* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [00:00:02] OKAY, SO THIS [CALL MEETING TO ORDER] IS A SPECIALLY CALLED MEETING OF THE ELECTRIC UTILITY COMMISSION FOR SEPTEMBER 30TH, 2024. CALL TO ORDER, FIRST ORDER OF BUSINESS. UM, JUST TAKE ATTENDANCE FIRST OF THEM ALL, SAY THEY'RE HERE. AND THIS IS COMMISSIONER KIRKSEY'S FIRST MEETING. SO WELCOME COMMISSIONER KIRKSEY. ANYTIME YOU SPEAK OR VOTE ON ANYTHING, YOU NEED TO BE ON CAMERA. AND, AND THAT INCLUDES FOR ATTENDANCE. I WAS GONNA ASK HIM TO INTRODUCE HIMSELF. WELCOME. AND DO YOU WANNA GIVE US SOME BACKGROUND? HARRY? HERE HE COMES. I THINK HE COULDN'T. OKAY, WELL LET'S JUST START WITH THE ROLL CALL. . WELL, YOU MAY HAVE HAD IT. YEAH. TOO MUCH PRESSURE. COMMUNICATION PROBLEM WITH, UM, WELL, IT'S THE FIRST THING ON THE AGENDA, SO TAKE IT HERE IN THE NEXT 10 MINUTES. OH, MAYBE THIS, ARE YOU HERE? HERE, HE JUST TURNED THE CALL AGAIN. OKAY. HE'S BACK. WE HAVE A NEW COMMISSIONER. WOULD YOU LIKE TO INTRODUCE YOURSELF? UH, I CAN'T GET MY CAMERA FOR SOME REASON, BUT, UH, THIS IS CHRIS GARCIA. HAPPY TO, UH, BE ON THE COMMISSION. UH, LOOKING FORWARD TO WORKING WITH EVERYBODY. A MEETING. THOSE OF YOU THAT I DON'T KNOW ALREADY. YEAH, WE'RE HAVING A DIFFICULT TIME HEARING YOU. YEAH, LET ME, LET ME TRY SOMETHING ELSE HERE. ALL RIGHT, WELL, LET'S, UH, JUST DO THE ROLL CALL FOR EVERYBODY ELSE THEN. SO WE HAVE TO MY LEFT, UM, I WHITE. I'M DAVE TUTTLE, JOSH RHODES, CYRUS REED, AND WE HAVE AT LEAST THREE OR FOUR COMMISSIONERS ONLINE. IT'S DIFFICULT TO SEE CESAR EZ HERE. BLACKBURN BRO ALVAREZ, AND OUR NEWEST EUC COMMISSIONER CHRIS KIRKEY, AND WHEN HIS COMMUNICATION. AND BRANDON CHAPMAN. ANDREW CHAPMAN, PLEASE. THANK YOU. SO WHEN CHRIS'S COMPUTER WORKS WELL, HE CAN INTRODUCE HIMSELF. SO ANY GENERAL, YEAH. UM, SO WE'LL START WITH [PUBLIC COMMUNICATION: GENERAL ] PUBLIC COMMENT. WE HAVE THREE SPEAKERS TONIGHT. UM, THE FIRST IS JEN KRIEGER. WE'LL HAVE THREE MINUTES. ALL RIGHT. GOOD MORNING COMMISSIONERS AND AUSTIN ENERGY STAFF. AND BY MORNING I OF COURSE MEAN EVENING. UM, MY NAME IS JEN KRIEGER. I AM COMMENTING ON AGENDA ITEM THREE, THE REGARDING THE RESOURCE PLAN. UM, FIRST OFF, I WANT TO THANK AUSTIN ENERGY STAFF FOR INCLUDING THE KNOX SOCKS AND PARTICULATE MATTER. UM, AS I REQUESTED AT THE UTILITY OVERSIGHT COMMITTEE MEETING LAST WEEK, UM, I WOULD LIKE TO ASK Y'ALL TO GO A STEP FURTHER IF YOU HAVEN'T ALREADY, WHICH IS TO ASK YOU TO PLEASE INCLUDE THE ACTUAL DOLLAR COST OF THAT POLLUTION FROM THE DIFFERENT RESOURCE PORTFOLIOS THAT MOVE FORWARD FROM THIS EVENING. UM, SPECIFICALLY I'D LIKE TO INCLUDE THAT, UH, THIS INCLUDE THE FINANCIAL ANALYSIS FOR THE GREENHOUSE GASES, CARBON DIOXIDE, METHANE, AND NITROUS OXIDE. AND FOR THE LOCAL CRITERIA, POLLUTANTS KNOCKS SOCKS IN PARTICULATE MATTER. UM, AND I WOULD PREFER TO SEE A THIRD PARTY GOVERNMENT BACKED SOURCE FOR THOSE DOLLAR PER MEGAWATT HOUR COST ASSOCIATED WITH THAT ENVIRONMENTAL POLLUTION. I THINK THAT WOULD PUT EVERYTHING ON A FAIR FOOTING TO COMPARE ALL OF THE GENERATION RESOURCE OPTIONS AGAINST EACH OTHER. UM, AND TO BACK THAT UP, YOU KNOW, THE AIR POLLUTION FROM FOSSIL FUEL COMBUSTION AND HYDROGEN COMBUSTION POSES A VERY REAL HEALTH THREAT TO ALL OF US. AND IMP IMPAIRS OUR QUALITY OF LIFE, ESPECIALLY FOR THOSE FRENCH LINE COMMUNITIES ALREADY OVERBURDENED BY POLLUTION AROUND AUSTIN ENERGY'S EXISTING POWER PLANTS. UM, AND ALSO THERE IS A COMPOUNDING COST TO NOT TAKING ACTION TO TRANSITION OFF OF FOSSIL FUELS. UM, FROM MY PERSPECTIVE, IT'S UNACCEPTABLE TO PASS THESE COSTS ONTO OUR FUTURE SELVES AND FUTURE GENERATIONS. [00:05:02] UH, YES, ABSOLUTELY. I WILL ADMIT THAT MOVING AWAY FROM FOSSIL FUELS AND TOWARDS RENEWABLE ENERGY AND ENERGY STORAGE TECHNOLOGY HAS PRESENT DAY COST, BUT SO DOES INACTION OR WORSE ACTION TOWARDS NEW INVESTMENTS IN FOSSIL FUEL INFRASTRUCTURE. AS JOURNALIST AND AUTHOR JASON MARK PUTS IT, WE UNDERSTAND THE MORAL CLARITY OF ZERO MEANING ULTIMATELY ZERO CARBON, ZERO FOSSIL FUEL RESOURCES. WE HAVE TO STOP BURNING THINGS IN ORDER TO REACH OUR COMMUNITY'S CARBON REDUCTION GOALS. ALLOWING CLIMATE CHANGE TO WORSEN BY CONTINUING TO INVEST IN FOSSIL FUELS WILL ONLY EXACERBATE RELIABILITY AND AFFORDABILITY CHALLENGES OF THE IN THE FUTURE, PLEASE, LET'S NOT MAKE THESE THINGS HARDER FOR OURSELVES DOWN THE LINE. SECOND, I WOULD LIKE TO PROVIDE MORE SPECIFICITY ABOUT MY PREVIOUS REQUEST FOR GREATER TRANSPARENCY. AS I NOTED AT LAST TUESDAY, LAST TUESDAY'S UTILITY OVERSIGHT COMMITTEE MEETING, IT IS DARN NEAR IMPOSSIBLE TO FIND ALL FOUR OF THE PREVIOUS RESOURCE PLANS ON ANY WEBSITE. AND IT'S ESPECIALLY HARD TO FIND ANY STUDIES OR MATERIALS THAT INFORM DEVELOPMENT OF THOSE PLANS. I BELIEVE IT'S IMPORTANT FOR DECISION MAKERS AND FOR THE PUBLIC TO HAVE ACCESS TO THE FULL HISTORY OF AUSTIN ENERGY'S RESOURCE PLANNING PROCESS, SO THAT WE CAN SEE THE INCREDIBLE PROGRESS THAT WE'VE MADE WITH EACH AND EVERY PLAN AND THE POTENTIAL REGRESSION WE WOULD BE MAKING IF WE BACKTRACK ON PREVIOUS COMMITMENTS TO STEADILY REDUCE EMISSIONS AND TO NOT PURSUE NEW SOURCES OF CARBON. I BELIEVE THAT MEANS MY TIME IS UP. SO I LOOK FORWARD TO HEARING MORE ABOUT THESE TOPICS DURING TONIGHT'S PRESENTATIONS, AND I'M AVAILABLE TO DISCUSS FURTHER. THANK YOU. THANK YOU. OUR NEXT SPEAKER IS AL BRADEN. UH, GOOD EVENING COMMISSIONERS AND AUSTIN ENERGY STAFF. I'M AL BRADEN, A DISTRICT SEVEN VOTER AND AUSTIN ENERGY SHAREHOLDER. I'D LIKE TO FIGURE THINGS OUT WITH MODELED EXPERIMENTS. IN THAT SPIRIT, I APPROACH TONIGHT'S DATA EXPERIMENTS, MINIMIZE OUTSIDE INFLUENCE. A BELL JAR IS A GOOD EXAMPLE. EVERYTHING IN THE EXPERIMENT IS KEPT IN AND EVERYTHING OUTSIDE IS KEPT OUT. WHAT HAPPENS IN THE BELL JAR STAYS IN THE BELL JAR, AS IT WERE SO FAR SO GOOD. BUT MAKE NO MISTAKE ON EARTH, WHAT HAPPENS IN THE BELL JAR DOESN'T STAY IN THE BELL JAR. IT SPEWS INTO THE ATMOSPHERE, THE WATER, THE SOIL. THESE EXTERNALITIES ARE REAL AND CONSEQUENTIAL. WE KNOW THAT OUR HOME EARTH IS WARMING. EACH YEAR IS NOW THE COOLEST YEAR THAT HUMANS WILL LIKELY KNOW. OCEANS HAVE ABSORBED THE BULK OF THE HEAT INCREASE, KILLING CORALS, THREATENING OCEAN CIRCULATION, MELTING THE ARCTIC GLACIER ANTARCTIC GLACIERS FROM BELOW. THIS WEEK, WE FACE HURRICANES AND FLOODS OF EVER GREATER POWER AND DESTRUCTION. THE POWER PLANT DOESN'T STAY IN THE BELL JAR. IT THREATENS US FASTER THAN OUR ABILITY TO ADAPT. WE MUST LOOK AT THE BIGGER PICTURE, BIGGER THAN OUR GEN PLANT CHARTS BIGGER THAN OUR AUSTIN CLIMATE EQUITY GOALS. SEE THE WORLDWIDE CONSEQUENCES, 2000 FOURTEENS COUNCIL DECREE, WE WOULD END FOSSIL FUEL POWER GENERATION AND CLOSE THE COAL PLANT. WE WOULD NEVER BUILD ANOTHER FOSSIL FUEL PLANT. COUNCIL AFTER COUNCIL HAVE ENDORSED THESE GOALS AND MADE THEM STRONGER. THIS 2020 GEN PLAN THAT WE ARE NOW UPDATING SAYS IT ONCE AGAIN, NO MORE FOSSIL FUEL PLANTS. COUNCIL SUPPORTS AUSTIN ENERGY AND MEETING THEIR GOALS IN INNOVATIVE AND LEADING WAYS, AND OFTEN WITH SUCCESS. BUT LOOKING AT TONIGHT'S EXPERIMENT, WE SEE HIGHLIGHTS OF MORE METHANE PLANTS OR GREEN HYDROGEN, WHICH IS JUST A GREEN FOIL WRAPPER ON A METHANE PLANT. GREEN HYDROGEN DOES NOT EXIST AT ANY SCALE TODAY. ANY GREEN HYDROGEN PRODUCED AT THE HOUSTON HUB WILL BE FOR PETROCHEMICAL OR FERTILIZER PRODUCTION, STEEL AND CEMENT, AND OTHER HARD TO ABATE INDUSTRIES. THOSE ARE TOP PRIORITY. RUNNING A SPECIAL LOW LEAKAGE PIPELINE TO AUSTIN FOR ELECTRICITY IS VERY LOW ON THE LIST. ULTIMATELY, THE KILLER IS EFFICIENCY. IF YOU SOLAR TO ELECTROLYZE WATER TO SEPARATE OUT THE HYDROGEN TO PIPE IT TO AUSTIN TO BURN FOR ELECTRICITY, YOUR NET EFFICIENCY IS ABOUT 30%. CONTRAST WITH BATTERIES THAT HAVE EFFICIENCIES, LIKE 85% STORE SOLAR ON SITE FOR BEST MARKET CONDITIONS, OR PREPOSITION IT IN AUSTIN FOR USE WHEN NEEDED, YOU'LL GET 85% BACK. HOW CAN THE COMPLEXITY, RISK AND SUBSIDIES OF GREEN HYDROGEN EVER COMPETE WITH THAT? HOUSTON JUST ANNOUNCED A 200 MEGAWATT TIMES TWO HOUR BATTERY IN SAN ANTONIO. 400 MEGAWATT TIMES FOUR HOUR BATTERY AND ADDITIONAL 200 MEGAWATT BATTERY ALL AT OLD COAL PLANTS. [00:10:01] ERCOT BATTERIES JUST CONTRIBUTED A PEAK 5% TO TOTAL POWER IN A CRITICAL EVENING HOUR. ERCOT BATTERY FLEET WILL BE 10 GIGAWATTS BY YEAR END AND 20 GIGAWATTS IN 2025. REAL OPERATING BATTERIES. NOW, NOT GREEN. FUTURE, NOT SPECULATION. SO WHERE IS AUSTIN? I ASK YOU ONCE AGAIN, DO THE STUDIES, FIND THE BEST COMBINATIONS, AND THEN GET TO WORK BUILDING THE BEST MIX OF RENEWABLE STORAGE AND TECHNOLOGY TO GET THE JOB DONE. WE'LL STILL HAVE GAS TILL 2035 AND THE NUKE TILL 2046, BUT WE CAN MOVE FORWARD WITHOUT MORE HARM TO OUR HEALTH AND CLIMATE. THANK YOU VERY MUCH. THANK YOU VERY MUCH. NEXT SPEAKER IS SUSAN LIPMAN. UH, GOOD EVENING COMMISSIONERS. THANK YOU FOR BEING HERE TONIGHT. UM, I WANT, I'M SUSAN LIPMAN AND I LIVE IN SOUTH AUSTIN IN DISTRICT FIVE OFF SLAUGHTER LANE. I'M AN AUSTIN ENERGY CUSTOMER, AND I HAVE BEEN SINCE IN 1967, I'D SAY. UM, I'M ASKING YOU TO PASS THE, UM, RESOURCE PLAN THIS YEAR. HAVE NO NEW GAS PLANT, ESPECIALLY EVEN IF IT'S HYDROGEN CAPABLE, WHICH HAS, UM, A LOT OF ARGUMENTS AGAINST IT. PRIORITIZE LOCAL SOLAR BATTERIES AND MULTI AND, UH, EXPANDED ENERGY SAVINGS, INCLUDING SOLAR FOR RENTERS AND MULTIFAMILY DWELLINGS AND NEW PROGRAMS TO HELP PEOPLE LOWER THEIR BILLS. I WOULD LIKE TO SEE THE FA AT COAL PLANT CLOSED SOONER RATHER THAN LATER AND ACHIEVE A HUNDRED PERCENT CARBON FREE ENERGY BY 2035. UH, AL BRADEN HAS SPOKEN ABOUT GREEN HYDROGEN AND HOW IT'S, UH, INEFFICIENT COMPARED TO BATTERIES. UM, AND IF WE BUILT THAT PLANT AND IT LASTS 30 OR 40 YEARS, THAT'S A A LOT OF SUNK COST TO BE GETTING OUT OF SOMETHING THAT MAY NOT BE THE MOST EFFICIENT THING. IF BATTERIES ARE ONLY LOSING 20% AND HYDROGEN IS LOSING 70% OF ITS ENERGY BEFORE IT HITS OUR GRID, UM, IT'S PRETTY WELL KNOWN THAT, UH, SOLAR COSTS ARE FALLING SO QUICKLY THAT, UM, IN GERMANY, PEOPLE ARE USING SOLAR PANELS JUST, UH, TO PUT FENCES AROUND THEIR GARDENS BECAUSE IT DOESN'T EVEN MATTER THAT MUCH IF IT'S FACING THE SUN AT JUST THE PERFECT ANGLE. UM, IT'S STILL PRODUCING SOME ELECTRICITY THAT ISN'T AT BENEFIT FOR THEM. AND, UM, THERE'S AN ARTICLE THAT I GOT FROM DAVID WALLACE WELLS AT THE NEW YORK TIMES. THE TITLE IS THE SHOCKING RISE OF SOLAR IS RESHAPING THE ENERGY LANDSCAPE. THE OTHER TITLE OF IT IS, WHAT WILL WE DO WITH ALL THIS POWER THAT'S VIRTUALLY FREE? SO, UM, I'M GONNA READ SOME EXCERPTS FROM THAT UNTIL I RUN OUT OF TIME, BUT FIRST I WANNA SHARE A COUPLE, UH, PIECES ABOUT BATTERY STORAGE COSTS. ACCORDING TO REAL CLEAR ENERGY OVER THE PAST DECADE, THE COST HAS FALLEN BY 80%. DOES THAT MEAN IT'S GONNA KEEP FALLING? UH, AN ARTICLE BY ROUTERS.COM FROM THE INTERNATIONAL ENERGY AGENCY DATA SAYS THAT THE TOTAL CAPITAL COSTS ARE DUE TO TUMBLE UP TO 40% BY 2030. WE SHOULD CAREFULLY COMPARE HOW MUCH BATTERY STORAGE COSTS HAVE FALLEN AND SOLAR HAS FALLEN AND NOTE THE TREND TO FOLLOW. WE RISK BEING LOCKED INTO OUTDATED AND EXPENSIVE GENERATION FOR DECADES IF WE DON'T CONSIDER THAT. AND THIS IS, UM, A LITTLE BIT ABOUT SOLAR POWER, THE BLOOMBERG, UM, NEW ENERGY FUTURES ANALYST. WELL, ANYWAY, I WISH I COULD TELL YOU MORE. THANK YOU. THANK YOU SO MUCH. UM, AND WE HAVE ONE LATE EDITION SPEAKER, BEN SOTHEBY. HELLO. UH, FIRST A DISCLAIMER, I'M HERE NOT ON BEHALF OF MY OFFICE IN WHICH I WORK, OR, UH, ON ANY, UM, ANY NONPROFIT BOARD I SIT ON AND NOT ON BEHALF OF MY UNION. I'M HERE AS AN INDIVIDUAL. UH, AND I I WANNA START OFF BY, UH, ACKNOWLEDGING THE SPEAKERS WHO SPOKE BEFORE ME. THEY SAID IT MUCH MORE ELOQUENTLY THAN I COULD WITH MORE SPECIFICS, BUT I DO WANNA SHARE WITH YOU WHAT I'M HEARING IN MY NEIGHBORHOOD. UH, I LIVE IN A NEIGHBORHOOD SURROUNDED BY HIGHWAYS, UH, MAJORITY BLACK AND LATINO WORKING CLASS NEIGHBORHOOD. WE MOSTLY RIDE [00:15:01] THE BUS, UM, OR CARPOOL OR BIKE OR CATCH A RIDE WITH A FAMILY MEMBER IN MY NEIGHBORHOOD, WE'RE AUSTIN ENERGY CUSTOMERS. AND WHEN I HEAR ABOUT WHAT THEIR DESIRES ARE, YES, IT'S ABOUT PRICES. YES, IT'S ABOUT RELIABILITY, BUT INCREASINGLY I'M HEARING FROM WORKING CLASS PEOPLE WHO WANT THERE TO BE A GREEN FUTURE, GOOD UNION JOBS. THAT'S A, A COMPONENT OF IT. BUT THEY SEE THE VALUE IN HAVING BATTERY STORAGE AND SOLAR. THEY SEE THAT THE BENEFITS THAT ARE HAPPENING IN OTHER COMMUNITIES, UH, YOU KNOW, LARGE FAMILIES SPREAD OUT ACROSS TEXAS. YOU HEAR ABOUT THE GOOD THINGS HAPPENING IN SAN ANTONIO, RIGHT? AND IF THEY CAN DO A BATTERY, AUSTIN CAN DO BATTERIES, WE CAN DO, WE CAN DO MORE THAN THEM, RIGHT? UH, SO I SEE THIS AS AN OPPORTUNITY FOR OUR COMMUNITY TO SHOW THE, THE WAY THAT WE CAN DO GOOD AND CALCULATE THE WAY, THE WAY THINGS ARE GOING. WE'RE LOOKING AT THE IMPACTS OF ALL THESE EXTERNALITIES OF, OF OUR FOSSIL FUELS, UH, OF, YOU KNOW, DECADES AND DECADES OF IT. WE'RE SEEING IT NOW IN THE NEWS, WHAT'S HAPPENING IN THE SOUTH, UH, THE IMPACT OF COMMUNITIES. AND WE'RE NOT, WE'RE NOT, YOU KNOW, ESCAPING IT EITHER, WHETHER IT'S FROM FREEZES OR OTHER TYPES OF NATURAL DISASTERS. THEY'RE GONNA BE BIGGER AND MORE FREQUENT. AND WE HAVE TO RECOGNIZE OUR, OUR PART OF IT. I WAS JUST AT A TOWN HALL WHERE 75 TO 80 PEOPLE WERE GATHERED AND TALKING ABOUT THE SAME THING. THERE'S NO COMMUNITY APPETITE FOR ANY FURTHER FOSSIL FUELS. IT HAS BEEN MADE CLEAR TO COUNCIL UPON COUNCIL. THE REAL DIRECTION THAT WE NEED TO BE LOOKING AT IS HOW QUICKLY CAN WE IMPLEMENT THESE NEW TECHNOLOGIES THAT ARE ALREADY REAPING BENEFITS THAT PEOPLE DIDN'T EVEN SEE COMING? LIKE THE BATTERIES, LIKE OTHER FORMS OF STORAGE. THERE'S OTHER TECHNOLOGIES COMING ON, AND HOW MUCH WE CAN GET FROM TEXAS SOLAR, TEXAS WIND, AND PUTTING IT INTO STORAGE SO THAT WE CAN SMOOTH OUT THOSE LUMPS. AND HEY, WE, WE DON'T EVEN NEED TO BUILD ALL THESE PEAKER PLANTS. UH, I AGREE THAT THIS, UH, YOU KNOW, CLEAN OR GREEN HYDROGEN, IT'S A MIRAGE. IT'S, IT'S, YOU KNOW, GREENWASHING. THERE'S NO PIPELINES FOR, FOR HYDROGEN ACROSS TEXAS, BUT THERE IS FOR NATURAL GAS, THERE IS FOR FOSSIL FUELS, AND THAT'S WHAT'S GONNA ACTUALLY END UP EARNING IN THOSE PLANTS. THANK YOU. THANK YOU VERY MUCH. THAT'S ALL THE SPEAKERS WE HAVE. WELL, THANKS TO ALL THE SPEAKERS. THIS WAS ACTUALLY THE TIME I WAS GOING TO ASK CHRIS IF HE WANTED TO INTRODUCE HIMSELF. LET'S SEE IF THE TECHNOLOGY IS WORKING RIGHT NOW. CHRIS, CAN WE, HOW IS THIS, CAN YOU SPEAK UP? THAT SOUND BETTER? YEAH, CAN YOU HEAR ME? IT'S VERY, YES. WE CAN JUST SPEAK UP A LITTLE BIT. OKAY. UH, SORRY ABOUT THIS. UH, I'M TRAVELING THIS WEEK AND, UH, IT'S NOT OPTIMUM, BUT, UH, HAPPY TO BE ON THE COMMISSION. I LOOK FORWARD TO GETTING TO KNOW THOSE OF YOU THAT I DON'T ALREADY KNOW. AND FOR SOME OF YOU, IT'S GOOD TO SEE SOME FRIENDLY FACES THERE. SO THANKS FOR, UH, THANKS FOR WELCOMING ME. OKAY, SO LET'S MOVE ON [1. Recommend conducting a public hearing and consider proposed terms, rate and fee changes for Austin Energy – Solar Standard Offer Rider – Solar Integrator; High Load Factor Primary Voltage (Demand greater than or equal to 20,000 kW); and High Load Factor Transmission Voltage (Demand greater than or equal to 20 MW).] TO DISCUSSION AND ACTION ITEMS. NUMBER ONE, DO WE HAVE A RECOMMENDATION OF CONDUCTING PUBLIC HEARINGS? YES. THE FIRST ONE IS THE RCA. RICHARD, DO YOU WANNA INTRODUCE IT? GOOD EVENING COMMISSIONERS. RICHARD GENESEE, VICE PRESIDENT OF CUSTOMER ENERGY SOLUTIONS. UH, THIS IS THE RCA FOR SOLAR STANDARD OFFER. UM, AND WE HAVE A, UH, BOARD COMMISSION RECOMMENDATION ON THIS ITEM AS WELL. UH, AND WE'VE WORKED, UH, PRETTY HARD ON THIS OFFERING. VERY EXCITED ABOUT THIS OFFERING. THIS IS, UH, GOING TO BE, UH, OUR MEANS TO EXPAND COMMUNITY SOLAR. AND, UM, WE ARE EXCITED TO SCALE THIS EVENTUALLY, UH, TO, YOU KNOW, IT'S GOING TO START WITH A 20, UH, MEGAWATT, UM, PAUSE. AND THEN WE'RE GOING TO SCALE IT AND EVENTUALLY ALSO EXPAND IT TO, UH, RESIDENTIAL. SO, UM, I ASK YOUR SUPPORT FOR THIS, UH, RCA DISCUSSION. I, I JUST WANNA SAY THANK YOU TO RICHARD AND HIS TEAM. YOU KNOW, I, I KNOW YOU HEARD SOME, SOME FEEDBACK HERE AND, AND AT CITY COUNCIL, AND I APPRECIATE THAT YOU, YOU KNOW, HEARD THAT AND MADE ADJUSTMENTS TO THE OFFERING. AND I ALSO REALLY LOOK FORWARD TO THE NEXT PHASE WITH THE ROLLING IN THE RESIDENTIAL. SO THANK YOU. [00:20:02] THANK YOU. ANY QUESTIONS ONLINE? UH, RICHARD, UH, HOW DOES THIS HAVE ANY EFFECT ON REMAINING CUSTOMERS IN TERMS OF THE O OVERALL IMPACT ON, ON PRICES? IS THERE ANY SUBSIDY, IN OTHER WORDS, ANY SUBSIDY BUILT IN AS A RESULT? UM, I BELIEVE, UH, TIM HARVEY IS ON LINE AND, UM, I'D LIKE TO HAVE HIM ADDRESS THAT QUESTION. I'M TIM CUSTOMER. OH, TIM. TIM, WE CAN'T HEAR YOU. YES. CAN YOU HEAR ME NOW? YES, WE CAN. ALRIGHT. WOW, THAT WORKED. UM, I'M TIM HARVEY. I AM THE CUSTOMER RENEWABLE SOLUTIONS MANAGER AT AUSTIN ENERGY. UM, SO NO, THIS SHOULDN'T HAVE ANY, UH, ILL EFFECT ON PRICES. SO THE WAY THIS WORKS IS WE'RE, WE'RE BASICALLY PASSING THROUGH OUR AVOIDED COSTS, UM, TO THE INTAKER OF THIS RATE. SO THE RATE WILL FLUCTUATE OVER TIME WITH OUR AVOIDED COSTS ON THE MARKET, BASED ON THE SAME, UM, METHODOLOGY THAT WE USE FOR THE AVOIDED COSTS FOR VALUES OF VALUE OF SOLAR. THANK YOU. MM-HMM, , ONE, ONE FOLLOW UP, UH, QUE QUESTION, RICHARD. UH, YOU MENTIONED GOING FORWARD, UH, HAVING A STANDARD OFFER FOR, UH, RESIDENTIAL, UH, IS THERE, HAVE THE CUSTOMER PROTECTIONS THAT ARE NECESSARY FOR THAT, UH, BEEN STUDIED? I KNOW THERE'S, I KNOW THE NATIONAL CONSUMER LAW CENTER HA HAS DONE SOME MAPPING NATIONALLY, THAT AREA. YEAH. UM, THE GLIDE PATH FOR DOING THAT IS GOING TO START WITH STAKEHOLDER ENGAGEMENT ON, IN DECEMBER OF THIS YEAR. AND ALL OF THAT WILL BE WORKED OUT AS WE MOVE FORWARD THROUGH THE PROCESS. AND WE ANTICIPATE, UM, BEING ABLE TO ROLL FORWARD POTENTIALLY WITH AN OFFERING IN JANUARY OF 2026. SO, UM, I EXPECT WHAT YOU'RE ADDRESSING WILL BE PART OF OUR STAKEHOLDER DISCUSSIONS STARTING IN DECEMBER. THANK YOU. I, THAT CONCLUDES MY QUESTION. CAN, CAN I FOLLOW UP ON, WELL, ACTUALLY CYRUS, YOU HAD A QUESTION? NO, I JUST, I REALLY JUST WANTED TO THANK, UM, BOTH COMMISSIONER WHITE FOR EFFORTS, UH, TOWARDS REACHING A CONSENSUS ON THIS AND ALSO AUSTIN ENERGY STAFF. UM, I, I KNOW I'VE ASKED THIS BEFORE, BUT THE SEPARATE POT OF MONEY, UM, THROUGH THE SOLAR FOR ALL FEDERAL GRANT IS SEPARATE FROM THIS STAND. IT'S A COMPLETELY DIFFERENT PROGRAM, CORRECT? YES, IT'S COMPLETELY SEPARATE. OKAY, THANKS. YEP. JOSH, DO YOU, UH, NO. NO, MA'AM. OKAY. WHAT OTHER QUESTIONS ONLINE? OKAY. BUT YOU HAD QUESTIONS? YEAH, I JUST WANTED TO FOLLOW UP SINCE RANDY ASKED ABOUT THE RATES AND, AND TIM MENTIONED THAT THIS, UH, TARIFF WILL BE BASED ON THE AVOIDED COSTS, BUT JUST WANTED TO GET, UH, CLARIFICATION ON THAT. THERE IS AGREEMENT ON WHAT'S IN THE RESOLUTION, WHICH IS THE, IN ROUND TWO, WHEN THE RESIDENTIAL, UM, SIDE OF THE PROGRAM IS LAUNCHED, THAT THE COMMUNITY SOLAR REVENUE WILL BE USED TOWARDS THAT, UH, WILL, WILL GO TOWARDS COMPENSATING THOSE RESIDENTIAL INSTALLATIONS. JUST YEAH, WANTED TO, LIKE, FOR THE RECORD, RECORD, HAVE THAT BE PART OF THIS, NOT JUST THE AVOIDED COST PIECE OF IT. WE RECOGNIZE THAT PART OF THE RESOLUTION, BUT THOSE DETAILS WE ARE GONNA WORK THROUGH AS PART OF OUR, UH, DECEMBER STAKEHOLDER ENGAGEMENT. SO, RIGHT. BUT THAT MONEY ISN'T JUST GONNA KIND OF GET SWEPT INTO SOME OTHER PURPOSE, RIGHT? IT'S GONNA GO TOWARDS THE INSTALLATIONS. YEAH. WE DON'T HAVE THE, THE DETAILS RIGHT NOW, BUT YEAH, THAT'S UNDERSTANDING. AND I DON'T HAVE THE, YOU KNOW, I'M NOT EVEN PROPOSING ONE METHOD OR ANOTHER. I JUST THINK IT'S REALLY IMPORTANT THAT WHEN WE HAVE A VOLUNTARY OFFERING AND CUSTOMERS STEP UP AND WANT TO PAY A LITTLE MORE FOR SOMETHING THAT WE MAKE SURE WE USE THOSE FUNDS FOR THAT PURPOSE. SO, THANKS. [00:25:03] ANY OTHER QUESTIONS OR DISCUSSION? OKAY. SO AMY, WE'RE LOOKING FOR A VOTE ON THIS. I'LL MOVE APPROVAL. NO SECOND. JOSHUA SECOND. ALL IN FAVOR SAY AYE. AYE. AYE. RANDY, WE DIDN'T SEE YOUR HAND UP, PLEASE. OKAY. THANKS. OKAY, PASSED. NEXT [2. Recommend approval of the Solar Standard Offer Program.] IS NUMBER TWO. THIS IS THE RECOMMENDED APPROVAL FOR THE SOLAR STANDARD OFFER PROGRAM. I THINK THIS IS MEANING TO BE THE RESOLUTION THAT YOU DRAFTED. YES. OKAY. AND THERE WAS A, AN ORIGINAL, THEN A REVISED POSTED ONLINE. DO YOU WANT TO DESCRIBE MORE? I HAVE A HARD COPY. YEAH. SO, UM, THAT'S OKAY, I GOT IT HERE. SO ORIGINALLY, UM, THIS WAS FOCUSED ON THE GETTING THE FULL, UH, VALUE OF SOLAR, BUT, YOU KNOW, WE, WE DID HAVE ADDITIONAL DISCUSSION, AND SO IT'S REALLY JUST AGREEING TO WHAT WE JUST DISCUSSED AND WHAT'S IN THE TARIFF. INITIAL TARIFF WILL BE THE AVERAGE OF THE LAST THREE YEARS, AVOIDED COST, WHICH, UH, DOES BOOST THE INITIAL OFFERING