[00:00:02]
LET'S COMMENCE, UH, MAY 12TH, 2025 AT 6:02 PM LET'S OPEN THE MEETING.
UM, SO WE'RE CALLING TO ORDER.
DO WE HAVE ANY PUBLIC COMMUNICATION? NIKKI, WE HAVE NO PUBLIC COMMUNICATION THIS EVENING.
[ADDITIONAL ITEM]
LET'S MOVE TO THE NEXT THING.UM, BEFORE WE GET TO THE APPROVAL OF MINUTES, THERE IS SOMETHING THAT IS SPECIAL TO AUSTIN ENERGY, AND I'D LIKE TO MAKE THIS ANNOUNCEMENT.
UM, SO BECAUSE OF COVID, THERE WAS NOT APPARENTLY A CELEBRATION FOR 125 YEARS, WHICH IS MORE OF A, A REGULAR THING.
BUT NOW THAT WE'RE AT THE A HUNDRED 30TH YEAR, THERE'S BEEN A DECISION THAT WE'RE OUT OF COVID.
SO BEFORE WE DIG INTO THE AGENDA TONIGHT, I'D LIKE TO TAKE A MOMENT TO RECOGNIZE THE HUNDRED 30TH ANNIVERSARY OF AUSTIN ENERGY.
130 YEARS AGO THIS MONTH, THE VERY FIRST MOONLIGHT TOWER WAS LIT AND IGNITED A NEW PUBLIC POWER UTILITY THROUGHOUT ITS HISTORY FROM THE MOONLIGHT TOWER ERA TO THE TECH BOOM.
AUSTIN ENERGY IS POWERED HOMES, BUSINESSES, LIVE MUSIC VENUES AND DREAMS, WHILE PIONEERING PROGRAMS AND ENERGY EFFICIENCY, GREEN BUILDING AND RENEWABLE ENERGY THAT HAVE INSPIRED CITIES ACROSS THE COUNTRY.
AUSTIN ENERGY'S 130 YEARS OF SERVICE REFLECTS NOT ONLY THE RESILIENCE AND INNOVATION OF THE UTILITY, BUT ALSO THE ENDURING SPIRIT OF AUSTIN COMMITTED TO RELIABILITY, AFFORDABILITY, SUSTAINABILITY, AND THE EQUITABLE WELLBEING OF ITS PEOPLE AND COMMUNITY.
WE, AS THE ELECTRIC UTILITY COMMISSION GET TO SHARE IN THAT LEGACY, AT LEAST SINCE 1977 WHEN THE COMMISSION WAS CREATED AS A CITIZENS OVERSIGHT COMMITTEE.
THE VERY ROOM WE ARE IN TODAY IS NAMED AFTER ONE OF THE ORIGINAL MEMBERS OF THE EUC, SHOULD HE FAITH.
UM, SO AS CHAIR, I'D LIKE TO SAY THANK YOU TO MY FELLOW COMMISSIONERS AND TO AUSTIN ENERGY STAFF FOR ALL YOUR SERVICE TO OUR COMMUNITY, AND FOR CARRYING FORWARD A 130 YEAR OLD TRADITION.
SO I THINK THE STAFF HAS TAKE, HAS A LITTLE TOKEN OF THEIR APPRECIATION FOR EACH OF THE COMMISSIONERS, AND THANK YOU FOR YOUR SERVICE.
SO ENJOY THAT WHILE WE TAKE A QUICK LOOK BACK AT HOW IT ALL BEGAN.
AND SO I THINK SOMEONE HAS A VIDEO YOU CAN ENTER INTO THE RECORD.
AND BELIEVE IT OR NOT, AUSTIN, TRAVIS COUNTY AT ONE TIME WAS RURAL AND IT'S ALL THROUGH TO GROWTH THAT IT WAS BENEFICIAL FOR AUSTIN TO CREATE ITS OWN ELECTRIC UTILITY.
THAT WAS SORT OF THE BEGINNING.
IN THE CENTRAL TEXAS AREA, WE ARE SO SURROUNDED BY ELECTRIC LIGHTS ALL THE TIME.
PEOPLE HAVE NO CONCEPTION OF HOW DARK IT WAS JUST EVERY NIGHT.
IT SEEMED LIKE AUSTIN, IF YOU GO BACK 125 YEARS, LIFE WAS DIFFICULT.
IT WAS A LITTLE BIT OF A PIONEER OR FRONTIER TOWN.
EVERYTHING WAS DONE BY HAND WITH ALL THESE MANUAL CHORES.
YOU HAD TO WALK TO WORK OR MAYBE RIDE A HORSE IF YOU HAD ONE.
AND SO THE OPPORTUNITY OF ELECTRICITY WAS THAT THEY COULD DO SOME OF THESE CHORES FOR US.
IT COULD PUMP THE WATER FOR US, IT COULD LIGHT THE CITY'S FOR SO THAT WE COULD STAY OUT AFTER DARK.
SO THEY WANTED TO PROVIDE ELECTRIC STREET LIGHTING.
THE FAMOUS MOONLIGHT TOWERS WERE ERECTED AROUND THE CITY AND THEY SPREAD THE LIGHT OVER A WIDE AREA.
THEY DIDN'T HAVE STREETLIGHTS.
THEY HAD THESE BIG TOWERS THAT WAS OUR TOWN LIGHTING.
THEY'RE VERY TALL, PROBABLY THREE TIMES AS TALL AS A REGULAR STREETLIGHT THAT YOU MAY SEE EVEN ON THE ROAD.
THEY ALSO HAVE A HALO EFFECT BECAUSE YOU WANTED THE LIGHT TO BE DISTRIBUTED.
AND HOPELY PROVIDE SOME SAFETY FOR INDIVIDUAL WHO WANTED TO WALK AT NIGHT.
AND THEY WON'T FALL BECAUSE THEY GOT STURDY IRON.
THEY, THEY'RE UP THERE FOR A VERY LONG TIMEFRAME AND EVEN THE WINDS ARE NOT GONNA KNOCK 'EM DOWN OR ANYTHING ELSE.
SO, UH, SO THEY'RE VERY SECURE TOO.
AND THEY WOULD COME ON ROUGHLY AT DUSK AND IT DAWNED THEY WOULD GO OFF.
AUSTIN STUCK WITH THE POWER LIGHTS LONG ENOUGH THAT THEY BECAME A NOSTALGIC OBJECT OF INTEREST.
THEY WERE BEGINNING TO AGE THE AGE THAT CAUGHT UP WITH THEM.
AND WE ACTUALLY PUT ONE OF OUR MANAGERS IN CHARGE OF THAT PROJECT TO GET IT COMPLETED, TO PUT THOSE BACK THE WAY THEY WERE ORIGINALLY BUILT.
THAT PROCESS TOOK YEARS, 5, 6, 7 YEARS TO COMPLETE.
AND THEY ARE STILL LIT UP TO THIS DAY, HOPEFULLY IN BETTER SHAPE THAN WHEN THEY WERE ORIGINALLY BUILT.
AND OVER THE YEARS, WE STARTED OUT WITH 31 TOWERS DOWN TO 17.
THEY WERE REGISTERED AS A TEXAS HISTORICAL LANDMARK.
NOW IT'S ACTUALLY A HISTORICAL PIECE THAT'S BEING PRESERVED.
THESE LIGHT BULBS WERE NOT UNIQUE
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TO AUSTIN.THEY WERE USED IN CITIES LIKE, UH, DETROIT AND FORT WAYNE, INDIANA AND OTHER PLACES.
SO IT WAS A COMMON THING FOR CITIES TO HAVE THESE MOON TOWERS.
AUSTIN WAS DIFFERENT AS OTHER CITIES GOT TO BETTER TECHNOLOGIES.
THEY REPLACED THEIR MOON TOWERS WITH THE NEWER TECHNOLOGY, AND AUSTIN DIDN'T REALLY QUITE GET AROUND TO THAT FOR QUITE A WHILE.
AND THEN BY THEN WE GOT USED TO THE MOON TOWERS AND KIND OF LIKED THEM.
SO NOW THEY'RE ONE OF OUR FEATURES AND SOMETHING WE CELEBRATE.
SO WE'VE ADOPTED IT AS A PART OF OUR KEEP AUSTIN WEIRD BRAND.
THERE'S A NEW FT IN THE MAKING AS WE SPEAK IS OUT AT THE MOON TOWER.
GABAPENTIN IS BRINGING YOU CLOSER TO AMPU.
[APPROVAL OF MINUTES]
MAY PROCEED WITH ITEM ONE.AND JUST A NOTE FOR ANYONE REMOTE, THERE'S ONE PERSON.
I HAVE SENT YOU A MESSAGE, UH, VIA WEBEX AND THEN I'M ALSO SENDING YOU AN EMAIL.
BUT I NEED YOUR ATTENDANCE AND CONFLICT OF INTEREST FORM IN ORDER TO BE COUNTED AS PRESENT AND ALSO TO BE COUNTED IN A VOTE.
LET'S MOVE TO APPROVAL OF THE MINUTES.
UH, ARE THERE ANY UPDATES OR SUGGESTED CORRECTIONS FOR LAST MONTH'S? NOPE.
DO I HAVE A MOTION? YEAH, I MOVE THAT WE APPROVE THE MINUTES.
WE HAVE A MOTION AND A SECOND.
[Items 3 & 6]
GO TO DISCUSSION AND ACTION ITEMS TWO THROUGH SIX.ANYONE WANT TO PULL ANY OF THOSE? UM, I JUST HAD A QUESTION ON NUMBER FOUR AND NUMBER FIVE.
I WANTED TO ASK MORE ABOUT NUMBER FIVE.
UH, WELL, WHY DON'T WE GET TWO, THREE, AND SIX VOTED ON AND WE CAN FOCUS ON THE OTHER ONES.
DO WE HAVE A MOTION AND A SECOND FOR TWO, THREE AND SIX? A MOVE OF APPROVAL? ACTUALLY A SECOND.
YOU CAN'T HEAR ME? YOU, YOU, YOU CAN'T, I MEAN, I'M UNMUTED.
YOU CAN'T HEAR ME NOW? I THINK WE'RE HEARING YOU BETTER.
IS THERE ANY ONE THAT YOU WANNA PULL? YES.
WHICH ONE WOULD YOU LIKE TO PULL? OH, UM, NUMBER TWO.
OKAY, WELL LET'S JUST VOTE ON THREE AND SIX.
I'LL, I'LL AMEND MAY, UH, MOTION.
[2. Recommend approval authorizing a contract for power engineering software solutions for Austin Energy with CYME International T & D, Inc., for an initial term of three years with up to two one-year extension options in an amount not to exceed $2,500,000. Funding: $166,666 is available in the Fiscal Year 2024-2025 Operating Budget of Austin Energy.]
LET'S, OKAY.WHO CAN TALK TO NUMBER TWO? ARE YOU ABLE TO HEAR ME NOW BETTER? YES.
UH, DAVID, TOM TESSON, VICE PRESIDENT OF ELECTRIC SYSTEM ENGINEERING, UH, AND TECHNICAL SERVICES.
CAN I HAVE A, WHO WERE YOUR QUESTION? YEAH, I JUST WAS, OH YEAH.
UM, I JUST WAS WONDERING IF THIS HAS ANYTHING TO DO WITH, UM, LIKE THE BEING ABLE TO, TO UTILIZE CUSTOMER SIDED BATTERIES OR IF THIS IS ENTIRELY SEPARATE OR IF IF THIS IS IN ANY WAY ENABLING THAT, UH, THIS WILL HELP IN THAT.
UM, SO IT COMBINES BASICALLY OUR, OUR CURRENT PLANNING SOFTWARE AND OUR, UM, DISTRIBUTION PROTECTION SOFTWARE INTO ONE SOFTWARE PACKAGE, WHICH WILL HELP WITH WHERE WE'RE HEADED WITH, UH, DISTRIBUTION RESILIENCY.
BUT SPECIFIC TO YOUR QUESTION, UH, IT, IT, IT WILL HELP IN REGARDS TO, UM, UH, CAPACITY, YOU KNOW, STUDIES AND, AND TRYING TO DETERMINE WHERE BEST TO, UH, PUT BATTERIES AND OTHER, OTHER, UM, UH, DISTRIBUTED RESOURCES ON THE SYSTEM.
WELL, UH, IS THAT SOMETHING THAT WE WILL PERHAPS GET A PRESENTATION ON DOWN THE ROAD AFTER SOME OF THIS WORK HAS BEEN DONE? I THINK WE CAN DO THAT, ABSOLUTELY.
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THANK YOU.ANY OTHER QUESTIONS ON NUMBER TWO AND MOVE? DO WE APPROVE ITEM TWO? YEAH, SECOND.
NIKKI, DID WE HAVE A GLITCH? I, I, SORRY, I JUST MISSED WHO WAS THE FIRST? CHRIS ACTUALLY CHRIS AND THEN CHRIS.
[4. Recommend approval authorizing an amendment to a contract for continuation of the Better Building Energy Efficiency Lending Program for Austin Energy with Velocity Credit Union, to increase the amount by $5,000,000 and to extend the term by five years for a revised total contract amount not to exceed $14,400,000. Funding: $600,000 is available in the Operating Budget of Austin Energy.]
NUMBER FOUR, CYRUS AND KAABA.THIS WAS FOR BUILDING ENERGY EFFICIENCY LENDING PROGRAM.
I'VE, I'VE GOT TWO OR THREE QUESTIONS.
IS IT OKAY IF I ASK THEM OR DO YOU WANNA YEAH, YEAH, MAYBE YOU'LL ASK.
SO QUESTION NUMBER ONE IS, UM, I BELIEVE THIS, UM, LOW INTEREST LOAN PROGRAM HAS BEEN AROUND FOR A WHILE.
CAN YOU JUST REMIND US WHY WE WORK WITH VELOCITY CREDIT UNION AND I THINK THEY'RE A GREAT CREDIT UNION.
UM, BUT WHY DO WE WORK WITH THEM AND ARE THERE NOT OTHER CREDIT UNIONS THAT WANNA PARTICIPATE? OR WHY, WHY DO WE SPECIFICALLY WORK WITH THEM? UH, GOOD EVENING COMMISSIONERS.
THIS IS, UH, RICHARD GENESEE, VICE PRESIDENT OF CUSTOMER ENERGY SOLUTIONS.
AND I BELIEVE WE'VE HAD THE AGREEMENT WITH VELOCITY IN PLACE FOR ALL THIS TIME.
UH, SO I DON'T KNOW OF A SPECIFIC REASON THAT WE'RE WORKING WITH HIM EXCEPT THE RELATIONSHIP HAS WORKED SINCE, I BELIEVE IT'S 2011 OR, UH, OR SO WE, UH, THIS WAS ORIGINALLY STARTED WITH FIVE, UH, MILLION DOLLARS.
AND UM, THE BUDGET FOR THIS IS 600,000 A YEAR.
WE HAVE CONSISTENTLY SPENT THE BUDGET ON THE LOW INTEREST, NO INTEREST LOANS ASSOCIATED WITH THIS PROGRAM FOR, AND, AND BASICALLY WHAT WE'RE DOING IS ARE WE, ARE WE PAYING SORT OF THE IN, IS THAT WHAT WE'RE DOING? YEAH, IT'S JUST THE INTEREST.
UH, WE'RE PAYING THE INTEREST AND THAT'S THE 600,000.
OKAY, SO THE INDIVIDUAL IS STILL PAYING BACK THE PRINCIPAL, WE'RE JUST HELPING KEEP IT THAT'S CORRECT.
AND, AND IS THIS ONLY AVAILABLE FOR LOW TO MODERATE? NO, IT'S AVAILABLE FOR BOTH LOW, UM, LOW INCOME AND NON LOW INCOME.
IT'S ZERO INTEREST ON THE NON LOW INCOME.
SO THE EXAMPLES THAT YOU HAVE IN THE WRITEUP, THOSE ARE JUST EXAMPLES.
PEOPLE COULD DO OTHER, YOU KNOW, THEY MIGHT DO AN AC THEY MIGHT DO CORRECT.
POOL, PUMP, THEY MIGHT, THEY MIGHT DO ALL KINDS OF THINGS THAT ARE, THAT THERE MAY NOT BE REBATES FOR, BUT OR TO COVER THE WHOLE COST, BUT THEY CAN, THEY CAN PACKAGE IT WITH OTHER THINGS.
IT CAN BE, YES, THAT'S CORRECT.
AND UM, THEN JUST SORT OF A, A FOLLOW UP OR STATEMENT? I MEAN, IF THERE ARE OTHER CREDIT UNIONS OUT THERE INTERESTED, I GUESS THEY COULD, THEY COULD REACH OUT TO AUSTIN ENERGY AND SAY WE'D BE INTERESTED IN PARTICIPATING.
IT, IT'S NOT OR IS IT A, IS THE CONTRACT WRITTEN SUCH WAY? I MEAN, THE CONTRACT IS WRITTEN WITH VELOCITY, BUT WE CERTAINLY COULD ENTERTAIN INTEREST FROM OTHER, UH, CREDIT UNIONS IF THEY WERE OKAY.
THAT ANSWERS MY QUESTION, EVA.
I WAS WONDERING HOW MANY PEOPLE ARE UTILIZING THIS PROGRAM, LIKE ON AN ANNUAL BASIS? I DON'T HAVE THE EXACT NUMBER OF, UH, PARTICIPANTS, BUT I CAN SAY THAT WE'VE CONSISTENTLY SPENT THE $600,000 THAT WE HAVE ALLOCATED FOR THIS, UH, PROGRAM.
BUT I, I CAN FOLLOW UP WITH THE EXACT NUMBER.
YEAH, YEAH, THAT WOULD BE GREAT.
I, I WOULD LOVE TO SEE JUST LIKE A REALLY LIKE BASIC, UM, TABLE ON LIKE HOW MANY ARE PARTICIPATING, YOU KNOW, BY YEAR AND LIKE WHAT, UM, WHAT THEY'RE UTILIZING IT FOR.
LIKE ARE THEY UTILIZING IT FOR EFFICIENCY OR EV CHARGERS OR SOLAR OR WHATEVER, UM, WHATEVER PROGRAM THEY'RE KIND OF PARTICIPATING IN.
IS THAT POSSIBLE? UM, YEAH, I THINK THAT'S POSSIBLE.
AND I THINK THESE ARE ALL IN THE REALM OF HOME IMPROVEMENTS.
SO I DON'T THINK THEY'RE EV CHARGERS PER SE.
I THINK THERE WOULD BE BUILDING ENVELOPE IMPROVEMENTS, ENERGY EFFICIENCY IMPROVEMENTS.
I SEE THOUGH THAT IT CAN STILL BE USED FOR SOLAR OR IS IT YOUR UNDERSTANDING MAYBE THAT IT'S JUST NOT BEING USED FOR SOLAR? CORRECT.
AND I KNOW IN THE PAST THAT WAS THE CASE THAT IT WAS PERMISSIBLE BUT NOT REALLY BEING UTILIZED THAT WAY BECAUSE OF THE TERM OF THE LOAN.
IS THAT STILL THE MAIN BARRIER OR HOW, WHAT IS THE LENGTH OF THE, THE LOAN NOW? UM, THE LENGTH I BELIEVE,
[00:15:01]
LET ME, LET ME GET BACK TO YOU ON THE SPECIFIC TERM.'CAUSE I'M NOT, UH, I DON'T WANT TO MISQUOTE.
UM, I MEAN I'M VERY SUPPORTIVE OF THIS, BUT I DO THINK THAT IF THERE'S NOT CURRENTLY LIKE A, YOU KNOW, A TERM THAT IS, YOU KNOW, ATTRACTIVE FOR SOLAR, WHICH MIGHT BE A LONGER PAYBACK, THEN SOME OF THE EFFICIENCY INVESTMENTS THAT, THAT WOULD BE WORTH PURSUING.
UM, SO MAYBE WE COULD TALK MORE ABOUT THAT, THAT LATER.
I DON'T KNOW IF THIS CONTRACT THOUGH, LIKE DOES THAT KIND OF CLOSE THE DOOR ON ANY CHANGES FOR THE NEXT YEAR? OR HOW, HOW DOES THAT WORK? UM, THIS, THIS, UM, EXTENSION IS JUST TO INCREASE THE CONTRACT AUTHORITY, UH, FOR MM-HMM
FIVE YEARS, UH, BUT DOES NOT PRECLUDE BEING ABLE TO MAKE CHANGES, UH, DURING THAT PERIOD OF TIME.
SO YOU COULD MAKE, WE COULD LOOK AT, UH, WAYS TO ENHANCE THE PROGRAM WITHIN THE FIVE YEAR PERIOD.
UM, 'CAUSE I CERTAINLY DON'T WANNA LIKE HOLD THIS UP.
UM, BUT I, I DO THINK THAT'S A, A NEED, UM, THAT, THAT COULD BE ADDRESSED.
I LOOK FORWARD TO SEEING THOSE, UH, THOSE NUMBERS.
ANY OTHER QUESTIONS ABOUT NUMBER FOUR? NO OTHER QUESTIONS? I WAS GONNA MAKE A MOTION TO APPROVE, UNLESS THERE ARE OTHER QUESTIONS.
WE HAVE A MOTION AND A SECOND.
I JUST DIDN'T WANT THE NEW, THE TWO NEW CHRISES TO GET ALL THE, TO BE IN THE RECORD.
[5. Recommend approval authorizing a contract for Strategic Partnership of Utilities and Retailers program administration for Austin Energy with CLEAResult Consulting, Inc., for an initial term of two years with up to three one-year extension options in an amount not to exceed $11,000,000. Funding: $1,250,000 is available in Operating Budget of Austin Energy.]
FIVE.UH, CYRUS ANDAL HAD A QUESTION ABOUT NUMBER FIVE.
WELL, UH, I JUST WANTED TO FIND OUT MORE ON, ON HOW THIS PROGRAM WORKS AND WHAT THESE FOLKS DO FOR US AND WHAT WE DO FOR THE PROGRAM.
'CAUSE THE, THE ENERGY EFFICIENCY REBATES AND, AND ESPECIALLY THE HEAT PUMP WATER HEATERS HAVE BEEN A PET PEEVE OF MINE THAT YOU ALL HAVE A GREAT REBATE, A GREAT PROGRAM, AND YOU GO INTO A STORE AND THESE THINGS DON'T EXIST.
AND YOU TALK TO PEOPLE IN THE AISLE AND THEY SAY, I'VE NEVER HEARD OF SUCH A THING.
A HEAT PUMP IS AN AIR CONDITIONER, IT'S WATER, NOT A WATER HEATER.
SO DO THESE, DOES THIS PROGRAM ENGAGED THE RETAIL STORES AND TRY TO BUILD UP, UH, STOCKING FOR THESE THINGS? YES, THAT IS, UH, THAT IS THE ROLE OF CLEAR RESULT, UH, THE CONTRACTOR THAT WE USE FOR THIS PROGRAM, THE STRATEGIC PARTNERSHIP BETWEEN UTILITIES AND RETAILERS.
SO PART OF WHAT THEY ARE DOING IS, UH, MANAGING THE, UH, NUMBER OF RETAILERS AND THE OFFERINGS AT THE RETAILERS, AND ALSO THE ADVERTISING OF THE MEASURES IN STORE SO THAT IT'S ATTRIBUTABLE TO, UH, AUSTIN ENERGY IN THE CITY OF AUSTIN.
