Link

Social

Embed

Download

Download
Download Transcript


[CALL TO ORDER]

[00:00:03]

THEN I'M LESLIE POOLE, CHAIR OF THE AUSTIN ENERGY UTILITY OVERSIGHT COMMITTEE.

TODAY IS WEDNESDAY, NOVEMBER NINE, IT'S 10 0 5 IN THE MORNING, AND WE ARE IN CITY HALL CHAMBERS ON THIS FINE FOGGY MORNING.

UM, I WANTED TO START WITH CONGRATULATIONS TO OUR TWO COLLEAGUES WHO PREVAILED IN THEIR REELECTION EFFORTS LAST NIGHT.

CONGRATULATIONS TO COUNCIL MEMBER HARPER MADISON IN DISTRICT ONE AND COUNCIL MEMBER PAIGE ELLIS IN DISTRICT EIGHT.

WE'RE REALLY HAPPY THAT YOU GUYS ARE GONNA BE CONTINUING ON THE DAS WITH US.

CONGRATULATIONS.

UM, I WANNA REMIND EVERYBODY THAT FRIDAY, NOVEMBER 11 IS VETERANS DAY, AND I PERSONALLY WANNA APPRECIATE AND CELEBRATE THE VETERANS.

I DON'T, I DON'T TALK ABOUT MY FAMILY MUCH, BUT I TELL YOU A LITTLE BIT ABOUT MY, MY FATHER.

HE SERVED IN THE EUROPEAN THEATER IN WORLD WAR II, UM, IN A THIRD ARMY INFANTRY DIVISION UNDER GENERAL MCCULLOUGH.

THAT WAS FROM 1944 TO 45.

HIS BATTALION LANDED ON A BEACH IN NORMANDY.

THEY MARCHED FROM FRANCE ACROSS THE ALPS INTO GERMANY.

AND IN 1945, HE PARTICIPATED IN FREEING, UM, A NAZI CONCENTRATION CAMP LIKE SO MANY OF HIS GENERATION.

MY DAD DIDN'T TALK MUCH AT ALL ABOUT HIS WAR SERVICE, AND THERE ARE MANY STORIES LIKE HIS OUT THERE.

UM, AND SO WHAT I WOULD SAY, BECAUSE NOT A LOT OF VETERANS TALK ABOUT THEIR EXPERIENCES, THAT WHEN THEY DO, WE SHOULD LISTEN.

AND THERE ARE MANY, MANY WAYS TO APPRECIATE VETERANS THIS YEAR.

SO I WANNA NAME JUST A FEW HERE IN AUSTIN THIS FRIDAY.

THERE'S A PARADE HONORING VETERANS THAT'LL RUN DOWN CONGRESS AVENUE STARTING AT 9:00 AM AT CAESAR CHAVEZ AND CONGRESS.

THE AUSTIN VETERANS ART FEST RETURNS THIS YEAR WITH A NUMBER OF ACTIVITIES GOING ON AROUND THE CENTRAL TEXAS AREA.

AND YOU CAN FIND OUT MORE AT A V A FEST.ORG.

AND LASTLY, PLEASE LET VETERANS, YOU KNOW, HOW MUCH YOU APPRECIATE THEM.

SO THANK YOU EVERYONE FOR BEING HERE.

AS WE MOVE THROUGH THE RATE CASE FOR AUSTIN ENERGY IN PARTICULAR, I WANNA THANK ALL THE PARTICIPANTS WHO HAVE JOINED THE PROCESS.

WE APPRECIATE YOU.

THANK YOU.

MADAME CHAIR.

YES.

REAL QUICK ANNOUNCEMENT BEFORE YOU GET ABSOLUTELY IN THE MEETING.

APPRECIATED, UH, COLLEAGUES WITH RESPECT TO THE COUNCIL MEETING.

THE INTENT, UH, AS UH, THE CHAIR POSTED, I THINK IS TO DO THE, UH, TESTIMONY OF THE PARTIES THIS MORNING.

UH, WE'LL DO THE EXECUTIVE SESSION REMOTELY DURING LUNCH.

SO I'LL COME OUT AND CONVENE THE CITY COUNCIL MEETING, OR THE MAYOR BROKE DOWN.

WELL, WE'LL DO THAT EXECUTIVE SESSION REMOTELY, ADJOURN THAT REGULAR SESSION DURING THE MEETING, UH, AND THEN PICK UP THE AUSTIN ENERGY MEETING AT TWO O'CLOCK, UH, FOR THE, FOR THE QUESTIONS.

UM, AND I APPRECIATE THE CHAIR'S ACCOMMODATIONS SINCE I'LL BE LEAVING AND GOING TO THE AIRPORT TO GO TO COP 27.

SO IF I COULD GO EARLY IN THAT LIST AND I WILL ABIDE BY MY FIVE MINUTE TIME.

UH, I WANT STAFF TO GIVE ME SHORT ANSWERS TO THE QUESTIONS I HAVE SO I CAN MAKE MY THREE QUESTIONS IN MY FIVE MINUTES.

UH, I WOULD ALSO LIKE TO JUST REALLY QUICKLY, UH, UH, NOTE, UH, THAT, UH, TWO PEOPLE THAT WERE IMPORTANT TO THIS COMMUNITY JUST PASSED AWAY.

UH, BOB LANDER, UH, PASSED AWAY.

UH, HE WAS, UH, UH, THE, THE CHAIR OF OUR, UH, VISIT AUSTIN, UH, PRIOR TO, UH, TO, TO TOM NEWNAN, UH, WAS AT A, JUST A REALLY CRUCIAL TIME FOR, UH, THE, THE, THE CITY.

UH, SO MUCH OF THE CULTURAL ARTS THAT WE HAVE IN OUR CITY IS FUNDED BY THE HOT TAX REVENUE.

UH, AND, AND, AND REALLY THAT FUND REALLY KICKED INTO, UH, UH, GEAR, UH, DURING HIS, HIS LEADERSHIP.

UH, SO OUR, UM, UH, THOUGHTS, UH, GO TO, UH, UH, HIS WIFE, JANET, HIS TWO SONS, JEREMY, AND, AND, AND NICK.

AND THEN JUST ALSO TO NOTE THAT, UH, KIM WHITE HAD, UH, PASSED AWAY THIS WEEKEND.

UM, SHE WAS, UH, UM, AN AVID, UM, UM, MUSIC, UH, ORGANIZER AND ADVOCATE, UH, AND SUPPORTER IN OUR COMMUNITY.

AND JUST ONE OF THOSE PEOPLE THAT NEVER WITH A FORMAL POSITION, UH, HAS, HAS MADE HUGE CONTRIBUTIONS TO THE, TO THE CITY.

SO, THANK YOU.

UH, MAYOR, COULD I JUST QUICKLY, I JUST WANT TO, UH, REMIND FOLKS, UM,

[00:05:01]

CUZ YOU MAY HAVE NOT HAD A CHANCE TO NOTICE THIS, BUT THE EXECUTIVE SESSION TODAY, UM, HAS TO DO WITH, UM, I FORGET EXACTLY HOW IT'S POSTED, BUT THE EXECUTIVE SESSION HAS TO DO WITH REAL ESTATE MATTERS RELATED TO, UM, UH, THE SHELTERS FOR HOMELESSNESS.

AND SO JUST WANTED TO GIVE PEOPLE A HEADS UP ABOUT THAT.

THANK YOU ALL.

OKAY.

LET ME TALK A LITTLE BIT ABOUT THE AGENDA TODAY AND WHAT TO EXPECT.

WE HAVE SCHEDULED, UH, PRESENTATIONS FROM INVITED PRESENTERS THIS MORNING.

THAT'LL LIKELY TAKE US RIGHT UP TO, UH, THE LUNCH HOUR.

AND AS THE MAYOR, UH, INDICATED, WE WILL, UH, BE ALSO HOLDING AN EXECUTIVE SESSION THAT'S UNRELATED TO AUSTIN ENERGY.

THERE WAS A REQUEST TO GA TO GRANT ONE PRESENTER MORE TIME, BUT IN THE INTEREST OF FAIRNESS, ALL MAIN PRESENTERS ARE GIVEN 10 MINUTES EACH.

AND I'LL ASK OUR, OUR STAFF HERE TO PUT ON THE TIMER FOR THOSE AND WITH, UH, THE 14 ADDITIONAL PARTICIPANTS EACH GET FIVE MINUTES.

I ALSO CONSIDERED A SUGGESTION THAT PARTICIPANTS DONATE TIME TO THE MAIN PRESENTERS, BUT I THINK WE'RE SERVED WELL TO HEAR DIRECTLY FROM EACH PARTICIPANT WITH THEIR OWN SPECIFIC ISSUES THAT ARE NOT ADDRESSED BY THE ICA.

AND WE CAN CERTAINLY HEAR MORE FROM ANY PRESENTER OR INDIVIDUAL PARTICIPANT DURING THE COUNCIL QUESTION TIME.

THAT'LL BE THE OPPORTUNITY TO DIG IN MORE DEEPLY ON THE REPORTS, THE PROPOSALS, AND THE PRESENTATIONS.

I UNDERSTAND A NEW PROPOSAL, UH, WAS SUBMITTED YESTERDAY.

IT IS, UH, POSTED ON THE CITY CLERK'S WEBSITE.

IT POSTED YESTERDAY AROUND NOON.

I HAVE POSTED THE LINK ON THE MESSAGE BOARD FOR EASE OF ACCESS.

AS I UNDERSTAND IT, NOT ALL PARTIES HAVE HAD A CHANCE TO REVIEW IT AND RESPOND.

I MYSELF RECEIVE THE DOCUMENT FROM ONE OF THE PARTIES THIS MORNING JUST A LITTLE BIT AT, UH, AFTER NINE O'CLOCK ABOUT AN HOUR AGO.

SO WE'LL BREAK AROUND NOON AND I'LL RECESS OUR MEETING, TURN THE MEETING OVER TO THE MAYOR WHO WILL CONVENE THE SPECIAL CALLED COUNCIL MEETING AND EXECUTIVE SESSION.

UH, WE'LL ALSO HAVE LUNCH DURING THAT TIMEFRAME AND PLAN TO RETURN TO THE DIOCESE TWO O'CLOCK FOR THE COUNCIL QUESTIONS OF THE PRESENTERS AND PARTICIPANTS AND A DISCUSSION PORTION OF OUR MEETING AT THE MAYOR'S REQUEST.

I'LL TAKE HIS QUESTIONS FIRST, AS HE WILL HAVE TO DEPART SHORTLY AFTER THAT.

YES.

I HAVE A QUICK QUESTION.

THIS PROPOSAL THAT WE JUST RECEIVED THAT IS ON THE DAIS.

UM, WILL THE, DURING, AS PART OF THE BRIEFINGS OR THE PRESENTATIONS, WILL THEY COVER THIS PROPOSAL IN DETAIL? I I WOULD IMAGINE THAT THE ICA WILL CERTAINLY DO THAT.

OKAY, THANK YOU.

WILL PLAN TO RETURN TO SOMEBODY ELSE? YES, TO THIS IS KATHY TOBO.

YES.

SORRY.

DARK HAIR.

SO, UM, I THINK THE PROPOSAL YOU WERE REFERRING TO IS ONE THAT SEVERAL OF THE DESIGNATED SPEAKERS HAVE INDICATED THEY WOULD DONATE THEIR TIME TO THE INDEPENDENT CONSUMER ADVOCATE.

I THINK THAT'S WHAT YOU'RE REFERRING TO, AND I CERTAINLY WOULD FAVOR THAT APPROACH.

UM, FOR ONE THING, THE INDEPENDENT CONSUMER ADVOCATE IS, IS REALLY AN OUTSIDE CONSULTANT THAT THE CITY HAS HIRED.

