* 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. [CALL MEETING TO ORDER] [00:00:04] UM, THIS IS THE ELECTRIC UTILITY COMMISSION FOR JULY 17TH, 2025. UM, FIRST THING, LET'S DO A ROLL CALL. WILL YOU PLEASE STATE THE TIME FOR THE RECORD? UH, 6 0 1 ROLL CALL. I'M DAVID TUTTLE, CHAIR IS VICE CHAIR WHITE ONLINE. UH, COMMISSIONER ALVAREZ. COMMISSIONER BELLAMY? HERE. COMMISSIONER BENAVIDEZ? HERE. COMMISSIONER BLACKBURN. COMMISSIONER BRADEN. I SEE HIM. I'M HERE. YEP. ALRIGHT. COMMISSIONER GILLETTE? YEP. COMMISSIONER KIRKSEY. YES. COMMISSIONER REED. DON'T SEE HIM HERE YET. AND COMMISSIONER ROAD. YOU SAID YOU EXPECT TO BE ONLINE SOON. UM, SO WE'VE DEFER THAT FOR RIGHT NOW. OKAY. OKAY. ALSO, THERE WAS A, A CLARIFICATION NEEDED. LET'S DO THIS. LET ME READ THIS INTO THE RECORD. UM, THERE'S, THIS IS UNDER EUC CHANGES AND CORRECTIONS FOR THIS SPECIAL MEETING CALLED ON JULY 17TH, 2025. THERE WAS A TYPO ON THE AGENDA FOR ITEM EIGHT. FOR THE RECORD, I WOULD LIKE TO READ THE CORRECT SPELLING OF THE CONSULTANT'S NAME. CURRENTLY IT READS FOR ITEM EIGHT, STAFF BRIEFING ON THE OVERHEAD DISTRIBUTION RESILIENCE STUDY BY DAVID THOMASON, VICE PRESIDENT ELECTRIC SYSTEMS ENGINEERING AND TECHNICAL SERVICES, AUSTIN ENERGY AND MICHAEL CONTI, PROJECT DELIVERY DIRECTOR 1898 AND COMPANY. IT SHOULD BE ITEM EIGHT, STAFF BRIEFING ON THE OVERHEAD DISTRIBUTION RESILIENCE STUDY BY DAVID THOMASON, VICE PRESIDENT ELECTRIC SYSTEMS ENGINEERING AND TECHNICAL SERVICES, AUSTIN ENERGY, AND MICHAEL COTE, COTE, PROJECT DELIVERY DIRECTOR 1898 AND COMPANY. SO I THINK WE'VE GOT THOSE ADMINISTRATIVE ITEMS OUT OF THE WAY. UH, WITH THAT, THIS CALL [PUBLIC COMMUNICATION: GENERAL] FOR PUBLIC COMMUNICATION, UH, WE HAVE, UH, ROBERT FOSTER, I GUESS FIRST, JUST GO. GOOD EVENING, Y'ALL. UH, MY NAME'S ROBERT FOSTER. I'M A NEIGHBOR. I WORK AT THE COMMUNITY COLLEGE HERE IN TOWN, AND I WANNA THANK YOU FOR THE OPPORTUNITY TO SPEAK. UM, I'M HERE TONIGHT TO URGE YOU TO CONSIDER PROPOSING MORE THAN A HUNDRED MEGAWATTS OF UTILITY SCALE BATTERY STORAGE, EITHER IN THIS CONTRACT OR ANOTHER ONE RIGHT AFTER THIS. THE CURRENT A HUNDRED MEGAWATT PLAN FALLS SHORT OF OUR OWN 125 MEGAWATT BY 2027 PROMISE. AND IT FALLS SHORT OF WHAT AUSTIN STANDS FOR. AS Y'ALL KNOW BETTER THAN ME, THE ECONOMICS ARE SHIFTING IN OUR FAVOR. IN THE PAST DECADE, THE COST OF UTILITY SCALE BATTERY STORAGE HAS DROPPED BY 80%. WHAT WAS ONCE CONSIDERED A FUTURISTIC INVESTMENT IS NOW ONE OF THE SMARTEST, MOST COST EFFECTIVE TOOLS WE HAVE TO IMPROVE GRID RELIABILITY, SUPPORT OUR SOLAR AND WIND ENERGY, AND REDUCE OUR RELIANCE ON POLLUTING GAS PEAKER PLANTS, LET ALONE COAL PLANTS THAT WERE SUPPOSED TO BE RETIRED YEARS AGO. UM, I KNOW THAT INTERNATIONAL TRADE, NATIONAL INCENTIVES, AND TO BE FRANK, OUR ENTIRE ECONOMY ARE CHAOTIC AND CHANGING DAY TO DAY. BUT THAT IS THE EXACT REASON WHY WE SHOULDN'T RETREAT FROM SERIOUS INVESTMENTS IN BATTERY STORAGE. WE HAVE SEEN AMAZING GROWTH IN INSTALL BATTERY CAPACITY OVER THE LAST HALF DECADE HERE IN TEXAS. AND THE LAST THING WE CAN AFFORD TO DO IS BACK AWAY FROM FURTHER INVESTMENTS AND HURT AN INDUSTRY THAT IS JUST GETTING STARTED. AUSTIN HAS LONG BEEN A BEACON OF INNOVATION AND CLIMATE LEADERSHIP IN TEXAS. LET'S NOT DIM THAT LIGHT. NOW. LET'S MEET AND EXCEED 125 MILLIWATT CAPACITY. AND ONE DAY, HOPEFULLY ENOUGH TO REPLACE FA IT. THE COST OF DELAY IS HIGH, BUT THE COST OF BATTERIES IS NOW LOW. THANK YOU GUYS ALL VERY MUCH. NEXT IS SANTIAGO GREETINGS COMMISSIONERS. I APPRECIATE YOUR SERVICE. I, UM, I'M HERE TO ASK FOR SOME SUPPORT. UH, I'M PROBABLY GONNA BE A LITTLE SCATTERED IN THIS PRESENTATION. UM, AND, UH, I'M SPEAKING ON BEHALF OF A ORGANIZATION HERE IN TOWN CALLED FESTIVAL BEACH FOOD FOREST. [00:05:01] UH, WE ARE LOCATED AT, UH, IN EDWARD RENDON PARK, WHICH IS, UM, ON THE COLORADO RIVER. UM, THE THING THAT HAS BEEN MOST PROMINENT FOR ME IN SORT OF CONTEMPLATING ON HOW TO ADDRESS, UH, THIS THIS BODY, UM, IS WITH REGARD TO RESILIENCE. UM, SO THIS IS A PHOTO OF, UH, I PULLED FROM OUR INSTAGRAM AND REALLY CHECK OUT OUR SOCIALS. UM, IT'S PRETTY ACTIVE. UM, UH, NEXT SLIDE, PLEASE. UH, AGAIN, THE NAME IS, UH, FESTIVAL BEACH, FOOD FOREST. SO WE'VE GOT SECOND, UM, SECOND SATURDAY WORK DAYS WHERE WE'VE GOT TWO THIRDS OF AN ACRE THAT WE, UH, GOT CITY PERMISSION. UM, WE ARE A COMMUNITY LED ORGANIZATION. WE'VE GOT NEARLY A THOUSAND IN KIND DONATION HOURS PER PER YEAR. WE JUST CYCLED THROUGH A HUNDRED THOUSAND DOLLARS GRANT. THAT WAS A, FROM A NATIONAL COMPETITION. UH, WE, WE STEWARD THIS LAND IN THE IDEA OF PERMACULTURE. SO, UM, THIS IDEA OF RESILIENCE, HOW DO WE, UH, ENSURE THAT THE LAND THAT WE HAVE CAN, FOR EXAMPLE, UH, TAKE WATER INTO THE GROUND SO THAT WE WE CAN MITIGATE FLOOD, UH, ISSUES. UM, AND SO ONE OF THE THINGS THAT WE WERE PIONEERING IS THIS THING CALLED BERMS. AND SWALES. WE'VE GOT OVER A HUNDRED SPECIES IN OUR TWO THIRDS OF AN ACRE, AND AT THE BEGINNING OF THIS YEAR, WE EXPANDED TO THREE ACRES, UH, STILL IN PART, UH, PARKLAND. AND, UM, I'M GONNA SWITCH GEARS. SO THERE'S THIS, UH, THERE'S THIS SOLAR PANEL OVER ON, UM, BUTLER SHORES. THAT WAS A REALLY DIFFICULT TIME MONTREAL CONSERVANCY TO GET PERMITTED. IT'S, IT'S OFF GRID, UM, AND IT SUPPLIES THE IRRIGATION FOR, UH, THIS, THIS, UH, EQUIPMENT EXERCISE PARK. AND THE ISSUE WAS, IS GETTING PERMITTING THROUGH, UH, BECAUSE IT'S NOT CONNECTED TO THE GRID, HOW, WHAT, WHOSE JURISDICTION WAS THAT? SO, UH, I'M TRYING TO LEAN IN HERE AND, AND COMPREHEND, UH, WITH THIS COMMUNITY LED ORGANIZATION AND US PIONEERING, UH, A MAINTENANCE AGREEMENT WITH PART TO COMPREHEND HOW WE MAINTAIN THIS LAND FOR, UH, A COMMUNITY ASSET THAT IS, UM, UH, REVERENT TO THE CULTURAL, UH, SIGNIFICANCE THAT IT HAS PLAYED IN, UM, IN THE CITY OF AUSTIN. AND I DON'T HAVE A TIMER, SO I DON'T REALLY KNOW HOW MUCH TIME I HAVE. UM, AWESOME. AWESOME. UM, NEXT SLIDE PLEASE. SO THIS IS A, A SKETCH WE HAD, WE HAVE A COUPLE ARCHITECTS ON OUR, WE HAVE A CORE TEAM OF ABOUT A HUNDRED MEMBERS. UM, THERE'S A COMMUNITY GARDEN JUST NORTH OF OUR SITE. UM, AND THEN THE FOOD FOREST IS, UH, UM, IT'S GOT THESE TWO PECAN TREES. THEY'RE REALLY BEAUTIFUL. UH, AND THESE OAK TREES THAT ARE REALLY AMAZING SHADE. UM, THIS IS THIS IDEA OF A HARVEST HUB. SO WE ARE, WE'RE, WE'VE PARTNERED WITH A FOOD PANTRY IN THE RBJ TOWER. UM, AND WE'VE GOT A FISCAL SPON, UH, FISCAL SPONSOR THAT IS, UM, PIONEERING THIS MODEL, UH, THROUGHOUT THE REST OF THE CITY IN, WE'VE PARTNERED WITH SANCHEZ ELEMENTARY SCHOOL. WE'LL HAVE A WORKDAY THIS WEEK. UM, WE'VE GOT WORK DAYS EVERY MONTH ON SECOND SATURDAY WHEN WE DO PLANT WALKS EVERY FIRST SATURDAY. AND THIS HELPS INDIVIDUALS IDENTIFY ALL THE VARIOUS SPECIES, UM, FROM THE PERENNIAL. IT IS BASED ON PERENNIAL PLANTS. SO WE'VE GOT GROUND COVER, WE'VE GOT SHRUBS, WE'VE GOT UNDERSTORY, AND WE'VE GOT GREAT CANOPY AND GREAT SHADE. WE'VE GOT DATA SCIENTISTS FROM UT SHOWING UP AND LOOKING AT WHAT THE TEMPERATURE, THE MICROCLIMATE THAT WE'RE CREATING IN THIS SPACE. WE'RE RIGHT ADJACENT TO I 35. AND WE'VE GOT A BARRIER WALL MADE OF VEGETATION EVERGREENS THAT, UH, THE DECIBEL READING FROM THE, THE SOUND IS GREATLY REDUCED JUST THROUGH THE DENSITY OF THIS. AND, AND SO LIKE I SAID, THERE'S THE RBJ TOWER, WHICH IS, UH, LOW INCOME. UH, THANK YOU SPEAKER. YOUR TIME HAS ENDED LOOKING FORWARD TO TALKING TO, YOU'LL SEE MORE HERE IN A MOMENT. NEXT WE HAVE DALE BULA. NO, GOOD EVENING COMMISSIONERS. MY NAME IS DALE BULA. UH, AS FAR AS BATTERY STORAGE, I DIDN'T WANT TO ADDRESS THAT TONIGHT. I SENT YOU AN ARTICLE, UH, ABOUT GERMANY EXPANDING THEIR BATTERIES BY 50% FROM 2024. SO I THINK THAT'S A GOOD SIGN TO LOOK FOR. ANYWAY, I WOULD LIKE TO TALK ABOUT A PROBLEM OF SAVING ENERGY AT AUSTIN ENERGY. AS I WALK MY NEIGHBORHOOD, I OFTEN CHECK OUT AC UNITS AND YOU'RE WELCOME TO DO THE SAME. JUST CHECK THEIR INSULATION ON THEIR REFRIGERANT LINES THAT GO FROM THE [00:10:01] COMPRESSOR INTO THE HOUSE. MOST ASTOUNDING THING I'VE NOTICED IS FOR APARTMENT AND COMMERCIAL AREAS WITH DOZENS OF REFRIGERANT LINES, MOST OF THEM WITH NO INSULATION AND COPPER LINES FULLY EXPOSED TO THE SUN. I'VE CONTACTED SOME OF MY NEIGHBORS THAT I'VE NOTICED HAVE HAD VERY GOOD RESULTS AND I SENT YOU A COPY OF THE LETTER THAT I'VE SENT TO MY, UH, NEIGHBORHOOD. BUT WITH APARTMENT MANAGEMENT, I'VE BEEN TOTALLY UNSUCCESSFUL. SINCE THE RENTERS PAY FOR THEIR UTILITY BILLS, THE MANAGEMENT IS REALLY NOT INTERESTED AT ALL. SO I RECENTLY FOUND OUT THERE'S A GROUP AT AUSTIN ENERGY THAT COULD PERHAPS HELP WITH THIS HUGE WASTE OF ENERGY. SO I CONTACTED STEPHANIE GRAHAM GRAND AND UM, AUSTIN ENERGY'S COMMERCIAL REBATES AS WELL AS KATIE HERNANDEZ WITH MULTI-FAMILY REBATES. UNFORTUNATELY, THEY SEEM TO BE ABLE ONLY TO HELP IF MANAGEMENT REQUESTED FROM THEM. AND I WAS ASKED TO CONTACT THE FOLKS AT THE APARTMENT COMPLEXES OR THEIR MAINTENANCE DEPARTMENT AND GIVE THEM THE INFORMATION SO THEY COULD CONTACT AUSTIN ENERGY. WELL, IT SEEMS TO ME THAT UH, IF WE SEE ZERO INSULATION ON OUR COPPER REFRIGERANT LINES AND WE PROVIDE THE ADDRESS FOR THESE PROPERTIES, PERHAPS AUSTIN ENERGY COULD AT LEAST CONTACT THEM AND LET THEM KNOW REBATES MIGHT BE AVAILABLE. I HAVE EVEN SENT PICTURES OF THESE ENERGY WASTING LOCATIONS, BUT TO NO AVAIL. AND I'VE SENT COPIES OF THOSE PICTURES TO ALL THE EUC MEMBERS SO THEY CAN SEE HUNDREDS OF ROOFTOP COMPRESSORS, COPPER, NO INSULATION. I'VE ALSO SENT YOU A COPY OF A RECENT ARTICLE, UM, UH, FROM THE STATEWIDE ORGANIZATION FOR CONSERVATION. AND I'VE SENT YOU A COPY OF HOW MUCH THEY CAN SAVE IN MONEY AND ENERGY AND IN THE LIFE OF THEIR UNITS BECAUSE THEY DON'T CYCLE AS MUCH WHEN THOSE REFRIGERANT LINES ARE INSULATED. I KIND OF GAVE UP AND, UM, CONTINUED TO INFORM THE FOLKS IN MY NEIGHBORHOOD A SIMPLE $5 INSULATION SLEEVE CAN SAVE UP TO 10% IN ENERGY COSTS. THIS ME IS FAR CHEAPER THAN SOME OF OUR OTHER ENERGY SAVING EFFORTS, WHICH I ALSO SUPPORT. OF COURSE. I WAS JUST TRYING TO FIND A CHEAP, EASY WAY TO SAVE MONEY AND ENERGY. I'VE SENT, UH, OUR COMMISSION MEMBERS ALL THESE PICTURES AND I'VE SHARED THEM WITH AUSTIN OTHER ALTA ENERGY OF FOLKS. THE LEAST I WAS ASKING FOR WAS AT LEAST TO PUT IN ANNOUNCEMENT IN OUR MONTHLY UTILITY BILL WITH A PICTURE OF WHAT A, A NAKED FREE REFRIGERANT LINE LOOKS LIKE. TELL PEOPLE, GO OUT IN YOUR BACKYARD AND LOOK AND SEE IF YOU CAN PUT A COVER ON THOSE AND SAVE YOURSELF SOME MONEY AND ENERGY. SO THAT'S MY LITTLE BAILIWICK I'VE BEEN ON LATELY. THANKS FOR LISTENING TO MY COMPLAINT, . THANK YOU. YOU HAVE SOME QUESTIONS? YEP. YOU HAVE SOME QUESTIONS ONLINE? YES, YES. QUESTION. I DIDN'T SEE ANY. WHO WAS IT? SORRY, I COULDN'T SEE. OKAY. AL. OH, IS THIS AL? YEAH. DID YOU GET MY EMAILS? THANK DALE FOR ONCE AGAIN DOING A, A GREAT AMOUNT OF HOMEWORK, UM, AND SEE FROM STAFF WHERE THIS FITS IN. IS THERE, IS THERE A WAY TO ADDRESS THIS IF IT REALLY AMOUNTS TO 5% HVAC SAVINGS? THAT'S A, THAT'S A BIG DEAL. SO KNOW, I'M JUST TRYING TO FIND OUT WHERE THIS WOULD FIT IN THE WEATHERIZATION PROGRAM OR IN THE CONTRACTOR TRAINING FOR HVAC CONTRACTORS OR, OR SEE HOW WE COULD GET SOME MORE, UH, MOMENTUM BEHIND THIS. ANY, ANY IDEAS? WELL, I SENT YOU A, A COUPLE OF PICTURES OF SOME ROOFTOPS WHERE THERE ARE HUNDREDS OF THESE UNITS JUST SITTING OUT THERE AND I'VE TALKED TO THE MANAGEMENT FOR MULTIPLE TIMES OVER THE LAST TWO OR THREE YEARS, BUT THEY'RE JUST REALLY NOT INTERESTED 'CAUSE THEY DON'T PAY FOR THE ELECTRICITY YET THAT YOU'D THINK THAT THEY WOULD CARE THAT THEIR UNITS ARE RUNNING MORE AND MORE FREQUENTLY AND IT'S, THEY HAVE TO REPLACE THOSE UNITS MORE FREQUENTLY, BUT THEY'RE PROBABLY OWNED BY SOME CONSORTIUM IN ABU DHABI OR SOMETHING. I DON'T KNOW. ANYWAY, THANK YOU FOR LISTENING TO MY GRIPE. ANY OTHER QUESTIONS ONLINE? OH, I HAVE A QUESTION. HEY, JOSH, YOU MAY KNOW THIS. I THINK THE PICTURES THAT DALE SENT, I WAS LOOKING ONLINE AND IT LOOKS LIKE THE HIGH, THE HIGH PRESSURE SIDE THAT'S NARROWER WAS THE ONE TYPICALLY UNINSULATED. IS THAT, I MEAN, AND IT'S SO PERVASIVE THAT THEY AREN'T, IS THAT TO LET THE HEAT ESCAPE INTO THE ATMOSPHERE? DAVE, DAVE, I'M CHAIR TED, I'M SORRY. I REALLY, WE ARE NOT POSTED FOR DISCUSSION ON PUBLIC COMMUNICATION. IT IS THREE MINUTES OF PUBLIC COMMUNICATION AND MOVE ON TO THE NEXT PUBLIC COMMUNICATION. AND IF YOU WOULD LIKE TO REACH OUT TO THE SPEAKER, UH, AFTER THE MEETING, PLEASE DO SO, BUT WE ARE NOT POSTED FOR DISCUSSION. OKAY, THANK YOU. THANK YOU. THAT'S OKAY. THANK YOU. [00:15:02] OKAY, THEN THE NEXT SPEAKER IS CAMILLE DID HAVE HER HAND UP. JUST, JUST HAD A QUESTION I NOT DISCUSSION. I WAS JUST GONNA ASK DALE IF YOU CAN PLEASE, UM, IF, IF YOU FEEL COMFORTABLE SENDING US THE, THE LIST OF THOSE MULTIFAMILY PROPERTIES. THANKS, I SENT THEM TO EVERYBODY. OKAY, THANKS. I'LL LOOK IN MY EMAIL. HI, GOOD AFTERNOON