* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [00:00:05] SO 1:00 PM [CALL MEETING TO ORDER] I CALL THIS MEETING OF THE RESOURCE MANAGEMENT COMMISSION TO ORDER. UM, DO WE HA WE HAVE A QUORUM? UH, I, I DO NEED FOLKS THAT ARE ON JOINING REMOTE TO, UM, COME ON CAMERA FOR PURPOSES OF ATTENDANCE. ROLL CALL. HELLO. HI. OKAY. UM, SO WE HAVE A JAM PACKED AGENDA TONIGHT. UM, A LOT OF STUFF TO GET THROUGH. SO, UM, AND THIS IS MY FIRST TIME SHARING THIS, SO PLEASE BEAR WITH ME AND, UM, TRY TO, LET'S TRY TO KEEP THINGS, I'M GONNA TRY TO KEEP THINGS MOVING ALONG. LET'S TRY TO KEEP THINGS CONCISE. UM, DO WE HAVE ANY PUBLIC SPEAKERS SIGNED UP? NO. OKAY. UM, MM-HMM . OKAY. UM, WE HAVE A NEW COMMISSIONER THIS, UH, THIS MEETING JOINING US. UM, COMMISSIONER ZAGON. DID I SAY THAT CORRECTLY? ZIN, LIKE ZIN AND ZIN. ZIN. OKAY. AWESOME. UM, WOULD YOU CARE TO, UH, INTRODUCE YOURSELF VERY BRIEFLY, WHAT DISTRICT YOU REPRESENT, AND KIND OF ANY BACKGROUND YOU'D LIKE TO SHARE WITH THE COMMISSION? SURE. I WAS APPOINTED BY COUNCIL, UM, COUNCIL MEMBER LA, UH, FOR DISTRICT SIX. MY, I'M A NUCLEAR ENGINEER, UM, MASTER'S IN GLOBAL POLICY OR GLOBAL ENERGY POLICY FROM UT AUSTIN. UM, DID ALL MY BIG FIRST ADULT THINGS HERE AS A TEXAN. SO I CONSIDER MYSELF A TEXAN. UM, I CURRENTLY WORK AT UT AUSTIN DOING A LOT OF NUCLEAR ENERGY POLICY FOR THEM AND FOR THE STATE OF TEXAS. WELL, WELCOME, GREAT TO HAVE YOU HERE. THANKS. OKAY. FIRST ORDER OF BUSINESS IS [1. Approve the minutes of the Resource Management Commission Meeting on April 15, 2025.] APPROVAL OF THE MINUTES FROM THE APRIL 15TH, 2025 MEETING. DO I HAVE A MOTION? SO MOVED. UH, UH, DO I HAVE A SECOND? SECOND. OKAY. UH, MOTION TO APPROVE THE MINUTES BY, UH, COMMISSIONER SILVERSTEIN, SECOND BY VICE CHAIR ROBBINS. IS THERE ANY DISCUSSION? OKAY. WE HAVE A SHOW OF HANDS. UH, ALL IN FAVOR OF APPROVING THE MINUTES, PLEASE, UH, RAISE YOUR HAND. THAT, THAT LOOKS AN, UH, I'M ABOUT TO SAY ANONYMOUS. UNANIMOUS. OKAY. UM, AND YOU STARTED THE MEETING RIGHT AT 6 0 1, BUT WE JUST NEED TO STATE THAT FOR THE RECORD. SO, 6 0 1 MEETING STARTED. THANKS. YEP. OKAY. UM, NEXT ITEM OF [2. 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] BUSINESS IS 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. UM, DO WE HAVE, UH, SOMEONE FROM AUSTIN ENERGY TO SPEAK TO THAT, MR. GENESEE, PERHAPS. GOOD EVENING. RICHARD GENESEE, VICE PRESIDENT OF CUSTOMER ENERGY SOLUTIONS. UM, THIS IS A, UH, CONTINUATION OF A, OR A CONTRACT THAT ENABLES US THROUGH VELOCITY CREDIT UNION TO PROVIDE NO INTEREST AND, UH, VERY LOW INTEREST LOANS FOR ENERGY, UH, EFFICIENCY PROJECTS. UM, IT WORKS ACROSS, UH, HOME ENERGY SAVINGS, UM, AND WEATHERIZATION, UH, AC REBATES IN THE SMALL BUSINESS BUNDLE. UH, THE LOAN TERM IS A HUNDRED UP TO 120 MONTHS. UH, SO IT WORKS ACROSS A NUMBER OF DIFFERENT PROGRAMS. UH, WE ACTUALLY THINK THAT THERE'S BEEN REALLY GOOD LOAN ACTIVITY. I JUST WANT TO CLARIFY THAT THE, THIS IS JUST AN EXTENSION OF THE CONTRACT AUTHORITY, BUT THE ACTUAL BUDGET FOR THIS, UH, PROGRAM IS $600,000, WHICH WE HAVE CONSISTENTLY SPENT, UM, YEAR OVER YEAR. SO THE CUMULATIVE CONTRACT AUTHORITY FOR THIS IS WHAT INCREASES THE AMOUNT TO THE AMOUNT THAT YOU SEE LISTED IN THE RCA, BUT IT IS, IT IS, I DON'T WANT ANYONE TO THINK THAT WE ARE SPENDING THAT AMOUNT OF MONEY ON AN ANNUALIZED BASIS OR ANYTHING LIKE THAT. SO, UM, I'LL, I'LL, I'M SORRY. I'LL TAKE YOUR QUESTIONS IF YOU HAVE SPECIFIC QUESTIONS. COMMISSIONERS, ARE THERE QUESTIONS ON THIS ITEM? YES. COMMISSIONER SILVERSTEIN. THANK YOU. SO, MR. GENESEE, JUST TO CLARIFY, THIS IS DOING TWO DIFFERENT THINGS. ONE, IT IS INCREASING THE TOTAL SIZE OF THE CONTRACT TO 5 MILLION. YEAH. THE, AND NUMBER TWO, IT IS AUTHORIZING YOU ALL TO PUT 600 GRAND IN FOR THE COMING FISCAL YEAR. 600 GRAND IS THE BUDGET THAT, AND SO, AS YOU KNOW, THE BUDGETS, UH, SEPARATE ITEMS HAS ALREADY BEEN SUBMITTED. [00:05:01] THIS IS REALLY TO EXTEND THE CONTRACT AUTHORITY OVER THE, UH, FIVE YEARS OF THE CONTRACT. SO, ARE WE APPROVING THE 600,000? NO. IS THAT JUST AN INFORMATIONAL YEAH, YOU'RE NOT APPROVING THE 600,000 BECAUSE THAT'S PART OF THE BUDGET SUBMISSION. YOU'RE ACTUALLY APPROVING THE EXPANSION OF THE CONTRACT AUTHORITY. THANK YOU VERY MUCH. OTHER QUESTIONS? COMMISSIONERS? HEARING NONE, I, I WILL, UH, ENTERTAIN A MOTION. SO MOVE. COMMISSIONER SILVERSTEIN MOVES TO APPROVE. DO I HAVE A SECOND? SECOND. OKAY. COMMISSIONER ROBBINS. ALRIGHT. UH, ALL IN FAVOR OF, UH, APPROVING THE EXTENSION OF THE CONTRACT FOR THIS BETTER BUILDING ENERGY EFFICIENCY LENDING PROGRAM, PLEASE RAISE YOUR HANDS. 1, 2, 3. WE HAVE EIGHT. UH, ALL OPPOSED, ANY ABSTENTIONS? OKAY. UM, MOTION PA OR, YEAH. ITEM PASSES ON AN 8 0 1, UH, VOTE. THANK YOU. OKAY. THANK YOU. UH, CONTINUING ON, THE NEXT ITEM [3. 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.] IS RECOMMEND APPROVAL AUTHORIZING A CONTRACT FOR STRATEGIC PARTNERSHIP OF UTILITIES AND RETAILERS PROGRAM ADMINISTRATION FOR AUSTIN ENERGY WITH CLEAR RESULT FOR AN INITIAL TERM OF TWO YEARS WITH UP TO THREE ONE YEAR EXTENSION OPTIONS IN AN AMOUNT NOT TO EXCEED 11 MILLION FUNDING OF 1.25 MILLION IS AVAILABLE IN THE OPERATING BUDGET. DO WE HAVE SOMEONE TO SPEAK ON THAT ITEM? MR. GENESEE? UH, RICHARD GENESEE, UH, VICE PRESIDENT OF CUSTOMER ENERGY SOLUTIONS. UH, AND I'M HERE TO ADDRESS ANY QUESTIONS THAT YOU HAVE. I'LL ALSO, UH, INTRODUCE TO HAMAD CHARI, WHO'S THE DIRECTOR OF ENERGY EFFICIENCY SERVICES, UH, WHO CAN ALSO SPEAK TO THIS ITEM. ARE THERE QUESTIONS ON THIS ITEM? YES. UH, VICE CHAIR ROBBINS, I ADVISED, UH, MR. GENESEE, UH, EARLIER IN THE DAY THAT I WOULD BE ASKING HIM ABOUT THE COST EFFECTIVENESS OF THE, THE SPUR PROGRAMS. UM, I WAS MESSING AROUND WITH SOME STATISTICS A FEW HOURS AGO AND OUT OF, UH, JUST AN EXAMPLE, I PULLED DOWN THE, UH, STATISTICS FROM ENERGY STAR FOR REFRIGERATORS. AND IT, I MEAN, I HAVE AN ENERGY STAR REFRIGERATOR, UH, BUT IT, ITS SAVINGS HELPS, BUT IT ISN'T HUGE. AND I WAS HAVING A HARD TIME UNDERSTANDING, UH, HOW THIS PROGRAM PAYS FOR ITSELF WITH, UH, SAVINGS FROM THE AIRCO GRID. SO I'M HOPING THAT YOU COULD, I'M, I MEAN, I, I DON'T WANT IT TO BE SEEN THAT I'M NOT SUPPORTIVE OF ENERGY STAR OR THAT I'M NOT SUPPORTIVE OF EFFICIENT APPLIANCES, BUT ARE THESE REBATES COST EFFECTIVE? YES. AND THAT, UH, IN SUMMARY, UM, BY SHARE ROBBINS, YES. UH, THEY ARE COST EFFECTIVE. THE OVERALL COST EFFECTIVENESS OF THIS PROGRAM IS 4.2 TRC, UM, TOTAL RESOURCE COSTS AS ONE OF THE TESTS THAT WE APPROVED FOR 2023 AND FIGURES FOR 2024, WE ARE STILL, UH, THEY'LL BE AVAILABLE SHORTLY. SO, UM, YEAH, IT IS COST EFFECTIVE IN A NUTSHELL, BECAUSE I LIKE YOU, I'M GONNA VOTE FOR THIS , BUT, UM, I REALLY DO WANT TO SEE THE COST EFFECTIVENESS EVALUATION. YEAH. AS, AS YOU, UM, MAY OR, UM, AS YOU MAY RECALL, ONE OF THE THINGS THAT WE'RE WORKING ON RIGHT NOW IS OUR, UH, EMNV, OUR EVALUATION, MEASUREMENT AND VERIFICATION SELECTION, WHICH WILL BE ONE OF THE THINGS THAT, THAT CONTRACT WILL DO, UM, IS HELP WITH THESE EVALUATIONS AND DETERMINING COST EFFECTIVENESS THROUGHOUT THE PORTFOLIO. SO WE SHARE YOUR, UM, YOU KNOW, YOUR, YOUR, UH, YOUR NEEDS IN TERMS [00:10:01] OF, YOU KNOW, WANTING TO MAKE SURE THAT WE'RE APPLYING DUE DILIGENCE TO COST EFFECTIVENESS ON A PROGRAM AND ON A PORTFOLIO BASIS. AND WE ARE, UH, CLOSE TO, UH, THE END OF, UH, A SELECTION PROCESS IN WHICH WE WILL HAVE A THIRD PARTY EVALUATOR TO HELP US WITH THAT. WELL, COULD YOU SEND ME THE EVALUATION FROM LAST YEAR, PLEASE? THE EVALUATION FROM LAST YEAR? WELL, THE LAST ONE THAT YOU'VE DONE FOR SPUR? YEAH. INTERNAL VERSUS EXTERNAL. I, I THINK WE'LL HAVE TO REFERENCE WHAT WE ACTUALLY, UH, HAVE PUBLISHED IN THE PAST AND THEN UPDATE THAT WITH, UH, MOST CURRENT RESULTS, UNDERSTANDING THAT WE'LL BE MOVING TO AN ENTIRELY DIFFERENT PROCESS WITH OUR THIRD PARTY, UH, EVALUATOR. VERY GOOD. OKAY. OTHER QUESTIONS? YES, COMMISSIONER SILVERSTEIN. THANK YOU. UH, TWO QUESTIONS PLEASE, MR. GENESEE. THE FIRST IS THAT THE TRUMP ADMINISTRATION HAS PROPOSED KILLING THE ENERGY STAR PROGRAM. WOULD THAT, HOW WOULD THAT AFFECT YOUR ABILITY TO CONTINUE THIS PROGRAM AND WHAT APPLIANCES Y'ALL PICK? YEAH, I DON'T, I DON'T KNOW. I THINK WE NEED TO UNDERSTAND THE DETAILS OF EXACTLY WHAT HAPPENS, BUT I'M, I DON'T WANT TO SAY THAT JUST, UM, THE KILLING OF THE PROGRAM AT THE FEDERAL LEVEL WOULD, UH, YOU KNOW, COMPLETELY DESTROY OUR ABILITY TO CONTINUE ON OUR OWN. UM, SO I THINK WE, WE WOULD HAVE SOME MEANS TO CONTINUE FORWARD, BUT I WOULDN'T BE ABLE TO PREDICT EXACTLY HOW, UNTIL WE KNEW THE SPECIFICS OF WHAT EXACTLY THE, UH, UH, THE ADMINISTRATION MIGHT DO. WELL, IT, IT WAS A CONGRESSIONALLY MANDATED PROGRAM, SO PERHAPS THEY WON'T BE ABLE TO KILL IT, BUT BEST TO, BEST TO THINK ABOUT IT IN ADVANCE. THANK YOU. THE SECOND QUESTION IS THIS, THE, THE BACKUP INFORMATION INDICATES THAT, UM, THE INSTANT SAVINGS IN THE ADDITION OF THE RETAIL COUPON ALLOW PARTICIPATION IN AUSTIN ENERGY'S DEMAND RESPONSE PROGRAMS. BUT A BUNCH OF THESE ARE STRICT ENERGY EFFICIENCY IMPROVEMENTS THAT DON'T ENABLE YOU TO PARTICIPATE IN AN IN DEMAND RESPONSE PER SE. YEAH. SO, SO TALK US THROUGH, IS THAT JUST ABOUT, HERE'S YOUR FANCY THERMOSTAT, YOU CAN BE IN IN DEMAND RESPONSE NOW, OR IS THERE SOMETHING ELSE GOING? I, I BELIEVE I'M GONNA, UM, ALSO ASK, UH, HAMAD CHADRI TO COME UP AND COMMENT ON THIS. BUT I BELIEVE THAT AS WE ARE ADDING NEW, UH, DEVICES AND MEASURES AND THINGS TO THE PORTFOLIO, WE HAVE AN EMPHASIS AND A FOCUS ON DEMAND RESPONSE OR DEMAND RESPONSE READY DEVICES. SO, UH, IT IS, YEAH, THE, THE, THE, THE, SO IT REALLY REFERS MORE TO THE THINGS THAT WE'RE ADDING VERSUS THE THINGS THAT WE HAVE ALREADY HAD IN THE PORTFOLIO. AHMAD, THANK YOU, MR. CHADRI. WELCOME. GOOD, GOOD EVENING COMMISSIONERS, HAM, UH, DIRECTOR OF ENERGY EFFICIENCY. SO, UH, SO YEAH, TO ANSWER THAT QUESTION, YES. SO ENERGY, WE HAVE, UH, INCENTIVES FOR ENERGY EFFICIENCY WITH THERMOSTATS, AND THEN WE HAVE ADDITIONAL INCENTIVES FOR THE CUSTOMERS TO ENROLL INTO DEMAND RESPONSE. WHERE WE ARE HEADING IS THAT WE HAVE, UH, WE ARE WORKING WITH ECO B, ECO B THERMOSTATS COMES PRE-PROGRAMMED, IF YOU WILL, FOR DEMAND RESPONSE READINESS. OKAY. SO IT'S ONLY, ESSENTIALLY ONLY THERMOSTATS THAT IT'S NOT ALL THE OTHER APPLIANCES THAT ARE COVERED UNDER THIS PROGRAM THAT LEAD YOU INTO THE DEMAND RESPONSE PROGRAM? UH, YEAH. SO THERMOSTATS ARE THE PRIMARY DEMAND RESPONSE OPPORTUNITY FOR CUSTOMERS THROUGH THIS PROGRAM. SO THIS PROGRAM IS A STRATEGIC PARTNERSHIP WITH UTILITIES AND BETWEEN UTILITIES AND RETAILERS. SO BASICALLY, THE PURPOSE OF PROGRAM IS TO INCENTIVIZE CUSTOMERS AT THE POINT OF PURCHASE TO MAKE THE RIGHT DECISION. SO IT'S THERMOSTATS IS LIGHTING TO AN EXTENT, IT'S LAWN CARE EQUIPMENT, UH, IT'S, YOU KNOW, OTHER MEASURES LIKE, UM, UH, LIKE DEHUMIDIFIERS AND WHAT HAVE YOU. SO WHERE YOU HAVE OPPORTUNITY FOR DEMAND RESPONSE, WE WILL OFFER IT. WE ARE DOING COUPLE OF, UH, PILOTS WITH THE, WITH THE DOE GRANT WHERE WE ARE WORKING WITH SOME, UH, UH, SOME OF OUR VENDORS TO SEE YOU IF WE, WE CAN GET WATER HEATERS INTO DEMAND RESPONSE AS WELL. SO, YEAH. EXCELLENT. THANK YOU VERY MUCH. OTHER QUESTIONERS FROM COMMISSIONERS? YES. COMMISSIONER SA. HEY THERE. MY QUESTION IS, UH, CAN YOU QUICKLY SAY LIKE, WHAT IS THE SCOPE OF PRODUCTS THAT ARE INCLUDED IN THE MONEY THAT WE'RE TALKING ABOUT TODAY? SO, IF I UNDERSTAND QUESTION CORRECTLY, THE SCOPE OF PRODUCTS WITHIN THE SPUR PROGRAM, UM, THAT THE OVERALL BUDGET OF THE PROGRAM IS, I DON'T REMEMBER ON TOP OF MY HEAD. I CAN GET BACK TO YOU. UH, BUT THE PRODUCTS WE ARE TALKING ABOUT ARE THE ENERGY SAVINGS PRODUCTS. THIS, THIS IS AGAIN, [00:15:01] LIGHTING. THESE ARE THERMOSTATS, DEHUMIDIFIERS, LAWN EQUIPMENT TO NAME SOME. AND SO ALL OF THOSE WILL, WILL BE INCENTIVIZED. THAT IS, IS THAT, I'M TRYING TO ASK THE MOST SIMPLE QUESTION. LIKE THAT IS WHERE THIS MONEY GOES, LIKE TOWARDS THE INCENTIVES OF YES, THOSE THINGS. THE, THE, THE PROGRAM INCENTIVIZES THE PURCHASE OF THESE, UH, EFFICIENT EQUIPMENT. SO BASICALLY THE, THE PROGRAM FUNDING IS SO TO, IS BASICALLY AN INCENTIVE OR A EBAY TO CUSTOMERS SO THAT THEY PURCHASE HIGH EFFICIENCY DEVICES. YES. SO I CAN GET, GET LIKE AN INSTANT COUPON KIND OF FOR A, A HIGH EFFICIENCY LIKE HEAT PUMP OR SOMETHING WOULD BE LIKE A, A THING THAT MIGHT BE ON THE LIST HERE. ABSOLUTELY. YEAH. SO WE, WE ARE CONTINUOUSLY EXPANDING THE, THE, UH, THE MAJOR LIST IN THIS PROGRAM. AS LIGHTING IS BECOMING MORE AND MORE, UH, CHALLENGING WITH THE IS STANDARDS, WE ARE LOOKING FOR NEW MEASURES AND NEW WAYS TO GET CUSTOMERS EXCITED AT THE POINT OF SALE. SO THANKS. UH, YES. COMMISSIONER SILVERSTEIN, JUST TO, TO BUILD ON WHAT YOU JUST SAID IS THESE, THESE FUNDS ARE ONLY TO INCENT THE PURCHASE OF NEW EFFICIENT EQUIPMENT. IS THERE A DIFFERENT BUDGET THAT WE'LL PAY FOR INCENTIVES FOR THOSE OF US WHO WANNA DO DEMAND RESPONSE WITH OUR MAIN YIELD DEVICES? YEAH. SO PER PROGRAM INCENTIVIZES NEW PRODUCT PURCHASE, UM, OR RETROFIT, IF YOU WILL. UM, UH, WE HAVE HVAC, A E UH, OUR APPLIANCE EFFICIENCY PROGRAM WHERE WE ARE GIVING INCENTIVES WHEN YOU'RE RETRO RETROFITTING YOUR OLD DEVICE. IF YOU ALREADY HAVE AN THERMOSTAT, WHICH IS, UM, ELIGIBLE FOR OUR DEMAND RESPONSE PROGRAM. WE HAVE A SEPARATE FUNDING THROUGH OUR POWER PARTNER THERMOSTAT PROGRAM. YES. IF THAT MAKES SENSE. EXCELLENT. THANK YOU. OKAY. ANY OTHER QUESTIONS FROM COMMISSIONERS? HEARING NONE, I'LL ENTERTAIN A MOTION. DOES ANYONE SO MOVE? THANK YOU. SECOND. THANK YOU. WE HAVE A MOTION AND A SECOND. UM, I'M GONNA ASK FOR A SHOW OF HANDS. ALL IN FAVOR, UH, OF ITEM NUMBER THREE, PLEASE RAISE YOUR HANDS. I'VE GOT 2, 3, 4, 5, 6, 7. UH, ALL OPPOSED, PLEASE. ANY ABSTENTIONS? OKAY. UH, I HAD, I COUNTED SEVEN YES. AND ONE ABSTENTION. TWO. TWO, TWO ABSTENTION. OKAY. THANK YOU. CAN YOU REPEAT WHO SECOND, UH, COMMISSIONER OR VICE CHAIR? SORRY. MOTION. OKAY. . THANK YOU. UM, AND YOU GOT THE ABS ABSTAINERS? YES. YEAH. OKAY. ALL RIGHT. RIGHT. GREAT. THANK YOU. UH, MOVING ON ITEM NUMBER FOUR, I'M GONNA PLAY A LITTLE, UH, SWITCHEROO WITH THE AGENDA. WE HAVE [6. Staff Briefing regarding Austin Water’s proposed Go Purple Affordable Housing Pilot Incentive for alternative onsite water reuse systems and reclaimed water connections by Katherine Jashinski, Supervising Engineer, Austin Water.] A STAFF BRIEFING BY AUSTIN WATER, WHICH IS ITEM NUMBER SIX ON THEIR GO PURPLE AFFORDABLE HOUSING PILOT INCENTIVE. UH, WE'RE GOING TO HEAR THAT PRESENTATION, UH, AND THEN TAKE UP THE ACTION ITEM NUMBER FOUR IF WE CAN. SO, UH, WE HAVE, YES. UM, OH, HI, I'M CATHERINE ENS GAM, A SUPERVISING ENGINEER WITH AUSTIN WATER IN THE RECLAIMED AND ONSITE WATER REUSE PROGRAM. WE WANTED TO JUST GIVE A QUICK BRIEFING ON THIS ITEM BECAUSE IT'S A NEW-ISH PROGRAM AND YOU, I THINK ARE LESS FAMILIAR WITH AUSTIN WATERS PROGRAMS THAN YOU ARE WITH AUSTIN ENERGIES. NEXT SLIDE. UM, SO THE ORIGINAL GO PURPLE PROGRAM WAS AMENDED, OR, OR, OR WAS INITIATED FIRST ADOPTED IN MARCH OF LAST YEAR. SO IT'S JUST ABOUT A YEAR OLD. UM, THE WHOLE PURPOSE OF THE PROGRAM IS TO EXPAND WATER REUSE WITHIN THE CITY. IT'S A, A STRATEGY WITHIN