Apr 29, 2026 Resource Management

MR. BRADEN, PLEASE COME UP TO THE PODIUM AND GIVE US YOUR COMMENTS.

THREE MINUTES.

THREE MINUTES.

GOOD EVENING, CHAIR DAVIS, VICE CHAIR, ROBBINS, AND COMMISSIONERS.

I'M AL BRADEN, AN AUSTIN VOTER IN DISTRICT SEVEN.

LET ME FIRST APPLAUD YOUR EFFORTS TO REVIEW THE UPCOMING GUEST COMPANY SERVICE AGREEMENT AND YOUR ADVICE TO COUNCIL IN A SERIES OF REALLY WELL THOUGHT OUT RESOLUTIONS BACK IN JANUARY.

I'M HAPPY THAT SOME OF THOSE RECOMMENDATIONS WERE INCORPORATED IN FULLER AND PART TO THE DRAFT KEY AMONG THEM, A 10 YEAR AGREEMENT WITHOUT AUTO RENEWAL AND THE ABILITY TO PURCHASE THE IN TOWN PORTION OF THE UTILITY AT ANY TIME DURING THE AGREEMENT.

CREATION OF A BEGINNING LOW INCOME ASSISTANCE PROGRAM IS A WORK IN PROGRESS REQUIREMENTS THAT DEVELOPERS PAY THEIR FAIR PAY COMPLETELY FOR SYSTEM EXPANSION CONNECTIONS RATHER THAN RATE PAYERS, ANNUAL REPORTING ON CAPITAL EXPENDITURES AND EMISSIONS, AND TWICE A YEAR PARTICIPATION, AT LEAST WITH THE RESOURCE MANAGEMENT COMMISSION.

THAT'S A GREAT FIRST STEP, BUT AS YOU'RE RECOMMENDING TONIGHT, THERE ARE MANY IMPORTANT DETAILS TO BE ADDED TO THE CONTRACT.

THANK YOU FOR CONTINUING TO STAY ENGAGED IN THIS AGREEMENT, WHICH WILL SET THE RULES FOR GAS SERVICE FOR THE NEXT DECADE.

WHAT WE, WHAT WE NEED IS, AS YOU SAID, REAL DEFINITION OF A LOW INCOME ASSISTANCE PROGRAM.

REAL TEETH IN THE REQUIREMENTS FOR CONTRIBUTIONS OF AID AND CONSTRUCTION RATE PAYERS SHOULD NOT HAVE TO PAY FOR EXPANSIONS DEVELOPMENT OF A REAL ENERGY CONSERVATION PROGRAM TO BE MANAGED BY THE CITY OF AUSTIN FOR THE BENEFIT OF RATE PAYERS AND OUR LOCAL ENVIRONMENT.

REAL REQUIREMENTS FOR VERIFIABLE MEASUREMENTS OF SYSTEM-WIDE LEAKS AND EMISSIONS WITH BEST PRACTICES TO REDUCE THOSE CLIMATE WARMING AND DANGEROUS METHANE LEAKS.

REAL REQUIREMENTS FOR CAPITAL EXPENDITURE REVIEWS BY OUTSIDE EXPERTS, PUBLIC ENGAGEMENT AND TRANSPARENCY IN FUTURE RATE MAKING PROCESS.

YOU ARE DOING IMPORTANT WORK TO BRING IMPROVEMENTS IN ACCOUNTABILITY TO THE GAS TEXAS GAS SERVICE OPERATIONS THAT OPERATE IN OUR CITY.

THIS GAS SERVICE RESPONSIBLY OPERATED IS A CRITICAL, IS CRITICAL FOR A QUARTER MILLION FAMILIES IN AUSTIN.

MAYBE IT CAN'T BE FULLY OPERATED IN LINE WITH OUR ENVIRONMENTAL AND EQUITY VALUES, BUT YOUR EFFORTS ARE MOVING IT CLOSER IN THAT DIRECTION.

SO I ASK YOUR SUPPORT OF THAT RESOLUTION, AND I ALSO ASK YOUR SUPPORT OF RESOLUTION FIVE REGARDING STORAGE.

THE ELECTRIC UTILITY COMMISSION LOOKS FORWARD TO WORKING WITH YOU ON THIS IMPORTANT MATTER ALSO.

THANK YOU VERY MUCH.

UH, COMMISSIONERS, DO WE HAVE ANY, UH, QUESTIONS FOR THE SPEAKER? YES, MR. BRADEN, THANK YOU FOR, FOR SHOWING UP TO SHARE YOUR VIEWS WITH US.

APPRECIATE IT.

AND THANK YOU FOR YOUR SERVICE ON THE EECI ECHO THOSE.

THANKS.

UM, JUST BEFORE WE JUMP IN, I, I DO WANNA ASK, UH, IF ANYBODY HERE HAS A HARD STOP, I JUST WANNA MAKE SURE WE'VE GOT A NUMBER OF VOTING ITEMS AND I WANNA MAKE SURE WE GET TO THEM, UH, AND DON'T LOSE QUORUM BEFORE WE DO SO, UM, IF EV ANYONE HAS A HARD STOP, PLEASE SAY, NOW I'M GONNA TRY TO GET THROUGH THIS AS, AS EFFICIENTLY AS POSSIBLE, BUT EIGHT O'CLOCK, WHAT? OKAY.

I DO.

THIS IS COMMISSIONER GARY.

MR. GARY.

UH, IS THE APPROVAL OF THE MINUTES FROM THE LAST MEETING.

WHAT TIME IS YOUR, DO YOU NEED TO DROP? 7 45.

[1. Approve the minutes of the Resource Management Commission Meeting on March 24, 2026. ]

YOU SHOULD HAVE A COPY OF THOSE IN YOUR PACKET.

UH, UH, HOPEFULLY YOU'VE HAD A, A CHANCE TO REVIEW.

IF NOT, THEY'RE PRETTY QUICK.

SKIMM OVER.

DO I HAVE A MOTION? SO MOVED.

I, I HAVE A MOTION FROM VICE CHAIR ROBBINS AND A SECOND FROM COMMISSIONER SILVERSTEIN.

HE BEAT ME TO IT.

OR COMMISSIONER LUKI.

UM, TO APPROVE THE MINUTES.

IS THERE ANY DISCUSSION ON THE MINUTES? HEARING NONE.

UH, ALL IN FAVOR OF ADOPTING THE MINUTES FROM THE MARCH MEETING, PLEASE RAISE YOUR HAND AND COME ON CAMERA IF YOU'RE VOTING PLEASE.

ALL RIGHT.

I'VE GOT NINE,

[00:05:01]

UH, A'S FOR THE MINUTES ARE ADOPTED.

NEXT WE HAVE ITEM TWO AS A STAFF BRIEFING ON THE VALUE OF SOLAR FROM TIM HARVEY, DIRECTOR OF CUSTOMER RENEWABLE SOLUTIONS.

UM,

[2. Staff briefing on the Value of Solar by Tim Harvey Director, Customer Renewable Solutions, Austin Energy.]

MR. HARVEY, PLEASE COME UP.

GOOD EVENING COMMISSION.

MY NAME'S TIM HARVEY.

UM, I AM THE DIRECTOR OF CUSTOMER RENEWABLE SOLUTIONS AT AUSTIN ENERGY.

TODAY, I'M GONNA GIVE YOU A PRESENTATION ON THE UPDATE OF THE VALUE OF SOLAR.

SO WE'RE GOING TO, UH, GO OVER, UH, JUST AN OVERVIEW OF WHAT THE VALUE OF SOLAR IS, UM, THE CALCULATION METHODOLOGY, THE PLAN FOR THE RATE ADJUSTMENT.

WE'RE GONNA ALSO TALK ABOUT FUTURE PLANS FOR RECALCULATE OR REASSESSING, UM, HOW WE CALCULATE SOCIETAL BENEFITS.

AND THEN I'LL TAKE QUESTIONS.

THAT IT'S NOT INCREASING COSTS TO CUSTOMERS.

SO, THE VALUE OF SOLAR IS THE RATE THAT WE COMPENSATE OUR CUSTOMERS FOR BEHIND THE METER PRODUCTION.

SO THIS APPLIES TO BOTH COMMERCIAL AND RESIDENTIAL.

UM, TYPICALLY SYSTEMS ARE UNDER A MEGAWATT.

UM, SO YOU'LL SEE THAT THERE ARE TWO VALUES TO THE VALUE OF SOLAR.

UM, ONE IS FOR SYSTEMS OVER A MEGAWATT, THAT'S A LOWER VALUE BECAUSE WE CAN'T CLAIM TRANSMISSION SAVINGS ON THOSE.

AND THE REST OF THEM, WHICH IS THE VAST MAJORITY OF THEM, ARE UNDER A MEGAWATT.

UM, SO I THINK THAT WE HAVE LIKE MAYBE TWO OR THREE SYSTEMS THAT ARE OVER A MEGAWATT THAT ARE INTERCONNECTED TO OUR SYSTEM.

UM, SO IN 2012, WE MOVED AWAY FROM NET METERING TOWARDS THE VALUE OF SOLAR.

UM, NET METERING HAD SOME INHERENT ISSUES THAT THE VALUE OF SOLAR SOLVES FOR.

ONE OF THOSE ISSUES IS, UM, UH, THE CROSS SUBSIDIZATION THAT HAPPENS.

SO WHEN YOU HAVE NET METERING AND A, UH, TIERED RATE SCHEDULE LIKE WE DO, THAT IS MEANT TO CONSERVE, UH, SEND COST SIGNALS TO CUSTOMERS WHO CAN CONSERVE ENERGY.

UM, WHAT HAPPENS IS, IS THAT THE CUSTOMERS THAT DON'T CONSERVE ENERGY AND USE A LOT OF ENERGY END UP IN THOSE HIGHER TIERS OF CONSUMPTION, UH, WHILE THE, UM, YOU KNOW, OTHER CUSTOMERS THAT ARE VERY, UM, CONSERVATIVE ARE IN THE LOW TIERS OF CONSUMPTION.

SO IF YOU HAVE SOLAR IN THAT SITUATION WITH NET METERING, IF YOU'RE A HIGH CONSUMER, YOU'RE GETTING MORE VALUE FOR YOUR SOLAR PRODUCTION THAN YOU DO IF YOU'RE A LOW CONSUMER.

UM, SO THAT'S JUST NOT EQUITABLE.

AND THE, THE VALUE OR THE VALUE THAT A HIGH CON CONSUMING CUSTOMER GETS IS MORE THAN THE AVOIDED COST VALUE THAT THE, THAN THE, UM, SOLAR BRINGS TO THE GRID.

SO THAT EFFECTIVELY CAUSES A SUBSIDIZATION TO THAT CUSTOMER ON THE OTHER SIDE.

UM, FOR LOW CONSUMING CUSTOMERS, THEY'RE GETTING A VALUE THAT'S LOWER THAN THE, UM, AVOIDED COST VALUE THAT IT BRINGS TO THE GRID.

SO THEY'RE NOT BEING COMPENSATED FAIRLY IN THAT, UH, SITUATION.

ANOTHER PROBLEM WITH NET METERING IS, UH, UTILITY RECOVERY.

SO, UM, BASICALLY WE RECOVER OUR FIXED COSTS LIKE TOS, WIRES, TRANSFORMERS, AND THE LIKE THROUGH VOLUMETRIC CHARGES.

WHEN A CUSTOMER DISPLACES THE, UM, PAYMENT OF A VOLUMETRIC CHARGE THAT AFFECTS A UTILITIES FIXED COST RECOVERY, WE CARRY THAT UNRECOVERED DEBT UNTIL THE NEXT BASE RATE CASE.

WHEN WE ADJUST OUR RATES TO RECOVER THAT, THEN WE START RECOVERING THAT DEBT OVER THE NEXT PERIOD OF YEARS WHILE WE INCUR MORE DEBT FOR THE SAME REASON.

SO IT'S, IT'S A CONTINUOUS CYCLE THAT'S BAD FOR UTILITY, UH, FINANCES.

UM, AND THE VALUE OF SOLAR SOLVES FOR THAT BECAUSE IT'S, IT'S LIKE A POWER PURCHASE AGREEMENT.

SO WE'RE ALWAYS RECOVERING FOR IT.

AND THE P AND THE POWER SUPPLY ADJUSTMENT BE SO THAT HELPS US BE MORE STABLE FINANCIALLY.

UM, AND IT, IT, IT, IT MAINTAINS THE COST SIGNALING THAT WE HAVE IN OUR, IN OUR, UM, TIER GRADE SCHEDULE, UH, TO INFLUENCE BEHAVIORAL CONSERVATION.

SO, UM, DURING THE BASE RATE CASE, UH, WE CHANGED THE METHODOLOGY FROM A FORWARD LOOKING APPROACH THAT HAD A LOT OF ASSUMPTIONS IN IT, UM, TO A BACKWARDS LOOKING KIND OF KNOWN AND MEASURABLE APPROACH.

SO WHAT WE DO, OR I'LL, I'LL GO THROUGH THE METHODOLOGY AND HOW THAT ALL WORKS, BUT, UM, IT, IT REALLY HELPS US TO HAVE MORE CERTAINTY IN THE RATE ITSELF.

UM, AND SO THAT ALLOWS THE UTILITY TO REALLY GET BEHIND THE RATE, UM, KNOWING

[00:10:01]

UM, THE RATE IS UPDATED ONCE EVERY THREE YEARS BASED ON A FIVE YEAR ROLLING AVERAGE.

AND, UM, SO, SO THIS RATE FOR 2026 WILL GO THROUGH THE BUDGET PROCESS FOR REVIEW FROM COUNCIL, AND THEN IT GETS IMPLEMENTED IN NOVEMBER OF 2026.

THERE ARE BASICALLY FOUR COST COMPONENTS TO THE VALUE OF SOLAR, THE FIRST OF WHICH IS ENERGY.

SO IF A CUSTOMER IS PRODUCING A KILOWATT HOUR BEHIND THE AUSTIN ENERGY NODE ON OUR DISTRIBUTION GRID, THAT'S A KILOWATT HOUR OF ENERGY THAT WE DO NOT HAVE TO BUY FROM THE ERCOT MARKET AT THAT TIME.

SO WHAT WE DO IS ALIGN CUSTOMER PRODUCTION PROFILES ON AN, ON A HOURLY BASIS WITH THE ERCOT MARKET PRICE PROFILES TO DETERMINE WHAT THE AVERAGE, UM, AVOIDED COST FOR ENERGY IS.

UM, AND THEN THE THIRD AVOIDED COST OF THE UTILITY IS, UH, TRANSMISSION SAVINGS.

SO BASICALLY THE COINCIDENCE OF SOLAR PRODUCTION WITH FOUR CP, UH, LOWERS OUR, UM, DEMAND THAT ERCOT, UM, USES TO THEN CALCULATE OUR TRANSMISSION COSTS FOR THE NEXT YEAR.