SIGNIFICANTLY. AND I THINK WE'LL PUT THE PROGRAM ON A, ON A GOOD PLACE TO LAUNCH AND, UH, IS ALSO STILL GONNA BE NOT A, ANY NET COST INCREASE TO THE UTILITY OR OTHER CUSTOMERS. AND THEN JUST STATING THAT THERE WILL BE, UM, A PROCESS FOR, UM, UPDATING THAT, THAT WILL ALIGN WITH THE VALUE OF SOLAR. SO IT WILL NOT BE THE SAME AS THE VALUE OF SOLAR TARIFF, BUT IT WILL UPDATE ON THE SAME CYCLE BECAUSE THE AVOIDED COST PORTION IS THE SAME. AND THAT, THAT'LL START IN MARCH OF 2026. AND, UH, THEN JUST THE PIECE THAT WE JUST DISCUSSED ABOUT THE STAKEHOLDER MEETINGS STARTING IN DECEMBER TO WORK OUT THE DETAILS OF EXPANDING INTO THE RESIDENTIAL, UH, SECTOR FOR SYSTEMS DOWN TO THREE KILOWATTS. UH, AND WITH THE INTENTION OF LAUNCHING THAT BY JANUARY OF 2026, AND THAT, THAT REVENUE FROM THE COMMUNITY SOLAR PROGRAM WILL BE USED TOWARDS THAT SEGMENT OF THE PROGRAM SINCE THOSE INSTALLATIONS WOULD LIKELY BE A BIT MORE COSTLY. AND THEN FINALLY, A RECOMMENDATION THAT THE CITY COUNCIL REQUEST QUARTERLY UPDATES ON THIS. UM, AND I THINK ONE OF THE THINGS THAT I THINK WE CAN TRY TO KEEP AN EYE ON AS A COMMISSION, AND I HOPE WE WILL, IS NEED FOR STAFFING AS THIS PROGRAM IS IMPLEMENTED. UM, YOU KNOW, IT, IT IS, I THINK, GONNA BE A, A SUBSTANTIAL INCREASE IN WHAT THE SOLAR TEAM HAS TO PROCESS IN TERMS OF, IN OUR CONNECTIONS, AND LIKELY EVEN JUST KIND OF QUESTIONS FROM THE PUBLIC. SO I THINK, UH, WE CAN HELP IT BE SUCCESSFUL, BUT, YOU KNOW, WHEN BUDGET TIME ROLLS AROUND, MAKING SURE THAT THE AE AND THE, THE SOLAR PROGRAM IN PARTICULAR HAVE THE STAFFING THEY NEED. BUT THE IDEA IS TO HOPEFULLY GET THEM, GET COUNCIL MEMBERS THOSE UPDATES PERIODICALLY SO THEY KNOW IF THERE'S LIKE A HUGE RUSH ON THIS PROGRAM AND STAFF IS OVERWHELMED. DISCUSSION AND QUESTIONS? ANY, ANY QUESTIONS ONLINE? SO MOVED. I'LL SECOND THOSE IN FAVOR SAY AYE. AYE. AYE. AYE. AYE. OKAY. PASS. OKAY. LET'S MOVE ON TO [3. Staff briefing on the initial modeling results for Austin Energy’s Resource, Generation, and Climate Protection Plan by Lisa Martin, Deputy General Manager and Chief Operating Officer] STAFF BRIEFINGS NUMBER THREE. LISA MARTIN. ALL RIGHT. GOOD EVENING, CHAIR, TUTTLE, VICE CHAIR, WHITE AND COMMISSIONERS. I'M LISA MARTIN, AUSTIN ENERGY'S CHIEF OPERATING OFFICER. AND I JUST WANNA THANK YOU FOR COMING TOGETHER FOR THIS SPECIAL CALLED ELECTRIC UTILITY COMMISSION MEETING. WE'RE AT A VERY IMPORTANT MILESTONE ON OUR RESOURCE PLANNING JOURNEY, AND WE HAVE OUR FIRST SET OF MODELING RESULTS, AND WE APPRECIATE YOU ALL MAKING THE TIME FOR IT. BEFORE WE GET STARTED, I WANNA SET THE STAGE FOR WHAT YOU CAN EXPECT TONIGHT. UH, NEXT SLIDE, PLEASE. SO, FIRST OF ALL, A SOLID DISCLAIMER. IN FULL TRANSPARENCY, IT'S IMPORTANT THAT WE ALL REALIZE THERE ARE NO RECOMMENDATIONS COMING OUT OF TONIGHT'S MEETING. THERE WILL DEFINITELY BE NEXT STEPS, BUT WE HAVE NOT PRE ANALYZED THE DATA AND DECIDED HOW TO MOVE FORWARD. WE'RE GONNA DO THAT TOGETHER, AND WE ALL HAVE TO REMEMBER THAT MODELS PROVIDE INFORMATION. THEY ARE NOT THE PLAN, AND THEY WILL NOT PROVIDE THE ANSWER OR THE SOLUTION THAT GOES INTO THE RESOURCE GENERATION AND CLIMATE PROTECTION PLAN TO 2035 MODELS, TURN [00:30:01] DATA INTO INFORMATION AND THEY ANSWER OUR QUESTIONS AND HELP US PROVIDE WITH, IN, PROVIDE US WITH INSIGHTS SO WE CAN MAKE BETTER DECISIONS. AND I ALSO WANNA, UM, UH, NOTE THAT ALL THE MODELING REFLECTS THE INPUT ASSUMPTIONS COORDINATED WITH YOU EARLIER THIS YEAR. OKAY, NEXT SLIDE. ALL RIGHT. SO TONIGHT WE HAVE A FULL AGENDA DEDICATED TO THE RESOURCE GENERATION PLAN. YOU'LL HEAR FROM SEVERAL OF US. I'M GONNA START US OUT. I'LL PASS IT OFF TO MICHAEL ANGER. AND THEN, UH, WE HAVE BEN ANDERSON, UH, FROM ASCEND ANALYTICS, WHO HAS JOINED US VIRTUALLY. AT THE CONCLUSION WE'LL BRING UP SOME OF THE MODELING TEAM MEMBERS, HAVE SOME DISCUSSION AND COLLABORATION, AND ULTIMATELY DETERMINE HOW THAT WILL CARRY OVER INTO OFFICE HOURS FOR INDIVIDUALS OR SMALLER GROUPS THROUGHOUT THE REST OF THE WEEK. NEXT SLIDE, PLEASE. RIGHT. THIS IS ALSO AN IMPORTANT SLIDE FOR ME, AND I JUST WANNA WALK THROUGH IT BIT BY BIT. I KNOW IT'S A LOT OF TEXT, UM, BUT IT LAYS THE GROUNDWORK FOR WHAT YOU CAN EXPECT TONIGHT. SO, FIRST OF ALL, THERE ARE 17 PORTFOLIOS TO DATE, 17 DIFFERENT TECHNOLOGY MIXES. YOU'LL SEE RESULTS FROM ALL OF THOSE TONIGHT, BUT YOU'LL SEE THEM IN TWO PARTS. SO FIRST, YOU'LL SEE THE RESULTS OF THE 13 PORTFOLIOS THAT WERE DEFINED BY AUSTIN ENERGY AND THE ELECTRIC UTILITY COMMISSION. UM, THOSE WERE THE TECHNOLOGY MIX THAT, THAT WE AGREED UPON IN AUGUST, UM, INCLUDING TWO THAT YOU DEFINED YOURSELF. AND MIKE'S GONNA SUMMARIZE THOSE. AND THEN THERE ARE FOUR ADDITIONAL PORTFOLIOS CREATED BY ASCEND ANALYTICS. WE'LL TALK MORE ABOUT THOSE LATER THIS EVENING. SEVERAL OF THE PORTFOLIOS ARE INCLUDED FOR REFERENCE ONLY. THESE ARE EDGE CASES PURPOSEFULLY DEFINED TO HELP UNDERSTAND THE BOUNDARIES OF THE SPACE THAT WE'RE WORKING WITHIN. AND THESE ARE CLEARLY MARKED AS YOU LOOK THROUGHOUT THE PRESENTATION. I WOULDN'T EXPECT ANY OF THESE TO END UP ON THE FINAL SET OF OPTIONS. THE TRADE-OFFS ARE JUST TOO EXTREME, BUT AGAIN, THEY ARE BOUNDARY CASES. AND THEN YOU'RE GONNA SEE A LOT OF DATA, BUT NOT A LOT OF TAKEAWAYS. THIS IS RAW DATA THAT SHOWS HOW EACH PORTFOLIO COMPARES TO THE OTHERS FOR ANY GIVEN OUTPUT METRIC. WHEN YOU REVIEW THIS, YOU MAY FEEL OVERWHELMED BY THE SHEER AMOUNT OF DATA PROVIDED. THERE ARE A LOT OF CHARTS, AND WHEN YOU PUT IT TOGETHER INTO A TABLE, IT'S A LOT. SO I JUST ASK THAT YOU HANG IN THERE WITH US, EMBRACE THAT OVERWHELMING FEELING THAT ALL OF US HAVE FELT WHEN WE LOOKED THROUGH THIS DATA AND KNOW THAT WE'LL SORT THROUGH IT TOGETHER. WE'VE PURPOSELY NOT PULLED OUT KEY HIGHLIGHTS OR USED HEAT MAP CHARTS TO IDENTIFY GOOD OR BAD OUTCOMES. WE WANNA DRAW THOSE CONCLUSIONS TOGETHER. ALL RIGHT, SO THAT BRINGS ME TO THE FINAL POINT ON THIS SLIDE, WHICH IS THAT TONIGHT WE'RE GONNA REVIEW, UM, ASCEND AND AE RESULTS. THERE ARE TWO DIFFERENT MODELS TO PROVIDE INFORMATION FOR NEXT STEPS. OUR NEXT STEP IS GOING TO BE TO ASK WHAT IF, WHAT IF THIS PORTFOLIO LOOKED THIS WAY OR WHAT IF IT LOOKED THAT WAY? AND THEN WE'LL REFINE THE PORTFOLIOS MIX AND MATCH TECHNOLOGIES. AND OUR GOAL IS TO FIND A SUBSET, UH, THAT WE CAN RUN AGAIN AND, UH, THAT WILL PROVIDE A MORE ACCEPTABLE SET OF TRADE-OFFS. NEXT SLIDE, PLEASE. SO WE'RE GONNA BEGIN THAT WORK TONIGHT. UM, I DON'T EXPECT WE'RE GONNA FINISH TONIGHT. SOME OF YOU WILL NEED TO SIT WITH THIS INFORMATION AND DIG INTO IT FURTHER. AND FOR THAT WE HAVE ESTABLISHED OFFICE HOURS. YOU CAN USE THEM FOR ANY OR ALL OF THE LISTED OBJECTIVES. AND I WILL CIRCLE BACK TO THIS AT THE END OF TONIGHT'S MEETING. SO BEFORE I PASS IT OFF TO MIKE, I HAVE ONE FINAL, UM, THING TO SHARE IS THAT, SO YOU ALL SHOULD HAVE A A, A BINDER, UM, WHICH WILL HELP YOU, UH, NAVIGATE THROUGH THE CONVERSATION TONIGHT. THOSE OF YOU VIRTUALLY SHOULD HAVE AN ELECTRONIC BINDER. WE HAVE SOME, UM, REFERENCE, UH, KIND OF QUICK CHEAT SHEETS OR CHARTS, UM, IN THE, UM, FOLDERS, I'M SORRY, IN THE YES, IN THE, IN THE SIDE POCKETS. AND THEN, UM, THIS FIRST SECTION BEHIND THE FIRST, UH, TAB IS A SET OF, UH, REFERENCE INFORMATION. MIKE'S GONNA EXPLAIN HOW YOU WOULD READ THAT. UM, BUT WE EXPECT THAT YOU MAY BE FLIPPING THROUGH THAT AS WE GO THROUGH THE PRESENTATION. THE PRESENTATION IS BEHIND THE SECOND TAB, AND THEN THE APPENDICES ARE BEHIND THE THIRD TAB. SO I WILL PASS IT OFF TO MIKE AND WE'LL BE AROUND QUESTION, VERY QUICK PROCESS QUESTION. YES, SIR. UM, CAN YOU REMIND US WHEN THE NEXT EUC MEETING IS? OCTOBER 21ST? OCTO. OH, OKAY. SO IT'S THE, OKAY, GOT IT. SO THERE IS A LITTLE TIME TO RUN. GOT IT. NOT MUCH, BUT WE'LL BE WORKING ON NOT MUCH, BUT SOMETIME. THANK YOU. ALL RIGHT, MIKE, NEXT SLIDE PLEASE. DID YOU WANT ME TO GO OVER TO MODELING TIMELINE POLICIES? YES. SO, YES. AND SO JUST TO, TO WRAP THINGS UP, UH, HERE'S THE MODELING TIMELINE OF WHAT WE HAVE DONE, UM, SO FAR, UH, AND THEN NEXT STEPS AS WELL. ALRIGHT, WELL THANK YOU. GOOD EVENING COMMISSIONERS. MY NAME IS MICHAEL ENGER. I'M THE VICE PRESIDENT OF ENERGY MARKET OPERATIONS AND RESOURCE PLANNING. AND I'LL BE HERE TO TALK ABOUT THE AE RESULTS FROM FROM MODELING. UH, NEXT SLIDE PLEASE. SO TO REITERATE AND, AND SHOW THIS SLIDE, UH, AGAIN, UH, THIS IS JUST IMPORTANT CONTEXT FOR DISCUSSION [00:35:01] THAT THESE ARE MODEL OUTPUTS. WE ARE NOT PROPOSING ANY RESOURCE PLANS TODAY. UH, NONE OF THESE PORTFOLIOS ARE PROPOSED RESOURCE PLAN. IT'S MORE SO THAT WE CAN LOOK AT THE RE RISK TRADE-OFFS OR THE TRADE-OFFS BETWEEN DIFFERENT TECHNOLOGIES AS WELL AS THE RISK WITHIN DIFFERENT PORTFOLIOS. NEXT SLIDE, PLEASE. UH, SO YOU'RE GONNA HAVE A REFERENCE GUIDE, I THINK THAT WAS MENTIONED A LITTLE BIT EARLIER, UH, WHERE YOU HAVE ALL THE PORTFOLIOS ONE THROUGH 13 HERE. YOU HAVE THE PORTFOLIO WITH, WITH KIND OF A, A, A NAME OR NOMENCLATURE FOR THAT, AS WELL AS A SHORT DESCRIPTION. YOU'LL PROBABLY WANT TO KEEP THIS OUT TO BE ABLE TO REFER BACK TO IT. A LOT OF THE CHARTS WE'RE GONNA SHOW, YOU KNOW, TO MAKE EVERYTHING FIT. WE, WE ARE REFERRING BACK TO THE NUMBERS AND NOT THE ACTUAL PORTFOLIO PORTFOLIO DESCRIPTION. AND SO BY HAVING THIS REFERENCE GUIDE OUT, IT'LL BE HELPFUL FOR YOU TO KIND OF GO BACK AND SEE, OKAY, WELL WHICH PORTFOLIO WAS THAT? THAT'S, YOU KNOW, HERE ON THE GRAPH, FOR EXAMPLE. NEXT SLIDE, PLEASE. UH, WE'VE ALSO INCLUDED A GLOSSARY OF TERMS. I DON'T THINK THIS IS ALL INCLUSIVE. SO IF THERE'S ANY TERM THAT I I SAY AS WE GO THROUGH THIS OR YOU SEE ON ANYTHING ON THE SLIDE THAT DOESN'T MAKE SENSE, UH, PLEASE LET ME KNOW. I KNOW, UH, DAVE AND I TALKED A LITTLE BIT EARLIER ABOUT THE A HUNDRED PERCENT CF AND THAT'S A HUNDRED PERCENT CARBON FREE, NOT CAPACITY FACTOR. SO IF YOU, IF YOU CATCH ANY KIND OF LITTLE ACRONYMS LIKE THAT OR ANY KIND OF, UH, ABBREVIATIONS, UH, THAT DON'T MAKE SENSE, PLEASE LET ME KNOW SO THAT WE CAN JUMP INTO THOSE AND ADDRESS THOSE. BUT HERE'S JUST A, A GLOSSARY OF SOME OF THOSE TERMS AND, AND WHAT WE ALL MEAN BY THOSE TERMS. UH, NEXT SLIDE PLEASE. UH, AND SO I WANTED TO START OFF AND JUST, UH, REITERATE, WE SHOWED THE SLIDE A LITTLE BIT AGO. THIS IS THE DEMAND SIDE MANAGEMENT IN 2035 SLIDE. UH, THIS IS A COMBINATION OF WHAT AUSTIN ENERGY HAS ALREADY COMMITTED IN OUR CURRENT RESOURCE PLANS. THAT IS THE DARK ORANGE NUMBER. AND THAT IS FROM 2025 ON THROUGH 2035. AND SO YOU'LL SEE THERE IS ABOUT 812 MEGAWATTS OF ADDITIONAL DEMAND SIDE MANAGEMENT OR DEMAND SIDE RESPONSE THAT WE'RE LOOKING TO ACCOMPLISH, EITHER THROUGH DEMAND, UH, DEMAND RESPONSE, LOCAL SOLAR OR ENERGY EFFICIENCY. UH, YOU'LL ALSO NOTICE A LITTLE YELLOW BAR ON TOP OF THAT. THAT IS, UH, THE ADDITIONAL CAPACITY FROM THE DMV STUDY THAT WE MIGHT BE ABLE TO ACCOMPLISH. UM, SO YOU CAN SEE WE'VE ALREADY DONE A, A REALLY GREAT JOB OF, OF TRYING TO, TO REALLY WORK ON DEMAND SIDE MANAGEMENT THAT THERE MIGHT STILL BE A LITTLE BIT MORE THAT WE CAN CAN ACHIEVE. AND THIS IS, LIKE I SAID, THIS IS GOING FORWARD. SO IT'S ABOUT ONE GIGAWATT OF ADDITIONAL DEMAND SIDE MANAGEMENT FROM 2025 TO 2035. AND THAT DOES NOT INCLUDE ALL OF THE GAINS WE'VE ALREADY MADE. SO, FOR EXAMPLE, ON ENERGY EFFICIENCY, I THINK WE'VE ALREADY, UH, ACCOMPLISHED ABOUT 828 MEGAWATTS OF ENERGY EFFICIENCY UP TO THIS DAY. UM, NEXT SLIDE PLEASE. UM, AND THEN NEXT SLIDE. SO WE ARE GONNA START OFF WITH, UH, PORTFOLIO COMPARISONS ON FINANCIAL IMPACT. SO WE'LL KIND OF GO THROUGH, UH, FINANCIAL IMPACTS, EMISSIONS AND RELIABILITY, AND WE'LL JUST KIND OF TALK THROUGH THE DIFFERENT METRICS. UH, BUT TO START OFF, FOR EVERY SINGLE PORTFOLIO ONE THROUGH 13 FOR THE AE PORTFOLIOS, YOU'LL HAVE A GRAPHIC LIKE THIS. AND SO WE'LL GO AND COMPARE DIFFERENT PORTFOLIOS THROUGHOUT THIS PRESENTATION, UH, TO DIFFERENT PORTFOLIOS. THIS IS A, A GREAT WAY TO JUST LOOK AT THE PORTFOLIO AND LOOK AT ALL THE METRICS JUST RIGHT IN ONE SPOT. SO IF YOU WANTED TO WALK THROUGH AND SEE HOW IT COMPARED THROUGH ALL THE DIFFERENT OUTPUT METRICS THAT'S ON YOUR TOP LEFT THERE WHERE YOU CAN SEE WHERE IT RANKED AND WHAT THE OVERALL VALUE IS. UH, SOME OF THE STATS ON THE ASSUMPTIONS HERE, FOR EXAMPLE, WHEN FPP IS RETIRED IN THE MODELING STUDY, UH, WHAT THE RENEWABLE ENERGY GOAL WOULD BE, THAT'S OUR E GOAL THERE. UH, IF WE REACHED A HUNDRED PERCENT CARBON FREE GOAL, UH, AND THEN HOW MUCH NEW ADDITIONAL LOCAL STORAGE AND GAS IS ADDED. AND THEN OVER ON THE RIGHT YOU CAN LOOK AT THE DIFFERENT GENERATION, UH, INSTALLED CAPACITY MIX BY YEAR, UH, UH, WITHIN THAT PORTFOLIO. SO YOU HAVE ONE OF THOSE FOR ALL 13 OF THE PORTFOLIOS. AND THAT'S, I BELIEVE IN YOUR APPENDICES. UH, SO YOU CAN REFERENCE BACK TO THAT AS WELL. UH, NEXT SLIDE PLEASE. SO WE'RE GONNA START OFF WITH NET COSTS. SO FIRST WE WANNA TALK ABOUT WHAT NET COST IS. THIS IS NOT A LEVELIZED COST OF ELECTRICITY OR JUST THE CAPITAL COST. SO THE NET COST IS THE TOTAL CAPITAL COST AS WELL AS THE O AND M COST, THE OPERATIONS AND MAINTENANCE COST IN ORDER TO BE ABLE TO GENERATE THAT POWER LESS THE TOTAL REVENUE FROM THE SALE OF THAT POWER INTO THE ERCO MARKET. UM, THE CAPITAL COSTS FOR ALL NEW ASSETS ARE AMORTIZED OVER THE LIFE OF THE ASSETS. SO WE'RE NOT JUST PUTTING IT ALL IN ONE YEAR, WE'RE AMORTIZING IT MUCH LIKE WE WOULD DO ON OUR FINANCIAL, UH, BALANCE STATEMENTS. UM, THE O AND M COSTS INCLUDE FUEL PERSONNEL AND REGULAR MAINTENANCE, THINGS THAT ARE EXPECTED, NOT, UH, UNEXPECTED MAINTENANCE. UM, AND TO COMPARE THE SINGLE NET COST ACROSS ALL THE DIFFERENT PORTFOLIOS. WE LOOKED AT THE ANNUAL COSTS AND WE BROUGHT, BROUGHT IT BACK TO A NET PRESENT VALUE WHERE WE USED A DISCOUNT FACTOR OF 7.8% AND WE USED 7.8%. 'CAUSE I BELIEVE THAT IS THE WEIGHTED, UH, AVERAGE COST OF CAPITAL FOR AUSTIN ENERGY PER OUR LAST RESOURCE PLAN OR SORRY, PER OUR LAST RATE CASE. VERY, VERY QUICK QUESTION. HOW, WHAT DO YOU DO FOR PPA IF YOU'RE DOING A NEW PPA FOR UTILITY, WIND OR SOLAR, HOW DO YOU FIGURE OUT THAT TOTAL COST OR YOU JUST TAKE THAT [00:40:01] SO YOU'D HAVE A TOTAL COST PER PER YEAR OF THAT PPA TO TO BUY THAT POWER? SO THAT BE BROUGHT BACK OR IF WE LOOKED AT ACTUALLY OWNING IT RATHER THAN A PPA, THEN WE'D LOOK AT THE CAPITAL COST. OKAY, THANKS. WE HAVE A QUESTION FOR RANDY ONLINE. UH, YES, RANDY, EXCUSE ME, UH, ON THAT PRIOR CHART FOR PORTFOLIO FIVE MM-HMM, , DO I UNDERSTAND THAT'S A $68 INCREASE IN RESIDENTIAL BILL PER MONTH. SO THAT IS, UH, 2035 AND WE'LL ACTUALLY GO TO THAT SLIDE AND LOOK AT ALL DIFFERENT PORTFOLIOS AND EXPLAIN THAT A LITTLE BIT BETTER. BUT THAT WOULD BE IN NOMINAL DOLLARS AND THAT WOULD SAY, VERSUS THE AVERAGE BILL TODAY IN, IN YEAR 2035, THAT IS WHAT THE AVERAGE BILL INCREASE WOULD BE. THANK YOU. SO ACTUALLY, WHY DON'T YOU TALK ABOUT THAT. SO WHAT'S THE AVERAGE BILL TODAY AND THEN WHAT'S THE NOMINAL BILL IN 2035 THAT YOU'D ADD ON TO? RIGHT. AND AND I DO WANNA POINT OUT, AND WE GET TO THE SLIDE I WAS GONNA MENTION THAT IS IT, IT'S NOT GONNA BE YOUR TOTAL BILL. THIS IS THE IMPACT OF THE PORTFOLIO ON THE BILL. THIS WOULD NOT TAKE INTO ACCOUNT ANY OTHER CAPITAL COST ON THE TRANSMISSION AND DISTRIBUTION SIDE. SO IT'S NOT AN ACCURATE DEPICTION OF THE OVERALL BILL IN 2035. IT IS JUST THE DIFFERENCE BETWEEN WHERE WE ARE TODAY AS WE ADD THESE NEW RESOURCES AND OPERATE IN THE WHOLESALE MARKET. WHAT THAT WOULD BE, UH, WITH OUR AVERAGE BILL IS TODAY IS OUR AVERAGE CUSTOMER USES ABOUT 860 KILOWATT HOURS OF ENERGY. I'M GONNA STOP HERE, I MIGHT HAVE TO LOOK THAT UP. IS RIGHT AROUND 110 TO $115 I BELIEVE IS 102 IS THE AVERAGE COST TODAY. SO THAT WOULD BE ABOUT A 50% INCREASE IN THE ELECTRIC BILL AND THAT DOESN'T COUNT ANY, UH, ADDITIONAL COSTS, UH, THAT MAY BE REQUIRED FOR TRANSMISSION. THAT IS CORRECT. THIS IS NOT, NOT ALL INCLUSIVE OF THE UTILITY. THIS IS JUST FOCUSING ON THE RESOURCE PLAN AND, AND THE GENERATION PORTION. THANK YOU. ALRIGHT, NEXT SLIDE PLEASE. SO HERE IS THE NET PRESENT VALUE OF THE 20 YEAR ANNUALIZED COSTS. SO LOOKING AT 2025 THROUGH 2045, UH, PER PORTFOLIO, YOU'LL SEE THAT THE REFERENCE PORTFOLIOS THAT LISA MENTIONED EARLIER ARE KIND OF IN A SHADED GRAY BOX. AND YOU'LL SEE THAT THROUGHOUT THE PRESENTATION. UH, AND THEN YOU HAVE PORTFOLIOS SIX THROUGH 13. THIS IS WHERE THAT REFERENCE GUIDE COULD BE VERY HELPFUL TO SEE WHAT THE DIFFERENT VARIOUS PORTFOLIOS ARE OR THE DESCRIPTIONS OF THEM. BUT YOU CAN SEE THAT WE KIND OF SIT THERE AND, UH, KIND OF AVERAGE ANYWHERE FROM ABOUT $7 BILLION UP TO THE HIGHER ONE CLOSER TO $12 BILLION. NEXT SLIDE PLEASE. UH, THIS IS A, JUST A DIFFERENT WAY TO LOOK AT THAT. AND THAT'S THE NET PRESENT VALUE COST. THE ANNUAL COST, WHAT WE SHOWED YOU EARLIER WAS UNDER NORMAL CONDITIONS WE DID RUN A NUMBER OF, OF SENSITIVITIES, UH, AROUND THESE PORTFOLIOS WHERE RISK MAY MATERIALIZE. AND SO HERE YOU STACK THOSE DIFFERENT RISKS ON TOP OF THE NORMAL, UH, VALUES. AND FROM HERE YOU CAN KIND OF GET A BETTER PICTURE OF MAYBE THE AMOUNT OF RISK IN EACH PORTFOLIO. SO IF RISK DID MATERIALIZE, SOME RISKS HAVE A LOT MORE RISK THAT COULD MATERIALIZE THAN, OR SOME PORTFOLIOS HAVE A LOT MORE RISK THAT COULD MATERIALIZE THAN OTHER PORTFOLIOS. AND SO YOU CAN START TO REALLY SEE WHICH ONE OF THOSE HAVE A LITTLE BIT MORE EXPOSURE AT RISK OR NOT. AND SO ON ANY GIVEN YEAR, IF YOU HAD SOME OF THOSE RISKS KIND OF MATERIALIZED, THEN THAT COST COULD GO A LITTLE BIT MORE FROM WHERE THOSE NORMAL SCENARIOS ARE. CAN, CAN YOU PROVIDE US WHAT TRANSMISSION ASSUMPTIONS THERE ARE? 'CAUSE ISN'T THAT A BIG PART OF THIS? SO THE TRANSMISSION ASSUMPTIONS WITHIN THE U PLAN MODEL ARE BASED UPON THE KNOWN TRANSMISSION BUILD OUTS, UH, IN ERCOT THAT HAVE BEEN ANNOUNCED AS WELL AS MAYBE A FEW ASSUMED TRANSMISSION LINES THAT HAVE TO GET BUILT. BUT THE THINGS THAT ARE IN THE AUSTIN AREA ARE THE THINGS THAT ARE KNOWN, UH, AND THAT HAVE BEEN APPROVED, UM, THROUGH ERCOT, UH, TO BE ADDED. SO WE USE REFERENCE CASES FROM LCG, WHICH IS THE CONSULTANT THAT DOES U PLAN. UH, AND THEY BASICALLY TAKE THE REFERENCE CASE FROM THE CURRENT YEAR THAT HAS THE ENTIRE SYSTEM IN IT. AND THEN THEY GIVE US A REFERENCE CASE FOR FIVE YEARS OUT, I BELIEVE, WHICH HAS ALL THE BUILD OUT OF ALL THE TRANSMISSION ELEMENTS THAT ARE WITHIN THE ERCOT, UH, MARKET THAT HAVE BEEN APPROVED AND PLANNED ON . SO IT WOULD GO OUT TO FIVE YEARS BUT NOT 10 YEARS. THAT'S WHERE THE, I BELIEVE THAT'S WHERE THE REFERENCE CASE AT. I CAN DOUBLE CHECK WITH SOME OF THE MODELING TEAM AND REALIZE YOU GO FURTHER OUT. IT'S HARDER TO, TO, IT'S, IT'S HARDER AND, AND THEY DON'T APPROVE TRANSMISSION PROJECTS THAT FAR OUT. UM, AND SO YEAH, THERE WON'T BE LOTS OF TRANSMISSION LINES IN YEAR SAY YEAR 2035 BEING ADDED TO THE MODEL. SO GO AHEAD JOSH. SO THE, UM, SO THE ROUGHLY THREE AND A HALF TO 4 BILLION IN, UH, HIGH CONGESTION SCENARIO, LIKE, SO THE MODEL WOULDN'T, IT WOULDN'T HAVE FEEDBACK TO, TO [00:45:01] TRY TO BUILD MORE TRANSMISSION LATER IN THE MODEL TO OVERCOME THOSE CONGESTION. UH, NOT IN THE U PLAN MODEL. I BELIEVE IN THE U PLAN MODEL, LOOK AT THE HIGH CONGESTION CASE IS MORE IF ALL THE TRANSMISSION IS NOT THERE AS WE EXPECT, WHAT HAPPENS IF WE BUILD THIS PORTFOLIO, RIGHT? 