SO, YOU KNOW, I REGARD THAT INDIVIDUAL AS, AS A CONSULTANT.

AND IF WE DON'T, IF WE DON'T HAVE TIME TO REALLY PROBE WITH THAT INDEPENDENT CONSUMER ADVOCATE, UM, TODAY, THEN I WOULD LIKE TO SUGGEST THAT WE SCHEDULE MORE TIME FOR THAT PRESENTATION AND FOR THAT BACK AND FORTH IN A FUTURE SESSION.

BECAUSE AGAIN, I, I REGARD THAT PERSON AS REALLY SERVING AS A CONSULTANT TO THE CITY OF AUSTIN AND TO THE CITY COUNCIL AND TO AUSTIN ENERGY.

AND SO I THINK WE NEED, WE NEED MORE TIME FOR THAT.

I APPRECIATE, I REALLY APPRECIATE THAT.

AND, AND I'LL NOTE THAT THE BULK OF OUR TIME THIS MORNING IS WITH THE, UM, PARTICIPANTS WHO ARE NOT THE INDEPENDENT, UM, UH, HEARING EXAM, UM, THE, UM, THE, THE HEARING EXAMINER OR AUSTIN ENERGY AND I, I THANK YOU FOR THAT AND, AND WE WILL CERTAINLY, UH, LOOK AT ADDITIONAL TIME IN THE FUTURE.

UM, WE HAVE A FINISH GOING THROUGH WHAT THE PROCESS HERE TODAY IS, AND I THINK YOU'LL SEE THAT THERE IS ADDITIONAL TIME AVAILABLE FOR ALL THESE CONVERSATIONS.

UM, SO WE'LL COME BACK AT TWO FOR COUNCIL QUESTIONS OF THE PRESENTERS AND THE PARTICIPANTS AND ANY FOCUS THAT YOU WANT TO HAVE ON THE NEW PROPOSAL, WHICH IS, WHICH IS BRAND SPAN AND NEW.

AND I THINK WE'RE ALL INTERESTED IN THAT.

UM, I'D LIKE TO CONDUCT THE QUESTIONS PORTION TODAY IN THE CONGRESSIONAL STYLE.

WE'LL HAVE A ROUND ROBIN FORMAT IN WHICH, IN WHICH EACH COUNCIL MEMBER WILL HAVE FIVE MINUTES TO ASK A QUESTION OR TWO AND GET THE RESPONSE.

WE CAN GO AROUND AS MANY TIMES AS NECESSARY.

JUST KEEP IN MIND THAT WITH 11 OF US ON THE DIAS 10 AFTER THE MAYOR DEPARTS, UM, AT FIVE MINUTES EACH, THIS MAY

[00:10:01]

TAKE, UM, EACH ROUND MAY TAKE AN HOUR.

SO ANY OTHER QUESTIONS ABOUT THE PROPOSED SCHEDULE OR FORMAT? MAYOR PAT? 10.

GOOD MORNING.

UM, I WAS JUST WONDERING, I'M NOT SURE WHETHER THE EXECUTIVE SESSION IS GONNA TAKE THE FULL TWO HOURS BETWEEN THE 12 AND TWO, SO I JUST WOULD LIKE US TO LEAVE OPEN THE POSSIBILITY OF COMING BACK BEFORE TWO, UM, TO CONTINUE THE CONVERSATION.

THAT SOUNDS LIKE A GOOD PLAN.

WE CAN BE FLEXIBLE ON THE TWO O'CLOCK AND THOSE OF YOU WHO ARE, ARE LOOKING FOR US TO RETURN TO STAY ALERT.

SO MAY I SPEAK, UH, COUNCIL MEMBER KITCHEN? YEAH, I THINK THAT, UH, REALISTICALLY WHEN WE BREAK, WE HAVE TO GO GET FOOD.

SO WE'RE PROBABLY NOT GONNA START EXECUTIVE SESSION CLOSER TILL 1230, HOPEFULLY SOONER.

SO I, I EXPECT EXECUTIVE SESSION TO TAKE AT LEAST AN HOUR.

SO WE'LL SEE HOW THAT GOES.

I THINK WE'VE ALLOCATED A GOOD PERIOD OF TIME, AND IF WE ARE ABLE TO COME BACK SOONER THAN TWO O'CLOCK, THEN, THEN THAT'S GREAT.

BUT, UM, WE'LL HAVE TO SEE HOW THINGS ROLL OUT AT THAT POINT.

[Public Communication: General]

I UNDERSTAND WE HAVE TWO SPEAKERS SIGNED UP FOR TODAY.

ONE REMOTE AND ONE IN PERSON.

LET'S TAKE THE REMOTE SPEAKER FIRST.

UH, BEKI.

MR. OKIE, ARE YOU ONLINE? YES, I AM.

GREAT.

THANK YOU MR. OKIE, YOU HAVE THREE MINUTES IF THE STAFF WILL RUN THE TIMER, PLEASE FOR THREE MINUTES.

OKAY.

THANK YOU VERY MUCH.

AND GOOD MORNING THIS YEAR.

I LEARNED THAT I SURVIVED CANCER FOR THE THIRD TIME, AND SO I AM DEDICATING THE REST OF MY LIFE TO CELEBRATING MY FAMILY AND GOOD FRIENDS AND DOING THE VERY BEST THAT I CAN TO HELP THE COMMUNITY.

WITH MY 39 YEARS OF EXPERIENCE IN REVIEWING AUSTIN ENERGY RATE CASES, THIS TIME I HAVE DONE THE MOST EXTENSIVE RESEARCH IN, INTO ANY PUBLIC ISSUE IN MY ENTIRE LIFETIME.

AND WHAT I WANT TO SAY TO YOU THIS MORNING IS THAT THE COMPROMISED PROPOSAL IS NOT THE BEST APPROACH THAT YOU SHOULD TAKE.

WHAT YOU SHOULD DO IS YOU SHOULD CAREFULLY CONSIDER EVERY SINGLE REVENUE AND COST SAVING RECOMMENDATION BY EACH ONE OF THE RATE CASE PARTICIPANTS, AND USE THOSE COST SAVING MEASURES TO COMPLETELY WIPE OUT THE BASE RATE INCREASE THIS BASE RATE INCREASE ON TOP OF THE DOUBLE RATE SHOCK FROM THE REGULATORY CHARGE AND THE CUSTOMER CHARGE, UH, WOULD BE DEVASTATING FOR THE COMMUNITY, AND YOU HAVE THE OPPORTUNITY TO WIPE OUT THE RATE INCREASE COMPLETELY.

THE SECOND THING I WANNA SAY IS THAT ON MY BLOG, AUSTIN AFFORDABILITY.COM, I HAVE DETAILED, UH, EXPLANATIONS FOR WHY AUSTIN ENERGY CANNOT CONTINUE TO RAISE RATES TO COMPENSATE FOR LOSS OF ENERGY SALES.

THEY NEED A NEW BUSINESS MODEL.

AND ON MY BLOG, I HAVE THE NATIONAL CONFERENCE OF STATE LEGISLATURES MAJOR 2019 REPORT ON NEW BUSINESS STRATEGIES FOR ELECTRIC UTILITIES ACROSS THE UNITED STATES.

THAT REPORT IS SOMETHING THAT YOU NEED TO REVIEW AND YOU NEED TO, UH, CONSULT WITH NATIONAL EXPERTS ON HOW TO MOVE AUSTIN ENERGY INTO A NEW BUSINESS MODEL SO THAT THEY CAN, THEY CAN REACH OUR CLIMATE CHANGE GOALS BY SELLING LESS CARBON GENERATED ELECTRICITY AND NOT ATTEMPTING TO COVER THOSE LOSS SALES WITH SEVERAL BASE RATE INCREASES AND REDUCTIONS TO, UH, SOLAR BENEFITS TO SOLAR CUSTOMERS.

I THINK YOU WILL FIND THAT THE APPROACH THAT I'M RECOMMENDING IS IN THE BEST LONG TERM INTEREST OF BOTH AUSTIN ENERGY AND THE CITY OF AUSTIN.

AND THE LAST THING I WANNA SAY IS THAT AUSTIN ENERGY NEEDS A NEAR TERM MIDTERM AND LONG TERM PLAN TO TRANSITION TO A NEW BUSINESS MODEL THAT WILL MEET AUSTIN'S CLIMATE CHANGE GOALS AND ENSURE THE, THE FINANCIAL STABILITY OF THE ELECTRIC UTILITY IF THEY CONTINUE TO RAISE RATES, THEY WILL CHASE AWAY CUSTOMERS FASTER THAN EVER.

AND THAT, THAT IS THE WRONG APPROACH.

WE, WE DON'T NEED TO GO BACK TOWARDS THE PAST TRADITIONAL MODELS.

WE NEED TO GO FORWARD WITH INNOVATIVE NEW BUSINESS MODELS THAT ARE ALREADY BEING USED IN EUROPE AND ARE ALREADY BEING USED IN OTHER PARTS OF THE UNITED STATES.

SO PLEASE STUDY AUSTIN AFFORDABILITY.COM VERY CAREFULLY.

THE REMARKS I'M GIVING YOU THIS MORNING ARE BEING SENT TO ALL OF YOUR OFFICES WITH THE LENGTHS IN THERE TO HELP GUIDE YOU TOWARDS THIS, THIS NEW INEVITABLE FUTURE.

AND IT'S NOT JUST THE CITY OF AUSTIN.

MR. OKEY, THANK YOU SO MUCH.

I APPRECIATE YOUR INPUT.

UM, OUR IN-PERSON SPEAKER THIS MORNING IS P YOUNG, MR. YOUNG, BEEN A LONG TIME.

WELCOME.

YOU HAVE THREE MINUTES MR. YOUNG, AND OUR STAFF WILL RUN THE TIMER WHEN YOU BEGIN SPEAKING.

[00:15:08]

OKAY.

I'D STAND UP AND TALK TO YOU, BUT I DON'T HAVE A NEED THAT DOESN'T WORK VERY WELL ANYMORE.

IT'S A PLEASURE TO BE WITH YOU TODAY.

UH, FOR JUST A MOMENT.

BEFORE I TALK ABOUT THE DETAILS, I WANT TO REMIND, UH, SOME OF Y'ALL WHY I'M TALKING ABOUT ELECTRIC RATES, BECAUSE THAT'S NOT SOMETHING MOST OF YOU PROBABLY THINK I KNOW ANYTHING ABOUT.

UH, MY HISTORY INCLUDES WORKING FROM 1975 TO 77 WITHIN MAYOR FRIEDMAN TO CREATE THE MAYOR'S COMMISSION ON ELECTRIC RATES.

AFTER THAT, I WORKED TO CREATE THE ELECTRIC UTILITY COMMISSION STARTING IN 1977.

AND FROM 77 TO 85, I SERVED ON THAT COMMISSION AND WAS CHAIR FROM 82 TO 85.

UH, I HELPED PASS, UH, BOTH AUSTIN'S PROGRESSIVE ELECTRIC RATE IN 81 AND OUR ENERGY EFFICIENT PROGRAM IN 82.

AND I HAVE NOT LOST TOUCH WITH THE UTILITY IN THE TIME THAT IT'S PASSED SINCE I, SINCE THE END OF MY SERVICE.

SO I KNOW SOMETHING ABOUT ELECTRIC RATES ALONG WITH SOME OF THE OTHER ISSUES I'VE DEALT WITH IN THE CITY, UH, FOR OVER 40 YEARS, WE HAVE HAD A RATE STRUCTURE THAT HAS BEEN BOTH, UH, STIMULATING CONSERVATION AND PROMOTING ENERGY EFFICIENCY.

