS INTENDED TO RETURN URI OVER COLLECTIONS.
AND SOME OF IT HAS BEEN FASTER THAN WE'D LIKE DUE TO SOME OF THESE MARKET STRESSES IN TERMS OF CUSTOMERS.
WE SEE ROUGHLY A 2% YEAR OVER YEAR INCREASE.
THAT'S LARGELY IN LINE WITH LONGTERM AVERAGES ON THE SALES.
WE ACTUALLY SEE AN 8% YEAR OVER YEAR INCREASE, WHICH IS OUT OF LINE WITH THE SORT OF HALF A PERCENT, A LONG-TERM AVERAGE.
AND AGAIN, THIS IS DUE TO THE HOT SEASON, SO NOT SO MUCH, UH, MORE CUSTOMERS HOOKING UP AS A MORE EXPENDITURE IN THE HOT WEATHER.
FINALLY, FOR ME, IF WE MOVE TO MORE SLIDES, UH, WE'LL JUST GIVE YOU SOME COLOR, WHICH I THINK WE'VE, WE'VE MOSTLY ALREADY DONE THROUGH OUR CONVERSATION.
SO OUR CREDIT RATINGS FOR AUSTIN ENERGY, UH, WHAT DO CREDIT RATINGS DO? WE'VE TALKED ABOUT THIS A BIT.
THEY PROVIDE INDEPENDENT OPINIONS BY UP TO 10 ORGANIZATIONS AND THREE LARGE ONES ON THE CREDIT WORTHINESS OF INSTITUTIONS, BUT MOSTLY THROUGH AN ASSESSMENT OF THEIR DEBT.
ISSUANCE'S RELATIVE LIKELIHOOD OF DEFAULT.
AND RELATIVE HERE IS IMPORTANT.
WE TEND TO THINK OF THIS AS BEING RELATIVE AMONGST THE INDUSTRY AND IN PARTICULAR, RELATIVE TO OTHER INDUSTRIES LIKE THE U S GOVERNMENT AS A, AS A PREDOMINANT BENCHMARK.
AND THEN WE'VE TALKED ABOUT THE THINGS THAT THEY AFFECT.
SO CREDIT AGENCIES AFFECTS OUR COST OF NEW DEBT, OUR PRICING FOR POWER PURCHASE AGREEMENTS IN PARTICULAR, AND BASICALLY THE LONGER THEY ARE, THE MORE THAT EFFECT IS.
AND THEN COLLATERAL AND CREDIT TERMS AND CONTRACTS.
[01:25:01]
THE CURRENT STATE OF THE WORLD IS ON THE RIGHT THERE FOR S AND P.WE ARE MAINTAINING THAT AA, BUT WE HAVE A NEGATIVE OUTLOOK FOR S AND P AND THERE'LL BE REVIEWING US IN ONE MONTH.
AND THAT'S THE RATING THAT WE'VE CHOSEN AS OUR INTERNAL STRATEGIC PLANNING GOAL FOR FITCH.
WE DO HAVE THAT AA MINUS, UH, BUT NOW WITH A STABLE OUTLOOK AND THAT'S AS OF A JUNE ACTION, WHICH I'LL DISCUSS ON THE NEXT SLIDE AND MOODY'S HAS US AT A THREE WITH A STABLE OUTLOOK AND IS ONLY, UH, REVIEWING US PERIODICALLY AS SCHEDULED.
SO IF WE GO TO THE NEXT SLIDE, WE'LL TALK A BIT ABOUT THE ACTION.
UH, SO THEY DID TAKE ACTION IN JUNE AND FITCH DOWNGRADED AUSTIN ENERGY FROM AA TO AA MINUS, BUT MOVED US TO A STABLE OUTLOOK.
THEY DIDN'T HAVE A CERTAIN SET OF ASSUMPTIONS BUILT INTO THEIR MODELING FOR THAT DOWNGRADE.
AND ONE OF THEM WAS FOR A $48 MILLION BASE RATE INCREASE EFFECTIVE JANUARY 23RD.
UM, SO IT'S SORT OF THE, THE, UM, THE INITIAL BASE RATE MODEL IN THERE.
THEY DID FORECAST THAT 0.6% ANNUAL GROWTH IN SALES AND FORECAST TODAY.
SO WE DO HAVE A STABLE OUTLOOK, BUT TO THE EXTENT THAT THOSE INPUTS CHANGE, THE RATING MAY CHANGE AGAIN IN THEIR ASSESSMENT.
THEY NOTED ELEVATED LEVERAGE, AS WE'VE TALKED ABOUT ON THE BALANCE SHEET, WEAKER OPERATE RATING, CASHFLOWS DRIVEN PRIMARILY BY LOWER BASE RATE REVENUES, AND THEN ELEVATED RISK, UH, WITH, WITHIN ERCOT, WHICH HAS LESS ABOUT AUSTIN ENERGY AND MORE ABOUT, UH, THE SECTOR AND THE GEOGRAPHY, AND THEN BASE RATE INCREASES, UM, RESULTS IN INCREASED PROJECTED IMPROVEMENT IN CASH FLOWS, ACCORDING TO, UH, ANY RATE REVIEW THAT IS SUCCESSFUL.
SO IF WE MOVE TO MY LAST SLIDE, SO AS FAR AS MANAGING THESE IN THE FUTURE, UH, THERE ARE FACTORS BOTH WITHIN OUR CONTROL AND WITH, OR WITHOUT OUR CONTROL THAT MAY AFFECT FITZ'S RATING SNPS AND OTHER AGENCIES.
UH, SOME OF THEM THAT COULD LEAD TO LOWER RATINGS INCLUDE CONTINUED ELEVATED LEVERAGE.
WE CAN FINANCIAL PROFILE FROM GLOBAL STRESSORS LIKE INFLATION OR GAS OR GEOPOLITICS UNANTICIPATED COSTS AS AUSTIN, ENERGY TRANSITIONS, ITS POWER PORTFOLIO, AND CONGESTION IS ONE THAT WILL BE TOP OF MIND, AND THEN SOME THINGS OUTSIDE AUSTIN ENERGY.
SO INCREASED RISKS IN THE ENERGY SECTOR, WHICH SOME OF OUR RATING AGENCIES HAVE HIGHLIGHTED RISKS IN THE ERCOT REGION AND RISKS IN THE U S OR A REGIONAL ECONOMY.
ON THE OTHER SIDE, SOME FACTORS COULD LEAD TO IMPROVED RATINGS.
THESE COULD BE IMPROVEMENTS IN CASH FLOWS, UH, PROJECTED DECLINES IN LEVERAGE OR ACTUAL ONES, AND THEN IMPROVEMENTS IN ERCOT RELIABILITY OR FINANCIAL STABILITY.
AND WITH THAT, THAT'S THE MATERIAL I HAD PREPARED FOR YOU HAVING TO ANSWER ANY QUESTIONS OR DISCUSS FURTHER OR A HANDOFF, JUST, UH, I JUST WANT TO SAY THANK YOU.
THAT WAS A REALLY GOOD PRESENTATION.
THANK YOU VERY, VERY THOROUGH.
IT'S SEVEN 30 NOW, AND WE'VE GOT THE BUDGET PRESENTATION UP NEXT, AND THEN I EXPECT SOME DISCUSSION.
UM, DO FOLKS NEED A VERY, VERY QUICK BREAK WHILE AUSTIN ENERGY COMES UP? SO, ALL RIGHT.
WHY DON'T WE DO THAT? LET'S GET A THREE-MINUTE BREAK.
SEE ABOUT, OKAY, GREAT, ROBIN, ARE WE ALL SET? OKAY.
THEN I WILL CALL THE MEETING BACK TO ORDER.
IT IS 7 36 AND WE ARE ON ITEM NUMBER 12, STAFF
[12. Staff briefing of the FY 2022/23 Austin Energy Budget by John Davis, Finance Director.]
BRIEFING FROM FISCAL YEAR TO 20 22, 20 23, AUSTIN ENERGY BUDGET.GOOD EVENING COMMISSIONERS ON JOHN DAVIS, DIRECTOR OF FINANCE, AND MY TEAM'S RESPONSIBLE FOR PUTTING TOGETHER THE 23 20 23 BUDGET FOR AUSTIN ENERGY.
BEFORE WE BEGIN, I'D LIKE TO PUT THIS PRESENTATION IN PERSPECTIVE.
WE HAVE THREE DIFFERENT FINANCIAL SCENARIOS THAT YOU'VE ALL HEARD ABOUT.
THE FIRST SCENARIO IS OUR BASE RATE REVIEW, WHICH UTILIZES HISTORICAL 2021 INFORMATION AS A TEST YEAR.
THE FINANCIAL INFORMATION PROVIDED FOR THE BASE RATE REVIEW USES ACTUAL REVENUES AND EXPENSES FROM FISCAL YEAR 21 AND IS ADJUSTED FOR KNOWN AND MEASURABLE CHANGES AS AN EARLY 2022.
THIS INFORMATION IS HISTORICAL AND DOES NOT REPRESENT OUR CURRENT OR FUTURE FINANCIAL PERFORMANCE OR REQUIREMENTS.
THE PURPOSE OF THE BASE RATE REVIEW IS TO CALCULATE WHAT BASE RATES SHOULD BE USING THAT HISTORICAL FINANCIAL DATA.
THE SECOND SCENARIO IS WHAT MR. MCELROY JUST PRESENTED TO YOU AND REPRESENTS THE CURRENT FISCAL YEAR 2022 FINANCIAL STATUS OF AUSTIN ENERGY FOR THE LAST NINE MONTHS OF ACTUAL ACTIVITY.
IT'S FOCUSES ON WHAT IS HAPPENING NOW AND COMPARING THAT TO THE FISCAL YEAR 2022 BUDGET.
THE THIRD SCENARIO IS THE 2023 BUDGET, WHICH IS WHAT I'M ABOUT TO PRESENT TO YOU AND REPRESENTS A FORECAST OF WHAT WE BELIEVE OUR FINANCIAL PERFORMANCE MIGHT BE FOR THE PROSPECTIVE PERIOD ENDED SEPTEMBER 30TH OF NEXT YEAR, AUSTIN TO BEGAN PREPARING THIS BUDGET IN EARLY 20, 22, WE USE THE BEST AVAILABLE DATA AND SOURCES AT THAT TIME TO MAKE THE ASSUMPTIONS AND DEVELOPING THE BUDGET AS WITH ANY FORECAST, REALITY WILL BE DIFFERENT THAN WHAT WE ANTICIPATED AND WE WILL MANAGE THOSE DIFFERENCES
[01:30:01]
WHEN THEY HAPPEN.ONE KEY ASSUMPTION USED IN THE FISCAL YEAR 23 BUDGET DEVELOPMENT WAS THE USE OF THE PROPOSED BASE RATES FROM THE APRIL 18TH BASE RATE FALLING PACKAGE.
THOSE BASE RATES ARE ASSUMED TO BE EFFECTIVE IN JANUARY OF 2023, FOR PURPOSES OF THE BUDGET.
WE KNOW THOSE BASE RATES WILL LIKELY BE SOMETHING DIFFERENT THAN WHAT WE'VE ASSUMED IN DEVELOPING THIS BUDGET.
AND WE WILL MANAGE ANY CHANGES ADOPTED BY CITY COUNCIL.
HOWEVER, YOU SHOULD NOT CONFUSE THE TEST, YOUR 2021 FINANCIAL DATA WITH THE FISCAL YEAR OF 2023 BUDGET DATA.
THEY REPRESENT DIFFERENT PERIODS OF TIME IN DIFFERENT EVENTS AND WILL NOT NECESSARILY MATCH A RECOMMENDATION TO APPROVE THE PROPOSED AUSTIN ENERGY.
FISCAL YEAR 2023 BUDGET IS NOT A RECOMMENDATION TO APPROVE THE 2022 PROPOSED BASE RATE REVIEW PROPOSAL.
THIS WILL BE CONSIDERED UNDER A SEPARATE CITY COUNCIL ACTION IN NOVEMBER, BUT THAT SAID, I'LL GO AHEAD AND BEGIN THE PRESENTATION RESTROOM, AND YES, AUSTIN ENERGY FINANCE.
I JUST WANT TO REITERATE THAT THE TARIFFS THAT WERE ATTACHED TO THIS BUDGET PROPOSAL HAS THE SAME BASE RATES IN THEM AS THEY EXIST TODAY.
SO JUST ONCE AGAIN, THAT, THAT THIS, UM, UM, UH, BUDGET PROPOSAL IS SEPARATE AND DISTINCT FROM THE RATE CASE.
UM, IT'S EVEN CONFUSING IN THE ITEM TOO, BECAUSE IT'S, IT'S TALKING ABOUT A PUBLIC MEETING ON RATES AND TARIFFS, AND, UM, A NUMBER OF US HAD THAT QUESTION.
WAIT, ARE THEY TALKING ABOUT A HEARING ON THE RATE CASE? SO THANK YOU FOR MAKING THAT CLARIFICATION.
THAT MAKES ME SAY EASIER, BUT WHATEVER I'M TRYING TO SAY, I'M TIRED, SLEEP EASIER AT NIGHT, SLEEP EASIER.
AS PART OF OUR PRESENTATION, I'D LIKE TO REMIND EVERYONE THAT THE BUDGET THAT WE'VE SUBMITTED IS BASED ON OUR BEST ESTIMATE OF WHAT WE ANTICIPATED FOR FISCAL YEAR 23 FINANCIAL PERFORMANCE.
BUT AGAIN, IT IS AN ESTIMATE AND WILL DEPEND ON MANY FACTORS, NOT THE LEAST OF WHICH IS THE IMPACT OF WEATHER AND THE PERFORMANCE OF THE ENERGY MARKETS, THEREFORE EXPECT THE ACTUAL RESULTS TO VARY FROM WHAT WE ARE PRESENTING TODAY.
NEXT, JUST A QUICK NOTE ON THE ORDER OF OPERATIONS, I'LL BE COVERING THE FIRST THREE TOPICS HERE, AND THEN I'LL INVITE REPRESENTATIVES FROM EACH OF THE MAJOR BUSINESS UNITS TO STEP UP AND SPEAK AND DISCUSS THEIR BUDGET PROPOSALS FOR 2023.
I'LL CONCLUDE WITH THE DISCUSSION OF OUR PROPOSED TARIFFS AND FEES.
NEXT AGAIN, NEXT PRESENTED HERE AS THE ANTICIPATED BUDGET ADOPTION SCHEDULE, AS YOU ARE AWARE, CITY MANAGER CROCK PRESENTED THE 23 BUDGET ON JULY THE 15TH, WHICH INCLUDED AUSTIN ENERGY'S 23 BUDGET.
HOWEVER, TODAY WE WANTED TO PROVIDE THE EEC WITH A LITTLE MORE DETAIL ON THOSE BUDGET ITEMS SPECIFIC TO AUSTIN ENERGY CITY COUNCIL BUDGET WORKING SESSIONS WILL OCCUR TOMORROW AND CONTINUE ON THROUGH THURSDAY.
NEXT WEEK FROM WEDNESDAY THROUGH FRIDAY WILL BE THE BUDGET READING SESSION.
AFTER WHICH POINT THE BUDGET WILL HOPEFULLY BE APPROVED.
LASTLY, AFTER THE FINAL BUDGET IS ADOPTED, WE WILL PROPOSE A NEW PASS THROUGH RATE ON SEPTEMBER THE 29TH, WHICH WILL INCLUDE THE POWER SUPPLY ADJUSTMENT, THE COMMUNITY BENEFIT CHARGE, AND THE REGULATORY CHARGE TO BE EFFECTIVE ON NOVEMBER.
THE FIRST, THE CITY COUNCIL'S CONSIDERATION OF OUR PROPOSED BASE RATE REVIEW WILL OCCUR IN NOVEMBER AND IS NOT PART OF THE NORMAL BUDGET PROCESS BASED ON THE OUTCOME OF THE CITY COUNCIL'S DECISION.
AUSTIN ENERGY WILL AMEND ITS FISCAL YEAR 2023, BUDGET TARIFFS AND FEES ACCORDINGLY NEXT, SORRY.
UM, AS YOU GUYS KNOW, UM, THERE ARE SOME PROPOSED CHANGES IN THE RATE CASE TO THE VALUE OF SOLAR.
UM, BUT YOU'LL BE DISCUSSING THE VALUE OF SOLAR BEFORE THE RIGHT CASES IS DECIDED.
SO WHAT WILL YOU DO IN THAT CASE? SO THE PROPOSED BUDGET HAS THE SAME CONCEPT OF VALUE OF SOLAR AS IT EXISTS TODAY, AND WILL ONLY CHANGE ONCE THE RIGHT CASE HAS BEEN VETTED BY CITY COUNCIL.
AND WHAT CHANGES IF ANY, THAT COME OUT OF THAT, THEN THOSE TARIFFS WILL BE MODIFIED AT THAT POINT IN TIME.
THE NEXT SLIDE, THIS PIE CHART MAY LOOK A LITTLE FAMILIAR TO YOU IT'S BECAUSE IT WAS PRESENTED BY CITY MANAGER CRONK DURING THE CITY-WIDE BUDGET PRESENTATION, WE'RE PRESENTING IT TO YOU TO GIVE YOU PERSPECTIVE OF AUSTIN.
ENERGY'S 30% SHARE OF THE OVERALL 23 CITY BUDGET NOTE THAT AUSTIN ENERGY'S BUDGET IS THE LARGEST SEGMENT OF THE OVERALL CITYWIDE BUDGET.
NEXT PRESENTED HERE IS A FUND SUMMARY FORMAT OF THE BUDGET TO HELP YOU SEE AUSTIN ENERGY'S FINANCIAL STATUS AND GIVE YOU PERSPECTIVE ON HOW THE BUDGET AS SUBMITTED WOULD IMPACT THE FUND BALANCE.
SOME MACRO TRENDS TO POINT OUT HERE INCLUDE A SLIGHT INCREASE IN OPERATING EXPENSES, WHICH SHOWS A 4.4% INCREASE DUE SOMEWHAT TO THE ANTICIPATED 4% COST OF LIVING INCREASE
[01:35:01]
AS ANNOUNCED BY THE CITY MANAGER.ALSO REVENUES SHOW A 5.8% INCREASE FROM THE 22 BUDGET AFTER ADDING IN APPROXIMATELY $40 BILLION OF ANTICIPATED ADDITIONAL REVENUE RELATED TO THE BASE RATE REVIEW.
AS A RESULT OF ADDING IN THIS INCREASE, YOU CAN SEE THE DEFICIENCY PROJECTED FOR FISCAL YEAR 22 OF 29.4 MILLION AT THE BOTTOM OF THE COLUMN WITH THE ESTIMATED HEADING THAT'S SUBSTANTIALLY REDUCED DOWN TO A DEFICIENCY OF 8.4 MILLION IN 2023.
ALSO NOTE THAT THE POWER SUPPLY EXPENSE AND THE 22 ESTIMATE OF 431.4 MILLION IS THE SAME AS THE 22 BUDGET AMOUNT, WHICH UTILIZED INFORMATION AVAILABLE AT THE TIME THE 23 BUDGET WAS PREPARED BACK IN MARCH, BUT WITH THE WEATHER THAT WE'VE SEEN THIS SUMMER, THIS AMOUNT IS GOING TO BE MUCH DIFFERENT.
AS I MENTIONED, WE WILL BE LOOKING AT THE PSA IN SEPTEMBER USING ACTUAL PRICES THROUGH AUGUST, AND WE'LL AMEND THIS FUND SUMMARY AS NEEDED.