'CAUSE THAT'S, THOSE ARE STILL PROJECTS THAT HAVE TO BE COMPLETED AND THERE'S DEVELOPMENT RISK ON THOSE AS WELL. OKAY. AND THEN COULD, UH, YOU THINK, WHAT ARE THE MARKET RULES CHANGE SCENARIO? WHAT, WHICH, SO THAT, THAT IS MAINLY LOOKING AT, UH, THE PERFORMANCE CREDIT ME MECHANISM, PCM. OKAY. UH, PCM, UH, BUT THAT'S TO INCORPORATE SOME OF THE MARKET RULE CHANGES THAT HAVEN'T ACTUALLY IMPACTED US YET AS A LOAD, BUT ARE OUT THERE TO BE DEVELOPED AND IMPLEMENTED. SO THAT WOULD BE IF THE PCM CAME ABOUT YES. IS THE GREEN, YES. AND I KNOW THERE'S GONNA BE SOME DISCUSSION AT THE LEGISLATURE THIS YEAR ON THE PCM. PART OF THAT IS THEY PUT A CAP ON THE TOTAL COST, RIGHT? AND I THINK THE, THE FEEDBACK FROM THE CONSULTANT AS WELL AS THE INDEPENDENT, UH, INDEPENDENT MONITOR WAS MARKET MONITOR WAS THAT AT THAT CAP, THE PCM ACTUALLY DID NOT ACCOMPLISH WHAT IT NEEDED TO DO. AND SO IT WAS JUST GONNA ADD COST WITHOUT ACTUALLY CREATING MORE RELIABILITY. AND SO I THINK THAT WILL PROBABLY BE SOMETHING THAT DISCUSSION AT THE LEGISLATURE, UM, I GUESS IN HERE THIS END OF THIS YEAR. YEAH. SAYS PCM WITH BILLION DOLLAR CAP. YES. OKAY. THIS IS PCM AS WE KNOW IT TODAY. OKAY. ALRIGHT. UM, NEXT SLIDE. SO NEXT WE'RE GONNA TALK A LITTLE BIT ABOUT BILL IMPACT. SO GOING BACK TO, TO MAYBE RANDY'S QUESTION A LITTLE BIT EARLIER. AND SO THIS IS THE AVERAGE MONTHLY RESIDENTIAL BILL INCREASE IN NOMINAL DOLLARS IN TODAY'S DOLLARS, UM, IN 2035. AND SO THAT'S WHAT WE'LL BE LOOKING AT HERE. UH, THIS IS BASED ON THE NET COST OF EACH PORTFOLIO. SO LIKE, AS I MENTIONED BEFORE, IT DOES NOT INCLUDE ADDITIONAL CAPITAL COSTS THAT MAY OCCUR FOR THIS UTILITY JUST AS WE GROW. UH, IT DOESN'T INCLUDE, YOU KNOW, WE'RE, WE'RE MAYBE, UH, SALARIES AND, AND HOW MANY PEOPLE HAVE EMPLOYED IN SAY 2035. THIS IS SOLELY LOOKING AT THE GENERATION SUPPLY PORTFOLIO AND WHAT THAT IMPACT WILL BE TO THE BILL BASED ON THESE PORTFOLIOS. UM, NEXT SLIDE PLEASE. SO HERE WE CAN LOOK AT THE AVERAGE, UH, MONTHLY BILL INCREASE AND HERE YOU HAVE A, A DOTTED BLACK LINE ACROSS AND THAT IS THE, UH, AFFORDABILITY LIMIT. WHEN WE LOOK AT THE 2% YEAR OVER YEAR, UH, AFFORDABILITY, UH, METRIC THAT WAS GIVEN TO US BY CITY COUNCIL, I BELIEVE BACK IN 2017. NOW, UM, MAYBE EVEN A LITTLE EARLIER THAN THAT, MAYBE IT WAS 2014. MY APOLOGIES. UH, AND THEN YOU CAN SEE UNDER NORMAL CONDITIONS IS THE ORANGE BAR. AND THEN YOU HAVE SOME OF THOSE OTHER, UH, SENSITIVITY CASES ON TOP OF THAT, UH, WHERE WE CAN LOOK AT, UM, MAYBE WHERE UNDER NORMAL CONDITIONS SOMETHING MIGHT BE WITHIN THAT AFFORDABILITY INDEX. BUT IF WE DID SEE SOME OF THOSE RISK MATERIALIZED, FOR EXAMPLE, LIKE A MARKET RULE CHANGE SCENARIO WHERE THAT EXTREME WEATHER SCENARIO WHERE THAT MAY PUSH THAT AVERAGE MONTHLY BILL UP ABOVE, UH, THAT AFFORDABILITY INDEX OR AFFORDABILITY TARGET, WE'VE GOT SOME QUESTIONS. UH, CERTAINLY GO AHEAD. UM, I'M JUST WONDERING, LOOKING AT THESE, UM, TWO GRAPHS OF THE 20 YEAR COST AND THE BILL INCREASE, WHY ARE THE BARS NOT PROPORTIONATE TO EACH OTHER ACROSS BETWEEN THOSE TWO GRAPHS? WELL, ONE IS TAKING ALL THE, ALL THE EXPENSES OVER A 20 YEAR TIME PERIOD AND PULLING IT BACK TO A NET PRESENT VALUE. AND THE OTHER IS JUST LOOKING AT OUR, OUR BILL TODAY VERSUS IN 2035 AND WHAT THAT DIFFERENCE MAY BE. AND SO THERE'S DIFFERENT THINGS THAT HAPPEN THROUGHOUT THE TIME HORIZON, UM, THAT COULD IMPACT WHEN THOSE PRICES HIT, HOW THAT 20 YEAR MPV WILL LOOK, UH, VERSUS WHAT THAT BILL LOOKS LIKE IN 2035. SO THERE ONES A COMPARISON TO A RESIDENTIAL BILL AND JUST ONE YEAR. AND THE OTHER IS A COMPARISON TO TOTAL COSTS OVER A 20 YEAR PERIOD BROUGHT BACK TO A NET PRESENT VALUE. SO THEN MAYBE I DON'T UNDERSTAND THIS GRAPH. SO AVERAGE MONTHLY, MONTHLY RESIDENTIAL BILL INCREASE? YEP. DOLLARS PER MONTH FROM FROM NOW NOW COMPARED TO 2035 IN 23. SO IF YOU LOOK AT 2035, THE MONTHLY AVERAGE MONTHLY RESIDENTIAL BILL IN 2035 BASED ON THE PORTFOLIO AND NET COSTS VERSUS IT WERE TODAY, THAT WOULD BE THE INCREASE THE ORANGES IN THE NORMAL CONDITION AND THEN THOSE BLUE, YELLOW AND GREEN BARS ARE WITH SOME OF THOSE SENSITIVITIES. OR IF SOME OF THESE RISKS MATERIALIZE SUCH AS WHAT WE SAW IN 2023 AND 2021 AND IN 2019. OH, I SEE. SO THIS IS 10 YEARS AND THAT'S 20, WELL THIS IS JUST YEAR 2035, THE AVERAGE BILL WHERE THE OTHER IS LOOKING AT A NET PRESENT VALUE OF ALL OF THE COST OVER A 20 YEAR PERIOD. SURE. AND, AND THE ONE BEFORE THAT IS, WOULD BE LIKE OUT TO 2045 MM-HMM, . OKAY. THANKS CY. SO TWO QUESTIONS IN A PREVIOUS SLIDE YOU JUST SHOWED AS JUST AN EXAMPLE PORTFOLIO FIVE, AND YOU DON'T NEED TO GO BACK TO IT, I'M JUST FROM MEMORY THAT SHOWED, AND, AND RANDY REFERENCED IT, THAT SHOWED AN A EXPECTED MONTHLY RESIDENTIAL BILL INCREASE. I THOUGHT IT WAS $68, BUT IF I LOOK AT BAR FIVE [00:50:01] HERE, IT SEEMS MORE LIKE $58. CORRECT. AND SO WHY IS THERE A DIFFERENCE BETWEEN THOSE TWO NUMBERS? 'CAUSE BECAUSE ONE, UH, THE $68 IS LOOKING AT THE AVERAGE OF THE NORMAL AND THE THREE RISK CASES AS WELL. SO KIND OF, I'M NOT SAYING AN EXPECTED VALUE, BUT KIND OF AN AVERAGE VALUE OF CASES. OH, SO YOU'RE AVERAGING ALL THOSE, RIGHT. AND SO YOU HAVE YES. OKAY. YES. AND SO THAT'S WHERE THAT $68 NUMBER COMES FROM AND THAT'S TO KIND OF RECOGNIZE THAT THE DIFFERENT RISK AMOUNTS AND THE DIFFERENT ONES THAT TRY TO GIVE THEM, GIVE THEM KIND OF A RELATIVE COMPARISON. OKAY. SO IF WE, IF WE LOOK AT ALL THESE SCENARIOS, I THINK, AND I I I LOOKED AT A PREVIOUS CHART, YOU KNOW, AND AGAIN, THESE ARE JUST, THESE ARE NOT, THIS IS NOT A RECOMMENDATION, RIGHT? THESE ARE JUST NUMBERS THAT COME FROM A MODEL. BUT NUMBER FOUR, UM, WHICH IS, WHICH IS BASICALLY A LOT OF LOCAL DISPATCHABLE, NEW NEW GAS PLANTS WAS THE CHEAPEST AT ABOUT A $21 INCREASE COMPARED TO TODAY. AND THE MOST EXPENSIVE WAS EUC NUMBER 13, INCREASING LOT, A LOT OF BATTERIES. I THINK IT WAS $81. SO THAT'S A, IF MY MEMORY IS RIGHT, BUT IT WAS, IT WAS BASICALLY THREE TIMES, FOUR TIMES, WHATEVER, A LOT MORE. SO WHAT IS DR WHAT IS, I'M NOT UNDERSTANDING WHAT IS DRIVING THAT SEEMS LIKE A HUGE DIFFERENCE. SO IT IS, WHEN WE LOOK AT WHAT THE TOLLING COST IS FOR A BATTERY TODAY AND WHAT THAT TOLLING COST REALLY KIND OF BECOMES MORE, UH, IT'S NOT QUITE LINEAR, BUT AS YOU MAKE THE BATTERIES LONGER AND LONGER IN DURATION, IF YOU'LL RECALL, THERE'S SOME 12 HOUR BATTERIES IN THERE. RIGHT? THOSE WOULD HAVE A VERY, VERY HIGH TOLLING COST IN THEM. TELL US WHAT THE WORD TOLLING COST MEANS. OKAY. SO IF, SO LIKE A PPA FOR A RENEWABLE PURCHASE POWER AGREEMENT IS YOU'RE AGREEING TO BUY ALL THE POWER THAT COMES OUT OF, OUT OF THAT FACILITY AS IT'S PRODUCED. MM-HMM. , UH, A TOLLING AGREEMENT IS WHERE YOU ARE PAYING A BASICALLY A CAPACITY COST EVERY MONTH TO THAT ASSET. AND THAT GIVES YOU RIGHT TO DISPATCH AND UTILIZE THAT ASSET AS YOU SEE FIT. SO YOU'RE BASICALLY PAYING A MONTHLY FEE FOR THE RIGHT TO, TO OPERATE THAT BATTERY SINCE YOU DON'T OWN IT. WHAT IF YOU OWNED IT THOUGH, THEN YOU WOULD PAY THE CAPITAL COST UP FRONT. OKAY. WHICH WOULD BE FAIRLY, I MAYBE THAT'S SOMETHING WE CAN DISCUSS FAIRLY SIMILAR HOURS IF THAT WOULD MAKE A DIFFERENCE BECAUSE IT JUST SEEMS LIKE A HUGE CHANGE AND COST. BATTERY TOLLING COSTS ARE, ARE VERY EXPENSIVE RIGHT NOW. THEY'RE, THEY'RE HIGHER THAN I SAW. THE LOWEST I'VE SEEN 'EM WAS BACK IN 2020, UH, AND THEY'VE BEEN ON A STEADY INCLINE SINCE THEN. OKAY. SO THE VALUE OF A BATTERY CAN GET LESS EXPENSIVE, BUT THE COST OF LABOR, UH, SOME OF THE PARTICULAR TARIFFS THAT MIGHT BE PUT ON, DEPENDING WHERE THAT BATTERY COMES FROM, AS WELL AS THE ENGINEERING, PROCUREMENT AND CONSTRUCTION OF THAT BATTERY, ALL THOSE COSTS HAVE GONE UP SIGNIFICANTLY AS WELL AS THE COST OF CAPITAL SINCE 2020. OKAY. SO IN MY VERY SIMPLIFIED VIEW OF THINGS, I'M THINKING WE USE POWER WHEN IT'S CHEAP, SO WIND AT NIGHT TO CHARGE THESE BATTERIES SO THEY'RE READY SO THAT THEY'RE AVAILABLE WHEN PRICES ARE HIGH IN THE DAY. AND THAT'S HOW WE MAKE MONEY. THAT'S MAKE, BUT YOU'RE TELLING ME MAKE THAT THAT'S HOW YOU MAKE MONEY IN THE MARKET, YOU STILL HAVE TO PAY THE COST OF THE BATTERY ON TOP OF THAT. OKAY. AND THAT'S WHERE DO YOU, DO YOU MAKE MORE MONEY IN THE MARKET THAN THE CAPITAL COST OF THE BATTERY? IF SO, THEN AS A NET BENEFIT TO OUR CUSTOMERS, IF NOT, YOU'D HAPPEN TO COST CUSTOMER, BUT WE'RE STILL, WE'RE STILL, UM, CALCULATING THE REVENUES YOU WOULD GET. YES, THAT IS CORRECT. IN 13. OKAY. THANKS. UM, AND I ALWAYS HAVE TO LOOK THIS UP EVERY SINGLE TIME, BUT WE, WE'VE THROWN THE NOMINAL AROUND FOR A WHILE, UM, OR WE IN THE PAST FEW SLIDES. UM, SO THIS IS, AND CORRECT ME IF I'M WRONG, GETTING IN, GETTING IT WRONG. SO THIS IS THE, THE INCREASE IN BILLS IN IN TODAY'S DOLLARS YES. IN, IN NOMINALS DOLLARS. BUT WE DO EXPECT WAGES TO GO UP OVER TIME, PRICES TO GO UP OVER TIME, THINGS TO GO UP OVER TIME. SO DO WE HAVE A FEEL FOR WHAT THE REAL DOLLAR INCREASE? LIKE WHAT IN 2035, WHAT DO WE EXPECT? UH, $110 INCREASE TO REALLY BE, UH, WE DID NOT CALCULATE THAT FOR THIS EXERCISE. WE'D HAVE TO PROBABLY MAKE SOME ASSUMPTIONS ON INFLATION AND RIGHT. AND SALARIES AND THINGS OF THAT NATURE. SO I DON'T, I DON'T HAVE THAT TODAY THAT THAT IS SOMETHING WE COULD POTENTIALLY LOOK AT. UH, THIS IS JUST MORE FOR RELATIVE COMPARISON PURPOSES. YEAH, FOR SURE. UM, THAT, THAT'D BE HELPFUL TO HAVE. AND I, I KNOW WE HAVE TO MAKE ASSUMPTIONS ABOUT INFLATION AND THAT'S BEEN HARD THE PAST FEW YEARS, BUT IT WOULD BE, UH, IT'D BE GOOD TO KNOW. 'CAUSE I MEAN, EVERYTHING'S GONNA BE EXPENSIVE, MORE EXPENSIVE IN THE FUTURE. I DO EXPECT WHOLESALE MARKET PRICES TO BE COMING DOWN OVER A 10 YEAR TIME HORIZON. THAT'LL BE NICE. WHY IN 11 YEARS, WOULD YOU STILL BE TRYING TO SAY RENT A BATTERY VERSUS OWN IT? WELL, THAT BECOMES A, A QUESTION ON, ON CAPITAL COSTS AND, AND HOW YOU WANT TO STRUCTURE THAT. UM, I THINK AS WE'VE TALKED ABOUT IN THE PAST HERE AT AUSTIN ENERGY, WE ARE THE ELECTRIC PROVIDER HERE IN THE CITY OF AUSTIN. SO WE HAVE AN OBLIGATION TO SERVE ANYBODY WHO MOVES INTO AUSTIN ELECTRIC, UH, ELECTRIC, UH, ELECTRIC SERVICE IF YOU WILL. UM, AND SO THERE'S ONLY A FINITE AMOUNT OF CAPITAL DOLLARS. AND SO IF WE'RE INVESTING CAPITAL DOLLARS IN TRANSMISSION [00:55:01] AND DISTRIBUTION, FOR EXAMPLE, THAT MAY REDUCE THE AMOUNT OF CAPITAL DOLLARS AVAILABLE FOR OTHER INVESTMENTS. AND WHERE THAT WAY WE COULD GO WITH A-A-P-P-A OR A TOLLING AGREEMENT AND KIND OF PAY AS WE GO AND DIRECTLY PASS THAT THROUGH TO OUR CUSTOMERS IN ORDER TO MOVE THAT FORWARD. SO TO SAY, SO TO MANAGE YOUR CAPEX BUDGET, I I IT'S ONE WAY TO MANAGE YOUR CAPEX BUDGET. YES. OH, WHAT ARE THE ASSUMPTIONS? YOU KNOW, FOUR IS HEAVILY GAS. WHAT ARE YOUR ASSUMPTIONS IN THE YEARS OUT ON GAS PRICES? WHAT HAPPENS IF WE HAVE A HUGE AMOUNT OF LNG EXPORTS HAPPEN, GAS IS NO LONGER. SURE. SO THAT IS ONE OF THE SENSITIVITIES THAT WE WERE GONNA RUN AND WE WILL RUN IN THE NEXT, UH, SET, UH, WITH HIGHER GAS PRICES. SO THE GAS PRICES WE USED WERE THE ASSUMPTIONS THAT WERE TRADED WITH THE EUC EARLIER IN, I BELIEVE IN JULY. UH, SO WE WERE LOOKING OUT AT THAT FORWARD CURVE WHERE NATURAL GAS WAS AT THAT TIME, PLUS WITH, UH, LIKELY WOOD MCKENZIE'S FORECAST BEYOND THE FORWARD CURVE. UH, AND SO YES, IF GAS PRICES GO UP, THAT'S DEFINITELY SOMETHING WE WANNA RUN IN SENSITIVITY ANALYSIS. I WAS JUST WONDERING IN TERMS, YOU MENTIONED THAT WITH THE BATTERIES, YOU, YOU ARE ASSUMING THAT YOU'RE PAYING THIS TOLL AND THEN YOU HAVE THE EARNINGS. DOES THAT INCLUDE BOTH IN THE ENERGY MARKET AND ANCILLARY SERVICES OR, YES. YEAH, THAT IS CORRECT. OKAY. WE HAVE A LOT OF INFORMATION AROUND BATTERIES AND BATTERY TOLLS AND WHERE THEY'RE ACTUALLY TRADING. UH, I DON'T KNOW IF ANY OF YOU ALL ARE GONNA PARTICIPATE IN THE GULF COAST, UH, POWER ASSOCIATIONS, UH, CONFERENCE HERE IN IN AUSTIN TOMORROW, FOR EXAMPLE. UH, BUT REIFY IS GONNA BE THERE AND THEY ACTUALLY HAVE A, AN EXCHANGE WHERE YOU CAN LOOK AT LIVE BIDS AND OFFERS FOR BATTERIES AND TOWING AGREEMENTS. AND SO WE HAVE A LOT OF MARKET TRANSPARENCY AROUND WHERE THOSE PRICES ARE. I GUESS I'M CURIOUS, LIKE, IT SEEMS LIKE, YOU KNOW, DOWN THE ROAD CPS IS GETTING INTO THE BATTERIES PRETTY MM-HMM. SIGNIFICANTLY AND, UM, THEY'RE GETTING INTO A LOT OF THINGS VERY SIGNIFICANTLY. I YEAH, I, I KNOW, BUT I'M JUST WONDERING LIKE 1,700 MEGAWATTS OF NATURAL GAS IS THIS, UM, ARE THE ASSUMPTIONS BEING USED HERE THE SAME, DO YOU THINK AS WHAT THEY ARE OR THEY WOULD THINK THEY'RE MAKING SOME DIFFERENT ASSUMPTIONS, DON'T THEY? NO, I THINK THEY'RE SEEING SIMILAR MARKET PRICES THAT WE'RE SEEING. I CAN'T SPEAK TO IF THEY ARE DOING THAT THROUGH STRAIGHT CAPITAL INVESTMENTS OR IF THEY'RE DOING THAT THROUGH TOLLING AGREEMENTS. I HAVEN'T, I HAVEN'T RUN INTO AND TALKED TO 'EM QUITE ABOUT THAT YET. UH, BUT I DO KNOW THAT THE BATTERY DEVELOPMENT COMPANY THEY'RE WORKING WITH, AND THEY'RE GONNA DO A STAGE APPROACH TO BUILD THAT OUT, UH, MUCH LIKE THEY DID WITH SOLAR, WITH UH, OCI, UH, BACK SHORTLY AFTER WE DID WEBER BILL, I DON'T KNOW IF YOU GUYS REMEMBER THAT, BUT THEY MM-HMM. THEN ANNOUNCED A LARGER SOLAR FACILITY AND IT WAS THE FIRST SOLAR FACILITY FOR LESS THAN A HUNDRED DOLLARS, UH, MEGAWATT HOUR FOR A PPA DONE IN TEXAS. THANKS. THEY ALSO DO HAVE A PARTICULAR ISSUE SOUTH OF SAN ANTONIO THAT THEY'RE DEALING WITH. I THINK AS WELL, WE HAVE THE SAME ISSUE. YES. THAT'S IT. IT IT IMPACTS THE ENTIRE MARKET. OH, IT IMPACTS YOU. OKAY. UM, AND, AND REDUCING LOAD IN SAN ANTONIO AND THEN IN AUSTIN ARE SOME OF THE BIGGEST WAYS TO REDUCE THAT ISSUE. AND SO THAT WAS WHY ERCOT ISSUED THAT RFP FOR DEMAND RESPONSE THIS SUMMER, AND THEN WAS UNABLE TO GET THE AMOUNT OF DEMAND RESPONSE THEY NEEDED TO SOLVE THE PROBLEM. UH, BUT THAT PROBLEM DID NOT MATERIALIZE THIS SUMMER. DO WE HAVE QUESTIONS ONLINE? I DON'T SEE ANY. OKAY. NEXT SLIDE PLEASE. AND SO WE SHOWED YOU THE 2035, UH, BILL. AND SO MAYBE THIS WOULD, MAYBE I SHOULD HAVE SHOWN THIS A LITTLE EARLIER. THIS IS THE BILL YEAR OVER YEAR OVER YEAR, AS WE HEAD INTO 2035 VERSUS THAT SAME 2%, UH, AFFORDABILITY INDEX. AND SO YOU DO SEE A, A LOT OF THEM JUMP THERE, UH, RIGHT THERE AT THE END IN 2035, AS WE SHUT DOWN MORE OF OUR ASSETS. I IS THE ASSUMPTION ON THE MONTHLY BILL THAT WE'LL BE USING A, A SIMILAR AMOUNT OF ELECTRICITY OR, I MEAN, I COULD SEE IT ARGUED BOTH WAYS. WE'RE GONNA HAVE MORE PEOPLE ARE GONNA HAVE MORE ELECTRIC VEHICLES, SO THAT INCREASES, BUT WE'RE ALSO GONNA DO THINGS MORE EFFICIENTLY. SO THAT DECREASES. BUT DID YOU SORT OF ASSUME THE SAME? I I THINK WE ASSUMED THE, THE SAME VOLUME. WE DIDN'T ASSUME IT INCREASING OVER TIME. OKAY. WE WERE JUST TRYING TO APPLES TO APPLES KIND OF RELATIVE COMPARISON. RIGHT. NEXT SLIDE PLEASE. UH, NEXT WE WANTED TO TALK ABOUT ELECTRICITY BURDEN. AND ELECTRICITY BURDEN IS THE PERCENTAGE OF HOUSEHOLD'S MONTHLY INCOME THAT GOES TOWARDS THEIR ELECTRICITY BILL. SO NOT ALL OF THEIR ENERGY NEEDS, BUT THEIR ELECTRICITY BILL. UM, AND THEN THE HIGHER PERCENTAGE OF INCOME DEDICATED TO ELECTRICITY COSTS INDICATES A HIGHER ELECTRICITY BURDEN. SO IF YOU HAVE TO SPEND MORE OF YOUR MONEY TO PAY FOR YOUR ELECTRICITY, THAT'S A HIGHER BURDEN. UM, AND FOR THE ANALYSIS, IT ESTIMATES THE ELECTRICITY BURDEN FOR THE TYPICAL CUSTOMER IN ITS CAP, UH, ASSISTANCE PROGRAM USING THE 2023 FEDERAL POVERTY INCOME GUIDELINES AS A REFERENCE FOR ESTIMATED ANNUAL INCOME. THAT'S A MOUTHFUL. UM, SO NEXT SLIDE, PLEASE. SO IF WE LOOK AT THESE, THIS IS THE 2035. SO ONCE AGAIN, NOT THE ENTIRE PERIOD, BUT JUST IN 2035 WHEN WE GET TO THE END, UM, WHAT IS THE ESTIMATED CUSTOMER ASSISTANCE PROGRAM? UH, CUSTOMER [01:00:01] ELECTRICITY BURDEN. SO THAT PERCENTAGE OF THEIR ELECTRICITY BILL VERSUS THEIR MONTHLY INCOME. IF YOU'RE A CUSTOMER, IF YOU'RE IN OUR CAP PROGRAM. AND SO YOU CAN SEE YOU HAVE TWO LINES THERE. THE DOTTED YELLOW LINE IS THE 2023 ESTIMATED CAP CUSTOMER ELECTRICITY BURDEN. SO WHAT WE HAD IN 2023 ESTIMATED, UH, AND THE 2020, UH, THE BLACK DOTTED LINE IS THE 2023 STATE AVERAGE, UH, FOR LOW INCOME CUSTOMER ELECTRICITY BURDEN. SO YOU CAN SEE WE HAVE A LITTLE BIT LOWER THAN THE STATE AVERAGE. AND THEN YOU CAN SEE THAT THROUGHOUT ALL OF THE PORTFOLIOS ONE THROUGH 13, UH, WE DON'T QUITE GET UP TO THAT STATE AVERAGE UNDER NORMAL, UH, SITUATION, NORMAL CONDITIONS. ALRIGHT, NEXT SLIDE PLEASE. UH, WE ALSO WANT TO TALK ABOUT LIQUIDITY RISK. I DON'T FOR ALL OF YOU ALL THAT HAVE BEEN HERE, UM, SINCE THE BEGINNING AS WE FIRST STARTED TALKING ABOUT THIS, I THINK I MENTIONED EARLY ON IS, UH, WE CAN'T MEET ANY GOALS IN 2035 IF WE CEASE TO EXIST BECAUSE WE CAN'T WEATHER THE NEXT BIG WEATHER, THE BIG NEXT BIG STORM. UM, YOU KNOW, WE DID VERY WELL IN THE URI EVENT. WE DO HAVE A DIFFERENT PORTFOLIO TODAY THAN WE HAD BACK THEN. AND SO IT'S JUST, UH, SOMETHING FOR US TO WATCH, MONITOR AND MAKE SURE WE MITIGATE THOSE RISKS. SO THE LIQUIDITY RISK IS RISK TO AUSTIN ENERGY OF NOT HAVING ENOUGH CASH ON HAND TO SETTLE THE FINANCIAL ACCOUNT WITH ERCOT, UH, DURING AN EXTREME EVENT. AND SO, AS, AS MANY ARE AWARE, WE BILL ONCE A MONTH THROUGH OUR CUSTOMERS. UH, ERCOT SETTLES WITH US EVERY SINGLE DAY. AND WHEN WE INCUR A BILL, WE HAVE ABOUT SEVEN DAYS TO PAY THAT BILL. UM, USING THIS MODELING TECHNIQUE CALLED, UH, BACK CASTING. SO WHAT WE DID IS WE WENT BACK AND WE LOOKED AT THE ACTUAL URI EVENT. AND ONE OF THE REASONS WE LIKE TO DO THAT IS, UH, WE'VE, WE'VE SHOWN GRAPHS WHERE USUALLY THE GEOGRAPHIC DIVERSITY WITHIN OUR PORTFOLIO, WE HAVE 15 MINUTE BY 15 MINUTE, UH, CAPACITY FACTORS OF DIFFERENT TYPES OF GENERATIONS THROUGHOUT THE STATE. SO WE COULD SEE WHAT WIND AND SOLAR WAS ABLE TO DO IN DIFFERENT AREAS OF THE STATE THROUGHOUT THAT URI EVENT. SO AS WE ADDED MORE IN THOSE AREAS, WE COULD SEE WHAT WE COULD EXPECT TO GET. FOR EXAMPLE, WE WERE ABLE TO SEE WHAT DIFFERENT ASSETS, HOW THEY PERFORMED, UH, WHAT WENT IN FOREST OUTAGE, WHAT DIDN'T. SO IT'S GOING BACK AND LOOKING AT THAT BACK CAST AND SAYING, OKAY, WITH THESE PORTFOLIOS, WITH WHAT HAPPENED, WHAT WOULD THE, WHAT WOULD THE NET RESULT LOOK LIKE? AND WE ALSO LOOKED AT A SUMMER EVENT AS WELL. UM, AND THIS IS BASED ON OUR 23RD, 35 PORTFOLIO. NEXT, WHAT I'LL SHOW NEXT, SO, SO WHEN YOU SAID YOU LOOK AT THE, DID YOU WEIGHT THOSE EQUALLY A WINTER EVENT AND A SUMMER EVENT OR, I THINK WHAT WE'LL BE SHOWING YOU IS, IS BASED ON THE, THE WINTER EVENT. THAT TENDS TO BE WHERE, WHERE AUSTIN HAS A BIT MORE RISK ON LIQUIDITY. OKAY. BUT IT'S BASED ON THE WINTER STORM URI BASED ON THE WINTER STORM URI FOR THE WINTER EVENT, YES. OKAY. YEAH, AS WE'VE HEARD, YOU KNOW, WE CAN EXPECT MORE AND MORE EXTREME EVENTS AS AS CLIMATE CHANGES. AND SO SINCE THIS HAS MATERIALIZED, WE WANNA BE PREPARED FOR THIS TYPE OF EVENT. YEAH. BUT I ONE COULD ARGUE THAT SINCE WINTER STORM URI, THE LEGISLATURE AND THE, AND THE PUC HAVE TAKEN MORE SERIOUSLY ENFOR, YOU KNOW, UM, STANDARDS AND ENFORCEMENT ON WEATHERIZATION OF BOTH TRANSMISSION AND ASSETS, WHICH PROBABLY WOULD MAKE THAT KIND OF SITUATION LESS LIKELY IN THE FUTURE. BUT ONE COULD ALSO ARGUE THE CLIENT IS GETTING WORSE. THEY MADE YOU WERE CORRECT. UH, EVERY TIME A EVENT MATERIALIZES, WE DO A GOOD JOB OF TRYING TO MITIGATE SOME OF THAT EVENT AND THE NEXT EVENT COULD BE A LITTLE BIT DIFFERENT. SO THIS IS REALLY JUST TO LOOK AT IF WE SAW A SIMILAR EVENT. 