UH, THAT HISTORY IS NOW IN JEOPARDY WITH THE PROPOSAL WITH THE UTILITY IS PUT FORWARD.

UH, THE UTILITY WOULD MOVE THE BURDEN OF, WOULD SHIFT THE BURDEN TO THE SMALLEST CUSTOMERS WITH A QUESTIONABLE RATE INCREASE THAT THEY ARE NOW PROPOSING AND LOWER RATES FOR THE LARGE COMMERCIAL USERS.

UH, BUT THIS IS BOTH UNFAIR AND COUNTERPRODUCTIVE TO ANY HOPE FOR OF STIMULATING CONSERVATION BY REMOVING AN INCENTIVE TO CONSERVE FROM THE LARGE USERS AND SIMPLY PENALIZING SMALL USERS FOR, FOR NOT BEING ABLE TO CONSERVE MORE THAN THEY ALREADY DO SO THEY CAN PAY THEIR BILLS.

I BELIEVE THE PROPOSED COMPROMISE, WHICH YOU INDICATES YOU JUST RECEIVED, RETAINS THE CONSERVATION, UH, SYSTEM AND ALSO CONTINUES TO CONSER TO, TO, TO CREATE FAIR UTILITY RATES.

I'M CURIOUS WHY WHEN SAN ANTONIO, AFTER THE SAME HOT SUMMER THAT WE REC WE WENT THROUGH, UH, IS MANAGING TO LOWER ITS COST TO ITS CONSUMERS CAUSE OF THE WINDFALL AND, AND FUND AND FUNDS THAT THAT UTILITY RECEIVED.

WHILE WE AT THE SAME TIME ARE ASKING TO GOUGE OUR, OUR CUSTOMERS AND OWNERS, UH, AFTER WE'RE THE SAME WINDFALL THAT THEY, THAT WE SHOULD HAVE HAD THAT THEY DID.

I'M CONCERNED THAT THIS UTILITY PICKED ITS OWN HEARING EXAMINER.

I'M CONCERNED THAT THEY MET WITH AND HAD PRIVATE CONVERSATIONS WITH THE BOND COUNCIL WHEN I SERVED ON THE ELECTRIC UTILITY COMMISSION.

IT WAS STANDARD PRO, PRO PROCESS FOR US TO MEET WITH BOND COUNCIL IN PUBLIC MEETINGS.

AND IT WAS STANDARD PROCESS FOR THE CITY COUNCIL TO MEET WITH BOND COUNCIL IN PUBLIC IN PUBLIC MEETINGS AND RECEIVE THEIR INPUT ON THE RECORD, NOT IN PRIVATE CONVERSATIONS THAT WERE NOT AVAILABLE TO, TO THE CITIZENS.

I URGE YOU TO ADOPT THE PROPOSAL THAT HAS BEEN PUT FORWARD BY THE, IN, BY THE INTERVENERS AS A MORE FAIR ELECTRIC GREAT PROPOSAL.

THANK YOU VERY MUCH FOR YOUR TIME.

THANK YOU SO MUCH MR. YOUNG.

THANKS FOR BEING HERE TODAY.

UM, I'D LIKE TO NOW GIVE AUSTIN ENERGY GENERAL MANAGER, JACKIE SERGEANT, UM, A MINUTE OR TWO TO SET THE STAGE FOR US IN TERMS OF WHERE WE ARE IN THE PROCESS, AND THEN WE'LL

[1. Discussion regarding Austin Energy's proposed base rate revisions including position presentations by participants in the base rate review process.]

MOVE TO THE FIRST PRESENTER, WHO IS TRAVIS VIC, THE IMPARTIAL HEARING EXAMINER, WHO IN THIS PROCESS IS A NEUTRAL PARTY WITH A JUDICIAL ROLE.

OH, MR. BOCATO IS GOING TO MAKE THE PRESENTATION.

OKAY, VERY GOOD.

THANK YOU SO MUCH.

THANKS FOR BEING HERE, MR. BOCATO .

MY NAME'S THOMAS QUEDO AND I REPRESENT THE CITY IN THIS BASE RATE REVIEW.

IN THIS BASE RATE REVIEW.

UH, ALTHOUGH THERE ARE MANY IMPORTANT ISSUES IN THIS CASE, MY TIME IS SHORT, SO I'LL FOCUS ON THREE SPECIFIC ISSUES.

REVENUE REQUIREMENT, THE RESIDENTIAL TIER STRUCTURE, AND THE RESIDENTIAL CUSTOMER CHARGE.

NOW WITH RESPECT TO THE REVENUE REQUIREMENT, THE UTILITIES FINANCIAL HEALTH HAS BEEN IN DETERIORATING DUE TO INCREASES IN ON M COSTS ASSOCIATED WITH PROVIDING ELECTRIC SERVICE.

SPECIFICALLY AUSTIN ENERGY IS PROPOSING TO INCREASE BASE RATES BY 35.7 MILLION TO ACCOUNT FOR HIGHER COST OF MATERIALS, GOODS, AND LABORS.

IN ADDITION, AUSTIN ENERGY HAS LOST TO COMBINE 90 MILLION OVER THE PAST TWO YEARS.

THE CURRENT FINANCIALS CONDITION HAS RESULTED IN LESS THAN 150 DAYS OF CASH ON HAND, WHICH IS IN

[00:20:01]

VIOLATION OF THE CITY'S FINANCIAL POLICIES.

THIS SUMMER.

TWO RATING AGENCIES DOWNGRADED AUSTIN ENERGY.

NOTABLY, THESE DOWNGRADES ASSUME THAT THE UTILITIES ORIGINAL, UH, PROPOSED INCREASE OF 48 MILLION IS APPROVED.

NOW, IN ORDER TO PRESERVE A ENERGY'S FINANCIAL HEALTH, THE UTILITY MUST RECOVER THE REQUESTED INCREASE TO THE REVENUE REQUIREMENT, AND THIS NEED IS SUPPORTED AND AFFIRMED BY THE RECOMMENDATIONS OF THE I E.

SECONDLY, AUSTIN ENERGY NEEDS TO REVISE ITS RATE DESIGN, ESPECIALLY FOR RESIDENTIAL CUSTOMERS IN ORDER TO STABILIZE REVENUES AND MORE EQUITABLY RECOVER ITS COST.

THE CURRENT RATE STRUCTURE HAS CONTRIBUTED TO THE DETERIORATING FINANCIAL POSITION.

CHANGES TO THE CURRENT RATE STRUCTURES ARE NOT ONLY WARRANTED BUT NECESSARY IN ORDER ORDER TO STABILIZE THE UTILITIES FINANCIAL POSITION AND ALLOW THE UTILITY TO CONTINUE TO DELIVER AFFORDABLE, RELIABLE ELECTRIC SERVICE TO OUR COMMUNITY.

AS SUCH, ALL ENERGY PROPOSES TO REDUCE THE NUMBER OF RESIDENTIAL TIERS FROM FIVE TO THREE AND TO FLATTEN THE TIERS.

CURRENTLY, REVENUE REQUIREMENT IS HAMPERED BY EXISTING RATE DESIGNS THAT RELY TOO HEAVILY ON ENERGY SALES.

IT IS OUTDATED BECAUSE CONSUMPTION PATTERNS CONTINUE TO CHANGE IN THE 2012 RATE CASE, FOR EXAMPLE, THE AVERAGE MONTHLY RESIDENTIAL CONSUMPTION WAS ABOUT 1100 KWH PER MONTH.

IN 2016, IT HAD FALLEN TO 900 KWH.

TODAY IT IS APPROXIMATELY 825 KWH PER MONTH, AND AUSTIN ENERGY IS PROUD OF THAT ACCOMPLISHMENT, BUT IT COMES AT A PRICE.

MOST RESIDENTIAL CUSTOMERS ARE BUILT ON A STEEP FIVE TIER STRUCTURE WITH EACH TIER BEING PRICED PROGRESSIVELY HIGHER.

THE FIRST AND SECOND TIERS, HOWEVER, ARE PRICED BELOW COSTS AND ARE SUBSIDIZED BY THE FOURTH AND FIFTH TIERS.

SIGNIFICANTLY MORE THAN 40% OF RESIDENTIAL CUSTOMERS ARE BEING SUBSIDIZED BY OTHER RESIDENTIAL CUSTOMERS THAT THAT'S NOT EVEN TO MENTION COMMERCIAL CUSTOMERS.

MOREOVER, THERE SIMPLY ARE NOT ENOUGH CUSTOMERS IN THE HIGHER TIERS TO MAKE UP THE REVENUE DEFICIT FROM THE LOWER TIERS.

UNDER RECOVERY, YOU DON'T WANT THE UTILITY TO BE FINANCIALLY SOLVENT ONLY IF CUSTOMERS USE A HIGH LEVEL OF CONSUMPTION.

ACCORDINGLY, AUSTIN ENERGY PROPOSES TO MOVE THESE CLASSES CLOSER TO COST OF SERVICE, BUT DESPITE THESE IMBALANCES, THE UTILITY IS MINDFUL OF RATE IMPACTS AND THE NEED FOR GRADUALISM.

AND IT IS FOR THAT REASON THAT THE UTILITY PROPOSES MOVING THE RESIDENTIAL CLASS 50% TO COST RATHER THAN ELIMINATING THE ENTIRE SUBSIDY AS PART OF THIS CASE.

THUS, THE PROPOSED TIER STRUCTURE BETTER REFLECTS CURRENT CUSTOMER CONSUMPTION WHILE CONTINUING TO SEND EFFICIENCY SIGNALS.

THE PROPOSAL ALSO REDUCES INTRA AND INTERCLASS SUBSIDIES, ENHANCES REVENUE STABILITY, AS I MENTIONED, AND REDUCES CUSTOMER BILL VOLATILITY.

AND I SHOULD NOTE THAT THE EVIDENCE DEMONSTRATED THAT FIVE TIERS DO NOT SEND PRICE SIGNALS THAT CUSTOMERS HAVE RESPONDED TO.

MOREOVER, THE TIERS ARE NOT DRIVING ENERGY EFFICIENCY EXPENDITURES.

FURTHERMORE, AUSTIN ENERGY IS NOT PROPOSING ELIMINATING THE PRICE SIGNAL.

EACH TIER'S RATE WILL CONTINUE TO BE HIGHER THAN THE PREVIOUS ONE.

IT WILL SIMPLY BE AT A FLATTER LEVEL.

THIRDLY, AUSTIN ENERGY PROPOSES TO INCREASE THE CUSTOMER CHARGE IN ORDER TO BETTER RECOVER FIXED COST.

BY RELYING LESS ON ENERGY SALES, THE PROPOSAL WILL INCREASE THE CHARGE FROM $10 TO $25 PER MONTH.

THE HIGHER CUSTOMER CHARGE WILL DECOUPLE FIXED COST RECOVERY OF, OF A KWH CELLS, WHICH ARE INSUFFICIENT TO RECOVER FIXED COSTS FOR THE UTILITY.

AND JUST TO BE CLEAR, WHEN YOU INCLUDE INCREASE THE CUSTOMER CHARGE, YOU ARE DECREASING THE ENERGY CHARGE BY AN EQUIVALENT AMOUNT.

ADDITIONALLY, THE MOST VULNERABLE CUSTOMERS ARE NOT IMPACTED BY THE CUSTOMER CHARGE INCREASED BECAUSE AUSTIN ENERGY WAIVES THE CUSTOMER CHARGE CAP CUSTOMERS.

THUS, THE HIGHER THE CUSTOMER CHARGE, THE MORE CAP CUSTOMERS BENEFIT.

