Nov 09, 2022 Special Austin Energy Utility Oversight Committee

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.

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.

TAKE, UM, EACH ROUND MAY TAKE AN HOUR.

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]

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

I UNDERSTAND WE HAVE TWO SPEAKERS SIGNED UP FOR TODAY.

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]

ONE REMOTE AND ONE IN PERSON.

LET'S TAKE THE REMOTE SPEAKER FIRST.

UH, BEKI.

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

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

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]

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.

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.]

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

OKAY, VERY GOOD.

VIOLATION OF THE CITY'S FINANCIAL POLICIES.

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]

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

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 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.

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.

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

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

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.

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

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]

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.

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.

PERFECTLY FUN TO DO IT LIKE THAT.

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]

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.

COUNCIL MEMBER POINT DOCUMENT THAT.

SORRY.

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.

YEAH, I, I, THAT WAS MY INTENT.

VICE CHAIR TOVA, DID YOU HAVE YOUR OKAY.

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.

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.

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

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.

WAS OUR REVENUE REQUIREMENT EXPERT.

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]

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.

INVITE YOUR QUESTIONS LATER.

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.

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

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]

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.

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.

INCLUDING STORAGE IN THE ONGOING VALUE OF SOLAR DISCUSSIONS OR CONCURRENTLY WITH THOSE DISCUSSIONS.

GOOD MORNING, MAYOR.

MAYOR PROTE AND COUNCIL MEMBERS.

I'M ASHLEY FISHER AND I'M HERE REPRESENTING THE SOLAR AND STORAGE COALITION.

THE SOLAR AND STORAGE COALITION IS MADE UP OF SOLAR STORAGE, INSTALLERS AND A REAL ESTATE DEVELOPER INTERESTED IN MICROGRIDS.

THIS GROUP IS AN INTERVENER IN THE RIGHT CASE.

SSC MEMBER COMPANIES OPERATE, MAINTAIN, AND INSTALL BATTERIES THROUGHOUT THE UNITED STATES AND THE WORLD, INCLUDING WITHIN THE AUSTIN ENERGY AREA.

THEY SHARE THE GOAL TO EXPAND THE ABILITY TO USE STORAGE IN ADDITION TO SOLAR, TO OFFER FLEXIBILITY TO ITS CUSTOMERS.

THE SSC INTERVENED FOR THE SPECIFIC ISSUE OF POTENTIAL NEW RATES RELATED TO STORAGE.

THE SOLAR STORAGE COALITION HAS SIGNED ON TO SUPPORT THE JOINT CONSUMER ALTERNATIVE PROPOSAL THAT YOU HAVE TODAY, BUT ALSO THROUGHOUT THE RATE CASE PROCESS.

AUSTIN ENERGY HAS HELD THE POSITION THAT OUR ISSUES THAT WERE RELATED TO STORAGE ARE OUTSIDE THE SCOPE OF THE RIGHT CASE.

SO WE ARE HAPPY TO SAY THAT WE'RE IN CONVERSATIONS WITH COUNCIL MEMBER POOL'S OFFICE ABOUT ADVANCING THESE ISSUES VIA A SEPARATE COUNCIL RESOLUTION.

WE LOOK FORWARD TO CONTINUE COLLABORATION WITH HER OFFICE AND ALL OF YOU ABOUT POSSIBLE FUTURE COUNCIL ACTION REGARDING SOLAR AND STORAGE.

BUT JUST SOME QUICK BACKGROUND WHILE WE'RE HERE TODAY.

SO THE COMPANIES WITHIN THE SOLAR AND STORAGE COALITION SHARE THE GOAL TO EXPAND THE ABILITY TO USE STORAGE IN ADDITION TO SOLAR, TO OFFER FLEXIBILITY FOR CUSTOMERS.

THIS BENEFITS AUSTIN ENERGY, AUSTIN RESIDENTS, AND THE FIGHT AGAINST CLIMATE CHANGE.

WHILE OUR PROPOSAL IN THE RIGHT CASE DID NOT PROPOSE EXACT RATES FOR THIS, SSC HAD ASKED AUSTIN ENERGY TO COMMIT TO

[01:00:01]

WE KNOW THAT AUSTIN RESIDENTS ARE INTERESTED IN RESILIENCE, ESPECIALLY AFTER WINTER STORM U.

WE KNOW THAT AUSTIN RESIDENTS ARE EAGER TO ADOPT, ADOPT TECHNOLOGY THAT HAS ENVIRONMENTAL AND RESILIENCE BENEFITS, AND THAT MANY AUSTIN ENERGY CUSTOMERS ARE ALREADY INSTALLING STORAGE SYSTEMS. WE KNOW THAT BATTERY STORAGE CAN BENEFIT BOTH AUSTIN ENERGY AND CUSTOMER AUSTIN ENERGY CUSTOMERS AND AUSTIN ENERGY AS A WHOLE AND HOW THEY OPERATE WITHIN NACO GRID.

AND THE PUBLIC UTILITY COMMISSION IS ACTIVELY WORKING ON THIS, AND WE DON'T WANNA BE LEFT BEHIND.

THEREFORE, IT WOULD MAKE SENSE FOR AUSTIN ENERGY TO PURSUE WAYS TO BETTER UTILIZE STORAGE WITHIN THEIR SYSTEM.

THERE ARE WAYS TO DESIGN PROGRAMS THAT BENEFIT BOTH THE INDIVIDUAL CUSTOMERS THAT HAVE STORAGE AS WELL AS THE UTILITY AS A WHOLE.

SSC MADE SEVERAL REQUESTS DURING THE RIGHT CASE PROCEEDINGS, AND THESE INCLUDED EXPANDING THE VALUE OF SOLAR TARIFF TO INCLUDE SOLAR PLUS STORAGE AND EXPANDING THE USE OF THE VALUE OF SOLAR, SOLAR TARIFF FOR MICROGRIDS AND MULTIFAMILY.

THE RATES AND PROGRAMS COULD INCLUDE THINGS LIKE REBATES FOR STORAGE INSTALLATIONS AND PROGRAMS THAT COMPENSATE FOR STORAGE.

DISCHARGED AT THE REQUEST OF AUSTIN ENERGY DURING PEAK TIMES.

AUSTIN ENERGY CLAIMED OUR REQUEST FOR OUTSIDE THE SCOPE AND WE, WE MADE THE CASE, THESE WERE RELEVANT, BUT BECAUSE AUSTIN ENERGY CONTINUES TO DISAGREE, WE PLAN TO, UH, PURSUE THESE THROUGH A DIFFERENT PATH.

SO AS MENTIONED, WE LOOK FORWARD TO WORKING WITH COUNCIL ON A SEPARATE RESOLUTION REGARDING THESE ISSUES IN THE FUTURE.

THANK YOU SO MUCH MS. FISHER.

IS ANYONE HERE FOR SOLAR UNITED NEIGHBORS? I DID NOT HAVE A NAME, SO I JUST WANTED TO CHECK.

UM, TWO, WR IS THE NEXT GROUP, AND IF YOU COULD INTRODUCE YOURSELF.

I WILL.

GOOD MORNING, MS. COOPER.

UH, YOUR HONOR, AND WELL, YOUR HONOR'S NOT HERE RIGHT NOW, BUT, AND OTHER MEMBERS OF THE COUNCIL.

MY NAME IS TTA COOPER AND I'M HERE BE ON BEHALF OF TWO WOMEN RATE PAYERS, NEITHER OF ONE WHICH COMES ANYWHERE NEAR QUALIFYING FOR CAP, BUT WE DO SHARE THE CONCERN AND SPIRIT THAT'S EXPRESSED IN A LINE FROM A CARRY NEWCOMER SONG THAT SAYS THERE'S ROOM AT THE TABLE FOR EVERYONE.

WE'RE REALLY HAPPY TO SEE YOU AGAIN.

PLEASE PROCEED.

IT'S YOU TO YOU ALL AFTER ALL WE'VE SUFFERED THROUGH.

ABSOLUTELY.

YOU WILL HAVE FIVE MINUTES IF OUR STAFF COULD RUN THE TIMER.

THANK YOU MA'AM.

YES MA'AM.

WE'RE HERE TODAY TO SUPPORT THE, WHAT I CALL IS A PARTIAL STIPULATION, WHICH IS WHAT IT'S CALLED AT THE PUC.

IT'S A REMARKABLE STIPULATION GIVEN THE THE PARTIES INVOLVED BECAUSE IT'S A BROAD BAND.

IT'S LIKE THE POLAR OPPOSITES OF, OF THE EARTH IN TERMS OF OUR, OUR INTEREST.

AND WHILE IT'S NOT WHAT WE HAD HOPED WE WOULD GET IN THE RIGHT CASE, IT IS A FAIR SETTLEMENT GIVEN THE DIVERGENCE OF THESE ISSUES.

AND WE HAVE PREPARED FOR YOU ALL TODAY.

AND I THINK IT'S BEEN HANDED OUT A BRIEF RESPONSE TO AUSTIN ENERGY'S ON RATE DESIGN, WHICH IS OUR, OUR MOST IMPORTANT ISSUE.

UH, AND WE HOPE THAT THIS, UH, RESPONSE WILL EXPLAIN WHY THE CURRENT RATE DESIGN IS NOT THE BOGEYMAN THAT AUSTIN ENERGY MAKES IT OUT TO BE.

AND I'D LIKE TO FIRST START WITH THE MOST IMPORTANT PART AND THE ONE THAT AUSTIN ENERGY JUST THIS MORNING STARTED WITH, AND THAT'S REVENUE INSUFFICIENCY.

AND IF YOU TURN TO PAGE ONE, I MEAN ATTACHMENT ONE, WHICH IS ON, EXCUSE ME, PAGE SEVEN, YOU'LL SEE THE GRAPH.

AND IT'S NOT A GRAPH THAT YOU'RE UNFAMILIAR WITH.

IT'S ONE THAT YOU HAVE SEEN OVER AND OVER AGAIN IN PRESENTATIONS BEFORE Y'ALL IN FINANCIAL MEETINGS.

AND THIS IS ONE THAT WAS INCLUDED IN THE RATE CASE.

AND WHAT THIS IS SUPPOSED TO SHOW IS THAT YOU'RE GONNA HAVE ECONOMIC ARMAGEDDON BECAUSE OF THE RATE DESIGN.

BUT WHAT IT REALLY SHOWS IS THAT FROM 2014 TO 2020 AND 2021, Y'ALL HAVE HAD SURPLUSES UNDER THE CURRENT RATE DESIGN.

AND THIS IS A SURPLUS, WHICH IN, IN THE PRIVATE INVESTOR ON UTILITY WOULD BE CONSIDERED EXCESS PROFITS.

UH, BUT WHEN IT BECOMES COSTLY IS IN 2020 AND 2021.

BUT WHAT OCCURRED, WE ALL KNOW WHAT OCCURRED IN 2020 AND 2021, THAT TRULY WAS ECONOMIC ARMAGEDDON, BUT IT WAS NOT CAUSED BY RATE DESIGN.

IT WAS CAUSED BY THE PANDEMIC.

IT WAS CAUSED BY WINTER STORM YU.

IT WAS ALSO CAUSED BY AUSTIN ENERGY MAKING A DECISION.

MAYBE THEY THOUGHT THIS WOULD BE A GOOD TIME FINANCIALLY TO DO IT TORAN TO PURCHASE AND BECOME THE OWNER OF THE NACODOCHES FACILITY, WHICH HERE BEFORE WAS WE, UH, BOUGHT, UH, POWER FROM WITH THE PURCHASE POWER CONTRACT.

SO WE BECAME THE OWNER AND NOT THE RECIPIENT OF A CONTRACT.

BUT THOSE COSTS ARE PSA COSTS.

THEY ARE NOW CONSIDERED A PSA COST IN 2022.

BUT IN 2020 AND 2021, THEY WERE PUT IN BASE RATES AND THAT WAS A 49 MILLION DEBT SERVICE COVERAGE.

AND THAT WAS AN ADDITIONAL 16 MILLION

[01:05:01]

IN OPERATING EXPENSES.

THAT IS A SIGNIFICANT W OF COST.

SO WHAT YOU CAN SEE, IF YOU KIND OF EXCLUDE ALL OF THESE COSTS THAT WERE CAUSED BY THE PANDEMIC AND BY THE WINTER STORM, EXCUSE ME, I MEAN REDUCED REVENUES AS WELL AS THE COST THAT THIS LINE, THIS CU THIS GAP THAT THEY KEEP POINTING OUT TO YOU GETS SMALLER AND SMALLER AND MAY EVEN TURN OUT TO BE A REVENUE SURPLUS IN AND OF ITSELF.

NOW, I'M NOT SAYING THERE MAY NEED TO BE A RATE INCREASE BECAUSE OF THE INFLATION THAT WE'RE CURRENTLY EXPERIENCING, BUT IT IS NOT CAUSED BY THE RATE DESIGN.

IT IS CAUSED BY THESE CATASTROPHIC EVENTS.

AND TO USE THAT, USE THESE CATASTROPHIC EVENTS AS AN EXCUSE TO FUNDAMENTALLY DRASTICALLY CHANGE RATE DESIGN AND REALLY HARM LOW INCOME AND MODERATE INCOME FAMILIES IS DISINGENUOUS AT BEST.

AND, UH, I CAN GO ON, I MEAN, I LAY OUT ALL THE REASONS, THE CERTAIN THINGS THAT CAUSE THE DECREASED REVENUES WE HAD AND THE INCREASED COST.

SO I WANNA TALK A LITTLE BIT IF I HAVE TIME, THE ARGUMENT THAT BIG USERS SUBSIDIZE SMALL USERS.

UH, AND THAT'S NOT NECESSARILY TRUE BECAUSE THE EVIDENCE THAT HAS BEEN PRESENTED BEFORE YOU ALL IS NOT FACTUAL.

IT'S HYPOTHETICALS AND HYPOTHETICALS ALWAYS REMIND ME OF THE OLD ECONOMIST JOKE.

TWO GUYS MAROONED ON THE ISLAND, CANNA BEAMS ROLLS UP.

ONE GUY SAYS, OH MY GOD, I CAN'T OPEN IT.

BUT THE ECONOMIST SAYS, DON'T WORRY.

WE CAN ASSUME A CAN OPENER.

SO HYPOTHETICALS DON'T NECESSARILY REFLECT THE REALITY OF THE CASE AND WHAT ACTUALLY THERE IS EVIDENCE.

AND ATTACHMENT TWO WILL SHOW YOU THAT ENERGY EFFICIENCY DECREASES DEMAND, WHICH IS ACCORDING TO AUSTIN ENERGY, 76% OF THE JOINT OPERATING COST OF AUSTIN ENERGY.

SO WHEN YOU DECREASE DEMAND, YOU DECREASE COST, YOU DECREASE COSTS THAT GET ALLOCATED TO RESIDENTIAL CUSTOMERS.

AND ENERGY EFFICIENCY WAS USED BY AUSTIN ENERGY IN THE RATE CASE TO SHOW THAT WE ARE HAVING SMALLER AND SMALLER AVERAGE USAGE PATTERNS.

BUT IT'S NOT BAD TO HAVE A SMALLER USAGE PATTERN IF IT'S COUPLED WITH A EVEN LARGER SMALLER DEMAND COST.

SO THANK YOU SO MUCH FOR SEEING US.

UH, I WOULD JUST RECOMMEND THAT Y'ALL TALK TO, AND I WANNA GIVE A SHOUT OUT TO MR. KAUFMAN AND MR. HALLMARK WHO BOTH WORKED TIRELESSLY TO HELP MAKE THIS SETTLEMENT AND THEY ARE PROBABLY THE BEST FOLKS FOR Y'ALL TO CALL ON ON THAT.

THANK YOU SO MUCH MS. COOPER, IT REALLY WAS A PLEASURE TO SEE YOU AGAIN.

THANKS FOR BEING HERE.

UM, THE NEXT SPEAKER FOR FIVE MINUTES, HOMEOWNERS UNITED FOR RATE FAIRNESS.

GOOD MORNING SIR.

IF YOU COULD GIVE US YOUR NAME.

MY NAME IS LAMAR JOHNSON.

I'M ONE OF THREE VOLUNTEER BOARD MEMBERS FOR THE HERF ORGANIZATION.

WELCOME MR. JOHNSON.

THANK YOU FOR BEING HERE.

AND YOU'LL HAVE FIVE MINUTES ON THE TIME.

KEF IS A NON-PROFIT ORGANIZATION OF RESIDENTIAL RATE PAYERS LIVING OUTSIDE THE CITY OF AUSTIN THAT WAS ORIGINALLY FORMED TO APPEAL THE CITY OF AUSTIN'S RATE ORDINANCE IN 2012.

KEF WAS REFORM IN 2022 TO PARTICIPATE IN A RATE MAKING PROCEEDINGS WITH ITS PRINCIPLE PURPOSE, NOW BEING TO PROTECT THE FUNDAMENTALS OF THE SETTLEMENT OF THE 20 20 20 12 RATE.

APPEAL TO THE PUC PERFS POSITION IS BASED UPON THE SETTLEMENT OF PCU DOCKET 46 27 IN 2013, IN WHICH THE PUBLIC UTILITY COMMISSION APPROVED A SETTLEMENT IN WHICH THE SIGNATORIES AGREED THAT RELATIVE TO THE RATES WITHIN THE CITY, THE REVENUE REQUIREMENT TO BE CHARGED A'S CUSTOMERS OUTSIDE THE CITY THROUGH BASE RATES AND THE COMMUNITY BENEFIT CHARGE SHOULD BE REDUCED.

AND THE PUBLIC POLICY THAT OUT OF CITY CUSTOMERS RECEIVE NO BENEFIT FROM THE GENERAL FUND TRANSFER AND IT SHOULD THEREFORE BE REMOVED FROM THEIR COST OF SERVICE.

THE TERMS OF THE ORIGINAL AGREEMENT APPLIED ONLY TO RATES CHARGED BY AUSTIN ENERGY TO CUSTOMERS WHOSE POINTS OF DELIVERY ARE OUTSIDE THE CITY OF AUSTIN AND DID NOT AFFECT RATES CHARGED TO CUSTOMERS INSIDE THE CITY OF AUSTIN.

PERF ASSERTS THAT THE THE REASONS FOR THAT AGREEMENT HAVE NOT FUNDAMENTALLY CHANGED AND IT SHOULD THEREFORE REMAIN IN EFFECT, THAT AGREEMENT WAS CONSISTENT WITH THE PUBLIC INTEREST BECAUSE THE ORIGINAL 5.8 BILLION, OR EXCUSE ME, MILLION DOLLAR REDUCTION TO THE REVENUE REQUIREMENT FOR CUSTOMERS OUTSIDE THE CITY OF AUSTIN RECOGNIZE THAT THOSE CUSTOMERS DO NOT FULLY RECEIVE THE BENEFIT OF UTILITIES RE UH, REVENUES TRANSFERRED TO THE CITY'S GENERAL FUND.

THE HERF DISCOUNT IS AND WAS BASED ON PUBLIC POLICY, NOT

[01:10:01]

COST OF SERVICE.

HER'S PRIMARY POLICY ARGUMENT FOR THE DISCOUNT HAS ALWAYS BEEN THAT ITS CUSTOMERS RECEIVE NO DIRECT CITY SERVICES.

SO THE GENERAL FUND TRANSFER PROVIDES NO DIRECT BENEFIT TO HERF CUSTOMERS.

HERF ASSERTS THAT A SIMILAR REDUCTION MUST BE INCORPORATED INTO THE NEW RATE PROPOSAL FOR THE SAME REASONS PREVIOUSLY LITIGATED AND INCORPORATED INTO PUC.

DOCKET 46 27 PERF REQUESTS A REDUCTION OF ITS PROPORTIONATE SHARE OF THE GENERAL FUND TRANSFER TO THE CITY OF AUSTIN.

AS IN PREVIOUS CASES, CUSTOMERS OUTSIDE THE CITY DO NOT DERIVE ANY BENEFITS FROM THE CITY'S EXPENDITURE OF THOSE FUNDS DUE TO THE CITY'S NEW PROPOSED RATE STRUCTURE.

HER'S PROPOSED REMEDY IS TO DELETE THE ALLOCATED EXPENSES FOR THE GENERAL FUND TRANSFER REPRESENTING THE ALLOCATIONS TO PRODUCTION, TRANSMISSION DISTRIBUTION, AND CUSTOMER FUNCTIONS RESPECTIVELY.

NO OTHER CHANGES ARE PROPOSED TO THE CITY'S CLAIMED EXPENSES, ALLOCATION OF THE EXPENSES OR THE METHODOLOGY USED TO ALLOCATE EXPENSES OR DESIGN RATES.

HF IS AWARE THAT OTHER PARTIES HAVE RECOMMENDED REDUCTIONS IN THE OVERALL REVENUE REQUIREMENT TO THE EXTENT ANY SUCH RECOMMENDATIONS ARE ADOPTED BY THE COUNCIL.

HF REQUESTS THAT ANY ASSOCIATED RATE REDUCTIONS DUE TO THE RE REDUCED REVENUE REQUIREMENT BE APPLIED TO ALL CUSTOMERS EQUALLY, INCLUDING THOSE OUTSIDE THE CITY LIMITS, SO THAT THE FINANCIAL BENEFITS OF THE 2013 RATE REDUCTIONS FOR OUT OF CITY CUSTOMERS ARE STILL FULLY RECOGNIZED PER ASSERTS THAT THE ORIGINAL REDUCTION TO THE REVENUE REQUIREMENTS FOR CUSTOMERS OUTSIDE THE CITY OF AUSTIN IMPLICITLY RECOGNIZE THAT THOSE CUSTOMERS DO NOT RECEIVE THE BENEFIT OF UTILITIES REVENUE TRANSFERRED TO THE CITY'S GENERAL FUND.

THIS RATE REDUCTION IS EASILY JUSTIFIABLE BASED UPON THE LACK OF ANY CITY SERVICES RECEIVED BY THOSE CUSTOMERS AND SHOULD BE RECOGNIZED AND MAINTAINED.

AUSTIN CITY COUNCIL'S INDEPENDENT HEARING EXAMINER ADDRESSED THE TESTIMONY OF ALL PARTIES AND OFFERED COMMENTS AND RECOMMENDATIONS.

THE EXAMINER DID NOT TAKE A POSITION ON HERF MATTERS, BUT DEFERRED TO CITY COUNCIL TO ADDRESS AS A POLICY ISSUE.

THE EXAMINER DID SAY THAT THE BURDEN OF PROOF ON WHETHER THE OUTSIDE OF CITY RESIDENT BENEFIT FOR OTHER SERVICES WAS ON AUSTIN ENERGY.

A DIRECT CONTRADICTION OF AUSTIN ENERGY'S POSITION IN THE PROCEEDINGS.

TO DATE AUSTIN ENERGY HAS NOT PROVIDED THIS PROOF OF SERVICE BENEFITS TO OUT OF CITY CUSTOMERS.

LASTLY, HERF IS THE ONLY PARTY WITH LEGAL STANDING TO APPEAL THE RATES.

COUNCIL ADOPTS TO THE PUBLIC UTILITY COMMISSION AS WE PREVIOUSLY DID IN 2013.

WE WOULD RESPECTIVELY REQUEST THAT THE COUNCIL MAINTAIN THE EXISTING RECOGNITION OF RATES EMITTING THE GENERAL FUND TRANSFER FOR OUT OF CITY CUSTOMERS SO THAT THIS APPEAL OPTION DOES NOT HAVE TO BE REPEATED.

THANK YOU MR. JOHNSON FOR BEING HERE TODAY.

APPRECIATE IT.

UM, PAUL ROBBINS IS UP NEXT.

WELCOME, MR. ROBBINS.

YOU, YOU WILL HAVE FIVE MINUTES TO MAKE YOUR PRESENTATION.

COUNCIL STAFF CAN RUN THE TIMER FOR US.

OF COST, WHICH EXCLUDED MORE THAN HALF THE ELECTRIC BILL AND IGNORES MANY FUTURE COSTS.

UH, CAN YOU PLEASE BEFORE YOU START THE TIME, WOULD YOU PLEASE CUE MY PRESENTATION? UH, COUNSEL.

I AM PAUL ROBBINS, AN ENVIRONMENTAL ACTIVIST AND CONSUMER ADVOCATE.

I HAVE BEEN WATCHING AUSTIN ENERGY SINCE 1977.

I HELPED START THE CITY'S NATIONALLY RECOGNIZED ENERGY CONSERVATION PROGRAMS IN THE 1980S WITH ABOUT 20 OTHER PEOPLE AT THE TIME.

AUSTIN ENERGY OPPOSED THIS.

UH, I AND I HAVE BEEN ON THE RIGHT SIDE OF ISSUES TO STOP COLOSSAL MISTAKES LIKE THE BIOMASS PLANT AND THE SOUTH TEXAS NUCLEAR PROJECT.

SO I KNOW FIRSTHAND THAT THIS UTILITY AND ITS EXPERTS CAN BE WRONG.

UH, SLIDE, UH, AUSTIN ENERGY HAS THE LOWEST AVERAGE RESIDENTIAL CONSUMPTION OF ANY MAJOR UTILITY IN AIRCO.

IT IS 26% BELOW THE AIRCO AVERAGE.

ONLY 2% OF AIR COTS CUSTOMERS HAD AN AVERAGE, UH, CONSUMPTION THAT WAS LOWER IN 2021.

UH, SLIDE CONSERVATION HAS MADE AUSTIN SPECIAL.

IF AUSTIN USED THE AIRCO AVERAGE, EACH RESIDENTIAL CUSTOMER WOULD PAY ABOUT $160 MORE A YEAR IN FUEL AND REGULATORY COST.

AND IT WOULD HAVE REQUIRED 940 MEGAWATTS OF ADDITIONAL PEAK DEMAND, WHICH AT TODAY'S COST FOR A NEW GAS GENERATOR WOULD BE ABOUT $1.2 BILLION.

YET CONSUMER ADVOCATES WERE NOT ALLOWED TO ENTER THIS INTO EVIDENCE IN THE RIGHT CASE.

AUSTIN ENERGY'S TWISTED METHODOLOGY WOULD NOT ALLOW LOOKING OUTSIDE A NARROW RANGE

[01:15:01]

SLIDE AUSTIN'S CONSERVATION PROG PROGRESS IS NO ACCIDENT.

WE'VE BEEN WORKING TOWARDS THIS GOAL SINCE 1977.

THE FOUR MAJOR STRATEGIES ARE THE ENERGY BUILDING CODE, THE PROGRESSIVE RATE STRUCTURE, THE ENERGY EFFICIENCY PROGRAMS, AND THE GREEN BUILDING PROGRAM.

SLIDE.

HOWEVER, AUSTIN ENERGY PROPOSES TO ELIMINATE THE PROGRESSIVE RATE STRUCTURE AND REPLACE IT WITH RATES THAT DISCOURAGE CONSERVATION SLIDE.

AUSTIN ENERGY SLIDE.

AUSTIN ENERGY PROPOSE A STEEP RESIDENTIAL TARIFF INCREASE.

UH, THIS IS A CHART FROM AUSTIN ENERGY'S RATE FILING.

THE FIXED MONTHLY CHARGE RISES FROM $10 TO $25.

THE UTILITY CLAIMS THAT THIS IS IN LINE WITH WHAT AUSTIN'S NEIGHBORING UTILITIES CHARGE SLIDE.

BUT WITH THE EXCEPTION OF GEORGETOWN, ALL MUNICIPAL UTILITIES IN AIRCO HAVE A RELATIVELY LOW MONTHLY CHARGE.

THE UTILITY CLAIMS THAT THIS CHART IS NOT IN CONTEXT BECAUSE MOST OTHER UTILITIES DO NOT HAVE TIERED RATES, BUT THERE IS A MORE FUNDAMENTAL REASON FOR LOW MONTHLY COST, WHICH IS UNIVERSAL ACCESS.

THE AVERAGE PERSON SHOULD NOT HAVE TO PAY $25 TO TURN ON A LIGHT BULB SLIDE.

AUSTIN ENERGY'S CURRENT RATES ALSO HAVE STEEP TIERS TO ENCOURAGE CONSERVATION UNDER THE NEW RATE.

THIS WOULD BE FLATTENED SO THAT THERE WOULD BE MUCH LESS INCENTIVE TO INVEST IN EFFICIENCY MEASURES.

SLIDE.

THE ESTIMATED RATE SHOCK IN THIS RADICAL REGRESSIVE RESIDENTIAL RIGHT STRUCTURE WILL BE ABOUT 13% ON AVERAGE, $136 A YEAR.

AND AS YOU CAN SEE, THE LOW USERS WILL SEE STARK INCREASES WHILE HIGH USERS WILL SEE PROFOUND SAVINGS SLIDE.

AUSTIN ENERGY CLAIMS THAT POOR PEOPLE DO BETTER THAN AVERAGE RATE PAYERS BECAUSE UNDER THE NEW RATE, UH, POOR CUSTOMERS USE MORE THAN AVERAGE.

HERE'S A CHART THEY PRESENTED AND IT, UH, SHOWS THAT 7% OF CUSTOMERS WHO, UH, PARTICIPATE IN THE CUSTOMER ASSISTANCE PROGRAM FOR THE POOR USE SLIGHTLY MORE THAN AVERAGE.

THE IMPLICATION IS THAT THIS REPRESENTS ALL POOR PEOPLE.

SLIDE, HOWEVER, AUSTIN ENERGY'S OWN DATA PROVES THE OPPOSITE.

THE UTILITY PROVIDED ME WITH CONSUMPTION BY ZIP CODE AND HOUSING TYPE.

THAT IS SINGLE FAMILY, MULTI-FAMILY.

AND THIS WAS A MATCH WITH US CENSUS INCOME DATA.

THE RESULTS SHOW CONSUMPTION TRACKS INCOME SLIDE DATA FROM THE ENERGY INFORMATION ADMINISTRATION'S.

RESIDENTIAL ENERGY CONSUMPTION SAYS THE SAME THING.

LAST SLIDE.

UH, SO IN CONCLUSION, UH, AUSTIN ENERGY'S NEW RADICALLY REGRESSIVE RATE STRUCTURE, PUNISHES ENER ENERGY CONSERVATION, AND DISPROPORTIONATELY RAISES BILLS FOR LOW INCOME CUSTOMERS.

DO NOT LET THEM TURN BACK 45 YEARS OF PROGRESS.

THANK YOU MR. ROBBINS.

I APPRECIATE YOU BEING HERE TODAY.

THE NEXT SPEAKER IS VICTOR MARTINEZ AND AUSTIN ENERGY CUSTOMERS.

MR. MARTINEZ HERE, UH, CHAIR, COULD I ASK, UH, DID MR. ROBINS MAKE THAT PRESENTATION PRESENTATION AVAILABLE TO US? I'M SORRY, I'M NOT SEEING IT.

MAYBE I'M SURE HE WILL.

MR. ROBIN, YOU SEND THAT TO US ALREADY.

UM, I I FINISHED THAT PRESENTATION AT TWO LAST NIGHT, SO, UM, I WILL, UH, OKAY, THANKS.

MAKE A NOTE TO GET IT TO ALL OF YOU.

UH, I THINK EVERYBODY UNDERSTANDS THAT IF YOU HAVE A PRESENTATION THAT HASN'T BEEN PROVIDED TO THE STAFF OR IS ALREADY IN BACKUP TO, PLEASE BE SURE TO SEND US ALL, ALL OF YOUR, UM, YOUR BACKUP AND PRESENTATIONS AND MORE.