AND AND DO YOU SELECT THE THINGS FOR THEM TO PROMOTE IN THE AUSTIN MARKET, OR DO THEY HAVE LIKE A NATIONAL PROGRAM THAT WE'RE JUST PART OF? IS IT IT IT'S BOTH.
UM, THEY DO HAVE A NATIONAL PROGRAM, SO THE CLEAR RESULT DOES COME TO US WITH IDEAS AND RECOMMENDATIONS.
OB OBVIOUSLY, ULTIMATELY IT'S OUR DECISION IN TERMS OF WHICH ITEMS WE ADD AND, UH, UH, UH, MAINTAINING THE PROGRAM MORE AND MORE WE'RE DOING, UH, DEMAND RESPONSE ENABLED, UH, PROGRAM, UH, DEVICES, MEASURES IN THE STORE SO THAT WE CAN BENEFIT THE THERMOSTAT, THE, IN ADDITION TO A THERMOSTAT, OTHER DEVICES THAT WOULD BE YES, MM-HMM
BUT THIS, THIS WOULD HELP PROMOTE AND, AND HAVE, UH, HEAT PUMP WATER HEATERS IN STOCK THEN WITH A, WITH A REBATE OR WITH A PROMOTION.
YEAH, THAT WOULD BE ONE OF THE ITEMS THAT WOULD BE AVAILABLE IN STORE.
BUT YOU KNOW, WOULD BE CLEAR RESULTS ROLE WOULD BE WORKING WITH THOSE RETAILERS, UM, THAT ARE IN THE PROGRAM TO CARRY THAT ITEM AND THEN INCLUDING IT IN OUR PROGRAM SO THAT, UH, THE CUSTOMER THAT BUYS ITEMS AT RETAIL GETS THE INSTANT REBATE, GETS THE INSTANT, UH, DISCOUNT OFF THAT ITEM IN INSTEAD OF APPLYING TO YOU LATE INSTEAD OF YEAH.
ARE, ARE THERE, UH, A RANGE OF OTHER THINGS THAT COULD BE ADDED TO IT? FOR EXAMPLE, HEAT PUMP, UH, CLOSE DRYERS, UH, INDUCTION RANGES, THINGS THAT ARE VERY ENERGY EFFICIENT? YEAH, WE ARE, WE ARE LOOKING TO ADD MORE AND MORE ITEMS AND INEVITABLY THERE'RE HIGHER COST ITEMS. THEY'VE
[00:20:01]
BEEN LOWER COST ITEMS IN THE PAST, YOU KNOW, THERMOSTATS ARE FAIRLY, UM, YOU KNOW, THEY'RE NOT THAT EXPENSIVE, BUT MORE AND MORE, YOU KNOW, UH, THERE ARE HIGHER COST ITEMS THAT ARE DELIVERING GREATER SAVINGS LIKE HEAT PUMP, WATER HEATERS, AND, UH, SO THOSE ARE OFFERED? YES.I JUST WANT TO SEE SOMEBODY BRING SOME HORSEPOWER TO RETAIL TO GET THESE THINGS INTO THE STORES AND, AND GET THEM PROMOTED AND ALSO GET THEM, UH, JUST, YOU KNOW, SO THAT THE TRADE FOLKS KNOW ABOUT IT TOO.
THAT'S ANOTHER, ANOTHER AREA OF RESISTANCE, BUT I'M SUPPORTIVE OF THIS HAPPENING.
I JUST WANNA KNOW WHAT THEY BROUGHT TO IT.
YEAH, WELL WE'RE CONTINUING TO ADD MORE AND MORE MEASURES, MORE AND MORE STORES, UH, MORE AND MORE, UH, OPPORTUNITIES FOR CUSTOMERS TO TAKE ADVANTAGE OF THE INSTANT SAVINGS.
IN THE, IN THE WRITEUP, THERE'S A STATEMENT THAT PART OF THIS IS TO GET PEOPLE NOT ONLY TO OBVIOUSLY PURCHASE THE, THE PRODUCTS, BUT THEN ENROLL IN DEMAND RESPONSE PROGRAMS. I DON'T UNDERSTAND HOW THAT ACTUALLY HAPPENS.
IS IT, IS IT CONTINGENT? LIKE YOU ONLY GET THE REBATE IF YOU ALSO NO.
SIGN UP? RIGHT NOW THERE'S NO, UH, REQUIREMENT, BUT IN THE FUTURE WE MAY BE ABLE TO MORE CLOSELY LINK, LIKE MAYBE THE DEVICES COULD BE PRE-ENROLLED OR SOMETHING LIKE THAT SO THAT, UH, WHEN THEY'RE PURCHASED, THEY WOULD ALREADY BE ENROLLED IN THE DEMAND RESPONSE PROGRAM.
SO THAT'S MORE OF A FUTURE THING IN THE, IN THE PROJECT, MORE, MORE OF A FUTURE THING.
WE'RE ALSO LOOKING AT THAT FOR OTHER PROGRAMS, LIKE WHEN WE INSTALL, UH, MEASURES IN MULTIFAMILY, CAN THOSE MEASURES ACTUALLY BE PRE-ENROLLED IN DEMAND RESPONSE? I HAVE A FEW OTHER QUESTIONS.
SO, UM, WHEN I GOT MY HEAT PUMP WATER HEATER, IT WAS THROUGH A PLUMBER.
IT WASN'T THROUGH A RETAIL STORE AND THEY, THEY SEEMED TO HAVE IT, SO MAYBE THEY WERE MORE EDUCATED ABOUT IT.
I SAID, WELL, MY PLUMBERS TOLD ME THAT IT WAS A CRAZY IDEA NOT TO DO IT.
UM, I HAD TO FORCE IT ON A, YEAH, WELL IT'S PRETTY, IT'S REALLY EFFICIENT, BUT, AND IT'S PRODUCED MY COST ANYWAY.
I GOT AN EMAIL FROM NEST SAYING THAT THEY'RE OBSOLETING FIRST AND SECOND GENERATION, AND THEY'LL GIVE A REBATE.
AND YOU BASICALLY HAVE, EVEN WITH THAT REBATE, YOU STILL HAVE TO GO REFRESH WHAT SEEMS TO BE PULL FULLY FUNCTIONAL, EXCEPT THEY DON'T WANT TO MAINTAIN THE SOFTWARE ANYMORE ON IT.
AND I'M WONDERING IF, UM, IN YOUR RECORDS OR FOR A REBATE FOR AUSTIN ENERGY, FOR A THERMOSTAT, IF THAT COULD BE CONSIDERED TO HELP WITH THE REFURBISHMENT BUYING ANOTHER ONE JUST BECAUSE THEY WON'T MA THEY WON'T SUPPORT THEIR SOFTWARE.
MAYBE IT'S SOME CYBER SECURITY ISSUE AND THEY HAVE HARDWARE EMBEDDED AND THEY CAN'T WORK AROUND IT WITH SOFTWARE, WHATEVER.
BUT THEY DID NOT EXPLAIN IT VERY WELL.
BUT I'VE GOT, FOR EXAMPLE, ME AND I, I THINK YOU MAY HAVE THOUSANDS OF THESE IN YOUR SERVICE TERRITORY, THOUSANDS OF THESE FIRST AND SECOND GENERATION NEST THERMOSTATS THAT ARE NO LONGER GONNA BE, UH, VISIBLE VIA YOUR APP AND PROGRAMMABLE LIKE THAT.
YOU'LL HAVE TO DO IT ALL MANUALLY IN THIS DIAL.
YEAH, I THINK WE, WE WOULD STILL NEED A WAY TO ASSESS, UM, AND I THINK WE'RE, WE'RE AWARE THAT OF THE NEST COMMUNICATION, BUT WE NEED A WAY TO ASSESS HOW MANY OF THOSE ARE SPEC, UH, STRICTLY FIRST GENERATION WITHIN OUR SERVICE TERRITORY.
SO I THINK WE'RE STILL TRYING TO ASSESS THAT.
YEAH, I CAN SEND YOU THE EMAIL THAT, BUT IT, IT'S JUST, IT'S VERY DISTURBING.
DOES DOES THAT DROP THEM OUT OF THE, UH, DEMAND MANAGEMENT PROGRAM? YEAH, I WOULD THINK SO.
SO, SO YOU'D WANT TO YEAH, ENCOURAGE PEOPLE TO BUY A NEW ONE AND REBATE 'EM TO KEEP 'EM IN THE PROGRAM.
IF A CUSTOMER'S APP CAN'T TALK TO THE THETA, I WOULD THINK YOUR DR PROGRAM WOULD NOT BE ABLE TO EITHER.
OR AS YOU SAID, MAYBE IT'S A, I, YOU KNOW, IT COULD ALSO BE JUST THE CAPABILITY TO COMMUNICATE WITH IT.
SO, UM, YEAH, IT WOULD NEED TO BE REPLACED IN ORDER FOR, UH, YOU TO BE ABLE TO COMMUNICATE REMOTELY WITH IT AND FOR US TO BE ABLE TO, UM, SO CAN YOU GET FROM NEST, ISN'T NEST OWNED BY GOOGLE? YEAH, NEST IS OWNED BY GOOGLE, YES.
COULDN'T YOU GET THE DATA FROM THEM ABOUT, YOU KNOW, WHO IN YOUR SERVICE AREA HAS THOSE AND, AND THEY'RE GONNA DROP OUT OF YOUR DER PROGRAM? POSSIBLY.
YEAH, I THINK WE'RE LOOKING AT THAT, BUT I DON'T THINK WE HAVE THAT YET.
[00:25:02]
SO IT'S COMING UP PRETTY QUICKLY.ANY OTHER QUESTIONS ON NUMBER FIVE? VICE CHAIR WHITE HAS HER HAND UP.
I WAS, UH, FIRST I'LL JUST SAY I HAD THE, IT'S BEEN A, A FEW YEARS NOW, BUT I HAD THE SAME EXPERIENCE WITH THE CONTRACTOR AND THE, THE HOT WATER HEAT PUMP.
SO, UM, I DON'T KNOW IF Y'ALL ARE DOING ANY CONTRACTOR EDUCATION.
HOPEFULLY IT'S BETTER NOW THAN IT WAS A FEW YEARS AGO.
UM, BUT MY QUESTION IS, UM, DOES, DOES THIS PROGRAM INCLUDE THE ANY ELECTRIC LAWN EQUIPMENT, LANDSCAPING EQUIPMENT? UH, YES.
THIS PROGRAM DOES INCLUDE ELECTRIC, UH, LAWN EQUIPMENT AND, UM, YOU KNOW, THERE'S, UH, ACTUALLY POTENTIAL TO ADD MORE ELECTRIC LAWN EQUIPMENT.
LIKE WE HAD IN THE EVENT RECENTLY WHERE WE WERE EXCHANGING THE GAS POWERED, UM, ELECTRIC LAWN, OH, GAS POWERED, UH, LAWN CARE EQUIPMENT FOR ELECTRIC POWERED, UH, LAWN CARE EQUIPMENT, LEAF BLOWERS, AND, UH, WEED WHACKERS SPECIFICALLY.
UM, WELL, I I, I, I'M HOPING THAT WE'RE GONNA GET A, UM, A DEBRIEF OF THAT EVENT.
ARE WE, ARE WE GOING TO YES, WE HAVE A MEMO AND DRAFT AND, UM, WE WILL CIRCULATE THAT ONCE WE FINALIZE THE MEMO.
UM, I, AND IT WOULD BE GREAT TO GET THAT ON AN AGENDA.
I'LL, I'LL REQUEST THAT SEPARATELY.
BUT, UM, I GUESS MY CONCERN IS, IS, IS THE ELEMENT THAT'S PART WHAT, WHAT CLEAR RESULT DOING JUST KIND OF THE OLD MODEL OF, I THINK LIKE SOME OF THE REBATES WERE, THEY WERE LIKE 15 OR $30 OFF.
UM, AND YOU KNOW, I THINK, YOU KNOW, THAT, THAT, UM, SCOTT HAS GONE AROUND, UM, THE, TO SOME OF THE RETAILERS AND SEEN THAT THEY'RE NOT IN ANY WAY, LIKE ADVERTISING THAT THAT DISCOUNT IS GOING TO OCCUR.
SO IT'S NOT CHANGING CONSUMER BEHAVIOR AND, AND SEEMS LIKE IT'S JUST PERHAPS A WASTE OF MONEY.
UM, AND I, I KNOW YOU'RE AWARE THAT COUNCIL PASSED A, A RESOLUTION ON THIS, I THINK AT LEAST A YEAR AGO, MAYBE MORE.
UM, SO I'M JUST WONDERING LIKE, HOW DO, IS THIS JUST A CONTINUATION OF WHAT HAD BEEN HAPPENING OR IS IT THAT IT CAN INCLUDE SOMETHING FOR A NEW PROGRAM THAT, THAT MIGHT BE MORE, UH, MORE EFFECTIVE USE OF THOSE FUNDS? I, I GUESS MY, MY RESPONSE WOULD BE WE ARE ALWAYS LOOKING TO IMPROVE, UH, THE PROGRAM AND, UH, PART OF THE, YOU KNOW, UH, RESPONSIBILITIES OF THE VENDOR ARE TO ENSURE THAT WE'RE GETTING PARTICIPATION AT RETAIL, UM, IN THIS PROGRAM.
SO WE WOULD BE EVALUATING THAT, UM, VENDOR AND IF THEY ARE NOT PERFORMING UP TO SNUFF, UH, WE WOULD DEAL WITH THAT ACCORDINGLY.
BUT THAT'S PART OF IT IS ALWAYS EVALUATING THAT AND ALWAYS IMPROVING THAT EXPERIENCE FOR THE CUSTOMER.
WELL, I GUESS MY, MY CONCERN ISN'T THAT PEOPLE AREN'T BUYING THE EQUIPMENT, IT'S THAT THEY'RE BUYING THE EQUIPMENT ANYWAY.
AND THIS MONEY IS JUST, UM, YOU KNOW, NOT NOT BEING USED TO ACTUALLY CHANGE BEHAVIOR.
IT'S JUST KIND OF A, A BONUS THAT COMES, UH, YOU KNOW, COMES AT THE END OF THE PURCHASE.
SO I'M, I'M WONDERING THAT LIKE IN LIGHT OF THE COUNCIL RESOLUTION AND THAT Y'ALL ARE EXPLORING OTHER MODELS, WHY THAT, WHY THAT IS CONTINUING? LIKE WHAT VALUE Y'ALL SEE IN THESE VERY SMALL, NOT ADVERTISED DISCOUNTS ON THIS EQUIPMENT? WELL, I, I, I GUESS I AGAIN SAY THAT THE VALUE WE SEE IS, UH, IN, WE ARE SEEING SUCCESS IN THE PROGRAM IN TERMS OF THE ITEMS THAT WE CONTINUE TO ADD TO THE ELIGIBLE ITEMS FOR, UM, FOR INSTANT REBATES, UH, INCLUDING HIGHER PRICED ITEMS, NOT JUST SMALL PRICED ITEMS IN THE STORE.
SO THERE'S THE, THERE'S THE PROPENSITY TO CONTINUOUSLY EVOLVE AND ADD, UH, NEW ITEMS, UM, ON THE LIST OF, UH, INSTANT SAVINGS ITEMS IN THE STORE.
YOU KNOW, I'M WONDERING IF, I THINK YOU HAD SOME SUCCESS WITH, UM, EVS WITH KIOSKS IN DEALERSHIPS, AND I WONDER IF THAT SAME IDEA COULDN'T BE USEFUL AT BIG BOX HOME
[00:30:01]
STORES WHERE THERE'S SOME KIND OF INEXPENSIVE, IT MAY BE CARDBOARD, NOT ELECTRONIC IN SOME WAY, BUT YOU KNOW, WHERE IT HAS VISIBILITY TO PUTTING ALL THE DIFFERENT APPLIANCES ON THERE, PICTURES OF THEM, WHAT COULD BE, AND THEN TAKE, TAKE AWAY FORMS OR QR AND OR QR CODES OR SOMETHING THAT WOULD MAKE AT LEAST SOME PEOPLE STUMBLE ACROSS IT AND THEN, UH, BE MORE AWARE OF IT, EVEN THE EMPLOYEES.I'LL TAKE THAT UNDER CONSIDERATION AND ADVISEMENT.
ANY OTHER QUESTIONS NUMBER? WELL, GO AHEAD, CALVIN.
I, I, I, I WANNA, I WOULD LIKE TO MAKE A MOTION IF THERE'S NOT MORE QUESTIONS.
L ALL IN FAVOR? WELL, I, I, I HAVEN'T MADE MY MOTION YET, SO YOU MIGHT WANNA WAIT TO SECOND IT.
MY, MY MOTION IS THAT WE, THAT WE RECOMMEND APPROVAL OF THIS ITEM, BUT ALSO RECOMMEND THAT CLEAR RESULT, UM, THESE, THE CURRENT DISCOUNTS AND REPLACE THOSE FOR SPECIFICALLY FOR, UH, WEED EATERS AND LEAF BLOWERS, BECAUSE THOSE ARE JUST SUCH A LOW, UM, DOLLAR AMOUNT THAT IT DOES NOT SEEM LIKELY TO MOVE CONSUMER BEHAVIOR.
SO THE MOTION IS THAT WE RECOMMEND APPROVAL, BUT WITH THE CAVEAT, THE CLEAR RESULT REPLACE THOSE EXISTING PROGRAMS FOR, UH, FOR WEED EATERS AND FOR LEAF BLOWERS WITH A PROGRAM THAT REQUIRES, UM, A, UM, A TRADE IN OF EXISTING GAS POWERED EQUIPMENT.
RICHARD, WHAT WOULD YOU SAY ABOUT THAT? I, I, I DON'T BELIEVE WE HAVE A TRADE IN.
I MEAN, WE'VE DONE THE EVENT, UH, OF COURSE, SO WE PARTNERED WITH AUSTIN RESOURCE RECOVERY FOR THAT, BUT, UH, YOU'RE TALKING ABOUT A DIFFERENT MODEL AT RETAIL, SO I THINK WE'D HAVE TO THINK THROUGH, UM, YOU KNOW, IF SOMETHING LIKE THAT COULD ACTUALLY BE, UH, ACCOMPLISHED AT RETAIL OR FIGURE OUT IF IT WE COULD PARTNER WITH A RR AT RETAIL OR I THINK IT WOULD REQUIRE ADDITIONAL CONSIDERATION.
SO, YEAH, AND I MEAN, MAYBE IT DOESN'T HAPPEN AT RETAIL, LIKE MAYBE IT IS AN EVENT BASED THING.
UM, BUT I THINK SOME, SOME WAY TO LIKE, MAKE SURE THAT WE ARE, WE ARE ACTUALLY TRANSITIONING PEOPLE THAT WERE USING GAS POWERED EQUIPMENT TO ELECTRIC AS OPPOSED TO JUST, UM, AN INEFFECTIVE SUBSIDY FOR PEOPLE WHO ARE GONNA BUY ELECTRIC ANYWAY.
WHICH GREAT JOB, IT'S MORE PLEASANT FOR EVERYTHING, BUT USE IT, USE THE DOLLARS A LITTLE MORE, UH, PRUDENTLY.
WELL, SOMETIMES THERE'S GROWTH.
YOU KNOW, MY SON BOUGHT AN ELECTRIC LAWNMOWER AND HE DIDN'T HAVE A GAS ONE TO TRADE IN, SO I, YOU KNOW, IT'S NOT NECESSARILY THAT WAY.
I DIDN'T MENTION LAWNMOWERS, I'M JUST MENTIONING THE, THE OTHER TWO YEAH.
I THINK SCOTT WOULD PROBABLY PROBABLY WANT ME TO INCLUDE LAWNMOWERS, BUT I DO THINK THOSE ARE A LITTLE MORE EXPENSIVE.
SO I, I DO THINK THOUGH THAT WE SHOULD MAKE SURE THAT THE DISCOUNT IS CLEARLY ADVERTISED.
UM, YOU KNOW, WHERE SOMEBODY'S MAKING THAT DECISION, NOT A SURPRISE DISCOUNT AT THE REGISTER.
WELL, IT IS ADVERTISED IN STORE.
IT IS IT, I MEAN, THAT'S PART OF WHAT WE CHARGE CLEAR RESULT WITH IS THE, UM, YOU KNOW, ENSURING THAT CUSTOMERS IN STORE ARE ABLE TO ASSOCIATE THE SAVINGS AND THE DISCOUNT WITH THE CITY OF AUSTIN AND AUSTIN ENERGY.
SO WE DO HAVE YOU SOME WORK ON ATTRIBUTION THERE.
HAVE, HAVE YOU, I'M CURIOUS IF YOU HAVE VERIFIED THAT RICHARD, IF I HAVE VERIFIED THAT I, I MEAN I, WE HAVE YEAH.
WE HAVE PROOF, WE HAVE PROOF IN THE STORES THAT IT'S OCCURRING.
I DON'T, I DON'T KNOW WHAT YOU MEAN.
I LIKE, I'M, I HAVEN'T WENT AROUND TO THE STORES, BUT SCOTT, UH, UM, JADE AND, UH, HE FOUND THAT, AT LEAST IT SOUNDED LIKE IN A NUMBER OF STORES, THERE WAS NO INDICATION WHERE THE CONSUMER IS MAKING THE DECISION THAT THERE WAS GOING TO BE A DISCOUNT.
AND THEN, UM, I THINK HE ACTUALLY LIKE WENT THROUGH WITH THE PURCHASE JUST TO SEE WHAT HAPPENED AND THEN THERE WAS A DISCOUNT.
UM, SO, YOU KNOW, I THINK IT'S WELL INTENTIONED, BUT IF THAT'S THE CASE, THEN YOU'RE NOT CHANGING, YOU'RE NOT CHANGING SOMEBODY'S DECISION, RIGHT.
YOU'RE JUST GIVING THEM A DISCOUNT FOR THE
[00:35:01]
DECISION THEY WERE ALREADY GONNA MAKE.SO WHAT I'M HEARING IS THERE'S SUPPORT FOR THE PROGRAM.
BUT THERE IS CONCERN ABOUT THE, THE RESULTS FROM CLEAR RESULT.
ARE THERE COMPETING PEOPLE THAT DO THIS AT THE SAME SCALE OR ARE THEY THE DOMINANT PLAYER? UH, I'M SORRY, COULD YOU REPEAT THE QUESTION? UH, ARE THERE OTHER PEOPLE LIKE, UH, CLEAR RESULT THAT DO THE SAME THING? OR ARE THEY KIND OF THE LEADING, I MEAN, COMPANY IN THIS ARENA, CLEAR RESULT IS ONE OF SEVERAL VENDORS THAT COULD DO THIS TYPE OF WORK, BUT THEY ARE THE LEAD, UM, NATIONALLY.
JUST TO BE CLEAR, I'M NOT SUGGESTING THAT LIKE AE SHOULDN'T CONTRACT WITH CLEAR RESULT.
I THINK IT'S JUST A MATTER OF GETTING THEM TO REFINE HOW THEY'RE INCENTIVIZING THIS TYPE OF EQUIPMENT.
I JUST WANT IT TO BE BIGGER AND MORE EFFECTIVE.
UH, I'M, I'M CONCERNED THOUGH ABOUT, I, I LIKE THE IDEA OF GETTING, UH, GAS EQUIPMENT OFF THE STREET, BUT I, I THINK BRINGING IT INTO EVERY RANDOM STORE IS JUST GOING TO BE A PROBLEM TO TURN INTO, YOU KNOW, TURN 'EM IN WHEN YOU BUY SOMETHING IN THE STORE.