Y'ALL. MY NAME IS CAMILLE COOK. UM, I'M HERE TO TALK ABOUT TWO THINGS RELATED TO THE ITEM NUMBER FIVE ABOUT BATTERIES. THE FIRST THING IS THAT LOVE BATTERIES. BUT, UM, I THINK WE NEED SOME MORE. I THINK WE SHOULD BE PUSHING FOR MORE. AND THEN TWO, I THINK WE SHOULD, UM, UH, ENSURE THAT THERE'S PROPER COMMUNITY BUY-IN, ESPECIALLY AS IT RELATES TO, UH, CONSIDERATIONS WITH SIDING. SO FIRST, WHILE LIKE I SAID, I'M ALWAYS IN SUPPORT OF NEW BATTERIES AND THANK YOU AE FOR GETTING THIS 100 MEGAWATT PROPOSAL. UM, I DON'T THINK IT'S ENOUGH THOUGH. ACCORDING TO THE GENERATION IN CLIMATE PROTECTION PLAN, AE COMMITTED TO PROCURING 125 MEGAWATTS OF LOCAL UTILITY SCALE BATTERY POWER BY 2025 OR BY 2027. SORRY. AND UNLESS THIS PROPOSAL HAS THE POTENTIAL TO BE EXPANDED UPON, OR A NEW PROPOSAL IS BROUGHT FORWARD PRETTY QUICK, PRETTY QUICKLY, UH, IT SEEMS LIKE THIS MAY BE ALL THAT WE'RE GONNA GET FOR THE MOMENT. AND FRANKLY FOR THIS MOMENT, I DON'T THINK IT'S ENOUGH. WITH THE TARIFFS, THE NEW RECONCILIATION BILL AND THE LOAD GROWTH THAT WE'RE FACING HERE IN TEXAS, IT IT LOOKS LIKE BATTERIES ARE ONLY GONNA GET HARDER AND MORE EXPENSIVE TO COME BY. UM, IF ANYTHING, WE SHOULD BE FRONTLOADING GETTING BATTERIES BEFORE THEY BECOME OUT OF REACH, ESPECIALLY AS IT COMES TO ALL OF THE, UH, LIKE FOREIGN OWNED ENTITY THINGS. AND THE OTHER THING I WANT TO ADDRESS WITH THIS PROPOSAL IS CITING, UH, I WAS JUST IN GRANBURY FOR A TOWN HALL CONDUCTED BY COMMUNITY MEMBERS CONCERNED ABOUT INDUSTRIAL BUILD OUT HAPPENING IN THEIR COMMUNITY. AND, UM, EVEN THOUGH THEY HAVE TWO BIG GAS PLANTS, A THIRD ON THE WAY, UH, THEY WERE REALLY, REALLY UPSET ABOUT THE POTENTIAL FOR A BATTERY ENERGY STORAGE SYSTEM BEING BUILT CLOSE TO THEIR COMMUNITY. UM, AND THEY WERE MORE CONCERNED ABOUT THAT THAN THE MANY GAS PLANTS AROUND THEM. AND OF COURSE THEY WERE WORRIED ABOUT THE BATTERIES EXPLODING AND CATCHING FIRE AND ALL THAT. AND REALLY, YOU KNOW, THE ONLY WAY TO ALLEVIATE THAT CONCERN OTHER THAN CONSTANTLY IMPROVING TECHNOLOGY OR PUTTING THESE BATTERIES FAR AWAY FROM EVERYTHING IS BY REASSURING THE SURROUNDING COMMUNITY THAT THEY HAVE A VOICE THAT WILL BE LISTENED TO. THAT MEANS DOING THINGS LIKE TELLING LOCAL FIREFIGHTERS ABOUT WHAT IS NEEDED TO PUT OUT A POTENTIAL FIRE. MAYBE HOSTING AN OPEN FORUM ABOUT THE RISKS AND BENEFITS OF BATTERY ENERGY, UH, OR CREATING A HOTLINE FOR PEOPLE TO CALL IF THEY HAVE QUESTIONS OR CONCERNS. UM, AGAIN, I'M GLAD THAT AE IS MOVING FORWARD WITH THIS BATTERY PROPOSAL. I'M JUST OFFERING A COUPLE OF SUGGESTIONS FOR HOW THIS PROPOSAL CAN BE MADE WITH MOST SUCCESSFUL AND LINE UP WITH THE CONCERNS OF THE ENTIRE COMMUNITY. YOU KNOW, MEANING THE PEOPLE WHO WANT TO SEE MORE BATTERIES AS WELL AS THE PEOPLE WHO MAY NOT BE EXCITED ABOUT LIVING NEAR BATTERIES. SO JUST, UH, SOME INSIGHT ABOUT, UM, SOME CONCERNS I'VE SEEN FROM PEOPLE WHO ARE REALLY ANTI IN WAYS TO KIND OF GET PAST THAT IN A SMOOTH WAY. THANK YOU. AND I THINK WE HAD ANOTHER SPEAKER ON A DIFFERENT TOPIC. SANTIAGO? YES. THE AGENDA IS POSTED THAT YOU MAY SPEAK ONLY ON ONE ITEM FOR THREE MINUTES. OKAY. SO WE'RE DONE. OKAY, NEXT DISCUSSION AND ACTION ITEMS WE HAVE TWO THROUGH SEVEN. ANYONE INTERESTED IN FURTHER DISCUSSION ON THOSE APPROVAL OF THE MINUTES? [APPROVAL OF MINUTES] UH, THE MINUTE, ARE YOU GONNA DO THE MINUTES? YEAH, THAT'S FAIR. OKAY. OKAY, SO WE HAD THE MINUTES FROM THE LAST SESSION. ARE THERE ANY UPDATES TO THIS OR WE HAVE A MOTION TO APPROVE THESE IN A SECOND. MOTION TO APPROVE THE MINUTES. SECOND. SECOND. WE HAVE A MOTION AND A SECOND. CYRUS AND CAESAR, ALL IN FAVOR SAY AYE. THANK YOU. HERE'S A COPY. OKAY, THANKS. OKAY, NOW, NOW LET'S GET INTO THE DISCUSSION TWO THROUGH SEVEN. ANYONE WANNA PULL ANY OF THOSE FOR DISCUSSION? UH, WOULD LIKE TO ASK SOME QUESTIONS ABOUT THE, THE BATTERY, UM, TO NUMBER FIVE. OKAY, SORRY, NUMBER FIVE. ANY ONLINE? I ALSO HAVE QUESTIONS. YEAH, I ALSO HAVE QUESTIONS ON FIVE. AND THEN, UM, I GUESS SEVEN AND, SORRY, I'M JUST TRYING TO FIND, OH, I GUESS NUMBER THREE. I WAS CURIOUS ABOUT THAT ONE TOO. THANK YOU. I'M SORRY, WHAT WAS THE LAST ONE? KIBA. THREE. THREE, OKAY. [00:20:02] OKAY, SO NO DISCUSSION [Items 2, 4, & 6] ON TWO, FOUR, AND SIX. OKAY. DO WE HAVE A MOTION AND A SECOND THOSE I'LL MOVE APPROVAL OF ITEMS TWO, FOUR, AND SIX. OKAY, I'LL SECOND CHRIS AND LAUREN. ALL IN FAVOR SAY AYE. AYE. OR MOTION? AYE. OKAY. APPROVE UNANIMOUSLY. SO, OKAY. QUESTION ON [3. Recommend approval authorizing a contract for regulatory consulting services for Austin Energy with NewGen Strategies and Solutions, LLC. d/b/a NewGen Strategies and Solutions, for a term to be in effect until the scope of work is complete, in an amount not to exceed $300,000. Funding: $25,000 is available in the Operating Budget of Austin Energy, funding for the remaining contract term is contingent upon available funding in future budgets.] NUMBER THREE FROM KAABA? YEAH, SORRY. LET ME JUST, UH, SCROLL SCROLLING THROUGH THE, I SHOULD HAVE OPENED UP THE INDIVIDUAL DOCUMENTS. UM, OKAY. MAKING SURE I'M OFF MUTE. NIKKI, CAN YOU TURN THAT UP A LITTLE BIT PLEASE? IS MY AUDIO NOT, SHOULD I SPEAK UP? YEAH, PLEASE. OKAY. UH, YEAH, THANKS. UM, I WAS JUST WONDERING, IS THIS ONE OF THOSE KIND OF, UM, LIKE KIND OF OPEN-ENDED CONTRACTS WHERE THEY CAN DO, YOU KNOW, DIFFERENT PROJECTS? UM, OR IS THIS FOR SOMETHING SPECIFIC DEFINED? RUSTY MAN, UH, RUSTY MANUS ACTING, UH, UH, A GM NO, THIS IS NOT AN OPEN-ENDED CONTRACT. THIS IS A CONTRACT FOR NEWGEN, UH, TO ASSIST AUSTIN ENERGY IN FILING A TCOS WITH A PUBLIC UTILITY COMMISSION. THEY'RE GOING TO, THE INTENTION IS TO HAVE A FISCAL YEAR 2026 TEST YEAR AND FILING 2027. SO THESE ARE, UH, CONTRACTUAL SERVICES, UH, TO AID IN THAT FILING. OKAY. SO IT'LL JUST BE THAT ONE PROJECT. COOL. YES MA'AM. THAT WAS IT. I MOVE APPROVAL. OKAY. AND A SECOND. SECOND. OKAY. CYRUS, ALL IN FAVOR? A. OKAY. THREE IS APPROVED. FIVE. [5. Recommend approval authorizing the negotiation and execution of a battery tolling agreement with Balcones Ridge Resiliency, LLC, a Jupiter Power subsidiary, for up to 100 megawatts of electricity from a utility-scale battery facility, in an estimated amount not to exceed $14,400,000 per year, for a term up to 20 years, for a total estimated amount not to exceed $288,000,000. Funding: $14,400,000 is available in the Fiscal Year 2026 Operating budget. Funding for the remaining years of the agreement is contingent upon available funding in future budgets.] WE HAVE QUESTIONS FROM CYRUS AND . YEAH. HELLO. HOW ARE YOU DOING? GOOD, HOW ABOUT YOURSELF? GOOD. UM, SO, UM, FIRST OFF, UH, ARE YOU ABLE TO TELL US, UM, I'M EXCITED ABOUT THIS, THIS CONTRACT. THAT'S GOOD NEWS THAT YOU'RE MOVING FORWARD WITH SOME, UH, WITH THIS, I GUESS IT'S A, A WHEEL CONTRACT BASICALLY. BUT, UM, UM, DO WE KNOW, IS THIS LOCATED IN IN ONE LOCATION OR IS IT IN SEVERAL? YES, SO, SO SORRY. UH, MICHAEL ENGER, VICE PRESIDENT OF ENERGY MARKET OPERATIONS RESOURCE PLANNING. UH, YES, THIS PARTICULAR PROJECT THAT WE'RE TAKING TO COUNCIL IS CITED IN IN ONE LOCATION. UH, BUT WE ARE WORKING ON, ON ANOTHER BATTERY CONTRACT AS WELL. IT'S JUST NOT AS FAR ALONG AND NOT READY FOR CITY COUNCIL YET. OKAY. AND THE ONE, THE ONE THAT'S BEFORE US, ARE YOU, UM, ALLOWED TO TELL US WHERE IT'S LOCATED? NOT QUITE YET. IT, I CAN TELL YOU IT'S WITHIN OUR LOAD ZONE, BUT UNTIL WE HAVE THE TERMS MORE, UM, SOLIDIFIED, UH, WE, WE DON'T WANNA RELEASE THAT YET. OKAY. UM, BUT YOU HEARD THE CONCERN OF JUST MAKING SURE THAT YES, WE, YOU KNOW, NEIGHBORS ARE YES. AND THAT, AND THAT IS, THAT IS ONE OF THE CHALLENGES, SIDING VERY LARGE UTILITY SKULL BATTERIES AND WHY WE HAVE LIMITED AREAS TO, TO DO IT HERE IN AUSTIN, BUT YES, UH, I DON'T HAVE THAT CONCERN WITH THIS PARTICULAR LOCATION. AND AND YOU ALSO JUST MENTIONED THAT YOU GUYS ARE LOOKING AT OTHER CONTRACTS. ARE THOSE CONTRACTS THAT AROSE FROM THIS LATEST RFP? YES. UM, THAT IS CORRECT, YES. WE'RE JUST NOT AS FAR ALONG WITH THE NEXT CONTRACT. OKAY. BUT THEY, ARE YOU ALLOWED TO, UM, CAN YOU SAY WHAT, WHAT THE SCOPE OR SIZE OF THOSE OTHER CONTRACTS? THE SIZE OF, OF THAT CONTRACT? IT RIGHT NOW IS TARGETED TO BE ABOUT 40 MEGAWATTS. SO IN TOTAL BE 140 MEGAWATTS, WHICH WOULD MEET THAT 2027 GOAL. THAT WAS DISCUSS, SIR. OKAY. THANK THOSE WERE MY QUESTIONS. THANK YOU VERY MUCH. SURE, , THANKS. WELL, SARAHS PRETTY MUCH ASKED THE SAME QUESTIONS THAT I HAD. UM, I WILL JUST, UM, MAYBE A, MAYBE SEEMS NITPICKY, BUT, UM, I, I DO THINK YOU, MAYBE THERE WAS A LITTLE TYPO OR I DON'T KNOW, MISTAKE IN THE DESCRIPTION THERE. IT SAYS THE GOAL WAS A HUNDRED MEGAWATTS BY 2027 AND IT IN THE, IN THE PLAN IT'S 125, WHICH IT SOUNDS LIKE Y'ALL ARE GOING TO MEET, SO MIGHT AS WELL, UM, YEAH, JUST MAKE IT ACCURATE IN THE DOCUMENTATION. IF YOU CAN UPDATE THAT WHEN IT GOES TO COUNCIL, I THINK IT WOULD BE GOOD. UM, DO YOU HAVE ANY INTENTION, I MEAN, IT SOUNDS LIKE MAYBE IT'S NOT NECESSARY, UH, NOT KNOWING THE LOCATION. I, I IT'S HARD TO KNOW WHAT TO ASK, BUT, UM, DO YOU THINK THAT ANY SORT OF COMMUNITY, UM, ENGAGEMENT WILL BE APPROPRIATE GIVEN [00:25:01] WHERE THIS, WHEREVER THIS IS CITED? UH, COMMISSIONER WHITE, THIS IS LISA MARTIN, UH, CHIEF OPERATING OFFICER. I JUST WANNA ADDRESS THE FIRST PART OF YOUR COMMENT. UM, I, I ALSO THOUGHT IT WAS A TYPO ORIGINALLY, AND THEN I WENT BACK AND LOOKED AT THE RESOURCE GENERATION AND CLIMATE PROTECTION PLAN. UM, DURING THAT TIME PERIOD, COUNCIL UH, MEMBERS INTRODUCED, UH, TWO DIFFERENT AMENDMENTS THAT WERE BOTH ADOPTED AND BOTH INSERTED INTO THE PLAN. ONE SAYS 100 TO 150 MEGAWATTS AS SOON AS POSSIBLE, AND THE OTHER ONE SAYS 125 MEGAWATTS BY 2027. SO THE LANGUAGE THAT'S IN THE RCA JUST SAYS A HUNDRED MEGAWATTS OR MORE TECHNICALLY IT IS ACCURATE. SO WE WON'T, IT'S NOT A TYPO. WE, WE, WE HAVE BEEN SIMPLIFYING IT BY SAYING 125 MEGAWATTS BY 2027. AND YOU'LL HEAR THAT WHEN I PRESENT THAT TO UOC ON TUESDAY AS WELL. SO, UH, JUST WANTED TO CLARIFY FOR YOU. AND THEN THE SECOND PART OF YOUR QUESTION, I'LL RETURN TO MICHAEL. I GUESS I WOULD STILL SAY ONE OF THOSE WAS THE GOAL TO BE MET AND THE OTHER WAS LIKE THE ACTION ITEM. SO I'M NOT SURE ACCURATE, BUT WHATEVER, I MEAN, IT DOESN'T MATTER. AND YES, ON COMMUNITY OUTREACH THAT THERE WILL BE SOME AMOUNT OF THAT DONE IN, UH, IN CONJUNCTION WITH THE DEVELOPER OF THAT BATTERY AND, AND THE OWNER OF THAT BATTERY. UH, BUT THIS LOCATION, UM, IS QUITE A BIT AWAY FROM RESIDENTIAL HOMES. UM, AND SO AS, AS WE GET FURTHER ALONG AND WE GET CLOSER TO NEGOTIATING TERMS AND, AND SIGNING THIS CONTRACT, THAT WILL CERTAINLY BE A CONSIDERATION, BUT, BUT MAYBE NOT, UM, NOT AS NECESSARY AS IT MIGHT BE IF IT WAS, UH, IN OTHER LOCATIONS OR A DENSER LOCATION. OKAY. UM, THAT SOUNDS GOOD. UM, AND THEN MY ONLY OTHER QUESTION WAS JUST ABOUT, UM, YOU KNOW, KIND OF THE STRATEGY, THE DESIGN, UM, AS IT PERTAINS TO CONTAINING FIRES. IS THERE ANYTHING BEING WORKED OUT IN THIS CONTRACT TO ENSURE THAT THE, YOU KNOW, BEST POSSIBLE DESIGN AND TECHNOLOGY IS BEING USED TO, YOU KNOW, MY MY UNDERSTANDING IS YOU WANT IT, IT KIND OF BROKEN INTO PIECES SO THAT THE FIRE CAN'T, IF FIRE STARTS IN ONE PART OF THE BATTERY, THAT IT CAN'T LIKE, YOU KNOW, SPREAD THROUGHOUT, UM, PART IN MY LACK OF TECHNOLOGICAL, UH, LANGUAGE THERE. BUT IS IS THE BEST AVAILABLE, UM, YOU KNOW, ENGINEERING BEING USED TO TRY TO KEEP THIS, UM, YOU KNOW, AS SAFE AS POSSIBLE? YES, YES. SO IN TERMS OF THE CONTRACT THAT TALK ABOUT UTILITY GOOD PRACTICES AS WELL AS SPECIFICALLY ADDRESS, UM, FIRE SAFETY. OKAY, THANKS JOSH. I JUST HAD A, A QUESTION THAT I KNOW IT'S AT THE VERY BOTTOM OF, OF THIS, UH, ITEM. IT SAYS YOU KNOW'S CONTINGENT ON THE PROJECT, MAKING IT THROUGH THE AIR INTERCONNECTION QUEUE. UM, AND THEN ABOVE THAT IT, IT TALKS ABOUT, IT'S STRUCTURED IN A WAY THAT ALLOWS FOR THE, THE MONETIZATION OF THE INVESTMENT TAX CREDIT. UM, SINCE THE, YOU KNOW, PASSAGE OF THE LATEST FEDERAL, UM, STUFF THAT THE TIMELINES FOR THE INVESTMENT TAX CREDITS HAVE, UM, BEEN SPED UP QUITE A BIT. SO IS, SO DO THEY'VE BEEN, IS THAT THEY'VE BEEN SPED UP QUITE A BIT FOR WIND AND SOLAR. UM, THE BATTERY ITC, UH, AS WELL AS GEOTHERMAL, UM, HAS ACTUALLY BEEN PRESERVED AND YOU CAN GET THE FULL PTC THROUGH 2033 ASSUMING CERTAIN LEVELS OF DOMESTIC CONTENT. AND THIS PROJECT SHOULD MEET ALL OF THOSE REQUIREMENTS. OKAY. ALL RIGHT. SO IT'S STILL, IT STILL MEETS HIM FOR THE LONGER ONE LONGER REQUIREMENT? YES, SIR. OKAY, GREAT. OKAY, AL UH, THANK YOU MICHAEL. I, I'M, I DIDN'T REALIZE BATTERIES HAD EXTENDED TO 2023, BUT THAT'S, THAT'S REALLY GOOD TO HEAR. AND THAT'S FOR UTILITY SCALE BATTERIES 2033? YES, THAT IS CORRECT. YEAH. UH, I HAD A BUNCH OF QUESTIONS ON THIS PROJECT. UH, ONE OF THE THINGS THAT THE GENERATION PLAN TALKED ABOUT 125 MEGAWATTS, BUT IT WASN'T PRESCRIPTIVE ABOUT HOW MANY HOURS THAT WOULD RUN. SO I WANT, I WANNA FIND OUT, YOU KNOW, HOW THIS IS A HUNDRED MEGAWATT BATTERY, BUT WHAT, WHAT MEGAWATT HOUR CAPACITY, UH, IS PLANNED FOR IT RIGHT NOW? WE'RE PLANNING FOR A FOUR HOUR CAPACITY ON THIS BATTERY PROJECT, MICHAEL, THAT IS THE RIGHT ANSWER, . OH, THANK YOU. OKAY. THAT'S, THAT'S REALLY EXCITING. 