SO MR. MARTINEZ IS VICTOR MARTINEZ HERE.

UM, THE NEXT SPEAKER IS, UH, FOR THE GROUP COALITION FOR CLEAN, AFFORDABLE, AND RELIABLE ENERGY, ALSO AFFECTIONATELY KNOWN AS SEA CARE AND GENTLEMAN APPROACHING THE PODIUM.

COULD YOU PLEASE INTRODUCE YOURSELF?

[01:20:01]

UM, CHAIRPERSON POOL.

THANK YOU FOR HAVING US THIS MORNING.

MY NAME IS TREY SALINAS.

GOOD MORNING, MR. SALINAS.

YOU WILL HAVE FIVE MINUTES.

I NEED TO STEP OFF THE DIAS BRIEFLY IF MY VICE CHAIR COULD JUST KIND OF KEEP TRACK OF THINGS AND TAKE THE CHAIR IN MY BRIEF ABSENCE.

GREAT, THANK YOU.

UM, AGAIN, THANK YOU FOR THE TIME THIS MORNING.

I WON'T NEED THE FULL FIVE MINUTES.

UH, I'M NOT GONNA ADDRESS THE JOINT ALTERNATIVE PROPOSAL THAT WE HAD BEFORE YOU.

I JUST WANTED TO LET YOU KNOW, UH, MADAME VICE CHAIR AND OTHER MEMBERS AT THE LAST WORK SESSION.

WE HEARD COUNCIL MEMBERS TALK ABOUT WHERE CAN WE, WHERE CAN WE FIND THESE DOCUMENTS? AND SO THEY'RE IN THE PORTAL.

WE SUBMITTED IT YESTERDAY TO AUSTIN ENERGY.

WE JUST WANTED TO MAKE SURE YOU HAD A CHANCE TO REVIEW IT BEFORE TODAY.

AND AGAIN, I'LL LET OTHERS SPEAK AGAIN.

UH, THE COALITION FOR CLEAN, AFFORDABLE, AND RELIABLE ENERGY IS A COALITION OF SMALL, MEDIUM, AND LARGE BUSINESSES, INCLUDING SCHOOL DISTRICTS, HOSPITALS, SEMICONDUCTORS, OFFICE BUILDINGS, YOU NAME IT.

UH, IT'S THE FULL GAMUT.

THE ONLY ISSUE THAT WE'RE HERE REALLY TO RAISE TODAY IS WE WANT TO HAVE A DISCUSSION ABOUT FREEZING THE GENERAL FUND TRANSFER.

AND THE REASON WHY WE WANT TO HAVE THAT DISCUSSION WITH YOU IS IT HAS BEEN DONE BEFORE.

WE'RE NOT HERE TO CALL FOR A SLASHING OF GENERAL FUND TRANSFERS OR ANYTHING LIKE THAT AT ALL.

JUST FREEZE IT.

THE LAST TIME THE UTILITY WAS IN TROUBLE WHERE THEIR RESERVES WERE IN TROUBLE, LIKE THEY ARE RIGHT NOW.

THE COUNCIL FROZE THE GENERAL FUND TRANSFER FOR FOUR OR FIVE YEARS.

YOU HAVE THE OPPORTUNITY TO DO THAT AGAIN.

IT WILL LESSEN THE BLOW ON YOUR RATE.

PAYERS, UM, RATE PAYERS ARE ABOUT TO FILL A SERIOUS RATE SHOCK THIS MONTH WITH THE INCREASE TO THE PSA.

AND SO YOU HAVE AN OPPORTUNITY TO LESSEN THAT BLOW, UH, BY CONSIDERING OUR JOINT ALTERNATIVE PROPOSAL, BUT ALSO FREEZING THE GENERAL FUND.

BOTTOM LINE IS YOU'RE THE DECIDERS.

YOU ARE THE PUC FOR A MUNICIPALLY OWNED UTILITY.

YOU GET TO DECIDE, AUSTIN ENERGY DOESN'T DECIDE.

WE DON'T DECIDE.

YOU GET TO DECIDE AND YOU HAVE THE OPPORTUNITY TO LESSEN THE BLOW ON YOUR RATE PAYERS.

THAT'S ALL WE'RE ASKING YOU TO CONSIDER.

THANK YOU MR. SALINAS.

UM, NEXT GROUP UP IS DATA FOUNDRY.

AND WHO IS HERE REPRESENTING DATA FOUNDRY, PLEASE? GOOD MORNING.

MY NAME'S TODD KIMBRO.

I'M HERE TODAY ON BEHALF OF DATA FOUNDRY.

MR. KIMBRO, WELCOME.

YOU'LL HAVE THANK YOU FIVE MINUTES.

WONDERFUL.

IT, IT RIPPLES TO PROPERTY TAX, IT, IT RIPPLES TO JOBS.

I, I FIND MYSELF, UM, WANTING TO JUST HIGHLIGHT WHAT MR. SALINAS JUST SAID A MOMENT AGO.

UM, I THINK DATA FOUNDRY AGREES WITH A LOT OF WHAT HE JUST SAID.

UM, DATA FOUNDRY AND, AND YOU MAY ALSO HEAR ME USE THE NAME SWITCH, UM, BECAUSE AT THIS POINT THEY'RE SOMEWHAT INTERCHANGEABLE.

I, I ASSUME Y'ALL ARE PROBABLY MORE FAMILIAR WITH THE NAME DATA FOUNDRY, BUT SWITCH, WHICH IS A NATIONWIDE DATA CENTER, UH, BUSINESS ACQUIRED DATA FOUNDRY ABOUT A YEAR AGO.

UM, SO, UM, AS I SAY, I, I'M PRONE TO USING BOTH NAMES.

DATA FOUNDRY'S ROLE IN, IN THIS CASE HAS ACTUALLY BEEN PRETTY NARROW IN SCOPE.

IT'S, UM, FOR, IT'S IN, UM, SUPPORT OF WHAT'S CALLED P I TWO.

UM, HL F OR HIGH LOAD FACTOR AS A NEW TARIFF.

THIS IS SOMETHING THAT AUSTIN ENERGY INCLUDED IN ITS CASE, UM, I GUESS BACK IN MAY, UH, UH, THIS PAST YEAR.

AND SOMETHING THAT WE STRONGLY ADVOCATE, IT'S, UH, PROBABLY GOES WITHOUT SAYING IT WOULD BE A SERVICE THAT DATA FOUNDRY ANTICIPATES USING, UH, OR A TARIFF THAT IT WOULD ANTICIPATE USING.

AND IT MUCH BETTER ALIGNS WITH THE ACTUAL COSTS AND THE ACTUAL PERFORMANCE OF, OF DATA CENTERS AND OTHER HIGH LOAD FACTOR, WHICH IS TO SAY VERY STEADY USERS OF ELECTRICITY.

UM, YOU'VE HEARD THROUGHOUT THE, YOU KNOW, MORNING A, A FAIR AMOUNT OF DISCUSSION AS TO THE JOINT CONSUMER ALTERNATIVE.

UH, YOU WILL PROBABLY NOTICE THAT OUR NAME IS NOT ON THERE.

DON'T READ MUCH INTO THAT ONE WAY OR ANOTHER.

UH, IT'S NEITHER AN ENDORSEMENT NOR A CRITICISM OF THE, UM, ALTERNATIVE.

BUT INSTEAD IT JUST HIGHLIGHTS THE FACT THAT WE HAVE A VERY NARROW SCOPE AND WHAT WE'RE PAYING ATTENTION TO AND WHAT WE'RE REALLY KEEN KEY TO FOCUS ON, WHICH IS THAT P I TWO TARIFF OFFERING.

UM, GOING BACK TO PART OF WHAT MR. SALINAS WAS TALKING ABOUT A MOMENT AGO, I THINK IT'S WORTHWHILE TO TAKE MAYBE JUST A BROADER STEP BACK AND TO THINK ABOUT THE BROADER IMPLICATIONS OF THE RATES THAT THAT ARE AT PLAY HERE.

UM, P R I TWO BEING A PERFECT EXAMPLE, FRANKLY, AUSTIN HAS TO COMPETE WITH THE REST OF THE STATE.

I'M, I'M SAYING SOMETHING THAT I'M SURE ALL OF YOU KNOW.

ONE OF THE KEY INPUTS IN THE DECISION OF WHETHER TO INVEST IN AUSTIN OR NOT FOR MANY BUSINESSES, DATA CENTERS BEING A PRIME ONE WHERE ENERGY IS A MAJOR COST FACTOR, IS IN FACT GONNA BE THE RATES THAT THAT ARE, ARE APPLIED TO THESE CONSUMERS.

AND, AND THAT OBVIOUSLY HAS A, A MATERIAL AND, UH, UNAVOIDABLE RIPPLE EFFECT FOR, FOR Y'ALL.

AS YOU THINK ABOUT ISSUES OUTSIDE OF THE, THE RATES THAT AUSTIN ENERGY CHARGES,

[01:25:01]

IT, IT RIPPLES TO THE BROADER COMMUNITY AT HAND.

SO, UM, YOU HAVE A VERY DIFFICULT TASK IN FRONT OF YOU.

UM, YOU OBVIOUSLY NEED TO MAKE SURE THAT AUSTIN ENERGY REMAINS FINANCIALLY VIABLE, UM, AND SOLID.

BUT AT THE SAME TIME, IT'S GOTTA BE BALANCED AGAINST THE INTEREST OF THE CONSUMERS.

WHO IN TURN ARE THE TAXPAYERS, THE JOB PROVIDERS, THE PROPERTY OWNERS, AND SO ON.

UM, BECAUSE AGAIN, YOU'RE IN A VERY, VERY COMPETITIVE ENVIRONMENT.

UM, SWITCH, FOR EXAMPLE, HAS DATA CENTERS ACROSS TEXAS AND ACROSS THE UNITED STATES AND IS GROWING.

AND, UM, ENERGY COST IS A, A VERY KEY COMPONENT IN DECIDING WHERE TO GROW.

UM, WITH THAT, I WOULD JUST REITERATE, UM, BY STRONG REQUEST, AND IT'S THE BEST I CAN TELL.

IT'S AN UN UNCONTESTED REQUEST THAT THE RATES INCLUDE P I TWO, HL F.

THANK YOU MR. KIMRA.

OUR NEXT, UH, GROUP PRESENTING IS THE AUSTIN REGIONAL MANUFACTURER'S ASSOCIATION, AND THERE IS NO REPRESENTATIVE FROM ARMA HERE TODAY.

HOW ABOUT NATIONAL INSTRUMENTS? DO WE HAVE A REPRESENTATIVE FROM NATIONAL INSTRUMENTS TO SPEAK TO US HERE TODAY? ALL RIGHT.

TEXAS INDUSTRY ENERGY CONSUMERS, T I E C.

GOOD MORNING, SIR.

COULD YOU GIVE US YOUR NAME? UH, GOOD MORNING CHAIR, POOL AND COUNCIL MEMBERS BEN HALLMARK FOR T I E C.

WELCOME, MR. HALLMARK.

YOU'LL HAVE FIVE MINUTES.

UH, I REPRESENT T I E C, WHICH IS AN ASSOCIATION THAT REPRESENTS THE INTEREST OF INDUSTRIAL RATE CONSUMERS AND ELECTRIC RATE PROCEEDINGS.

UH, TIA'S PARTICIPATING MEMBER IN THIS CASE IS SAMSUNG AUSTIN SEMICONDUCTOR.

AS YOU KNOW, SAMSUNG HAS ONE OF THE MOST ADVANCED SEMICONDUCTOR FACILITIES IN THE WORLD HERE IN AUSTIN.

IT DIRECTLY EMPLOYS OVER 3,300 WORKERS AND SUPPORTS OVER 11,000 LOCAL JOBS.

ELECTRICITY IS TYPICALLY ONE OF THE TOP COSTS FOR T MEMBERS, AND SAMSUNG IS CERTAINLY NO EXCEPTION.

SO MANAGING ELECTRICITY COSTS IS ALSO A TOP PRIORITY AND IT IMPACTS THE ABILITY TO COMPETE IN THE MARKETPLACE.

AND OF COURSE, WE HAVE ALL SEEN, UH, THE RECENT INCREASE IN THE PSA IN THE PAST THROUGH CHARGES, WHICH HIT ALL RATE PAYERS, UH, BUT ARE PARTICULARLY INCREASED RATES MORE FOR HIGH USERS LIKE SAMSUNG WHO ARE ENERGY INTENSIVE, AND THEREFORE A HIGHER PERCENTAGE OF THEIR BILL IS A, UH, THE PSA.

SO THIS JUST UNDERSCORES AGAIN, THE IMPORTANCE OF THIS CASE FROM OUR PERSPECTIVE, AND WE APPRECIATE YOUR ATTENTION TO IT.

IT, WE SUBMITTED TESTIMONY IN THIS CASE FROM TWO OF OUR EXPERT WITNESSES THAT ARE WELL KNOWN THROUGHOUT THE INDUSTRY, UH, BUT WE ARE OF COURSE NOW PROUD TO HAVE JOINED THE JOINT CONSUMER, UH, ALTERNATIVE.

YOU'VE HEARD ABOUT THE JOINT CONSUMER ALTERNATIVE TODAY, AND I WON'T GO OVER ALL THE DETAILS, BUT I WOULD LIKE TO HIT A FEW OF THE HIGH POINTS FOR YOU.

UH, ON THE REVENUE REQUIREMENT SIDE, WE BELIEVE THAT A $12 MILLION INCREASE IS A FAIR RESOLUTION TO THIS CASE.

UH, THE ICA WAS HERE EARLIER.

BUT THERE ARE, OF COURSE, NUMEROUS OTHER PARTIES THAT HAVE ALSO, UH, PROPOSED DIFFERENT DIS ALLOWANCES.

FOR EXAMPLE, ONE OF THE ONES THAT WE PROPOSED THAT THE I E, UH, APPROVED WAS TO REDUCE THE AMOUNT OF THE GENERAL FUNDS TRANSFER THAT'S REFLECTED IN RATES BY FIVE TO 6 MILLION, TO TO BE CONSISTENT WITH WHAT AUSTIN ENERGY ACTUALLY PAID TO THE CITY IN THE REAL WORLD, RATHER THAN INCLUDING A HIGHER AMOUNT THAT IS BASED ON SPECULATION THAT THE GFT WILL GROW TO THAT EXTENT IN THE FUTURE.

THERE ARE ALSO NUMEROUS OTHER ISSUES, UH, IN THE CASE.

UH, THE IHE MENTIONED THERE ARE CONCERNS ABOUT THE TEST YEAR, WHICH INCLUDED WINTER STORM URI, WHERE WE HAD WIDESPREAD OUTAGES, AND WHETHER WE HAVE PROPERLY, UH, ACCOUNTED FOR THOSE OUTAGES IN LOOKING AT OUR SALES.

ALL ELSE EQUAL, IF YOU SET RATES BASED ON ABNORMALLY LOW SALES, THE RATES WILL BE TOO HIGH.

SO AGAIN, WE THINK THAT THE 12 MILLION INCREASE IN THE PROPOSAL REPRESENTS A FAIR COMPROMISE ON THE COST ALLOCATION SIDE.

UH, OUR BELIEF IS THAT RATE CLASSES SHOULD TO THE EXTENT PRACTICAL PAY FOR THE COST THAT THEY CAUSE AUSTIN ENERGY TO INCUR.

YOU'LL SOMETIMES HEAR THAT REFERRED TO AS COST CAUSATION.

COST-BASED RATES THAT LIMIT SUBSIDIES ARE CRITICAL TO MANAGING THE COST OF LARGE ENERGY CONSUMERS LIKE SAMSUNG.

WE BELIEVE THE JOINT CONSUMER ALTERNATIVE REPRESENTS A POSITIVE STEP TOWARDS COST-BASED RATES, AND ONE THAT HAS BEEN AGREED TO, OF COURSE, BY A BROAD SPECTRUM OF RATE PAYERS, INCLUDING RESIDENTIALS AND LARGE BUSINESS GROUPS.

I DO WANNA GIVE YOU SOME BACKGROUND ON, ON WHY WE THINK IT'S A REASONABLE COMPROMISE.

UM, WE SUBMITTED TESTIMONY IN THIS CASE THAT UNDER THE COST ALLOCATION METHODOLOGIES COMMONLY USED AT THE TEXAS PUC, THE PRIMARY GREATER THAN 20 CLASS WOULD'VE BEEN IN LINE FOR SOMETHING LIKE A 25%

[01:30:01]

RATE DECREASE.

UH, FURTHER, AS THE IE MENTIONED TODAY, HE RECOMMENDS APPROVAL OF OUR PRIMARY SUBSTATION RATE, WHICH BY ITSELF WOULD DECREASE THE, UH, ALLOCATION OF COST, WE ESTIMATE FOR THAT PRIMARY GREATER THAN 20 CLASS BY ABOUT $9 MILLION, WHICH WOULD'VE BEEN ABOUT AN A 15% RATE DECREASE.

SO WE, WE ARE WILLING, HOWEVER, WE'VE JOINED WITH THE PARTIES AND AS A COMPROMISE, WE'VE DECIDED TO JOIN THIS PROPOSAL UNDER WHICH ALL THE LARGE BUSINESSES, THE LARGE COMMERCIAL AND LARGE INDUSTRIAL WOULD BE TREATED THE SAME WHILE TRYING TO MINIMIZE THE IMPACT TO THE RESIDENTIAL.

AND WE WOULD POSTPONE UNDER THIS PROPOSAL CONSIDERATION OF THE PRIMARY SUBSTATION RATE UNTIL THE NEXT RATE CASE NOTWITHSTANDING THAT THE, I AGREED WITH US THAT IT SHOULD BE APPROVED.

I DID WANNA FLAG ONE THING ON THE PRIMARY SUBSTATION RATE.

UM, I'VE SEEN SOME NUMBER RUNS THAT HAVE BEEN PRODUCED.

I KNOW THAT, THAT Y'ALL HAVE ASKED FOR NUMBER RUNS.

AND I WANT TO BE CLEAR THAT AUSTIN ENERGY IS OPPOSING THE PRIMARY SUBSTATION RATE.

SO WHEN, WHEN THEY ARE PROVIDING NUMBER RUNS, INCLUDING FROM WHAT I'VE SEEN OF, OF WHAT THE I'S RECOMMENDATION IS, IT IS NOT INCLUDING ANYTHING FOR THIS PRIMARY SUBSTATION RECOMMENDATION THAT HE MADE AND THAT WE SUPPORT.

SO I WANT, I WANT TO BE CLEAR ABOUT THAT.

SO IN, IN, IN SOME, WE BELIEVE THAT THE JOINT CONSUMER ALTERNATIVE REPRESENTS A FAIR APPROACH.

UH, A LOT OF WORK WENT INTO IT AMONGST A LOT OF PARTIES THAT HAVE DISPARATE INTEREST IN AT LEAST SOME RESPECTS.

AND, UH, WE'D ASKED THAT YOU ADOPT IT.

I'D BE HAPPY TO TAKE ANY QUESTIONS.

THANK YOU, MR. HALLMARK.

UM, OUR LAST PRESENTER FROM, UH, THE PARTIES WHO PARTICIPATED IN THE PROCESS IS FROM NXP SEMICONDUCTOR.

WELCOME, SIR.

IF YOU COULD GIVE US YOUR NAME.

THANK YOU, MADAM CHAIR.

MEMBERS.

UH, MY NAME IS CHRIS HUGHES AND I REPRESENT NXP SEMICONDUCTORS.

WELCOME, MR. HUGHES.

YOU WILL HAVE FIVE MINUTES.

AE THAT A LOWER GEN, LOWER REVENUE REQUIREMENT WILL LIMIT ACCESS TO CAPITAL, WE BELIEVE IS UNFOUNDED.

UM, NXP HAS ALSO JOINED THE JOINT CONSUMER PROPOSAL.

UM, AND I'M JUST HERE TO KIND OF, I GUESS, TO CLOSE UP SHOP, UM, BEFORE AUSTIN ENERGY COMES BACK UP.

AND I JUST WANNA LEAVE YOU WITH A, A FEW KEY POINTS.

UM, IN MY OPINION, IN REALITY, AUSTIN ENERGY IS NO DIFFERENT THAN OTHER VERTICALLY INTEGRATED UTILITIES IN TEXAS.

UM, THEY ARE IN BUSINESS TO GENERATE CASH FOR CONSTRUCTION AND TO GENERATE REVENUE FOR CITY GOVERNMENT, UH, AS OPPOSED TO PROVIDE PROFITS TO SHAREHOLDERS.

UM, AND LIKE OTHER UTILITIES IN TEXAS, IT'S RATES SHOULD BE BASED ON GENERALLY ACCEPTED RATE MAKING PRINCIPLES TYPICALLY USED BY THE PUBLIC UTILITY COMMISSION OF TEXAS, UH, IN THE PUC PROCESS.

AND YOU'VE, WE'VE HEARD A LOT ABOUT THE, THE COMPARISONS BETWEEN THE TWO IN THE PUC PROCESS.

IT IS THE RESPONSIBILITY OF THE COMMISSION TO CLOSELY SCRUTINIZE THE CASE PRESENTED BY A UTILITY AND WEIGH IT AGAINST THE ENA EVIDENCE PRESENTED BY INTERVENERS IN THAT PROCESS.

IT IS COMMON PRACTICE FOR THE PUC TO REDUCE THE REVENUE REQUIREMENTS OR RATE REQUESTS OF TEXAS UTILITIES.

IN FACT, THE PUC REGULARLY APPROVES REVENUE REQUIREMENTS AND RATE REQUESTS SIGNIFICANTLY LOWER THAN WHAT IS REQUESTED OR BY THE, BY THE UTILITY.

FOR EXAMPLE, IN 2018, THE P APPROVED A REVENUE REQUIREMENT FOR ENCORE THAT WAS ALMOST 200 MILLION LESS THAN THEY HAD ORIGINALLY REQUESTED.

IN 2021, THE P APPROVED A REVENUE REQUIREMENT FOR SWEPCO THAT WAS 51 MILLION LOWER THAN THEY HAD ORIGINALLY REQUESTED IN 2022.

JUST LAST MONTH, THE P APPROVED A REVENUE REQUIREMENT FOR EL PASO ELECTRIC.

THAT WAS ROUGHLY 35 MILLION LOWER THAN THEY HAD ORIGINALLY REQUESTED.

AND IN THE 2016 AUSTIN RATE REVIEW, WHICH I PARTICIPATED IN, THE CITY COUNCIL APPROVED IN THAT CASE A REVENUE REQUIREMENT FOR AUSTIN ENERGY THAT WAS 25 MILLION LOWER THAN THEY HAD ORIGINALLY REQUESTED, AS STATED EARLIER BY OTHERS.

SO I WON'T GO INTO IT IN DETAIL.

THERE IS SUBSTANTIAL EVIDENCE IN THIS RECORD FROM INTERVENERS THAT THE REVENUE REQUIREMENT REQUESTED BY AUSTIN ENERGY IS NOT SUPPORTED UNDER COMMONLY ACCEPTED RATE MAKING PRINCIPLES.

IN ADDITION, AUSTIN ENERGY HAS MADE THE CLAIM THAT A LOWER REVENUE REQUIREMENT THAN A REQUESTED WILL SOMEHOW NEGATIVELY IMPACT THEIR CREDIT RATING AND ACCESS TO CAPITAL.

THIS CLAIM SHOULD BE REJECTED FOR THE FOLLOWING REASONS.

THE GOAL IS NOT TO HAVE THE HIGHEST CREDIT RATING POSSIBLE.

THIS WOULD BE INCREDIBLY EXPENSIVE TO RATE PAYERS.

IT'S TO RATHER STRIKE A BALANCE BETWEEN SECURING ACCESS TO CAPITAL AND KEEPING CUSTOMER RATES LOW.

AUSTIN ENERGY'S RATE CREDIT RATING REMAINS VERY STRONG AS CURRENTLY SIX RUNGS HIGHER THAN INVESTMENT GRADE.

THAT'S WHAT'S IN THE EVIDENCE.

AUSTIN ENERGY'S CREDIT RATING IS THREE TO FIVE RUNGS HIGHER THAN MOST INVESTOR OWNED UTILITIES IN TEXAS, AND THEY ALL HAVE ADEQUATE AC ACCESS TO CAPITAL.

AND AUSTIN ENERGY CONTINUES TO HAVE CONSIDERABLE ACCESS TO CAPITAL MARKETS.

THEREFORE, CLAIMS BY

[01:35:01]

MR. SALINAS TOUCHED ON THIS A BIT.

YOU MAKE THE DECISION ON WHETHER RATES FOR AUSTIN ENERGY WILL BE SET IN ADJUST AND REASONABLE MANNER.

THE STANDARD USED AT THE PUBLIC UTILITY COMMISSION, JUST AS THE PUC, IS THE REG REGULATORY BODY THAT SETS UTILITY RATES FOR UTILITIES ACROSS THE STATE OF TEXAS, AUSTIN.

THE AUSTIN CITY COUNCIL IS THE REGULATED BODY THAT SETS RATES FOR AUSTIN ENERGY.

IT IS INCUMBENT UPON COUNSEL TO CAREFULLY WEIGH THE EVIDENCE PRESENTED BY INTERVENERS IN A MANNER THAT IS OBJECTIVE AND NOT DEPENDENT ON THE INFORMATION PROVIDED BY THE UTILITY UNDER RULES THAT WERE CREATED BY THAT SAME UTILITY.

AND I'LL LEAVE IT AT THAT AND BE HAPPY TO ANSWER QUESTIONS AT TWO O'CLOCK.

I'M GONNA COME BACK.

THANK YOU MR. HUGHES FOR BEING HERE.

WE'LL TAKE QUESTIONS THIS AFTERNOON.

UM, COLLEAGUES, AUSTIN ENERGY HAS ASKED FOR A BRIEF BREAK SO THEY COULD PREPARE THEIR CLOSING.

AND, UM, I, I PROPOSE I'M, I'M WILLING TO GRANT THAT.

IS FIVE MINUTES SUFFICIENT OR FIVE MINUTES SUFFICIENT? ALL RIGHT, WE'LL STAND IN RECESS FOR FIVE MINUTES AND COME BACK AT 1146.

RHYTHMS TO BE FROM THE RECESS, AND THEY'LL BE PREPARING TO COME UP TO THE PODIUM AND GIVE, UM, 10 MINUTES OF CLOSING REMARKS.

LET'S SEE IF WE CAN GET THE DIAS BACK.

IT LOOKS LIKE EVERYONE'S COMING BACK.

ALL RIGHT, WE ALL SET.

I WILL RECONVENE THE AUSTIN ENERGY OVERSIGHT COMMITTEE SPECIAL CALLED HEARING AT 1149.

MR. BOCATO, ARE YOU GOING TO PRESENT THE CLOSING FOR AUSTIN ENERGY? YES.

THANK YOU, SIR.

YOU WILL HAVE 10 MINUTES.

I'M JUST GONNA, HE NEEDS HIS MIC ON.

DO WE HAVE OUR STAFF HERE? I HEAR A DOOR OPENING.

HANG ON CHAIR AND I THINK CHAIR, WE'LL GET THAT MICROPHONE ON.

YES, VICE CHAIR.

WHILE EVERYONE IS RECONVENING, UM, WHEN THE PRESENTATIONS FROM THE COALITION OF SIERRA CLUB, UH, SOLAR AND OTHERS WERE DISTRIBUTED, THERE WERE SOME OTHER MATERIALS ON THE BOTTOM OF THAT THAT I HAVE RETURNED TO THE CLERK'S DESK.

SO I'M NOT SURE.

I'M NOT SURE WHO WAS HANDING THOSE OUT, BUT I THINK WE HAVE SOME OTHER MATERIALS FOR YOU THAT, UM, THAT YOU DIDN'T INTEND TO DISTRIBUTE.

IS BECAUSE IT AVOIDS RESULTS, RESULT DRIVEN DECISIONS, UM, BY, BY LOOKING AT EACH ISSUE INDIVIDUALLY AS OPPOSED TO SEEING WHAT THE RESULT OF ALL THE RECOMMENDATIONS ARE, IT ALLOWS YOU TO MAKE A DECISION IN A VACUUM, WHICH IS AGAIN, UM, APPROPRIATE.

THANK YOU FOR THAT.

ALL RIGHT, MR. BOCATO, YOU HAVE 10 MINUTES.

YOU OBVIOUSLY HEARD A LOT FROM THE PARTICIPANTS THIS MORNING, AND I'M GOING TO ADDRESS SOME OF THOSE POINTS IN A PRETTY, UM, RAPID KIND OF BULLET POINT APPROACH.

LET ME JUST START ACTUALLY WITH THE FINAL SPEAKER, NXP.

HE MADE THE COMMENT THAT AE IS, IS SIMILAR TO AN INVESTOR ON UTILITY AND THAT IS SIMPLY INCORRECT ON IOU HAS A FI A FISCAL OBLIGATION TO SHAREHOLDERS TO MAXIMIZE PROFITS.

AUSTIN ENERGY DOES NOT HAVE THAT SAME INCENTIVE.

THEY HAVE NO INCENTIVE TO OVERCHARGE CUSTOMERS LIKE AN IOU DOES, AND THEIR ROLE IS CERTAINLY NOT TO GENERATE MONEY FOR THE PURPOSES PROVIDING CITY SERVICES.

AS MR. HUGHES INDICATED, IOU HAVE A RETURN COMPONENT.

IF, IF THEY DON'T GET THEIR FULL REQUEST, THEN EARNINGS DE DECREASE AS OPPOSED TO AE WHOSE GENERAL FUND TRANSFERS AN EXPENSE TO THE UTILITY.

UNDER MR. HUGHES'S VIEW, YOU SHOULD LOWER THE A'S REQUEST BECAUSE IOUS ACROSS OUR STATE HAVE CERTAIN INSTANCES REQUESTED MORE THAN THEY WERE FOUND TO, TO HAVE NEED.

AND THAT'S NOT HOW YOU SET RATES, UM, FOR A UTILITY.

BY LOOKING AT WHAT OTHER UTILITIES MAY OR MAY NOT HAVE RECEIVED THE ROLE, UM, IS TO, MR. HUGHES INDICATED THAT, THAT YOUR ROLE WAS TO EVALUATE THE EVIDENCE.

BUT I WILL TELL YOU THAT IN NUMEROUS INSTANCES, PARTICIPANTS HAVE MADE STATEMENTS AT THE HEARING IN THEIR BRIEFS AND HERE TODAY THAT ARE SIMPLY NOT SUPPORTED BY THE EVIDENCE.

AND I WOULD URGE YOU AGAIN, TO LOOK AT THE IHES REPORT WHERE HE REVIEWED THE EVIDENCE THAT WAS ACTUALLY PRESENTED AND MADE RECOMMENDATIONS BASED UPON THAT EVIDENCE.

UM, MOVING ON NOW, UM, THE IHE MENTIONED THAT THERE WERE NO NUMBER RUNNING.

THERE WAS NO NUMBER RUNNING DONE IN THIS, IN THIS CASE.

AND I I JUST WANT TO, UH, CLARIFY THAT THAT'S COMMON IN RATE MAKINGS AND THAT THAT WAS DONE INTENTIONALLY, AND THAT THE REASON

[01:40:01]

UM, THE ICA ADDRESSED REVENUE REQUIREMENT IN HIS PRESENTATION, AND I WANNA TALK ABOUT THAT FOR A LITTLE BIT.