IF, IF YOU HAVE AN EVENT LIKE YOU DID WITH LAWNMOWERS WHERE THERE'S A A PLACE, THESE THINGS ALL COME AND THEY CAN BE DISPOSED OF PROPERLY.
I MEAN, THEY'RE, THEY'RE LEAKING OIL, THEY HAVE GAS IN 'EM, THEY'RE, THEY'RE NOT SOMETHING YOU WANT JUST SITTING AROUND YOUR STORE.
SO I, I WOULDN'T, I WOULDN'T MAKE THAT A REQUIREMENT.
I, I, IF YOU CAN BLEND IT IN WITH YOUR LAWNMOWER PROGRAM, THAT'S GREAT, BUT I WOULDN'T MAKE IT A PART OF THE TRADE IN TO GET THE DISCOUNT ON THE NEW ELECTRIC WEED WHACKER.
I GUESS WHAT MY UNDERSTANDING WAS THAT THESE WERE LIKE HOME DEPOT, LOWE'S, KIND OF LIKE BIG STORES LIKE THAT.
IS THAT ACCURATE OR ARE WE TALKING ABOUT SMALLER? NO, IT'S A MIX OF, UH, RETAILERS LIKE HOME DEPOT'S, LOWE'S, BUT ALSO OTHER SMALLER RETAILERS.
SO THERE'S A MIX OF RETAILERS.
AND, AND WASN'T THE EVENT PROBABLY MORE FOCUSED ON COMMERCIAL OPERATIONS BUYING THESE, OR WAS IT FOR GENERAL? NO, THE EVENT WAS, THE TRADE IN EVENT ON A SATURDAY WAS FOCUSED ON LOW INCOME.
WELL, LET'S MOVE FORWARD ON NUMBER FIVE.
DO WE HAVE A MOTION AND A SECOND? WELL, SO, SO EVA MADE A MOTION WITH A KIND OF A DIRECTION, UM, I DON'T KNOW IF SHE'S OPEN TO, TO MEANT THAT TO BE MORE GENERAL.
LIKE MAYBE IT'S NOT A TRADE IN AT THE STORE, BUT SOME WAY OF ENSURING THAT THE PROGRAM IS REPLACING IS MAXIMIZING REPLACEMENT OF ELECTRIC OR OF GAS POWERED WITH ELECTRIC AS OPPOSED TO JUST SUBSIDIZING ELECTRIC.
WELL, I WAS GONNA SUGGEST THAT WE, WE APPROVE THE CONTRACT, BUT GIVE A DIRECTION THAT THEY EXPLORE WHAT KABA JUST SAID.
SO MY, SO WE'RE NOT, I DON'T WANNA HOLD UP THE CONTRACT, BUT SAY, YOU KNOW, A MOTION TO PROVE THE CONTRACT WITH A DIRECTION TO EXPLORE, UM, HOW TO, UH, INCENTIVIZE THE REPLACEMENT OF, UM, GAS, UH, LAWN EQUIPMENT.
IS THAT THE RIGHT TERMINOLOGY WITH ELECTRIC EQUIPMENT? SO SORT OF WE'RE SAYING WE'RE PROVING CONTRACT, BUT WANT THEM TO EXPLORE HOW TO MAKE SOME OF THAT HAPPEN? UM, WELL, THEY'RE DOING IT, IT'S JUST A MATTER OF IS IT AS EFFICIENT AND EFFECTIVE AS POSSIBLE? RIGHT.
WELL, IT SOUNDS LIKE THEY MAY NOT BE DOING THIS ASPECT.
SO IS IT, I I IF IT, UH, IF IT'S OKAY WITH THE UUC, I THINK MAYBE WE SHOULD, UH, PROVIDE SOME, UH, RESPONSE AND FEEDBACK ON OUR ASSESSMENT OF THE EFFECTIVENESS OF THE PROGRAM THAT MIGHT GIVE THE EUC A LITTLE BIT MORE INSIGHT AS TO WHETHER WE THINK IT'S EFFECTIVE, AND IF SO, WHY DO WE THINK IT'S EFFECTIVE AND IF NOT, WHAT ARE THE AREAS THAT WE SEE FOR IMPROVEMENT IN THE PROGRAM? OKAY.
UM, SINCE YOU'RE COMING BACK WITH THAT, I WILL SAY LIKE I WOULD LOVE TO SEE, AND I AM ASSUMING THE HOME DEPOT AND LOWE'S ARE COLLECTING THESE KIND OF DATA, LIKE AND THE OTHER RETAILERS, LIKE HOW MANY ELECTRIC, UM, YOU KNOW, EQUIPMENT THEY'RE SELLING, BUT HOW MANY BRA AS WELL AND, YOU KNOW, ANYTHING THEY'RE HEARING FROM CUSTOMERS.
[00:40:01]
WE'LL SEE WHAT WE CAN GET, UM, IN AND WRAP UP INTO THE ASSESSMENT.UM, THANK YOU VICE CHAIR WYATT.
WITH THAT, WITH A COMEBACK FROM AE ON THEIR ASSESSMENT OF THE EFFECTIVENESS.
SO IS THERE, IS THERE A NEW MOTION? MOTION AND A SECOND? WELL, DO WE NEED MOTION
I WAS SAYING I'LL SECOND WHAT YOU SAID.
SO MOTION TO APPROVE WITH THE DIRECTION THAT AUSTIN ENERGY COME BACK WITH AN ASSESSMENT OF ITS EFFECTIVENESS.
OH NO, I THOUGHT YOU WERE RECOMMENDING THE CLEAR RESULT EXPLORE OPTIONS.
A MOTION TO PROVE WITH THE DIRECTION THAT, UM, CLEAR RESULT EXPLORE A EXCHANGE PROGRAM FOR LAWN AND EQUIPMENT THAT USES GAS WITH LOT MORE EFFICIENT, LOT OF EQUIPMENT THAT RUNS ON ELECTRICITY.
LET'S JUST STICK WITH THEM COMING BACK AND THEN WE'LL, WE'LL GO FROM THERE.
THE, THE EXCHANGE PROGRAM YOU HAVE NOW, I'LL SECOND THAT MOTION FOR THE LAWNMOWERS IS NOT THROUGH CLEAR RESOLVE IS IT IS YOUR OWN PROGRAM? NO, IT, THAT, THAT WAS, AND THAT'S A PILOT.
SO THAT WAS JUST A EXCHANGE PILOT TARGETED AT LOW INCOME, UH, INDIVIDUALS WITH AUSTIN RESOURCE RECOVERY, WITH PARTNERING WITH AUSTIN RESOURCE RECOVERY PART OF THIS PROGRAM ANYWAY.
RIGHT, NIKKI? UM, I WAS THINKING WE WERE GOING TO APPROVE IT AS IS AND THEN THEY WERE GOING TO COME BACK AS A FUTURE ITEM.
AND THEN AT THAT POINT IN TIME, IF THE EUC WOULD LIKE TO PRESENT A FORMAL RECOMMENDATION, THEN WE CAN DO THAT AND THEN HAVE THAT FORWARDED, UH, TO COUNSEL AS A FORMAL RECOMMENDATION.
THE PROBLEM WITH THAT, THEN THE CONTRACT IS ALREADY DONE.
SO WOULD IT BE POSSIBLE FOR US TO TAKE THIS CONTRACT UP NEXT MONTH AFTER WE GET THAT PRESENTATION? UH, ONE MOMENT.
I NEED TO SEE WHEN IT'S SCHEDULED TO GO BEFORE COUNSEL.
IT'S SCHEDULED TO GO BEFORE COUNSEL ON SIX FIVE.
AND AT THIS TIME, WITHOUT TALKING TO THE PURCHASING GROUP, I DO NOT KNOW IF THIS IS ABLE TO PUSH.
AND SINCE THE EUC MEETING IS AFTER JUNE 5TH, AND THEN WE'RE GONNA GO INTO RECESS, AND SO THIS CONTRACT WOULDN'T PROBABLY BE ABLE TO COME BACK TO COUNCIL UNTIL THE END OF JULY.
SO I DON'T THINK THAT THAT
JUNE 5TH IS THEIR LAST MEETING BEFORE THEY GO INTO RECESS.
THAT'S EARLY FOR HOW LONG? IT IS EARLIER NOW BECAUSE BUDGET SEASON NOW STARTS IN THE MIDDLE OF, UH, JULY.
I, I THINK THAT LIKE, THIS IS ONE OF THOSE THINGS WHERE LIKE COUNCIL MADE A RECOMMENDATION.
I I THINK IT WAS PROBABLY AT LEAST A YEAR AND A HALF AGO ACTUALLY.
UM, AND I APPRECIATE THAT THE EVENT HAPPENED, BUT PART OF THE RECOMMENDATION WAS, YOU KNOW, OR THE, THE RESOLUTION FROM COUNCIL WAS ABOUT, YOU KNOW, REPURPOSING THE MONEY THAT IT SEEMS LIKE IT MIGHT NOT BE, YOU KNOW, USED IN THE MOST EFFECTIVE WAY.
AND HERE WE ARE, IT'S STILL STILL HAPPENING.
SO I, I DEFINITELY HAVE SOME YEAH, UNEASE ABOUT JUST CONTINUING WITH THE STATUS QUO, GIVEN THAT SO MUCH TIME WAS GIVEN TO TRY TO WORK WITH CLEAR RESULT TO FIND ANOTHER OPTION ALREADY.
AND I GUESS IT HASN'T HAPPENED.
SO, UM, YEAH, THAT, THAT'S, THAT'S MY CONCERN.
WELL I THINK IT'S CLEAR, ISN'T IT CLEAR THAT WE HAVE TO VOTE ON THIS OR NOTHING AND THAT WE'LL HAVE A COMEBACK AND THAT WE CAN DISCUSS IT WHEN WE HAVE THAT.
SO IS IT REALLY RIGHT, BUT WE CAN ALWAYS MAKE A RECOMMENDATION.
LIKE WE CAN ALWAYS RECOMMEND MORE THAN JUST WE RECOMMEND APPROVAL, WHICH IS I THINK WHAT CYRUS AND I HAVE BOTH PUT FORWARD AS A MOTION.
AND COULD I JUST GET THE SPECIFIC LANGUAGE THEN? CAN ONE OF YOU WRITE IT OUT SO THAT IT CAN BE OFFICIALLY READ INTO THE RECORD? OR DO YOU WANT TO USE IT WORD BY WORD AS WHAT COMMISSIONER REED SAID PREVIOUSLY? AND I'LL HAVE TO TAKE IT FROM THE RECORDING.
CYRUS, WHY DON'T NOT HAVE TO REPEAT WHAT YOU SAID.
I THINK WHAT I SAID IS A MOTION TO
[00:45:01]
APPROVE THE CONTRACT WITH THE DIRECTION THAT CLEAR RESULTS EXPLORE AND EXCHANGE PROGRAM FOR, UM, EXCHANGING LAWN AND GAS EQUIPMENT FOR MORE EFFICIENT LAWN AND ELECTRIC EQUIPMENT.AND IF THE COMMISSION IS IN AGREEMENT WITH THAT AND PASSES IT, I'LL PULL THE LANGUAGE STRAIGHT FROM THE RECORDING SOUNDS.
IS THERE A SECOND TO THAT MOTION? ABSOLUTELY.
ALL IN FAVOR WITH, WITH ONE AMENDMENT
ONE AMENDMENT I, I'M STILL INTERESTED IN, IN RICHARD'S EVALUATION OF THE PROGRAM.
'CAUSE IT'S SOMETHING I REALLY SUPPORTED.
I'D LIKE TO KNOW MORE ABOUT MORE NUMBERS, MORE HOW, HOW IT'S WORKING.
I THINK HE ALREADY COMMITTED TO THAT, SO I DON'T KNOW THAT WE NEED THAT IN THE MOTION.
ALRIGHT, I TAKE THAT BACK LONG.
THE CONTRACT SECOND AS IS, IT'S UH, THREE ONE YEAR EXTENSIONS.
INITIAL TERM OF TWO YEARS AND THREE.
SO WE HAVE A MOTION, WE HAVE A SECOND IN FAVOR.
OKAY, SO WE HAVE FIVE NOW WE GO TO STAFF BRIEFINGS.
WHAT'S THAT? I SAID POINT OF ORDER.
DID WE HAVE FIVE? DOES THAT MEAN IT DID NOT PASS? NO, I THINK WE HAD AT LEAST SIX HERE.
I THOUGHT I JUST HEARD YOU SAY WE HAD FIVE AND THANK YOU.
NO, I THINK CYRUS WAS PULLING OUR CHAIN ANYWAY.
[7. Staff briefing on the Austin Energy FY26 Forecast by Rusty Maenius, Senior Vice President & Chief Financial Officer.]
OKAY, NUMBER SEVEN, STAFF BRIEFING.RUSTY FINANCIAL, GOOD EVENING COMMISSIONERS.
UH, RUSTY MANUS, ACTING GENERAL MANAGER OF, UH, BUSINESS SERVICES.
LEMME START BY APOLOGIZING FOR MY VOICE.
I KIND OF BATTLED A CASE OF LARYNGITIS AND I MIGHT EVEN GET A LITTLE MORE RASPIER AS THE DAY GOES ON.
WHAT I'M HERE TO PRESENT TO YOU TODAY IS THE FORECAST, THE SAME INFORMATION THAT WAS INCLUDED IN THE CITY'S, UH, FORMAL FORECAST PRESENTATION IN APRIL.
SO ACTUAL RESULTS WILL VARY FROM, UH, FROM THIS FORECAST.
UH, UH, IT CONTAINS UM, UH, WHAT WE BELIEVE ARE REASONABLE ASSUMPTIONS, BUT IT IS A FORECAST.
SO, ABOUT A YEAR AGO I STOOD UP HERE AND TOLD YOU THAT WE WERE IN, UH, OUR HISTORIC FINANCES WERE IN A DIRE SITUATION, TRIED TO TELL YOU HOW WE GOT THERE, WHAT WE'RE GONNA DO TO REMEDY IT, AND DID ALL OF THAT WITH ABOUT 44 SLIDES.
THE GOOD NEWS, IT'S BOUND TO ABOUT 20 SLIDES
AND UH, SO I WILL TELL YOU THIS, THAT OUR, UH, FINANCIAL POSITION HAS IMPROVED, BUT IT'S NOT GREAT THAT WE HAVE GOT SIGNIFICANT CHALLENGES, UH, THAT WE FACE GOING FORWARD.
UH, WE HAVE, UH, PUT TOGETHER A PROPOSAL THAT WE FEEL ADDRESSES THOSE CHALLENGES.
I WILL TELL YOU THAT FOR FAR TOO LONG, AUSTIN ENERGY HAS ALLOWED ITS REVENUES TO DRIVE ITS OPERATIONS, ESPECIALLY WHEN IT COMES TO THE CAPITAL IMPROVEMENT PLAN.
UH, ABOUT 18 MONTHS AGO, I STARTED TALKING TO OUR OPERATIONS PEOPLE AND THEY'RE SAYING, WE HAVE GOT TO INVEST IN PLANT.
WE CAN NO LONGER KICK THE BALL, KICK THE CAN DOWN THE ROAD.
ARE WE GONNA GET BEHIND THE POWER CURB? AND THINGS ARE GONNA GET WORSE THAN BETTER.
AND SO WITH THIS FORECAST, WE ARE TRYING TO BE PROACTIVE AND WE'VE TURNED THE PAGE AND WHAT WE'VE ASKED OUR STAFF TO DO IS TELL ME WHAT YOU NEED AND I WILL BUILD A FINANCING PLAN AROUND IT TO GET YOU WHAT YOU NEED.
AS LONG AS I CAN BALANCE THAT AGAINST RATE IMPACT AND WHAT WE'RE ASKING OUR CUSTOMERS TO PAY.
SO AS I MENTIONED, WE'RE BETTER BUT NOT GREAT.
WHAT I WANT YOU TO FOCUS ON, UH, ON THE LINE GRAPH ON TOP IS THAT YOU CAN SEE IN FISCAL YEAR 2023 WE WERE, WE WERE, UM, KIND OF AT THE, AT THE BOTTOM OF OUR, UM, UH, FINANCIAL TROUGH.
AND WE HAVE MANAGED TO COME UP OUT OF THAT.
AS YOU CAN SEE, THE YELLOW LINE THAT STAYS CASH ON HAND, UH, MOVED FROM 94
[00:50:01]
DAYS TO 170 BY FISCAL YEAR 24, WE THINK THROUGH CURRENT YEAR ESTIMATES THROUGH 2025, WE'LL BE AT 164.I WILL TEMPER THAT BY SAYING THAT INCLUDES A LOT OF OVER RECOVERY AND POWER SUPPLY ADJUSTMENT.
AND THE OTHER LINES, THE MAIN TAKEAWAY FROM THEM IS THAT EVEN AS SLIGHT AS IT IS, THEY'RE THIS, THEY HAVE A POSITIVE TREND.
AND IF YOU LOOK AT THE NUMBERS ON THE BOTTOM, YOU CAN SEE THOSE TRENDS A LITTLE MORE CLEARLY.
WE TURNED OUR FIRST PROFIT, OUR NET POSITIVE, NET MARGINS IN FISCAL YEAR 2024.
IT'S THE FIRST TIME THAT WE'VE HAD POSITIVE NET MARGINS SINCE 2019.
YOU CAN LOOK AT DEBT SERVICE COVERAGE.
WE WENT FROM ONE NINE TO TWO FOUR WITH A TARGET OF 2.5 OPERATING MARGINS IN 21.
WERE A MINUS 5% AND NOW THEY'RE AT 11 AND WE'RE LOOKING AT 12.
UH, DEBT TO CAPITAL, UH, HAS NOT IMPROVED IN DAYS OF CASH ON HAND.
ALREADY TALKED ABOUT THAT A LITTLE BIT.
SO WE'RE GETTING THERE, BUT WE'RE NOT THERE YET.
AND THAT'S, THAT'S UNFORTUNATE.
I WISH THAT WE COULD START FROM A LITTLE STRONGER FINANCIAL POSITION TO TACKLE THE HURDLES THAT ARE IN FRONT OF US.
SO WHAT ARE THOSE HURDLES? WE HAVE STRUCTURALLY IMBALANCED RATES, WHICH BASICALLY MEANS WE DON'T HAVE ENOUGH REVENUE PAID FOR THE COSTS UNDER, UNDER TODAY'S RATES.
OUR LOAD FORECAST INTO THE FUTURE IS LOWER THAN IT WAS LAST YEAR.
WE'RE STILL GROWING BUT NOT AS IS AS AT A FAST AS RATE.
WE STILL SUFFER FROM INFLATION AND IN FACT OUR REVENUES ARE BEHIND THE INFLATION CURVE.
AND THEN ONCE AGAIN, WE GET TO SYSTEM IMPROVEMENTS.
I PREEMPTED THAT A LITTLE BIT WITH PREVIOUS DISCUSSION ABOUT KICKING THE CAN DOWN THE ROAD AND WE ALWAYS KIND OF FELT LIKE MAYBE WE WERE UNDER INVESTING.
AND SO WE LOOKED AT SOME DATA AND, AND REALIZED THAT WE ARE NOT INVESTING AT THE SAME RATE OUR PEERS ARE.
SO THIS IS WHERE WE STAND TODAY.
THE DOTTED ORANGE LINE ARE THE REVENUES UNDER TODAY'S RATES WITH PASS THROUGH SET COST AND THERE'S A $90 MILLION SHORTFALL GOING INTO 2026.
YOU CAN SEE AT THE TAIL END THE, THE DOTTED YELLOW LINE THAT WAS LONG-TERM FORECAST LAST YEAR.
THE CURRENT FORECAST IS THE BLUE DOTTED LINE THAT REPRESENTS 10 TO $15 MILLION A YEAR LESS IN REVENUE.
WE TALKED A LITTLE BIT ABOUT INFLATION.
THIS IS WHAT I FIND REALLY INTERESTING AND HOW, UH, THIS DOVETAILS INTO WHAT'S ACTUALLY HAPPENING TO US.
UM, YOU CAN SEE THAT BY, UH, WE, WHAT WE, WE WE, WE, UH, START AT 2021 'CAUSE THAT'S WHEN OUR LAST RATE CASE WAS.
AND SO WE LOOK AT THE COST FROM THEN.
YOU CAN SEE FOR THAT THREE YEAR PERIOD THAT INFLATION AND, UH, EITHER THROUGH THE CPI OR THE PRODUCER PRICE INDEX INCREASED 14 TO 16% SINCE 2021.
THAT IS, REPRESENTS AN UNPRECEDENTED 40 YEAR HIGH OF CPI.
BUT THE STUFF WE BUY, THE STUFF THAT'S, UH, GOES INTO OUR CAPITAL IMPROVEMENT PLAN POLES, WIRES, TRANSFORMERS, THEY'VE INCREASED IN MULTIPLES OF THAT.
THEY'VE INCREASED TWO TO THREE TIMES THAT RATE.
AND THAT'S EXACTLY WHAT THIS GRAPH SHOWS.
THESE, THIS IS OUR OM COSTS THAT ARE PAID FOR OUT OF BASE RATES PEGGED AT THAT SAME TIME.
AND YOU LOOK OVER THAT SAME THREE YEAR PERIOD, OUR COMPOUNDED ANNUAL GROWTH RATE IS 5% OR ROUGHLY 15%, 17%, UH, SINCE 2021.
THAT IS RIGHT IN LINE WITH CPI AND PPI.
AND THE ONLY THING WE'VE DONE TO TRY TO, TO MATCH REVENUES TO THOSE COST INCREASES IS A SINGLE 2% BASE RATE INCREASE IN 2024.
SO TALK A LITTLE BIT ABOUT CAPITAL IMPROVEMENT.
AND WE FELT THAT MAYBE WE WERE NOT INVESTING AT THE SAME LEVEL AS OUR PEERS ARE.
SO WE WENT AND WE LOOKED AT EARNINGS MONITORING REPORT.
THESE ARE PUC FILINGS AND THEY'RE AVAILABLE TO THE PUBLIC.
AND WE LOOKED AT, UH, CAPITAL EXPENSE TO DEPRECIATION, UH, UH, EXPENSE THAT RATIO.
AND WHAT WE FOUND THAT OVER THOSE THREE YEARS THAT WE WERE INVESTING BACK INTO OUR PLANT AT A LEVEL ABOUT EQUAL TO DEPRECIATION EXPENSE.
BUT IF YOU LOOK WHAT OUR, OUR, UH, PEERS HAVE DONE, PERNELL'S ELECTRIC BLUE BONNET AND L-C-R-A-P-E-C INVEST ABOUT TWO TO ONE TO ITS DEPRECIATION EXPENSE.
[00:55:01]
IS TWO POINT A HALF TO 3%.LCRA IS MORE LIKE $4 FOR EVERY DEPRECIATION EXPENSE THAT TURNS INTO, UH, SO IT'S NOT, UM, UH, LOST ON US THAT OUR PLANT AGE IS OLDER.
BECAUSE WE'RE NOT REPLENISHING IT AS QUICK AS DEPRECIATING IT.
SO THIS, UH, THE LAST COLUMN COMES FROM A FITCH REPORT.
UH, SO NONE OF THESE NUMBERS WERE CALCULATED BY US.
THIS ALL COMES FROM A THIRD PARTY.
UH, WE'RE AT, WE, OUR AVERAGE AGE OF OUR PLAN IS 20 YEARS PER ANALYSIS.