IF I MAY ASK, UH, I'M LOOKING AT THE ENDING VIOLENCE FTES, IT APPEARS THE 1897, UH, ESTIMATED AND AS AMENDED 1897 AND PROJECTED SAME NUMBER, SAME NUMBER THAT'S RIGHT.
THAT'S A GOOD SEGUE TO MY NEXT POINT.
THEN WE HAVE HOW MANY EMPLOYEES WERE, HOW MANY EMPLOYEES DID WE HAVE WORKING AT DECKER AND HOW COME, WHERE, HOW COME THE WE'RE NOT SEEING SOME SAVINGS IN EMPLOYEE EXPENSES? SO THOSE EMPLOYEES THAT WERE DECKER HAD BEEN MOVED TO OTHER VACANT POSITIONS WITHIN THE ORGANIZATION, AND EACH OF THE EXECUTIVES IS GOING TO COME UP TO SPEED MORE.
SOME OF THEM WE'LL TALK ABOUT SOME OF THAT REORGANIZATION IS SHIFTING OF THE EMPLOYEES, BUT THE KEY TAKEAWAY HERE IS THAT THE NUMBER OF FTES THAT ARE IN THE BUDGET FOR 23 ARE EXACTLY THE SAME.
THAT WAS IN THE BUDGET FOR TWAIN TWO, DESPITE GROWTH IN CUSTOMERS AND OTHER AREAS.
SO THE EMPLOYEES WERE SHIFTED TO OTHER DEPARTMENTS, OH, ALL THE WAY.
I'M NOT TALKING ABOUT THE INDIVIDUAL, YOU KNOW, THE INDIVIDUAL WHO WORK IN THOSE JOBS, BUT RATHER RATHER FINANCE ADMINISTRATION ON OTHER WORDS, OTHER PARTS OF AUSTIN ENERGY ARE PROPORTIONATELY GROWING.
UH, SO IN ORDER TO KEEP, UH, IF WE'RE GOING TO KEEP THE NUMBER OF FTES THE SAME AS THAT, CORRECT.
SO FOR THE PR PERSPECTIVE, THE UTILITY, THE NUMBER OF FTES IS NOT CHANGING THE BUDGET FROM 22 TO 23.
I I'M JUST SAYING THERE, I EXPECTED WITH DECKER CLOSING THAT THERE WOULD BE SOME SAVINGS, UH, IN TERMS OF THE OVERALL EMPLOYMENT COST, THE OVERALL COST FOR, FOR LABOR.
AND WE'RE NOT SEEING THAT WELL, TO THE EXTENT THAT THERE WAS VACANCY SAVINGS, UM, THAT HAVE OCCURRED THROUGHOUT THE YEAR.
AND SO TO THE EXTENT THAT EMPLOYEES WOULD, WOULD VIE FOR AND INTERVIEW FOR THOSE POSITIONS THAT WE HAD FOR THE VACANCIES, AND THEY COULD MOVE INTO THOSE POSITIONS AS WELL.
UH, AGAIN, I'M NOT, EXCUSE ME, I'M NOT TALKING ABOUT THE INDIVIDUAL EMPLOYEES.
I'M TALKING ABOUT THE NUMBER OF PEOPLE WHO WORKED FOR AUSTIN.
AND WHEN WE LOSE AN ENTERPRISE, AS LARGE AS DECKER, WHAT WE'RE SAYING IS EMPLOYEE GROWTH IN OTHER DEPARTMENTS.
PAGE NINE PROVIDES AN ILLUSTRATION OF THE BREAKOUT OF THE SOURCES OF THE 1.6 BILLION IN REVENUES, AND CAN BE VIEWED IN CONJUNCTION WITH SLIDE 10, WHICH INCLUDES THE ASSUMPTIONS.
THE LOAD FORECAST THAT'S USED FOR THE 23 BUDGET IS BASED UPON A 20 YEAR AVERAGE OF WEATHER, NORMALIZED SALES.
NEXT SLIDE, PLEASE SLIDE 10 DESCRIBES OUR REVENUE ASSUMPTIONS BASED REVENUES ASSUMED THE NUMBER OF CUSTOMERS OR GROW AT 1.7% WHILE ENERGY SALES WOULD GROW AT 0.6% AS PREVIOUSLY DISCUSSED THE S THE BUDGET ASSUMES A $40 MILLION OF ADDITIONAL BASE RATE REVENUES IN THE LAST NINE MONTHS OF THE FISCAL YEAR, BEGINNING IN JANUARY OF 2023, THIS WAS BASED UPON THE RATES PROPOSED IN THE APRIL 18TH, 2022 BASE RATE REVIEW.
AS I MENTIONED EARLIER, BASED ON THE OUTCOME OF THE CITY COUNCIL'S DECISION ON THE BASE RATE REVIEW, AUSTIN ENERGY WILL AMEND ITS FISCAL YEAR 23 BUDGET TARIFFS AND FEES ACCORDINGLY.
ONCE AGAIN, I'D LIKE TO STRESS THAT A RECOMMENDATION TO APPROVE
[01:40:01]
THE PROPOSED OSS ENERGY FISCAL YEAR 23 BUDGET IS NOT A RECOMMENDATION TO APPROVE THE 2022 BASE RATE REVIEW, AS MENTIONED EARLIER IN THE PAST, THAT RATES WILL BE PROPOSED LATER IN THE YEAR IN SEPTEMBER, AND WILL GO INTO EFFECT IN NOVEMBER.THE BUDGET THERE'S IN FRONT OF YOU NOW IS BASED UPON THOSE PAST THE RATES THAT ARE CURRENTLY IN EFFECT TODAY.
NEXT PAGE 11 IS A PIE CHART, ILLUSTRATION OF THE USES OF FUNDS THAT PROVIDES THE DETAIL OF HOW THE 1.6 BILLION OF BUDGETED EXPENSES WILL BE ALLOCATED AND SHOULD BE VIEWED IN CONJUNCTION WITH THE ASSUMPTIONS ON PAGE 12, THE GRAY SECTION OVER THE RIGHT HAND SIDE OF THE PIE CHART, SORRY, IN THE RIGHT HAND SIDE OF THE PIE CHART INDICATES 456.8 MILLION OF SPENDING ON ONM, WHICH IS BURLY LABOR NOTE THAT THE AMOUNT BUDGETED FOR 23 IS 2.5 MILLION LESS THAN THE 22 APPROVED AMOUNT OF 459 MILLION, BUT STILL AFFORDS ENOUGH FOR THE PROPOSED COST OF LIVING INCREASE OF 4% FOR THE 1,997 EMPLOYEES.
NEXT PAGE 12 DETAILS OUT SOME OF THE OPERATING EXPENSE ASSUMPTIONS, SOME WHICH WERE COVERED TO THE PRIOR SLIDE.
BUT I WOULD ALSO LIKE TO NOTE THAT THE BUDGET INCLUDES ADDITIONAL COST OF INSURANCE BENEFITS, WHICH HAVE INCREASED FROM 12,546 TO 13,550 PER EMPLOYEE.
THESE COSTS HAVE HAD REMAINED FLAT FOR THE PRIOR YEAR.
NEXT SLIDE 13 ILLUSTRATES THE TRANSFER PAYMENTS TO THE CITY AS PLANNED IN THE 23 BUDGET.
IN TOTAL, WE ANTICIPATE 182 MILLION IN PAYMENTS BROKEN DOWN AS SHOWN.
THE LARGEST COMPONENT OF THE TRANSFERS IS THE GENERAL FUNDS TRANSFER OF 115 MILLION.
THIS IS BASED UPON A PERCENTAGE APPLIED TO A THREE-YEAR HISTORICAL AVERAGE REVENUE GENERATED BY AUSTIN ENERGY NOTE THAT THE GFT AMOUNT BUDGETED FOR 23 IS CALCULATED FROM THE AVERAGE REVENUES FOR FISCAL YEAR 2021 AND ESTIMATED REVENUES FOR 22.
AND IT DOES NOT INCLUDE ANY IMPACT FOR THE RATE CASE CURRENTLY UNDER REVIEW BECAUSE THE GENERAL FUNDS TRANSFER IS BASED UPON A THREE-YEAR HISTORICAL AVERAGE.
IT WOULD NOT INCLUDE THE 23 RESULTS.
IS IT POSSIBLE THAT THAT NUMBER FOR FISCAL YEAR 23 WOULD CHANGE, UM, OR WOULD IT IN OTHER WORDS, BECAUSE IT'S HISTORICAL 20, 21, 22, NO MATTER WHAT HAPPENS IN THE RATE CASE, ASSUMING US ENERGY, IT ENDORSES THIS BUDGET, IT'S GOING TO BE 115 MILLION, AND THEN WHAT THE RIGHT CASE MIGHT DO IS IMPACT A FUTURE ONE.
THIS IS A HIGH LEVEL SUMMARY OF THE CAPITAL PROJECTS FOR POWER PRODUCTION, RELIABILITY AND SUPPORT SERVICES.
THE EST CAPITAL BUDGET IS RELATED TO SYSTEM EXPANSION AND THE TRENDS HERE APPEAR TO BE DECLINING, BUT THIS PRIMARILY BECAUSE THE POT PROJECTS OUT THAT FAR CONTINUE TO BE VERY FLUID, POWER PRODUCTION REMAINS CONSISTENT OVER THE PERIOD SHOWN DISTRICT COOLING CAPITAL EXPENSES APPEAR TO DROP IN 2023, BUT THAT IS BECAUSE FISCAL YEAR 22 WAS HIGH SINCE IT INCLUDED PLANNED CONSTRUCTION COST ASSOCIATED MUELLER COOLING PLANT NUMBER TWO.
BUT AS OF RECENT, THIS PROJECT HAS BEEN CANCELED.
ALSO IT'S WORTH NOTING THAT DISTRICT COOLING AND TRANSMISSION RELATED AND CIP PROJECTS ARE NOT RECOVERED THROUGH OUR ELECTRIC BASE RATES.
AND EACH OF THE EXECUTIVES IS GOING TO COME UP AND SPEAK ABOUT SPECIFIC CAPITAL PROJECTS, THEIR AREAS IN MORE DETAIL.
I'M GOING TO PRESENT THE ANTICIPATED FINANCING FOR THE CAPITAL IMPROVEMENT PLAN, WHICH FOR 23 IS EXPECTED TO BE CONSISTENT WITH PRIOR PERIODS.
SO YOU CAN SEE IN THE 2023 COLUMN, WE SHOW 52.5% FUNDED BY DEBT 31.7% FUNDED BY EQUITY IN 15.9% FROM CUSTOMER CONTRIBUTIONS.
THE AMOUNT FUNDED BY DEBT IS ANTICIPATED TO BE LESS IN THE NEAR FUTURE.
AS WE EXPECT THE FINANCIAL HEALTH TO IMPROVE TO THE PROPOSED BASE RATE ADJUSTMENT.
ALSO THE OUTER YEARS INDICATE LESS DEBT FINANCE, SUCH AS IN 2027, AS A REFLECTION OF THE RELATED CAPITAL BUDGET THAT WE DISCUSSED, THAT ISN'T AS WELL DEFINED FOUR TO FIVE YEARS FROM NOW NEXT LINE.
AND ONE MORE SLIDE 17 PRESENTS THE AVERAGE BILL IMPACT FOR A CUSTOMER WITH AN 860 KILOWATT HOUR MONTHLY BILL.
GENERALLY SPEAKING, THE PASS THROUGHS WILL BE UPDATED WHEN THE NEW RATES ARE PROPOSED IN SEPTEMBER TO BE IN EFFECT NOVEMBER.
FIRST QUESTION ON THAT YOU'RE SHOWING AVERAGE BILL IS AS INCREASING 18.4%.
[01:45:02]
IS THAT CORRECT? THAT'S CORRECT.AND HOW, UH, I DIDN'T SEE A SLIDE THERE, BUT WHAT WOULD HAPPEN FOR, FOR THE AVERAGE CUSTOMER, A COMMERCIAL CUSTOMER? WHAT WOULD THEIR IN PROPORTIONATE INCREASE OR ARE THE TREND, UH, ARE THE INDUSTRIAL CUSTOMER, WOULD THEY HAVE THAT SAME 18.4% IN GRACE OR SOMETHING DIFFERENT? YEAH, IT WILL DEPEND ON, UH, CLASS.
UH, AND IT'S REALLY THAT THAT'S REALLY MORE OF A RATE CASE QUESTION AS FAR AS THAT GOES.
UH, BUT TO THAT POINT, IT DEPENDS ON WHAT, UH, WHAT RIGHT CLASS, SO
GO AHEAD, COMMISSIONER HADN'T.
AND SO I'D LIKE TO FOLLOW UP ON THAT LAST QUESTION.
IS IT KNOWN WHAT THE BUDGET PROPOSAL, NOT THE RATE INCREASE THAT'S PROPOSED? IS IT KNOWN WHAT THE COMMERCIAL CUSTOMER BILL IMPACT WILL BE FROM THIS BUDGET BY UNDERSTAND YOUR QUESTION CORRECTLY AND LET ME RESTATE IT.
SO YOU, SO YOU'RE ASKING ME, DO I DO, DO WE KNOW BASED ON THIS BUDGETED INFORMATION, WHAT THE RATE IMPACT WOULD BE ON, UH, ON, ON A COMMERCIAL CUSTOMER THAT YOU MAY DESIGNATE? IS THAT, DOES THAT SOUND ABOUT RIGHT? YES.
CAUSE WE'RE LOOKING AT THE RESIDENTIAL BILL IMPACTS.
DO WE, WHAT ARE THE COMMERCIAL IMPACTS? I DON'T KNOW THAT WE HAVE CALCULATED THAT.
I MEAN, CERTAINLY IN THE RIGHT CASE, THERE, THERE ARE BILL IMPACTS.
UM, BUT FOR THIS PRESENTATION, I DON'T KNOW THAT WE HAVE, UH, UH, BILL IMPACTS FOR, FOR COMMERCIAL CLASS.
WE, WE TYPICALLY JUST SHOW IMPACT TO THE RESIDENTIAL CUSTOMERS.
WELL, COULD WE GET THAT INFORMATION? I THINK IT'S PRETTY IMPORTANT AT THIS POINT IN TIME.
WELL, YOU CERTAINLY CAN, BUT THAT INFORMATION IS ALSO IS THIS MARKED AND RUSTY AS CFO.
I JUST WANT TO POINT OUT THAT REGARDLESS OF THE BUDGET ADOPTED, THE RATES ARE BASED UPON THE F THE TEST YEAR 2021.
SO WHAT YOU ADOPT IN THIS BUDGET WON'T IMPACT THOSE RATES IN FUTURE.
IT'S ALREADY PROGRAMMED IN NO FOR RESIDENTIAL.
SO THE TARIFF THAT ACTUALLY DETERMINES WHAT WE CHARGE CUSTOMERS THAT TARIFF THAT'S INCLUDED IN THIS BUDGET HAS THE EXISTING RATES IN THERE.
WE ARE NOT CHANGING RATES, EXCUSE ME, I'M, I'M CONFUSED BECAUSE IT SHOWS THE CUSTOMER CHARGE, UH, JUMPING UP 150% FROM 10 TO $25, RIGHT? AS, AS WE STATED EARLIER, THAT WHEN WE CREATED OUR REVENUE FORECAST, WE MADE ASSUMPTION THAT THOSE PROPOSED RATES FROM OUR ABLE EIGHT 18TH PACKAGE WERE ADOPTED.
AND THAT'S WHAT WE USE TO CREATE OUR REVENUE FORECAST.
IF WE HAD NOT DONE THAT, WE WOULD HAVE A, A FORECAST THAT SHOWS US NOT COMPLYING WITH FINANCIAL POLICIES.
AND THE QUESTION WOULD BE, WHAT ARE YOU GOING TO DO ABOUT THAT? SO OUR, THE WAY WE ANSWERED THAT IS WE, WE SHOW IF THEY ADOPT THESE RATES, THIS BUDGET, UM, WOULD HAVE EIGHT POINT FOUR BILLION MILLION DOLLAR DEFICIT GETS US CLOSER TO OUR FINANCIAL POLICIES.
SO YOU CAN'T PROPOSE A FORECAST THAT BLOWS THROUGH YOUR POLICIES, BUT THIS BUDGET ITSELF DOES NOT CHANGE RATES.
I'LL STATE AT ONE MORE TIME, IF THE EUC WERE TO ADOPT THE AA BUDGET AS PROPOSED, WE ARE NOT, WE ARE NOT ADOPTING THIS SLIDE WITH A SPECIFIC TARIFF.
AND YOU'RE NOT DICTATING EVERY RESIDENTIAL CUSTOMER WILL USE 860 KWH EITHER.
I'M NOT MAKING A CALL ON EXACT $15
[01:50:01]
MONTHLY FEE.THAT IS SOMETHING THAT'S GOING TO BE DETERMINED TO.
YES, THE TARIFF IN THE PACKAGE HAS THE EXISTING RATES HAS A $10 CUSTOMER CHARGE HAS FIVE TIERS AT THE TATE THAT THE TIERS THAT THEY'RE CURRENTLY SET AT.
SO, SO WHAT WILL HAPPEN IF AN AND ASSUME WITH ME THAT THE RATE THAT IS ULTIMATELY ADOPTED OR APPROVED BY CITY COUNCIL, ISN'T EXACTLY AS AUSTIN ENERGY PROPOSED.
AND SO YOUR ASSUMPTION IN THE BUDGET IS NOT IDENTICAL.
HOW WILL THAT, HOW WILL YOU ADJUST, YOU KNOW, THE BUDGET MOVING FORWARD THROUGH NEXT YEAR TO REFLECT THE, YOU KNOW, LOWER IN THEORY, UH, RE REVENUE, RIGHT.
SO IT WOULD, UH, IF WE, IF THE RATES WERE LOWER THAN WHAT WE'VE PROPOSED, THAT WOULD REDUCE OUR REVENUE ASSUMPTION, WE'D PULL IN LESS REVENUE IN 23, THAT WOULD INCREASE THAT DEFICIENCY AT THE BUDGET LEVEL.
UM, WE WOULD LOOK FOR OPTIONS TO REDUCE OUR SPENDING, BUT AS MR. DAVIS POINTED OUT, THERE'S VERY LITTLE IN OUR BUDGET, THAT'S DISCRETIONARY.
UM, AND SO WE MAY NOT HAVE THAT OPPORTUNITY IN THE SHORT TERM, REDUCE THAT SPENDING BY AN EQUAL AMOUNT.
SO WE WOULD EXPECT OUR DEFICIENCY TO GROW FROM WHAT WE FORECASTED, BUT IT WOULD ONLY IMPACT THAT THAT REVENUE ESTIMATE WE HAVE IN THE BUDGET.
AND SO THEN HOW WE WOULD SEE THAT PLAY OUT AT THE EOC WOULD BE IN OUR QUARTERLY FINANCIAL REPORTS, WE'RE GOING TO HAVE A BUDGETED, YOU KNOW, COLUMN, LIKE WE SEE ON OUR GRAPHS HERE AND AN ACTUAL COLUMN, AND THOSE AREN'T GOING TO ALIGN.
UM, IF THE ASSUMED REVENUE IS DIFFERENT THAN WHAT ARE THE BUDGET THAT YOU'VE PROPOSED HERE TODAY? THAT'S CORRECT.