LASTLY, I'D LIKE TO TALK FOR A MOMENT ABOUT THE PROCESS FOLLOWING THE 2012 RATE CASE.

CITY COUNCIL DIRECTED AE TO CREATE A PUC TYPE PROCESS THAT INCLUDED THE SELECTION OF AN I G AND AN INDEPENDENT CONSUMER ADVOCATE.

THIS PROCESS WAS FOLLOWED IN 2016 AND IN THE CURRENT CASE AFTER MONTHS OF DISCOVERY, A HEARING AND BRIEFING, THE IE ISSUED HIS REPORT.

SOME PARTIES, HOWEVER, HAVE GONE BEYOND THIS PROCESS THIS MORNING.

AND IF I MAY JUST HAVE ANOTHER HALF A MINUTE, PLEASE FINISH.

THANK YOU.

UH, THIS MORNING YOU MET, YOU RECEIVED A NEW JOINT ALTERNATIVE PROPOSAL FROM A GROUP OF PARTICIPANTS.

YOU WILL NO DOUBT HEAR MORE ABOUT THAT MOMENTARILY.

I SHOULD LET YOU KNOW THAT AUSTIN ENERGY WAS NOT INFORMED OF THIS PROPOSAL IN ADVANCE OF THE FILING AND BELIEVES THAT IT'S SIMPLY CERTAIN PARTIES IN THE FACE OF THE I U'S REPORT MAKING ARBITRARY PUBLIC CONCESSIONS TO THEIR DIRECT CASE IN ORDER TO ACHIEVE A MORE FAVORABLE OUTCOME.

I WILL WAIT TILL MY CONCLUDING REMARKS TO ADDRESS THE PROPOSAL MORE DIRECTLY, BUT FOR NOW, I WOULD REQUEST THAT COUNCIL ADHERE TO THE PROCESS THAT ESTABLISH AND NOT ENGAGE IN NEGOTIATIONS FROM THE DIAS.

[00:25:01]

THANK YOU FOR YOUR THOUGHTFUL CONSIDERATION OF THIS IMPORTANT MATTER TO THE UTILITY AND TO OUR COMMUNITY.

THANK YOU SO MUCH MR. BOCATO.

AND, AND TO THAT POINT TODAY, WE ARE NOT ACTUALLY HAVING ANY NEGOTIATIONS ON THE DIAS AND WE'LL BE TAKING NO ACTION TODAY.

IT IS TO HEAR FROM ALL OF THE PARTICIPANTS ABOUT THE REPORTS AND PROPOSALS AND TO SEE THE PRESENTATIONS CHAIR.

THANKS.

UH, YES.

COUNCIL MEMBER TOVO, UH, MR. BACCATO, THANK YOU VERY MUCH.

I WANTED TO JUST CLARIFY WHAT YOU SAID.

DID ANYONE, DID ANY OF THE PARTIES WHO PULL TOGETHER THIS ALTERNATIVE PROPOSAL REACH OUT TO AUSTIN ENERGY TO REQUEST TIME TO, TO REVIEW IT? NO.

OKAY.

ALL RIGHT.

THANK YOU.

DID THEY SUBMIT IT TO AUSTIN ENERGY? WE RECEIVED IT YESTERDAY BY EMAIL.

OKAY.

THANK YOU.

BUT IT DID, IT WASN'T ACCOMPANIED BY A REQUEST TO DISCUSS? NO.

OKAY.

THANK YOU.

I I I WILL SAY IN FAIRNESS, THERE HAVE BEEN SOME SETTLEMENT DISCUSSIONS, UH, EARLIER IN THE WELL IN OCTOBER, UH, AND IN LATE SEPTEMBER I BELIEVE AS WELL, BUT, OKAY.

THANK YOU.

THANKS, MR. BROCA.

NOW WE'RE GOING TO HEAR FROM THE, UM, IMPARTIAL HEARING EXAMINER TRAVIS VIC.

MR. VIC'S GONNA PRESENT HIS REPORT AGAIN.

HE WA HE ACTED IN A JUDICIAL CAPACITY HERE.

MR. VICARY, YOU HAVE 10 MINUTES.

UH, THANK YOU VERY MUCH.

I WAS WONDERING, UM, IF WE COULD GO AHEAD AND PUT UP THE FIRST SLIDE.

UM, I THINK WE'RE GONNA HAVE PLENTY OF TIME TO GET IN.

ONCE AGAIN, I'M TRAVIS VICTORY.

I WAS RETAINED BY THE CITY OF AUSTIN, AUSTIN ENERGY, TO BE CLEAR, UM, AS AN INDEPENDENT HEARING EXAMINER, UH, I'LL GET INTO MY BACKGROUND IN JUST A MINUTE, BUT I THOUGHT WHAT WE COULD START WITH IS JUST SOME FUNDAMENTALS.

THERE MAY BE FOLKS WATCHING THIS, UH, PROCEEDING WHO DON'T KNOW THAT MUCH ABOUT THE BASICS.

AND ACTUALLY THIS SLIDE THAT WE HAVE UP RIGHT HERE.

YEAH, FIGURE ONE.

THE THING I LIKE ABOUT THIS SLIDE IS THAT IT ACTUALLY IS SIMPLE AS IT IS.

IT ILLUSTRATES A LOT FOR, FOR, UH, VARIOUS ARGUMENTS OF THE PARTIES.

SO FIRST OF ALL, OBVIOUSLY ON THE LEFT YOU HAVE YOUR GENERATION ASSETS, THAT'S SOLAR, WIND, AND OF COURSE YOUR STANDARD, UH, POWER FACTORIES, UH, POWER PLANTS.

NEXT YOU HAVE THE BULK TRANSMISSION.

AND FOR FOLKS WHO AREN'T THAT FAMILIAR WITH IT, YOU SEE BULK TRANSMISSION CUTTING THROUGH THE COUNTRYSIDE.

IT'S ALL THOSE BIG POWER LINES.

THEY'RE PRETTY OBVIOUS.

YOU, YOU MIGHT HAVE 'EM IN AUSTIN, BUT YOU JUST DON'T SEE 'EM AS CLEARLY.

THOSE, UH, BRING IN TRANS, UH, ELECTRICITY FROM THE POWER PLANTS AND BIG, IT'S A, IT'S, IT'S A BIG PIPELINE.

THEN IT GETS STEPPED DOWN TO THE FINAL STEP OF DISTRIBUTION.

AND DISTRIBUTION, OF COURSE, IS WHAT WE'RE TALKING ABOUT HERE TODAY.

WE ARE NOT TALKING ABOUT TRANSMISSION THAT'S GOVERNED BY ERCOT, UH, THE, WHAT'S CALLED THE POSTAGE STAMP RATE.

AND BACK WHEN THE, UH, LEGISLATURE, TEXAS LEGISLATURE DEREGULATED THE ENERGY MARKET IN ERCOT, WHICH COVERS ABOUT 90% OF THE STATE, INCLUDING AUSTIN ENERGY, UH, WHEN THEY DEREGULATED GENERATION FOR INVESTOR ON UTILITIES, WAS SEPARATED OUT SO THAT A VERTICALLY INTEGRATED UTILITY THAT WENT FROM GENERATION TO DISTRIBUTION SUDDENLY DOESN'T HAVE GENERATION ASSETS ANYMORE.

AND I THINK THE IDEA BEHIND THAT WAS THEY'RE GONNA GET A ROBUST GENERATION MARKET, ROBUST MARKET FOR GENERATORS IN ANY EVENT.

UM, THE INTERESTING THING ABOUT THAT, AND, AND REMEMBER WE'RE JUST TALKING ABOUT IN THIS RATE CASE, THE DISTRIBUTION ASSETS, UM, IS OUTSIDE OF BECO.

YOU ACTUALLY DO HAVE FULLY INTEGRATED, UH, INVESTOR ON UTILITIES.

NOW, AUSTIN ENERGY IS NOT, THERE ARE CERTAIN, UH, CAPABILITIES FOR THE PUBLIC UTILITY COMMISSION OF TEXAS TO REVIEW SOME OF AUSTIN ENERGY'S, UH, IF, IF YOU GET A RATE INCREASE, BUT, BUT BASICALLY THEY'RE, THEY'RE NOT REGULATED.

SO THAT AUSTIN ENERGY ACTUALLY HAS ALL THREE TYPES OF ASSETS, GENERATION, TRANSMISSION, DISTRIBUTION.

THEY LOOK AND THEY ARE, THEY LOOK LIKE, AND THEY ARE A VERTICALLY INTEGRATED A UTILITY.

AND SO WHAT YOU HAD WERE ARGUMENTS FROM PARTIES SAYING, LOOK, THEY LOOK JUST LIKE AN AN IOU AND I'M GONNA GET INTO WHAT AN IOU IS IN JUST A SECOND.

THEY LOOK JUST LIKE AN IOU OUT OUTSIDE OF BUROP.

THAT ISN'T NECESSARILY TRUE, UH, AT LEAST NOT IN MY OPINION.

UM, CAN WE GO TO, BEFORE WE GO TO FIGURE TWO, LET ME GO AHEAD AND TALK ABOUT THE TYPES OF ELECTRIC UTILITIES.

UH, THERE ARE THREE BASIC TYPES OF ELECTRIC UTILITIES OUT THERE.

UH, YOU HAVE INVESTOR OWN UTILITIES.

THEY ARE FOR PROFIT ENTITIES.

THEY GO AFTER THE BOTTOM LINE.

THEY'RE ALSO REGULATED BY THE PUBLIC UTILITY COMMISSION.

NEXT, YOU HAVE MUNICIPALLY OWNED UTILITIES, WHICH IS WHAT AUSTIN ENERGY IS, CPS FOR SAN ANTONIO.

THEY ARE NOT FOR PROFIT.

AND ALTHOUGH SOME WOULD ARGUE WITH, ARGUE WITH ME ABOUT THIS REGARDING THE GFT, AN MOU IS BASICALLY TRYING TO OPERATE AT COST.

THIRD TYPE OF, UH, ELECTRIC UTILITY IS ELECTRIC COOPERATIVE ELECTRIC COOPERATIVES ARE THE FOLKS WHO BASICALLY, THEY'RE NOT FOR PROFITS AND

[00:30:01]

THEY ARE TRYING TO PROVIDE ELECTRIC ENERGY OUT IN THE COUNTRYSIDE WHERE YOU HAVE A LOT OF INFRASTRUCTURE PER CUSTOMER, LOW CUSTOMER DENSITY.

SO THEY STRUGGLE WITH THEIR OWN ISSUES, BUT BASICALLY AN IOU IS FOR PROFIT.

THEY ARE SET UP DIFFERENTLY IN HOW THEY RUN THEIR FINANCES FROM A NOT FOR PROFIT, LIKE AN MOU AUSTIN ENERGY OR AN ELECTRIC COOPERATIVE.

THERE MAY BE A FEW PARALLELS BETWEEN A CO-OP AND, AND AN MOU BASED ON HOW MUCH MONEY THEY'RE HAVING TO SPEND ON INFRASTRUCTURE VERSUS THEIR ENERGY CHARGE.

WE'LL TALK ABOUT THAT LATER.

ALL RIGHT, UH, LET'S GO TO THE, UM, UH, FIGURE TWO REAL QUICK PLEASE.

FIGURE TWO IS BASICALLY THE, WHAT WE JUST LOOKED AT.

YOU'VE GOT YOUR, YOUR, UH, GENERATION UNITS, YOUR TRANSMISSION LINES.

THEN YOU HAVE THIS STEP DOWN TO THAT SUBSTATION WHERE EVERYTHING DIVIDES OUT.