SO TO THE EXTENT THAT WE CAN LOWER THOSE, UM, 15 MINUTE WINDOWS IN EACH OF THE SUMMER MONTHS, THEN WE REDUCE OUR TRANSMISSION COSTS AND WE ALSO REDUCE OUR, UM, LOAD SHE REQUIREMENTS IN THE EVENT OF, UM, SOME KIND OF A, A GRID ISSUE.

UM, AND THEN FINALLY THE LAST BENEFIT IS SOCIETAL BENEFIT.

SO THIS IS A, UM, IT'S AN AVOIDED COST TO SOCIETY, NOT NECESSARILY DIRECTLY TO THE UTILITY, UM, AS WHAT THE OTHER AVOIDED COST.

UM, BUT THIS IS INCLUDED IN THE RATE AND HAS BEEN SINCE ITS ITS INCEPTION.

UH, WE AGREED UPON A METHODOLOGY, UM, TO CALCULATE THIS THROUGH THE BASE RATE CASE IN 2022.

AND, UM, THAT HAS PROVEN TO BE A BIT CHALLENGING.

SO I WILL, UM, KIND OF GO OVER THAT IN A FUTURE SLIDE HERE.

FY 21, WHICH WAS THE TEST YEAR FOR THE BASE RATE CASE, WHICH WE GOT THIS METHODOLOGY APPROVED THROUGH.

SO I WANTED TO SHOW YOU ALL THE RATES, UM, THAT, THAT CAME OUT OF THESE ANALYSIS.

UM, SO WE DO THIS ON AN ANNUAL BASIS.

UH, UM, SO YOU'LL SEE UP HERE WE'VE GOT FY 21 THROUGH 25, AND THAT'S WHAT THIS UPDATE IS BASED ON.

UH, SO WE'RE TAKING THE AVERAGE OF THOSE YEARS.

UM, YOU'LL SEE THAT IN, UH, 22 AND 23 FOR THE ENERGY PRICE, IT WAS REALLY HIGH.

AND THAT'S BECAUSE WE HAD EVENTS, RIGHT? WE HAD, UM, SCARCITY EVENTS ON THE ERCOT MARKET, WHICH DROVE THE PRICE, THE ERCOT MARKET PRICE UP.

UM, IT DOESN'T TAKE A REALLY LONG EVENT TO MAKE A SIGNIFICANT DIFFERENCE, UH, FOR THAT, ESPECIALLY IF THE SOLAR IS SHOWING UP THAT DAY AND PRODUCING, UM, IT, THAT THE MARKET PRICE CAN GO FROM HOVERING AROUND $35 A MEGAWATT HOUR, UP TO $5,000 A MEGAWATT HOUR.

SO IN A SHORT AMOUNT OF TIME, IT CAN CREATE A SIGNIFICANT AMOUNT OF VALUE.

UM, AND 24 AND 25, YOU'LL SEE THOSE NUMBERS ARE SIGNIFICANTLY LOWER.

AND THAT'S BECAUSE THE ERCOT GRID WAS BETTER BALANCED AND DIDN'T HAVE AS MANY SCARCITY EVENTS.

UM, SO THE PRICE WAS PRETTY STABLE.

UM, SO, SO THAT KIND OF JUST GIVES YOU AN IDEA OF HOW, UM, THE VALUE CAN FLUCTUATE AND, AND HOW VOLATILE THE, THE, THE VALUE ACTUALLY IS.

AND SO THIS IS ONE OF THE REASONS WHY, UM, WE, UM, ARE AVERAGING OVER A PERIOD OF FIVE YEARS IS TO REDUCE THAT VOLATILITY, SEND A STRONGER COST SIGNAL TO CUSTOMERS AND THE MARKET.

AND, UM, WE UPDATE IT ONE, OR WE, YEAH, WE UPDATE IT ONCE EVERY THREE YEARS SO THAT THAT CAN BE IN PLACE AND ISN'T SHIFTING AROUND.

UM, AND HOPEFULLY THAT MAKES SOLAR MORE MARKETABLE OUT THERE.

UM, AND THEN, AND, AND SO YOU CAN SEE THAT, AND, AND YOU MAY NOT KNOW, BUT CURRENTLY THE VALUE OF SOLAR IS AT 9.91 CENTS, UM, FOR SYSTEMS UNDER A MEGAWATT OR YEAH, UNDER A MEGAWATT.

AND SO IT WILL BE GOING UP FROM 9.91 CENTS TO 12.88 CENTS.

SO A PRETTY SIGNIFICANT DIFFERENCE THERE.

UM, AND THAT'S BASICALLY BECAUSE THE VALUE OF SOLAR IS CURRENTLY TIED TO

[00:15:01]

UM, SO NOW IT'S AVERAGING ALL FIVE OF THOSE YEARS, WHICH INCLUDED SOME REALLY HIGH PRICE YEARS.

AND SO THAT'S DROVE THE PRICE UP ALONG WITH AN INCREASE TO THE SOCIETAL BENEFITS.

UM, SO YOU'LL, YOU'LL SEE THERE THAT THE SOCIETAL BENEFITS, WHICH WAS, UM, IN THE PREVIOUS RATE WAS 2.30 CENTS, IS NOW 3.30 CENTS.

SO I'M GONNA COVER HOW WE GOT THERE.

GO TO A NEW METHODOLOGY THAT STILL INCLUDES SCIENCE AND VALUES, THE ENVIRONMENT.

OH, BUT REAL QUICK, I'LL GO OVER THE TIMELINE HERE.

SO, UM, THE, THE, THE WEB IS UPDATED AND HAS THESE RATES CURRENTLY ON IT.

UM, THIS WILL GO THROUGH THE, THE BUDGET PROCESS AND THEN WILL BE IMPLEMENTED IN NOVEMBER 1ST, NEXT SLIDE.

SO THE SOCIETAL BENEFITS, I'LL SAY THIS WAS CHALLENGING, UM, TO FOLLOW OUR, OUR METHODOLOGY BECAUSE THE DOCUMENTS THAT WE TIE TO WEREN'T UPDATED AS WE ANTICIPATED.

SO THERE ARE BASICALLY TWO DOCUMENTS THAT WE FOLLOW HERE.

UM, ONE IS THE SOCIETAL COST OF CARBON REPORT FROM THE FEDERAL GOVERNMENT, AND THE OTHER IS A EIA REPORT, WHICH, UM, REPORTS ON CARBON INTENSITY FOR THE ERCOT MARKET.

SO, UM, WHAT WE'RE DOING IS THE GOVERNMENT GIVES A PRICE PER CARBON PER TON OF CARBON.

AND, UM, THE, UM, EIA REPORT GIVES A TON OF CARBON PER KILOWATT HOUR OR WELL MEGAWATT HOUR, BUT WE REDUCE IT DOWN TO KILOWATT HOUR.

UM, AND SO THEN WE CAN DETERMINE A PRICE PER KILOWATT HOUR.

UM, BUT THOSE REPORTS, ESPECIALLY THE, THE FEDERAL GOVERNMENT'S REPORT, UM, DID CHANGE SIGNIFICANTLY DURING THIS TIME.

SO THE INITIAL REPORT THAT WE BASE THIS ON, UM, DURING THE BASE RATE CASE WAS THE 2021 SOCIETAL COST OF CARBON REPORT.

UM, THAT REPORT PROVIDED, UM, A ANALYSIS FOR THE VALUE FOR 21 THROUGH 25, UM, AND 2021 THROUGH 2025, TO BE CLEAR.

UM, AND IMPORTANTLY THE, UM, THE MIDDLE.

SO IT GIVES LIKE THREE DIFFERENT, UM, DISCOUNT RATES THAT ARE ASSOCIATED WITH THAT.

AND THAT KIND OF, IT, IT INTERPRETS TOO, HOW MUCH DO YOU VALUE THE FUTURE.

UM, SO WE LANDED ON THE MIDDLE ONE, WHICH WAS 3%, UM, IN THE BASE RATE CASE.

SO THAT'S WHAT WE INTENDED TO TIE TO.

UM, BUT THEN THINGS CHANGE ON US A LITTLE BIT.

SO THE 2021 REPORT WAS THE PREVAILING REPORT FOR FY 21, 22, AND 23.

SO ALL CALCULATIONS FOR THOSE YEARS WERE BASED ON THIS 2021 REPORT AND THE VALUES THAT THEY PUT IN THAT REPORT FOR THE, FOR THE CORRESPONDING YEARS.

UM, IN 20, AT THE END OF 2023, WHICH WAS ACTUALLY OUR FISCAL YEAR, 24 IN NOVEMBER, UM, THE FEDERAL GOVERNMENT CAME OUT WITH AN UPDATED, UH, SOCIETAL COST OF CARBON REPORT.

IN THAT REPORT, THEY, UH, ABANDONED THE 3% DISCOUNT RATE AND THEN THE HIGHEST DISCOUNT RATE THEY HAD WAS 2.5%.

UM, SO WHAT THAT DOES, UM, THE LOWER THE DISCOUNT RATE, THE MORE YOU ASSIGNED VALUE TO THE FUTURE, ESSENTIALLY.

SO THAT PUSHED VALUES UP TO GO TO THAT LOWER DISCOUNT RATE.

UM, BUT THAT WAS THE HIGHEST DIS, UH, DISCOUNT RATE THAT THEY HAD CLOSEST TO WHAT WE AGREED TO IN THE RATE CASE.

UM, WE REACHED OUT TO EPA, THEY SAID THAT WE SHOULD NOT TRY TO APPLY A 3% DISCOUNT RATE TO THAT.

UM, WE DECIDED TO GO WITH WHAT WAS IN THE REPORT WITH THE 2.5%, UM, WHICH IS A BIT MORE CONSERVATIVE.

UM, AND SO THAT BROUGHT THE VALUE OR THE, UH, VALUE OF THE SOCIETAL BENEFITS UP PRETTY SIGNIFICANTLY.

NOW, CONTRARY, OR ON, ON THE FLIP SIDE OF THAT, IN 2026, THE PREVAILING RATE WOULD BE ZERO BECAUSE THE CURRENT ADMINISTRATION BASICALLY TOOK ALL OF THAT AWAY.

UM, AND, UM, UH, SO THAT WOULD BE, SO IF WE WERE TO CON CONTINUE WITH THIS METHODOLOGY FOR THE FY 26, UH, VALUE, IT WOULD BE ZERO.

SO FOR THAT REASON, AFTER THIS UPDATE, WE'RE ABANDONING THIS METHODOLOGY AND WE'RE GOING TO

[00:20:01]

UM, SO HAVING SAID THAT, UM, WE'LL, WE'LL HOLD STAKEHOLDER MEETINGS IN FY 27 TO START TO DEVELOP A NEW METHODOLOGY AND, AND TIE TO NEW INFORMATION.

UM, BUT CURRENTLY, YOU KNOW, THIS IS BASICALLY UNAFFECTED BY THE CURRENT ADMINISTRATION'S, UM, DISBELIEF IN CLIMATE SCIENCE.

UM, SO WITH THAT, I THINK THAT MIGHT BE MY LAST SLIDE.

THANK YOU MR. HARVEY.

APPRECIATE THAT.

YES, COMMISSIONER SILVERSTEIN NEXT PLEASE.

UM, WE DO HAVE SOME, UH, DISCUSSION ABOUT A, ABOUT THIS AS OUR NEXT ITEM, BUT WHILE MR. HARVEY IS STILL UP HERE, I'D LIKE TO OPEN IT FOR QUESTIONS.

AND I DO SEE, UH, COMMISSIONER KENNER'S HAND UP, SO I'M GONNA START WITH THE COMMISSIONER.

KENNER, GO AHEAD.

THANKS SO MUCH.

UH, I HOPE YOU CAN ALL HEAR ME OKAY.

JUST WANTED TO TEST THAT OUT BEFORE I SPEAK TOO MUCH.

UH, SOUNDS LIKE IT'S ALRIGHT.

UM, THANKS VERY MUCH TIM.

THAT WAS A, THAT WAS A REALLY HELPFUL, UM, PRESENTATION.

I'M CURIOUS ABOUT THE OTHER BENEFITS TO SOCIETY, THE NON-CARBON BENEFITS OF SOLAR.

SO THAT'S THINGS LIKE, UM, UH, AIR POLLUTION REDUCTION.

SO IF YOU ARE DISPLACING A COAL POWER PLANT, THEN YOU'RE OBVIOUSLY REDUCING AIR POLLUTION AND THAT SEEMS LIKE THAT'S A PRETTY READILY MONETIZABLE BENEFIT.

JUST WONDERING IF THAT WAS SOMETHING THAT YOU CONSIDERED OUTSIDE OF THAT STICKY ISSUE OF THE SOCIAL COST OF CARBON BIT.

IT'S NOT IN THE CURRENT METHODOLOGY.

SO, UM, YOU KNOW, I THINK WE COULD RECOGNIZE THAT DEFINITELY OFFSETS OTHER THINGS BESIDES CARBON.

UM, THAT'S WHAT WAS TIED TO IN THE CURRENT METHODOLOGY.

SO, UM, YOU KNOW, WE COULD DEFINITELY ENTERTAIN THE IDEA OF OTHER VALUES AS WE, UM, OPEN UP A NEW STAKEHOLDER, UM, ENGAGEMENT TO, TO TRY TO IDENTIFY A NEW APPROACH TO THOSE SOCIETAL BENEFITS.

LOVELY.

THANKS VERY MUCH.

THANK YOU, MR. HARVEY.

SO IF I CAN SUMMARIZE A COUPLE OF PUNCHLINES HERE.

THIS VALUE OF SOLAR RATE IS UPDATED EVERY THREE YEARS.

AND SO, SO THIS NU SET OF NUMBERS WILL STAY IN EFFECT FOR THE 2026 THROUGH 2028.

UM, AND THEN, WELL, NO, 2027 THROUGH 2029, SORRY.

SO, BUT THREE YEARS YES.

FOR THE, THIS SET OF NUMBERS.

AND THEN, UM, IT'S, I I, MY PERSONAL BET IS THAT IT WILL GO LOWER STARTING IN YEAR FOUR BECAUSE THREE OR FOUR YEARS OF NEW PRICES WILL HAVE ROLLED IN THAT REFLECT SIGNIFICANTLY MORE PHOTOVOLTAICS AND BATTERIES IN THE ERCOT FLEET UNLESS, UM, GAS PRICES AND OR SHORTAGES DRIVEN BY DATA CENTERS AND OR MAJOR EVENTS CAUSE SPECIFIC EPISODES THAT DRIVE PRICES UP IN ONE OR MORE OF THOSE YEARS.

WOULD THAT NOT WHATEVER THE SOCIAL, THE COST OF CARBON DOES, WHAT IT DOES MM-HMM .

BUT IN TERMS OF THE OTHER DRIVERS, DID I JUST NOTE THE SPECIFIC EFFECTS THAT COULD CHANGE THAT COULD AFFECT WHERE THE PRICES GO THREE YEARS? HENCE? I THINK THOSE ARE LOGICAL DRIVERS.