VARIOUS, UH, PARTICIPANTS MADE RECOMMENDATIONS PROPOSING ADJUSTMENTS TO AUSTIN ENERGY'S REVENUE REQUIREMENT.

THEY WENT FROM A RANGE OF 11 MILLION TO 41.7 MILLION, BUT I WILL TELL YOU THAT NOTABLY NOT A SINGLE RECOMMENDED DISALLOWANCE WAS BASED UPON A RECOMMENDATION OR A FINDING THAT ANY EXPENSE WAS EXCESSIVE OR UNREASONABLE.

NOT A SINGLE RECOMMENDATION SAID THAT AUSTIN ENERGY'S PROPOSED REVENUE REQUIREMENT INCLUDED UNREASONABLE OR EXCESSIVE COSTS.

INSTEAD, THEY MADE RECOMMENDATIONS AS MR. UM, KAUFMAN INDICATED BASED UPON TIMING.

UH, THEY SAID THAT THE EXPENSES THAT AUSTIN ENERGY HAD PROPOSED INCLUDE RATES, UM, WERE NOT RIPE YET, OR WEREN'T FULLY KNOWN, COULDN'T CA UH, COMPLETELY BE BE CALCULATED.

BUT IN REBUTTAL TESTIMONY AT THE HEARING, AUSTIN ENERGY EXPLAINED THAT, FOR EXAMPLE, THE CALL CENTER STAFFING, THAT THOSE, THOSE, UM, STAFFING LEVELS HAD BEEN FULFILLED AND COMPLETED, SO THEREFORE THEY WERE KNOWN AND MEASURABLE, OR THAT THE LEASE AGREEMENTS HAD BEEN APPROVED AND WERE NOT SIMPLY TENTATIVE OR SPECULATIVE.

AND AGAIN, THE IESS REPORT REFLECTS THAT AS WELL.

UM, NU UH, NON-NUCLEAR DECOMMISSIONING, THE ICA RECOMMENDED THAT A DECREASE OF, FOR NON-NUCLEAR DECOMMISSIONING FROM 8 MILLION TO 2 MILLION ANNUALLY, EVEN THOUGH HIS RECOMMENDATION IN 2016 WAS 8 MILLION.

AND SINCE THAT TIME, WE NOW HAVE A NEW POWER PLANT IN NACODOCHES, IT'S GOING TO HAVE TO BE DECOMMISSIONED AT SOME POINT THAT HE DID NOT EVEN ADDRESS AT ALL.

AND, UH, HE DIDN'T TAKE INTO ACCOUNT THE EXPERIENCE THAT WE HAD WITH, WITH, UH, THE HOLLY PLANT, WHICH COST FAR IN EXCESS OF WHAT WAS ANTICIPATED.

SO, UM, HE ALSO TALKED ABOUT COST ALLOCATION METHODS BEING, UH, WITHIN THE EYE OF THE BEHOLDER.

AND, AND I WILL TELL YOU, YES, REASONABLE MINDS CAN AND DO, UH, DIFFER AS TO HOW YOU ALLOCATE OR ASSIGN COSTS TO THE VARIOUS CUSTOMER CLASSES.

THAT'S HOW COST ALLOCATION WITNESSES MAKE, MAKE A LIVING.

UM, BUT I WILL TELL YOU THAT THE RECOMMENDATIONS FROM THE ICA WERE, WERE VERY ONE-SIDED IN PUSHING COSTS AWAY FROM THE RESIDENTIAL CLASS, WHEREAS THE PROPOSALS BY AUSTIN ENERGY WERE MUCH MORE NEUTRAL ON THOSE POINTS.

UM, AND AGAIN, THAT WAS RECOGNIZED BY THE I AND HIS RECOMMENDATION.

HE ALSO TALKED ABOUT THE CUSTOMER CHARGE, BUT WHAT HE FAILED TO MENTION IS THAT THEIR CALCULATION OF THE CUSTOMER CHARGE DID NOT INCLUDE INTERNALLY GENERATED FUNDS FOR, UM, UH, CONSTRUCTION.

IT DID NOT INCLUDE GFT, IT DID NOT INCLUDE GENERAL PLANT.

IT DID NOT INCLUDE A AND G, IT DID NOT INCLUDE NON UTILITY OPERATIONS.

IF YOU INCLUDE ALL OF THOSE ADDITIONAL COSTS, WHICH IT IS APPROPRIATE TO DO IN CALCULATING A CUSTOMER CHARGE, THEN YOU HAVE A MUCH HIGHER CUSTOMER CHARGE THAT NEEDS TO BE RECOVERED RATHER THAN THE 11 OR $13 RECOMMENDATION THAT HE INITIALLY PRESENTED, OR THE $12 THAT HE'S INCLUDED WITHIN THE, UM, THEIR ALTERNATIVE PROPOSAL.

UH, MS. COOPER MENTIONED THE NACODOCHES PLANT.

I WOULD JUST POINT OUT THAT THAT PLAN IS NOT IN BASE RATES.

IT'S NOT PART OF THIS RATE EXAMINATION WHATSOEVER.

UM, HF MADE SOME COMMENTS, AND I'LL ADDRESS THOSE BRIEFLY.

THE 2012 AGREEMENT IS NOT BINDING UPON THE PARTIES.

THAT'S NUMBER ONE.

NUMBER TWO, OUTSIDE CITY CUSTOMERS WILL BE RECEIVING A SIGNIFICANT OR MOST OUTSIDE CITY CUSTOMERS WILL, WILL RECEIVE SIGNIFICANT RATE DECREASES UNDER AUSTIN ENERGY'S PROPOSAL.

THIRD POINT, IT IS APPROPRIATE TO CHARGE OUTSIDE CITY CUSTOMERS A GENERAL FUND TRANSFER.

HIS HIS STANDARD OF, YOU KNOW, THE, THE FACT THAT THEY DON'T, THEY MAY NOT RECEIVE DIRECT CITY BENEFITS, THAT THAT IS NOT A STANDARD IOUS, FOR EXAMPLE, PAY DIVIDENDS TO SHAREHOLDERS ACROSS THE GLOBE.

RATE PAYERS PAY THOSE RATES THAT INCLUDE THOSE PAYMENTS, EVEN THOUGH THEY OBVIOUSLY WOULDN'T GET ANY BENEFIT FROM THE MONEY THAT'S PAID OUT TO SHAREHOLDERS.

AND THEN LASTLY, WITH RESPECT TO HER, IT'S, IT IS APPROPRIATE TO HAVE SYSTEM-WIDE RATES.

IN FACT, PURE, SPECIFICALLY, THAT'S THE PUBLIC UTILITY REGULATORY ACT, UH, SPECIFICALLY CONTAINS PROVISIONS THAT SAY THAT THERE'S A PREFERENCE FOR SYSTEM WIDE RATES.

UM, MR. ROBINS AND MS. COOPER BOTH MADE COMPARISONS OF THE CUSTOMER CHARGE PROPOSED BY AE TO OTHER UTILITIES.

AND AS HE NOTED, UH, THOSE OTHER UTILITIES DO NOT HAVE TIERED RATES, WHEREAS AUSTIN ENERGY OBVIOUSLY DOES.

THAT'S IMPORTANT THOUGH, BECAUSE THEY'RE ABLE TO COLLECT THOSE FIXED COSTS, UM, AT ALL LEVELS OF CONSUMPTION.

[01:45:01]

WHEREAS AUSTIN ENERGY'S RATES ARE OBVIOUSLY, UM, THEY HAVE TO COLLECT THOSE DOLLARS FROM THE HIGHER TIERS AND THEY'RE SIMPLY ARE NOT ENOUGH.

KW H SELL IN THOSE TIERS IN ORDER FOR THEM TO GET FULL COST RECOVERY.

IS $25 THE MAGIC NUMBER? PERHAPS NOT.

IS THERE SOME ROOM FOR DISCUSSION? CERTAINLY THERE IS.

HAS IT OR BEEN? YES.

WILL WE CONTINUE TO VISIT WITH THE INTERVENERS? UH, MOST DEFINITELY IN HOPES OF REACHING SOME TYPE OF AGREEMENT.

AND THEN LASTLY, UH, T I C UH, POINTED OUT THAT THE REVENUE REQUIREMENT OF 12 MILLION IN THEIR OPINION IS FAIR.

I WOULD STATE THAT IT'S ENTIRELY, UM, ARBITRARY.

THE, THE ICA DID PUT ON EVIDENCE THAT WAS REJECTED BY THE IE SAYING THAT, THAT THE REVENUE REQUIREMENT INCREASE SHOULD BE $6 MILLION.

AND THEN THIS MORNING WE GET A RECOMMENDATION THAT SAYS 12 IS APPROPRIATE WITHOUT ANY BASIS WHATSOEVER FOR THAT.

AS I SAID AT THE OUTSET, IT APPEARS THAT IT IS SIMPLY A PUBLIC SETTLEMENT OFFER, PERHAPS, OR A CONCESSION OFF THEIR DIRECT CASE, UM, THAT AGAIN, WE'VE NOT HAD A CHANCE TO, TO FULLY DIGEST.

AND THEN LASTLY, T UM, REFERENCED THE PRIMARY SUBSTATION RATE.

UM, THE REASON IT WAS NOT INCLUDED IN THE, ANY OF THE NUMBERS IS CAUSE AUSTIN ENERGY HAS NOT DEVELOPED THAT RATE AT THIS TIME.

UH, BUT IT WILL SHIFT ABOUT 9 MILLION, I BELIEVE, UH, MR. HALLMARK INDICATED TO OTHER CUSTOMERS WHO WILL HAVE TO PICK UP THOSE COSTS.

SO THAT'S GOING TO TAKE SOME TIME TO DEVELOP, UH, IF AUSTIN ENERGY IS REQUIRED TO DO SO.

THOSE ARE ALL MY COMMENTS.

THANK YOU, MR. BOCATO.

UM, THAT PUTS US RIGHT ABOUT 1159, RIGHT ABOUT NOON, WHICH IS WHEN WE HAD AGREED WE WOULD BREAK FOR LUNCH.

AND I WOULD AT THIS POINT HAND THE CHAIR OVER TO MAYOR PRO, TOM AFTER I RECESSED THIS MEETING AND HAND THE GAVEL OVER TO THE MAYOR PROTO TO CONVENE A SPECIAL CALLED MEETING.

ONLY ONE REAL WAY TO REDUCE RESIDENTIAL RATES, AND THAT'S TO CHARGE MORE IN THE OTHER RATE CASES OR TO LOWER THE REVENUE ESTIMATES.

UH, COUNCIL MEMBER POOL.

UM, AND AS CHAIR OF THE OVERSIGHT COMMITTEE, I WILL RECONVENE US FROM OUR RECESS.

UM, LOOKS LIKE WE HAVE CLOSE TO A QUORUM IN DEFERENCE TO THE MAYOR WHO'S GONNA HAVE TO HEAD OUT HERE PRETTY QUICKLY.

I'M GOING TO, UH, GO AHEAD AND START THE MEETING WITH HIS, UH, ROUND OF QUESTIONS.

UM, WE'LL DO THE ROUND ROBIN, WE'LL START WITH THE MAYOR FOR FIVE MINUTES.

WE'VE GOT A TIMEKEEPER FOR THE TIME.

WE'LL MOVE THROUGH EACH DISTRICT IN NUMERICAL ORDER, BEGINNING WITH DISTRICT ONE.

AND I WANNA NOTE IF YOU WANNA PASS, UM, WHEN YOUR TIME COMES UP, I'LL CIRCLE BACK AROUND TO YOU BEFORE ENDING THE ROUND AND I'LL BE THE LAST QUESTIONER IN THE ROUND MAYOR EVER.

GREAT, THANK YOU.

I HAVE QUESTIONS FOR AUSTIN AND ENERGY, UH, AND, AND I HAVE THREE QUESTIONS AND I'M GONNA ASK ALL THREE OF THEM AND HOPE THAT YOU CAN GIVE ME AN ANSWER TO ALL THREE OF THEM WITHIN THE FIVE MINUTE PERIOD OF TIME BEFORE THEY MOVE TO THE NEXT PERSON.

THE FIRST ONE IS, IS I LOOK AT THE SLIDES.

I AM, I AM HAVING TROUBLE SEEING HOW IT IS THAT IF WE CHANGE TIERS OR IF WE CHANGE THE LEVEL OF THE FLAT BASE RATE AMOUNT, WE HAVE ANY REAL IMPACT ON BETTER GETTING DOLLARS TO PEOPLE WHO ARE MOST VULNERABLE OR MOST ECONOMICALLY CHALLENGED.

IN OTHER WORDS, WITHIN THE LOWER THREE TIERS, IT SEEMS TO BE, UM, UH, WE HAVE PEOPLE WHO ARE, ARE VULNERABLE IN EACH OF THE TIERS.

WE HAVE PEOPLE WHO ARE NOT VULNERABLE IN EACH OF THE TIERS.

UH, AND IF WE BRING BENEFIT TO ONE OF THE TIERS, WE'RE JUST BRINGING BENEFIT TO ONE GROUP OR ANOTHER OF OUR MOST VULNERABLE.

UM, AND SINCE THE FLAT RATE PLUS THE VARIABLE RATE HAS TO EQUAL THE TOTAL AMOUNT WE NEED TO ACHIEVE, I'M HAVING DIFFICULT FINDING ANY REASON TO BE INVOLVED IN TIER OTHER THAN ONE THE REASONS THAT YOU GAVE WITH RESPECT TO VOLATILITY AND NOT OVERCHARGING OR UNDERCHARGING.

AND SECOND, WHETHER OR NOT THE TIERS ACTUALLY GIVE US A, A PRICE SIGNAL THAT PEOPLE USE.

MY SECOND QUESTION IS, IF WE WANT TO ACTUALLY GET DOLLARS TO SOMEBODY WHO IS MOST VULNERABLE, THAT APPEARS AS IF OUR BEST.

AND, AND REALLY THE ONLY REAL WAY TO DO IT THAT'S BEEN IDENTIFIED IS TO DO A BETTER JOB WITH THE CAP PROGRAM.

WE'RE GETTING THE 25% OF THE PEOPLE.

AND I THINK THAT AUSTIN ENERGY OUGHT TO HAVE AS ONE OF ITS GOALS NOT TO WORK HARD OR TO HOLD PUBLIC HEARINGS AND MANAGER, PROBABLY PART OF YOUR EVALUATION TOO SHOULD BE SIMPLY, DO WE GET 75% OF THE ELIGIBLE PEOPLE PARTICIPATING IN CAP NOW GO FIGURE OUT HOW TO DO THAT BECAUSE IT'S A PROGRAM THAT WORKS AND THAT WE CAN'T DO THAT AND WE TARGET THOSE PEOPLE.

AND THEN THE LAST ONE IS, UH, AS WE STRUGGLE WITH TRYING TO REDUCE RESIDENTIAL RATES, IT'S ALSO BECOMING APPARENT THAT THERE'S

[01:50:01]

IF WE'RE NOT GONNA LOWER THE REVENUE ESTIMATES AS, AS, AS, BECAUSE IF THAT'S THE CASE, THEN IT'S A ZERO SUM GAME.

AND I WANT TO KNOW IF IT IS LEGAL FOR US TO MAINTAIN A SYSTEM THAT THAT DOES NOT APPROPRIATELY CHARGE COMMERCIAL AND RESIDENTIAL, UH, WITH THEIR COST OF SERVICE.

AND WE'LL HAVE AUSTIN ENERGY COME UP AND RESPOND.

AND I'LL ALSO SAY THAT TO THE EXTENT THAT QUESTIONS CANNOT BE ANSWERED TODAY, OR IF OTHER QUESTIONS COME UP, WE WILL, WE WILL SUBMIT THEM TO STAFF AND ASK THAT STAFF PROVIDE WRITTEN RESPONSES TO THEM.

UH, MAYOR, I, I'LL, UH, ADDRESS THE SECOND AND THIRD QUESTION AND DEFER TO MR. DOMBROWSKI TO ADDRESS THE, THE FIRST QUESTION THAT YOU HAD ON THE SECOND QUESTION RELATED TO THE CAP PROGRAM.

UM, THIS IS SOMETHING THAT CAME UP IN THE WORK SESSION THE OTHER DAY AND SINCE THAT TIME, AND EVEN ACTUALLY BEFORE THAT TIME, AUSTIN ENERGY HAS BEEN EVALUATING THE CAP PROGRAM AND IN PARTICULAR THE ISSUE THAT YOU JUST MENTIONED, WHICH IS, UH, WHETHER THERE ARE METHODS, WAYS, MEANS, AND, UH, TO GET GREATER, UM, ENROLLMENT FROM THE ELIGIBLE CUSTOMERS THAT AE ALREADY HAS, AS YOU NOTED, YOU KNOW, IT'S ON THE ORDER OF 25, 30% OF ELIGIBLE CUSTOMERS ARE ACTUALLY SIGNED UP.

SO THAT'S SOMETHING THAT IS, UM, BEING EXPLORED RIGHT NOW.

AND, AND, UM, AND WE HOPE TO COME BACK WITH SOMETHING IN THE VERY NEAR FUTURE THAT, THAT PRESENTS LIKE SPECIFIC THINGS THAT AE HAS IDENTIFIED AND ITS CAP PROGRAM THAT COULD HELP RE ACHIEVE, UM, GREATER ENROLLMENT NUMBERS.

UM, CUZ CERTAINLY THAT WILL HELP LOW INCOME CUSTOMERS.

YOUR FINAL QUESTION ADDRESSING LIKE COST ALLOCATION METHODS AND, AND UM, POTENTIALLY DISCRIMINATORY RATES.

YOU KNOW, INSTEAD IN DOING RATE MAKING GENERICALLY, UM, IT'S APPROPRIATE TO ASSIGN OR ALLOCATE COSTS TO VARIOUS CUSTOMER CLASSES BASED UPON COST CAUSATION PRINCIPLES, WHICH MEANS THAT THE CUSTOMERS WHO CAUSE AN EXPENSE TO BE INCURRED SHOULD BE THE ONES WHO BEAR THOSE COSTS IN THEIR RATES.

UM, HOWEVER, UM, THE REALITY IS THAT THROUGHOUT THIS COUNTRY'S, UH, HISTORY AND IN ALL 50 JURISDICTIONS ACROSS THE COUNTRY, RATES ARE RARELY IF EVER DONE ENTIRELY, UM, BASED UPON COST OF SERVICE.

AND OF COURSE, DIFFERENT CONSULTANTS, DIFFERENT EXPERTS CAN DIFFER AS TO WHAT THEY THINK THE REASONABLE ALLOCATION IS IN THE FIRST PLACE.

SO THE STARTING POINT IS NOT EVEN GOING TO BE THE SAME.

NEVERTHELESS, UM, THE PUBLIC UTILITY REGULATORY ACT, WHICH, UM, REGULATES THE, UH, ELECTRIC REGIME OR PARADIGM, UM, IN OUR STATE, THE LAW THAT, THAT THE PUBLIC UTILITY COMMISSION, UM, USES TO BASE ITS DECISIONS, IT HAS LANGUAGE THAT PROHIBITS UNREASONABLY DISCRIMINATORY RATES.

AND THAT HAS GENERALLY BEEN INTERPRETED TO MEAN THAT RATES DON'T HAVE TO BE ENTIRELY COST BASED, BUT THEY MUST BE WITHIN SOME CERTAIN AREA, UH, RANGE OF REASONABLENESS.

THERE'S SOME SUBJECTIVITY OBVIOUSLY TO THAT, UH, AND TO, YOU KNOW, THAT'S NOT A DEFINED TERM IN THE STATUTE.

AND SO AGAIN, WHILE THERE'S A LITTLE BIT OF GRAY AREA THERE, YOU KNOW, GENERALLY IN SETTING RATES, YOU ATTEMPT TO DO IT IN A WAY THAT IS COST BASED.

THANK YOU, MR. BROCA.

AND THEN ON YOUR FIRST QUESTION I'LL DEFER TO, TO MR. DUMBROWSKI.

MARK THE CHIEF FINANCIAL OFFICER, IF I UNDERSTAND IT CORRECT, THE QUESTION CORRECTLY IS CAN YOU USE RATES AND THE TIERS TO, UM, UH, PROVIDE ASSISTANCE TO LOW INCOME CUSTOMERS? AND WHAT WE FIND IS THAT UNLIKE TAXES, UH, UTILITY RATES ARE NOT PROGRESSIVE AND REGRESSIVE.

AND WHAT WE FIND IS THAT AT AROUND $60,000 OR LESS INCOME, THERE'S NO CORRELATION BETWEEN CONSUMPTION AND AND INCOME.

UM, AND SO IF YOU THINK ABOUT IT, EVERY CUSTOMER HAS SALES IN THEIR FIRST TIER, REGARDLESS OF INCOME, FIRST 500 KWH, AND THEY'RE ALL BEING SUBSIDIZED.

SO WHETHER YOU MAKE A MILLION DOLLARS A YEAR OR $10,000 A YEAR, YOUR RATES ARE BEING SUBSIDIZED THAT YOU'RE BUYING IN A FIRST TIER ARE ALSO BEING SUBSIDIZED IN THE SECOND TIER REGARDLESS OF INCOME.

AND SO WHAT WE'RE FINDING IS CUSTOMERS WHO ARE BETWEEN 60 AND A HUNDRED THOUSAND DOLLARS, UM, UH, ARE THE ONES WHO ARE MOSTLY BUYING ELECTRICITY.

THOSE FIRST TIERS ARE BEING SUBSIDIZED.

SO WE THINK TRYING TO USE RATES IN TIERS AS A WAY TO, UH, IMPLEMENT LOW INCOME PROGRAMS IS A BLUNT TOOL.

WE BELIEVE RATES SHOULD BE SET, UH, TO RECOVER COST AND DESIGN PROGRAMS TO ASSIST OUR VULNERABLE CUSTOMERS.

EXHIBIT THAT YOU SHOWED US IN WORK SESSION THAT SAID, HERE'S A RESIDENTIAL AREA AND A VULNERABLE COMMUNITY, AND HERE'S ONE THAT'S NOT, LOOK WHAT THEY'RE BEING, WHAT THEY'RE PAYING.

SO WITH RESPECT TO THE ACTUAL, AND I APPRECIATE THAT ANSWER.

THERE WAS AN

[01:55:01]

AND THE VULNERABLE COMMUNITY ACTUALLY HAD A HIGHER BILL.

AND THEN, UM, UH, COUNCILMAN FUENTES SAID, LET'S COMPARE APPLES TO APPLES.

GIVE US BOTH A RESIDENTIAL AREA IN, IN BOTH SO WE CAN COMPARE.

UH, AND WHEN YOU DID THAT, THAT IN FACT DID LEAD TO AN ADJUSTMENT WHERE THE RATE BEING PAID WAS, WAS CLOSER TO BEING THE SAME, IT WAS ONLY $6, UH, DELTA THAT'S CORRECT.

THAT'S UNDER THE EXISTING SYSTEM THAT HAS MULTIPLE TIERS.

FIVE, AND IT HAS A PRETTY EXTREME MOVEMENT FROM FIRST YEAR, FIRST TIER CHARGE TO FIFTH TIER TIER CHARGE.

AND THEN WE ASKED YOU TO RUN THAT EXACT SAME COMPARISON WITH THE MORE FLAT RATE AND WITH THE FEWER TIERS TO SEE IF THAT WOULD CHANGE THE RELATIONSHIP BETWEEN WHAT THE VULNER MORE ECONOMICALLY VULNERABLE COMMUNITY WAS PAYING VERSUS THE MORE AFFLUENT COMMUNITY.

AND IT HAD VIRTUALLY NO IMPACT.

THE DELTA WAS VERY MUCH THE SAME.

THAT'S CORRECT.

UH, AND, AND I WOULD APPRECIATE IF YOU WOULD TAKE THAT, THAT SHEET THAT, THAT SHOWED THAT, UH, AND, AND, AND PUT IT INTO BACKUP FOR THIS SESSION SO THAT PEOPLE CAN SEE THAT.

BECAUSE IF IN FACT THAT'S TRUE AND DOESN'T MAKE ANY DIFFERENCE HOW MANY TIERS WE DO, OR WHETHER WE'RE FLAT OR NOT FLAT, THEN WE CAN HAVE A CONVERSATION ABOUT RATES AND TIERS THAT REALLY JUST FOCUS ON DOES IT GIVE US PRICE SIGNALS THAT WE NEED TO USE AND DO WE WANT TO HAVE A SYSTEM THAT, UH, UH, DOESN'T HAVE THE VOLATILITY, UH, AND DOESN'T HAVE US IN DANGER OF DOING OVERPAYMENTS OR UNDERPAYMENTS? IT WOULD NARROW DOWN THE CONVERSATION IF THE OTHER CONVERSATION ISN'T RELEVANT.

SO IF YOU COULD INCLUDE THAT PAGE, I THINK THAT WOULD BE HELPFUL.

WE WILL, WE'LL, UH, ADD THAT TO THE PUBLIC DOCUMENTS.

THANK YOU, MAYOR.

THANK YOU MR. DON BROSKI.

AND I'VE ASKED, UH, THE STAFF TO RUN THE TIMER SO THAT WE CAN HEAR IT, UM, CAUSE WE COULDN'T HEAR IT BEFORE.

UH, LET'S SEE.

DISTRICT ONE, UH, COUNCIL MEMBER HARPER MADISON, DO YOU HAVE ANY QUESTIONS THAT YOU'D LIKE TO ASK AT THIS POINT? VERY GOOD.

I DO.

THANK YOU, CHAIR.

WE'VE GOT THE FIVE MINUTE TIMER GOING AND, UM, WE'LL TEE UP THE STAFF.

PLEASE PROCEED.

COUNCIL MEMBER HARBOR MEDICINE.

AND THANK YOU.

UH, THE FIRST QUESTION IS FOR MR. KAMAN.

UM, AND, UH, THE, THE QUESTION IS, UH, HOW DID YOU BALANCE, HOW DID YOU BALANCE RATHER THE INTERESTS OF THE RESIDENTIAL CLASS WHEN DEVELOPING YOUR PROPOSED RATE DESIGN? UH, THANK YOU.

UH, WE, UM, IT, IT WAS QUITE AN EXTENSIVE PROCESS AND, UM, LET ME SAY THAT IT IS, IT IS NOT DEAL, IT IS NOT EASY DEALING WITH THESE VARIOUS TIERS, BUT WE HAVE AN EXPERT IN CLEARANCE JOHNSON, AND I THINK I MIGHT JUST DEFER TO HIM IN A SECOND TO, TO TALK ABOUT THAT.

BUT, UM, YOU KNOW, WITH THE TIERS, YOU HAVE A WHOLE, YOU HAVE, UH, THE CONCERN THAT, YOU KNOW, IF YOU TINKER WITH THAT YOU ARE GONNA CAUSE, YOU KNOW, SOME, SOME RATE SHOCK OR SOME DISRUPTION TO SOME GROUP OR ANOTHER, WHETHER THEY'RE LOW INCOME OR, OR WHATEVER IT, IT, IT'S, IT'S VERY EASY TO WIND UP WITH A, A CHANGE THAT REALLY SOCKS IT TO ONE PARTICULAR SUB SUBGROUP OF CUSTOMERS.

BUT I, I THINK MAYBE IT'S JUST BEST LET, UH, LETTING MR. JOHNSON HERE, UH, TELL YOU HOW HE DID IT.

HELLO, MY NAME'S CLARENCE JOHNSON.

UM, WHEN I APPROACHED THIS ISSUE, UH, IT REMINDED ME OF WHAT, UH, RATE DESIGN EXPERTS, UH, THAT I'VE SEEN OVER THE YEARS, MANY TIMES SAY, WHICH IS THAT, UH, RATE DESIGN IS MORE OF AN ART THAN A SCIENCE.

AND IN THIS CASE, I THINK THAT'S, UH, DESCRIBES WHAT I, WHAT I HAD TO DO IN THIS CASE.

AND THE, THE, UH, AND THE REASON IT IS AN ART IS BECAUSE THERE ARE MANY CONSIDERATIONS, MANY POLICY CONSIDERATIONS THAT AFFECT, UH, AN APPROPRIATE RATE DESIGN.

UM, FOR INSTANCE, YOU, YOU NEED TO BALANCE, UH, AUSTIN ENERGY'S CONCERN REGARDING, UH, RATE VOLATILITY OR RATE STABILITY WITH, UH, THE ACTUAL IMPACT OF THE RATES ON SPECIFIC CUSTOMERS.

UH, IN ORDER TO AVOID RATE SHOCK, UH, IN ORDER TO AVOID WHAT I WOULD CALL AN INEQUITABLE, UH, RECOVERY OF A, OF A SIZABLE RATE INCREASE WITHIN THE RESIDENTIAL CLASS.

UH, SO, UH, WHEN AUSTIN ENERGY USES THREE TIERS AND ALSO INCREASES THE CUSTOMER CHARGE BY 150%, THE IMPACT OF THAT IS TO PRODUCE VERY LARGE PERCENTAGE INCREASES IN THE LOWER TIERS.

AND AT THE SAME

[02:00:01]

TIME, IT PRODUCES RATE REDUCTIONS IN THE BILLS OF THE VERY HIGHEST USERS.

AND THE REASON THIS OCCURS IS BECAUSE YOU'VE TAKEN AWAY THE TOP TIERS AND IT ALSO AFFECTS, UH, THE, UH, PRICE SIGNALS THAT ARE PRODUCED.

THE, THE AUSTIN ENERGY ACKNOWLEDGES THAT THE CURRENT INCLINING BLOCK RATE STRUCTURE IS INTENDED TO, UH, PRODUCE ENERGY CONSERVATION.

AND, UH, IF YOU REMOVE THOSE TOP TIERS, UH, YOU REMOVE THOSE PRICE SIGNALS AT VERY HIGH USAGE.

UH, YOU IN FACT ARE, UH, RUNNING COUNTER TO ANOTHER POLICY CONSIDERATION, WHICH IS ENERGY CONSERVATION.

SO MY APPROACH, CAN I INTERRUPT YOU BRIEFLY? I'M SORRY.

CAN YOU REMIND ME YOUR LAST NAME? IT WAS CLARENCE.

I'M SORRY, WHAT'S YOUR LAST NAME? JOHNSON.

MR. JOHNSON.

I, I, I APOLOGIZE AND I CERTAINLY DON'T MEAN TO SEEM ABRUPT, BUT I ONLY HAVE FIVE MINUTES AND I DON'T THINK WE'RE GONNA GET THROUGH IT WITH THIS RESPONSE.

SO LET ME JUST, I'LL, I'LL CON I'LL HAVE YOU, I'LL TRY TO HELP YOU CONDENSE HOW TO ARTICULATE MY RESPONSE.

I THINK TO SOME DEGREE WHAT I'M ASKING YOU FOR IS ADVICE ON HOW TO EXPLAIN EXTRAORDINARILY COMPLICATED SUBJECT MATTER TO LAY PEOPLE AND MY CONSTITUENTS.