BLUE BONNET WASN'T RATED AND L CCRA IS IT 15 YEARS? YES, SIR.
SO I MEAN, BLUEMONT AND ELLIS PRETTY MUCH GET THEIR ELECTRICITY FROM LCRA.
SO WHEN YOU SAY PLANT A, YOU MEAN THE, A POWER PLANT OR ALL PLANT? THEIR TRANSMISSION ASSETS, THE DISTRIBUTION ASSETS, ALL PLANTS.
IT'S NOT LIMITED TO POWER PRODUCTION.
AND, AND PEC AT LEAST I CAN SPEAK TO, THEY DON'T HAVE ANY POWER PRODUCTION MM-HMM.
THEY MAY HAVE SOME, THEY HAVE SOME DISTRIBUTED LEVEL, LIKE CORRECT STORAGE IF THEY HAVE NO POWER SOLAR, BUT NOT, NOT, NOT ANYTHING BIG.
SO ANY PROPERTY, PLANT OR EQUIPMENT OR CAPEX OR IS THERE ANY PROPERTY, PLANT OR EQUIPMENT OR CAPEX THAT'S DEPRECIATED OVER MULTIPLE YEARS AS THEY'RE COUNTING? YES.
RIGHT NOW, HOW IS THIS NORM? YOU MAY HAVE IT IN A CHART SUBSEQUENT TO THIS, BUT HOW IS THIS NORMALIZED FOR THEIR LOAD GROWTH AND THEIR CUSTOMER COUNT GROWTH? IT'S NOT, IT IS, IT IS JUST PURE NUMBERS FOR THAT YEAR.
SO I CAN'T TELL YOU WHAT OUR LOAD, HOW OUR LOAD GROWTH OR OUR CUSTOMER COUNT INCREASED, UH, COMPARED TO PEC BLUE BONNET OR LCRA.
BUT LCRA DOESN'T HAVE ANY RETAIL CUSTOMERS MM-HMM
SO I MEAN, YOU'RE NOT SUGGESTING THAT WE NEED 195 TO 2 22 29 OR WHATEVER THOSE NUMBERS ARE.
200% ARE YA, YOU'RE JUST SAYING WE NEED MORE.
WELL I, SO OUR PLANNERS HAVE CONSISTENTLY SAID WE, WE NEED TO INVEST MORE.
I THINK THIS POINTS TO THE FACT THAT PERHAPS WE DO MM-HMM
DO YOU HAVE ANYTHING SIMILAR FOR, UH, CPS OR I DO NOT.
IF WE, IF WE COULD HAVE, COULD HAVE PULLED IT, WE WOULD HAVE, OKAY, NEXT SLIDE PLEASE.
BUT ALSO ENERGY IS NOT UNIQUE IN THE SENSE THAT, UM, WE ARE PRESSURED BY INCREASING COSTS.
OTHER UTILITIES ARE EXPERIENCING THE SAME THING AND THEY RESPONDED THE SAME WAY THAT WE'RE GOING TO PROPOSE TO RESPOND.
ON THIS SIDE OF THE SLIDE, YOU CAN SEE, UM, WHAT'S HAPPENED, UH, ACROSS THE US AND ON THE RIGHT HAND SIDE YOU CAN SEE WHAT HAPPENED IN TEXAS AND EVEN LOCALLY.
SO CENTRAL TEXAS HAS RAISED THEIR REVENUES BY 11.23%.
KEEP IN MIND WHEN WE TALK ABOUT BASE RATE INCREASES, THE EQUIVALENT BASE RATE INCREASE TO THAT WOULD BE 22%.
THAT'S ON I THINK ABOUT A 1,250, UH, KWH AVERAGE CUSTOMER, SOMETHING LIKE THAT.
AND THEY RAISED THE CUSTOMER CHARGE $10, DIDN'T RAISE THEIR AVERAGE RATE BY $30.
CPS JUST INCREASED THEIR RATES BY 4.25%.
THAT COMES ON THE HEEL OF, UH, A PREVIOUS INCREASE A YEAR OR TWO AGO OF AROUND 4%.
AND THEY'RE PROPOSING SOMETHING LIKE 5% NEXT YEAR OR THE YEAR AFTER.
KEEP IN MIND THOSE ARE WHOLE RATE INCREASES.
WHAT WE'RE GONNA BE TALKING ABOUT IS BASE RATES ABOUT HALF OF THAT.
AND THEN YOU HAVE NEW BRAUNFELS ONCE AGAIN RAISE THEIR RATES 4.8% IN 2024, ADDITIONAL 5.9 IN 2025.
SO HOW DO WE PROPOSE TO ADDRESS THE CHALLENGES? AND WHAT WE'VE TRIED TO DO IS CREATE A LONG-TERM FINANCIAL PLAN, RIGHT? TO SUPPORT OPERATIONS, MAKE THE NECESSARY INVESTMENTS WE HAVE, BUT BALANCE IT AGAINST BILL IMPACT.
SO WHAT WE'RE PROPOSING IS A 5% ANNUAL BASE RATE INCREASE EVERY YEAR FOR THE NEXT FIVE YEARS.
WE'RE ALSO PROPOSING THAT WE DIRECTLY RECOVER THE GENERAL FUND TRANSFER THAT'S ASSOCIATED WITH REGULATORY REVENUES, ENERGY EFFICIENCY SERVICE, REVENUES AND SERVICE AREA LIGHTING RATES THROUGH THOSE PASS THROUGH RATES.
THOSE THREE PASS THROUGH RATES ARE ASSESSED TO GENERAL FUND TRANSFER, BUT ALL THE CASH TO PAY FOR THAT GENERAL FUND TRANSFER IS PAID OUT OF BASE RATES.
AND SO WE ARE GONNA TRY TO FIX THAT MISALIGNMENT.
[01:00:01]
WE'RE GONNA CONTINUE ON WITH WHAT WE'VE ALWAYS DONE AND THAT'S PRUDENT COST MANAGEMENT.CAN, CAN YOU, CAN YOU EXPLAIN ONE MORE TIME AND MAYBE SIMPLE LANGUAGE THAT I CAN UNDERSTAND THAT SECOND BUCKET, UH, IN THE, IN THE PREVIOUS SLIDE.
SO DIRECTLY RECOVER GENERAL TRANS, I'VE GOT A SLIDE ON THAT MAYBE THAT'LL HELP CLEAR IT UP AND IF IT DOESN'T THEN I'LL BE HAPPY TO COME BACK TO THIS.
KYLE, YOU HAVE YOUR HAND UP? YEAH.
UM, JUST TO BE CLEAR, YOU'RE PROPOSING THAT, THAT THIS, UM, 5% RATE INCREASE HAPPENED WITH OR WITHOUT A RATE CASE THROUGH THE BUDGET PROCESS.
THE WE'RE WE'RE REQUESTING THROUGH THIS BUDGET PROCESS A 5% RATE INCREASE.
OKAY, MAYBE I CAN CLEAR THIS UP.
SO GENERAL FUND IS ASSESSED ON PASS THROUGH REVENUES, BUT THE DOLLARS THAT PAY FOR THAT GENERAL FUND TRANSFER ALL COME OUT OF BASE REVENUES, NOT THE PASS THROUGHS.
SO OUT OF THE THREE PASS THROUGHS, ENERGY EFFICIENCY, SERVICE AREA, LIGHTING AND REGULATORY, BY FAR THE REGULATORY CHARGE IS THE LARGEST WELL OVER $200 MILLION.
IF YOU LOOK AT THE RATE OF GROWTH FROM 2013 WHEN THAT, WHEN THAT COST WAS BROKEN OUT AND ESTABLISHED AND COMPARE IT TO BASE REVENUES, IT HAS GROWN ABOUT TWICE AS FAST AS BASE REVENUES.
SO THE GFT THAT'S ASSOCIATED WITH THAT REGULATORY REVENUE HAS GROWN TWICE AS FAST AS THE BASE REVENUES THAT GO TO PAY FOR IT.
SO IF YOU LOOK AT THE PROPOSED SOLUTION, I THINK KIND OF LAYS IT OUT.
SO WE PROPOSE THAT WE INCLUDE THE GENERAL FUND TRANSFER AS A RECOVERABLE COMPONENT OF ENERGY EFFICIENCY SERVICES.
SO, AND REGULATORY, UH, RATES AND AS THESE PASS THROUGHS INCREASE, RIGHT, THERE'LL BE SELF-FUNDING, WE WON'T HAVE TO WORRY ABOUT THE RATE OF INCREASE BECAUSE THE GFT THAT WILL BE ASSESSED ON THAT WILL BE RECOVERED THROUGH THAT RATE AND IT CURES THAT SYSTEMIC MISALIGNMENT.
SO, SO JUST TO BE CLEAR, YOU MEAN WE WOULD ADD LIKE A 12.5% FEE ON TOP OF THOSE THREE SO THEY WOULD RECOVER.
SO IF WE, SO IF WE LOOKED AT THE COST TO SAY REGULATORY AND SAY THE COST WAS A HUNDRED DOLLARS, SO INSTEAD OF SETTING A RATE, SO, AND THE REGULATORY RATE IS MATRIX EXPENSE, RIGHT? IS IT'S, IT'S WHAT WE PAY OTHER TRANSMISSION PROVIDERS TO USE THEIR TRANSMISSION, RIGHT? SO IF OVER THE COURSE OF THE YEAR IT WAS A HUNDRED DOLLARS OF COSTS, RIGHT? WHAT WE ARE PROPOSING IS TO ADD THE GFT PIECE ASSOCIATED WITH IT, ASSUME 12% THAT WE WOULD'VE COLLECT NOT ONLY THAT A HUNDRED DOLLARS, BUT THE $12 THAT WE WOULD HAVE TO PAY AS GENERAL FUND TRANSFER RATHER THAN TAKE IT OUT OF BASE RATES BASICALLY.
PRIMARILY CUSTOMERS WOULD NOT BE CHARGED TWICE, YOU'D JUST BE MOVING IT TO THAT RECOVERABLE.
IT WOULD BE RECOVERED THROUGH THE PASS THROUGH RATES.
SO THESE ARE SOME OF THE FINANCIAL TRANSACTIONS, OUR FINANCIAL ACTIONS WE TOOK LAST YEAR AT THIS TIME.
AND UM, YOU KNOW, WE, WE KIND OF WORKED THROUGH THE SAME PROCESS, UH, THIS YEAR, BUT I CAN'T REALLY TALK ABOUT THOSE UNTIL THE BUDGET COMES OUT.
BUT WHAT WE DID LAST YEAR, WE REDUCED O AND M BY $60 MILLION.
WE INCREASED DEBT FUNDING OF CIP TO TO MAXIMIZE OUR CASH RESERVES.
UH, WE UH, USED THE PSA OVER RECOVERY TO FUND THE POWER SUPPLY RESERVE ACCOUNT.
WE ACQUIRED A HUNDRED MILLION DOLLARS LETTER OF CREDIT FOR POWER MARKET COLLATERAL THAT WAS FORMALLY FUNDED WITH CASH.
AND LEMME TELL YOU, IN 2023, THAT AMOUNT WAS VERY SIGNIFICANT
AND THEN WE MANAGE POWER SUPPLY COSTS REALLY, REALLY WELL IN MY OPINION.
YOU KNOW, WHEN WE TALK ABOUT BASE RATES, IT'S IMPORTANT, BUT IT'S ALSO IMPORTANT WHAT OUR CUSTOMERS PAY.
AND I THINK YOU ALL HAVE SEEN THIS SLIDE.
THIS IS TWO YEARS OF BACK TO BACK INFORMATION.
WANNA FOCUS JUST ON, ON TWO SETS OF BARS, THIS ONE AND THE ONE ON THE TAIL END.
THE FIRST BARS BY YEAR SHOW YOU WHAT WHAT OUR PURCHASES WERE FROM ERCOT
[01:05:01]
2023 WAS A LOT OF, UM, UH, REALLY VOLATILE MARKETS.WE'VE PAID $1.3 BILLION FOR POWER THAT YEAR.
BUT BY THE TIME WE GOT THROUGH DISPATCHING OUR GENERATION, USING OUR PPAS AND HEDGING, WE WERE ABLE TO BUY DOWN THAT BILLION THREE TO 647 MILLION.
THE BLACK BAR AT THE END, RIGHT? IN 24, THE MARKET WASN'T AS VOLATILE, IT WAS ONLY 559 MILLION.
AND WHILE WE WEREN'T ABLE TO ACHIEVE THE SAVINGS LIKE WE DID IN 23, WE STILL WERE ABLE TO REDUCE THOSE POWER SUPPLY COSTS DOWN TO 542 MILLION.
SO WHAT HAPPENS IF THIS PROPOSAL IS, IS, IS APPROVED? THE DOTTED LINE BECOMES THE BLUE LINE AND, AND AS YOU CAN SEE, WE'RE STILL 20, ABOUT $20 MILLION SHORT IN 2026.
BUT WHAT WE'RE TRYING TO DO IS CREATE A LONG-TERM PLAN TO MEET NOT ONLY THE FINANCING NEEDS THAT AUSTIN ENERGY NEEDS, BUT TO BALANCE THAT AGAINST RIGHT PAYER IMPACT.
SO WHAT DOES THE RATE PAYER PAY? FORTUNATELY, WE'VE BEEN ABLE TO LOWER THE POWER SUPPLY ADJUSTMENT, UH, FOUR TIMES WHEN THIS PROPOSAL WAS WRITTEN, UM, WITH A FIFTH BEGINNING AT THE BEGINNING OF THIS MONTH.
AND WHEN WE LOOK AT WHAT OUR CUSTOMERS PAID A YEAR AGO TO WHAT WE'RE PROPOSING THEY PAY NOW, THEIR BILL FALLS FROM $122 A MONTH TO A HUNDRED 16TH.
NOW THAT INCLUDES, THAT INCLUDES NO ADJUSTMENTS TO THE PASS THROUGH CHARGES, RIGHT? THOSE NUMBERS WILL BE FORTHCOMING AND THEY'LL BE INCLUDED IN OUR BUDGET AND WE'LL PRESENT THOSE LATER THIS SUMMER ONCE IT BECOMES, UH, PUBLIC THROUGH THE, THROUGH THE, UH, CITY'S BUDGET PROCESS.
BUT THE REDUCTIONS IN THE, UM, THE, THE PSA THIS YEAR ALONE, THE FIVE TIMES INCLUDING MAY, ARE ABOUT EQUAL TO WHAT WE'RE PROPOSING IN BASE RATES OVER THE NEXT FIVE YEARS.
SO I HAVE A, MAYBE THIS IS COVERED, BUT ON THE, ON THE PROPOSAL TO INCREASE BASE RATES BY 5%, AS, AS YOU KNOW, RUSTY, WHEN YOU DO A, AN ACTUAL RATE CASE, THERE'S ALWAYS TWO ISSUES.
ONE IS HOW MUCH MONEY DOES THE UTILITY NEED? AND THEN THE SECOND ISSUE IS ALWAYS HOW DO YOU ALLOCATE THAT AMONG CUSTOMER CLASSES? RIGHT? AND SO THIS PROPOSAL IS ACROSS THE CLASSES.
WELL, IF I'M A LARGE, I'M JUST BEING IN DEVIL'S ADVOCATE.
IF I'M A LARGE INDUSTRIAL CONSUMER, I'M GONNA SAY, WELL, THAT'S NOT FAIR BECAUSE, OR WHOEVER I'M RESIDENTIAL, SOMEONE'S GONNA ARGUE THAT'S NOT FAIR.
THAT NEEDS TO GO THROUGH A RATE CASE TO DETERMINE WHAT THE PROPER ALLOCATION OF THAT 5% INCREASE IN REVENUES YOU NEED IS, I MEAN, I'M ASSUMING YOU'VE THOUGHT THAT THROUGH, BUT ABSOLUTELY THAT WOULD, THAT WOULD BE SO I THINK THE CRITICISM IS IF YOU REALLY WANT AN INCREASE OF 5% OVER THE NEXT SEVERAL YEARS, IT SHOULD GO THROUGH A RATE CASE.
SO MY RESPONSE TO THAT WOULD BE, WOULD BE THIS, WE HAVE A FINANCIAL POLICY THAT WILL DO A RIGHT REVIEW EVERY FIVE YEARS, WHICH WE WILL DO.
BUT IF I HAVE TO HAVE A RATE CASE, NOW, I WOULD, IF, IF, IF CITY COUNCIL WOULD SAY, NO, WE'RE NOT GONNA GRANT THIS 5% REDUCTION.
THE ALTERNATIVE IS FOR ME TO STOP EVERYTHING RIGHT NOW, GO THROUGH AN ACCELERATED RATE CASE, AND I'M GONNA ASK FOR A HUNDRED MILLION DOLLARS.
THAT'S ABOUT A 15% BASE RATE INCREASE.
ONCE AGAIN, THIS IS A LONG TERM PLAN TO KIND OF MEET THE NEEDS AND BALANCE THE IMPACT TO OUR CUSTOMERS.
AND REMIND ME WHEN, I REMEMBER WHEN WE DID THAT, UM, RATE CASE, AND I'M GETTING MIXED UP WITH ALL MY YEARS.
UM, WHAT YEAR IS IT? 2025? NO, UM, WE PHASED IT IN.
ARE WE ALREADY THROUGH THOUGH THAT PHASE IN? YES, YES.
AND WHAT HAPPENED IS WE RAISED THE CUSTOMER CHARGE AND REDUCED THE ENERGY CHARGE.
SO THEN THAT EFFECT OF THAT INCREASE IN CUSTOMER CHARGE WAS ZERO.
SO IF THE, I'M LOOKING AT YOUR SLIDE THAT HAD THE GREEN BARS.
IF THE AVERAGE BILL IS ABOUT THE SAME OR GOES DOWN ALL THE WAY THROUGH 2028, HOW DO YOU GET MORE REVENUE THAT HELPS SOLVE THINGS LIKE DISTRIBUTION, HARDENING CAPEX? SO PART, PART OF IT WILL BE RIGHT, THE, THE 5% BASE RATE
[01:10:01]
INCREASE, BUT THE OTHER PART WILL BE INCREASING THE PASS THROUGH, UH, RATES TO RECOVER THAT GFT.SO IT'S, IT'S, BUT YEAH, SO, SO WHAT THIS SLIDE SHOWS IS, UM, IT SHOW AND THE, AND THE BILL IMPACT TO THE AVERAGE RESIDENTIAL CUSTOMER FOR A 5% BASE RATE INCREASE IS AROUND THREE BUCKS A MONTH.
WHAT THIS DOESN'T SHOW YOU IS THE IMPACT TO PASS THROUGHS BECAUSE WE DON'T KNOW THOSE YET AND WE'LL BE COMING BACK.
BUT IT'S, IT'S MY SINCERE BELIEF THAT THEY WILL NOT BE MATERIAL.
I THINK THE QUESTION IS HOW CAN YOU BE ACHIEVING ANY KIND OF FINANCIAL, UH, FINANCIAL HEALTH, UH, BENEFIT IF THE BILL IS GOING DOWN? AND THAT'S BECAUSE THE $122 THAT YOU SEE FOR FY 25, THAT WAS WHAT WAS ADOPTED IN THE FY 25 BUDGET.
WHAT'S HAPPENED SINCE THEN IS THERE HAVE BEEN FIVE, 5% REDUCTIONS TO THE POWER SUPPLY ADJUSTMENT, WHICH IS NEARLY HALF THE CUSTOMER BILL.
SO BY INCORPORATING THAT, YOU FIRST YOU HAVE TO SUBTRACT THAT OUT AND THEN YOU ADD THE 5% AND THAT'S WHAT ENDS UP AT THE ONE 16.
DOES THAT MAKE SENSE? I THINK THAT ANSWERS THE QUESTION.
SO I MEAN, UH, THANK YOU FOR THAT EXPLANATION.
BUT THEN THAT JUST MAKES ME WONDER LIKE WHAT ARE THE ASSUMPTIONS FOR OUR SUPPLY COST GOING FORWARD? BECAUSE THIS SEEMS TO YEAH.
LIKE WHY IS IT ASSUMED THAT IT'S GONNA KEEP GOING DOWN? OH, I DON'T KNOW THAT THEY'LL KEEP GOING DOWN, BUT WE THINK THEY'LL BE RELATIVELY STABLE.
AND THAT, UM, AND, AND, AND THANK YOU STUART FOR THAT BECAUSE, UH, LEMME GO BACK TO WHY THE BILL IS, IT'S THE NET EFFECT, UH, THE, THE 5% REDUCTIONS IN THE PSA CUTS THIS TYPICAL BILL BY OVER $10.
AND YOU CAN SEE HERE THAT IT'S ABOUT $5.
SO THERE'S THE, THAT'S, THAT'S THE DELTA IN THERE.
UM, WE, I DON'T KNOW WHAT POWER SUPPLY COSTS ARE GONNA DO.
UM, ALL I CAN TELL YOU IS WHAT WE, UH, WHAT WE, WHAT'S INCLUDED IN THE FORECAST.
AND THAT'S THAT THOSE NUMBERS STAY RELATIVELY STABLE.
BUT KEEP IN MIND, WE ARE A COST RECOVERY UTILITY.
SO IF COSTS GO UP, WE HAVE TO RECOVER.
AND THE FACT OF THE MATTER IS, IS EVERY YEAR THAT WE DON'T RECOVER COSTS, IT JUST GETS WORSE.
RIGHT? BECAUSE NOW I ONLY HAVE, I ONLY HAVE ONE POT TO PAY BILLS WITH AND THAT'S CASH.
AND IF I DON'T GET RATE RELIEF, THEN I HAVE TO DRAW ON THOSE CASH RESERVES SO THAT WHEN IT DOES COME TIME FOR A RATE RELIEF, I HAVE TO, I HAVE TO REFILL THOSE CASH RESERVES.
YOU HAVE TO MAKE UP EVEN MORE.
AND SO THIS, THIS, AS CYRUS SAID, THE FIRST THING IS REVENUE RECOVERY AND THEN HOW YOU SPREAD THE BILL, RIGHT? SO IT'S GONNA BE RECOVERED, BUT IT'S A MATTER OF WILL YOU GET BEHIND THE CURVE EVEN MORE? AND THIS IS SHARING MORE RISK THAT THE COMMUNITY ALREADY HAS EFFECTIVELY JUST MORE QUICKLY AS FAR AS, I DON'T WANNA SAY HEDGING MARKET RISK THAT AE NATURALLY HAS.
IT, IT INCREASES GRADUALISM, IT INTRODUCES GRADUALISM.
'CAUSE MY ALTERNATIVE IS A RATE CASE.
AND IF I HAVE TO GO TO A RATE CASE, I'M GONNA ASK FOR EVERYTHING I NEED TO MAKE THE UTILITY SOUND.
CAN YOU GO BACK TO SLIDE, UM, 10, PLEASE? UH, I LOVE THE SLIDE.
'CAUSE IT, THE POINT IT DOESN'T MAKE, THAT'S REALLY EVIDENT AND I LIKE TO POINT, RIGHT? SO LET ME POINT, AND THEN I'LL COME BACK TO THE MICROPHONE.
AND CYRUS, YOU'LL REMEMBER THIS, YOU KNOW, WHAT THE UTILITY WAS DOING BACK AT THIS PERIOD OF TIME, 2021 WE'RE JUST COMING OUT OF COVID.