SO, SO IF YOU'VE GOT SOLAR AND YOU'RE BEING PAID ON, ON VALUE OF SOLAR FOR THE COMING THREE YEARS, YOU'RE IN TALL, KIND OF TALL COTTON, YOU'RE WHAT? YOU'RE IN TALL COTTON, YOU'RE, YOU'RE GETTING A GOOD LIFE FOR, AS AN AS AN EXPRESSION.

SO, SO YOU'RE PROBABLY GETTING, GETTING A PRETTY, PRETTY JUICY PRICE FOR THE VALUE OF YOUR SOLAR GENERATION.

IT'S, IT'S AS FAIR AS WE'VE BEEN ABLE TO COME UP WITH OUR OKAY.

WITH OUR CURRENT METHODOLOGY.

COORDINATE WITH STAKEHOLDERS AND IDENTIFY A GOOD PATH FORWARD THERE.

THANK YOU VERY MUCH.

OTHER QUESTIONS? YES, COMMISSIONER FARMER IS, IS THERE, UH, SO WHEN YOU GUYS ARE LOOKING AT A NEW METHODOLOGY THAT'S JUST FOR THE SOCIAL COST OF CARBON PIECE OF THAT, IT'S, IT'S NOT GONNA CHANGE THE TOTAL MATRIX AND THE FIVE YEAR ROLLING, RIGHT? THE, THE CURRENT METHODOLOGY WAS SET THROUGH THE BASE RATE CASE AND TO UPDATE THE FULL METHODOLOGY WILL DO IT IN THE NEXT BA BASE RATE CASE.

IF THERE ARE, UM, YOU KNOW, IF THERE'S A PROPOSAL TO UPDATE THAT METHODOLOGY.

BUT WHEN IT COMES TO THE SOCIETAL OR THE SOCIAL BENEFITS, UM, THAT PART WILL BE, YOU KNOW, LOOKING TO CO UH,

[00:25:01]

IS THERE, SO ONE OF THE WAYS THAT I, I THINK ABOUT THIS STUFF IS THE RETURN ON INVESTMENT HORIZON FOR LIKE AN INSTALLED SYSTEM, RIGHT? AND SO THIS IS A BIG PART OF THAT.

AND THEN THE COST TO INSTALL, IT'S THE OTHER SIDE OF THAT EQUATION, RIGHT? SO IS THERE, DO YOU THINK THERE'S A CASE TO BE MADE IN THE NEXT BASE RATE CASE TO PIN THOSE THINGS TO A CERTAIN HORIZON? 'CAUSE RIGHT NOW IT'S, IT'S VERY HARD FOR LIKE A CUSTOMER TO SAY, YOU KNOW, IF THIS RATE IS FLUCTUATING, YOU KNOW, IT MIGHT MEAN THAT MY INSTALL IS ACTUALLY GONNA TAKE 15 YEARS TO PAY OFF INSTEAD OF EIGHT.

AND THAT'S A PRETTY SIGNIFICANT, UH, DELTA.

BUT ALSO I THINK THAT THAT AFFECTS MARKET ADOPTION, RIGHT? THAT'S SORT OF THE ULTIMATE GOAL OF THE WHOLE THING IS TO LIKE GET MORE SOLAR ON THE SYSTEM, MORE PV ON THE ROOFTOPS.

WELL, SO I, I WOULD, I WOULD CHARACTERIZE THE RATE AS THE BASELINE.

SO THIS IS THE PRICE AT WHICH THE UTILITY IS PASSING FORWARD.

ALL OF THEIR, THE UTILITIES AVOIDED COSTS TO THE CUSTOMER.

UM, AND IT DOESN'T INCLUDE A SUBSIDIZATION TO DRIVE THE MARKET.

THAT'S FOR INCENTIVES.

SO COUPLING THE TWO, THEN YOU HAVE THAT TOOL TO KIND OF DO WHAT YOU'RE SAYING AND DRIVE TOWARDS A DESIRED, UM, YOU KNOW, PAYBACK OR, OR WHATNOT.

BUT YOU WANT IT, IT'S IDEAL TO KEEP THE RATE SEPARATE FROM INCENTIVES.

SO THE RATE THAT ITSELF ISN'T, UM, NECESSARILY DRIVING COST INCREASE TO CUSTOMERS, IT'S SOMETHING THAT'S VERY SUSTAINABLE AND SCALABLE.

UM, WHEN YOU START TO PUT TOO MANY INCENTIVES IN THERE AND CROSS SUBSIDIZATION AND THINGS LIKE THAT, THAT'S WHEN PEOPLE START TO LOSE CONFIDENCE IN ITS ABILITY TO BE SCALABLE AND SUSTAINABLE FOR A LONG PERIOD OF TIME.

SO YOU, YOU WANNA MAKE SURE THAT THAT RATE IS VERY STABLE AND THEN YOU CAN LAYER THE INCENTIVES ON TOP OF IT AND DO THEM IN A JUSTIFIED WAY THAT IS, UM, YOU KNOW, CONFINED TO DRIVE TO THE OUTCOMES THAT YOU'RE LOOKING FOR.

UM, AND IN A WAY THAT'S VERY TRANSPARENT.

SO I GUESS LIKE THE THOUGHT WOULD BE THEN, AS THIS IS FLUCTUATING, THE INTENSIVE, THE INCENTIVES COULD FLUCTUATE ON THE, TO COVER THE OTHER SIDE OF IT TO TRY AND KEEP THE SORT OF PAYBACK PERIOD REASONABLE.

BUT THE INCENTIVE PIECE WOULD BE THE THING THAT, LIKE, YOU'D RATHER PIN THIS TO BE SORT OF NEUTRAL, ESSENTIALLY, RIGHT? THAT THE, THE INCENTIVE, THE INCENTIVE IS LIKE YOUR GAS PEDAL.

OKAY, THANK YOU MR. HARVEY.

I DO HAVE A, A QUESTION FIR FIRST, THANKS SO MUCH FOR THE VERY INFORMATIVE PRESENTATION.

AND I, I AM CHEERED TO HEAR THAT THE PLAN IS TO CONTINUE TO CALCULATE A SOCIAL COST OF CARBON THAT IS BASED ON SCIENCE AND DOES NOT DENY THE REALITY OF THE CLIMATE SITUATION THAT WE ARE IN, UH, WITH GREENHOUSE GASES.

UM, CAN YOU TALK ABOUT THE STAKEHOLDER PROCESS, WHO THE STAKEHOLDERS WILL BE, UM, WHAT GROUPS ARE YOU REACHING OUT TO AND KIND OF WHAT DOES THAT, WHAT DOES THAT LOOK LIKE AS FAR AS ENGAGEMENT? YEAH, WE HAVEN'T DEVELOPED THAT WHOLE PLAN YET.

SO, UM, YOU KNOW, WHEN, WHEN WE DO, IT WILL BE A VERY OPEN PROCESS.

UM, AND WE'LL INVITE PARTICIPATION FROM ALL CUSTOMER CLASSES, UM, BECAUSE THIS AFFECTS ALL CUSTOMER CLASSES.

UM, I'M SURE WE'LL HAVE, UM, YOU KNOW, OUR ENGAGED STAKEHOLDERS PRESENT AS WELL AS, UM, COMMISSIONERS FROM BOTH EUC AND RMC.

WHICH IS DISCUSSION AND RECOMMENDATION ON THE VALUE OF SOLAR.

UM, ANY OTHER DISCUSSION ON THIS? WE'RE, WE'RE GONNA MOVE RIGHT INTO, UH, ITEM NUMBER THREE,

[3. Discussion and recommendation on the value of solar and the social cost of carbon components. ]

COMMISSIONER SCHWARTZ HAS PUT TOGETHER A PRESENTATION.

I WILL, UH, NOTE THAT THERE IS NO ACTION ITEM.

UH, WE WE'RE POSTED FOR ACTION JUST IN CASE, BUT THIS WILL JUST BE DISCUSSION.

SO, UM, GO AHEAD, TAKE IT AWAY.

COMMISSIONER SCHWARTZ, PLEASE NOT.

I, I REALLY, REALLY INFORMATIVE.

REALLY APPRECIATE IT.

IS THIS ON? YES.

BUT I GUESS IT'S, IT'S NICE THAT WE WE'RE TAKING THE OPPORTUNITY, I THINK TO, TO, TO TALK ABOUT, I GUESS MY PERSONAL THOUGHTS ON SOME THINGS THAT I'VE, UH, SEEN AND FELT ABOUT VALUE OF SOLAR AND NOTICED OVER, YOU KNOW, THE COUPLE OF YEARS I'VE BEEN PLUGGED INTO THIS.

CAN YOU GO TO THE NEXT SLIDE? SO, YEAH, SO WITH, UH, THE TIMELINE OF THE NEXT, UH, BASE RATE CASE, IT COULD BE THAT WE'RE HAVING THIS CONVERSATION EARLY,

[00:30:01]

UM, SO IT COULD BE THAT, YOU KNOW, SOME OF THIS STUFF MIGHT BE LIKE A MUCH LONGER, A LONGER CONVERSATION, BUT I'LL, I'LL GO THROUGH THE SLIDES AND I'LL TRY TO GO, YOU KNOW, READ SOME OF IT AND GO THROUGH AS QUICK AS POSSIBLE.

'CAUSE I THINK, UH, MR. HARVEY COVERED, UH, THERE'S A FAIR AMOUNT OF OVERLAP HERE IN WHAT, OR WHAT ARE, THERE'S SOME OVERLAP IN WHAT ARE ON MY SLIDES AND WHAT WE JUST SPOKE ABOUT.

SO, SO JUST TO KIND OF TALK ABOUT THIS QUICKLY, UM, AND I DON'T REALLY HAVE AN INTEREST SLIDE, BUT THE IDEA HERE IS THE FIRST, LIKE SIX OR SEVEN SLIDES ARE REALLY BACKGROUND THAT I FELT WAS IMPORTANT FOR US TO KIND OF GET ALIGNED ON.

AND THEN THEY'RE, THEY'RE KIND OF BUILDING UP THE CONTEXT TOWARDS WHAT I'M GETTING AT, AT THE END, WHICH ARE REALLY THE LAST TWO OR THREE SLIDES, WHICH ARE A RECOMMENDATION ON CERTAIN CHANGES TO THE WAY VALUE OF SOLAR IS CALCULATED.

SO THE, THE INTEREST SLIDE IF IT EXISTED, WOULD BE THAT WE'RE GOING TO TALK ABOUT THE SOLAR AUSTIN ENERGY, SOLAR GOALS BRIEFLY TO THE, TO THE EXTENT THAT I CAN DO THAT, UH, TO JUST GO, GO THROUGH IT, UH, AS BEST I UNDERSTAND IT.

AND THEN WE'RE GONNA GET INTO SOME OF THE OBSTACLES OVER THE LAST COUPLE YEARS AND THE FEDERAL CHANGES, OBSTACLES RELATED TO THAT.

AND THEN DISCUSSED SOME PROPOSED IDEAS FOR CHANGES TO VALUE OF SOLAR, I GUESS TO START THE CONVERSATION AT LEAST AS FAR AS RMC IS CONCERNED.

SO TO JUST GO THROUGH THIS ONE QUICKLY, LOCAL SOLAR GOALS, RIGHT? THIS IS STRAIGHT FROM THE GEN PLAN, THE TEXT ON THE LEFT.

UM, SO PROMOTE INNOVATIVE LOCAL SOLAR SOLUTIONS.

AUSTIN ENERGY WILL CONTINUE TO BUILD LOCAL SOLAR SOLUTIONS AND EXPAND LOCAL SOLAR ACCESS FOR ALL CUSTOMERS.

SO THE IDEA WAS TO THAT THE 20 30, 20 35 GOAL, RIGHT? EIGHT YEARS FROM NOW, EIGHT AND A HALF YEARS IS 405 MEGAWATTS.

AND I DOING THE BACK OF THE ENVELOPE MATH AS WELL AS I CAN, THAT'S 23 YEAR GOING FORWARD, RIGHT? I GUESS OVER THE NEXT EIGHT AND CHANGE YEARS.

SO THE, THE SLIDE ON THE RIGHT IS FROM A, A NICE PRESS RELEASE THAT Y'ALL DID, AND IT'S, I GUESS THE LAST SIX YEARS OF MEGAWATT CAPACITY ADDED LOCALLY.

AND, AND THEN I PUT, UH, THE 23 MARKER.

SO JUST TO SHOW THERE ISN'T, YOU KNOW, IT'S NICE THAT THESE BARS ARE GOING UP.

I UNDERSTAND THAT.

I THINK 23, 24, 25 ALL BENEFITED FROM THE 30% FEDERAL SUBSIDY, I BELIEVE.

BUT DEFINITELY FY 25 HAD A BIG BOOST.

'CAUSE THAT WAS THE YEAR WHERE LAST HALF OF THE YEAR, YOU KNOW, IT WAS UNDERSTOOD THAT THE, THE 30% SUBSIDY FOR RESIDENTIAL WAS BEING CUT OFF.

SO THERE'S DEFINITELY A BOOST FROM THAT.

SO AS FAR AS I KNOW AND WHAT I'VE, YOU KNOW, LEARNED OVER THE LAST HALF A YEAR, IT'S 26 IS EXPECTED TO TRAIL 25 AT LEAST NATIONALLY.

I DON'T KNOW, YOU KNOW, NUMBERS OF WHAT'S GOING ON LOCALLY, BUT THAT'S MY UNDERSTANDING THAT WE'LL SEE A DROP OFF THIS YEAR.

I, AS FAR AS I UNDERSTAND, SO THE IDEA HERE IS JUST WHAT CAN WE DO TO CHANGE THIS? 'CAUSE REALLY IF WE EXCLUDE 25 THE LAST THREE YEARS OR LIKE HALF OF WHAT WE NEED TO BE, YOU KNOW, MAYBE WE WOULD NEED TO SEE LIKE A, A 60% BOOST TO EVEN HIT WHAT THE AVERAGE WOULD NEED TO BE FOR THE NEXT EIGHT YEARS GOING FORWARD.

SO, YOU KNOW, UH, CAN YOU GO TO THE NEXT SLIDE? UM, JUST TO SAY LIKE, THERE'S BEEN OBVIOUSLY, YOU KNOW, TONS OF SUCCESSFUL SOLAR PROGRAMS, YOU KNOW, REFLECTING ON IT.

I THINK, UM, SPEAKING FOR MYSELF REALLY, IT'S BEEN REALLY IMPRESSIVE TO KIND OF WATCH ALONG WITH THE PROCESS OF ALL THE STAKEHOLDER MEETINGS AS WELL AS THE PRESENTATIONS TO EUC AND RMC.

AND I THINK AUSTIN REALLY SHOULD BE GRATEFUL THAT A LOT OF THIS STUFF IS LIKE HOW WELL, YOU KNOW, THE SOLAR PROGRAMS ARE BEING STEWARDED BY THE, THE TEAM AT AUSTIN ENERGY.