THE CITY'S WATER FORWARD LONG RANGE WATER SUPPLY PLAN. AND SO IN MARCH OF LAST YEAR, UH, COUNCIL ADOPTED A A NUMBER OF THINGS THAT INCLUDED CODE REQUIREMENTS, NEW REQUIREMENTS FOR INCORPORATING ONSITE WATER REUSE SYSTEMS AND RECLAIMED WATER AND NEW DEVELOPMENT. THEY ALSO ADOPTED AFFORDABILITY STRATEGIES FOR REUSE PROJECTS, WHICH INCLUDE INCENTIVES AND COST SHARING WITH THE UTILITY FOR, TO PAY FOR SOME OF THE, UH, RECYCLED WATER INFRASTRUCTURE. AND THEN, UH, THEY ADOPTED A NEW COMMUNITY BENEFIT CHARGE INCREASE OF 15000 CENTS PER GALLON, PER THOUSAND GALLONS ON EVERYONE'S UTILITY TO BE ABLE TO HELP FUND SOME OF THOSE STRATEGIES. NEXT SLIDE. UH, WHEN COUNCIL ADOPTED THE CODE REQUIREMENTS, THEY MADE AN EXEMPTION FOR DEEPLY AFFORDABLE HOUSING PROJECTS, UM, WITH THE SORT OF UNDERSTANDING THAT THEY COULDN'T MAYBE AFFORD TO INCORPORATE ALL OF THE COSTS OF THESE TYPES OF REUSE SYSTEMS. AND SO TO MEET THAT CRITERIA, YOU HAVE TO HAVE A MINIMUM OF 50% ONSITE INCOME RESTRICTED DWELL DWELLING UNITS FOR 60% OR LOWER ME MEDIUM FAMILY INCOME FOR RENTAL UNITS, OR, UM, [00:20:01] 80% OR LOWER MEDIUM FAMILY INCOME FOR OWNERSHIP UNITS. AND SO THOSE ARE PROJECTS THAT WOULD MEET LIKE AFFORDABILITY UNLOCKED CRITERIA OR, UH, WOULD QUALIFY FOR LITECH THE LOW INCOME HOUSING TAX CREDIT. SO REALLY DEEPLY AFFORDABLE HOUSING PROJECTS. NEXT SLIDE, . UM, BUT IN THE SAME ORDINANCE WHERE THEY GAVE THOSE EXEMPTIONS, THEY GAVE US SOME DIRECTION TO LOOK AT THE FEASIBILITY OF FULLY SUBSIDIZING THE COST OF, UM, INCORPORATING REUSE INTO THESE EXEMPT AFFORDABLE HOUSING PROJECTS BECAUSE THEY WANTED, UH, ALSO TO HAVE EVERYONE HAVE THE SAME BENEFIT FROM GETTING LOWER UTILITY RATES AND MORE EFFICIENT BUILDINGS WHEN YOU DO INSTALL THESE RECLAIMED WATER SYSTEMS. NEXT SLIDE. SO, UH, WE DID AN ANALYSIS AND DETERMINED THAT AT MOST ON THE HIGH END, IT WOULD COST UP TO $1.5 MILLION, UM, FOR, UH, YOU KNOW, A, A KIND OF A MID-RISE SPREAD OUT BUILDING TO INCORPORATE DUAL PLUMBING AND, AND THE REUSE SYSTEM, AN ONSITE REUSE SYSTEM. UM, IT COULD COST AS, AS LOW AS A FEW HUNDRED THOUSAND DOLLARS IF THEY HAD ACCESS TO THE RECLAIMED WATER LINE. BUT THIS IS THE MAX. AND SO WE HAVE TWO EXISTING INCENTIVES THAT WE, UM, THE FIRST ONE IS AN ONSITE WATER REUSE SYSTEM THAT COVERS THE COST OF EVERYTHING, DUAL PLUMBING, THE DESIGN OF THE SYSTEM, THE, THE COLLECTION SYSTEM FOR THE, THE WATER REUSE SYSTEM. THE CURRENT CAP FOR THAT INCENTIVE IS 500,000. AND SO WE WOULD JUST RAISE THE CAP TO THAT TO 1.5 MILLION FOR THE RECLAIMED MAIN EXTENSION COST SHARE. THAT GOES TOWARDS, UM, FUNDING A PORTION OF THE RECLAIMED WATER MAIN FOR THESE EXEMPT PROJECTS. WE CAN COVER THE FULL COST OF IT, UH, UP TO $500,000. SO NO CHANGE TO THAT PROGRAM. BUT THEN WE ALSO NEED A DUAL PLUMBING REBATE, WHICH IS A NEW REBATE THAT WOULD GO TO COST COVER, THE COST OF DUAL PLUMBING, THESE BUILDINGS THAT WOULD BE CONNECTING TO THE RECLAIMED WATER SYSTEM. NEXT SLIDE. UH, WITH RESPECT TO THE OVERSIGHT AND MANAGEMENT, UH, THE CURRENT CITY BUDGET INCLUDES A RESERVATION OF 4 MILLION PER FISCAL YEAR FOR THESE INCENTIVES, WE HAVE NOT RECEIVED ANY NEW INCENTIVES THIS SINCE, UH, THE PROGRAM WAS REAUTHORIZED IN SEPTEMBER OR OCTOBER 1ST. UM, BUT WE ARE GONNA BE MONITORING THE PROGRAM. IT'S RELATIVELY NEW AND PEOPLE ARE JUST GETTING USED TO THE REQUIREMENTS AND KIND OF FIGURING OUT HOW TO INCORPORATE THEM INTO THEIR PROJECTS. SO WE DO ANTICIPATE THE VOLUME OF APPLICATIONS TO GO UP, UM, IN THE NEAR FUTURE, BUT WE'LL BE MONITORING THE BUDGET TO SEE IF WE NEED TO IN INCREASE THE OVERALL PROGRAM CAP. BUT AGAIN, WE, EVERY YEAR WE GET THIS PROGRAM REAUTHORIZED, UM, FOR EACH NEW FISCAL YEAR. AND THEN WE ALSO WILL BE REPORTING THE PROGRAM ACTIVITY TO YOU ALL QUARTERLY STARTING NEXT MONTH. WE ARE REFORMATTING, UM, A WATER MANAGEMENT STRATEGIES QUARTERLY REPORT WHERE WE WILL REPORT ON THE PROGRAM ACTIVITY, UH, REGULARLY IN A CONSISTENT FORMAT ALONG WITH OTHER WATER SUPPLY AND MANAGEMENT STRATEGIES THAT THE UTILITY IS UNDERTAKING. SO THAT IS WHAT I WANTED TO PRESENT IF THERE ARE ANY QUESTIONS. RIGHT. QUESTIONS ON THAT. UM, IS THERE ANY, ARE THERE ANY QUESTIONS FROM THE REMOTE ATTENDEES? IF NOT, I'LL START IN THE ROOM. COMMISSIONER GARY, UH, THANK YOU SO MUCH FOR THE PRESENTATION. SO BACK TO, IF WE CAN GO BACK TO THE LAST SLIDE ON THE REPORTING. I GUESS MY QUESTION IS, UM, WILL YOU BE PROVIDING INFORMATION FROM THE FISCAL YEAR MOVING FORWARD, OR WHAT WOULD THAT REPORTING LOOK LIKE? SO WE WOULD BE REPORTING THE, UM, QUARTER, LIKE ANYTHING THAT CAME IN AND WAS APPROVED FOR THE, THE RELEVANT QUARTER. AND THEN I BELIEVE WE'RE DOING ANNUAL REPORTS AT THE END OF THE YEAR AS WELL. OKAY. AND SO THIS PROGRAM STARTED IN 2024, IS THAT CORRECT? CORRECT, MM-HMM . IN MARCH. UM, DO YOU HAVE THE NUMBER, AND IF YOU DON'T, DON'T WORRY ABOUT IT. THE NUMBER OF APPLICANTS FROM THEN TO NOW. YEAH. LAST YEAR WE APPROVED, UM, TWO, UH, ONSITE WATER REUSE SYSTEM INCENTIVES, ONE FOR $500,000 AND ONE FOR $250,000. 250. MM-HMM . OKAY. YEP. OKAY. THANK YOU SO MUCH. MM-HMM . UH, VICE CHAIR, ROBBINS FIRST. FIRST, UM, I'M NOT SURE IF ALL THE COMMISSION MEMBERS UNDERSTAND THE FULL SIGNIFICANCE OF WHAT'S HAPPENING HERE. WE ARE ONLY THE SECOND CITY IN THE COUNTRY TO DO SOMETHING LIKE THIS, THE FIRST BEING SAN FRANCISCO. SO, UH, I, I CONGRATULATE, UH, AUSTIN WATER. UH, AND ANOTHER THING THAT SOME COMMISSIONERS MAY [00:25:01] NOT UNDERSTAND IS, UM, THE ACTUAL COST PER ACRE FOOT, WHICH IS THE METRIC THAT'S OFTEN USED TO, UH, ASSESS OR BENCHMARK OR COMPARE, UH, UH, WATER, NEW WATER SOURCES, UH, THIS IS GONNA BE HIGHER THAN WHAT WE'RE PAYING THE LCRA, UH, THE, THE WATER, UM, FORWARD, UH, PLAN, THE WATER CONSERVATION EFFORTS ARE TRYING TO THINK AHEAD. IT'S SORT OF LIKE, OKAY, WE'VE GOT COMMITMENTS FROM LCRA FOR ALL THIS WATER. NOW WHAT ARE WE GONNA DO WHEN WE RUN OUT? THEN WE'VE GOTTA BUY OR FIND OR CONSERVE NEW WATER. AND WHILE THIS IS A LOWER COST OPTION COMPARED TO SOMETHING LIKE DESALINATING BRACKISH WATER 60 MILES AWAY, UH, THIS IS GONNA COST MORE THAN CRA'S CONTRACT. UH, RA'S CONTRACT IS, UH, REMIND ME IT'S $151 AN ACRE FOOT, AND THIS WATER'S GONNA COME IN HIGHER THAN THAT. YES. TO THE SECOND PART. I'M NOT SURE WHAT THE CURRENT PRICE IS, BUT MAYBE THAT'S CLOSE. CLOSE . UM, SO, UH, UPON, UH, UH, DEFINING THIS AND CONGRATULATING YOU, UH, I WANT TO ASK, UH, DOES THE 15 CENT FEE PER THOUSAND GALLONS THAT EVERYBODY BUT CUSTOMER ASSISTANCE PROGRAM CUSTOMERS, UH, PAY, DOES THAT FUND THESE REBATES? YES, IT DOES. AND I, I, I GUESS I'M JUST RESTATING WHAT I UNDERSTAND. THIS IS GOING TO GIVE AN EXTRA REBATE FOR AFFORDABLE HOUSING, BUT IT IS ALSO GOING TO FUND REBATES TO OTHER, UH, OTHER, UH, NEW, NEW BUILDINGS THAT ARE REQUIRED TO DO THIS. CORRECT. OKAY. SO, UM, I HAVE STATED ON TWO PREVIOUS OCCASIONS THAT WHILE I LOVE WHAT YOU'RE DOING, I FIND IT DIFFICULT TO ASK RATE PAYERS TO PAY FOR IT SINCE IT IS ALREADY REQUIRED. BUT IF SOMEONE WOULD, I'M, I'M WILLING TO MAKE A MOTION TO FUND REBATES FOR AFFORDABLE HOUSING AND NOT FOR THE REST OF IT. JUST SAYING, UH, I THINK WHEN WE GET TO THAT ITEM, WE CAN TALK ABOUT THAT. I DON'T KNOW THAT WE'RE GONNA HAVE AN OPTION TO CHANGE WHAT THAT ITEM SAYS AND VOTE ON AN I'LL ALTERNATIVE TO IT. BUT WE CAN TALK ABOUT THAT. AND I WOULD, I WOULD CLARIFY THAT THE ONLY, UM, ONLY ONE OF THOSE INCENTIVES ARE COST SHARING PROGRAMS GO TOWARDS PROJECTS THAT ARE REQUIRED. THE, THE MAJORITY OF THEM ARE FOR VOLUNTARY PROJECTS AND, AND THEN INCLUDING EXEMPT PROJECTS. BUT FOR THE RECLAIMED WATER MAIN EXTENSION, FOR THOSE PROJECTS THAT ARE HELPING TO EXTEND THE CITY'S PUBLIC RECLAIMED WATER INFRASTRUCTURE, WE COST PARTICIPATE OR WE COST SHARE WITH A PORTION OF INSTALLING THAT PUBLIC MAIN FOR REQUIRED PROJECTS. BUT THOSE ARE PROJECTS THAT ARE INSTALLING MORE THAN 250 FEET OF RECLAIMED WATER, MAINE. OTHER QUESTIONS? YES, COMMISSIONER GARY, I HAVE ONE MORE QUESTION. SO, BACK TO, UM, IT LOOKS LIKE YOU SAID YOU GAVE 750,000 LAST YEAR. SO, SO LOOKING AT THAT NUMBER $4 MILLION, WHAT COMES OUT OF THAT? LIKE MARKETING? LIKE HOW MUCH ARE YOU SPENDING ON THAT? IS THERE ANY WAY WE CAN GET SOME TYPE OF ITEMIZED ON WHAT THAT WOULD LOOK LIKE AS FAR AS THE AMOUNT THAT YOU'RE ASKING FOR? CAN YOU, SORRY, CLARIFY THAT QUESTION AGAIN. I'M NOT SURE I'M FOLLOWING. SO IT LOOKS LIKE FUNDING IS AN AMOUNT OF 4 MILLION IS AVAILABLE, RIGHT? CORRECT. FOR THE ENTIRE INCENTIVE PROGRAM? MM-HMM. OKAY. AND YOU'VE ONLY GAVE OUT 750,000 LAST YEAR, SO LAST YEAR, SO [00:30:01] THAT, I'M TRYING TO DO MATH IN MY HEAD, LIKE WHAT'S GOING, WHAT'S HAPPENING TO THE REST OF THE MONEY? CORRECT. THAT'S WHAT I WANNA KNOW. YEAH. SO THE REST OF THE MONEY THAT, THAT DOESN'T GO TOWARDS INCENTIVES, UM, WILL BE SPENT ON EXPANDING THE RECYCLED WATER PURPLE PIPE NETWORK THAT THE CITY OWNS AND MAINTAINS. SO WHATEVER WE HAVE LEFT OVER AFTER INCENTIVES, WE WILL BE EXPANDING THE RECLAIMED WATER SYSTEM SO THAT MORE PROJECTS ARE REQUIRED TO CONNECT, UM, WHEN THEY COME UP FOR DEVELOP REDEVELOPMENT OR DEVELOPMENT. AND DOES THAT HAVE A PARTICULAR AMOUNT OF WHAT THAT WOULD COST? I THINK WHAT THE, THE ESTIMATES ARE FOR, UH, WHAT, WHAT WE'RE GENERATING IN, IN NEW REVENUE FROM THAT CHARGE IS ABOUT $10 MILLION PER YEAR. OKAY. SO SIX. AND I THINK, YOU KNOW, RIGHT NOW WE'RE TARGETING 6 MILLION TO GO TOWARDS BUILDING OUT THE RECLAIMED INFRASTRUCTURE AND 4 MILLION FOR INCENTIVES. GOT IT. WE MAY ADJUST IT YEAR BY YEAR. OKAY. THANK YOU. MM-HMM . COMMISSIONERS, ANY OTHER QUESTIONS? YES, COMMISSIONER SAS, JUST A QUICK QUESTION. WHERE DOES THIS STACK AGAINST OTHER PROGRAMS, UH, IN TERMS OF LIKE DOLLARS PER GALLON OF WATER SAVED, HOW, LIKE, EFFECTIVE IS IT? AND IF YOU DON'T KNOW EXACTLY, JUST LIKE A CENT, LIKE A ROUGH YEAH. UM, I THINK WE'LL NEED MORE DATA THAN JUST THE TWO PROJECTS THAT WE HAVE. UM, THE FIRST, THE ONE THAT WE GAVE, UM, $500,000 TO, THEY'RE SAVING 60 MILLION GALLONS A YEAR, WHICH IS PRETTY SIGNIFICANT WATER SAVINGS. THAT'S ON A MAGNITUDE THAT OUR OTHER PRO PROGRAMS DON'T. UM, SO BETTER IT SOUNDS LIKE PER DOLLAR, WELL, ON A PER DOLLAR BASIS, I GUESS WE HAVE TO, YOU KNOW, SIX 60 MILLION GALLONS PER YEAR. DIVIDE . YEAH. WE, UM, YEAH. UM, WE HAVEN'T COMPARED TO, TO OUR EXISTING PROGRAMS, BUT WE ARE SORT OF DESIGNATING THIS A PILOT AS WE WERE, WE'RE PAYING MORE THAN THE COST OF PURCHASING WATER FROM LCRA, UH, BECAUSE THIS IS A, A NEW AND INNOVATIVE SORT OF TECHNOLOGY THAT WE'RE TRYING TO, UM, PROMOTE THE EXPANSION OF. JUST TRYING TO GET A SENSE FOR IF THIS IS AN EFFECTIVE STRATEGY OVERALL MM-HMM . OR IF THESE DOLLARS ARE BETTER SPENT ON JUST O OTHER CONSERVATION METHODS. 'CAUSE YOU WANT TO SAVE THE WATER, IT DOESN'T MATTER HOW IT'S SAVED, REALLY. YOU JUST WANT TO PUT THE MONEY TOWARDS LIKE, THE MOST EFFECTIVE SOLUTIONS. YEAH. I THINK THE BENEFIT THAT WE ARE GETTING FROM THESE SYSTEMS IS THAT WE STARTED WITH A VOLUNTARY PROGRAM BECAUSE THESE TYPES OF SYSTEMS ARE SO NEW. THIS BUILDING IN PARTICULAR IS ONE OF, I COULD COUNT ON ONE HAND BUILDINGS IN THE CITY THAT'S USING RECLAIMED RECYCLED WATER TO FLUSH TOILETS. AND SO WE WANNA NORMALIZE THE PRACTICE, BUT THERE'S A LOT OF HESITATION AND UNKNOWNS ABOUT IT. AND SO THE MORE EXAMPLES THAT WE CAN GET ON THE GROUND OF PEOPLE DOING IT SUCCESSFULLY, THE LESS AND LESS WE'RE GONNA NEED TO RELY ON THESE INCENTIVES IN THE FUTURE. SO I THINK WE'RE REALLY JUST IN THIS INITIAL STAGE OF CHANGING THE WAY THAT BUILDINGS ARE DESIGNED AND AND OPERATED AS HOW WE WE ARE APPROACHING IT. I DON'T KNOW IF THAT ANSWERS YOUR QUESTION FULLY. IT DOES. SORT OF, IT JUST SOUNDS LIKE IT. WE THINK THIS IS THE WAY THINGS ARE GONNA HAPPEN IN THE FUTURE, SO YOU'RE JUST KIND OF TRYING TO JUMPSTART IT AND IT'S NOT NECESSARILY, IT DOESN'T NECESSARILY MAKE SENSE TO STACK IT AGAINST OTHER PROGRAMS THAT JUST SAVE WATER. OKAY. YEAH. I SEE WE HAVE SOMEONE APPROACHING THE, THE PODIUM. SO KEVIN CRIT IN AUSTIN WATER, UM, CATHERINE'S EXACTLY RIGHT. BUT LET ME JUST ALSO SAY, UM, A BIG PART OF THIS IS REALLY I WANNA REINFORCE ABOUT CHANGING ATTITUDES AND CHANGING BEHAVIORS, RIGHT? UM, AS, UH, COMMISSIONER ROBBINS MENTIONED, UM, GETTING PEOPLE TO THINK DIFFERENTLY ABOUT HOW WE USE WATER IS, IS HIGHLY CRITICAL. IT'S CERTAINLY A FUNDAMENTAL STRATEGY IN OUR OVERALL WATER FORWARD PLAN. AND SO TRYING TO MONETIZE INCREMENTALLY ANY OF THESE INDIVIDUAL SAVINGS IS VERY DIFFICULT AT THIS STATE. BUT AS CATHERINE SAID, YOU KNOW, OF OUR TWO PRIMARY BENEFICIARIES OF THE FIRST INCENTIVE, UM, ONE OF THEM PARTICULARLY IS VERY LARGE, WE WON'T BE ABLE TO ACCOMPLISH THAT VOLUME THROUGH SOME OF OUR MORE TRADITIONAL REBATE PROGRAMS. SO AT THIS POINT, WE'RE, WE'RE, AGAIN, I THINK TRYING TO REINFORCE THE IMPORTANCE OF BEGINNING TO THINK DIFFERENTLY ABOUT HOW WE USE WATER. UM, AS WE GO ON, WE WILL CONTINUE TO MONITOR THE, UH, EFFECTIVENESS OR THE, THE, UM, BEHAVIOR CHANGE THAT WE'RE SEEING OUT OF THESE. BUT FOR NOW, THIS IS JUST SORT OF A, AN INCREMENTAL STEP KIND OF FORWARD. SO, UH, OKAY. I SEE COMMISSIONER GERLAND HAS A HAND UP. SO, YES, GO AHEAD. [00:35:04] COMMISSIONER GERLAND, DID YOU HAVE A QUESTION THERE? YOU'RE, NO, YOU'RE MUTE. CAN YOU HEAR ME NOW? YES, GO AHEAD. OKAY. SO SORRY ABOUT THAT. UM, QUICK QUESTION FOR EITHER OF YOU ON THE, THE FACT THAT YOU HAVE HAD NO, UM, APPLICATIONS, YOU KNOW, I THINK THIS IS A GREAT PROGRAM AND I'D LOVE TO SEE IT SUCCEED. SO ARE THERE ANY POTENTIAL BARRIERS TO ENTRY? I MEAN, IT DOESN'T SOUND LIKE IT'S UNDER INCENTIVIZED, BUT YOU KNOW, WHAT, WHAT DO YOU SEE AS THE REASON FOR THAT? YEAH, THAT'S A, THAT'S A GOOD QUESTION. UM, IT, IT SEEMS LIKE THE PEOPLE WHO HAVE APPLIED FOR THESE INCENTIVES WERE, UM, IT WASN'T THE INCENTIVE MONEY THAT CONVINCED THEM TO DO IT. THEY WERE ALREADY PLANNING TO DO IT FOR THEIR OWN REASONS. AND THE INCENTIVE WERE JUST LIKE, EVEN MORE SORT OF, UH, HELPED, HELPED MAKE THE CASE. UM, I THINK THAT IT'S JUST, LIKE KEVIN MENTIONED, IT'S CHANGE. IT'S CHANGING THE WAY YOU DESIGN A BUILDING. IT'S CHANGING THE WAY YOU DELIVER A PROJECT. IT'S, YOU KNOW, FROM THE GROUND UP. AND SO I THINK IT, IT REALLY, UM, WE'VE HEARD FROM SOME OF THESE, UM, THE, THE DEVELOPERS OF THESE EXEMPT AFFORDABLE HOUSING PROJECTS, YOU KNOW, WE'RE TALKING ABOUT, WELL, WE, WE WILL PAY FOR THE ENTIRE THING. AND THEY HAD SAID, WELL, WE'RE GONNA NEED TO GET A FEW UNDER OUR BELT. WE'LL DO A FEW MANDATORY PROJECTS BEFORE WE START TELLING OUR CLIENTS THAT WE WILL WORK ON THIS FOR AN EXEMPT PROJECT. AND SO I THINK IT'S, IT'S REALLY JUST, UM, IT'S A NEW THING AND IT'S AN UNKNOWN QUANTITY FOR THE DEVELOPMENT COMMUNITY. OKAY. THANK YOU. MM-HMM . COMMISSIONER SILVERSTEIN, THANK YOU. I, I DO THINK THIS IS A GOOD IDEA IN THE ENERGY EFFICIENCY SPACE. WE REFER TO WHAT YOU'RE TRYING TO DO AS A MARKET TRANSFORMATION PROGRAM. AND, UM, AND I ENCOURAGE YOU TO PR THE HECK OUT OF THIS SO THAT, THAT YOU CAN ACCELERATE AND SPREAD THE, THE MESSAGE THAT THIS IS A GOOD THING AND WHY IT IS. AND, AND I APPLAUD YOU TRYING TO DO IT ON LOW INCOME HOUSING FIRST. SO THANK YOU. YES. VICE CHAIR ROBBINS, I MIGHT FEEL MORE AT EASE ABOUT VOTING FOR THIS IF THERE WAS SOME TIME PERIOD, UH, AFTER WHICH IT WOULD EXPIRE. AGAIN, WE ARE HAVING TO BE STEWARDS OF RATE PAYERS MONEY, AND I JUST CRINGE AT, UH, PAYING FOR REBATES, UH, FOR PEOPLE TO MEET CODE YEAR AFTER YEAR. I MEAN, YOU'RE SAYING, WELL, THIS IS MARKET TRANSFORMATION. WELL, OKAY, WHEN DOES IT NOT BECOME MARKET TRANSFORMATION NEXT YEAR, THE YEAR AFTER, 10 YEARS FROM NOW? YEAH, THAT'S A GOOD POINT. UM, AND WE, THE PROGRAM DOES REQUIRE REAUTHORIZATION EVERY FISCAL YEAR. SO I THINK THAT WILL BE A GOOD POINT TO LOOK BACK AT THE, THE DATA THAT WE HAVE AND EVALUATE IF WE'RE AT THAT POINT OR NOT. AND I DO THINK THAT OUR INTENT IS THAT THESE WILL NOT BE FOREVER INCENTIVES. IT'S, BUT THEY'RE NECESSARY RIGHT NOW, AND EVERY YEAR WILL BE THE OPPORTUNITY TO EVALUATE. THANK YOU SO MUCH, UH, FOR THAT. UM, WITH, WITH THIS, I'M GONNA FORMALLY MOVE [4. Recommend approval of a resolution authorizing amendments to Austin Water’s Fiscal Year 2024-2025 GoPurple pilot incentive program for alternative onsite water reuse systems and reclaimed water connections for new commercial, mixed use and multi-$1,500,000 per project for affordable housing projects exempt from the GoPurple reuse requirements and not to exceed $500,000 per project for all other projects. Funding in the amount of $4,000,000 is available in the Fiscal Year 2024-2025 Operating Budget of Austin Water] US, UH, BACK TO ITEM NUMBER FOUR, WHICH IS THE, UH, DISCUSSION ACTION ITEM ON RECOMMENDING APPROVAL TO AUTHORIZE THESE AMENDMENTS. UM, I'LL ASK, UM, MS. JASINSKI AND MR. CRIT TO STAY UP IN CASE THERE'S ANY, ANY OTHER QUESTIONS IF WE CAN GET A MOTION. SO MOVE COMMISSIONER SILVERSTEIN MOVES. DO I HAVE A SECOND? SECONDED. IS THIS MOTION FOR VOTE OR DISCUSSION? SORRY. THIS IS A MOTION TO APPROVE THE RESOLUTION. THEN WE CAN STILL DISCUSS BEFORE WE VOTE. UM, I BELIEVE THAT WAS COMMISSIONER GERLAND THAT SECONDED? YES. YES, THAT WAS ME. OKAY. IS THERE ADDITIONAL DISCUSSION? 