'CAUSE YOU KNOW, MODELS ARE TYPICALLY, UH, 95% CONFIDENCE INTERVALS, RIGHT? SO IT'S, IT'S 95% OF THE UNIVERSE, BUT IT DOESN'T HAVE THOSE REAL TAIL EVENTS THAT AN EVENT LIKE THAT WAS. SO WE REALLY DON'T CAPTURE THOSE IN MODELS. AND SO WE JUST WANNA BE AWARE OF THAT RISK SO THAT WE UNDERSTAND HOW PORTFOLIOS PERFORM IN THOSE SITUATIONS. SO LET'S TALK ABOUT HOW SIMILAR IT IS TO, TO YURI AND THE BACK CASTING. SO OFFER CAP WAS 9,000 BACK THEN. IT'S 5,000 NOW. AND I THOUGHT IT'S REDUCED TO 2000 ONCE MET. THAT'S TRUE. AND SO THAT, YES. AND THAT'S ON BOTH SIDES THOUGH. SO IF YOU HAVE GENERATION ADEQUATE TO, TO LOAD, UM, YOU KNOW, YOU'LL, YOU'LL PAY LESS FOR YOUR LOAD, BUT YOU'LL ALSO RECEIVE LESS FOR YOUR GENERATION. AND SO THOSE ARE TAKEN INTO ACCOUNT AS WELL. SO I THINK IT'S, I THINK HIS QUESTION IS, SO DID YOU MODEL THIS ONE UNDER THE NEW EXISTING RULES TODAY? DOUBLE CHECK WITH ADAM WHO DID OUR LIQUIDITY MODELING. GOOD EVENING COMMISSIONERS. ADAM MCINROY, UH, FINANCE DIRECTOR FOR RISK MANAGEMENT AT AUSTIN ENERGY. UH, MY TEAM, UH, WAS RESPONSIBLE FOR THE LIQUIDITY ANALYSIS. UH, IN A SENSE WE SPLIT THE DIFFERENCE BETWEEN THE, UH, PRE URI WORLD AND THE NEW WORLD. SO WE HAVE A $5,000 OFFER CAP FOR THE ANALYSIS, BUT WE DO NOT HAVE THE EMERGENCY PRICING MECHANISM, WHICH WAS MORE RECENTLY ENACTED. WE SORT OF CAME UP WITH A FRAMEWORK FOR THIS, UH, BEFORE THAT ENACTMENT. UH, AND SO IN A SENSE WE SORT OF SPLIT THE DIFFERENCE, IF YOU LIKE, THERE'S SORT OF A BARBELL OF MARKET RULES. THERE'S THE ONES THAT HAD A $9,000 CAP AND NO, UH, EMERGENCY MECHANISM. THERE'S THE ONES THAT HAVE A $5,000 MARKET CAP AND THE NEW EMERGENCY MECHANISM. WE'RE KIND OF IN THE MIDDLE FOR THIS SCENARIO FOR THOSE MARKET RULES. [01:05:04] YEAH. BUT OKAY, SPLITTING THE DIFFERENCE MAY MAKE IT TO WHERE ONE SCENARIO LOOKS A LOT MORE ATTRACTIVE THAN THE OTHERS. AND THEN AT, AT THE OFFICE HOURS, I GUESS MAYBE YOU CAN GIMME DETAILS ON THE ASSUMPTIONS FOR GAS. YOU KNOW, I WAS JUST GOING THROUGH, MAYBE BOB AND I ARE THE ONLY ONES WHO MIGHT REMEMBER OSCAR, WYATT CUT OFF RIPPED UP GAS CONTRACTS. MM-HMM. AND GAS QUADRUPLED DURING 2022. SO I JUST WONDER IF HOW WE'RE REALLY PRICING AND RISK FOR VOLATILE FUEL. THE FUEL COSTS ARE THE ONES THAT WE EXPERIENCED DURING URI. SO GAS GOES TO ABOUT 400, UH, DOLLARS PER M-M-B-T-U, UH, UNDER THOSE CIRCUMSTANCES. BUT, UM, THAT, THAT DOES ONLY AFFECT THE GAS GENERATORS IN OUR FLEET. BUT ON ONE OF THE SCENARIOS THAT WAS GAS HEAVY, IT LOOKED LIKE IT WAS A LOWER COST, BUT IT DOESN'T REALLY SEEM TO TALK TO THE AMOUNT OF RISK FROM THE FUEL. AGREED. IT'S SORT OF, UM, THE URI CASE IS KIND OF HOW ALL RISKS ARE REALIZED. SO THERE'S A LOT OF, UM, SETTING OF CORRELATIONS IN THERE. YOU KNOW, YOU SORT OF GET THE EXACT BEHAVIOR BETWEEN POWER PRICES AND GAS THAT YOU HAD IN THAT EVENT. AND YOU DON'T GET OTHER POSSIBLE BEHAVIORS BETWEEN GAS PRICES AND POWER, FOR EXAMPLE, GAS GOING WAY UP AND POWER GOING WAY DOWN. SO WE HAVE, THERE, THERE ARE LOTS OF, UM, ASSUMPTIONS EMBEDDED IN THE SORT OF GOVERNING ASSUMPTION. THAT IS IT, IT IS THE YURI CASE THAT IS STUDIED AND IT REALLY SHOULDN'T BE JUST THE YURI CASE, RIGHT? BECAUSE WE HAVE THE RUSSIAN INVASION OF UKRAINE CASE THAT DROVE LNG UP, THAT DROVE THE PSA UP FOR EXAMPLE, RIGHT? YEP. MY, MY PERSONAL MANTRA IS ALL MODELS ARE WRONG. SOME MODELS ARE USEFUL, USE LOTS OF MODELS. UH, SO WE DO HAVE A SUMMER CASE HERE AND I THINK IN A SENSE THOSE ARE GOOD BARBELLS. UH, WE CAN SHOW YOU THOSE IN OFFICE HOURS. OKAY. UH, BUT A WINTER CASE THAT'S VERY EXTREME AND SHARP AND SHORT AND THEN A SUMMER CASE THAT'S, UH, MAYBE MORE FREQUENT BUT IS UH, LOWER IN IMPACT. SO YEAH, STUDY LOTS OF THEM. AND DID THIS AT ALL, UH, LOOK AT THE POSSIBILITY OF GAS NOT BEING AVAILABLE, WHICH WAS THE CASE FOR, I KNOW IT WASN'T THE CASE FOR AUSTIN ENERGY, BUT FOR SOME UTILITIES DURING YURI KIND OF IN THE, IN THAT SENSE. SO IT, UM, WOULD'VE SORT OF BEEN LIKE YURI IN THAT THAT SHORTAGE INCREASED POWER PRICES, UM, ACROSS THE STATE. UH, THE LOAD SHED THAT RESULTED, UH, IS INCORPORATED IN THE STUDY. AUSTIN ENERGY DOESN'T REALIZE ITS FULL LOAD. IT REALIZES THE CURTAILED LOAD FROM YURI. UM, BUT AS YOU SAID, DURING YURI AUSTIN ENERGY'S GAS SHOWED UP. SO DURING THIS BACKCAST, AUSTIN ENERGY'S GAS SHOWED UP AS WELL AS, UH, AS WELL AS ITS OTHER FUELS TO THE EXTENT THEY DID. BUT BASICALLY EVERY ASSET CLASS HAD AN OUTAGE DURING ERIE, WHICH IS FACTORED IN HERE. OKAY. WE WOULD NOT DO 'CAUSE WE HAD IT OFFLINE DURING URI. THAT'S RIGHT. SORRY, WHAT WAS THAT? SORRY. IT WOULD NOT INCLUDE NACODOCHES 'CAUSE WE ACTUALLY HAD THAT OFFLINE DURING URI 'CAUSE WE WERE NOT UNABLE TO DELIVER THE WOOD 'CAUSE WE HAD NOT PLANNED ON RUNNING THAT UNIT THAT WINTER BECAUSE IT WAS MOTHBALLED FOR, UH, FOR REASONS TO SAVE MONEY. AND, AND SO, I'M SORRY, JUST FOR CLARITY THOUGH, DID, DOES THIS ASSUME THAT ALL OF AUSTIN ENERGY'S GAS UNITS ARE ABLE TO OPERATE DURING THIS EVENT CLOSE? UH, IT ASSUMES THAT THEY OPERATED THE WAY THEY DID DURING URI AND THERE WERE SOME SHORT TERM OUTAGES THAT WERE RECTIFIED IN THE GAS FLEET. SO THOSE ARE SORT OF REPLICATED. OKAY. YEAH, I'D BE INTERESTED TO SEE LIKE, BUT I'M HAPPY TO SPEAK TO WHY WE WERE ABLE TO GET GASTER AND URI AND WHY SOME OF THOSE OTHER ENTITIES UP NORTH WERE NOT, IF YOU'D LIKE TO DELVE MORE INTO THAT, IT HAS TO BE THE WAY WE, UH, CONTRACT FOR FIRM TRANSPORTATION. HOW WE USE MULTIPLE SUPPLY SOURCES AND HOW MANY OF THOSE, UH, UTILITIES UP THERE, WE DO INTERRUPTABLE TRANSPORTATION SO THEY'LL PAY LESS. UH, BUT THEN THE, THE PROBLEM WITH THAT IS DURING CERTAIN EVENTS LIKE THAT THERE MAY NOT BE A GAS AVAILABLE FOR YOU AND YOU CAN'T RUN YOUR UNITS. AND THEN A LOT OF CHANGES WERE MADE TO WEATHERIZATION, UH, BECAUSE SOME OF THOSE PIPELINES FROZE. AND TO, TO CYRUS'S POINT EARLIER, WE MIGHT NOT SEE THAT SAME GAS ISSUE GOING FORWARD IN THE NEXT YEAR EVENT. YEAH. SO THAT'S, UH, ON SOME, ON THE, ON THE SCENARIOS WHERE WE BUILD NEW GAS, THEY, THEY'RE ESSENTIALLY, UM, PERFORMING THE SAME AS THE EXISTING FLEET DID DURING THAT. UH, YES. AND WE HAVE NOT GIVEN UP ANY OF OUR FIRM GAS TRANSPORTATION EVEN AS WE HAVE RETIRED SOME GAS UNITS AND USED LESS GAS. OKAY. SO I, I GUESS, I DON'T KNOW THE, I DON'T HAVE IN MY HEAD THE EXACT, LIKE WE WERE DOWN 10% FOR THIS FEW HOURS AND THEN WE WERE BACK UP TO A HUNDRED PERCENT TOWARDS THE END OF THE EVENT. I, BUT I'M JUST, AND I DON'T, YOU DON'T HAVE TO SAY IT EXACTLY, BUT WE COULD DEFINITELY DELVE INTO THAT IN OFFICE HOURS. 'CAUSE WE HAVE ALL THAT DATA IF YOU'D LIKE TO SEE. BUT WE, YEAH, DIFFERENT UNITS, UH, HAD DIFFERENT D RATES OR WERE DIFFERENT SHORT TERM OUTAGES AT DIFFERENT TIMES. YEAH. OKAY. THANKS. QUESTIONS ON MINE? [01:10:07] OKAY, KEEP GOING. ALRIGHT, SO NEXT SLIDE IS THE ACTUAL STRESS TEST RESULTS ON THE TOTAL LIQUIDITY RISK. SO YOU CAN SEE THE REFERENCE CASES ONCE AGAIN OVER ON THE LEFT, UH, AND PORTFOLIOS ONE 13. AND YOU CAN SEE THAT REALLY RANGES ABOUT ANYWHERE FROM ABOUT, UH, MAYBE $300 MILLION ALL THE WAY UP TO ABOUT 1.7 BILLION. NEXT SLIDE PLEASE. UH, NEXT WE'D LIKE TO TALK ABOUT RELIABILITY. UH, AND WHAT WE'RE GONNA CALL THESE IS RELIABILITY, UH, RISK HOURS, NOT HOURS OF, OF LOST LOAD. UH, AND THE REASON FOR THAT, AND I GUESS MAYBE TO TALK A LITTLE BIT ABOUT IT, IS IT IS A VERY DYNAMIC SYSTEM AND IT CAN, IT CAN VARY UM, AS POWER FLOW CHANGES AND AS DIFFERENT TRANSMISSION ELEMENTS ARE OUT. BUT WHAT WE DO SEE IS AROUND A CERTAIN AREA WE TEND TO SEE, UH, SEPARATION OF OUR LOW ZONE PRICE. SO THERE'S HOURS WHERE WE'RE MORE AT RISK. UH, SOME OF THE THINGS YOU MAY NOT SEE IN A MODEL, SUCH AS U PLAN FOR EXAMPLE, IS YOU CAN ACTUALLY RUN, UM, SAY A, A TRANSFORMER AT A SLIGHTLY HIGHER RATE FOR A SHORT PERIOD OF TIME UNDER EMERGENCY CONDITIONS, FOR EXAMPLE. AND SO IN THE REAL TIME MARKET, UH, WE MAY NOT EXPERIENCE QUITE AS MANY UH, RELIABILITY HOURS AS WHAT YOU MIGHT SEE IN A MODEL. BUT THESE ARE HOURS WITHIN THE MODEL BASED ON THE CRITERIA THAT WE ARE CLOSER TO AT RISK COULD POTENTIALLY HAVE LOCALIZED OUTAGES OR IF AN ELEMENT BROKE OR A POWER PLANT BROKE COULD SEND US INTO A LOCALIZED OUTAGE. SO THAT'S KIND OF WHAT HOURS AT RISK MEANS. WE LOOK AT THE, AND AND YOU'RE LOOKING AT THEM ONLY FOR THAT LAST YEAR, 2035. UH, THAT'S WHAT WE ARE SHOWING HERE. BUT WE CAN CERTAINLY GO THROUGH EACH YEAR ON THAT DURING OUR OFFICE HOURS. BUT WE'RE KIND OF SHOWING KIND OF THE END RESULT OF EACH PORTFOLIO AND WHERE WE MAY END UP IN 2035 WITH THE, WITH THE FINANCIAL IMPACT, THE EMISSIONS AS WELL AS THE RELIABILITY. OKAY. AND AGAIN, JUST TO REMIND, WE ASSUMED FOR MANY OF THESE, UM, PORTFOLIOS, WE ASSUMED THAT THE GAS PLANTS SHUT OFF ON DECEMBER 31ST, 2024. 2034. YES. YEAH, 20, SORRY. 2034. RIGHT, RIGHT. WHICH IS YES, WHICH WILL CERTAINLY ADD TO THE INCREASE OF RELIABILITY RISK HOURS. SO HOW, HOW MUCH RISK TRIGGERS A RISK HOUR? DO YOU MEAN OVERALL LOAD, LIKE PERCENTAGE CHANCE IT WOULD HAPPEN? I MEAN, LIKE THERE'S A RISK, A METEORITE LIKE HITS THIS BUILDING, BUT I'M NOT GONNA WORRY ABOUT IT. I'M WONDERING HOW, HOW MUCH RISK DOES THERE HAVE TO BE BEFORE IT IS CONCLUDED IN A RISK HOUR? SO IN THIS METRIC WHAT WE'RE LOOKING AT IS WHEN WE TAKE OUR LOCAL GENERATION AND THEN WE LOOK AT WHAT WE'RE IMPORTING WHEN THAT INCREASES ABOVE 3000 MEGAWATTS, UH, WHEN YOU ADD THOSE TOGETHER, IF THAT'S ABOVE 3000 MEGAWATTS, WE'RE LOOKING AT THAT AS A RELIABILITY RISK HOUR. SO BASICALLY IF WE'RE IMPORTING 2200 MEGAWATTS OR MORE AT ANY GIVEN HOUR, THAT IS WHEN WE TEND TO SEE MORE SIGNIFICANT MAGNITUDE TO LOAD ZONE PRICE SEPARATION, WHICH IS A PRICE SIGNAL FROM ERCOT THAT YOU HAVE A LOOMING RELIABILITY ISSUE TO ADDRESS. AND SO YOU'RE SAYING 2200 MEGAWATT HOURS IS OF THE IMPORT AND THAT'S KIND OF A, A ROUGH NUMBER 'CAUSE THAT'S A DYNAMIC NUMBER THAT CHANGES DEPENDING ON THE CONDITIONS WITHIN THE, THE SYSTEM AT ANY GIVEN TIME. BUT THAT'S ABOUT THE MAXIMUM THAT THE SYSTEM CAN IMPORT IS WHAT YOU'RE SAYING. THAT TENDS TO BE WHERE WE START TO SEE SOME VERY SIGNIFICANT LOAD ZONE PRICE SEPARATION EVEN BEFORE THAT. BUT YES, THAT'S, AND THAT IS AROUND WHERE OUR LOAD WAS, I WOULD SAY BACK, UH, LAST YEAR IN 2023 WHEN WE HAD THE ROCK EVENT ON SOME OF OUR UNITS WHEN WE DID NOT BRING THEM ONLINE. SORRY IF I'M MISSING SOMETHING, BUT I'M JUST CONFUSED. 'CAUSE YOU MENTIONED THAT'S THE THRESHOLD FOR PRICE SEPARATION, BUT THIS SAYS THAT THERE WILL BE INCREASED RISK OF LOCAL OUTAGES. SO THOSE SEEM LIKE DIFFERENT THINGS, RIGHT? SO IT'S NOT THE THRESHOLD FOR PRICE SEPARATION. THAT'S WHEN WE TEND TO SEE IT VERY MAGNIFIED. PRICE SEPARATION IS A DYNAMIC SYSTEM, SO THAT NUMBER'S GONNA CHANGE DEPENDING ON HOW THE POWER IS FLOWING AND WHAT TRANSMISSION ELEMENTS ARE OUT AND HOW LOAD IS CONSUMING. BUT THAT IS KIND OF OUR, OUR ROUGH ESTIMATE CONSERVATIVE ESTIMATE OF WHEN WE GO ABOVE THAT WE HAVE A MUCH HIGHER PROBABILITY OF LOCALIZED OUTAGES. AND THAT'S VERY SIMILAR TO WHAT WE SAW IN SEPTEMBER OF 2023 WHEN WE GOT VERY CLOSE TO POTENTIALLY HAVING A LOCALIZED OUTAGE WHEN WE WERE NOT BRINGING ON LOCAL GENERATION. AND THE AIRPORT LIMIT WAS VERY HIGH AND WE SAW SOME VOLTAGE ISSUES WITHIN OUR SYSTEM. OKAY. AND YOU JUST SAID HIGHER PROBABILITY, SO I'M WONDERING WHAT'S THAT NUMBER? SO I DON'T HAVE THAT, THAT CALCULATION TO THAT, THAT THAT'S A VERY DIFFICULT NUMBER TO PIN DOWN, WHICH IS WHY WE WANTED TO GO WITH RELIABILITY RISK HOURS TO SAY THESE ARE THE NUMBER OF HOURS WHERE WE MIGHT BE AT RISK THAT THAT MAY OCCUR THE HIGHER PROBABILITY HOURS, RIGHT. AT ANY HOUR, I GUESS SOME TYPE OF LOCALIZED OUTAGE COULD HAPPEN FOR ANY, FOR A NUMBER OF GIVEN REASONS. BUT THESE ARE WHERE WE ARE LOOKING AT, WE ARE STRESSING OUR OWN SYSTEM AND WE HAVE HIGH PROBABILITY OF OUTAGES [01:15:01] OR LOCALIZED OUTAGES IN ORDER TO BALANCE THE SYSTEM. DO WE HAVE SOME QUESTIONS ONLINE? I WANT TO ENCOURAGE PEOPLE, BUT AGAIN, AGAIN, THIS IS LOOKING AT FIVE YEARS OUT TRANSMISSION PLANS, NOT WHAT COULD BE RE CONDUCTED IN AS FAR AS TRANSMISSION LINE. THIS, THIS HAS ONLY KNOWN PROJECTS THAT HAVE BEEN, UH, ANNOUNCED AND APPROVED BY ERCOT. YES. SO THAT'S GONNA BE CREATING AN IMPORT CONSTRAINT. SO THERE ARE TRANSMISSION AND DISTRIBUTION UPGRADES WITHIN OUR SYSTEM THAT HAVE BEEN PLANNED ON THEM, THAT ARE KNOWN, UH, BUT MAY NOT HAVE ALL OF THE TRANSMISSION UPGRADES AND DISTRIBUTION UPGRADES THAT COULD OCCUR OUT TO 2035. AS OUR COMMUNITY CONTINUES TO GROW, WOULD IT, WOULD IT BE POSSIBLE TO RUN SOMETHING WHERE WE VERY GENERICALLY MAKE SOME ASSUMPTIONS ABOUT LIKE FUTURE TRANSMISSION? WE CAN CERTAINLY TALK ABOUT THAT IN IN OFFICE HOURS AND HOW WE WOULD MODEL THOSE AND WHEN THE APPROPRIATE TIME TO BRING THOSE NEW LINES ON WOULD BE. YEAH. UH, RIGHT NOW WITH SUPPLY CHAIN DELAYS, IT'S TAKES QUITE A BIT OF TIME TO BUILD A NEW SUBSTATION AND, UH, TRANSMISSION LINE. YEAH. YEAH. I'M, I'M NOT, IT MAY NOT EVEN BE POSSIBLE, BUT I'M JUST, YEAH. ALRIGHT, NEXT SLIDE PLEASE. SO THESE ARE THE 2035. SO IN 2035, AFTER MANY OF THE GAS UNITS, THE LOCAL GAS UNITS HAVE BEEN SHUT DOWN IN CERTAIN PORTFOLIOS. THESE ARE THE RELIABILITY RISK HOURS. UH, AND SO FOR PEOPLE THAT DON'T LOOK AT THIS ALL THE TIME, THERE'S 8,760 HOURS IN A GIVEN YEAR. UM, AND SO YOU CAN SEE THAT VARIOUS PORTFOLIOS HAVE MUCH HIGHER THAN THAN OTHER PORTFOLIOS HERE, BUT THESE ARE JUST TOTAL EVENTS. AND SO WE TALKED ABOUT THAT. SO WHAT ARE THE LONGER DURATION EVENTS? SO NEXT SLIDE PLEASE. SO THIS WOULD REALLY SPEAK TO HOW MANY EVENTS OR OR HOURS AT RISK COULD THIS LAST FOUR, SIX OR EIGHT HOURS? I THINK, YOU KNOW, WE'VE DONE SOME, UH, SURVEYS OF CUSTOMERS IN THE WORKSHOPS. UH, WE'VE BEEN ASKING ABOUT OUTAGES AND HOW THEY IMPACT PEOPLE. TYPICALLY WHAT WE'VE GOTTEN BACK IS IF THE OUTAGE IS ABOUT AN HOUR IS, IS KIND OF AN INCONVENIENCE, BUT AS SOON AS THAT OUTAGE GETS TO BE FOUR, SIX OR EIGHT HOURS, IT ACTUALLY STARTS CAUSING SOME PROBLEMS FOR, FOR THEM OR THEIR BUSINESS. QUICK, SORRY, QUICK QUESTION ON THIS SLIDE. UM, AND I WANTED TO FOCUS ON THE ONES THAT HAVE THAT LOOK LIKE, UM, THE WORST IN TERMS OF THIS METRIC, WHICH ARE THE TWO ONES CHOSEN BY THE EEC. UM, SO I THINK IN, AND AGAIN, MY SIMPLE MIND, THE THOUGHT WAS INVEST QUITE A BIT OF MONEY IN LOCAL 12 HOUR BATTERIES AND THAT WILL HELP YOU AVOID THE RISKS THESE MULTI-HOUR RISKS. BUT YOU'RE TELLING ME EXACTLY THE OPPOSITE AND WHAT, WHY, WHY IS THAT? SO WE HAVE FOUND WHEN THE BATTERIES GET TO A CERTAIN LEVEL AND YOU'RE CHARGING THEM AT NIGHT, NOW YOU'RE IMPORTING A LOT OF POWER TO CHARGE THE BATTERIES, WHICH THEN COULD CREATE A DIFFERENT HOUR WITH A RELIABILITY RISK IF YOU WILL. SO IT, YOU'RE, YOU'RE NOT NECESSARILY, YOU'RE, IF YOU'RE USING THE SOLAR TO SERVE YOUR LOAD AND THEN YOU'RE CHARGING IT AT NIGHT WITH WIND AND YOU HAVE A, A SIGNIFICANT NUMBER OF BATTERIES, YOU'RE HAVING TO IMPORT A LOT OF POWER. SO IN CERTAIN HOT DAYS IN THE SUMMER FOR EXAMPLE, WHERE IT JUST DOESN'T COOL DOWN THAT MUCH. LIKE WE SAW A LOT OF IN 2023 AND MAYBE A LITTLE BIT THIS YEAR, YOU MIGHT STILL HAVE HIGH LOADS WHEN YOU'RE NOW NEEDING TO CHARGE THOSE BATTERIES IN ORDER TO MEET YOUR NEEDS FOR THE NEXT DAY AS WELL. AND SO THAT'S SOMETHING WE CAN DEFINITELY DELVE INTO IN OFFICE HOURS AS WELL IF YOU WANT TO GO THROUGH KIND OF THE, THE NUTS AND BOLTS OF, OF WHY IT TURNED OUT THAT WAY. AND, AND THAT CAN REALLY HELP INFORM US ON HOW TO AUGMENT SOME OF THESE PORTFOLIOS TO THEN RUN YET ANOTHER SCENARIO TO SEE HOW WE MIGHT BE ABLE TO, YOU KNOW, ELIMINATE THAT ISSUE. YEAH. BECAUSE IN THE CASE OF 10, WHICH WAS KIND OF KEEP YOUR GAS UNITS BUT ALSO ADD A BUNCH OF STORAGE, YOU DON'T SEE THAT PROBLEM 'CAUSE YOU COULD RUN THOSE GAS UNITS WHILE YOU'RE CHARGING THOSE BATTERIES FOR EXAMPLE AND MAYBE REDUCE THAT IMPORT CONSTRAINT OKAY. DURING THOSE HOURS WHEN YOU NEED THEM. RIGHT. ALRIGHT, NEXT SLIDE PLEASE. QUICK QUESTION ON THAT. SURE. DOES THE MODEL ASSUME THAT THE BATTERIES JUST ALL CHARGE AT ONCE OR DOES IT STAGGER THEM? UM, I NEED TO GO BACK AND TALK TO THE MODELING TEAM. EXACTLY, BUT NO, IT WOULD BE STAGGERED. IT WOULD NOT BE ALL AT ONCE, BUT IT WOULD STILL NEED TO MEET THE NEEDS FOR THAT NEXT DAY. AND SO THEY WOULD ALL HAVE TO GET CHARGED THROUGHOUT THAT PERIOD OF TIME. OKAY. YEAH, I'D ALSO BE INTERESTED IN SEEING THE DETAILS. SURE, SURE. AND THAT'S EXACTLY WHAT THE OFFICE HOURS ARE FOR SO WE CAN REALLY DIG INTO SOME OF THOSE LITTLE NUANCES. ON THE POWERLY LEVEL, THE THE CHARGING PATTERNS ARE NOT FIXED, RIGHT? IT'S OPTIMAL. THEY'RE LIKE THE, THE MODELS CHOOSING WHEN TO CHARGE AND DISCHARGE THE FLEET. RIGHT. THERE IS PROBABLY NOT A BATTERY OPTIMIZATION TOOL WITHIN U PLAN, BUT I'LL NEED TO DOUBLE CHECK WITH THE MODELING TEAM THAT RUNS THAT. BUT WHEN ASCEND WILL SHOW THEIR RESULTS HERE LATER, THEY USE A BATTERY OPTIMIZATION MODEL [01:20:01] FOR, FOR THEIR CHARGING AND DISCHARGING. OKAY. YEAH. 'CAUSE IF IT'S A FIXED CHARGING PROFILE THAT DOESN'T CHANGE, THAT COULD, COULD REALLY IMPACT THAT. YEAH. I DON'T THINK IT'S A FIXED CHARGING PROFILE, BUT I ALSO DON'T THINK IT'S OPTIMIZED AROUND THE MARKET TO, TO ALWAYS EXTRACT THE MOST OPTIMAL VALUE. 'CAUSE THAT WOULD BE AN ADDITIONAL KIND OF MODULE WITHIN YOU PLAN THAT I DON'T BELIEVE WE HAVE RIGHT NOW. OKAY. UH, NEXT SLIDE PLEASE. ALRIGHT. AND NOW WE WANTED TO GET TO THE EMISSION IMPACTS. SO IF WE GO TO THE NEXT SLIDE, WE FIRST MODELED, UH, AUSTIN ENERGY'S ENERGY STACK FOR CO2 EMISSIONS THROUGH DIFFERENT PORTFOLIOS. SO YOU CAN SEE THE ONES THAT, THAT MEET THE CARBON FREE GOAL BY 2035 ALL GETTING KIND OF DOWN THERE ZERO IN 2035. AND YOU CAN SEE THE OTHERS. AND JUST FOR REFERENCE, THAT DOTTED LINE IS OUR HISTORICAL CO2 EMISSIONS. SO YOU CAN SEE THE PROGRESS WE HAVE MADE SO FAR, UH, WITH THE IMPLEMENTATION OF REACH AND THEN WHERE THE DIFFERENT PORTFOLIOS WOULD, WOULD END UP. AND SO IF WE GO TO THE NEXT SLIDE, CAN YOU GO BACK? SURE. UM, SO I, I SERVED IN THE, THE LAST WORKING GROUP THAT UM, DID THE LAST RESOURCE PLAN. MM-HMM . AND I RECALL THAT UM, WHEN WE DISCUSSED RENEWABLE ENERGY GOALS AND CARBON FREE GOALS, THAT WE DECIDED THERE WAS NO NEED TO STATE A RENEWABLE ENERGY GOAL BEYOND THE 65% BECAUSE IT WAS ALL GONNA BE RENEWABLE ENERGY TO REPLACE CARBON FREE. I WAS THERE TOO. CHARLES DICKERSON. YES. WE WERE TALKING ABOUT WHAT'S REALLY IMPORTANT, WELL NO REPLACE IS THAT WE HAVE CARBON FREE GENERATION. NO, WE ALSO, IT ALSO SAYS IN THERE NO NEW NUCLEAR, SO I'M TALKING ABOUT REPLACEMENT. WHAT WOULD REPLACE THE FOSSIL FUELS WAS RENEWABLE ENERGY. SO I FIND IT, UM, A BIT FRUSTRATING AND FRANKLY I THINK IT'S A LITTLE MISLEADING TO HAVE ALL THESE LISTED AS A HUNDRED PERCENT CARBON FREE BECAUSE THAT'S JUST YOUR STACK COMMISSIONS AND THAT WAS NOT THE INTENTION OF THE LAST RE THE CURRENT RESOURCE PLAN AND WHAT THE EUC YOU KNOW, PORTFOLIOS PUT FORWARD WAS ACTUALLY MEETING LOAD WITH A HUNDRED PERCENT, WHICH IS A MUCH MORE COMMON METRIC. YOU KNOW, YOU LOOK AROUND, YOU HAVE UTILITIES THAT DON'T EVEN GENERATE AND THAT'S HOW THEY DEFINE A HUNDRED PERCENT CARBON FREE. THERE'S A BIG DIFFERENCE, RIGHT? YOU COULD SHUT EVERYTHING AGREEING DOWN AND JUST BUY OFF THE GRID AND I AGREE. YEAH, YOU'RE NOT A HUNDRED PERCENT CARBON FREE. SO MY REQUEST HERE IS CAN YOU FIND A DIFFERENT WAY TO COMMUNICATE? SO WE'RE GONNA SHOW BOTH ZERO STACK EMISSIONS AS DISTINCT FROM 100% CARBON FREE. UM, TWO SLIDES FROM HERE WILL SHOW THAT CARBON PERCENT CARBON FREE AS WELL. I'M SEEN IT'S STILL GONNA BE HERE. AND IT, IT SENDS A MISLEADING MESSAGE THAT ALL OF THOSE ARE THIS, THEY ALL GET TO THE SAME POINT AND THEY DO NOT. WELL ONCE A CARBON STACK FREE EMISSIONS, WHICH ISN'T THE RESOURCE PLAN AS WRITTEN AND THEN WE'LL ALSO SHOW A PERCENT OF CARBON FREE GENERATION VERSUS LOAD. SO WE CAN LOOK AT BOTH METRICS. WE'RE TRYING TO SHOW YOU THE RESULTS OF BOTH HERE. SURE. I'M JUST SAYING , WHAT THIS IS NOT A HUNDRED PERCENT CARBON FREE. WELL THIS IS SHOWING MODELED STACK EMISSIONS, RIGHT? SO THIS IS THIS METRICS AND I'M ASKING CAN YOU USE THAT TERMINOLOGY WHICH IS DIFFERENT FROM A HUNDRED PERCENT CARBON FREE AND WE'RE GONNA SHOW THE A HUNDRED PERCENT OR THE CARBON FREE AS WELL FROM THE AUTO RESULTS. I I ALSO JUST WANNA POINT OUT THAT THE UM, TABLE ON THE SIDE IS NOT SAYING THAT THEY'RE A HUNDRED PERCENT CARBON FREE. IT'S SAYING THAT THE PERCENT REDUCTION IN 2035, THE REDUCTION COMPARED TO 2022. BUT THAT'S NOT ACCURATE BECAUSE YOU'RE BUYING OFF THE GRID THAT IS NOT OFFSET WITH RENEWABLE ENERGY. I SEE. I MEAN, AND THIS IS, I MEAN IF YOU, IF YOU LOOK AT OTHER LIKE CITIES AND UTILITIES THAT ARE SAYING GOING UP 100% CARBON FREE, EVEN COMPANIES THAT SAY THEY'RE GOING A HUNDRED PERCENT CARBON FREE, I MEAN SOME OF THEM DO IT IN A WAY THAT I ALSO DON'T AGREE WITH. I JUST BUY REC AND THAT MAY OR MAY NOT DO ANYTHING, BUT IT IS MEETING LOAD WITH A HUNDRED PERCENT CARBON FREE OR A HUNDRED PERCENT RENEWABLE DEPENDING ON HOW IT'S STATED. YEAH, I UNDERSTAND POINT. SO JUST, I THINK THERE'S A COMMUNICATION ISSUE WITH HOW THIS IS REPRESENTED WITH HOW THIS, HOW THIS APPEARS. OKAY, I UNDERSTAND. I THINK WE UNDERSTAND. OKAY, THANK YOU. SORRY, I'M TRYING TO CLARIFY WHAT YOUR QUESTION. SO STACK YOUR, YOUR ISSUE IS NOT THE LINES ON THE CHART, WHICH SOME OF THEM GET TO ZERO AND SOME OF THEM DON'T. RIGHT. SO, SO THE ONLY ONES THAT GET TO ZERO ARE 12, 13, 8 AND NINE I BELIEVE IN 2035. IN TERMS OF, I JUST THINK THROUGHOUT THIS, YOU KNOW, YOU SEE UM, GETTING TO A, ON ON THIS PAGE YOU SEE GETTING TO A HUNDRED PERCENT YOU, I UNDERSTAND THAT THIS IS STACK EMISSION I UNDER LIKE I JUST, [01:25:01] UM, IT, WHY ARE WE TALKING JUST ABOUT STACK EMISSION I GUESS? WELL, WE'RE GONNA TALK ABOUT BOTH AND THAT'S WHERE I WAS TRYING TO EXPLAIN. WE'RE GONNA GO FAIR ENOUGH. WE CAN COME BACK. WE'RE TALKING ABOUT STACK EMISSIONS 'CAUSE IT WAS IN OUR PREVIOUS RESOURCE PLAN. SO WE WANNA ADDRESS THAT, BUT THEN WE ALSO WANNA TALK ABOUT CARBON FREE GENERATION AS A PERCENTAGE OR BELOW. OKAY. ALRIGHT, NEXT SLIDE PLEASE. SO THIS IS JUST THE CUMULATIVE, UH, EMISSION METRIC TONS. SO YOU KIND OF SAW THE PATH ALONG THE WAY, BUT JUST CUMULATIVE WHAT'S THE IMPACT OVER THE NEXT 10 YEARS. AND YOU CAN SEE SOME HAVE MUCH HIGHER, UH, CO2 EMISSIONS THAN, THAN OTHERS. BUT THIS DOESN'T INCLUDE, THIS IS STACK EMISSIONS AS WELL. IT'S NOT CARBON FREE AS A PERCENTAGE OF LOAD, IT'S JUST THE, THE CUMULATIVE AMOUNT. SO WE CAN KINDA LOOK AT THEM RELATIVE OVER THAT 10 YEAR PERIOD. OKAY. UM, NEXT SLIDE PLEASE. SO THE NEXT SLIDE WOULD BE LOOKING AT THE PERCENT OF LOAD MATCHED WITH CARBON FREE ENERGY IN 2035. AND SO YOU CAN SEE SOME, SOME RANGES AROUND THESE. THEY'RE NOT GONNA BE A A SET NUMBER GIVEN THAT WE, WE RAN A FEW DIFFERENT, UH, FUTURE WORLD SCENARIOS, BUT YOU CAN SEE THE DIFFERENT PORTFOLIOS. YOU HAVE THE REFERENCE CASE ONCE AGAIN IN THE, IN THE BOX THERE AND YOU CAN SEE THE OTHER SCENARIOS OUT THERE AND WHICH ONES, UM, GRAVITATE RIGHT AROUND THAT 80% AND WHICH ONES MAKE IT ALL THE WAY UP TO A HUNDRED PERCENT. SO CAN WE GET SOME CLARIFICATION BEFORE WE MOVE ON TOO FAR? SO WHEN YOU'RE TALKING ABOUT STACK EMISSIONS, THAT'S FROM THE GENERATOR'S STACK. MM-HMM. BUT IT DOESN'T INCLUDE THE UPSTREAM FUEL, LIKE METHANE LEAKS IN PIPELINES, OTHER THINGS LIKE THAT. OH YEAH, THAT'S ANOTHER COMPLAINT I HAVE . BUT WHAT WERE THE OTHER THINGS BESIDES THE STACK EMISSIONS THAT YOU WERE TALKING ABOUT? I MEAN, I THINK I'M REALLY JUST, I WAS LOOKING AHEAD AND JUST AT THIS NEXT PAGE HERE DOESN'T SAY STACK EMISSIONS. SO REALLY I WAS KIND OF MAKING MY COMMENT ON, I GUESS ON THE WRONG SLIDE, BUT WE COULD SHUT DOWN. LIKE IF YOU, IF YOU'RE NOT MEETING, IF YOU'RE NOT ACTUALLY PURCHASING RENEWABLE ENERGY TO COVER, THEN WE'RE JUST RELYING ON ERCOT FOSSIL FUEL AND NOT DOING OUR PART TO ACTUALLY OFFSET THAT. AND I'M SAYING THAT THE CURRENT PLAN SAYS BOTH. IT MAYBE DOESN'T SAY IT IN THE CLEAREST LANGUAGE, BUT I LIKE THAT WAS THE INTENTION OF, OF THE CURRENT PLAN. SO I JUST DON'T WANNA LOSE SIGHT OF THAT AND I DON'T KNOW WHY WE'RE MODELING ALL THESE SCENARIOS THAT DON'T EVEN COVER LOAD ANY COMMENT OR QUESTIONED ONLINE. I I'M ALWAYS ASKING QUESTIONS JUST TO MAKE SURE I UNDERSTAND. SO AS AN EXAMPLE, SCENARIO NINE IS HYDROGEN PLUS STORAGE, BUT ONLY GETTING TO 65% RENEWABLE. SO BASICALLY WHAT THIS IS SAYING IS THE STORAGE PLUS THE HYDROGEN PLUS THE, THE RENEWABLES TICKET TO 65% GETS YOU TO 80, YOU KNOW, 85% WHATEVER. BUT YOU WOULD STILL HAVE TO PURCHASE OFF THE MARKET TO MEET YOUR LOAD. YES. AND THAT PURCHASE IS PROBABLY NOT GONNA BE CARBON FREE MOST LIKELY. UM, IN, IN THE MODEL SCENARIO WE'RE, WE'RE NOT MODELING THAT THE PURCHASES. OKAY. UM, BUT BASED ON THE CURRENT ERCOT MIX, TYPICALLY WHEN YOU'RE BUYING POWER FROM THE MARKET WHERE YOU'RE NOT MEETING ITS PROBABLY YOUR OWN GENERATION IS BECAUSE THE WIND AND SOLAR IS NOT AS PREVALENT. SO IT LIKELY IS SOME CARBON GENERATION. THANK YOU. ALRIGHT, NEXT STEP PLEASE. SO NEXT WE'RE GONNA TALK ABOUT TOTAL NOX EMISSIONS AS WELL. UM, SO MUCH LIKE THE CO2 EMISSION GRAPH. THIS IS OVER THE WHOLE TIME HORIZON FROM 2025 OUT TO 2035. AND YOU CAN SEE THE VARIOUS PORTFOLIOS AND THE TOTAL METRIC TONS OF NOX IN THOSE PORTFOLIOS. CAN YOU JUST REMIND, I THINK WE'VE COVERED THIS IN PREVIOUS OFFICE HOURS, BUT WHAT ARE OUR, OUR ASSUMPTIONS ON THE NOX EMISSIONS FROM SAY THE HYDROGEN PEAKER VERSUS A GAS PEAKER? ARE THEY SOON TO BE RELATIVELY THE SAME? THEY'RE SOON TO BE CLOSE TO THE SAME BASED ON SCRS AND TECHNOLOGY THAT YOU CAN INSTALL TODAY THAT YOU CAN REDUCE NOX. OKAY. BECAUSE WE HAD SEEN SOME, SOME DATA THAT NOX EMISSIONS FROM, FROM THEY, THEY ARE HIGHER WITHOUT THE SCR, WITHOUT THE OKAY. BUT YOU CAN INSTALL AND WHICH IS A SELECTIVE CATALYTIC REDUCTION. REDUCTION. YEAH. UM, SCR AND SO THAT, THAT CAN REALLY TAKE OUT QUITE A BIT OF THE NOX. SO BASICALLY THE NOX ASSUMPTIONS IN THIS MODEL ARE THAT WHETHER YOU'RE BURNING GAS OR HYDROGEN HAS MORE OR LESS THE SAME. I BELIEVE THE NOX IS SLIGHTLY HIGHER ENOUGH TO LOOK BACK AT THE ASSUMPTION SHEET THAT WE, THAT WE SHARED. OKAY. UM, BUT WE ARE LOOKING AT UTILIZING POLLUTION CONTROLS TO REDUCE THAT IMPACT. OKAY. THANKS. IN THE MODELING, JUST FOR, JUST FOR CLARITY, THESE ARE, THESE ARE STACK EMISSIONS ON OUR, OUR POWERPOINT? YES. YEAH. ALL WE'RE, WE'RE CALCULATING STACK EMISSIONS AND THEN WE WILL ALSO LOOK AT OUR PERCENT VERSUS LOW FOR CARBON FREE GENERATION WHEN WE CAN. 