AND SO IF THEY WERE TO ASK ME THE QUESTION ABOUT HOW YOU FORMULATED, WHAT WOULD BE, YOU KNOW, A ONE MINUTE, 30 SECONDS, I MEAN, I KNOW I MIGHT BE ASKING FOR THE IMPOSSIBLE, IN WHICH CASE I WOULD PREFER THAT YOU BE CANDID AND SAY YOU CAN'T DO IT QUICKLY, UM, OR EASILY OR SIMPLY.

UH, BUT THAT'S REALLY WHAT I WAS TRYING TO EXTRACT WITH THAT QUESTION.

UH, MY APPROACH WAS TO AVOID THE LARGE RATE INCREASES IN THE, IN THE FIRST BLOCKS, UH, AND TO, UH, ELIMINATE THE RATE REDUCTIONS IN THE VERY HIGH BLOCKS AND TRY TO CONDENSE THE PERCENTAGE INCREASES FOR ALL OF THE TIERS INTO A FAIRLY NARROW RANGE OF PERCENTAGES.

AND TO DO THAT, I NEED, I NEEDED FOUR TIERS AND WITH FOUR TIERS, IT IS A, IT DOES ACKNOWLEDGE TO SOME EXTENT THE CONCERNS THAT AUSTIN ENERGY HAS REGARDING REVENUE STABILITY.

THANK YOU, MR. JOHNSON.

WE'LL MOVE TO DISTRICT TWO.

COUNCIL MEMBER FUNES.

APPRECIATE YOUR, YOUR CANDOR.

AND, UM, CHAIR POOL.

I DO WANNA TO, THIS, THIS, UH, CONVERSATION HAS REMINDED ME SOMETHING OF WHAT COUNCIL MEMBER BE TOVO SHARED EARLIER THAT I JUST WANNA ECHO SUPPORT FOR IS THAT IF WE COULD HAVE SOME DEDICATED TIME TO HAVE A PRESENTATION ON THE PROPOSAL PROPOSED BY THE INTERVENERS, THAT WOULD BE VERY HELPFUL BECAUSE IN THE TESTIMONY WE HEARD EARLIER, I KNOW THERE WERE SOME COMMENTS THAT TOUCHED ON THE PROPOSAL, BUT WE REALLY HAVEN'T GOTTEN AN OVERVIEW OF WHAT ALL IS INCLUDED AND HOW THEY GOT TO, UH, THE 12 MILLION TOTAL.

I KNOW I HAVE SOME QUESTIONS ON THAT.

AND THEN THE OTHER QUESTION I HAVE FOR YOU, A CHAIR PULL BEFORE WE START MY TIME, IS ON PROCESS, CUZ THERE ARE, THERE'S RESPONSES HAPPENING, AND I HAD A QUESTION WITH WHAT THE MAYOR SHARED EARLIER, BUT ARE WE, AM I JUST ASKING ANY GENERAL QUESTION RIGHT NOW? OR CAN I, IF THERE'S A RESPONSE THAT'S GIVEN TO ANOTHER COLLEAGUE AND THE QUESTION THAT THEY ASK, CAN WE BUILD ON THAT RESPONSE? OF COURSE YOU CAN.

YOU CAN BUILD ON IT.

YOU HAVE FIVE MINUTES TO USE ENTIRELY YOURSELF OR TO PITCH A QUESTION AND LET THE RESPONDER ANSWER.

UM, KIND OF LIKE WHAT YOU SEE IN A CONGRESSIONAL KIND OF A CONVERSATION.

UM, I WILL NOTE THAT THIS IS, UH, AN INFORMATION SEEKING, UM, SESSION.

WE'RE NOT COMING TO ANY CONCLUSIONS.

AND AT THE, AT THE END OF OUR CONVERSATION TODAY, UH, I WILL REMIND THE PARTIES THAT THEY ARE STILL IN THE PROCESS OF NEGOTIATING AND URGE THEM TO GET BACK TO THE NEGOTIATIONS SO THAT WE GET SOME RECOMMENDATIONS AND OPTIONS THAT WE CAN DEAL WITH AND, UM, AND, AND DISCUSS LATER ON THIS MONTH.

SO TODAY WE REALLY ARE OPENING THE DOOR FOR EACH OF THESE PARTICIPANTS TO LAY OUT THEIR CONCERNS FOR OUR GREATER BENEFIT.

AND WE HAVE TIME BETWEEN NOW AND THE END OF THE MONTH AND THE FIRST DECEMBER TO DELVE INTO THAT IN A VARIETY OF DIFFERENT WAYS, BOTH AT WORK SESSIONS, UH, TWO MORE PUBLIC HEARINGS, AND THEN OF COURSE IN SMALL GROUP OR ONE-ON-ONE CONVERSATIONS THAT YOU MAY CHOOSE TO HAVE.

SO FOR TODAY, UM, THAT'S KIND OF THE, YOU CAN USE YOUR FIVE MINUTES, HOWEVER, HOWEVER YOU'D LIKE.

SO I WILL START WITH A QUESTION FOR THE INDEPENDENT HEARING EXAMINER.

AND THIS QUESTION IS, THANK YOU.

I'M NOT SURE WHAT YOU'RE GONNA BE ASKING ABOUT.

THAT'S OKAY.

ANY JUDGE DOESN'T KNOW THE CASE AS WELL AS THE PARTIES THAT PRESENTED IT.

IT'S JUST PART OF THE DEAL, BUT I'LL DO MY BEST.

GOTCHA.

[02:05:01]

UM, UNDER YOUR RECOMMENDATION INSIDE CITY RESIDENTIAL CUSTOMERS WHO COMPRISE THE VAST MAJORITY OF AUSTIN ENERGY CUSTOMERS WOULD RECEIVE A BASE REVENUE INCREASE OF 16.4%, WHICH IS 25 HIGH, 25% HIGHER THAN PROPOSED.

CAN YOU EXPLAIN HOW YOU ARRIVED AT THE 16.4% INCREASE OR INSIDE THE CITY RESIDENCE? I THINK YOU'RE TALKING ABOUT RATE DESIGN.

YEAH, MY, MY, UH, LAW PARTNER ANDREW EDGE, WHO'S IN A COURT HEARING RIGHT NOW, ACTUALLY DEVELOPED ALL OF ALL OF THAT.

UM, BUT LET ME SAY THIS, UM, WE CAN FOLLOW UP AND PROVIDE YOU MORE INFORMATION ON IT.

THAT'S NOT A PROBLEM.

WE CAN DO IT THROUGH STAFF OR HOWEVER YOU LIKE, BUT THAT'S SUCH A SPECIFIC QUESTION.

I'M NOT SURE EXACTLY HOW HE CAME UP WITH THAT, BUT I DO KNOW, I DO KNOW THIS, LIKE THE ICA HAS POINTED THIS OUT JUST REAL QUICK.

UM, YOU HAVE A 35, UH, MILLION DOLLAR PROPO, 35.7 MILLION REVENUE REQUIREMENT, BASICALLY IS WHAT THE, THE CITY'S TALK, UH, AUSTIN ENERGY'S TALKING ABOUT.

AND ICAS POINTED OUT THAT SOME 43 MILLION IS GONNA BE TAKEN OUTTA RESIDENTIALS.

SO THAT WAS THE, THAT FOR ME TRIGGERED A MAJOR CONCERN.

I CAN, I CAN GIVE YOU THAT, BUT AS FOR THE, THE 16%, IT'S SUCH A SPECIFIC FIGURE.

I WISH THAT I COULD GIVE YOU AN ANSWER RIGHT NOW, BUT WE CAN FOLLOW UP.

UM, OKAY.

YEAH, NO, THAT, THAT'S FINE.

I, I'LL ASK SARAH WITH MY TEAM TO ALSO EMAIL THAT TO YOU SO YOU HAVE THE, THE QUESTION.

UM, OKAY.

AND I THINK THIS IS GETTING TO THE QUESTION THAT, UM, COUNCIL MEMBER HARPER MADISON JUST ASKED, BUT IF YOU COULD ALSO TOUCH ON THIS, CAN YOU EXPLAIN FURTHER HOW THE RATE SHOCK, EXPLAIN FURTHER THAT THE RATE SHOCK THAT RESIDENTIAL CUSTOMERS WILL EXPERIENCE WITH A PROPOSED CUSTOMER CHARGE AND TIER STRUCTURE.

SO IF YOU CAN JUST ELABORATE ON WHAT THAT RATE SHOCK WOULD ENTAIL FOR OUR RESIDENTIAL CUSTOMERS.

UM, ALRIGHT.

YES, ACTUALLY THE, THE 150% INCREASE IN THE CUSTOMER CHARGE, WHILE I UNDERSTAND AUSTIN ENERGY, THE REASON WHY THEY WANTED, AND THEY, THEY FEEL THAT THEY NEED TO DO THAT IS BECAUSE THEY'RE TRYING TO RECOVER FIXED COSTS AND NOT USE A VARIABLE, UM, OR REVENUE SET UP LIKE FUEL AND ENERGY.

UM, I GET IT, BUT THE THING IS, WHEN WE AREN'T EVEN CERTAIN OF THE FOLKS WHO AREN'T COVERED BY CAP, RIGHT? AND I'M NOT TALKING ABOUT EVERYONE THAT'S ELIGIBLE FOR CAP.

THERE ARE PEOPLE WHO ARE ELIGIBLE FOR CAP.

AND BY THE WAY, FOR CAP, I DON'T KNOW, MAYBE YOU COULD JUST PUT SOMETHING ON THE BILL THAT FOLKS COULD SIMPLY SAY, ARE YOU HAVING PROBLEMS PAYING YOUR ELECTRIC BILL? CALL US? SOMETHING LIKE THAT.

I DON'T KNOW.

UM, JUST PRACTICAL SOLUTIONS.

BUT ANYWAY, GETTING BACK TO WHAT I THINK YOUR, YOUR QUESTION IS CAP, I MEAN THE, UH, THE CUSTOMER CHARGE CREATED SOME REAL CONCERNS ABOUT RAY SHOCK.

IT JUST DID, UH, 150% AND WE AREN'T QUITE SURE IF THE LOW USAGE FOLKS ARE THE FOLKS THAT ARE, THAT ARE ECONOMICALLY DISADVANTAGED OR THE HIGH USAGE FOLKS BECAUSE WE'VE, WE'VE SEEN EVIDENCE OF BOTH.

AND WHAT, UH, MR. EDGE AND I BOTH SUSPECT, AND WE WERE JUST DISCUSSING THIS, IS THAT IT'S A LITTLE BIT OF BOTH.

YOU MIGHT HAVE FOLKS WHO ARE LIVING IN, YOU KNOW, UH, UH, A COMBINED HOUSING UNIT WHERE THEY HAVE ACTUALLY LOW ENERGY CHARGES, BUT BOY, THAT THAT CUSTOMER CHARGE IS GONNA HIT THEM HARD.

AND THEN YOU CAN ALSO HAVE PEOPLE WHERE WE HAD THE EXAMPLE DURING THE WORK SESSION IN 7, 8, 7, I CAN'T REMEMBER, TWO FOUR, I, I CAN'T REMEMBER WHAT IT WAS, BUT UP ON THE NORTHEAST SIDE WHERE THEY ALREADY PAY A LOT AND THEY'RE GONNA HAVE A CUSTOMER CHARGE AS WELL.

SO WHAT I'M GETTING AT IS I'M NOT SURE WHETHER IT'S LOW SUIT, LOW USAGE, OR HIGH USAGE.

WE HAVE A FEELING WE SUSPECT, AND THIS IS REALLY THE PROVINCE OF EXPERTS, BUT WE SUSPECT THAT YOU'RE GONNA SEE IT AT BOTH ENDS.

AND SO THERE COULD BE A REALLY BROAD SWATH OF FOLKS WHO ARE GONNA BE AFFECTED BY THIS THAT AREN'T EVEN ELIGIBLE FOR CAP.

AND THAT WAS A KNEE-JERK CONCERN OF OURS FROM THE VERY BEGINNING.

WELL, LET'S TALK ABOUT CAP.

YOU KNOW, RIGHT NOW WE KNOW THAT IT IS, UM, AUTO-ENROLLED FOR THOSE WHO ARE 200% AND THE FEDERAL PROPERTY LINE, UM MM-HMM.

THAT AND EVEN THAT, UM, THERE'S 35,000 CUSTOMERS.

SO WE'RE NOT REALLY SURE OF, OF ALL OF THE INDIVIDUALS WITHIN THE SERVICE AREA THAT WOULD BE ELIGIBLE TO CAP IF THEY'RE EVEN ON THE PROGRAM.

SO IT'S A VERY, IT'S A SMALL SUBSET OF 25%, I THINK IS WHAT THE, IS THE FIGURE THAT IT'S THE NUMBER THAT THROWN AROUND OR THAT THAT'S WHAT I HEAR.

JUST 25% OF THOSE ELIGIBLE IS MY UNDERSTANDING, 25% OF THOSE ELIGIBLE.

SO I GUESS MY QUESTION FOR YOU IS, YOU KNOW, IN YOUR EXPERTISE, UM, HOW ARE OTHER, WHICH I WE'LL TAKE UP ON THE NEXT ROUND, , THANK YOU.

UM, IF YOU WOULD SUBMIT THE QUESTION IN, IN WRITING, WE'D, WE'D GET BACK TO YOU ON IT.

AND I'M, I'M SORRY THAT I COULDN'T ANSWER YOUR 16% QUESTION, BUT WE'LL GET IT ANSWERED.

DISTRICT THREE, COUNCIL MEMBER RENTERIA.

MY, MY QUESTION IS ON THE SAME LINE AS, UH, CAP, UH, IF, IF WE, UH, WE REALLY TRY TO NEUTRALIZE THE, UH, THE SHOCK, UH, AND I HEARD THAT THE MAYOR WAS SUGGESTING THAT, UH, WE INCREASE THE, UH, THE AMOUNT OF, OF, UH, THE LEVEL ON, UH, CAMPS.

UH,

[02:10:01]

UM, HOW WOULD THAT, AND I MEAN, I'M REALLY STUCK WITH THE, UH, $12 BASED COST FEE, UH, IT, UH, BRINGING IT UP TO THAT EXTRA $2.

AND, UH, I WOULD LIKE TO HEAR FROM MR. JOHNSON OR HIS ASSOCIATE ASSOCIATE THAT, UM, AFTER HEARING WHAT THE, YOU KNOW, AUSTIN UTILITY, AUSTIN ENERGY RESPONDS TO IT, UH, CAN YOU GIMME A MORE CLARIFICATION ABOUT EXACTLY WHAT THE, THE, WHAT DO YOU THINK THE, THE DISCUSSION IS, AND DO YOU, UH, FEEL LIKE THERE MIGHT BE A, A NEUTRAL AREA OR, OR DO YOU REALLY FEEL LIKE THE $12 IN THE FOUR TIER IS THE BEST WAY TO GO? OKAY.

UH, I'LL, I'LL DO MY BEST.

UH, UM, COUNCIL MEMBER REN, UH, THE, WELL, AND, AND THIS IS, I I THINK AN ANSWER TO THE ORIGINAL QUESTION.

WHAT WE TRIED TO DO WAS TO PREVENT ANY SUBSET OF CUSTOMERS FROM RECEIVING A VERY SHOCKING BILL.

YOU KNOW, WHETHER THEY'RE LOW INCOME OR NOT.

UH, I, I TEND TO BELIEVE THAT, UM, THAT A MAJORITY OF, UH, LOW INCOME FOLKS IN, IN, IN THE CITY USE LESS THAN THE AVERAGE.

I MEAN, THAT'S, THAT'S WHAT WE SEE NATIONWIDE.

THAT'S WHAT WE SEE TEXAS WIDE.

AND, UH, WE DON'T HAVE, YOU KNOW, ALL THE DATA, AND I'M SURE THERE ARE OUTLIERS, BUT IT SEEMS TO BE AN ECONOMIC CONSTANT THAT IN THAT INCOME AND ENERGY USAGE ARE CORRELATED.

SO THAT LEADS US TO BELIEVE THAT MAJORITY OF LOW INCOME CUSTOMERS WOULD BE AFFECTED BY AUSTIN ENERGY'S RATE DESIGN.

NOW, THAT'S NOT, THAT'S NOT EVERYONE.

WE KNOW IT'S LOW USAGE.

WE ALSO KNOW THAT SENIOR CITIZENS TEND TO USE LESS THAN THE AVERAGE.

AND SO, SO MORE SENIOR CITIZENS WOULD BE IMPACTED BY AUSTIN ENERGY'S APPROACH AND SO FORTH.

BUT OUR, OUR APPROACH WAS NOT TO NECESSARILY PICK WINNERS OR LOSERS.

IN FACT, WE WERE TRYING TO SHARE THE PAIN AND, AND MOVE IN THE DIRECTION THAT AUSTIN ENERGY WANTS, BUT NOT DO IT IN A WAY THAT DOESN'T GIVE SOMEONE A 45% RATE INCREASE.

AND, UH, THAT'S, THAT, THAT'S IT IN A NUTSHELL.

NOW, IF WE DO RATE DESIGN, RIGHT, UH, AND WE, UH, WE, WE MAKE SURE THAT ALL THE COSTS ARE ALLOCATED EITHER TO THE FIXED CHARGE OR TO THE USAGE CHARGE, EITHER TO THE CUSTOMER CHARGE OR TO THE PER KILOWATT HOUR CHARGE, AUSTIN ENERGY SHOULD GET ALL THE MONEY THAT THEY DESERVE.

NOW I UNDERSTAND WHERE THEY'RE COMING FROM.

THEY'RE LOOKING AT THIS, THIS USAGE CURVE, UH, AND THEY SEE USAGE, UH, DECLINING, AND THEY'RE WORRIED THAT IF THEY DON'T PUT MORE COST INTO THE FIXED CHARGE, THAT THEY'RE GOING TO SOMEHOW HAVE A, A CONTINUALLY DETERIORATING, UM, UH, YOU KNOW, FINANCIAL PICTURE.

UH, THAT'S NOT GONNA HAPPEN VERY QUICKLY.

AND OF COURSE, AUSTIN ENERGY CONTROLS THE ABILITY TO COME IN IF, IF THAT STARTS HAPPENING, THEY COULD ASK FOR ANOTHER RATE INCREASE IN, IN TWO YEARS OR WHATEVER.

BUT, UH, WE, WE STILL BELIEVE FIRMLY THAT THERE ARE MANY REASONS, INCLUDING COST REASONS.

WE STILL BELIEVE THAT, THAT, THAT, THAT THE PROPER WAY TO ALLOCATE COST IS NOT TO PUT ALL THE FIXED COSTS IN THE CUSTOMER CHARGE, BUT ONLY THE CUSTOMER SPECIFIC COSTS.

AND THAT'S WHY WE ARE TRYING TO HOLD THAT DOWN.

AND THERE'S, AND THERE'S A VARIETY OF REASONS, UH, TO, TO DO THAT AS, AS WE'VE TALKED ABOUT, INCLUDING THE ENERGY EFFICIENCY INCENTIVE AND, UH, JUST THE MITIGATION OF, OF IMPACTS ON LOW USAGE CUSTOMERS, NO MATTER WHAT KIND OF PEOPLE THEY ARE.

UM, SO, AND, AND AS YOU RAISE, THE HIGHER YOU RAISE THAT CUSTOMER CHARGE, THE HARDER IT BECOMES TO PREVENT THE RATE SHOCK AND, AND THE HIGHER, THE HIGHER THE OVERALL REVENUE REQUIREMENT IS.

AND THE MORE THAT YOU DUMP THAT ON THE RESIDENTIAL CLASS, THE HARDER IT BECOMES.

AND SO, UM, WE, WE HAVE TRIED TO TAKE TO STAKE OUT A POSITION HERE THAT IS WITHIN THE ZONE OF REASONABLENESS.

AND, AND WE, EVERYTHING THAT YOU SEE IN THE JOINT CONSUMER ALTERNATIVE, UH, PROPOSAL IS SOMETHING THAT HAS BEEN THROUGHOUT THE PROCESS, SOMETHING THAT AUSTIN ENERGY HAS SEEN.

THERE'S NOTHING NEW IN THAT, UH, PARTICULAR PROPOSAL AND IT, BUT IT IS A, WHAT WE BELIEVE IS A MIDDLE OF THE ROAD APPROACH.

UM, THE OTHER THING I WOULD SAY ABOUT THE CUSTOMER CHARGE IS, IS NO MATTER WHAT OVERALL REVENUE REQUIREMENT YOU DO, YOU, YOU APPROVE, TRY TO KEEP THAT INCREASE, UH, AS CLOSE TO THAT PERCENTAGE AS AS POSSIBLE.

NOW AT $12, YOU'RE GONNA BE RAISING THE CUSTOMER CHARGE AT A HIGHER RATE THAN THE OTHER PARTICULAR TIERS.

BUT, UH, AS MR. JOHNSON WAS GOING INTO, YOU HAVE TO DO A LOT OF TINKERING TO STILL KEEP THAT INCENTIVE IN THERE, UH, BUT NOT CAUSE SOMEONE ALONG THE WAY TO, TO GET A SHOCKING, UH, BILL AND, AND FOR YOU TO GET A LOT OF CALLS FROM PEOPLE WHO ARE VERY UPSET

[02:15:02]

AND YOUR RECOMMENDATION IS JUST TO GO TO THE FORD TIER AND NOT INCREASE THE BASE COSTS.

DID YOU WANNA ANSWER THAT? I, I'M NOT SURE I HEARD IT.

, ARE YOUR, ARE YOUR, UH, ARE YOU SAYING THAT, UH, YOU SHOULD, WE SHOULD JUST GO WITH THE FOUR TIERS AND NOT THE, UM, ADDED VALUE OF THE $2 TO, TO GO TO 12 BUCKS? NO, NO.

WE, IT IT'S A, IT'S A PACKAGE TOGETHER.

AND I THINK TO DO THIS RIGHT, YOU HAVE TO CONSIDER BOTH THE FIXED CHARGE AND WHERE THE TIERS ARE.

IT, IT'S, IT'S KIND OF A BALANCING ACT.

AND WE GO TO DISTRICT FOUR, WHICH IS COUNCIL MEMBER.

BELLA, DO YOU HAVE ANY QUESTIONS? MY QUESTION WOULD BE ON THE DIFFERENCE BETWEEN THE CURRENT, UM, VALUE OF SOLAR, UH, UH, POLICY AND THE PROPOSED CHANGES TO THE VALUE OR THE, THE, THE, THE NEW PROPOSED POLICY.

UH, I JUST WANNA UNDERSTAND THAT, UH, A LITTLE BIT BETTER IN SIMPLE TERMS. JAMES BRAZIL FOR SIERRA CLUBS.

IN SIMPLE TERMS, THERE'S A COUPLE OF WAYS TO LOOK AT IT.

FIRST OF ALL, THE CURRENT, THE CURRENT RATE CURRENT CALCULATION LOOKS FORWARD INTO THE FUTURE 25 YEARS.

THAT'S TO CONSIDER WHAT WE THINK IS THE RIGHT WAY TO DETERMINE WHAT THE, UH, INVESTOR, THE HOMEOWNER IS GOING TO LOOK AT.

THE PROPOSED RATE OR CALCULATION LOOKS BACKWARDS.

IN ADDITION, THE CURRENT RATE LOOKS FORWARDS AND INCLUDES A SUITE OF COSTS THAT ARE, UM, KIND OF A COMPLICATED SUITE OF COSTS, BUT, UH, IT INCLUDES SOME ENVIRONMENTAL COSTS, IT INCLUDES SOME CAPACITY COSTS, SOME TRANSMISSION DISTRIBUTION COSTS.

IT INCLUDES ALL KINDS OF COSTS THAT WE BELIEVE, OR THAT THE AUSTIN ENERGY PEOPLE WHO DEVELOPED THIS IN THE PAST BELIEVED CORRECTLY REFLECT ALL THE DIFFERENT KINDS OF COSTS THAT ARE AT ISSUE, THE BACKWARD LOOKING COSTS UNDER THE PROPOSAL, LOOK AT JUST A FEW COSTS THAT ARE BASED ON ERCOT RATE, CURRENT ERCOT, OR PAST ERCOT, UH, CHARGES FOR TRANSMISSION DISTRIBUTION.

THAT'S A SIMPLE EXPLANATION.

SO FROM, IF I'M A HOMEOWNER WITH, UH, AND AGAIN, I'M JUST TRYING TO UNDERSTAND THIS A LITTLE CONCEPTUALLY BEFORE DIGGING TOO FAR INTO THE DETAILS, BUT IF I'M A HOMEOWNER WITH, YOU KNOW, SOLAR PANELS ON, UH, THE ROOF OF MY HOUSE, UH, THERE'S A CERTAIN AMOUNT OF, I WOULD IMAGINE LIKE EXTRA KIND OF, YOU KNOW, CAPACITY OR EXTRA KILOWATTS THAT ARE, YOU KNOW, GIVEN INTO THE SYSTEM.

AND ARE WE TALKING ABOUT WHAT THAT PERSON IS CREDITED FOR THE ELECTRICITY THAT IS PUT BACK ONTO THE GRID? IT YES, THAT'S THE CALCULATION TO DETERMINE THE AMOUNT OF THAT CREDIT.

THE AMOUNT OF THE CREDIT IS CALCULATED CURRENTLY USING THE FORWARD LOOKING CALCULATION.

25 YEAR FORWARD CALCULATION, THE AMOUNT OF THE CREDIT IS BEING PROPOSED TO BE CALCULATED USING THE NEW ONE.

AND SO IN IT, WILL THAT CALCULATION THEN GIVE THAT A SOLAR PANEL HOMEOWNER LESS MONEY FOR THE, UH, SOLAR ENERGY THAT THEY'RE GENERATING? I BELIEVE THAT IT, THERE IS A KIND OF A QUIRK IN THE RESULT.

THE BACKWARD LOOKING ONE THAT IS BEING PROPOSED WILL ACTUALLY INCREASE IT UNDER THE CURRENT CONDITIONS.

BUT THAT'S A KIND OF A QUIRK OR, OR A, A, AN EXCEPTION TO WHAT WOULD'VE NORMALLY HAPPEN.

OUR CLAIM HAS BEEN THAT WHETHER IT GOES UP OR DOWN, YOU STILL NEED TO USE THE RIGHT METHODOLOGY AND LOOK FORWARD.

BUT I BELIEVE THAT IT, THE PROPOSAL IN THIS INSTANCE WOULD ACTUALLY MAKE IT GO UP, MAKE THE CREDIT GO UP SLIGHTLY.

AND HOW LONG, UH, UH, WOULD THAT KIND OF QUIRK CONTINUE? I MEAN, I'M ASSUMING THAT THERE'LL BE ANOTHER, YOU KNOW, RATE CASE AT SOME POINT WHERE THE, THE, THE METHODOLOGY COULD BE ADJUSTED AGAIN.

AND, UH, WE DON'T KNOW FOR SURE HOW LONG IT WOULD GO ON.

THERE IS A DIFFERENCE BECAUSE WHEN YOU START LOOKING, WHEN YOU LOOK FORWARD FOR 25 YEARS, YOU GET A, A PRETTY FIXED DETERMINATION.

WHEN YOU LOOK BACKWARDS AT OCK COSTS, EVERY OR SO OFTEN YOU GET A, A VERY CHANGE, YOU KNOW, A CHANGEABLE RATE.

SO WE DON'T REALLY KNOW HOW LONG IT WOULD STAY IN PLACE.

UH, WHAT WE ALSO, WHAT WE DO KNOW IS THAT UNDER THE JOINT PROPOSAL WE'RE PROPOSING THAT IT BE LOOKED AT AGAIN IN, IN THE NEAR FUTURE.

SO I DON'T HAVE A PRECISE ANSWER FOR YOU, BUT CURRENTLY IT STAYS IN PLACE, I THINK MORE FOR LONGER TERM UNDER THE CURRENT, UNDER THE PROPOSAL, IT COULD BE CHANGED.

THAT THEY'RE GENERATING AS A, AS A RESULT OF THAT INVESTMENT.

SO THE, THE, THE VALUE OF SOLAR CALCULATION THEN IS AGAIN, FUNCTIONALLY WHAT WE'RE TALKING ABOUT THE NET METERING KIND OF VALUE, I GUESS, FOR THE, THE, THE HOMEOWNER THERE, RIGHT? IT IS A, IT IS A, IT'S A CREDIT THAT'S PROVIDED FOR, UH, THE, TO COMPENSATE THEM FOR THE INVESTMENT AND FOR THE POWER THAT THEY'RE USING AS A RESULT OF THAT INVESTMENT OR POWER

[02:20:01]

UM, THAT'S RIGHT NOW, THAT'S, UH, THAT'S THE ONLY, UH, THE ONLY QUESTION I HAVE.

I'M HAPPY TO DONATE THE REST OF MY TIME TO ANYBODY ELSE IF THANK YOU SO MUCH.

AND WHAT I'M, WHAT I'M GONNA DO, I REALIZED, UM, AND THE CITY MANAGER ASKED ME TO, UM, WHEN YOU ASK A QUESTION, COULD YOU IDENTIFY WHO YOU WANNA ASK IT OF, AND THEN WE'LL GIVE PEOPLE A CHANCE TO GET UP TO THE PODIUM BEFORE WE START THE TIME.

SO LET'S SEE, THAT WAS DISTRICT FOUR, DISTRICT FIVE, WHICH IS COUNCIL MEMBER KITCHEN.

YOU HAVE, UM, UH, YES.

WHO DID YOU WANT TO ASK YOUR QUESTION OF? YES, THANK YOU, CHAIR.

I'M NOT CERTAIN WHO TO ASK THIS, THIS, UH, QUESTION OF, I AM FOLLOWING UP ON SOME EARLIER QUESTIONS ABOUT THE CAP PROGRAM, AND I WANT TO ASK SOME, UH, QUESTIONS SPECIFICALLY ABOUT THE ANALYSIS THAT'S BEING DONE THAT WAS MENTIONED THAT WOULD BE BROUGHT BACK TO US.

SO WHO WOULD YOU SUGGEST THAT I WOULD THAT BE AUSTIN ENERGY.

OKAY, MR. BOCATO.

MR. BOCATO, COME UP TO THE PODIUM AND WE CAN STOP THE TIME UNTIL HE GETS THERE.

AND MS. COOPER WITH HIM? VERY GOOD.

ALL RIGHT, WE CAN START THE TIME AGAIN.

HELLO, TAMMY COOPER, SENIOR VICE PRESIDENT OF REGULATORY COMMUNICATIONS AND COMPLIANCE.

AND JUST SPECIFICALLY SOME THINGS THAT WE HAD ALREADY HAD IN THE WORKS REGARDING, WELL, WHAT CAN I ASK MY QUESTION? HOLD ON JUST A MINUTE.

ASK MY QUESTION.

SO THANK YOU.

THANK YOU VERY MUCH.

BUT I WANNA GET VERY SPECIFIC ABOUT THE QUESTION.

UH, SO, UM, AND, AND JUST AS, AS A PREFACE, OTHERS HAVE SAID, UH, BECAUSE THE CUSTOMER SERVICE CHARGE OR THE CUSTOMER CHARGE IS NOT, UH, CHARGED FOR THOSE FOLKS IN THE CAP, UM, IT'S PARTICULARLY IMPORTANT FROM MY PERSPECTIVE TO, TO, UH, UNDERSTAND WHAT WE CAN DO TO MAKE SURE WE'RE REACHING MORE OF THE ELIGIBLE PEOPLE, UH, FOR CAP.