'CAUSE NOW WE'RE ON SIX INSTEAD OF, OR FOUR RATHER. INSTEAD OF SIX. I SAY ONE THING. COMMISSIONER SAADI, THANK YOU. I, I RECOGNIZE THE VOTE IS LIKE, MAYBE LARGELY SYMBOLIC HERE, BUT I HAVE TO SAY, LIKE, I, I FEEL INCLINED TO VOTE NO. AND I WANT TO EXPLAIN WHY. UH, I LOVE SAVING WATER. THIS IS CONCEPTUALLY DEFINITELY A GOOD THING. AND, BUT THERE WAS A, THE NOTE ABOUT BEHAVIOR CHANGE, LIKE WE SHOULD INCITE BEHAVIOR CHANGE. AND THE WAY PEOPLE ARE THINKING ABOUT THIS, THIS IS A NOBLE GOAL [00:40:01] IF THE END IS NOBLE. AND THE QUESTION I WAS ASKING ABOUT IS THIS EFFECTIVE THAT DETERMINES WHETHER OR NOT THE, THE END IS A NOBLE, A NOBLE GOAL. SO, AND I'LL GIVE AN EXAMPLE. SO DOES IT MAKE SENSE TO CHANGE THE BEHAVIOR IF THE BEHAVIOR CHANGES EXPENSIVE AND THE THING YOU GET FOR THE BEHAVIOR CHANGE IS NOT VERY GOOD, RIGHT? IS THIS THE RIGHT PLACE TO BE, LIKE POINTING OUR EFFORTS HAS NOT, IS NOT CLEAR TO ME NOW, UM, ABOUT TO VOTE ON THIS. AND THE METRIC I ASKED FOR INITIALLY WOULD HELP MAKE THAT THAT CLEAR. UM, BUT THAT'S WHY I AM, I'M SORT OF, UH, YEAH, ON THE FENCE ABOUT THIS. I LIKE SAVING WATER, BUT I'M NOT CONVINCED THIS SAVES WATER. 'CAUSE I, I HAVEN'T HEARD ANY NUMBERS THAT SUGGESTS THAT IT DOES ONLY THAT IT'S DIRECTIONALLY CORRECT. YEAH, THAT'S FAIR. BUT I DO WANNA CLARIFY THAT THIS RIGHT NOW IS JUST AN AMENDMENT TO THE EXISTING RESOLUTION THAT UNDERSTOOD IS OKAY. YEAH. YEAH. IT'S IN FACT, AND THAT'S WHY IT'S SYMBOLIC, BUT STILL, OKAY. YEAH. IS THERE OTHER COMMENTS YET? YES. COMM UH, VICE CHAIR ROBBINS, I, WE'RE ONLY AN ADVISORY COMMISSION, AND I TRY NOT TO TAKE US, TAKE MYSELF THAT SERIOUSLY, BUT TO THE EXTENT THAT THIS IS MY VOTE, UM, I WOULD LIKE TO SUGGEST, UH, TWO ALTERNATIVE, UH, AMENDMENTS. UH, ONE, MAYBE WE SHOULD VOTE TO APPROVE IT CONDITIONAL ON THIS BEING SUNSETTED IN A CERTAIN AMOUNT OF TIME. THE OTHER WOULD BE TO, UH, FOR ME TO VOTE FOR FULL REBATES TO AFFORDABLE HOUSING, WHICH GIVEN THAT THEY ARE EXEMPT FROM THIS ORDINANCE, I COULD CONCEPTUALLY SUPPORT, I COULD SUPPORT EITHER OF THESE AMENDMENTS. UM, I, I JUST DON'T FEEL GOOD, UH, VOTING FOR, UH, PERPETUAL, UH, REBATES WHEN IT'S ONLY COMPLYING WITH WHAT'S REQUIRED NOW. SO I WANT TO THROW THOSE TWO SUGGESTIONS OUT THERE AND FIND OUT WHAT PEOPLE MIGHT THINK. UH, UM, I JUST, BEFORE WE, WE MOVE ON, THAT I DO WANNA, UH, CONSULT A STAFF OPINION ON THE PROPRIETY OF CHANGING AN ITEM LIKE THIS OR AMENDING THIS ITEM. YEAH, IT'S, I MEAN, YOU GUYS CAN WEIGH IN IF YOU WANT, BUT, UM, YOU CANNOT, UH, AMEND A RECOMMENDATION TO COUNSEL THAT ALREADY EXISTS. OKAY. OKAY. THANK YOU. WE'VE DONE IT BEFORE. YOU'VE PROVIDED DIRECTION THAT WE'VE PUT IN THE MINUTES, BUT IT'S NOT A RECOMMENDATION THAT GOES TO COUNSEL. I, I'M, I DIFFER. UH, I'M FAIRLY CERTAIN THAT WE HAVE THE, UH, LATITUDE TO, UH, MAKE SUGGESTIONS. AND I'M FAIRLY CERTAIN THAT WE HAVE DONE IT BEFORE VICE CHAIR ROBBINS. I THINK WHAT WE, WHAT WE ARE ALLOWED TO DO, UH, IS PRESENT AND OUR OWN RESOLUTION OR RECOMMENDATION FOR APPROVAL, WHICH CAN GO TO COUNSEL SAYING THAT ON THIS TOPIC, THE RMC RECOMMENDS THESE, THESE CHANGES. AND THAT WOULD BE A SEPARATE SORT OF STANDALONE RECOMMENDATION. BUT THIS ITEM NUMBER FOUR IS GOING TO COUNSEL AND IT'S GOING TO SAY WHETHER OR NOT THE RMC SUPPORTED IT, UM, IN ITS, YOU KNOW, IN ITS UNADULTERED FORM. THAT IS CORRECT. I'M NOT SURE. SO, UM, COMMISSIONER SCHWARTZ, YOU WERE, UH, UH, COMMISSIONER ROBBINS, I JUST HAD A, A QUICK QUESTION TO MAKE SURE I UNDERSTAND THE FULL CONTEXT. UM, WHEN YOU SAY THAT IT'S PROVIDING INCENTIVES FOR SOMETHING THAT'S ALREADY REQUIRED IN THE CODE, UM, ARE THE INCENTIVES GOING TO THE EXEMPTIONS FROM THE CODE FOR THE, THE, UM, PROJECTS THAT, I'M SORRY. ARE THE INCENTIVES GOING TO THE INCENTIVES IN THE, UNLESS I MISUNDERSTOOD. MY UNDERSTANDING WAS THAT THE $4 MILLION IS GOING TO TOWARDS PROJECTS THAT ARE CURRENTLY EXEMPTED FROM THE WAY THE CODE IS CURRENTLY WRITTEN. SO THAT'S, UH, UM, SOME OF, THEY, THEY ARE RECOMMENDING SOME OF WHAT YOU SAID, BUT THEY'RE ALSO [00:45:01] RECOMMENDING THAT IT GO TO, UH, PEOPLE THAT ARE REQUIRED TO DO IT. WELL, THAT, THAT'S, THAT'S IN THE EXISTING RESOLUTION THAT, UM, WE'RE ASKING YOU TO AMEND. SO AT THIS, AT THIS, FOR THIS PARTICULAR ACTION, IT'S FOR CAN WE AMEND THAT EXISTING AUTHORIZATION TO INCREASE A FUNDING CAP FOR EXEMPT AFFORDABLE HOUSING PROJECTS THAT THEY, SO THEY, THOSE EXEMPT PROJECTS, BECAUSE THEY WOULD BE VOLUNTARY, QUALIFY FOR ALL OF THE EXISTING, UM, INCENTIVES. AND NOW WE'RE JUST ASKING FOR INCREASING THE CAPS TO INCREASE THE CHANCE THAT THEY COULD PARTICIPATE. COMMISSIONER SCHWARTZ. SO WE'RE NOT TOUCHING THE INCENTIVES FOR REQUIRED PROJECTS, CORRECT? RIGHT NOW IT'S ALREADY EXISTS, BUT WE'RE NOT ADDING TO THAT. IS THAT TRUE? YES. OKAY. CORRECT. BUT WE ARE, I MEAN, AM I READING THIS WRONG? FUNDING IN THE AMOUNT OF 4 MILLION IS AVAILABLE, AND SO WE'RE VOTING TO CONTINUE THIS, UH, $4 MILLION FUND. UH, WE ARE INDEED, UH, EXPANDING IT FOR AFFORDABLE HOUSING. SO I'LL JUST, I'LL JUST TRY IT. UM, I MEAN, THE, THE AMENDMENT ON THE TABLE IS SIMPLY TO PROVIDE EXPANDED FUNDING TO ALLOW PREVIOUSLY EXEMPT DEVELOPMENT TO UTILIZE, UM, THESE FUNDS FOR ONSITE REUSE AND RECLAIM. SO THAT'S THAT ON THE, ON THE, UM, AND AGAIN, IT'S JUST INFORMATION, RIGHT? UM, ON THE, OTHERWISE THIS WHOLE ITEM WILL BE BROUGHT TO THE COUNCIL IN RMC NEXT YEAR DURING BUDGET TIME. SO YOU'LL SEE IT AGAIN. SO COMMISSIONER SILVERSTEIN, THANK YOU. I AM, UM, UNDERSTAND AND APPRECIATE COMMISSIONER ROBBINS CONCERN. HOWEVER, I CAN GET OVER THE DESIRE TO SUNSET THIS BY RECOGNIZING WHAT YOU HAVE REPEATEDLY SAID THAT THIS IS GONNA COME BEFORE THE RMC AND THE COUNCIL EVERY YEAR. SO IT IS UP. WE HAVE, WE HAVE MANY CHANCES, OR OUR SUCCESSORS HAVE MANY, MANY SHOTS AT THIS. WE DON'T NEED TO PLACE A SUNSET ON IT. NOW. IT CAN, THAT CAN BE DONE IN THE FULLNESS OF TIME. IF, AND, AND ASSUMING THAT YOU GUYS GIVE US EVALUATION INFORMATION AS TO ITS EFFECTIVENESS, I'D RATHER HAVE INFORMATION TO LET US KNOW WHETHER TO KEEP THIS GOING THAN MAKE THAT DECISION PREMATURELY. THE OTHER THING THAT I, UM, WHILE I UNDERSTAND YOUR CONCERNS, THE FACT THAT THEY'RE USING THE REST OF ANY MONEY THAT IS NOT SPENT TO EXTEND THE PURPLE WATER NETWORK OR THE PURPLE PIPE NETWORK OR WHATEVER YOU CALL IT, THAT'S PRETTY COMPELLING. 'CAUSE THE BROADER THAT NETWORK GOES, THE MORE PLAYERS WE CAN GET, THE MORE DEVELOPMENT WE GET INTO THAT, WHICH IS THE LONG-TERM BENEFIT. SO IT'S NOT AS THOUGH THE MONEY THAT ISN'T SPENT ON INCENTIVES DOESN'T GET USED FOR PRODUCTIVE PURPOSE. OKAY? SO FOR BOTH OF THOSE REASONS, I'M FOR IT. THANK YOU. THANK YOU COMMISSIONERS. UH, SILVERSTEIN, UM, I ALSO AM SUPPORTIVE OF THIS ITEM. UH, I THINK FOR SOME OF THE, THE SAME REASONS, UH, OUTLINED BY COMMISSIONER SILVERSTEIN, BUT ALSO, UM, JUST TO PROVIDE INCENTIVE TO THOSE AFFORDABLE HOUSING UNITS THAT ARE NOT, THAT ARE CURRENTLY EXEMPTED. THEY DON'T HAVE TO DO IT. HERE'S SOME EXEMPTION, UH, OR SOME INCENTIVE FOR THEM TO DO IT. AND WE HAVE TIME EVERY YEAR TO REAUTHORIZE. WE'LL HAVE DATA. I'D LOVE TO COME AND, AND SEE THE RESULTS AND HOW THIS IS DONE IN A YEAR. UM, BUT I AM, I AM PLANNING TO VOTE ON VOTE FOR THIS ITEM. VICE CHAIR ROBBINS, WHEN WILL THIS BE BROUGHT BACK TO US FOR ANNUAL REVIEW? IT COMES EVERY YEAR IN SEPTEMBER BEFORE THE NEW FISCAL YEAR. I DROP MY RESERVATIONS. I WILL VOTE FOR THIS. IS THERE ANY OTHER DISCUSSION, COMMISSIONERS? HEARING NONE? UH, I'M CALLING FOR A SHOW OF HANDS VOTE ON THIS ITEM. ALL IN FAVOR OF ITEM NUMBER FOUR, PLEASE RAISE YOUR HAND. 1, 2, 3, 4, 5, 6, 7. UH, ALL OPPOSED, PLEASE RAISE YOUR HAND. WE HAVE TWO OPPOSED. THE ITEM PASSES ON A SEVEN TWO VOTE. THANK YOU SO MUCH. WHO ARE THE OPPOSED, UH, COMMISSIONER GARY. COMMISSIONER ARIUS. OKAY. OKAY. OKAY. UM, MOVING ON. [5. Recommendation regarding an audit of the Austin Energy District Energy and Cooling System. ] THE NEXT ITEM ON OUR AGENDA NUMBER FIVE IS A RECOMMENDATION REGARDING AN AUDIT OF THE AUSTIN ENERGY DISTRICT ENERGY AND COOLING SYSTEM. UH, WE HAD THIS ON OUR AGENDA LAST MONTH, AND THIS IS A CONTINUATION. [00:50:01] THIS WILL BE VICE CHAIR ROBIN SHOW, SO TAKE IT AWAY. WE HAD ASKED FOR A STAFF BRIEFING, WHICH MIGHT BE HELPFUL TO, TO HEAR FROM STAFF BEFORE WE TAKE UP THE RESOLUTION ITSELF, PLEASE. WE DO NOT HAVE A STAFF BRIEFING, UH, ON THE AGENDA, BUT WE CAN I SEE MS. MARTIN APPROACHING THE, UH, THE PODIUM, SO, NO. OKAY. GOOD EVENING COMMISSION. IT'S LISA MARTIN AUSTIN, ENERGY CHIEF OPERATING OFFICER. UM, WHAT I CAN OFFER IN THE WAY OF A VERBAL BRIEFING IS THAT, UM, ALL OF YOU SHOULD HAVE SEEN EARLIER THIS WEEK IN YOUR INBOX, A COPY OF A MEMO TO MAYOR AND COUNCIL, WHICH, UM, EXPLAINED OUR NEXT STEPS FORWARD, WHICH IS TO, UM, LEVERAGE THE CITY'S FINANCIAL ADVISOR, PFM, TO, UH, DO AN ASSESSMENT OF OPTIONS IN ORDER TO EXPAND THIS SYSTEM. AND SO THERE'S A, A NUMBER OF DIFFERENT OPTIONS THEY'LL BE ASSESSING. UM, AND THEIR DELIVERABLE IS A REPORT THAT WE WOULD EXPECT NO LATER THAN OCTOBER 1ST, AND THEN WE WOULD PROVIDE AN UPDATE TO CITY COUNCIL AT THAT TIME. OKAY. VICE CHAIR ROBBINS, ARE YOU? YEP. WELL, I'M GONNA READ THE, UH, MAIN PARTS OF THIS INTO THE RECORD, BUT, UM, UM, I WILL DEFER TO COMMISSIONER SILVERSTEIN, UH, UH, FOR QUESTIONS BEFORE I HAVE THEM. UH, THEREFORE BE IT RESOLVED THAT THE RESOURCE MANAGEMENT COMMISSION RECOMMENDS THAT THE CITY COUNCIL, UH, COMMISSION AND AUDIT OF AUSTIN ENERGY'S DISTRICT ENERGY AND COOLING SYSTEM TO IDENTIFY THE DRIVERS OF ITS FINANCIAL UNDERPERFORMANCE, ASSESS THE COST BENEFIT OF FUTURE EXPANSION OR DIVESTMENT, AND TO SUGGEST POTENTIAL ACTIONS, UH, AUSTIN ENERGY MAY TAKE TO ENSURE THE LONG-TERM FINANCIAL VIABILITY. UH, AND TWO, UH, DIRECT AUSTIN ENERGY TO PUBLICLY SHARE A STRATEGIC ROADMAP DETAILING THE TIMELINE RATIONALE AND EVALUATION CRITERIA FOR ANY PLANNED EXPANSION OR DIVESTMENT OF THE DISTRICT ENERGY COOLING SYSTEM, AND DELIVER A PUBLIC STATUS REPORT NO LATER THAN SEPTEMBER 30TH, 2025. UM, THERE, UH, IS AT LEAST ONE NEW COMMISSIONER HERE, AND SHE MAY NOT KNOW THAT THIS ISSUE HAS BEEN GOING ON IN ONE FORM OR ANOTHER. UH, NOW THE, THE, UH, MS. GOODWIN, THIS IS NOT, UH, ABOUT THANK YOU. UH, THIS, THIS, THIS ISSUE HAS BEEN GOING ON SINCE JULY OF LAST YEAR. UH, AT THAT TIME, THE, UM, CITY COUNCIL WAS TOLD BY AUSTIN ENERGY THAT THERE WAS CONSIDERATION OF A SALE AND THAT THEY WANTED, UH, AUSTIN ENERGY WANTED TO HIRE, UH, UM, A CONSULTANT TO INVESTIGATE SALE. UH, THERE WAS A LOT OF PROTESTS. THE COUNCIL QUICKLY PULLED IT DOWN. UH, I, UH, AS A COMMISSIONER AND AS AN INDIVIDUAL BEGAN ENGAGING IN A LINE OF QUESTIONS. UH, SOME OF THESE QUESTIONS WERE NOT ANSWERED. AFTER, UM, AMPLE FRUSTRATION OVER THE COURSE OF THE BETTER PART OF A YEAR, I DECIDED THAT PERHAPS THE PRUDENT THING TO DO WOULD BE TO ASK FOR AN AUDIT DONE BY THE CITY AUDITOR. THE CITY AUDITOR IS THE, THE AUDIT DEPARTMENT IS THE ONLY DEPARTMENT OF THE CITY THAT IS, UH, ACCOUNTABLE DIRECTLY TO COUNCIL AND NOT THE CITY MANAGER. AND I THOUGHT THAT WOULD BE THE BEST WAY TO GET A THIRD PARTY OPINION. UM, OUR RESOLUTION, UH, A SIMILAR RESOLUTION TO THIS WAS, UH, MADE AT, UH, THE LAST RESOURCE MANAGEMENT COMMISSION MEETING. UH, IT, THE VOTE WAS FIVE FOUR WITH TWO ABSTENTIONS, BUT SINCE WE ARE AN 11 MEMBER COMMISSION, WE HAVE TO HAVE A QUORUM MAJORITY, NOT A SIMPLE [00:55:01] MAJORITY. SO, UH, THIS NEW RESOLUTION HAS BEEN REVISED WITH THE, UH, INPUT OF SEVERAL COMMISSION MEMBERS, AND HOPEFULLY IT BETTER REFLECTS, UH, OUR GROUP AND OUR MISSION, UH, WITH THAT, UH, COMMENS COMMISSIONER SILVERSTEIN? YES, GO AHEAD. THANK YOU. UM, MS. MARTIN, A QUESTION, PLEASE. I APPRECIATE, AND I'M SURE OTHERS DO, THAT THE AUSTIN ENERGY IS MOVING TO, TO, TO INITIATE A REVIEW, FORMAL REVIEW OF THE DISTRICT ENERGY AND COOLING SYSTEM. AND I WANTED TO ASK ABOUT THE FIRM THAT IS CONDUCTING AT PFM. IS THIS GOING TO BE AN INDEPENDENT REVIEW, OR WILL YOU ALL BE, TO WHAT DEGREE WILL YOU ALL BE REVIEWING INTERIM FINDINGS AND TELLING THEM WHAT YOU, WHAT YOU WANT THEM TO SAY? PFM IS, UH, IS OF COURSE A THIRD PARTY. THEY ARE THE CITY'S FINANCIAL ADVISOR. AND SO, UM, YOU KNOW, WE'VE WORKED TOGETHER ON WHAT A SCOPE WOULD LOOK LIKE FOR THEM TO ASSESS FIVE DIFFERENT OPTIONS. AND, UM, WE HAVE NOT TOLD THEM MEANS OR METHODS OF HOW TO GO ABOUT DOING THEIR REVIEW. UM, BUT CERTAINLY THEY WILL HAVE TO ASK FOR INFORMATION TO BE ABLE TO COMPLETE THEIR REVIEW. WE ARE MAKING OURSELVES AVAILABLE FOR THEM TO DO THAT. UM, AND THEN THEY WILL DELIVER A REPORT TO US AT THE END OF THE, UM, AT THE END OF THE REVIEW. AND TO WHAT DEGREE DOES THE SCOPE OF THEIR INVESTIGATION MATCH THE QUESTIONS AND THE CHARGE, WHICH OUR PROPOSED RESOLUTION HAD ASKED YOU ALL OR THE CITY AUDITOR TO UNDERTAKE? SO I, UM, I WILL JUST LOOK BACK TO THE, UM, MEMO THAT IS IN YOUR TO, AND, AND KIND OF READ SOME OF THE HIGHLIGHTS. SO, UM, THEY'RE CONDUCTING AN ASSESSMENT OF POTENTIAL OPTIONS FOR THE FUTURE OF THE DISTRICT ENERGY AND COOLING SYSTEM WITH A FOCUS ON ITS BEING ABLE TO GROW. THAT'S REALLY THE OBJECTIVE HERE. UM, THEIR REPORT WILL EXAMINE THE FINANCIAL AND BUSINESS INFORMATION AND DETAIL POTENTIAL PATHWAYS FOR THAT