SO IN 2022, WE STARTED LITIGATING THE, THE RATE CASE, THE $30 MILLION THAT WE ULTIMATELY GOT 5% TO, TO PLUG THE REVENUE SHORTFALL IN 2021.
AND THAT BECAME EFFECTIVE HALFWAY THROUGH 2023.
AND JUST ON THE HEELS OF THAT, WE HAD A 2% RATE INCREASE.
WHAT WE SHOULD HAVE BEEN DOING IS FIGHTING ABOUT THAT 2021 RATE CASE AND INCREASING RATES 5% ON TOP OF THAT EVERY YEAR TO KEEP UP WITH COST.
BUT WE DIDN'T, WE ONLY INCREASED IT 2%
[01:15:01]
TO ACCOUNT FOR THIS, AND WE ONLY INCREASED IT 2% IN 25.AND SO WE HAVE TO PLAY CATCH UP.
IF WE WOULD'VE DONE RATE INCREASES MORE, IF WE WOULD'VE DONE LARGER RATE INCREASES EARLIER, WE WOULDN'T BE LOOKING AT 5% NOW.
AND THE CUSTOMERS BENEFITED FROM THOSE LOWER RATES.
AL UM, IT, IT, IT SEEMS TO ME IN A WAY THAT WE'RE BALANCING THE WHOLE THING ON A, ON A REDUCTION IN THE PSA, THAT THAT 2023 WAS A U HOPEFULLY UNIQUELY BAD YEAR THAT HAD TREMENDOUS TRANSMISSION CONSTRAINTS, VOLATILITY, BAD WEATHER, YOU KNOW, IT ALL HAPPENED AT ONCE, WHICH, WHICH THREW THE, THE POWER COSTS WAY OUTTA SIGHT AND, AND THREATENED A LOT OF UTILITIES.
AND 24 HAD A LOT, I THINK BETTER WEATHER ON AVERAGE.
AND, UH, 25 IS SO FAR THE SAME.
AND WE ALSO HAVE AN INCREDIBLE BUILD OUT OF BATTERIES IN ERCOT THAT ARE BRINGING A LOT OF STABILITY TO THE GRID AND REDUCING THOSE VOLATILITY SPIKES, WHICH HOPEFULLY WILL CONSISTENTLY OVER TIME REDUCED THE, THE REALLY HIGH PSA SPIKES.
I I DON'T KNOW IF THERE'S A WAY TO STUDY THAT OR IF THAT'S, BUT IT SEEMS, IF THAT'S TRUE, THEN IT WOULD NARROW DOWN TO A MORE STABLE POWER COST GOING FORWARD.
THAT'S WHAT WE HOPE FOR IS THAT WHAT WE'RE, WHAT WE'RE COUNTING ON, THAT'S WHAT WE'RE HOPING FOR.
WELL, ONCE WE GET TO THAT EQUILIBRIUM THAT YOU'RE PROPOSING, RIGHT? THAT THE MARKETS THAT THE RATES SETTLE, YOU'LL SEE INCREASES OF ABOUT $3 A MONTH.
THAT'S WHAT A 5% BASE RATE INCREASE WILL DO.
BUT THE OTHER PART OF THE EQUATION, ONE OF THE SLIDES TALKED ABOUT, WELL, LAST YEAR YOU SOLVED THINGS BY, UH, FOREGOING 20 $60 MILLION IN O AND M COST AND, AND DOING THE SAME THIS YEAR.
THAT'S, THAT'S PUTTING YOU FARTHER BEHIND THE CURVE THAT, THAT YOU NEED TO CATCH UP ON.
RIGHT? WHAT, WHAT WE'RE TRYING TO DO, THAT WAS IN 2025, RIGHT? WHEN, WHEN, ONCE AGAIN, REVENUE DROVE, DROVE OPERATIONS MM-HMM
RIGHT? WE'RE TURNING THE PAGE TRYING TO BE PROACTIVE.
I CAN'T SPEAK TO WHAT WE DID THIS YEAR 'CAUSE THAT'S PART OF THE BUDGET PROCESS.
AND WE CAN TALK ABOUT THAT IN A COUPLE OF MONTHS WHEN IT GOES PUBLIC.
WHAT I'M TALKING ABOUT HERE IS WHAT WAS INCLUDED IN THE FORECAST.
BUT, BUT TO YOUR POINT, WE BALANCE ALL OF THAT.
IT'S NOT A, IT'S NOT A BLANK CHECK.
I CAN'T SAY TO OUR TEAM, GO BUY WHAT YOU WANT.
GO BUILD WHAT YOU WANT AND I'LL JUST RAISE RATES AND PAY FOR 'EM.
THIS UTILITY'S ALWAYS BEEN VERY CONSCIENTIOUS ABOUT BILL IMPACT.
SO WE HAVE TO FIND THAT BALANCE MM-HMM
RIGHT? AND THAT PART OF THAT BALANCE IS MANAGING COSTS, NOT NECESSARILY KICKING THE CAN DOWN THE ROAD, BUT BEING PRUDENT WITH WHAT WE HAVE, BUT NOT SHORTCHANGING OUR CAPITAL PLAN BECAUSE THERE'S NOT ENOUGH REVENUE.
BUT IF WE DO THAT LONG ENOUGH, WE GET BEHIND THE CURVE.
LIKE YOU, YOU ILLUSTRATED IN THE BEGINNING.
THAT'S WHAT THIS PROPOSAL ACCOMPLISHES.
IT ALLOWS US TO INVEST IN THE PLANT THAT WE THINK WE NEED AND PAY FOR OUR OPERATING COSTS.
PRUDENT COSTS, RIGHT? AND HAVE A MANAGEABLE IMPACT TO OUR CUSTOMERS.
WHAT ABOUT OTHER COMMENTS FROM OTHER COMMISSIONERS? CHRIS IS RAUL, LAUREN, CESAR, ANY OTHER QUESTIONS ON THIS? I THINK, UH, I WAS LOOKING AHEAD AT THE SLIDE, SO I THINK I MAY HAVE SOME QUESTIONS, BUT I WAS QUESTION, I'M GONNA WAIT UNTIL WE GET A LITTLE FURTHER IN THE PRESENTATION.
CHRIS? K THE, UM, THE 5% NUMBER.
IS THAT, UM, IS THAT SUBJECT TO CHANGE? YOU KNOW, ABSOLUTELY.
YOU KNOW, I I I HOPE THAT I COULD STAND BEFORE YOU NEXT YEAR AND SAY, HEY, THINGS HAVE TURNED AROUND, INFLATION'S GONNA, AND KEEP IN MIND THIS FORECAST ASSUMES NO IMPACT TO, TO THE TARIFF ISSUES THAT ARE GOING ON TODAY.
RIGHT? WE'VE HAD VENDORS SAY THAT IF THOSE TARIFFS GOING TO FLAG, YOU CAN EXPECT 25% BASE RATE, 25% RE UH, INCREASES IN PRODUCT COSTS.
NOW KEEP IN MIND, I JUST SHOWED YOU THE SLIDE THAT COMPARED C UH, CIP AND, AND, UH, PPI, UH, TO WHAT WE ACTUALLY BUY, RIGHT? SO THE, THE, IT COULD BE A LOT WORSE, BUT I'M HOPING THAT'S A LOT BETTER.
THIS PLAN, BASED ON THE INFORMATION WE HAVE TODAY, THIS PLAN, IN
[01:20:01]
MY OPINION, IS THE MOST LOGICAL TO GET US FROM POINT A TO POINT B WITH MINIMAL IMPACT.AND THERE'S CHECKS AND BALANCES ONCE AGAIN WITH THE, WITH THROUGH THE FINANCIAL, UH, POLICIES TO HAVE THE FIVE YEAR REVENUE INCREASE.
IF WE DO A REVENUE ADEQUACY, UH, UM, COST OF SERVICE USING A 2026 TEST YEAR, AND IT SAYS WE NEED $80 MILLION, I WOULD PROPOSE LET'S NOT HAVE A RATE CASE.
THIS WILL GET US THERE AND MITIGATE THE IMPACT TO THE RATE CUSTOMERS, TO OUR, TO THE CUSTOMER'S BILLS.
IF YOU'LL ADVANCE THE SLIDES, I THINK WE CAN GET TO, CAN YOU GO FORWARD PLEASE? SLIDE 20.
I WILL TELL YOU THIS, THIS, THIS FORECAST WAS DEVELOPED PRIOR TO THE BUDGET AND WE KNEW THAT IN 2025 WE HAD A CIP SPEND PLAN OF $1.3 BILLION.
AND WE KNEW THAT THAT WAS NOT GONNA BE ENOUGH.
SO WE CAME UP, WE USED OUR BEST GUESS ESTIMATE TO COME UP WITH A PROXY.
SO THIS FIVE YEAR CIP LOOK COMES IN AT $1.6 BILLION OVER THE LAST FIVE YEARS.
I'VE BEEN HERE 25 YEARS, NEVER SEEN IT THAT HIGH.
BUT I'M TELLING YOU, THAT'S NOT GONNA BE WHAT'S GONNA BE IN THE BUDGET.
BY THE TIME EVERYTHING COMES IN AND WE GET TO ASSESSING THE CAPITAL NEEDS, 1.6 BILLION IS GONNA BE TOO LOW.
SO WITH THAT BEING SAID, I WANNA DRAW YOUR ATTENTION TO THE AE RESERVE LINE RIGHT HERE.
SO YOU CAN SEE HOW THOSE DOLLARS START TO BUILD IN THOSE OUTER YEARS.
55,000,027, 97,000,028, 118,000,029, A LOT OF MONEY.
AND I GUARANTEE YOU, WHEN WE COME BACK AND BRING YOU THE BUDGET, THAT MONEY WILL BE GONE AND IT'LL BE USED TO FUND CIP, MAYBE NOT ALL OF IT, BUT A BIG BUNCH OF IT.
THIS IS WHAT THE KPIS END UP LOOKING LIKE.
WE DO HAVE POSITIVE NET MARGINS, UH, DAYS OF CASH ON HAND THOUGH, EVEN WITH THOSE RATE INCREASES.
NOW THIS, THIS DOES NOT FACTOR IN OVER, UNDER RECOVERY, BUT LOOK AT THE DAYS OF CASH ON HAND.
EVEN WITH THOSE IN, UH, WITH THOSE TYPES OF INCREASES, WE DON'T, WE DON'T ACCUMULATE A LOT OF CASH.
OUR TARGET IS 200 DAYS, A MINIMUM IS 150.
WE DON'T EVEN REALLY QUIT FLIRTING WITH 150 DAYS UNTIL 20, 29, 3 YEARS DOWN THE ROAD.
DEBT SERVICE COVERAGE, WE DON'T GET, WE DON'T BUST THE TARGET OF 2.5 UNTIL YEAR FIVE.
DEBT DE CAPITAL STARTS TO GET SOME RELIEF.
CASH AND RESERVES, THEY LOOK BIG.
BUT KEEP IN MIND, THESE WILL CHANGE WHEN THE BUDGET COMES.
RIGHT? THIS DOES NOT HAVE WHAT I BELIEVE IS GONNA BE THE TRUE CIP SPEND OVER THIS FIVE YEARS, BUT THIS IS THE FORECAST INFORMATION THAT WAS INCLUDED WITH THE CITY COUNCIL THAT WAS GIVEN TO THE CITY COUNCIL.
HERE IS OUR ESTIMATED CIP SPEND.
YOU CAN SEE IT'S AT A, AT 1,000,000,006, IT'S FUNDED ABOUT 42% CASH, 58% DEBT, SOMETHING LIKE THAT.
WE STRIVE FOR ABOUT A 50 50 SPLIT.
I WILL TAKE ANY QUESTIONS THAT Y'ALL HAVEN'T ASKED AND I'LL EVEN ANSWER THE ONES THAT YOU HAVE ASKED ALREADY.
UM, I DON'T KNOW IF THIS IS A QUESTION FOR RUSTY OR STEWART, BUT, UM, IS THERE SOMETHING MAGIC ABOUT THE NUMBER 5%? IN OTHER WORDS, IF YOU WERE TO PROPOSE MORE THAN 5%, DOES THAT MEAN YOU HAVE TO DO A RATE CASE AND THERE'S SOMETHING MAGICAL? OR IS 5% REALLY JUST SORT OF THE, THE ROUND NUMBER YOU GUYS CAME UP WITH? IT'S, IT'S, IT'S THE, IT'S THE NUMBER.
WHEN WHEN WE SAT DOWN AND SAID, WHEN WE ASKED, RIGHT, WHAT, WHAT DO YOU NEED? LET ME FIGURE OUT HOW TO FINANCE IT AND YET BE MANAGEABLE TO THE CUSTOMER.
BUT I IMAGINE THERE'S ALSO LIKE, IF, IF, IF THE NUMBER YOU HAD COME UP WITH AND YOU SAID YOU NEEDED 10%, THAT'S GETTING INTO MORE LIKE THAT, THAT WOULD PROBABLY BE A THRESHOLD.
IF WE, IF WE TRULY NEEDED 10%, UM, AND WE FELT LIKE WE COULDN'T GO FORWARD WITH A, WITH A FINANCING
[01:25:01]
PLAN THAT WE THOUGHT CITY COUNCIL MIGHT BE OFF, WE WOULD PROBABLY HAVE A RATE CASE.SO THERE'S SOME, YEAH, ABSOLUTELY.
AND I, YOU KNOW, ONCE AGAIN, IT'S THE COUNTERWEIGHT TO THAT IS WHAT'S THE BILL IMPACT, RIGHT? WE THINK THAT 5% OR ABOUT $3 A MONTH CONSIDERING INFLATION COSTS AND ALL THAT, THAT'S REASONABLE.
KEEP IN MIND WE DON'T HAVE THE DATA HERE, BUT AS FAR AS RESIDENTIAL CUSTOMERS, OUR CUSTOMERS PAY SOME OF THE LOWEST BILLS IN THE STATE.
OUR SYSTEM AVERAGE IS STILL BELOW THE STATE AVERAGE.
AND OUR, OUR OUR AVERAGE BILL, RESIDENTIAL BILL, EVEN WITH THESE INCREASES ARE STILL GONNA BE MUCH SMALLER.
SO MY RATES, PEOPLE WILL TELL YOU, UM, I ALWAYS SAY, LISTEN, WE WE'RE STARTING LOW, WE CAN AFFORD RIGHT? THAT, THAT AND MY RATES, PEOPLE WILL TELL ME, YOU DON'T, YOU DON'T, YOU DON'T RAISE RATES BECAUSE IT'S AFFORDABLE OR 'CAUSE YOU DON'T WANNA MAKE, MAKE A BILL IMPACT.
AND I MIGHT BE CONFUSED 'CAUSE THERE WAS THE, THERE WAS THE POLICY DECISION ON THE PPSA, RIGHT? THAT SAID, YOU GUYS CAN GO UP TO 5%, BUT IF IT'S OVER THAT YOU NEED TO CONSULT WITH COUNSEL.
IS THAT WHAT I'M GETTING CONFUSED WITH? MAYBE? THAT'S CORRECT.
AND I'M JUST CHIME IN FOR A SECOND.
SO, UM, YOU KNOW, ONE THING TO TO RECALL, THERE WAS A SLIDE THAT SHOWS THE YELLOW BARS WITH THE ORANGE LINE AND THERE WAS THE DOTTED ORANGE LINE THAT SHOWS THE SHORTFALL BETWEEN COSTS AND REVENUES.
AND IT JUST SO HAPPENS THAT 5%, ALTHOUGH 5% DOESN'T BRIDGE THAT GAP IN YEAR ONE OF THE FIVE YEAR PLAN, 'CAUSE IT STILL LEAVES A $20 MILLION SHORTFALL IN YEAR ONE.
IT JUST SO HAPPENS THAT 5% THEN BRIDGES THAT GAP AND, AND TRACKS THE COST PROJECTIONS THROUGH THE FORECAST PERIOD PERFECTLY FOR THE REST OF THOSE FIVE YEARS.
BUT AGAIN, YOU, EVEN THOUGH THIS IS A PLAN FOR A 5% INCREASE OVER THOSE FIVE YEARS, YOU WOULD NEED TO GO BACK TO CITY COUNCIL EVERY YEAR, RIGHT? AS OH, ABSOLUTELY, THIS IS, THIS IS A FORECAST AND YOU KNOW, WE'RE TALKING ABOUT IT LIKE IT'S A PLAN.
IT'S REALLY, IT'S REALLY A FORECAST.
IT'S A PROJECTION OF LOOKING AT WHAT IT WOULD TAKE IF WE, IF WE, LIKE RUSTY SAID, YOU, YOU WILL GO TO CITY COUNCIL IN IN JULY OR AUGUST OR WHENEVER IT IS, THEY WILL MAKE A DECISION WHETHER 5% IS THE RIGHT AMOUNT AND THEN THE NEXT YEAR YOU'LL HAVE TO GO BACK TO THEM AGAIN.
AND, AND YOU KNOW, WHAT WE'RE SEEING, UM, I I I, I DON'T RECALL, I THINK RUSTY MAY HAVE MENTIONED IT, BUT YOU KNOW, IN TERMS OF, OF THE, THE BILL IMPACTS THAT YOU SAW NATIONALLY AND STATEWIDE, IF YOU, YOU, YOU SAW, FOR EXAMPLE, COLORADO SPRINGS UTILITIES, THEY HAVE A PLAN OF 6% EVERY YEAR FOR THE NEXT FIVE YEARS.
THAT WOULD BE LIKE US DOING 12% BECAUSE OUR 5% IS ONLY TWO AND A HALF PERCENT OF THE CUSTOMER BILL.
SO FOR, FOR, FOR US, IT'S, IT'S FOR THE CUSTOMER BILL IMPACT, IT'S A TWO POINT A HALF PERCENT INCREASE.
BUT WHEN YOU SAW ALL THOSE OTHER 11% FOR CENTRAL TEXAS ELECTRIC CO-OP OR, UM, YOU KNOW, A A A FOUR POINT A HALF PERCENT FROM CPS ENERGY OR PERIS AT FOUR POINT A HALF PERCENT WOULD BE LIKE US DOING A 9%.
UM, AND SO THAT STILL KEEPS US AS THE, WITHIN TEXAS, IT STILL KEEPS US AS THE THIRD MOST AFFORDABLE RESIDENTIAL CUSTOMER BILLS IN THE STATE BEHIND ONLY EL PASO, WHICH ISN'T IN, EVEN IN ERCOT AND DENTON, WHICH THEY WERE ACTUALLY ON RUSTY'S LIST.
THEY JUST RAISED THEIR CUSTOMER, THEIR RESIDENTIAL CUSTOMER BILLS BY $30 A MONTH.
SO EVEN WHEN YOU FACTOR IN THIS PLAN AND YOU GET TO THE, EVEN IF YOU ONLY LOOK AT THE YEAR FIVE NUMBER, EVEN BY TODAY'S METRICS, WE WOULD BE THE SECOND OR THIRD MOST AFFORDABLE BILLS IN THE STATE, EVEN ONCE WE GET TO YEAR FIVE COMPARED TO TODAY'S BILLS THROUGHOUT THE STATE.
AND I THINK IT'S, UM, A BIT OF A CAUTIONARY TALE IN TERMS OF HOW HAVE WE BEEN SO AFFORDABLE FOR SO LONG AS AUSTIN ENERGY, WHEN WE OFFER SO MUCH.
WE OFFER RESIDENTIAL PROGRAMS, CA CAP CUSTOMER PROGRAMS, WE OFFER SERVICE AREA LIGHTING, WE OFFER SOLAR REBATE PROGRAMS, ENERGY EFFICIENCY PROGRAMS, ALL OF THOSE THINGS THAT, THAT COUNT TOWARDS THAT CUSTOMER BILL IMPACT.
WHEN YOU LOOK AT THAT NET CUSTOMER BILL, MANY OF THOSE THINGS, THOSE OTHER UTILITIES THAT WE'RE COMPARED TO DO NOT OFFER.
AND YET SOMEHOW WE'RE ABLE TO HAVE SOME OF THE MOST AFFORDABLE BILLS IN THE STATE.
AND IF YOU TALK TO OUR OPERATIONS PEOPLE, THEY'LL TELL YOU, 'CAUSE WE'VE BEEN UNDER INVESTING IN OUR SYSTEM.
AND SO WE LOOKED AT THE DATA TO SEE IF THAT PROVES IT OUT.
RAUL, YOU WERE SAVING SOME QUESTIONS.
YEAH, I HAD A COUPLE QUESTIONS ON, UH, SLIDE 18.
I MEAN, YOU SHOW AN INCREASE IN, IN THE RATE PAYER BILL AND FY 27, BUT THEN IT'S FLAT, SO I'M NOT, SO, UH, SO THIS IS JUST A ONE TIME 5% INCREASE THAT IT GETS MAINTAINED THROUGHOUT THE FIVE YEARS?
[01:30:01]
IS THAT WHAT WE'RE TALKING ABOUT? OR NO? WHY IS THAT LINE FLAT? THE, THE, THE, IT, IT'S, IT'S RELATIVELY FLAT, BUT IF YOU LOOK AT THE NUMBERS AT THE TOP, IT SHOWS THAT THE BILL GOES UP ABOUT $3, UH, A MONTH.AND, AND I, UH, COMMISSIONER ALVAREZ, UH, IT'S A CONFUSING GRAPHIC THE WAY THE CITY'S FINANCIAL FORECAST AND BUDGET DOCUMENTS DO THIS.
BUT THAT SHOWS THE, THE, THE LINE THAT YOU'RE LOOKING AT SHOWS GOING FROM, YOU KNOW, FLAT TO THE TWO POINT A HALF PERCENT BILL IMPACT THAT I WAS JUST REFERRING TO.
AND THEN IT SHOWS TWO POINT A HALF PERCENT, TWO POINT A HALF PERCENT, TWO.
SO THAT THAT LINE, EVEN THOUGH IT STAYS FLAT, THAT'S BECAUSE IT'S STAYING AT THE TWO POINT A HALF PERCENT.
AND REALLY, UM, THAT'S, THAT'S COMMON FOR IN CITY FORECAST DOCUMENTS BECAUSE TYPICALLY, UM, YOU WILL SEE SOMETHING LIKE A THREE POINT A HALF PERCENT EVERY YEAR FOR THE, FOR THE, UM, REVENUE INCREASE ON THE CITY SIDE OR OTHER, SOME OF THE OTHER UTILITIES THAT YOU WERE, IT IS SHOWING YEAR OVER YEAR WHAT THAT PERCENT INCREASE IS.
DOES THAT MAKE SENSE? I GUESS.
WHY IS THAT FIRST BIG JUMP AND THEN, AND THEN IT SEEMS LIKE IT'S A 'CAUSE IT GOES DOWN, THE BILL IMPACT GOES DOWN FROM 1 21.
SO IT'S ACTUALLY A NEGATIVE NUMBER AT THAT DOT BECAUSE THE BILL IS ACTUALLY GOING DOWN FROM LAST YEAR'S BUDGET NUMBER.
SO IT'S A NEGATIVE AND THEN IT GOES UP TO THE, THE TWO POINT HALF PERCENT.
UM, SO IT'S REALLY COMPARING FY 26 TO 27 AND THEN AND SO ON.
THAT WAS, UH, THAT WAS, I THINK THAT'S WHAT WAS CONFUSING ME.