I THINK THE UTILITY HAS A TON TO BE PROUD OF WITH THE PROGRAMS THAT HAVE BEEN SUCCESSFUL.

COMMUNITY ENGAGEMENT IS REALLY ROBUST AND COLLABORATIVE AND LIKE REALLY RICH AND COLLABORATIVE.

AND, YOU KNOW, AUSTIN ENERGY, I, I THINK, HAS DONE AN ADMIRABLE JOB NAVIGATING THE CHANGING FEDERAL SUBSIDIES AND A LOT OF PIVOTS OVER THE LAST SIX MONTHS THAT Y'ALL HAVE, UH, TOLD US ABOUT.

AND THE COMMUNICATION WITH US, I THINK HAS BEEN WAY ABOVE AVERAGE.

SO, UM, THAT'S JUST TO SAY THIS SLIDE'S JUST TO COVER THAT THERE'S LIKE, I MEAN, AT LEAST THAT I CAN THINK OF, RIGHT? UH, SIX OR SEVEN SUCCESSFUL LOCAL PROGRAMS THAT ARE DOING ALL THIS STUFF.

SO I JUST WANTED TO CALL ATTENTION TO THAT.

CAN YOU GO TO THE NEXT SLIDE? OKAY.

SO JUST TO JUMP INTO SOME OBSTACLES, AND I THINK WE KIND OF COVERED SOME OF THIS ALREADY, BUT THE US SOLAR MARKETS IN A TRANSITION YEAR IN 26, LOSS OF 30% FE FEDERAL SUBSIDY, FROM WHAT I'VE HEARD EARLIER THIS YEAR, EXPERTS IN THE FIELD ARE SAYING THAT IT'S GONNA BE LIKE A 30, MAYBE 30, 33% DECLINE.

NATIONALLY.

THERE'S BEEN OTHER CHANGES THAT MAKE SOLAR INSTALL MORE EXPENSIVE ALSO FOR AN ENTITY OF CONCERN.

I, I CALL THAT OUT HERE THAT PANELS FROM ASIA OR CHINA ARE, YOU KNOW, NOT GONNA RECEIVE CERTAIN SUBSIDIES.

IT'S ANOTHER MAJOR COST INCREASE THAT I THINK FOLKS IN THE INDUSTRY ARE DEALING WITH.

[00:35:01]

UM, AND I KNOW FROM FOLLOWING ALONG THE COMMERCIAL STANDARD OFFER, AS I UNDERSTAND IT WAS ALREADY STRUGGLING TO SCALE, UH, LAST YEAR.

AND THE RESIDENTIAL STANDARD OFFER, AS I UNDERSTAND IT APPEARS THAT IT WILL NOT MOVE FORWARD.

AT LEAST THAT'S THE LAST I HEARD, UH, I GUESS A COUPLE MONTHS AGO IN THE SOLAR FOR ALL PROGRAM THAT WE WERE ALL SO EXCITED ABOUT LAST YEAR, AS FAR AS I UNDERSTAND APPEARS TO BE DEAD.

AND, AND THEN THE LAST BULLET HERE IS ME CALLING OUT THAT I KNOW FROM FOLLOWING ALONG THAT AUSTIN ENERGY DOES NOT HAVE MUCH APPETITE TO INCREASE SUBSIDIES.

UH, CAN YOU GO TO THE NEXT SLIDE? UH, SO HERE'S A LITTLE BACKGROUND ON THE VALUE OF SOLAR, SOLAR TARIFF, AND I THINK WE JUST TALKED ABOUT THIS.

I'LL TRY TO GO THROUGH QUICK JUST TO GET A ALIGNED ON IT.

SO YEAH, SO SET UP IN 2012 TO ASSESS WHAT THE TRUE VALUE OF LOCAL, LOCAL SOLAR IS.

THE UTILITY LEADERSHIP HAS BEEN CLEAR.

THE INTENTION IS TO PROPERLY VALUE, CUSTOMER SAID SOLAR AS A RESOURCE TO THE UTILITY, RIGHT TO THE UTILITY, AND FAIRLY COMPENSATE THE CUSTOMER WITHOUT BURDENING THE NON-SOLAR CUSTOMERS.

SO THERE ARE FOUR COMPONENTS OF AVOID COST.

TIM JUST TALKED ABOUT THEM, I WON'T GO INTO THEM AGAIN.

AND I JUST TO NOTE AT THE BOTTOM THAT SOME OF THE TARIFFS DO NOT INCLUDE THE SOCIETAL BENEFIT.

I KNOW THE NEW STANDARD OFFER TARIFFS DON'T INCLUDE THAT.

CAN YOU GO TO THE NEXT SLIDE? OKAY.

SO STEPPING AWAY FROM SUBSIDIES, AUSTIN ENERGY HAS TRIED TO STEP AWAY FROM THE ACTUAL INCENTIVES, AND I THINK MR. HARVEY KIND OF MENTIONED THIS, THAT ROLLING OUT THE NEW PROGRAMS STANDARD OFFER PROGRAMS, WHICH DO NOT VALUE CARBON EMISSION REDUCTION OR ANY ENVIRONMENTAL ASPECT OF SOLAR, UH, CHARGING COMMERCIAL CUSTOMERS, UH, RELATIVELY HIGH PERMITTING FREE FEES.

FROM WHAT I UNDERSTAND, AUSTIN ENERGY HAS MADE CLEAR THAT EVEN MODEST INCENTIVES ARE NOT SUSTAINABLE FOR THE UTILITY LONG TERM, AT LEAST THE WAY THAT UTILITY LOOKS AT ITS FINANCIALS AND THE WAY THAT THEY VIEW SUBSIDIES ON TOP OF THESE, THESE ARE REALLY THINGS THAT, YOU KNOW, THE UTILITY SEEMS TO BE WILLING TO DO TO, TO SAVE THE PROGRAMS AND HELP THEM, BUT ARE NOT SEEN AS THINGS THAT CAN HELP THE PROGRAMS BE SUSTAINABLE AND SCALABLE.

UH, THAT, THAT'S REALLY MORE IN THE WAY THAT UTILITY IS LOOKING AT THIS TODAY, TIED TO WHAT ARE THE ACTUAL FINANCIAL AVOIDED COSTS TO THE ENTITY ITSELF TO THE UTILITY.

AND YET IN THE BOTTOM, EVERY DOLLAR SPENT ON SOCIETAL BENEFITS OR INCENTIVES LIMITS THE PROGRAM SUSTAINABILITY IN THE UTILITIES VIEW.

IT'S REALLY HIGHLY FLUCTUATING.

YEAH, VALUE OF SOLAR SIM, UH, STOLEN, UH, TABLE, AGAIN, VALUE OF SOLAR PAYOUT AS, UH, MR. HARVEY, UH, ALLUDED TO IS REALLY DEPENDENT ON ENERGY SCARCITY ON ERCOT.

I JUST WAS JUST LOOKING AT THE NUMBERS HERE.

IF WE, UM, IGNORE THE SOCIETAL BENEFIT COMPONENT THAT COMES FROM THE SOCIAL COST OF CARBON, THE LAST TWO YEARS, FY 24 AND FIVE, AVOIDED COSTS WERE 5.60 CENTS, WHICH OVER THE PREVIOUS THREE YEARS WAS 12.2.

SO IT'S NOT LIKE A 10 OR 20% DROP, IT'S LIKE A 60 70% DROP.

SO I THINK, UH, COMMISSIONER SILVERSTEIN MENTIONED MASSIVE BATTERY GROWTH ON ERCOT HAS GREATLY LOWERED COST OF SUMMER SCARCITY EVENTS.

AND, YOU KNOW, FOLKS THAT ARE SMARTER THAN ME ARE TRYING TO FIGURE OUT WHETHER FUTURE DATA CENTER DEMAND MAY OR MAY NOT SAVE US IN THIS SITUATION, SAVE US INCREASED THE WHOLESALE COST OF ENERGY ON THE ERCOT MARKET'S.

NOT CLEAR, I THINK, I THINK AT ALL HOW THAT'S GONNA SHAKE OUT.

UM, SO, AND THEN THE OTHER THING I NOTE AT THE BOTTOM WAS THE, YOU KNOW, THE 2023 EPA REPORT KIND OF BY CHANCE, I THINK FROM WHAT I UNDERSTAND, UM, WAS, YOU KNOW, THE TIMING WAS FORTUITOUS IN THAT IT DOUBLED THE SOCIAL COST OF CARBON VALUE.

IF IT HADN'T DONE THAT, I THINK WE WOULD BE LOOKING AT A REDUCTION FROM THE LAST ONE.

YOU KNOW, THAT WENT INTO EFFECT IN 22.

SO ALL THIS TO SAY, TO JUST REALLY CALL OUT THAT GOING FORWARD, IT REALLY SEEMS LIKE, UM, YOU KNOW, DEPENDING ON HOW THE UTILITY VIEWS ITS ROLE AND INCREASING THE SOCIETAL BENEFIT OR INCENTIVES, IT REALLY DOES SEEM LIKE THE ODDS ON BAT IS THAT THIS SITUATION IS GOING TO, IS THAT, WHAT WAS THE EXPRESSION WE'RE, UH, SWIMMING IN OR STANDING IN HIGH ECONOMY, STANDING IN TALL COTTON THAT IT'S GONNA, UH, YOU KNOW, IN THE FUTURE THIS COULD PLUMMET LIKE SIGNIFICANTLY TO WHAT IT, FROM WHAT IT IS TODAY, IF WE DROP, LET THESE THREE YEARS DROP OFF AND SEE OTHER YEARS THAT ARE LIKE IN LINE WITH 24 AND 25.

SO NEXT SLIDE.

UM, YEAH, SO THIS IS AN EXAMPLE THAT I WANTED TO CALL OUT THE VALUE OF SOLAR ON COMMERCIAL STANDARD OFFER.

I KNOW FROM WATCHING THE STAKEHOLDER MEETINGS, THE COMMERCIAL STANDARD OFFER DOES NOT HAVE THE SOCIETAL BENEFIT COMPONENT TO BOOST PAYOUT.

UH, AUSTIN ENERGY JUST ANNOUNCED A PRICE FLOOR SUBSIDY OF 11 CENTS PER KILOWATT HOUR TO SAVE THE PROGRAM, WHICH I THINK WAS USING THE VALUE OF SOLAR CALCULATION WAS AT 9.60 CENTS BEFORE THE FLOOR.

SO IT'S LIKE A SUBSIDY HERE

[00:40:01]

OF LIKE ONE WHATEVER, 1.40 CENTS A KILOWATT HOUR, OR I GUESS SOMETHING LIKE 15%.

THIS IS ACCOUNTED FOR AS A SUBSIDY, UM, IN THE CUSTOMER RENEWABLE SOLUTIONS BUCKET.

IT'S A BUDGET AMOUNT THAT IS, AS I UNDERSTAND, NEEDS TO BE SPECIALLY APPROVED BY COUNCIL ON AN ANNUAL BASIS.

AND, UH, DURING THE STAKEHOLDER MEETINGS, WE WERE TOLD IT CANNOT BE GUARANTEED IN THE FUTURE NECESSARILY.

THAT'S NOT TO SAY THAT COUNCIL, YOU KNOW, WON'T APPROVE IT, BUT IT DEPENDS ON THE POLITICAL MAKEUP I SUPPOSE, OF THIS.

AND IT, AND IT'S SEEN VIEWED BY THE UTILITY, UM, FROM WHAT I UNDERSTAND AS A SEPARATE INCENTIVE BUCKET.

UH, IT'S TERM LIMITED TO 10 YEARS AND WILL ONLY APPLY TO 30 OF THE 70 MEGAWATTS THAT ARE BEING PLANNED UNDER THE STANDARD OFFER.

SO LESS THAN HALF, YOU KNOW, MAYBE FOR THE FORESEEABLE FUTURE THIS FLOOR EXISTS, BUT THE UTILITY HAS A PLAN TO END THE FLOOR FOR THE MAJORITY AS THE MA LIKE MORE THAN HALF OF THE MEGAWATTS OF THIS PROGRAM WILL NOT RECEIVE THE FLOOR.

SO NEXT SLIDE.

OKAY, SO THIS IS REALLY, REALLY GOOD INTO WHAT THE POINT IS HERE.

SO AROUND, UH, ONE MORE BACKGROUND POINT.

SO 2014, THE VALUE OF SOLAR IS ORIGINALLY CONCEIVED.

HE WAS AN ANNUAL, UH, UPDATED, UH, TARIFF.

IN 2014, THE COST OF ENERGY BEGAN TO PLUMMET DUE TO THE SHALE GAS BOOM.

THE UTILITY RESPONDED BY SETTING UP PLAN TO LEVELIZE THE TARIFF, WHICH IS THIS FIVE YEAR ROLLING AVERAGE IDEA TO STABILIZE THE RATE, WHICH DOING THAT, YOU KNOW, STABILIZES THE RATE VALUE OF SOLAR IS A FIVE YEAR AVERAGE, WHICH GET, WHICH GETS UPDATED EVERY THREE YEARS.

SO AT ANY GIVEN TIME, THE VOIDED COSTS ARE NOMINAL DOLLAR VALUES FROM AS FAR BACK AS THREE TO EIGHT YEARS AGO.

THE, THIS MECHANISM PUT IN PLACE AFTER THE ORIGINAL TARIFF DESIGN IGNORES ANY SORT OF INFLATION ADJUSTMENT.

IT'S AKIN TO SOLAR CUSTOMER PROVIDING THE UTILITY LOCAL POWER TODAY AND BEING PAID IN 2018 TO 2020 $2.

SO I KNOW FROM DOING SOME RESEARCH ON THIS, YOU KNOW, AUSTIN ENERGY, IT'S A PRETTY UNIQUE STRUCTURE, THE VALUE OF SOLAR, BUT IT'S BY NO MEANS, YOU KNOW, COMPLETELY UNIQUE.

THERE ARE OTHER UTILITIES THAT DO THIS.

I KNOW THERE'S UTILITIES IN MINNESOTA AND I BELIEVE THERE'S, UH, MORE RECENTLY MORE UTILITIES THAT ARE GOING IN THIS DIRECTION.

AND THERE'S BEEN A LOT OF RESEARCH IN HOW, YOU KNOW, UTILITIES CAN CALCULATE AVOID COSTS AND HOW THEY CAN VALUE SOLAR.

OTHER VALUE OF SOLAR TARIFFS THAT EXIST NATIONWIDE THAT DO HAVE A MULTI-YEAR LEVELIZING FRAMEWORK THAT IS SOMEWHAT SIMILAR TO THIS.

THEY DO INCLUDE, SOME OF THEM DO INCLUDE SIMPLE INFLATION ADJUSTMENT, WHICH WILL ACT AS AN ESCALATOR, ESCALATES THE NOMINAL AVOID COSTS FROM MANY YEARS AGO TO TODAY'S, YOU KNOW, TODAY'S DOLLARS.