AND IF YOU LOOK DOWN AT, AT THE LOWER LEFT, YOU'LL SEE THAT THERE IS A WHAT APPEARS TO BE INDUSTRIAL UNITS, AND THERE'S NOTHING IN BETWEEN THE SUBSTATION AND THAT INDUSTRIAL UNIT.

NOW, AUSTIN ENERGY HAS A FEW INDUSTRIAL, UH, CUSTOMERS LIKE THAT.

UH, I THINK IT'S THREE.

UM, BUT THOSE INDUSTRIALS ASK FOR A SEPARATE RATE BECAUSE A SUBSTATION RATE, PRIMARY SUBSTATION RATE.

AND I AGREED THAT THEY SHOULD GET THAT BECAUSE THE GOAL OF OF, OF THIS RATE CASE IS IN PART, AND IT'S A VALID GOAL, IS TO TRY TO GET EVERYONE TO COST OF SERVICE.

AND SO IF YOU'RE GOING TO COST OF SERVICE AND, AND EVERYONE SHOULD THINK ABOUT THIS BASIC PRINCIPLE, THE INDUSTRIALS ARE SAYING, IF ALL IF THERE'S NO OTHER CUSTOMER BETWEEN US AND THAT SUBSTATION, WHY ARE WE PAYING FOR THE REST OF THAT DISTRIBUTION THAT WRAPS ALL THE WAY AROUND TO THE HOUSES AND SUCH? SO THAT'S JUST A BASIC CONCEPT.

SOMETHING TO KEEP IN MIND.

FINAL THING, LINE LOSS REALLY ISN'T, I DON'T THINK IT'S A, A MAJORLY CONTESTED ISSUE, BUT IT IS A CONCEPT TO KEEP IN MIND.

LINE LOSS JUST MEANS AS YOU MOVE POWER THROUGH A SYSTEM, YOU'RE GONNA LOSE SOME ENERGY AND YOU LOSE IT EVERY TIME YOU STEP DOWN AS WELL.

SO THE, THOSE HOUSES AT THE TAIL END OF THAT DISTRIBUTION NETWORK, THEY SUFFER THE MOST LINE LOSS.

AND SO THERE WERE SOME ISSUES THAT THE INDUSTRIALS BROUGHT UP ABOUT THAT.

ALL RIGHT.

LET'S MOVE ON TO, UH, BASICALLY THE PROCESS.

YOU CAN GO TO THE THIRD SLIDE.

YOU DON'T HAVE TO, BUT MAYBE IF FOLKS WANT TO WANT TO SEE, I'M NOT GONNA GO THROUGH ALL OF THAT STUFF.

WE DON'T, WE DON'T HAVE TIME FOR IT.

BUT I JUST WANNA HIT ON A FEW MAJOR ISSUES.

UM, I AM AN INDEPENDENT HEARING EXAMINER.

UM, I WAS AN ADMINISTRATIVE LAW JUDGE, AND I MENTIONED THIS AT THE WORK SESSION ON NOVEMBER ONE, WHICH I ATTENDED.

I WAS AN ADMINISTRATIVE LAW JUDGE AT THE STATE OFFICE OF ADMINISTRATIVE HEARINGS, WHICH IS KNOWN AS SOAH STATE AGENCY.

HANDLES ALL TYPES OF CASES WITHIN THE EXECUTIVE BRANCH, INCLUDING CASES FOR THE PUC.

I WAS HIRED INTO AND RE AND STAYED IN THE ELECTRIC ENERGY PRACTICE GROUP THE ENTIRE TIME WAS BACKUP TEAM LEADER.

SO I HAVE SOME EXPERIENCE IN ELECTRIC ENERGY.

UM, I TRIED TO RUN THIS PROCEEDING AS CLOSE TO A SOIC CASE AS POSSIBLE.

AND ALSO, I AM IMPARTIAL.

I'M AN AUSTIN ENERGY, YOU KNOW, RESIDENTIAL CUSTOMER.

I DON'T CARE.

MY JOB WAS TO BE IMPARTIAL AND INDEPENDENT AND REALLY THINK ABOUT WHAT WAS GOING ON HERE AND GIVE YOU MY RECOMMENDATIONS.

AND THAT'S ALL THEY ARE.

TAKE 'EM OR LEAVE THEM THEIR RECOMMENDATIONS.

UH, FINALLY, NO EX PARTE COMMUNICATIONS.

I WANT EVERYONE WHO'S LISTENING TO UNDERSTAND SOMETHING ABOUT THAT.

EX PARTE, UM, IS LATIN.

FOR THOSE WHO DON'T SPEAK LATIN, AND I DON'T SPEAK LATIN EXCEPT WHAT THEY TAUGHT ME IN LAW SCHOOL RELUCTANTLY.

UM, EX PART, EX PARTE BASICALLY MEANS THAT IF YOU'RE A JUDGE OR A HEARINGS EXAMINER, YOU SHOULD NOT BE TALKING TO ANYONE, FAMILY MEMBERS INCLUDED ABOUT WHAT'S GOING ON IN THE CASE, UNLESS IT'S A PUBLIC FILING ON THE CITY OF AUSTIN'S FILING SYSTEM WHERE IT'S DONE AN OPEN COURT OR AN OPEN HEARING.

I HAVEN'T, UH, RECEIVED ANY INFORMATION OTHER THAN WHAT WAS FILED IN THIS CASE AND WHAT WE RECEIVED AT THE, AT THROUGH THE, THROUGH THE HEARINGS PROCESS.

I HAVE NOT LOOKED AT ONE ONLINE ARTICLE ABOUT THIS CASE.

I HAVE NOT LISTENED TO ANYTHING ON THE RADIO.

I'VE BEEN TOLD THERE'S TALK RADIO GOING ON.

I DON'T CARE.

I DIDN'T LISTEN TO ANY OF THAT.

I DON'T CARE WHAT'S GOING ON ON TV.

I DID MY JOB AND MY JOB IS TO BASICALLY PUT BLINDERS ON AND NOT LISTEN TO ANYTHING ELSE.

WASN'T AWARE, OF COURSE, OF, OF THE NEW PROPOSAL.

ALL RIGHT.

FINAL THING, UH, REGARDING THE HEARING.

UM, THE TYPICAL LEGAL RUBRIC AS THE ADMINISTRATIVE PROCEDURES ACT, WHICH, UH, YOU, YOU USE FOR MOST ADMINISTRATIVE CASES THAT DIDN'T APPLY HERE.

UH, THE RULES OF EVIDENCE, UH, DID APPLY, BUT WITNESSES WERE NOT SWORN IN.

AND I THINK IT'S JUST BECAUSE THERE WAS NO LEGAL MECHANISM FOR ME TO HAVE THE AUTHORITY TO ACTUALLY SWEAR IN WITNESSES.

SO I CONSIDERED THIS HEARING TO BE QUASI EVIDENTIARY.

IT DOESN'T MEAN PEOPLE WERE GETTING ON THE STAND AND TELLING STORIES, BUT IT WAS QUASI EVIDENTIARY BECAUSE THOSE FOLKS WEREN'T SWORN IN.

SO THERE ARE A LOT OF THINGS THAT FLOW FROM THAT.

UM, FINALLY, AND I MENTIONED THIS AT THE WORK SESSION, THERE WAS NO NUMBER RUNNING.

WHAT I MEAN IS WE MADE RECOMMENDATIONS OUT INTO THE ETHER.

WE DON'T KNOW WHAT THE IMPACT OF THOSE RECOMMENDATIONS WERE.

AND THAT'S FINE BECAUSE YOU'RE GONNA DEAL WITH THAT RIGHT NOW.

I THINK IT'S A, IT IS

[00:35:01]

PERFECTLY FUN TO DO IT LIKE THAT.

UH, JUST REAL QUICK, GETTING TO THE SUMMARY RECOMMENDATIONS, PAGE TWO, I'M JUST GONNA HIT ON ONE, TWO, AND FOUR REAL QUICK.

THESE ARE THE THREE BIG ONES.

IN ANY RATE CASE, YOU'VE GOT REVENUE REQUIREMENT.

YOU IS PAGE TWO AVAILABLE.

YOU'VE GOT REVENUE REQUIREMENT, WHICH IS BASICALLY YOUR COSTS.

YOU'RE JUST FIGURING OUT WHICH COST SHOULD ACTUALLY BE PART OF, OF WHAT THE UTILITY'S ABLE TO RECOVER.

THEN YOU HAVE COST ALLOCATION NUMBER TWO.

COST ALLOCATION IS HOW YOU TAKE THOSE COSTS AND YOU ASSIGN THEM TO CUSTOMERS.

IT'S A, IT'S A THREE, OR IT SEEMS LIKE EVEN FOUR STEP PROCESS SOMETIMES, BUT YOU'RE BASICALLY FIGURING OUT WHO IS RESPONSIBLE FOR WHAT COST OR HOW YOU SHARE THOSE COSTS AMONG YOUR CUSTOMERS.

AND THEN FINALLY, THERE'S RATE DESIGN NUMBER FOUR, RATE DESIGN, WHICH IS THE BIG ISSUE HERE.

AND I AGREE RATE DESIGN SHOULD BE A BIG ISSUE.

RATE DESIGN.

UH, MY LAW PARTNER ANDREW EDGE, WHO IS HERE WITH ME TODAY, ACTUALLY DID THE ORIGINAL DRAFT ON THAT.

PUT A LOT OF THOUGHT INTO IT.

WE WERE, WE WORKED TOGETHER ALL THE WAY THROUGH.

I REVIEWED AND EDITED EVERYTHING THAT CAME OUT IN THE FINAL REPORT, BUT HE'S HERE AND HE HAS A, ACTUALLY HAS A COURT HEARING AROUND NOON TODAY, AND HOPEFULLY HE CAN BE BACK IN TIME.

IF YOU HAVE QUESTIONS ON RATE DESIGN, I'LL FIELD THEM.

BUT I'D LIKE TO HAVE DREW, UH, HERE IF HE CAN BE HERE.

LET ME JUST SAY A COUPLE THINGS ABOUT THE REVENUE REQUIREMENT.

UM, I MOSTLY AGREE WITH AUSTIN ENERGY, AS, AS EVERYONE KNOWS, I DISAGREED ON THE GENERAL FUND TRANSFER CALCULATION.

UM, AND WE COULD TALK ABOUT THAT.

AND I THOUGHT WITH REVENUE AND BILLING DETERMINANTS, I HAD A PROBLEM WITH THAT BECAUSE I WASN'T SURE WHAT IMPACT WINTER STORM YURI HAD HAD AND WHETHER THEY TAKE THAT INTO ACCOUNT.

BUT LET ME, LET ME POINT OUT WHAT WAS SIGNIFICANT FOR ME AS AN ATTORNEY AND A FORMER JUDGE WHO'S, WHO'S JUST LOOKED AT UTILITIES.

WE REPRESENT ELECTRIC COOPERATIVES IN MY LAW FIRM ALMOST EXCLUSIVELY.

WE DON'T REPRESENT INVESTOR OWNED UTILITIES.

ONE THING, AUSTIN ENERGY SAW IT ORIGINALLY JUST REAL QUICK OF 48 MILLION INCREASE.

AND EVEN WITH THAT, AND, AND NOTE THE NEW PROPOSAL IS 12 MILLION.

AGAIN, I'M INDEPENDENT ON IT.

IF YOU, IF THAT'S, IF THAT'S HOW IT SHAKES OUT, THAT'S HOW IT SHAKES OUT.

BUT MY GREAT CONCERN WAS THAT THEY SOUGHT A 48 MILLION INCREASE IN FITCH, AN INDEPENDENT RATINGS AGENCY DOWNGRADED AUSTIN ENERGY.