'CAUSE THAT MAKES A A, A HECK OF A DIFFERENCE. IT IT'S PRIMARY USE CASE. COULD YOU DESCRIBE WELL, THERE'S, THERE'S PLENTY OF USE CASES FOR IT, AND THAT WILL BE A STRATEGY THAT EVOLVES FOR US. UH, YOU HAVE, UH, RISK MITIGATION, UH, WHERE YOU CAN AVOID SOME DAY AHEAD MARKETS AND UTILIZE THAT BATTERY TO PROTECT YOUR LOAD PRICE IN NEAR REAL TIME. WE CAN CARRY ANCILLARY SERVICES ON THIS BATTERY, LIKE AIRCRAFT CONTINGENCY [00:30:01] PRESERVE SERVICES, ALTHOUGH WE ARE SEEING SOME OF THOSE, UH, VALUES GOING DOWN, WHICH IS WHY IT NEEDS A DYNAMIC STRATEGY. UH, AND, AND CLEARLY WE'LL BE TRYING TO TAKE ADVANTAGE ON SOME OF THOSE, UH, LOWER LOAD PERIODS OF, UM, CHARGING WHEN PRICES ARE LOW AND DISCHARGING AGAIN WHEN THEY'RE HIGH IN ORDER TO MM-HMM . PRODUCE REVENUE TO OFFSET THE CAPITAL COST OF THIS BATTERY THERE. THERE'S BEEN A, I MEAN, A FOUR HOUR BATTERY CAN JUST DO A GINORMOUS AMOUNT OF HELP IN THE AFTERNOONS AND, AND SOME IN THE MORNINGS. IS IS IT YEAH. UNDER THE CONTRACT ABLE TO OPERATE TWICE A DAY FOR MORNING AND NIGHT OR DO YOU HAVE ANY YES. PLANS FOR THAT? UH, YES. THE BATTERY CONTRACTS ARE TYPICALLY, UM, LIMITED OR TOLLING AGREEMENTS ARE TYPICALLY LIMITED IN TOTAL CYCLES, AND THAT'S A COMPLETE CYCLE. UM, AND SO YOU CAN DO MULTIPLE, UM, LESS THAN COMPLETE CYCLES IN A GIVEN DAY. OKAY. UH, DURING THE, THE GEN PLAN, THERE'S A LOT OF MODELING ABOUT ALL THE COM POSSIBLE COMPONENTS OF THE GEN PLAN, BUT HAVE YOU, HAVE YOU DONE OR CAN YOU SHARE, UH, A FINANCIAL ANALYSIS OF THIS? I MEAN, THIS IS A, A HUGE BIG CONTRACT AND AT FOUR HOURS IT'S, THAT'S REALLY IMPORTANT. BUT, UH, ARE THERE FINANCIAL ANALYSIS TO GO WITH THIS? WE DO RUN, UM, ALL THE PROJECTS THROUGH VARIOUS MODELS IN ORDER TO, UH, DETERMINE WHICH, WHICH BATTERY PROJECT IN WHICH LOCATION IS IN OUR BEST INTEREST, IN THE BEST INTEREST FOR OUR CUSTOMERS. UH, THE MODELS DO NOT HOLD A LINE, BUT I WILL SAY THAT THIS BATTERY WILL PROVIDE, UH, SIGNIFICANT RISK MITIGATION FOR US, AND WE CAN RELY ON THIS BATTERY AHEAD OF OUR PEAKING UNITS, UH, WHEN THAT SUN GOES DOWN TO HELP WITH THAT, THE RAMPING ISSUE THAT WE SEE IN THE OP MARKET. MM-HMM . OKAY. WILL THAT, WILL THOSE ANALYSIS BE SHARED WITH COUNCIL OR, OR DO YOU NO, WE TYPICALLY DON'T SHARE THE FINANCIAL MODELING AND ANALYSIS. OKAY. ALRIGHT. WELL, I, I'M EXCITED TO SEE THIS GO FORWARD. THIS IS, THIS IS REALLY GOOD NEWS AND, UH, LOOK FORWARD TO THE NEXT PROJECT, UH, COMING WITH IT. THANK YOU. SOUNDS GOOD. THANK YOU. ANY OTHER QUESTIONS IN PERSON OR ONLINE? DO WE HAVE A MOTION IN A SECOND OVER APPROVAL WITH ENTHUSIASM ? SO AND AL HAS EMOTIONAL SUPPORT FOR THIS TOO, SO WE HAVE A SECOND. ALL IN FAVOR SIGNIFY. OKAY. AYE. AYE. THANK YOU. SO FIVE IS APPROVED AND THEN WE GO [7. Review and Approve the Annual Internal Review of the Electric Utility Commission for July 2024 through June 2025.] DOWN TO SEVEN. AND CAN I HAVE A, YOU HAD A QUESTION ABOUT SEVEN, I JUST HADN'T HAD A CHANCE TO LOOK TO SEE IF YOU ADDED THE COUPLE THINGS IN. UH, AND I SEE YOU DID. SO YEAH, I DON'T HAVE ANYTHING ELSE. THANK YOU FOR DOING THIS. YOU'RE WELCOME. SO, UM, THIS WAS POSTED, RIGHT? WE GOT THIS DONE EARLIER THIS WEEK. AND DID ANYBODY GET A CHANCE TO LOOK AT IT? OKAY. SO DOES ANYBODY HAVE ANY UPDATES FOR IT? I READ IT OVER THE WEEKEND. OKAY. SO DO WE HAVE A MOTION AND A SECOND? I'LL MAKE A MOTION TO APPROVE . THANK YOU. OKAY. ALL IN FAVOR SIGNIFY. OKAY, WE HAVE THAT. ALRIGHT, THANK YOU. SEVEN. NOW WE GO TO EIGHT [8. Staff briefing on the Overhead Distribution Resilience Study by David Tomczyszyn, Vice President, Electric System Engineering & Technical Services – Austin Energy and Michael Conte, Project Delivery Director – 1898 & Co.] FOR STAFF BRIEFINGS. WE HAVE THE OVERHEAD DISTRIBUTION RESILIENCY STUDY. BEFORE I START, I JUST WANNA MAKE SURE THAT, UH, MICHAEL, UH, CODY IS ONLINE, OUR CONSULTANT. OKAY. OKAY. MICHAEL, JUST A QUICK SOUND CHECK. ARE YOU ABLE TO HEAR US HEADPHONES? SOMETHING'S NOT. OKAY. MICHAEL, WE'RE, WE'RE UNABLE TO HEAR YOU. DAVID, CAN YOU HEAR ME? YES, SIR. THANK YOU VERY MUCH. OKAY. UM, ALRIGHT. UH, SO, UH, GOOD EVENING, UH, COMMISSIONERS CHAIR, VICE CHAIR. MY NAME IS DAVID TOM CHESON. I'M VICE PRESIDENT OF ELECTRIC SYSTEM ENGINEERING AND TECHNICAL SERVICES AND I'M HERE WITH MICHAEL CODY WITH 1898 AND COMPANY, THE CONSULTING ARM OF BURNS AND MCDONALD, UH, [00:35:01] TO PRESENT THE RESULTS OF THE OVERHEAD HARDENING STUDY AS LISA MARTIN, OUR CO REMINDS ME, A STUDY IS NOT A PLAN BUT CONTRIBUTES TO ONE. THIS STUDY IS A MAJOR STEP IN DEVELOPING A COMPREHENSIVE DISTRIBUTION RESILIENT RESILIENCY PLAN FOR THE RESIDENTS OF AUSTIN THAT WILL GUIDE US FOR THE NEXT 10 YEARS AND BEYOND TO MAKE OUR ELECTRIC INFRASTRUCTURE MORE RELIABLE AND RESILIENT. NEXT SLIDE, PLEASE. FOR OUR AGENDA, I'LL GIVE A BRIEF SYSTEM OVERVIEW AND SOME BACKGROUND. THEN MICHAEL WILL PRESENT THE RESULTS OF THE STUDY. THEN I'LL COME BACK UP AND WRAP IT UP, UH, WITH, UH, WRAP UP EVERYTHING AND THEN, UH, FINISH WITH ANY QUESTIONS. I WILL ASK THAT EVERYONE PLEASE HOLD ANY QUESTIONS UNTIL THE END BE BEING THAT WE HAVE QUITE A BIT TO COVER HERE TODAY. NEXT SLIDE PLEASE. AS BACKGROUND, RECENT EVENTS SUCH AS YURI MARA AND AND THE MAY, 2025 MICROBURST REINFORCE THE IMPORTANCE OF INVESTMENT TO, TO STRENGTHEN THE ELECTRIC GRID. AFTER URI, WE APPLIED FOR A BRICK GRANT, WHICH IS A BUILDING RESILIENT INFRASTRUCTURE IN COMMUNITIES THROUGH FEMA AND, AND TEEM. NEXT SLIDE PLEASE. AND IN, IN 2023, WE WERE AWARDED A GRANT FOR OUR OVERHEAD RESILIENCY STUDY. THE GOAL OF THE STUDY IS TO ASSESS THE, THE CURRENT STATE OF THE OVERHEAD DISTRIBUTION SYSTEM FOR OPPORTUNITIES TO HARDEN, AUTOMATE SECTIONALIZE, TO ENHANCE LOAD SHED, CRITICAL LOAD TO ISOLATION AND COLD LOAD PICKUP CAPABILITIES DURING BOTH BLUE SKY DAYS AND SEVERE WEATHER EVENTS. NEXT SLIDE PLEASE TO BRING EVERYONE BACK UP TO SPEED. SINCE LAST WEEK, PROVIDED AN UPDATE, WE'RE WORKING TOWARDS A COMPREHENSIVE DISTRIBUTION RESILIENCY PLAN. THIS PLAN WILL MERGE EXISTING RELIABILITY PROGRAMS SUCH AS CIRCUIT HARDENING, WILDFIRE MITIGATION, VEGETATION MANAGEMENT WITH BEST, BEST PRACTICES IDENTIFIED IN BOTH THE UNDERGROUND AND THE OVERHEAD, UH, STUDY RESULTS. AUSTIN ENERGY HAS APPROXIMATELY 12,000 MILES OF DISTRIBUTION LINES. 7,000 MILES OF IT IS ALREADY UNDERGROUND AND 5,000 IS OVERHEAD. WE RECENTLY COMPLETED UNDERGROUNDING STUDY TO SEE WHAT IT WOULD COST TO UNDERGROUND THE 5,000 MILES OF REMAINING. THE COST WAS 50 BILLION WITH A B AND IT WOULD TAKE DECADES. SO THE OVERHEAD RESILIENCY STUDY WE WILL BE PRESENTING TODAY PROVIDES ALTERNATIVES TO MAKE OUR SYSTEM MORE RESILIENT BUT FASTER AND AT A FRACTION OF THE COST. NEXT SLIDE PLEASE. NOW BEFORE I, I HAND IT OVER TO MICHAEL TO PRESENT THIS STUDY AND FINDINGS. JUST A QUICK NOTE. UH, THIS STUDY DID A DEEP DIVE INTO CRITICAL PROTECTED INFRASTRUCTURE LOOKING AT EQUIPMENT, LOCATIONS, CIRCUIT CONFIGURATIONS, CUSTOMER ACCOUNTS BY DEVICE PROTECTION SETTINGS, ET CETERA. AND SO THE, UH, THE STUDY WAS OVER, OVER 150 PAGES, BUT IT GOES INTO TO QUITE A BIT OF, UH, DETAIL ABOUT CRITICAL PROTECTED INFRASTRUCTURE. AS SUCH, WE'RE ONLY ABLE TO MAKE PUBLIC THE EXECUTIVE SUMMARY DUE TO THE CONCERNS OF THIS INFORMATION FALL IN THE HANDS OF BAD ACTORS. I WILL NOW TURN IT OVER TO MICHAEL TO PRESENT THE RESULTS OF THE OVERHEAD HARDENING STUDIES, MICHAEL. ALRIGHT, AWESOME. APPRECIATE IT DAVID. THANKS FOR HAVING ME. SO MY NAME IS MICHAEL CODY. UH, I WORK FOR 1898 AND CO. SO WE'RE THE CONSULTING ARM OF BURNS AND MCDONALD. WE CAN ACTUALLY GO TO THE NEXT SLIDE, PLEASE. WE'LL JUST GIVE A QUICK OVERVIEW, UH, OF WHO WE ARE HERE. SO 1898 WAS THE YEAR BURNS AND MCDONALD WAS FOUNDED. WE'VE GOT ABOUT 600 CONSULTANTS NATIONALLY AND ACTUALLY 50 OF WHICH CONTRIBUTED DIRECTLY TO STUDY. UM, SO RESILIENCY, I MEAN, IT'S BEEN AN EMERGENCY EMERGING THEME IN THE INDUSTRY, UH, PARTICULARLY HERE IN TEXAS. WE'VE COMPLETED A NUMBER OF RECENT STUDIES RANGING FROM FULL DETAILED 10 YEAR PLANS TO HIGH LEVEL ASSESSMENTS. AND THEN GOING ON TO THE NEXT SLIDE, WE'VE GOT AN KIND OF AN OVERVIEW HERE OF THE STUDY SCOPE. UM, SO AGAIN, LIKE DAVID SAID, THIS STUDY FOCUSED ON THE OVERHEAD DISTRIBUTION SYSTEM. SO WE'RE TALKING ABOUT 5,000 MILES, ABOUT 42% OF THE SYSTEM. UH, THIS WAS OVER A YEAR LONG STUDY THAT COMBINED SYSTEM REVIEW, TECHNICAL ANALYSIS AND STRATEGIC PLANNING. SO WE HAVE THREE MAIN TASKS. UH, WE'VE GOT THE AS IS STATE, SO KIND OF ASSESS THE CURRENT SYSTEM OF WHERE WE'RE AT. BUT TASK TWO FEEDER COORDINATION STUDIES. SO ANALYZE FEEDER LEVEL PROTECTION AND AUTOMATION. AND THEN TASK THREE, THE FUTURE STATE. WE DEFINED INITIATIVES, UH, DETAILING NEW TECHNOLOGIES AND INDUSTRY TRENDS THAT AUSTIN ENERGY SHOULD CONSIDER WHEN DEVELOPING A FULL COMPREHENSIVE RESILIENCY PLAN. ALRIGHT, SO WE'LL GO THROUGH EACH OF THE TASKS AGAIN, TASK 1, 2, 3, STARTING ON THE NEXT SLIDE WITH THE AS IS STATE. SO WE'LL START WITH KIND OF WHERE WE ARE TODAY. THE AS IS STATE OF AUSTIN ENERGY SYSTEM. THIS IS THE FOUNDATION. EVERYTHING WE BUILD GOING FORWARD, WHETHER IT'S TECHNOLOGY, STRATEGY OR INVESTMENT, HAS TO START WITH A CLEAR [00:40:01] UNDERSTANDING OF THE CURRENT SYSTEM. SO WE'VE GOT THE FOUR DIFFERENT ANALYSES IN THE AS IS STATE. FIRST WE'VE GOT STANDARDS COMPLIANCE. SO WE LOOKED AT HOW WELL AUSTIN ENERGY'S CURRENT SYSTEM ALIGNS WITH ITS OWN INTERNAL DESIGN STANDARDS. ESSENTIALLY OUR FEEDERS AND DEVICES BUILT AND PLACE THE WAY THAT THE STANDARDS CALL FOR. WE ALSO LOOKED AT AGE AND KEY OVERHEAD DISTRIBUTION ASSETS. UM, AND THEN WE REVIEW, WE ALSO REVIEWED AUSTIN ENERGY'S GUIDELINES FOR CONNECTING DERS SUCH AS SMALL SOLAR AND, AND BATTERY STORAGE. SO SECONDLY, CAPACITY. UM, BASICALLY WE LOOKED AT HOW WELL CAN EACH FEEDER AND SUBSTATION HANDLE ITS CURRENT AND PROJECTED LOAD LOOKING INTO THE FUTURE. AND, UM, KIND OF THE THIRD ONE THERE IS LOAD SHED, UM, LOAD SHE CAPABILITIES. SO WE EVALUATED AUSTIN ENERGY SYSTEM, HOW WELL THEY CAN MEET ERCOT LOAD SHE OBLIGATIONS IN AN EMERGENCY. AND THEN BEYOND THAT, WE LOOKED AT, RATHER THAN JUST SHEDDING THE BREAKER OF A CIRCUIT, WE LOOKED AT UTILIZING RECLOSERS AND RETROFITTING SWITCHES DOWNSTREAM TO FURTHER ENABLE LOAD SHED CAPABILITIES. AND THEN LASTLY, IN THE ASIS STATE, WE LOOKED AT THE SYSTEM'S ABILITY TO ACCOMMODATE ADDITIONAL DERS WITHOUT CAUSING PROBLEMS. SO KIND OF THESE FOUR PILLARS OF THE ASIS STATE. ALL OF THESE WERE USED TO INFORM FUTURE PLANNING AND INVESTMENT DECISIONS. AND SO ON THE NEXT SLIDE WE GET KIND OF RIGHT TO THE PUNCHLINE, RIGHT TO THE, UH, RECOMMENDATIONS HERE FROM THE AS IS STATE. SO WE CAME OUT WITH SIX MAIN RECOMMENDATIONS. THE FIRST ONE THERE IS TO PRIORITIZE REPLACEMENT OF LEGACY OR HIGH RISK INFRASTRUCTURE. SO WE DID FIND THAT THE DISTRIBUTION EQUIPMENT IS HIGHLY COMPLIANT WITH INTERNAL STANDARDS. HOWEVER, THERE ARE SOME AGING OLDER ASSETS, 40, 50 YEARS OLD, WHICH IN AND OF ITSELF IS NOT A PROBLEM, BUT CALLS FOR THE NEED FOR MORE PROACTIVE INSPECTIONS, ASSESSMENTS, AND THEN POTENTIALLY ASSET REPLACEMENT PROGRAMS AS WELL. UM, ON THE CAPACITY SIDE, WE FOUND 14 SUBSTATIONS THAT WERE NEARING THEIR OPERATIONAL LIMITS. SO WE THINK THAT THESE SHOULD BE, IN PARTICULAR, THESE SHOULD BE TRACKED AND EVALUATED. UH, THESE LOCATIONS SHOULD BE PRIORITIZED FOR MODELING REFINEMENTS AND POTENTIAL INVESTMENT AND UPGRADES. AND THEN WE FOUND OPPORTUNITIES AGAIN TO, TO EXPAND LOAD SHE FLEXIBILITY THROUGH AUTOMATION. SO ALSO WE FOUND THAT AUSTIN ENERGY CAN CURRENTLY MEET ITS PORTION OF AN ERCOT EMERGENCY SHED REQUEST, BUT WE FOUND OPPORTUNITIES TO ENHANCE THAT USING RECLOSERS AND SWITCHES THAT CAN INCREASE THE LOAD CAPABILITY AND THEN REDUCE CUSTOMER IMPACT FOR A LARGER ERCOT LEVEL EVENT. AND ADDITIONALLY, WE FOUND OPPORTUNITIES TO IMPROVE INTEGRATION ACROSS ALL THESE SYSTEMS. WE WORKED WITH A LOT OF DIFFERENT SYSTEMS WITHIN AUSTIN ENERGY. SO WE FOUND OPPORTUNITIES FOR KIND OF DATA, DATA CLEANUP AND INTEGRATION. UH, WE FOUND OPPORTUNITIES TO IMPROVE AUSTIN ENERGY'S STANDARDS AND GUIDEBOOKS RELATED TO DERS. AND THEN WE ALSO FOUND SOME OPPORTUNITIES TO REFINE SMALL TWEAKS TO AUSTIN ENERGY'S EXISTING HOSTING CAPACITY METHODOLOGY. ALRIGHT, AND THEN MOVING ON TO THE NEXT SLIDE. SO TASK TWO, WE HAVE FEEDER STUDIES. SO ONCE WE HAD KIND OF THE AS IS BASELINE, WE ZOOMED IN. SO THIS IS VERY DETAILED FEEDER BY FEEDER ANALYSIS TO LOOK AT INDIVIDUAL COORDINATION STUDIES. THE GOAL HERE WAS HOW CAN WE MAKE EACH FEEDER MORE