SO WHAT I'D LIKE TO ASK AS A FOLLOW UP QUESTION IS, I KNOW THAT SOME ANALYSIS HAS BEEN BEGUN BASED ON EARLIER, UM, QUESTIONS.

I WOULD LIKE TO KNOW, UH, WHEN WE, WHEN, WHEN THAT ANALYSIS WILL BE MADE AVAILABLE TO US, I'D LIKE TO HAVE THAT BEFORE WE MAKE DECISIONS ON HOW WE'RE GONNA GONNA PROCEED, UH, WITH THIS, UM, WITH THIS, UH, RIGHT INCREASE.

SO, AND I WOULD LIKE TO HAVE AS A COMPONENT OF THAT ANALYSIS, IT SEEMS TO ME IT'S IMPORTANT TO UNDERSTAND WHAT ARE, WHAT ARE THE, UM, WHAT ARE THE APPROACHES THAT YOU ALL, UM, ARE RECOMMENDING OR INTEND TO TAKE, UH, TO INCREASE THAT PERCENTAGE OF ELIGIBLE PEOPLE PARTICIPATING? SO WHAT'S THE, HOW, WHAT'S THE TIMELINE THAT YOU WILL TAKE THOSE, UM, AND WHAT'S THE TARGET PERCENTAGE FOR EACH HOW, IN TERMS OF HOW OF HOW MUCH YOU THINK YOU CAN, UH, INCREASE PARTICIPATION, UM, AND THEN A THOROUGH ANALYSIS OF THE ELIGIBILITY PROCESS.

SO BASICALLY I'M ASKING YOU FOR A WORK PLAN SO THAT WHEN YOU COME BACK AND TALK WITH US ABOUT THE CAP PROGRAM AND HOW YOU INTEND TO GET FROM ABOUT 25% TO CLOSER TO A HUNDRED PERCENT, I'D LIKE A WORK PLAN FOR HOW THAT'S GOING TO BE DONE.

AND I'D LIKE TO HAVE THAT BEFORE WE TALK ABOUT THE, UM, YOU KNOW, BEFORE IT COMES BACK TO US, UH, BEFORE WE ARE ACTUALLY MAKING OUR DECISIONS ON THE BREAK CASE.

SO CAN YOU SPEAK TO, UM, TO THAT SCOPE FOR THE ERROR ANALYSIS AND YOUR TIMING FOR GETTING IT BACK TO US? I CAN'T SPEAK SPECIFICALLY TO THE SCOPE, UM, BUT I CAN TELL YOU THAT I HAVE TALKED TO STAFF MEMBERS IN THAT AREA AND HAVE ASKED THEM TO SEE IF THEY COULD HAVE SOMETHING TO PRESENT TO YOU NEXT TUESDAY AT THE, UH, NEXT MEETING.

SO THAT WOULD CERTAINLY GIVE YOU, UM, AT AT LEAST A PRELIMINARY REVIEW OF THAT WORK PLAN.

UH, WE HAVE ALREADY HAD SOME THINGS ALREADY IN THE WORKS BEFORE THIS DISCUSSION EVEN CAME UP WITH RESPECT TO MM-HMM.

, UH, SPECIFIC MARKETING EFFORTS THAT WILL BE SOFT LAUNCHING BEGINNING DECEMBER AND STARTING INTO THE NEW YEAR.

SO THEY CAN ALSO OUTLINE THAT AS WELL.

BUT IN TERMS OF SPECIFICALLY MEETING CERTAIN TARGETS AND WHAT, WHAT OTHER ACTIVITIES THEY WILL BE LOOKING AT, UM, I WILL DEFER TO THEM TO PRESENT THAT, UH, TO YOU NEXT WEEK.

CAN YOU ASK THEM TO COVER THAT, COVER THOSE, UM, THOSE ASPECTS OF A WORK PLAN? ABSOLUTELY.

YEAH, I WANNA KNOW SPECIFIC ACTIONS.

I WANNA KNOW WHEN, AND I WANNA KNOW WHAT'S EX WHAT, UH, THE THINKING IS IN TERMS OF WHAT YOU'LL GET OUT OF THOSE ACTIONS.

DOES IT, DOES THAT MAKE SENSE? YES.

IN TERMS OF ASKING FOR YES, IT DOES.

UM, AND THEN, UM, RELATED TO THAT, I WOULD LIKE TO ASK THEM TO CONSIDER, UM, CONSIDER DIRECT OUTREACH TO INDIVIDUALS, UM, AS OPPOSED TO

[02:25:01]

MORE BROADER MARKETING.

I THINK MARKETING CAN BE USEFUL, BUT I ALSO THINK IN THIS INSTANCE THAT MORE DIRECT CONVERSATIONS WITH INDIVIDUALS ABOUT THE AVAILABILITY OF THE PROGRAM MAY BE NECESSARY.

SO I'D LIKE TO ASK THEM TO THINK ABOUT WHAT MIGHT BE POSSIBLE IN TERMS OF THAT APPROACH.

DOES THAT MAKE SENSE? YES.

YOU DONE, I'M ASKING.

YES, WE CAN, WE CAN HAVE THEM SPEAK TO THAT AS WELL.

I'D ALSO LIKE TO ASK THEM TO SPEAK TO BROADENING THE RANGE OF AUTO ENROLLMENT.

UM, IN TERMS OF WHAT THEY, WHAT THEY, UM, WHAT THEY DO FOR THAT.

UM, AND I'D ALSO LIKE TO ASK THEM TO THINK IN TERMS OF AN OPT OUT AS OPPOSED TO AN OPT IN.

THERE, THERE'S SOME COMPLEXITIES TO THAT THAT MAY NOT BE POSSIBLE, BUT I'D LIKE 'EM TO THINK ABOUT THAT ALSO.

I, I WILL CERTAINLY, UH, GO BACK AND, AND TALK TO THE RESPONSIBLE STAFF PEOPLE ABOUT THAT.

AND THANK YOU.

I THINK NEXT TUESDAY WILL BE TIMELY BECAUSE THAT GIVES US TIME FOR AN INITIAL CONVERSATION.

AND THEN, UM, I, I KNOW MY COLLEAGUES WILL PROBABLY HAVE MORE QUESTION AND PERHAPS MORE IDEAS RELATED TO THAT.

SO THAT SHOULD GIVE US TIME TO HAVE A CONVERSATION, UM, IN TIME TO CONSIDER THE CAP PROGRAM.

UM, SO CHAIR, THAT'S ALL THE QUESTIONS I HAVE AT THE MOMENT.

THAT'S GREAT.

AND, AND YOU WERE RIGHT ON TIME DISTRICT, UH, SIX.

HELLO.

THAT'S ME.

COUNCIL MEMBER KELLY.

YOU HAVE FIVE.

DO YOU KNOW WHO YOU WANNA ASK A QUESTION? I, YOU KNOW, I DON'T, BUT I, I THINK IT WOULD BE A QUESTION POSSIBLY FOR AUSTIN ENERGY.

IT WAS MENTIONED EARLIER TODAY ABOUT THE TEST YEAR HAPPENING DURING WINTER STORM URIE.

AND SO MY QUESTION WAS REALLY TO WHAT EXTENT WOULD THE EFFECTS OF THE WINTER STORM HAVE HAD ON THAT TEST URINALYSIS AND HAS IT BEEN CONSIDERED AS PART OF YOUR CALCULATIONS MOVING FORWARD? SO COUNCIL MEMBER, THIS WAS AN ISSUE THAT, THAT WAS ADDRESSED BY THE IE.

AND, AND HE ASKED, UH, AUSTIN ENERGY TO REEVALUATE THIS AND UM, AND IN FACT AE DID THAT AND ADDRESSED IT IN THEIR EXCEPTIONS THAT WERE FILED IN SEPTEMBER.

AND YOU CAN FIND THAT DISCUSSION ON PAGES SEVEN THROUGH NINE OF THEIR EXCEPTIONS.

BUT SPECIFICALLY, UH, FOLLOWING THE ISSUANCE OF THE IHE REPORT, AE WENT BACK AND LOOKED AT THE ACTUAL DATA, UM, AND THEY PRESENTED A TABLE THAT SHOWED ENERGY SALES FOR FEBRUARY AND MARCH, WHICH WERE THE BILLING AND THE BILLING MONTHS THAT WERE IMPACTED BY WINTER STORM YURI.

AND THEY COMPARED THAT TO THE 2021 BUDGETED ENERGY SALES AMOUNTS AND THEN THE WEATHER NORMALIZED ENERGY SALES AMOUNTS.

AND WHAT THEY FOUND WAS THAT ACTUAL ENERGY SALES FOR THE MONTHS OF FEBRUARY AND MARCH OF 2021 WHEN WINTER STORM YURI OCCURRED, WAS THAT THEY WERE HIGHER THAN BO ACTUAL CONSUMPTION WAS HIGHER THAN BOTH THE BUDGETED AMOUNT AND THE WEATHER NORMALIZED AMOUNTS, WHICH SUGGEST THAT THE WINTER STORM REALLY DID NOT HAVE AN, AN EFFECT IN TERMS OF POTENTIALLY LOWERING THE, UM, TEST YOUR BILLING DETERMINANTS.

SURE.

THAT'S ALL I HAVE FOR RIGHT NOW.

OKAY, GREAT.

THAT'S COUNTERINTUITIVE THAT YOU WOULD BE INCREASING YOUR GENERAL FUND TRANSFER WHILE YOU'RE LOSING MONEY.

I'M DISTRICT SEVEN AND I'M GONNA GO AT THE END.

SO WE'LL JUMP TO DISTRICT EIGHT, WHICH IS COUNCIL MEMBER ELLIS.

DO YOU KNOW WHO YOU WANNA ASK A QUESTION? EXCITING.

I LIKE JUMPING THE LINE.

UM, I WANTED TO ASK A QUESTION ABOUT THE GENERAL FUND TRANSFER.

SO I THINK THAT IS FOR MR. SALINAS WHO HAD HAD MENTIONED IT.

THANKS FOR BEING HERE WITH US.

CAN YOU JUST QUICKLY RECAP SOME OF YOUR STATEMENTS ABOUT THE GENERAL FUND TRANSFER AND THE, UM, THE IDEA OF POTENTIALLY FREEZING IT? YES, MA'AM.

UH, THANK YOU FOR THE QUESTION.

WHAT I WAS RAISING EARLIER IS THAT WE WOULD LIKE TO HAVE A DISCUSSION WITH YOU ABOUT FREEZING THE GENERAL FUND TRANSFER RATE.

AGAIN, NOT CUTTING IT, NOT SLASHING IT, JUST FREEZING IT.

AND THERE'S PRECEDENT.

UH, I BELIEVE, UH, COUNCIL MEMBER TOVO WAS ON THE COUNCIL THE LAST TIME THEY DID THIS.

AND SO IN ORDER TO HELP THE UTILITY GET HEALTHY AGAIN, THE COUNCIL MADE THE RIGHT DECISION AND FROZE THE TRANSFER.

WE THINK YOU SHOULD CONSIDER THAT AGAIN THIS TIME.

UH, I'LL GIVE YOU AN EXAMPLE.

THE UTILITY, AS MR. DOMBROSKI HAS SHARED WITH YOU OVER THE LAST TWO YEARS, HAS LOST 90 MILLION AND THAT'S 90 MILLION THEY'VE HAD TO PULL OUTTA RESERVES, BUT BECAUSE OF THE WAY WE CALCULATE THE TRANSFER, 12% OF BASE RATES IN REGULATORY THIS YEAR, YOU WERE DUE A 6 MILLION INCREASE FROM ONE 14 TO 1 21.

[02:30:01]

THAT'S THE EXAMPLE THAT I WANTED TO GIVE.

UH, WHILE WE'RE ASKING YOU TO CONSIDER FREEZING THE GENERAL FUND TRANSFER, I THINK IT'S ONE 15 THIS YEAR IS WHAT YOU ADOPTED FOR FY 23.

THAT'S, THAT'S REALLY HELPFUL.

AND MY OTHER QUESTION, I SEE THE CITY MANAGER HAS STEPPED OFF THE DIAS, SO MAYBE I'LL JUST GET THIS, UM, YOU KNOW, OFF, OFF THE, THE HEARING, BUT I'M, I'M ALSO CURIOUS ABOUT ANY SORTS OF IMPACTS TO THE GENERAL FUND DEPARTMENTS KNOWING THAT SOME ARE SELF-SUSTAINING.

AND I'M JUST CURIOUS THAT IF WE WERE TO DO ANYTHING WITH THAT GENERAL FUND TRANSFER, THAT WE'D REALLY WANNA UNDERSTAND WHAT IMPACTS ARE HAPPENING TO OTHER DEPARTMENTS AND PROGRAMS. CUZ I KNOW THAT THOSE WOULD ULTIMATELY BE REALLY TOUGH DECISIONS FOR US.

UM, SO I'D, I'D WANNA MAKE SURE THAT WE'RE LOOKING INTO THAT.

UM, I ALSO, I GUESS IF I HAVE EXTRA TIME, I HAVE ANOTHER QUESTION I THINK THIS MIGHT BE FOR, IS IT MR. PEREL WITH THE SIERRA CLUB? UM, I REALLY APPRECIATED COUNCIL MEMBER KITCHEN'S LINE OF QUESTIONING ON, ON EXPANDING THE CAP PROGRAM.

UM, HOW, HOW MUCH DO YOU THINK THAT CAN MAKE UP FOR SOME OF THE THINGS WE ARE TRYING TO ACCOMPLISH ON THE DIAS HERE WITH BALANCING THAT THE, THE BASE RATE AND, AND THE TIER STRUCTURE? I'M NOT THE PERSON TO ANSWER THAT, THAT'S NOT ONE OF OUR ISSUES.

SO I THINK IT MAY BE ONE OF THE OTHER PARTIES.

IS THERE SOMEONE WHO COULD SPEAK TO THAT? I'VE STOPPED THE TIME UP HERE.

IS THERE SOMEBODY WHO? MR. KAUFMAN.

AND I, I APOLOGIZE.

I KNOW WE HAD A MEETING WITH SIERRA CLUB AND PUBLIC CITIZEN AND, AND UN FOLKS, AND SO MAYBE I'M JUST CROSSING MY WIRES ON KIND OF WHERE THESE IDEAS ARE COMING FROM.

COULD YOU PLEASE RE-ASK THE QUESTION? YEAH.

I KNOW WE WERE TALKING ABOUT THE IDEA OF EXPANDING THE CAP PROGRAM TO HELP OFFSET SOME OF THE IMPACTS TO, TO TO THE RATE PAYERS.

UM, IS THAT GOING, IS THAT REALISTICALLY GONNA BE, IS THERE A POTENTIAL TO EXPAND IT ENOUGH TO OFFSET WHAT WE'RE SEEING RIGHT HERE? WELL, FIRST OF ALL, I'M VERY GLAD, I WAS VERY GLAD TO HEAR COUNCIL MEMBER KITCHEN TALKING ABOUT THAT.

UM, UM, SOME OF MY CLIENTS ARE LOW INCOME, YOU KNOW, ENERGY ADVOCATES AND, UH, IT, IT HAS ALWAYS BEEN A FRUSTRATION OF MINE THAT THAT'S HARD TO GET.

THE, THE FEDERAL LIE HEAT PROGRAM ONLY REACHES ABOUT 30% OF FOLKS IN, IN ALMOST EVERY STATE.

AND THERE'S THERE, SINCE THE PANDEMIC, THERE'S BEEN A CONSIDERABLE AMOUNT OF MONEY PUT INTO THAT AND TO OTHER FUNDS.

AND YET STILL STUBBORNLY, IT'S BEEN DIFFICULT TO, UH, EXPAND THAT, TO GET FURTHER PENETRATION, UH, OUT THERE.

AND, UH, SO WE, YOU KNOW, SO I DO, YOU KNOW, I DORET WHEN I LOOK AT THIS, YEAH, I MEAN, IT'S A GREAT PROGRAM.

WE LIKE THE FACT THAT IT'S AUTO ENROLLMENT.

UH, ICA LIKES THIS PROGRAM AND WE WANT, WE THINK THAT THERE SHOULD BE AN EFFORT TO, UH, PROMOTE IT.

ONE THING WE'VE LEARNED IS THAT NOT CALLING THESE LOW INCOME PROGRAMS SOMETIMES HELPS PEOPLE HAVE, THERE'S A STIGMA TO THAT.

UH, PART OF THE PROBLEM WITH LIHEAP IS THAT IT'S AN ANNUAL PROCESS YOU HAVE TO GO THROUGH.

UH, BUT THAT BEING SAID, I I, I'M, I'M PESSIMISTIC THAT YOU'LL BE ABLE TO GET VERY FAR, GETTING TO 75% I DON'T THINK IS REALISTIC.

AND SO DESPITE THOSE EFFORTS, WHICH I APPLAUD AND ENCOURAGE, I THINK THAT YOU ALSO HAVE TO LOOK AT THE RATE DESIGN AND MAKE SURE THAT YOU'RE NOT, UH, DOING THINGS WITH THE RATE.

I THINK THE RATE DESIGN, UH, HAS TO ALSO BE A TOOL TO PROTECT THE MORE VULNERABLE CUSTOMERS AS WELL.

I, I APPRECIATE THAT.

AND I SEE MR. ROBINS HAS HIS HAND UP.

WILL YOU COME DOWN IF I HAVE A MINUTE LEFT OR EVEN 30 SECONDS? I JUST WANNA FLAG, I KNOW YOU'VE TALKED ABOUT THIS PROGRAM BEFORE IN MAKING SURE IN SACRAMENTO, ONE OF THEIR TECHNIQUES IS TO, WHEN PEOPLE LITERALLY SIGN UP FOR SERVICE, ONE OF THE FIRST THINGS THEY ASK IS, OH, WOULD YOU LIKE TO APPLY? UH, I DON'T THINK WE DO THAT HERE.

THANK YOU FOR THAT.

AND I'LL JUST FLAG FOR AUSTIN ENERGY.

I KNOW YOU'VE BEEN MAKING THE ROUNDS WITH ALL OF US THROUGHOUT THIS CASE, BUT I KNOW THAT MR. ROBBINS HAS IDENTIFIED AT LEAST ONE SITUATION WHERE POTENTIALLY, UM, SOMEONE MIGHT BE USING THE CAT PROGRAM THAT THAT MAY NOT NECESSARILY NEED TO QUALIFY.

AND SO I'LL, I'LL JUST FLAG THAT FOR OFFLINE.

WE WANNA MAKE SURE WE'RE CALIBRATING THAT PROGRAM IF WE'RE GONNA BE EXPANDING IT AND OFFERING IT TO PEOPLE.

AND, UM, COUNCIL MEMBER, VICE CHAIR, TOVO.

AS SOME OF THE INTERVENERS HAVE SUGGESTED FOR LATE FEE REVENUE.

DISTRICT TEN NINE.

UM, THANKS.

THERE ARE A COUPLE THINGS THAT I'M TRACKING, TRACKING THAT I JUST WANNA FLAG FOR MY COLLEAGUES.

THE CUSTOMER CHARGE, WHICH MANY OF YOU HAVE MENTIONED, I THINK IT SHOULD BE CLOSER TO, TO, UM, I THINK THE ICA HAS RECOMMENDED 11 OR $13.

I HAVE TO GO BACK AND CHECK.

I'M CONCERNED ABOUT THE NUMBER OF, OF TIERS.

AND THEN IN LOOKING THROUGH THE INTERNATIONAL, IN THE, THE INDEPENDENT HEARING EXAMINER DOCUMENT, UM, SOME OF THE THINGS THAT I THINK MAKE SENSE TO CONSIDER ARE, AND THESE ARE NOT NECESSARILY RECOMMENDATIONS FROM THE INDEPENDENT HEARING EXAMINER, BUT HAVING READ THAT REPORT AND GOING BACK AND FORTH, THESE THINGS SEEM TO MAKE SENSE TO ME.

UM, EX EXTENDING THE COLLECTION OF THE RATE CASE EXPENSES OVER FIVE YEARS RATHER THAN THREE, AS SOME OF THE INTERVENERS HAVE SUGGESTED, UM, INCLUDING A 2 MILLION ADJUSTMENT

[02:35:01]

AND I AM THINKING THROUGH THE GENERAL FUND TRANSFER, UM, OF WHETHER IT SHOULD BE SET CLOSER TO THE ONE 15 MILLION, WHICH IS MORE REFLECTIVE AS SOME OF THE INTERVENERS HAVE SAID, OF, OF WHAT HAS BEEN ACTUALLY THE, THE DOLLAR AMOUNT FOR THAT TRANSFER.

THE OTHER TWO AREAS, UH, THAT I CAN MENTION TODAY THAT I'M REALLY LOOKING AT ARE THE STORM, THE STORM EXPENSES.

UM, I THINK THAT IT DOES MAKE SENSE AS THE INTERVENERS HAVE SUGGESTED SOME OF THEM TO REMOVE ABOUT AT 1.5 MILLION WORTH OF OVERTIME AND CONTRACTUAL LABOR FROM THAT GENERAL REVENUE REQUIREMENT.

AND I ALSO WANNA TALK ABOUT THE REVENUE.

UM, AND I THINK I WOULD LIKE TO REQUEST THAT LANETTA COOPER SPEAK TO THE REVENUE RELATED TO YOUR DOCUMENT THAT YOU DISTRIBUTED TODAY TALKS ABOUT, TALKS ABOUT, UM, THE LOSS OF 2021 REVENUES CAUSED BY SIGNIFICANT SHUTDOWN OF ELECTRIC CONSUMPTION.

ARE YOU, WOULD YOU LIKE TO SPEAK TO THAT OR WOULD YOU SUGGEST I HAVE THE INDEPENDENT HEARING INDEPENDENT CONSUMER ADVOCATE? I FACEBOOK THAT.

I KNOW THAT'S IN YOUR DOCUMENT YOU'VE TALKED ABOUT A COUPLE DIFFERENT WAYS THAT THE PANDEMIC AND THE STORM REDUCED REVENUES.

AND SO IF YOU COULD ADDRESS THOSE, CUZ I THINK THAT SOUNDS, THAT SOUNDS, THAT RESONATES WITH ME THAT THAT'S A COMMON SENSE.

YOU'VE GOT THE DOCUMENT.

I DO WANNA CLARIFY SOMETHING THAT MR. BRODO SAID, UH, INVOLVING THE NACODOCHES PLANT AND WHAT, AND THAT'S WHAT MADE IT A LITTLE CONFUSING AND HARDER TO UNDERSTAND UNTIL AFTER THE RIGHT CASE, UM, WAS THEY HAVE TWO DIFFERENT SETS OF, OF, OF FISCAL YEARS.

THE FISCAL YEAR THAT THEY USED TO SET THE RATES, THEY MADE ALL KINDS OF ADJUSTMENTS.

AND ONE OF 'EM WAS THE NACODOCHES PLANT.

BUT THE, THEY MADE NO ADJUSTMENTS TO THE GRAPH THAT THEY USED TO, TO AS EVIDENCE TO SUPPORT THAT THE CURRENT RATE DESIGN IS CREATING ECONOMIC ARMAGEDDON TO YOU ALL.

AND THERE ARE SEVERAL REVENUE DECREASES THAT OCCURRED BECAUSE OF THE PANDEMIC AND BECAUSE OF THE STORM THAT ARE REFLECTED, NOT THAT ARE REFLECTED IN THE REVENUES AND THE COST IN THE GRAPH, WHICH IS ATTACHMENT ONE PAGE SEVEN OF MY RESPONSE.

THAT WAS IN THE RATE FILING PACKAGE.

AND THAT IS NOT THE FIRST TIME YOU ALL HAVE SEEN IT.

Y'ALL SAW IT IN MANY FINANCIAL, UH, UH, PRESENTATIONS.

YOU SAW IT AS A PRESENTATION BEFORE THE RATE CASE WAS FILED.

THAT VERY SAME GRAPH.

AND THAT GRAPH DOES INCLUDE NATOS.

WHY DO I KNOW THAT? BECAUSE THAT WAS A KNOWN AND MEASURABLE ADJUSTMENT THEY MADE TO THE TEST YEAR TO TAKE THOSE COSTS OUT OF FISCAL YEAR 2021 TO PUT 'EM IN THE TEST YEAR.

SO THOSE WERE IN FISCAL YEAR 2020 AND 2021.

SO WHAT DOES THAT MEAN? THAT MEANS IF WE ADJUSTED THOSE COSTS AND THE GRAPH TO TAKE OUT THE NACODOCHES, THOSE THAT COST LINE WOULD COME DOWN SO THAT THE GAP THAT SEEMS SO HUGE WOULD BE SMALLER.

THE SAME THING WITH THE REVENUES, FOR INSTANCE, YOU ALL, AND I DO, AND I DID COMMEND YOU IN THE FINAL, OUR FINAL BRIEF, BUT I COMMEND YOU ALL FOR, FOR PROTECTING CUSTOMERS.

BUT YOU CREATED RATE DISCOUNTS AND FEE WAIVERS.

YOU INCREASED THE CAP DISCOUNT THAT HAD THE EFFECT OF DECREASING REVENUES.

AND WHAT, AND IF YOU TOOK THAT ADJUSTMENT OUT, THAT WOULD HAVE THE EFFECT OF INCREASING THE REVENUE LINE ONCE AGAIN, MINIMIZING THE GRAPH.

AND WE ALL KNOW PEOPLE, PEOPLE'S BUSINESSES GOT CLOSED DOWN.

WE KNOW RESTAURANTS, WE KNOW MY FAVORITE RESTAURANT IS CLOSED IN PART BECAUSE OF THE PANDEMIC AND SALOONS.

AND WHAT DOES THAT MEAN? THEY WEREN'T PROJECTING REVENUES, FROST AND ENERGY, THEY WASN'T USING ELECTRICITY.

SO THAT ECONOMIC EFFECT WAS NOT ADJUSTED OUT.

AND I THINK THERE'S ALSO ALLEGATIONS, AND THEY MAY BE TRUE THAT IT WASN'T EVEN ADJUSTED OUT FOR, UH, THE TEST YEAR, BUT THAT'S A DIFFERENT ISSUE.

I'M REALLY ONLY TALKING ABOUT WHAT EVIDENCE DID AUSTIN ENERGY USE TO JUSTIFY THE RATE DESIGN THEY'RE PUT BEFORE YOU.

THERE'S TWO SETS OF BOOKS.

SO AS I UNDERSTAND, SO MY TAKEAWAY FROM THIS IS THAT, UM, THE REVENUES THAT ARE REFLECTED IN THE TEST YEAR ARE NOT MAKING YOUR POINT IS ARE NOT FULLY ACCOUNTING FOR THE FACT THAT BUSINESSES WERE CLOSED, PEOPLE WERE HOME, AND ALSO THE COUNCIL, AND I THINK THIS WAS MAYBE MY RESOLUTION, UM, WAIVED, WAIVED, UM, SOME OF THE CHARGES AND, AND MADE OTHER ADJUSTMENTS TO HELP FOLKS PAY THEIR BILLS DURING THAT PERIOD OF TIME.

SO OUR REVENUES WOULD'VE BEEN HIGHER.

AND SO, AND THOSE AREN'T, UM, THOSE AREN'T WELL ACCOUNTED FOR.

THERE'S,

[02:40:01]

THINK ABOUT THE ONES THAT THEY GIVE TO THE DIFFERENT TAXING AUTHORITIES.

THEY USED ONE SET OF REVENUES, I MEAN, YOU KNOW, REVENUES FOR THE TEST YEAR.

AND THEY ADJUSTED THOSE, THOSE, THEY ADJUSTED THOSE FOR THE NACODOCHES AND THEY ALSO ADJUSTED, THEY WEATHER NORMALIZED.

BUT THE SET OF BOOKS THAT YOU SAW, THOSE WERE THE ACTUAL REVENUES AND OPERATING EXPENSES THAT ACTUALLY OCCURRED IN FISCAL YEAR, FISCAL 2020.

AND THAT'S REFLECTED ON THE GRAPH THAT WASN'T PART, WELL IT IS KIND OF PART OF THE TEST YEAR, BUT IT WASN'T RIGHT.

THE OFFICIAL TEST YEAR.

AND SO, BUT THAT, THAT GRAPH IS WHAT THEY USED FOR, FOR THEIR EVIDENCE TO SAY WE NEED TO CHANGE THE RACE, THE STRUCTURE, YEAH, THE DESIGN.

SO TO ME, I THINK, UH, COLLEAGUES THAT WE NEED TO LOOK BOTH AT THE, AT THE REVENUES WITH REGARD TO THE STORM AND ALSO, UM, SOME OF THE COSTS BECAUSE OF, OF THE OVERTIME AND SOME OF THE TESTIMONY THAT WAS OFFERED WITH REGARD TO OVERTIME AND CONTRACTUAL EXPENSES, CONTRACTUAL LABOR RELATED TO THE, TO THAT.

I DON'T KNOW THAT I HAVE TIME TO INVITE THE INDEPENDENT CONSUMER ADVOCATE TO SPEAK TO THAT POINT.

I THINK, I THINK WE HAVE EXCEEDED THE FIVE MINUTES, ALTHOUGH I HAVEN'T HEARD THE BUZZER.

I HAVE 13 SECONDS, BUT PROBABLY NOT ENOUGH FOR OUR INDEPENDENT CONSUMER ADVOCATE.

I'LL HIT IT ON THE NEXT ROUND FOR YOUR INTRO, GET ANOTHER ROUND.

UH, LET'S SEE.

AND THE MARI PRO TEMP DISTRICT 10.

UM, BEFORE YOU START MY TIME, I JUST WANTED TO THROW OUT A PROCESS OPPORTUNITY.

I'LL BE, UH, CHAIRING THE MEETING ON NOVEMBER 15TH WHEN WE HAVE OUR PUBLIC HEARING.

THINK WOULD BE REALLY USEFUL IF WE COULD HAVE A REPRESENTATIVE FROM THIS JOINT PROPOSAL PRESENTED TO US, UM, AT THAT MEETING AND HAVE AN OPPORTUNITY FOR AUSTIN AND ENERGY TO DIGEST THAT AND PRESENT THEIR VIEW ON SOME OF THE ASSUMPTIONS AND THE APPROACHES.

UM, I'M WORRIED THAT IF WE WAIT UNTIL DECEMBER 1ST, WHICH WOULD BE THE ONLY OTHER OPPORTUNITY OR, OR THE 29TH, THAT THAT WILL NOT BE ENOUGH TIME.

UM, SO I'M GONNA SUGGEST THAT WE PROCEED THAT WAY AND OR COME TO MY POOL AND I CAN CONFER A LITTLE, BUT SINCE PEOPLE ARE HERE, I THOUGHT IT MIGHT SAVE SOME TIME IF WE JUST DECIDED THAT YEAH.

LET'S, LET'S DO CONFER.

UH, GENERALLY THAT SOUNDS LIKE A GOOD PLAN TO ME.

AND DO YOU KNOW WHO YOU WANNA ASK A QUESTION OF SO WE CAN SOMEBODY UP? YES.

I WOULD LIKE TO, UM, ASK, UM, THE ICA TO COME ON UP.

UM, SO ONE OF OUR LEVERS, UM, THAT YOUR PROPOSAL MAKES VERY CLEAR IS HOW MUCH REVENUE WE WANT TO SAY WE NEED TO RAISE WITH THIS RATE CASE.

SO WE'VE TALKED A LOT ABOUT TIERS, WE'VE TALKED ABOUT CUSTOMER CHARGES.