AND WHEN WE COME BACK WITH OUR, UM, OUR RATE PROPOSAL IN NOVEMBER, THAT THE COUNCIL ADOPTS, WE MAY MAKE ADJUSTMENTS TO THIS BUDGET TO REFLECT THAT, THAT REALITY.
SO WE MAY ADJUST THAT REVENUE.
UM, BUT IF WE DON'T, UM, THE IMPACT WILL BE LESS REVENUE THAN WHAT WE FORECASTED.
AND IF YOU MAKE AN ADJUSTMENT TO THE BUDGET AT THAT TIME, UM, WOULD WE GET AN UPDATED PRESENTATION ON THAT? YES, YES.
IF I COULD THEN THIS, UM, CHART THAT WE'RE LOOKING AT WITH TYPICAL RESIDENTIAL CUSTOMER BILL IMPACT LOOKS AT WHAT WE HAVE BEEN DOING, BUT ALSO THE PROPOSED RATES.
SO THAT IS WITH THE RATE INCREASE.
IS THAT CORRECT? THAT'S THE EIGHT.
YEAH, BECAUSE THE 18 4% IS IF THERE'S A RATE INCREASE, THAT'S CORRECT.
THAT ASSUMES THAT THE RIGHTS THAT WE PROPOSE ON ORIGINAL FILING WERE ADOPTED, THIS IS WHAT IT WOULD BE, BUT THIS DOES NOT ADOPT THOSE RATES.
SO OUR BUDGET AS PROPOSED THAT WE'RE TALKING ABOUT RIGHT NOW, WHAT IS THE RATE INCREASE FOR RESIDENTIAL THAT'S BAKED INTO THE BUDGET? IS THERE ANY THAT THE BUDGET DOES NOT SET RATES? SO, YES.
SORRY, BILL INCREASED RATHER WHAT'S THE BILLING PRIESTS THAT PEOPLE CAN EXPECT WITH OUR CURRENT PROPOSED BUDGET.
THE BUDGET DOES NOT CHANGE THE BILL.
SO ONLY THE THING, THE ONLY THING YOU CAN CHANGE RATES AND BILLS IS THE, UH, THE RIGHT PROPOSAL.
THAT'S GOING BEFORE YOU, IN NOVEMBER, REGARDLESS OF THE BUDGET YOU ADOPT, THESE ARE THE RATES THAT WE HAVE NOW, AND THAT GENERATES THIS BILL.
IF WE DON'T INCREASE SOME, YOU'LL SEE A HIGHER DEFICIENCY AND LESS CASH AND WEAKER METRICS IN THE FUTURE, BUT ADOPTING THE BUDGET, DOESN'T CHANGE THE ADOPTED RATES THAT WON'T HAPPEN UNTIL NOVEMBER WHEN THE COUNCIL GETS THAT RATE PROPOSAL.
WELL, LET ME ASK, UH, I'VE BEEN KIND OF FOLLOWING THE RIGHT, THE PUBLIC FILINGS IN THE RIGHT INCREASE.
AND AS I UNDERSTAND, THERE'S BEEN A REDUCTION, A RECENT REDUCTION.
HOW, IF THAT, ASSUMING THAT'S ASSUMING THAT RIGHT REDUCTION, DO YOU HAVE, COULD YOU TELL US WHAT, HOW THAT WOULD IMPACT WHAT WE'RE LOOKING AT NOW? RIGHT.
SO OUR ORIGINAL RIGHT HAD A 48, UH, MILLION DOLLAR INCREASE THAT WAS DECREASED TO 35.7.
SO THAT WOULD HAVE A SLIGHT DECREASE IN THESE PROPOSED RATES AND THE BILL.
BUT I WOULD ADD THAT THE BASE RATE INCREASE WE'RE LOOKING AT FOR TYPICAL BILL IS ONLY ABOUT TWO AND A HALF PERCENT, MAYBE EVEN LESS THAN THAT.
UM, SO IT'S NOT A SIGNIFICANT CHANGE IN THE BILL, UH,
[01:55:01]
FROM, FROM THE REVENUE.WHAT REALLY CHANGES IS THAT STRUCTURE, LIKE WE SAID, IN ORDER TO, UH, ENSURE WE COLLECT THE REVENUE FROM THE CUSTOMERS.
UM, BUT THE, THE, THE AMOUNT IS A, IS A RATHER SMALL AMOUNT, UH, IN TERMS OF OUR TOTAL REVENUE AND A COMMISSIONER HADN'T ASKED FOR COMPARABLE FOR, FOR OTHER RIGHT CLASSES.
CAN, CAN YOU GET US THAT DATA, RIGHT? SO WE DON'T HAVE A TYPICAL INDUSTRIAL COMMERCIAL CUSTOMER BECAUSE THE, UM, THE, THE, UM, THE DEVIATION OR THE DIFFERENCE BETWEEN THOSE CUSTOMERS IS SO LARGE, BUT WE DO BILL IMPACT TABLES.
AND WE HA WE WILL HAVE THAT WHEN WE DO OUR RATE PROPOSAL, WE WILL BRING THAT FORWARD TO SHOW YOU WHAT CUSTOMERS IN VARIOUS CLASSES MIGHT EXPERIENCE WITH THE RATE CHANGES.
HERE'S THE CHART ILLUSTRATING THE TREND IN DEBT SERVICE AND WHAT WE'RE ANTICIPATING FOR 2023, THE GROWTH YOU SEE FROM 2019 WAS LARGELY DUE TO THE ACQUISITION OF THE NACADOCIOUS BIOMASS PLANT.
AND FROM THEN THAT POINT FORWARD, THE TRENDS ARE PRETTY CONSTANT BASED ON, PRIMARILY ON THE EXPECTED CIP SPENT.
THESE ARE THE CORE METRICS THAT WE LOOK AT ROUTINELY AS AN OVERVIEW.
IF THE NUMBERS ARE GREEN, THE KNEE HAS MET OR EXCEEDED ITS MINIMUM NUMBERS IN RED INDICATE WHERE AUSTIN ENERGY IS NOT MEETING THE MINIMUM CRITERIA.
NOW THAT THE MINIMUMS ARE TARGETS THAT WE TRY TO ATTAIN TO PROTECT OUR AA CREDIT RATING.
AS MR. MCENROE JUST EXPLAINED TO YOU EARLIER, ESPECIALLY WITH STANDARD AND POOR'S, WHICH REVIEWS IS KIND OF THE COMMON METRIC OVER THE YEARS.
AND AGAIN, THE 2023 FORECAST IS ASSUMING THAT INCLUDES THE 40 MILLION FOR THE BASE RATE REVIEW.
THIS IS ALSO SIMILAR TO THE GRAPH THAT MR. MCENROE, I SHOWED YOU EARLIER, IT JUST SHOWS IT FROM THE PERSPECTIVE OF THE 2023 FORECAST.
I DON'T UNDERSTAND THE RED VERSUS THE GREEN.
SO THE RED IS SHOWING WHERE WE'RE FALLING BELOW WHAT THE RESERVE MINIMUM IS.
THE FIRST COLUMN IS THE SORRY.
THE FIRST COLUMN IS THE TARGET THAT WE'RE TRYING TO ATTAIN.
SO WITH THE FORECAST OR THE BUDGET THAT'S BEEN PRESENTED SO FAR, YOU CAN SEE WHAT HAPPENS IN THE 2023 FORECAST COLUMN.
WE'RE WORKING CAPITAL, WE'RE STILL SHOWING GREEN WORKING CAP RESERVE, CONTINGENCY, RESERVE, FALSE OR RED, AS WELL AS THE CAPITAL RESERVE.
AND I'LL JUST EXPLAIN TO YOU A LITTLE BIT ABOUT HOW THOSE ARE DEFINED WORKING CAPITAL.
WE TRY TO MAINTAIN ENOUGH RESERVES TO COVER 60 DAYS OF BUDGETED O AND M COSTS, EXCLUDING POWER SUPPLY.
LIKEWISE, FOR THE CONTINGENCY RESERVE, WE ALSO TRY TO MAINTAIN 60 DAYS OF BUDGETED, ONM COSTS, EXCLUDING POWER SUPPLY.
AND THEN THE POWER SUPPLY RESERVE IS BASED UPON 90 DAYS OF NET POWER SUPPLY COSTS, NET OF ANY REVENUES FROM AEG POWER GENERATION ASSETS, AND THE CAP RESERVE IS CALCULATED, OR THE TARGETS CALCULATED BASED UPON 50% OF THEIR PRIOR YEAR'S DEPRECIATION EXPENSE.
IN GENERAL, WE AIM FOR A MINIMUM OF 150 DAYS OF RESERVES, WHICH WILL FLUCTUATE OVER TIME, DEPENDING ON OUR DAILY CASH NEEDS.
TH THE REDUCTION AND THE NON-NUCLEAR DECOMMISSIONING.
IS THAT DUE TO SPENDING MONEY FOR DECKER? YES.
SO, UM, FOR 2023, WE PLANNED TO SPEND ABOUT 23.
WE PLAN TO SPEND ABOUT, UM, 14 MILLION ON DECKER, UM, CHANGES.
AND THEN WE ALSO PLAN TO INCREASE THE RESERVE BY AN ADDITIONAL 8 MILLION.
SO WE HAVE A NET CHANGE OF SIX.
I'M NOW GOING TO HAND OVER THE PRESENTATION TO EACH OF THE EXECUTIVES IN EACH ONE OF THEM IS GOING TO SPEAK TO THE BUDGETS FOR THE RESPECTIVE BUSINESS UNITS.
THE FIRST OF WHICH IS OUR CUSTOMER CARE AND CUSTOMER ACCOUNT MANAGEMENT, VICE PRESIDENT, ELAINE BASILICA.
I'M ELAINE, THE SALKA VICE PRESIDENT OF CUSTOMER ACCOUNT MANAGEMENT, AND I'LL BE GIVING THE FY 23 BUDGET HIGHLIGHTS FOR BOTH CUSTOMER CARE SERVICES AND CUSTOMER ACCOUNT MANAGEMENT.
YOU'LL SEE, UM, OUR PROPOSED BUDGET FOR F Y 23, UH, COMES IN AT $50 MILLION.
THAT'S A LITTLE BIT OF REDUCTION, UM, AGAINST THE $53 MILLION FYI 22, UM, AMENDED BUDGET.
THAT'S MOSTLY DUE TO THE REMOVAL OF ONE-TIME COST AND SOME, UH, LICENSING COSTS REMOVALS FOR SOME OF OUR SOFTWARE.
UM, IN ADDITION, THERE'S A $2 MILLION INCREASE
[02:00:01]
FOR THE, UM, CONTINUED, UH, IMPLEMENTATION AND USE OF GEN GENESIS AS OUR TELEPHONY SYSTEM IN OUR CUSTOMER SERVICE CENTERS.AND IT, AUSTIN 3, 1, 1, AND THE, UH, UH, CATEGORIES ARE LABOR AND BENEFITS AS, AS, UH, MR. DAVIS PREVIOUSLY MENTIONED AS WELL AS CONTRACTUALS, INCLUDING OUR STAFFING CONTRACTS AND OUR CUSTOMER FACING SYSTEMS. AND WE HAVE NO INCREASE IN CIP FOR
THERE ARE QUESTIONS OR NO QUESTIONS.
I WILL TURN OVER TO RICHARD GENESEE.
WHY DID THE AMENDED 22 BUDGET GO UP SO MUCH FROM THE ESTIMATE TO THE, IT WAS AT 36 MILLION SAN AND WENT UP TO 53.
UH, THE 53 WAS THE PROPOSED OF Y 22 ORIGINAL BUDGET.
UM, THE PAST AND THE AMENDED IS THE I'M SORRY, THE ESTIMATED IS OUR ACTUAL TO DATE.
SO, UM, THERE'S, THERE'S SOME TIMING CONSTRAINTS USUALLY WITH DIFFERENT CONTRACTS THAT HAVE TO BE PAID.
I'M THE VICE PRESIDENT OF CUSTOMER ENERGY SOLUTIONS.
AND I'M GOING TO GIVE THE SYNOPSIS OF THE FISCAL FISCAL YEAR 2023 CUSTOMER ENERGY SOLUTIONS BUDGET.
SO STARTING ON THE TOP LEFT QUADRANT, WE HAVE A $46.6 MILLION BUDGET FOR FISCAL 23.
THIS IS A $5.4 MILLION INCREASE OVER WHERE WE EXPECT TO END IN FISCAL YEAR 22.
WE HAVE 16 POSITIONS WHICH HAVE MOVED TO TECH AND DATA UNDER OUR DATA ANALYTICS AND BUSINESS INTELLIGENCE GROUP, BUT THOSE RESOURCES ARE STILL AVAILABLE TO SEE US MAKING OUR TOTAL FTE AVAILABLE, TO WORK ON CES BUSINESS UNCHANGED ON THE LOWER LEFT QUADRANT.
YOU CAN SEE THAT ALL OF OUR $46.6 MILLION BUDGET, 70% OF OUR BUDGET IS SPENT ON PROGRAMS AND 30% IS IN LABOR AND BENEFITS.
UM, SO IN SUMMARY ON THIS SLIDE, I THINK WHAT'S MOST IMPORTANT TO TAKE AWAY IS THAT OUR PROPOSED BUDGET MEETS OR EXCEEDS ALL OF OUR COUNCIL AND GEN PLAN GOALS.
UM, YOU KNOW, WE ARE BY VIRTUE OF THE RESOURCE AND GENERATION PLAN AND, UM, ACHIEVING 1200 MEGAWATTS THROUGH ENERGY EFFICIENCY AND DEMAND RESPONSE MEASURES, AND ALSO PROVIDING 375 MEGAWATTS OF LOCAL SOLAR WITH 200 MEG, 200 MEGAWATTS OF THAT BEING CUSTOMER SITED.
UM, THERE'S ALSO A $2.85 MILLION INCREASE TO MEET THE DEMAND OF SOLAR PV, UH, THROUGH A PERFORMANCE-BASED INCENTIVE PROGRAM.
AND THE 16 POSITIONS THAT I MENTIONED EARLIER.
CAN YOU EXPLAIN, UM, WELL, ONE, I WANT TO REMIND YOU OF THE OTHER GOAL OF THE 1%, MEANING 1% ENERGY SAVINGS PER YEAR.
UM, UH, WHICH I HAVE REASONS WHY I LIKE THAT, UM, WHY THE 2.85 MILLION INCREASE, WHAT, WHAT IS CHANGING THAT'S CAUSING THAT INCREASE? NO, THERE'S NOTHING CHANGING THAT ACTUALLY REPRESENTS A 2.85 MILLION THAT WAS SHIFTED FROM, UM, UH, PROJECTS THAT WERE DEFERRED ON PUT UNTIL THIS FISCAL YEAR.
SO, UH, DEFERRED IN THE FUTURE.
SO THE SHARED SOLAR, OR YEAH, SHARED SOLAR AND, UM, OTHER PERFORMANCE-BASED INCENTIVE PROGRAM PROJECTS.
SO, UH, IT DOESN'T REALLY REPRESENT A CHANGE SO MUCH AS IT REPRESENTS A SHIFT OF PROJECTS.
SO ON THIS SLIDE, I REALLY WANTED TO JUST, UH, SPEAK TO THE CONTINUOUS NATURE OF OUR PROCESS.
UM, YOU KNOW, WE START WITH THE RESOURCE AND GENERATION PLAN, UH, WHICH WE RECEIVE LOTS OF INPUTS FROM, AND IT'S A CONTINUOUS PROCESS FROM THE EOC, THE RMC, UM, YOU KNOW, VARIOUS, UH, STAKEHOLDERS, UH, ALL OF THAT, UH, DEFINES OUR POLICY OBJECTIVES.
AND SO WE HAVE OUR POLICY OBJECTIVES, AND THAT REALLY IS THE BEGINNING OF OUR PROCESS.
WE MOVE FROM WHAT THOSE POLICY OBJECTIVES ARE INTO BUDGET DEVELOPMENT.
AGAIN, LOTS OF SOURCES FOR DEVELOPMENT OF WHAT THAT EES BUDGET DEVELOPMENT IS OCCURRING IN THE JANUARY THROUGH MAY TIMEFRAME.
WE HAVE EVERYTHING FROM CITIZEN INPUT, STAKEHOLDER INPUT, CES
[02:05:01]
STAFF INPUT, UM, ALL GOING INTO WHAT SPECIFIC BUDGET IS NEEDED TO ENSURE THAT WE MEET THOSE POLICY OBJECTIVES.AND THEN, UH, IN THE, UH, JULY THROUGH SEPTEMBER TIMEFRAME, WE MOVE INTO, UH, THE, THE PROGRAMS DRIVING THE TARIFFS, WHICH LARGELY BECOMES A MATHEMATICAL CALCULATION BASED ON THE BUDGET NEEDED TO MEET POLICY OBJECTIVES.
SO I JUST WANTED TO MAKE SURE THAT, UM, IT WAS UNDERSTOOD THAT WE ACTUALLY HAVE A YEAR LONG PROCESS IN WHICH WE, UH, GET A LOT OF INPUT STARTING WITH, BUT THE PROCESS STARTS WITH SETTING WHAT OUR POLICY OBJECTIVES ARE AND THE PROCESS ENDS OR WHATEVER, WITH THIS, UH, EES TARIFF CALCULATION, WHICH IS LARGELY MATHEMATICAL.
NEXT SLIDE, PLEASE ARE 1, 1, 1 OTHER POINT.
I JUST WANTED TO MAKE SURE THAT OUR OVERARCHING GOAL IS ALWAYS TO ACHIEVE THE RESOURCE GOALS AT THE LOWEST POSSIBLE COSTS.
AND THAT REMAINS OUR, OUR FOCUS.
UM, THIS IS SLIDE REALLY JUST REFLECTS THE $4.3 MILLION INCREASE OF THE BUDGET, UH, RELATED TO THE 5.4 MILLION.
SO IT'S THE MAJORITY OF THE, UH, INCREASE RELATED JUST TO THE ENERGY EFFICIENCY SERVICES INCENTIVES, UM, UH, AND THE LARGEST OF WHICH IS SOLAR, UH, THAT I SPOKE TO EARLIER, UH, 2.8, 5 MILLION OF THAT BEING THE, UH, COMMERCIAL AND MULTIFAMILY, AND THEN 400,000 OF THAT BEING FOR PV METERS.
UM, BUT THE, THE BIGGEST IMPACT HERE IS THAT AS YOU CAN SEE ACROSS MANY OF THESE, UH, PROGRAMS AND OFFERINGS, REBATES, AND INCENTIVES, WE ACTUALLY HAVE A VERY STRONG $4.3 MILLION INCREASE, UH, ACROSS THE BOARD.
ONE OTHER ONE THAT I DID WANT TO POINT OUT IS IN OUR SCHOOL-BASED EDUCATION, UH, PROGRAM, WE ACTUALLY HAVE, UM, 7,000 KIDS THAT WE'RE GOING TO BE TOUCHING THROUGH OUR, OUR PROGRAM, UH, INCREASING OUR PENETRATION TO 70% OF THE KIDS IN OUR SERVICE TERRITORY THAT WE'RE GOING TO BE ABLE TO IMPACT THROUGH THIS PROGRAM AND THE, UH, YOU KNOW, BUDGETED $150,000 INCREASE IN THAT LINE ITEM BUDGET.
UM, SO GOING FROM A 500, 5,443 TO 7,000 STUDENTS, UH, 56 TO 70% PENETRATION INCREASED IN THE PROGRAM.