THIS IS AN EXTREMELY SIMPLE ADJUSTMENT THAT JUST INVOLVES MULTIPLYING THE EACH YEAR IN THE TABLES VALUE OF SOLAR BY THE CPI INFLATION DIFFERENCE BETWEEN THAT YEAR AND TODAY OR I I PUT HERE, YOU KNOW, IT COULD EVEN JUST BE LIKE A FIXED INFLATION FACTOR.

OKAY, UH, CONTINUED.

SO THERE IS A ACCOUNTING TERM, CONSTANT DOLLAR ACCOUNTING THAT'S LIKELY A BETTER ACCOUNTING METHOD HERE.

INFLATION ADJUSTED ACCOUNTING, RESTATES FINANCIAL STATEMENTS TO REFLECT CHARGES IN PURCHASING POWER, CHANGES IN PURCHASING POWER, ADDRESSING THE DISTORTION OF HISTORICAL COSTS GIVEN INFLATION.

THE CHANGING DOLLAR VALUE YEAR TO YEAR, UH, SHOWS REAL RATHER THAN NOMINAL COSTS.

CURRENT VALUE OF SOLAR USES HISTORICAL COST ACCOUNTING, WHICH UNDER COMPENSATES THE ACTUAL AVOID COSTS OF LOCAL SOLAR PRODUCTION.

THE IMPACT IS SURPRISINGLY SIGNIFICANT.

I'M NOT GONNA READ THE NUMBERS IN THE TABLE, BUT JUST U YOU KNOW, UH, USING THIS MULTIPLIER OF HOW INFLATION AFFECTS EACH OF EACH OF THESE YEARS NUMBERS, IT TURNS OUT THAT ACCOUNT FOR INFLATION INCREASES THE RATE VALUE OF SOLAR RATE BY ABOUT 2 CENTS PER KILOWATT HOUR ON AVERAGE TO 14.80 CENTS.

UM, AND THEN I DID WONDER WHETHER, HOW MUCH OF THAT BUMP THAT TWO, 2 CENT BUMP, OR I GUESS LIKE 15 TO 20%, 15% BUMP IS RELATED TO THE COVID KIND OF 20, 21, 22 ERROR INFLATION THAT WE SAW.

SO JUST REMOVING THAT AND MAKING THOSE YEARS NORMAL, I REDID THE CALCULATION, IT TURNED OUT TO LIKE 1.60 CENTS, SO IT'S REALLY NOT UNIQUE TO THE LAST FEW YEARS WHERE WE HAD, LIKE ONE YEAR I THINK WE HAD 9% INFLATION.

THIS IS GONNA HAPPEN IN LIKE A PRETTY SIMILAR WAY IN ANY GIVEN PERIOD.

IT'S GONNA, YOU KNOW, THE AVOID COSTS AS THEY'RE, THEY'RE ACCUMULATED WILL BE UNDER COUNTED BY ABOUT LIKE 50 AND, YOU KNOW, 10 50 AND 20%, UH, USING METHODOLOGY THAT DOESN'T INFLATION ADJUST.

OR AT LEAST WAS, WAS PART OF THE, THE FORMULA, THE WAY THAT THE UTILITY WAS LOOKING AT, UH, PRIOR TO 20 22, 1 OF WHICH IS DISTRIBUTION CAPACITY.

UH, SO THIS IS A WHOLE OTHER CAN OF WORMS THAT OF MISSING AVOID COST COMPONENTS FOR FUTURE STUDY.

SO THESE ARE OTHER IDEAS AND I THINK, UH, COMMISSIONER KENARD WAS SPEAKING TO SOME OF THIS CURRENT VALUE OF SOLAR TARIFF LEAVES OUT A NUMBER OF AVOIDED COST COMPONENTS THAT ARE WELL KNOWN AND WIDELY ACCEPTED AND HAVE BEEN STUDIED AND USED ELSEWHERE.

THE DECLINING FINANCIALS OF SOLAR MAKE IT IMPORTANT THAT WE GET THIS RIGHT.

I DON'T KNOW THAT I, I GUESS I'LL READ THEM, BUT I AM NOT GONNA GET INTO ALL OF THESE.

BUT THERE ARE A WHOLE BUNCH OF DIFFERENT TYPES OF AVOIDED COST COMPONENTS.

I KNOW SOME OF WHICH THE UTILITY USED UNTIL 22

[00:45:01]

AND I KNOW THERE'S BEEN STUDIES IN BOTH DIRECTIONS ON WHETHER THAT'S ACTUALLY NEUTRAL OR NEGATIVE OR POSITIVE AND WHAT, HOW THE AVOIDED COSTS LOOK LIKE FOR THAT.

MY UNDERSTANDING IS IN A GROWING LOAD ZONE, IT IS, IT DOES TYPICALLY TEND TO BE A POSITIVE AVOIDED COST, BUT THERE'S OTHER, YOU KNOW, WELL, WELL, WELL STUDIED AND MEASURABLE TYPES OF AVOIDED COSTS INCLUDING, YOU KNOW, 2, 3, 4, 5, AND SIX DEMAND REDUCTION INDUCED PRICE EFFECT.

I'LL JUST MENTION ONE MORE.

SO THIS IS THE IDEA THAT, YOU KNOW, LOCAL SOLAR, LOCAL SOLAR GENERATING LOCALLY DOES REDUCE DEMAND TO THE WHOLESALE PRICE ITSELF BECAUSE THE, YOU KNOW, THE DEMAND AT THE NODE AUSTIN ENERGY LOAD ZONE NODE IS GONNA BE LOWER.

IT PRODUCES BILL SAVINGS FOR THE UTILITY IN ALL LOCAL CUSTOMERS.

IF THAT'S HAPPENING DURING, YOU KNOW, THESE SUMMER SCARCITY PEAK EVENTS, THE EFFECT IS REALLY HIGH.

AND I, AND SOMEONE WHO DID A STUDY ON WHAT THIS WOULD LOOK LIKE IN TEXAS, ESTIMATED LIKE ONE TO 3 CENTS.

SO I'M NOT GONNA GO THROUGH ALL THE OTHERS, I'M NOT AN EXPERT IN THIS STUFF, BUT I JUST WANTED TO CALL OUT THAT THESE ARE THINGS THAT ARE WELL KNOWN, STUDIED, AND ARE EASY.

LIKE, YOU KNOW, SOME OF THEM NEED TO BE, I THINK, MODELED OR ESTIMATED, AND THEY'RE NOT NECESSARILY THINGS THAT YOU CAN LOOK AT THE ACCOUNTING AND WHAT THE UTILITY HAS PAID OUT SPECIFICALLY.

YOU KNOW, THERE MAY BE A RELATIONSHIP THAT NEEDS TO BE MODELED, BUT THEY'RE NOT THINGS THAT ARE NECESSARILY DIFFICULT TO ESTIMATE AT ALL.

THEY'RE THINGS THAT ARE REAL AND THEY'RE, UH, MEASURABLE AND THEY'RE, YOU KNOW, IT'S IF YOU MIGHT NOT BE ABLE TO GET WITHIN, UH, YOU KNOW, 1% OF AN ACCURATE ESTIMATE EASILY, BUT YOU, IT DOESN'T NECESSARILY MEAN THAT YOU, YOU SHOULD THROW OUT THE IDEA COMPLETELY IF YOU'RE GONNA TRY TO COMPENSATE FOLKS FAIRLY FOR IT.

AND SO THE, THE LAST POINT IN ALL OF THIS HERE IS JUST THAT THE STUDY THAT LOOKED AT SOME OF THE STUFF ACROSS TEXAS FOUND REALLY HIGH, I THINK REALLY QUITE HIGH, 27 CENTS A KILOWATT HOUR VALUE FOR VALUE OF SOLAR IN TEXAS.

AND THAT'S NOT AUSTIN, IT WAS MEASURING TEXAS ON AVERAGE.

AND I CAN'T, I'M NOT GONNA TRY TO DEFEND HOW THEY CAME UP WITH THAT, BUT IT'S JUST TO SAY, YOU KNOW, FOLKS LOOK AT THE SAME STUFF AND ARRIVE AT REALLY DIFFERENT CONCLUSIONS.

AND I THINK EVEN IF AUSTIN, YOU KNOW, DID STUDIES ON THIS AND COME UP WITH MUCH MORE CONSERVATIVE, YOU KNOW, LOWER VALUES FOR A LOT OF THESE THINGS, A TRUE FAIR VALUE ACCOUNTING WOULD CERTAINLY HAVE A MAJOR IMPACT ON THE SCALABILITY OF ALL THE SOLAR PROGRAMS IN AUSTIN IF THE AVOID COST IS FOUND TO BE HIGHER.

SO YEAH, NEXT STEPS I THINK ARE, UH, SOMETHING THAT WE HAVE TO FIGURE OUT WHETHER THAT WOULD BE IN PREPARATION FOR THE, UH, YOU KNOW, STAKEHOLDER DISCUSSIONS NEXT YEAR.

WHAT I, WHAT I PUT HERE IN THE PRESENTATION WAS THAT RC CAN ASK FOR AVOIDED COST INFLATION ADJUSTMENT IN TIME FOR THE FY 20 20 20 27 BUDGET PROCESS.

AND THEN THE SECOND STEP WAS JUST TO ASK, YOU KNOW, ASK THE UTILITY TO STUDY THESE OTHER, THOSE OTHER ONE THROUGH SIX AVOID COST COMPONENTS FOR FUTURE INCLUSION, FOR FUTURE INCLUSION IN THE UPDATED VALUE OF SOLAR TARIFF DISCUSSION.

UH, THAT'S ALL.

WE ARE CONSUMING LESS ELECTRICITY AND PAYING LESS TO AUSTIN.

THANK YOU COMMISSIONER SCHWARTZ FOR THAT, UH, VERY INFORMATIVE PRESENTATION.

APPRECIATE THAT.

UM, LET'S OPEN THE FLOOR TO DISCUSSION FROM COMMISSIONERS.

UM, COMMISSIONER SILVERSTEIN, I'LL WAIT WHILE YOU GET YOUR, UH, MICROPHONE BACK.

THANK YOU FOR, UM, ALL OF THE EFFORT AND ANALYSIS THAT WENT INTO THIS AND, AND YOU MAKE SOME WONDERFUL POINTS, BUT I'M TORN AS A PV OWNER.

SURE, PAY ME MORE.

BUT WE, I'M NOT ON THIS COMMISSION TO BE A PV OWNER.

I'M ON THIS COMMISSION TO REPRESENT THE NEEDS OF THE CITIZENS OF AUSTIN, AND I'M DEEPLY CONCERNED ABOUT THE FACT THAT THE SURE PAY PV OWNERS MORE INSTINCT WOULD RAISE SIGNIFICANT COSTS AND HAVE SIGNIFICANT EQUITY IMPACTS AND AFFORDABILITY IMPACTS ON PROBABLY THE 40% OF PEOPLE IN AUSTIN WHO ARE LOW AND MIDDLE INCOME AND WHO DO NOT HAVE THE OPTION OF GETTING PV UNTIL WE DO SOMETHING LIKE BALCONY SOLAR, WHICH IS A DIFFERENT DISCUSSION THAN I'D BE THRILLED TO HAVE WITH, WITH STAFF IN THE FUTURE.

SO AS A, AS AN EQUITY ISSUE, IT SEEMS TO ME THAT PROPOSALS TO RAISE THE COST OF THE VALUE OF SOLAR CREATE A REALLY DIFFICULT, ESSENTIALLY WHAT THEY PROPOSE.

WHAT, WHAT, WHAT THE CONSEQUENCE OF RAISING THESE COSTS BY 2 CENTS PER KILOWATT HOUR RATE WOULD ESSENTIALLY DO IS BE TRANSFERRING MONEY FROM LOW INCOME CUS FROM CUSTOMERS WHO DON'T HAVE SOLAR TO CUSTOMERS WHO DO, MOST OF US ARE NOTABLY WEALTHIER BECAUSE WE COULD AFFORD TO BUY THE SOLAR IN THE FIRST PLACE AND

[00:50:01]

SO THAT HAS AN, A FURTHER COMPOUNDING NEGATIVE EFFECT ON THE BILLS THAT ARE NON-SOLAR NEIGHBORS ARE PAYING.

SO WATCH FOR ME TO BE SIGNIFICANTLY TORN ON THESE ISSUES AS WE GO THROUGH THESE CONVERSATIONS IN THE FUTURE FOR THE VERY REASONS OF EQUITY AND AFFORDABILITY THAT, THAT WE FACE NOW MORE THAN EVER.

UM, THE OTHER FACTOR IS THERE ARE OTHER, AS A, AS SOMEBODY WHO BOUGHT PV, I'M TAKING THE SAME RISK THAT AN ERCOT GENERATOR TAKES.

THERE ARE NO PRICE GUARANTEES.

I MEAN, IT'S AMAZING THAT WE'VE GOT A THREE YEAR PRICE GUARANTEE THAT'S BETTER THAN NOTHING.

AND, AND, UM, AND THERE ARE NO GUARANTEES FOR US ABOUT WHAT FUEL PRICES WILL DO OR WHAT SCARCITY EVENTS WILL HAPPEN OR WHETHER, UM, IN WHAT KIND OF INFLATION WILL HAPPEN.

ALL OF THOSE THINGS ARE COMPLETELY RANDOM.

AND YET I CHOSE TO BUY, TO SPEND SOME OF MY MONEY ON SOLAR, I HAVE TO TAKE A RISK.

I CHOSE TO TAKE THAT RISK WITH UNDERSTANDING THAT THERE WERE NO GUARANTEED FUEL PV PRICES GOING FORWARD.

AND, AND SO I THINK THAT IT IS NOT UNFAIR FOR ME AND MY FELLOW PV OWNERS IN AUSTIN TO BE EXPOSED TO SOME OF THE SAME RISKS THAT OTHERS ARE.

SO, SO I JUST WANT TO GET THAT OUT AND SAY ALSO IF WE WANT, I'M COMMITTED TO INCREASING PV ADOPTION IN AUSTIN AND UM, I'D LIKE TO LOOK AT MULTIPLE WAYS TO DO THAT, BUT I DON'T JUST THINK PAYING MORE MONEY FOR THE VALUE OF SOLAR RATE IS THE RIGHT ROUTE TO GET THERE.

AND IT'S A DAMN SHAME THAT WE LOST THE, UM, SOLAR FOR ALL GRANT BECAUSE THAT WOULD'VE REALLY HELPED DO PARTICULARLY L-M-I-P-V AND MULTIFAMILY AND THE KINDS OF THINGS THAT COULD MAKE A DIFFERENCE FOR THE CUSTOMERS WHOM I'M COMMITTED TO SERVE.

UM, COMMISSIONER KENARD, THANKS VERY MUCH.

THOSE WERE REALLY HELPFUL COMMENTS.