RESILIENT, AGAIN, BEYOND UNDERGROUNDING, HOW CAN WE MAKE IT MORE RESILIENT AND BETTER SEGMENTED FOR FASTER RESPONSE? SO WE ANALYZED EVERY OVERHEAD FEEDER TO IDENTIFY LOCATIONS FOR MAINLINE RECLOSERS AND LATERAL RECLOSERS. THE ANALYSIS FOCUSED ON PLACING ESSENTIALLY THE RIGHT DEVICES IN THE RIGHT SPOTS TO REDUCE OUTAGE SIZE AND IMPROVE RESTORATION. AND THEN WE DETERMINE THE APPROPRIATE PROTECTION SETTINGS TO ACHIEVE, UH, TO ACHIEVE PROTECTION. COORDINATION. ON THE NEXT SLIDE IS A, IS A QUICK REMINDER OF OF RECLOSERS. UM, SO WE HAVE MAINLINE RECLOSERS AND LATERAL RECLOSERS. AGAIN, RECLOSERS ARE LIKE SMART CIRCUIT BREAKERS INSTALLED OUT ON THE LINES. SO BEYOND THE SUBSTATIONS DOWNLINE FROM THEM, THEY CAN AUTOMATICALLY DETECT ISSUES LIKE TREE BRANCHES AND QUICKLY SHUT OFF AND RESTORE POWER WITHOUT REQUIRING A CREW TO GO OUT THERE. UM, SO IF YOU THINK ABOUT MAINLINE RECLOSERS, THAT'S PROTECTING THE LARGER THREE PHASE TRUNK LINES. AND THEN WE HAVE LATERAL RECLOSERS PROTECTING SOME OF THE SMALLER SIDE BRANCHES. AND TOGETHER THEY BOTH REDUCE THE NUMBER OF CUSTOMERS AFFECTED BY OUTAGES AND HELP RESTORE POWER FASTER. AND ON THE NEXT SLIDE, SO WE HAVE THIS CONCEPT OF PODS BREAKING UP THE CIRCUIT AGAIN, BEYOND THE BREAKER INTO SMALLER CIRCUITS OR SMALLER SUBSECTIONS THAT WE CALL PODS, KIND OF INDEPENDENT PORTIONS THAT CAN BE THROWN OVER TO ADJACENT CIRCUITS. [00:45:02] UM, IDEALLY HERE WE TRY TO EQUATE LOAD AND OVERHEAD EXPOSURE AND CUSTOMERS AND MAKE SURE THAT THERE'S A CLEAN TIE TO AN ALTERNATE FEEDER IN THE EVENT THAT, UH, THERE IS AN OUTAGE OR SOMETHING THAT DOES HAPPEN ON THAT HOST FEEDER AND LATERAL RECLOSERS WERE PLACED AND PRIORITIZED BASED ON VEGETATION DENSITY, HISTORICAL OUTAGE, CUSTOMER COUNT, UH, LINE LENGTH AND LOAD AS WELL. AND THE NEXT SLIDE HAS OUR RECOMMENDATIONS. SO AT THE CONCLUSION OF TASK TWO, THE FEEDER COORDINATION STUDIES, UH, WE HAVE DETAILED SET OF DEVICE PLACEMENT RECOMMENDATIONS ON EVERY OVERHEAD FEEDER. SO WE IDENTIFIED OVER 600 MAINLINE RECLOSERS AND OVER A THOUSAND LATERAL RECLOSERS, UM, ACTUAL DEVICES AND LOCATIONS, WHICH GIVES AUSTIN ENERGY KIND OF THE, THE PLANNERS THOSE OPTIONS FOR DEPLOYMENT. NOT NECESSARILY THAT THEY'RE GONNA DEPLOY THEM ALL, BUT IT GIVES THEM THAT OPTIONALITY TO PICK AND CHOOSE AND PRIORITIZE. SO OUR RECOMMENDATIONS ARE TO EXPAND MAINLINE RECLOSERS TO REDUCE FAULT EXPOSURE AND ISOLATE OUTAGES MORE EFFECTIVELY. UM, STRENGTHEN AND ADD FEEDER TIES TO SUPPORT THOSE LOAD TRANSFERS AND PARCEL RESTORATION, UH, AMONGST CIRCUITS. AND THEN ALSO DEPLOY MORE LATERAL RECLOSERS, PARTICULARLY IN HIGH RISK OR REMOTE AREAS TO REDUCE THOSE SUSTAINED OUTAGES AND TO REDUCE, UH, THE NEED FOR CREWS TO GO OUT THERE. AGAIN, THE OVERALL GOAL OF THESE DEVICES REDUCE THE FAULT IMPACTS, IMPROVE THOSE RESTORATION SPEEDS, IMPROVING RESILIENCY, AND THEN ALSO ENABLING GRID AUTOMATION, UH, DOWN THE LINE. THE NEXT SLIDE, THE THIRD TASK THAT WE HAVE IS THE FUTURE STATE. SO OUR GOAL HERE IS TO STEP BACK AND FIGURE OUT WHAT INITIATIVES COULD HELP AUSTIN ENERGY GET CLOSER TO WHERE IT WANTS TO BE. SO WE CONDUCTED INTERVIEWS THROUGHOUT THE ORGANIZATION. WE TALKED TO ENGINEERING FIELD OPERATIONS, ASSET MANAGEMENT, DER TEAMS, UH, VEGETATION MANAGEMENT, IT DATA AND ANALYTICS. THE IDEA WAS TO GET KIND OF A COMPREHENSIVE VIEW OF WHAT'S WORKING, WHAT'S NOT WORKING, AND WHERE THE BIGGEST OPPORTUNITIES ARE. WE HEARD THEMES ABOUT, UM, NEEDING MORE AUTOMATION, SOME RESOURCE CONSTRAINTS AND A LOT OF VEGETATION CHALLENGES. UM, THE OUTCOME WAS A PRIORITIZED LIST OF 24 INDEPENDENT RESILIENCY INITIATIVES, AND WE GROUPED THEM INTO THESE FIVE THEMES THAT YOU SEE ON THE SCREEN HERE. SO WE HAVE INFRASTRUCTURE RESILIENCE, ESSENTIALLY MODERNIZING STANDARDS, MATERIALS AND ASSETS, MAKING OUR RES OUR INFRASTRUCTURE STRONGER DATA-DRIVEN OPERATIONS, ESSENTIALLY LEVERAGING DATA AND ANALYTICS TO MAKE BETTER INVESTMENT DECISIONS, MAINTENANCE DECISIONS, UM, AND THEN GRID CONNECTIVITY, EXPANDING AUTOMATION MONITORING AND COMMUNICATION SYSTEMS, EMERGENCY READINESS. SO THIS IS MORE OF THE PEOPLE SIDE OF IT, IMPROVING COORDINATION TRAINING AND SITUATIONAL AWARENESS. AND THEN OPERATIONAL EXEL EXCELLENCE. THE LAST ONE IS STRENGTHENING GOVERNANCE AND CROSS TEAM COLLABORATION SO THAT EVERYONE'S KIND OF ROWING IN THE, IN THE SAME DIRECTION FOR A OVERALL RESILIENCY PROGRAM. SO THESE INITIATIVES, SOME OF THEM ARE NEW, UM, BUT A LOT OF 'EM, AUSTIN ENERGY IS ALREADY DOING. WE JUST IDENTIFIED ACTIONS THAT WERE ABOVE AND BEYOND WHAT THEY'RE CURRENTLY DOING. SO WE DID RANK THESE 24 INITIATIVES BASED ON FACTORS SUCH AS CRITICALITY TO RESILIENCY, TIME HORIZON TO REALIZE BENEFITS, COMPLEXITY, AND THEN COST. AND WE CAME UP WITH MODERATE AND AGGRESSIVE VERSIONS OF EACH OF THESE INITIATIVES, AND THEY HAVE KIND OF OWNERSHIP AND TACTICAL ACTIONS THAT CAN BE INCLUDED IN WITH EACH. SO IT KIND OF GIVES US AN ENERGY, UH, A PLAYBOOK OR, OR A, NOT A PLAYBOOK, BUT OPTIONS, A TOOLKIT THAT, THAT THEY CAN CHOOSE FROM. AND ON THE NEXT SLIDE HERE, WE'VE GOT THE FUTURE STATE RECOMMENDATIONS. SO WE FOUND THAT AUSTIN ENERGY HAS A REALLY STRONG FOUNDATION, ESPECIALLY IN INFRASTRUCTURE, ROBUSTNESS AND INCIDENT RESPONSE. BUT TO REACH THIS REALLY OPTIMAL FUTURE STATE RESILIENT GRID, WE THINK AUSTIN ENERGY NEEDS A COORDINATED AND REALLY ENTERPRISE-WIDE ACTION. SO WE RECOMMEND THIS PHASED APPROACH, KIND OF A PARALLEL PATHWAY WITH WE'VE GOT THE TOP AND THE ORANGE AND ON THE BOTTOM THE GREEN. SO WE IDENTIFIED SOME INITIATIVES, KIND OF LOW HANGING FRUIT THAT CAN START RIGHT AWAY DELIVERING EARLY IMPACT WHILE AUSTIN ENERGY, PERHAPS THE ORGANIZATION FOR A LONGER BIGGER RESILIENCY TRANSFORMATION. SO SIMULTANEOUSLY AUSTIN ENERGY CAN BE BUILDING THAT LONG TERM PROGRAM, WHICH TAKES, YOU KNOW, LEADERSHIP, UH, CROSS DEPARTMENT COORDINATION, BUDGETING, GOVERNANCE TRACKING, ALL THOSE THINGS FOR THAT LONG TERM PROGRAM. BUT WHILE THEY'RE WORKING ON THAT, THEY CAN START WITH SOME OF THESE KIND OF LOW HANGING FRUIT EASY [00:50:01] WINS. SO WE THINK THIS KIND OF PARALLEL APPROACH NEAR TERM ACTION COUPLED WITH LONG-TERM PLANNING, WILL ENABLE A MORE COORDINATED, SUSTAINABLE, AND EFFECTIVE RESILIENCY PROGRAM OVER TIME. AND, AND SO I'LL KICK IT BACK TO DAVID TO WRAP UP WITH NEXT STEPS. THANK YOU MICHAEL. UM, SO I JUST WANNA CIRCLE BACK ONE MORE TIME TO KIND OF BRING EVERYTHING TOGETHER AS WE TALK ABOUT NEXT STEPS. UH, WE NOW HAVE ALL THREE LEGS OF, OF THE STOOL. SO WE HAVE EXISTING RELIABILITY PROGRAMS THAT HAVE ALREADY BEEN UNDERWAY. WE, WE HAVE THE RESULTS OF THE UNDERGROUNDING STUDY. WE HAVE THE RESULTS OF THE OVERHEAD RESILIENCY STUDY AND TO GIVE US THE INFORMATION AND BEST PRACTICES TO, UH, COMPLETE A COMPREHENSIVE DISTRIBUTION RESILIENCY PLAN FOR AUSTIN. I'M HAPPY TO REPORT THAT WE'VE ALREADY STARTED THE DRAFTING THE PLAN. UM, AND, AND THE WORK FROM 1898 HAS SET THE TABLE ALMOST LIKE ALEC HARTE AS, AS MICHAEL WAS TALKING ABOUT, WHERE WE CAN, UH, LOOK AT EVERY CIRCUIT AND, AND, AND SEE WHERE IT MAKES MOST, UH, THE MOST SENSE. UM, AND, AND IT'LL GIVE US THE OPPORTUNITY TO QUICKLY COMPARE OVERHEAD VERSUS UNDERGROUND OPTIONS, UM, UH, AS WELL AS MODERATE OR MORE AGGRESSIVE APPROACHES. UH, AS FAR AS YOU KNOW, TIME AND MONEY, UH, AS FAR AS DEPLOYMENT, UH, ON A FEEDER BY FEEDER BASIS, THIS WILL HELP US EVALUATE THE BEST OVERALL SOLUTION TO PROVE RELIABILITY, UH, RESILIENCY WHILE KEEPING OUR RATES LOW. ADDITIONALLY, THE OVERHEAD STUDY HIGHLIGHTS BEST PRACTICES IN CONNECTING DISTRIBUTED ENERGY RESOURCES AND MAKES RECOMMENDATIONS ON HOW TO INCREASE HOSTING CAPACITY. NEXT SLIDE PLEASE. SO, UH, AS FOR THE NEXT STEPS, UH, WE CONTINUE TO ANALYZE THE RESULTS OF THE UNDERGROUNDING STUDY WE HAVE RECEIVED ARE REVIEWING THE RESULTS OF THE OVERHEAD STUDY AND WE'VE STARTED WRITING THE DISTRIBUTION RESILIENCY PLAN. WE WILL BE ENGAGING STAKEHOLDERS IN THE COMING MONTHS TO INFORM BOTH NEAR AND LONGER TERM PRIORITIES IN THE PLAN. AND WE'LL BE BACK LATER THIS YEAR TO PRESENT THE DISTRIBUTION RESILIENCY PLAN, A LIVING PLAN THAT WILL GUIDE US FOR THE NEXT 10 PLUS YEARS TOWARD A MORE ROBUST AND RESILIENT FUTURE. THANK YOU. AND WE'RE HAPPY TO TAKE ANY QUESTIONS. QUESTIONS, UM, JUST, JUST ONE QUESTION, AND THIS MAY BE RELATES TO THE, THE PREVIOUS DISCUSSION OF STORAGE. I WAS JUST WONDERING AS PART OF THIS, UH, DID FOLKS LOOK AT THE USE OF BATTERY STORAGE, LIKE PUTTING IT AS AT SUBSTATIONS TO CREATE A MORE RESILIENT SYSTEM? IS THAT, IS THAT SOMETHING THAT YOU GUYS ASSESSED AT ALL THIS? WELL, THIS WAS FOCUSED ON THE DISTRIBUTION SYSTEM AND PARTICULARLY 5,000 MILES. BUT, UM, PART OF THAT, WHEN WE TALK ABOUT HOSTING CAPACITY, IT'S AN OPPORTUNITY WHETHER, YOU KNOW, IT MAY BE BATTERIES, IT COULD BE SOLAR, IT COULD BE ANY, ANY, ANY TYPE DIFFERENT TYPE OF, UH, OF DEVICES OUT THERE. AND THE, AND WHAT THE STUDY PULLED OUT IS THAT WE, UH, BY, UM, ACCEPT OR, UH, MODIFYING TO SOME OF THE, YOU KNOW, THE BEST PRACTICES TODAY, WE CAN PROBABLY GET A LITTLE BIT MORE AND BRING MORE ON OUR SYSTEM. AND SO THAT IS PART OF IT, UH, BUT NOT, NOT SPECIFICALLY ABOUT SUBSTATIONS ITSELF. OKAY, THANKS. YES, SIR. ANY OTHER HERE WE HAVE KABA AND AL, UH, KABA, DO YOU LIKE QUESTIONS? THANKS, UH, THANKS FOR THE PRESENTATION AND THE WORK. UM, I WAS JUST WONDERING, UM, IF ANY, UH, LOOK WAS DONE AT, UH, YOU KNOW, USING SMART METERS, UM, TO BE ABLE TO DISCONNECT ON A MORE CUSTOMER BY CUSTOMER BASIS IN A LOAD SHE EVENT, MY UNDERSTANDING IS THAT THAT IS DONE MAYBE A COUPLE OTHER PLACES. I'M NOT SURE IF ANY OF THEM ARE IN THE US, BUT JUST CURIOUS ABOUT THAT. YEAH, THAT WASN'T PART OF THE STUDY ITSELF. UM, BECAUSE PART OF IT IS, YOU KNOW, THE ABILITY TO SECTIONALIZE THE SYSTEM OFFERS MULTIPLE BENEFITS AND, UM, YOU KNOW, WHEN IT, WHEN SOMETHING, UH, YOU KNOW, YOU, YOU KNOW, IF THE STORM ROLL SO FORTH, MINIMIZING THE FOLKS OUT IN LOAD SHIFT EVENTS, WE HAVE ABILITY TO BREAK UP THE SYSTEM IN, IN SMALLER CHUNKS. THEN WE'VE HISTORICALLY BEEN ABLE TO, UH, WE ARE, UH, DISCUSSING THAT INTERNALLY. UM, AS FAR AS OTHER, OTHER METHODOLOGIES IN ORDER TO, UH, FURTHER, UH, SECTIONALIZE OUR SYSTEM, ESPECIALLY FOR, UM, UH, LOAD SHE PURPOSES. UH, BUT THAT WASN'T SPECIFICALLY PART OF THE STUDY. OKAY. YEAH, I WOULD DEFINITELY LOVE TO SEE IF, IF Y'ALL DO LOOK AT THAT, WHAT WHAT COMES OF IT, IF THERE'S, IF THERE'S A WAY TO DO IT JUST SINCE I, I'M SURE THERE ARE SOME CASES WHERE, YOU KNOW, IN ORDER TO KEEP, UH, SOME CRITICAL LOAD ONLINE, YOU ARE NOT ABLE TO TO SHUT OFF, YOU KNOW, OTHERS BECAUSE THERE'S MAYBE NOT A, ANOTHER CONNECTING FEEDER, YOU KNOW. BUT YEAH, JUST CURIOUS. THANKS AL. OH, THANK YOU. AND KIND OF, UH, LOOKING AT THE SLIDES AHEAD OF THE MEETING, I THOUGHT, WELL, THIS IS PRETTY HIGH LEVEL AND WHEN ARE THEY GONNA DO THE WORK? BUT IT SOUNDS LIKE YOU REALLY DID THE WORK AND, UH, GIVEN AUSTIN ENERGY, ALL KINDS OF INFORMATION, UH, IS THIS SOMETHING THAT [00:55:01] CAN BE DIGESTED WITHIN THE NORMAL MAINTENANCE AND AND IMPROVEMENT BUDGET FOR THE DISTRIBUTION SYSTEM? OR WILL THIS REALLY ULTIMATELY EVOLVE INTO A, A BIGGER CAPITAL NEED AND, UH, BE PRESENTED IN FUTURE YEARS? UH, YOU KNOW, HOW DOES, I KNOW THERE'S A MILLION MOVING PARTS IN THIS, SO HOW DOES THIS ALL MOVE FORWARD? UH, NO, GREAT, GREAT QUESTION. SO NO, WE HAVE, WE HAVE MONEY IN THE BUDGET, UH, IN THE CURRENT YEAR, UM, UH, MORE IN THE, THE UP UPCOMING BUDGET, WHICH WILL BE PRESENTED HERE SHORTLY. SO I, I WON'T, UH, UH, I'LL, I'LL LET THEM, UH, SHARE THE NUMBERS ON THAT. BUT THAT PART OF IT IS, UH, WE ALSO HAVE IN THE FIVE YEAR CAPITAL PLAN IS TO INCREASE THAT AMOUNT, UH, OVER THE NEXT, UH, FIVE YEARS. AND AS WE GET INTO THE PLAN, THAT'S ONE OF THE THINGS THAT IS, UH, YOU KNOW, YOU KNOW, AS WE, YOU KNOW, WE TALK ABOUT SHORT TERM AND MORE LONG TERM, UH, WE MAY FIND THAT CERTAIN, YOU KNOW, CERTAIN THINGS ARE COSTING MORE OR MAYBE ARE, ARE MORE COST EFFECTIVE AS WE DO IT. AND SO WE WILL HAVE TO CONSTANTLY REEVALUATE THAT ON AN ANNUAL BASIS, UM, YOU KNOW, WITH, YOU KNOW, IF THERE'S NEW TECHNOLOGY THAT COMES ALONG THE WAY OR SO FORTH, AND ADJUST THAT ACCORDINGLY. SO WE, WE HAVE QUITE A BIT OF MONEY, UH, BUDGETED, UH, WHICH YOU'LL SEE HERE SHORTLY, UH, IN THE, IN THE, UH, IN THE BUDGET, UH, FOR IT. UM, UH, AND THEN, YOU KNOW, WHETHER THAT'S ENOUGH OR OR NOT, WE WILL, WE'LL HAVE TO SEE AS, AS TIME GOES ON, IT SEEMS LIKE, I MEAN, IN THE, IN THE COURSE OF DAY-TO-DAY WORK, YOU'RE UPGRADING AND CHANGING ALL KINDS OF THINGS. IT'S JUST GIVES AN OPPORTUNITY TO STEP BACK AND, AND GET A BIG PICTURE AND I APPRECIATE THAT BEING DONE. THANK YOU. YEAH, ABSOLUTELY. THAT'S, THAT, THAT'S THE BIG THING ABOUT THE DISTRIBUTION, RESILIENCE, RESILIENCY PLAN. WE HAVE SO MUCH GREAT WORK ALREADY ONGOING, BUT TO BRING IT ALL TOGETHER IN ONE PLAN SO THAT WE CAN GO OUT THERE, MAKE