'CAUSE THAT IS ONE [01:30:01] OF THE METRICS THAT WE SHOT ON OUR WEBPAGE. RIGHT. NEXT SLIDE PLEASE. AND SO WE, WE PUT BOTH, UH, TOTAL SO TWO AND UH, PM ON THE SAME GRAPHIC HERE. AND SO HERE YOU HAVE, UH, A SIMILAR LOOK OF THE, THE TOTAL OVER THAT 10 YEAR TIME HORIZON. WHAT IS THE TOTAL SO TWO? SO, YOU KNOW, NOT TO POINT OUT ONE OF THE REFERENCE CASES, BUT THE, THE ONE WHERE, UH, FPP IS NOT RETIRED AND, AND RUNS AT THE TOP, YOU SEE QUITE A BIT MORE SO TWO THAN THE OTHER CASES. AND THEN OVER ON THE RIGHT YOU'LL BE LOOKING AT THE PM PARTICULATE MATTER. I GUESS, UM, MAYBE THEN I, I'LL BE CURIOUS HOW, HOW THESE ARE, YOU KNOW, QUOTE UNQUOTE MONETIZED SINCE THEY'RE, UM, YOU KNOW, VERY LOCAL IMPACTS TO, YOU KNOW, THE, THE COMMUNITIES THAT ARE, THAT ARE, WOULD BE CLOSE TO THE, THE POWER PLANTS. 'CAUSE I I KNOW WE'RE PROBABLY MODELING THEM AS JUST A GENERIC WELL BESIDES THE ONES WE HAVE, WE KNOW WHERE THEY ARE HOPEFULLY. UH, BUT THE THE NEW STUFF, UM, YOU KNOW, WILL HAVE A PARTICULAR IMPACT AND A PARTICULAR PLACE. AND SO IS HOW ARE WE THINKING ABOUT THAT FOR SAY, SO ALL THE, THE NEW STUFF IS MODELED HERE LOCALLY RIGHT? BUT IT BUT BUT IS NOT, IT'LL PHYSICALLY EXIST AT A SITE SOMEWHERE. RIGHT? RIGHT. LIKE AND SO, UM, HOW WOULD WE BE MODELING THE IMPACTS OF LIKE THE COMMUNITIES AROUND, AROUND THAT PHYSICAL ASSET FOR THESE, UH, CRITERIA AIR POLLUTANTS? RIGHT? WE HAVE NOT INCLUDED THAT HERE 'CAUSE THERE'S BEEN NO SITE SELECTION OR RESOURCE CLAIM YET, BUT THIS IS JUST TOTAL STACK EMISSIONS. SO WE CAN HAVE A LOOK AT A RELATIVE COMPARISON OF SOC KNOX PM IN THE VARIOUS PORTFOLIOS. RIGHT. IT JUST, IT WILL HAVE AN, IT WILL HAVE, UH, A NON EVEN IMPACT ACROSS LIKE THE COMMUNITY. SO I JUST THINK WE NEED TO KEEP THAT IN MIND. SURE. NEXT SLIDE PLEASE. ALRIGHT, SO, UH, THE, THE, TO WRAP IT UP, UH, BEFORE WE BRING UP ALL THE MODELING TEAM AND, OR ACTUALLY, SORRY, BEFORE WE GO TO ASCEND AND HAVE THE NEW PRESENTATION, UH, WE JUST HAVE A SUMMARY OF TABLES WITH OVERALL VALUES AND RANKINGS. AND SO IF YOU LOOK AT THIS FIRST TABLE HERE, YOU CAN KIND OF SEE THE TOTAL, UH, EITHER DOLLAR AMOUNTS OR, OR NUMBERS IN, IN TONS OR, UH, METRIC TONS FOR THE EMISSIONS AS WE GO TO THE NEXT SLIDE. UM, YOU GET TO SEE THE RELATIVE RANKINGS, UH, FOR EACH, UH, RELATIVE ONE THROUGH 13, ONE BEING THE, THE LOWEST NUMBER OR, OR THE BEST NUMBER FOR THAT VARIOUS METRIC. 13 THE WORST. UH, BUT THEY'RE ALL RELATIVE TO EACH OTHER. SO THE DIFFERENCE BETWEEN THREE AND FOUR MAY NOT BE THE SAME AS THE DIFFERENCE BETWEEN SEVEN AND EIGHT. SO IT'S GOOD TO LOOK AT BOTH OF THE, THE NUMBERS AS WELL AS THE RELATIVE RANKINGS. WITH THAT, I WOULD LIKE TO PASS IT ON TO, UH, TO BEN WITH THIS SENT. UM, I HAD A QUESTION BEFORE YOU GO. UM, ON THE, ON THE TOPIC THAT DAVE MENTIONED, I, I KNOW THAT I SUBMITTED A COMMENT ON THE ASSUMPTIONS AROUND THE LIFECYCLE EMISSIONS, UM, IN PARTICULAR THE UPSTREAM FUGITIVE METHANE EMISSIONS. AND I THOUGHT THAT THE RESPONSE WAS THAT IT WAS GONNA BE DONE OUTSIDE, THAT THAT WAS GONNA BE INCORPORATED OUTSIDE OF U PLAN, BUT THAT IT WAS GONNA BE INCORPORATED. BUT IT SEEMS LIKE IT'S NOT HERE. SO I'M, YOU'RE TALKING TOTAL LIFECYCLE EMISSIONS OF TECHNOLOGY. I MEAN, TO BE HONEST, LIKE I THINK A LOT GOES INTO LIKE TOTAL LIFECYCLE. WHAT I'M INTERESTED IN IS AT LEAST CAPTURING THE FUGITIVE METHANE EMISSIONS. 'CAUSE THAT IS SIGNIFICANT ENOUGH THAT IT CAN ERASE ANY CLIMATE BENEFIT OF SWITCHING FROM COAL GAS. SO I'M, I'M ASKING ABOUT THAT PIECE. AND IT'S NOT ALL THAT COMPLICATED. IT'S REALLY BASED, YOU KNOW, PERCENT YEAH. WE, WE DON'T HAVE THAT PERCENTAGE WITHIN, WITHIN THE MODEL. I KNOW THAT WE WERE GONNA TRY TO LOOK AT THAT OUTSIDE OF THE MODEL. YEAH. UM, BUT I DON'T BELIEVE THAT STUDY HAS BEEN DONE YET. WELL, THERE'S, I MEAN, YOU DON'T REALLY NEED TO DO A STUDY. LIKE THERE'S STUDIES BEING DONE BY SCIENTISTS OUT THERE. I DON'T, I DON'T THINK YOU NEED TO DO A STUDY. YOU JUST NEED TO APPLY THE EMISSIONS RATES THAT ARE BEING OBSERVED IN THE STUDIES. LET'S GO BACK AND LOOK AT THOSE Q AND A AND THAT CONVERSATION, WE'LL TALK WITH YOU FURTHER ABOUT IT DURING THE, UM, OFFICE HOURS. I DON'T RECALL IF WE WERE GONNA DO IT FROM A QUALITATIVE PERS COM PERSPECTIVE OR, OR QUANTITATIVE. SO LET US GO BACK AND TAKE A LOOK. WELL, IT'S A QUANTITATIVE THING. IT SHOULD GO IN THE TOTAL CO2 EMISSIONS COLUMN. I DON'T, I DON'T THINK WE HAVE AN ANSWER FOR YOU TODAY. OKAY. ALL RIGHT. IF YOU COULD GO TO THE NEXT, OH, CAN I ASK A COUPLE QUESTIONS? SURE. JUST ABOUT THE, I'M STILL TRYING TO UNDERSTAND THE SCENARIOS , BUT, UH, YEAH. SO, UH, 'CAUSE ON SOME OF IT, UH, THERE'S ONLY ONE PLACE WHERE WE SAY FPP RETIRE END OF 2028. SO [01:35:01] THAT'S NUMBER 11. SO BECAUSE EVERYTHING ELSE IS SILENT, DO WE ASSUME FPP IS RETIRED IN 2035? I GUESS THAT'S ONE QUESTION. UM, SO IN MOST OF THE SCENARIOS, WE RETIRED FPP AT THE END OF THIS YEAR. SO WE COULD LOOK AT THE COMPARISONS BETWEEN THE PORTFOLIOS AT THE END OF THIS YEAR. YES. OKAY. WELL THAT'S NOT REALLY OUTLINED ANYWHERE. UM, SO WHEN YOU LOOK AT EACH ONE OF THOSE PORTFOLIOS, THE, THE FULL, UM, WHEN WE LOOK AT THAT PORTFOLIO NUMBER FIVE, FOR EXAMPLE, WHEN WE LOOK THROUGH ALL THE DIFFERENT YEAH. UM, SO IF YOU LOOK ON THERE, IT ACTUALLY HAS THE FPP RETIRE DATE ON IT AS ONE OF THE BULLETS. SO YOU CAN GO THROUGH EACH PORTFOLIO AND YOU CAN SEE WHEN THAT FPP RETIRE DATE IS ASSUMED IN THIS MODEL. OH, OKAY. SO THERE'S LIKE A PAGE DESCRIPTION OF EACH OF THESE SOMEWHERE? UH, YES. THAT'S IN YOUR, I'M JUST LOOKING AT THE, I'M JUST LOOKING AT THE SUMMARY YET, . UM, AND THEN MY OTHER QUESTION IS, UM, 'CAUSE THREE AND 11 SEEM PRETTY SIMILAR TO ME, EXCEPT OBVIOUSLY THERE'S AN FPP DIFFERENCE, BUT, UM, SO AN 11, YOU DON'T SAY WHEN IS IT, WHEN OUR DECORATE AND SANDHILL RETIRED, BUT IN NUMBER THREE YOU DO IS DO WE ASSUME THAT IT'S THE SAME OR NO? SO IF IT'S NOT SPELLED OUT SPECIFICALLY, THEN THEY WOULD RETIRE AT THE END OF 2034 TO MEET THE A HUNDRED PERCENT CARBON FREE STACK EMISSION SCHOOL. GOTCHA. ALL RIGHT. AND, UM, YEAH, WELL THAT'S IT. I MEAN, I HAVE A LOT MORE QUESTIONS, BUT I CAN DO 'EM IN THE OFFICE HOURS, BUT I'M JUST TRYING TO UNDERSTAND, UH, YOU KNOW, WHAT THE DIFFERENCE IS BETWEEN VARIOUS SCENARIOS. SO APPRECIATE YOU WALKING ME THROUGH THAT. SURE. THANK YOU. I'M SORRY. NOW I JUST CONFUSED MYSELF. UM, WHEN YOU SEE, WHEN YOU LOOK AT, AT THIS CHART WITH THE RESOURCES, THE WAY I'M READING IT IS IF I SEE A NUMBER NEXT TO DECK OR SANDHILL, UM, CC OR CT, IF A NUMBER'S THERE, THAT MEANS THE GAS PLANTS WOULD CONTINUE TO OPERATE IN 2035. IF NOT, THEN THEY WOULD RETIRE AT THE END OF 2034. AM I READING THAT? I BELIEVE THAT'S CORRECT. IF I'M FOLLOWING YOU CORRECTLY, I BELIEVE THAT'S CORRECTLY, YES. OKAY. SO RAUL, IF THERE'S A NUMBER IN THIS YELLOW SHEET, I DON'T KNOW WHERE THE CAMERA IS, . UM, IF, IF THERE'S A NUMBER NEXT TO DECKER OR SAND HILL, THAT MEANS IT'S STILL OPERATING IN 2035. IF THERE'S NOT, IT MEANS IT RETIRED THE YEAR BEFORE. OKAY. I'LL LOOK FOR THE YELLOW SHEET. YEP. . ALL RIGHT. NEXT SLIDE PLEASE. ALL RIGHT, SO I KNOW THAT WAS A LOT. THANK YOU FOR YOUR QUESTIONS ALONG THE WAY. UM, BEFORE WE PASS THE FLOOR TO BEN FROM ASCEND, I WANNA PAUSE AND UH, HAVE YOUR BRAIN RESET FOR A MOMENT, UM, BECAUSE IT NEEDS TO DO SO IN ORDER TO MAKE SENSE OF WHAT WE JUST SAW AND WHAT WE'RE ABOUT TO SEE. UM, ONE OF THE KEY DIFFERENCES IS THAT MIKE JUST TALKED, HE JUST REVIEWED ALL THE, UH, RESULTS WITH THE ASSOCIATED PORTFOLIOS WHERE WE DEFINE THE TECHNOLOGY MIXES. EITHER YOU, US OR WE DID IT TOGETHER, RIGHT? WE CALL THOSE THE HUMAN MADE PORTFOLIOS, RIGHT? WE SAID, WHAT IF WE HAD THIS MUCH DEMAND RESPONSE IN ENERGY EFFICIENCY? WHAT IF WE HAD THIS MUCH WIND IN SOLAR PPAS, WHAT ABOUT BATTERIES? WHAT ABOUT PEAKERS, ET CETERA. AND YOU OF COURSE CAN THINK OF AN INFINITE NUMBER OF THOSE TYPES OF PORTFOLIOS. WE CHOSE 13 OF THEM AND WE JUST GIVE US A WHOLE BUNCH OF DATA ABOUT IT. SO THAT'S THE ORANGE OR YELLOWISH PART HERE AT THE TOP. ASCENDS WORK IS VERY DIFFERENT. UM, AND WE HIT ON THIS LAST TIME, BUT I JUST, I CAN'T REITERATE THIS ENOUGH. AND, AND, AND IT'S IMPORTANT WHEN BEN STARTS HIS WORK THAT YOU, UM, GET THIS DIFFERENCE. SO ASCEND USES THEIR SOFTWARE TO CREATE OPTIMIZED PORTFOLIOS BASED ON SPECIFIED CONSTRAINTS. THEY WOULD SAY WHAT TECHNOLOGY MIX WOULD RESULT IF THE, SO WE REQUIRED THE SOFTWARE TO HIT THESE CONSTRAINTS. SO BEN'S GONNA SHOW YOU A LIST OF ALL THE CONSTRAINTS. UM, BUT ONE EXAMPLE IS IF HE SAID, WHAT IF WE MET LOCAL RELIABILITY REQUIREMENTS, WE WERE A HUNDRED PERCENT CARBON FREE BY 2035, AND WE USE THE 65% RENEWABLE ENERGY BY 2027 BEYOND. SO THAT'S THE GENERAL PREMISE OF THE BASELINE, WHICH IS PORTFOLIO A. UM, THEN THEY SAID, WHAT IF YOU MAXIMIZE THE ENVIRONMENTAL SUSTAINABILITY, UH, BY NOT ALLOWING ANY EMISSIONS EMITTING TECHNOLOGIES WHEN THEY CREATE. AND THEN THEY CREATED A PORTFOLIO AND THEY SAID, WHAT IF YOU HAD TO FIND THE LEAST COST BY RELAXING SOME OF THE CONSTRAINTS? AND THEY CREATED ANOTHER PORTFOLIO. AND THEN THEY SAID, WHAT IF YOU ENHANCED RELIABILITY AND THEY CREATED A FINAL PORTFOLIO. SO IN THE END THEY HAVE FOUR, THE BASELINE, [01:40:01] AND THEN ONE THAT DOES THE BEST POSSIBLE IN EACH OF THE VARIOUS THREE AREAS THAT THE COMMUNITY VALUES. AND SO NONE OF THESE ARE GONNA BE PERFECT PORTFOLIOS, NOR ARE THEY INTENDED TO BE, BUT THEY'RE USEFUL FOR COMPARISON PURPOSES AND GENERAL, UH, SHAPING OF NEXT STEPS. SO, UH, AGAIN, BEN'S GONNA TALK ABOUT THE SOFTWARE OPTIMIZED PORTFOLIOS FROM ASCEND, AND UH, HE'LL SAY THAT IN A MORE, UH, ELEGANT WAY, BUT I HAD TO LIKE KIND OF GET YOU TO PAUSE BEFORE WE JUST WENT FROM ONE SECTION TO THE NEXT. SO BEN, UH, PLEASE JOIN US NOW AND IF YOU USE THANKS, LISA. THANK YOU. CAN EVERYBODY HEAR ME? IS THAT A YES? UH, HOW ABOUT NO, NO. OKAY. I I I HEARD THE NO, CLEARLY. LET ME SEE IF I CAN, HOW ABOUT NOW IF I, I JUST TALK A LITTLE BIT LOUDER. IS THIS, THAT'S, THAT'S FAR BETTER. IS THIS BETTER? THANK YOU. OKAY, GREAT. I'LL MAKE SURE TO SPEAK UP. ALRIGHT, UH, THANK YOU LISA FOR THE INTRODUCTION. NEXT SLIDE PLEASE. SO, UM, I'M BEN ANDERSON. I'M A MANAGER OF RESOURCE PLANNING HERE AT ASCEND ANALYTICS. AND, UH, I'M VERY PLEASED TO BE HERE. SO THANK YOU FOR HAVING ME, AND I'LL BE PRESENTING THE ANALYSIS THAT MY TEAM AND I DID WHERE WE EVALUATED OPTIONS FOR AUSTIN ENERGY'S PORTFOLIO THROUGH 2035. NEXT SLIDE, PLEASE. THANKS. SO THE, THE GOAL OF THIS ANALYSIS WAS TO EVALUATE FOUR GENERATION PORTFOLIOS. ELISA JUST MENTIONED TO ILLUSTRATE THE TRADE-OFFS BETWEEN COST SUBMISSIONS AND RELIABILITY DURING THE 2025 TO 2035, AUSTIN ENERGY COMMISSIONED US TO CONDUCT THIS RESOURCE PLANNING STUDY. OUR RESULTS ARE THERE TO SUPPLEMENT THEIR U PLAN ANALYSIS AND TO HELP INFORM WHICH PORTFOLIOS ARE DOWN SELECTED FOR FURTHER STUDY. WE USE THE SAME SET OF COST AND LOAD ASSUMPTIONS THAT THEY DID IN THE U PLAN ANALYSIS, AND WE VETTED THESE COSTS AGAINST, UH, PUBLICLY AVAILABLE DATA, PARTICULARLY FROM NRE. UH, AS LISA MENTIONED BEFORE, THESE PORTFOLIOS ARE NOT PRESCRIPTIVE. THEY'RE REALLY HERE TO HELP US UNDERSTAND TRADE OFFS. IN TERMS OF HOW WE DID THIS, WE USE OUR POWER SIM POWER SYSTEM MODELING SOFTWARE, AND WE HAVE TWO MAIN STEPS. FIRST IS RUNNING A CAPACITY EXPANSION MODEL WITH THE DIFFERENT CONSTRAINTS SETS THAT LISA MENTIONED. THAT GIVES US FOUR PORTFOLIOS. WE THEN RUN THESE PORTFOLIOS THROUGH A PRODUCTION COST MODEL TO HELP EVALUATE THEIR COSTS, EMISSIONS AND RELIABILITY. UM, AND THAT ALLOWS US TO DRAW SOME COMPARISONS BETWEEN THEM. NEXT SLIDE PLEASE. SO THESE WERE THE FOUR PORTFOLIOS. WE CALL THEM A, B, C, AND D. AND I'LL START ON THE RIGHT. IT SHARES SOME COMMONALITIES BETWEEN SOME OF THE PORTFOLIOS. UH, A, B AND D HAVE A CARBON FREE CONSTRAINT BY 23 5, AND THAT'S PORTFOLIO EMISSIONS. THEY ALSO ACHIEVE A 65% RENEWABLE ENERGY TARGET FROM 2027 ONWARDS. AND THAT'S DEFINED AS THE AMOUNT OF ENERGY THAT THE RENEWABLE ASSETS PRODUCE IS AT LEAST 65% OF THE AMOUNT OF ENERGY THAT THE LOAD CONSUMES. ALL OF THE PORTFOLIOS HAVE TO BUILD LOCAL STORAGE OR GAS OR HYDROGEN FUEL POWER PLANTS TO SATISFY A LOCAL FIRM CAPACITY CONSTRAINT TO ENSURE RELIABILITY. AND ALL OF THE PORTFOLIOS ALSO USE THE MAXIMUM ASSUMPTIONS AROUND DEMAND SIDE RESOURCE BUILD OUTS. THOSE WERE TAKEN FROM THE DMV STUDY COMPLETED RECENTLY. SO MOVING INTO THE FOUR PORTFOLIOS AND HOW THEY'RE DEFINED, THE FIRST PORTFOLIO MEETS THOSE EMISSIONS AND RENEWABLE ENERGY TARGETS MENTIONED, AND IT ALSO HAS TO BUILD ENOUGH LOCAL FIRM CAPACITY TO COVER PEAK LOAD. SO IT REPRESENTS A LEAST COST PATH TO MEET THESE BASIC CONSTRAINTS. SO WE SOMETIMES REFER TO IT AS A BASELINE BECAUSE IT WAS A GOOD POINT OF COMPARISON, UM, TO THE OTHER SCENARIOS, NOT NECESSARILY BECAUSE WE THINK IT'S MORE LIKELY TO HAPPEN JUST BECAUSE IT'S A GOOD COMPARISON POINT. PORTFOLIO B HAS THE SAME EMISSIONS, RENEWABLE AND LOCAL FIRM CAPACITY TARGETS AS PORTFOLIO A, BUT IT'S NOT ALLOWED TO BUILD ANY NEW GAS OR HYDROGEN BURNING PLANTS. SO THIS SHOWS US WHAT A PATH TO ZERO EMISSIONS COULD LOOK LIKE THAT'S NOT DEPENDENT ON CLEAN HYDROGEN BEING AVAILABLE. [01:45:02] PORTFOLIO C FOCUS MORE ON COST. IT DOESN'T HAVE AN EMISSIONS OR A RENEWABLE ENERGY TARGET. THE ONLY TARGET, THE ONLY CONSTRAINT IT HAS IS TO BUILD ENOUGH LOCAL FIRM CAPACITY TO COVER BIG LOADS. BESIDES THAT, ANY RESOURCES, IT'S SELECTED IT, IT'S SELECTING FOR ECONOMIC REASONS. AND FINALLY, PORTFOLIO B HAS THE SAME TARGETS AS PORTFOLIO A, EXCEPT THE LOCAL FIRM CAPACITY TARGET, UH, IS INCREASED. WE ADD A 15% RESERVE MARGIN TO THE PEAK LOAD TO ENSURE A HIGHER LEVEL OF RELIABILITY THAN IN THE OTHER PORTFOLIOS. UH, IF THERE'S NO QUESTION, WE CAN GO TO THE NEXT SLIDE. DRILLING INTO THE CONSTRAINTS A LITTLE BIT MORE, A, B AND D SHARE A FEW. FIRST OFF, THEY'RE COAL FREE. THE FPP COAL PLANT IS ASSUMED TO BE RETIRED AT THE END OF THIS YEAR, SO IT'S NOT INCLUDED IN THE MODEL. THEY ALSO HAVE THE ZERO CARBON EMISSIONS CONSTRAINT BY 2035. AND AGAIN, THAT'S PORTFOLIO EMISSIONS. AND ALSO THE 65% RENEWABLE ENERGY REQUIREMENT FROM 2027 ONWARDS. PORTFOLIOS A AND D REQUIRE ALL EXISTING NATURAL GAS PLANTS TO CONVERT TO GREEN HYDROGEN FUEL IN THE 2030S. THAT INCLUDES SANDHILL AND DECKER AND PORTFOLIOS. A, B, AND C HAVE THE BASIC LOCAL RELIABILITY REQUIREMENTS THAT I MENTIONED. THE WAY WE CALCULATE THAT IS THAT THE LOCAL FIRM CAPACITY, WHICH IS THE CAPACITY OF THE RESOURCE, UH, ADJUSTED BY ITS EXPECTED LOAD CARRYING CAPACITY, PLUS THE IMPORT CAPACITY THAT WE THINK WE CAN RELY ON MUST EXCEED THE ANNUAL PEAK LOAD. IN TERMS OF THE IMPORT CAPACITY, WE THINK WE CAN RELY ON FROM TRANSMISSION. UH, WE ASSUME THAT TO BE 2200 MEGAWATTS, UH, TO BE ON THE MORE CONSERVATIVE SIDE. PORTFOLIO D HAS AN ENHANCED LOCAL RELIABILITY REQUIREMENT. SAME CALCULATION. WE JUST ADD A 15% MARGIN TO THE ANNUAL PEAK LOAD SO THAT IT'S HAS TO BUILD MORE LOCAL FIRM RESOURCES. PORTFOLIO B IS NOT ALLOWED TO BUILD ANY NEW NATURAL GAS OR HYDROGEN BURNING PLANTS. AND THE EXISTING PLANTS, SANDHILL AND DECKER, THEY RUN WITH A REACH ADDER, WHICH BASICALLY INCREASE THE COST THAT THEY WOULD BID INTO THE MARKET AT, MEANING THAT THEY'RE GOING TO RUN LESS. THEY ALSO RETIRE AT THE END OF 2034. THAT MEANS IN 2035, ALL OF THE LOCAL RESOURCES HAVE TO BE EITHER RENEWABLES OR BATTERIES. FINALLY, PORTFOLIO C HAS NO FUEL RESTRICTIONS. SO THIS PORTFOLIO CAN CONTINUE TO OPERATE NATURAL GAS PLANTS WITHOUT HYDROGEN CONVERTING HYDROGEN THROUGH THE DURATION OF THE STUDY. THERE'S NO QUESTIONS HERE. WE COULD MOVE TO THE NEXT SLIDE. WE HAVE A, WE HAVE A QUESTION. OH, YES, PLEASE. OH, THAT'S OKAY. KEEP GOING, KEEP GOING THEN. ANY QUESTIONS ONLINE? ALL RIGHT, SO WE'VE TALKED A LITTLE BIT ABOUT THE CONSTRAINTS AND UH, THE BUILD OUT LIMITS. SO WHAT DOES OUR CAPACITY EXPANSION MODEL DO WITH THIS INFORMATION? IT TAKES FORECAST OF LOAD, WHETHER AND MARKET PRICES AS INPUTS TO THE SIMULATION. AND THEN WE GIVE IT THE SET OF TECHNOLOGIES THAT CAN BE BUILT AND THE CONSTRAINTS IT HAS TO MEET. THAT INCLUDES THE EMISSIONS TARGETS, RENEWABLE ENERGY TARGETS AND RELIABILITY TARGETS THAT WE JUST TALKED ABOUT, IDENTIFIES THE COST OPTIMAL RESOURCE BUILD OUT THAT SATISFIES THE, THESE CONSTRAINTS. AND AS LISA MENTIONED EARLIER, UH, THESE ARE NOT HAND DESIGN PORTFOLIOS. THESE ARE PORTFOLIOS THAT THE OPTIMIZATION ALGORITHM DEVELOPED BASED ON THE DIFFERENT CONSTRAINTS SETS THAT WE PROVIDED. SO BECAUSE WE HAVE, UH, OUR BASELINE PORTFOLIO A, WE WERE ABLE TO RUN THREE DIFFERENT PORTFOLIOS TO COMPARE WITH IT THAT FOCUSED A LITTLE BIT MORE ON COST, RELIABILITY AND EMISSIONS. I'VE GOT A QUESTION ON THE SLIDE. UM, WHEN YOU SAY IT TAKES IN MARKET PRICES AS INPUTS, DO YOU MEAN TECHNOLOGY PRICES? BECAUSE WHEN I THINK OF MARKET PRICES, I MEAN LIKE THE HOURLY PRICE OF ELECTRICITY, WHICH WOULD BE SET BY THE DISPATCH OF THE POWER PLANTS? YES, THAT, THAT'S A GREAT QUESTION. UM, WE [01:50:01] HAVE, WE DO BOTH. SO WE HAVE MARKET PRICE FORECAST, UH, FOR, UH, ALL NODES THROUGHOUT ERCOT, INCLUDING THE AUSTIN LOAD ZONE AND, AND NODES WHERE DIFFERENT ASSETS ARE LOCATED. WE ALSO HAVE A TECHNOLOGY PRICE FORECAST THAT WE USE FOR ALL THE DIFFERENT RESOURCES THAT CAN BE BUILT IN OUR TECHNOLOGY. PRICE FORECAST IS ALIGNED WITH WHAT WAS USED IN THE U PLAN ANALYSIS TO MAKE IT MORE CONSISTENT. ALL RIGHT. SO HOW SO, UM, SO I'M FAMILIAR WITH CAPACITY EXPANSION, MODELING, UNIT COMMITMENTS, CAPACITY EXPANSION, MODELING, UM, UH, AND SO USUALLY I THOUGHT THOSE MODELS SET THE PRICES OR THEY GENERATE PRICES BASED ON THE DISPATCH OF THE INDIVIDUAL TECHNOLOGIES GIVEN LOAD WEATHER, ET CETERA, ET CETERA. SO I, I GUESS LIKE IF THIS IS A, IF THIS MODEL IS TAKEN AS AN INPUT MARKET PRICES, WHAT, WHAT SUITE OF TECHNOLOGIES ARE YOU USING TO FORECAST MARKET PRICES THAT THEN INFLUENCE WHICH TECHNOLOGY GETS BUILT? OR MAYBE I'M JUST MISUNDERSTANDING. YEAH, THAT'S A GOOD QUESTION. UM, SO OUR MARKET PRICES ARE BASED BOTH ON HISTORICAL SPOT PRICES, UH, FROM ALL THE NODES WE'RE