SO WOULD, UM, WHERE IN THIS LIST IS A POTENTIAL EDD, INTELLIGENT CHARGING ENHANCEMENT OR IMPROVEMENT OR UPGRADE FROM THE
THIS WOULD BE IN ANOTHER LINE ITEM FOR, UH, THE GREEN BUILDING BECAUSE, UM, THE, UH, EVY BUDGET FALLS IN UNDER THE GREEN BUILDING A BUDGET, BUT IT IS INCLUDED IN THERE.
AND WE DO HAVE THE INCREASE IN ALL OF OUR ELECTRIC VEHICLES FROM OUR ALL ELECTRIC ELECTRIFICATION ELECTRIC VEHICLES PROGRAM IS NOW, UH, MORE THAN A $600,000 A BUDGET INCREASE IN FISCAL 23.
SO THAT IS AN INCREASE OVER FISCAL 22.
IT WOULD BE IN THAT I I'D LIKE TO, UM, MAKE THE COMMENT THAT I ACTUALLY THINK SOME PARTS OF THIS BUDGET, UM, PROBABLY SHOULD BE INCREASED IN, ARE NOT CHANGING, FOR EXAMPLE, A WEATHERIZATION AND MUNICIPAL CONSERVATION PROGRAM WHEN WE'RE AT THIS POINT IN TIME WHERE ERCOT IS WORRIED ABOUT US, YOU KNOW, NOT MAKING IT THROUGH THE HOT SUMMER.
IT SEEMS LIKE WE OUGHT TO BE POURING IN RESOURCES ON ENERGY AND CONSERVATION.
WE'RE ASKING CUSTOMERS TO HELP CONSERVE, AND THAT'S REALLY GREAT, BUT I THINK WE REALLY NEED TO POUR IN RESOURCES THERE TO AVOID PROBLEMS THAT COULD BE INCREDIBLY EXPENSIVE ON THE TAIL END AND BE HARMFUL TO ALL OF US.
YEAH, THERE, THERE ARE OTHER, UH, CONSIDERATIONS THAT ARE NOT YET REFLECTED IN THIS, THAT THE, UM, THE MANAGEMENT AND THE STAFF ARE CURRENTLY CONSIDERING, UH, THROUGHOUT THE CES PORTFOLIO, WEATHERIZATION, WE KNOW IS ALWAYS A, UH, A CRITICALLY IMPORTANT TOPIC.
AND SO WE DO HAVE MAKE CONTINUOUS, UM, CHANGES AND CONSIDERATIONS ON HOW TO IMPROVE THE WEATHERIZATION PROGRAM.
AND AS FAR AS YOUR POINT ON, UH, DEMAND RESPONSE, THAT IS WELL NOTED.
THE LAST LINE ITEM YOU SEE HERE IS A BEHAVIORAL DEMAND RESPONSE PILOT, UH, BECAUSE WE ARE ALSO TRYING TO IMPROVE,
[02:10:01]
UH, THE DEMAND RESPONSE PORTFOLIO AND, AND MAKE THAT WORK HARDER FOR US AND DELIVER MORE RESULTS FOR US.SO, UH, THAT IS NEW TO THE, UM, DEMAND, DEMAND RESPONSE PORTFOLIO, IF YOU WILL.
AND SOMETHING THAT WE'RE TRYING TO ENHANCE TO IT, JUST LIKE, UH, UH, COMMISSIONER TUTTLE WAS COMMENTING ON THE DEMAND RESPONSE COMPONENT ASSOCIATED WITH ELECTRIC VEHICLES AND THE PILOT WE HAVE THERE.
I WOULD SUPPORT EVEN MORE MONEY IN THOSE ARENAS, INCLUDING THE DEMAND RESPONSE PILOT, BECAUSE IT'D BE GREAT IF IT WAS EFFECTIVE AND, AND, YOU KNOW, WE COULD GET SOME POSITIVE RESULTS OUT OF IT.
I WAS JUST GONNA ASK, UM, CAN YOU SPEAK MORE TO THE DECREASE IN THE MULTIFAMILY REBATES? IS THAT BEING REALLOCATED ELSEWHERE? AND YEAH, I W I'M GLAD YOU BROUGHT THAT UP.
IT'S NOT REALLY A DECREASE, EVEN THOUGH IT'S REFLECTED THAT WAY.
UM, ESSENTIALLY IT IS JUST TO MAKE SURE THAT WE ARE, UH, CLOSER TO ACTUALS IN TERMS OF WHAT WE SPEND, WHAT WE HAVE, WHAT WE HAVE EXPERIENCED IN THE MOST RECENT, UH, BUDGET CYCLES IS THAT WE BUDGET.
SO MUCH, AND THEN WE DON'T EFFECTIVELY SPEND ALL OF IT.
SO IT LOOKS LIKE A $50,000 REDUCTION, BUT ESSENTIALLY WHAT IT IS, IS JUST TRYING TO GET CLOSER TO WHAT WE ACTUALLY HAVE SPENT.
AND WE, WE DON'T LIKE, UH, BEING IN A POSITION WHERE AT THE END OF ANY GIVEN YEAR, YOU KNOW, WE'VE BUDGETED SO MUCH AND WE HAVEN'T EFFECTIVELY SPENT ALL OF IT.
SO THIS IS JUST AN ATTEMPT TO GET CLOSER TO WHAT WE ACTUALLY HAVE EXPERIENCED.
AND IS THIS IS FOR THE PROGRAM.
I JUST WANT TO MAKE SURE I'M UNDERSTANDING CORRECTLY.
THIS IS FOUR UNITS LARGER THAN THE, I THINK THEY'RE CALLED LIKE QUADPLEXES FOURPLEXES.
THAT IS THAT FOR THE PROGRAM WHERE THE LANDLORDS HAVE TO TAKE THE INITIATIVE TO HAVE LIKE REBATES FOR THEIR PROGRAM OR TO MY CONFUSING.
NO, I DON'T THINK YOU'RE CONFUSING PROGRAMS. ARE YOU REFERRING TO AS THE SPLIT INCENTIVE CHALLENGE WHERE, UM, YOU KNOW, WE'RE TRYING TO BENEFIT THE TENANTS, BUT THE LANDLORDS HAVE TO APPROVE THE IMPROVEMENTS TO THE PROPERTY.
AND SO YES, THIS IS THIS, IS THAT, UM, EFFORT? UM, I GUESS I'M JUST WONDERING IF THERE'S SOME WAY WE COULD JUST HAVE BETTER OUTREACH FOR THESE PROGRAMS. CAUSE I'M NOT, I FEEL LIKE NOT A LOT OF THESE ARE GOING TO BE SIGNIFICANT BENEFITS TO RENTERS SPECIFICALLY, THEY MAKE UP ROUGHLY 50% OF THE CUSTOMER BASE.
SO AS A RENTER, I'M JUST CONCERNED ABOUT WHAT KIND OF BENEFITS I MIGHT SEE AND NOW COMMISSIONER CHAPMAN MIGHT HAVE MORE QUESTIONS.
SO I, I SHARE THE CONCERN, UH, COMMISSIONER CROSS-SOLD, UH, REFERENCED THE HIGH NUMBER OF RENTERS.
AND AS I LOOKED THROUGH HERE, WE'RE GOING, UH, 20 MILLION, 4.3 MILLION INCREASE IN THE COMMUNITY BENEFIT CHARGE.
AND AGAIN, UH, WE'RE NOT SEEING THAT KIND OF INCREASE FOR PROGRAMS THAT BENEFIT, UH, RESIDENTIAL RENTERS AND OR LOW INCOME FOR THAT MATTER WHERE, UH, MY UNDERSTANDING IS AUSTIN ENERGY, UH, HAS HAD PROBLEMS IN THE PAST WITH THERAPY, WITH THEIR PROGRAM, ENERGY EFFICIENCY, WEATHERIZATION PROGRAM, AND THEN HIRED A, AN IMPLEMENTER.
AND YOU'RE SAYING IT AT ARE INDICATING TO US, YOU'RE COLLECTING MORE, ARE COLLECTED MORE MONEY IN THE MULTIFAMILY ANYWAY, THEN YOU'RE SPENDING AND THEREFORE THE $50,000 ADJUSTMENT THERE, BUT OVERALL IN THIS WHOLE $25 MILLION PROPOSED BUDGET, UH, VERY LITTLE, IT APPEARS OUR GOING IN FOR RESIDENTIAL CUSTOMERS AND PARTICULARLY FROM A STANDPOINT OF EQUITY OF TINY FRACTION.
AND I, I LEARNED TODAY THAT THERE IS SOME GROUP, UH, THAT WE HAVEN'T HEARD FROM THAT IS LOOKING AT EQUITY WITHIN, OFF SPIN ENERGY.
YEAH, NO, I, I APPRECIATE THE COMMENT AND, AND CES IS ACTUALLY THE GROUP WITHIN AUSTIN ENERGY THAT IS PIONEERING, UH, AN EQUITY EFFORT.
AND LET ME TELL YOU ABOUT, UH, WHAT, WHAT THAT ENTAILS, UH, WE'VE ACTUALLY HIRED A THIRD-PARTY CONTRACTOR, UM, THAT HAS COME IN AND IS HELPING US TO LOOK AT HOW TO REFRAME AND RE-LOOK AT THE PORTFOLIO FROM AN EQUITY LENS PERSPECTIVE, AND JUST CONSIDERING THE SIZE OF THE PORTFOLIO.
[02:15:01]
ONE OF THE DECISIONS WE'VE MADE IS TO NARROW THE FOCUS TO THREE AREAS.INITIALLY, EVENTUALLY WE'LL GET TO THE WHOLE PORTFOLIO, BUT IT'S JUST SUCH A MASSIVE UNDERTAKING AND SUCH AN IMPORTANT UNDERTAKING THAT WE'VE DECIDED TO FOCUS ON WEATHERIZATION.
SO COMMUNITY SOLAR AND EVS AS THE THREE INITIAL AREAS THAT WE WILL FOCUS ON TO TRANSFORM AND LOOK AT FROM AN EQUITY LENS PERSPECTIVE, THIS IS SIMULTANEOUSLY WHILE WE TRAIN UP THE CS STAFF ON EQUITY, RIGHT? BECAUSE THAT'S EQUITY IS NOT SOMETHING THAT PEOPLE NECESSARILY KNOW ABOUT.
AND, UM, THE WHOLE CITY OF AUSTIN IS ACTUALLY UNDERGOING AN EFFORT WITH TRAINING UP ON EQUITY.
SO, SO WE HAVE THOSE TWO SIMULTANEOUS THINGS GOING ON WITH NCS.
HOW DO WE TRANSFORM THE INITIAL THREE AREAS OF OUR PORTFOLIO AND HOW DO WE TRAIN UP THE REST OF THE PROFESSIONAL STAFF IN CS TO UNDERTAKE THAT EFFORT? UM, AND WE WILL BE GETTING AN INITIAL, UH, REPORT OUT OF THOSE EFFORTS.
UM, UH, I, I THINK THERE'S AN INITIAL REPORT OUT BY THE END OF THIS YEAR OF CALENDAR YEAR.
I THINK THIS COMMISSION WOULD BE REALLY INTERESTED IN HEARING ABOUT THAT REPORT AND GETTING A REPORT ON THE REPORT.
YEAH, WE WILL ABSOLUTELY INCLUDE YOU AND COME BACK WITH THAT REPORT.
I MEAN, YOU KNOW, I MEAN, I JUST WANT TO MAKE SURE YOU UNDERSTAND, UM, HOW SERIOUSLY WE UNDERTAKE THIS WORK.
UM, BUT THE SERIOUSNESS WITH WHICH WE UNDERTAKE THIS WORK IS REFLECTED IN HOW DELIBERATE AND SLOW WE WANTED TO GO TO MAKE SURE THAT WE GET IT RIGHT AND NOT TO BITE OFF MORE THAN WE CAN CHEW OR THAT OUR CONSULTANT CAN CHEW IN TERMS OF THE INITIAL EFFORT IN TRANSFORMING THE PORTFOLIO.
HENCE THE FOCUS ON WEATHERIZATION, UH, EVS AND COMMUNITY SOLAR, BUT TASK.
AND IN ANOTHER WAY, THE EFFORT YOU'RE MAKING WITH THE CONSULTANT HASN'T YET HAD AN INFLUENCE ON THE PROPOSED BUDGET YET, BUT IT MIGHT IN THE FUTURE, IS THAT WHAT WE'RE SAYING? OKAY, WE'RE GOING TO GOING AT RIGHT NOW.
IT ABSOLUTELY WILL HAVE AN IMPACT IN THE FUTURE, BUT THAT WOULDN'T BE REFLECTED YET BECAUSE WE DON'T HAVE OUR RESULTS.
SOME OF THE THINGS THAT WE'VE BEEN UNDERTAKING IS ALL OF THE, UM, YOU KNOW, FOCUS GROUPS AND ENGAGEMENT COMMUNITY FORUMS. THERE'S BEEN A WHOLE WEALTH OF ACTIVITY THAT WE'VE UNDERTAKEN, WHICH IS ALL DESIGNED TO GATHER INPUT FROM CUSTOMERS ON, ON EQUITY AND HOW WE TRANSFORM THE PORTFOLIO.
CAN YOU REMIND US, ISN'T THERE A POT OF MONEY FROM CAP THAT COMES OVER FROM WEATHERIZATION? IS THAT REFLECTED IN THIS BUDGET OR NOT? IT IS NOT, I BELIEVE THAT'S A SEPARATE POT OF MONEY.
I THINK IT'S ABOUT A MILLION DOLLARS.
I THINK, UH, JERRY, UH, WOULD BE ABLE TO, I MEAN OUR VP OF, OKAY, SO THAT WOULD BE IN ADDITION TO THIS MONEY THERE'S ADDITIONAL WEATHERIZATION MONEY OR IS IT REFLECTED IN HERE? I GUESS THAT'S THE QUESTION AND THIS DOES NOT REFLECT CAP, UM, INVESTMENTS, UH, THAT IS A SEPARATE, UH, BUDGET AND IT IS NOT REFLECTED HERE.
SO THAT TO ANSWER YOUR QUESTION, THAT WOULD BE ON TOP OF WHAT YOU SEE HERE.
DON'T, DON'T LOOK AT ANY LIGHT ITEMS FOR WEATHERIZATION AND THINK THAT'S THE ONLY MONEY THAT WE'RE ALLOCATING TO THAT EFFORT IS GOING TO ANSWER.
SO I'D MENTIONED THAT THERE IS WHAT YOU'RE REFERRING TO IS A REVENUE SOURCE.
AND SO FROM THAT, THAT, THAT CBC, WE GET A REVENUE SOURCE TO HELP FUND THIS WEATHERIZATION PROGRAM.
SO THAT'S A REVENUE SOURCE FOR THIS, AS OPPOSED TO ALREADY IN HERE, OR YES, THAT'S THE TOTAL, THAT'S THE TOTAL SPENDING REVENUE SOURCES COME FROM, UH, VARIOUS FORMS, INCLUDING, UH, UH, UH, UH, CAP WEATHERIZATION PROGRAM.
SO THAT'S REVENUE, NOT, NOT EXPENDITURE.
LET ME, LET ME ASK, UH, SINCE YOU'RE UP HERE, THE, HAVE, THERE ARE CUP AREAS OF HEARTBURN HERE THAT, THAT WE'VE HEARD IN WITH THE PREVIOUS SLIDE PREVIOUS SLIDE, THIS SLIDE, UH, AND, AND WE, WE HEAR ABOUT THE EFFORTS, UH, THAT ARE UNDERWAY THAT MAY MAKE SOME HOPEFULLY SIGNIFICANT CHANGES IN TERMS OF EQUITY.
UH, MY QUESTION IS, UH, IS, IS AN ABSOLUTELY ESSENTIAL THAT WE ADOPT A 12 MONTH BUDGET AS OPPOSED TO A QUARTERLY BUDGET OR SEMI ANNUAL BUDGET.
AND THEN COME BACK WITH THAT WITHOUT ADDITIONAL KNOWLEDGE, WE'D HAVE TO RUN IT THROUGH OUR CITY ATTORNEY, BUT I BELIEVE OUR CHARTER REQUIRES A ONE-YEAR BUDGET, THE APPROPRIATIONS.
SO WHAT THE SETS IS THE LEVEL OF APPROPRIATION THAT COUNCIL ALLOWS US TO SPEND.
[02:20:01]
UM, AND IT'S DONE ON AN ANNUAL BASIS.I'M NOT AWARE WE CAN DO MID-COURSE CORRECTIONS.
IF WE GOT SOME MORE INFORMATION DURING THE COURSE OF THE YEAR, COME OUT, DO A BUDGET AMENDMENT, UM, ON THAT.
BUT I DON'T BELIEVE WE COULD JUST DO LIKE A SIX MONTH BUDGET FOR ONE SECTION OF OUR BUDGET.
ALRIGHT, I, I'M JUST TRYING TO WRAP AROUND THAT.
CAN WE ADOPT AN ANNUAL BUDGET, BUT ADOPT WITH THE UNDERSTANDING THAT THE SPENDING PLAN WOULD BE FOR A LIMITED, LIMITED TIMEFRAME SO THAT WE CAN COME BACK AND LOOK AT THOSE BUDGET REVISIONS THAT REFLECT OUR VALUES? WELL, YOU WOULD ADOPT THE BUDGET AS PRESENTED HERE, AND WE WOULD REPORT BACK TO YOU.
AND IF WE NEEDED TO MAKE SOME SORT OF A CORRECTION OR WE FOUND A PROGRAM THAT WOULD BE BENEFICIAL, IT NEEDED ADDITIONAL FUNDING THAT WE NEEDED MORE, A BUDGET OF 34, THEN WE COULD, UH, MAKE IT A BUDGET AMENDMENT AND CHANGE THAT, THAT AMOUNT.
UM, BUT YOU WOULD APPROVE A PHYSICAL YEAR'S BUDGET.
I MEAN, THINKING OUT LOUD, I THINK WHAT WE COULD DO AS A COMMISSION IS FOR EXAMPLE, ADOPT THIS BENEFIT, THIS BUDGET AS IS, BUT SAY WE ENCOURAGE THE COUNCIL FROM THE RESULTS OF THE EQUITY TO CONSIDER FURTHER INVESTMENTS IN THE MULTI AND MULTIFAMILY AND WEATHERIZATION PROGRAMS. I MEAN, SOMETHING LIKE THAT, WHERE WE'RE SAYING THIS IS WHAT'S PRESENTED TO US TODAY, BUT WE WOULD LIKE AUSTIN ENERGY TO COME BACK WITH THE RESULTS OF THAT EQUITIES STUDY.
AND IF THERE'S A, YOU KNOW, IF THERE'S THE NEED, WHICH I THINK THERE IS, AND THE DEMAND, WHICH THERE PROBABLY WOULD BE FOR MORE, SOMETHING LIKE THAT, WHERE WE COULD SAY, LET'S HAVE A, YOU KNOW, CONSIDER AN INCREASE, OR IF THERE WAS SUPPORT WE COULD CONSIDER INCREASE NOW.
BUT I DON'T KNOW IF I WERE TO ASK YOU IF I GAVE YOU A MILLION DOLLARS MORE FOR DIRECT INSTALLATION, WEATHERIZATION AND MULTIFAMILY DIRECT INSTALLATION.