THE NEEDED UPGRADES AND THEN MOVE ON AND NOT HAVE TO COME BACK AND, AND, UH, RETOUCH IT. AND SO IT'S BETTER USE OF, OF OUR, UH, UH, CUSTOMER'S MONEY. MM-HMM . GOOD. THANKS. SO I HAVE A QUESTION. SO HAVE YOU ALREADY PENCILED THIS IN FOR, SAY, OUR AND COUNCIL MEETINGS IN NOVEMBER OR DECEMBER, OR WHEN, WHAT'S THE TIMELINE? WE, WE'VE COMMITTED, UH, BY THE END OF THIS YEAR TO PRESENT IT. I DON'T KNOW THE SPECIFIC DATES HAVE BEEN PENCILED IN JUST YET. UM, AND, AND, UH, BUT IT WILL PROBABLY BE TOWARDS THE LATTER PART OF THIS YEAR CALENDAR. ALRIGHT, THANKS. OTHER QUESTIONS? ALRIGHT, WELL THANK YOU. UM, JUST, JUST THANK YOU FOR DOING THIS WORK AND DOING THIS CONTRACT. THIS IS, UH, PRETTY INCREDIBLE STUFF. SO MM-HMM . THANK YOU. CAN'T SAY I UNDERSTAND IT ALL, BUT, UH, , I APPRECIATE IT. THANK YOU. WELL, I ACTUALLY, I HAVE ONE MORE QUESTION. SURE. I WAS, UM, HEARING ABOUT HB 1 45 THAT GOT PASSED IN THE LEDGE AND IT'S WILDFIRE LIT. SO WE'LL BE A, A SECOND ANALYSIS ON WILDFIRE MITIGATION IS THERE'S SOME NEW REQUIREMENTS THAT THE LEGISLATOR PUT IN PLACE. SO, SO WE, PART OF THE DISTRIBUTION RESILIENCY PLAN IS TO BRING ALL THOSE EFFORTS UNDERWAY. WE HAVE A, A, A, UH, DISTINCT EFFORT FOR JUST WILDFIRE MITIGATION. UM, I'M NOT OVER THAT AREA, SO I'M NOT PROBABLY THE BEST PERSON TO SPEAK, UH, THOUGH MY TEAM, UH, CONTRIBUTES TO IT. THAT WILL BE REFERENCED IN THE DISTRIBUTION RESILIENCY PLAN BECAUSE IT ALL MATTER. IF WE'RE GONNA GO OUT THERE AND IT'S A WILDFIRE AREA, WE'RE GONNA GO AHEAD, YOU KNOW, IDEALLY WOULD APPLY WILDFIRE, WILDFIRE STANDARDS TO IT, WHICH MAY BE SOMETHING A LITTLE BIT MORE THAN MAYBE SIMPLE HARDENING OR, YOU KNOW, SMART DEVICES OR SO, OR SOME COMBINATION THEREOF. AND SO THAT IS SOMETHING THAT HAS TO BE TAKEN IN CONSIDERATION, UM, UH, AS WE'RE, YOU KNOW, TOUCHING AREAS OF THE SYSTEM. SO YEAH, THE ONES I'VE SEEN ARE HB 1 45, HB 1 43, AND HB 1 44, SB 34, SB 7 67, SB 8 68. SO IF WE COULD PENCIL THAT IN SOMETIME IN THE FUTURE. AND IT MAY BE A SEPARATE AND PARALLEL THING, UM, FOR DISCUSSION ABOUT WHAT, WHAT DOES THIS MEAN FOR AUSTIN ENERGY, WHAT ADDITIONAL ACTIVITIES YOU MAY NEED. AND I CAN, I'LL SEND AN EMAIL ON ALL THOSE THAT I JUST SAID. SOUNDS GREAT. THANKS. THANK YOU. NOW WE'RE AT NUMBER NINE, STAFF BRIEFING OF THE FISCAL YEAR 20 25, 20 26 AUSTIN ENERGY BUDGET. GOOD EVENING. GOOD EVENING. IS THAT WORKING? YEAH, WE CAN'T HEAR YOU. YOU CAN'T HEAR ME? IS THAT BARELY, IS THAT BETTER? OKAY. IT'S JUST A LITTLE, I MAY HAVE TO HOLD IT. I'LL LEAN OVER. HOW ABOUT THAT? GOOD EVENING. I'M JOHN DAVIS AND SENIOR VICE PRESIDENT, UH, [01:00:01] CHIEF, UM, FINANCIAL OFFICER ACTING IN THE ACTING ROLE FOR AUSTIN ENERGY. AND I'M HERE TO PRESENT THE 2026 PROPOSED BUDGET. THIS IS AUSTIN ENERGY'S SECTION OF THE CITY BUDGET THAT WAS PRESENTED YESTERDAY BY CITY MANAGER. AND YOU MAY RECALL THERE WAS A SLIDE IN THERE THAT SHOWED THAT AUSTIN ENERGY COMPRISED ABOUT 30% OF THE SOURCES OF REVENUE FOR THE CITY. SO THAT'S JUST TO TRY AND GIVE YOU SOME PERSPECTIVE. WE NORMALLY INCLUDE THAT SLIDE IN OUR PRESENTATION, BUT SINCE THE PRESENTATION HAPPENED YESTERDAY, WE COULDN'T MAKE IT IN THERE IN TIME. SO, UM, WITH THAT SAID, I'LL JUST GO THROUGH THE PRESENTATION FROM HERE. NEXT SLIDE, PLEASE. IT IS GONNA BE A REAL SURPRISE WHEN IT SHOWS UP . OKAY. EVERYBODY SHIFT A HARD COPY. YEAH, YEAH, I WAS BEING FUNNY. PUT THE, I'M GONNA SEND THEM A MESSAGE BECAUSE I CAN STILL SEE DAVID. OKAY. WHY IS IT? I WILL LET OUR NETWORKING TEAM KNOW. TAKE A BREAK. BREAK, TAKE A RECESS. WE HAVE A TECHNOLOGY PROBLEM, . OKAY, LET'S TAKE A FIVE MINUTE BREAK. I'M LETTING THEM KNOW ONLINE, I'M ABLE TO COMMUNICATE WITH THEM. OKAY. SO FIVE MINUTES, 7 0 5 RIGHT NOW, THIS RECONVENE AT SEVEN 10. WE'RE WAITING FOR, WHAT [9. Staff Briefing on the FY 2025/26 Austin Energy Budget by John Davis, Acting Senior Vice President and Chief Financial Officer.] I'M ABOUT TO DISCUSS IS A BUDGET FOR A FUTURE YEAR. AND AS WE KNOW, THE ACTUAL RESULTS WILL END UP BEING DIFFERENT. MOVE ON TO THE NEXT SLIDE. OKAY. IN THE AGENDA TONIGHT, WE'RE GONNA COVER THE OVERVIEW AND HIGHLIGHTS. THEN WE'RE GONNA TALK ABOUT THE FINANCIAL HEALTHY UTILITY IF WE ADOPT THIS PROPOSED BUDGET. AND THEN WE'RE LASTLY GONNA TALK ABOUT THE RATE PAYER IMPACT TO THE TYPICAL RATE PAYER. NEXT SLIDE PLEASE. NEXT SLIDE. OKAY. LET'S TALK ABOUT THE BUDGET, UH, FOR REVENUES. WE'RE GONNA START AT THE BOTTOM HERE WITH THE BUDGET FOR BASE REVENUES. IS IT 749.2 MILLION? THE BUDGET FOR POWER SUPPLY REVENUES IS AT 592.9 MILLION. AND IT'S IMPORTANT TO NOTE THAT IN THE FORECAST THAT WE USE FOR THE 26 BUDGET, UM, THE INDICATORS WERE, UM, INDICATING THAT WE WERE GONNA HAVE A DECLINE IN GROWTH IN TRAVIS COUNTY. SO THE GROWTH RATE THAT WE'RE SHOWING FOR 2026 IS SLIGHTLY LOWER THAN WHAT WE ANTICIPATED LAST YEAR. WE'RE SHOWING A 1.3% INCREASE IN LOAD, UM, WHICH IS A LITTLE SLIGHTLY SLOWER GROWTH RATE THAN WHAT WE PROJECTED [01:05:01] LAST YEAR AT 1.6%. AND WE'RE SHOWING A 1.7% INCREASE IN CUSTOMER COUNT COMPARED TO LAST YEAR'S 2%. UM, AND THESE ASSUMPTIONS ARE COMMON DRIVERS BEHIND ALL VARIOUS REVENUE COMPONENTS. SO, FINISHING OUT THE PIE CHART, UH, REGULATORY AND CONGESTION REVENUE, RIGHT? REVENUE OF 244 MILLION, COMMUNITY BENEFIT REVENUE OF 123.3 MILLION. THIS PAYS FOR THE CAP PROGRAM. AND THEN WE HAVE TRANSMISSION REVENUES OF 116.3 MILLION INTEREST REVENUE ON CASH FUNDS OF 44 MILLION AND OTHER REVENUE OF 76.8. OVER ON THE RIGHT HAND SIDE, WE'RE GONNA GO THROUGH SOME OF THE DRIVERS, UM, THAT ARE AFFECTING REVENUE. UM, AS YOU MAY HAVE RECALLED DURING THE FORECAST PRESENTATION, AUSTIN ENERGY IS PROPOSING A 5% INCREASE IN BASE RATES TO HELP COVER THE INCREASE IN COSTS THAT WE'VE SEEN. UM, WE'RE ALSO INCLUDING AN INCREASE IN POWER SUPPLY REVENUES OF 17.1 MILLION, UM, INDICATING AN INCREASE IN THE COST THAT AUSTIN ENERGY IS GONNA INCUR FOR, UH, PROCURING POWER. AN INCREASE IN REGULATORY REVENUE, REVENUE DUE TO RISING COST IN ERCOT DUE TO ALL THE TRANSMISSION REVENUE, UH, TRANSMISSION INVESTMENT IN THE STATE. UH, AND THAT'S 10.7 MILLION AN INCREASE IN THE COMMUNITY BENEFIT REVENUE OF 26.9 MILLION, AND AN INCREASE IN TRANSMISSION REVENUE THAT AUSTIN ENERGY COLLECTS FROM OTHER USERS OF AUSTIN ENERGY'S SHARE OF THE STATE GRID 7.5 MILLION. NEXT SLIDE. PLEASE TRY NOT TO BUMP THE MIC. OKAY. FOR THE COSTS. SO WE TALKED ABOUT THE 1.95 BILLION IN REVENUES THAT WE NEEDED. UH, FOR THE, UH, BUDGET FOR 2026, WE'RE GONNA TALK ABOUT THE COSTS THAT THOSE REVENUES NEED TO COVER. UH, WE HAVE POWER SUPPLY COSTS OF 527.7 MILLION TRANSMISSION AND ERCOT COST OF 217.7 MILLION, DEBT SERVICE OF 195 MILLION. THE CITY GENERAL FUND TRANSFER OF 139 MILLION CIP TRANSFER. THIS IS FOR THE CASH PORTION OF, UH, THE DEBT BUDGET, 123.5 MILLION JOINT PROJECTS, UH, FPP AND STP 1 24 0.6 MILLION. AND THEN OTHER CITY DIRECT TRANSFERS OF 77.3 MILLION. AND WE HAVE O AND M COST OF 590 MILLION. SO THAT COMPLETES THE $1.99 BILLION WORTH OF, UM, REQUIRE, UH, USES THAT WE HAVE FOR THE REVENUE BUDGET. UM, OVER ON THE RIGHT HAND SIDE, WE BREAK OUT THE O AND M EXPENDITURES INTO, UH, ANOTHER PIE CHART. UM, SO O AND M EXPENDITURES FOR 2026 OF 590 MILLION, COMPRISED OF 340 MILLION OF PERSONNEL COSTS, 230 MILLION OF CONTRACTUALS COSTS AND 19.8 MILLION OF COMMODITIES COSTS. AND I'M GONNA GO THROUGH SOME OF THE COST DRIVERS THAT ARE DRIVING THE O AND M NUMBERS ON THE NEXT SLIDE. BUT BEFORE WE GO THERE, THE REASON WHY WE FOCUS ON THE 590 MILLION OF OPERATING COSTS IS BECAUSE THAT IS THE ONE AREA OF THE UTILITY THAT WE HAVE MORE CONTROL OVER THE EXPENDITURES AS COMPARED TO POWER SUPPLY OR TRANSMISSION OR SOME OF THE OTHER CHARGES THAT WE INCUR THAT WE DON'T HAVE AS MUCH CONTROL OVER. SO WITH THAT SAID, I'LL GO THROUGH THE COST DRIVERS FOR THE O AND M SIDE OF THE BUDGET ON THE NEXT SLIDE. CAN YOU REAL QUICK ABOUT 1.95 BILLION IN REVENUE AND 1.99 BILLION IN COSTS? YES. SO YOU'RE GONNA SEE A LITTLE BIT LATER IN THE FUND SUMMARY THAT WE SHOW A DEFICIT FOR 2026, UM, OF ROUGHLY $43 MILLION. UM, BUT IF YOU LOOK IN THE AFTER YEARS, UH, WITH THE IMPACT OF COST CONTROL AND THE BASE RATE INCREASES OVER THE FIVE YEAR PERIOD, THAT DEFICIT DWINDLES DOWN TO WHERE IT'S BASICALLY NOTHING, UH, IN THE OUTER YEARS. IT'S LIKE 3 MILLION, IF I REMEMBER CORRECTLY, IN THE OUTER YEARS. SO, UM, YOU'RE CORRECT, THE EXPENSES OUTPACED REVENUES AND THE 26 BUDGET. AND THAT'S SOMETHING THE REST OF THE ALSO DEALING WITH. UM, OKAY. COST DRIVERS IN THE, UH, BUDGET THAT ARE DRIVING THE OWN EXPENSE. A GOOD PORTION OF THAT INCREASE IS RELATED TO THE, UM, INCREASE IN THE EMPLOYEE SALARIES AND FRINGE COSTS OF 14.8 MILLION, AND THAT INCLUDES AN ADDITIONAL 2.2 MILLION FOR ADDITIONAL FTES. WE'RE ALSO SEEING AN INCREASE IN AUSTIN'S SHARE OF OPERATING COSTS FOR THE JOINT PROJECTS OF 13.5 MILLION. AN INCREASE IN TRANSMISSION EXPENSE, AGAIN, DUE TO RISING COSTS IN THE ERCOT MARKET. BAD DEBT EXPENSE INCREASE OF 4 MILLION INCREASE IN NADOS OPERATING COSTS OF 3.8 MILLION, INCREASE IN CUSTOMER ENERGY SOLUTIONS, CONSERVATION REBATES OF 3.7 MILLION INCREASE IN THE APPLE ONE [01:10:01] CONTRACT COSTS FOR JUST LABOR RATES OF 2.8 MILLION, AN INCREASE IN THE HEAVY EQUIPMENT THAT WE LEASE FROM ALL TECHS, SUCH AS THE BUCKET TRUCKS OF 2.7 MILLION, INCREASE IN SECURITY OF TWO AND A HALF MILLION, UH, RELATED TO SOME COMPLIANCE REQUIREMENTS THAT WE NEED TO MEET. AND, UH, AND, UM, AN EXPENSE THAT WE'RE GONNA INCUR FOR, UM, UH, UPGRADING TO A NEW GENESIS PHONE SYSTEM. THE PLATFORM THAT WE USE NOW IS NO LONGER IN, UH, SUPPORTED. SO, AND THEN IN THE TRANSFERS SECTION, UM, WE HAVE AN INCREASE IN CIP CASH TRANSFER OF 25 MILLION THAT'S DRIVEN BY THE INCREASE IN THE CIP EXPENDITURE PLAN, AN INCREASE IN DEBT SERVICE COST OF 19.2 MILLION, AN INCREASE IN THE GENERAL FUND TRANSFER OF 14 MILLION, AND AN INCREASE IN OTHER TRANSFERS TO THE CITY OF 4.3 AND RESTORING NON-NUCLEAR DECOMMISSIONING, UH, FUNDING OF 6 MILLION. NEXT SLIDE, PLEASE. THIS IS JUST TO POINT OUT THAT WE'RE NOT THE ONLY ONES THAT ARE INCURRING, UH, THE INCREASED COST DURING THE FORECAST PRESENTATION. UM, A DISCUSSION ENSUED ABOUT THE FACT THAT, UH, THE COST OF TRANSFORMERS AND POLES AND EQUIPMENT THAT THE UTILITY COMPANY HAS TO INCUR, UH, TO MAINTAIN SERVICE ARE INCREASING AT A MUCH HIGHER RATE THAN THE CONSUMER PRICE INDEX. UM, THIS IS DRIVING INCREASES ACROSS THE REST OF THE UNITED STATES AND THROUGHOUT TEXAS THAT UTILITIES ARE TRYING TO COVER. UM, A FEW EXAMPLES. UH, PACIFIC GAS AND ELECTRIC, UM, HAD AN INCREASE OF ABOUT $40 PER CUSTOMER. AND SOCAL EDISON HAD AN INCREASE OF ABOUT $32. A CUSTOMER CON ED IN NEW YORK CITY RAISED BILLS 12% DUKE ENERGY UP BY 13%. SHIFTING OVER THE RIGHT HAND SIDE, YOU CAN SEE THAT WITHIN THE STATE OF TEXAS AND FREDERICKSBURG, AN 11.23% INCREASE BY CENTRAL TEXAS ELECTRIC CO-OP PER ALICE RAISED RESIDENTIAL RATES BY 4.4%, INCLUDING A $10 PER MONTH CUSTOMER CHARGE INCREASE. DENTON RAISED THE AVERAGE RESIDENTIAL RATES BY MORE THAN $30, AND CPS RAISED THEIRS BY 4.25%. SO WE'RE NOT THE ONLY ONES THAT ARE SEEING THE, THE COST INCREASING. UM, LET'S GO AHEAD AND MOVE TO CAPITAL IMPROVEMENT PROGRAM. NEXT SLIDE. SO THE CAPITAL IMPROVEMENT PROGRAM FIVE YEAR PLAN IS SHOWING A TOTAL EXPENDITURES OVER THE FIVE YEARS OF 1.741 BILLION. AND YOU CAN SEE THE CATEGORIES BROKEN OUT THERE. UH, ELECTRIC SERVICE, UM, ELECTRIC SERVICE DELIVERY IS THE LARGEST OF THE CATEGORIES AT 1.3 BILLION, FOLLOWED BY POWER PRODUCTION AND DISTRICT COOLING AND, UM, GENERAL CAPITAL EXPENDITURES. SO THE CAPITAL PLAN IS FUNDED, UH, ABOUT, UH, 48, UH, PERCENT CASH AND 52%, SORRY, 42% CASH AND 58% DEBT. UM, AND WE'RE GONNA SEE A SLIDE A LITTLE BIT LATER THAT TALKS ABOUT HOW THAT PERCENTAGE IS GONNA SHIFT SLIGHTLY OVER TIME AS WE HAVE A MUCH HIGHER CAPITAL BUDGET THAN WE'VE HAD IN THE PAST. SO, GOING OVER THE CAPITAL BUDGET HIGHLIGHTS, THIS WILL ANSWER A QUESTION THAT WAS RAISED EARLIER. UM, ON THE NEXT SLIDE, THANK YOU. UM, THE CAPITAL BUDGET HAS BEEN, UM, IMPACTED BY THE DISTRIBUTION, UM, COSTS THAT ARE INCURRED FOR THE MATERIALS THAT WE BUY, UH, FOR OUR SYSTEM. UM, THE ANSWER, THE QUESTION THAT WAS ASKED EARLIER WAS WHAT IS IN THE BUDGET RELATED TO THE RESILIENCE PROGRAM? SO IN THAT THIRD BULLET, YOU'LL SEE THAT WE HAVE 83 MILLION OVER THE FIVE YEAR TIMEFRAME. UH, THAT'S INCLUDED IN THE CIP BUDGET FOR RESILIENCY. SO WE SPREAD THAT OUT OVER THE FIVE YEARS DISTRICT COOLING, WE HAVE A HUNDRED MILLION IN THE SPIN PLAN FOR THE FIVE YEARS AT WHICH 9.5 MILLION IS IN 2026. THAT'S PRIMARILY RELATED TO THE CONVENTION CENTER, UH, COOLING SYSTEM THAT'S BEING, UM, BASICALLY CONSTRUCTED WITH THE NEW CONVENTION CENTER. OVER ON THE RIGHT HAND SIDE, WE HAVE THE BRACKENRIDGE SUBSTATION COSTS OF WHICH WE, UH, ANTICIPATED 43.7 MILLION IN THE 2026, SORRY, 43.7 MILLION