WHEN I WAS AT THE WORK SESSION, I THINK I LEARNED, AND I DIDN'T ASK ANY QUESTIONS ABOUT THIS OR LOOK IT UP BECAUSE I'M NOT GONNA DO THAT, BUT I THINK I LEARNED THAT THERE'S BEEN A SECOND DOWNGRADE THAT'S, THAT'S OUR CREDIT SCORE.

AND SO EVERY TIME YOU GET A DOWNGRADE, THE FOLKS WHO PAY THE RATES HAVE TO PAY FOR ADDITIONAL INTEREST ON THINGS THAT THEY WOULDN'T OTHERWISE.

SO I JUST THINK FINANCIAL INTEGRITY, WHEN I HEAR A UTILITY TALK ABOUT FINANCIAL INTEGRITY, I, UM, I TAKE A CLOSE LOOK AT WHAT THEY WANT FOR THEIR REVENUE REQUIREMENT.

THANK YOU, MR. BICKERY.

THANK YOU.

YES.

COUNCIL MEMBER POINT DOCUMENT THAT.

SORRY.

OKAY.

YES, MA'AM.

THIS DOCUMENT THAT WE HAVE ON THE SCREEN, IS THAT MADE AVAILABLE? I DIDN'T SEE IN THE BACKUP.

CAN WE HAVE A COPY OF THAT? YEAH, SURE.

THAT'S WHY I CREATED IT.

I MEAN, I DIDN'T GO THROUGH EVERYTHING ON THERE BECAUSE I THOUGHT FOLKS MIGHT WANT TO SEE A BIT ABOUT, THAT'S ACTUALLY THE LEAST TO ME.

THAT'S THE, I MEAN, YOU CAN LOOK AT THE, THE FINAL REPORT AND SEE ALL THAT IN THE, WE'LL HAVE THAT INCLUDED IN THE BACKUP FOR SURE.

YEAH, YOU CAN HAVE IT.

THANK YOU.

YEAH, I, I, THAT WAS MY INTENT.

THANK YOU SO MUCH.

VICE CHAIR TOVA, DID YOU HAVE YOUR OKAY.

THANK YOU SO MUCH.

IT WAS THE SAME QUESTION.

I WAS JUST LOOKING FOR THAT OUTLINE.

I THINK WE ALL WERE THANKS MR. VICARY.

UM, UH, YOUR ASSOCIATE, UM, COULD I HAVE DREW'S LAST NAME? I MISSED IT.

EDGE.

EDGE, THANK YOU SO MUCH.

SURE.

ALL RIGHT.

UM, OUR NEXT CHAIR, SPEAKER, I APOLOGIZE, BUT BEFORE WE TO, BEFORE WE MOVE ON FROM THAT, I THINK IT MIGHT BE HELPFUL AS WE DO OUR QUESTIONS TO HAVE THAT DOCUMENT.

SO I DON'T KNOW IF CTM IS ABLE TO FORWARD IT SO WE CAN PRINT IT OUT.

THANK YOU.

GREAT.

AND YOU'RE RIGHT, I MEAN, ALL OF THOSE ISSUES ARE DISCUSSED IN THE REPORT, BUT THAT'S A REALLY HANDY CHECKLIST.

THANK YOU.

JOHN KAUFMAN IS OUR INDEPENDENT CONSUMER ADVOCATE.

GOOD MORNING, MR. KAUFMAN.

HE'S HERE TO, UH, PRESENT, UH, HIS REPORT AND, UH, I ASSUME THE UPDATE, MR. KAUFMAN HAS 10 MINUTES.

IF THE STAFF WILL KEEP TRACK OF THE TIME, PLEASE.

GREAT.

10, 10 MINUTES ON THE CLOCK, PLEASE.

MR. KAUFMAN, THE FLOOR IS YOURS.

YES, GOOD MORNING.

UM, MY NAME IS JOHN KAUFMAN.

EXCUSE ME.

I WAS SELECTED BY THE CITY TO SERVE AS THE REPRESENTATIVE OF THE RESIDENTIAL AND SMALL BUSINESS INTERESTS AS A WHOLE.

UH, I APPRECIATE BEING HERE.

UM, I, I LIVE IN ST.

LOUIS, MISSOURI.

I, UH, BUT I DO THIS FOR A LIVING.

I HAVE, UM, PARTICIPATED IN RATE CASES AND RATE REVIEWS IN 27 DIFFERENT STATES.

AND I ALSO HAVE A VERY EXPERIENCED, UH, TECHNICAL TEAM THAT WORKED WITH ME.

UH, CLARENCE JOHNSON, WHO'S HERE TODAY, IS A LONGTIME AUSTIN RESIDENT WHO HAS PROBABLY PARTICIPATED IN MORE ELECTRIC, UH, UTILITY RATE CASES IN TEXAS THAN ANYONE I KNOW.

UH, DAVID EFRON

[00:40:01]

WAS OUR REVENUE REQUIREMENT EXPERT.

UH, NEXT SLIDE, PLEASE.

UM, I THINK THE, UM, THE HEARING EXAMINER KIND OF, UH, WENT THROUGH THESE STEPS HERE, AND I JUST WANNA MAKE SURE WE'RE, WE'RE CLEAR ON THE STEPS THAT, UM, UH, WE HAVE GONE THROUGH OVER THE LAST EIGHT MONTHS.

WE'VE HAD ARGUMENTS ABOUT THE OVERALL SIZE OF THE INCREASE, AND THAT'S, UH, UM, UH, SOMETHING I'M GONNA FOCUS ON, UH, IN MY DISCUSSION.

THE ALLOCATION OF COST TO DIFFERENT CUSTOMER CLASSES, YOU KNOW, SORT OF TAKES THE PIE, THE WHATEVER THE OVERALL INCREASE YOU THINK IS JUSTIFIED, AND THEN SLICES THAT AND DICES THAT BETWEEN THE VARIOUS CUSTOMER CLASSES, AND THEN, UH, SPREADS THOSE OF THE CUSTOMER CLASSES.

THEN FINALLY, WITHIN EACH OF THOSE CUSTOMER CLASSES, ONCE YOU'VE DIVIDED UP THOSE COSTS AND, AND ALLOCATED THOSE, YOU HAVE TO DESIGN THEM.

AND THAT'S THE, UH, YOU KNOW, THE VERY CONTROVERSIAL ISSUE OF, UH, YOU KNOW, HOW MUCH OF THAT COST, SAY FOR RESIDENTIAL CUSTOMERS, IS IN AN UNAVOIDABLE FIXED FEE.

HOW MUCH OF IT IS BASED ON USAGE AND HOW ARE THOSE TIERS DESIGNED? UM, LET ME JUST SAY THAT, UM, WE HAVE WORKED REALLY HARD OVER THE LAST EIGHT MONTHS, DONE A LOT OF DISCOVERY, AN AUDIT INVESTIGATION, AND AS WITH ALL THE PARTIES, WE'VE ALL BEEN LOOKING AT THE SAME COST INFORMATION, THE SAME BOOKS AND RECORDS OF THE UTILITY, AND WE HAVE, UH, COME TO DIFFERENT CONCLUSIONS.

AND SO I THINK IT'S IMPORTANT, AND I THINK THIS IS IMPORTANT THROUGHOUT THIS DISCUSSION, WHEN YOU HEAR ANYONE, INCLUDING ME OR AUSTIN ENERGY SAY, WE NEED TO MOVE TO COST OF SERVICE, OR THESE CUSTOMERS ARE SUBSIDIZING THESE OTHER CUSTOMERS, THAT'S ALL IN THE EYE OF THE BEHOLDER.

THERE ARE PROFESSIONAL JUDGEMENTS ABOUT EXACTLY WHERE THESE COSTS GO, AND THEY'RE ALL REASONABLE TO A CERTAIN EXTENT.

AND MOST, UH, UTILITY DECISION MAKERS, MOST THE PUBLIC UTILITY COMMISSION OF TEXAS, FOR INSTANCE, WILL TAKE THOSE AND, AND GENERALLY CONSIDER THEM IN A RANGE OF REASONABLE RESULTS.

AND, UH, THESE ARE, THEY'RE, THOSE ARE, UH, YOU KNOW, THEN, AND THEN PICK A RESULT WITHIN THAT RANGE.

AND I THINK THAT'S WHERE WE'RE AT AT THIS POINT.

UNLIKE LAST TIME IN 2016, 2017, WHEN, UH, MY TEAM WAS ALSO, UH, PLAYING THE ROLE OF THE INDEPENDENT CONSUMER ADVOCATE, WE WERE ABLE TO REACH AN AGREEMENT WITH AUSTIN ENERGY.

AND, UH, WE, WE, WE BROUGHT EVERYONE TOGETHER AND I, I BELIEVE A UNANIMOUS AGREEMENT THIS TIME, NOT SO MUCH, AND IT WASN'T FOR TRYING, WE HAVE SPENT DAYS TALKING TO AUSTIN ENERGY AND, AND THE REST OF THE PARTIES, AND THERE HAVE BEEN OFFERS AND COUNTER OFFERS GOING BACK.

WE CANNOT DISCUSS THOSE CONFIDENTIAL SETTLEMENT DISCUSSIONS.

BUT, UH, EXCEPT TO SAY THAT THE LAST COUNTER OFFER IS IN AUSTIN ENERGY'S LAP, THE OTHER PARTIES MADE AN OFFER, AND WE HAVE NOT HEARD BACK, UH, FOR A LONG TIME.

AND SO, UH, WE SPENT THE, THE LAST FEW WEEKS AMONGST OURSELVES, THE OTHER, UH, PUBLIC INTEREST MINDED PARTIES AND, AND CONSUMER GROUPS, AND SEEING IF WE COULDN'T, UM, BRIDGE THE DIFFERENCES BETWEEN OURSELVES.

AND SO THIS JOINT CONSUMER ALTERNATIVE IS AN EFFORT TO MOVE THE CASE FORWARD, MAKE IT EASIER FOR YOU TO UNDERSTAND AND TO, UM, TRY TO FIND, UH, THE MIDDLE GROUND.

I MEAN, THERE WERE, THERE WERE DIFFERENCES BETWEEN MY, UH, MY TEAM'S PERSPECTIVE ON THINGS.

AND THE LARGE INDUSTRIAL CUSTOMERS WHO YOU'LL ALSO HEAR FROM TODAY, WE HAVE REACHED AN AGREEMENT WITH THEM ABOUT HOW THE, THE ALLOCATION OF CUSTOMER CLASSES SHALL BE DONE.

AND WE ALSO, UM, REACHED AN AGREEMENT WITH ENVIRONMENTAL CUSTOMER, UH, INTERESTS, THE SIERRA CLUB, PUBLIC CITIZEN, THE SOLAR REPRESENTATIVES HERE.

AND SO, UM, THIS WAS NOT, UH, DONE, UH, BEHIND AUSTIN ENERGY'S BACK BECAUSE WE DIDN'T, WE DIDN'T WANT TO INCLUDE THEM.

WE WISH THAT THEY WOULD COME, UH, AND, UH, CLOSER TO OUR PERSPECTIVE.

BUT IF YOU GO TO THE NEXT SLIDE, I THINK THIS WILL KIND OF EXPLAIN WHY IT'S BEEN SO DIFFICULT, UH, THIS TIME AROUND TO REACH, UH, A CONCLUSION.

SO, UM, IN, IN DECIDING THE OVERALL PIE, THE OVERALL INCREASE, AUSTIN ENERGY IS CURRENTLY AT OVER 35 MILLION.

AND IT'S IMPORTANT TO NOTE THAT, OF THAT 35 MILLION, THEY'RE WANTING TO RECOVER 43 MILLION OF THAT FROM RESIDENTIAL CUSTOMERS.