LOOKING AT, INCLUDING, UH, THE AUSTIN LOAD ZONE NODES. AND, UM, THE FORECAST IS BASED BOTH ON MARKET CURVES FROM ICE, THE INTERCONTINENTAL EXCHANGE, SO CURVES THAT OR FORWARD, UM, TRANSACTIONS THAT ARE ACTUALLY TAKING PLACE FOR THE FIRST FEW YEARS. AND THEN WE BLEND THAT WITH, UH, FUNDAMENTAL FORECAST FOR MARKET PRICES FROM OUR MARKET INTELLIGENCE TEAM. AND THAT INCLUDES A VARIETY OF CONSIDERATIONS, BUT IT INCLUDES THINGS LIKE RO LOAD GROWTH, UM, THE TIME OF THE LOAD OR THE LOAD SHAPE I SHOULD SAY, AND PROJECTIONS FOR THE SUPPLY STACK IN HER COST. SO THE, THE DIFFERENT AMOUNTS OF DIFFERENT TYPES OF RESOURCES THAT ARE GOING TO BE BUILT, THE DISPATCH OF THE ITEMS THAT THE CAPACITY EXPANSION MODEL CHOOSES DOES NOT AFFECT THE MARKET PRICE THOUGH. OKAY. SO, SO IF WE PUT IN JUST VERY CLEAR, SO WE PUT IN LIKE A GIGAWATT OF, OF BATTERIES, LIKE IT DOESN'T, IT DOESN'T AFFECT LIKE THE AUSTIN ENERGY PRICE AS, AS RELATIVE TO THE MARKET? THAT'S CORRECT, YES. OKAY. I HAVE A QUICK QUESTION. SO THE ASSUMPTION HERE IS THAT YOU CAN BUILD GAS. SO HOW CLOSE ARE WE IN AUSTIN TO BEING A NON-ATTAINMENT AREA AND IF WE BECOME A NON-ATTAINMENT AREA, WILL YOU GET PERMITS TO BUILD NEW GAS PLANTS? DO WE HAVE A COMMISSIONER WHO HAPPENS TO KNOW ABOUT THAT? YOU, YOU CAN STILL GET PERMITS. IT'S JUST TOUGHER IF YOU'RE NON EXAMINED AREA. BUT IT'S NOT THAT YOU CAN'T GET, YOU CAN'T APPLY FOR A PERMIT, IT'S JUST DIFFERENT RULES APPLY. OKAY. UM, YOU HAVE TO MORE TIGHTLY CONTROL THE EMISSIONS OR THERE MIGHT BE LIMITS ON THE NUMBER OF HOURS THAT YOU CAN OPERATE, THINGS LIKE THAT. BUT IT'S NOT THAT YOU CAN'T GET A PERMIT. THANKS. SO IF IT, UH, WAS BUILT WHERE, UH, WHERE PAY IT IS FOR EXAMPLE NOT AFFECT, IT WOULD NOT AFFECT THAT, BUT IT WOULD STILL BE IN THE LOAD ZONE? NO, I THINK WE'VE BEEN TOLD IT WOULD NOT BE IN THE LOAD ZONE. WELL, THAT BRINGS UP THE QUESTION OF THE GRANDFATHERED CRS FROM DRE. IS, IS THAT ASSOCIATED WITH THE COAL PLANT OR IS THAT ASSOCIATED WITH THE FAYETTE SITE SO THAT IF YOU BUILT, SO IT'S ASSOCIATED WITH THE COAL PLANT BECAUSE WE OWN THAT COAL PLANT PRIOR TO GOING INTO THE DEREGULATED MARKET. SO THAT WAS SOMETHING PROVIDED TO MUNICIPALITIES TO RECOGNIZE THAT WE HAD INVESTED IN THAT TO SERVE OUR OWN LOAD AND THAT WE WOULD HAVE FINANCIAL IMPACTS OF THE DEREGULATED MARKET. AND SO WE WERE GRANDFATHERED INTO PRE-ASSIGNED CONGESTION REVENUE RIGHTS. IF WE, IT'S NOT A HUNDRED PERCENT CLEAR, TO BE HONEST, IF WE SHUT DOWN THE COAL PLANT AND BUILT A NEW UNIT THAT WOULD NOT BE GRANDFATHERED IN. IT'S NOT A HUNDRED PERCENT CLEAR IF WE JUST CHANGED THE FUEL TYPE OF AN EXISTING UNIT, IF THAT WOULD STILL COUNT AS THE ORIGINAL UNIT OR NOT. WE'D HAVE TO HAVE FURTHER DISCUSSIONS ON THAT. IT WOULD PROBABLY DEPEND ON HOW MATERIALLY YOU CHANGE THAT UNIT. SO YOU, IF YOU JUST CHANGED THE FUEL, PROBABLY STILL ARE GRANDFATHERED IN, BUT IF YOU STARTED TO MAKE MAJOR MODIFICATIONS TO THE BOILER AND THINGS OF THAT NATURE, THEN, THEN YOU MAY NOT. ANY OTHER QUESTIONS? PLEASE CONTINUE. THANK YOU. ALL RIGHT. MOVING INTO PORTFOLIO RESULTS. SO FIRST WE'LL LOOK AT THE, THE BUILD OUTS FOR THE [01:55:01] FOUR PORTFOLIOS PORTFOLIO. A, THIS IS THE ONE BALANCING COST, EMISSIONS AND RELIABILITY. IT BUILD'S ABOUT 1900, OR PROCURES, I SHOULD SAY ABOUT 1900 MEGAWATTS OF WIND PPAS TO SATISFY THE 65% RENEWABLE ENERGY TARGET BUILDING WIND PPAS, UH, BECAUSE OF THEIR, UH, NET COST BEING LOWER THAN SOME OF THE OTHER PPA OPTIONS WE WERE LOOKING AT. IT ALSO BUILDS 630 MEGAWATTS OF NEW LOCAL HYDROGEN CAPABLE PEAKERS FOR RELIABILITY TO MEET THAT LOCAL FIRM CAPACITY REQUIREMENT. SANDHILL DECKER AND THE NEW PEAKERS ARE ALL CONVERTED TO BURN HYDROGEN IN THE 2030S. THAT ALLOWS US TO HIT THE ZERO CARBON EMISSIONS FROM THE PORTFOLIO BY 2035. UM, IN 2035, MOST OF THE ENERGY IS COMING FROM THE WIND PPAS, THE PORTFOLIO IS SLIGHT SLIGHTLY LONG, MEANING IT PRODUCES SLIGHTLY MORE ENERGY THAN THE AUSTIN LOAD CONSUMES. NEXT SLIDE PLEASE. AND AND JUST TO BE CLEAR, YOU DIDN'T PICK WIND BECAUSE YOU PICKED WIND, THE MODEL PICKED WIND 'CAUSE IT CAME OUT WITH THE BEST IT OPTIMIZED WIND VERSUS SOLAR. THAT'S CORRECT. THAT'S CORRECT. THANKS. PORTFOLIO B. SO THIS WAS THE PORTFOLIOS THAT SHOWED US THE PATH TO REACH ZERO EMISSIONS, RELYING ON ONLY NEW RENEWABLE AND BATTERY BUILT OUTS. IT HAS THE SAME WIND, PPA PROCUREMENTS HITTING THE RENEWABLE ENERGY TARGET. UM, IT ALSO HAS TO BUILD A VERY LARGE AMOUNT OF LOCAL STORAGE AND SOLAR ABOUT 2000 MEGAWATTS OF EACH. THE COMMUNITY SOLAR PROVIDES ENERGY DURING THE DAY TO SATISFY PEAK LOAD AND THE STORAGE SHIFTS THE ENERGY, UH, TO WHERE IT'S NEEDED ELSEWHERE DURING THE DAY OR DURING THE NIGHT. IF WE LOOK AT THE INSTALLED CAPACITY GRAPH, UH, YOU CAN SEE THE, THE MAGNITUDE OF THE LOCAL STORAGE, WHICH IS THE, THE PINKISH REDDISH PIECES ON TOP. AND THEN THE COMMUNITY SOLAR, WHICH IS THE LIGHT PEACH COLOR CLOSER TO THE BOTTOM. THE BUILDOUTS HERE ARE SIGNIFICANTLY MORE THAN IN THE PORTFOLIO. A UM, AS I MENTIONED BEFORE, THE SANDHILL AND DECKER PLANTS ARE RETIRED AT THE END OF 2034. THOSE ARE THE PURPLE-ISH PIECES OF THE GRAPH. SO THEY'RE NO LONGER THERE IN 2035. THERE'S NO QUESTIONS ON THIS. WE CAN MOVE TO THE NEXT SLIDE. I'M, I'M SORRY, I HAVE A QUESTION. UM, MM-HMM. DID THIS, THIS MODEL DIDN'T THINK THAT YOU NEEDED IT DIDN'T ASSUME THAT YOU HAD TO HAVE THE SOURCE THAT'S CHARGING YOUR STORAGE NEARBY. IT JUST OPTIM IT THOUGHT THAT WAS THE BEST SOLUTION TO PUT IT NEARBY. OH YEAH, THAT'S A GOOD QUESTION. UM, SO AS FAR AS THE SOLAR AND STORAGE WAS CONCERNED WHEN WE FIRST RAN THE, IT HAD A SMALLER AMOUNT OF BULK, AND THEN WE RAN A LITTLE RELIABILITY ANALYSIS AND REALIZED IT WAS NOT SATISFYING THE LOCAL CAPACITY, BUT THERE WAS A VERY SIGNIFICANT AMOUNT OF LOSS LOADS, WHAT I SHOULD SAY. SO THEN WE DID SOME, UH, ANALYSIS OUTSIDE OF THE MODEL TO UNDERSTAND HOW MUCH LOCAL SOLAR AND STORAGE WE WOULD HAVE TO ADD TO COVER THE LOADS. UH, SO DID THAT ANALYSIS AND CAME UP WITH THIS 27, 50 MEGAWATTS OF, UH, LOCAL STORAGE OF DIFFERENT DURATIONS, TWO HOUR, FOUR HOUR, 12 HOUR IN 2,800 MEGAWATTS OF COMMUNITY SOLAR TO CHARGE THE STORAGE. UM, AND THEN RAN THAT AGAIN THROUGH OUR, UH, STOCHASTIC MODEL TO LOOK AT RELIABILITY. AND WE, WE HIT THE RELIABILITY TARGET WHEN WE DID THAT. SO THESE TWO PIECES, WE HAD TO DO SOME HAND CALCULATIONS, UH, TO GET THE MODEL THERE. OKAY. SO IT'S, IT'S, I WOULD JUST SAY IT'S NOT, THAT'S NOT LIKELY JUST BECAUSE OF THE ISSUES WITH SPACE THAT YOU COULD BUILD THAT MUCH. UH, YES, LOCALLY. THAT'S VERY TRUE. I, I HAVE A NOTE ON THE SPACE REQUIRED LATER. IT'S, UH, IMMENSE TO SAY THE LEAST. RIGHT? THIS [02:00:01] SHOWS US SORT OF WHAT IT WOULD TAKE IF WE, IF WE WANTED, IF YOU NEEDED TO MEET ALL YOUR RELIABILITY JUST FROM YEAH. LOCAL STORAGE, YOU WOULD NEED A LOT OF I SEE WHAT YOU'RE SAYING. OKAY. YEAH. OR THE OTHER SOLUTION WOULD BE YOU IMPROVE THE TRANSMISSION SYSTEM SO YOU CAN BRING IN MORE POWER TO CHARGE THOSE BATTERIES, BUT YEAH, CORRECT. YES. AND THAT'S NOT A OPTION THAT WE CONSIDERED IN THIS ANALYSIS, THE ABILITY TO EXPAND TRANSMISSION. ALL RIGHT. THANK YOU FOR THAT QUESTION. NEXT SLIDE PLEASE. OKAY, SO NOW WE HAVE PORTFOLIO C. THIS IS THE PORTFOLIO THAT'S, UH, MORE FOCUSED ON LOWERING COSTS, BUT DOES NOT HAVE TO KNIT TO MEET A EMISSIONS OR A CLEAN ENERGY OR A RENEWABLE ENERGY TARGET, I SHOULD SAY. SO IT, IT ONLY PROCURES EPAS THAT IT CONSIDERS TO BE ECONOMICS. SO 400 MEGAWATTS INSTEAD OF 1900 MEGAWATTS. AND THEN IT BUILDS LOCAL PEAKERS FOR RELIABILITY AND IT ALSO BUILDS A 400 MEGAWATT CC, MOSTLY FOR RELIABILITY AS WELL. SO IT BUILDS ABOUT THE SAME AMOUNT OF LOCAL THERMAL GENERATION AS PORTFOLIO A DOES PORT RELIABILITY. AND AS I MENTIONED BEFORE, IN THIS SCENARIO OR IN THIS PORTFOLIO, SANDHILL AND DECKER CONTINUE TO RUN ON GAS THROUGHOUT THE DURATION OF THE STUDY. THEY DON'T RETIRE. THE OTHER DIFFERENCE HERE IS THAT THE COAL PLANT FDP RUNS THROUGH THE END OF 2031. SO IF WE LOOK IN THE INSTALL CAPACITY GRAPH, THAT'S THAT DARK BLUE PRESENT THROUGH THE END OF 2031 IN MY 2035, MOST OF OUR INSTALLED CAPACITY IS COMING FROM LOCAL GAS BURNING PLANTS. ANY QUESTIONS ON THIS BEFORE WE MOVE ON? ALRIGHT, EXCELLENT. AND THEN THIS IS PORTFOLIO D. THIS IS THE ONE THAT HAD THE SAME CONSTRAINTS SET AS PORTFOLIO A, BUT JUST WITH AN ENHANCED RELIABILITY REQUIREMENT. AND AS YOU MIGHT EXPECT, THE BUILD OUT IS IDENTICAL, EXCEPT IT BUILDS 1,155 MEGAWATTS OF NEW LOCAL HYDROGEN CAPABLE PEAKERS. THAT'S 525 MEGAWATTS MORE THAN PORTFOLIO HAY BILLS. SO THAT'S THE ONLY DIFFERENCE HERE. AND WE CAN MOVE TO THE NEXT SLIDE. SO HERE WE'RE COMPARING PORTFOLIO BUILDOUTS IN 23 5, UH, I SHOULD SAY INSTALL CAPACITY, SO EXISTING AND NEW. SO ONE OBSERVATION HERE, PORTFOLIOS A, B, AND D HAVE WIND AND SOLAR PROVIDING MOST OF THE ENERGY BY 2035 WINDS. BUT BLUE AND SOLAR IS THE, THE ORANGE SHADES. WE MENTIONED THAT WEST AND SOUTH WIND ARE THE PRIMARY ONES SELECTED FOR COST REASONS, A, C, AND D, THEY BUILD LOCAL, LOCAL PEAKERS OR CCS TO PROVIDE RELIABILITY. PORTFOLIO B ON THE OTHER HAND IS USING LOCAL SOLAR AND STORAGE FOR RELIABILITY. SO THAT LEADS TO A MUCH HIGHER BUILD OUT. IF WE THINK ABOUT THE AMOUNT OF LOCAL GENERATION IN 2035 PORTFOLIO, A FOR INSTANCE HAS 1,330 MEGAWATTS. PORTFOLIO B HAS ABOUT 5,600 MEGAWATTS. SO VERY LARGE INCREASE IN THE LOCAL GENERATION REQUIRED. AND THE LAST THING THAT'S RELEVANT IS THAT A, B AND D HAVE SIGNIFICANTLY MORE BUILD OUTS THAN PORTFOLIO C BECAUSE THEY ALL HAVE TO BUILD MORE RENEWABLE ENERGY TO HIT THE RENEWABLE ENERGY TARGET, WHEREAS SEED DOES NOT HAVE THAT RENEWABLE ENERGY TARGET. ANY QUESTIONS ON THIS COMPARISON? ALRIGHT, LET'S MOVE INTO LOOKING AT THE PERFORMANCE OF THE PORTFOLIOS IN TERMS OF COSTS, EMISSIONS AND RELIABILITY. WE'LL START WITH COSTS. ON THE RIGHT HAND SIDE, WE HAVE, UH, NTV OF OUR NET PORTFOLIO COSTS. THIS IS FROM THE PERIOD 2025 TO 2045, JUST LIKE, UH, THE MTV WAS LOOKED AT FOR THE E PLAN ANALYSIS, AND IT'S IN BILLIONS OF DOLLARS. THE MODEL WE RAN IS STOCHASTIC, MEANING WE RAN SEVERAL SIMULATIONS FOR EACH OF THE FOUR PORTFOLIOS, A HUNDRED SIMULATIONS EACH. SO THAT GAVE US A COST DISTRIBUTION. SO THE, WHAT WE'RE SEEING HERE IN THE BOTTOM OF THE RECTANGLE IS WHERE THE FIFTH PERCENTILE COST IS. THE.IN THE MIDDLE IS THE MEAN, AND THEN THE TOP OF THE BLUE, THAT'S THE 95TH PERCENTILE. IN PORTFOLIO A ACROSS TIME, WE HAD A STEADY INCREASE IN NET COSTS FROM BUILDING NEW [02:05:01] PEAKERS, CONVERTING PEAKERS IN, UH, SANDHILL TO HYDROGEN AND PROCURING WIND PPAS LOOKING AT A C AND D, THE COSTS ARE ROUGHLY IN THE SAME BALLPARK. PORTFOLIO B ON THE OTHER HAND, IS MUCH MORE EXPENSIVE. MOST OF PORTFOLIO B'S COSTS COME FROM BATTERY TOLLS FROM THOSE THAT LOCAL BATTERY STORAGE THAT WAS BUILT AND ALSO FROM BUILDING A LOT OF COMMUNITY SOLAR TO CHARGE THE BATTERIES. PORTFOLIO C IS THE LEAST EXPENSIVE BECAUSE ITS PLANTS CONTINUE TO BURN GAS. ITS LOCAL PLANTS CONTINUE TO BURN GAS AND IT ONLY PROCURES PPAS THAT ARE ECONOMICAL. HOWEVER, BEAR IN MIND, THIS IS THE ONLY PORTFOLIO THAT CONTINUES TO HAVE CARBON AND SO TWO EMISSIONS IN 2035. SO IT DOES COME AT A COST. AND THEN FINALLY, THE LAST THING WE NOTICE IS A AND D HAVE VERY SIMILAR COSTS. THAT'S MOSTLY BECAUSE THE, THE DIFFERENCE BETWEEN THEM IS THAT ABOUT 500 MEGAWATTS MORE PEAKER BUILD OUT AND THE COSTS AND REVENUE ARE ROUGHLY A LITTLE BIT MORE COST THAN REVENUE, BUT NOT THAT MUCH, WHICH MEANS THAT THE OVERALL COSTS ARE FAIRLY SIMPLE. THINKING ABOUT HOW THIS TRANSLATES TO RATES, AND I'LL JUST DO A QUICK DISCLAIMER. UM, THIS IS, THESE ARE JUST REPRESENTATIVE MODELING RESULTS. UH, THESE AREN'T PROJECTIONS OF AUSTIN ENERGY'S FUTURE PRICES, FUTURE RATES. UH, THE POINT OF US LOOKING AT RATES HERE IS, IS MORE TO COMPARE THE PORTFOLIOS TO EACH OTHER. SO THE RATES INCREASE MARGINALLY FROM ABOUT NINE AND A HALF CENTS PER KILOWATT HOUR IN 2025 TO THE 12 TO 13 CENTS PER KILOWATT HOUR RANGE IN 2035 FOR PORTFOLIOS AC AND D. SO TRUE FOR THOSE THREE PORTFOLIOS. HOWEVER, PORTFOLIO B HAS MUCH HIGHER RATES. WE'RE LOOKING AT CLOSER TO 20 CENTS PER KILOWATT HOUR IN 2035. ANY QUESTIONS ON THIS? CAN I HAVE A QUICK QUESTION? BECAUSE IT HAS, THE GREEN HAS FIFTH PERCENTILE AND THE BLUE IS 95TH PERCENTILE. CAN YOU EXPLAIN WHAT THAT MEANS? I'M NOT QUITE SURE I UNDERSTAND. SURE. SO THE WAY TO, THE WAY TO THINK ABOUT IT, THIS IS ALSO THE FIFTH IN THIS COULD ALSO BE REPRESENTED OR EXPRESSED AS A CONFIDENCE INTERVAL. SO IF YOU THINK ABOUT A HUNDRED SIMULATIONS, UH, SO IF YOU THINK ABOUT THE PERCENT OF THE TIME THAT THE COSTS FALL IN A CERTAIN RANGE IN THOSE SIMULATIONS, 90% OF THE TIME YOU'RE BETWEEN YOUR FIFTH AND YOUR 95TH PERCENTILE. THAT ACCOUNTS FOR 90% OF YOUR RANGE. NOW, THERE'S 5% OF THE TIME YOU'RE BELOW YOUR FIFTH PERCENTILE, AND THERE'S 5% OF THE TIME YOU'RE ABOVE YOUR 95TH. UH, BUT 90% OF THE TIME YOU'RE IN THAT, UH, FIFTH TO 95TH RANGE. GOOD QUESTION. I NEVER DID REALLY LIKE STATISTICS, IF I'M BEING HONEST. UM, I GOT IT. ANY MORE QUESTIONS, SIR? YEAH, WE GOT A, A QUESTION ON, UM, I, I'M JUST THINKING ABOUT THE, LIKE THE MPV OF, UH, SCENARIO B. UM, THE ONE WITH, IT'S GOT A LOT, IT'S GOT A LOT OF STORAGE IN IT. UM, BUT, AND IT'S ABOUT TWICE AS LOOKS LIKE TWICE AS EXPENSIVE AS, AS THE OTHER OPTIONS. UM, BUT IF, IF, IF THE MODEL'S NOT LIKE, SO YOU KNOW, YOU HAVE A BUNCH OF BATTERIES, YOU KNOW, YOU, YOU CHARGE THE BATTERIES, LIKE LOCAL PRICES SHOULD GO UP, DISCHARGE, ALL, ALL CENTERS, PERVIS ALL ELSE EQUAL, YOU DISCHARGE PRICES SHOULD, SHOULD GO DOWN, SHOULD BE A MODERATING EFFECT ON PRICES. SO I'M, I'M JUST CURIOUS, LIKE, CAN YOU, CAN YOU SPEAK TO WHAT IF, IF THE MODEL WERE ABLE TO SET PRICES BASED ON TECHNOLOGY DEPLOYED, LIKE WOULD YOU EXPECT THAT NUMBER TO COME DOWN? UM, I GUESS I'M JUST HAVING TROUBLE RECONCILING THOSE AND IF, IF IT'S JUST, UH, IF IT'S JUST I'M NOT GETTING IT, UM, THAT THAT'S FINE. UM, BUT JUST HELP ME THINK THROUGH THAT IF YOU WOULDN'T MIND. YEAH, THAT, THAT'S A GOOD QUESTION. I THINK THAT THE, THE BATTERY WOULD HELP TO MODERATE THE PRICE SPIKES IN THE AUSTIN LOAD ZONE AND THE PRICE SEPARATION THAT WE SEE BETWEEN THE AUSTIN LOAD ZONE AND, UM, THE REST OF HER CAR. UM, I DON'T THINK THAT THAT BEHAVIOR THOUGH, IS SPECIFIC TO BATTERIES. I THINK THAT HAVING, UH, LOCAL PEAKERS COULD, UH, ALSO HELP TO REDUCE THAT PRICE SEPARATION BECAUSE THEY CAN, UH, DISPATCH ON DEMAND. BUT, BUT I DO THINK THAT THAT WOULD BE A FACTOR FOR THE, THE WIND SOLAR BATTERY CASE, OR SORRY, THE, UM, PORTFOLIO B THAT'S FOCUSED ON, UH, RENEWABLES AND BATTERIES. AND THEN I THINK THE OTHER THING WOULD BE, COULD YOU SPEAK CLOSER TO THE MICROPHONE, PLEASE? OH, SORRY. I THINK THE OTHER [02:10:01] THING WOULD BE PRICE DEPRESSION DURING THE DAY FROM HAVING THAT MUCH SOLAR PRESENT. UM, SO I THINK THE, THE PRICE WOULD GO DOWN DURING THE DAY. YOUR BATTERIES WOULD BE, UH, AT LEAST IN THE SUMMER, UH, YOUR BATTERIES WOULD BE CHARGING BASICALLY OFF OF THE SOLAR DURING THE DAY, SO AT A LOW PRICE AND THEN DISPATCHING AT OTHER TIMES OF DAY WHEN THE PRICE WAS HIGHER. AND THAT WOULD HAVE AN EFFECT OF BRINGING THE PRICE DOWN, UM, DURING THOSE TIMES. SO I, I DO THINK IT WOULD HAVE A MODERATING EFFECT ON THE PRICES. OKAY. AND JUST SO JUST TO BE CLEAR, LIKE FOR SCENARIOS A, B, C, AND D, IT WAS THE SAME FORDS IN PRICING, LIKE ACROSS ALL OF THEM THAT THE MODEL CONSIDERED? THAT'S CORRECT. OKAY. YES, THAT'S RIGHT. GOOD QUESTION. THANK YOU. ALL RIGHT, ANY OTHER QUESTIONS? OKAY, NEXT SLIDE PLEASE. OH, UH, WE CAN SKIP TO THE NEXT ONE. THIS WAS JUST SOME NUMBERS IN CASE WE NEEDED THEM. ALRIGHT, SO THIS SLIDE WE'RE LOOKING AT EMISSIONS FOR THE FOUR PORTFOLIOS. THE GRAPH ON THE RIGHT SHOWS US ANNUAL CARBON EMISSIONS. THE LEGEND, OR SORRY, THE Y AXIS OR THE ANNUAL IS ON THE LEFT, IT ALSO SHOWS US CUMULATIVE CARBON EMISSIONS. THOSE ARE THE DOTS. AND THE Y AXIS FOR THAT IS ON THE RIGHT. SO WE'RE SEEING SIGNIFICANTLY REDUCED EMISSIONS BY THE YEAR 2030 FOR THE PORTFOLIOS A, B, AND D. THOSE ARE THE LOWER THREE ONES. THAT'S BECAUSE GAS PLANTS ARE EITHER CONVERTING TO HYDROGEN OR JUST OPERATING AT MUCH LOWER CAPACITY FACTORS. SO YOUR, YOUR EMISSIONS ARE DOWN QUITE A BIT ALREADY BY 2030. AND LOOKING AT THE YEAR 2035, THE EMISSIONS HAVE ALL GONE TO ZERO FOR EVERY PORTFOLIO EXCEPT FOR C BECAUSE C IS THE ONE THAT CONTINUES TO BURN GAS. IF WE THINK ABOUT CUMULATIVE EMISSIONS PORTFOLIO A, WHICH IS KIND OF SERVING AS OUR REFERENCE POINT IS THE DARK BLUE. SO THAT'S 7.23 MILLION TONS CUMULATIVE. PORTFOLIO B HAS SIGNIFICANTLY LESS EMISSIONS BECAUSE IT APPLIES THE REACH ADDER TO THE GAS PLANTS. SO THEY'RE RUNNING A LOT LESS. PORTFOLIO D HAS ROUGHLY SIMILAR EMISSIONS ABOUT A 9% INCREASE BECAUSE IT'S, THE PORTFOLIO IS THE SAME, IT'S JUST RUNNING MORE, IT JUST BUILDS MORE PEAKERS AND THE PEAKERS DON'T RUN THAT MUCH. UM, SO EVEN THOUGH THEY'RE GAS, UH, IN THE 2020S OR THEY'RE GAS BURNING IN THE 2020S, THEY'RE NOT PRODUCING THAT MUCH MORE CUMULATIVE EMISSIONS. AND FINALLY, PORTFOLIO C HAS ABOUT DOUBLE THE CUMULATIVE EMISSIONS AS PORTFOLIO A, BECAUSE IT'S RUNNING GAS THROUGHOUT THE STUDY PERIOD, BOTH PEAKERS AND ALSO COMBINED CYCLE. YES, I SEE. HAND RAISED. YEAH. LET ME ASK, UH, DOES THIS, I ASSUME THAT THE GAS PLANTS ARE USING, UH, HYBRID HYDROGEN OF AS THEIR FUEL IN THE LATER YEARS? UM, FOR PORTFOLIO C? YEAH, NO, IT'S ASSUMING IT JUST BURNS STRAIGHT GAS THROUGHOUT THE STUDY PERIOD. OKAY. IF IT WERE TO BURN A FUEL BLEND OF GAS AND HYDROGEN, THEN THE EMISSIONS WOULD BE LOWER. GOOD QUESTION. THANKS. SO ONE MAIN TAKEAWAY FROM THIS IS THAT WE CAN SEE ZERO CARBON EMISSIONS ACHIEVED EITHER BY CONVERTING OUR GAS BURNING PLANTS TO HYDROGEN OR, SO THAT'S WHAT, UM, PORTFOLIOS B, OR SORRY, THAT'S WHAT PORTFOLIOS A AND D DO THE TWO KIND OF MIDDLE LINES IN THERE. OR YOU CAN RETIRE YOUR GAS PLANTS, UH, RUN THEM LESS, RETIRE THEM, REPLACE THEM WITH LOCAL SOLAR AND STORAGE. THAT'S WHAT PORTFOLIO B IS DOING. LINE AT THE BOTTOM. ANY MORE QUESTIONS ON THIS SLIDE? OKAY, WE CAN MOVE TO THE NEXT. THE LAST MAIN THING WE WANNA LOOK AT IS RELIABILITY. AND THE GRAPH ON THE RIGHT SHOWS US, UM, ANNUAL HOURS AT RISK OF LOAD LOSS. AND THE, WE HAVE A 2.4 HOUR THRESHOLD AS THE, THE DOTTED BLACK LINE. UH, OFTEN IN RELIABILITY PLANNING, YOU'RE TRYING TO GET BELOW, UH, 2.4 HOURS A YEAR OF LOAD LOSS. SO THAT'S WHY WE HAVE THAT THRESHOLD THERE. WE'RE SEEING FOR ALL PORTFOLIOS THAT RELIABILITY IMPROVES VERY SIGNIFICANTLY [02:15:01] OVER TIME. THEY'RE ALL MUCH MORE RELIABLE IN 2035 THAN IN 2025. THAT'S BECAUSE WE'RE BUILDING MANY MORE LOCAL RESOURCES TO SERVE THOSE HIGH LOAD PERIODS. WE HAVE THAT LOCAL FIRM CAPACITY CONSTRAINT AND IT WORKS. THEY'RE ALL BELOW THAT 2.4 HOUR THRESHOLDS. UH, IN FACT, BY 2030, THEY'RE ALL, UH, ON AVERAGE AT LEAST BELOW ABOUT A ONE HOUR THRESHOLD. AND IF WE LOOK AT PORTFOLIO D SPECIFICALLY, THAT ONE IS THE MOST RELIABLE BECAUSE IT HAS MORE LOCAL FIRM PEAKER CAPACITY THAN THE OTHER PORTFOLIOS THAT'LL HELP IT HANDLE EXTREME LOAD EVENTS WELL. UM, IT'LL HELP IT HANDLE EXTREME WEATHER EVENTS THAT WOULD AFFECT LOAD GENERATION, TRANSMISSION, TRANSMISSION LINES DOWN. OTHER CONTINGENCIES LIKE POWER PLANTS SHUTTING DOWN FOR A VARIETY OF REASONS, HAVING MORE LOCAL FIRM CAPACITY PROVIDES A, A HEDGE AGAINST THOSE EVENTS. AND PORTFOLIO B HAS THE HIGHEST HOURS AT RISK OF LOAD LOSS. AND THE REASON FOR THAT IS, UM, IT DOES NOT HAVE ANY LOCAL PEAKERS. SO IT'S, IT'S RELYING ON LOCAL SOLAR AND LOCAL STORAGE TO PROVIDE, UH, ENERGY AND CAPACITY. THEY DO A GOOD JOB. IT'S, IT'S STILL RELIABLE. IT'S STILL BEFORE, UH, A REASONABLE THRESHOLD. UM, JUST NOT QUITE AS LOW AS THE SCENARIOS THAT UTILIZE PEAKERS FOR RELIABILITY. CAN I ASK A QUESTION? UM, I'M CONFUSED BY THAT LAST STATEMENT. COMPARED TO THE GRAPH, IT SURE LOOKS LIKE B IS THE MOST RELIABLE ON THE GRAPH. OH, YEAH, THAT'S, UM, YOU'RE PROBABLY LOOKING AT THE FIRST COUPLE YEARS. SO THAT'S BECAUSE PORTFOLIO B, IT STARTS TO BUILD STORAGE, UH, SOONER. WE ASSUME THAT YOU COULDN'T BUILD, UM, LOCAL PEAKERS UNTIL AT LEAST 2027. UM, SO THE OTHER PORTFOLIOS SUFFER FROM LOWER RELIABILITY AND LOWER MEANING OF ROUGHLY WELL TO CURRENT LEVELS OF RELIABILITY UNTIL THEY CAN START BUILDING PEAKERS OUT. PORTFOLIO B ON THE OTHER HAND, ONE ONE ADVANTAGE OF SOLAR IS, UM, WE BELIEVE WE CAN BUILD IT SOONER. SO FOR THE FIRST COUPLE YEARS, UH, IT'LL DROP OUR RISK OF LOAD LOSS AND THEN THE OTHER PORTFOLIOS CATCH UP IN THE LATE 2020S TO IT TO GOOD OBSERVATION. ANY OTHER QUESTIONS? ALL RIGHT, NEXT SLIDE PLEASE. OKAY, SO LET'S MOVE TO SOME KEY TAKEAWAYS FROM THIS MODEL A. THERE'S THREE KEY TAKEAWAYS I WANNA HIGHLIGHT HERE. AND TO DO THAT, LET'S LOOK AT THIS GRAPH ON