IN THE FIVE YEAR PLAN, AND 11 POINT A HALF MILLION IN 2026. UM, THE TIMBER CREEK SUBSTATION, 21.3 MILLION IN THE SPIN PLAN, OF WHICH 42.2 IS IN THE 26 BUDGET. AND THE NORTH CENTRAL AUSTIN UPGRADE, UH, FROM 69 KB SYSTEM TO 1 38. UH, THAT WILL ADD CAPACITY AND RELIABILITY TO CENTRAL AUSTIN. WE HAVE 18.1 MILLION OVER THE FIVE YEARS OF WHICH 11.1 IS IN THE SPIN PLAN. AND THEN LAST BUT NOT LEAST, A HIGHLIGHT FOR POWER PRODUCTION DECKER DAM IMPROVEMENTS, FALWELL LANE BANK STABILIZATION WORK, AS WELL AS WORK AT SANDHILL, WHICH IS 19 MILLION IN FISCAL YEAR 2026 [01:15:03] ONTO PERSONNEL REQUIREMENTS. SO THE BUDGET THAT WAS, UH, SUBMITTED INCLUDES 32 POSITIONS, UM, OF WHICH 22, SORRY, 20 ARE CONVERSIONS AND 12 ARE NEW FTES. AND THE NET COST OF THE PERSONNEL ADDITIONS IS ABOUT 2.28 MILLION YOU'LL SEE THERE IN THE ANNUAL NET COST COLUMN. UM, JUST AS A SIDE NOTE, OVER THE LAST 10 YEARS, THE CUSTOMER GROWTH HAS BEEN APPROXIMATELY TWO TIMES WHAT OUR FTE GROWTH RATE HAS BEEN. SO WITH THIS BUDGET THAT WE PUT TOGETHER IN THE FORECAST IN THE OUTER YEARS, WE'RE PLANNING ON 20 POSITIONS A YEAR FOR EACH OF THE FIVE YEARS. UM, OKAY, MOVING ON. NEXT, NEXT. OKAY. IN THE FORECAST FUND SUMMARY, UM, TO COMMISSIONER'S TOTAL QUESTION, HE MADE A COMMENT ABOUT, UM, HOW THE LEAD OFF SLIDES WERE SHOWING THAT WE HAD TOTAL EXPENSES OF 1.99 BILLION, AND THE REVENUE SLIDE WAS SHOWING 1.95 BILLION. THAT'S WHAT'S DRIVING THAT $43.5 MILLION DEFICIT IN THE FISCAL YEAR PROPOSED BUDGET COLUMN. AND YOU COULD SEE THAT AS WE MOVE THROUGHOUT THE FUTURE YEARS, UM, THAT EXCESS OR DEFICIENCY, THE DEFICIENCY GOES AWAY AND BECOMES A SLIGHT EXCESS, UH, 3.2 MILLION IN 20 27, 1 0.1 MILLION IN 2028 AND SO ON. AND THAT'S BECAUSE THE BASE RATES THAT WE'RE PUTTING INTO EFFECT IN 2026, THE BASE RATE INCREASE OF 5% IS GONNA HELP OFF SOME OF THAT OFFSET SOME OF THAT IN 2026, BUT THEN IT STARTS TO OFFSET MORE OF IT AS WE MOVE INTO THE OUTER YEARS. THE DEFICIT THAT YOU SEE THERE IN 2025, UM, IS A BIT MISLEADING. THAT REPRESENTS THE $30 MILLION TRANSFER THAT WE MADE TO THE POWER SUPPLY STABILIZATION RESERVE TO MEET THE CITY POLICY OF HAVING ON HAND A 90 DAY, UM, BALANCE OF THE NET POWER SUPPLY COSTS. CAN I ASK A QUICK QUESTION ON THE SURE. BASE RATE INCREASE? YES. IT'S ACTUALLY TWO QUESTIONS OR MAYBE THREE . UM, SO THERE WAS A, A RATE CASE BACK IN 2022. COUNCIL ADOPTED NEW RATE, A NEW RATE STRUCTURE. UM, THE CUSTOMER CHARGE WENT UP OVER I THINK A PERIOD OF THREE YEARS, AND IT'S CURRENTLY $15. IS THE ANNUAL BASE RATE INCREASES NOT A CHANGE TO THE MONTHLY CUSTOMER CHARGE, IT'S JUST IN THE, THE KILOWATT CHARGE? OR HOW, HOW WOULD THE, HOW WOULD THE 5% INCREASE ACTUALLY BE IMPLEMENTED FOR 2026? UM, FOR 2026? FOR 2026, THE CUSTOMER CHARGE FOR RESIDENTIAL WAS BUMPED UP TO 1650. AND THE REST OF THE BALANCE THAT MADE UP THE 5% WAS SPREAD INTO THE FIRST TIER. AND LOOKING TO RUSTY, MAYBE RUSTY COULD COME UP AND SPEAK TO THE OUTER YEARS. CYRUS, IF YOU NEED TO KNOW WHAT'S IN, YOU KNOW, THE FUTURE YEARS. UM, AND THEN WOULD THERE BE, WOULD THAT BE THE SAME FOR COMMER, YOU KNOW, COMMERCIAL FOLKS HAVE A DIFFERENT STRUCTURE. YEP. I GUESS I'M ASKING, ARE WE GIVEN, IS EVERYONE GETTING IN THIS PROPOSAL A 5% INCREASE OR IS IT ONLY RESIDENTIAL CUSTOMERS? RUSTY MANUIA IS ACTING DEPUTY GENERAL MANAGER? NO, THE 5% IS, IS SPREAD ACROSS ALL CLASSES. SO EVERYBODY, WHAT IF YOUR SAMSUNG OR N PA THEIR, THEIR RATES GET INCREASED? ALL, ALL CLASSES RECEIVE THE RATE INCREASE. OKAY. AND, AND ABOUT HOW MUCH OF THE TOTAL BILL IS THIS BASE RATE? BASE RATE REPRESENTS ABOUT HALF OF THE BILL. SO WHEN WE TALK ABOUT A 5% BASE RATE INCREASE, IT'S REALLY ABOUT A TWO AND A HALF PERCENT, UH, INCREASE ALL THINGS ELSE EQUAL. OKAY. AND THEN MY OTHER QUESTION, SORRY, I DON'T KNOW HOW MANY QUESTIONS I'VE ASKED , UM, IS MORE LIKE THE LEGALITY OF THIS. 'CAUSE WE WENT THROUGH A WHOLE RATE CASE, RIGHT? TO DETERMINE ALLOCATION OF RATES AND HOW MUCH TO GO UP. AND THEN THROUGH THIS BUDGET PROCESS, WE'RE SAYING EVERY YEAR WE'RE GONNA INCREASE BASE RATES 5% THAT I'M NOT A LEGAL EXPERT, BUT THAT SEEMS FISHY TO ME. LIKE SHOULDN'T THOSE THINGS HAPPEN THROUGH A RATE CASE? ISN'T THAT THE WHOLE POINT OF A RATE CASE IS YOU DETERMINE WHAT THE RATES ARE? SO, UM, WHAT, SO ULTIMATELY OUR REGULATORY BODY IS THE CITY COUNCIL. AND SO IF THEY APPROVE THE BUDGET, THEN THEY APPROVE THE RATES. AND SO THAT'S IN, IN SHORT, THAT'S THE REGULATORY HURDLE THAT WE HAVE TO GET OVER. BUT FOR WHAT IT'S WORTH, UM, THESE, UH, ANNUAL, UH, BUDGET BASED RATE INCREASES ARE, UM, UH, NOT NEW, UH, IOUS [01:20:01] AND, UM, WIRE COMPANIES, UH, GET THE SAME BENEFIT THROUGH THE PUC THROUGH DISTRIBUTION COST RECOVERY FACTOR, TRANSMISSION COST RECOVERY FACTOR. UH, WE WILL KEEP INTACT THAT FINANCIAL POLICY THAT SAYS EVERY FIVE YEARS WE'LL DO A COST OF SERVICE. THAT'S THE CHECKS AND BALANCE. MM-HMM . THAT WE DON'T RUN RATES UP TOO HIGH OR TOO LOW. AND SO EVERY YEAR, EVERY FIVE YEARS, WE'LL DO A THAT COST OF SERVICE AND SEE WHERE WE STAND, RIGHT? SO EVEN IF THERE ARE INCREMENTAL INCREASES AND THE COST OF SERVICE SAYS, OH, YOU NEED MORE, THE NICE PART ABOUT IT IS IT AVOIDS THE RATE SHOCK. KEEP IN MIND THAT AUSTIN ENERGY'S COST RECOVERY UTILITY PLAIN AND SIMPLE. SO REGARDLESS OF WHAT THE RATES ARE, IF COSTS GO UP, WE HAVE TO RECOVER IT. IT'S JUST HOW MM-HMM . DO YOU WANT IT IN ONE BIG SUMP AND CREATE A BUNCH OF RATE SHOCK OR DO YOU WANNA TAKE IT AT BITE-SIZED PIECES AND TRUE IT UP THROUGH A COST OF SERVICE? AND IF YOU OVER COLLECT, THEN THEN THAT WOULD BE REFLECTED IN THE COST OF SERVICE AND WE'D ADJUST. OKAY. WELL I THINK THAT'S LIKE THE PSA, RIGHT? YEP. SOMETIMES IT'S BEEN OVER RECOVER EVEN THEY UNDER RECOVER AND THEY BALANCE IT OUT. YEAH. BUT THE P THE PSA IS SOMETHING THEY CAN LOOK AT EVERY SI YOU KNOW, THEY CAN CONTINUALLY REVIEW. THIS IS MORE, ONCE YOU PASS THE BUDGET, IT'S A, IT'S AN INCREASE ON EVERYBODY. UM, UM, AND IN THIS CASE, IT SOUNDS LIKE YOU'RE SPREADING IT BETWEEN THE CUSTOMER CHARGE AND THE, THE OTHER, THE FIRST TIER OF ENERGY USE. THE, WE, WE, THE LOGIC BEHIND THAT, THAT TYPE OF RATE DESIGN IS, IS A FIRST, UM, BY, BY ADDING A DOLLAR AND A HALF OF THAT, FIRST OF ALL, A 5% BASE RATE INCREASE REPRESENTS ABOUT A $3 CHARGE INCREASE. AND, AND I THINK JOHN WILL WILL SHOW THAT THE NOTION ABOUT INCREASING THE CUSTOMER CHARGE BY A DOLLAR AND A HALF, IT INSULATES THE CAP CUSTOMERS, CAP CUSTOMERS DON'T HAVE TO PAY THAT. OKAY. THOSE WERE MY THANKS FOR ANSWERING THE QUESTIONS. HAVE A QUESTION. OKAY. UM, MY UNDERSTANDING WAS THAT THERE WERE, I THINK 2% IS IN MY HEAD, INCREASES THE LAST COUPLE YEARS, UH, AS PART OF THE BUDGET. IS THAT CORRECT? THAT'S CORRECT. 2% AND 24 AND 2% AND 25. OKAY. AND FOR THOSE ON THE RESIDENTIAL SIDE, THE, THE CUSTOMER FEE WAS NOT CHANGED, RIGHT? THOSE JUST WENT INTO THE CONSUMPTION RATES, IS THAT CORRECT? SO THOSE RUSTY MANUS, UH, ACTING DEPUTY GENERAL MANAGER, UH, IF YOU'LL REMEMBER RIGHT, THAT WE WERE IN THAT PERIOD OF, OF INCLINING CUSTOMER CHARGES SET OUT BY THAT 22 RATE CASE. SO, UM, THE AGREEMENT WE CAME TO IN THAT RIGHT CASE, I THINK WE WERE AT 13, 14, THEN 15. SO AT, AT, SO BECAUSE THAT WAS ALREADY ESCALATING, THAT CUSTOMER CHARGE WAS ALREADY ESCALATING. WE, UM, AND, AND, AND IT WAS ALL SUPPOSED TO BE REVENUE NEUTRAL. SO AS THAT CUSTOMER CHARGE WENT UP, THE ENERGY CHARGES WENT DOWN. SO THE BILL STAYED NEUTRAL, CREATED REVENUE NEUTRALITY, WE BACKFILLED THE ENERGY CHARGE TO GET, UM, THE 5% RIGHT. SO WE 2%, 2%, EXCUSE ME, 2%. UM, SO THAT WE WOULDN'T IMPACT THE CUSTOMER CHARGE ANY MORE THAN THAT ALREADY WAS BEING IMPACTED. YEAH, I GUESS I THINK AS SARAH IS ALLUDING TO, UM, THERE WAS A LOT THAT WENT INTO GETTING TO THAT PLACE, UH, PARTICULARLY ON THE, THE CUSTOMER CHARGE. UM, AND I HEAR YOU, UM, AS IT PERTAINS TO CAP CUSTOMERS, BUT YOU KNOW, THERE'S A LOT OF FOLKS THAT ARE JUST ABOVE THE THRESHOLD FOR GETTING THE CAP DISCOUNT, UM, THAT, YOU KNOW, ARE OFTEN ON THE LOWER END OF THE, YOU KNOW, USAGE. AND, UM, SO INCREASING THE, THE CUSTOMER FEE, YOU KNOW, IS GONNA IMPACT THOSE, THOSE FOLKS WHO DON'T GET, DON'T GET THE DISCOUNT MORE. UM, AND, YOU KNOW, WHATEVER, THERE, THERE COULD BE A WHOLE DEBATE ABOUT THAT. BUT I THINK THIS DOES, UM, YOU KNOW, KIND OF CALL, CALL INTO LIGHT, I GUESS. UM, WHY, WHY JUST, UM, HA HAVING IT, HAVING IT DONE IN THIS, THIS KIND OF, UM, FASHION WITH VERY LIMITED OPPORTUNITY FOR PUBLIC AND RATE PAYER INPUT IS, IS A BIT TROUBLING. UM, I, YOU KNOW, I SUPPORT AUSTIN ENERGY. I WANT Y'ALL TO HAVE THE FUNDS THAT YOU NEED TO OPERATE. UM, BUT I THINK, UH, AS, AS OFTEN, OFTEN HAS BEEN THE CASE THERE, THERE CAN BE DISAGREEMENT AS TO HOW THOSE FUNDS ARE RECOVERED FROM THE CUSTOMER. SO I, I DO HAVE CONCERN ABOUT THAT, UH, INCREASE IN THE CUSTOMER CHARGE [01:25:01] ESPECIALLY. 'CAUSE IT SOUNDS LIKE IT'S GONNA KEEP HAPPENING WITHOUT A RATE CASE. YEAH. UH, JUST TO, TO GET PERSPECTIVE, UM, AUSTIN ENERGY'S PROPOSED CUSTOMER CHARGE IS 1650 P'S CURRENT CUSTOMER CHARGE IS 32 50, BLUE BONDS IS 2250, AND GEORGETOWN IS 24 80. SO, UH, AND THOSE ARE MUNICIPALITIES, UH, AROUND US, UH, SAVING, ACCEPT, UM, WELL, UH, AND, AND CO-OPS AS FAR AS THAT GOES. SO WE HAVE SOME OF THE, ONE OF THE LOWER CHARGES CUSTOMER CHARGES. WELL, I MEAN THAT WAS A, A SELECT GROUP, RIGHT? LIKE WHERE, WHERE DOES, WHERE, WHERE DOES THAT RANK STATEWIDE, RIGHT? I THINK, WELL, I, I DON'T KNOW. I, I THINK THAT WOULD BE PRETTY DIFFICULT TO ASCERTAIN BECAUSE THE MAJORITY OF THE STATE IS COMPETITIVE. WELL, I'M JUST SAYING YOU, YOU SHARED THREE EXAMPLES. THERE'S I THINK 150 SOME NON-COMPETITIVE UTILITIES IN TEXAS. SO, UH, IF WE'RE GONNA COMPARE, THEN WE SHOULD COMPARE BROADER THAN JUST THREE OR FOUR EXAMPLES. UM, RUSTY, I'VE GOT A QUESTION. THE INCREASE IN THE GENERAL FUND TRANSFER, IS THAT COMING THAT DIRECTION COMING FROM CITY MANAGER'S OFFICE OR THE COUNCIL OR WE'RE, WE'RE, WE CONTINUE TO FINAL, UH, FOLLOW FINANCIAL POLICY. OUR FINANCIAL POLICY THAT SAYS THAT WE CAN PAY UP TO 12%. THAT'S WHAT WE'RE PAYING OF REVENUES. IT'S INCREASING BECAUSE WE'RE STARTING TO SEE THAT THAT, UH, COMPOUNDING EFFECT OF THE 5% BASE RATE INCREASE FROM THE 21 CASE, THE 2% BASE RATE INCREASE IN 24, THE 25. AND THEN OF COURSE THIS ALSO LAYERS IN 5% BASE RATE INCREASES. SO THIS SEEMS KIND OF LIKE A VICIOUS CIRCLE HERE. UM, BECAUSE OF THE, IN THE PRESENTATION, THE 5%, UM, RATE INCREASE WAS GONNA YIELD, WHAT, 38 AND A HALF MILLION DOLLARS? YES. WELL, 14 OF THAT 38 AND A HALF IS GOING TO THE GENERAL FUND TRANSFER ADDITIONALLY TO THE GENERAL FUND TRANSFER. SO I JUST WANT TO POINT THAT OUT THAT OVER A THIRD OF THE INCREASED REVENUE FROM THE BASE RATE INCREASE IS GETTING SWEPT OUT BY THE GENERAL FUND TRANSFER. COMMISSIONER RAEL PLEASE. AND MY, MY QUESTIONS, UH, WERE ALSO ABOUT THE, THE FUND TRANSFER PIECES, ALTHOUGH OBVIOUSLY THERE'S INCREASES ACROSS THE BOARD HERE IN THESE VERY LARGE NUMBERS. UM, BUT, UH, BUT I DO SEE KIND OF A LEVELING OFF OF THE INCREASES IN THE GENERAL FUND TRANSFER, I GUESS, YOU KNOW, BASED ON CONVERSATIONS WE'VE HAD OVER THE LAST COUPLE OF YEARS. BUT THEN YOU KIND OF NOTICE THAT THEN THE SUPPORT TRANSFER LINE GOES UP MORE PRECIPITOUSLY, . SO IT SEEMS LIKE THE UTILITY'S NOT, UH, NECESSARILY SAVING ANY ON THE TRANSFER. SO I DON'T KNOW WHAT IS THE SUPPORT TRANSFER IS ALSO POLICY BASED OR FORMULAIC, UM, OR WHAT DETERMINES SORT OF HOW THAT GOES UP OR DOWN? SO MOST OF THOSE COSTS IN THE OUTER YEARS ARE JUST TRENDED OUT BASED ON HISTORICAL TRENDS. UH, I BELIEVE IN 26 THOSE TRANSFERS INCREASED ABOUT WHAT, 7 MILLION, UH, FROM CURRENT YEAR, 71 TO ABOUT $5 MILLION. RIGHT. UM, AND SO WE JUST TREND THEM OUT, WHATEVER THAT PERCENTAGE IS, IF THEY'RE SUBJECT TO CHANGE BY PERCENTAGE. OKAY. AND, AND THEY WILL BE, THEY WILL CHANGE, RIGHT? THE, THIS IS THE, THE REASON FOR THE, THE SECOND SLIDE THAT THE DISCLAIMER, RIGHT? THAT THIS IS OUR BEST GUESS ESTIMATE, UH, AND THAT THESE NUMBERS ARE SUBJECT TO CHANGE, BUT THAT'S HOW THE, THOSE NUMBERS WERE DERIVED. OKAY. JUST CURIOUS ABOUT THAT. I, I JUST, UH, AND THEN THE LAST ONE, WHEN WE SAY, UH, AUSTIN ENERGY RESERVE TRANSFERS, THAT'S TRANSFERRED TO THE RESERVES? THAT'S, THAT'S CORRECT. OKAY. THAT'S WHAT I THOUGHT. I JUST WANTED TO MAKE SURE. THANK, THANKS FOR CLARIFYING THAT AND FOR TAKING MY QUESTIONS RIGHT NOW. SO WE DON'T HAVE TO COME BACK TO THIS SLIDE AT THE VERY END. SO , SO GRETCHEN, YOU COULD STAY THERE. SO WHEN CYRUS WAS TALKING ABOUT CUSTOMER CHARGE, SO I PULLED UP MY BILL JUST TO TRY TO GET A, A CLEAR UNDERSTANDING OF THIS. SO IS THE BASE RATE ROLLED INTO THE CUSTOMER CHARGE OR IS IT EXPLICITLY THE CUSTOMER CHARGE, OR WHAT ARE THE OTHER ONES? I SEE THE TIERS, THEN I SEE REGULATORY CHARGES, COMMUNITY BENEFIT, PSA, [01:30:02] ET CETERA. WHICH ONE OF THESE CATEGORIES DOES THIS 