GROWTH. AND, UM, THEY WILL LOOK AT A NUMBER OF DIFFERENT OPTIONS, UM, THAT ARE LISTED IN THE SCOPE. UM, BUT THEY WILL ALSO MAKE ANY OTHER RECOMMENDATIONS OR PROVIDE ADDITIONAL OPTIONS THAT THEY IDENTIFY THROUGH THE COURSE OF THEIR ANALYSIS. AND SO I, UM, I I THINK IT, UM, ALIGNS WITH THE FIRST ITEM, UH, TO THE EXTENT THAT IT LOOKS TO ENSURE THE SYSTEMS LONG-TERM GROWTH. AND IS THAT LONG-TERM GROWTH ALIGNED WITH THE GOAL OF MITIGATING PEAK DEMAND GROWTH? YES. FOR THE CITY, YES, IT IS. OKAY. GOOD NEWS THERE. UM, AND AT SUCH TIME AS THIS IS, THIS STUDY IS COMPLETED, WILL IT BE SHARED WITH US AT THE SAME TIME THAT IT IS SHARED WITH CITY COUNCIL OR BEFORE THEN? UM, I CAN'T SPEAK TO THE EXACT TIMING OF THAT. UM, I ANTICIPATE THAT THIS WILL EITHER GO TO THE OCTOBER OR NOVEMBER, UM, UTILITY OVERSIGHT COMMITTEE MEETING, AND THE TIMING OF YOUR MEETINGS ARE AROUND, AROUND THERE. ONE'S AFTER ONE'S THE SAME DAY. IT, IT WOULD BE DELIGHTFUL IF YOU GUYS COULD FIGURE OUT HOW TO GET IT TO US SO THAT WE COULD ATTEMPT TO SHARE OUR VIEWS WITH THE CITY COUNCIL ON THEIR OVERSIGHT. THANK YOU. THANK YOU. UH, COMMISSIONER GARY, THANK YOU SO MUCH. SO, UM, TO VICE CHAIR'S, UM, RECOLLECTION, AS FAR AS THE TIMELINE, HOW EVERYTHING CAME TO THIS POINT. YOU FORGOT TO ADD THAT WE DID HAVE A MEETING WITH AUSTIN ENERGY STAFF ON MARCH 11TH, AND WE HAD AN OPPORTUNITY TO ASK QUESTIONS. THEY GAVE US INFORMATION ON HOW THEY WERE WILLING TO MOVE FORWARD. SO I THINK THE MEMO THAT THE CITY COUNCIL HAS PUT BEFORE US SHOULD SUFFICE. I THINK THIS RESOLUTION IS, I'M NOT SURE WE KEEP BRINGING THIS UP. I DEFINITELY DON'T LIKE NUMBER TWO, WHERE WE'RE DIRECTING AUSTIN ENERGY TO DO SOMETHING AND GIVING THEM A, UH, DIRECTIVE. I THINK THIS IS MORE OF A PARTNERSHIP. I THINK THE CITY COUNCIL HAS DID THEIR DUE DILIGENCE TO MAKE SURE THAT WE GET AN AUDIT, AND ONCE WE RECEIVE THAT INFORMATION AFTER OCTOBER 1ST, WE SHOULD THEN LOOK AT IT AND IF WE NEED ADDITIONAL INFORMATION, [01:00:01] MAYBE GO IN A DIFFERENT DIRECTION. BUT I THINK THIS RESOLUTION IS FROM, JUST, IN MY OPINION, IS, IS A WASTE OF TIME AT THIS POINT. WE HAVE SEEN THIS OVER AND OVER AGAIN. VICE CHAIR ROBBINS, UH, I'LL DEFER TO COMMISSIONER SILVERSTEIN FIRST. OKAY. COMMISSIONER SILVERSTEIN. THANK YOU. VICE CHAIR ROBBINS. THANK YOU, MS. GARY. I, I APPRECIATE YOUR POSITION, BUT LET'S BE CLEAR THAT THE MEMO AND THE INFORMATION ABOUT THE CITY'S PLAN TO SEND THIS TO THEIR FINANCIAL ADVISOR DID NOT EXIST. OR IF, IF IT DID, WE WERE NOT AWARE OF IT WHEN THIS CAME UP AT THE LAST MEETING. AND SO I BELIEVE IT WAS OUR RESPONSIBILITY AND OPPORTUNITY TO BRING THIS RESOLUTION BACK, AND I'M PROUD TO BE A CO-SPONSOR OF IT. WITH THAT SAID, SINCE THE, SINCE AUSTIN ENERGY HAS MADE A COMMITMENT TO CONDUCT THIS, TO HAVE THIS REVIEW CONDUCTED AT I AS ONE OF THREE CO-SPONSORS OF THE RESOLUTION AND WILLING TO PULL IT DOWN, BECAUSE I AGREE WITH YOU THAT WE DO NOT NEED TO PASS IT AT THIS POINT, BUT THAT DOES NOT MEAN THAT I AGREE WITH YOU IN ANY WAY, THAT THE RESOLUTION DID NOT SERVE A PURPOSE. THANK YOU VERY MUCH. AND LET ME BE CLEAR IF MAYBE I DIDN'T, UH, CLARIFY. I'M NOT SAYING THAT IT DIDN'T SERVE, I THINK THE TIMELINE THAT WE TOOK TO MEET WITH STAFF, AND THEY GAVE US CLEAR INFORMATION. I WALKED AWAY WITH EVERYTHING I NEEDED TO KNOW CONCERNING NEXT STEPS. AND SO THOSE NEXT STEPS, THEY HAVE BEEN WORKING WITH US. I THINK WE'VE, OUR VICE CHAIR'S BEEN ASKING FOR MORE THAN THEY WERE WILLING TO GIVE AT THAT TIME, BECAUSE THEY DID HAVE A PROCESS. THEY CLEARLY SPOKE TO US ABOUT THEIR PRIORITIES AND WHAT NEXT STEPS WERE. SO I'M NOT SAYING THAT, OKAY, SO IF YOU WANTED TO PRESENT THE RESOLUTION, THAT'S FINE. I'M SAYING THAT AS A PARTNERSHIP WITH THIS, WITH AUSTIN ENERGY, I THINK WE CAN DO A LITTLE BIT BETTER AS FAR AS MAKING SURE THAT WE'RE WORKING TOGETHER AND NOT AGAINST ONE ANOTHER. AND AGAIN, THAT'S JUST MY OPINION. THANK YOU. THANK YOU, COMMISSIONER GARY. UM, OKAY. VICE CHAIR ROBBINS. I THOUGHT THE MARCH 11TH MEETING WAS A PROFOUND WASTE OF TIME FOR ALL THE ATTENDEES. UH, PERHAPS YOU DIFFER, BUT TO PULL FIVE AUSTIN ENERGY STAFF, UH, OUT OF THEIR BUSY DAY, UH, TO TELL US BASICALLY NOTHING SERVED, NO PURPOSE FOR OUR COMMISSION OR FOR THEM. UH, NO, THERE WAS NOT ANY SIZABLE AMOUNT OF NEW INFORMATION GIVEN AT THAT MEETING AT ALL. UH, REGARDING THE, UM, THE RESOLUTION ITSELF, I GUESS I HAVE TWO COMMENTS. FIRST, I AM NOT SURE THAT THE, UM, CONTRACT, UH, WITH, UH, THIS, UH, REVIEW, THIS COMPANY THAT'S GOING TO REVIEW IT, UH, WOULD'VE HAPPENED HAD WE NOT, UH, HAD OUR RESOLUTION ON TWO SEPARATE MEETINGS. SECONDLY, I'M WONDERING ABOUT THE WISDOM, AND I'M, I'M SEEKING INPUT FROM COMMISSIONER SILVERSTEIN AND OTHER CONSTRUCTIVE COMMISSIONERS ABOUT THE, UM, HAVING AUDIT REVIEW THIS AFTER IT'S CREATED, AFTER IT'S PRESENTED. AND THIRD, AND I DIDN'T THINK OF THIS UNTIL THIS MOMENT, UM, MY BIGGEST POINT IN THIS WHOLE ALMOST YEAR LONG PROCESS IS I NEEDED TO UNDERSTAND THE FINANCES, EXACTLY WHAT IT'S GONNA TAKE TO GET THE DISTRICT ENERGY COOLING SYSTEM FROM, ITS, ITS CURRENT FINANCIAL STATE TO SOMETHING THAT'S MAKING MONEY. AND, UM, YOU CAN CUT THIS INFORMATION 20 DIFFERENT WAYS, BUT WHEN IT'S FINALLY PRESENTED, UH, IF THERE IS NO CLEAR [01:05:01] TIMELINE WHEN THE SYSTEM IS GOING TO BE SOLVENT, THEN I DON'T THINK THE REPORT WILL HAVE SERVED ITS PURPOSE. SO GETTING BACK TO, UH, THESE, UH, MY, MY POINTS, UM, COMMISSIONERS, DO YOU THINK THAT IF WE ASK AUDIT TO LOOK AT THIS AFTER IT'S COMPLETED, IT WOULD BE A GOOD THING? COMMISSIONER SILVERSTEIN? UM, SPEAKING OF SOMEONE WHO HAS WORKED AS A CONSULTANT FOR A LONG TIME, IT IS ALWAYS MY GOAL TO PROVIDE MY CLIENT AN HONEST, STRAIGHTFORWARD AND PROBLEM SOLVING SET OF ANSWERS THAT COVERS ENOUGH BACKGROUND TO HELP THEM UNDERSTAND WHY THE RECOMMENDATIONS THAT I AM OFFERING WILL LET THEM ACHIEVE THEIR GOALS. IT IS MY EXPECTATION THAT THE, IF PFS DID I GET THAT RIGHT? P-M-P-F-M IS, PFM THANK YOU, IS THE CITY'S CURRENT FINANCIAL ADVISOR. THEY PROBABLY DIDN'T JUST WALK IN OFF THE GUTTER. THEY PROBABLY BEEN AT THIS FOR A WHILE, AND THEY PROBABLY DO A VERY GOOD JOB. AND IT IS MY HOPE THAT P-F-S-P-F-M THANK YOU WILL PROVIDE A SUPERIOR REPORT THAT WILL EXPLORE THE FIVE OPTIONS THAT MS. MARTIN REFERRED TO AND GIVE US, GIVE THE CITY AND THE PEOPLE WHO WORK FOR THE DISTRICT ENERGY AND COOLING SYSTEM, AND THE PEOPLE AT AUSTIN ENERGY WHO WANT TO REDUCE PEAK LOAD AND GET A WELL PERFORMING SYSTEM THAT PROVIDES COOL AIR AS WELL AS PEAK REDUCTION. THAT I THINK THEY, IT IS THEIR OBLIGATION AS A GOOD CONSULTANT, AND I EXPECT IT'S THEIR HISTORY, OR THEY WOULDN'T HAVE BEEN GIVEN THIS JOB TO PROVIDE A SOLID SET OF RECOMMENDATIONS WITH A GOOD SET OF EXPLANATIONS. I, IT, I DOUBT THAT HAVING THE CITY AUDITOR REVIEW THAT REPORT WILL MAKE ANY DIFFERENCE TO THE QUALITY OF THAT OUTCOME, OTHER THAN SAYING THEY PROBABLY, YOU KNOW, MAYBE THEY MISSED DOTTING AN I, BUT THEY'LL PROBABLY CROSS ALL THE T'S. I THINK THAT HAVING THE AUDITOR REVIEW IT WOULD, WOULD SLOW DOWN THE PROCESS FOR SOMETHING THAT DESPERATELY NEEDS TO BE RESOLVED IN A VERY EFFECTIVE FASHION AS QUICKLY AS POSSIBLE. THE, THE, THE AUDIT WOULD HAPPEN AFTER THE REPORT WAS MADE UN UNDERSTOOD, BUT HAVING AN ODD, INSERTING AN AUDIT INTO THE PROCESS OF HOW DO WE IMPLEMENT, SHOULD WE IMPLEMENT THIS REPORT? OH, LET'S GET AN AUDITOR TO REVIEW IT, I THINK WOULD UNNECESSARILY SLOW DOWN THE PROCESS AND SLOW DOWN THE RESOLUTION. SO MY, MY HOPE IS THAT PFM IS GONNA SAY HOT DIGGITY. THIS IS A GREAT SET OF ISSUES AND IT'S ANOTHER OPPORTUNITY TO CONTRIBUTE TO THE QUALITY OF AUSTIN VICE CHAIR ROBBINS. MAY I ASK MS. MARTIN A QUESTION? HOW WILL YOU INVOLVE EMPLOYEES OF THE DEC SYSTEM? HOW WILL THEY BE GIVEN, UH, INPUT? IT'S AN EXCELLENT QUESTION. UM, SO, UH, VICE PRESIDENT KEN SNIPES HAS DEVELOPED, UM, WITH THE DIRECTOR OF DISTRICT ENERGY AND COOLING A SMALL GROUP OF, UH, EMPLOYEES TO REPRESENT THE, THE VIEWPOINTS OF THE WHOLE. UM, AND THEY HAVE HAD A FEW MEETINGS ALREADY. UM, AND THEN THEY, UH, ARE GOING TO PICK UP NOW THAT WE ARE GETTING PFM UNDER, UH, SCOPE OF WORK FOR THIS. UH, THEY WILL BE PICKING UP AND HAVING PERIODIC MEETINGS. I THINK THE INTENT IS AT LEAST MONTHLY TO, UH, ENSURE THAT THEY'RE AWARE OF THE QUESTIONS THAT ARE BEING ASKED AND THE PROGRESS THAT IS BEING MADE CAN ALSO HAS REGULAR MEETINGS WITH, UH, THE DISTRICT ENERGY AND COOLING EMPLOYEES AS WELL. OKAY. THE, THIS IS GOOD TO KNOW. AND WILL THE REPORT, UH, HAVE A FINANCIAL ANALYSIS THAT TELLS US, UH, WHEN THE SYSTEM BREAKS EVEN? I, I DO NOT KNOW IF THAT IS WHAT THE REPORT WILL CONTAIN. WE HAVE NOT DESCRIBED TO PFM WHAT MEANS AND METHODS THEY MUST OBTAIN OR USE IN ASSESSING THE FIVE OPTIONS. THEY ARE A FINANCIAL ADVISING GROUP. MAY, IF I WAS DOING THE REPORT, IT WOULD HAVE IT. WELL, MAY I HUMBLY SUGGEST THAT IT SHOULD. [01:10:01] YOU MAY. THANK YOU. OKAY. UH, AS A QUESTION FOR THE CO-SPONSORS, COMMISSIONER SILVERSTEIN HAS INDICATED, UM, A WILLINGNESS TO, UH, DROP THIS RESOLUTION. UM, I WOULD LIKE TO HEAR FROM THE OTHER CO-SPONSORS WHETHER THEY FEEL THAT THIS RESOLUTION IS STILL SOMETHING THAT WE NEED TO ACT ON TONIGHT, OR ARE WE SATISFIED WITH THE NEXT STEPS AS OUTLINED? UH, IN THE MEMO AND BY, UH, MS. MARTIN TONIGHT, UH, COMMISSIONER GERLAND IS, IS COMMISSIONER GERLAND A, UH, CO-SPONSOR? OKAY. NOT TO PUT YOU ON THE SPOT, BUT IF YOU HAVE AN OPINION ABOUT IT, WE WOULD LOVE TO HEAR IT. HEY, YEAH. SORRY, I'M HAVING ALL THESE AUDIO DIFFICULTIES. UH, BUT YEAH, I AGREE WITH COMMISSIONER SILVERSTEIN, UM, THAT GIVEN THE MEMO, I THINK THE RESOLUTION HAS SERVED ITS PURPOSE AND I AM, YOU KNOW, STATED WITH, UH, THE ACTIONS THE NEXT STEPS DESCRIBED IN THE MEMO. I CONCUR. SO, UH, DO YOU HAVE A MOTION TO, UH, TABLE IT OR WHAT'S, WHAT'S NEEDED TO WITHDRAW? I THINK YOU CAN JUST NOT TAKE ACTION ON IT. OKAY. NO. OKAY. UM, UNLESS THERE'S ANY OBJECTION, UH, THE RMC IS GOING TO NOT TAKE ACTION ON THIS ITEM NUMBER FIVE. OKAY. THANK YOU VERY MUCH MS. MARTIN. THANKS FOR THE, THE CONSTRUCTIVE, UH, DISCUSSION COMMISSIONERS AS WELL. OKAY. UM, WE ARE NOW [7. Staff Briefing regarding the 2024 Texas Gas Service rate case and discussion on policies for future rate case and franchise agreement negotiations by Marija Norton, City Controller, Financial Services Department.] AT ITEM NUMBER SEVEN, WHICH IS STAFF BRIEFING REGARDING THE 2024 TEXAS GAS SERVICE RATE CASE AND DISCUSSION ON POLICIES FOR FUTURE RATE CASE AND FRANCHISE AGREEMENT NEGOTIATIONS BY MARIA NORTON CITY CONTROLLER. GOOD EVENING COMMISSIONERS. MY NAME IS MARIA NORTON, CITY CONTROLLER. I'M HERE TO PROVIDE A HIGH LEVEL SUMMARY OF THE 24 TEXAS GAS SERVICE RATE CASE, FOLLOWED BY DISCUSSION ON GAS UTILITY POLICY MATTERS. NEXT SLIDE, PLEASE. MS. MS. NORTON. CAN, CAN I STOP YOU? ONE MOMENT. I'M SORRY FOR THE INTERRUPTION. I OH, NO WORRIES. DID I MISS A HAND UP? COMMISSIONER ZIN? YEAH, I, I'M, THIS IS MY FIRST COUNCIL MEETING, UM, AND I JUST WANTED TO CLARIFY SOMETHING. UM, AND I, I NEED YOUR GUYS' INPUT ON THIS. SO I READ THE BYLAWS BEFOREHAND AND IN THEIR POSTED FORM, THEY EXPLICITLY EXCLUDE GAS FROM THIS COMMISSION'S, UM, REMIT. AND I SPOKE WITH MS. GOODWIN AHEAD OF TIME, AND SHE INFORMED ME THAT BYLAWS HAD BEEN CHANGED IN FEBRUARY TO INCLUDE GAS. AND I JUST BEFORE WE STARTED, COULD ANY OF YOU GIMME A BACKGROUND ON THE HISTORY OF WHAT PRECIPITATED THAT BYLAW CHANGE AND, OR IS THAT IRRELEVANT? YES. TO, BEFORE WE KICK THIS OFF, UH, I, I WILL, I WILL ATTEMPT TO DO A VERY QUICK BACKGROUND. THANK YOU FOR THAT, UH, QUESTION. YES, ABSOLUTELY. UM, SO YES, ORIGINALLY THIS RESOURCE MANAGEMENT COMMISSION, UH, WAS INTENDED TO PROVIDE, UM, ADVISORY ON ENERGY EFFICIENCY ON, UH, WATER CONSERVATION ITEMS. AND IT DID EXPLICITLY EXCLUDE, UM, NATURAL GAS, UH, OVER A PERIOD OF SEVERAL MONTHS. THIS COMMISSION, UM, WORKED TO UPDATE THOSE BECAUSE AT THE TIME THERE WAS NO, UM, CITIZEN COMMISSION OR BOARD THAT GAVE THE CITY OF AUSTIN ANY, UM, YOU KNOW, ANY CITIZEN INPUT AROUND, UH, THE NATURAL GAS UTILITIES, THE WAY THAT WE HAVE FOR THE MUNICIPAL UTILITIES OF, OF WATER AND ELECTRICITY. UM, SO THAT, UH, WE VOTED TO AMEND THOSE BYLAWS TO BE, UM, ABLE TO ADVISE, UH, ON, ON NATURAL GAS. AND SO THAT IS VERY NEW, BUT THAT IS SOMETHING THAT WE ARE, WE ARE DOING NOW AND WE CAN CERTAINLY HAVE A, A MUCH LONGER CONVERSATION ABOUT THAT, UM, OFFLINE. I APPRECIATE IT. THANK YOU. AND THANKS FOR THE PAUSE. I APPRECIATE THAT. SURE. THANK YOU. OKAY. ALRIGHT, MOVING FORWARD. UM, THE 2024 TGS RATE CASE TIMELINE IS LISTED ON THIS SLIDE. UH, DURING THE RATE CASE NEGOTIATIONS, THE CITY JOINS A COALITION OF CITIES COMPRISED OF ALL MUNICIPALITIES WITHIN THE SERVICE AREA. THIS ALLOWS THE COALITION COLLECTIVE BARGAINING POWER, SHARED LEGAL AND EXPERT EXPENSES AND MORE FAVORABLE OUTCOMES. AS HISTORICALLY, COALITIONS HAVE ACHIEVED LOWER RATE INCREASES, REFUNDS, AND OTHER CONCESSIONS FROM UTILITIES THAN CITIES ACTING ALONE. IN ADDITION TO AUSTIN, THERE ARE 29 OTHER CITIES IN THE CENTRAL GULF SERVICE AREA. THE OUTSIDE COUNCIL HIRED DURING THE 2024 TGSR CASE BY THE COALITION OF CITIES WAS MR. THOMAS [01:15:01] PERATO FROM LLOYD GOSLIN. SO I'M NOT GONNA GO OVER ALL OF THE DATES ON THIS SLIDE, I'M JUST GONNA POINT OUT A FEW KEY ITEMS. AS YOU CAN SEE ON THIS SLIDE, THE RAILROAD COMMISSION, UH, APPROVED, UH, MADE ITS DECISION ON THE HUNDRED AND 69TH DAY. LEGALLY, THEY HAD A HUNDRED EIGHTY, EIGHTY FIVE DAYS TO TAKE ACTION. EVEN THOUGH ONLY THREE SETTLEMENT MEETINGS ARE LISTED ON THIS SLIDE, THERE WERE UPWARDS OF 20 OR SO SETTLEMENT MEETINGS HELD DURING THE NEGOTIATIONS. ALSO, I WANTED TO POINT OUT THAT THE SETTLEMENT MEETINGS BEGAN JUST 52 DAYS AFTER THE CASE WAS FILED. IN SHORT, IT IS IMPORTANT FOR ANY CITY PROCESS OR COUNCIL APPROVAL TO APPROVE OR DENY THE PROPOSED RATES TO BE COMPLETED APPROXIMATELY 45 TO 50 DAYS AFTER THE FILING IN ORDER FOR THE CITY TO INCORPORATE ITS CONCERNS INTO SETTLEMENT DISCUSSIONS AND DIRECT TESTIMONY. NEXT SLIDE PLEASE. SO THE NEXT FEW SLIDES PROVIDE AN OVERVIEW OF THE KEY DIFFERENCES BETWEEN THE LAST APPROVED TGS RATE CASE FROM 2020, THE 2024 TGS PROPOSED RATE CASE HAS FILED, AND THE ACTUAL SETTLEMENT. UM, SO THIS SLIDE OUTLINES THE REVENUE REQUIREMENT, RETURN ON EQUITY, RATE OF RETURN, CAPITAL STRUCTURE, AND NET PLANT, UH, RECOMMENDATIONS. AND AS YOU CAN SEE, THE REVENUE REQUIREMENT DURING THE, IN THE PROPOSED, UH, SECTION WAS 25.8 MILLION INCREASE, AND THE SETTLEMENT AMOUNT WAS 19.3 MILLION INCREASE. AND THEN THE RETURN ON EQUITY WAS 10.25 AS PROPOSED. UM, AND THE SETTLEMENT RETURN ON EQUITY RATE WAS 9.7% AND THEN THE RATE OF RETURN, UH, WAS 7.8% AS PROPOSED AND 7.55% AS SETTLED. NEXT, NEXT SLIDE PLEASE. THE SLIDE GOES OVER THE, UM, RATE, UH, RATE CLASSES AND BILL IMPACTS AS PROPOSED AND SETTLED. SO DURING THE LAST, UH, PROPOSED, UH, RATE CASE, THE RATE WAS SPLIT INTO SMALL AND LARGE SUBCLASSES WITHIN THE RESIDENTIAL AND COMMERCIAL CLASSES. AND, UH, THOSE WERE ADOPTED AS PROPOSED. AND THEN THE BILL IMPACTS AS PROPOSED WERE ABOUT 14% INCREASE FOR THE RESIDENTIAL SMALL AND LARGE CUSTOMER CLASSES. AND THEN BOTH, UH, THE