UM, ONE EXTRA CONSIDERATION THAT I DON'T THINK HAS COME UP IN EITHER OF THE DISCUSSION SO FAR IS THIS SPATIAL COMPONENT WITH RESPECT TO THE DIFFERENCE OF HAVING A SOLAR PANEL WITHIN AUSTIN ON AN AUSTIN BUILDING VERSUS OUT IN WEST TEXAS.

AND AT THE MOMENT, NONE OF THE METHODOLOGY IN THERE CAPTURES THAT PER SE.

AND I KNOW THAT WE'RE SORT OF LOOKING TO ENCOURAGE, UH, SOLAR PV UPTAKE WITHIN AUSTIN ITSELF.

THERE'S ONE EXTRA LITTLE BENEFIT THAT JUST OCCURRED TO ME THAT IT WASN'T NECESSARILY ON THE LIST THAT MIGHT BE USEFUL FOR FUTURE DISCUSSIONS IS THE, UH, IMPACT OF SHADING.

SO YOU, IF YOU HAVE A, A PANEL ON YOUR ROOF, THE IDEA IS THAT YOU REDUCE SOME OF THE INCOMING RADIATION THAT WOULD OTHERWISE END UP WARMING UP THE HOUSE THAT YOU THEN HAVE TO OFFSET WITH COOLING AFTER THE FACT.

UH, AND SO THERE'S THAT, THAT'S MORE OF A COLLECTIVE BENEFIT AND THAT'S SOMETHING THAT COULD GET A LITTLE BIT ROUND SOME OF THOSE EQUITY CONCERNS THAT WE WERE THINKING ABOUT BEFORE.

I'M NOT SAYING THAT THE OVERALL IMPACT IN TERMS OF URBAN HEAT ISLAND AND EFFECT WOULD NECESSARILY BE LARGE, BUT IT'D BE WORTH THINKING ABOUT I THINK.

THANKS VERY MUCH, COMMISSIONER FARMER.

UM, I THINK LOTS OF GOOD POINTS AND STUFF TO THINK ON.

UM, YOU KNOW, JUST LIKE GOING BACK TO THE AUSTIN ENERGY GOALS SLIDE WHERE WE HAVE STATED GOALS AND WE'RE ARGUABLY PRETTY FAR BEHIND ON THEM AND SORT OF LIKE TRENDING BEHIND ON THEM.

I THINK THAT'S THE, THE POINT COMMISSIONER SILVERSTEIN BRINGS UP ABOUT LIKE, HOW DO WE GET THERE AND LIKE WHAT ARE THE TOOLS THAT WE'RE USING TO GET THERE AND IS PUTTING A LOT OF SOLAR ON ROOFTOPS.

THE ONLY WAY IS DOING BIG SOLAR INSTALLATIONS LIKE THE ONE THAT WE'RE DISCUSSING LATER TONIGHT OR MAYBE NEXT MONTH OUT AT THE LANDFILL.

YOU KNOW, IS THAT A BETTER WAY? DOES IT NEED TO BE BOTH? AND I THINK THOSE ARE INTERESTING DISCUSSIONS.

I GUESS IN WHERE, WHERE I GO WITH THIS IS LIKE LOOKING AT PLACES IN THE WORLD THAT HAVE SIGNIFICANTLY MORE ADOPTION, WHERE THEY'RE GETTING TOWARDS LIKE 50% ADOPTION ON A RESIDENTIAL SCALE WHERE THIS IS NOT A THING THAT IS ONLY FOR THE ULTRA WEALTHY, IT'S LIKE A MORE COMMON COMMODITY WHERE IT PAYS ITSELF OFF IN A YEAR AND SO YOU CAN GET A LEASE TO OWN AND IT, IT SORT OF, THERE'S A MARKET SHIFT THAT HAPPENS AT A CERTAIN POINT WHERE WE ARE ENCOURAGING MORE ROOFTOP SOLAR SO INDUSTRY GETS MORE EFFICIENT WITH IT.

UM, AND SO AUSTIN ENERGY IS PERMITTING AND INSTALLATION REQUIREMENTS SO YOU GET MORE EFFICIENT AS WELL AND THOSE COSTS START TO COME DOWN.

IT DOESN'T BECOME SUCH A, LIKE A COMMODITY OR, OR SORT OF LIKE A, A THING THAT'S OUT OF REACH FOR EVERYBODY.

AND THEN MAYBE AT THE SAME TIME THERE'S A WAY THAT THAT CAN HELP SUBSIDIZE THE LOW INCOME PEOPLE AT LEAST, LIKE WHILE THEY'RE AT LEAST HOPEFULLY TEMPORARILY IS A GAP IN FEDERAL SUBSIDY

[00:55:01]

FOR THE SOLAR FOR ALL.

UM, SO YEAH, I DON'T KNOW.

THOSE ARE JUST SORT OF THINGS I'M WRESTLING WITH AS WELL.

OTHER COMMENTS? YES, VICE CHAIR ROBBINS.

UM, I'M GONNA KEEP THIS VERY SHORT, UH, BUT AS LONG AS WE'RE DISCUSSING OPTIONS, WE MIGHT PUT TIME OF USE RATES, MANDATORY TIME OF USE RATES FOR SOLAR, UH, CUSTOMERS, UH, INTO THE MIX.

UH, I BELIEVE THAT'S WHAT THEY DO IN CALIFORNIA.

AM I, AM I NOT MISTAKEN, COMMISSIONER SILVERSTEIN? I DON'T THINK SO, BUT I HAVEN'T CITED IT LATELY.

COULD BE NEW.

I THOUGHT THAT'S WHAT THEY, THAT WHAT THAT I THOUGHTS.

THAT'S WHAT THEY WERE MOVING TOWARDS IN CALIFORNIA.

UH, SO I HOPE WHEN WE HAVE THIS FULLER DISCUSSION, WE TALK ABOUT THAT AS WELL.

I DO REALIZE THAT, UH, PART OF THE VALUE OF SOLAR IS SORT OF, KIND OF, UH, TIME OF USE, BUT IT'S NOT REALLY THE SAME AS TIME OF USE.

UH, YOU, YOU HAD A LOT OF WORK THAT WENT INTO THIS PRESENTATION.

COMMISSIONER SCHWARTZ, THANK YOU FOR BRINGING IT TO US.

UH, ECHO THOSE.

THANKS.

UM, I'M GONNA MOVE US ALONG UNLESS, UH, ANYONE ELSE HAS ANY BURNING COMMENTS ON THIS TOPIC.

UM, I THINK IT IS VERY IMPORTANT WE'RE GONNA CONTINUE TO DISCUSS IT.

THANK YOU FOR BRINGING THIS TO US, UH, THIS MONTH.

AND I, I THINK IT'S GREAT THAT WE'RE TALKING ABOUT IT EARLY PRIOR TO THE 2027 BUDGET CYCLE AND LET'S KEEP TALKING ABOUT IT AND, AND WORKING TOWARDS, UH, SOME KIND OF A RECOMMENDATION.

SO THANK YOU.

UM, SEVEN O'CLOCK, WE'VE GOT THREE ITEMS TO GO.

UM, VOTING ITEMS. UH, ITEM NUMBER FOUR IS DISCUSSION AND RECOMMENDATION ON THE TEXAS GAS SERVICE FRANCHISE AGREEMENT.

UM, THIS, UH, TOPIC IS PRIMARILY THE REASON WE MOVED, UH, OUR APRIL MEETING TO, TO THIS WEEK.

UM, THE DRAFT ORDINANCE FOR THE FRANCHISE JUST BECAME AVAILABLE ON SATURDAY.

UM, I IT'S VERY LONG, UH, YOU GOT A MEMO AND SOME INFORMATION VIA EMAIL.

IT'S, IT'S A LOT, UH, AS WELL AS A, A DRAFT RECOMMENDATION FOR, UM, FOR THIS, UM, ITEM.

UM, WE'RE GONNA DO ITEM FOUR.

SO CAN WE BRING UP THE, UH, DRAFT RECOMMENDATION? I BELIEVE IT'S CALLED MADAM CHAIR, ITEM FOUR.

I IF SINCE WE'RE GONNA LOSE, EXCUSE ME FOR INTERRUPTING THE FLOW HERE, BUT SINCE WE'RE GONNA LOSE COMMISSIONER GARY AT 7 45 AND MISS COMMISSIONER FARMER'S ALSO ON A DEADLINE, I WONDER IF WE COULD TAKE UP ITEMS FIVE AND SIX FIRST BEFORE WE GO TO ITEM FOUR SO THAT WE GET THE VOTING ITEMS OUT OF THE WAY.

ARE YOU MAKING A MOTION? YES, PLEASE.

DO I HEAR A SECOND? SECOND.

FIVE, UH, AND THAT WILL BE APPROVED, THE CREATION OF A WORKING GROUP FOCUSED ON LONGER DURATION STORAGE AND ITS ROLE IN AUSTIN ENERGY'S RESOURCE AND GENERATION PLAN.

UH, I DON'T KNOW IF THAT REALLY NEEDS TO BE VOTED ON, BUT , UM, OKAY.

WE CAN, WE CAN DO THAT.

I THINK THOSE ITEMS ARE FAIRLY QUICK.

ALRIGHT, SO WITH, UH, WITHOUT OBJECTION, WE WILL MOVE TO ITEM

[5. Approve the creation of a working group focused on longer duration storage and its role in Austin Energy's Resource and Generation Plan. ]

SO SORRY ABOUT THAT FOR, UH, FOR THE TECH GUYS, UM, UH, THERE'S NO BACKUP FOR THIS ONE.

I'M GONNA LET COMMISSIONER SILVERSTEIN TALK ABOUT THIS.

THERE'S BEEN DISCUSSION ON A SUB QUORUM ABOUT THIS.

WHY DON'T YOU TALK ABOUT WHAT THIS IS MEANT TO DO? SURE.

RELIABILITY AND AFFORDABILITY EFFECT.

UM, LONG DURATION STORAGE HAS BECOME MORE AND MORE WIDE ECONOMIC AND WIDESPREAD ACROSS THE NATION AND ACROSS THE WORLD.

AND IT, UM, AUSTIN ENERGY'S LAST GENERATION PLAN DOESN'T HAVE ANYTHING OF NOTE IN IT WITH RESPECT TO LONG-TERM STORAGE.

AND, UM, WE HAD A JOINT WORKING GROUP WITH THE ELECTRIC UTILITY COMMISSION MEMBERS TO REVIEW AND, AND OFFER RECOMMENDATIONS ON THE LAST GENERATION PLAN.

AND IT SEEMS TO ME WE MIGHT BE ABLE TO INFORM OURSELVES AND INFORM AUSTIN ENERGY BETTER BEFORE THE NEXT GENERATION PLAN BY GETTING TOGETHER AND, UM, IN A JOINT WORKING GROUP ON THIS ISSUE.

THAT IS THE BACKGROUND.

THE EUC HAS A SIMILAR PROPOSAL ON THEIR AGENDA AND, UM, AND I HOPE I AM EAGER TO SERVE ON THIS COMMITTEE AND WORK WITH OUR COLLEAGUES AT THE EUC AND WORK WITH YOU TO LEARN MORE ABOUT THIS ISSUE AND TO HELP BOSTON LEVERAGE IT TO MAXIMUM

[01:00:03]

UM, CAN YOU TALK ABOUT WHAT YOU EXPECT A TIME COMMITMENT FOR SERVING ON THIS WORKING GROUP TO BE? GOSH, THAT'S, THAT.

I THINK PROBABLY WE'VE GOT ABOUT SIX MONTHS, MAYBE SOME READING, WE'LL WE'LL BE HOLDING, I WOULD GUESS A MEETING A MONTH.

UM, KNOWING HOW ENTHUSIASTIC MOST OF US ARE ON THESE TECHNICAL TOPICS.

IT WON'T BE A SHORT MEETING, BUT IT'LL BE A REALLY INTERESTING AND FUN ONE.

I WOULD EXPECT THAT, THAT PEOPLE WILL BE EMAILING AROUND DIFFERENT, UM, READING MATERIAL AND, AND SOURCES.

AND SO I THINK IT'S PROBABLY ABOUT FIVE HOURS A MONTH OF SKIMMING DOCUMENTS AND THREE HOURS OF VIRTUAL OR IN-PERSON MEETINGS PER MONTH.

AND THEN WE WOULD REPORT BACK REGULARLY TO YOU ALL IN MAYBE A FIVE MINUTE PER MEETING SESSION.

AND POSSIBLY I'M MAKING THAT UP, BUT THAT'S MY HUNCH.

THAT'S GREAT.

UH, I, I HE THINKS SO TOO.

I DEFINITELY THINK THAT THE, UH, OKAY, GREAT.

I THINK THAT IT'S SUPER IMPORTANT AS YOU KNOW, LIKE HAVING STORAGE, UH, LONGER DURATION STORAGE IS REALLY THE UNLOCK FOR, YOU KNOW, MANY, MANY OF THE THINGS WE TALK ABOUT IN TERMS OF, OF, UM, CARBON FREE GENERATION AND, AND YOU KNOW, BEING ABLE TO GET TO NET ZERO.

SO, UM, I, I APPLAUD THIS EFFORT AND I WOULD LIKE TO OPEN IT UP AND SEE, UH, IF THERE IS A OTHER MEMBERS OF THE RMC THAT WOULD LIKE TO SIT ON THIS WORKING GROUP AND JOIN COMMISSIONER SILVERSTEIN, I WOULD LIKE TO.

COMMISSIONER COOK.

UH, COMMISSIONER GARY, I WOULD LIKE TO AS WELL.

COMMISSIONER GARY, UM, WE HAVE MATCH ONE ON FIVE RIGHT? CAN UP TO FIVE.

SO THAT'S .

I, I HAVE AN INTEREST IN IT.

I'LL HAVE TO CHECK MY SCHEDULE.

AND I WAS JUST GONNA SAY SAME APPLIES TO ME.

I'M INTERESTED, BUT I HAVE TO THINK ABOUT THE, THE, MY SCHEDULE AND, AND WE CAN CERTAINLY SHARE MATERIALS WITHOUT BREAKING QUORUM EVEN IF PEOPLE DON'T PARTICIPATE IN MEETINGS.

COMMISSIONER FARMER, WHAT WERE YOU, YOU LOOK LIKE YOU WERE ABOUT TO MAYBE POSSIBLY MAKE A COMMENT A NON-COMMITTAL COMMENT.

UM, I HAVE A, A SORT OF A PROTOCOL QUESTION FOR STAFF LIAISON.

UM, FOR A WORKING GROUP, IF WE HAD A WORK, WE APPROVE A WORKING GROUP, UH, SAY THAT INCLUDES FIVE MEMBERS FROM THE RMC.

AND AFTER THREE MONTHS, ONE OF THEM DECIDES, CAN'T DO THIS ANYMORE, DON'T WANNA BE ON THIS WORKING GROUP.

COULD WE SUB OUT A MEMBER? YES, I THINK THAT'S FINE.

GOOD TO KNOW.

UM, SO I DON'T WANNA TAKE UP TOO MUCH TIME ON THIS.