5% INCREASE? IT'LL, IT'LL IMPACT THE TOP PART, UH, OF YOUR BILL WHERE IT SAYS CUSTOMER CHARGE AND ENERGY CHARGE BY TIERS. THOSE ARE, THOSE ARE BASE RATE CHARGES. THINGS LIKE COMMUNITY BENEFIT CHARGE, REGULATORY CHARGE, PSA, THOSE ARE PASS THROUGHS AND DO NOT HAVE THE 5% RIGHT. WE, WE ADJUST THOSE TO, TO THE COST. OKAY. IF THERE'S NO MORE QUESTIONS ON THE FUND SUMMARY, WE'LL MOVE ON TO THE NEXT SLIDE. FORECASTED KEY FINANCIAL METRICS. SO HERE THE FORECASTED KEY FINANCIAL METRICS SLIDE, UH, YOU'LL SEE THE COLUMN. THIS IS MINIMUM OR TARGET. THAT'S THE GOAL THAT AUSTIN ENERGY'S TRYING TO HIT. UM, AND YOU CAN SEE THAT FOR OPERATING MARGIN, WE ARE SUCCESSFULLY EXCEEDING THE OPERATING MARGIN TARGET OF 10%, ESPECIALLY AS YOU START GETTING INTO 27 THROUGH 20, UH, 20, 30 NET MARGIN. THAT'S JUST A, UM, AGGREGATE NUMBER. SO THAT'S JUST THE ACTUAL NET MARGIN THAT IS IN THE FORECASTED YEARS FOR THOSE YEARS. UM, DAYS, CASH ON HAND IS ANOTHER KEY MEASURE THAT WE LIKE TO PAY ATTENTION TO. UH, YOU CAN SEE THAT IN 2026 WE'RE SHOWING 155 DAYS IN CASH ON HAND TAKES A SLIGHT DIP IN 27 AND THEN, UH, STARTS TO INCREASE. AND BY THE TIME WE GET TO 2030, WE'RE NOT QUITE AT 200 DAYS YET, BUT, UM, SEEING A SUBSTANTIAL IMPROVEMENT IN FINANCIAL HEALTH OF AUSTIN ENERGY IN THE OUTER YEARS. DEBT SERVICE COVERAGE RATIO STAYS PRETTY FLAT THROUGH 27, SEE A SLIGHT INCREASE IN 28 AND 29 AND A LARGER INCREASE IN 30 20 30 THAT'S RELATED TO THE CIP SPEND PLANNED. AS WE START TO SPEND MORE ON CAPITAL, AS WE START TO FINANCE MORE OF THAT WITH DEBT, UH, WE'RE GONNA SEE THAT DEBT SERVICE COVERAGE RATIO CHANGE, UH, DEBT TO CAPITAL RATIO. UM, WE'RE SEEING, UH, THE, THE GOAL THERE IS LESS THAN 50%. UM, AND WE ARE EXCEEDING THAT IN THE OUTER YEARS, AGAIN, PRIMARILY DUE TO THE CIP CAPITAL, UH, CAPITAL SPEND PLAN. AND THEN YOU'VE GOT THE GGFT TRANSFER, WHICH WE'VE ALREADY TALKED ABOUT ON THE FUND SUMMARY. MOVING FORWARD TO THE TYPICAL RESIDENTIAL CUSTOMER BILL, WE, AND YOU CAN SEE HERE, UH, IF YOU JUST LOOK AT THE TOTAL THERE, THE TOTAL MONTHLY BILL IN YELLOW, UH, THE TYPICAL RATE PAYER, WHICH IS A RATE PERIOD IN OUR SERVICE TERRITORY THAT IS USING ABOUT 860 KILOWATT HOURS OF ENERGY A MONTH, THEY'RE GONNA SEE A DECLINE, UH, FROM UH, 2025 BUDGET TO THE 2026 PROPOSED, UH, $4 AND 89 CENTS. AND THE CAP CUSTOMER IS GONNA SEE A LITTLE BIT LARGER DECLINE, UH, $6 AND 68 CENTS, UH, BECAUSE THEY'RE NOT PAYING THAT LARGER CUSTOMER CHARGE. SO WITH THAT SAID, WITH THE PROPOSED BUDGET THAT WE'VE PUT TOGETHER, A TYPICAL RESIDENTIAL RATE PAYER WILL SEE A DECREASE IN THEIR BILL. CAN I ASK A, SORRY, CAN I ASK A QUESTION ABOUT THAT? SURE. UM, AND YOU SAY THAT BECAUSE YOU'RE PROJECTING THAT THE PA PSA IS GONNA GO DOWN SIGNIFICANTLY, WE'RE PA WE'RE PASSING ON THE, UM, P THE POWER SUPPLY SAVINGS THAT WE'VE ALREADY INCURRED OR WE'VE ALREADY COLLECTED, IF YOU WILL. SO YOU, SO YOU, I'M, I'M GUESS MY QUESTION IS, IS THIS A FORECAST OR, YOU KNOW, THE PSA IS GOING TO, IS GONNA BE SET AT A LOWER RATE AND THEREFORE, YOU KNOW THAT AN AVERAGE CUSTOMER USING 860 KILOWATTS, IT'S A HOURS, IT'S, IT'S A FORECAST WHERE WE'VE PLANNED TO PASS ON SAVINGS RELATED TO PURCHASE POWER SUPPLY ONTO THE RATE PAYERS. GORDON, SORRY. SO, UM, AND MAYBE JUST REMIND ME, LET RESET THE, LEMME RESET THE STAGE THAT COMPARISON COMPARES, UH, THE RESIDE TYPICAL RESIDENTIAL BILL THAT WAS SET IN THE 2025 BUDGET ABOUT A YEAR AGO COMPARED TO WHAT WE THINK IT WILL BE GOING FORWARD. SO THAT, THAT THOSE POWER SUPPLY COSTS, ONCE AGAIN, WE'RE A COST RECOVERY UTILITY, RIGHT? AS THOSE COSTS HAVE GONE DOWN, WE HAVE ALREADY PASSED BACK THE MAJORITY OF THAT, UH, PSA REDUCTION. AND SO WHEN WE TALK ABOUT, UH, BA JUST AS WE TALK ABOUT BASE RATES, UH, INCREASING, THE STORY THAT GETS LOST IS THAT ALL OF THOSE INCREASES ARE OFFSET AND EVEN MORE THAN OFFSET BY OUR ABILITY TO LOWER THE POWER SUPPLY ADJUSTMENT. SO THE NET IMPACT TO OUR CUSTOMERS COMPARED FROM WHAT THEY PAID A YEAR AGO TODAY TO WHAT THEY'RE PAYING NOW IS A $5 A MONTH REDUCTION. OKAY. BUT SO, SO TO BE CLEAR, THE, THE $45 WAS THE PSA, YOU KNOW, WHAT THAT PSA WAS 'CAUSE WE'VE ALREADY PASSED THAT. AND THEN THE FISCAL YEAR 26 PSA IS A FORECAST BASED ON YOUR PROCESS. WE, WE MAKE NO ASSUMPTION ON THE PSA WE ARE, WHAT WE ARE SAYING IS [01:35:01] THE PSA THAT OCCURRED IN, WE KNOW WHAT THE PSA WAS IN 2025. RIGHT. AND THAT, THAT CREATED A CHARGE OF $45 AND 77 CENTS. THE PSA THAT EXISTS TODAY REDUCES THAT CHARGE TO $35 AND 41 CENTS. OKAY, SO THAT'S, THAT'S THE PSA RIGHT NOW AND YOU'RE SAYING YES, ASSUMING THAT'S THE SAME PSA GOING FORWARD AND WE DON'T HAVE HUGE CHANGES IN THE ENERGY MARKET. CORRECT. THAT SHOULD BE WHAT PEOPLE PAY. OKAY. THAT'S HELPFUL. THANKS. AND CAN YOU DESCRIBE A LITTLE BIT WHAT THE MAIN DRIVERS OF THE PSA DECLINE? WHERE IS IT JUST ERCOT MARKET CONDITIONS, THE LOWER PRICE OF NATURAL GAS AT THE MARGIN OR WHAT? YES, AB EXACTLY RIGHT. IT, WE, WE'VE, WE'VE, UH, UH, EXPERIENCED, UM, UH, A TAMER POWER MARKET, IF YOU WILL. UM, AND WE WERE ABLE TO, UH, THAT, THAT RESULTED IN LOWER COSTS, UH, FOR US. UM, AND, UH, WE CONTINUE TO MONITOR THAT ON A, ON A MONTHLY BASIS. OKAY. TAMER AS IN LESS VOLATILITY? YES. LESS HEDGING NEEDED OR LESS, LESS VOLATILITY, LESS CONGESTION FOR AUSTIN ENERGY, UH, COMPARED TO, SAY 2023, WHERE WE HAD, I THINK IT WAS, UH, AROUND A HUNDRED MILLION DOLLARS OF CONGESTION COSTS. THERE, THERE ARE LESS THAN THAT NOW. THANK YOU. NEXT SLIDE PLEASE. RESIDENTIAL, I THINK AL AND I HAD A COUPLE QUESTIONS. OKAY. THANKS KIVA, FOR SPEAKING UP. GO AHEAD. GO, GO AHEAD, KIBA. WE'LL GET AL, AL YOU CAN GO ON THE, ON THE LESS CONGESTION AND, AND THE LOWER VOLATILITY. CAN THAT BE ATTRIBUTED TO BATTERIES IN ERCOT OR ARE THERE OTHER FACTORS THAT ALSO CONTRIBUTE? WE'LL, LET SOMEBODY BETTER, BETTER INFORMED THAN ME ANSWER THAT RESPONSE. THANKS FOR THE QUESTION. COMMISSIONER BRADEN. LISA MARTIN, CHIEF OPERATING OFFICER. UM, NO, IT'S, IT'S REALLY RELATED TO, UM, A LOT OF FACTORS IN HOW WE'RE MANAGING THE ERCOT MARKET AND WE ARE ACTUALLY DOING A LOT MORE HEDGING. UM, AND JUST, YOU KNOW, THE, THE MARKET IS A LITTLE LESS VOLATILE. 2023 REALLY WAS A PEAK, BUT IT'S NOT NECESSARILY CONTRIBUTED ATTRIBUTED DIRECTLY TO BATTERIES. OKAY. UH, I HAD ANOTHER QUESTION GOING, UH, SLIDE BACK IF YOU COULD DO THAT. I DIDN'T, I DIDN'T GET IT. ASK IN TIME I BELOW STUFF. UH, BUT THE NET MARGIN, THE OPERATING MARGIN WE'RE, WE'RE SHOWING GROWING FROM 12% TO 17%, WHICH IS A PRETTY HUGE I PERCENT OF INCREASED MARGIN. UH, WHAT'S THE PHILOSOPHY BESIDE BETWEEN THAT WE'RE TRYING TO BALANCE CUSTOMER PRICES, CUSTOMER COST, AND, AND HOW DO WE, HOW OR WHY, UH, IS THE MARGIN PLANNED TO GO UP THAT MUCH? SO WE, WE'LL NEED THOSE ADDITIONAL MARGINS BECAUSE COSTS ARE ALSO RISING. UH, I I PREFER TO USE, UH, THE INDICATOR OF DAYS OF CASH ON HAND BECAUSE ONCE AGAIN, WE'RE COST RECOVERY. SO WE SEE DOLLARS COME IN AND DOLLARS GO OUT AND IT'S SETTLED ON IN CASH, RIGHT? MM-HMM . SO YOU CAN SEE THAT, UH, WE HAVE A $43 MILLION DEFICIT IN 26, AND THAT DAYS OF CASH GOES DOWN, RIGHT? THAT MEANS MORE DOLLARS HAVE WALKED OUT THE DOOR THAN WALKED IN, AND WE ABOUT BREAK EVEN FOR THE NEXT TWO YEARS BEFORE WE REALLY START TO ACCUMULATE SOME CASH. AND KEEP IN MIND THAT 150 DAYS IS A MINIMUM. I HAD A DISCUSSION TODAY. I, I I I, I DRAW, UH, AN EXAMPLE OF WHEN YOU'RE DRIVING DOWN A ROAD, BACK WHEN YOU DROVE GASOLINE POWERED CARS DROVE DOWN THE ROAD AND THE LITTLE LIGHT CAME ON THAT SAYS, GOSH, YOU GOT LIKE TWO GALLONS OF GAS LEFT, YOU BETTER FILL UP. THAT'S THE 150 DAYS. OUR GOAL IS 200 DAYS. I, UH, HEARD SOMEBODY TALKING, UH, THAT ATTENDED, UM, UH, A CONFERENCE RECENTLY THAT FITCH WAS THERE. FITCH SAYS, UTILITIES OUR SIZE ARE AT, AT OUR, UH, RATINGS SHOULD HAVE ABOUT 222 DAYS OF CASH ON HAND. WHAT WE'RE ASKING FOR IS NOT AN ANOMALY. IT SOUNDS LIKE BASE RATES, WE GET KIND OF CAUGHT UP IN THE 5%, BUT THE REALITY IS WE'RE NOT OVER RECOVERING. DEBT SERVICE COVERAGE WAS A, YOU KNOW, A A A MAJOR METRIC. OUR, OUR GOAL, OUR TARGET IS 2.5. WE DON'T GET THERE TILL FIVE YEARS FROM NOW. SO WHAT WE'RE PROPOSING IN THIS BUDGET IS A FIVE YEAR PLAN, RIGHT? THAT TRIES TO, TO BALANCE THE NEEDS OF THE UTILITY ALONG WITH THE CUSTOMER BILL IMPACT. AND WE THINK THAT TO DO THAT [01:40:01] IS ABOUT A 5% BASE RATE INCREASE, ALL ELSE, UH, EQUAL. THAT'S ABOUT A $3 A MONTH CHARGE. AND SO RUSTY, SO DOES THAT MEAN THAT UNTIL YOU GET TO ALMOST 200, THERE'S A LOT LESS OF A CHANCE TO GET BACK TO AA VERSUS AA MINUS? WE, WE'VE, YOU KNOW, I, I THINK THAT THAT, THAT, UM, WEATHER PLAYS A ROLE IN, IN OUR, IN OUR, OUR, OUR, UM, OPERATIONS. BUT MY PERSPECTIVE RIGHT NOW, WE SHOULDN'T BANK ON A, ON A RATE INCREASE FOR THE NEXT YEAR OR TWO. AND, AND I THINK THIS HAS TO PLAY OUT. I MEAN, WE HAVE TO WALK HAND IN HAND WITH COUNSEL AND THE EEC TO, TO GET THIS RIGHT? WE, WE, WE WE'RE COST RECOVERY. IT, IT ALWAYS IS INTERESTING TO ME WHERE, UM, WE CAN CHANGE A, A PASS THROUGH RATE. NOBODY, NOBODY SAYS ANYTHING, RIGHT? BECAUSE WE'RE COST RECOVERY. WELL, BASE RATES ARE COST TOO. AND, AND WE'VE JUST SHOWN YOU A BUDGET WHAT WE THINK WE'RE GONNA SPEND AND WE'RE SHORT. AND SO WE BUILT THIS PLAN TO, TO MEET THE NEEDS AND, AND, AND, AND MINIMIZE, UH, CUSTOMER BILL IMPACT. RIGHT. OKAY. SO THE, BUT AS YOU SAID, THE MARGIN, THE OPERATING MARGIN IS BEING FED BACK INTO THE CASH ON HEAD. IT'S NOT GOING OFF TO ADDITIONAL CITY TRANSFERS AND ALL THAT KIND OF STUFF, BUT REALLY MEETING THE NEED THAT YOU HAVE FOR THE 200 DAYS TO, TO RECOVER YOUR BOND RATING. IS THAT CORRECT? SO THAT, THAT, THAT ADDITIONAL MARGIN GOES TO PAY FOR A RISING DEBT SERVICE? UH, UH, A HIGHER CIP SPEND TRYING TO GET BACK TO A MORE, UH, DEBT TO, UH, DEBT TO CASH FINANCING. AND THAT CIP SPEND OF 50%, WE DON'T REALLY DO THAT. IT'S MORE LIKE 60 40. SO THERE'S A LOT OF NON, THERE'S A LOT OF CASH ITEMS THAT GO OUT THAT DOOR. UH, BUT KEEP IN MIND, LIKE OUR, OUR CIP SPEND JUST LOOKING AT SOME DATA TODAY, OUR CIP SPEND IN OUR 2021 TEST YEAR, THE BASE RATE CASE, IT'S INCREASED, IT'S DOUBLED COMPARED TO WHAT WE SPENT IN 2025. THE COMPONENT OF, IN THE, IN THE REVENUE REQUIREMENT IN 2021, THE CASH FOR CONSTRUCTION, IF MEMORY SERVES AROUND $75 MILLION, IT'S 125 MILLION. NOW, IF YOU TAKE THAT 75 MILLION AND INCREASE IT BY 2% IN 24 AND 2% IN 25, AND YOU CAN SEE THAT, THAT WHAT WE ARE ASKING FOR IS, UM, UH, IS NOT OVER ZEALOUS. OKAY. NOW KABA, WHAT'S YOUR QUESTION? THANKS, THANKS. UM, MY QUESTION WAS ON THE, THE NEXT SLIDE, I THINK, UM, BUT I JUST, JUST TO LIKE RESPOND TO THAT. I THINK, YOU KNOW, IT'S, IT'S NOT JUST A QUESTION OF THE TOTAL AMOUNT THAT THE UTILITY NEEDS, IT'S HOW IT IS RECOVERED AND, UM, THAT'S WHY A DEEPER DIVE CAN BE HELPFUL. CAN WE GO TO THE NEXT, UM, SLIDE THAT WE WERE ON? NEXT SLIDE PLEASE? YEAH, SO YOU WERE TALKING ABOUT, I THINK MAYBE IT WAS LISA MENTIONED, UH, ON THE, ON THE PSA THAT THERE WAS, UM, THAT A PIECE OF THAT WAS AROUND, YOU KNOW, IMPROVEMENTS IN CONGESTION. AND I WAS JUST CURIOUS, UM, IF ANY PART OF THAT HAD TO DO WITH AUSTIN ENERGIES, UH, YOU KNOW, WIND AND SOLAR ASSETS THAT PERHAPS HAD BEEN EXPERIENCING MORE CONGESTION AND, YOU KNOW, UH, UNFAVORABLE PRICING, HAS THAT IMPROVED OR WAS IT MORE ABOUT LOCAL CONGESTION AND IF, IF THERE'S ANY QUANTIFICATION OF, YOU KNOW, HOW MUCH OF THIS IS COMING FROM ONE ASPECT OR ANOTHER? YES, COMMISSIONER WHITE, UH, LISA MARTIN AGAIN, UM, SO, UH, IT'S, IT'S NOT REALLY ATTRIBUTABLE TO OUR, UM, EXTERNAL, UH, OR WIND AND SOLAR CONTRACTS THAT ARE OUTSIDE OF OUR LOAD, UM, UH, SERVICE AREA. UH, THOSE ARE STILL SEEING SIGNIFICANT CURTAILMENT, UM, DURING CERTAIN TIMES OF THE YEAR. UM, WHAT, WHAT WE SAW, UM, WHEN WE SAW SOME PRETTY EXTENSIVE CONGESTION IN 2023, A LOT OF IT WAS LOCAL CONGESTION. AND UH, A SIGNIFICANT PORTION OF THAT WAS WE HAD AN EXTENDED OUTAGE ON, UM, SOME OF OUR INTERNAL GENERATION DURING THAT TIME PERIOD. AND, UM, WE WERE SEEING, UM, SOME CONGESTION BASED OFF OF SOME OF THE TRANSMISSION RATINGS OF, UM, SOME OF THE, UM, UH, TRANSMISSION LINES OF, OF NEIGHBORING UTILITIES. AND SO WE HAVE NOT SEEN THAT IN, UH, YOU KNOW, THE LAST COUPLE OF SUMMERS. UM, AND WE'VE HAD A REALLY GOOD GENERATOR AVAILABILITY, UM, AND, [01:45:01] AND UH, YOU KNOW, WE HAVEN'T HAD AS EXTREME TEMPERATURES. SO IT'S REALLY ALL THE FACTORS THAT PLAY INTO THE LOCAL CONGESTION, UM, THAT WE HAVE BEEN VERY FORTUNATE TO NOT SEE IN THE LAST COUPLE OF SUMMERS. OKAY. THANK YOU. THANK YOU. OTHER QUESTIONS? NEXT SLIDE, DAVID. SORRY. THANK YOU. ALRIGHT, THIS IS THE LAST SLIDE AND UH, WE'RE GONNA TALK ABOUT THE COMPARISON TO THE, UM, SURROUNDING PEER UTILITIES. SO YOU CAN SEE AUSTIN ENERGIES AVERAGE BILLS 117. THAT TIES BACK TO THE TYPICAL RATE PAYER SLIDE THAT WE JUST REVIEWED. UH, IN COMPARISON, CPSS $149 PEC AT $153, UM, AND, UH, BLUEBONNET