AND THAT'S BECAUSE THEY WANT TO SHIFT THOSE, THEY WANT TO CHARGE RESIDENTIAL CUSTOMERS TO LOWER THE RATES OF OTHER CUSTOMERS.

SO IT'S A VERY AGGRESSIVE PROPOSAL.

UH, AFTER OUR AUDITED INVESTIGATION AND SOME COMPROMISE ON A FEW ISSUES, THE ICA HAS RECOMMENDED A, A SIX AND A HALF MILLION DOLLAR INCREASE.

SO WE ARE RECOMMENDING A RATE INCREASE, JUST NOT AT ONE AS HIGH AS AUSTIN ENERGY DESIRES.

UH, THEN AFTER, UH, A MUCH DISCUSSION WITH OTHER CONSUMER GROUPS AND TRYING TO FIND SOMETHING THAT WOULD BE, UH, HOPEFULLY MORE APPEALING TO AUSTIN ENERGY, WE HAVE COME UP UP TO 12 MILLION, AND I CAN EXPLAIN MORE OF THAT.

IF YOU GO TO THE NEXT SLIDE, I CAN SHOW YOU THESE NUMBERS, UH, GIVE YOU AN IDEA, AND I, I DON'T HAVE TIME TO GO INTO ALL OF THE DIFFERENT FINDINGS THAT WE MADE AND, AND, AND THE ADJUSTMENTS THAT WE WERE RECOMMENDING, BUT THIS KIND OF, THIS SHOWS THE DIFFERENCE BETWEEN OUR SIX AND A HALF MILLION DOLLAR RECOMMENDATION AND THE 35 MILLION THAT AUSTIN ENERGY WANTS ON AN ANNUAL BASIS.

UH, THE CA THE ISSUES ROUGHLY FALL INTO THREE CATEGORIES.

UH, ONE I WOULD SAY IS THE, UH, SOME

[00:45:01]

OF THE BIG ITEMS ARE WHAT, NOT WHAT WE CONSIDER KNOWN AND MEASURABLE.

SO FROM OUR OPINION, THEY DID NOT REACH THE EVIDENTIARY STANDARD THAT THEY KNOW THAT THESE, THESE COSTS ARE GONNA INCUR THE THREE 11 CALL CENTER.

UH, THEY HAVE NOT FILLED CERTAIN POSITIONS, OR THERE IS NOT, AS, THERE WERE NOT SUFFICIENT ASSURANCES THAT THERE WOULD BE, UH, AS MANY POSITIONS OR AS MUCH AS, UH, COST AS THEY, UH, BELIEVE THEY WOULD HAVE.

UH, I DON'T BELIEVE THAT, UH, THE PUC WOULD, WOULD ALLOW SUCH AN INCREASE.

HEAVY EQUIPMENT LEASES ARE SIMILAR.

IT IS NOT, THIS IS NOT A CONTRACT, BUT JUST A, UH, AN AGREEMENT TO POTENTIALLY LEASE VEHICLE, UM, EQUIPMENT AT CERTAIN, AT A CERTAIN RATE.

UH, THOSE ARE NOT CERTAIN COSTS.

UM, THE, THE TEST YEAR DATA AS THE SECOND CATEGORY, UH, THESE, THESE ARE ISSUES THAT RELATE TO THE TEST YEAR.

WE, WE LOOK, WHEN WE'RE LOOKING AT THE DATA, WE LOOK AT A TEST YEAR, WHICH IS A 12 MONTH PERIOD, UH, A RECENT PERIOD THAT WE KIND OF AUDIT AND LOOK AT TO SEE IF IT'S REPRESENTATIVE.

THE REPRESENTATIVE PERIOD THAT WAS USED IN THIS CASE INCLUDED SOME OF THE, UH, THE HEIGHT OF THE PANDEMIC, IT INCLUDED WINTER STORM, YURI.

AND SO, UH, THERE IS SOME QUESTION ABOUT WHETHER THIS IS THE BEST DATA TO USE AND WHETHER IT'S REPRESENTATIVE OF WHAT AUSTIN ENERGY IS GONNA HAVE IN, IN THE COMING YEARS.

UH, IN, IN THESE CASES, WE RECOMMENDED ADJUSTMENTS OR, OR RECOMMEND A NORMALIZATION OR AVERAGES OF THE COST OVER TIME.

AND, UH, THE LAST CATEGORY THERE IS INTERGENERATIONAL ON EQUITY, WHICH GENERALLY MEANS THAT THE, THAT WHEN YOU'RE DESIGNING RATES, YOU WANT THE CHARGES, THE COST TO KIND OF FOLLOW, UH, THE BENEFIT, UH, OVER TIME.

YOU DON'T WANT TO CHARGE, UM, YOU KNOW, ONE ALL THE COSTS IN ONE YEAR IF THE BENEFIT OR, OR THE, UM, ACTIVITY IS GOING TO BE SPREAD OUT OVER TIME.

UM, I'M JUST GONNA MOVE ON IN INTEREST OF TIME.

YOU CAN ASK ME QUESTIONS ABOUT THESE LATER.

WE COULD GET INTO MORE DETAIL.

UM, THE NEXT SLIDE, I THINK JUST DISCUSSES THE, UH, THE DISTRIBUTION OF COST, UH, TO THE INDUSTRIAL COMMERCIAL SMALL BUSINESS RESIDENTIAL RATES.

UM, WE HAD A GREAT DEAL OF DISAGREEMENT AND, UH, AFTER MUCH, UH, WORK, WE HAVE REACHED AN AGREEMENT WITH THOSE BIG CUSTOMERS.

WE THINK WE HAVE A FAIR, UH, COMPROMISE AS TO HOW THOSE RATES COULD BE DIVIDED AMONGST THE DIFFERENT CUSTOMERS.

IT INVOLVES A RATE DECREASE FOR THE BIG CUSTOMERS AND A RATE INCREASE TO THE RESIDENTIAL CUSTOMERS, JUST NOT AS SEVERE AS WHAT AUSTIN ENERGY OR, OR SOME OF THE OTHER INDUSTRIALS HAD REQUESTED.

AND THAT YOU COULD SEE THAT IN, UM, THE ATTACHMENT ONE, WHICH IS AT THE BACK OF THIS JOINT CONSUMER ALTERNATIVE.

NEXT SLIDE, PLEASE.

UH, SO I, WHATEVER TIME I HAVE LEFT, I WANT TO TALK ABOUT THIS BECAUSE THIS, IN, IN OUR OPINION, IS A VERY DRASTIC PROPOSAL, UH, ON THE FIXED CUSTOMER CHARGE, INCREASING IT FROM $10 TO $25, UH, FROM THE, AND, UM, FLATTENING THE TIERS.

AUSTIN ENERGY'S INTENT STATED INTENT IS TO FLATTEN THE INCLINING USAGE.

AUSTIN ENERGY WAS VERY PROGRESSIVE IN ONE OF THE FIRST UTILITIES TO KIND OF GO TO AN INCLINING BLOCK, WHICH ENCOURAGES CONSERVATION AND ENERGY EFFICIENCY.

AND I WOULD DISAGREE WITH THE STATEMENT THAT IT HASN'T WORKED EXACTLY, OR I, I HEARD THAT MAYBE IT WORKS TOO WELL OR IT DOESN'T WORK WELL ENOUGH.

THERE ISN'T EVIDENCE THAT AT EACH OF THE FIVE TIER BREAKING POINTS, THERE ISN'T EVIDENCE THAT CONSUMERS REACT TO EACH ONE OF THOSE BREAKING POINTS.

BUT I THINK THE EVIDENCE IS CLEAR THAT CUSTOMERS DO REACT TO THE OVERALL SLOPE OF THE INCREASE.

AND WE ARE, WE, WE THINK THAT THE PROPOSAL TO FLATTEN THAT IS TOO RADICAL.

UH, WE COULD AGREE TO SOME INCREASE IN THE CHARGE, WE WOULD PREFER TO KEEP IT AT $10, AND I'LL GET INTO WHY THAT IS.

BUT, UM, GENERALLY WOULD NOT LIKE TO SEE THAT FIXED CHARGE, WHICH IS AN UNAVOIDABLE CHARGE, UH, TO EVERYONE BEFORE YOU EVEN SWITCH ON THE LIGHT.

WE PREFER THAT NOT TO GO UP ANY MORE THAN THE OVERALL RATE INCREASE ITSELF.

SYSTEM INCREASE, UM, UH, CLARENCE JOHNSON, UH, WORKED TIRELESSLY TO DESIGN A RATE INCREASE THAT WASN'T AS IMPACTFUL.

WE, WE WOULD HAVE A RATE DESIGN THAT IS AT A FOUR TIERS, SO WE'RE, WE'RE SOMEWHAT IN BETWEEN THE CURRENT AND AUSTIN ENERGY'S PROPOSAL.

THE JOINT CONSUMER ALTERNATIVE WOULD ADOPT OUR ICA RATE DESIGN.

NEXT SLIDE, PLEASE.

UM, I WOULD NOTE THAT WE DID DO A COST ANALYSIS OF THE CUSTOMER CHARGE AND, UH, OUR APPROACH IS THE TRADITIONAL BASIC CUSTOMER CHART, BASIC CUSTOMER METHOD, WHICH IS YOU LOOK AT METERS, CUSTOMER SERVICE BILLING, THE LINE TO THE HOUSE, ONLY THE COSTS THAT VARY BY CUSTOMER.

AND WHEN WE DID THAT COST ANALYSIS, WE BELIEVE THAT THE COST THAT SHOULD BE IN THAT FIXED CUSTOMER CHARGE IS MORE LIKE $6.

WE ALSO, UM, IF I COULD JUST WRAP UP HERE, THE, UM, UH, THE AVERAGE TEXAS CUSTOMER CHARGE IS $7 AND 44 CENTS.

SAN ANTONIO'S FIXED CHARGE IS AT, UM, $9 AND 10 CENTS.

LUBBOCK.

UH,

[00:50:01]

THESE ARE THE TWO BEST COMPARABLES.

OTHER LARGE MUNICIPALS, LUBBOCK HAS AN $8 CUSTOMER CHARGE.

SO IF I COULD JUST ONE MORE THING, JUST GO TO THE LAST SLIDE AND LOOK AT THAT.

UM, UH, THE, THE LAST ONE, NEXT ONE, THAT ON THE RIGHT HAND SIDE SHOWS THE RATE IMPACTS AT DIFFERENT USAGE LEVELS.

THEY'RE AT, AT THE 875 IS ABOUT THE AVERAGE USAGE, BUT YOU ARE LOOKING AT ABOUT HALF OF THE CUSTOMERS RECEIVING SOMEWHERE BETWEEN A 25%, 45% RATE INCREASE.

THAT IS BY DEFINITION RATE SHOCK.

IT IS NOT PUBLICLY ACCEPTABLE, IT IS NOT GRADUALISM.

AND, UM, THE ON THE LEFT HAND SIDE IS WHAT OUR ORIGINAL ICA RECOMMENDATION IS.

IF YOU LOOK AT THE NEXT TO LAST PAGE OF THIS JOINT CONSUMER ALTERNATIVE, YOU'LL SEE, UH, WHAT, WHAT THE, WHAT WHAT WE HAVE NOW SUPPORTING, WHICH IS SOMETHING THAT WOULD RANGE BETWEEN FOUR AND, UH, 12% AND MUCH MORE MODERATE DOES NOT SOCKET TO ANY PARTICULAR SUBGROUP OF CUSTOMERS.

MR. COFFMAN, HAVE YOU PROVIDED THIS DOCUMENT TO OUR CLERK SO THAT IT'S IN THE BACKUP? BECAUSE I KNOW THAT MY COLLEAGUES HERE ON THE DIAS WOULD LIKE TO GET A COPY OF IT AND WE'D LIKE TO MAKE IT PUBLIC AS WELL.