COULD YOU SPEND IT IN 23? UM, I'D SAY NOT WITHOUT A CONSIDERABLE, YOU KNOW, ADDITIONAL WORK BECAUSE THE, UM, ADJUSTMENT IN THE MULTIFAMILY FROM 900 TO 850 REFLECTED WHAT WE REALLY BELIEVE I WAS REFERRING MORE TO THE NEXT LINE, THE MULTIFAMILY WEATHERIZATION DIRECT INSTALL.
IS THERE THE DEMAND TO DO MORE THAN ABOUT 1.8 MILLION A YEAR? OR IS THAT BASED ON THE SORT OF THE DEMAND YOU'RE GETTING? YEAH, I WOULD SAY THIS IS SUFFICIENT FOR GOALS, BUT IN TERMS OF DEMAND, WE COULD INVESTIGATE, YOU KNOW, MORE OR ADJUST THE GOALS SO THAT WE COULD, YOU KNOW, UM, DO MORE.
IT REALLY, I'M NOT TRYING TO BE EVASIVE THAT'S I THINK HE COULD DO IT.
YOU SAID THAT, UM, IT'S NOT REALLY DECREASED BECAUSE THE PROGRAM SPEND AN EXCESS, WHAT HAVE WE DONE WITH THAT EXCESS IN THE PAST? IS THAT JUST GONE TO DEBT SERVICE OR IS IT JUST SITTING ON ALLOCATED? I GUESS I'M CONFUSED ON THAT.
W W FOR THAT, FOR THE MULTI-FAMILY REBATES SPECIFICALLY.
WE, ACROSS OUR BUDGET, WE DO NOT HAVE THE ABILITY TO CARRY OVER IN BUDGET YEARS FROM YEAR TO YEAR.
SO IF THERE ARE UNSPENT FUNDS, UM, THEY ARE NOT CARRIED OVER.
SO THAT WOULD GO TO JUST MAKING UP FOR THAT REVENUE DEFICIT, I GUESS TH THERE IS KIND OF A TRUE-UP PROCESS THOUGH, WITH THESE WOULD THE S FEES.
I MEAN, THEY'LL ADJUST REGULAR ADJUST THE TARIFFS TO MATCH WHAT'S AVAILABLE.
SO YOU, I MEAN, IF YOU'VE, IF YOU'VE COLLECTED, IF YOU'VE COLLECTED MORE THAN YOU USE, EITHER YOU GIVE IT BACK TO THE CUSTOMERS WITH A LOWER YES.
OR IF THERE'S A DEMAND, YOU, YOU KNOW, YOU SAY WE'RE GOING TO HAVE A BIGGER BUDGET THE NEXT YEAR.
SO THERE IS A, THERE'S LIKE A TRUE-UP AT THE END OF THE YEAR.
IT WOULD NOT BE, UM, MONEY THAT YOU WOULD CARRY OVER, BUT YOU WOULD SEE IT REFLECTED IN FUTURE YEARS.
SOUNDS LIKE PERHAPS THE QUESTIONS ARE SETTLING AT LEAST ON THIS TOPIC.
ANYTHING ELSE FROM YOU? OKAY, GREAT.
THANK YOU LIKE TO LIKE CRAIG, UP TO COME AND TALK ABOUT ESD.
[02:25:05]
GOOD EVENING.I'M CRAIG BROOKS ACTING VICE-PRESIDENT OF ELECTRIC SYSTEM FIELD OPERATIONS SITTING IN FOR ELTON RICHARDS.
ESD IS ON M AND CIP PLAN FROM THE GRAPH ON THE TOP LEFT.
YOU'LL SEE, THERE'S A 2.6 MILLION DECREASE FROM
A COUPLE OF OTHER AMOUNTS THAT ARE INCLUDED IN THIS FYI 23 BUDGET ARE 946,000 FOR ADVANCED METERING CONTRACT AND 250,400 ADDITIONAL DISTRIBUTION DESIGN CONTRACTORS.
NOW, LET'S SEE, I'VE TALKED MORE ABOUT THE CIP PLAN ON THE NEXT SLIDE.
UH, THESE, SOME OF THE HIGHLIGHTED PART PROJECTS FROM OUR PREVIOUS, MY PREVIOUS SLIDE, THE EAST VILLAGE AND SOUTHEAST SUBSTATIONS WITH THE EAST VILLAGE BEING ON THE NORTHEAST SIDE OF THE TERRITORY, TAKING SOME OF THE LOAD OFF THE DESKS, ALL CIRCUITS AND THE SOUTHEAST SUBSTATION BEING DOWN BY THE ABI AIRPORT ARE BOTH SCHEDULED FOR COMPLETION AND
UM, DOES ANYBODY HAVE ANY QUESTIONS ON WHAT I JUST MENTIONED? IT'S A SUPER BASIC, BUT CAN YOU TELL ME WHAT, WHAT ALL FITS WITHIN ELECTRIC SERVICE DELIVERY? W W WHAT ARE WE TALKING ABOUT? OKAY.
WE'RE TALKING ABOUT THE DISTRIBUTION CONSTRUCTION GROUP.
UM, THE ALARM MINUTE, JUST COME OUT AND KEEP YOUR LIGHTS ON THE DOWNTOWN NETWORK.
THE GUYS THAT WORK UNDERGROUND IN THE DOWNTOWN AREA, YOU HAVE STREET LIGHT MOONLIGHT TOWER GUYS, AND OUR ELECTRIC MAINTENANCE GROUP, ALONG WITH OUR METERING OPERATIONS TRANSMISSION, SUBSTATION, AND CRAFTING FIELD TRAINING.
I THINK THAT COVERS MOST OF THE GROUPS.
IT'S THE, UH, UH, THE RAINY STRAIGHT, UH, IS THAT THE DUNWAY UP TRANSFORMER OR WHERE IS THAT NOW? THE DUNLAP TRANSFORMER.
I CAN'T REMEMBER WHAT IT IS NEW.
I DON'T THINK IT'S PART OF THE RAINY STREET PROJECT.
ANY OTHER QUESTIONS FOR ME? ALRIGHT, THANK Y'ALL FOR Y'ALL'S TIME.
I'D LIKE TO INVITE UP PAT SWEENEY, TALK ABOUT POWER GENERATION AND DISTRICT COOLING BUDGET.
MY NAME'S PAT SWEENEY AND VICE PRESIDENT FOR POWER PRODUCTION.
ALSO HAVE A DISTRICT COOLING IN MY AREA OF RESPONSIBILITY.
UH, THE FIRST SLIDE, JUST, UH, WE'LL WE'LL BREAK DOWN, UH, COMPONENTS OF OUR COST IN TERMS OF O AND M AND CIP CAPITAL INVESTMENT.
AS YOU CAN SEE ON THE BAR CHART, UH, THE O AND M IS UP SLIGHTLY, BUT COMPARABLE TO THE PRIOR THREE YEARS.
UM, YOU SEE ALSO ON SAME CHART, UH, ANOTHER LINE THAT SHOWS YOU STAFF LEVELS.
WE'VE TALKED A LITTLE BIT ABOUT THE REDUCTIONS ASSOCIATED WITH DECKER.
UH, AS YOU KNOW, WE RETIRED STEAM UNIT NUMBER ONE IN 2020 IN THIS PAST MARCH STEAM UNIT NUMBER TWO.
AND SO WE'VE BEEN IN THE PROCESS OVER THE LAST FEW YEARS OF DRAWING DOWN THE STAFF THERE ACCORDINGLY.
UM, AND YOU SEE THAT DEPICTED THERE ON THE, UH, CIP OR FURTHER ON THE O AND M SIDE.
I WOULD POINT OUT THAT, UH, WE, WE ARE SEEING GENERAL COSTS, COST PRESSURES, LIKE MOST PARTS OF THE ORGANIZATION, WHETHER IT'S IN TERMS OF STAFF COST OR COMMODITIES AND THINGS THAT WE CONSUME AT THE FACILITIES, INCLUDING, UH, BOTH THE POWER PLANTS IN THE DISTRICT COOLING PLANTS.
UM, ALSO IN THIS, IN THIS YEAR, WE WILL SEE THE FIRST FULL YEAR OF OPERATION FOR DISTRICT COOLING, PLANT THREE, UH, AS WELL AS ACC, HIGHLAND COOLING PLANT.
UH, WE ALSO HAVE SOME INCREASES IN OUR SHARE OF THE OPERATING COSTS FOR OUR JOINT PROJECTS.
UH, THE LARGEST IS IN THE, AT THE SOUTH TEXAS PROJECT.
UH, THOSE UNITS RUN ON A 12 MONTH, UM, I'M SORRY, 18 MONTH REFUELING CYCLE.
AND SO EVERY FEW YEARS THEY WILL LINE UP WHERE WE'LL END UP WITH TWO REFUELINGS IN ONE BUDGET YEAR.
AND SO, UH, THAT IS ONE OF OUR, THIS WILL BE ONE OF THOSE YEARS.
SO WE HAVE TWO REFUELINGS IN THE COMING FISCAL YEAR.
AND SO THAT THERE'S ALWAYS A, A BUMP THAT OCCURS NATURALLY, IF YOU WILL, AS A RESULT OF THOSE REFUELING CYCLES, WHICH ALSO INCLUDE, UH, MAINTENANCE DURING THOSE SAME PERIODS, UH, ALSO ON THE FAT POWER PLANT, UH, WE'RE SEEING A LITTLE BIT OF AN INCREASE THERE, UH, DUE TO SOME HIGHER INCREASED PERIODIC MAINTENANCE.
SO, UH, PLANTS, UH, HAVE LOWER AND HIGHER LEVELS OF MAINTENANCE OVER TIME
[02:30:01]
TO PINK BOND RUN HOURS, AS WELL AS INCREASES IN THE GENERAL ADMIN ADMINISTRATIVE EXPENSES, MUCH LIKE EXPENSES THAT WE'VE SEEN OUR OWN STAFF AND COSTS GO UP ON.UM, CAN I ASK YOU A QUICK QUESTION ON THAT, ON THE INCREASE ON FAT, UM, WITHIN THIS PROPOSED BUDGET UNDER JOINT PROJECTS, ARE WE SPENDING ANY MONEY ON FAYETTE THAT WOULD EXTEND THE LIFE OF A PLAN THAT CITY COUNCIL HAS TOLD US THAT WE ULTIMATELY WANT TO GET OUT OF? OBVIOUSLY WE'RE NOT GOING TO GET OUT OF IT THIS YEAR, BUT ARE IN OTHER WORDS, I WANT TO MAKE SURE WE'RE NOT ENDORSING A BUDGET THAT IS INVESTING IN ANYTHING MORE THAN JUST SORT OF NORMAL OPERATIONS AND MAINTENANCE.
SO SOME, SOME, THERE THERE'S SOME MINOR CAPITAL COSTS.
IT'S VERY LITTLE AT THIS POINT IN TIME.
UH, THOSE CAPITAL COSTS THOUGH, ARE INTEND TO REPLACE WORN COMPONENTS AND THINGS LIKE THAT.
NATURALLY, THEY HAVE A LONGER LIFE, BUT THEY'RE NOT, THEY'RE NOT DIRECTED AT EXTENDING THE LIFE, BUT MAINTAINING A SAFE AND RELIABLE OPERATION.
BUT IN TERMS OF MAJOR REPLACEMENTS OF TURBINES OR NO MAJOR UPGRADES AND THINGS OF THAT SORT.
IF THERE'S NO QUESTIONS, I'LL GO TO THE NEXT SLIDE, WHICH IS A LITTLE BIT DEEPER.
LOOK AT OUR, SOME OF OUR KEY, UM, UH, CAPITAL IMPROVEMENT PLAN PROJECTS.
UM, AND SO YOU CAN SEE HERE A, A SAMPLE OF, UH, SOME OF THE KEY PROJECTS COMING UP IN THE CURRENT FISCAL YEAR.
UH, IT WAS NOTED EARLIER THAN IN DISTRICT COOLING, AND WE HAVE TWO ITEMS LISTED HERE THAT WE'VE SEEN AN OVERALL DECREASE THERE THAT IS BECAUSE WE CANCELED THE, THE, UH, PLANT THAT, THAT WAS INTENDED TO BE ADDED TO THE MUELLER SITE HERE.
SO OUR OVERALL IS GOING DOWN AND THAT, AND THAT SIDE OF IT, UH, THE TWO ITEMS LISTED HERE FOR DISTRICT COOLING, THE SATELLITE ACC PLANT.
YOU CAN SEE IT, UH, STEPPING DOWN FROM, UH, FY 2022.
THAT'S BASICALLY THE WRAP-UP AND COMPLETION OF THAT PLANT THAT WILL OCCUR IN THE LAST CALENDAR QUARTER OF THIS YEAR, FIRST QUARTER OF THE FISCAL YEAR.
UH, ALSO WE ARE DOING WORK DOWNTOWN TO IMPROVE OUR DOWNTOWN COOLING NETWORK.
WE HAVE, UH, FOUR PLANTS, UH, UH, OPERATING DOWNTOWN AND A PRETTY EXTENSIVE NETWORK.
AS YOU MAY KNOW, THERE'S SIGNIFICANT WORK.
THAT'S ABOUT TO GET UNDERWAY AT THE CONVENTION CENTER AND ALSO ADJACENT TO THE CONVENTION CENTER PROJECT CONNECT.
AND WE'VE GOT, GOT QUITE A BIT OF GROWTH GOING ON WITH NEW CUSTOMERS, CONNECTING TO OUR SYSTEMS DOWNTOWN.
AND SO THIS PIPE WORK, THE TRANSMISSION PIPE THERE WILL ADDRESS THOSE GROWTH NEEDS IN THOSE CHANGES.
ALSO WE'VE NOTED A SANDHILL, UH, CAPITAL PROGRAM IMPROVEMENT, UM, THAT WILL INCREASE FOR 2023.
THAT'S PRIMARILY TO, UH, UPGRADE CONTROL SYSTEMS AND OTHER MAINTENANCE REQUIREMENTS, UH, THAT, THAT WE SEE NOW AT A PLANT THAT IF YOU MAY RECALL, IS NOW APPROACHING NEARLY 20 YEARS OLD, DEPENDING ON WHAT UNIT YOU'RE TALKING ABOUT.
AND SO WE'RE AT THAT POINT WHERE WE NEED TO DO SOME OF THOSE UPGRADES AND WORK TO MAINTAIN SAFE AND RELIABLE OPERATION.
ALSO OUT AT THE DECKER, UH, FACILITY, UH, YOU'LL SEE SOME DAM IMPROVEMENTS, UH, UH, THOSE ARE NEEDED TO MAINTAIN THE INTEGRITY OF THE DAM AND IMPROVE ON IT.
AND ULTIMATELY OUR PLAN MUCH LIKE WITH LONGHORN DAM AFTER HOLLY CLOSED, THAT WE INTEND TO TRANSFER ITS USE TO, UH, AUSTIN WATER.
BUT AFTER THOSE UPGRADES AND CHANGES ARE MADE TO MAKE SURE IT'S IN GOOD CONDITION.
AND I BELIEVE THAT'S THE LAST I HAD.
AND QUICK QUESTION ON SANDHILL.
AGAIN, THOSE ARE MAINTENANCE AND CONTROL AND OPERATIONS.
WE'RE NOT INCREASING IN ANY WAY THE SIZE OF THE UNITS OR NO CAPACITY INCREASES.
SOUNDS LIKE NO OTHER QUESTIONS.
AND WITH THAT, I'D LIKE TO ASK GREG FLEE TO COME UP.
GOOD EVENING COMMISSIONERS I'M GREG FLAY, VICE PRESIDENT OF TECHNOLOGY AND DATA.
AND I'M HERE TO SHARE THE HIGHLIGHTS OF THE FY 2023 TECHNOLOGY AND DATA BUDGET WITH YOU AS THE GRAY BARS IN THE UPPER LEFT HAND CORNER INDICATE OUR FY 2023 REQUESTED OPERATIONS AND MAINTENANCE BUDGET IS $64.7 MILLION, WHICH REPRESENTS A $1.1 MILLION INCREASE OVER THE APPROVED FYI 2022 BUDGET.
THIS INCREASE IS DUE TO EXPANSION IN UTILITY WIDE.
IT SERVICES AND SOLUTIONS IN KOREA, INCLUDING A INCREASE IN THE MOBILE DEVICES FOR FIELD CREWS AS THE ORANGE LINE IN THE SAME GRAPH INDICATES THE HEAD COUNT, UH, OF THE TECHNOLOGY AND DATA AT FUNCTION IS INCREASING BY 14 DUE TO THE TRANSFER OF THE 14 DATA ANALYSIS POSITIONS FROM CUSTOMER ENERGY SOLUTIONS THAT YOU HEARD ABOUT EARLIER, THE GRAPH ON O AND M EXPENSES
[02:35:01]
IN THE LOWER LEFT HAND CORNER, UH, SHOWS THAT THE BULK OF OUR EXPENSES RELATE TO TECHNOLOGY CONTRACTS AND LABOR TURN TO THE GRAPH IN THE UPPER UPPER RIGHT CORNER.OUR REQUESTED CIP BUDGET FOR OUR FY 2023 IS $14.3 MILLION.
THE BULK OF THE SPEND IS DEVOTED TO TWO AREAS, 9.2 MILLION FOR THE COMPLETION OF PHASE TWO OF OUR INFRASTRUCTURE TRANSFORMATION PROJECT, AND 3.7 MILLION FOR NORMAL END OF LIFE HARDWARE REFRESHES.
THE REMAINDER OF THE CAPITAL BUDGET IS DEVOTED TO SMALLER PROJECTS, SUCH AS THE MIGRATION OF OUR INTERNET AND INTRANET WEB CONTENT MANAGEMENT PLATFORM.
WITH THAT, I CAN TAKE ANY QUESTIONS YOU MAY HAVE.
UH, WHAT IS THE INFRASTRUCTURE TRANSFORMATION PROJECT? IT'S A MOVE OFF OF OUR LEGACY SERVERS, NETWORKING SECURITY ONTO A MODERN PLATFORM.
THE EXISTING INFRASTRUCTURE IS AT THIS POINT IN QUITE OLD, IS THIS THE ONE THAT WAS INVOLVED YEARS AGO, THE IBM CONTRACT, UH, IS THIS FOR CUSTOMER BILLING? IS THAT, IS THAT WHAT THAT IS OR SOMETHING DIFFERENT? NO, SIR.
IT IS NOT IT'S UH, FOR THE UNDERLYING INFRASTRUCTURE THAT SUPPORTS THE ON-PREMISE APPLICATIONS THAT WE'VE GOT THE, I THINK THE CUSTOMER CARE AND BILLING SYSTEM YOU'RE REFERRING TO IS, UH, HOSTED ORIGINALLY BY IBM.
I GOT MOVED OVER TO THE ORACLE CLOUD INFRASTRUCTURE.
NEXT SLIDE, PLEASE PRESENTED HERE AS THE SUPPORT SERVICES BUDGET, WHICH INCLUDES THE FOLLOWING DEPARTMENTS, CORPORATE COMMUNICATIONS, CORPORATE SERVICES, ENVIRONMENTAL HEALTH, AND SAFETY FINANCE, AND CORPORATE SERVICES, GENERAL MANAGER'S OFFICE LEGAL SERVICES OFFICE OF THE CHIEF OPERATING OFFICER AND REGULATORY AND GOVERNMENT AFFAIRS.