COMMERCIAL SMALL AND THE COMMERCIAL LARGE, UH, CLASSES SAW, UM, HAD PROPOSED DECREASES. THE SETTLEMENT ALLOCATED ALL DECREASES FROM NON-RESIDENTIAL CLASSES TO THE RESIDENTIAL CLASS, UM, IN AN EFFORT TO MINIMIZE THE INCREASE TO THE RESIDENTIAL CLASS. AND THAT ENSURED THE NO CLASS RECEIVED A DECREASE IN RATES. NEXT, NEXT SLIDE PLEASE. THIS SLIDE GOES OVER THE CUSTOMER CHARGE IN THE CUSTOMER ASSISTANCE PROGRAM. UM, AS YOU CAN SEE, THE THE LAST APPROVED, UH, RATE FOR THE RESIDENTIAL AND COMMERCIAL WERE $16 AND $53 RESPECTIVELY, UH, WITH THE ANNUAL GRIP, UH, INCREASES. UH, THE RATES FOR THE RESIDENTIAL WERE 25.49 AND 96 POINT 18, UH, FOR RESIDENTIAL AND COMMERCIAL PRIOR TO THE, UM, NEW RATE CASE APPROVAL. SO FOR THE 2024 RATE CASE, TGS PROPOSED, UH, THAT THE RESIDENTIAL SMALL CLASS WAS $25.50. THE RESIDENTIAL LARGE $39 COMMERCIAL SMALL $85 AND COMMERCIAL LARGE $75. AND THEN THE SETTLEMENT AMOUNTS ARE LISTED TO A FAR, FAR RIGHT. UH, THE SETTLEMENT AMOUNT FOR RESIDENTIAL SMALL WAS 18 FOR RESIDENTIAL LARGE 30 COMMERCIAL SMALL OF 60, AND THEN COMMERCIAL LARGE 75. AND THEN AS FAR AS THE CUSTOMER ASSISTANCE PIECE, UM, THE LAST APPROVED, UH, TGS RATE CASE HAD $120,000 OF A TGS CONTRIBUTION TO SHARE THE WEALTH, THE WARMTH PROGRAM. UM, AND THEY HAD PROPOSED THAT THOSE CONTRIBUTIONS, UH, REMAIN UNCHANGED AND THEN THE SETTLEMENT AMOUNT INCREASED THE TGS ANNUAL CONTRIBUTION TO $200,000. NEXT SLIDE PLEASE. AS YOU CAN SEE FROM THIS SLIDE, TGS IS BY FAR THE LARGEST, UM, GAS UTILITY PROVIDER IN THE CITY OF AUSTIN WITH OVER 95%, 94% OF THE MARKET SHARE WITH ATMOS COMING IN CLOSE, UH, WITH ATMOS COMING IN FAR SECOND, UM, WITH ABOUT 4% OF THE MARKET SHARE, BOTH CENTER POINT AND SI ENERGY, UH, DE COMPRISE LESS THAN 1% OF THE CUSTOMER BASE. NEXT SLIDE PLEASE. THE NEXT FEW SLIDES ARE GONNA PROVIDE A VISUAL REPRESENTATION OF THE SERVICE AREA OF EACH OF THE GAS UTILITY COMPANIES IN AUSTIN. SO AS YOU CAN SEE HERE, TGS IS, UH, THE MAJOR PLAYER, UH, ALL OF THE AREA IN RED IS GONNA BE THEIR SERVICE AREA. UM, NEXT SLIDE PLEASE. ATMOS ENERGY IS PRIMARILY LOCATED IN THE NORTH PORTION OF AUSTIN. AND THEN NEXT SLIDE PLEASE. CENTER POINT ENERGY'S CUSTOMER BASE IS LIMITED TO A PORTION THAT IS SOUTH IN SOUTHEAST AUSTIN, UH, NEAR EAST OF I 35 IN SLAUGHTER LANE. [01:20:02] UH, NEXT SLIDE PLEASE. AND THEN THE S ENERGY, UH, SERVICE AREA IS BASICALLY, UM, RESTRICTED TO THE WILDHORSE RANCH DEVELOPMENT IN NORTHEAST AUSTIN. NEXT SLIDE PLEASE. SO NEXT I WANTED TO SHARE SOME INFORMATION ON KEY DATES FOR THE RATE CASES, FRANCHISE AGREEMENTS AND GRIP FILINGS. THE LAST RATE CASE SETTLEMENTS FOR EACH OF THE FOUR GAS UTILITIES IS LISTED ON THIS SLIDE. UM, SO ATMOS SETTLED AT RAILROAD COMMISSION IN MARCH OF 2025 TGS IN NOVEMBER OF 24. CENTER POINT IN JUNE, JUNE 24. AND SER ENERGY'S LAST RATE CASE WAS SETTLED AND APPROVED AT BY CITY COUNCIL IN AUGUST OF 2023. SO TYPICALLY WE SEE FULL RATE CASES FILED EVERY FOUR TO FIVE YEARS. IF A COMPANY HAS FILED A GRIP, UH, WHICH IS KNOWN AS A GAS RELIABILITY INFRASTRUCTURE PROGRAM, THEY MUST FILE A FULL RATE CASE WITHIN FIVE AND A HALF YEARS. NEXT SLIDE PLEASE. FROM A FRANCHISE AGREEMENT STANDPOINT, THE TGS FRANCHISE AGREEMENT EXPIRES ON OCTOBER 15TH, 2026, FOLLOWED BY ATMOS ENERGY ON MAY 14TH, 28. AND THEN CENTER POINT AND HIGH ENERGY'S AGREEMENTS DO NOT EXPIRE UNTIL MID 2030. TO GIVE A BRIEF OVERVIEW, FRANCHISE AGREEMENTS GIVE GAS UTILITIES THE LEGAL RIGHT TO USE THE CITY'S PUBLIC, UH, RIGHT OF WAY FOR INSTALLING AND MAINTAINING PIPELINES AND INFRASTRUCTURE. IN RETURN, THE UTILITY PAYS THE CITY A FRANCHISE FEE, UM, USUALLY A PERCENTAGE OF REVENUES FROM LOCAL CUSTOMERS, WHICH HELPS FUND CITY SERVICES. AND THESE AGREEMENTS ALSO SET THE RULES FOR HOW UTILITIES MUST OPERATE WITHIN THE CITY, COVERING THINGS LIKE SAFETY STANDARDS, STREET RESTORATION INSURANCE, AND DISPUTE RESOLUTION. OVERALL, THE FRANCHISE AGREEMENTS ARE KEY TOOLS FOR MANAGING THE CITY'S PRESENCE AND ENSURING FAIR COMPENSATION TO THE CITY. CURRENT FRANCHISE RATE. THE CURRENT FRANCHISE RATE IS 5% OF TG S'S TOTAL GROSS REVENUES. ALL OF THE CITY'S GAS UTILITY FRANCHISE AGREEMENTS ARE PUBLIC PUBLICLY AVAILABLE IN AUSTIN, TEXAS.GOV. IF YOU GOOGLE CITY OF AUSTIN GAS UTILITY FRANCHISE AGREEMENTS, THE CITY'S RIGHT OF WAY RESOURCES WEBSITE SHOULD COME UP AT THE TOP OF THE RESULTS PAGE, AND I CAN ALSO SEND THOSE TO YOU IF YOU EVER NEED THEM. NEXT SLIDE PLEASE. THE GAS RELIABILITY INFRASTRUCTURE PROGRAM, OR ALSO KNOWN AS GRIP, WAS CREATED BY THE STATE TO HELP GAS COMPANIES RECOVER THE COST OF UPGRADING PIPELINES AND INFRASTRUCTURE IN BETWEEN FULL RATE CASE REVIEWS. THE, THESE GRIP INCREASES SHOW UP AS CHARGES TO THE FIXED MONTHLY CHARGE AND MUST BE REVIEWED DURING A FULL RATE CASE AT LEAST EVERY FIVE, FIVE AND A HALF YEARS. UNFORTUNATELY, CITIES, UM, CITIES LIKE AUSTIN HAVE VERY LIMITED POWER WITH WHEN IT COMES TO GRIP INCREASES. IN 2011, UM, THE TEXAS SUPREME COURT RULED THAT GRIP FILINGS AREN'T CONSIDERED FULL RATE CASES, SO CITIES CAN'T FULLY REVIEW THEM OR CHALLENGE THEM. OUR ROLE IS MOSTLY TO MAKE SURE THAT THE MATH IS RIGHT AND OUR STAFF CAREFULLY CHECKS THAT. SO ON THIS LIGHT YOU CAN SEE THAT UH, THERE WERE TWO GRIP CASES, UH, FILED THIS YEAR. TEXAS GAS SERVICE FILED THEIR GRIP CASE ON, UH, FEBRUARY 11TH. UH, WITH THE ORIGINAL EFFECTIVE DATE OF APRIL 12TH, COUNSEL APPROVED AN ORDINANCE TO EXTEND THE, UM, THE DATE BY 45 DAYS TO BASICALLY THE END OF THIS MONTH. UM, THIS GRIP FILING INCREASES THE RESIDENTIAL RATES BY 3.36 PER MONTH, 12.88 PER MONTH FOR COMMERCIAL 4 61 0.83 FOR INDUSTRIAL, AND 25 96 PER MONTH FOR PUBLIC AUTHORITY CUSTOMERS. AND THEN CENTER POINT, UH, FILED THEIR GRIP FILING AROUND THE SAME TIME IN FEBRUARY 18TH, AND COUNCIL APPROVED AN ORDINANCE TO EXTEND THE EFFECTIVE DATE TO, UH, JUNE 3RD, 2025. AND THEN THE CENTER POINT GRIP FILING INCREASES, UM, THE RESIDENTIAL RATE BY 2.88 AND THEN 5.14 FOR SMALL COMMERCIAL AND 61 20 FOR LARGE COMMERCIAL CUSTOMERS. NEXT SLIDE PLEASE. UM, SO ON THIS SLIDE, UH, STAFF SUGGEST THAT THE RESOURCE MANAGEMENT COMMISSION DEVELOP AND PROPOSE PRIORITIES THAT ARE GONNA BE, UH, GUIDING THE CITY'S UPCOMING UTILITY RATE CASE AND FRANCHISE NEGOTIATIONS. UM, THESE PRIORITIES SHOULD FOCUS ON BROAD POLICY AREAS, SUCH AS, UM, WHETHER WE SHOULD FOCUS ON PROGRESSIVE RATES VERSUS REGRESSIVE RATE STRUCTURES, INCREASING FUNDING FOR CUSTOMER ASSISTANCE PROGRAMS, OR EXPANDING CONSERVATION RE REBATES. ALSO, PLEASE REMEMBER THAT THE RATE CASES ARE WHERE RATE RELATED ITEMS SHOULD BE NEGOTIATED, WHEREAS THE FRANCHISE AGREEMENTS SHOULD BE FOCUSED ON RIGHT OF WAY RELATED ITEMS. AND THEN RATHER THAN SETTING VERY SPECI SPECIFIC PRIORITIES, STAFF RECOMMEND THAT THE, UM, COMMISSION RECOMMEND MORE GENERIC PRIORITIES. FOR EXAMPLE, SUGGESTING, UM, LOWER RATE INC RATE INCREASES FOR RESIDENTIAL CUSTOMERS COMPARED TO COMMERCIAL CUSTOMERS. ONCE FINALIZED, THESE [01:25:01] PRIORITIES WILL BE PRESENTED TO CITY COUNCIL FOR APPROVAL THROUGH A RESOLUTION WHICH WILL THEN SERVE AS A GUIDING FRAMEWORK FOR CITY STAFF AND LEGAL COUNCIL DURING NEGOTIATIONS. NEXT SLIDE PLEASE. ALRIGHT. OKAY. CITY STAFF PROPOSES THE FOLLOWING STEPS DURING FUTURE RATE CASES. AS MENTIONED PREVIOUSLY, WHEN A GAS UTILITY FILES A RATE CASE, THE PROCESS MOVES VERY QUICKLY WITHIN SEVEN TO 10 DAYS OF THE FILING. WE THINK IT WOULD BE BENEFICIAL FOR RMC TO HOLD A MEETING OR WORKSHOP WHERE OUTSIDE COUNSEL PROVIDES AN OVERVIEW OF THE CASE AND THE PROPOSED RATE CHANGES. IT'S IMPORTANT TO NOTE THAT DURING THIS FAST MOVING TIME TIMELINE, OUTSIDE COUNCIL IS GOING TO RELY ON THE CITY COUNCIL APPROVED PRIORITIES, UM, RESOLUTION TO GUIDE NEGOTIATIONS. BECAUSE OF THE TIME CONSTRAINTS, THERE WON'T BE AN OPPORTUNITY TO REVISE OR REVISIT THOSE PRIORITIES DURING THE CASE ITSELF, AS THOSE ARE GONNA HAVE TO BE APPROVED BY COUNCIL. ANY CHANGES SHOULD BE ADDRESSED OUTSIDE OF THE FORMAL RATE CASE NEGOTIATIONS. STAFF ALSO RECOMMENDS THAT CITY COUNCIL TAKE ACTION TO APPROVE OR DENY THE UTILITIES PROPOSAL WITHIN 50 DAYS OF THE RATE FILING. AS WAS NOTED DURING THE FIRST SLIDE OF THE PRESENTATION, THE RAILROAD COMMISSION SETTLEMENT NEGOTIATIONS BEGAN 52 DAYS AFTER THE RATE CASE WAS FILED. IF THE CITY WANTS A SEAT AT THE RAILROAD COMMISSION NEGOTIATING TABLE, IT IS BEST THAT COUNCIL MAKE A DECISION BEFORE THE NEGOTIATIONS BEGIN. ADDITIONALLY, RMC MEMBERS WHO ARE CUSTOMERS OF THE UTILITY INVOLVED IN THE RATE CASE, HAVE THE INDIVIDUAL RIGHT TO INTERVENE DIRECTLY IN THE, IN THE CASE AT THE RAILROAD COMMISSION, GIVING THEM PERSONAL STANDING AS RATE PAYERS. THIS STRUCTURE ENSURES BOTH TIMELY CITY PARTICIPATION AND THE OPTION FOR INDIVIDUAL, UM, ADVOCACY. SO WITH THAT SAID, THIS CONCLUDES MY PRESENTATION. DO YOU HAVE ANY QUESTIONS? THANK YOU SO MUCH FOR THE PRESENTATION. ABSOLUTELY. LOTS OF INFORMATION IN THERE. UM, I'M GOING TO SEE IF COMMISSIONERS HAVE QUESTIONS. COMMISSIONER STEIN. THANK YOU. THIS WAS VERY HELPFUL MS. NORTON. THANK YOU. AND HAPPY TO, TO COMMISSIONER ZI AND ANYONE ELSE WHO, WHO NEEDS SOME GAS INTRO COMMISSIONER, VICE CHAIR S PREPARED A SUPERB ANALYSIS PARTICULARLY OF TEXAS GAS SERVICE THAT WAS, THAT I BELIEVE IS IN THE RECORD FROM OUR LAST MEETING OR TWO MEETINGS AGO. SO, SO I COMMEND THAT TO YOUR ATTENTION. UH, IT WAS, IT WAS AT THE MARCH MEETING AND I HAVE A SMALL SUBSET OF THAT PRESENTATION HERE TONIGHT. OH, OKAY. BUT THANK YOU. UM, DO THE, JUST A COUPLE QUICK QUESTIONS, IF I MAY. DO THE GAS AGREEMENTS INCLUDE ANY QUALITY OF SERVICE PROVISIONS? UH, THE FRANCHISE AGREEMENTS? YES, MA'AM. YES, I BELIEVE SO. BUT I CAN DOUBLE CHECK. AND, AND DOES IS, IS QUALITY OF SERVICE, ARE THERE EXPLICIT METRICS THAT THE RAILROAD COMMISSION CONSIDERS OR THAT THE CITY APPLIES TO GAS SERVICE FROM THE UTILITIES? I'M NOT SURE OF THAT. I'LL HAVE TO DOUBLE CHECK AND GET BACK TO YOU. UM, DO YOU KNOW OFFHAND THE MAGNITUDE OF TOTAL GAS REVENUES FROM THAT AUSTIN CUSTOMERS PAY TO THE, TO TGS OR TO ALL OF THE GAS UTILITIES? I DO NOT, BUT I'M HOPING THAT MAYBE THAT'S SOMETHING THAT Y'ALL ARE GONNA PRESENT TODAY OR NO, MAYBE NOT. TGS WE, WE HAVE A PRESENTATION AFTER THIS. I DUNNO. OKAY. YEAH, THAT INCLUDES A LOT OF DATA. 'CAUSE I KNOW YOU HAD ASKED FOR SPECIFIC INFORMATION, SO I YES. HOPE THAT THEY CAN PROVIDE THAT. THANK YOU. AND DO YOU KNOW THE MAGNITUDE OF THE, THE, YOU SAID THE FRANCHISE PAYMENT IS 5% OF GAS REVENUES. DO YOU KNOW BALLPARK WHAT THAT NUMBER IS IN TERMS OF DOLLARS AND WHAT THE CITY DOES WITH IT? I CAN, I KNOW IT GOES TO THE GENERAL FUND REVENUE. UM, SO IT IS SPENT ON GENERAL FUND ACTIVITIES. UM, WHEN I GO BACK TO MY COMPUTER LATER, I CAN DEFINITELY CHECK THAT FOR FISCAL YEAR 24 OR MAYBE THAT'S SOMETHING YOU ALL HAVE AT HAND. I WOULD SAY IN 24 IT WAS AROUND 12 MILLION. THANK YOU. THANKS, MS. DO YOU'RE WELCOME. ANY OTHER QUESTIONS? STAY UP THERE FOR A SEC. OTHER QUESTIONS? COMMISSIONER SCHWARTZ? YEAH, I HAD A QUESTION, UM, ON THE TIMELINE FOR THE FRANCHISE RENEWAL THAT'S COMING UP. MM-HMM . SO I THINK THE, THE, THE LAST, UH, SLIDE THAT YOU PRESENTED WAS THE TIMING FOR THE RATE CASE FOR OUR INPUT ON A RATE CASE. MM-HMM . SO WITH THE TGS FRANCHISE RENEWAL COMING UP, IS THERE A SIMILAR SORT OF STRUCTURE FOR A TIMELINE ON THAT? AND THEN THE FOLLOW UP QUESTION IS WHERE IS THE CITY RIGHT NOW IN ALL OF THAT? OH, NEGOTIATION. I SEE WHAT YOU'RE SAYING. YEAH. UM, SO WE ACTUALLY JUST KICKED OFF, HAD A KICKOFF MEETING MAYBE LESS THAN A MONTH AGO. JUST INTERNAL STAFF WITHIN FINANCIAL SERVICES AND LAW TO KIND OF DISCUSS, UM, OUR APPROACH TO THE NEGOTIATIONS FOR THE FRANCHISE AGREEMENT. UM, OUR NEXT MEETING IS COMING UP IN JUNE WITH, UM, OTHER CITY PARTIES LIKE AUSTIN WATER, AUSTIN ENERGY, PUBLIC, PUBLIC TRANSPORTATION, UM, PUBLIC WORKS AND [01:30:01] TRANSPORTATION, JUST TO GET THEIR INPUT AND FEEDBACK ON, UM, ANY MATTERS THAT THEY WANT TO WANT US TO CONSIDER DURING THE NEGOTIATIONS. UM, I DON'T KNOW THAT I NECESSARILY PREPARED ANYTHING LIKE THAT, BUT I THINK IF Y'ALL HAVE ANY SPECIFIC POLICY DISCUSSIONS THAT YOU WANT US TO CONSIDER OR RECOMMENDATION OR PRIORITIES DURING THE FRANCHISE AGREEMENT NEGOTIATIONS, LET US KNOW. AND THAT MAY BE AS, AS THINGS PROGRESS, WE CAN COME BACK AND PROVIDE A PRESENTATION OR WHERE WE ARE. THANKS. YEAH. ARE THERE ANY KEY, I GUESS, UH, TIMELINE DEADLINES COMING UP IN 2025 THIS YEAR? I KNOW THE, FOR THE FRANCHISE NEGOTIATIONS, THE FINAL AGREEMENT ENDS OCTOBER NEXT YEAR? UH, NOT AT THIS TIME. NO. NO. FOR THE FRANCHISE NEGOTIATIONS. YEAH, FOR THE FRANCHISE. MM-HMM. YEAH. STILL IN THE EARLY STAGES. AND, UM, WHAT'S WOULD ITEMS LIKE THE CONTRIBUTION NATIVE CONSTRUCTION AND OTHER ITEMS RELATED TO HOW THE UTILITY, I GUESS THAT'S STUFF THAT'S MORE RELATED TO THE RATE CASES THAT JUST SEEMS MORE RELATED TO RATE CASES. RIGHT. UM, I THINK WE WANNA KIND OF FOCUS OUR PRIORITIES ON RIGHT OF WAY SPECIFIC ITEMS AND THEN, UM, YOU KNOW, SERVICE, UH, RELATED ISSUES, BUT NOT NECESSARILY RATE CASE ITEMS BECAUSE THOSE ARE GONNA BE NEGOTIATED DURING THE RATE CASES. OKAY. THANK YOU. BECAUSE I'M NOT REALLY SURE WHAT EXACTLY WE CAN PUT INTO THE FRANCHISE AGREEMENT IF IT'S LIKE RATE CASE RELATED OR NOT. IF I TURN ON, OH, WHERE ARE YOU GOING? I, I SAY I CAN GO THE, I SAY I CAN, IF YOU'RE GONNA SPEAK, UH, PLEASE MAKE YOUR WAY TO THE PODIUM SO THAT THE REMOTE ATTENDEES, AND THE RECORD CAN, MY NAME IS LON LU, I'M AN ACCOUNT MANAGER. MICROPHONE, PLEASE. MY NAME ISLAN NEW, I'M MY COUNTY MANAGER. I WORK FOR MARIA. UM, SO I THINK IT THAT, I'M TRYING TO GIVE ANOTHER CONNECTION. THE FRANCHISE FEE WITH THE RAID CASE. 