TALKED ABOUT CAP.

UM, BUT THE REAL GAME CHANGER IN YOUR APPROACH IS TO OFFER A DIFFERENT REVENUE REQUIREMENT.

RIGHT.

UM, RIGHT NOW, AUSTIN ENERGY SAYS THAT WE NEED TO RAISE 35.7 MILLION, WHICH IS DOWN FROM THE ORIGINAL PROPOSAL THANKS TO THE PROCESS.

THEN WE HAVE THE INDEPENDENT HEARING EXAMINER WHO SAYS IT'S, I BELIEVE 31.3, WHICH IS A REDUCTION IN THE GENERAL FUND TRANSFER.

AND THEN YOUR JOINT GROUP SAYS 12 MILLION.

UM, I'VE ONLY HAD A CHANCE TO SKIM YOUR PROPOSAL, BUT IT DOESN'T SAY WHAT YOU'RE COVERING WITH THAT REVENUE REQUIREMENT.

SO CAN YOU TELL US HOW YOU DERIVED 12 MILLION AND WHAT THAT COVERS AND WHAT THAT DOESN'T COVER? AND CAN YOU FOLLOW UP WITH SOMETHING IN WRITING ON THAT? YES.

WELL, I THINK, UM, UM, IF YOU HAVE OUR EXCEPTIONS DOCUMENT, WHICH IS FILED, UM, A COUPLE MONTHS AGO, I, WE COULD CERTAINLY GIVE YOU A COPY OF THAT.

THAT GOES DOWN THE VARIOUS ISSUES THAT WE HAD THAT EXPLAIN THE DIFFERENCE BETWEEN OUR 6 MILLION AND THE, AND THE 35 MILLION NUMBER.

AND SO THERE WERE ABOUT ABOUT EIGHT, SEVEN OR EIGHT ISSUES THAT WE TOOK THAT WERE, YOU KNOW, SEVERAL MILLIONS OF DOLLARS EACH.

AND SO I, I DIDN'T HAVE TIME TO GO INTO, INTO MUCH DETAIL ABOUT IT, BUT YOU, WE HAVE SORT OF A, YOU KNOW, SORT OF A LEGAL DOCUMENT THAT GOES DOWN AND DISCUSSES EACH OF THOSE FOR A FEW PAGES.

UH, AND SO THAT, THAT'S WHAT I WOULD, UH, POINT YOU TO, TO UNDERSTAND IT.

BUT THAT THE, THE, THE 12 MILLION IS A NUMBER JUST WITHIN THAT RANGE.

WE, UH, THE, THE JOINT CONSUMER GROUP THAT WE WERE WORKING WITH THAT REPRESENTS A MAJORITY OF THE OTHER PARTIES, WE THOUGHT THAT, UH, WE COULD GO THAT HIGH GOING ANY HIGHER THAN THAT.

THEN WE STARTED CREATING MORE PROBLEMS FOR THE CLASS ALLOCATION AND THE RATE DESIGN FURTHER DOWN IN THE PROCESS.

BUT, UH, THE 12 MILLION NUMBER JUST IS, IS I, I SUPPOSE, UM, CONCEDING ANOTHER $6 MILLION FROM WHAT WE HAD IN OUR LIST, BUT THERE WERE OTHER PARTIES THAT ALSO HAD ADJUSTMENTS THAT THEY PROPOSED AS WELL.

BUT THAT FROM, FROM OUR PERSPECTIVE, FROM FROM THE ICA VERSUS AUSTIN ENERGY, UM, HOPEFULLY THAT THAT EXPLAINS IT.

AND, AND WE DO HAVE THAT IN WRITING AND I THINK THAT WOULD BE THE BEST DOCUMENT.

COMFORTABLE WITH THE REVENUE REQUIREMENTS AS OFFERED, EXCEPT WITH THE EXCEPTION OF THE GENERAL FUND TRANSFER.

IF YOU LOOK AT, IF SOMEONE COULD MAKE SURE I HAVE THAT DOCUMENT, THAT WOULD BE HELPFUL.

AND IF I COULD ASK THE IE TO SPEAK TO, UM, WHAT YOU THINK WOULD, UM, WHAT, WHAT QUESTIONS WE SHOULD BE ASKING IN AS WE EVALUATE THESE REVENUE REQUIREMENTS, GIVEN THAT YOU, YOU ARE

[02:45:01]

I THINK THAT'S ESSENTIALLY, UH, THAT'S ESSENTIALLY CORRECT.

UM, I'VE INDICATED THIS ALREADY THAT, UM, WHEN YOU LOOK, ESPECIALLY IN MY, IN MY RESPONSE TO THE EXCEPTIONS, WHICH WAS FILED ON MONDAY, UM, CERTAIN PARTIES COME TO THIS WITH THEIR INTEREST THAT THEY WANT TO PROTECT.

UH, THAT WOULD BE THE ICA AND THE ICA HAS DONE AN OUTSTANDING JOB OF BEING VERY AGGRESSIVE IN TRYING TO PROTECT THE INTEREST OF THE FOLKS THAT, THAT HE REPRESENTS.

SAME THING WITH T I N X P, THEY'VE GOT THE INDUSTRIALS AND THEY'VE TRIED TO REPRESENT THEIR INTEREST.

AUSTIN ENERGY IS A NON-PROFIT AND THEY'RE TRYING TO MAKE SURE THAT THEY HAVE FINANCIAL STABILITY.

SO AS A STARTING POINT, AND IT DOESN'T, THAT IS NOT DETERMINATIVE OF EVERY REVENUE REQUIREMENT ISSUE.

RIGHT.

I JUST WANNA MAKE THAT CLEAR.

BUT ON THINGS LIKE, YOU KNOW, WHEN YOU'RE LOOKING AT THE CREDIT RATING, THEIR CONCERN OVER THE CREDIT RATING I THINK IS VALID.

AND THE INDUSTRIALS TRIED TO ARGUE WITH THEM THAT, YOU KNOW, THERE ARE, THERE ARE OTHER TYPES OF UTILITIES INCLUDING INVESTOR OWN UTILITIES THAT AREN'T SO CONCERNED ABOUT THESE TYPES OF THINGS AND MAYBE OTHER MOU.

BUT THE BASELINE WAS THIS THAT I, I FELT THAT AUSTIN ENERGY'S CONCERNS WERE LEGITIMATE.

AND WHEN YOU LOOK AT EACH OF THEIR ARGUMENTS, I ACTUALLY FOUND THEM TO BE FAIRLY COMPELLING.

I THOUGHT THAT THEY WERE REASONABLE ARGUMENTS.

YOU KNOW, THERE'S THIS ARGUMENT ABOUT THE FAYETTE POWER PLANT, AND I, IT'S MY UNDERSTANDING AND AUSTIN ENERGY CAN CORRECT ME THAT WE'RE STILL UNDER, WE HAVE AN AGREEMENT WITH FAYETTE POWER PLANT, HOW CAN WE WITHDRAW FROM THAT AGREEMENT WITHOUT GETTING SUED BY ALL CRA.

SO THERE, AND THAT'S A VERY REASONABLE POSITION THAT AUSTIN ENERGY HAS TAKEN, WHICH IS WE CAN'T SIMPLY JUST UNILATERALLY WITHDRAWAL WITH SOMETHING.

SO ARE YOU ASKING ME NOW, LET ME PIVOT TO, WHAT ARE YOU ASKING ME? ARE THERE, ARE THERE THINGS THAT ARE MORE IMPORTANT IN THE REVENUE REQUIREMENT OR ISSUES THAT ARE MORE IMPORTANT, OR I GUESS I'M TRYING TO UNDERSTAND, GIVEN YOUR EXPERTISE MM-HMM.

GIVEN THEIR PROPOSAL VERSUS A'S PROPOSAL, WHAT QUESTIONS WE SHOULD BE ASKING? YOU MEAN TO EVALUATE THEIR PROPOSAL VERSUS THE OTHER, UM, ICAS PROPOSAL, OR DO YOU MEAN THE JOINT PROPOSAL? I MEAN, ICAS PROPOSAL, I'M TALKING ABOUT THE JOINT PROPOSAL.

YEAH, THE JOINT PROPOSAL.

I THINK YOU HIT ON IT.

YOU ASKED SPECIFICALLY WHAT IS IN THERE, RIGHT.

WHAT DO YOU HAVE IN THERE? AND, UH, THE ICA LISTED A FEW THINGS.

I WOULD, IF I WERE YOU, I WOULD GET A LIST OF WHAT'S IN THERE MM-HMM.

AND THEN I WOULD COMPARE WHAT A, AT WHAT AE REQUESTED.

AND FOR THE MOST PART, I WENT WITH A, ON THE REVENUE REQUIREMENT, I ACKNOWLEDGED THIS, WHAT I, WHAT I, UH, FOUND TO BE APPROPRIATE AND REASONABLE, AND THEN SEE WHAT THEY'VE COME UP WITH.

AND I WOULD TAKE THAT DELTA AND, AND BY THE WAY, THERE MAY BE THINGS THAT ARE MISSING ENTIRELY, NON-NUCLEAR DECOMMISSIONING.

I ALSO WENT WITH AE ON THAT AND I, I HAVE NO PROBLEM GOING WITH A AE ON THAT ISSUE.

UH, LOOK AT THINGS LIKE THAT.

DOES IT REALLY MAKE SENSE TO ALTER OR CHANGE THE REVENUE REQUIREMENT FOR EACH OF THESE ISSUES? SO I THINK ALL YOU HAVE TO DO IS JUST LINE THEM UP NEXT TO EACH OTHER IF SOMETHING'S MISSING.

WHY IF SOMETHING'S IN THERE AND THEY'VE REDUCED THE AMOUNT, WELL, WHY, UM, YOU KNOW, COUNCILWOMAN TOBO, YOU MENTIONED THE, I THINK IT'S 1.3 MILLION.

I HEARD 1.5, BUT I THINK IT WAS 1.3 FOR THE CONTRACTUAL, YOU KNOW, THE, BASICALLY THE FOLKS WHO CAME IN AFTER U AND CONTRACTUAL YEAH.

DID SOME CONTRACT WORK OF ALL OF THOSE THREE ISSUES THAT WERE IN THERE.

I THINK THAT ONE YOU COULD ACTUALLY TAKE A CLOSE LOOK AT.

HOWEVER, ONE LAST THING, WHEN YOU LOOK AT THE NUMBERS THAT AUSTIN ENERGY PROVIDED, CONTRACTUAL LABOR COSTS FOR FISCAL YEAR 2020 WERE 17.6 MILLION.

CONTRACT LABOR COSTS FOR 2021 WERE 15.6 MILLION.

SO THAT'S, THAT'S WHAT I'M SAYING.

YOU HAVE TO, YOU HAVE TO LOOK AT EACH ISSUE AND LINE 'EM UP AND THEN SEE WHERE THE NUMBERS ARE AND THEN ASK QUESTIONS ABOUT THOSE NUMBERS.

I, I, THAT THAT'S HOW IT SHOULD GO.

AND IT'S NOT, YOU KNOW, IF YOU LOOK AT REVENUE OR CRIME, IT'S REALLY NOT THAT LONG IN TERMS TERMS OF, OF, OF THE, THE, THE HARD AND FAST ISSUES AS OPPOSED TO LIKE BILLING DETERMINANTS OR SOMETHING LIKE THAT.

THANK YOU, MR. GREGORY.

IF WE DON'T FIGURE OUT WHAT WE'RE GONNA AGREE ON, ON THE REVENUE REQUIREMENT, ANY EXERCISE THAT WE DO ON THE RATE AND STRUCTURE AND DESIGN IS, IS SORT OF NOT USEFUL UNTIL WE, UNTIL WE LAND ON THIS IS WHAT WE THINK OUR REVENUE REQUIREMENT OUGHT TO BE.

IF I COULD JUST, UM, JUST RESPOND TO THAT.

UM, YOU KNOW, I THINK THAT FOR COLLEAGUES, I THINK THAT'S ONE OF THE THINGS THAT WE HAVE TO DETERMINE IS HOW MUCH REVENUE DO WE THINK WE NEED TO RAISE? AND THAT SHOULD BE IN SOME SENSE, SEPARATE FROM WHAT RATE WE THINK IS REASONABLE OR NOT REASONABLE.

ABSOLUTELY.

IF WE NEED THAT, IF WE NEED TO RAISE THE REVENUE IN OUR VIEW TO MAKE IT BE, UM, FINANCIALLY STABLE AND TO COVER OUR COSTS, THEN WE HAVE TO STRUCTURE A RATE THAT GETS US THE REVENUE.

WE DON'T HAVE TO AGREE WITH THE REVENUE THAT AUSTIN ENERGY'S PUTTING FORWARD.

AND THERE MAY BE A LOT OF REASON AT THE MINIMUM TO GO DOWN TO THE 31, UH, 0.3 IS ONE STEP FORWARD, AND THERE MAY BE A LOT OF OTHER THINGS THAT WE CAN TAKE OUT.

UM, BUT WE CAN PLAY ALL WE WANT WITH CAP.

WE CAN DO ALL THESE OTHER THINGS, BUT

[02:50:01]

AND I DON'T HAVE THE ANSWER TO WHAT THAT OUGHT TO BE, BUT, UM, I THINK WE, WE NEED TO AGREE ON A COUNCIL, THIS IS THE REVENUE REQUIREMENT THAT WE'RE GONNA BUILD THE RATE STRUCTURE ON IT AND THEN, AND THEN, YOU KNOW, LOOK AT, LOOK AT THINGS THROUGH THERE.

THANK YOU MAYOR TOM, IT'S, IT'S THE BEDROCK CHAIR.

CAN I RESPOND TO THE MAYOR TIM, THAT WAS, I THINK THAT'S EXACTLY RIGHT.

I THINK WE NEED TO REALLY, THERE ARE DEFINITELY POINTS OF DISPUTE HERE, UM, ABOUT SOME OF THE REVENUE REQUIREMENT.

AND I WAS TRYING TO HIGHLIGHT KIND OF WHERE IN THERE I AGREED WITH YOU WHERE, UM, A FEW POINTS WHERE I DISAGREED, BUT AGREED WITH SOME OF THE INTERVENERS.

BUT I DO THINK WE'RE GONNA NEED TO FIGURE OUT WHAT PROCESS WE WANNA USE TO WORK THROUGH A FEW OF THOSE LEARNING ISSUES BECAUSE THAT'S, THAT IS REALLY GONNA DETERMINE, UM, A LOT BASED ON, ON WHERE WE'RE ALL, WHERE WE ALL LAND WITH REGARD TO THE REVENUE REQUIREMENT.

THANK, THANK, THANK YOU.

VICE CHAIR.

YES, MR. BICKERY, JUST ONE THING.

UH, COUNCILWOMAN PUENTES, I THINK YOU WERE TALKING ABOUT PAGE 1 27 IN THE FINAL REPORT.

WHEN YOU ASKED ME THAT QUESTION, I THINK THAT THAT'S WHAT YOU WERE TALKING ABOUT.

AND THE ICA ACTUALLY HAS AN ANSWER FOR YOU, BUT WE, WE DON'T RUN CALCULATIONS.

WE, WE TELL YOU WHAT THE CALCULATIONS WERE PROVIDED BY THE PARTIES.

SO I JUST WANNA CLARIFY.

I'M, I JUST WANNA MAKE THAT CLEAR.

SO THANK YOU.

SO I'LL GO AHEAD AND ASK, ASK MY QUESTION.

IT'S GONNA BE OF AUSTIN ENERGY AND IF, IF, UH, AND IT'S GONNA BE ON THE GENERAL FUND TRANSFER, WOULD THAT BE YOU, MR. BECA? RIGHT.

WHEN HE GETS TO THE PODIUM, PLEASE START THE TIMER AND THEN WE'LL GO AROUND ONE MORE TIME AND DO SOME MOP UP ON ANY QUESTIONS THAT HAVEN'T BEEN COMPLETELY ANSWERED, ANOTHER FIVE MINUTE ROUND FOR EVERYBODY.

AND THEN, UM, ANY CLOSING DISCUSSION? ALL RIGHT.

COULD YOU START THE TIMER ON ME PLEASE FOR FIVE MINUTES? UM, AUSTIN ENERGY, CAN YOU, YOU SPEAK TO THE GENERAL FUND TRANSFER PROJECTION AND THE PROPOSAL TO CHANGE THE PROJECTION TO 115 MILLION VERSUS THE 120 MILLION.

THAT'S THE FREEZING OF IT THAT I THINK SOME OF OUR, UM, SPEAKERS TODAY HAVE TALKED ABOUT.

AND THEN IF THERE IS A 5 MILLION DIFFERENCE BETWEEN THE ONE 15 AND THE ONE 20, DOES THAT CHANGE THE STATED 35.7 MILLION, UH, THAT'S NEEDED OR IS IT 31.3 MILLION? SO I'M JUST LOOKING FOR SOME SPECIFICS ON THE NUMBERS.

SURE.

IF WE REDUCE IT IN THE REVENUE REQUIREMENT, THEN WE WON'T COLLECT IT FROM THE CUSTOMERS, SO WE WON'T HAVE ANY TO PUT INTO RESERVES.

I'M GONNA DEFER TO MR. DOBROWSKI TO GIVE YOU A MORE COMPLETE ANSWER.

HI MR. DOMBROWSKI.

WELCOME.

SO THE, UH, EXISTING GENERAL FUND TRANSFER POLICY STATES THAT WE WILL, UM, USE, UH, AN AVERAGE OF THREE YEARS REVENUE, TWO PRIOR YEARS IN A CURRENT YEAR ESTIMATE, AND 12% OF THAT UP TO 12% OF THAT, UM, ON ALL REVENUES EXCEPT FOR NON, EXCEPT FOR POWER SUPPLY IN DISTRICT COOLING.

UM, THE CALCULATION WE DID FOR THE TEST YEAR, UH, IS 12% OF THE REVENUES.

UM, AND SO THE DISPUTE WAS, UM, THE BUDGETED YEAR THAT WE'RE CURRENTLY IN, IN FY 23, WE HAD 115 MILLION AS OUR GENERAL FUND TRANSFER.

AND THAT'S THE AVERAGE OF THREE YEARS.

UM, THE TEST YEAR IS ONLY A SINGLE YEAR, BUT IF YOU DON'T COLLECT 12%, YOU WILL BE SHORT OF ENOUGH REVENUE TO TRANSFER TO THE CITY.

SO THAT'S WHERE THE DISPUTE CAME FROM.

UM, AND THE WAY AUSTIN ENERGY DOES IT IS WE CALCULATE THE 12% AND THEN WE, UH, EXPRESS IT TO THE CLOSEST MILLION DOLLARS.

UM, IT'S NOT ALWAYS EXACTLY, UH, THE MILLION DOLLARS, BUT THAT'S WHAT WE DO.

SO IN THIS CASE, I THINK THE ACTUAL ADJUSTMENT IS ABOUT, UH, 4.5 MILLION OR 4.4 MILLION.

UH, THAT'S THE DIFFERENCE BETWEEN THE 35.7 AND THE 31.33.

UM, THAT'S THE DIFFERENCE IN THE GENERAL FUND TRANSFER.

AND SO, UM, IN ORDER TO GET TO 115 MILLION, WE WOULD'VE TO USE A NUMBER, SOMETHING OTHER THAN 12%, AND THAT NUMBER IS 11.6.

SO IF YOU TAKE THOSE REVENUES, MULTIPLY IT TIMES 11.6, YOU WILL GET THE APPROXIMATELY 115 MILLION.

UH, BUT IT WOULD NOT BE THE 12% THAT WE HAVE HISTORICALLY, UH, TRANSFERRED TO THE GENERAL FUND.

WOULD SOME OF THAT GENERAL FUND TRANSFER THAT WOULDN'T BE MADE, LET'S JUST SAY 5 MILLION JUST FOR ROUND FIGURES, WOULD THAT, UM, BE CONSIDERED DEPOSIT INTO RESERVES SO THAT WE CAN BUILD UP OUR RESERVE, UH, BALANCES? YES, YOU CAN INSTRUCT US AS A COUNCIL TO, TO USE THOSE FUNDS IN, IN SOME PARTICULAR WAY.

UM,

[02:55:01]

UM, AND THE RESERVES THAT WE'RE TALKING ABOUT ARE THE ONES THAT WE'RE ALSO TRYING TO REFILL BECAUSE OF THE LOSS IN THE POWER SUPPLY ADJUSTMENT.

CORRECT.

THAT'S, THAT'S PART OF THE CASH WORKING CAPITAL ARE POWER SUPPLY ADJUSTMENT.

UH, STABILITY FUND IS ALSO SHORT NOW BECAUSE IT'S 90 DAYS OF POWER SUPPLY ADJUSTMENT COST AND BECAUSE OF THE COST HAVE INCURRED HAVE IN, HAS RISEN SO MUCH OVER THIS LAST YEAR AND A HALF THAT, UH, WE ARE SHORT NOW IN THAT FUND AS WELL.

AND WE DON'T HAVE THE CASH TO TRANSFER IN THERE.

UM, AND THEN ON THE CAP PROGRAM, I DON'T KNOW WHO WOULD WANNA TALK ABOUT CAP PROGRAM.

YOU KNOW WHAT, I'LL HOLD THAT QUESTION FOR A SECOND ROUND AND I WILL JUST STOP HERE AND WE CAN STOP THE TIMER.

SHALL WE GO AROUND ONE MORE TIME? WE CAN START AGAIN.

THE MAYOR'S NOT HERE WITH, UH, DISTRICT ONE AND IT LOOKS LIKE COUNCIL MEMBER HARPER MADISON HAS ANOTHER QUESTION.

AND, UH, DO YOU KNOW WHO YOU'D LIKE TO ASK YOUR QUESTION OF COUNCIL MEMBER? I BELIEVE SO.

UM, JAMES BRAZIL.

MR. BRAZEL, WHY DON'T YOU COME ON UP TO THE PODIUM AND THEN WE'LL START THE TIMER FOR FIVE MINUTES NOW.

JAMES BRAZIL HERE FOR SIERRA CLUB.

BE PUBLIC CITIZEN SON.

I'M SORRY, CAN YOU SAY THAT LAST THING AGAIN? UH, JAMES BRAZIL FOR PUBLIC CITIZEN SIERRA CLUB AND SON SOLO UNITED NEIGHBORS IS, YES.

SO IT'S KIND OF A TWO-PARTER.

UM, AND SO THE QUESTION IS, I'LL JUST LAY IT OUT AND YOU ANSWER IT AS IT'S MOST APPROPRIATE.

UM, HOW WOULD AUSTIN'S ENERGY AUSTIN ENERGY'S PROPOSED CHANGES TO RESIDENTIAL RATES IMPACT THE COST EFFECTIVENESS OF THE INVESTMENTS, UM, BY RESIDENTIAL CUSTOMERS IN ENERGY EFFICIENCY? UM, QUESTION MARK.

AND THEN AS AN EXTENSION OF THAT, CAN YOU ELABORATE ON THE ELEMENTS OF, UM, A'S REVENUE REQUIREMENT, UM, REQUESTS THAT YOU ALL IDENTIFIED AS, UH, PROBLEMATIC? WELL, FIRST OF ALL, REVENUE REQUIREMENT WAS NOT ONE THAT SIERRA CLUB PUBLIC, CITIZEN AND SUN ADDRESSED.

UM, OKAY, THAT'S A REGULAR RATE MAKING TYPE OF ISSUE.

AND WE WERE FOCUSED MORE ON THE, UH, ENVIRONMENTAL AND, UH, SOLAR ISSUES.

SO THAT'S AN AE QUESTION THAT WOULD BE AN AE QUESTION OR THE, UH, INDEPENDENT, UH, UH, CONSUMER ADVOCATE.

YOUR FIRST QUESTION I DIDN'T QUITE CATCH.

UM, YOU KNOW, I THINK THIS, MY FIRST QUESTION MIGHT BE, UH, AN AE QUESTION ALSO, BUT I HAVE ANOTHER QUESTION THAT MIGHT BE MORE APPROPRIATE FOR YOU TO ANSWER.

UM, NO, THAT'S AN AE QUESTION ALSO.

SO I, MY QUESTION IS FOR AE.

I'M SORRY, I'M NOT LOOKING AT THERE.

IT'S, I CAN'T SEE Y'ALL'S SIDE OF THE ROOM, SO I DON'T KNOW IF WE HAVE MR. BECA COMING UP TO THE PODIUM AND WE'LL, YES, COUNCIL MEMBER.

WE'LL RESTART.

WE'LL START THE TIME.

I PAUSED IT WHILE YOU WERE SWITCHING.

GO AHEAD.

I APPRECIATE IT.

UM, SO JUST, I WAS ASKING THE QUESTION THAT I ASKED, UH, MR. BRAZIL ABOUT THE ELEMENTS OF AUSTIN ENERGY'S REVENUE REQUIREMENT REQUEST THAT YOU ALL IDENTIFIED AS PROBLEMATIC.

I, I'M SORRY, I DON'T KNOW THAT I UNDERSTAND YOUR QUESTION.

THAT, THAT AUSTIN ENERGY FOUND, FOUND WAS PROBLEMATIC.

CORRECT.

YOU MEAN THE PROPOSED ADJUSTMENTS? CORRECT.

THE REQUEST, THE PROPOSED THE REQUEST, UH, I'M SORRY.

UM, YES, AUSTIN ENERGY PRESENTED, UH, REBUTTAL TESTIMONY AND DID CROSS EXAMINATION AND BRIEFED REALLY ALL OF THE ADJUSTMENTS THAT WERE MADE BY THE INTERVENERS, WITH THE EXCEPTION OF A COUPLE OF ITEMS WHERE THE UTILITY CHOSE TO CONCEDE THE ISSUES BECAUSE, UM, UH, BECAUSE I FELT LIKE IT HAD MERIT, IT WAS APPROPRIATE OR FOR OTHER REASONS.

FOR EXAMPLE, THERE WAS A COST ALLOCATION PROPOSAL MADE BY THE ICA THAT AUSTIN ENERGY ADOPTED.

IN ITS REBUTTAL CASE.

THERE WAS AN IDENTIFICATION OF A MATHEMATICAL ERROR THAT AUSTIN ENERGY, UM, RECOGNIZED IN THEIR REBUTTAL TESTIMONY THAT BROUGHT THE REQUEST DOWN SIGNIFICANTLY.

BUT ON ALL THE OTHER PROPOSED ADJUSTMENTS, ALL SYNERGY, UM, TOOK ISSUE WITH THEM, UH, AND PRESENTED EVIDENCE, UH, RESPONDING TO IT.

UM, COUNCIL MEMBER FUENTES, DISTRICT TWO, DO YOU HAVE ANOTHER QUESTION YOU'D LIKE TO ASK? YES.

AND WHO WOULD YOU LIKE IT OF? UM, I GUESS I'LL START WITH THE ICA, MR. KAUFMAN, AND WE WILL START THE TIMER.

UM, IN THE REPORT YOU ESSENTIALLY DETAILED OUT THAT, UM, THAT COST ALLOCATION SHOULD BE BASED ON REVENUES.

SO,

[03:00:01]

IS THAT RIGHT? IN SOME CASES.

IN SOME CERTAIN, ARE YOU TALKING ABOUT THE, ARE YOU TALKING ABOUT THE COST ALLOCATIONS BETWEEN THE DIFFERENT CUSTOMER CLASSES OR BETWEEN, OR WITHIN THE, WITHIN THE RESIDENTIAL CLASS.

BETWEEN THE DIFFERENT CUSTOMER CLASSES.

UM, AND CAN YOU PROVIDE DETAIL ON THE RECOMMENDATIONS YOU'VE PROVIDED REGARDING THE COST ALLOCATION FOR BAD DEBT AND CUSTOMER SERVICE EXPENSES BASED ON REVENUE AMONG THE DIFFERENT CUSTOMER CLASSES? AND IF YOU CAN HELP FRAME THAT COMPARED TO THE PUC RECOMMENDATIONS AND GUIDELINES ON HOW DEBT IS USUALLY TYPICALLY ALLOCATED.

UM, MAYBE THIS IS ONE FOR CLARENCE JOHNSON.

UM, OF COURSE, AS YOU KNOW, WE ARE, YOU KNOW, WE'VE KIND OF REACHED A SETTLEMENT WITH THE BIG INDUSTRIAL CUSTOMERS AS TO WHERE WE ARE, BUT, UH, I THINK CLARENCE CAN ANSWER THE LATE FEE AND BEFORE YOU START SECOND BAND DEBT AT COUNCIL TOBA.

YOU MENTIONED THE LATE FEES TOO, SO I'D LIKE TO HEAR IN A SECOND WHAT YOU WERE REFERENCING TO.

OKAY, THANK YOU.

UM, I, I, IF I'M UNDERSTANDING THE QUESTION, UH, HAD TO DO WITH THE ALLOCATION OF BAD DEBT EXPENSE, AND THERE'S BASICALLY TWO WAYS TO DO THAT.

ONE OF WHICH, UH, AUSTIN ENERGY PROPOSED, WHICH IS DIRECT ASSIGNMENT, WHICH IS TO SAY THAT IT'S BASED ON THE HOW MANY BAD DEBT, UH, CUSTOMERS THERE ARE WITHIN EACH CLASS.

AND THE OTHER OF WHICH IS, WHICH I RECOMMENDED IN MY TESTIMONY, WHICH IS TO USE, UH, CLASS REVENUES TO ALLOCATE, UH, UNCOLLECTABLE COST, WHICH IS THE SAME THING AS BAD DEBT EXPENSE.

AND, UH, UH, IN MY VIEW, THAT'S CONSISTENT WITH, UH, THE, UH, WHAT THE TEXAS PUC HAS, HOW THEY HAVE ALLOCATED UNCOLLECTABLE EXPENSE, UH, OVER THE LAST, UH, 20 YEARS.

SO, UH, IN MY VIEW, IT, IT'S JUSTIFIED.

SO IF WE SHIFTED TO WHAT THE PUC RECOMMENDS AS A WAY TO ALLOCATE DEBT, HOW WOULD THAT HELP US IN OUR REVENUE REQUIREMENT? OKAY.

THAT IT, IT DOES NOT AFFECT THE REVENUE REQUIREMENT.

IT ONLY AFFECTS ALLOCATION OF COST BETWEEN CLASSES, WHICH, UH, REALLY I, AT THIS POINT I HAD NOT FOCUSED ON BECAUSE WE, UH, HAD MORE OR LESS TRIED TO COME TO AN AGREEMENT WITH THE INDUSTRIAL CUSTOMERS ON COST, ON A, YOU KNOW, COMPROMISE ON COST ALLOCATION.

BUT THAT ISSUE IS, IS TOTALLY, UH, UH, A, WELL, THERE IS A REVENUE, OR EXCUSE ME, THERE IS A REVENUE REQUIREMENT COMPONENT TO IT, UH, WHICH IS THAT ONE OF MY RECOMMENDATIONS WAS TO USE THE THREE YEAR AVERAGE UNCOLLECTABLE EXPENSE, UH, PRIOR TO THE PANDEMIC, BECAUSE IN MY VIEW, UH, THE YEARS, UH, DURING THE PANDEMIC AND, AND IMMEDIATELY SUBSEQUENT, UH, TO, TO 2020, UH, ARE, UH, QUESTIONABLE WITH RESPECT TO BAD DEBT EXPENSE, QUESTIONABLE IN TERMS OF THE EXTENT TO WHICH THAT AMOUNT OF BAD DEBT EXPENSE IS GONNA CONTINUE TO RECUR AT THAT LEVEL INTO THE FUTURE.