THE GRAPH ON THE LEFT HAND SIDE ILLUSTRATES AN INCREASE IN STAFFING, BUT THIS IS SIMPLY A REORGANIZATION WHERE 14 EMPLOYEES WERE TRANSFERRED IN FROM OTHER AUSTIN ENERGY AREAS TO ALLOW FOR BETTER ORGANIZATIONAL ALIGNMENT, AS MENTIONED BY GREG RICHARD, AND THAT EARLIER IN THE PRESENTATION, THIS IS ALSO THE PRIMARY REASON FOR THE INCREASE IN BUDGETED ONM EXPENSE FOR 2023, AS REPRESENTED BY THE GRAY COLUMN ON THE LEFT-HAND CHART ON THE RIGHT-HAND SIDE OF THE 23 CAPITAL EXPENDITURE BUDGET.
THIS IS RELATED TO THE NEW AUSTIN ENERGY WAREHOUSE.
WHAT IS THAT WAREHOUSE? I DON'T, I, I GUESS I'VE NOT BEEN PAYING ATTENTION.
HAVE I MISSED A NEW WAREHOUSE? UH, NOT THAT THIS HAS BEEN IN THE PLANS FOR QUITE SOME TIME.
I CAN MARK, YOU'RE GOING TO SPEAK TO THAT IF YOU DON'T MIND.
SO THE, FOR SEVERAL YEARS WE HAVE BEEN ATTEMPTING TO CONSOLIDATE A NUMBER OF WAREHOUSES AND LAY DOWN YARDS.
SOME OF THEM WHICH ARE BEING LEASED.
WE ISSUED AN RFP, UH, ABOUT 18 MONTHS AGO AND SELECTED A, UM, A DEVELOPER FOR THAT WAREHOUSE.
UM, THEY ALMOST TRIPLED THE PRICE BETWEEN THE TIME THAT THEY MADE THEIR BID AND WE GOT TO THE, UM, NEGOTIATING, UH, TIME.
AND SO WE WENT BACK OUT TO BID ON, UM, ANOTHER WAREHOUSE USING THOSE SAME DESIGNS.
AND, UH, WE ARE CURRENTLY NEGOTIATING WITH SEVERAL BIDDERS ON THAT, UH, WAREHOUSE WE WOULD EXPECT TO MOVE IN AND OCCUPIED THAT WAREHOUSE BY
AND PART OF THAT IS TO GET OFF OF OUR PROPERTY AT, UM, THE CRESTVIEW NEIGHBORHOOD ON RYAN DRIVE, UM, EXIT A LEASE SPACE OVER ON TODD LANE FOR OUR, UM, METERING.
UM, AS LONG AS THE NUMBER OF, UM, OTHER SITES AROUND THE CITY, WE HAVE CONNECTS BOXES AND WAREHOUSES THAT, UM, STORAGE SHEDS THAT YOU SEE AROUND TOWN.
UM, SO IT'S GOING TO CONSOLIDATE ALL THAT INTO A SINGLE LOCATION.
THIS SLIDE PROVIDES A SUMMARY OF THE KNOWN TARIFF AND FEE CHANGES.
AS OF THIS POINT IN TIME DOES NOT REFLECT ANY TARIFF CHANGES ASSOCIATED WITH THE ONGOING RATE REVIEW PROCESS.
THE FEES ARE BASED WHEN THE ACTUAL COST STUDIES AND IN GENERAL COST FOR THESE SERVICES HAVE INCREASED AS A REMINDER OF THE PAST THEIR RATES, INCLUDING POWER SUPPLY ADJUSTMENT, AND THE REGULATORY CHARGE WILL BE PROVIDED TO YOU IN SEPTEMBER TO BE EFFECTIVE ON
[02:40:01]
NOVEMBER.I HAVE A QUESTION IT'S JUST FOR MY OWN EDIFICATION.
EVERY, EVERY TIME I SEE THIS BUDGET AND I SEE THIS, I, I, I WONDER HOW FREQUENT IS IMPACTED STREET POLE AND INQUIRE IMPACTED UTILITY POLE.
DOES THAT HAPPEN DAILY TWICE DAILY, ONCE A MONTH, MR. BROOKS SPEAKING FROM EXPERIENCE THAT HITTING THEM OR REPAIR GETTING THEM, I'M SORRY, CRAIG BROOKS, WHAT WAS THE QUESTION AGAIN? I, I'VE ALWAYS NOTICED WE HAVE THESE, UH, FEES FOR IMPACTED UTILITY POLES AND IMPACTED, UM, STREET LIGHTING POLES.
AND I WAS JUST WONDERING HOW FREQUENT AND OCCURRENCE THAT IS ROUGH EVERY OTHER DAY, EVERY OTHER DAY.
DO YOU HAVE ALL THE BUDGET AND RESOURCES NEEDED TO MAKE SURE THAT WHEN WE HAVE MANY BAD FOREIGN ACTORS TRYING TO ATTACK OUR CRITICAL INFRASTRUCTURE, THAT WE CAN BE ASSURED THAT AEA IS SECURE AND WE WON'T BE READING ABOUT, WELL, WE WON'T HAVE FAILURES OR BREACHES, UM, IN A HE'S IT INFRASTRUCTURE, DO YOU HAVE EVERYTHING YOU NEED TO MAKE SURE HE IS SECURE? YEAH, SO WE, UH, THIS IS, UH, GREG FLAY, UH, VP OF TECH AND DATA.
SO WE CONTINUALLY MONITOR THE STRENGTH IN OUR CYBER POSTURE, UH, BOTH INTERNALLY AND EXTERNALLY, UH, ON A MORE OR LESS CONTINUAL BASIS.
UM, WE ARE, UH, CONTINUALLY STRENGTHENING VIA A NUMBER OF DIFFERENT METHODS, UH, PROCESS TECHNOLOGY, UM, UH, DIFFERENT PEOPLE ON ASSIGNMENTS, UH, TO, UH, STRENGTHEN OUR CYBER POSTURE.
SO, UH, IS THERE A GUARANTEE THERE IS NOT A GUARANTEE THERE CAN ONLY BE CONTINUAL IMPROVEMENT OF OUR CYBER POSTURE, AND THAT IS WHAT WE DO EVERY DAY, BUT DO YOU HAVE ENOUGH BUDGET? DO YOU HAVE ENOUGH PEOPLE ALLOCATED TO YOUR ORGANIZATION TO GO MAKE SURE THAT PROGRESSIVE, YOU KNOW, NEVER ENDING BATTLE, YOU CAN DO IT TO THE BEST OF YOUR ABILITY? OKAY.
WE BELIEVE WE'VE HAVE ADEQUATE BUDGET TO, UM, CARRY FORWARD WITH OUR CONTINUAL PLANS FOR A CYBER IMPROVEMENT.
THAT CONCLUDES OUR PRESENTATION.
WE HAPPY TO ANSWER ANY QUESTIONS THAT YOU MIGHT HAVE.
I JUST WANT TO SAY THANK YOU ALL FOR ALL SHOWING UP HERE TONIGHT AND STAYING SO LATE AND GIVING SUCH A THOROUGH PRESENTATION.
I THINK EVERYONE HERE REALLY APPRECIATES THAT.
AND I THINK WE, WE CAN FEEL GOOD ABOUT, UH, MAKING A RECOMMENDATION ON A BUDGET AFTER WE'VE BEEN GIVEN THIS TYPE, THIS LEVEL OF, OF DETAIL AND, AND, UM, YOU KNOW, CONVERSATION.
SO I REALLY, I APPRECIATE THAT EFFORT AND, AND I THINK SOME WITH SOME FORWARD, UH, PLANNING THIS YEAR, I THINK WE WERE ABLE TO, UH, ALLOW FOR MAYBE LESS IT DIDN'T, AT LEAST TO ME FEEL LIKE IT CAME ON AS SUDDENLY.
AND, UM, AND SO I APPRECIATE THE EFFORTS TO GET US PREPARED AND, AND WALK US THROUGH WHAT THE TIMELINE WAS GOING TO BE, AND THEN GIVE SUCH A DETAILED PRESENTATION TONIGHT.
THANK YOU VERY MUCH FOR YOUR TIME.
SO, NO, I THINK THAT CONCLUDES, UH, THE STAFF BRIEFINGS FOR THE EVENING.
[2. Recommendation to conduct a public hearing and consider proposed rate and fee changes for Austin Energy as part of the Fiscal Year 2022-2023 proposed budget.]
NOW I'D LIKE TO GO BACK AND TAKE UP ITEM NUMBER TWO, WHICH IS THE, UH, AS, AS POSTED, IT IS RECOMMENDATION TO CONDUCT A PUBLIC HEARING AND CONSIDER PROPOSED RATE AND FEE CHANGES FOR US IN RJ AS PART OF THE FISCAL YEAR OF 20 22, 20 23 BUDGET OR PROPOSED BUDGET.I'D LIKE TO FIRST, JUST NOTE AFTER ALL OF THE CLARIFICATION WE GOT, UH, FROM AEE TODAY THAT,
[02:45:01]
UM, THE PUBLIC HEARING THAT THIS, THIS, THIS ITEM IS REFERENCING IS THE BUDGET HEARING OPEN MEETING THAT WILL BE OCCURRING WITH THE CITY COUNCIL ON AUGUST 17TH, 18TH, 19TH, WHERE, UH, THE, THE BUDGET WILL BE, UH, DISCUSSED.IT'S NOT THE RATE CASE OR THE RATE REVIEW PROCEEDING HEARING THAT HAS ALREADY OCCURRED.
UH, AND THEN THE SECOND NOTE THERE IS, UH, AGAIN, WE ARE TALKING ABOUT SPECIFICALLY THE PROPOSED BUDGET, NOT THE, UH, PROPOSED RATE CHANGES INCLUDED IN THE RATE REVIEW PROCEEDING.
UH, SO JUST AGAIN, REITERATING THAT I OPEN THE FLOOR FOR DISCUSSION.
WHERE ARE YOU GOING TO SAY? SORRY, CARRIE.
I JUST GOING TO SAY, BECAUSE, UM, THAT WAS A BIG CONCERN OF, YOU KNOW, OUR LITTLE COMMITTEE MAT OF OURS.
DO YOU THINK IT'S NECESSARY IN ASSUMING WE'RE GOING TO, UM, RECOMMEND ADOPTION OF THIS BUDGET PERHAPS WITH CHANGES? UM, DO WE NEED TO HAVE A STATEMENT W LIKE THE EOC WANTS TO MAKE IT CLEAR THAT ENDORSING AUSTIN OR DS FISCAL YEAR 2023 BUDGET, WE ARE NOT ENDORSING CHANGES RELATED TO THE PROPOSED RATE INCREASE, JUST TO MAKE IT CLEAR TO CITY COUNCIL WE'RE NOT A PINING ON THAT ISSUE, OR DO YOU THINK IT'LL BE CLEAR ENOUGH? I THINK, YOU KNOW, I THINK WE COULD PROPOSE SOME LANGUAGE, LIKE, UH, I'VE BEEN THINKING ABOUT THAT AND PERHAPS IT'S SOMETHING ALONG THE LINES OF THE ELECTRIC UTILITY COMMISSION ENDORSES, THE AUSTIN ENERGY FISCAL YEAR 20 22, 20 23 BUDGET AS PRESENTED ON AUGUST 8TH SUBJECT TO FUTURE MODIFICATIONS TO REFLECT CITY COUNCIL'S DECISIONS, UH, ON AUSTIN ENERGY'S BASE RATE PROPOSAL OR SOMETHING LIKE THAT.
UM, JUST SO THAT IT'S, I MEAN, I THINK THAT THAT IS GOING, IT WILL JUST HAPPEN, RIGHT? I MEAN, IF, IF, IF THE REVENUE ASSUMPTION IS INCORRECT, THEY'LL, THEY'LL EITHER HAVE TO AMEND THE BUDGET OR WE'LL JUST SEE, UM, THE, THE PROGRESS REPORTS ACTUAL IS WON'T REFLECT, UH, BUDGET, UH, BASED ON REVENUES THAT ARE, THAT ARE COMING IN.
UM, BUT, BUT I THINK THAT IT WOULD BE, I THINK IT MAKES SENSE TO SAY SUBJECT TO, YOU KNOW, UH, CITY COUNCIL'S DECISIONS ON, UM, AUSTIN ENERGY'S BASE RATE PROPOSAL, SOMETHING LIKE THAT.
I, I THINK WE WANTED MAYBE EVEN A CLEAREST STATEMENT THAT WE'RE NOT ENDORSING THE RIGHT INCREASE BECAUSE WE'RE GOING TO BE LOOKING AT THAT LATER.
HOWEVER YOU WANT TO SAY IT, BUT JUST SOME THAT'S IMPORTANT IN PART, BECAUSE WE DON'T WANT PEOPLE TO MISINTERPRET OUR ENDORSEMENT OF THE BUDGET.
AND I DO THINK THERE IS A LOT OF ROOM FOR CONFUSION THERE.
I MEAN, I WAS CONFUSED, RIGHT.
SO, YEAH, NO, I THINK, I THINK THAT MAKES SENSE, CARRIE, WHERE YOU GOING TO IT'S THE SAME, SAME THING WE HAD FIVE YEARS AGO, UH, WHEN WE WERE DOING, UH, A RIGHT CASE, UH, EVERYBODY KNOWS THAT, THAT THE, THIS STEP IN THE BUDGET OCCURS BEFORE THE DETERMINATION HAS BEEN MADE ON THE RIGHT.
SO IT'S NOT GOING TO COME AS A SHOCK TO ANYBODY THAT YOU'RE EVERYTHING SUBJECT TO THE, UH, TO THE RIGHT CASE.
UM, SO WE CAN, WE CAN SAY THAT IF WE WANT TO, BUT IT'S BY JUST BECAUSE ONE THING COMES BEFORE THE OTHER, THAT HAS TO BE THE CASE, UM, THIS K UH, I WOULD LIKE TO SEE THIS SOME KIND OF STATEMENT MADE, BECAUSE I AGREE THAT IT WAS, IT WAS CONFUSING LOOKING THROUGH THE, UM, BUDGET BECAUSE THEY, THERE ARE PORTIONS THAT TALK ABOUT, UM, THE PROPOSED RIGHT CASE, UM, THE CHANGE IN THE CUSTOMER CHARGE, FOR INSTANCE, THAT IS THERE.
AND I UNDERSTAND THAT, UH, IT, IT SUBJECT TO MODIFICATION LATER ON, BUT I THINK IT WOULD BE HELPFUL JUST TO HIGHLIGHT THAT WE UNDERSTAND THAT IT'S NOT, UH, AN, THIS DOES NOT BUDGET, DOES NOT INDICATE APPROVAL OF THE BASE RATE CHANGES THAT ARE COMING LATER IN THE YEAR.
ANY, ANY, ANYTHING ELSE FOLKS WOULD LIKE TO DISCUSS? WE, WE HAD COME UP WITH A LIST OF, OF SEVEN THINGS, AND I DON'T KNOW THAT WE NEED ALL SEVEN OF THESE THINGS.
THIS WAS PREVIOUS TO THE PRESENTATION, BUT THE FIRST WAS EXACTLY THAT OUR LITTLE COMMITTEE, UM, THE FIRST WAS TO SAY SOMETHING LIKE THE EUC WANTS TO MAKE IT CLEAR THAT ENDORSING THE AUSTIN ENERGY FISCAL YEAR 2023 BUDGET,
[02:50:01]
WE'RE NOT ENDORSING CHANGES RELATED TO THE PROPOSED BASE RATE INCREASE, INTRODUCED BY AUSTIN ENERGY ON APRIL 18TH.UM, AND THEN THERE'S, I THINK WE COULD JUST STOP IT THERE JUST TO MAKE IT CLEAR.
UH, WE HAD A BUNCH OF LANGUAGE THAT WE'RE GOING TO BE LOOKING AT THAT LATER, BUT I DON'T KNOW THAT WE NEED THAT IN THIS.
UH, WE JUST WANTED TO MAKE IT CLEAR THAT WE'RE NOT GIVE A PINING ON THOSE, UH, INCREASES.
SO THAT WAS NUMBER ONE, NUMBER TWO, I DON'T KNOW.
I DON'T THINK WE NEED ANY MORE.
IT WAS ABOUT THE GENERAL FUND TRANSFER.
AND THAT WAS, UH, I MEAN, I THINK IF WE ENDORSE THE BUDGET, WE'RE ENDORSING THE GENERAL, GENERAL FULL FUND TRANSFER.
WE DON'T NEED TO MAKE AN OPINION ON IT.
I THOUGHT IT WAS, I WAS CONFUSED ABOUT HOW IT WAS SET, BUT THANK YOU FOR THOSE ANSWERS.
UM, THE THIRD WAS JUST, UH, NOT MAKING A, MORE OF A STATEMENT THAT THE ADDITIONAL COSTS, UH, OF APPROXIMATELY 2.7 MILLION DUE TO MAINTENANCE COSTS AND INCREASES IN GENERAL ADMINISTRATIVE EXPENSES RELATED TO THAT COAL PLANT SHOULD BE CAREFULLY SCRUTINIZED BY CITY COUNCIL, GIVEN THE STATED GOAL OF GETTING OUT OF COAL BY THE END OF THIS YEAR.
SO NOT REALLY MAKING A RECOMMENDATION ON WHETHER TO SPEND THAT AMOUNT OR NOT, BUT ASKING CITY COUNCIL TO SCRUTINIZE IT.
UH, BECAUSE AGAIN, IF OUR GOAL IS TO GET OUT OF COAL, WE DON'T WANT TO PUT A GOOD MONEY AFTER BAD.
UM, SORRY, JUST POINT OF INFORMATION HERE.
ARE YOU LOOKING AT, I, I SENT AN EMAIL.
DID PEOPLE GET AN EMAIL WITH THIS DOCUMENT? I GOT AN EMAIL WITH A DIFFERENT, I MEAN, WITH A DIFFERENT ORDER, THE THINGS YOU'RE GOING, I'M GOING 1, 2, 3, AND, AND IT DOESN'T COORDINATE WITH WHAT YOU'RE SAYING.
UM, THE FIRST ONE WAS THE ONE WAS A GENERAL STATEMENT.
WHICH I THINK WE SHOULD SHORTEN TWO IS WHAT PERCENTAGE OF RESIDENTIAL CUSTOMERS ARE IN RENTAL PROPERTIES.
OH, THAT WAS, THOSE WERE THE QUESTIONS THAT SHOULD BE FROM THE LANDSCAPE.
DO YOU HAVE A SUMMARY OF WHAT YOU WANTED TO PROPOSE THEN? DO I THOUGHT I JUST SENT IT OUT AS AN EMAIL? DID PEOPLE GET AN EMAIL FROM ME? OH, I DON'T THINK THAT, SO IT WAS THAT TODAY, THE WAVES, RIGHT? IT WAS ABOUT 15 MINUTES AGO.
I STOPPED ONE ABOUT AN HOUR AGO AND THEN ONE ABOUT 15 MINUTES AGO.
I'VE GOT THE ONE YOU SENT 15 MINUTE.
THAT'S THE ONE I'M I'M OPERATING OFF OF.
THERE'S GOTTA BE A BETTER WAY TO DO THIS.
UM, SO YEAH, NUMBER ONE WAS JUST A STATEMENT, MAKING IT CLEAR.
WE'RE NOT ENDORSING THE RATE INCREASE AND I WOULD PROPOSE THAT WE JUST END IT AFTER APRIL 18TH.
I DON'T THINK WE NEED ALL THAT ADDITIONAL LANGUAGE.
RICK, CAN YOU SEND ME THE MOST RECENT VERSION AS WELL? I HAVE THE MOST RECENT ONE I HAVE IS FROM 6 0 8, UH, SUNDAY.