I BELIEVE SO WE'VE TRIED TO, WE'VE EMAILED IT TO, TO THE CITY COUNCIL.

WE'VE ALSO, IT, IT'S POSTED ON THE INTERCHANGE, THE CITY COUNCIL WEBSITE, WHICH, WHICH HAS 256 DOCUMENTS.

AND SO WHAT WE'LL DO IS ALL OF THE PRESENTATIONS AND THE DOCUMENTS THAT ARE COMING IN TODAY, WHICH WE REALLY APPRECIATE, WE'LL MAKE SURE THAT EVERYTHING IS ALSO POSTED ON THE MESSAGE BOARD, WHICH IS A EASY SPOT FOR PEOPLE TO LOOK AT THE AUSTIN ENERGY SITE AND, UH, CERTAINLY THE CITY CLERK'S SITE AND IN BACK.

THANK YOU.

OKAY, MR. KAUFMAN.

THANK YOU.

RIGHT.

INVITE YOUR QUESTIONS LATER.

THANK YOU.

WE WILL MOVE NOW TO, UM, HEARING FROM EACH OF THE 14 INVITED PARTICIPANTS.

AND FIRST UP WE'LL BE HEARING FROM REPRESENTATIVES OF THE SIERRA CLUB AND PUBLIC CITIZEN.

IF YOU COULD COME AND GIVE YOUR NAME AND, UM, HEAR STAFF IF YOU COULD PUT THE TIMER ON.

THESE WILL BE FIVE MINUTE SPEAKING, UH, INCREMENTS.

AND SIR, IF YOU COULD INTRODUCE PRESENTATION, IF YOU COULD INTRODUCE YOURSELF AND I CAN ACKNOWLEDGE YOU.

UM, YES.

GOOD MORNING.

I'M JAMES BRAZIL.

I'M APPEARING ON BEHALF OF THE SIERRA CLUB PUBLIC CITIZEN AND SOLO UNITED NEIGHBORS THIS MORNING.

UH, YOU SHOULD HAVE A COPY OF MY SLIDE SO THAT YOU CAN REFER TO THEM LATER ON.

WELCOME, MR. BRAZEL.

UM, FIRST SLIDE.

UH, FIRST SIERRA CLUB PUBLIC CITIZEN SON SUPPORT THE JOINT CONSUMER ALTERNATIVE PROPOSAL FILED YESTERDAY IN THIS PROCEEDING.

THE PROPOSAL IS A FAIR AND REASONABLE COMPROMISE FOR AUSTIN ENERGY'S 2022 BASE RATE REVIEW FOR THREE MAIN REASONS.

FIRST, IT PROVIDES AUSTIN ENERGY WITH A GENEROUS INCREASE IN REVENUE, WHICH IT, IT NEEDS SECURING ITS FINANCIAL STABILITY WHILE PROTECTING CONSUMERS FROM RATE SHOCK AND CONTINUING TO ADVANCE ENERGY EFFICIENCY SIGNALS AND CONSERVATION GOALS THROUGH STRATEGIC RATE DESIGN.

SECONDLY, THE COMPROMISE ADOPTS IN THE FACE OF SERIOUS CONCERNS.

AUSTIN ENERGY'S VALUE OF SOLAR, UH, CREDIT, BUT ENSURES FAIR ALLOCATION OF COSTS AMONG RATE CLASSES, STABILITY FOR CUSTOMER SIDE OF GENERATION, AND A TRANSPARENT PROCESS FOR PERIODICALLY REEVALUATING THE VOS CREDIT IN THE FUTURE.

AND THIRD, THE COMPROMISE ESTABLISHES A TRANSPARENT STAKEHOLDER PROCESS FOR A COMPREHENSIVE UPDATE OF AUSTIN ENERGY'S RESOURCE PLAN TO REVIEW THE ECONOMIES OF THE FAYETTE COAL PLANT AND THE TIMELINE FOR RETIREMENT.

ISSUE NUMBER ONE IN THAT THREE PART, UH, DISCUSSION IS THE RESIDENTIAL RATE DESIGN, WHICH YOU'VE HEARD ABOUT ALREADY.

THE PROPOSED RESIDENTIAL RATE DESIGN IS BAD POLICY.

IT INCREASES FIXED CHARGES BY 150% AND ELIMINATES THE CITY'S FIVE CURRENT PROGRESSIVE TIERS.

THIS INCREASES ENERGY COSTS FOR LOW ENERGY USERS, CAUSES RATE SHOCK, UNDERMINES THE CITY'S ENERGY CONSERVATION AND SOLAR GOALS, ELIMINATES PRICE SIGNALS FOR CONSERVATION AND PREVENTS CONSUMERS FROM REDUCING ENERGY BILLS THROUGH CONSERVATION.

THE JOINT PROPOSAL ADDRESSES THESE, IT PROVIDES AE WITH A 12 MILLION REVENUE INCREASE ADDRESSING THE FINANCIAL INTEGRITY PROBLEM.

IT ALSO INCREASES THE CUSTOMER CHARGE TO $12, INCREASING THE FIXED COST, BUT ONLY BY $2, NOT BY $15.

AND IT CHANGES THE CURRENT FIVE TIER DESIGN TO A FOUR TIER DESIGN, THE ONE PROPOSED BY THE, UH, INDEPENDENT CONSUMER ADVOCATE, SIMPLIFYING THE DESIGN WHILE PRESERVING PRICE SIGNALS FOR ENERGY EFFICIENCY AND SOLAR.

NEXT SLIDE.

WITH REGARD TO THE VALUE OF SOLAR TARIFF, THIS IS ONE OF THE CITIES OF AUSTIN'S JEWELS.

THE BUT AUSTIN ENERGY PROPOSES TO CHANGE ITS HIGHLY SUCCESSFUL VALUE OF SOLAR TARIFF FROM A FORWARD LOOKING CREDIT THAT CAPTURES THE FULL COST TO CONSUMERS OF IN, OF, IN, OF, UH, UH,

[00:55:01]

OF INSTALLING SUCH, UH, FACILITIES TO A BACKWARD LOOKING, ICOT BASED AVOIDED ENERGY MARKET COST ANALYSIS.

THIS ABANDONS, THE SUCCESS THIS TARIFF HAS, HAS, UH, UH, HAD IN THE CURRENT OR IN THE FOR THE ROOFTOP SOLAR, THE PROPOSED STRUCTURE TREATS HOMEOWNERS AND SMALL BUSINESSES LIKE WHOLESALE GENERATORS AND IGNORES THE UNIQUE, UH, PROBLEMS OF THEIR, UH, DETERMINATIONS OF WHETHER TO INVEST.

IT ALSO EXCLUDES SIGNIFICANT COSTS RECOGNIZED IN THE CURRENT CURRENT METHODOLOGY CONTRARY TO THE CITY'S CITY'S SOLAR GOALS.

WE OPPOSE IT.

THE JOINT PROPOSAL, HOWEVER, ADOPTS A COMPROMISE.

IT ADOPTS A'S VALUE OF SOLAR METHODOLOGY PROMOTING STABILITY, BUT CONTINUES TO RECOVER SOCIETAL BENEFITS FROM ALL CUSTOMERS THAT USE THE SYSTEM.

IT REQUIRES THE CREDIT TO BE SET ON A FIVE YEAR ROLLING AVERAGE EVERY THREE YEARS, AND IT REQUIRES AUSTIN ENERGY TO ENGAGE IN A TRANSPARENT, COLLABORATIVE STAKEHOLDER PROCESS TO PERIODICALLY REVIEW THE METHODOLOGY AND THE AMOUNT OF THE VALUE OF SOLAR CREDIT.

THIS IS A COMPROMISE WE CAN LIVE WITH.

NEXT SLIDE.

THIS IS OUR FINAL ISSUE.

ISSUE NUMBER THREE IS THE FAYETTE COAL PLANT ISSUE.

AUSTIN ENERGY IS SPENDING MILLION, MANY MILLIONS IN CAPITAL AND O AND M AT THE FAYETTE PLANT.

THE AUSTIN ENERGY 2030 RESOURCE PLAN ESTABLISHED A POLICY THAT THE CITY WOULD POLICY THAT THE CITY WOULD EXIT THE PLANT BY THE YEAR END OF 2022.

EVEN SO, AUSTIN ENERGY INCLUDED NO EVIDENCE IN ITS RATE FILING ON THE PROP PRO PRUDENCE OF ITS CONTINUED INVESTMENT IN THE PLANT PAST YEAR END 2022 THAT WAS ANTITHETICAL TO THE CITY'S GOALS TO EXIT BY THE END OF 2022 AND ANTITHETICAL TO THE CITY'S CARBON GOALS IN THE 2030 PLAN.

IT ALSO IGNORES THE RECENT PA PASSAGE OF THE INFLATION REDUCTION ACT, WHICH OFFERS TAX CREDITS AND DIRECT PAYMENTS THAT COULD LOWER THE COST OF RENEWABLES AND BATTERY ALTERNATIVES BY AS MUCH AS 50%, THEREBY PROVIDING A WAY TO HELP AUSTIN TO EXIT THE PLANT.

THE JOINT PROPOSAL ADDRESSES THIS.

IT ADOPTS A COMPROMISE THAT ALLOWS AUSTIN ENERGY TO RECOVER ITS CURRENT EXPENSES AT FAYETTE, BUT REQUIRES AUSTIN ENERGY TO INITIATE AND CONCLUDE IN 20 23, 20 24, UH, WITH THE E U C AND STAKEHOLDER INPUT, A TRANSPARENT AND COMPREHENSIVE UPDATE OF AUSTIN ENERGY'S RESOURCE PLAN TO REEVALUATE THE ECONOMICS OF FAYETTE AND TO, UH, MAKE CHANGES TO THE, UH, TO, TO, UH, THE DATE FOR RETIREMENT.

UH, IN CONCLUSION, UH, FOR THE REASONS WE'VE DISCUSSED, WE OPPOSE VARIOUS PORTIONS OF THE AUSTIN ENERGY PROPOSED RATE BASE INCREASE.

WE SUPPORT THE CONSUMER ALTERNATIVE PROPOSAL AS A REASONABLE COMPROMISE.

BE HAPPY TO ANSWER ANY QUESTIONS NOW, OR WHEN YOU COME BACK TO QUESTIONS LATER.

WE'LL BE TAKING QUESTIONS LATER.

THANK YOU, MR. THANK YOU, BRAZIL, FOR YOUR PERSONAL CARE.

JUST MAKE ONE COMMENT BEFORE WE GO TO THE NEXT SPEAKER.

YES, MAYOR.

UM, I JUST WANTED TO LET MY COLLEAGUE KNOW THAT, YOU KNOW, REGARDLESS OF WHAT WE DO ON THE RATE PROPOSAL, THAT I HAVE A IFFC THAT I'M WORKING ON TO IN INITIATE A COMPREHENSIVE UPDATE OF THE NEXT GEN PLAN AND THE SECOND HALF OF THE YEAR, UM, NEXT YEAR.

SO IF YOU'RE INTERESTED, I THINK WE'VE REACHED OUT TO A COUPLE OFFICES, BUT IF YOU'RE INTERESTED IN JOINING US IN THAT, PLEASE LET US KNOW.

THAT'S GREAT.

THANK YOU.

MAY I PRETEND OUR NEXT, UM, SPEAKER FOR A PRESENTATION IS THE SOLAR AND STORAGE COALITION, AND WE HAVE MS. ASHLEY FISHER HERE TO, TO TALK WITH US TODAY.

WELCOME, MS. FISHER.