THE RIGHT. IT HAS CUMULATIVE NET COSTS IN BILLIONS OF DOLLARS FOR THESE FOUR PORTFOLIOS ACROSS THE STUDY PERIOD. IT ALSO HAS CUMULATIVE CARBON EMISSIONS IN MILLIONS OF TONS FOR THE FOUR PORTFOLIOS. AND FINALLY, HOURS AT RISK OF LOAD LOSS IN 2035 FOR THE FOUR PORTFOLIOS. SO THE FIRST OBSERVATION WE SEE IS THAT USING RENEWABLES AND STORAGE INSTEAD OF PEAKERS FOR RELIABILITY IS QUITE EXPENSIVE. SO LOOKING AT THE COST OF PORTFOLIO B, FOR INSTANCE, ABOUT $13 BILLION INSTEAD OF COMPARED TO PORTFOLIO A, WHICH IS ABOUT $7 BILLION. UM, IT'S UP QUITE A BIT. AND THAT'S MOSTLY BECAUSE IT HAS TO BUILD SO MUCH LOCAL SOLAR AND STORAGE TO PROVIDE A SIMILAR LEVEL OF RELIABILITY. UM, WE PROJECT ROUGHLY WOULD TAKE ABOUT 20,000 ACRES OF LAND TO CITE THAT MUCH SOLAR AND STORAGE. THAT'S ABOUT 10% OF AUSTIN ENERGY SERVICE AREA. SO IT WOULD OBVIOUSLY BE A, A MAGNIFIED TASK. UH, ON THE OTHER HAND, IT, INSTEAD OF HAVING THERMALS, YOU JUST USE RENEWABLES AND STORAGE, YOU DON'T HAVE ANY NOX EMISSIONS IN 2035 AND YOU DON'T HAVE TO WORRY ABOUT THE RISK OF GREEN HYDROGEN NOT BEING AVAILABLE. SO DEFINITELY TRADE OFFS THERE. THE SECOND MAIN OBSERVATION WE SEE IS THAT THERE'S AN INCREASING MARGINAL COST TO REMOVE THE NEXT CHUNK OF EMISSIONS. THINKING ABOUT CUMULATIVE CARBON EMISSIONS DURING THE STUDY PERIOD. SO IF WE LOOK AT OUR CARBON EMISSIONS PORTFOLIO, C HAS ABOUT 15 MILLION TONS THROUGHOUT THE STUDY PERIOD. AND THEN IF WE WANT TO DROP DOWN TO PORTFOLIOS, A LEVELS ABOUT 7 MILLION TONS. SO SAVE 8 MILLION TONS, IT COSTS US ABOUT A BILLION DOLLARS [02:20:01] OR CUMULATIVE NET COST GOES FROM ABOUT SIX TO 7 BILLION. SO WE'RE SAVING 8 MILLION TONS FOR $1 BILLION ROUGHLY. BUT THEN IF WE WANT TO DROP OUR EMISSIONS FROM PORTFOLIO A'S LEVEL TO PORTFOLIO B'S LEVEL, THAT'S GOING FROM 7 BILLION, OR SORRY, 7 MILLION TONS TO 2 MILLION TONS. SO SAVING ABOUT 5 MILLION TONS. OUR COSTS GO UP FROM 7 MILLION TO 13 MILLION. SO THAT'S ABOUT A A BILLION, I'M SORRY, THAT'S ABOUT A $6 BILLION INCREASE. SO THAT FIRST 8 MILLION TONS COST US 1 BILLION. THE NEXT 5 MILLION TONS COST US 6 MILLION ILLUSTRATING THE INCREASING MARGINAL COST TO REMOVE EMISSIONS AS YOU GET CLOSER TO ZERO. AND THIS, THIS FINDING IS BACKED UP BY LITERATURE ON THIS TOPIC, UH, QUITE GENERALLY WE FOUND AS WELL. SO THAT'S SOMETHING TO BEAR IN MIND. UM, I WILL POINT OUT, UH, THREE OF THESE FOUR SCENARIOS DO ALL HIT ZERO BY 2035. WE'RE JUST LOOKING AT THE CUMULATIVE EMISSIONS BETWEEN NOW AND 2035 WHEN WE'RE TALKING ABOUT THIS. AND THEN THE LAST MAIN POINT IS ALL OF THE PORTFOLIOS ARE QUITE RELIABLE BY 2035. SO YOU CAN ACHIEVE RELIABILITY WITH, UH, RENEWABLES AND STORAGE IF YOU CAN BUILD ENOUGH OF THEM. UM, PORTFOLIO D IS PARTICULARLY RELIABLE BECAUSE IT HAS, UH, MORE PEAKERS. SO COMPARED TO PORTFOLIO A ABOUT 500 MEGAWATTS MORE LOCAL PEAKERS, THAT IMPROVES THE RELIABILITY BY ABOUT 10%. IT ALSO DOES INCREASE EMISSIONS BY ABOUT, BY ABOUT 10%, UH, CUMULATIVE EMISSIONS. AND IT HAS A PRETTY NEGLIGIBLE COST IN IMPACT. SO THAT'S THE TRADE OFF. ANY QUESTIONS ON THESE TAKEAWAYS BEFORE WE MOVE TO OUR LAST SLIDE? ALL RIGHT. I WAS GONNA MAKE A JOKE, BUT I SAID A NOT TO YOU. YOU WERE IN THE MOOD. I GUESS WHAT GOES THROUGH MY MIND IS, AND MAYBE IT'S BURIED IN THE DATA OR I JUST DIDN'T SEE IT, HOW LONG CAN YOU DEFER THE, THE DECISION POINT FOR HAVING TO BUILD NEW GAS PLANTS AND LET OTHER TECHNOLOGIES MAYBE CATCH UP? I MEAN, WE HAVE 50,000 EVS IN THIS AREA, TIMES 75 KILOWATT HOURS. THERE'S A STUPENDOUS AMOUNT OF OF VEHICLE STORAGE THAT COULD BE, IT'S NOT RIGHT NOW, BUT IT OVER TIME COULD BE APPLIED TO THIS. IT LOOKS LIKE ONE OF THE REASONS WHY B IS SO EXPENSIVE, TOLLING COST, AND THAT'S DRIVEN BY THE BATTERY COST IF YOU EFFECTIVELY REDUCE THE BATTERY COST BECAUSE YOU CAN, YOU CAN DO THAT THROUGH TOLLING WITH V TWO G, MAYBE THAT WOULD BE A LESS EXPENSIVE SOLUTION. BUT HOW LONG DO YOU HAVE AS FAR AS A WINDOW TO LET THOSE OTHER TECHNOLOGIES PERHAPS MATURE AND, AND GET MORE VIABLE AND DEPLOYABLE? YEAH, THAT, THAT'S A REALLY GOOD QUESTION. I THINK THE CHALLENGE THAT WE'RE SEEING IS, UH, WE'RE SEEING A HIGH RISK OF LOAD LOSS IMMEDIATELY. UM, SO I THINK WHAT THAT SAYS IS IF WE DEFER BUILDING OUT FIRM RESOURCES HOPING THAT COST WILL COME DOWN, WE'LL JUST HAVE A HIGHER AND HIGHER RISK OF LOAD LOSS OVER TIME. SO THAT'S, I THINK THAT THAT'S ONE OF THE MAIN THINGS, UH, TO, TO WEIGH AGAINST THE RISK OF LOAD LOSS VERSUS WAITING FOR, UH, STORAGE, UM, COSTS TO COME DOWN. I THINK THE OTHER CHALLENGE IS, UM, WE'RE SEEING THAT THE STORAGE HAS TO BE CHARGED, SO IT REQUIRES A SIGNIFICANT ENERGY SOURCE. UH, SO WE USE COMMUNITY SOLAR AS THAT ENERGY SOURCE. SO THOSE WOULD BE THE, THE TWO CHALLENGES TO DEFERRING. IS YOUR MODEL CAPABLE OF ADDRESSING TRANSMISSION EXPANSION OR IS THAT JUST NOT PART OF WHAT Y'ALL DO? WE, WE, WE COULD RUN THE, THE MODEL WITH DIFFERENT LEVELS OF TRANSMISSION. UM, BUT THAT, THAT WAS JUST A DESIGN CHOICE FOR THIS MODELING EFFORT WAS TO, TO USE A CERTAIN AMOUNT OF TRANSMISSION AND TRY TO SEE WHAT WE COULD DO OUTSIDE OF ADDING MORE TRANSMISSION. SO THE, THE UPGRADES THAT AUSTIN ENERGY IS ALREADY PLANNING ARE NOT INCLUDED IN THIS, JUST TO BE CLEAR, RIGHT? UM, I THINK THAT'S CORRECT. AND MIKE, MAYBE YOU COULD SPEAK A LITTLE BIT MORE ON THAT, ON WHAT THE 2200 MEGAWATT NUMBER DOES OR DOES NOT INCLUDE, BUT I WOULD ASSUME THAT DOES NOT INCLUDE ANY PLANT UPGRADES 'CAUSE IT'S WHAT WE'RE AT TODAY. YEAH, SO I THINK A KEY DIFFERENCE FROM, FROM THIS MODEL VERSUS THE U PLAN MODEL IS ONCE THE N ONE MODEL ALL THE TRANSMISSION ELEMENTS AND THE OTHER ONE LOOKS AT THAT FORWARD FUTURE PRICE, UH, YOU KNOW, OF POWER THAT WE CAN LOOK AT, HAS ALL THAT INFORMATION ALREADY [02:25:01] EMBEDDED IN IT. AND THEN THOSE HISTORICAL CORRELATIONS ARE, ARE UTILIZED TO THEN LOOK AT THE DIFFERENTIALS, UH, BETWEEN DIFFERENT NODES AND THAT THAT PLACE. SO WHEN WE TALK ABOUT, HEY, WE ADD MORE GENERATION IN THE AUSTIN AREA, BUT IT DOESN'T COLLAPSE THE, THE, THE PRICE FOR LOAD, IT ALSO DOESN'T RELEASE THE PRICE FOR GENERATION. AND SO YOU'RE KIND OF OFFSETTING ON BOTH SIDES, RIGHT? YOU HAVE HIGHER PRICES FOR GENERATION AND HIGHER PRICES TO LOAD AND YOU TIE BACK YOUR PRODUCTION COSTS WHEN IT LOOKS AT THE COST THAT OUR CUSTOMERS ARE PAYING. WHERE IN THE OTHER MODEL YOU CAN DO THINGS TO REDUCE THE LOAD COST, UH, WHEN YOU ADD THESE THINGS 'CAUSE IT'S FUNDAMENTAL, BUT THAT IN SENSE IS ALSO GONNA REDUCE THE REVENUE THAT YOU GET. AND SO IT MIGHT ALSO TIE YOU BACK TO THAT PRODUCTION COST OF THE ASSET. YOU'RE JUST LOOKING AT DIFFERENT REVENUE STREAMS, IF THAT MAKES SENSE TO YOU. SO THE 2200 NUMBER IS THE SAME FOR BOTH MODELS AND THE WAY WE'RE LOOKING AT IT BASED UPON THE INFORMATION WE HAVE. UM, BUT THEY'RE GONNA OPERATE DIFFERENTLY. AND SO WHERE ONE WILL IMPACT PRICE THAT HITS BOTH SIDES, THE OTHER WILL NOT, BUT BOTH SIDES WILL GET THAT REVENUE AS WELL. SO YOU TIE BACK TO A, A SIMILAR COMPARISON ON YOUR PRODUCTION COST TO MEET LOAD. YEAH. BUT IN THIS CASE IT ALSO FORCED HIM TO PUT ALL OF THE SOLAR IN THE LOAD ZONE, CORRECT. BECAUSE, BECAUSE OF THIS RELIABILITY AND LOW ZONE PRICE SEPARATION RISK THAT WE'RE REALLY LOOKING TO MITIGATE IN THIS, UH, RESOURCE PLANNING PROCESS. AND SO I GUESS I'M JUST WONDERING, AND I THINK Y'ALL LISTED, I BELIEVE IT WAS FIVE DIFFERENT TRANSMISSION UPGRADES THAT YOU WERE EMBARKING ON AS A RESULT OF THE TRANSMISSION STUDY. AND I'M WONDERING HOW THOSE FIT INTO ALL OF THIS. IS THAT EXPANDED TRANSMISSION CAPACITY GONNA BE FACTORED INTO THE MODEL OR ONE OR BOTH OF THESE MODELING EXERCISES? SO IT IS FACTORED INTO THE U PLAN MODEL 'CAUSE WE'RE, WE'RE MODELING THOSE ELEMENTS. IT WILL NOT BE INCLUDED IN THIS MODEL. 'CAUSE THIS MODEL IS GONNA DRIVE IT BASED ON PRICE. SO THE 2200 IS THAT WITH THE EXPANSION OR WITHOUT THE EXPANSION? SO THAT'S A ROUGH NUMBER WITH THE EXPANSION. IT'S NOT A PERFECT PRECISE NUMBER. AND THAT NUMBER WILL VARY THROUGHOUT DIFFERENT TIMES OF THE YEAR DEPENDING ON WHAT'S GOING ON WITH POWER FLOW AND DIFFERENT TRANSMISSION ELEMENTS, LOAD AND POWER PLANTS. AND SO IT'S THE BEST ROUGH ESTIMATE WE CAN DO AT A HIGH LEVEL TO UTILIZE THESE NUMBERS. OKAY. SO WHAT WOULD THE CURRENT LIMIT BE IF 2200 IS WITH THE EXPANSION? SO IT, IT DEPENDS. SO SOMETIMES WE SEE, UH, LOAD ZONE PRICE SEPARATION AT ABOUT 1800, 18 50. SOMETIMES WE CAN GET ALL THE WAY UP TO ABOUT 2000 WITHOUT REALLY SEEING IT. UM, BUT IT IS DEPENDENT ON, ON QUITE A FEW DIFFERENT FACTORS. IT, THERE'S NOT JUST ONE PIPELINE THAT IT ALL COMES THROUGH AND IT'S THE SAME NUMBER ALL THE TIME. IT'S, IT'S MORE DYNAMIC THAN THAT. AND YOU REALLY NEED TO UTILIZE POWER FLOW MODELS TO BE ABLE TO DETERMINE THAT ALL OF THE TIME AND, AND MAKE A LOT OF ASSUMPTIONS THROUGH POWER FLOW MODELS TO TRY TO ACTUALLY DETERMINE THAT. SO ASSUMPTIONS UPON ASSUMPTIONS UPON ASSUMPTIONS. AND SO IN THIS STUDY WE HAVE LOOKED AT NUMBERS THAT WE FEEL PRETTY GOOD ABOUT THAT WE CAN KIND OF ROUGH ESTIMATE IF YOU WILL. THEN, THEN LOOK AT HOW, USING THE SAME NUMBER FOR ALL PORTFOLIOS, HOW THEY PERFORM, GONNA SOLICIT QUESTIONS AND DISCUSSION FROM ONLINE. YEAH, I THINK BEN HAS ONE MORE SLIDE BEFORE WE GO TO FULL. YOU'RE GOOD. DON'T GO TOO FAR. MM-HMM, . ALRIGHT. SO, UH, JUST A, A FEW POINTS THAT WE'VE, WE'VE ALREADY MADE. UM, THAT'S THINGS TO THINK ABOUT AS WE MOVE FORWARD TO THE NEXT STAGE OF THE RESOURCE PLANNING ANALYSIS. FIRST OFF, WE'RE SEEING THERE'S MORE THAN ONE WAY TO GET TO ZERO SUPPLY STACK EMISSIONS BY 2035. UM, WHETHER THAT'S BY USING GREEN HYDROGEN OR THAT YEAH. LIKE, OR CLEAN FUEL OR WHETHER THAT'S BY, UH, USING RENEWABLES AND STORAGE. AS WE THINK ABOUT THE BALANCE BETWEEN COSTS AND EMISSIONS OVER THE NEXT DECADE, WE'RE SEEING INCREASING MARGINAL COSTS TO REMOVE THE NEXT CHUNK OF EMISSIONS. UH, THINKING BACK TO THE COMPARISON WE DID BETWEEN PORTFOLIO CAB, WE'RE ALSO SEEING THAT IF WE WANT TO BOTH ACHIEVE ZERO PORTFOLIO CARBON EMISSIONS AND MAINTAIN LOCAL RELIABILITY, IF WE LIMIT WHICH DISPATCHABLE TECHNOLOGIES CAN BE CHOSEN, IT DOES HAVE THE POTENTIAL TO GREATLY INCREASE OUR COSTS AND OUR SIGHTING NEEDS. UM, THAT'S WHAT PORTFOLIO B DID. IT, IT LIMITED THE TECHNOLOGIES THAT COULD BE CHOSEN. AND THEN FINALLY, THE LAST THING WE'RE SEEING IS THAT LOCAL PEAKERS [02:30:01] DO INCREASE RELIABILITY AND AS MODELED, THEY HAVE A VERY NEGLIGIBLE INCREASE IN COST, VERY SMALL INCREASE IN COST, AND THEY ALSO HAVE A MARKETPLACE IN EFFICIENCY THAT'S WORTH BEARING IN MUCH. SO, UH, THIS CONCLUDES THE PRESENTATION. HAPPY TO TAKE, UH, ANY CONCLUDING QUESTIONS AND THEN WE'LL BE STAYING AROUND FOR SOME ADDITIONAL CONVERSATION. SO IF WE COULD JUST FLIP, UH, TWO MORE SLIDES. OKAY. THANKS. THANKS FOR LISTENING, RON. THANKS BEN. YEAH, HANG AROUND. UM, OKAY, SO I'M NOT GONNA WALK THROUGH THIS, RIGHT? YOU'VE, YOU'VE BEEN TROOPERS, IT'S TWO AND A HALF HOURS INTO THIS MEETING AND, UM, WE'VE TALKED ABOUT A LOT, BUT I JUST WANNA HIT THE, THE HIGHLIGHTS THAT WITH THE PORTFOLIOS THAT YOU SAW, WHETHER THEY WERE THE 13 AUSTIN ENERGY, EUC PORTFOLIOS OR THE FOUR FROM ASCEND, THE TRADE-OFFS ARE SIGNIFICANT. I DON'T EXPECT THAT ANY OF THESE ARE WHAT WE WANT MOVING FORWARD. AND SO WE HAVE OUR NEXT STEPS WHERE WE HAVE TO SAY, HOW CAN WE DO BETTER? AND WE HAVE TO HAVE TO REMEMBER THAT WE'RE NOT GONNA GET AN ANSWER OUT OF ANY OF THESE PORTFOLIOS, RIGHT? I CAN SEE IN YOUR FACES, I CAN HEAR IN YOUR QUESTIONS AND I SEE IT ON MY TEAM AND MYSELF AS WELL, THAT WE'RE NOT STUCK, RIGHT? WE JUST HAVE TO KEEP THINKING THROUGH, WELL, ALL THESE WHAT IF QUESTIONS TO SAY WHAT ARE WE ULTIMATELY TRYING TO GET OUT OF WHEN WE RECOGNIZE THERE ARE TRADE OFFS, RIGHT? AND, AND HOW DO WE GET BETTER? SO, UM, ON THE NEXT SLIDE, I DON'T KNOW HOW YOU WANNA HANDLE THIS, UM, CHAIR TUTTLE, BUT ESSENTIALLY THIS IS WHAT WE NEED TO ACCOMPLISH TODAY IS EITHER WE CAN BRING OUR TEAM UP AND HAVE SOME MORE DIALOGUE IF YOU'D LIKE TO HAVE SOME CONTINUED DISCUSSION ABOUT ANYTHING. BUT WE ALSO NEED TO MAKE SURE THAT ULTIMATELY WE HAVE A PLAN FOR COMING UP WITH A REFINED SET OF PORTFOLIOS SO THAT WE CAN GO BACK AND DO A LITTLE BIT MORE ANALYSIS TO PROVIDE SOME ADDITIONAL INFORMATION IN OCTOBER SO THAT WE CAN ULTIMATELY INFORM WHAT WE TAKE FORWARD TO COUNCIL, UM, AT THE, FOR THE END OF THIS CALENDAR YEAR. SO DO YOU WANT ME TO BRING MY TEAM UP? I THINK, I THINK THIS IS A CONSTRUCTIVE FRAMEWORK, SO WHY DON'T WE JUST HIT THIS. ALL RIGHT. SO CAN I GET MIKE, MATT, MIKE, ADAM, WE CAN ALL COME TO THE, WE'RE GONNA, SOME OF US ARE GONNA SIT THERE. MIKE, DO YOU WANNA SIT OR DO YOU WANNA STAND? WHATEVER YOU PREFER. YOU OKAY SITTING? YEAH. OKAY. WELL THEN I'LL, I'LL HANG ON UP HERE. AND THERE'S TWO SEATS ON THIS SIDE, TWO SEATS ON THAT SIDE. Y'ALL MIGHT JUST HAVE TO SHARE THE MICROPHONE. MIKE, GO SIT OVER THERE WITH ADAM PLEASE. I MEAN THIS, SO THIS IS FOR ALL OF US, A STAFF AS WELL AS, AND BEN'S HERE AS WELL. YEP. OKAY, SO LET'S START WITH THE FIRST ONE. WHAT DID YOU OBSERVE? SO COMMENTS ON THAT? I MEAN, I THINK THAT FOR ME, THE LAST, WELL, I MEAN AT LEAST IN, IN, IN THE MODELING RESULTS, THE, THE, THE SCENARIOS THAT HAD THE BEST, LET'S CALL 'EM THE BEST ENVIRONMENTAL IMPACT IN TERMS OF EMISSIONS, WERE ALSO THE ONES THAT HERE HAD EITHER THE HIGHEST COST OR HIGHEST RISKS GENERALLY. SO I THINK I WAS EXPECTING IN PARTICULAR THAT INVESTING MORE ON THINGS LIKE DEMAND RESPONSE AND ENERGY EFFICIENCY COULD HELP MITIGATE THAT RISK. BUT THAT'S NOT WHAT THE MODEL, UM, SPIT BACK OR WHATEVER. UM, SO THAT SURPRISED ME, UM, THAT THERE DIDN'T SEEM TO BE A BIG DIFFERENCE, YOU KNOW, BETWEEN SAY 12 AND 13, I WAS EXPECTING, UM, YOU KNOW, THAT THE ADDED ENERGY EFFICIENCY, ET CETERA, WOULD, WOULD HELP MITIGATE SOME OF THAT RISK. OTHER OBSERVATIONS? ANYONE ONLINE? I'M GONNA PICK ON SOMEBODY THEN RANDY. UH, ALL OF ALL OF WHICH IS LOOKING AT THE TRADE OFFS, UH, THE NUM NUMBER 10 IN TERMS OF ACHIEVING, UH, CLEANER, CLEANER AIR REDUCTION, BUT HAVING RELIABILITY AND NOT AS STEEP OF AN INCREASE, UH, LOOKED BETTER. UH, WHEN, WHEN LOOKING AT EVERYTHING TOGETHER, I, I DO THINK WE NEED TO, UH, LOOK FURTHER AT SWITCHING THE FUEL. AND WE DO NEED GENERATION, UH, AS PART OF THE SOLUTION AS WELL AS STORAGE. AND MY, I I THINK IF WE CAN, UH, DO, LIKE, I, MY [02:35:01] QUESTION ON FAYETTE IS IF, IF WE CAN LOCATE IT OUTSIDE OF THE AUSTIN AREA, UH, IT WOULD BE IDEAL. THE PEOPLE IN PEOPLE IN LA GRANGE ARE NOT COMPLAINING, HAVE NEVER BEEN TO OUR MEETINGS AND DON'T, DON'T SUPPORT THE CLOSURE. THIS WOULD ALLOW THAT. JUST, JUST SOME RANDOM THANK YOU. HOW ABOUT SOME OF THE OTHER COMMISSIONERS AO HAVE, ARE YOU STILL? WELL, I CAN'T SEE. YEAH, I'M STILL HERE. UM, LOTS OF BAD DATA STILL, YOU KNOW, DIGESTING A LOT OF IT AND TRYING TO, UM, FIGURE OUT CONCLUSIVELY, UM, A FEW THINGS THAT I PLAN TO DIG INTO DURING THE OFFICE HOURS. FAIR. CHRIS, YOU'RE THE NEWBIE. WHAT DO YOU OBSERVED? I DON'T KNOW THAT THERE WAS ANYTHING THAT REALLY SURPRISED ME. UH, IT IS, IS AN INCREDIBLE AMOUNT OF INFORMATION AND I THINK IT GETS TO THE POINT WHERE IT'S OVERLOADED AND AFTER A WHILE IT'S HARD TO CHOOSE BECAUSE THERE'S SO MANY OPTIONS. UH, BUT I THINK TRYING TO UNDERSTAND THE, THE, THE ORIGIN OF THE ASSUMPTIONS AND WHAT'S BEHIND SOME OF THE ASSUMPTIONS MIGHT TEND TO KIND OF NARROW SOME OF THE, THE OPTIONS DOWN. I I'M GONNA GO ACROSS THE, THE ROW AS WE SEE IT HERE. RAUL, YOU'RE NEXT. UM, WHAT SURPRISED YOU? UH, I MEAN, I THINK IT'S, UH, IT'S ALL EXPENSIVE. . I MEAN, I DON'T KNOW IF THAT'S A SURPRISE, BUT, UH, THERE ISN'T, UH, SOMETHING MAGICAL THAT, UH, BRINGS DOWN YOUR MONTHLY RESIDENTIAL BILL, UH, BECAUSE WE'RE GROWING AND WE NEED TO, YOU KNOW, THE CITY'S GROWING, SO WE NEED MORE GENERATION AS WELL AS TRYING TO CREATE A CLEANER MIX RIGHT, OF, UH, OF ENERGY SOURCES. SO, UM, BUT IT WAS INTERESTING TO SEE THE DEGREE TO WHICH THINGS BECOME KIND OF UNAFFORDABLE VERY QUICKLY, RIGHT? UM, BUT THEN FOR ME, THE ONE, UM, THE CHART THAT STOOD OUT, I THINK 29 WAS JUST THE ONE WITH THE COS STACK, CO2 EMISSIONS AND VERY, VERY DIFFERENT, UH, THE DIFFERENT SCENARIOS OF WHAT THEY PRODUCE IN TERMS OF, UH, CO2 EMISSIONS. SO I'M TRYING TO LOOK AT THAT TO SEE WHAT'S CAUSING, UH, YEAH, LOOKING AT THE TRENDS AND LOOKING AT, UH, WHICH ONES ARE MOVING IN THE RIGHT DIRECTION, WHICH ONES ARE NOT, AND WHY ARE THEY SO DISPARATE, RIGHT? THEY'RE VERY, THERE'S A BIG, UM, THERE'S A BIG GAP BETWEEN THE ONES THAT CREATE MORE MISSIONS AND THE ONES THAT, UM, PUT US IN A BETTER PLACE. 'CAUSE I DON'T THINK IF WE LOOK AT THE TRENDS ON CO2 EMISSIONS FROM 2005, IT'S GOING DOWN IF YOU KIND OF PROJECT THE LINE OR A TREND. SO WE DEFINITELY DON'T WANT THAT. WE DON'T WANT THAT LINE TO GO BACK UP. SO, SO SOMETHING'S GOTTA CHANGE. UM, IN TERMS OF WHAT WE SEE THERE, THAT'S THE ONE THAT STOOD OUT TO ME IN NUMBER, I THINK IT'S SLIDE 29 ON, ON ONE OF THE SLIDE DECK. I KNOW WE HAVE SEVERAL SLIDE DECKS, BUT, UH, BUT YEAH, SOMETHING THAT I HAVEN'T, UH, I'M STILL, I'M STILL TRYING TO UNDERSTAND ALL THE SCENARIOS, BUT ALSO LOOKING AT WHICH ONES PRODUCE, WHAT OUTCOMES AND TRYING TO MAKE SENSE OF WHY THEY'RE PRODUCING THEIR OUTCOMES, THE OUTCOMES THEY'RE PRODUCING. SO THANKS FOR SHARING ALL OF IT AND THANKS FOR WALKING US THROUGH IT. MM-HMM, . SO I SEE JONATHAN ON THE SCREEN, BUT UH, ALSO SAY, ARE JONATHAN, WHAT IS, WHAT ARE YOUR COMMENTS? YEAH, UM, ON THE SURPRISE TO ME, I'M KIND OF WITH ECHO CYRUS EARLIER, I WOULD'VE EXPECTED THE, THE STORAGE TO HAVE ALLEVIATED SOME OF THE, UM, YOU KNOW, RELIABILITY AND EVEN COST CONCERNS TO A LARGE DEGREE THAN THEY DID IN THOSE TWO PORTFOLIOS. IT ALMOST MAKES ME WONDER IF WE ARE BEING A LITTLE TOO CONSERVATIVE ON, UM, THE COST ASSUMPTIONS GOING FORWARD ON STORAGE. AND, YOU KNOW, LIKE, YOU KNOW, WE DID THE SAME THING WITH, WITH SOLAR. EVERYONE DID. WHERE, YOU KNOW, HAVE CONSISTENTLY UNDERESTIMATED HOW QUICKLY THOSE COST OF HAVE, [02:40:01] HAVE DECLINED AND ALMOST WONDER IF WE'RE, UM, SETTING OURSELF UP TO DO THE SAME THING ON STORAGE. UM, THE OTHER THING I, I THINK YOU SAID EARLIER, REALLY TO ME SUMS UP, YOU KNOW, THE KEY QUESTION HERE IS HOW, HOW LONG CAN WE, YOU KNOW, RUN THE EXISTING GAS FLEET AND DELAY MAKING DECISIONS ON, UM, YOU KNOW, NEW GENERATION THAT WILL, YOU KNOW, POTENTIALLY LOCK US INTO A TECHNOLOGY PATH, UM, AND LET YOU KNOW SOME OF THE LIKE VERY RAPIDLY EMERGING TECHNOLOGIES, UM, WHETHER IT'S HIGH, MAYBE IT'S HYDROGEN, MAYBE IT'S GEOTHERMAL, MAYBE IT'S LONG DURATION STORAGE, MAYBE EVEN SOME TYPE OF, YOU KNOW, CONVENTIONAL OR ADVANCED NUCLEAR, UM, AMONGST OTHER OPTIONS. YOU KNOW, CAN, CAN WE DELAY THOSE DECISIONS FOR A COUPLE OF YEARS TO SEE WHAT SHAKES OUT IN THE, IN THE NEXT FEW YEARS, SAY, SIR? YEAH, I WAS, UM, OH, ALSO SURPRISED THAT, UM, DEMAND RESPONSE DIDN'T HAVE THE, A GREATER IMPACT THAN WAS SHOWN. SO, UM, THAT'S JUST GOT ME THINKING AND I GOTTA DIVE DEEPER INTO, UM, THIS PACKAGE TO, TO BETTER UNDERSTAND, UM, WHERE THAT, WHERE THAT THERE GOES. THANK YOU. UM, I GUESS SO, UH, DIGGING INTO THE APPENDICES A LITTLE BIT, LIKE LOOKING AT THE RELIABILITY RISK HOURS, I DON'T JUST SPEAK MORE INTO, HUH? OH, SORRY. UM, SO JUST TAKING A LOOK AT THE APPENDICES. UH, SO RELIABILITY RISK HOURS, LIKE THEY'RE, THEY'RE, THEY'RE PRETTY HIGH IN 2035. IT DOES LOOK LIKE IT'S, THEY MAKE LIKE EVEN FOR LIKE, UM, FOR NUMBER 13, LIKE THEY'RE, UH, THEY'RE VERY PRETTY MUCH NON-EXISTENT UP UNTIL 2034 AS, UM, AND I GUESS THAT'S THE IMPACT OF DECKER AND SAND HILL RETIRING, UH, RIGHT. OKAY. UM, AND SO I, I GUESS, I MEAN I GUESS THAT THAT SURPRISED ME. THEY JUMPED THAT FAST. UM, LIKE WITH THOSE, WITH THOSE RETIREMENTS, AND I GUESS WHAT I'M TRYING TO PUT TOGETHER IS BASICALLY, AND MAYBE IF MAYBE I'M JUMPING THE GUN AND COMING TO LIKE FUTURE STUFF TO MODEL, IT'S LIKE KEEPING THOSE AROUND HOW EVEN BUILDING ROUGHLY THE SAME AMOUNT OF, OF STORAGE OR WHATEVER, LIKE HOW LITTLE DO WE HAVE TO RUN THEM TO KNOCK THOSE NUMBERS DOWN REALLY FAR. LIKE IF IT'S JUST A CAPACITY PLAY, UM, MOSTLY LIKE THAT COULD BE INTERESTING TO LOOK AT 'CAUSE IT, 'CAUSE IT LOOKS LIKE THERE'S LIKE NOT A PROBLEM UP UNTIL 2034. OBJECT. ARE YOU LOOKING AT SLIDE 82? I'M SORRY. YEAH, SORRY, I'M LOOKING AT SLIDE 82, DAVID IN THE APPENDIX APPENDIX IT MOVES TO 82. 