LET ME KNOW IF YOU RECEIVE IT.
UM, NUMBER TWO WAS SAYING THE PROPOSED GENERAL FUND TRANSFER 150 MIL MILLION IS REASONABLE SINCE THERE'S CALCUTTA AT 12% OF THE THREE-YEAR AVERAGE.
I THINK WE COULD JUST TAKE THAT OUT, DONATE IT.
I THOUGHT IT WAS RELATED TO THE RATE CASE, BUT IT'S NOT, THAT'S MY MISUNDERSTANDING.
SO REMOVE NUMBER TWO, NUMBER THREE, NUMBER THE NEW NUMBER TWO WOULD BE ADDITIONAL COST OF APPROXIMATELY 2.7 MILLION DUE TO MAINTENANCE COSTS AND INCREASE IN GENERAL ADMINISTRATIVE EXPENSE RELATED THEIR FAYETTE COAL PLANT AS LAID OUT IN THE BUDGET SHOULD BE CAREFULLY SCRUTINIZED BY CITY COUNCIL.
GIVEN THE STATED GOAL OF GETTING OUT OF COAL BY THE END OF THE YEAR, UH, I THEN HAD ANOTHER SENTENCE, WHICH I DON'T REALLY THINK WE NEED.
UM, BUT JUST ASKING CITY COUNCIL TO SCRUTINIZE BASICALLY THE EXTRA COST AT FAYETTE.
AND IF ANYONE OBJECTS TO THESE, THEY CAN OBJECT TO THEM.
UM, JUST A QUICK QUESTION THERE.
DO YOU, DO YOU FEEL LIKE YOUR QUESTIONS OR CONCERNS WERE NOT ADDRESSED, UH, SUFFICIENTLY
[02:55:01]
BY, UM, I THINK IT WAS MR. RESPONSE ABOUT BASICALLY THAT THEY THEY'VE BUDGETED THAT MUCH, UH, BECAUSE THAT'S WHAT IS REQUIRED TO SAFELY AND RELIABLY OPERATE, OPERATE THE PLANT AND THAT IS, IT IS HIS ANSWER HELPED ME.UM, I JUST THINK WE SHOULD BE, I THINK AS A GENERAL COURSE, CITY COUNCIL SHOULD BE SCRUTINIZING INVESTMENTS AT FAYETTE, GIVEN THE ONGOING DISCUSSION ABOUT IT.
IF YOU WANT TO TAKE OUT THE SPECIFICS OF 2.7 MILLION AND JUST SAY ADDITIONAL COSTS, ADDITIONAL MAINTENANCE COSTS RELATED TO FAT COAL PLANT SHOULD BE CAREFULLY SCRUTINIZED.
IT'S NOT, IT'S, IT'S MORE JUST SORT OF MAKE SURE YOU'RE LOOKING AT THE, THE BUDGET ON TO FAT.
ALL OF WHICH IS SPEAKING AS A MEMBER OF BUDGET AND AUDIT COMMITTEE.
I THINK EACH OF ALL OF THESE ITEMS ARE IMPORTANT, UH, AND, AND MUST BE RELAYED IT IF WE'RE GOING TO APPROVE AT LEAST MY VOTE, IF WE'RE GOING TO APPROVE THE BUDGET TO TONIGHT, UH, THAT THIS LANGUAGE SHOULD BE ON THE FRONT OF THE BUDGET, THAT IT IS APPROVED CONTINGENT UPON CONTINGENT AND WITH THE UNDERSTANDING THAT THESE ITEMS ARE ADDRESSED AND, AND OTHER OTHER OTHERWISE, OTHERWISE WE'RE GIVING A GREAT IN ESSENCE, MY QUESTION ABOUT HOW WE ARE ADDRESSING EQUITY, MY, AND, AND THE VARIOUS PROGRAMS THAT, THAT GAVE ME ART BYRNE IN THE SLIDES THAT WE SAW, THE 18% INCREASE THAT IF THAT, THAT IF WE ARE TO APPROVE THE BUDGET, I CERTAINLY WANT, WOULD, UH, ASK RESPECTFULLY REQUEST THAT THIS, THAT EACH AND EVERY ITEM, UH, REFERENCED EXCEPT AS NOTED JUST NOW BE, BE PART OF THAT APPROVAL, SAME APPROVAL.
WELL, LET'S, LET'S GET THROUGH THE LIST.
UM, SO I WOULD REWRITE IT AS ADDITIONAL COST RELATED TO THE FAYETTE COAL PLANT AS LANDO IN THE BUDGET SHOULD BE CAREFULLY SCRUTINIZED BY CITY COUNCIL, GIVEN THE STATED GOAL OF GETTING OUT OF COAL BY THE END OF THE YEAR.
SO IT'S KIND OF A SAYING, YOU KNOW, WE'RE STILL THINKING ABOUT THE COAL PLANT IT'S IN THE BUDGET.
SCRUTINIZE IT ANY FURTHER THOUGHTS ON JUST THAT ONE ITEM? OKAY.
LET'S KEEP, LET'S KEEP THE NEXT ONE.
THE NEW NUMBER THREE, UM, CITY COUNCIL SHOULD AUTHORIZE FUNDING AND FISCAL YEAR 2023 FOR AN UPDATE TO THE 2015 DECOMMISSIONING STUDY TO DETERMINE IF THE BUDGETARY SET ASIDE OF $8 MILLION PER YEAR TO THE NON-NUCLEAR DECOMMISSIONING FUND IS THE APPROPRIATE AMOUNT.
BASICALLY, WE DID A DECOMMISSIONING STUDY IN 2015 BEFORE THE LAST RATE CASE WE HAVEN'T DONE AN UPDATE SINCE.
UM, SO THIS WOULD BE A RECOMMENDATION THAT IS PART OF THE BUDGET.
THEY DO A DECOMMISSIONING STUDY.
I DON'T KNOW WHAT THAT WOULD COST ANY, ANY FURTHER DISCUSSION ON THAT POINT.
THE NEXT ONE IS, UM, UH, THIS IS JUST SIMPLY BASICALLY TELLING OFFS ENERGY TO KEEP, KEEP GOING WITH THEIR EQUITY STUDY.
SO IT SAYS WITH NEARLY HALF OF AUSTIN'S POPULATION LIVING IN RENTAL HOUSING, WE RECOMMEND THE COUNCIL REVIEW CURRENT EFFORTS BY AUSTIN ENERGY TO MAKE IMPROVEMENTS TO ENERGY EFFICIENCY PROGRAMS AND ENSURE EQUITY AND ACCESS TO EFFICIENCY PROGRAMS. SO IT'S REALLY TELLING THEM TO CONTINUE THAT PROCESS.
UM, NO, I DON'T DISAGREE WITH THE SENTIMENT AT ALL.
IN FACT, TOTALLY SUPPORT THAT.
UM, I'M JUST WONDERING IF IT MAKES SENSE AS FAR AS A MODIFICATION TO THE APPROVAL OF THE BUDGET, BECAUSE WE'RE NOT REALLY, WE'RE NOT REALLY.
YEAH, IT'S NOT, IT'S NOT A BUDGET ITEM.
IT'S JUST CONTINUING WHAT THEY'RE DOING.
[03:00:01]
THIS WAS, UH, COMMISSIONER CHAPMAN'S RECOMMENDATION, WHICH I THOUGHT WAS A GOOD ONE.UM, IF, IF YOU'RE SATISFIED THAT THEM COMING BACK IN DECEMBER, UH, IT WOULD NEED THE LANGUAGE.
I DON'T THINK WE HAVE A, AND ANY, I WOULD LIKE THIS TO BE PART OF JUST LIKE THE OTHER ITEMS TO BE PART AND PARCEL THAT AND APPROVE APPROVED AND APPROVING THE BUDGET THAT THIS, THAT, YOU KNOW, LET WE'VE SEEN, SPENT THE DOLLARS ALLOCATED FOR WEATHERIZATION, WHICH IS AN EQUITY PROGRAM NOT SPENT IN THE, IN PREVIOUS YEARS FOR VARIOUS REASONS.
SO ALL OF WHICH IS THIS KEEP KEEPS, KEEPS OUR FOOT ON THE GAS PEDAL PEDAL.
SO YES, I'D LIKE TO LIKE TO SEE SEA EAT EACH OF THESE, UH, ITEMS CONSIDERED IN THE PACKAGE.
UH, NEXT IS, UM, FUNDING FOR DIRECT INSTALL, WEATHERIZATION PROGRAMS AND MULTIFAMILY PROGRAMS HAVE REMAINED STAGNANT IN FISCAL YEAR 2023 HAS PROPOSED THE EOC, RECOMMENDS THE COUNCIL WORK WITH AUSTIN ENERGY TO INCREASE THE BUDGETS OF MULTIFAMILY AND HOME WEATHERIZATION PROGRAMS PROPORTIONALLY TO THE OVERALL INCREASE.
I PROBABLY SHOULD SAY TO THE OVERALL INCREASE IN THE, UM, CUSTOMER ENERGY SERVICES BUDGET IT, SO WE'RE NOT ACTUALLY MAKING A SPECIFIC RECOMMENDATION AS TO THE DOLLAR AMOUNT WE'RE SAYING, UH, WE RECOMMEND THAT THESE PROGRAMS GET MORE MONEY IN PROPORTION TO THE INCREASE THAT'S BEING ANTICIPATED IN THAT PART OF THE BUDGET.
UH, I JUST GOT, I JUST GOT A MESSAGE FROM COMMISSIONER HATTON THAT SHE'S MUTED.
CAN YOU UNMUTE HER? IT'S THE SAME ISSUE OF HAVING TOO MANY MICROPHONES ON, I THINK, OH, COMMISSIONER HAD A NEW SHOULD BE UN-MUTED WAIT, WAIT.
THERE, SHE SHOULD BE UN-MUTED NOW.
UH, NO URGENT COMMENT RIGHT NOW.
I JUST WANT TO MAKE SURE THAT I CAN COMMENT AND VOTE AS WE MOVE.
ANY COMMENTS ON THE LAST ITEM THAT WE, THAT, UH, COMMISSIONER REED JUST PROPOSED AN INCREASE TO FUNDING FOR DIRECT INSTALL, WEATHERIZATION PROGRAMS AND MULTIFAMILY PROGRAMS? I WOULD LIKE TO SAY THAT I STRONGLY SUPPORT THAT AND I STRONGLY AGREE WITH RANDY.
CHAPMAN'S THINKING THAT WE NEED TO SEND THIS MESSAGE ALONG WITH BUDGET IN ORDER TO HAVE MY VOTE.
AND AGAIN, WE DON'T, I DIDN'T, WE DIDN'T PUT A SPECIFIC DOLLAR AMOUNT.
WE JUST SAID WORK WITH AUSTIN ENERGY TO INCREASE THE BUDGET IN PROPORTION TO THE INCREASE IN THE REST OF THE, THAT BUDGET.
UM, AND THEN THE LAST ONE, THIS IS REALLY, THIS IS SOMETHING THAT CAME FROM US FROM MEMBERS, UH, AUSTIN, THREE 50.
IF YOU REMEMBER, WE HAD A MEETING SEVERAL MONTHS AGO WHERE MEMBERS OF THE COMMUNITY EXPRESS CONCERN ABOUT, UM, GROUNDWATER CONTAMINATION IN THE AREA OF THE COAL PLANT.
UM, SO IT READS IN ORDER TO ASSESS COMMUNITY CONCERNS WITH POTENTIAL GROUNDWATER CONTAMINATION IN THE AREA OF THE COAL PLANT CITY COUNCIL SHOULD AUTHORIZE UP TO A HUNDRED THOUSAND AND ADDITIONAL GROUNDWATER TESTING FOR A THIRD PARTY TO CONDUCT.
THIS IS AN UNBREAKABLE WRITTEN BY THE WAY, UH, FOR A THIRD PARTY TO CONDUCT FOCUS, TESTING OF GROUNDWATER AND WATER WELLS IN THE IMMEDIATE AREA.
I SHOULD WRITE THAT BETTER, BUT AGAIN, I, I SPOKE TO MEMBERS OF AUSTIN THREE 50, WHO SAID, UH, THEY HAD CONSULTED WITH A THIRD PARTY ABOUT DOING TESTING IN THE AREA AND THAT IT WAS UNDER A HUNDRED, I DON'T KNOW THE EXACT AMOUNT, BUT IT WAS UNDER A HUNDRED THOUSAND.
SO THAT'S THE WAY I READ IT AGAIN.
OTHER COMMISSIONERS DON'T HAVE TO AGREE WITH THIS,
[03:05:01]
UH, INCLUDING THIS, BUT I THOUGHT IT WAS GIVEN THAT WE HAD COMMUNITY CONCERN ABOUT GROUNDWATER CONTAMINATION OUT THERE.I THOUGHT IT WAS A GOOD THING FOR US TO DO.
UM, I THINK THE QUOTE WAS AROUND 73,000 THAT THEY HAD RECEIVED.
ANY FURTHER COMMENTS ON, UH, YEAH, GO AHEAD, COMMISSIONER.
HADN'T IT'S BEEN LIKE, IT SEEMS LIKE THIS IS A GOOD TIME IN PLACE TO MAKE THAT RECOMMENDATION.
I, I GUESS NOW THAT WE'RE AT THE END OF THE LIST, I, I POSE DOING ANYTHING EXCEPT THE FIRST ONE FIRST ITEM.
AND THE REASON IS, I MEAN, THIS IS A BUDGET AND WHAT WE'RE DOING IS WE'RE TRYING TO COVER A WHOLE BUNCH OF OTHER POLICY STUFF THAT WE DO IN THE ORDINARY COURSE.
MOST OF THIS STUFF IS ALREADY COVERED BY OTHER THINGS THAT WE'VE DONE IN THE PAST AND THAT IT'S CURRENTLY PENDING AND WE'LL BE GOING, UH, MOVING FORWARD.
CITY COUNCIL IS GOING TO IGNORE US SAYING, OH YES, WE APPROVE THE BUDGET, BUT WE WANT YOU TO INCREASE SOME AMOUNT.
WE'RE NOT TELLING YOU HOW MUCH ON A PARTICULAR ITEM GOING FORWARD.
WE JUST WANT EVERYBODY TO KNOW IT'S AN IMPORTANT ITEM.
THERE'S LOTS OF IMPORTANT ITEMS IN HERE, AND I JUST DON'T THINK IT, IT HELPS US GET ANY CREDIBILITY FOR OUR RECOMMENDATIONS TO THE CITY COUNCIL TO SAY, OH, WE WANT YOU TO WORK ON COMING UP WITH ADDITIONAL MONEY FOR SOME, SOME PROGRAM.
IF WE WANT TO DO THAT, WE OUGHT TO TAKE IT UP OURSELVES, FIGURE OUT WHAT WE WANT TO PROPOSE AND RECOMMEND IT.
I MEAN, MY VIEW, I, I UNDERSTAND HOW THIS WORKS WITH BUDGETS.
PEOPLE START LOOKING AT BUDGETS AS A POLICY DOCUMENT AND, AND, AND IT IS TO A GREAT EXTENT, BUT, UH, IT'S NOT A PROGRAM DOCUMENT.
IT'S NOT WHERE YOU SAY, OH, I'M GOING TO USE THE BUDGET AS MY VEHICLE TO DEVELOP A NEW PROGRAM FOR WEATHERIZATION BECAUSE WE HAVE A PROGRAM FOR WEATHERIZATION AND, AND WE SPENT SIX MONTHS AND UNTOLD HOURS COMING, COMING UP WITH THAT AND, AND ARGUING THROUGH A VERY COMPLEX PROPOSAL AND LAYING IT OUT THERE AND TO NOW SAY, WELL, WHATEVER WE DID IN THE PAST, WE LIKED THAT.
AND WE'VE NOW GOT A BUDGET THAT REFLECTS THOSE POLICIES THAT WE PUT TOGETHER.
BUT, YOU KNOW, MAYBE IN YOUR, IN YOUR SPARE TIME WITH ALL THE OTHER STUFF YOU'RE WORKING ON, ON THE BUDGET, YOU COULD ADD SOME MORE MONEY TO THAT AND FIND SOME WAY TO DEPLOY IT.
I JUST DON'T THINK THAT HELPS US ANY, I DON'T THINK IT HELPS THE CITY COUNCIL ANY.
AND, AND I WOULD RECOMMEND THAT, THAT WE, YOU KNOW, I WOULD PROPOSE THAT WE JUST RECOMMEND THE BUDGET.
AND IF WE'VE GOT POLICY ISSUES THAT WE WANT TO TAKE UP, WELL, WE TAKE THAT UP, STARTING AT THE NEXT MEETING.
THAT'S JUST MY, SO IN RESPONSE, I WOULD SAY THREE OF THESE ACTUALLY ARE BUDGETARY RECOMMENDATIONS.
UM, ONE IS CONDUCTED DECOMMISSIONING STUDY.
I JUST DON'T KNOW WHAT THAT WOULD COST, RIGHT? NUMBER THREE.
UM, AND THE GROUNDWATER TESTING AS A BUDGETARY ISSUE AND SAYING THEY SHOULD INCREASE THE BUDGETS OF THE MULTIFAMILY AND HOME WEATHERIZATION PROGRAMS AS A BUDGET ISSUE.
WE JUST DIDN'T HAVE A NUMBER, BUT WE COULD CERTAINLY SAY BY 20%, WHICH IS WHAT THE OVERALL BUDGET IS GOING UP.
I MEAN, WE COULD SAY THAT I JUST DIDN'T SAY IT.
SOME OF THEM, I WOULD AGREE ARE MORE POLICY ISSUES, BUT SOME OF THEM ARE SPECIFIC BUDGETARY ITEMS SAYING, INCREASE YOUR BUDGET BY 20%.
WELL, WHAT ARE YOU GOING TO SPEND IT ON? HOW ARE YOU GOING TO, HOW YOU'RE GOING TO IMPLEMENT THAT POLICY? WHAT'S JUST SAYING, THROW MORE MONEY AT IT.
ISN'T GOING TO GET YOU MUCH OF AN AUDIENCE.
IF YOU SAY, HERE'S WHAT WE WANT TO DO WITH THIS MONEY.
AND WE THINK IT'S A GOOD EXPENSE, UH, THAT WILL, UH, BRING REWARDS TO THE COMMUNITY.
THAT'S, THAT'S ONE THING, BUT JUST SAYING, JUST ADD A ZERO OR, YOU KNOW, DO SOMETHING TO INCREASE IT.
THAT'S, THAT'S NOT A HELPFUL POLICY RECOMMENDATION.
WE HAVE JUST SEEN THE LAST COUPLE OF DAYS, CONGRESS
[03:10:01]
ADOPT BILLIONS AND BILLIONS OF DOLLARS FOR CLIMATE TO ADDRESS PROBLEMS OF CLIMATE CHANGE THAT WAS DONE THROUGH BUDGET RECONCILIATION.THE BUDGET IS IN MY ESTIMATE, A POLICY DOCUMENT, WE'RE NOT CHANGING THE WHAT, FOR EXAMPLE, THE WEATHERIZATION PROGRAM, WE'RE SAYING DO A BETTER JOB, SERVE MORE PEOPLE.