UM, I, I THINK OUR, OUR ACTION HERE IS TO APPROVE THE CREATION OF THE WORKING GROUP.

I HEARD COMMISSIONER GARY, COMMISSIONER SILVERSTEIN, COMMISSIONER COOK, AND THREE MAYBES.

AND I'M SURE WE CAN HAVE DROP-INS, EVEN IF, AS LONG AS WE DON'T VIOLATE THE SUB QUORUM LIMIT OR THE QUORUM, WHATEVER THE WORD IS.

NO, I THINK YOU WOULD HAVE TO, THEY CAN'T OVERLAP BECAUSE THEN YOU'RE, YOU'VE GOT A WALKING.

WE'D HAVE TO AVOID THAT.

BUT, UM, YOU CAN REPORT OUT AT YOUR MEETINGS THOUGH.

DO WE HAVE TO NAME OFFICIALLY THE MEMBERS THAT TO, IN ORDER TO APPROVE THE WORKING GROUP? I DON'T THINK YOU NEED TO NAME 'EM RIGHT NOW, BUT YES, I THINK WE WOULD NEED TO KEEP TRACK OF THAT.

WELL THEN LET'S, LET'S DO THIS.

CAN I GET A MOTION TO CREATE A WORKING GROUP TO STUDY LONG, LONG DURATION STORAGE IN CONJUNCTION WITH THE ECC IN CONJUNCTION WITH THE EUCI.

SECOND, I HAVE A MOTION TO SECOND TO, UH, CREATE A JOINT WORKING GROUP WITH THE EUC TO STUDY LONG DURATION STORAGE.

UH, ALL IN FAVOR, PLEASE RAISE YOUR HANDS ON CAMERA AND ON CAMERA IF YOU'RE VOTING.

CAN I JUST MENTION HERE, JUST FOR LOGISTICAL PURPOSES OF THE WORKING GROUP, UM, WE DON'T STAFF THE MEETINGS, WE, BUT WE CAN HELP YOU WITH MEETING SPACE.

SO WE'LL JUST RESERVE THE ROOM FOR YOU, AND THEN YOU'RE ON YOUR OWN.

FANTASTIC.

AND MY, UH, PERSONAL EQUIVOCATION HAS NOTHING TO DO WITH THE MERITS OF THE IDEA.

THANKS.

I, I JUST, UH, WANT TO COMMEND, UH, COMMISSIONER SILVERSTEIN FOR, UH, GETTING THIS STARTED.

[01:05:01]

I JUST WANT TO MAKE SURE I MAINTAIN MY SANITY BY NOT DOING WHAT'S THE, UH, IT CAN ONLY BE THREE PEOPLE AT ONCE.

IS THAT ALL? OKAY? UM, I'M GETTING OLDER.

DO WE WANNA DO THE OFFICER ELECTIONS? OKAY.

UM, WE'RE GONNA DO THE LAST ITEM NEXT, AND THEN WE'RE GONNA SAVE NUMBER FIVE FOR LAST.

OFFICER ELECTIONS, UM, IT HAS BEEN MY, MY HONOR AND A PRIVILEGE TO SERVE AS CHAIR OF THE RESOURCE MANAGEMENT COMMISSION FOR THE PAST YEAR.

SO,

[6. Conduct officer elections for the Chair and Vice Chair of the Resource Management Commission. ]

UM, I WELCOME, UH, NOMINATIONS FOR THE OFFICE OF CHAIR, AND WE'LL DO, WE'LL DO IT CHAIR AND THEN VICE CHAIR.

UM, I WOULD BE HONORED TO NOMINATE YOU AGAIN FOR CHAIR.

I WOULD BE DELAYED TO SECOND THAT NOMINATION.

CHAIRPERSONSHIP, GOOD TRY.

UM, I'M WILLING TO CONTINUE TO SERVE, HOWEVER, I WOULD ALSO LOVE TO ENTERTAIN OTHER FRESH NEW BLOOD WHO WOULD LIKE TO GET EXPERIENCE AND, AND THE, AND EXPERIENCE THE THRILL THAT IS THE RESOURCE MANAGEMENT COMMISSION.

ANYONE CALL FOR THE VOTE? AND SELF NOMINATIONS ARE, ARE ACCEPTABLE TOO.

UM, ALL IN FAVOR OF MYSELF AS CHAIR OF THE RMC.

PLEASE RAISE YOUR HAND.

UM, MY PRIVILEGE TO CONTINUE TO SERVE.

IT WOULD BE MY HONOR TO NOMINATE COMMISSIONER ROBBINS TO BE VICE CHAIR.

SECOND, THAT NOMINATION.

OPEN TO OTHER, OTHER NOMINATIONS FOR VICE CHAIR.

ANYONE SELF NOMINATIONS ARE ACCEPTABLE.

ALL IN FAVOR OF, UH, COMMISSIONER, VICE CHAIR ROBBINS FOR VICE CHAIR OF RMC, PLEASE RAISE YOUR HAND.

WHICH IS DISCUSSION AND RECOMMENDATION ON THE TEXAS GAS SERVICE FRANCHISE AGREEMENT.

THAT IS EIGHT.

UM, ALL OPPOSED? OKAY.

ALL RIGHT, THANK YOU.

UM, ALRIGHT, NOW, NOW WE GET TO NUMBER FOUR,

[4. Discussion and recommendation on the Texas Gas Service Franchise Agreement. ]

THIS WAS THE PRIMARY, UH, MOTIVATION FOR MOVING THIS, UH, MONTH MEETING.

THERE'S BEEN A LOT OF INFORMATION.

UM, I KNOW IT'S, IT'S BEEN A LOT IN A SHORT PERIOD OF TIME.

UH, I'M GOING IN JUST A SECOND TO TURN THIS OVER TO, UM, VICE CHAIR ROBBINS, WHO HAS DONE, UH, QUITE A BIT OF, OF WORK LEADING THE CHARGE ON, UM, TRYING TO GET A, AN A FAIR EQUITABLE AND, UH, YOU KNOW, GOOD PROGRAM FOR THE FRANCHISE.

UM, WE MADE SEVERAL RECOMMENDATIONS AS A BODY, UH, UNANIMOUS, I BELIEVE, BACK IN JANUARY, UH, REGARDING THE RENEWAL OF THE FRANCHISE AGREEMENT.

AND LOTS OF THOSE RECOMMENDATIONS HAVE BEEN INCORPORATED INTO THE DRAFT ORDINANCE.

UM, HOWEVER, THERE ARE, THERE ARE SEVERAL THAT, UM, DO NOT APPEAR OR, OR ARE EITHER ABSENT OR, OR LACKING IN TEETH.

AND SO THIS IS SORT OF OUR, OUR LAST, UM, OPPORTUNITY TO ADVISE, UH, COUNSEL ON, UM, WHAT WE'D REALLY LIKE TO SEE, UH, IN, IN THOSE AGREEMENTS.

AND SO, UM, WE CAN GO THROUGH, UH, SPECIFICALLY WHAT THOSE, WHAT THOSE ARE.

UM, BUT THAT'S JUST BY WAY OF OF INTRODUCTION IT.

THIS IS KIND OF A, A, UM, AN EFFORT TO STRENUOUSLY RECOMMEND, UH, THOSE THINGS THAT WE'VE, WE'VE RECOMMENDED, UM, INITIALLY.

UM, SO I WILL, UH, ASK VICE CHAIR TO SAY A FEW WORDS ABOUT, UM, THIS RECOMMENDATION.

UM, COMMISSIONERS, UH, FIRST, JUST SO YOU KNOW, THE LOGISTICS OF HOW THIS WAS DONE.

UM, THERE WERE, UH, THERE WAS A SUB QUORUM THAT WAS READ IN, AND THAT WOULD INCLUDE, UH, COMMISSIONER SCHWARTZ, COMMISSIONER SILVERSTEIN, MYSELF, UH, THE CHAIR, AND, UH, COMMISSIONER COOK, UH, FOR THE OTHER, UH, FOUR.

I, I WOULDN'T EX

[01:10:01]

I WOULD HOPE THAT YOU WOULDN'T FEEL PARTICULARLY SLIGHTED.

UH, IT'S JUST THAT'S, THIS SEEMED TO US LIKE THE PEOPLE THAT HAD THE MOST INTEREST OR THE MOST BACKGROUND.

UH, HAVING SAID THAT, WE TRIED TO GET THE, UH, OUR RECOMMENDATIONS POSTED, UH, AS SOON AS POSSIBLE.

AND THE PROBLEM WITH THAT WAS THAT WE DIDN'T EVEN KNOW WHAT STAFF WAS RECOMMENDING UNTIL, I GUESS, SATURDAY MORNING.

YES, WE ACTUALLY GOT A MEMO ON SATURDAY.

UH, AND, UM, YOU KNOW, UM, UH, CHARLOTTE AND I PUT ON OUR RED CAPES AND GOT INTO ACTION.

AND, UH, UM, SHE CAME UP WITH, UH, A LOT OF THIS AS, AS WELL AS ME, AND THEN COMMISSIONER SCHWARTZ AND, UH, SILVERSTEIN ADDED TO THIS.

UM, UH, SO HAVING SAID ALL THIS, UH, I, I MAKE IT A POINT NOT TO SWEAR OR SCREAM AT MEETINGS.

THOSE, THOSE ARE MY, UH, GUARDRAILS.

AND, UH, FOR THAT MATTER, I, I USUALLY, UH, DON'T GENERALLY SOUND TOO DISGRUNTLED, BUT I DO WANNA CALL OUT BRIEFLY, UH, COMPLAIN THAT THIS COULD HAVE BEEN HANDLED BETTER BY STAFF.

THEY DIDN'T AGREE WITH SOME OF OUR STRONGEST RECOMMENDATIONS, BUT THEY WOULD NOT TELL US WHY.

AND WE HAD TO GO BACK AND ASK, UH, I DIDN'T EVEN GET AN ANSWER ON SOME OF THIS UNTIL LATE MORNING OR EARLY AF OR, OR, OR THIS AFTERNOON, UH, WHICH DOESN'T HELP ANY OF US.

AND IT FRANKLY CAME OFF AS, IN SOME CASES, AS CONDESCENDING AND UNHELPFUL RATHER THAN SAY, WELL, YOU KNOW, WE CAN'T DO, WE DON'T THINK YOU CAN DO IT THIS WAY FOR THIS STRATEGIC OR LEGAL REASON, BUT MAYBE YOU COULD TRY IT THIS WAY.

BUT THAT WAS LARGELY ABSENT AND WELL JUST SUFFICE TO SAY WITHOUT SWEARING OR SCREAMING THAT IT WAS KIND OF AGGRAVATING.

NOW GETTING TO THE, UM, THE, UH, RECOMMENDATIONS THEMSELVES, UH, THE FIRST ONE IS THAT THEY IGNORED A REQUEST FOR AT LEAST $500,000 IN 2020 $6 TO, UH, WITH A, AND, AND OF THAT $500,000, A HALF OF THAT WOULD COME FROM TEXAS GAS SERVICE.

THEY IGNORED, UH, THAT THEY DID NOT BRING IT FORWARD IN, IN THEIR RECOMMENDATIONS.

UH, THIS WOULD BE FOR, UM, EMERGENCY BILL ASSISTANCE.

UH, I WILL CONFESS THAT HALF A MILLION DOLLARS IS ARBITRARY, BUT IT'S WAY MORE THAN THE APPROXIMATE $70,000 THAT'S BEING SPENT TODAY.

AND, UH, IF YOU BENCHMARK IT AGAINST WHAT'S HAPPENING WITH AUSTIN ENERGY'S EMERGENCY BILL ASSISTANCE PROGRAM, IT'S PROBABLY VERY UNDERSTATED AS TO THE REAL NEED.

FURTHER, UH, HALF OF THIS IS, THE $250,000 CONTRIBUTION FROM THE COMPANY IS SOMEWHAT JUSTIFIED BY THE FACT THAT THIS LOWERS THEIR BAD DEBT AND INCREASES TO SOME EXTENT THEIR PROFIT.

SO, HAVING SAID THAT, UH, I WOULD, SHOULD WE MOVE THESE ONE AT A TIME, OR, OR DO YOU WANT ME TO EXPLAIN THEM ALL AND THEN WE VOTE FOR THEM? I THINK WE SHOULD QUICKLY TALK ABOUT WHAT'S IN THE RECOMMENDATION WITHOUT ADD ADDITIONAL COMMENTARY ABOUT FEELINGS, AND THEN YOU CAN, OH, I'VE ALREADY GIVEN MY COMMENTARY ABOUT FEELINGS.

GREAT.

WE'RE PAST THAT AND I DID IT WITHOUT SCREAMING OR SWEARING.

YOU DID IT.

CONGRATS.

SO LET'S, LET'S QUICKLY, CAN WE SCROLL, UH, DOWN TO THE, NOW THEREFORE BE IT RESOLVED, UH, PORTION AND MAYBE, UH, MAKE THE LANG THE LANGUAGE A LITTLE LARGER?

[01:15:02]

YEAH, I, OKAY.

SO IF WE GO DOWN TO THE BOTTOM OF THIS FIRST PAGE AND INTO THE SECOND PAGE.

OH, WE CAN ONLY SEE THE FULL PAGE.

SO THE FIRST BULLET, UH, IS ABOUT THE HALF MILLION DOLLAR, UH, NEED FOR EMERGENCY BILL ASSISTANCE.

FIRST QUESTIONS, NO QUESTIONS.

WITH HALF OF THAT COMING FROM TEXAS GAS SERVICE, ACTUALLY, UH, ARE THERE, ARE THERE QUESTIONS ON THIS PARTICULAR ITEM? WHY DON'T WE DO THAT? AND THEN THAT WAY IF THERE'S AMENDMENTS THAT PEOPLE WANT TO MAKE, THEN WE CAN, WE CAN LOOK TO DO THAT.

IF HEARING NONE, LET'S MOVE ON.

LET'S EXPLAIN QUICKLY THIS EACH BULLET POINT.

THE SECOND BULLET POINT, UH, IS ABOUT, THAT'S ABOUT, UH, REPORTING THE EXPECTED CAPITAL, UM, IMPROVEMENT PROJECTS THAT OCCUR ANYWHERE IN THE STATES.

SINCE THE GAS COMPANY HAS MERGED REGIONS, ANY CAPITAL EXPENDITURES THAT OCCUR EVEN OUTSIDE OF THE CITY, UH, POTENTIALLY CAN AFFECT RATES, UH, FOR AUSTIN RATE PAYERS.

SO THAT IS A REQUEST TO, UH, INCLUDE IN THE REPORTING OF ANTICIPATED CAPITAL COSTS.

UH, ANYTHING OUTSIDE OF AUSTIN? UH, IS THAT RIGHT? UH, THAT'S RIGHT.

UM, IF YOU THINK YOU CAN DO THIS MORE CONCISELY, CHAIR, UH, HYPO, I, I WILL TRY , BUT I I WILL, I WILL LEAN ON YOU FOR YOUR ASSISTANCE.