82 AND 80, WELL 83 IS FOR PORTFOLIO FIVE. UM, YEAH, SO IT, YEAH, SO IT LOOKS LIKE THERE'S LIKE HAVING A BIG CONTINUITY JUMP WITH THIS CONTINUITY THERE WHEN THOSE RETIRE, WHEN THOSE RETIRE. SO I THINK ONE WHEN THING I'D, I GUESS I'D LIKE TO SEE IS LIKE HOW, HOW MUCH WOULD THEY HAVE TO RUN IN 2035 TO LIKE, TO KNOCK THAT DOWN BUT STILL HAVE SOME OF THE OTHER BENEFITS OF THE STORAGE. IF THAT'S, AND IF, AND IF IT'S UM, IF THE HIGHER COSTS ARE ASSOCIATED WITH THESE RELIABILITY RISK HOURS AND PRICE SEPARATION AND SCARCITY OR HOW MUCH ARE ASSOCIATED WITH THAT VERSUS LIKE THE CAPITAL COST OF LIKE BUILDING ALL OF THE STORAGE I GUESS, IF THAT MAKES SENSE. I WILL JUST SAY THAT A LOT OF OUR GTS HAVE CAPACITY FACTORS THAT ARE SOMEWHERE BETWEEN 7% AND 15% ON ANNUAL BASIS. AND THAT IS WITHOUT TWO HOUR STORAGE HERE IN AUSTIN. SO IF YOU THINK BACK, IF YOU HAD, UH, BATTERIES THAT WERE TWO HOURS, ANY EVENT WHERE WE'RE RUNNING A GT FOR JUST TWO HOURS, YOU MIGHT BE ABLE TO REDUCE THAT CAPACITY FACTOR EVEN FURTHER. 'CAUSE YOU'D PROBABLY DISPATCH THE BATTERY FIRST AND THEN ONLY BRING ON THE GT IF THAT EVENT WAS GONNA LAST A LITTLE LONGER. SO THAT'S CERTAINLY SOMETHING WE CAN DELVE INTO AND LOOK AT MORE. OKAY. AND YOU KNOW, ONE OF THE REASONS WE ASKED YOU TO RUN SCENARIO 10 WAS, WHICH I THINK GETS AT THIS QUESTION WAS EXACTLY IF WE'VE DRAWN A LINE IN THE SAND OF 2035 AND OUR CHOICE IS BUILDING A WHOLE BUNCH OF NEW RESOURCES THAT WE HAVE TO INVEST IN VERSUS MAYBE WE GOTTA RUN THE STUFF WE HAVE A COUPLE MORE YEARS WHILE THE TECHNOLOGY CATCHES UP. IT'S A, IT'S AT LEAST A GOOD CONVERSATION TO HAVE. UM, AND YOU KNOW, MAYBE IT'S NOT ALL OF THE GAS UNITS, MAYBE IT'S SOME OF THEM, BUT YOU [02:45:01] KNOW, THERE IS SOME WISDOM TO KEEPING SOMETHING AROUND UNTIL YOU'VE GOT THE TECHNOLOGY THAT WORKS THAT CAN REPLACE IT, THAT CAN REDUCE OUR RISKS. UM, SO I THINK THAT'S IMPORTANT. I DID HAVE A, YEAH, MAYBE I'M GETTING THAT QUESTION ONE. CAN I SURE, GO AHEAD. SORRY TO FOLLOW UP ON THAT, I, AND I DON'T KNOW IF WE HAVE ENOUGH TIME TO MODEL ALL OF THESE, BUT, UH, TO MODEL THESE THINGS NECESSARILY, BUT, BUT EVEN LIKE WE'RE RETIRING BOTH OF THOSE LIKE DECKER AND SANDHILL, BUT I MEAN, IS THERE A WAY OF, I MEAN, JUST LOOKING AT WHAT HAPPENS IF WE KEEP JUST OUR BEST UNITS, OUR BEST ONE UNIT, OUR BEST TWO UNITS, OUR BEST THREE UNITS, WHAT WHATEVER ARE AROUND AS A WAY OF LIKE TRYING TO CUT DOWN SOME OF THAT, THE RELIABILITY, LIKE HOW FAR CAN THAT GET US VERSUS LIKE, 'CAUSE THIS IS EITHER ZERO ONE, THEY'RE EITHER THERE OR THEY'RE NOT. RIGHT? UM, YEAH. AND WHAT THE, AND WHAT THE FEEDBACK IS IS, IS WITH YEAH, WITH BATTERIES AND CAPACITY, UM, HOW MUCH WOULD WE NEED? SORRY, GO AHEAD. SORRY. AND, AND I CAN'T TELL FROM THE MODELING IF, UM, THE, THE MODELING OF, YOU KNOW, SOME OF THE SCENARIOS FOR THE SCENARIOS INCLUDE A HUNDRED HOUR BATTERIES AND I SORT OF, THE QUESTION IS DID THAT ACTUALLY MAKE A DIFFERENCE OR NOT? UM, AND MAYBE IT'S, MAYBE IT'S LOOKING AT APPENDICES. UM, IT WAS HARD FOR US TO KNOW THE IMPACT OF THE DIFFERENT KINDS OF BATTERIES. UH, UNFORTUNATELY BABU WHO RUNS THE, THE TECHNICAL MODELING WASN'T ABLE TO JOIN TONIGHT. HE WOULD PROBABLY HAVE A BETTER ANSWER. BUT WE JUST KIND OF SEE LOCAL STORAGE AS A CHUNK AND DON'T SEE A LOT OF GRANULAR DETAIL OF HERE'S THE RELATIVE IMPACT OF 100 VERSUS FOUR VERSUS EIGHT. I HAD A QUESTION ABOUT THE, UM, THE CUSTOMER CITED SOLAR FOR BOTH OF THE, UM, SETS OF MODELING WERE THE COST ASSUMPTIONS THAT WERE SHARED WITH US AS THE FINAL CONTINUED, EVEN THOUGH THE STANDARD OFFER CHANGED. YEAH, WE DID NOT CHANGE THE ASSUMPTIONS FROM THE BEGINNING OF THE MODELING JUST FOR CONSISTENCY. OKAY. SO WHEN YOU GO BACK, WILL YOU CHANGE THOSE TO ALIGN WITH WHAT'S BEING ADOPTED, UH, AS WE RUN JUST NEW SCENARIOS OR NEW PORTFOLIOS? YEAH, I MEAN, I GUESS SO. I MEAN WE CAN CERTAINLY DISCUSS THAT DURING THE OFFICE HOURS AND WHAT THE PROS AND CONS OF THAT MAY, MAY BE. IS THERE A CON UH, I MEAN IF WE START TO CHANGE ASSUMPTIONS FOR SOME MODELS OR FORM PORTFOLIOS AND OTHERS, THEN YOU START NO, I'M SAYING THAT ANY PORTFOLIO THAT HAS THAT ELEMENT IN IT, IT SHOULD ALIGN WITH WHAT YOU'RE ACTUALLY GONNA PAY, RIGHT? SURE. SO YOU'RE TALKING ABOUT GOING BACK TO EXISTING MODEL RUNS AND IT CHANGING THE, THE PRICE FOR THE LOCAL SOLAR. I'M NOT LIKE I, I DON'T NECESSARILY, I'M NOT NECESSARILY ASKING FOR THAT. I'M JUST SAYING WELL LET, LET'S DISCUSS IT DURING OFFICE HOURS. I BETTER UNDERSTAND IT. WE CAN OKAY. JUST REALLY LOOK AT WHAT THE, THE TIME AND RESOURCES MAY BE. I THINK WE HAVE ABOUT 10 DAYS TO RUN ANY NEW PORTFOLIOS. YEAH. I'M NOT ASKING YOU TO RERUN THESE. I'M JUST SAYING IF WE'RE TRYING TO REFINE AND GO FORWARD SO WE COULD HAVE NEW ASSUMPTIONS IN THE GOING FORWARD PORTFOLIOS MAYBE IS WHAT YOU'RE, I MEAN, I THINK THAT WOULD BE PART OF THE REFINING AND THE ASSUMPTIONS WERE BASED ON THAT Y'ALL WERE GONNA PAY ONE AMOUNT AND THAT'S NOT WHAT'S MOVING FORWARD. I, WE'LL HAVE TO DOUBLE CHECK, BUT I DO THINK THAT IT WAS ONLY ACCOUNTING FOR AVOIDED COST, UM, FOR THE STANDARD SOLAR OFFER COMPONENT. UM, I JUST THINK THAT THAT AVOIDED COST HAS SHIFTED OVER TIME IN THE LAST SEVERAL WEEKS. BUT WE CAN DOUBLE CHECK. YEAH, I DON'T THINK SO. IT SAYS HERE THAT I'VE GOT THE ASSUMPTIONS UP HERE AND IT WAS THE FULL VOS COST. 'CAUSE THAT WAS WHAT HAD BEEN DISCUSSED AT THE MAY STAKEHOLDER MEETING FOR THE PROGRAM. YEAH, I THINK WHAT HAPPENED WAS, UH, AND AGAIN, WE'LL DOUBLE CHECK, BUT I THOUGHT THE STANDARD SOLAR OFFER COMPONENT WASN'T INITIALLY INCORPORATED AND THEN I THINK Y'ALL INCORPORATED INTO ONE OF THE EUC UM, PORTFOLIOS, AND I THOUGHT THAT THAT ASSUMPTION FOR THAT COMPONENT WAS ADJUSTED. BUT, BUT I HEAR YOU. UH, WE WILL, WE WILL DOUBLE CHECK AND CONFIRM AND FIGURE OUT HOW TO MOVE FORWARD. I GUESS KIND OF BIG PICTURE, WHAT SURPRISES ME IS THAT IT SEEMS [02:50:02] LIKE GOING FORWARD WE'RE KIND OF LIKE, OTHER THAN THE RESOURCES THAT ARE ALREADY THERE, LIKE KIND OF TRYING TO, UM, I DON'T KNOW, DETACH FROM UTILIZING THE GRID AS A RESOURCE. UM, AND I GUESS IT JUST DOES MAKE ME WONDER IF THERE ARE ADDITIONAL TRANSMISSION UPGRADES, UH, LOCAL TRANSMISSION UPGRADES THAT THAT WOULD BE WORTHWHILE TO ALLOW. SO, SO I CAN ADDRESS THAT SOMEWHAT, RIGHT? SO IT, THE INTEGRATED PLANNING OF TRANSMISSION AND GENERATION GETS COMPLICATED AND IT GETS ESPECIALLY COMPLICATED FOR A MUNICIPALITY LIKE AUSTIN ENERGY. AND SO, UM, I THINK ONE OF YOU ASKED, CAN YOU JUST GENERICALLY ASSUME THERE'S GOING TO BE SOME MORE TRANSMISSION? AND I THINK THE ANSWER TO THAT IS YES, WE CAN'T GO AND HAVE, ASK OUR TRANSMISSION FOLKS WHAT ARE YOU PLANNING BEYOND WHAT YOU'VE ALREADY GOT APPROVAL FOR AND SHARED WITH ERCOT? UM, AND THEN PUT THAT INTO OUR MODEL FOR WHAT'S HAPPENING, RIGHT? THAT THERE'S, THERE'S STANDARDS OF CONDUCT THAT PREVENT US FROM HAVING THOSE TYPES OF CONVERSATIONS. UM, BECAUSE WE ARE A VERTICALLY INTEGRATED, MUNICIPALLY OWNED UTILITY OF A CERTAIN SIZE. AND SO, UM, YOU KNOW, THE OTHER THING IS THAT ERCOT DOESN'T INTEGRATE THOSE PLANNING, THAT PLANNING EITHER. SO, SO IN ADDITION TO THE FACT THAT WE HAVE THE PROBLEM INSIDE IT, UM, IT'S LIKE A BIT OF A CHICKEN AND EGG PROBLEM. SO THE GENERATION FOLKS PLANNING FOLKS WANNA KNOW WHAT KIND OF TRANSMISSION ARE YOU BUILDING? THE TRANSMISSION FOLKS WANNA KNOW WHAT THE GENERATION YOU'RE PLANNING AND, UM, IT, AGAIN, IT, YOU AND I BOTH CAN SAY THE BETTER ANSWER IS TO DO IT ALL TOGETHER AND WE HAVE THOSE CHALLENGES. THE OTHER PIECE OF IT IS THAT WE HAVE CONTROL OVER A CERTAIN AMOUNT OF TRANSMISSION, BUT IF WHAT WE'RE TALKING ABOUT IS TRYING TO BRING ADDITIONAL RESOURCES FROM OUTSIDE OF OUR SERVICE TERRITORY AND IMPORT THAT POWER IN, WE DON'T HAVE CONTROL OF ALL OF THE, THE TRANSMISSION BETWEEN THERE AND HERE. SO IT BECOMES AN INCREASINGLY COMPLEX ISSUE. AND SO WHAT WE HAVE IN THE SENSITIVITY ANALYSIS IS TO ASSESS WHAT IF THERE'S A, YOU KNOW, MORE CONGESTION, BUT I THINK WE COULD ALSO RELAX THAT AND SAY WHAT IF THERE'S LESS? RIGHT? IT, IT'S NOT GONNA BE A PERFECT ANALYSIS. RIGHT? I I HEAR YOU. WE ARE NOT SAY SUGGESTING AT ALL THAT WE WOULD PLAN A GENERATION PORTFOLIO AND THEN STOP DOING EVERYTHING WITH REGARDS TO TRANSMISSION AND JUST MARCH FORWARD EVERY STEP OF THE WAY OF WHATEVER IS PLANNED IN A MODEL. LIKE IT'S JUST, THAT'S JUST NOT THE WAY IT WORKS. IT'S A CONSTANT EVOLVING, ITERATIVE PROCESS WHERE WE DO THE TRANSMISSION ANALYSIS EVERY YEAR. WE DO THE GENERATION ANALYSIS EVERY SO OFTEN IS WHATNOT. SO I, I GET WHAT YOU'RE SAYING, BUT WE'RE NOT GONNA GET THAT PERFECT ANSWER. BUT WE CAN, IF THAT'S HOW YOU CHOOSE TO SAY LIKE, WITH THE LIMITED TIME WE HAVE REMAINING FOR THE NEXT SET TO RELAX OR ASSUME THAT THERE IS LESS OF A TRANSMISSION CONSTRAINT, I THINK WE CAN FIGURE OUT HOW TO MODEL THAT. WE JUST CAN'T GO TO OUR TRANSMISSION FOLKS SAY, TELL US EXACTLY WHAT YOU PLAN ON DOING, BECAUSE THAT'S AN EVOLVING PROCESS TOO. YEAH. SO THANKS. I UNDERSTAND THAT. I'M JUST KIND OF THINKING BACK TO, YOU KNOW, THE LAST TIME WE DID THIS, IT WAS MADE CLEAR THEN THAT LIKE, IN ORDER TO MAKE THE TRANSITION TRANSMISSION UPGRADES WERE GONNA BE NEEDED. AND YES, HERE WE ARE AND IT KIND OF FEELS LIKE WE HAVEN'T, YOU KNOW, WE HAVEN'T CRACKED THAT, I GUESS. WELL, TRANSMISSION UPGRADES WILL ALWAYS BE A PART OF THE SOLUTION. THEY WILL ALWAYS BE NECESSARY. THE QUESTION BEFORE WAS CAN WE, UH, YOU KNOW, INSTEAD OF SHUTTING DOWN OUR GENERATION IN 2035, CAN WE DO IT IN 2030? RIGHT? THAT'S WHAT THE TRANSMISSION STUDY ULTIMATELY ASSESSED. RIGHT? BUT NOW IF IT LOOKS LIKE IT'S BEING CALLED INTO QUESTION WHETHER WE CAN EVEN DO IT IN 2035, I SO I I THINK THAT QUESTION EXISTED THEN TOO. DOESN'T FEEL LIKE FORWARD PROGRESS. I GUESS I I UNDERSTAND YOUR YOUR POINT PLEASE. ANY OTHER COMMENTS ONLINE? UM, OH, SORRY. WAS THERE A COMMENT ONLINE? ONE THING THAT HAPPENED RECENTLY AT THE COMMISSION IS THEY, THEY GAVE, I'LL SAY THE FIRST PHASE PHASE APPROVAL ON THE PERMIAN BASIN RELIABILITY STUDY, WHICH I KNOW IS GONNA BE STILL BE YEARS FROM NOW. DO THOSE UPGRADES AND NEW IMPORT PATHS POTENTIALLY MAKE SOME OF OUR RESOURCES IN SOUTHWEST TEXAS MORE VALUABLE? CAN THAT BE MODELED OR IS THAT STILL TOO IFFY? [02:55:01] UH, YES, I THINK IT WOULD REDUCE THE CONGESTION IN THE MODEL THAT YOU SEE FROM SOME OF THE ASSETS OUT THERE, BUT I THINK WHAT YOU SEE IS, UH, LESS CONGESTION IN THE MODEL THAN WHAT YOU SEE IN REALITY. AND PART OF THAT IS THE MODEL HAS PERFECT KNOWLEDGE ON HOW MUCH THE WIND AND SUN IS GONNA GENERATE EVERY SINGLE HOUR AND FROM WHERE, AND THEN IT OPTIMIZES ALL THE UNITS AROUND THAT. SO IT DOESN'T CREATE CONGESTION BY OVERSUPPLYING IN A GIVEN AREA. WHEREAS IN, IN REAL LIFE, IN REAL TIME MARKET, PEOPLE ARE GONNA BRING ON THEIR GENERATION ASSETS TO RUN THEIR GENERATION. WE DON'T HAVE PERFECT KNOWLEDGE ON WIND AND SOLAR AND OFTENTIMES WE SEE MORE SUPPLY IN AN AREA THAN EXPECTED. AND THAT'S WHEN YOU SEE THAT CONGESTION, THAT PRICE SCOPE WAY DOWN. AND SO IT WILL, IT WILL HELP. UM, BUT I DON'T THINK YOU'RE GONNA SEE IT ALL IN THE MODEL AND THE MODEL'S ALREADY UNDERESTIMATING THE CONGESTION THAT WE REALLY SEE FOR OUR RENEWABLES. DAVID, CAN YOU FLIP BACK TO, HMM. TRYING TO GET THERE. JUST KEEP GOING BACK TO THE, UM, SLIDE WHERE WE WERE WITH THE QUESTIONS. I THINK IT WAS RIGHT BEFORE THE END RIGHT THERE, UNLESS YOU'RE READY FOR, WANT ME TO MOVE TO OFFICE HOURS? I COULDN'T, UNLESS YOU WANT ME TO MOVE TO OFFICE HOURS LOGISTICS. YOU MAY BE EXHAUSTED. , I BET Y'ALL ARE EXHAUSTED. AS FAR AS ALL THESE TOPICS ALL, YEAH, I'LL JUST SAY LIKE ONE THING, WHAT QUESTIONS I HAVE, I MAY NOT BE ABLE TO MAKE OFFICE HOURS JUST GIVEN SCHEDULE IS THE TWO THINGS I'D BE GREAT TO SEE IS LIKE FUTURE RUNS, UM, OR SUMMARIES OF THESE RUNS IS THINGS IN REAL DOLLARS WITH SOME ASSUMPTIONS ON, UH, INFLATION INTO THE FUTURE RELATIVE JUST NOMINAL. UM, AND THEN IF, IF IT'S KIND OF LIKE, AND I, AND I, AND I, AND I KNOW THIS DEPENDS ON A LOT OF THINGS, BUT IF THE MAGIC BAND OF WHEN WE HAVE, UH, SEPARATIONS BETWEEN 1,822, LIKE IF WE COULD JUST KINDA SEE WHERE WE ARE AND IF, IF, IF, IF WE COULD KIND SEE LIKE IN IMPORTS, LIKE HOW OFTEN ARE WE IN THAT BAND, LIKE HOW WE FOR THESE SCENARIOS KIND OF GOING, GOING FORWARD, IT WOULD JUST LIKE, IT WOULD JUST HELP REALLY HELP TO KIND OF UNDERSTAND AND, AND DRIVE HOME THE VALUE OF ANY OF THESE SCENARIOS. UM, SINCE THAT'S LIKE WHAT BRINGS US ALL HERE TODAY. , IF YOU WERE, I MEAN, AND THIS IS NOT, YOU KNOW, THIS ISN'T MY DECISION, IT'S SORT OF A GROUP DECISION, BUT ALSO I, I UNDERSTAND WHY YOU PICKED WINTER STORM URI AS SORT OF THE RELIABILITY RISK TO LOOK AT, BUT WE KNOW THERE, AS YOU SAID, THERE'S GONNA BE, UM, YOU'RE, THERE'S GONNA BE DIFFERENT. I GUESS THIS IS THE, THE LIQUIDITY AND THE RELIABILITY. I MEAN, THERE'S GONNA BE DIFFERENT SITUATIONS, SO HAVING MAYBE A BROADER CONSIDERATION OF THAT. SO WE'RE NOT, BECAUSE IF YOU, IF YOU'RE ONLY LOOKING AT ONE SITUATION, YOU'RE GONNA, IT'S GONNA LEAD YOU TO ONE ANSWER, BUT THAT'S NOT THE ONLY SITUATION YOU'RE GONNA SEE. SO I DON'T KNOW IF THERE'S A WAY TO, I'M NOT SAYING DON'T RUN WINTER STORM YEAR, I'M SAYING INCLUDE SOME OF THOSE OTHER ANSWERS TOO IN THE FUTURE RUNS. 'CAUSE I THINK IT'D BE HELPFUL AND I THINK WE, WE DO HAVE SOME RISK NUMBERS THAT WE CAN SHARE DURING OFFICE HOURS, RIGHT ADAM? WE DO. YEAH. THANKS. UM, I GUESS ON THE, ON THE QUESTIONS, UH, ANOTHER ONE THAT I HAVE, UH, I ASK ABOUT THE AVAILABILITY OF NATURAL GAS, BUT I'M ALSO WONDERING IF AVAILABILITY OF HYDROGEN AT THE POINT AT WHICH IT'S SUPPOSED TO REPLACE, UH, THE NATURAL GAS IS FACTORED IN AT ALL. LIKE THERE'S SOME RISK THAT IT WON'T BE AVAILABLE. YEAH, ALL I CAN TELL YOU IS THAT I HAVE A NUMBER OF DEVELOPERS LINED UP THAT WOULD LOVE TO INVEST IN, TO MAKE HYDROGEN. THEY WANT THE DEMAND BEFORE THEY INVEST THE MONEY AND THEY WANT THE CONTRACT TO DO THAT. SO, UH, WHILE IT IS NOT SOMETHING THAT IS, IS WIDELY PRODUCED RIGHT NOW IN TEXAS, THERE ARE A NUMBER OF PROJECTS UNDER DEVELOPMENT RIGHT NOW. AND IF YOU CREATE THE DEMAND, YOU CAN CREATE THE SUPPLY AND THEN IT GETS INTO HOW WELL DO YOU CONTRACT FOR THAT AND HOW WELL CAN YOU CONTROL PRICES. BUT THERE IS A, A LOT OF INCENTIVES OUT THERE AT THE FEDERAL LEVEL RIGHT NOW, AND THERE'S A LOT OF DIFFERENT, UM, INVESTORS LOOKING TO LEVERAGE AND TAKE ADVANTAGE OF THOSE INCENTIVES. UM, AND TO ONE OF THE POINTS I THINK I HEARD ABOUT HYDROGEN, A LOT OF THE HYDROGEN IN THE HOUSTON AREA IS NOT GONNA ACTUALLY PROBABLY STAY IN THE UNITED STATES AT ALL, BUT IT'S GONNA GET TURNED INTO GREEN AMMONIA AND SHIPPED OUTTA THE UNITED STATES WHERE IT CAN LEVERAGE SOME ADDITIONAL SUBSIDIES. SO WHILE WE DON'T SEE A WHOLE LOT ABOUT IT TODAY, UM, THERE IS DEFINITELY A LOT OF, UM, MONEY ON THE SIDELINES LOOKING TO INVEST TO PRODUCE THAT IF THEY HAVE THE DEMAND AND THEY HAVE THE CONTRACT AND A PLACE TO SELL IT. SURE. AND, BUT THEY ALSO HAVE TO GET IT HERE, RIGHT. AND MY UNDERSTANDING IS THE EXISTING PIPELINES WOULD NOT BE [03:00:01] SUITABLE FOR THAT. SO I'M JUST SAYING THERE'S SOME LEVEL OF RISK THERE AND I'M WONDERING IF THAT IS FACTORED IN. IT'S OKAY IF IT'S NOT. I'M JUST WONDERING IF IT'S, I MEAN, I THINK, I THINK WHAT WE HAVE DONE IS WE HAVE, WE'VE PUT IT OUT IN THE FUTURE ON WHEN IT'S GONNA BE AVAILABLE. AND THEN TO, TO BEN'S POINT, SOME OF THE ASCEND ANALYSIS THEY DID, THEY RAN AS IF YOU DIDN'T HAVE GREEN HYDROGEN, HOW COULD YOU DO IT TO TRY TO, TO TAKE INTO ACCOUNT THAT RISK? UM, SO YES, THERE'S CER CERTAINLY A RISK. AND SO IS IT ASSUMED THAT IT'LL BE, WHAT YEAR IS THE FIRST YEAR YOU ASSUME YOU'LL HAVE HYDROGEN? THE ORIGINAL MODEL ASSUMPTIONS THAT WE PROVIDED STATED 2028 IS THE FIRST YEAR THAT HYDROGEN IS AVAILABLE. THANK YOU. ALL RIGHT. FLIP TWO. ARE WE GONNA, HOW ARE WE SUPPOSED TO DECIDE ON THIS LAST QUESTION HERE? I MEAN, I HAVE DO YOU MEAN IF YOU COULD CHANGE SOMETHING AND RERUN THE MODEL, WHAT WOULD IT BE? YEAH. LIKE DO YOU WANT TO HEAR THAT NOW? HOW, HOW IS THE UC SUPPOSED TO DO THAT IN THE TIMELINE? I, I, I THINK THAT YOU CAN, YOU CAN, I'VE HEARD SEVERAL THINGS THAT PEOPLE ARE INTERESTED IN IN SEEING NOW. UM, AND I THINK THAT WE WOULD, I WOULD IMAGINE WE WILL GARNER MORE INFORMATION FROM OFFICE HOURS AND, UM, ULTIMATELY WE NEED TO KNOW BY THE END OF THIS WEEK A SMALL SUBSET OF ITEMS THAT WE CAN RUN PROBABLY WITHIN, OVER THE FOLLOWING WEEK. SO I'M NOT GONNA DICTATE HOW YOU COME ABOUT DOING THAT. WE NEED TO MAKE SURE THAT, YOU KNOW, WE HAVE SOME WHAT IF THAT WE WANNA DISCUSS AS WELL WITH YOU, UM, THROUGH OFFICE HOURS AND WHATNOT. SO I, I GUESS I ASSUME YOU'LL COME TO OFFICE HOURS AND IS YOUR QUESTION, HOW CAN WE AS THE EUC TELL THEM TO RUN MODELS AND WE'RE NOT GONNA MEET AS THE EUC? YEAH, I MEAN, TO TELL THEM TO RUN THE MODELS OF, THAT'S THE DIFFICULTY. FIVE OF US CAN TALK AND THAT'S IT. I GUESS I'LL RUN THROUGH A FEW THINGS THAT I'M LOOKING FOR. UM, SO I MENTIONED, YOU KNOW, THE ACCOUNTING FOR THE FUGITIVE METHANE EMISSIONS, UM, ACROSS THE, THE, UM, BASICALLY UNTIL THEY GET TO THE, THE PLAN. UH, AND THEN LIKE, UH, JEN KRIEGER MENTIONED IN HER COMMENTS, I WOULD REALLY LIKE TO SEE THE, UM, EMISSIONS, BOTH THE CRITERIA POLLUTANTS AND THE CARBON EMISSIONS TRANSLATED INTO COST. UM, AND THEN I MEAN, I THINK THE EUC WHAT'S LABELED AS THE EUC RECOMMENDATIONS, ALTHOUGH IT WAS A LITTLE MODIFIED FROM THE WORKING GROUP, JUST BASED ON WHAT I'M SEEING HERE, IT SEEMS LIKE MAYBE IT WOULD BE WORTH RUNNING THAT WITHOUT REACH. I DON'T KNOW. UM, AND IT SEEMS LIKE WE PROBABLY NEED TO ACTUALLY ADD MORE LOCAL SOLAR TO THAT PORTFOLIO. SO THOSE ARE, I GUESS JUST KIND OF OFF THE TOP THINGS THAT I WOULD LOOK AT ADJUSTING. OKAY. I THINK OUR SUBGROUP NEEDS TO GET TOGETHER AND GIVE SOME GUIDANCE BEFORE FRIDAY. YEAH. I'M TOO TIRED TO THINK CLEARLY ABOUT WHAT WOULD BE , SO LET'S GIVE YOU A THOUGHT. AND I BLAME MCCALLUM BAND DIRECTOR FOR HAVING VERY EARLY, UM, PRACTICES TO TAKE DAUGHTERS TO. FAIR ENOUGH, FAIR ENOUGH. UM, FLIP TO THE NEXT SLIDE FOR ME PLEASE. AND, AND SO SIMILAR, RIGHT? I ALSO ASSUMED THAT SIMILAR TO HOW Y'ALL CAME TOGETHER IN A SMALL GROUP AND, UM, HELPED DEFINE THE PORTFOLIOS THAT YOU WANTED US TO SEE, I WOULD IMAGINE THERE MIGHT BE, AS YOU STARTED TO GO DOWN A VARIATION OF THOSE PORTFOLIOS OR PERHAPS A VARIATION OF A DIFFERENT SET OF PORTFOLIOS THAT YOU'D LIKE TO MAKE SURE THAT WE INCORPORATE IN SO THAT WOULD BE CERTAINLY HELPFUL IF, IF Y'ALL RIGHT, CAN THROUGH, THROUGH A SUBSET OF YOU COME UP WITH THAT. UM, WE HAVE HEARD, UM, FROM VICE CHAIR, WHITE COMMISSIONER REED, COMMISSIONER ALVAREZ, AND COMMISSIONER KIRKSEY SO FAR ABOUT KIND OF WANTING TO COME TO DIFFERENT TIMES, BUT I THINK SO FAR IT'S BEEN LIKE I'M, THIS IS WHEN I'M AVAILABLE AND SO I LEAVE IT TO YOU CHAIR, UH, TODD, IF YOU WANT TO TRY TO COORDINATE A SMALL NON QUORUM GROUP, UM, WE LEAVE IT TO YOU. WELL, I MEAN YOU'LL HAVE THE NUMBER AND THEY CAN JUST CALL IN, RIGHT? THERE'LL BE INDIVIDUAL CONVERSATIONS. ABSOLUTELY. IT'S THROUGH A TEAMS AND THEN WE'LL TALK ABOUT WHEN WE CAN GET TOGETHER AS A SMALL GROUP OF SUBSTITUTE OF FIVE. I DON'T KNOW OTHER, OTHER WAY. I GUESS I COULD ASK THE QUESTION, WHICH COMMISSIONERS WOULD BE INTERESTED IN GETTING TOGETHER AND, YOU KNOW, CONSIDERING SOME TWEAKS TO SOME OF THESE MODELS THAT THEY COULD THEN RUN AGAIN. [03:05:01] I, I KNOW, I KNOW THE THREE OF US WOULD, UM, ANYONE ONLINE THAT WOULD LIKE TO BE PART OF THAT CONVERSATION. JOSHUA, ARE YOU GONNA BE AVAILABLE? I KNOW YOU'RE NOT AVAILABLE AT OFFICE HOURS, BUT ARE YOU AVAILABLE OTHER TIMES? SO JUST TO CLARIFY, THIS IS OUTSIDE OF OFFICE HOURS. I THINK WE OUGHT TO HAVE IT OUTSIDE OFFICE HOURS SO WE CAN JUST TALK AND TRY TO CONVERGE. I'LL, I'LL, I CAN CHAT WITH Y'ALL TOMORROW. WE CAN SET UP SOMETHING UP. I'M NOT GONNA BE ABLE TO BE AVAILABLE FOR ANY OF THESE TIMES, BUT, UM, MAYBE YOU CAN CONVEY MY THOUGHTS. ALRIGHT, YEAH, YEAH. I, I THINK I WAS PERSONALLY PLANNING TO GO TO THE ONE TOMORROW, BUT MORE JUST TO GET FURTHER CLARIFICATION ON SOME THINGS AND THEN HOPEFULLY MEET WITH SOME OTHERS. AND ACTUALLY MAYBE IT'S SOMETHING LIKE THE THURSDAY ONE ACTUALLY SUGGEST SO THAT WE'RE MORE OF A, IT'S NOT JUST ONE INDIVIDUAL. WE HAVE A LITTLE BIT MORE OF A GROUP. 'CAUSE OTHERWISE I THINK IT COULD GET REALLY MESSY. ARE YOU AVAILABLE THURSDAY, DAVE? YEAH, I THINK WE OUGHT TO DO TWO STEPS. I THINK IF THERE'S ANY WAY POSSIBLE TOMORROW, FIVE OF US OUGHT TO GET TOGETHER AND BRAINSTORM WHEN WE HAVE SOME SLEEP. YEP. AND, UH, WE'RE THROUGH THE MARATHON SESSION AND THEN BY THURSDAY OR FRIDAY WE OUGHT TO GIVE SOME INPUTS. OKAY. SO THERE'S THE FOUR OF US. IS THERE ANYONE ELSE WHO WOULD LIKE TO BE PART OF THAT PARTY OF FIVE? WAS THAT A MOVIE PARTY OF THE TV SHOW? THIS IS RANDY. I, I'M AVAILABLE ANY DAY BUT THURSDAY. OKAY. OKAY. OKAY. WITH THAT, I THINK WE'RE ABOUT DONE. YOU'RE FEELING HOW I FEEL , IT'S YOUR MEETING, SIR. OKAY. LET'S ADJOURN. THANK YOU SO MUCH FOR YOUR TIME ON THAT. THANK YOU ALL. THANK YOU. AND, AND THANK YOU FOR ALL THE WORK. IT'S APPRECIATED. YES, THANK. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.