YEAH, IT'S, IT'S, AND THEN IN SLIDE 20, YEAH, IF YOU CAN GO TO SLIDE 20, UM, I KNOW YOU HAVE THE LINE ON, UM, THAT SHOWS, UH, DAVID, CAN YOU GO TO SLIDE 20? WHAT HAPPENS GENERAL? SORRY.
SO YOU HAVE ONE OF THE LINE ITEMS IS GENERAL FUND TRANSFER.
UH, DOES THAT INCLUDE THE, THE CHANGES THAT YOU DESCRIBED, OR IS THAT JUST HOW WE CURRENTLY FORECAST THE GENERAL FUND TRANSFER? SO THE, THIS, THIS IS THE FORECAST, UM, THAT INCLUDES, UH, WHAT THE GENERAL FUND TRANSFER WOULD BE.
WE'RE NOT PROPOSING TO INCREASE THE GENERAL FUND TRANSFER.
THE GENERAL FUND TRANSFER IS DEFINED BY PO BY FINANCIAL CITY FINANCIAL POLICY.
WE'RE JUST RIGHT CHANGING HOW IT'S RECOVERED IN THE CHA THE COST THAT IS CA THAT CAUSES THAT COST IN THE, IN THE, IN THE RATE THAT CAUSES THAT COST.
SO AS RUSTY SHOWED REGULATORY CHARGE, 200 MILLION IN REVENUES TO COVER OUR REV REGULATORY CHARGE THAT WE PAY FOR THE STATEWIDE TRANSMISSION SYSTEM, THAT 200 MILLION IN REVENUE RESULTS IN $24 MILLION OF GENERAL FUND TRANSFER.
INSTEAD OF THAT COMING OUT OF BASE RATES, IT WOULD BE DIRECTLY IN THE, THE CHARGE THAT CAUSES THAT COST.
IT'S, AND IT'S, IT, IT'S SELF-SUSTAINING THAT WAY AND IT CAN, REGARDLESS OF HOW THAT REGULATORY, 'CAUSE THAT REGULATORY CHARGE IS NO, IS IS OUTSIDE OF AUSTIN ENERGY'S CONTROL.
SO AS THAT GOES UP, IT CAN TRACK RIGHT ALONG WITH IT.
OTHER QUESTIONS? AND THE UTILITY OVERSIGHT COMMITTEE'S ALREADY SEEN THIS.
YOU HAVE TO, IT, IT WAS INCLUDED IN THE CITY'S FORECAST.
[8. Staff briefing on the Second Quarter Financial Report by Stephanie Koudelka, Finance Director.]
MOVE ALONG TO NUMBER EIGHT QUARTERLY FINANCIAL REPORT.MY NAME IS STEPHANIE ALKA, I'M DIRECTOR OF FINANCE FOR AUSTIN ENERGY.
I'M PRESENTING TO YOU OUR, UH, FINANCIAL RESULTS FOR THE SECOND QUARTER OF OUR FISCAL YEAR 2025.
PLEASE HAVE A STANDARD AGENDA FOR YOU THIS EVENING.
I'LL RUN THROUGH A SUMMARY OF OUR RESULTS.
I'LL THEN GIVE YOU SOME INFORMATION ON OUR FINANCIAL HEALTH STRATEGIC GOAL, UM, AND SOME OF THE METRICS THAT, THAT WE BENCHMARK OURSELVES AGAINST THERE.
UM, I'LL THEN GO IN INTO A LITTLE BIT MORE DETAIL ON OUR ACTUAL FINANCIAL STATEMENTS.
OUR OPERATING RESULTS SO FAR THROUGH MARCH, UM, WE ARE TRENDING ABOVE BUDGET, UM, PRIMARILY DUE TO, AS RU RUSTY MENTIONED, WE MOVED $30 MILLION INTO OUR POWER SUPPLY RESERVE THAT DID GENERATE REVENUE FOR THE UTILITY.
[01:35:01]
WILL SEE THAT IN AN UPCOMING SLIDE.UM, WHEN I SHOW YOU THE FUND SUMMARY FOR OUR BOND RATING, AUSTIN ENERGY IS AT AA MINUS PER STANDARD AND POORS.
UM, AS A REMINDER, OUR TARGET IS AA, SO WE'RE STILL SITTING BELOW THAT TARGET.
UM, THAT RATING WAS REAFFIRM BY THE RATING AGENCIES WHEN WE ENTERED THE BOND MARKET IN NOVEMBER OF 2024 FOR OUR FINANCIAL POLICIES.
I'M STILL SHOWING YOU THAT WE'RE SUBSTANTIALLY COMPLIANT IN THOSE POLICIES.
AS A REMINDER, THOSE ARE SET ANNUALLY THROUGH OUR BUDGET PROCESS.
WE HAVEN'T HAD MUCH CHANGE HERE.
UM, WE DO MEET THAT CASH AND RESERVE, UM, TARGET THAT I'VE TALKED TO YOU ABOUT BEFORE.
IT'S A MINIMUM TARGET OF 150 DAYS, BUT OUR INDIVIDUAL RESERVES DO NOT MEET MINIMUMS IN A COUPLE OF CATEGORIES.
UM, SO I'M STILL SHOWING YOU THAT WE'RE NOT FULLY COMPLIANT AS OF THE END OF THE QUARTER FOR POWER SUPPLY ADJUSTMENT, WE ARE OVERCOVERED BY 103 MILLION AS OF THE END OF THE QUARTER.
UM, AS A REMINDER, THE 150 DAY MINIMUM THAT I'M TA UM, I'LL SHOW YOU MORE INFORMATION ON, BUT WE DO MEET OR EXCEED THAT GOAL AS OF THE END OF THE QUARTER.
THAT CASH THAT WE'VE OVERCOVERED FROM THE CUSTOMER IS INCLUDED IN, IN THOSE BALANCES, UM, AND IS SET TO BE RETURNED TO OUR CUSTOMERS THROUGH, UH, FUTURE RATES.
FOR THE STANDARD AND POS BOND RATING, I JUST MENTIONED THAT WE WERE AT AA MINUS AS OF THE END OF MARCH.
UM, OUR TARGET IS AA, SO WE'RE STILL SITTING BELOW WHERE WE'D LIKE TO BE AT AUSTIN ENERGY.
UM, WE WILL RUN THROUGH REALLY QUICKLY THESE, UH, FOUR METRICS THAT WE LOOK AT AND THE RATING AGENCIES, UM, ARE PARTICULARLY, UH, INTERESTED IN.
UM, OUR DAYS CASH ON HAND, WE'RE AT 193 DAYS.
UH, RUSTY DID MENTION THAT TARGET OF 200, SO WE'RE SLIGHTLY BELOW THAT TARGET AS OF MARCH.
UM, I DID INCLUDE A LITTLE NOTE FOR YOU HERE, UM, TO LET YOU KNOW THAT THAT 100 MILLION, UH, DOLLARS OF OVER RECOVERY IS SITTING IN THAT, UM, TOTAL DAYS CASH ON HAND.
SO THAT CASH WILL BE RETURNED TO OUR CUSTOMERS.
UM, IT IS NOT AVAILABLE TO FUND, UM, OPERATIONS.
UM, THE NEXT TWO METRICS ARE COVERAGE AND OUR MARGIN.
WE ARE, UM, JUST MEETING THOSE TWO METRICS.
UM, MOSTLY DUE TO, UM, THE BASE RATE INCREASES.
WE'D HAVE 2% INCREASES, UM, THAT WE'VE SEEN THIS FISCAL YEAR.
UM, IT IS HELPING US MEET OUR TARGET AND SO IS THE WEATHER.
UM, BUT I WILL MENTION TO YOU AS RU RUSTY DID, UM, WE'RE JUST MEETING THOSE TARGETS WITH THAT 2%.
SO, UM, OUR FINANCIAL POSITION IS GOOD.
UM, STILL NEEDS IMPROVEMENT, UM, ESPECIALLY FOR SUSTAINED FINANCIAL HEALTH.
UM, THE RATING AGENCIES HAVE MENTIONED THEY ARE NOT INTERESTED IN MOVING OUR RATING ALL ELSE EQUAL UNTIL THEY SEE THOSE AS SUSTAINED FINANCIAL RESULTS.
AND FINALLY, OUR DEBT TO CAPITALIZATION IS AT 57%.
UM, WE HAVEN'T SEEN MUCH MOVEMENT HERE.
UM, WE'RE STILL A BIT OVER DUE TO THEOSIS ACQUISITION, UM, ABOUT FIVE YEARS AGO.
UM, AS I MENTIONED EARLIER, WE ARE SEEING, UM, POSITIVE RESULTS TO BUDGET.
I DID HIGHLIGHT, UM, THAT WE ARE AHEAD OF THE CURVE BY 29 MILLION.
UM, THAT IS REALLY DUE TO THAT $30 MILLION PSA RESERVE TRANSFER.
WE WERE ABLE TO RECOGNIZE REVENUE AND MOVE THOSE FUNDS FROM AN OVER RECOVERY INTO THE RESERVE.
UM, THAT IS A ONE-TIME EVENT, SO I WANNA MAKE THAT KIND OF JUST KNOWN THAT IT'S HELPING OUR INCOME.
BUT, UM, JUST AS A ONE-TIME EVENT.
SO YOU'LL SEE THIS, UM, AS WE CONTINUE THROUGH THE FISCAL YEAR, UM, WHICH WILL BE POSITIVE TO OUR BUDGET RESULTS.
SO, UH, WE SHOW YOU THE STATUS OF THE POWER SUPPLY ADJUSTMENT EACH QUARTER.
UM, THE BAR CHART, UM, THE BAR SHOW YOU OUR COST, UM, ACTUAL TO BUDGET.
UM, AS YOU CAN SEE THROUGH THE FISCAL YEAR, UM, THROUGH MARCH, WE HAVE TRENDED COST UNDER BUDGET, WHICH IS, UH, GOOD NEWS FOR OUR CUSTOMERS.
UM, WE'VE SEEN JUST A, A MILDER MARKET AND LOWER COSTS THROUGH MARCH.
UM, AS WE ALL KNOW THIS, BACK HALF OF THE YEAR IS WHERE MOST OF THE VOLATILITY OCCURS.
SO SITTING AT 103 MILLION OVER RECOVERED, UM, WILL HELP US POSITION OURSELVES FOR POTENTIAL UNDER RECOVERY OVER THE SUMMER.
UM, SO, UM, AS YOU CAN SEE, THIS BLUE LINE THAT HOVERS ABOVE THOSE COSTS, THAT IS, UM, REPRESENTING WHAT WE'RE BILLING OUR CUSTOMERS FOR POWER SUPPLY.
UM, AS YOU CAN SEE, IT'S GONE DOWN.
THAT'S DEMONSTRATING THAT WE HAVE LESS USAGE, BUT MOSTLY THAT WE'VE DECREASED THAT RATE.
UM, AS RUSTY MENTIONED THROUGH THE QUARTER, WE'D HAD FOUR 5% DECREASES TO THE POWER SUPPLY RATE.
UM, AND ANOTHER ONE THAT, UM, WAS EFFECTIVE
[01:40:01]
MAY 1ST.WE'RE AT A $400 MILLION BUDGET FOR THE FISCAL YEAR.
WE'VE SPENT ABOUT 166 MILLION, SO WE'RE SLIGHTLY UNDER HALFWAY SPENT, UM, FOR THE YEAR.
UM, MOST OF OUR SPENDING HAS OCCURRED IN DISTRIBUTION, WHICH IS A SIMILAR, UM, STORY AND TONE FROM LAST QUARTER.
MOST OF THAT IS JUST DUE TO GROWTH IN OUR SERVICE TERRITORY.
ON THE RIGHT I SHOW YOU HOW WE PAY FOR THOSE CAPITAL ASSETS.
UM, THE GRAY AND GOLD REPRESENT CASH, UM, PAID FOR THOSE ASSETS.
UM, THAT IS CASH IN THE FORM OF CONTRIBUTIONS FROM OUR CUSTOMERS AS WELL AS CASH GENERATED THROUGH OUR BASE RATES.
UM, WE TEND TO LIKE TO KEEP THAT CLOSER TO A 50 50 SPLIT.
AS RUSTY MENTIONED, WE ARE OVER IN DEBT FUNDING, WE'RE CLOSE TO 60% AND THAT'S MOSTLY DUE TO CONSTRAINTS WE'VE SEEN IN OUR CASH POSITION.
SO WE ARE, UM, OUTSIDE OF OUR, UM, TARGET A LITTLE BIT HEAVY ON DEBT.
SO ON THE TRANSMISSION, ISN'T THAT ALL SOCIALIZED ACROSS ALL OF ERCOT? IS THIS THE AE PORTION THAT IS NOT PUC REGULATED AND, UH, RECOVERED THROUGH IT IS.
SO THOSE ARE OUR INTERNAL UPGRADES THAT WOULD BE RECOVERED THROUGH OUR, UH, TRANSMISSION RATE.
DID THAT ANSWER? UH, NEXT SLIDE PLEASE.
UH, THIS IS OUR, UH, GAP BASIS INCOME STATEMENT AT MARCH.
UM, I DID HIGHLIGHT THAT WE HAD INCOME FOR THE SIX MONTHS ENDED MARCH.
UM, THE BIG TAKEAWAY HERE IS THAT ALTHOUGH WE HAVE HAD INCOME, UM, 30 MILLION OF THAT IS FROM THE POWER SUPPLY, UM, MOVEMENT OF OVER RECOVERY TO RESERVES, WHICH GENERATED REVENUE FOR THE UTILITY WITHOUT THAT 30 MILLION, UM, WE'D BE A BIT BETTER OFF THAN LAST YEAR.
UM, BUT MOST OF THAT IS DUE AGAIN TO THOSE BASE RATE INCREASES.
WE HAD 2% THIS YEAR, UM, ON TOP OF THE 2% THAT WE HAD LAST YEAR.
UM, WE ALSO HAD MUCH WARMER WEATHER THAT HELPED OUR, UM, BASE REVENUES THIS YEAR.
UM, I WILL DID NOT HIGHLIGHT ON THE SLIDE, BUT WANT TO BRING YOUR ATTENTION TO OPERATING EXPENSES.
UM, AS YOU CAN SEE, WE HAD ABOUT A $25 MILLION INCREASE IN COST OVER THE YEAR.
UM, SO COSTS ARE STILL PUTTING A LOT OF PRESSURE ON OUR KPIS AND, UM, OUR MARGINS.
THE, UH, BAR CHARTS ON THE RIGHT.
WE'VE HAD SOME, UM, BIGGER INCREASES THAN WE HAD ANTICIPATED FOR OUR NUMBER OF CUSTOMERS.
WE DID HAVE, UM, SALES OVER BUDGET FOR THE PERIOD, UM, WHICH IS WHY THAT'S GROWING AT A LITTLE BIT HIGHER RATE THAN WE ANTICIPATED.
THIS IS A HIGH LEVEL ROLL UP OF OUR BALANCE SHEET ON THE LEFT.
I HAVE CONTINUED TO HIGHLIGHT CASH AND RESERVES AS, AS YOU'VE SEEN IN PRIOR QUARTERS.
UM, I'LL START WITH THE TOP LINE CASH.
UM, THAT'S A, A PRETTY BIG INCREASE OVER THE FISCAL YEAR, BUT I WILL, UM, CAUTION YOU THAT MAJORITY OF THAT IS POWER SUPPLY OVER RECOVERY.
SO AS WE BEGIN TO RETURN THAT OR SPEND THAT ON POWER COSTS, THAT WILL LEVEL OFF.
UM, THE LINE BELOW THAT ALSO HAD SOME INCREASES.
UM, WE HAD THE 30 MILLION THAT I'VE BEEN, UM, MENTIONING THIS PRESENTATION THAT DID INCREASE, UH, OUR POWER SUPPLY RESERVE, BRINGING IT INTO, UM, POLICY COMPLIANCE.
UM, AND AS RUSTY MENTIONED AS WE'VE TALKED ABOUT HERE TONIGHT, UH, THE POWER MARKET WAS VERY EXPENSIVE IN 2023 AND WE DID HAVE TO MOVE FUNDS INTO CASH TO PAY POWER BILLS OF 70 MILLION.
SO WE WERE ABLE TO MOVE THAT BACK TO THE RESERVE WHERE IT STARTED AND WHERE IT BELONGS.
UM, AND LASTLY, I'LL JUST SHOW YOU THIS CASH POSITION AS, AS YOU'VE SEEN IN PRIOR QUARTERS.
UM, THIS IS AA BOND RATING TARGET OR 200 DAYS CASH ON HAND.
WE ARE STILL UNDER, UM, WHERE WE'D LIKE TO BE IN CASH RESERVES, UM, BUT WE ARE MAKING SOME DECENT HEADWAY WITH THE SMALL BASE RATE INCREASES THAT WE'VE BEEN ABLE TO PUT IN TO EFFECT THIS FISCAL YEAR TO CONTINUE TO SUPPORT OUR METRICS AND FINANCIAL HEALTH.
SO ALL FOUR OF THOSE KEY METRICS ARE ESSENTIAL TO GET BACK TO AA OR IS IT REALLY, UH, THE THREE AND THEN THE DEBT RATIO BEING 57 OR 59, IS THAT AS CONSEQUENTIAL AS THE OTHER THREE? SO ALL FOUR ARE TAKEN INTO CONSIDERATION AND USED BY ALL THREE OF THE RATING AGENCIES THAT WE WORK WITH.
UM, THEY HAVE SEVERAL OTHER, UM, METRICS THAT THEY LOOK AT TOO ON THE FINANCIAL PROFILE
[01:45:01]
SIDE.UM, SO THEY TAKE A LOOK AT, UM, CASH RESERVES, UM, TO COME UP WITH OUR LEVERAGE AND HOW HEAVY WE ARE ON OUR DEBTS, UM, PROFILE.
UM, THE RATING AGENCIES ALSO USE ABOUT HALF OF OUR RISK AGAINST OUR OPERATIONS.
SO THEY'RE LOOKING AT, YOU KNOW, MAJOR EVENTS AND HOW WE'RE HANDLING THOSE EVENTS, UM, HOW WELL THE UTILITY IS MANAGED THROUGH EVENTS.
UM, SO IT'S MORE THAN JUST AS YOU KNOW, THE FINANCIAL SIDE OF THE BUSINESS, BUT THEY DO LOOK AT THOSE FOUR IN PARTICULAR MM-HMM
AND SO WHEN'S THE NEXT TIME THEY'LL REASSESS? SO THEY DO ANNUAL SURVEILLANCE REVIEWS OF AUSTIN ENERGY.
SO IF THINGS ARE RELATIVELY QUIET, UM, THEY'LL JUST DO THAT ANNUALLY IN THE EVENT OF A MAJOR, UM, STORM OR EVENT THAT WOULD AFFECT AUSTIN ENERGY, THEY WILL COME RIGHT IN AND DO A REVIEW OF RISK AND TAKE A LOOK AT OUR OUTLOOK TO SEE IF WE'RE STILL IN THE STABLE CATEGORY, WHICH WE ARE TODAY.
UM, SO THEY WILL DO, LIKE I SAID, THOSE ANNUAL SURVEILLANCE REVIEWS OR IF WE GO TO THE MARKET, THEY'LL DO A FULL REVIEW OF THE UTILITY.
ANY MORE QUESTIONS? THAT'S THE LAST SLIDE.
GOOD EVENING AGAIN, STUART RILEY, INTERIM GENERAL MANAGER.
UM, A COUPLE THINGS AS I WAS LISTENING, I WANTED TO MAKE SURE THE COMMISSION UNDERSTOOD ABOUT THE 30 MILLION THAT WAS MOVED INTO THE POWER SUPPLY STABILIZATION RESERVE.
SO I MENTIONED FINANCIAL POLICY EARLIER.
UM, ONE OF THE CITY FINANCIAL POLICIES IS THAT WE HAVE 90 DAYS OF POWER SUPPLY COSTS IN OUR POWER SUPPLY STABILIZATION RESERVE.
AND ONE OF THE CHANGES THAT WAS MADE LAST YEAR TO THE POWER, UH, SUPPLY ADJUSTMENT TARIFF WAS THE ABILITY TO MOVE AN OVER RECOVERY INTO THAT RESERVE IN ORDER TO MAKE, TO COME INTO COMPLIANCE WITH THAT POLICY.
SO ACTUALLY BY BEING ABLE TO DO THAT, WE WERE ABLE TO TAKE 30 MILLION OF POWER SUPPLY OVER RECOVERY AND F FULLY COME INTO COMPLIANCE ON OUR POWER SUPPLY STABILIZATION RESERVE, WHICH BY DOING THAT ACTUALLY MITIGATES THE NEED TO GET $30 MILLION OUT OF BASE RATES TO BE ABLE TO FUND THAT.
BECAUSE PREVIOUSLY THE ONLY PLACE WE COULD GO TO FUND THE POWER SUPPLY STABILIZATION RESERVE WAS FROM BASE RATES WHEN REALLY, UM, THAT THAT FUND NE NEEDS TO BE, YOU KNOW, UM, FUNDED THROUGH POWER SUPPLY COSTS.
SO IT WAS, IT WAS TOUGH TO GET FULLY FUNDED IT, UH, ON THAT RESERVE IF WE WERE LOOKING TO DO IT FROM BASE RATE.
SO THAT'S JUST SOMETHING THAT WE'VE DONE.
IT'S HELPED KIND OF MITIGATE SOME OF THE RATE IMPACTS FROM THE BASE RATE SIDE.
SO, BUT DOES THAT MEAN THAT THEN RATE PAYERS DON'T GET THAT 30 MILLION BACK OR IT'S JUST A TIMING ISSUE? CORRECT.
WHERE YOU USE IT, IT, IT WOULD, IT WOULD STILL BENEFIT THOSE RATE PAYERS IN TERMS OF THE POWER, THOSE POWER SUPPLY ADJUSTMENT, UM, RATE PAYERS WOULD BENEFIT FROM THAT IN THE EVENT THAT, UM, THERE WAS SOME KIND OF EMERGENCY OR WE SAW WINTER STORM URI, LIKE POWER SUPPLY COSTS WHERE WE NEEDED TO FUND TO BRIDGE THE GAP.
SO IT STILL ULTIMATELY BENEFITS THOSE CUSTOMERS, BUT IT'S JUST NOT BENEFITING THOSE CUSTOMERS IMMEDIATELY WHERE IT'S THAT OVER UNDER FLOWING BACK, IT MORE SITS TO, TO BE READY TO SUPPORT THOSE CUSTOMERS WHEN NEEDED IF THAT KIND OF BLOWOUT MARKET EVENT WERE TO HAPPEN.
SO, SO CUSTOMERS ARE, ARE LOSING THE IMMEDIATE BENEFIT OF GETTING THAT MONEY BACK, BUT THEY'RE HAVING ULTIMATELY MORE STABLE RATES BECAUSE OF THAT.
AND IS, IS THE 30 MILLION, IS IT A PERCENTAGE OR IS $30 MILLION? 30 MILLION WAS WHAT WAS NECESSARY TO CUT BACK, GET BACK INTO COMPLIANCE ON THE 90 DAYS, UM, OF POWER SUPPLY COSTS IN THAT RESERVE, WHICH THAT RESERVE COUNTS TO ALL OF OUR RESERVES.
SO WHEN WE SAY, SO WHEN STEPHANIE TALKS ABOUT OUR, YOU KNOW, OUR TARGET OF 200 DAYS, IT IT, IT INCORPORATES THAT COST OF THAT 90 DAYS.