AND IN THIS INSTANCE, 20% IS A MODEST, A VERY MODEST INCREASE, AND IT GIVES AUSTIN ENERGY, UH, THE NECESSARY FUNDS TO EXECUTE EXISTING PROGRAMS AND, AND, UH, YOU KNOW, LOOKING AT THE MONEY THAT WOULD BE NEEDED TO DO A GROUND STUDY, A HUNDRED THOUSAND DOLLARS THAT COULD BE FOUND WITHIN THE BUDGET.
BUT THIS IS SAYING THAT WE, THE EUC TAKE THIS MATTER SERIOUSLY BECAUSE IT IS PART AND PARCEL OF THE BUDGET.
SO JUST TO, TO FOLLOW UP IS, IS THE IDEA HERE THAT WE TELL THE CITY COUNCIL THAT SOME OF THIS THAT'S UNSPECIFIED AND SOME OF IT'S SPECIFIED THAT WE RECOMMEND THAT, AND WE DON'T ENDORSE THE BUDGET UNLESS YOU DO THAT.
IS THAT WHAT WE'RE SAYING? THAT WE HAVE TO HAVE THEM FIGURE IT OUT AND COME UP WITH SOMETHING, UH, THE RIGHT AMOUNT OF MONEY, THE RIGHT, THE RIGHT POLICIES, THE WAY IT'S GOING TO BE IMPLEMENTED.
AND IF THEY DON'T, THEN WE'RE NOT ENDORSING THE BUDGET COMMISSIONER FERTILE.
I WOULD RESPECTFULLY STATE THAT.
I BELIEVE THAT THE CITY COUNCIL LOOKS TO US FOR RECOMMENDATIONS THAT THIS DOCUMENT PROVIDES THOSE RECOMMENDATIONS.
THEY WILL, OF COURSE MAKE THE DECISIONS ON THEIR END, BASED ON ANY CONVERSATIONS THEY MAY HAVE WITH AUSTIN ENERGY.
AND I'M NOT PREPARED TO VOTE FOR OUR, THIS PROPOSED BUDGET UNTIL WE SEND SOMETHING OF THIS NATURE ALONG WITH IT, UH, POINT MADE.
I UNDERSTAND WHAT YOU'RE SAYING.
AND, AND MY, MY ONLY POINT IS IF WE'RE GOING TO RECOMMEND SOMETHING TO THE CITY COUNCIL, IT SHOULDN'T BE, YOU KNOW, THINK ABOUT ADDING SOME MONEY TO, UH, TO A LINE ITEM THAT, THAT DOESN'T HELP THEM.
EH, I AGREE WITH YOUR POINT, EXACTLY.
WHICH IS THEY'RE LOOKING TO US AND WE HAVEN'T DONE ANY BACKUP FOR ANY OF THIS STUFF.
UH, WE'RE SIMPLY SAYING, HEY, LET'S, LET'S CRANK UP THE DIAL AND I DON'T THINK THAT'S USEFUL.
AND I DON'T THINK IT'LL GET MUCH OF AN AUDIENCE, BUT, YOU KNOW, I DON'T, I REALLY DON'T WANT TO ARGUE THE POINT ANYMORE.
SO I'LL JUST OFFER ONE MORE THOUGHT.
UM, WOULD TAKING UP THESE INDIVIDUAL ITEMS SPECIFICALLY, YOU KNOW, AT A FUTURE COMMISSION MEETING WHERE WE, FOR INSTANCE, WE, WE ASK AUSTIN ENERGY TO, UM, OR, OR EVEN AUSTIN, THREE 50 TO COME AND PROVIDE, UH, SOME INFORMATION ABOUT THE GROUNDWATER CONCERN AT, UH, FAYETTE AND, UM, GET AUSTIN ENERGY TO GIVE US A INFORMATION ABOUT WHAT, UH, A NEW, UH, OR A GROUNDWATER TESTING WOULD COST AND WHAT A NEW DECOMMISSIONING, UH, STUDY WOULD COST AND THINGS OF THAT NATURE, AND THEN MAKE A SPECIFIC RECOMMENDATION AS TO THAT PARTICULAR PROGRAM OR POLICY AT THAT TIME.
UM, SO JUST A COMMITMENT TO, YOU KNOW, TAKE UP THOSE INDIVIDUAL AND SAME WITH THE, UH, EQUITY STUDY FROM CUSTOMER ENERGY SOLUTIONS.
UM, AFTER WE RECEIVED THAT REPORT, WE TAKE UP THAT ITEM AND, YOU KNOW, PROVIDE A RECOMMENDATION AT THAT TIME AS TO AMENDING THE BUDGET, TO INCREASE IT BY X AMOUNT OR, UH, SOMETHING LIKE THAT AFTER WE'VE HAD SOME TYPE OF PRESENTATION.
I THINK WE'VE BEEN TALKING ABOUT THE WEATHERIZATION, BUT AT LEAST I'VE BEEN TALKING ABOUT IT FOR AS LONG AS I'VE BEEN HERE.
AS LONG AS I'VE BEEN HERE ON THE ELECTRIC UTILITY, THIS IS NOT, SHOULD NOT COME AS THIS PRIZE AND EQUITY, THE
[03:15:01]
CAP PROGRAM.AND AUSTIN ENERGY, UH, HEARD US IN PART AND, AND, AND WE HAVE, WE HAVE QUESTIONS AND ANSWERS REGARDING THE GROUNDWATER AND THEY S UH, THE RESPONSE WAS WE'LL MEET, WE'LL COMPLY WITH FEDERAL AND STATE REQUIREMENTS.
AND THAT WAS, UH, THE END OF IT.
AND I BELIEVE WE SHOULD ADDRESS IT NOW, AT LEAST IN TERMS OF HAVING A UNANIMOUS VOTE IN SUPPORT OF THE BUD IN SUPPORT OF ADOPTION OF THE BUDGET.
OTHERWISE, I RAISED THE ISSUE.
I RAISED THE POSSIBILITY OF ADOPTING AN ANNUAL BUDGET, BUT APPROVING IT SPEND A CHURCH ON A QUARTERLY BASIS.
IF, IF THAT, IF MORE TIME, IF MORE TIME IS NEEDED THAN TO STATE THAN TO STATE THAT WHAT WE ARE APPROVING ADOPT AN ANNUAL BUDGET WITH CO SUBJECT TO QUARTERLY, QUARTERLY REVIEW OF EACH OF THE SEVEN ITEMS THAT THAT CYRUS HAS AS ADVANCED.
BUT I TH I THINK WE'VE BEEN TALKING ABOUT THIS FOR, FOR A LONG TIME.
AND THE TIME TO ACT IS NOW COMMISSIONER TUTTLE.
YOU GOT ANYTHING TO SAY OR ADD, I SHOULD SAY, UM, IT'S EXHAUSTING.
UM, YOU KNOW, I THINK CARRIE'S POINTS ARE WELL-MADE ABOUT, THESE ARE JUST CERTAIN THINGS, BUT THEN AGAIN, FOLKS LIKE CYRUS HAVE BEEN INVOLVED WITH THIS SO MANY YEARS THAT I CERTAIN RESPECT HIS INSIGHTS TO SAY HERE'S SOME RIFLE SHOTS OF THINGS TO DO.
AND SO, UM, I COULD SEE SENDING THIS FORWARD TO JUST TO GIVE SOME GUIDANCE TO THE CITY COUNCIL, BUT THEY'RE GOING TO HAVE, IT WOULD SEEM LIKE SO MANY THINGS TO GO THROUGH IN PLOWING THROUGH THEIR POLICY DECISIONS FOR THE RATE CASE.
UM, SO I, I GUESS I WOULD SAY, IS THERE, IS THERE ANY HARM IN SENDING THIS AS IT IS BESIDES THEM MAYBE NOT LISTENING TO ALL OF IT? AND I THINK CARRIE WAS POINT WAS SOME OF THE F THE TOP ONE, UM, NUMBER ONE ONLY, BUT IT WAS A REALLY MUCH HARM AND GIVING THE DIRECTIONS THAT WE THINK THAT THESE OTHER THINGS THAT DESERVE ATTENTION TO ALL RIGHT.
I HAVEN'T HEARD ANYTHING FROM YOU.
I JUST WANT TO GIVE ONE MORE OPPORTUNITY.
UM, NOW I THINK THAT THIS COMPORTS WITH MY UNDERSTANDING OF THE UCS FUNCTION IN ADVISING THE COUNCIL AND THAT PERHAPS IT IS TRUE, THAT THEY ARE, WILL BE SO OVERWHELMED DURING THEIR WORK SESSIONS AND, UH, OPEN MEETINGS CONCERNING THE BUDGET THAT THEY, THAT THIS WILL NOT MAKE MUCH HEADWAY, BUT IT CERTAINLY WILL NOT MAKE ANY HEADWAY IF WE DON'T TELL THEM THAT THESE ARE CONCERNS THAT WE'VE RAISED.
AND I THINK I AGREE THAT THERE ARE SOME OF THESE THAT IN THE, UM, TIME I'VE SERVED ON THE COUNCIL.
I, I KNOW WE HAVE TALKED ABOUT THESE, UM, REPEATEDLY, AND I JUST FEEL AS THOUGH, UH, IT'S NOW TIME TO, UM, MAKE IT CLEAR TO THE COUNCIL THAT, UH, THE BUDGET THAT THEY, THAT WE ARE PROPOSING, THAT THEY REQ, WE RECOMMEND THAT THEY ADOPT.
IT HAS CERTAIN IMPACTS THAT, UH, COULD BE FINE-TUNED.
COMMISSIONER TRUSSELL, KOSHER YONKER, ANYTHING TO ADD? UM, I GUESS MY ONLY ADDITIONAL POINT IS THAT I DO, I FEEL LIKE, YOU KNOW, WE HAVE QUITE A FEW POINTS HERE, BUT THEY'RE NOT ALL ASKING FOR ADDITIONAL ACTION.
THEY'RE JUST SAYING WE'RE ENDORSING THIS WITHOUT ENDORSING THE BASE RATE.
THE POINT ON FATE IS JUST IN LINE
[03:20:01]
WITH THE PREVIOUS MANDATE THAT THIS COMMISSION SET FORTH AND THAT WE WANT TO CONTINUE COUNSEL TO PURSUE.AND, YOU KNOW, AS WELL AS WE'VE GIVEN SOME GENERAL GUIDELINES.
SO I I'D RATHER DO THIS THAN NOTHING AT ALL.
I DON'T WANT TO BE THE, DO NOTHING COMMISSION AND I HAVEN'T BEEN ON THE COMMISSION LONG, BUT I CERTAINLY FEEL LIKE A RUBBER STAMP SOMETIMES.
AND THINK THIS IS PUSHING A BIT MORE THAN WHAT WE HAVE IN MY FEW MONTHS ON THE COUNCIL AND THE COMMISSION AND CARRIE, THE WAY IT READS THIS HAS THE ELECTRIC UTILITY COMMISSION ENDORSES, THE PROPOSED HOUSE ENERGY BUDGET WITH THE FOLLOWING MODIFICATIONS.
SO WE ARE ENDORSING THE BUDGET AND THEN GIVING A SERIES OF MODIFICATIONS OR STATEMENTS, SOME OF WHICH ARE MORE SPECIFIC THAN OTHERS, ALL GRANT YOU.
I FEEL LIKE IT'S A LOT OF IT'S PRINCIPLES AND, YOU KNOW, WE CAN REWORD IT, BUT FOR THE MOST PART, I LIKE IT, MY ARM, MY COMMOTION POLICE DO IT.
WE APPROVE THE BUDGET AS SUBMITTED SUBJECT TO THE FOLLOWING PRINCIPLES AS SET FORTH BELOW.
I WANT THAT AS THE MOTION, I WON'T REREAD, REREAD THE PRINCIPLES THAT WE'VE JUST, UH, THAT WE'VE JUST DISCUSSED, WHICH WHEN I ASKED YOU FIRST, OH, I'M SORRY.
WHICH ONES DID YOU TAKE OUT CYRUS? THE ONLY ONE I TOOK IT, THE ONLY ONE I TOOK OUT WAS THE ONE ABOUT THE GENERAL TRANSFER.
CAUSE THAT'S, THERE'S NO NEED TO SAY THAT.
SO YOUR MOTION IS THAT WITH NUMBER THREE, TAKEN OUT OF THIS LIST? NUMBER TWO, NUMBER TWO.
IS THERE A SECOND, SECOND, ALL THOSE IN FAVOR? WAIT, CAN YOU HANG ON ONE SECOND? CAN I HELP JUST FOR MY PURPOSES? YEP.
SO FOR MY PURPOSES OF, OF WORDS AND A THEME, THIS, IF WE COULD SAY THAT THE RECORD TO RECOMMEND ITEM TO THE ELECTRIC UTILITY ENDORSES, THE AUSTIN ENERGY FISCAL YEAR 2023 BUDGET AS PRESENTED TODAY.
UM, AND WE'LL GET, WE'LL DO THE, THE MOTION IN THE SECOND AND THEN ADD AS SUBMITTED SUBJECT TO THE FOLLOWING PRINCIPLES AS SET FORTH BELOW.
AND WE'LL USE THE SIX ITEMS LISTED ON THE ATTACHMENT, CORRECT.
WITH, WITH ITEMS, ITEM TWO REMOVED.
THAT'S THAT'S COMMISSIONER CHAPMAN'S MOTION.
I, I THINK I HEARD COMMISSIONER TRUSSELL.
WHO MADE THE MOTION? I MISSED THAT COMMISSIONER CHAPMAN MADE THE MOTION COMMISSIONER YONKERS SECOND, AND YOU HAVE UNANIMOUS SUPPORT.
THANK YOU ALL FOR STAYING SO LATE.
UM, LET'S, LET'S WRAP THE REST OF THIS UP.
UH, SO WE'VE GOT A, UM, THE ANNUAL REVIEW
[13. Discussion and possible action on the Annual Internal Review of the Electric Utility Commission for July 2021 through June 2022.]
I HAVE, UH, YET TO DO THAT.SO THAT'LL BE PUSHED TO NEXT MONTH, THE WORKING
[14. Update from the Budget & Audit Working Group]
GROUP UPDATE.I ASSUME THAT WE'VE COVERED EVERYTHING.
[15. Discussion of report regarding City Council action on items previously reviewed by the EUC.]
REGARDING CITY COUNCIL ACTION ITEMS PREVIOUSLY REVIEWED BY THE EUC, ANY CHANGES OR ANY COMMENTS ABOUT THAT? OKAY.[FUTURE AGENDA ITEMS]
FUTURE AGENDA ITEMS. AS A NOTE, WE HAVE, UH, THE RATE REVIEW PARTICIPANT PRESENTATIONS NEXT MONTH, ALONG WITH THE DISCUSSION OF THE HEARING EXAMINERS RECOMMENDATION.AND THEN IN OCTOBER, WE HAD THE BASE RATE REVIEW RECOMMENDATION IN NOVEMBER, WE'RE SCHEDULED FOR THE QUARTERLY OPS REPORT, AGAIN, THE QUARTERLY FINANCIAL REPORT, AND THEN THE STORAGE AND RENEWABLE RFP, UH, THEN LIKELY NO MEETING IN DECEMBER.
AND THEN IN 2023, WE HAVE SORT OF PENDING, UH, SEXUALIZATION, AAE FLEET ELECTRIFICATION.
UM, UH, AND THEN, UH, WE JUST HAD A REQUEST FOR A READOUT OF, UM, ADDITIONAL COSTS DRIVEN BY THE ERCOT ACTIONS.
UM, SO THAT'LL BE SOMETIME IN THE FUTURE.
AND THEN FINALLY, I'D LIKE TO ADD JUST,
[03:25:01]
I WOULD LIKE A REPORT FROM AUSTIN ENERGY AT THE NEXT MEETING, IF POSSIBLE ON, UM, THE RESOLUTION OF, UH, MS. BLACK'S COMMENT EARLIER, UH, THIS EVENING, UH, AND THE CONVERSATION WITH HER AND COMMUNITY FIRST, I'D JUST LIKE TO KNOW HOW THAT WAS RESOLVED.SO, UH, ANY, ANYTHING ELSE? SO THE OTHER ONE, AND I'M, I'M GOING TO MAKE COST ENERGY NERVOUS IS, UM, UNDER THE, UM, RESOURCE PLAN, THERE WAS A REQUIREMENT THAT THE EUC AFTER TWO OR THREE YEARS SHOULD TAKE A LOOK AT IT AND SEE IF THERE WERE ANY MATERIAL CHANGES THAT WOULD MERIT FURTHER CHANGES TO THE RESOURCE PLAN ITSELF.
SO THERE WAS SORT OF A, AS YOU REMEMBER, CARRIE, THERE WAS SORT OF A MID-LEVEL CHECK.
I THINK IT MIGHT'VE SAID DECEMBER OF 20, 22.
I DON'T THINK IT'S A PROBLEM IF WE DO IT A LITTLE BIT LATER, BUT WE SHOULD, AT SOME POINT HAVE A MID-LEVEL CHECK WHERE WE SAY, OKAY, WE DIDN'T CLOSE THE COAL PLANT.
SOME OTHER THINGS HAVE CHANGED OR CUTS CHANGING THE MARKET.
DO WE NEED TO, ARE THERE ANY, DO WE NEED TO MAKE ANY CHANGES TO THE PLAN OR DO WE KIND OF GO FORTH AS IS? AND I DON'T THINK WE DETERMINED THAT NOW, BUT WE SHOULD HAVE SOME DISCUSSION OF THAT.
AND WHENEVER I THINK IN THE RESOURCE PLAN, IT SAID DECEMBER OF 20, 22, I DON'T THINK ANYONE'S GOING TO HAVE A PROBLEM IF WE PUSH IT OFF A BIT, BUT WE SHOULD HAVE THAT DISCUSSION.
I THINK I AGREE THAT SHOULD BE ON THE AGENDA.
WE'LL LET IT, UH, TO, TO ITEM TWO ITEMS. UH, ONE IS AT OUR NEXT MEETING, LIKE, LIKE TO HERE THE, UH, UH, ASSUMING THE HOUSE CONGRESS UP VOTES AND APPROVES CHANGES IN TERMS OF CLIMATE CHANGE, ANY EXISTING REPORTS, UH, AS IT MIGHT AFFECT AUSTIN ENERGY AND AUSTIN ENERGY CUSTOMERS, JUST VERY TOP LEVEL WISE, AS I SUSPECT EVERY THE MUNICIPAL UTILITY PROVIDER IS LOOKING AT THAT AGAIN, TOP LEVEL.
UH, AND SECONDLY, UH, WE'VE HAD DISCUSSION ABOUT RESIDENTIAL ENERGY EFFICIENCY PROGRAMS. AND I RECALL ABOUT A YEAR AND A HALF AGO, UH, AN IMPLEMENTER WAS HIRED TO IMPLEMENT, UH, TO, UH, FIX THINGS.
UH, W AT SOME POINT MAYBE DECEMBER, JANUARY, THAT WE HAVE AN UPDATE IN TERMS OF, SO WE'RE NOT JUST TALKING IN POLICY, BUT WE'RE LOOKING AT THE SUBSTANCE OF THE PRO OF THE RESIDENTIAL ENERGY EFFICIENCY PROGRAMS. THANK YOU.
UM, I'LL COMMISSIONER CHAIRMAN, I'LL GET BACK WITH YOU ON THE, UH, CLIMATE ACT IMPACT, UM, AS, AS FAR AS LIKE THE NEXT MEETING, THE NEXT MEETING MAY BE REALLY BOLD.
BUT, BUT PERHAPS A LITTLE BIT LATER.
THANK YOU EVERYONE THERE WITHOUT OBJECTION.