'CAUSE THE CITY OFFICER, WE CHARGE THOSE GAS COMPANY CHARGE THEM FRANCHISE FEE. THOSE FEES IS EXPENSIVE FOR THE GAS COMPANIES. SO THEY'RE GONNA RECOVER THOSE COSTS THROUGH THE RATE CASE OR THAT'S CORRECT. SO I JUST WANNA, I JUST WANNA POINT OUT, WE DON'T WANNA NECESSARILY INCREASE THE AMOUNT THAT WE CHARGE GAS COMPANIES BECAUSE ULTIMATELY ALL OF THAT IS GONNA GET BILLED BACK TO THE CUSTOMERS OR THE RATE PAYERS. SO IT'S NOT NECESSARILY BENEFITING THE CITY OR NOT. YES. I CHAIR ROBINS. UM, I AGREE WITH, UH, THANK YOU FOR YOUR PRESENTATION AND I AGREE WITH 98% OF IT. OH NO, THE TWO THAT YOU DON'T DISAGREE, , , WHAT'S THE OTHER TWO? ? UH, THE OTHER SHOE WILL FALL. UH, UH, I DO INTEND DURING FRANCHISE NEGOTIATIONS DISCUSSIONS TO BRING UP RATES, UH, ONE KEY THING, BUT CERTAINLY NOT THE ONLY THING IS THE, UH, CONSTRUCTION WORK IN PROGRESS, UH, OR CAPITAL RECOVERY FEES. UM, I KNOW THAT TEXAS GAS SERVICE HAS WEDGED THAT INTO THEIR PRESENTATION. I'M NOT SURE I AGREE WITH THEIR NUMBERS. UH, I HOPE TO DISCUSS THIS DURING, UH, FRANCHISE NEGOTIATIONS. YEAH. AND IF Y'ALL CAN MAYBE SEPARATE THOSE PRIORITIES BETWEEN FRANCHISE AND THEN RATE CASE PRIORITIES, THAT WOULD BE GREAT. AND THAT WAY THE STAFF CAN, WELL, I, I KNOW THAT, UH, AT LEAST ONE CITY COUNCIL OFFICE WAS TOLD BY, UH, VARIOUS CITY STAFF THAT THE PROPER TIME TO BRING UP CONSTRUCTION WORK IN PROGRESS, UH, IS DURING THE FRANCHISE, UH, NEGOTIATIONS. OKAY. I DON'T DISAGREE. OKAY. , OTHER QUESTIONS FOR THE PRESENTER? OKAY. THANKS SO MUCH MS. NORTON. THANK YOU ALL VERY MUCH. OKAY. ALRIGHT. UH, NEXT ITEM [8. Presentation by Texas Gas Service regarding An Overview of Texas Gas Service: Operations and Rates by Anthony Brown, Manager, Rates, Texas Gas Service and Larry Graham, Manager, Strategic Advocacy, Texas Gas Service] IS, UH, PRESENTATION BY TEXAS GAS SERVICE, AN OVERVIEW OF TGS. PLEASE INTRODUCE YOURSELF AT THE PODIUM. GOOD EVENING. UH, MY NAME IS LARRY GRAHAM WITH TEXAS GAS SERVICE AND, UM, WE ARE HERE TONIGHT 'CAUSE UM, I GUESS THE COMMISSION OR SEVERAL MEMBERS WANTED US TO PRESENT, UH, INFORMATION, UM, ABOUT THE RATE CASE AND RATES AND SOME OTHER THINGS. SO WITH ME TODAY, I HAVE, UM, ANTHONY BROWN, WHO'S OUR MANAGER OF RATES, AND ALSO BRIAN WEEKS, [01:35:02] WHO'S OUR DIRECTOR OF ENGINEERING. AND AGAIN, OUR PRESENTATION IS BASED ON THE REQUESTS THAT WE GOT. I'M NOT SURE EXACTLY HOW LONG IT'S GONNA TAKE, BUT, UH, WE, WE TRIED TO KEEP IT TO THE THINGS THAT YOU ASKED FOR. UM, TWO THINGS BEFORE WE START THE PRESENTATION, I WANNA MAKE SURE EVERYBODY KNOWS YOU SHOULD HAVE RECEIVED AN INVITATION. WE ARE GONNA HAVE TWO ON TWO DIFFERENT DAYS. WE'RE GONNA OFFER WHAT WE'RE CALLING AS A HARD HAT TOUR, AND IT'S AN OPPORTUNITY TO LEARN MORE ABOUT TEXAS GAS SERVICE AND ABOUT WHAT WE DO. AND, UM, WE ARE OPEN, IF YOU GUYS HAVE OTHER QUESTIONS OR THINGS THAT WE DON'T COVER TODAY TO, UM, WE CAN INCLUDE THOSE. THE TWO DATES ARE EITHER FRIDAY, JANUARY 6TH, AND BOTH OF THESE ARE EIGHT 30 IN THE MORNING. WHAT OBJECTION, YOUR HONOR. WHAT'S THAT? JUNE, YOU SAID? JANUARY. OH, JANUARY. EXCUSE ME. I'M TRYING TO PUT IT OFF UNTIL AFTER THE, AFTER THE FRANCHISE. UM, JUNE 6TH, FRIDAY, JUNE 6TH, AND WEDNESDAY, JUNE 11TH. UH, BOTH OF THESE ARE LIKE EIGHT 30, KIND OF HALF DAY. WE'RE GONNA VISIT SOME, UH, LOCATIONS. WE'RE ALSO GONNA SPEND SOME TIME KIND OF GO, GOING OVER OUR SYSTEM, WHAT WE DO, AND A LITTLE BIT ABOUT THE RATES. SO I WANNA MAKE SURE YOU GUYS KNOW THAT. AND, YOU KNOW, PLEASE LET US KNOW IF YOU'RE AVAILABLE. WE KNOW IT'S A SIGNIFICANT TIME, UH, COMMITMENT, BUT WE THINK THAT, UM, IT WOULD REALLY BE WORTH IT, ESPECIALLY AS YOU GUYS CONTINUE TO, UM, ENGAGE WITH US AND ADVISE THE COUNCIL. AND THEN ONE LAST THING BEFORE WE BEGIN. AND COMMISSIONER, YOU JUST ASKED A QUESTION, AND I'M NOT SURE IF THIS IS WHAT YOU'RE TALKING ABOUT, BUT WE HAVE A DOCUMENT THAT'S USUALLY ADOPTED DURING A RATE CASE CALLED THE RULES OF SERVICE. AND SO THE RULES OF SERVICE HAS A LOT OF THINGS. IT HAS FEES, FOR EXAMPLE, ON, YOU KNOW, WHAT WE CHARGE IF WE DISCONNECT OR WE RECONNECT, JUST THE BASIC FEES ARE INCLUDED IN THAT ARE POLICIES FOR DISCONNECT, JUST FOR EXAMPLE. SO SOME OF THESE THINGS, UM, ARE IN A DOCUMENT CALLED THE RULES OF SERVICE, AND THAT IS USUALLY ADOPTED AT THE TIME THAT THE NEW RATES ARE ADOPTED. AND SO, YOU KNOW, IF YOU WANT TO LOOK AT THAT OR FIND OUT MORE, BUT I THINK THAT MAY BE SOME OF THE THINGS THAT YOU WERE LOOKING FOR. AND WITH THAT, I'M GONNA TURN IT OVER TO, IS IT BRIAN OR AN ANTHONY? OKAY. HELLO, UH, MY NAME IS ANTHONY BROWN. I AM A MANAGER OF RACE AND REGULATORY FOR TEXAS GAS SERVICE. UM, AND AS LARRY MENTIONED, WE, WE, MYSELF AND WELL, MYSELF AND BRIAN ARE HERE TO DISCUSS A FEW OF THE TOPICS, UH, THAT Y'ALL REQUESTED. NEXT SLIDE, PLEASE. OH, THIS IS THE SLIDE. SO HOW NATURAL GAS SERVES EVERY AREA OF THE ECONOMY. SO THIS PART PIE CHART, UM, BASICALLY SHOWS THE NATURAL GAS CONSUMPTION BY SECTORS IN 2024. AND, UM, WHAT'S INTERESTING TO ME, UM, BECAUSE A LOT OF MY FRIENDS AND FAMILY KNOW THAT I'M IN THE NATURAL GAS INDUSTRY, AND, UM, WHEN I TELL THEM THAT, UM, ELECTRIC GENERATION IS THE LARGEST CONSUMER OF NATURAL GAS, THEY'RE TYPICALLY SHOCKED. I KNOW MOST OF THE COMMISSIONERS HERE ARE PROBABLY NOT SHOCKED BY THAT. BUT, UM, IT'S JUST AMAZING THAT, UM, THE EDUCATION OUT THERE THAT PEOPLE ONLY THINK THAT NATURAL GAS IS ONLY PROVIDED DIRECTLY TO THEM BY LDCS. UM, WHEN IN FACT THAT 40% OF THE ELECTRIC POWER GENERATION IN THE US, UM, IS FROM NATURAL GAS. UM, INDUSTRIAL CUSTOMERS FOLLOW AT 32%, AND RESIDENTIAL CUSTOMERS FOLLOW AT 13%. NEXT SLIDE PLEASE. SO, A FEW STATS ABOUT TEXAS GAS SERVICE. SO TGS IS THE THIRD LARGEST UTILITY, UM, IN THE STATE OF TEXAS. WE SERVE APPROXIMATELY 700,000 TEXANS THROUGHOUT THE GREAT STATE OF TEXAS. SO IF YOU LOOK AT THIS MAP, THE DARK GREEN AREAS ARE THE VARIOUS SERVICE, UM, AREAS THAT WE SERVE. WE SERVE ABOUT 111 COMMUNITIES THROUGHOUT TEXAS. UM, THE COMPANY EMPLOYS APPROXIMATELY A THOUSAND TEXAS THAT RESIDE IN TEXAS. AND THE 2024 ECONOMIC IMPACT TO TEXAS WAS APPROXIMATELY $137 MILLION. CHARITABLE GIVINGS IN 2024, UH, WAS APPROXIMATELY $524,000. NEXT SLIDE, PLEASE. SO, AS I MENTIONED IN THE GREEN MAP OF THE DARK AREAS, UM, AUSTIN IS ONE OF THE, ONE OF 30, 30 CITIES, AS MS. NORTON STATED, UM, IN WHAT WE CALL THE CENTRAL GULF SERVICE AREA. SO THE CENTRAL GULF SERVICE AREA IS COMPRISED OF AUSTIN AND A FEW CITIES AROUND AUSTIN, A FEW CITIES, ABOUT A HUNDRED MILES SOUTH OF AUSTIN, [01:40:01] AND, UH, A FEW CITIES IN THE GULF COAST AREA THAT INCLUDE, UH, GALVESTON AND PORT ARTHUR. NEXT SLIDE, PLEASE. SO, OUR COMPANY'S MISSION, STRATEGY, AND CORE VALUES. SO WHY WE EXIST, OUR MISSION IS THAT WE DELIVER NATURAL GAS FOR A BETTER TOMORROW. THE STRATEGY ON HOW WE GET THERE IS SAFE OPERATIONS. SAFE OPERATIONS IS AT THE FOREFRONT OF EVERYTHING THAT WE DO. UM, BRIAN, WHEN HE'S UP IN A FEW SLIDES, HE, HE WILL DISCUSS THAT, UM, EXECUTING CAPITAL INVESTMENTS, DELIVERING FOUNDATIONAL ENERGY, UH, EXCEPTIONAL SERVICE TO CUSTOMERS, AND EMPLOYING AND ENGAGED IN HIGH, HIGH POWERED WORKFORCE. OUR CORE VALUES, ONCE AGAIN, SAFETY IS AT THE FOREFRONT, FOLLOWED BY ETHICS, UM, IND, INCLUSION AND DIVERSITY AND VALUE, UH, THAT VALUED IS NOT ONLY FOR OUR STAKEHOLDERS, BUT ALSO FOR OUR CUSTOMERS, EMPLOYEES, UM, INVESTORS, AND, UH, COMMUNITIES THAT WE SERVE. NEXT SLIDE, PLEASE. HI THERE. UH, BRIAN WEEKS DIRECTOR OF ENGINEERING FOR TEXAS GAS. UM, AS, AS ANTHONY MENTIONED, UH, OUR NUMBER ONE CORE VALUE IS SAFETY. AND SO WE, WE APPROACH THAT WITH A FRAMEWORK THAT WE CALL WORK WHEN SAFE, WHICH IS ALL ABOUT A MINDSET FOR OUR EMPLOYEES TO THINK ABOUT WHAT COULD HAPPEN IN ADVANCE RATHER THAN, UM, JUST ASSUMING IT, IT MAY NOT HAPPEN OR WONDER IF IT WILL HAPPEN. AND SO, UH, IT REALLY ENCOURAGES EMPLOYEES, UM, IN THE OFFICE OR IN THE FIELD TO CONSIDER ANYTHING THAT COULD GO WRONG. UH, A GOOD EXAMPLE OF THIS FOR MEETINGS OF 10 PEOPLE OR LARGER, WE HAVE A CHECKLIST THAT WE GO THROUGH WHERE WE IDENTIFY WHO'S THE PERSON WHO'S GONNA CALL 9 1 1 IF THERE'S A MEDICAL EVENT, UH, WHO KNOWS CPR IN THE ROOM, WHO'S GOING TO BE IN CHARGE OF GETTING THE A ED, WHERE'S OUR MUSTER POINT? UM, SO WE, WE GO THROUGH ALL OF THESE ITEMS SO THAT WE'RE PREPARED AND WE DON'T HAVE TO ASK QUESTIONS FIRST. SO, UH, WE'RE VERY PROUD OF OUR SAFETY CULTURE. UH, A LOT OF OUR SAFETY METRICS HAVE REALLY IMPROVED, UH, AT LEAST OVER MY TIME THERE IN THE LAST 12 YEARS. AND IT'S DEMONSTRATED THIS YEAR. I THINK THEY JUST ANNOUNCED, UH, THE EIGHTH STRAIGHT YEAR THAT WE WON THE, UH, AWARD FOR, UH, SAFETY ACHIEVEMENT THROUGH THE AMERICAN GAS ASSOCIATION FOR OUR LOW DART RATE, WHICH IS JUST A METRIC THAT DEFINES HOW MANY SERIOUS INJURIES YOU HAVE THAT LEAD TO WORK RESTRICTIONS. SO AGAIN, REALLY PROUD OF THAT AWARD. AS FAR AS, UH, THE AGENCIES THAT REGULATE US, OF COURSE, WE'RE REGULATED BY THE FEDERAL DEPARTMENT OF TRANSPORTATION AND, UH, THE PIPELINE, HAZARDOUS MATERIALS SAFETY ADMINISTRATION. UH, AND THEN OF COURSE, THAT'S IMPLEMENTED BY THE RAILROAD COMMISSION. UM, THE, THE RAILROAD COMMISSION, I'M SORRY, THE TEXAS ADMINISTRATIVE CODE, WHICH, UM, IMPOSES GUIDELINES ABOVE AND BEYOND THE FEDERAL GUIDELINES INCLUDES, UH, A SECTION THAT'S, I THINK, REALLY IMPORTANT FOR THIS DISCUSSION AROUND SAFETY. AND THAT'S SECTION 82 0 9. UH, THAT SECTION, THAT CHAPTER OF THE ADMINISTRATIVE CODE, UH, DICTATES THAT WE AS A DISTRIBUTION OPERATOR ARE GOING TO RISK RANK OUR, UH, OUR PIPELINE SEGMENTS, AND WE'RE GOING TO REPLACE THE HIGHEST RISK SEGMENTS EACH YEAR BASED ON THAT PRIORITIZATION. AND SO, SO TEXAS GAS AND ONE GAS, OUR PARENT COMPANY USES A SOFTWARE FOR THAT. IT'S CALLED JD IT, UM, IT'S MADE BY A SOFTWARE COMPANY OUT OF ONTARIO, CANADA CALLED JANA. AND ESSENTIALLY IT'S, UH, AI SOFTWARE THAT ASSIGNS RISK TO EVERY PIPELINE SEGMENT, WHICH THERE'S A MAP. THE FIRST MAP I GAVE YOU GIVES YOU AN IDEA, UH, OF THE SEGMENTS IN OUR SYSTEM. UH, IT'S ASSIGNING RISK TO EVERY SEGMENT IN THE SYSTEM. AND SO THEN WE TAKE THOSE HIGH RISK RANKED PROJECTS AND WE DEVELOP OUR WORK PLAN, UM, EACH YEAR IN YEAR OUT, DEVELOP OUR WORK PLAN. WE GO THROUGH THE CITY FOR PERMITTING THAT WORK PLAN, AND WE EXECUTE IT TO THE BEST OF OUR ABILITY. AND SO, UM, AS YOU MIGHT EXPECT, WELL, I SHOULD SAY THAT THE, THE RISK SCORE OF THE PIPE IS BASED ON THE CLASSIC DEFINITION OF RISK, WHICH IS THE LIKELIHOOD OF A FAILURE MULTIPLIED BY THE CONSEQUENCE IF SOMETHING DOES FAIL. AND SO, UH, THE LIKELIHOOD IS GONNA BE BASED ON THINGS LIKE THE AGE OF THE PIPE, THE, UH, MAINTENANCE HISTORY OF THE PIPE, UM, THE, THE MATERIAL OF THE PIPE, THE CATHARTIC PROTECTION METHOD, UH, OF COURSE. AND THEN THE CONSEQUENCE IS BASED ON WHERE IS THAT PIPE? IS IT IN [01:45:01] THE METRO CORE WHERE THERE'S A HIGH POPULATION DENSITY, WHERE THERE'S A LOT OF PAVEMENT FOR GAS TO MIGRATE, UM, OR IS IT IN A RURAL AREA WHERE THERE ARE NO STRUCTURES, VERY FEW STRUCTURES NEARBY, AND, UH, LEAST LESS LIKELIHOOD FOR MIGRATION. SO, UM, SO THE MODEL, UM, CONSIDERS ALL THESE FACTORS AND WE BASE OUR ANNUAL SPEND TO REDUCE RISK USING IT. UM, AND THEN ONE OTHER THING I'LL MENTION, WE ALSO, WHAT'S SOMEWHAT UNIQUE TO OUR COMPANY IS WE HAVE A MATERIALS TESTING LAB IN KANSAS, AND WE'RE ABLE TO, UH, AND THIS IS IN COMPLIANCE WITH THE CODE, UH, TO PERFORM, UH, ASSESSMENTS OF MATERIAL FAILURES. UH, WE SEND MATERIAL FAILURES TO OUR LAB IN KANSAS. THEY ANALYZE IT AND THEY LOOK FOR, OR THEY MAKE RECOMMENDATIONS AROUND WHAT COULD BE SYSTEMIC ISSUES, WHETHER, UH, MANUFACTURER DEFECTS OR INCORRECT OPERATIONS THAT WE NEED TO LEARN FROM AS OPERATOR. LET'S SEE. UM, SO ALSO INVESTING HEAVILY IN DAMAGE PREVENTION. UM, IN 2012, THE NTSB UH, MADE A RECOMMENDATION TO FMSA THAT OPERATORS IMPLEMENT A, UH, PIPELINE MANAGEMENT, UH, SAFETY PROGRAM. AND SO THIS WAS NEVER CODIFIED, BUT TGS DID TAKE IT ON AS A OR ONE GAS, OUR PARENT COMPANY AND T-G-S-T-G-S SUBSEQUENTLY TOOK THIS ON AS A BEST PRACTICE. AND SO, UH, IT'S A FRAMEWORK THAT IDENTIFIES, UH, AND MAN HELPS US MANAGE RISK, PROMOTES A LEARNING ENVIRONMENT, AND IS CONTINUOUSLY IMPROVING PIPELINE SAFETY. AND SO, UH, IT'S, IT'S A VERY LARGE PROGRAM. SO TO BREAK IT DOWN IN A FEW EXAMPLES, UH, AROUND LINE LOCATING. SO WE LIVE IN AUSTIN. UH, YOU'VE, YOU'RE ALL FAMILIAR WITH LINE LOCATING BECAUSE THERE, YOU SEE THE GRAFFITI ALL OVER THE GROUND THAT'S MARKING THE UTILITIES. AND SO, UM, WE'VE, UH, WE'VE IMPLEMENTED A PROGRAM THAT WE CALL RADAR. IT'S AN ACRONYM FOR A RISK ASSESSMENT AND DAMAGE REDUCTION. IT'S ANOTHER SOFTWARE TOOL THAT USES DATA TO IDENTIFY HIGH RISK DIG TICKETS THAT COME IN, OR 8 1 1 TICKETS. UH, IT LOOKS FOR CONDITIONS AROUND THOSE TICKETS TO IDENTIFY THE HIGH RISK ONES. AND WE'VE INVESTED IN ADDITIONAL EMPLOYEES TO MAKE CONTACT WITH EXCAVATORS ON THOSE HIGH RISK TICKETS SO THAT WE CAN HAVE TOUCH POINTS WITH THEM IN THE FIELD, WALK THROUGH THE PROCESS, AND ENSURE THAT THOSE HIGH RISK ACTIVITY WE'RE, WE'RE, WE'RE DOING OUR BEST TO REDUCE THE, UM, THE LIKELIHOOD OF THOSE HIGH RISK ACTIVITIES TURNING INTO A PIPELINE DAMAGE. AND THEN ANOTHER GOOD EXAMPLE IS, UM, ADVANCED MOBILE LEAK DETECTION, A MLD. WE, UM, YOU MAY HAVE HEARD IT REFERRED TO AS BACARO, WHICH IS THE COMPANY THAT MAKES THE CAR THAT, THAT, OR THE VEHICLE THAT WE USE. SO TRADITIONAL LEAK DETECTION METHODS, UM, ARE A PERSON WALKING ALONG THE LINE WITH A HANDHELD DEVICE. UH, IT'S RESTRICTED TO WEATHER CONDITIONS. UH, IF IT'S TOO WINDY OR IF IT'S BEEN RAINING THE GROUND SATURATED. UM, IT YOU, IT'S NOT THE MOST EFFICIENT PROCESS AND IT'S A REAL CHALLENGE. AND SO THE MOBILE LEAK DETECTION TECHNOLOGY HAS JUST BEEN INCREDIBLY USEFUL AND EFFICIENT, AND IT HAS ALLOWED US TO DISCOVER, UM, MORE LOW CONSEQUENCE LEAKS, I'D CALL THEM, UH, LOW VOLUME LEAKS, UH, SO THAT WE CAN GET AHEAD OF ANY LEAKS ON THE SYSTEM TOO THAT WE MAY NOT HAVE KNOWN ABOUT OTHERWISE WITH TRADITIONAL EQUIPMENT, BECAUSE THIS EQUIPMENT'S ABLE TO DETECT LEAKS IN A PARTS PER BILLION RANGE VERSUS PARTS PER MILLION RANGE. SO, UM, SO THAT'S BEEN VERY HELPFUL FOR US. AND THEN THE LAST THING I'LL MENTION, UM, WINTER STORM URI WAS A REAL GAME CHANGER FOR US. IT'S NO DIFFERENT THAN, UH, ANYONE ELSE, BUT, UM, WE WERE VERY FORTUNATE TO PERFORM WELL AND NOT LOSE VERY MANY CUSTOMERS IN AUSTIN OR THROUGHOUT OUR ENTIRE SYSTEM. UM, BUT IT DID RESET THE DESIGN PARAMETERS THAT WE NEED TO CONSIDER FOR OUR GAS SUPPLY AND, UH, OUR SYSTEM. SO WE'VE BEEN INVESTING HEAVILY IN REINFORCEMENTS TO THE SYSTEM SO THAT IF ANOTHER URI COMES, WE'RE, WE'RE BETTER PREPARED AND THE PEOPLE WHO WE PROVIDE GAS TO, UH, ARE SAFE IN THEIR HOMES. AND, UM, AND SO, UH, WE'VE BEEN SUCCESSFUL IN A LOT OF THOSE IMPROVEMENTS, UH, AND PARTNERING WITH THE CITY, UH, IS WE'VE HAD A GOOD PARTNERSHIP WITH SOME OF THE CITY DEPARTMENTS TO MOVE ON SOME OF THESE PROJECTS MORE QUICKLY THAN WE WOULD'VE OTHERWISE. SO WE'RE VERY APPRECIATIVE TO THAT OF THAT. UH, AND SO AS A RESULT, THE LAST SEVERAL [01:50:01] WINTER STORMS, WE'VE, UH, WOULD'VE BEEN PROBLEMS FOR US IN THE PAST, UM, AND, AND THEY HAVEN'T BEEN. SO, UH, SO THOSE HAVE BEEN VERY USEFUL INVESTMENTS THAT WE'VE MADE. AND THEN THE, UH, IF YOU PAY, IF YOU TURN YOUR ATTENTION TO THE MAPS THAT I HANDED YOU, THERE'S THE FIRST MAP IS A HIGH LEVEL LOOK AT THE AUSTIN SYSTEM. UM, IT ONLY, WELL, THE, THE MAP THAT WE LOOKED AT EARLIER, IT SHOWED ALL OF THE GAS PIPE WITHIN THE AUSTIN CITY LIMITS. THIS MAP IS MEANT TO SHOW THE EXTENSIVE OUR SYSTEM. AND SO THE, THE YELLOW DOTS ARE OUR CITY GATES OR WHERE WE TAKE GAS FROM SUPPLIERS. AND SO YOU SEE MULTIPLE POINTS THROUGHOUT THE SYSTEM WHERE WE'RE RECEIVING GAS FROM THE SUPPLIERS, AND THEN WE'RE CUTTING PRESSURE, UH, WE'RE REDUCING THE PRESSURE, UH, TO A, A SAFER LEVEL. AND, UM, AND YOU CAN SEE THAT OUR SYSTEM NOW EXTENDS AS FAR WEST AS MARBLE FALLS, UM, NORTH DE PFLUGERVILLE AND SOUTHWEST TO DRIPPING SPRINGS AND DRIFTWOOD. AND SO, UM, THIS DOESN'T SHOW THE CONTINUITY OF THE SYSTEM, WHICH THE NEXT MAP IS REALLY MEANT TO SHOW THAT, UH, THIS IS OUR DISTRIBUTION SYSTEM THAT SERVES THE CUSTOMERS, UH, AT A LOWER PRESSURE. SO, MR. MR. BROWN, WHO ARE Y'ALL'S PRINCIPAL WHOLESALE SUPPLIERS, PLEASE, I'M SORRY, I DIDN'T HEAR THE QUESTION. WHO ARE, WHO ARE, WHO DO YOU BUY GAS FROM? WHO ARE THE SUPPLIERS WHO ARE SERVING THESE CITY GATES? SURE. THERE'S, THERE'S SEVERAL, UH, KINDER MORGAN ENTERPRISE, UH, ETC ATMOS. I'M GONNA ASK, UH, COMMISSIONERS FOR THE SAKE OF EXPEDIENCY, UM, TO HOLD THE REST OF THE QUESTIONS TILL THE END OF THE PRESENTATION. NEXT SLIDE, PLEASE. OH, ONE MORE SLIDE, PLEASE. OKAY. SO THIS LINE GRAPH DEPICTS THE CONSUMER PRICE INDEX, WHICH IS A MEASURE OF INFLATION