SO THAT'S, THAT LOOKED AT COMPLETELY SEPARATELY, BUT THERE IS A SEPARATE REQUIREMENT THAT WE HAVE 90 DAYS OF POWER SUPPLY COSTS IN THAT.
SO, SO IT'S NOT A SPECIFIC NUMBER, IT'S COMING INTO COMPLIANCE WITH THAT POLICY.
STUART, DOES THAT STABILIZATION FUND GET ADJUSTED BASED ON FORECAST FOR? SO IF, FOR EXAMPLE, UM, AND STEPHANIE AND ADAM AND RUSTY CAN KEEP ME HONEST HERE, BUT, UM, YOU KNOW, IF WHEN WE'VE SEEN CERTAIN YEARS WHERE, UH, YOU KNOW, A DAY OF POWER SUPPLY COSTS WE'RE MORE LIKE FOUR AND A HALF, 4 MILLION, WHEREAS NOW THEY MIGHT BE MORE LIKE, YOU KNOW, 3 MILLION OR SOMETHING MAY MAYBE LESS, THAT WILL ALTER THE EQUATION.
AND, AND SO WE'RE KIND OF, WE'RE LOOKING BACK AT THE, AT A AT A ROLLING 12 MONTH PERIOD.
OTHER QUESTIONS ONLINE AND COMMISSIONER, UH, CHAIR TITLE WHEN YOU, UH, YOU HAD A QUESTION ABOUT, UM, TCOS RECOVERY IN TERMS OF TRANSMISSION INVESTMENTS.
[01:50:01]
TO REMEMBER IS THAT WE STILL HAVE TO INVEST THAT MONEY UPFRONT THAT CIP AND THEN WE WILL RECOVER THAT OVER THE 30 OR 40 YEAR LIFE OF THAT ASSET VIA TCOS.SO IT'S STILL A LOT OF MONEY UPFRONT TO BE INVESTING.
AND SO ONE OF THE THINGS THOUGH THAT WE WANT TO DO, AND SOMETHING THAT WE, I KNOW WE ALL TALKED ABOUT A LOT DURING THE RESOURCE GENERATION PLAN PROCESS WAS INCREASING OUR, OUR TRANSMISSION IMPORT CAPACITY.
AND SO THAT'S GOING TO BE A CIP, UH, INTENSIVE ACTIVITY.
WE WON'T SEE THE RE THE TCOS REVENUE, YOU KNOW, FOR, FOR MANY YEARS TO COME ON THAT.
SO, SO YOU HAVE TO HAVE THE MONEY UPFRONT, YOU CONSUME CASH UPFRONT TO INVEST AND THEN YOU MAKE A RATE OF RETURN OVER TIME OF THAT? CORRECT.
[9. Staff briefing on the Second Quarter Operations Report by Lisa Martin, Deputy General Manager and Chief Operating Officer.]
OKAY, LET'S MOVE TO NUMBER NINE, STAFF BRIEFING, SECOND QUARTER OPERATIONS REPORT.TITLE, VICE CHAIR, WHITE AND COMMISSIONERS.
HOW ARE WE DOING ON TIME TONIGHT? OKAY.
ALL RIGHT, WE'LL JUST, IF YOU CAN TURN YOUR FINANCIAL BRAIN OFF FOR A LITTLE BIT AND TAKE A LITTLE BIT OF A REST, WE'LL SHIFT TO AN OPERATIONAL UPDATE.
SO TONIGHT I'M PRESENTING THE OPERATIONS UPDATE FOR JANUARY, FEBRUARY AND MARCH, 2025.
DAVID, STANDARD AGENDA AND THE EXECUTIVE SUMMARY ON THE NEXT SLIDE.
QUICK OVERVIEW SHOWS 49% RENEWABLE PRODUCTION AND 77% CARBON FREE PRODUCTION, BOTH AS A PERCENTAGE OF LOAD FOR Q2.
OUR GENERATORS WERE GENERALLY AVAILABLE WITH LIMITED DURATION OFFLINE OTHER THAN PLANNED OUTAGES AND OUR RELIABILITY TRENDS REMAIN STABLE.
SO A REALLY POSITIVE QUARTERLY UPDATE FOR Y'ALL TODAY.
I'LL START WITH SOME DETAILS ABOUT THE ENVIRONMENTAL PERFORMANCE NEXT SLIDE.
SO FOR, UH, FISCAL YEAR 25 Q2, THE CARBON FREE GENERATION AS A PERCENTAGE OF LOAD AVERAGED 77%.
YOU SEE THAT IT VARIED, UM, FOR THE DIFFERENT MONTHS, BUT THE, UH, TOTAL IS 77 AND THAT WAS ACTUALLY THE SAME PERFORMANCE LAST YEAR THIS TIME.
SO ON THAT, UH, JANUARY NUMBER, IS THAT BECAUSE THE LOAD IS SO MUCH BIGGER IN JANUARY BECAUSE OF THE, THE COLD WEATHER AND WAS THERE, UH, NUCLEAR REFUELING? IS THAT, SO THERE WAS NO NUCLEAR OUTAGE, UH, DURING THESE THIS QUARTER, AND SO YOU CAN KIND OF USE THAT AS A BAROMETER BECAUSE THE OUTPUT'S PRETTY STABLE.
AND SO, UH, YES, I WAS JUST GOING BACK AND KIND OF LOOKING THROUGH NOTES AND IN JANUARY YOU'LL RECALL WE HAD, UM, A COUPLE OF, UH, REALLY COLD, UH, STENTS ONE, UM, WHERE IT SNOWED HERE.
AND SO, UM, YES, I I THINK THE, UH, LOAD MUST HAVE BEEN HIGHER IN JANUARY AND THEN IN MARCH IT'S REALLY JUST THE SWEET SPOT OF WHEN RENEWABLES ARE PRODUCING A LOT AND THE LOAD IS THE LOWEST.
SO YOU SEE THE OPPOSITE EFFECT THERE.
UM, AGAIN, THE JAGGED LINE HERE SHOWS, REPRESENTS THE SAME INFORMATION AS THE BAR CHART FOR THE PREVIOUS SLIDE, JUST SHOWING MORE YEARS, UM, HISTORICALLY, BUT WE LIKE TO, UM, SHOW BOTH THE JAGGED LINE AND THE SMOOTH LINE.
SO I'LL DRAW YOUR ATTENTION TO THE ROLLING 12 MONTH AVERAGE, WHICH IS THE SMOOTH LINE.
UM, AND SO FOR THE UH, QUARTER WE ENDED AT 63% CARBON FREE GENERATION AS A PERCENTAGE OF LOAD.
UH, COMMISSIONER BRADEN, I THINK YOU ASKED DURING THE LAST MEETING, IF WE COULD PULL THIS SLIDE UP AND TALK A LITTLE BIT ABOUT IT.
UM, AND I KNOW Y'ALL WERE ASKING WHY THE DECLINE IN THE LAST COUPLE OF YEARS IN OUR ROLLING 12 MONTH AVERAGE.
UM, THERE'S A NUMBER OF REASONS.
UH, IN GENERAL, OUR CARBON FREE GENERATION JUST ISN'T GOING AS FAR, UM, AS IT ONCE DID.
SO SOMETIMES THAT'S BECAUSE THERE'S NOT ENOUGH CAPACITY IN THE TRANSMISSION WIRES TO CARRY THE CARBON FREE, UH, ENERGY FROM WHERE IT'S PRODUCED TO WHERE IT'S USED.
OF COURSE, YOU KNOW THAT AS CONGESTION, SOMETIMES THERE'S MORE CARBON FREE ENERGY BEING PRODUCED THAN IS NEEDED.
UM, AND THEN AT THAT POINT, THE ERCOT MARKET IS DESIGNED TO SEND LOWER PRICING SIGNALS TO TRY TO GET THE ENERGY THAT'S NOT NEEDED TO CURTAIL.
AND THEN SOMETIMES THE DECLINE IS FROM INCREASED ENERGY USAGE OVERALL, ALSO KNOWN AS DEMAND GROWTH.
SO A NUMBER OF DIFFERENT FACTORS AFFECT DIFFERENT MONTHS, BUT IN GENERAL, WE'RE SEEING ALL OF THOSE FACTORS AFFECT, UM, OUR CARBON FREE PERCENTAGES.
IN OTHER WORDS, THERE ARE FACTORS ON BOTH SIDES OF THE EQUATION THAT IMPACT THIS METRIC, AND WE'RE REALLY WORKING TO MITIGATE THAT AND ADDRESS IT WHILE STILL ENSURING OUR CUSTOMER'S ENERGY NEEDS ARE MET.
UM, ALL OF OUR EFFORTS UNDERWAY FOR THE RESOURCE GENERATION PLAN IMPLEMENTATION HAVE THIS METRIC IN MIND AND LOOK FOR WAYS TO BRING THE PERCENTAGE BACK ON AN UPWARD TREND, BUT FOR NOW, AT LEAST FOR THE LAST TWO QUARTERS, YOU CAN SEE THAT THAT NUMBER TENDS TO BE STABILIZING.
I CAN ASK QUESTIONS AT THE END.
I, I'M JUST STILL CONCERNED BY THAT BECAUSE WE HAVEN'T INCREASED OUR RENEWABLE GENERATION.
AM I ON HERE? WE HAVEN'T ADDED ANY RENEWABLE GENERATION SINCE
[01:55:01]
2021, AND WE'VE HAD STRUGGLES WITH TRANSMISSION AND SO FORTH, BUT WE'VE, WE HAVEN'T DONE ANYTHING TO ADD ANY MORE RENEWABLE CAPACITY AND OUR LOAD HAS GONE UP AND THEREFORE THERE'S A FALLING TREND ON, ON A THING THAT'S A KEY METRIC FOR OUR GEN FOR OUR, UH, GOALS OF GETTING TO ZERO CARBON.SO WE SPENT A, A LOT OF TIME DURING THE RESOURCE GENERATION AND CLIMATE PROTECTION PLAN WORK, YOU KNOW, LOOKING AT THE CHANGING ENERGY LANDSCAPE AND ALL THE DIFFERENT FACTORS THAT ARE IMPACTING THIS.
UM, I, I, I ASSURE YOU THAT THE, THESE METRICS ARE AT THE TOP OF OUR FOCUS.
UM, AND WE HAVE A NUMBER OF DIFFERENT EFFORTS THAT WE'RE TRYING TO, TO DO TO TRY TO INCREASE OUR RENEWABLE PERCENTAGE AND MAKE THE MOST OF, UM, THE RENEWABLES THAT WE HAVE.
AND THEN TO BRING MORE RENEWABLES ON, WE JUST HAVE TO MAKE SURE THAT, UM, WE DO THAT IN A WAY THAT, UH, BRINGS, YOU KNOW, WE, WE DON'T, IF WE ALREADY HAVE AN AREA THAT'S SHOWING CONGESTION AND CURTAILMENT, ADDING MORE POWER PURCHASE AGREEMENTS FOR ADDITIONAL RENEWABLES IN THOSE AREAS IS REALLY JUST GONNA EXACERBATE THE PROBLEM AND WE'LL BE SPENDING MORE MONEY WITHOUT GETTING THE ACTUAL CARBON FREE GENERATION THAT WE NEED.
AND SO, UM, YOU KNOW, I I JUST, WE'LL, WE'LL CONTINUE TO WATCH THE TREND AND CONTINUE TO BRING BACK, UM, YOU KNOW, PROJECTS AND WORK THROUGH THIS.
I, I ASSURE YOU, WE ARE, WE ARE WORKING HARD TO TRY TO REVERSE THIS TREND.
WELL, I THINK THE, THE ONE THING THAT WE'RE MISSING HERE IS, IS THE USE OF THE USE OF BATTERIES WHICH HAVE EXPLODED IN ERCOT.
AND IF WE WERE ABLE TO MOVE THAT POWER AROUND TO DIFFERENT TIMES OF THE DAY, WE COULD AVOID A LOT OF THE TRANSMISSION CONSTRAINTS AND PRICE SEPARATIONS THAT WE'VE SEEN.
SO I'M EXCITED THAT WE'RE MOVING FORWARD WITH BATTERIES.
I AM HOPEFUL THAT THAT WILL ENABLE US TO THEREFORE SUPPORT MORE RENEWABLE ENERGY AS WE FIND WAYS TO MANAGE THE TIME THAT THAT ENERGY IS AVAILABLE TO US.
UM, AND WE, AND I HAVE AN UPDATE ON THE, TOWARDS THE VERY END TO TALK ABOUT THE BATTERY RFP.
WE'RE EXCITED ABOUT IT AS WELL, SO, OKAY.
I'M WAITING TO HEAR ABOUT THAT.
UH, DAVID, IF YOU CAN FORWARD ONE MORE SLIDE.
UM, JUST KIND OF ON THAT SAME VEIN, UH, YOU, YOU SAID THAT Y'ALL ARE, ARE WORKING HARD AND, AND LOOKING AT OPTIONS TO ADD MORE RENEWABLE GENERATION.
UM, I, I, I WASN'T AWARE OF ANY RFPS ARE, ARE YOU SAYING THAT THERE ARE PROJECTS THAT YOU'RE ACTIVELY CONSIDERING OR ARE YOU CONSIDERING PUTTING OUT ANOTHER RFP OR WHAT DOES THAT LOOK LIKE? SO WE, UM, STILL HAVEN'T CLOSED OUT THE, UH, RFP FROM THE RENEWABLE RFP THAT WE INITIATED LAST YEAR.
SO WE'RE STILL IN DISCUSSIONS, UM, WITH AT LEAST ONE PROJECT THERE TO SEE IF WE CAN GET TO FRUITION, UM, BRING THAT ONE ALL THE WAY TO THE FINISH LINE.
UM, AND THEN, UH, YOU KNOW THAT WE'VE GOT LOTS OF PROJECTS REGARDING LOCAL SOLAR, UM, EFFORTS GOING ON UNDERWAY THERE, UM, IN TALKS OF COURSE WITH, UM, OTHER CITY DEPARTMENTS ABOUT OPPORTUNITIES, UM, FOR LOCAL SOLAR.
AND THEN, UM, WE HAVE THE BATTERY STORAGE RFP THAT'S UNDERWAY, UH, NOW.
AND THEN, UM, WE'LL LOOK TO DO ANOTHER, UH, RFP LATER THIS YEAR PLUS.
I'M, I'M GLAD TO HEAR THAT THERE'S, I DIDN'T REALIZE THERE WAS A PROJECT STILL ON THE HOOK FROM LAST SUMMER.
IS THAT A SOLAR PROJECT? IT IT IS.
UM, AND THEN YOU JUST MENTIONED THE LOCATION, UM, YOU KNOW, THE, THE IMPORTANCE OF LOCATION, WHICH I, YOU KNOW, AGREE WITH AND WAS JUST WONDERING IF, YOU KNOW, IF AUSTIN ENERGY HAS IDENTIFIED, YOU KNOW, LOCATIONS THAT, THAT Y'ALL THINK WOULD BE, UM, KIND OF TARGET AREAS PERHAPS FOR FUTURE RFPS OR YEAH, HOW YOU'RE APPROACHING THAT.
UM, ARE YOU TALKING ACROSS THE ERCOT REGION? I MEAN, WHATEVER, YOU KNOW, UH, Y Y'ALL WOULD KNOW.
SO ACROSS ERCOT, WHETHER IT'S LOCAL, WHATEVER.
YEAH, SO WHEN WE, UM, ISSUER OR RFP, OUR TEAM TENDS TO CAST THE NET AS WIDE AS POSSIBLE SO THAT THEY CAN GET AS MUCH INFORMATION TO TRY TO DRIVE, UH, THE BEST DEALS FOR, FOR OUR CUSTOMERS.
UM, AND THEN TO GET THE BEST SENSE OF WHAT'S GOING ON IN THE MARKET.
UM, YOU KNOW, WHEN PEOPLE OFFER IN, UM, UH, A PROJECT THAT'S RIGHT NEXT TO AN EXISTING PROJECT THAT WE'RE SEEING A LOT OF CURTAILMENT WITH, THEN, THEN WE TEND TO SAY THAT'S NOT A GREAT LOCATIONAL ASPECT, BUT WE DON'T, UM, TEND TO, UM, KIND OF EXCLUDE THOSE PROJECTS FROM BEING OFFERED BECAUSE IT, AGAIN, IT GIVES US GOOD MARKET INFORMATION ABOUT WHAT'S GOING ON.
I GUESS EVEN IF YOU DIDN'T WRITE THE RFP LIKE THAT, IS THERE
[02:00:01]
ANALYSIS HAPPENING TO, UM, SO THAT Y'ALL CAN SEE THE AREA, YOU KNOW, SO THAT YOU HAVE A SENSE ALREADY OF, OF WHAT AREAS WOULD BE YES.OH, AND ON THAT SOLAR PROJECT, DO YOU HAVE ANY IDEA OF THE TIMELINE? UM, NO, BECAUSE IT'S SLIGHTLY, WELL, NO, I DO NOT AT THE MOMENT.
AS QUICKLY AS WE CAN BRING IT FORWARD.
SO ON THAT SOLAR PROJECT, IS IT REALLY SOLAR PLUS BATTERY? I THOUGHT THERE WAS A AFFIRMING REQUIREMENT STARTING 2027 IN ERCOT.
I WILL HAVE TO GET BACK TO YOU ON THE AFFIRMING REQUIREMENT.
DO YOU WANT, YOU HAVE A COMMENT THAT IT'S REALLY A POTENTIAL AFFIRMING REQUIREMENT.
IT DEPENDS ON SOME ACTION BY THE PUC, WHICH HASN'T BEEN TAKEN YET, SO IT'S POTEN POTENTIALLY THERE COULD BE A AFFIRMING REQUIREMENT.
AND ALSO ON THIS, SO AE IS LONG ON GENERATION, I THOUGHT I SAW IN SOME PREVIOUS, UM, PREVIOUS QUARTERLY REPORTS THAT IT WAS SHORT.
IS THAT SEASONAL WHERE IT'S TYPICALLY, OR WHAT SEASONS DO YOU TYPICALLY ARE LONG AND WHAT SEASONS ARE YOU TYPICALLY SHORT? WELL, WHEN THE, IT'S, IT'S USUALLY DRIVEN BY CONSUMPTION, RIGHT? WHEN WE HAVE LOW CONSUMPTION, WHICH IS GENERALLY DURING THE MILDER SPRING OR FALL, UM, WHEN WE ARE LUCKY ENOUGH TO HAVE THOSE KINDS OF SEASONS HERE IN AUSTIN.
UM, AND SO YES, UH, THIS, THIS PARTICULAR, WHICH, YOU KNOW, WHEN YOU, WE HAD A RELATIVELY, UM, RELATIVELY MILD, UH, FEBRUARY AND MARCH, AS YOU SAW AND POINTED OUT FROM THE SLIDE A COUPLE AGO.
UM, JANUARY WAS A LITTLE HARDER.
UM, AND SO IN THIS CASE, YES, WE, WE ENDED UP BEING LONG ON GENERATION.
ALRIGHT, SO I'M GONNA BRING YOUR ATTENTION BACK TO THE PIE CHART IN THE UPPER LEFT HAND CORNER HERE.
UM, THE FUEL COST METRICS, UH, UH, CONTINUE TO SHOW SIGNIFICANT USE OF CARBON FREE SOURCES, UM, AT A TOTAL OF 68% WHEN YOU SUM UP RENEWABLE PLUS NUCLEAR.
UH, DRAWING YOUR ATTENTION DOWN TO THE LINE CHART, UH, THE BLUE LINE SHOWS THE SYSTEM PEAK DEMAND, UM, FOR Q2 FOR THE PAST FOUR YEARS.
UM, THIS QUARTER, UH, THE PEAK IN SHOWN HERE WAS 27 22 MEGAWATTS, WHICH WAS A NEW WINTER PEAK FOR US.
UM, THE BAR CHART IN THE TOP RIGHT SHOWS GENERATION FOR THE QUARTER TOTALING ABOUT 3.5 MILLION MEGAWATT HOURS.
UM, AND THE CONSUMPTION, AS YOU ALREADY POINTED OUT, WAS ABOUT 3.3 MILLION MEGAWATT HOURS.
UM, AND THEN POWER GENERATION AS A PERCENTAGE OF LOAD WAS 49% RENEWABLES, 28% NUCLEAR TOGETHER, THAT GETS DUE TO THE 77% WE'VE BEEN TALKING ABOUT.
AND SO NOW WE'RE SEEING WINTER PEAK AT THE SAME LEVEL AS SUMMER PEAK.
UH, SUMMER PEAK IS, UH, 31 35, BUT THAT'S WHAT OUR SUMMER PEAK USED TO BE
BUT NOW THIS IS OUR WINTER PEAK WHOLE NEW WORLD.
SO THIS IS SECOND QUARTER SYSTEM PEAK.
UM, MOVING FORWARD, DAVID, PLEASE, WE'LL SHIFT GEARS TO SOME RELIABILITY PERFORMANCE, UH, NEXT SLIDE, STARTING WITH OUR GENERATOR COMMERCIAL AVAILABILITY.
UM, AND SO I JUST WANNA REITERATE THAT, UM, DURING THIS QUARTER WE START TO TAKE OUR, SOME OF OUR UNITS ON OUTAGE.
UM, AND SO THAT'S WHY THE ACTUALS IN THE FAR RIGHT, UM, CORNER, SORRY, IN THE FAR RIGHT COLUMN ARE AREN'T AS HIGH AS BUT ARE ULTIMATELY OUR GOAL IS TO REACH, UH, COMMERCIAL AVAILABILITY FOR THE SUMMER AT ITS MAX PEAK, WHICH IS WHAT WE SHOW IN THE MIDDLE.
SO, UM, THE SANDHILL COMBINED CYCLE UNIT STARTED AT SEASONAL OUTAGE, UM, AT THE BEGINNING OF MARCH.
AND SO IT WAS OUT FOR AN ENTIRE MONTH OF THIS QUARTER.
THAT'S WHY THE PERCENTAGES IS JUST UNDER, UH, YOU KNOW, TWO THIRDS.
UM, FPP, UM, WAS SHUT DOWN FOR A PLANT SUMMER PREPARATION OUTAGE, UM, FOR, FROM MARCH 22ND THROUGH APRIL 3RD.
UM, AND THEN FPP TWO HAD, UM, A FEW BRIEF FOREST OUTAGES AS WELL.
STP ONE AND TWO, UH, COMMERCIAL AVAILABILITY WAS A HUNDRED PERCENT NO ISSUES TO REPORT.
SO I THOUGHT THERE WAS A REPORT BY THE WEBER GROUP TALKING ABOUT HOW THE, THE WINDOWS FOR MAINTENANCE ARE GETTING NARROWER BECAUSE OF THE DIFFERENT CLIMATES.
CAN YOU DESCRIBE QUICKLY, YOU KNOW, HOW THAT'S IMPACTING YOU? IS IT DRIVING UP COST OR YOU JUST HAVE TO BE MORE ADEPT AT GETTING IT DONE FASTER AND GETTING IT BACK ONLINE? YEAH, SO I MEAN, THERE'S A TYPICAL SHOULDER WINDOW WHEN THE OUTAGES CAN HAPPEN IN GENERAL, JUST 'CAUSE YOU WANNA BE AVAILABLE FOR THE SUMMER.
BUT NOW ERCOT SAYS YOU CAN'T TAKE, UH, GENERATOR OUTAGES FROM MAY 15TH TO SEPTEMBER 15TH.