AT 142 AND GEORGETOWN AT 129. AGAIN, UM, THIS IS BASED UPON AUSTIN ENERGY'S TYPICAL RATE PAYER THAT USES ABOUT 860 KILOWATT HOURS. SO EVERYONE WAS A LITTLE BIT DIFFERENT, BUT, UM, THIS BASICALLY SHOWS THAT AUSTIN ENERGY'S TYPICAL RATE PAYER IS PAYING A BILL THAT'S LOWER THAN THE PURE UTILITIES. SO WITH THAT SAID, THAT WRAPS UP THE 2026 BUDGET PRESENTATION. AND THAT TYPICAL RATE PAYER, IS THAT SOME KIND OF MEDIAN IN EACH ONE OF THE RESPECTIVES UTILITY OR EVERYONE AT 860? NO, IT'S THE HOURS THAT'S REPORTED BY EEIA, OURS IS 860. UM, AND THE, THE VARIOUS UTILITIES, YOU KNOW, THEY'VE GOT DIFFERENT AMOUNTS, SO P C'S AT 1230, SO A LOT OF IT HAS TO DO WITH THE DENSITY OF AUSTIN AND THE APARTMENTS AND THE AMOUNT THAT WE SPEND ON ENERGY EFFICIENCY. PEC DOESN'T HAVE A REBATE PROGRAM LIKE WE DO. SO, UM, I DID HAVE A QUICK QUESTION ON THE ENERGY EFFICIENCY. I NOTICED THAT THERE'S A, UM, THERE'S A PROPOSAL TO, TO FOR A SLIGHT INCREASE IN THE ENERGY EFFICIENCY PART OF THE CAP CHARGE. UM, AND JUST WONDERED, I DON'T KNOW IF WE HAVE ANY DETAILS ON, ON WHAT'S BEING PROPOSED, BUT ARE THERE, IF YOU CAN JUST IN A GENERAL SENSE, IF SOMEONE CAN SAY OR WHAT, WHICH PROGRAMS ARE BEING INCREASED SLIGHTLY OR WHY, WHAT'S THE REASON? I MEAN, I, I SUPPORT THAT I, YOU KNOW, I SUPPORT THAT, BUT I JUST, I, I WONDER WHAT, WHAT IS BEING INCREASED IN TERMS OF THE BUDGET? SORRY. GOOD EVENING COMMISSIONERS. RICHARD GENESEE, VICE PRESIDENT OF CUSTOMER ENERGY SOLUTIONS. SO THE $3.7 MILLION INCREASE, UH, TO THE CES BUDGET AS, UH, STEWART WAS ASKED WHEN THE, UH, BUDGET WAS PRESENTED, UH, IS ALL CONSISTENT WITH OUR, UH, RESOURCE AND GENERATION PLAN. AND SO IT IS, UH, THE BIGGEST PORTIONS OF IT ARE GOING TO DEMAND RESPONSE, UH, SOLAR AND EXISTING PROGRAMS AND, UH, THAT DEMAND RESPONSES, COMMERCIAL AND RESIDENTIAL, AND ALSO INCLUDES, UH, WHAT WE'RE PLANNING ON WITH BATTERIES. OKAY. DID YOU PRESENT THAT LAST MONTH? WAS THAT WAS NO, MAY, MAYBE COUNCIL LAST ON TUESDAY. OH, COUNCIL LAST ON TUESDAY. OKAY. GOT IT. THANK YOU SO MUCH. OKAY, THANK YOU. I HAD A SIMILAR QUESTION. UM, I HAD HEARD THE, UM, I THINK COMMENT FROM STUART RILEY AT THE BUDGET WORK SESSION ABOUT THE BATTERY PROGRAM, WHICH WAS GREAT TO HEAR, AND OR THE, THE REBATE IN PARTICULAR THAT THAT WAS IN THE WORKS. AND I WAS WONDERING, IS THERE ALSO A PLAN FOR SOME SORT OF TARIFF, UH, TO ALLOW FOR, YOU KNOW, DEPLOY AUSTIN ENERGY TO DEPLOY THOSE BATTERIES? AND WHAT IS THE TIMELINE FOR ANY OF THAT? UH, RICHARD GENESEE AGAIN, UM, SO BATTERIES, I MEAN, THERE'S BATTERIES ACROSS THE BOARD THAT WE'RE PURSUING EVERYTHING FROM UTILITY SCALE ALL THE WAY THROUGH CUSTOMER CITED BATTERIES AND BATTERIES. UH, DON'T REMEMBER THAT. BATTERIES ARE ALSO GONNA BE PART OF THE SOLAR FOR ALL, UH, INITIATIVE, WHICH IS, UH, SOLAR PLUS BATTERIES DIRECTED AT LOW INCOME. AND THEN THERE'S THE BATTERIES ASSOCIATED WITH, UM, A STANDALONE BATTERY PROGRAM THAT WE'RE ALSO PURSUING. UM, THE TIMELINE FOR THAT IS THERE'S A LOT OF WORK THAT STILL NEEDS TO BE DONE, UH, AND FRANKLY ASSESSING WHAT THE VALUE OF BATTERIES ARE TO THE UTILITY, UH, WE ARE HAVING CHALLENGES, FRANKLY, UH, WITH COST EFFECTIVENESS, UH, OF THAT. SO WE MAY END UP, I'M, I'M NOT SAYING THIS IS A DECISION YET, [01:50:01] BUT WE MAY END UP HAVING TO BIFURCATE AND HAVE, UH, SOMETHING FOR CUSTOMERS THAT DON'T HAVE BATTERIES YET AND SOMETHING DIFFERENT FOR CUSTOMERS THAT DO HAVE BATTERIES BECAUSE FOR CUSTOMERS THAT DO HAVE BATTERIES ALREADY, UM, WE'D BE ABLE TO DO SOMETHING, UH, MUCH DIFFERENT POTENTIALLY THAN CUSTOMERS THAT DON'T HAVE BATTERIES BECAUSE OF THE COST EFFECTIVENESS CHALLENGE. SO A LOT OF WORK TO BE DONE, UH, ANSWER TO YOUR QUESTION IS THAT THIS WORK IS GONNA UNFOLD, UH, OVER, UH, 2026 AND WE'RE GONNA SEE DIFFERENT PORTIONS OF IT COME AT DIFFERENT TIMES CONSISTENT WITH HOW SOLAR FOR ALL IS ROLLING OUT THE UTILITY SCALE STUFF THAT MICHAEL LANGER IS DOING AND, UM, THE STANDALONE BATTERY THAT WE'RE PURSUING. OKAY, THANKS. YEAH, I WAS SPECIFICALLY ASKING ABOUT CUSTOMER CITED BATTERIES, WHETHER IT'S WITH SOLAR OR WITHOUT, AND MAYBE STEWART MISSPOKE, I DON'T KNOW, BUT HE SAID THERE WAS, UM, THAT SOME OF THAT MONEY, SOME OF THAT INCREASE WAS FOR A BATTERY REBATE PROGRAM, UM, WHICH, YOU KNOW, I'M SUPPORTIVE OF, BUT UM, OBVIOUSLY TO MAKE IT USEFUL TO THE UTILITY AND CUSTOMERS AT LARGE, UM, YOU'LL NEED TO BE ABLE TO ACCESS AND UTILIZE THOSE CUSTOMER CITED BATTERIES OUTSIDE OF SOLAR FOR ALL. I KNOW YOU ALREADY PLANNED TO DO THAT. SO THAT'S, THAT WAS WHAT I WAS ASKING ABOUT SPECIFICALLY. YEAH. AND THAT, THAT, THAT'S THE STANDALONE PORTION OF WHAT I, UM, JUST WENT THROUGH. OKAY. OKAY, COOL. SO SOMETIME IN 2026, SOMETIME IN 2026, ASSUMING, AND DEPENDING ON HOW, WHAT WE CAN DO REGARDING THE COST EFFECTIVENESS AND DETERMINING THE, WHICH IS GONNA BE IMPACTED BY THE ASSESSMENT OF WHAT THAT VALUE OF THE BATTERY IS TO THE UTILITY, WHICH IS WORKFORCE AND IT BE RIGHT, WHICH IS WORK. NEIL HAD ALREADY INITIATED THAT. YEAH, THE WORK, THE WORK IS UNDERWAY, BUT, UM, YOU KNOW, IT'S A SUBSTANTIAL AMOUNT OF WORK. OKAY. THANK YOU. ANY OTHER QUESTIONS? OKAY, WITH THAT, I THINK WE'RE DONE ON THAT ONE. NEXT ITEM. UM, WE HAVE FUTURE ITEMS, UH, YEAH, I WAS JUST GONNA ON THAT STAFF BRIEFING, IS IT, IS IT SOMETHING WHERE, UM, IS THE CITY COUNCIL LOOKING FOR INPUT FROM THE EUC ON THE, I CAN'T REMEMBER WHAT THE NORMAL COURSE IS THIS JUST A, IS THIS JUST A, THIS IS NOT AN ACTIONABLE ITEM, JUST A BRIEFING. YES. OKAY. IF YOU WOULD LIKE TO TAKE ACTION, YOU COULD PUT IT ON THE AGENDA FOR AUGUST 11TH PRIOR TO THEIR VOTE. OKAY. OR CONTACT YOUR RESPECTIVE COUNCIL MEMBER. COUNCIL MEMBER. I, I THINK WE SHOULD DO THAT. HONESTLY, I, I THOUGHT WE WERE GONNA BE POSTED FOR ACTION TODAY, BUT, UM, I THINK IT WOULD BE GOOD FOR US TO BE POSTED FOR ACTION ON THE 11TH. I THINK IT MAKES SENSE, UM, TO PUT IT ON THE AGENDA AND I DON'T, I DON'T NECESSARILY, I DON'T HAVE A PROPOSAL OF YAY OR NAY OR SOMETHING IN BETWEEN, BUT I THINK IT WOULD MAKE SENSE FOR THIS BODY TO AT LEAST CONSIDER WHETHER WE WANTED TO SAY ANYTHING ABOUT THE BUDGET OR NOT. OKAY. AND SO THAT'S, YOU SAID THERE'S AN AUGUST 11TH COUNCIL MEETING, AND SO NO, AUGUST 11TH IS THE EUC MEETING AND THE BUDGET IS BEING VOTED ON ON AUGUST 13TH, OR WILL BE THE FIRST DAY. AND IF YOU DO DECIDE TO ADD IT TO THE AGENDA, PLEASE LET ME KNOW IN WRITING AND OR TONIGHT WITH WHO THE SPONSOR AND CO-SPONSORS ARE. THANK YOU. WELL, IF SOMEONE WANTS TO DRAFT A PROPOSAL ON THAT, UM, SO YOU WANNA BE SPONSOR, I WOULD REQUEST TO BE PUT ON THE AGENDA AND THEN WE CAN, YOU KNOW YEAH. HAVE CONVERSATIONS ABOUT, I MEAN, I THINK THERE IS SOME, UM, I DON'T DISAGREE WITH THAT. THERE MAY BE A NEED FOR A, A BASE INCREASE OF, BUT H HOW IT'S DONE AND WHAT THE POLICY IS ON THE GENERAL FUND TRANSFER, I MEAN THOSE, AT LEAST WE SHOULD E EVEN IF WE'RE NOT SAYING YAY OR NAY, BUT SAYING COUNSEL SHOULD CONSIDER THOSE ISSUES, I THINK IS IMPORTANT FOR US TO SAY, UM, 'CAUSE THESE, YOU KNOW, IT DOES GET INTO HOW YOU ALLOCATE COSTS AND WHAT ARE WE PAYING FOR. AND, UH, BUT I I, I APPRECIATE THE FACT THAT IF YOU LOOK AT THE OVERALL BILL, IT'S WITH THE PSA, IT'S, I I RECOGNIZE THAT IT'S ACTUALLY GOING DOWN, BUT I STILL THINK, UM, WE SHOULD AT LEAST TALK ABOUT IT. RIGHT. SO, SO, SO THE REQUEST IS TO HAVE IT POSTED FOR OUR NEXT EUC MEETING, A DISCUSSION ON THE BUDGET, A DISCUSSION AND POTENTIAL ACTIONABLE ITEM, WHETHER WE TAKE ACTION. I DON'T KNOW THAT WE WILL AT THAT LATE DATE, BUT WE CAN AT LEAST [01:55:01] TALK ABOUT IT. OKAY. SO, AND NIKKI, YOU NEED THAT FROM, FROM ME. CAN YOU LIST ME, NIKKI, YOU NEED THAT FROM ME AND RYAN? I CAN. UM, GOOD EVENING, COMMISSIONER STEWART RILEY, INTERIM GENERAL MANAGER. UM, WHAT WE CAN GO AHEAD AND DO IS JUST ON THIS NEXT EUC AGENDA, JUST PUT AN ITEM ON THE AGENDA FOR APPROVE A RECOMMENDATION ON THE AUSTIN ENERGY FY 26 BUDGET. UM, WE CAN COME BACK WITH A, ANOTHER VERY SHORT, YOU KNOW, SYNOPSIS OF IT AND THEN KIND OF TEE IT UP FOR, UH, A RECOMMENDATION FROM THE COMMISSION. DOES THAT WORK? THANK YOU. A A AND I ALSO WANT TO, UH, RUSTY MANUS ACTING DEPUTY GENTLEMAN REMIND YOU THAT YOU KNOW, WHAT, WHAT WE PUT TOGETHER IS A FIVE YEAR PLAN, BUT WHAT'S ACTUALLY IN THE BUDGET IS A ONE YEAR DEAL, RIGHT? SO THIS BUDGET IS, WE'RE JUST REQUESTING A SINGLE 5% BASE RATE INCREASE ALONG WITH, UH, THE OTHER ADJUSTMENTS THAT YOU SAW. IT'S JUST FOR THIS YEAR AND, AND RATE DESIGN INTO FUTURE YEARS AND FUTURE, UH, RATE INCREASES. THAT ALL HAS NOT BEEN DETERMINED YET. A IF THERE'LL BE A RATE INCREASE IN, IN HOW IT'LL BE ASSESSED, BUT OUR INTENT IS ANY BASE RATE INCREASES WILL BE SPREAD, WILL BE, WILL IMPACT EVERY RATE CLASS. SO NOTHING SPECIFICALLY JUST TARGETS RESIDENTIAL CUSTOMERS ARE NOT BEING TARGETED AND SINGLED OUT FOR INCREASES. THE, THE RATE INCREASES. YEAH. AND I DIDN'T THINK THAT'S THE REASON. I DIDN'T THINK THAT THAT'S THE REASON I ASKED THE QUESTION, BUT BECAUSE YOUR, UM, POWERPOINT PRESENTATION ONLY SHOWS THE RESIDENTIAL CLASS, I STARTED TO GET SUSPICIOUS, SO. OKAY. THANK YOU. THANK YOU. I KNOW HOW GOOD THOSE INDUSTRIAL LOBBYISTS ARE, SO YEAH. OKAY. [FUTURE AGENDA ITEMS] FUTURE ITEMS. UM, I DON'T KNOW HOW TO ADDRESS THIS, BUT, UM, AND UM, BUT AT THE VERY LEAST IT SEEMS LIKE OUR AGENDA SHEET, UM, SHOULD BE CLEARER ON THE PUBLIC COMMUNICATION. 'CAUSE WE HAD ONE SPEAKER TODAY WHO WAS, UM, I MEAN THE LANGUAGE HERE IS CONFUSING, SO THIS ISN'T REALLY A FUTURE AGENDA ITEM, BUT MM-HMM . IT SEEMS TO ME IT SHOULD BE CLEAR THAT PEOPLE CAN SIGN UP FOR ITEMS NOT POSTED ON THE AGENDA AND ITEMS POSTED ON THE AGENDA TO VOID ANY CONFUSION. I THINK THAT'S ALWAYS BEEN THE CASE, BUT I THINK CONFUSION WAS CREATED TONIGHT. SO I DON'T KNOW IF THERE'S A WAY TO ADDRESS THAT. YES, I WILL REACH OUT TO THE CLERK'S OFFICE TOMORROW AND WE'LL FOLLOW UP WITH THE COMMISSION VIA EMAIL AND ALSO THE INDIVIDUAL, UH, WHERE THE CONFUSION CAME ABOUT TODAY AND GET CLARIFICATION ON EVERYTHING FOR BOTH THE EUC COMMISSION AND THE INDIVIDUAL. OKAY. AND IF THERE NEEDS TO BE A CHANGE TO THE TEMPLATE, WE'LL WORK WITH THE CLERK'S OFFICE ON MAKING THAT CHANGE. OKAY. ANY OTHER INPUTS ON FUTURE AGENDA? UM, AND YOU KNOW, I, I DON'T THINK IT WOULD'VE CHANGED, CHANGED MY VOTE, UM, ON THAT PARTICULAR ITEM. UM, BUT I DON'T KNOW IF THERE'S A WAY TO GET ON THAT PARTICULAR ITEM TO KIND OF GET AN UPDATE ON, UM, THIS IS ITEM ITEM NUMBER FOUR JUST ON, UM, THE TIMELINE AND WHAT INPUT FROM THE COMMUNITY THAT'S IMPACTED, LIKE HIS PROJECT OR, OR MAYBE IT'S JUST AN EMAIL FOLLOW UP. UH, 'CAUSE UH, ITEM FOUR, WHICH IS THE ITEM FOUR WAS THE, UM, EMINENT DOMAIN. THE EMINENT DOMAIN, WHICH IMPACTS NOW THAT I'VE GOT THIS ADDITIONAL INFORMATION IMPACTS PART OF THE, UH, FESTIVAL, UM, BEACH FOOD FOREST PROJECT THAT THE INDIVIDUAL SPOKE EARLIER IS ENGAGED IN. SO THAT WAS THE CONCERN. UM, SO IT WOULD BE NICE TO KNOW THAT AT THE END OF THE DAY, YOU KNOW, THEY CAN DO THE GOOD WORK THAT THEY'RE DOING. MM-HMM . UM, SO MAYBE THAT'S A FOLLOW UP, BUT I ASSUME THERE'S SOME SORT OF PROCESS SO THAT AS THEY BUILD THIS TRANSMISSION, THEY'RE NOT IMPACTED. I HAVE IT RECORDED. OKAY. ANY, ANYONE ELSE ONLINE? GABBY, YOUR, YOU HAVE YOUR HAND STILL UP? YEAH, YEAH. UM, I ATTENDED THE, UM, GENERAL, UM, SOLAR CONTRACTOR MEETING THIS MORNING AND UM, ONE OF THE THINGS THAT WAS PRESENTED WAS AN UPDATE ON THE SOLAR FOR ALL PROGRAM, WHICH OF COURSE IS AFFECTED BY THE BIG UGLY BILL. UM, AND THE, YOU KNOW, TAX CREDIT, THE SOLAR TAX CREDIT EXPIRATION. [02:00:02] UM, SO IT, IT, YOU KNOW, I DON'T THINK IT NEEDS TO BE ON THE 11TH, BUT SOMETIME SOON WE SHOULD I THINK, GET AN UPDATE JUST SO FOLKS KNOW CURRENT, CURRENT STATUS OF THE PLANS AND, UM, YEAH, STAY, STAY ABREAST OF THAT. AND THEN I THOUGHT I SAW SOMETHING ABOUT A CHANGE, UH, TEXAS LEGISLATIVE LAW PUT IN PLACE TO TRY TO HELP CONSUMERS, UH, IN THE SOLAR, UH, OFFERING SPACED CONSUMER PROTECTION, I GUESS. AND I THINK TRAINING AND A NUMBER OF THINGS. I'LL, I'LL FIND THE, THE BILL NUMBER. YEAH, IT'S THE ZINI BILL THAT, THAT INVOLVES. UM, YEAH, TRAINING THE INSTALLERS AND MAKING SURE THEY'RE REGISTERED WITH TLDR. I THINK THAT'S THE ONE, WELL THAT'S MAYBE ONE, BUT IT WAS REALLY CONSUMER PROTECTION. I THINK THAT WAS WHAT MICHAEL WAS TALKING ABOUT. I'LL, I'LL FIND IT AND I'LL SEND IT TO YOU, BUT IT WOULD BE GOOD TO SEE. OKAY. WHAT IT, THIS JUST CAME DOWN FROM THE LEDGE. HOW DOES THAT IMPACT, OR, OR WHAT ARE THE ACTION PLANS THAT AE IS GOING TO DO? AND I THINK THIS IS ON THE SCHEDULE, BUT A GENERAL LEGISLATIVE UPDATE. YEAH. WHEN WAS THAT, NIKKI? THE LEGISLATIVE UPDATE. I WILL FOLLOW UP WITH YOU. THANK YOU. OKAY. ALRIGHT, SO ANY OTHER FUTURE AGENDA ITEMS OR COMMENTS? OKAY, IT IS 8 21 AND WITH THAT LET'S ADJOURN. THANK YOU. * 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.