UM, AUSTIN ENERGY USED THE, THE TEST, YOUR BAD DEBT AMOUNT, I THINK THE ICA RECOMMENDED THAT THEY SHOULD HAVE USED INSTEAD THE THREE PRIOR, UH, YEARS AVERAGE OR OF SOME SORT.

AND IF WE CAN HAVE AUSTIN ENERGY, CAN YOU SPEAK TO WHY THE 2021 WAS USED AS THE TEST YEAR FOR THE BAD DEBT ALLOCATION? AND IF YOU COULD PUT THAT IN THE CONTEXT TO WHAT WAS RECOMMENDED HERE OF USING THE THREE YEARS AVERAGE PRIOR TO THE PANDEMIC INSTEAD.

AND WHILE YOU'RE COMING UP, MAYBE CUSTOMER TO, IF YOU CAN SPEAK TO WHAT YOU WERE MENTIONING EARLIER.

THANK YOU, COUNCIL MEMBER.

ON PAGE 43, THERE'S A DISCUSSION ABOUT LATE REVENUE, ABOUT LATE FEES, AND SOME OF THE INTERVENERS, AND I'M SORRY, I'M NOT, I'M GETTING YOU ALL MIXED UP.

I THINK IT WAS, UM, THE ICA AND THE INDEPENDENT CONSUMER ADVOCATE AS WELL AS TO MS. COOPER, UM, AND OTHERS PROPOSED ADJUSTING THE LATE FEES, LATE FEE REVENUE UPWARDS TO, BECAUSE THE, THE TEST YEAR AMOUNT THAT THEY, THAT WAS USED FOR THE REVENUE REQUIREMENT THEY FELT WAS UNNATURALLY LOW.

AND PART OF THAT WAS BECAUSE THERE WAS A, A WAIVER OF LATE FEES DURING THE PANDEMIC.

AND SO THAT SEEMED TO ME A REASONABLE, A REASONABLE STATEMENT.

AND I THINK, AND I AGREE THAT WE PROBABLY SHOULD RAISE IT BACK UP TO WHAT, 5.5 WHICH WOULD LOWER, HAVE THE IMPACT OF LOWERING THE REVENUE REQUIREMENT.

THANKS FOR ASKING.

SO I, I, I MISSED SOME OF YOUR RESPONSE, BUT I, BUT I CAN ANSWER YOUR, YOUR QUESTION.

[03:05:01]

UM, AUSTIN ENERGY DID MAKE A DOWNWARD ADJUSTMENT TO BAD DEBT TO TAKE INTO ACCOUNT THE EFFECTS OF, UH, THERE BEING A, A MORATORIUM ON, ON LATE FEE, UM, CHARGES, UM, DURING THE, DURING THE PANDEMIC.

SO THEY, THEY DID MAKE AN ADJUSTMENT TO REFLECT THAT AND FELT THAT IT WAS MORE APPROPRIATE TO USE A BAD DEBT FIGURE THAT WAS MORE RECENT IN TIME, WHICH IS TYPICALLY WHAT YOU DO, UM, BY USING A, A MORE RECENT TEST YOUR ALTOGETHER.

SO AN ADJUSTMENT HAS BEEN MADE.

AND I WAS LOOKING TO SEE, AND I DON'T KNOW IF MR MANUS KNOWS THE EXACT AMOUNT, BUT YES, THAT'S CORRECT.

TO TAKE THAT INTO ACCOUNT AND HOW HAS IT HAD AN IMPACT ON OUR REVENUE REQUIREMENT? WELL, BAD DEBT IS REVENUE NEUTRAL, AS MR. JOHNSON SAID A MOMENT AGO TO THE UTILITY BECAUSE, UM, BASICALLY IF YOU HAVE BAD DEBT, THE UTILITIES MADE WHOLE BY COLLECTING THAT, THOSE DOLLARS FROM OTHER CUSTOMERS.

OR MAYBE I WAS, I MEANT TO ASK HOW DID THAT, DID IT HAVE ANY IMPACT TO THE COST ALLOCATION BETWEEN THE DIFFERENT CUSTOMER CLASSES? YES, THERE WAS A DISPUTE AS TO HOW TO ALLOCATE THOSE COSTS.

AND AS I THINK MR. JOHNSON MENTIONED ALL SYNERGY PROPOSING, THE, I AGREED THAT IT WAS APPROPRIATE TO DIRECTLY ASSIGN THOSE COSTS TO THE, THE SPECIFIC CUSTOMER CLASSES IN WHICH THE BAD DEBT AROSE, AS OPPOSED TO MR. JOHNSON'S RECOMMENDATION, WHICH WAS TO ALLOCATE IT BASED UPON REVENUES, WHICH BASICALLY WOULD PUSH COSTS OUTSIDE OF THEIR, AWAY FROM THE, THE RESIDENTIAL CLASS RELATIVE TO A'S PROPOSAL.

AND LET'S SEE, COUNCIL MEMBER, DO YOU HAVE A QUESTION FROM DISTRICT THREE? YEAH, I, I THINK THIS IS, THAT GOES TO AUSTIN ENERGY ALSO.

IT'S ON THE CAP PROGRAM.

UH, I HEARD SO MANY CONFLICTING STATEMENTS.

I, UH, EITHER PEOPLE WAS AUTOMATICALLY ENROLLED.

UH, THERE WAS, UM, A GENTLEMAN THERE SAYING THAT WE SHOULD POST IT ON THE BILL SAYING THAT IF YOU'RE HAVING TROUBLE PAYING THE BILL, PLEASE CALL.

THERE'S A CAP PROGRAM.

UH, I'M JUST, UM, GONNA, I HEARD ANOTHER GENTLEMAN SAY IS THAT THERE'S ONLY 35% ENROLLMENT INTO THE CAP PROGRAM.

SO, UH, I, I JUST WANT TO HEAR WHAT, WHAT RECOMMENDATION AUSTIN ENERGY HAS AND RECOMMENDATIONS.

UH, YES, COUNCIL MEMBER RENT I EARLIER I INDICATED THAT WE WOULD BE ABLE TO PROVIDE THAT INFORMATION MORE FULLY NEXT TUESDAY.

UM, AND CERTAINLY WE WILL DO THAT AND, AND INCLUDE YOUR QUESTIONS AS WELL, A RESPONSE TO YOUR QUESTIONS.

UH, I, I'M REALLY CONCERNED ABOUT THAT PROGRAM IF, UH, UH, WHATEVER WE DO IS GONNA AFFECT OUR PEOPLE AND, UH, UH, I JUST GOTTA MAKE SURE THAT, UH, WE, WE GET A FIND WAY TO MAKE SURE THAT EVERYONE THAT'S, UH, GONNA BE HURTING OUT THERE AND GET THE INFORMATION TO EM SO THAT THEY CAN GO TO THIS PROGRAM.

UM, WE WILL MOVE TO DISTRICT FOUR.

COUNCIL MEMBER VALLA.

AND THE, THE $35 MILLION RATE INCREASE THAT Y'ALL ARE REQUESTING IS, I GUESS I'M JUST TRYING TO COMPARE THE TWO AND, AND I WAS LISTENING TO THE KIND OF THE LINE BY LINE, LIKE, YOU KNOW WHAT I MEAN, LOOKING AT THAT, WHAT, UH, UH, UH, THE, THE DIFFERENT KIND OF COST ELEMENTS AND, AND THAT ARE, ARE, ARE, ARE ROLLED INTO THERE.

WHO, WHO WOULD YOU LIKE TO DIRECT YOUR QUESTIONS HERE? I WOULD SAY TO AUSTIN ENERGY WITH REGARD TO THE ALTERNATE PROPOSAL.

AND I KNOW THEY HAVEN'T HAD A LOT OF TIME TO, YOU KNOW, REVIEW IT, BUT I, I GUESS THEY'VE HAD SOME TIME TODAY, I WOULD IMAGINE.

AND JUST TO KIND OF GET A SENSE OF, OF THOUGHTS, REACTIONS TO IT, FRANKLY.

UM, I THINK IT'S, IT'S INAPPROPRIATE AND UN UH, UNPROFESSIONAL AND, AND IRRELEVANT.

IT'S INAPPROPRIATE BECAUSE IT WENT OUTSIDE THE BOUNDS OF THE PROCESS THAT THE CITY COUNCIL ESTABLISHED.

IT'S UNPROFESSIONAL BECAUSE A WAS NOT NOTIFIED AND IT CONTAINS, UM, LANGUAGE FROM PRIOR SETTLEMENT, AND IT'S IRRELEVANT BECAUSE IT'S SIMPLY A CONCESSION OFF THEIR DIRECT CASE.

THEY'RE SIMPLY SAYING, YOU KNOW, WE CAN NOW LIVE WITH 12 MILLION INCREASE INSTEAD OF 6 MILLION INCREASE.

AND FRANKLY, IF, YOU KNOW, FROM WHAT I UNDERSTAND, AND VISITING WITH AE AND WORKING ON THIS CASE WITH THEM, IF A 12 MILLION RATE INCREASE IS APPROVED, YOU'RE LIKELY TO SEE 'EM BACK VERY SOON.

[03:10:06]

AGAIN, JUST KIND OF THINKING ABOUT THE 35 MILLION, UH, UM, YOU KNOW, INCREASE, WHERE WOULD THOSE COST ALLOCATIONS? THE MAJORITY OF, YOU KNOW, THE, THE COST ALLOCATIONS ON THE 35 MILLION INCREASE, WHERE WOULD THOSE BE KIND OF COMING FROM OR WHAT, WHAT WOULD BE DRIVING A LOT OF THOSE, UH, COST INCREASES? WELL, IN ALLOCATING COST TO THE VARIOUS CUSTOMER CLASSES, AFTER YOU'VE DETERMINED THE APPROPRIATE REVENUE REQUIREMENT, YOU BEGIN BY WHAT'S CALLED A FUNCTIONALIZATION.

SO BASICALLY YOU TAKE THE WHOLE POT OF DOLLARS THAT THE UTILITY, UM, NEEDS TO PROVIDE SERVICE, AND THEN YOU BREAK THAT POT UP TO THE VARIOUS CLASSES OR TO THE VARIOUS FUNCTIONS, AND THEN YOU ALLOCATE IT TO THE VARIOUS, UH, CUSTOMER CLASSES.

AND THE WAY THAT THAT'S SUPPOSED TO BE DONE IS YOU DO IT BASED UPON WHAT CUSTOMERS CAUSE A AN EXPENSE TO BE INCURRED.

UM, AS I'VE MENTIONED AND OTHERS HAVE MENTIONED, EXPERTS CAN, CAN DIFFER AS TO WHAT'S THE, THE APPROPRIATE BASIS OR ALLOCATION METHOD, UH, TO BE USED TO ASSIGN A PARTICULAR COST.

UM, AND INDEED THERE WAS A, A LOT OF DISAGREEMENT AND DISCUSSION ABOUT THAT DURING THE HEARING.

AND THEN TURNING TO THE, CAUSE I KNOW Y'ALL ARE LOOKING TO FLATTEN OUT THE, THE, UH, THE STEPS, UH, IN THE INCREASE AS THE KILOWATT HOUR USAGE GOES UP.

AND THERE WAS THIS, I I WOULD SAY THIS, THAT I UNDERSTAND THAT AS YOU JUMP FROM TIER TO TIER, YOU KNOW, YOU'RE NOT GOING TO SEE POTENTIALLY A IMMEDIATE KIND OF, YOU KNOW, REDUCTION OR, YOU KNOW, A REACTION.

BUT MY SENSE WOULD BE THAT THERE WOULD BE A REACTION TO THE GENERAL IDEA.

THAT'S, I THINK AT THIS POINT, BECAUSE OF, YOU KNOW, 40 YEARS OF THAT, THAT TIERED INCREASE, THAT CUSTOMERS OF AUSTIN ENERGY WILL UNDERSTAND THAT AS THEY USE MORE IN ANY GIVEN MONTH, THERE IS AN ESCALATING PER KILOWATT OUR CHARGE AND ADJUST THEIR BEHAVIOR ACCORDINGLY, EVEN IF IT'S NOT ON A KIND OF A CASCADING BASIS.

I MEAN, YOU DON'T, YOU DON'T GET A, A TEXT ALERT WHEN, YOU KNOW WHAT I MEAN? YOU'RE, YOU'RE GOING PAST THAT, THAT THAT CERTAIN POINT.

BUT, SO IN OTHER WORDS, IS THE CONSUMER BEHAVIOR ACTUALLY RESPONDING TO THE A TIERED INCREASE, EVEN THOUGH IT MAY NOT BE TRIGGERED BY KIND OF THE, THE SPECIFIC, UH, UH, YOU KNOW, PRICE AMOUNTS ALONG THE, THE, THE SCALE? YEAH, I MEAN, GOOD QUESTION.

AND SOMETHING THAT WE CERTAINLY GRAPPLED WITH, I WOULD NOTE THAT THE ALL SYNERGIES HAD TIERED RATES, I BELIEVE SINCE THE 2012 RATE CASE, IT DOESN'T GO QUITE AS FAR BACK.

YOU KNOW, THE QUESTION IS HOW STEEP DOES IT DO THE TIERS NEED TO BE IN ORDER TO INCENTIVIZE CUSTOMERS TO CONSERVE? AND, YOU KNOW, ALL ENERGY'S, UM, PROPOSAL IS TO STILL HAVE AN INCLINING RATE STRUCTURE WITH EACH TIER BEING SEPARATED BY AN INCREASE OF ABOUT A OR RIGHT AT A HALF A PENNY MM-HMM.

CURRENTLY, THE, THE, IT'S MORE STEEP THAN THAT.

YOU HAVE A HIGHER, UM, INCREASE THAN A HALF A CENT AS YOU GO FROM ONE TIER TO THE NEXT.

AND, YOU KNOW, WE WISH CUSTOMERS WOULD RESPOND, WE WISH PEOPLE WOULD, YOU KNOW, SEE THAT, OKAY, THEY'RE GOING TO THE NEXT TIER, AND SO THEY NEED TO CONSERVE THE EVIDENCE.

ALL THE EVIDENCE THAT WE'VE SEEN HAS BEEN PRESENTED BY AUSTIN ENERGY, UH, AND IT SHOWS THAT CUSTOMERS DON'T IN FACT DO THAT.

AND IN MY, UH, MY GUESS, AND THIS IS A GUESS ONLY, IS THAT PEOPLE DON'T REALLY KNOW WHEN THEY GO FROM ONE TIER TO ANOTHER IN A PARTICULAR MONTH.

YOU KNOW, TODAY'S, YOU KNOW, THE, THE 18TH DAY OF THE MONTH, ARE WE IN THE SECOND TIER OF THE THIRD TIER? BUT WHAT THEY DO KNOW IS THE MORE YOU CONSUME, THE HIGHER YOUR BILL IS GOING TO BE.

AND SO, YOU KNOW, THERE'S STILL, YOU KNOW, AN INCENTIVE THERE BECAUSE

[03:15:01]

THEY ALSO KNOW THAT THE RATE IS GOING UP, BUT THERE'S NO MAGIC THAT SAYS, OKAY, THIS IS EXACTLY HOW STEEP OR FLAT IT NEEDS TO BE IN ORDER TO INCENTIVIZE PEOPLE TO CONSERVE.

COUNCIL MEMBER KITCHEN, DO YOU HAVE A QUESTION? UM, UH, NO, I'M, I'M LISTENING TO OTHER QUESTIONS.

I DON'T HAVE ANY ADDITIONAL QUESTIONS AT THIS TIME.

COUNCIL MEMBER KELLY.

UM, THIS IS FOR AUSTIN ENERGY.

UM, Y'ALL KNOW, I LIKE TO SAY NO TO ANY KIND OF RATE INCREASES AND THAT SORT OF THING.

AND AS SUCH, WE'VE GOTTEN A LOT OF EMAILS IN MY OFFICE ABOUT WHAT MIGHT HAPPEN IF WE DON'T REVISE THE BASE RATE.

AND SO I WAS WONDERING IF YOU MIGHT BE ABLE TO LAY IT OUT SIMPLY FOR THE COMMUNITIES THAT THEY CAN BETTER UNDERSTAND IF WE DON'T TAKE ACTION ON THIS, WHAT SOME OF THE CONSEQUENCES MIGHT BE.

MARK DEBAS, THE CHIEF FINANCIAL OFFICER.

UM, SO WE RECOVER OUR ONGOING CURRENT COST WITH ONGOING CURRENT REVENUE THROUGH RATES.

AND TO THE EXTENT THAT THOSE RATES DON'T COVER THOSE COSTS, UH, WE USE CASH AND THAT'S WHAT WE'VE BEEN DOING FOR THE LAST THREE YEARS.

AND, UH, OUR CASH SAYS, UH, PROBABLY LESS, LESS THAN A HALF OF WHAT IT WAS A YEAR AGO.

IT'S LESS THAN WHAT OUR POLICY CALLED FOR.

AND TO SOME EXTENT WE'LL HAVE TO CONTINUE TO USE THAT CASH UNTIL IT'S GONE.

UM, IF WE DON'T HAVE ENOUGH REVENUE, THEN, UH, WE WON'T BE ABLE TO PAY OUR BILLS.

AND IF WE CAN'T PAY OUR BILLS, UH, THE BOND HOLDERS WILL CALL OUR BONDS AND WE'LL HAVE TO PAY 1.9, UH, BILLION DOLLARS, AS IS CALLED BOND DEBTS.

THAT'S SORT OF AN EXTREME CASE OF WHAT HAPPENS IF WE DON'T HAVE ENOUGH REVENUE.

I APPRECIATE THAT.

CONSUMER PROPOSAL WAS SOMEHOW OUTSIDE THE PROPOSAL OR, OR SOMEHOW ON PROFESSIONAL.

AND, UM, THIS IS MORE FOR THE CITY MANAGER.

EARLIER WE TALKED ABOUT, UM, PERHAPS IF WE HAD LOOKED AT, UM, THE GENERAL FUND TRANSFERS AND POSSIBLY FREEZING THEM LIKE IT'S BEEN DONE IN THE PAST, WE JUST KIND OF SPOKE ABOUT IT GENERALLY.

I'M CURIOUS TO KNOW, AND I KNOW THAT ONE OF MY COLLEAGUES MENTIONED THIS EARLIER, BUT WHAT THE POTENTIAL IMPACTS ON FUTURE CITY SERVICES MIGHT BE TO FREEZING GENERAL FUND TRANSFERS.

AND I'M NOT SURE IF YOU CAN SPEAK TO THAT NOW, BUT IF THAT'S SOMETHING YOU COULD DEFINITELY FOLLOW UP WITH US ON, I'D APPRECIATE IT.

I WILL DO THAT.

AND I KNOW, BUT WE'VE BEEN IN CONVERSATION WITH OUR CHIEF FINANCIAL OFFICER FOR, UH, THE CITY, AND SO WE WANT TO GET YOU THAT INFORMATION SO YOU MIGHT KNOW THE IMPACTS OF WHAT THAT WOULD HAVE, UH, IF WE WERE TO SEE ANY DIFFERENCES IN HOW WE LOOK AT THE GENERAL FUND TRANSFER GOING FORWARD.

COUNCIL MEMBER ELLIS DISTRICTING, I LOVE IT.

AND THANK YOU FOR THAT.

CITY MANAGER.

I KNOW, UH, YOU HAD STEPPED AWAY FOR A MOMENT, BUT WE HAD TALKED ABOUT THE GFT AND JUST IMPACTS TO THE, THE GENERAL FUND DEPARTMENTS AND WHAT KIND OF DECISIONS IF WE TOOK THAT APPROACH, MIGHT NEED TO BE ADDRESSED.

UM, MY QUESTION IS FOR THE ICA, I WOULD LOVE TO GET YOUR THOUGHTS ON THE TIER STRUCTURE.

I KNOW WE JUST HAD AN EXCHANGE WITH AUSTIN ENERGY ABOUT, UM, THE THE TIER PROPOSAL.

I WOULD LIKE TO KNOW YOUR THOUGHTS ABOUT THE NUMBER OF TIERS AND THE SEVERITY OF MOVING FROM TIER ONE TO THREE OR TIER ONE TO FOUR AND WHAT YOUR RECOMMENDATION HAS BEEN.

WELL, THE FIRST THING I WOULD SAY IS THAT THE, YOU KNOW, IT'S NOT JUST THE NUMBER OF TIERS.

IT'S WHERE YOU PLACE THE TIERS AND, AND WHETHER OR NOT YOU HAVE A, UM, A TIER AT THE END TO PREVENT, UM, YOU KNOW, HAVING TO GIVE MASSIVE RATE REDUCTIONS TO THE HIGHEST USERS THAT WOULD BE THEN FUNDED BY THE OTHER RATE PAYERS.

UM, SO IT, TO ME, IT'S AN ENTIRE PACKAGE.

YOU HAVE TO, YOU HAVE TO BALANCE THE FIXED CHARGE AND THE VARIOUS TIERS ALONG THE WAY.

I ALSO, I MEAN, I AGREE WITH AUSTIN ENERGY IN THAT THERE ISN'T A LOT OF EVIDENCE THAT USAGE CHANGES AT EACH OF THOSE LEVELS, BUT I WOULD AGREE WITH, I, I THINK THE POINT OF YOUR QUESTION, UH, COUNCIL MEMBER THAT THE, UM, THAT THAT THERE IS DEFINITELY EVIDENCE THAT CUSTOMERS REACT TO THE INCLINING BLOCK ITSELF, UH, IF NOT TO, YOU KNOW, AT EVERY LITTLE, LITTLE POINT, I, I DON'T THINK CUSTOMERS KNOW EXACTLY WHEN THEY'RE HITTING EACH TIER, BUT I THINK THEY KNOW THAT THEIR OVERALL BILL GOES UP WHEN THEY USE MORE.

SO I THINK IT IS AN EFFECTIVE TOOL.

I APPRECIATE THAT.

I KNOW THAT'S DEFINITELY ON ALL OF OUR PLATE TO BE ABLE TO, TO ANALYZE OVER THESE NEXT COUPLE OF WEEKS, BUT IT, YOU KNOW, THERE'S THE CONVERSATION OF IS IT THE TRIGGERING OF THE TIER THAT CHANGES THE BEHAVIOR, OR IS IT JUST YOU GET A BIG BILL AND YOU SAY, I NEED TO CHANGE MY PATTERNS BECAUSE I, YOU KNOW, CAN'T AFFORD THAT BILL AND NEED TO BE TURNING OFF MY LIGHTS AND FIGURING OUT WHEN TO USE MY APPLIANCES.

UM, BUT I'LL, I'LL JUST REPEAT FOR THE DIAS, YOU KNOW, OVER THIS WHOLE CONVERSATION, I'VE ALWAYS WANTED TO MAKE SURE THAT FOLKS WHO ARE DOING THEIR PART TO CONSERVE ENERGY AND MAKING SURE THEIR HOME IS ENERGY EFFICIENT AREN'T BEARING AN UNFAIR LOAD OF THIS ADJUSTMENT THAT THAT MAY NEED TO HAPPEN WITH THE RATES.

SO DID YOU HAVE ANY FINAL THOUGHTS? I THOUGHT MAYBE YOU, WELL, I, I WOULD LIKE TO RESPOND TO MR. BRITOS, UH, CLAIM THAT THE, THE ALTERNATIVE

[03:20:01]

AND, AND, AND, UH, I, I DON'T EVEN KNOW HOW, WHERE TO BEGIN WITH THAT IN, IF WE WERE AT THE TEXAS PUBLIC UTILITY COMMISSION PARTIES O UM, OFTEN GET TOGETHER BECAUSE THERE'S SO MANY PARTIES, AS YOU CAN SEE HERE, THERE'S SO MANY STAKEHOLDERS, IT'S SUCH A COMPLICATED ISSUE.

UH, DIFFERENT GROUPS OF STAKEHOLDERS COME TOGETHER AND REACH PARTIAL, UH, RESOLUTION NON UNANIMOUS AGREEMENTS HERE AND THERE.

AND IT WAS, IT WAS NOT OUR INTENT TO SOMEHOW BLINDSIDE AUSTIN ENERGY AT ALL WITH THIS PROPOSAL.

IT TOOK US WEEKS TO GET, TO GET IT TOGETHER AMONGST SOME OF THE OTHER PARTIES.

OUR APPROACH HERE, OUR INTENT WAS TO NARROW THE ISSUES, REDUCE THE NUMBER OF, OF DECISIONS THAT THE COUNCIL HAS TO MAKE, AND FIND SOME WAY TO BRING US CLOSER.

AND, UH, WE, WE REALLY WISH THAT AUSTIN ENERGY WOULD COME BACK TO THE NEGOTIATING TABLE AND TALK TO US THE LAST TIME THAT THE OTHER STAKEHOLDERS TRIED TO MAKE AN OFFER.

WE MADE A COUNTER OFFER, I BELIEVE, ON OCTOBER 13.

AND SO IT'S, IT'S BEEN ALMOST A MONTH SINCE WE'VE HEARD BACK FROM THEM.

SO OUR HOPE IS THAT THIS PARTIAL SETTLEMENT WILL HELP NARROW THINGS AND BRING AUSTIN ENERGY BACK INTO DISCUSSION WITH US, AND MAYBE WE CAN RESOLVE THIS CASE FURTHER.

I, I APPRECIATE THOSE COMMENTS AND I APPRECIATE WHEN FOLKS REACH OUT.

I KNOW US ON THE DIAS WE'RE VERY FAMILIAR WITH GETTING INFORMATION TO US ALL THE WAY UP UNTIL THE POINT THAT WE TAKE VOTES, RIGHT? AND SO WE WANNA MAKE SURE THAT PEOPLE ARE FEELING HEARD IN THIS RATE CASE REVIEW.

AND SO I APPRECIATE YOUR COMMENTS ON THAT.

AND, UH, VICE CHAIR, THANK YOU.

AND ACTUALLY MY QUESTIONS ARE GONNA BE FOR, UM, OUR INDEPENDENT CONSUMER ADVOCATE, MR. KAUFMAN.

AND, AND I JUST, UM, WANTED TO POINT OUT, I'M, UM, QUOTING FROM THE IMPARTIAL HEARING EXAMINER QUOTING YOU TALKING ABOUT ARGUING THAT THE RATE IMPACT, NON-COST CONSIDERATIONS, PROMOTING EFFICIENT BEHAVIOR AND PUBLIC POLICY ARE ALSO RELEVANT FACTORS.

SO I, YOU KNOW, I, YES, I REALLY SUPPORT CONTINUING TO SEND THOSE PRICING SIGNALS AND THINKING THROUGH, UH, THE TIER THE PROPOSAL REGARDING THE MATERIAL BECAUSE I, I THINK IT'S STILL, UM, AN ISSUE.

BUT THANK YOU FOR YOUR COMMENTS ABOUT, THANK YOU FOR YOUR COMMENTS ABOUT, UM, YOUR WORK WITH THE OTHER GROUPS OUTSIDE OF THE PROCESS.

AND I THINK, YOU KNOW, NOW THAT THAT HEARING PROCESS IS DONE, UM, THIS ISN'T A HEARING PROCESS.

WHERE, WHERE YOU FALL IN THAT PARTICULAR ZONE OF REASONABLENESS, AS WE CALL IT.

, YOU KNOW, SO THESE ARE POLICY MATTERS BEFORE THE COUNCIL AND I, I WELCOME THE CONTINUED CONVERSATIONS AND I WELCOME THE CONVERSATIONS WITH THE COUNCIL BECAUSE THERE ARE, THERE ARE JUST GONNA BE DECISION POINTS AND I THINK WE'RE, WE'RE ALL WELL SERVED BY THOSE CONTINUED CONVERSATIONS.

AND I WOULD SAY AE MAY BE WELL SERVED BY TALKING THROUGH, THROUGH, UH, THAT INDEPENDENT, THAT ADDITIONAL PROPOSAL WITH Y'ALL.

I, I HAVEN'T HAD AN OPPORTUNITY TO READ IT, SO I CAN'T EVEN START TO ASK QUESTIONS ABOUT IT, BUT COULD YOU PICK UP WHERE I LEFT OFF WITH, UM, LEONARDA COOPER REGARDING THE WINTER STORM ADJUSTMENTS, BOTH IN TERMS OF REVENUES, BUT ALSO IN TERMS OF COSTS AND HOW THOSE WERE ACCOUNTED FOR IN THE REVENUE REQUIREMENT, PLEASE? UM, WELL THERE IS, THERE IS AN EX, THERE'S A REVENUE REQUIREMENT ISSUE INVOLVING THAT AND WHERE I DON'T THINK THAT WINTER STORM YEAR HAD THAT BIG OF AN IMPACT, BUT THE, CERTAINLY THE PANDEMIC DID.

AND, UM, WE, UM, WE MADE A, A MORE AGGRESSIVE ADJUSTMENT, UH, INITIALLY AND THEN, YOU KNOW, AFTER SOME BACK AND FORTH WE, WE CAME TO, AND IN OUR EXCEPTIONS DOCUMENT, WE CAME TO A FALLBACK POSITION.

AND ONE THAT I THINK, UH, THE HEARING EXAMINER SAID IN HIS ORDER WAS, YOU KNOW, HE DIDN'T SIDE WITH US, BUT HE SAID, IF YOU WERE, LOOK AT THE OVERTIMES AND SO FORTH.

AND SO, UM, I THINK THAT'S A VERY FAIR, BALANCED WAY TO ADJUST THE REVENUE REQUIREMENT THERE.

SO THAT WENT FROM A, I DUNNO, A $6 MILLION TO A $3 MILLION ISSUE.

I'M NOT SURE I GOT THE EXACT NUMBER ON THAT.

UM, HOPEFULLY THAT ANSWERS YOUR QUESTION THERE, BUT IF, IF I COULD RESPOND TO, TO JUST GENERALLY WE'LL NEED TO, WE'LL NEED TO FIGURE OUT WHAT, CUZ I KNOW, UM, THERE'S, MR VICARY MENTIONED A NUMBER, I MENTIONED A NUMBER THAT MR. VICARY MENTIONED A DIFFERENT NUMBER AND YOU'VE MENTIONED A DIFFERENT ONE ENTIRELY, BUT, OKAY.

BUT I THINK THE POINT IS, UM, I AGREE WITH YOU THAT, UH, THAT THERE SHOULD BE AN ADJUSTMENT THERE, AND IT DOES SEEM REASONABLE TO USE THE EXCLUSIONS THAT THE INDEPENDENT HEARING EXAMINER SAID, IF YOU ARE, IF THE COUNCIL GOES DOWN THIS PATH, YOU SHOULD PROBABLY JUST DO IT FOR THOSE TWO KINDS OF EXPENSES, RIGHT? AND THERE'S, THEN THERE'S SOME OTHER ISSUES THAT DEAL WITH, YOU KNOW, COST ALLOCATIONS, WHETHER YOU PUT COSTS ON THE RESIDENTIAL CLASS OR THE BIGGER CUSTOMERS.

AND, UM, AS FAR AS OUR RELATIONSHIP WITH THE BIG INDUSTRIAL CUSTOMERS, WE KIND OF RESOLVE THAT AND KIND OF COME TO A MIDDLE GROUND THERE.