AND THEN DEPENDING ON WHAT'S HAPPENING, THEY DO THE SAME THING FOR TRANSMISSION.
[02:05:01]
THEY ALSO HAVE A WINDOW IN THE WINTER.I CAN'T REMEMBER THE EXACT DATES.
UM, AND SO YES, IT'S NARROWING THE, WHAT IS CONSIDERED THE SHOULDER MONTHS, AND THEN WHEN YOU HAVE, UM, YOU KNOW, HIGH TEMPERATURES OR LOW TEMPERATURES OUTSIDE OF THOSE WINDOWS, ERCOT WILL, UM, YOU KNOW, CALL FOR, FOR OUTAGES TO BE EITHER DELAYED OR, UM, TO NOT TO, TO BE PULLED BACK FROM OUTAGE SOONER IF POSSIBLE.
AND SO, FOR EXAMPLE, UM, ERCOT IS CALLING FOR SOME OF THE OUTAGES THAT ARE USUALLY, AGAIN, THE MORATORIUM STARTS ON MAY 15TH, BUT WE'RE EXPECTED TO HAVE, YOU KNOW, HIGH TEMPERATURES THIS WEEK IN THE DAYS LEADING TO THAT.
AND SO SOME OF THE ALLERGIES ARE COMING BACK EARLIER.
ALL RIGHT, LET'S SHIFT GEARS TO ELECTRIC VEHICLE CHARGING STATION OPERATIONS.
UM, SO THE OVERALL CHARGING NETWORK HAD AN UPTIME OF 98.3%.
UM, WE'RE LOOKING AT THAT ON A ROLLING 12 MONTH AVERAGE AS WELL.
UM, WITH THE DC FAST CHARGING COMPONENT, UH, AT A 91%.
UM, THERE WERE TWO DC FAST CHARGERS THAT WERE PUT BACK ONLINE, UM, AT THE VERY END OF THIS, ACTUALLY, I THINK IT'S THREE, UM, PUT BACK ONLINE AT THE END OF THIS QUARTER.
UM, AND SO OUR NUMBERS SHOULD LOOK A LITTLE BETTER.
I JUST WANNA REITERATE THAT THERE'S A NUMBER OF WAYS THAT CUSTOMERS AND EV DRIVERS CAN REPORT OUTAGES THROUGH THE CHARGEPOINT APP THROUGH AUSTIN 3 1 1 AND ALSO TO EMAIL, UM, HERE AT AUSTIN ENERGY.
AND THEN ON THE NEXT SLIDE, UM, WE'RE NOW AVERAGING OVER 32,000 CHARGING SESSIONS PER MONTH, UM, WITH THE PEAK USAGE TIME BETWEEN UH, 9:00 AM AND 2:00 PM AND YOU CAN SEE THAT THE AVERAGE SESSION LENGTH, UM, FOR IS ABOUT TWO HOURS AND, UH, 44 MINUTES IN CHARGING FOR AVERAGE TOTAL PLUGIN TIME OF A LITTLE OVER FIVE HOURS.
SO LARGELY PEOPLE PROBABLY PLUGGING IN WHILE THEY'RE GOING TO WORK.
UM, SHIFTING TO THE DISTRIBUTION RELIABILITY.
UM, AGAIN, UH, TO ORIENT YOU WITH THE, UM, NUMBERS ON THE CHART, UM, AUSTIN ENERGY'S NUMBERS FOR THE QUARTER ARE SHOWN BY THE ORANGE BARS, UM, COMPARED TO THE LATEST INFORMATION WE HAVE ON TEXAS AVERAGE IN THE GRAY BARS, UM, STARTING WITH THE AVERAGE NUMBER OF CUST OF OUTAGES PER CUSTOMER ON THE FAR LEFT, THE AVERAGE DURATION IN THE MIDDLE, AND THE AVERAGE TIME TO RESTORE OF SERVICE TO AFFECTED CUSTOMERS.
ON THE FAR RIGHT, YOU CAN SEE THE TREND LINES DOWN AT THE BOTTOM.
UM, AND, UH, LOWER NUMBERS OF OUR COURSE ARE OF COURSE BETTER IN THIS SITUATION.
AND YOU CAN SEE THAT A NUMBER OF OUR METRICS ARE TRENDING JUST A LITTLE BIT DOWN.
SO WE'RE, WE'RE PLEASED TO SEE THAT.
UM, WE DID, OH, CAN I ASK A QUESTION? YES, MA'AM.
UH, CAN YOU EXPLAIN THE DIFFERENCE BETWEEN THE AVERAGE DURATION OF OUTAGE IN MINUTES AND THE TIME TO RESTORE? YES.
SO, UM, THE MIDDLE ONE IS IF YOU TAKE ALL THE, UM, CUSTOMER OUTAGE MINUTES, AND THEN YOU DO THE AVERAGE ACROSS OUR ENTIRE SYSTEM, WHETHER OR NOT CUSTOMERS HAD DID OR DIDN'T HAVE AN OUTAGE.
SO, UH, IF YOU KIND OF SPREAD IT OUT ACROSS OUR ENTIRE CUSTOMER SYSTEM, UM, AND THEN SOME PEOPLE SAY, WELL, THAT'S NOT REALLY A FAIR WAY OF LOOKING AT IT, ALTHOUGH IT IS A STANDARDIZED WAY OF LOOKING AT IT, AND THEY SAY, WHAT IF YOU JUST LOOKED AT THE CUSTOMERS WHO ACTUALLY WERE AFFECTED BY OUTAGES? AND SO, UM, THAT'S WHAT'S ON THE FAR RIGHT SIDE.
UM, LISA, THOSE ARE IN MINUTES ON THE TIME TO RESTORE ALSO.
YES, I'M ASSUMING, BUT I WANT, YES.
71 MINUTES ON AVERAGE ACROSS OUR ENTIRE SYSTEM.
84 MINUTES FOR THOSE AFFECTED BY OUTAGES DURING THIS QUARTER.
UM, AND THEN I, I WILL SAY THAT, UM, SOME PRETTY SIGNIFICANT EXTREMES.
UM, IN THIS QUARTER, THE, THE LOW WAS 17 DEGREES FAHRENHEIT.
THE HIGH WAS 97 DEGREES FAHRENHEIT.
SO YOU MIGHT RECALL IT WAS A LITTLE BIT OF A, A DIFFERENT KIND OF, OF A START TO 2025.
AND THEN AS I SHIFT TO STRATEGICAL UPDATES AND OTHER UPDATES, UM, A NUMBER OF QUESTIONS HAVE COME UP IN THE LAST COUPLE OF MEETINGS.
AND SO I, I TRIED TO USE THIS AS AN OPPORTUNITY TO ANSWER SOME OF THOSE QUESTIONS.
SO, UM, LET'S SEE HOW THAT GOES.
WE'LL START WITH, UM, ON THE, STAYING ON THE THEME OF DISTRIBUTION SYSTEM RELIABILITY.
SO WE ALWAYS HAVE SEVERAL GRID RESILIENCE INITIATIVES UNDERWAY, AND AS YOU KNOW, WE'RE WORKING TOWARDS, UM, COMPLETING THE OVERHEAD HARDENING STUDY.
UM, BUT WHILE WE'RE DOING THAT, WE CONTINUE TO WORK ON OUR END-TO-END CIRCUIT IMPROVEMENTS.
AS OF MARCH 31ST, NINE CIRCUITS ARE FULLY COMPLETE, AND WE HAVE 25 IN VARIOUS STAGES OF COMPLETION.
IN TOTAL, UH, FISCAL, IN FISCAL YEAR 24, WE INSTALLED 79 SMART GRID DEVICES, WHICH INCLUDES SMART SWITCHES, SECTIONALS, AS WELL AS TRIP SAVERS.
A TRIP SAVER IS ESSENTIALLY A SMART FUSE THAT CAN RECLOSE AFTER A MOMENTARY OUTAGE.
[02:10:04]
NEXT SLIDE, PLEASE.SOME OF YOU ASKED ABOUT BLACK START CONSIDERATIONS.
UM, SO JUST TO LEVEL SET WITH EVERYBODY, BLACK START IS THE PROCESS TO RESTORE THE ELECTRIC GRID AFTER A FULL OR PARTIAL BLACKOUT.
UM, THE PHOTO IS NOT ACTUALLY A BLACK START SITUATION THAT IS, UM, ACTUAL PHOTO DURING WINTER STORM YURI, BUT, UM, IT DOES SHOW, YOU KNOW, UH, A LOT LESS LIGHTS WHEN IT COMES TO, UM, UH, POWER OUTAGES.
AND SO, UM, YOU KNOW, I WANNA BE CAREFUL ABOUT HOW MUCH I SAY HERE.
AND YOU'LL NOTICE THIS IS A LITTLE BIT HIGH LEVEL.
UM, CONVERSATIONS ABOUT BLACKSTAR REALLY ARE HIGHLY SENSITIVE.
ERCOT HAS DESIGNATED BLACKSTAR INFORMATION AS CRITICAL ENERGY INFRASTRUCTURE INFORMATION YOU CAN IMAGINE IN THE HANDS OF A BAD ACTOR.
UM, IT COULD BE VERY VALUABLE.
AND SO I'LL JUST SAY, UM, AT THE HIGHEST LEVEL, UH, BLACKSTAR CONTRACTS WITH ERCOT, UM, THAT ARE IN PLACE ARE THROUGH 2026.
THAT'S ACROSS THE WHOLE SYSTEM.
WE ANTICIPATE THE NEXT ERCOT REQUEST FOR PROPOSAL LATER THIS YEAR, OR PERHAPS EARLY NEXT YEAR, THEREFORE THREE YEAR TERMS. UM, AND WE ARE CONTINUING TO MONITOR THAT FOR BATTERY STORAGE APPLICABILITY AS WAS REQUESTED, UM, AND DESIRED DURING THE RESOURCE GENERATION PLAN.
WE DON'T HAVE ANY INDICATIONS THAT THEY'RE SWITCHING THEIR RULES, UM, ABOUT THAT YET.
UM, WE HAVE BLACKSTAR UNITS, WE HAVE ADDITIONAL UNITS THAT Y'ALL HAVE ASKED IF THEY ARE CAPABLE, THEY ARE, UH, CAPABLE, BUT IT WOULD REQUIRE SUBSTANTIAL MODIFICATIONS AND COSTS TO, UH, ENABLE THAT THOSE UNITS ALREADY HAVE A ROLE TO PLAY IN THE BLACK START RESTORATION.
SO YOU WOULDN'T, YOU KNOW, IT'S, IT'S A, YOU KNOW, A BIT OF GIVE OR TAKE AS TO WHAT, WHETHER YOU WOULD INVEST IN THOSE ADDITIONAL UNITS WHEN THEY ALREADY HAVE A ROLE TO PLAY, UM, IN THE PROCESS.
UM, BUT ANY NEW PEAKER UNITS, UM, IF WE EVER DID INSTALL ANY, WE WOULD, UH, HAVE A REQUIREMENT THAT THEY BE OUTFITTED FOR BLACK STAR CAPABILITY.
I GUESS MY, MY QUESTION IS WHETHER IT WAS WORTH IT IN AN ADVANTAGEOUS TO AUSTIN ENERGY TO CONSIDER DOING THE ONES THAT SANDHILL THE SANDHILL PEAKERS, AND THAT'S, THAT'S OVER MY PAY GRADE.
IT'S JUST A QUESTION OF IS THERE AN OPPORTUNITY AND MONEY TO BE MADE THERE, AND IF SO, ARE Y'ALL EITHER EVALUATING IT OR PLANNING ON IT SO THOSE ADDITIONAL UNITS ARE CAPABLE, BUT WOULD REQUIRE SUBSTANTIAL MODIFICATIONS AND COST? MM-HMM
AND AGAIN, THEY ALREADY HAVE A ROLE IN THE PROCESS.
UM, AND SO IT DOES NOT SEEM LIKE THAT'S THE RIGHT BEST USE OF OUR RESOURCES AT THIS POINT, POINT IN TIME.
WE'LL SWITCH TO THE LAST SLIDE.
UM, SO YOU ASKED ALL A NUMBER OF QUESTIONS AND REQUESTED A TIMELINE FOR THE BATTERY STORAGE REQUEST FOR PROPOSAL.
UM, AND SO I, I JUST WANNA START AND MAKE SURE THAT YOU ARE ALL VERY AWARE THAT WE'RE REALLY EXCITED ABOUT THIS REQUEST FOR PROPOSALS.
UM, AND WE THINK THAT THERE'S A POSSIBILITY WE CAN MEET OUR ENTIRE, UH, FIRST, FIRST LEVEL, FIRST TIER GOAL WITH BATTERY STORAGE, UM, WITH JUST THIS RFP.
UM, SO, UH, JUST A QUICK TIMELINE.
THE RFP CLOSED IN MARCH OF 24.
UM, THERE WERE MANY PROPOSALS THAT WERE IN THERE THAT WERE OUTSIDE OF THE AUSTIN ENERGY SERVICE TERRITORY.
YOU MAY RECALL, WE REQUESTED LOCAL, AND SOME PEOPLE I THINK WERE CONFUSED AND THOUGHT, WELL, MAYBE IF I INTERCONNECT TO YOUR TRANSMISSION WAY OUT THERE, THAT STILL COUNTS AND IT DOESN'T, IT HAS TO BE WITHIN OUR LOAD ZONE.
UM, OUR TEAM, THERE'S A MULTI-PART PROCESS THAT WE DO INTERNALLY.
UM, WHEN WE REVIEW THESE PRO UH, PROPOSALS, UH, WE START WITH A, A MODELING ANALYSIS.
UM, THAT ANALYSIS WAS COMPLETED ON ALL THE VIABLE PROJECTS IN APRIL, AND NOW WE HAVE SHORTLISTED THE PROJECTS AND OUR CONTRACT DISCUSSIONS ARE UNDERWAY.
SO ESSENTIALLY NEGOTIATING TERMS AND CONDITIONS, UM, UH, WE ANTICIPATE THAT WE'LL BE, UH, WE'LL BE FAR ENOUGH ALONG IN THOSE, UH, CON CONTRACT NEGOTIATIONS TO COME BACK TO THE EUC, UM, AT THE JULY 14TH MEETING WITH AN OPPORTUNITY TO REVIEW THE RECOMMENDATIONS.
AND WE ARE TARGETING THE JULY 24TH MEETING FOR COUNCIL APPROVAL.
UM, MIKE HELPED ME PUT THIS SLIDE TOGETHER, AND HE WOULDN'T LET ME, UH, EVER LEAVE WITHOUT SAYING THAT THERE'S A NUMBER OF, UH, REG RISKS TO ALL OF THESE PROPOSALS, INCLUDING TARIFF AND REGULATORY RISKS.
UM, AS YOU ALL KNOW, THOSE ARE CURRENTLY ELEVATED.
THEY COULD POTENTIALLY PRESENT CHALLENGES.
THOSE ARE SOME OF THE ISSUES THAT ARE, UM, CAUSING CHALLENGES FOR THE RENEWABLE, UH, CONTRACTS THAT WE'RE TRYING TO NEGOTIATE AS WELL.
UM, WHICH IS WHY I TOLD VICE CHAIR WHITE, I DIDN'T HAVE A TIMELINE FOR HER RIGHT NOW, UM, BUT ON, UH, THE, THE BATTERY STORAGE RFP, WE SHOULD BE ABLE TO BRING THINGS AND WE SHOULD KNOW WHERE THINGS ARE ARE GOING.
UM, AND WE'RE AGAIN AIMING FOR JULY 24TH.
UM, I DO WANNA SAY THAT DURING THIS NEGOTIATION PROCESS, IT'S VERY TYPICAL FOR PROPOSERS TO DISCUSS A TERM THAT THEN REQUIRES THEM TO ADJUST THEIR PRICE IN SUCH A WAY.
AND SO, UM, I KNOW THAT LAST TIME THERE WAS A NUMBER OF, UM, SOME CONCERN ABOUT THE 120
[02:15:01]
DAY PRICING AS IF THAT WAS A LOCKED IN WINDOW.AND AFTER THAT, THE OFFER WAS OFF THE TABLE AND THERE WAS NEVER ANY, NORMALLY THESE PRICES GET ADJUSTED DURING THE NEGOTIATION PROCESS, SO WE DON'T THINK THAT WE'RE GONNA RUN OUT OF TIME OR WIND OUT THE CLOCK OR ANYTHING LIKE THAT.
GABBY, YOU HAVE A QUESTION? THANKS.
YEAH, THANK YOU FOR THE UPDATE, LISA.
UM, I WAS JUST WONDERING HOW MANY, UH, MEGAWATT HOURS Y'ALL ARE CURRENTLY NEGOTIATING? FOUR.
HOW MANY MEGAWATT HOURS? UH, THE PROPOSALS RANGE FROM ONE TO FOUR, I THINK.
IS THAT WHAT YOU'RE ASKING? ONE TO FOUR HOURS.
ONE TO FOUR HOURS IN DURATION.
AND THEN HOW MANY MEGAWATTS IN CAPACITY? UM, I, IT'S, UH, THE ONE TO FOUR HOURS, IT'S BETWEEN 120 AND A HUNDRED FIFTY, A HUNDRED TWENTY FIVE AND 150.
AND I TAKE IT IT'S MORE THAN ONE PROJECT THAT YOU'RE LOOKING AT? YES.
WELL, I'VE BEEN, I'VE BEEN LOBBYING FOR THIS TO HAVE A PRESENTATION IN MAY AND, AND WAS PRETTY EMPHATIC ABOUT IT, BUT IF INSTEAD OF THAT YOU'RE ACTUALLY ACTIVELY ENGAGING IN PROJECTS THAT COULD BE REAL BY JULY, THAT'S, THAT'S WELL WORTH IT AND VERY, VERY SATISFYING TO HEAR.
SO IT'S BETTER THAT YOU'RE DOING THAT THAN I KNOW SOMETHING, LET'S PUT IT THAT WAY.
SO AL WHAT YOU'RE SAYING IS YOU'D LIKE ACTUAL ACTION RATHER THAN A STUDY? YES.
AND I THINK THAT'S MY LAST SLIDE FOR YOU.
UH, I KNOW WE'VE ANSWERED QUESTIONS ALONG THE WAY.
ANYTHING ELSE, ANY OTHER QUESTIONS ONLINE OR HERE? ALL RIGHT, THANK YOU VERY MUCH.
[DISCUSSION]
THAT WE'RE ANY DISCUSSION ITEMS THAT THE EUC MEMBERS WANNA BRING UP? UH, I JUST WANNA SAY, UH, THANK YOU FOR SHARING SOME GOOD NEWS.THERE'S SOME GOOD, UH, FINANCIAL AND OPERATING NEWS, EVEN IF IT'S JUST FOR THIS QUARTER, SO APPRECIATE IT.
HAPPY BIRTHDAY, AUSTIN ENERGY.
UH, SO I WAS A LITTLE UNCLEAR ON THE, ON THE BUDGET.
WOULD THAT COME TO US IN JULY? SO THE BATTERY RECOMMENDATION AND THE BUDGET PRESENTATION WOULD COME IN JULY, OR IS THE BUDGET PRESENTATION AUGUST? WHEN'S THE, WITHOUT LOOKING IT UP? I, UM, BASED ON MY MEMORY, THE CITY MANAGER RELEASES THE BUDGET, THE, HIS PROPOSED BUDGET ON JULY 11TH, I BELIEVE.
I DON'T KNOW WHEN THE, WHAT DATE? THE E THE JULY EUC MEETING IS JULY 14TH.
SO, UM, WE'LL HAVE TO LOOK AT THE TI HOW, WHETHER WE HAVE ENOUGH TIME IN BETWEEN THERE, UM, BUT WE'LL LET YOU KNOW.
UM, I, I THINK THAT SHOULD WORK, THAT WE WOULD, WOULD COME BACK WITH A PROPOSED BUDGET IN JULY.
UM, I JUST CAN'T 100% COMMIT TO THAT RIGHT NOW, BUT THAT WOULD MAKE THE MOST SENSE.
[FUTURE AGENDA ITEMS]
THEN WE'VE GOT FUTURE AGENDA ITEMS. THE LIST I'VE ACCUMULATED OVER TIME HERE IS DISTRIBUTION, HARDENING, BATTERY STORAGE.UM, WOULD IT MAKE SENSE TO HAVE, UH, THE AE REPORT, JUST SOMEBODY GO OVER THAT, THAT WAS PUBLISHED FOR 2024? UM, GOOD AND THE BAD, WHATEVER WE HAVE IN THAT LANDSCAPE.
ELECTRIFICATION, SOLAR STANDARD OFFER, AND SOLAR FOR ALL UPDATES.
AUSTIN ENERGY, WILDFIRE MITIGATION MANAGER, CHRIS, ANOTHER CHRIS, UH, LEGISLATIVE UPDATE AFTER THEY'RE DONE BY TAMMY.
UM, INTERESTING TOPIC THAT GOT BROUGHT UP TODAY WAS A DISTRIBUTION PROTECTION SOFTWARE THAT HELPS DERS, MAYBE THAT COULD BE SOONER OR LATER SOMETHING ROLLED IN WITH THE A DMS SORT OF VISION THAT YOU HAVE ON UPDATES OVER TIME, OR MAYBE THAT'S PART OF THE DISTRIBUTION HARDENING.
UM, SOME KIND OF FOLLOW UP ON OUR, HOW MUCH OF OUR DR IS GONNA DROP OUT WITH THIS NEST SITUATION, WHICH I THINK IT'S A SUBSTANTIAL NUMBER IF I'M GUESSING.
UM, AND THERE'S GONNA BE A MEMO SENT OUT ON THE LANDSCAPE DEMO THAT HAPPENED, SO I'M KIND OF COME BACK ON THE, THE ASSESSMENT OF THE EFFECTIVENESS, UH, WITH RETAILERS FROM CLEAR RESULT
[02:20:01]
AND A BUDGET PRESENTATION.ANYTHING ELSE? THAT'S A BIG LIST.
I MAYBE THIS WAS KIND OF ROLLED UP IN ONE OF YOUR, YOUR, YOUR ITEMS ALREADY, BUT I'M, I'M KIND OF CURIOUS ABOUT WHAT THE TIMELINE IS FOR HAVING A, A DERMS IN PLACE AND HAVING SOME SORT OF RATE, HOPEFULLY TO BE ABLE TO UTILIZE CUSTOMER SIGHTED BATTERIES.
UM, I FEEL LIKE EVERY TIME I HEAR SOMETHING IT'S, IT'S A LITTLE DIFFERENT.
UM, SO YEAH, JUST WONDERING IF THERE'S YEAH.
SOME, SOME SORT OF FOCUSED EFFORT TO, TO GET THAT DONE SOONER THAN LATER AND IF WE CAN, YEAH, I'M WONDERING IF THAT'S PART OF THE SOLAR FOR ALL.
RICHARD ISN'T HERE RIGHT NOW, BUT I'LL SEND YOU THIS LIST, NIKKI, AND GET IT.
IT'S, IT CERTAINLY WAS PRESENTED AT ONE POINT AS INTEGRAL TO SOLAR FOR ALL, BUT THEN THE LAST TIME IT WAS MENTIONED IT WAS LIKE, WELL, THAT'S ONE OPTION.
SO, UM, THAT'S WHY I'M CURIOUS TO SEE HOW WE MIGHT SUPPORT IT MOVING FORWARD.
ANYTHING ELSE? WELL THEN AT 8 23, LET'S ADJOURN.