RATE IN THE US, UM, AND IN AUSTIN SINCE 2018. UM, AS YOU CAN SEE, UM, ONCE 2020 HIT, THERE IS A STEEP INCLINE, UM, AFTER THAT, AS WE CAN ALL GUESS, THE CONTRIBUTING FACTOR TO THAT WAS CO. UM, THE UNFORTUNATE REALITY OF COVID IS, UM, EXPENSES INCREASED. UM, I CAN'T THINK OF ONE INDUSTRY, ONE BUSINESS, ONE CUSTOMER, ONE CONSUMER THAT WASN'T IMPACTED BY COVID AND THE RISE IN EXPENSES AND THE UTILITY, UM, SECTOR WAS NO DIFFERENT FROM THAT. UM, COVID CONTRIBUTED TO AN INCREASE IN MATERIAL COSTS, EQUIPMENT COSTS, AND, UH, CONTRACTOR COSTS TO LIST A FEW, BUT ALSO, NEXT SLIDE PLEASE. COVID ALSO INCREASED, UM, LABOR, UH, THE LABOR INFLATION RATE. SO, UM, ONE, ONE OF, IF NOT THE LARGEST O AND M EXPENSE THAT, UM, NATURAL GAS UTILITIES HAVE IS, UH, LABOR EXPENSES, UM, THE SALARIES THAT THEY PAY, THEIR, UM, EMPLOYEES BENEFITS AND SO FORTH. AND AS YOU CAN SEE, THERE WAS AN INCREASE IN 2020, BUT AUSTIN IN PARTICULAR, WHICH IS THE ORANGE LINE, IS OUTPACING THAT RATE OF INFLATION. AND YOU CAN GUESS WHY IS BECAUSE AUSTIN HAS BEEN A POPULAR DESTINATION FOR, UH, FOR PEOPLE TO, UM, RELOCATE TO, UM, AS SOMEONE THAT IS, UH, BORN AND RAISED IN AUSTIN, THIRD GENERATION. UM, I HAVE A LOVE HATE RELATIONSHIP WITH THE GROWTH IN AUSTIN, BUT, UH, IT'S A PART OF THE REALITY. SO, UM, THAT, THAT INCREASE IN MATERIAL COSTS, LABOR COSTS WAS, UH, ONE OF THE FEW DRIVERS THAT LED TEXAS GAS TO FILING A RATE CASE LAST YEAR. NEXT SLIDE, PLEASE. SO, APPROVED NET PLANT AND RATE BASED IN THE CENTRAL GULF SERVICE AREA. SO THIS, UH, BAR GRAPH SHOWS THE APPROVED, UH, RAY BASE AND NET PLANT, AS I MENTIONED, OVER THE PAST FIVE YEARS. UM, AS YOU NOTICE, UM, RAY BASE HAS INCREASED STEADILY, WELL, SORRY, NET PLANT HAS INCREASED STEADILY OVER THE PAST FIVE YEARS. UM, A FEW CONTRIBUTING FACTORS, FACTORS TO THAT IS, AS I MENTIONED BEFORE, AN INCREASE IN MATERIALS COSTS INCREASE IN LABOR COSTS. UM, BRIAN STATED THE VARIOUS, UM, PIPE REPLACEMENT, UM, REGULATIONS, UM, AND VINTAGE PIPE, VINTAGE PIPE REPLACEMENT PROGRAMS THAT WE'VE HAD INCREASE IN SYSTEM RESILIENCY. UM, ALL THOSE FACTORS HAVE CONTRIBUTED TO AN INCREASE, UM, IN CAPITAL INVESTMENT YEAR OVER YEAR. [01:55:01] BUT ALSO, AS I MENTIONED BEFORE, A CONTRIBUTING FACTOR TO THAT IS GROWTH. UM, ONCE AGAIN, AUSTIN FOR MANY YEARS HAS BEEN ONE OF, IF NOT THE FASTEST GROWING CITIES IN THE NATION. SO, UM, WITH THAT, WITH THAT, WITH THOSE, UM, RELOCATIONS TO AUSTIN HAS, HAS FACILITATED A, A QUICK RISE, UM, IN CONSTRUCTION FOR BUSINESSES AND HOMES. UM, TGS, UM, AS A NATURAL GAS PROVIDER FEELS LIKE WE ARE OBLIGATED TO SERVE THESE CUSTOMERS WITH NATURAL GAS. UM, SO GROWTH IS ONE OF THE CONTRIBUTING FACTORS TO THE INCREASE IN THAT PLANT YEAR OVER YEAR. UM, BUT WITH THAT BEING SAID, UM, THERE ARE BENEFITS TO BOTH EXISTING AND NEW CUSTOMERS WHEN IT COMES TO GROWTH. UH, NEW CUSTOMERS, LIKE I SAID, THEY ARE SUPPLIED WITH A RESILIENT ENERGY SOURCE, A RELIABLE ENERGY SOURCE, BUT, UH, EXISTING CUSTOMERS, UM, THAT THOSE, THOSE INCREASE IN COSTS DUE TO COVID, ANY, ANY INCREASE IN O AND M CAPITAL EXPENSES, REPAIRS IS SPREAD OVER A LARGER CUSTOMER BASE. SO IT, IT ENACTS A, UM, ECONOMIES OF SCALE, SO TO SPEAK. NEXT SLIDE, PLEASE. THIS SLIDE DISPLAYS THE INCREASE IN CUSTOMER COUNT OVER THE, OVER THE PAST FIVE YEARS. AND ONCE AGAIN, YOU CAN SEE YEAR OVER YEAR WE'VE HAD AN INCREASE IN CUSTOMER COUNT IN THE AUSTIN AREA AND IN THE CENTRAL GULF SERVICE AREA AS A WHOLE. NEXT SLIDE, PLEASE. OH, WOULD YOU LIKE TO REVIEW THAT, COMMISSIONER? OH, OKAY. OKAY. SO THIS SLIDE DISPLAYS THE, UM, THE CHANGE IN THE AVERAGE BILL FOR A SMALL RESIDENTIAL, UH, CUSTOMER. UM, AS MS. NORTON STATED, UM, ONE OF THE RESULTS OF THE SETTLEMENT AGREEMENT IN THE RATE CASE LAST YEAR WAS THE APPROVAL OF A NEW SMALL, LARGE RATE DESIGN. UM, FOR THE RESIDENTIAL AND COMMERCIAL CLASS PRIOR TO 2024, THERE WAS NOT A SMALL, LARGE, UM, RATE DESIGN. UM, BUT FOR ILLUSTRATION PURPOSES, UH, THE COMPANY HAS DISPLAYED, UM, WHAT THE AVERAGE BILL WOULD'VE BEEN IF SMALL LARGE RATES WERE, UM, IN EFFECT IN 2020 AND BEYOND. SO, UH, THE CUSTOMER CHARGE INCREASED INCREMENTALLY ANNUALLY FROM 2022 TO 2023 VIA GRIP FILINGS. AND ALSO, SORRY, THAT'S A TYPO. IN 2020, UH, THE COMPANY HAD A FULL RATE CASE, UM, WITH A 2024 RATE CASE SETTLEMENT. THIS AMOUNTS, THIS AMOUNT DECREASED FOR SMALL RESIDENTIAL CUSTOMERS AND REMAINS LOWER THAN THE 2023 AMOUNT. THE VOLUMETRIC CHARGE ONLY DECREASED IN 2024, FOLLOWING THE RATE CASE SETTLEMENT. UM, ON THE STACKED BAR GRAPH, UH, THAT DISPLAYS THE CUSTOMER CHARGE, THE VOLUMETRIC CHARGE AND THE COST OF GAS, PLEASE NOTE THAT THE COST OF GAS IS NOT SET BY TGS AND CUSTOMERS ARE BILLED EXACTLY WHAT WE PAY FOR IT WITH NO MARKUP. AND JUST TO PROVIDE SOME DETAIL, IF YOU LOOK IN THE BACK OF, SORRY. NO, UH, YOU CAN STAY ON THIS SLIDE IF YOU LOOK IN THE BACK IN THE APP DEPENDENCIES IN THE APPENDIX, UH, THERE'S THE NUMBERS AND DETAILS OF HOW THIS AVERAGE BILL WAS CALCULATED. NEXT SLIDE, PLEASE. ONCE AGAIN, THIS SHOWS THE AVERAGE BILL, UM, SINCE 2020. AND THIS TIME, THIS IS FOR A LARGE RESIDENTIAL, UH, A LARGE RESIDENTIAL CUSTOMER. UM, THE CUSTOMER CHARGE INCREASED INCREMENTALLY ONCE AGAIN FROM, FROM, UH, 2020. FROM 2020 THROUGH 2023. UH, THE VOLUMETRIC CHARGE ONLY INCREASED IN 2024 FOLLOWING THE RATE CASE. AND THE COST OF GAS, ONCE AGAIN, IS NOT SET BY TGS. NEXT SLIDE, PLEASE. THIS SLIDE DISPLAYS THE SMALL COMMERCIAL AVERAGE BILL. NEXT SLIDE, PLEASE. THIS SLIDE DISPLAYS THE LARGE COMMERCIAL AVERAGE BILL. NEXT SLIDE, PLEASE. AND THE FOLLOWING TWO SHOW INDUSTRIAL AND PUBLIC AUTHORITY. NEXT SLIDE. AND NEXT SLIDE. SO, CONTRIBUTION IN NATIVE CONSTRUCTION REQUIREMENTS, ALSO CALLED KAYAK. SO THE GOAL OF OF TGS SIX KAYAK PROGRAM IS, IS THAT EXISTING CUSTOMERS DO NOT SUBSIDIZE NEW CUSTOMER'S. MAIN EXTENSION, KAYAK IS A PAYMENT FROM NEW CUSTOMERS TO COVER THE COST OF EXTENDING NATURAL GAS SERVICE WHEN THE PROJECT ISN'T FULLY COST JUSTIFIED BY FUTURE REVENUE. TEXAS GAS DOES NOT WAIVE KAYAK TO COMPETE FOR NEW CUSTOMERS. [02:00:01] UM, BASICALLY, UM, IF A CUSTOMER, UH, WANTS TO EXTEND A, A NATURAL GAS MAIN, AND WE, WHEN I SAY WE, THE PROJECTS AND THE ENGINEERS COST OUT THAT PROJECT AND THE FUTURE REVENUES DO NOT SUPPORT, UM, THAT INSTALLATION PROJECT, THEN KAYAK IS REQUIRED. AND IF THAT CUSTOMER SAYS, YOU KNOW, NOPE, I DON'T WANNA CONTRIBUTE KAYAK, THEN THE PROJECT ISN'T COMPLETED. SO, ONCE AGAIN, TEXAS GAS SERVICE DOES NOT WAVE KAYAK TO COM. TO COMPETE FOR NEW CUSTOMERS, REVENUES FROM THE PROJECT MUST COVER ITS COSTS SO THAT EXISTING CUSTOMERS DON'T SUBSIDIZE NEW SERVICE EXTENSIONS. TEXAS GAS LIMITS INVESTMENTS TO THE EQUIVALENT OF 10 YEARS OF PROJECT REVENUE AND EXCESS COSTS REQUIRE KAYAK. WITH AUSTIN'S GROWTH, MANY NEW DEVELOPMENTS GENERATE ENOUGH REVENUE TO JUSTIFY THE IN THE INVESTMENT WITHOUT NEEDING KAYAK. AND THE TABLE BELOW SHOWS KAYAK FROM 2020 THROUGH 2024. NEXT SLIDE, PLEASE. CUSTOMER ASSISTANCE PROGRAM. MS. NORTON, UH, TOUCHED ON THIS. UH, TEXAS GAS HAS A LONGSTANDING PARTNERSHIP WITH TRAVIS COUNTY HEALTH AND HUMAN SERVICE TO HELP CUSTOMERS WITH NATURAL GAS BILLS USING COMPANY FUNDS. TRAVIS COUNTY ALSO MANAGES AND AND ADMINISTERS LIHEAP CUSTOMER ASSISTANCE FUNDS. IN 2024, TEXAS GAS CONTRIBUTED $165,000 TO THE, TO OUR SHARE THE WARMTH PROGRAM AND RESIDENTS, RESIDENTIAL CUSTOMERS DONATED AN ADDITIONAL $66,000 CUSTOMERS CAN APPLY FOR ASSISTANCE AT SEVEN TRAVIS COUNTY HEALTH AND HUMAN SERVICES LOCATIONS OR ONLINE ASSISTANCE IS INCOME BASED, AND AN INFORMATION SHARING AGREEMENT ALLOWS COUNTY STAFF TO ACCESS ACCOUNT INFORMATION FOR FASTER SERVICE. NEXT SLIDE, PLEASE. SO, WINTER STORMY WITHOUT HOUSE BILL 1520 UTILITIES WOULD'VE HAD TO IMMEDIATELY CHARGE CUSTOMERS BILLIONS IN UNEXPECTED WINTER STORM URY NATURAL GAS COSTS. THIS WOULD'VE CREATED SIGNIFICANT FINANCIAL HARDSHIP FOR MILLIONS OF CUSTOMERS. HOUSE BILL 1520 ALLOWS UTILITIES TO WORK WITH THE RAILROAD COMMISSION TO FINANCE THESE COSTS THROUGH BONDS SPREADING RECOVERY OVER YEARS INSTEAD OF MONTHS. THE RESULTING THE RESULT FROM WINTER STORMING SURCHARGE, SORRY, THE, THE U THE, THE WINTER STORMING SURCHARGE APPEARS IN THE CAST OF, IN THE COST OF GAS LINE ITEM ON, ON CUSTOMER'S BILLS. THE CURRENT CUSTOMER RATE RELIEF CHARGE, WHICH IS BASICALLY THE WEARING STORMING RECHARGE, IS APPROXIMATELY, UM, 12 CENTS PER CCF. I'M, I'M SORRY. ARE YOU SURE THAT'S LINE ITEM DOWN THE BILL? I'VE NEVER SEEN IT. NO, IT'S IN THE COST OF GAS. OKAY. IT'S IN THE COST OF GAS. SORRY IF I MISSPOKE. NEXT SLIDE, PLEASE. MS. NORTON TOUCHED ON THIS EARLIER. UM, THIS SLIDE, UM, HAS INFORMATION ABOUT THE 2024 CENTRAL GULF FREIGHT CASE. TEXAS GAS FILED A RATE CASE IN THE CENTRAL GULF SERVICE AREA ON JUNE 3RD, THE CITY OF AUSTIN, ALONG WITH TEXAS GAS SERVICE CITIES COOPERATED WITH THE COALITION OF SIMILARLY SITUATED CITIES. WE SERVE TO, TO FACILITATE THE REVIEW OF THE RATE CASE, TEXAS GAS SERVICE CITIES INTERVENED IN THE RAILROAD COMMISSION, UH, PROCEEDING. THAT'S THE, THAT'S THE DOCKET NUMBER. TEXAS GAS SERVICE RAILROAD COMMISSION STAFF, AND TEXAS GAS CITIES REACHED A SETTLEMENT AGREEMENT THAT WAS APPROVED BY THE RAILROAD COMMISSION ON NOVEMBER 19TH. NEW RATES WERE IMPLEMENTED IN DECEMBER OF 2024. NEXT SLIDE, PLEASE. SO THIS SLIDE, UM, HAS A FEW OF THE UPCOMING EVENTS. UM, AS LARRY MENTIONED, UH, THERE WILL BE A HARD HAT DAY ON JUNE 6TH AND JUNE 11TH. UH, THE FRANCHISE AGREEMENT EXPIRES ON OCTOBER 6TH, 2026. UM, THE COMPANY WILL FILE A GRIP AND PIPELINE INTEGRITY TESTING FILING ANNUALLY IN FEBRUARY. TEXAS GAS SERVERS IS REQUIRED TO FILE A RATE CASE NO LATER THAN NOVEMBER 20TH, 2030. TEXAS GAS WILL PROVIDE 30 DAYS WRITTEN NOTICE TO OUR REGULATORS PRIOR TO FILING ANY FUTURE FULL RATE CASE ENERGY EFFICIENCY. TEXAS GAS SERVICE WILL, WILL PROVIDE AN UPDATE AT THE JULY RMC MEETING. THAT CONCLUDES THE PRESENTATION. ANY QUESTIONS? THANK YOU SO MUCH FOR THE PRESENTATION. MM-HMM . UM, GONNA, ALRIGHT. OKAY. UH, QUESTIONS FROM THE COMMISSIONERS? YES. AND I CAN'T SEE, UH, THE FOLKS THAT ARE ON, UH, THAT ARE ON REMOTELY. SO, UH, I'LL TAKE, UH, VICE CHAIR ROBBINS FIRST AND GO AHEAD. UM, UM, YEAH, IF YOU COULD TAKE THE POWERPOINT DOWN, UM, , UM, MM-HMM . SO YEAH, WE COULD, THANKS. [02:05:01] ARE OUR REMOTE ATTENDEES GONE? NO, THEY'RE THERE. OKAY. UH, AND JOE JOSEPH GERBER, COMMISSIONER BROWN, GO AHEAD AND ASK YOUR QUESTION. UH, WELL, UM, I, I, UH, ACTUALLY HAVE AN ALL, UH, A TRUNCATED, UH, SMALL PRESENTATION THAT I'D LIKE TO MAKE IN A, A COUPLE MINUTES. UH, BUT I DO WANT TO ASK A SPECIFIC QUESTION OR RELATED, UH, COUPLE QUESTIONS, UH, CONCERNING THE PIPE MATERIAL. UH, SOME OF THE COMMISSIONERS HERE KNOW THAT METAL PIPE, UH, IS MORE LEAK PRONE THAN POLYETHYLENE PIPE AND GAS COMPANIES IN TEXAS, BUT REALLY ALL OVER THE COUNTRY AND PERHAPS THE WORLD ARE TRYING TO CHANGE OUT THEIR FLEET, UH, IF YOU WILL, UH, TO PLASTIC PIPE. CAN YOU GIVE ME A BALLPARK PERCENTAGE? UH, WHAT PERCENTAGE OF THE PIPE IN THE CENTRAL TEXAS SYSTEM IS STILL METAL? BRIAN? I CAN LOOK. I DON'T WANT TO MISQUOTE. UM, BUT WE, WE DO HAVE THOSE NUMBERS AVAILABLE. UM, BUT THE LAR THE, THE CATEGORY WITH THE MOST MILEAGE OF PIPE IS COATED STEEL PIPE. AND SO I WILL SAY THAT THE EPA DOES HAVE ASSUMED LEAK RATES FOR DIFFERENT PIPE TYPES. AND THE, THE ASSUMED LEAKAGE RATE IS BASED PRIMARILY FOR STEEL PIPE. IT'S BASED PRIMARILY ON CATHODIC PROTECTION METHOD ON THE PIPE. AND SO, UM, SO COATED STEEL PIPE THAT IS PROTECTED METHODICALLY VERSUS CO COATED STEEL PIPE, THAT'S NOT, IT'S JUST A TREMENDOUS DIFFERENCE. AND SO MAINTAINING CATHODIC PROTECTION ON THAT PIPE IS EXTREMELY IMPORTANT. AND WE DIG UP STEEL PIPE ALL THE TIME. THAT'S VERY OLD. IF YOU, YOU KNOW, IF YOU WERE TO, UM, IT SURPRISES PEOPLE THAT A 60-YEAR-OLD PIECE OF PIPE COULD BE IN PERFECT CONDITION BECAUSE OF, OF THE CATHODIC PROTECTION SYSTEM. SO IT JUST SPEAKS TO THE IMPORTANCE OF MAINTAINING THE CATHODIC PROTECTION SYSTEM ON THE, SO YOU CAN'T GIVE US A BREAKDOWN ON THE SPOT. I I DO. UM, IT'S, MAJORITY OF IT WAS COATED STEEL FOLLOWED BY POLYETHYLENE. UH, PERHAPS, UH, YOU COULD GET BACK TO US WITH THAT INFORMATION. WELL, YES, WE WERE WORKING ON THAT TODAY. AS A MATTER OF FACT, REVIEWING THAT, WE GOT AN RFI, UM, SOMEONE ON THE COMMISSION SENT IT TO MARIA. AND WE ARE FINALIZING THOSE NUMBERS. I MEAN, LITERALLY THIS AFTERNOON WE WERE FINALIZING THEM. I DON'T HAVE 'EM IN FRONT OF ME, BUT YOU WILL GET THOSE PRETTY SOON. SO WE HAVE ALL THE NUMBERS FOR AUSTIN. OKAY. UH, YEAH, I'LL, I'LL JUST SAY THAT OUR, THE WAY WE CATEGORIZE AND REPORT OUR PIPE, IT'S NOT USUALLY BY TOWN OR MUNICIPALITY 'CAUSE IT'S NOT, IT'S, IT'S DIFFICULT TO DIVIDE IT UP. SO WE'RE WORKING ON IT. WELL, I I, I WOULD THINK THAT YOU COULD AT LEAST GIVE US AN ESTIMATE FOR THE REGION, THE SYNTAX REGION, UH, C COMMISSIONER, UH, UH, CHAIR DAVIS. UM, I, I HAVE A FEW SLIDES I'D LIKE TO PRESENT. I'LL LEAVE IT TO YOUR DISCRETION AS TO WHEN. OKAY. UH, ARE THERE OTHER QUESTIONS FOR THE PRESENTERS? I HAVE A QUESTION. UM, I, I HAVE LONG BEEN OF THE OPINION THAT THE CUSTOMER ASSISTANCE PROGRAM THE TEXAS GAS HAS IS WOEFULLY INADEQUATE. AND I JUST WONDER IF, IS THERE ANY REASON WHY IT'S SO SMALL? $165,000? WHAT? SO, SO, UM, IF YOU LOOK AT THE REGULATORY, IF YOU LOOK AT THE RATE MAKING FRAMEWORK, IT, IT, THE, THE MARGINS ARE VERY SLIM FOR, FOR NATURAL GAS UTILITIES. UM, YOU HAVE LIKE A 10% ROE. YEAH. YES. BUT, BUT, BUT OVERALL, UM, THOSE EXPENSES, THOSE LARGE CONTRIBUTION EXPENSES ARE NOT RECOVERABLE. UM, I'VE HEARD COMMISSIONER ROBBINS MENTION THE AUSTIN ENERGY PROGRAM. UM, I'M NOT SURE EXACTLY WHERE THE SOURCE OF THE AUSTIN ENERGY FUNDS ARE COMING FROM, BUT WHAT I WILL SAY IS THE COMPANY HAS HAD VERY ME MEANINGFUL AND PROGRESSIVE CONVERSATIONS ABOUT THIS. UH, WE HAVE HEARD, UM, [02:10:01] Y'ALL'S DISPLEASURE WITH THAT AND THAT WE HOPE TO OFFER SOMETHING THAT YOU WILL BE PLEASED WITH IN THE FUTURE. LEMME SAY ONE MORE THING. YOU KNOW, IN AUSTIN, WE WORK WITH TRAVIS COUNTY AND THEY ALSO PULL DOWN, UH, FEMA MONEY. SO THERE'S, THERE IS MONEY AVAILABLE TO CUSTOMERS IN ADDITION TO THE FUNDS THAT WE PROVIDE. AND WE HAVE, YOU KNOW, WE'RE IN CONTACT WITH THOSE FOLKS SEVERAL TIMES DURING THE YEAR, AND WE HAVE A MEETING ONCE A YEAR TO DECIDE HOW TO DIVVY UP THE MONEY BETWEEN TRAVIS COUNTY AND THE REST OF THE SERVICE AREAS. SO, UM, YOU KNOW, AS A REMINDER, OUR BILLS ARE A THIRD OF WHAT AUSTIN ENERGY ARE. THEY HAVE TWICE AS MANY CUSTOMERS. SO I WOULDN'T SUGGEST THAT YOU COULD DO A APPLE TO APPLE COMPARISON. NO, I KNOW, BUT IT, I MEAN, IT'S ORDERS OF MAGNITUDE DIFFERENCE. BUT, BUT, YOU KNOW, UNDERSTAND, SO THE, I'M A CUSTOMER OF AUSTIN ENERGY AND THE CUSTOMERS PAY FOR THAT MONEY THAT'S GIVEN, RIGHT? MM-HMM . AND THAT'S NOT THE WAY OUR RATES ARE STRUCTURED. SO IT'S, THAT'S, I THINK, AN IMPORTANT DISTINCTION AS WELL. YEP. ANY OTHER QUESTIONS FROM COMMISSIONERS? UM, VICE CHAIR ROBBINS, CAN YOU DO YOUR, YOUR SLIDES IN UNDER FIVE MINUTES? I'LL DO MY BEST. UH, I WAS HOPING TO DO THIS FOR THE BENEFIT OF THE TWO NEWEST COMMISSIONERS. ONE OF THEM SEEMS TO BE GONE. I HOPE I HAVE THE BRIEF ATTENTION OF THE OTHER. UH, AND I SAVED A FEW