I MEAN, ALL OF THIS, AND, AND THIS IS NATURAL FOR US IN DOING THESE CASES THAT, YOU KNOW, WE HAVE DIFFERENT PERSPECTIVES ON WHERE THE COSTS GO.

AND THEN AFTER THAT YOU HAVE POLICY REASONS AND WHICH IS, YOU KNOW, YOU KNOW, DEFINITELY THE COUNCIL'S PREROGATIVE.

UH, THE, YOU KNOW, WE HAVE PUBLIC ACCEPTABILITY, GRADUALISM, ENERGY EFFICIENCY, ALL THESE THINGS THAT ARE EVEN ONCE, ONCE YOU GET TO THE COST, WHICH WE DON'T ALWAYS AGREE ON, THEN YOU HAVE THESE OTHER FACTORS THAT YOU HAVE TO CONSIDER.

AND SO I THINK THE BEST WAY TO LOOK AT THIS IS SOMETIME YOU LOOK, YOU KNOW, STUDY ALL THE ISSUES AND THEN JUST REALIZE WHERE YOU KNOW, WHERE THE APPROPRIATE RANGE IS AND THEN FIND

[03:25:01]

UM, I WANTED TO 0.1 THING OUT FOR MY COLLEAGUES, MAKE A COMMENT FOR CITY MANAGER AND THEN ASK SOME QUESTION.

I THINK OF THE A I H E FIRST.

UM, SO I SHARE THE CONCERNS ABOUT IMPROVING THE TAKE UP OF USING THE CAP.

I JUST WANNA POINT OUT THOUGH, IF WE GET MORE PEOPLE USING THE CAP, WE'RE STILL GONNA HAVE TO FUND THAT MONEY.

UM, I THINK THAT'S WORTHWHILE, BUT, BUT IT DOES ADD TO THE REVENUE REQUIREMENT AND SO WE JUST HAVE TO KEEP THAT IN MIND AS, AS WE, AS WE GO THROUGH THAT PROCESS.

UM, SO MANAGER, IF YOU COULD GET BACK TO US ABOUT WHAT YOU'VE ASSUMED IN TERMS OF THE GENERAL FUND TRANSFER AND THE FINANCIAL FORECASTS.

IF WE'VE ALREADY ASSUMED THE 120 OR IF YOU'VE ASSUMED THE ONE 15 OR WHAT YOU ASSUMED, THAT WOULD BE GREAT.

UM, SO FOR THE INDEPENDENT HEARING EXAMINER, I WANTED TO DIVE A LITTLE BIT MORE INTO THIS PRICE ELASTICITY QUESTION.

UM, WE'VE BEEN TALKING A LOT ABOUT IT WITH RESPECT TO THE SHORT TERM IMPACTS OF LIKE, IF YOU KNOW WHAT YOUR RATE IS, BUT, UM, IT SEEMS TO ME THERE'S A LONG TERM IMPACT ON THE INVESTMENTS THAT YOU MAKE IN, UM, ENERGY EFFICIENCY, WHICH IS WHAT WE'RE REALLY TRYING TO, IS IS ANOTHER PIECE OF THIS, NOT JUST YOUR CONSUMPTION ON A GIVEN DAY.

UM, IS IT, IS IT YOUR SENSE THAT, YOU KNOW, HAVING THE TIERS, UM, OVER TIME HELPS PEOPLE MAKE CHOICES WHERE THEY RETROFIT THEIR HOUSE OR THEY INVEST MORE IN ENERGY EFFICIENCY AND IT'S NOT NECESSARILY A SHORT TERM MEASURE THAT WE'RE LOOKING FOR TO SEE THE IMPACT, BUT IT COULD BE SOMETHING THAT'S HAPPENING OVER THE LONG TERM? UM, I THINK, SO IN TERMS OF LONG TERM, LET ME, YOU KNOW, WE TALKED ABOUT MY TEAM, WE TALKED ABOUT THIS A LOT, AND I'M, UNFORTUNATELY, ANDREA EDGE ISN'T HERE, BUT, BUT WE TALKED ABOUT THIS ENOUGH THAT I CAN DEFINITELY RESPOND TO WHAT YOU'RE ASKING.

UM, ONE GOOD EXAMPLE IS THE, IS THE BUNCHING ANALYSIS THAT AUSTIN ENERGY REFERRED TO, WHERE, AS I UNDERSTAND IT, AS YOU GET CLOSER TOWARDS BREAKING OVER TO THE NEXT TIER, YOU'RE SUPPOSED TO BECOME, UM, MORE COGNIZANT.

IT'S MY UNDERSTANDING OF BUNCHING ANALYSIS, MORE COGNIZANT THAT YOU'RE GONNA BREAK INTO THE NEXT YEAR FOR THAT MONTH, AND SO YOU, YOU AVOID DOING SO.

AND THERE IS EVIDENCE THAT THAT DOESN'T REALLY HAPPEN.

BUT THAT DOES NOT MEAN THAT PEOPLE, AND I CAN TELL YOU FROM MY OWN PERSONAL EXPERIENCE AS A RESIDENTIAL RATE PAYER, WE DO CERTAIN THINGS TO MAKE, MAKE SURE THAT WE KEEP OUR ENERGY CONSUMPTION DOWN.

UM, AND THAT THAT ISN'T JUST LIMITED TO LONG TERM INVESTMENTS AND LIKE, YOU KNOW, WHATEVER INSTALLATION IN THE ATTIC AND THINGS OF THAT NATURE, NEW WINDOWS, IT CAN BE AS SIMPLE AS, YOU KNOW, WE USE NEST.

AND SO WE ALWAYS MAKE SURE THAT OUR, THAT WE TURN THE TEMPERATURE UP WHEN WE LEAVE THE HOUSE.

JUST THINGS OF THAT NATURE THAT AREN'T GOING TO BE REFLECTED AND WEREN'T NECESSARILY REFLECTED IN SOME OF THE ANALYSIS THAT AUSTIN ENERGY PROVIDED.

GETTING BACK TO YOUR ORIGINAL QUESTION, IT SEEMS TO ME THAT TIERS, THESE INCLINING TIERS CAN HAVE, UH, AN IMPACT ON HOW FOLKS USE ENERGY.

MAYBE NOT EVERYONE, THERE ARE SOME PEOPLE IN THIS CITY WHO PROBABLY DON'T LOOK AT IT AT ALL, BUT THERE ARE PEOPLE LIKE ME SOMEWHERE IN THE MIDDLE WHO DEFINITELY LOOK AT IT.

AND I KNOW WHEN I WAS A STUDENT HERE, 1989 TO 95, I LOOKED AT MY THERMOSTAT.

THAT WAS ONE THAT WAS PROBABLY THE SECOND OR THIRD BIGGEST EXPENSE THAT I HAD WHEN I WAS IN SCHOOL.

AND I CAN TELL YOU I WATCHED IT CLOSELY BECAUSE IT'S A, IT'S A BIG EXPERIENCE.

SO I THINK IF YOU'RE ASKING ABOUT THE TIERS, YES, I ACTUALLY THINK THAT THE TIERS, UM, COULD MAKE A DIFFERENCE.

I'M KIND OF IN FAVOR OF THE TIERS, BUT I ALSO AM IN FAVOR OF GOING BACK TO THE DRAWING BOARD ON RATE DESIGN AND TAKING A LOOK AT THESE ISSUES AND ALSO CONSERVATION PRICE SIGNALS.

SO DID THAT, JUST SAY THE LAST PART ONE MORE TIME? CONSERVATION PRICE SIGNALS IS WHAT IS KIND OF WHERE, WHERE WE, WE'VE HAD A LOT OF DISCUSSION.

AND WHAT WOULD THAT BE? HOW WOULD THAT BE DIFFERENT THAN THE TIERING? UH, NOT DIFFERENT NECESSARILY FROM THE TIERING, JUST MAKING SURE THAT FOLKS ARE COGNIZANT OF, UH, THE IMPACTS OF THEIR ENERGY USAGE, SO.

MATTERS WHAT I'M DOING, UM, WHEN ENERGY COSTS THE MOST.

AND THEN I HAVE A QUESTION FOR AE.

UM, YOU HAVE A CHART, I THINK IT'S NUMBER 50 IN THE MATERIAL THAT YOU SHARED WITH COUNCIL THE OTHER DAY THAT HAS A SUMMARY ANALYSIS OF REQUESTED BASE RATE SCENARIOS, AND THERE'S A COLUMN IN THERE THAT SAYS BILL AND REVENUE STABILITY.

UM, CAN YOU EXPLAIN HOW YOU'RE INTERPRETING THAT GOAL? BECAUSE AS I'M HEARING IT, YOU'RE SAYING, WELL, WE DON'T WANT THERE TO BE FLUCTUATIONS, AND THOSE FLUCTUATIONS LARGELY COME WHEN THERE'S HOTTER WEATHER, AND I SORT OF THINK THAT'S EXACTLY WHEN I WANNA HAVE THE PRICE SIGNAL AND THE CLARITY TO KNOW THAT IT

[03:30:01]

SO CAN YOU PLEASE EXPLAIN WHAT GOES INTO THAT COLUMN? SURE.

SO WHAT WE'RE DRAWING DO IS MEASURE, UM, THE IMPACT OF THE AMOUNT OF THE, UH, FIXED MONTHLY CHARGE.

UH, WE CALL IT THE CUSTOMER CHARGE, AND THE NUMBER OF TIERS AND THE, THE PRICING OF THOSE TIERS AND HOW THEY ACT IN RELATIONSHIP TO EACH OTHER.

BECAUSE I THINK THERE'S SOME MISNOMER HERE, WHICH IS, UM, AUSTIN ENERGY ENCOURAGES, UH, ENERGY CONSERVATION AND ENERGY EFFICIENCY.

WE WANT CUSTOMER TO USE LESS ENERGY.

WE WANT TO INSTALL SOLAR SO THAT WE CAN HAVE, HAVE LESS POWER SUPPLY COSTS, BUT WHEN A CUSTOMER USES LESS ENERGY, WE DON'T HAVE LESS FIXED COSTS TO RECOVER.

AND SO, UH, WHEN YOU HAVE A MILD YEAR, WE DON'T RECOVER THOSE COSTS.

IT DOESN'T MEAN OUR, OUR COSTS ARE REDUCED OR WHEN A CUSTOMER USES LESS.

AND CONVERSELY, WHEN WE HAVE A REALLY HOT SUMMER LIKE WE HAD THIS SUMMER, UH, OUR COSTS DON'T GO UP ON ON BASE RATE COST, UH, THEY STAY THE SAME, BUT YET WE COLLECT A LOT MORE.

SO THAT'S THE, THE INSTABILITY THAT WE'RE TRYING TO MEASURE, UM, BETWEEN THE CUSTOMER'S BILL AND WHAT WE'RE COLLECTING TO COVER THOSE FIXED COSTS.

AS MUCH AS I'D LIKE THE, UH, TEMPERATURES TO GO DOWN, I'M NOT REALLY SURE THAT'S GONNA HAPPEN.

UM, IN MY SCENARIO NUMBER 12, I DON'T THINK YOU CAPTURED IT RIGHT, CUZ SOMEHOW MY TIER, THE TIERS THAT YOU CREATED GO FROM ZERO TO 300 TO 301 TO 2300 KILOWATT HOURS.

AND I DON'T THINK THAT'S WHAT I INTENDED BY ADJUSTING THE BREAKS.

I WAS TRYING TO SEE WHAT HAPPENED IF WE INCREASED THE CUSTOMER CHARGE, SAY THREE, FIVE OR $7, AND THEN WE KEPT OUR EXISTING RATES AND WE MIGHT HAVE TO, TO, YOU KNOW, SHIFT IT SO THAT THE, THE TIERS WERE IN A DIFFERENT PLACE, BUT KEPT SOME OF THE, UM, THE STEEPNESS THAT WE HAVE.

UM, AND YOU JUST FLATTENED IT COMPLETELY, IF I'M UNDERSTANDING.

SO I'M HEARING YOU EXPLAIN THAT NOW I UNDERSTAND, UM, THE, THE REQUEST WAS TO HAVE FIVE TIERS, SO WE REDESIGNED THOSE FIVE TIERS, BUT I, I HEAR YOUR REQUEST AND WE'LL GO BACK A LITTLE OVER THE NUMBERS IN THAT FASHION BECAUSE WE HAVE OTHER DATA THAT SAYS IF WE GO UP A DOLLAR AND A CUSTOMER CHARGE, WE GET 5.7 MILLION OR SOMETHING LIKE THAT APPROXIMATELY.

SO IF I WANNA GET TO 30 SOME MILLION, I GO UP $7 AND KEEP MY RATE STRUCTURE, I SHOULD BE ABLE TO RECOVER THE REVENUE.

AND I WANTED TO SEE WHAT THAT THAT'S CORRECT.

AND ONE OF OUR GET THE IMPACT, ONE OF OUR ATTEMPTS WAS TO REDESIGN THE, THE RATES BASED UPON CUSTOMERS ARE USING ENERGY NOW AS OPPOSED TO BACK IN 2009.

SO IT WOULDN'T ADDRESS THAT PROBLEM.

AND BY STILL HAVING FIVE TIERS WITH THE STEEP PRICE, UH, PRICING, YOU WOULDN'T ADDRESS THE BILL STABILITY.

SO IT DOESN'T ADDRESS TWO OF THE THREE ISSUES WE'RE TRYING TO, TO FIX, BUT WE CAN RUN THOSE NUMBERS FOR YOU AND PRE PRESENT THEM FOR YOU.

I, I THINK I WOULD STILL LIKE TO, TO SEE THOSE NUMBERS.

UM, THANK YOU SO MUCH.

I'M GONNA ASK MY LAST QUESTION AND THEN WE'LL, WE'LL, UM, DO SOME CLOSING IF PEOPLE HAVE REMARKS THEY WANNA MAKE AND THEN I'LL DO A CLOSING AS WELL.

MY QUESTION, MY LAST QUESTION IS FOR MR. BOCATO, AND I WANTED YOU TO ADDRESS, IT'S PROBABLY A PRETTY QUICK ANSWER, UH, ADDRESS, AN ISSUE THAT WAS BROUGHT UP EARLIER ABOUT WHETHER THE HEARING PROCESS IS COMPLETE.

UM, ARE WE OUTSIDE THE PROCESS NOW OR ARE WE STILL, UH, WITHIN THE, THE HEARING PROCESS SPECIFICALLY NEGOTIATIONS? WELL, THE NEGOTIATIONS CAN OCCUR OF COURSE, AT ANY TIME, AND DEPENDS ON WHAT YOU THINK OF WHEN YOU THINK OF THE HEARING PROCESS.

I, I THINK OF THIS ENTIRE PROCESS, WHICH INCLUDES THE I I E G PORTION AND THE HEARING AND THE DISCOVERY AND ALL AS ALL PART OF THE PROCESS.

AND NOW WE'RE IN THE DELIBERATION AND DECISION MAKING PHASE, IF YOU WILL.

AND SO IN MY MIND, YOU KNOW, AGAIN, IF YOU DEFINE THE HEARING PROCESS AS THE, THE EVIDENTIARY HEARING AND THE WRITING OF BRIEFS, THEN THAT HAS ALL BEEN CONCLUDED.

AND WHAT WE ARE, WHAT I THINK OF AS BEING IN THE, AGAIN, THE DELIBERATION PROCESS.

UM, BUT WE'RE STILL IN NEGOTIATIONS.

THE PARTIES ARE STILL NEGOTIATING.

WELL, PARTIES ARE FREE TO DO SO.

AND AS MR. KAMAN SAID EARLIER, YES, INTERVENERS MADE A PROPOSAL ON OCTOBER 13TH.

AUSTIN ENERGY HAS BEEN DISCUSSING A COUNTER, UH, PROPOSAL, UH, REALLY SINCE THAT TIME.

UM, AND BECAUSE OF ALL THE OTHER THINGS INVOLVED IN THE PROCESS, HAVE NOT, UM, PRESENTED ANYTHING AT THIS POINT.

BUT WE STILL, UM, ANTICIPATE DOING SO AND HAVING CONTINUING TALKS AND HOPES OF BRINGING YOU SOME PROPOSAL THAT INCLUDES, UH, THE UTILITY AND PERHAPS EVEN OTHER, UM, PARTICIPANTS WHO DID NOT SIGN ON.

ANYBODY WANNA MAKE ANY, UM, FINAL, FINAL COMMENTS? WE'RE AT FOUR O'CLOCK AND I THINK IT'S BEEN A PRETTY GOOD SESSION TODAY.

COUNCIL ENTENTES, THANK YOU.

UM, THANK YOU CHAIR FOR

[03:35:01]

LEADING TODAY'S MEETING.

CERTAINLY THERE'S A LOT OF INFORMATION TO UNPACK HERE.

UM, I DO JUST WANNA ACKNOWLEDGE THE ALTERNATIVE PROPOSAL THAT WAS BROUGHT FORTH BY OUR COMMUNITY THAT IS UNIQUE IN THAT IT BRINGS TOGETHER INDU INDUSTRIAL PARTNERS, UH, COMMUNITY ADVOCATES, ENVIRONMENTAL GROUPS, UH, SO CERTAINLY WOULD LIKE TO MAKE SURE THAT WE HAVE ENOUGH TIME TO CONSIDER THAT.

SO I APPRECIATE MAYOR, PRETEND YOU MENTIONING THAT WOULD BE INCORPORATED OR SHOULD BE INCORPORATED IN OUR NOVEMBER 15TH MEETING.

UM, AND, UM, AND WE'LL CONTINUE WORKING WITH STAFF ON SOME ADDITIONAL FOLLOW UP QUESTIONS THAT WE HAVE.

UM, AND YOU KNOW, AGAIN, I THINK FOR ME TO BE ABLE TO SUPPORT THIS, THIS INCREASE ON OUR RESIDENTS, UM, I WOULD LIKE TO SEE AN EXPANSION OF THE, OF THE CAP PROGRAM TO ENSURE THAT WE GET MORE PEOPLE ENROLLED AND, UH, ARE AWARE OF WHAT WE HAVE TO OFFER.

UM, AND WE'LL BE WORKING TOWARDS, UM, SOME AMENDMENTS TO THAT EFFORT.

I MENTIONED SOME OF THE THINGS I'M LOOKING AT BEFORE IT WOULD BE HELPFUL.

UM, AND I'LL, I'LL MAKE THIS REQUEST MORE FORMALLY, BUT I WOULD BE INTERESTED IN LOOKING AT WHETHER, WHETHER THERE'S AN OPPORTUNITY AUSTIN ENERGY TO SHIFT MORE OF THE COST TO THOSE TIER, UM, AT A STEEPER GENERALLY MAKING A STEEPER INCLINE THERE, UM, TO, TO ACCOMMODATE SOME OF WHAT I THINK I UNDERSTOOD YOU TO BE DESCRIBING, WHICH IS THAT MOST OF OUR, THAT THE EX THE CUSTOMER BASE IS EXPANDING, BUT IT'S EXPANDING AT THOSE LOWER TWO TIERS.

AND SO I, SO IF YOU WERE ABLE TO, TO KIND OF DO A FEW PROPOSALS THAT WOULD FIGURE OUT THAT WOULD SHIFT, UH, SOME OF THE AMOUNT WE NEED TO RECOVER THROUGH THE RESIDENTIAL INCREASES TO THOSE TWO UPPER TIERS, I'D BE INTERESTED IN SEEING THAT.

DOES I SEE MR. BOCATO SHAKING, SHAKING MY HEAD SO THAT SHAKING HIS HEAD.

SO I THINK, I THINK THAT YOU UNDERSTAND WHAT I'M ASKING.

I REALLY APPRECIATE IT AND I AM INTERESTED IN FIGURING OUT KIND OF WHAT PROCESS WE'RE GONNA HAVE TO WORK THROUGH SOME OF THESE ISSUES THAT I THINK ARE JUST GONNA BE POLICY DECISIONS THAT WE NEED TO FIGURE OUT WHERE WE ALL AGREE ON.

SO I DON'T KNOW WHAT, UH, WHAT THAT PROCESS LOOKS LIKE.

I MEAN, I THINK SEVERAL OF US COULD WORK ON IT AND COME BACK AND TALK ABOUT IT, OR WE COULD JUST CARVE OUT SOME TIME TO KIND OF HIT THIS REVENUE REQUIREMENT, THIS REVENUE REQUIRE, YOU KNOW, BUT, BUT WE'RE GONNA NEED TO FIGURE OUT HOW WE'RE GONNA MAKE THOSE DECISIONS.

MAYOR, PER THANK YOU.

UM, I WANNA SAY THANK YOU TO ALL OF THE PARTICIPANTS, UM, IN THIS RATE PROCESS.

UM, I KNOW THIS IS NOT ALWAYS AN EASY PROCESS AND IT IS SOMEWHAT PAINFUL, BUT I THINK WE'RE, YOU KNOW, I THINK THIS IS BETTER THAN THE ALTERNATIVE AND, AND IT DOES PROVIDE US WITH A LOT MORE, UM, INFORMATION WHICH, WHICH I FIND, UM, VALUABLE AND I APPRECIATE THAT AND I APPRECIATE ALL THE WORK THAT AUSTIN ENERGY'S DOING TO TRY TO ANSWER, ANSWER OUR QUESTIONS.

I THINK, UM, FOR ME, I THINK WE HAVE TO, LIKE I'M APPROACHING THIS, THAT WE NEED TO ACCOMPLISH MULTIPLE THINGS.

I DON'T KNOW THAT I ALWAYS COME DOWN WHERE AUSTIN ENERGY LANDED IN TERMS OF THEIR SOLUTION, UM, IN WEIGHING THOSE, BUT I WANT US TO, YOU KNOW, BE ACHIEVING AFFORDABILITY.

I WANT US TO BE ACHIEVING THE FINANCIAL STABILITY OF OUR UTILITY AND I WANT US TO BE ENCOURAGING, UM, CONSERVATION A LITTLE BIT LESS CONCERNED ABOUT, UM, GETTING TO COST OF SERVICE PARITY.

UM, BUT I UNDERSTAND, UM, THE NEED FOR THAT IN THAT PROCESS.

UM, I FEEL PRETTY STRONGLY THAT, UM, IF WE WANNA PROCEED EFFECTIVELY, WE NEED TO LAND ON OUR REVENUE REQUIREMENT, UM, BECAUSE THE WHOLE RATE STRUCTURE DEPENDS ON THAT.

UM, BUT I WILL POINT OUT, IF YOU LOOK AT THE SCENARIOS, UM, ON THAT PAGE 50, YOU KNOW, THE, THE CURRENT RATES ARE 45, UM, WOULD HAVE A, I'M SORRY, HOW IS IT, IT WOULD BE HELPFUL TO UNDERSTAND, CUZ I GUESS I'M NOT READING THIS RIGHT NOW.

UM, THE INCREASE IN THE RATES FOR THE RESIDENTIAL IMPACTS ACROSS, UM, THE DIFFERENCE IN SCENARIOS BECAUSE YOU HAD OUR CURRENT RATE AS BEING 45 AND THEN THE NEW RATE IS, UM, PROPOSED FROM THE REBUTTAL, UM, IS 59 0 4.

SO IS IT JUST THE DIFFERENCE THERE THAT WE'RE TALKING, TALKING ABOUT WOULD BE THE CHANGE? OKAY.

UM, OKAY THEN MY COMMENT ON THIS ISN'T RELEVANT THEN.

UM, I I I THINK WE NEED TO UNDERSTAND THERE'S NOT A WHOLE LOT, YOU KNOW, IN THE, IN THE THINGS THAT HAVE BEEN PUT FORWARD AT THIS POINT, UNLESS WE PLAY WITH THE REVENUE REQUIREMENT, WHICH I DON'T KNOW THAT I WANNA PLAY WITH THE REVENUE REQUIREMENT CUZ WE HAVE TO GO, WE HAVE TO DIG DEEPER INTO THAT.

UM, THERE'S NOT A WHOLE LOT OF DIFFERENCE ON THE IMPACT FOR THE AVERAGE

[03:40:01]

RESIDENTIAL CUSTOMER.

I MEAN, UNLESS WE GO DOWN TO THE ICAS ORIGINAL PROPOSAL, YOU KNOW, WE'RE WITHIN A DOLLAR OR SO OF ONE ANOTHER WITHOUT NECESSARILY SOLVING PROBLEMS. UM, AND SO UNLESS WE FIGURE OUT THAT WE'RE REAL COMFORTABLE CHANGING A REVENUE REQUIREMENT, THE POTENTIAL IMPACTS, AT LEAST WITH THE, THE, THE STRUCTURES THAT WE HAVE BEFORE US THUS FAR, NOT ALL THAT DIFFERENT.

UM, AND SO WE NEED TO LOOK ON THAT REVENUE REQUIREMENT AND THEN WE NEED TO UNPACK SOME OF THIS, UM, COST OF SERVICE ASSUMPTIONS AND WHAT, WHAT'S HAPPENING.

UM, WITH THAT.

I STILL SORT OF THINK THAT, I STILL DON'T UNDERSTAND WHY IF YOU JUST RAISED A CUSTOMER CHARGE A CERTAIN AMOUNT AND YOU KEPT VERY SIMILAR TIERS OR YOU JUST ADJUSTED THOSE TIERS, SO THERE WERE HIGHER RATES AT TIER THREE AND TIER FOUR AND MAYBE YOU, YOU BROKE 'EM A LITTLE BIT, UM, LOWER WHY, WHY YOU WOULDN'T BE ABLE TO, TO GET TO A, TO A BETTER PLACE.

UM, SO THOSE ARE SOME OF THE THINGS THAT I'M THINKING THROUGH.

UM, AND YOU KNOW, ONCE WE GET THAT REVENUE REQUIREMENT, THEN WE CAN FIGURE OUT THE NEXT STEPS.

I THINK WE HAVE COUNCIL MEMBER KITCHEN HERE WANTS TO, UM, TAKE A TURN.

I'LL JUST SAY VERY QUICKLY, I KNOW WE'RE TITLE AND TIME, UH, FIRST OFF, UM, UH, THANK YOU CHAIR FOR SETTING UP, UH, A STRUCTURE LIKE THIS FOR US TO HAVE CONVERSATIONS, UH, THIS AND OVER THE NEXT FEW MEETINGS.

THIS HAS BEEN VERY HELPFUL.

I'LL EMPHASIZE AGAIN THAT I WANT TO, UM, I WANT TO MAKE IMPROVEMENTS TO OUR CAP PROGRAM.

I THINK THAT'S IMPORTANT REGARDLESS OF THE CASE THAT'S IN FRONT OF US, BUT IT'S PARTICULARLY IMPORTANT, UH, CONSIDERING THE KINDS OF IMPACTS THAT WE'RE TALKING ABOUT.

SO I THINK THAT THAT'S CRITICAL AND I'LL BE WORKING ON THAT AND WITH OTHERS ON THE DIAS, I KNOW A LOT OF US ARE INTERESTED IN THAT.

AND SECOND, I, I DO THINK THAT, UM, YOU KNOW, FUNDAMENTAL TO HOW WE PROCEED, UM, IS THE REVENUE, UM, AS THE MAYOR PRO TIM HAS BEEN MENTIONING WHAT, WHAT THAT NUMBER IS.

SO THERE'S A, A RANGE OF OTHER THINGS I COULD SPEAK TO CONVERSATION, UH, CONSERVATION IS ALSO IMPORTANT TO ME, BUT I'LL JUST LEAVE IT AT THAT FOR NOW.

COUNCIL ENT, THANK YOU.

I JUST WANTED TO BUILD OFF SOME COMMENTS THAT MAYOR EM, UH, MENTIONED AND SOME OF WHICH SOME OF THE SENTIMENTS I SHARE ABOUT.

AND I, I THINK IT IS A MATTER OF POLICY WHETHER OR NOT, UM, WE ACHIEVE PARITY ON THE COST OF SERVICE.

SO I WANTED TO DAYLIGHT, UH, SOME OF THE QUESTIONS THAT I HAVE FOR STAFF THAT PERHAPS, UM, YOU KNOW, YOU CAN HELP US WITH THE, WITH THE RESPONSES.

AND THE QUESTIONS I HAVE IS, ARE WHAT IS A TYPICAL PERCENTAGE OF KILOWATT THAT IS BELOW COST OF SERVICE FOR RESIDENTIAL CUSTOMERS FOR OTHER TEXAS PUBLIC UTILITY WITH SIMILAR CUSTOMER CHARGES? AND UM, I THINK THAT'LL HELP US HAVE A FRAME OF REFERENCE OF HOW OTHER UTILITIES HANDLE THEIR COST OF SERVICE AND THE PERCENTAGE THAT IS, UM, AT COST OR BELOW COST.

THANKS AND I'LL CLOSE BY APPRECIATING EVERYBODY FOR THE HARD WORK TODAY.

UM, AND THAT GOES TO EVERYBODY INVOLVED.

UM, THERE'S CLEARLY MORE WORK TO BE DONE AND I TRUST THAT GOOD OUTCOMES WILL RESULT FROM COLLABORATION OF ALL THE PARTICIPANTS TO ACHIEVE THAT RESOLUTION.

WITH REGARD TO ACHIEVING RESOLUTION, I WOULD LIKE THE PARTIES TO WORK TOGETHER IN THE WEEKS AHEAD BETWEEN TODAY AND THE END OF THE MONTH TO FIND A MUTUALLY AGREEABLE COMPROMISE.

UH, WOULD LIKE THAT COMPROMISE OF TO INCLUDE OPTIONS AND OUTCOMES ANALYSIS SO THAT THE RECOMMENDATIONS CAN BE PRESENTED TO THE COUNCIL.

FOR OUR CAREFUL DELIBERATION, I DO WANT TO SPECIFICALLY REQUEST THAT THE PARTIES WORK TOWARD A COMPROMISE TOGETHER RATHER THAN ONE PARTY OR ONE PARTY OR EVEN A SMALL GROUP OF PARTIES COMING DIRECTLY TO THE COUNCIL.

I'D LIKE TO ASK AUSTIN ENERGY TO COME BACK WITH OPTIONS FOR US ON TUESDAY AND THOSE OPTIONS SHOULD BE BASED ON WHAT WE HEARD TODAY.

I UNDERSTAND THAT WILL BE POSSIBLE.

AND NEXT TUESDAY IS THE 15TH.

ON THE 15TH AS A REMINDER, STARTING AT ONE O'CLOCK, WE WILL HOLD A PUBLIC HEARING ON THE RATE CASE AND WE WILL HEAR RECOMMENDATIONS FROM THE ELECTRIC UTILITY COMMISSION.

I'VE INVITED MARTY HOPKINS, WHO'S THE CHAIR OF THE EUC, TO COME AND PRESENT THE COMMISSION'S RESULTS.

OUR NEXT WORK SESSION WILL BE ON NOVEMBER 29.

THE SECOND PUBLIC HEARING IS SET FOR DECEMBER 1ST.

UH, WE ARE ALSO SET FOR THAT DATE FOR DISCUSSION

[03:45:01]

AND UM, AND VOTE.

SO THERE IS A LOT OF WORK YET AHEAD FOR ALL OF THE PARTIES AND I THANK YOU ALL FOR BEING HERE TODAY.

UM, GO AND DO THAT WORK FOR US PLEASE AND THAT BEING ALL OF OUR WORK TODAY, WE ARE ADJOURNED AT FOUR 11.