SLIDES FROM MY MARCH PRESENTATION. UH, UH, SLIDE PLEASE. JUST TO GIVE YOU A GRAPHIC EXAMPLE. THESE ARE, UH, THE THREE MAJOR GAS UTILITIES AND THEIR RATE INCREASES IN THE LAST YEAR AT MOST. IS THAT 162% IN A 10 YEAR PERIOD. UH, TEXAS GAS SERVICE IS 117%. UH, CENTER POINT, UH, IS, UH, FORGIVE ME, UM, IT'S 90, THAT'S WHAT I WAS THINKING. I CAN'T READ IT FROM HERE. 90%. AND, UH, THE CITY OF SAN ANTONIO, UH, WHICH HAS ITS OWN MUNICIPAL GAS UTILITY IS 7%. UM, SO I FIND THIS KIND OF ALARMING. NEXT SLIDE. UH, AND THERE ARE REASONS FOR THIS. UH, ONE IS THE HUGE INCREASE IN PLANT COSTS. UH, IN THE LAST RATE CASE, UH, THERE WAS A 63% PLANT COST INCREASE IN THE TEXAS GAS SERVICE CENTRAL TEXAS SERVICE AREA IN ONLY FOUR YEARS. BUT THERE'S ONLY A, THERE WAS ONLY A 5% INCREASE IN CUSTOMERS IN THE SAME TIME PERIOD. NEXT SLIDE. UH, AND UNLIKE AUSTIN ENERGY AND AUSTIN WATER, THE CITY COUNCIL IS NOT ALLOWED IN DECISIONS ON WHETHER TO ALLOCATE THIS MONEY AND HOW MUCH THIS IS PART OF THE ANNUAL, UH, GRIP INCREASE THAT WAS REFERENCED EARLIER, UH, BY THE, BY THE GAS COMPANY AND BY, UH, UH, MARIA, UH, NORTON, UH, WITH THE CITY. UH, THE, THE THING IS THAT FOR ALL INTENTS AND PURPOSES, GRIP CAN ESSENTIALLY BE CALLED A DEFACTO RATE INCREASE. THEORETICALLY, WHEN A NEW RATE CASE IS FILED, UH, THE CITY OF AUSTIN AND ALL THE OTHER CITIES CAN CHALLENGE THE GRIP INCREASES AND SAY THEY WERE IMPUDENT, BUT THAT ALMOST NEVER HAPPENS. UM, AND, UH, NEXT SLIDE. UH, NOW REGARDING THE CONSTRUCTION WORK IN PROGRESS OR, UH, UH, CAPITAL AND AID OF CONSTRUCTION AS, UH, THE GAS COMPANY CALLS IT, THERE WAS $185 MILLION INCREASE IN NEW INFRASTRUCTURE IN A FOUR YEAR PERIOD, BUT THERE WAS ONLY FOUR. THERE WERE ONLY $4 MILLION COLLECTED IN, UH, [02:15:01] CONSTRUCTION WORK IN PROGRESS, OR, UH, CAC. UH, SO BASICALLY ONLY 2% OF THE NEW INFRASTRUCTURE IS COVERED WITH CAPITAL RECOVERY FEES. UH, TEXAS GAS SERVICE TOLD YOU A MOMENT AGO, THEY WERE, UH, GETTING FULL FREIGHT ON THEIR NEW CUSTOMERS. THIS DOES NOT APPEAR TO ME THE SAME THING. WE OBVIOUSLY HAVE DIFFERENT DEFINITIONS. NEXT SLIDE, AND THEN ANOTHER INCREASE. UH, ANOTHER REASON FOR THE INCREASE IS THAT, UH, IN THE LAST RATE CASE, THE ONE THAT TOOK PLACE IN I GUESS 20, UH, 19 AND 2020, UH, THESE TWO REGIONS OF CENTRAL TEXAS AND GALVESTON WERE MERGED. AND SINCE GALVESTON AS A WARMER REGION THAN THE CENTRAL TEXAS, UH, REGION, UH, IT ENDS UP HURTING OUR CON OUR CONSTITUENTS HERE. UM, AND THE CITY ACTUALLY DID CONTEST THIS WITH THE RAILROAD COMMISSION, BUT IT WAS NOT SUCCESSFUL. I HOPE TO BRING THIS BACK, UH, DURING FRANCHISE NEGOTIATIONS. UH, ONE OTHER COUPLE OTHER THINGS FOR WHICH I DO NOT HAVE SLIDES. CHAIR DAVIS SAID THAT SHE WAS NOT HAPPY WITH THE MEAGER $200,000 OR SO, UH, UH, AID TO THE POOR THAT OCCURS FROM TEXAS GAS SERVICE. UH, AUSTIN ENERGY AND AUSTIN WATER COLLECTIVELY, UH, CONTRIBUTE ABOUT AT LEAST $22 MILLION A YEAR TO, UH, ASSISTANCE TO THE POOR. AND A PERSON FROM TEXAS GAS SERVICE IS CORRECT THAT THE MAGNITUDE OF THE UTILITY REVENUE IS NOT THE SAME, BUT EVEN AFTER YOU COMPENSATE, UH, TEXAS GAS SERVICE IS WAY, WAY UNDER WHAT THEY SHOULD BE PAYING IF THEY WERE AT THE CITY OF AUSTIN'S LEVEL. UH, I AM NOT, UH, I HAVE NEVER ADVOCATED FOR TAKING THIS, UH, A TO THE POOR OUT OF, UH, THE PROFITS OF THE GAS COMPANY. UH, I HAVE ALWAYS MAINTAINED THAT IT SHOULD BE A PASS THROUGH COST. SO AT LEAST FROM MY VANTAGE POINT, THE ARGUMENT THAT THERE'S A DIFFERENT, UM, UM, RATE, UH, COLLECTION, UH, METHOD, IT, IT JUST, THAT ARGUMENT DOES NOT REGISTER WITH ME. UH, FINALLY, UH, TEXAS GAS SERVICE IS CORRECT THAT THERE IS A WINTER STORM URI, UH, SURCHARGE. IT AMOUNTS TO ROUGHLY $38 A YEAR PER RESIDENTIAL CUSTOMER. AND WE WILL BE PAYING THAT FOR ROUGHLY THE NEXT 15 YEARS BECAUSE THIS IS, UH, $3.4 BILLION AMORTIZED. UH, I DON'T NECESSARILY FAULT THE GAS COMPANY FOR DOING IT. WHAT I DO FAULT THE GAS COMPANY FOR IS THAT THEY, AND APPARENTLY THEIR, UH, THE OTHER TWO LARGE GAS COMPANIES HAVE NOT TRIED TO CONTEST THESE OUTRAGEOUS CHARGES IN COURT. UH, I KNOW THE CITY OF SAN ANTONIO HAS DONE IT WITH PARTIAL SUCCESS. I KNOW THAT THERE IS AN ONGOING LITIGATION EFFORT, UH, FROM, UM, A, UM, FROM AN INITIATIVE IN HOUSTON. UH, I KNOW THAT THERE HAVE BEEN VARIOUS STATES WHERE THE ATTORNEY GENERAL HAS TRIED TO, UH, CONTEST THESE OUTRAGEOUS CHARGES, AND I DON'T SEE THAT HAPPENING HERE. IF SOMETHING HAS HAPPENED, I'M CERTAINLY NOT AWARE OF IT. UH, I HOPE I'VE BEEN AS BRIEF AS POSSIBLE. THANK YOU. VICE CHAIR ROBBINS, UH, ANY QUESTIONS OR COMMENTS? UH, YES. MS. NORTON RESPOND TO ONE OF THE QUESTIONS EARLIER. OKAY. UM, THIS GOES BACK TO HOW MUCH STATE YOUR NAME, PLEASE. OH, RETIRE BECOMES, OH, SORRY. MARIA NORTON. STATE CONTROLLER. UM, THIS GOES BACK TO THE BACK TO THE QUESTION OF HOW MUCH, UH, WE, THE CITY RECEIVED FROM TGS AND THE OTHER, UM, GAS UTILITIES AND FRANCHISE FEES. SO IN FISCAL YEAR 24, TGS PAID APPROXIMATELY 8.7 MILLION, [02:20:02] UM, AND IN FRANCHISE FEES TO THE CITY, AND THEN TOTAL FOR ALL GAS WAS 9.4 MILLION. THANK YOU. THANK YOU. QUESTIONS? YES, COMMISSIONER SCHWARTZ, JUST A QUICK COMMENT. UH, THANK YOU, PAUL FOR BRINGING THAT UP REGARDING THE CONTRIBUTION NATIVE CONSTRUCTION. UM, I THINK MOST PEOPLE WOULD AGREE THAT PAYING THE ENTIRETY OF SOMEBODY ELSE'S CONSTRUCTION PROJECT COULD BE, UH, CALLED THE SUBSIDY. SO I, YOU KNOW, WE CAN ALL MAKE OUR OWN, UH, PERSONAL DETERMINATION OF WHETHER THAT'S SUBSIDIZING SOMETHING. BUT, UH, IT'S HELPFUL TO HAVE THE INFORMATION LIKE THAT, THAT YOU PUT TOGETHER. SO, THANK YOU. UH, I, UM, FOR, FOR THE, FOR THE BENEFIT OF THE GAS COMPANY AND THE AUDIENCE, I INTEND TO MAKE ANOTHER PRESENTATION, UH, MAYBE JUNE OR JULY. UH, I ONLY DEALT WITH THE RATES, BUT THERE'S ISSUES REGARDING THE FUEL. THERE'S ISSUES REGARDING THE CONSERVATION PROGRAM, ISSUES REGARDING GAS LEAKAGE. I HOPE TO BRING THOSE UP IN THE NEXT COUPLE MONTHS. THANK YOU. OKAY. WITHOUT OBJECTION. [9. Discussion on changes to Austin Energy’s Residential Rooftop Solar Program. ] I'M GOING TO MOVE TO THE FINAL ITEM ON THE AGENDA, WHICH IS DISCUSSION ON CHANGES TO AUSTIN ENERGY'S RESIDENTIAL ROOFTOP SOLAR PROGRAM. COMMISSIONER SA. ALL RIGHT, THANKS VERY MUCH. GO TO THE FIRST SLIDE, PLEASE. SO, TO REFRESH EVERYONE'S MEMORY, I THINK ABOUT THREE, THREE MEETINGS AGO, UM, BROUGHT THIS RESOLUTION, UH, WITH MY CO-SPONSORS, COMMISSIONER SILVERSTEIN AND ROBINS, UH, RECOMMENDING CHANGES TO THE RESIDENTIAL ROOFTOP SOLAR REBATE PROGRAM, UH, AND, AND, AND RELATED RULES. UM, SO TODAY IS MY SECOND FOLLOW UP ON, UH, SOME SORT OF REQUESTED AND INFERRED REQUESTED INFORMATION, UM, REGARDING, UH, UH, AUSTRALIA, WHICH IS LIKE A, A, UH, AN EXAMPLE I GAVE OF A, UH, UH, EXAMPLE OF WHAT GOOD LOOKS LIKE FOR SOLAR DEPLOYMENT AND THEN ALSO REMOTE INSPECTIONS. UH, NEXT SLIDE PLEASE. SO, I DIDN'T FLY TO AUSTRALIA, BUT I DID PUT SOME MONEY ON MY MINT MOBILE ACCOUNT TO BE ABLE TO MAKE LONG DISTANCE CALLS AND STAYED UP LATE AND CALLED UH, AUSTRALIA. UH, SOLAR INSTALLERS ARE THE FOLKS THAT I CALLED. FUN FACT, YOU CAN'T CALL, UH, THE EQUIVALENT OF A ONE 800 NUMBER IN AUSTRALIA LONG DISTANCE. SO I WAS LIMITED TO ONLY ONES THAT HAD LOCAL NUMBERS, BUT THERE ARE A TON. SO THAT WAS NOT A PROBLEM. I EMAILED A WHOLE BUNCH. I THINK I GOT SPAM FILTERED 'CAUSE NOBODY GOT BACK TO ME, BUT I DID SPEAK TO A NUMBER OF THEM ON THE PHONE. AND, UM, I JUST WANTED TO GET SOME FIRSTHAND SORT OF CONFIRMATION OF ONE OF THE THINGS, ONE OF THE CLAIMS I I MADE IN MY EARLIER PRESENTATION, WHICH IS THAT SOLAR IS IN FACT A LOT CHEAPER IN AUSTRALIA TO DEPLOY. SO FROM BLOOMBERG N THE, UH, FACTS I GAVE IN MY INITIAL PRESENTATION WAS IT'S ABOUT $1 PER WATT, UH, US INSTALLED. AND UH, WHEREAS AS FOR REFERENCE, WE'RE IN THE THREE TO $4 PER WATT, SO THREE TO FOUR X THE COST, UH, HERE IN AUSTIN AND THE REST OF THE UNITED STATES. UM, AND WHAT I FOUND WAS THAT THAT IS IN FACT A BIT HIGH, UM, OF ONE OF THE, ONE OF THE INSTALLERS I SPOKE TO SAID 50 CENTS, UH, PER WATT IS, IS, IS COMMON. THAT DOES INCLUDE SOME SUBSIDY. UM, AND, AND THE OTHER SAID 64 CENTS PER WATT WAS COMMON. THEY BOTH SAID THEY COULD INSTALL A SIX PLUS KILOWATT SYSTEM FOR IN THE $3,000, UH, RANGE, AND THIS WOULD BE A MUCH, MUCH, MUCH LARGER BILL HERE IN AUSTIN. THE, WHAT IS THAT WOULD BE IN THE 20 TO $30,000, UH, RANGE FOR A SYSTEM OF THAT SIZE. SO THE REASON I'M, I'M UNDER UNDERLYING THIS IS JUST TO, IS JUST TO AGAIN, PRO TRY TO PROVIDE EVIDENCE THAT THAT THERE IS A BETTER WAY. THERE, THERE IS E EVIDENCE OF LOWER COST RESIDENTIAL SOLAR DEPLOYMENTS. UM, AND, AND OF COURSE AUSTRALIA DOES HAVE 30 TO 40%, UM, RESIDENTIAL ROOFTOP, UH, PENETRATION, AND I DUNNO THE EXACT NUMBERS HERE, BUT I THINK WE'RE DOWN IN THE LIKE 3, 4, 5, 6% IN AUSTIN. I DID ALSO ASK THEM ABOUT INSPECTIONS, UM, AND PERMITTING. AND SO PERMITTING IS A SORT OF ONE MINUTE APP ON THE PHONE SITUATION AND INSPECTIONS ARE IN MOST PLACES, UM, UH, RANDOM OR THEY DON'T DO THEM AND THEY RELY ON THE REGULATORY LANDSCAPE OF THE COMPONENTS. SO THIS IS ALL OF THE SORT OF EQUIVALENT OF THE UL TESTING AND ELECTRICAL CODE REQUIREMENTS THAT ARE GENERALLY MIRRORED IN AUSTRALIA. UM, SO THEY, THEY RELY ON THOSE FOR SAFE INSTALLATIONS AND, [02:25:01] AND, UH, AND DON'T DO A LOT OF INSPECTIONS. AND I THINK THAT'S PROBABLY EVERYTHING FOR THIS SLIDE. NEXT SLIDE PLEASE. OKAY. UM, AND THE SECOND REQUESTED FOLLOW-UP WAS ON REMOTE INSPECTIONS. UM, JUST WANTED TO GIVE SOME EXAMPLES OF LIKE WHERE THIS IS IS HAPPENING. SO ONE THING TO KNOW IS THAT UTILITIES, WHICH ARE DIFFERENT FROM CITIES GENERALLY, CITIES, MUNICIPALITIES ARE DOING THE ELECTRICAL INSPECTIONS. I THINK AUSTIN ENERGY IS LIKE A LITTLE BIT OF AN EXCEPTION THERE, UM, FOR, FOR SOLAR INSTALLS. BUT NEVERTHELESS, THE OBJECTIVE IS THE SAME INSPECT FOR SAFETY AND UM, UH, CENTER POINT, WHICH IS THE SECOND LARGEST UTILITY IN IN TEXAS DOES REMOTE INSPECTIONS. THIS IS HAPPENING NOW. UM, AND ENCORE IS CONSIDERING IT FOR THE, THE FUTURE. UM, AND, AND THEN FOR, FOR ACTUAL MUNICIPALITIES THAT ARE, UM, DOING INSPECTIONS, FORT WORTH IS DOING THEM NOW AS WELL AS 15 OTHER CITIES I COULD FIND, UM, ARE PLANNING ON IMPLEMENTING IT IN IN THE FUTURE. UM, AND THERE IS IN FACT AN NFPA. SO NFA IS NATIONAL FIRE PROTECTION ASSOCIATION. THIS IS THE SAME BODY THAT WRITES THE NATIONAL ELECTRICAL CODE DOES HAVE A STANDARD EXISTING FOR REMOTE INSPECTIONS THAT CAN BE, UM, EMPLOYED. AND NEXT SLIDE. I THINK THAT'S X IS ACTUALLY MIGHT BE IT. YEP. SEEMS LIKE THAT'S IT. OKAY. UM, THEN I DID WANT TO ADD A COUPLE OF ITEMS THAT CAME SINCE I, UH, SUBMITTED THIS, UH, PRESENTATION. ONE CAME FROM VICE CHAIR ROBBINS, WHICH WAS EVIDENCE THAT I BELIEVE IS THE CITY OF LOS ANGELES STARTING REMOTE INSPECTIONS FOR ROOFTOP SOLAR. UM, AND ACTUALLY THAT, YEAH, I'LL JUST LEAVE IT THERE. AND SO NO, NO FURTHER ACTION. JUST FOLLOWING UP ON REQUESTS FOR INFORMATION FOR MY, UM, RECOMMENDATION TO COUNSEL THAT I HOPE WE CAN VOTE ON AT A, AT A FUTURE DATE OR, OR NOW IF PEOPLE ARE ARE, ARE INTERESTED. IT'S PRETTY LATE THOUGH. THANKS SO MUCH FOR, FOR THAT. UH, WE ARE NOT POSTED TO TAKE ANY OTHER ACTION ITEMS, SO, UM, WE'LL HAVE TO LEAVE THAT FOR A FUTURE MEETING. UM, I KNOW, I THINK THAT'S SOMETHING THAT WE HAVE BEEN DISCUSSING FOR A WHILE AND I BELIEVE THAT AUSTIN ENERGY IS WORKING ON SOME RECOMMENDATIONS, THE SOLAR TEAM TO COME BACK TO US AT A FUTURE MEETING. IS THAT SOMETHING THAT WE MAKE, CAN EXPECT TO SEE IN JUNE? UH, RICHARD GENESEE, VICE PRESIDENT OF CUSTOMER ENERGY SOLUTIONS, AUSTIN ENERGY, UH, WE ARE HAVING INTERNAL DISCUSSIONS ON, UH, ALL OF COMMISSIONER CITAS IS, UH, UH, PROPOSALS AND, UH, WE WILL COME BACK AT A FUTURE MEETING IF IT'S GOING TO BE YOUR NEXT MEETING IN JUNE TO DISCUSS. THANK YOU. UH, YES. COMMISSIONER FARMER, NO. OH, THERE WE GO. UM, I GUESS ONE OF THE THINGS I WOULD BE CURIOUS ABOUT IS JUST WHAT IS THE RETURN ON INVESTMENT TIMELINE FOR A SOLAR INSTALLATION IN AUSTIN AND LIKE WHATEVER OTHER ON AVERAGE FOR A RESIDENTIAL CUSTOMER AND HOW DO WE BRING THAT TIMELINE DOWN? LIKE MY UNDERSTANDING IS RIGHT NOW IT'S LIKE 30 30 PLUS YEARS, WHICH IS OBVIOUSLY, I MEAN, THAT'S WHAT I'M HEARING FROM YEAH. SO, SO I, SO IF THAT'S WRONG, THEN I GUESS THAT'S JUST A QUESTION I HAVE. I'M NOT ASKING, BUT IF YOU GUYS ARE COMING BACK NEXT MONTH, I'M CURIOUS LIKE WHAT THAT TIMELINE, WHAT IS THAT ROI AND HOW DO WE BRING THAT DOWN? THAT SEEMS LIKE A REALLY GOOD METRIC FOR, I THINK THE ULTIMATE GOAL HERE RIGHT? IS TO HAVE MORE PENETRATION, RIGHT? RIGHT. SO LIKE THAT IS A THING THAT I THINK MOST PEOPLE LOOK AT WHEN THEY'RE DECIDING WHETHER OR NOT TO DO THIS. RIGHT. I'LL LET, UH, TIM HARVEY ADDRESS THAT QUESTION. TIM HARVEY, DIRECTOR OF CUSTOMER RENEWABLE SOLUTIONS. UM, WE'LL COME BACK WITH SOME DATA ON THAT. WE, I MEAN, 30 PLUS YEARS IS NOT CORRECT. UM, IT'S, IT'S CLOSER TO IN BETWEEN 10 AND 15 DEPENDING ON THE INSTALLED COST. UM, BUT WE CAN, WE CAN GIVE YOU AVERAGE INSTALLED COST OUT AT THE NEXT, UH, MEETING AND A LITTLE BIT MORE AND, AND THE PAYBACK ANALYSIS ON THAT. OKAY. DO YOU KNOW WHAT THE ROI IS ON AUSTRALIA SOLAR INSTALL? [02:30:01] I, I, I THINK IT'S LIKE ALMOST IMMEDIATE. THEIR, THEIR RATES ARE MUCH HIGHER, SO THE SOLAR COSTS VERY LITTLE AND THEIR ELECTRIC RATES ARE VERY HIGH, SO THEY PAY BACK RAPIDLY. I, I DON'T KNOW, IT'S PROBABLY A COUPLE OF YEARS. TWO, THREE, I'M, I'M DOING AIR MATH HERE, BUT YEAH, IT'S FAST. OKAY. UH, IT IS 8 31. IT'S GETTING LATE. UH, OUTTA RESPECT FOR FOLKS TIME. I'M GONNA SUGGEST WE, UH, MOVE, WE ADJOURN AND WE CAN TAKE, UH, THIS ITEM AND OTHER ADDITIONAL ITEMS THAT PEOPLE WANNA DISCUSS FOR OUR NEXT MEETINGS, UNLESS THERE'S ANY BURNING OBJECTION TO THAT. YES. VICE CHAIR ROBBINS, UM, I'M JUST, UH, TRUSTING THAT WHEN UH, STAFF HAS THEIR DISCUSSIONS, THEY WILL, UH, INCLUDE THE, UH, PRECEDENTS THAT HAVE BEEN CITED FOR REMOTE INSPECTION. OKAY. DO I HAVE A MOTION TO, OH WAIT, THE NEXT IS IS BUSINESS. YES. SORRY. UM, FUTURE [FUTURE AGENDA ITEMS] AGENDA ITEMS. UH, WE HAVE THE AUSTIN WATER QUARTERLY UPDATE STAFF BRIEFING ON HOME ENERGY SAVINGS STAFF BRIEFING, UH, ON THE ATMOS ENERGY RATE CASE, AND A PRESENTATION BY ATMOS ENERGY. WHAT ELSE, UH, DO WE WANNA SEE ON THE FUTURE AGENDA ITEMS? UH, I WOULD LIKE TO GIVE ANOTHER BRIEFING TO THE COMMISSION ON NATURAL GAS UTILITY ISSUES. UH, AGAIN, THIS WOULD RELATE TO FUEL CONSERVATION, UM, AND, UH, OTHER THINGS THAT I DID NOT COVER IN THE FIRST BRIEFING. OTHER COMMISSIONERS. ANY OTHER ITEMS? OH, YES. AND WE NEED TO START, UH, PLANNING FOR A COUPLE HEARINGS ON THE NATURAL GAS FRANCHISE. OKAY. UM, IF, UH, BETWEEN NOW AND THE NEXT, UH, DEADLINE, I'M NOT SURE WHEN THE DEADLINE IS FOR THE JUNE AGENDA ITEMS, BUT IF YOU HAVE, UM, ITEMS THAT YOU WANT TO SEE, PLEASE UH, EMAIL THEM TO MS. GOODWIN AND MYSELF AND WE WILL, UM, CONSIDER THOSE FOR FUTURE MEETINGS. OKAY. THANK YOU ALL FOR BEARING WITH ME. DO I HAVE A MOTION? SO I MOVE TO ADJOURN? TO ADJOURN? ANYBODY WANT A SECOND? YES. OKAY. UH, WITHOUT OBJECTION. THE MEETING IS ADJOURNED AT 8:33 PM THANK YOU SO MUCH. GOOD, GOOD. FIRST MEETING CHAIR. I. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.