THIRD BULLET POINT, WHICH IS AT THE TOP OF THE NEXT PAGE.

BEGINNING IN JANUARY, 2027, THE COMPANY COLLECTS A NEW TARIFF TO HIRE A CONSULTANT OF THE CITY'S CHOOSING.

UM, THE CONSULTANT WILL MAKE THE REPORT AVAILABLE FOR THE PUBLIC.

SO, UH, THE DRAFT ORDINANCE DID NOT INCLUDE ANY FUNDING MECHANISM FOR A CONSULTANT.

I DON'T BELIEVE THAT IT MENTIONED THE CONSULTANT.

THAT'S CORRECT.

PUT, UH, AMEND THE LANGUAGE SO THAT IT COULD BE EITHER A TARIFF OR AN INCREASE IN THE FRANCHISE FEE.

AND, UH, IF I COULD FILL THIS IN, UM, WHEN WE ASKED, HOW COME YOU DIDN'T PUT IN A TARIFF TO FUND THIS CONSULTANT? UH, WE WERE BASICALLY TOLD, UH, THAT, UM, THAT IS THAT, LET ME GET IT.

THE ANSWER THAT WE GOT FROM THE, UH, FINANCIAL OFFICE WAS THAT, UM, THE AGREEMENT DOES NOT PRECLUDE THE CITY FROM AL ALLOCATING FRANCHISE FUNDS TOWARDS CONSULTANT REVIEW OF THE REPORT DURING THE CITY'S ANNUAL BUDGET PROCESS.

SO IN OTHER WORDS, THERE'S NO FUNDING MECHANISM WITHIN THE ORDINANCE, BUT IT DOESN'T MEAN, WHAT WE'RE TOLD IS IT DOESN'T MEAN THE CITY CAN'T, OR THE CITY CAN'T ALLOCATE, ALLOCATE MONEY FROM THE FRANCHISE FEE IT COLLECTS TO HIRE THE CONSULTANT, OR IT FOR THAT MATTER.

IT DOESN'T MEAN WE CAN'T ASK FOR A TARIFF, IT JUST MEANS THAT IT WASN'T PUT INTO THE DRAFT AGREEMENT.

UH, UH, I, I SHOULD ADD THAT, UH, WE, WE ASKED HOW COME, UH, YOU COULD PUT IN A TARIFF FOR THE LOW IN THE LOW INCOME PROGRAM THAT WOULD START IN 2029, BUT YOU COULDN'T PUT ONE IN FOR THIS PURPOSE AND DID NOT RECEIVE AN ACCEPTABLE ANSWER, EXCEPT IT'S NOT IN OUR, IT WASN'T AGREED TO.

AND IF YOU WANT TO FUND IT THROUGH THE FRANCHISE, YOU CAN, BUT THEN THEY LEFT THE FRANCHISE COLLECTION RATE OF 5% THE SAME.

AND SINCE THAT 5% IS COVETED BY THE GENERAL FUND, UH, AND THEY'RE NOT RAISING THE FRANCHISE FUND, THEN HOW ARE WE GONNA FUND IT? AND I, I WAS TOLD, WELL, COUNCIL COULD MAKE IT A PRIORITY REALLY.

UH, SO MAYBE WE SHOULD

[01:20:01]

AND, UM, GIVEN THE LATE HOUR WHEN THIS ALL CAME TOGETHER, I, I WOULD'VE RATHER HAD THE LANGUAGE PACKAGED AND MORE REFINED.

BUT I, I JUST DON'T THINK WE CAN DO IT WITHOUT THIS MORE SIMPLIFIED, UH, AMENDMENT.

PLEASE GO AHEAD, CHAIR.

ARE YOU, ARE YOU PROPOSING AN AMENDMENT TO THAT SECTION? UH, YEAH.

UH, RAPHAEL AND I, UH, EXCUSE ME, COMMISSIONER SCHWARTZ AND I AGREED THAT, UH, PUTTING AN AND OR EITHER, UH, A TARIFF OR A, AN INCREASE IN THE FRANCHISE FEE, UH, WOULD BE ACCEPTABLE LANGUAGE AT THE LATE HOUR.

UM, UM, FOR THE CONSULTANT IN PARTICULAR, WHAT ARE WE, ARE, ARE YOU THINKING TO SPECIFY A ZERO POINT WHATEVER PERCENTAGE? WE COULD, WE COULD SPECIFY THAT THE AMOUNT WOULD BE NO MORE THAN A FRACTION OF A PERCENT.

RIGHT NOW, THE FRANCHISE FEE IS 5%, SO THIS COULD BE 5.2%, UH, OR EXCUSE ME, AN EXTRA POINT AS MUCH AS AN EXTRA 0.2%, WHICH, IF YOU'RE WONDERING, WOULD COME OUT CURRENTLY TO ABOUT $400,000.

I'M HOPEFUL THAT IT WOULDN'T COST MORE THAN ONE OR 200,000, BUT WE'VE NEVER DONE THIS BEFORE, SO IT'S HARD TO SAY.

UH, MY VIEW IS THAT I, I DON'T MIND INCLUDING A, A, AN AMENDMENT ABOUT, YOU KNOW, COLLECTING A NEW TARIFF OR INCREASED FRANCHISE CHARGE, BUT PUT SPECIFYING A NUMBER FEELS TOO PRESCRIPTIVE TO ME.

I DON'T MIND COMPROMISING WITH YOU AT ALL.

UM, I JUST, EVERYONE, IF WE BRING THIS TO THE COUNCIL, UH, THERE, THE FIRST QUESTION THEY WILL ASK IF THEY TAKE IT SERIOUSLY IS HOW MUCH? YES, COMMISSIONER SILVERSTEIN, UM, I BROADLY SUPPORT THE IDEA THAT THE CITY SHOULD BE AGGRESSIVE IN WATCHING WHAT TGS DOES, BUT I NEED TO SAY THAT IT IS IMPOSSIBLE TO EVALUATE THE PRUDENCE OF EXPECTED CAPITAL EXPENDITURES.

UM, NO MATTER HOW GOOD YOUR CONSULTANT IS AND, AND THE EVERYWHERE ELSE IN UTILITY REGULATION, WE EVALUATE AND JUDGE THE PRUDENCE OF, OF CAPEX THAT HAS ALREADY BEEN INVESTED.

WE LOOK AT WHAT DID YOU SPEND IT ON, AND HOW MUCH DID YOU SPEND, AND WAS THE PURPOSE APPROPRIATE AND WAS THE AMOUNT APPROPRIATE? AND IT SEEMS TO ME TO BE ILL-ADVISED TO ATTEMPT TO DO A PRUDENCE AND EVALUATION OF SOMETHING THAT HASN'T BEEN, HASN'T BEEN COMMITTED YET, BECAUSE EVERY UTILITY DEVELOPS A CAPITAL BUDGET AND A PLAN, AND THEN LIFE HAPPENS, AND NOT EVERYTHING THAT'S IN THAT CAPEX PLAN, NOT ALL THOSE PROJECTS ARE GONNA HAPPEN.

NOT ALL OF THOSE PRICES ARE GONNA HOLD AND, AND EMERGENCIES AND LEAKS AND, AND STUFF GETS IN THE WAY.

SO I, NOT WITHSTANDING THE FACT THAT WE DON'T TALK HERE ABOUT WHAT'S THE POINT OF THE PRUDENCE EVALUATION, WHAT HAPPENS WITH THE REPORT, THE CITY DOESN'T HAVE THE JURISDICTION TO ACT ON PRUDENCE.

THE, ALL OF THAT HAS BEEN TAKEN AWAY AND GIVEN TO THE RAILROAD COMMISSION.

SO THAT IF WE HAD A PRUDENCE REPORT OR A SERIES OF PRUDENCE REPORTS, I, IF IT WERE ME AND LOOKING AT THE TGS AND PRUDENCE, I WOULD WANT TO TAKE A SERIES OF ANNUAL REPORTS ON ACTUAL CAPEX AND LOOK AT THEM COLLECTIVELY OVER TIME TO SEE WHAT THEY REVEAL ABOUT THE COMPANY'S CAPITAL MANAGEMENT AND PROJECT MANAGEMENT SKILLS.

AND WHETHER THEY ARE LACKING IN, IN PROJECT MANAGEMENT CAPABILITY OR P*****G

[01:25:01]

AWAY THEIR MONEY ON STUFF THAT IS, WAS UNPLANNED.

SO I WOULDN'T BE LOOKING AT ANNUAL REPORTS, I'D BE LOOKING AT A COLLECTIVE SET OF, OF ACTUAL INVESTMENTS AND SEEING IF THOSE MADE SENSE AND IF THOSE WERE PRUDENT.

SO I JUST, I, I CANNOT SUPPORT THIS SPECIFIC BULLET, WHICH DOESN'T MEAN YOU ALL CAN'T, BUT I'M JUST TELLING YOU WHY I AIN'T WITH YOU ON IT.

UH, VICE CHAIR.

UM, WE KIND OF HASH THIS OUT AT OUR ORIGINAL, UM, UH, MEETING ON THIS BACK IN JANUARY.

UH, AND IF YOU WOULD, PERHAPS, IF YOU WANT TO CHANGE THE WORD PRUDENCE TO SOMETHING, UH, LESS OFFENSIVE TO YOU, MY GOAL HERE, UH, IS TO TRY AND STOP ALL THE BRIDGES TO NOWHERE.

UH, AND WHAT I THINK A CONSULTANT CAN REVIEW, UH, IS WHAT IS ACTUALLY NEEDED? DO YOU REALLY NEED THIS INFRASTRUCTURE OR IS THIS JUST SOMETHING TO ENHANCE YOUR RATE OF RETURN? UH, BUT YOU CAN'T, YOU CAN'T DO THAT ONE YEAR AT A TIME, AND YOU CAN'T, EVEN IF THE CONSULTANT WERE TO RAISE THE EYEBROW AND, AND ASK THE QUESTION ABOUT SOME OF THESE PLANNED EXPENDITURES, THE CITY DOESN'T HAVE ANY FORMAL VEHICLE TO ACT ON THOSE QUESTIONS.

WHAT WAS INTENDED WITH YOU ARE CORRECT.

THE CITY CANNOT UNILATERALLY STOP THESE EXPENDITURES.

AND I NEVER INTENDED, I NEVER SAID OTHERWISE.

THE GOAL OF THIS IS TO GET IT ON THE RECORD YEARS IN ADVANCE.

UH, IF WE HAVE IDENT, IF THE CONSULTANT HAS IDENTIFIED, UH, PRI BRIDGES TO KNOW WHERE YEARS IN ADVANCE, SEND IT TO THE RAILROAD COMMISSION YEARS IN ADVANCE, THEN IT BECOMES, IN MY OPINION, A PRECEDENT HARDER TO DEFEND DURING A RATE CASE, HARDER TO DEFEND IF THE RATE CASE WAS APPEALED TO A COURT CASE.

UH, THIS IS MY, THIS IS THE INTENDED GOAL OF THIS, UH, AGAIN, AND, AND REGARDING THE MULTI-YEAR, UH, UH, PRUDENCY, UH, CONCERNS THAT YOU HAVE, SINCE THIS IS GOING TO HAPPEN EVERY YEAR, UH, THEN YEAH, IT DOES TURN INTO NOT JUST WHAT IS COMING UP, BUT WE, PERHAPS WE SHOULD REWORD IT SO THAT IT IS NOT JUST NEW, UH, NEW ITEMS, UH, THAT ARE PROPOSED, BUT EXISTING ITEMS, UH, THAT ARE BEING CONSTRUCTED.

I, I UNDERSTAND YOUR GOAL AND I APPRECIATE IT.

HOWEVER, IT SEEMS TO ME THAT BOTH THE CITY STAFF AND THE RAILROAD COMMISSION HAVE MADE IT VERY CLEAR THAT THEY ARE NOT INTERESTED IN THIS KIND OF INFORMATION.

AND, AND I THINK THAT THIS IS, THIS IS A, A WINDMILL I'M NOT WILLING TO TILT AT.

AND MY PERSONAL RECOMMENDATION, Y'ALL ARE WELCOME TO VOTE ME DOWN ON THIS, WOULD BE TO DELETE THIS PARTICULAR BULLET FROM OUR COLLECTED RECOMMENDATIONS.

I DON'T THINK THE RAILROAD COMMISSION OR THE CITY CARE MOST ABOUT MOST OF OUR RECOMMENDATIONS, FRANKLY, AND WILL NOT ACT ON THEM.

BUT THIS ONE IN PARTICULAR, I THINK, UM, REACHES IS, IS SO FAR BELOW THE BAR OF FEASIBILITY AND PRACTICALITY THAT I DON'T THINK WE SHOULD EMBARRASS OURSELVES BY GOING FORWARD WITH IT.

NO MATTER HOW LOFTY AND APPROPRIATE OUR SENTIMENTS ARE.

SEE WHAT FOLKS WHO HAVEN'T HAD THE CHANCE TO SPEAK YET, FEEL ABOUT THAT.

VICE CHAIR ROBINSON, I, I'M GONNA LET YOU RESPOND TO THAT, AND THEN AFTER THAT, I AM GONNA MAKE A RECOMMENDATION THAT WE VOTE ON AN AMENDMENT TO THIS, UM, FINE.

SO GO AHEAD.

UH, I'M WILLING TO AMEND IT.

AND YOU ARE CORRECT THAT THE CITY STAFF IS NOT INTERESTED.

IT'S NOT UP TO THEM.

IT'S UP TO CITY COUNCIL.

UM, AND SURE.

PLEASE, UH, AMEND WAY.

WELL, I, I THINK I HEARD FROM COMMISSIONER SILVERSTEIN A SUGGESTION OF DELETING THIS BULLET POINT.

SO WHY DON'T WE START WITH THAT AND

[01:30:01]

WOULD YOU LIKE TO MAKE A MOTION TO AMEND THE RECOMMENDATION TO REMOVE THIS BULLET POINT? THANK YOU.

I MOVE THAT WE MODIFIED THE RECOMMENDATION TO DELETE BULLET ITEM FOUR CONCERNING, UM, OH, NO.

WHAT, WHAT ITEM THREE, THIRD ONE.

BULLET THREE, WITH RESPECT TO REVIEW OF THE PRUDENCE OF EXPECTED CAPITAL EXPENDITURES.

IS THERE A SECOND? OKAY.

THERE'S NOT A SECOND.

SO IS THERE, THERE I WAS WAITING TO HEAR A PIN DROP.

UM, DO SHALL WE MOVE ON? UH, IS THERE ANY OTHER RECOMMENDATION FOR AMENDING THIS, UH, COMMISSIONER SILVERSTEIN? UH, IS, COULD WE COME UP WITH, SINCE PRUDENCE IS A LOADED TERM, IT COULD BE SEEN SEVERAL WAYS.

I'LL CONCEDE IF YOU COULD COME UP WITH A, A BETTER WORD OR COUPLE WORDS THAT DESCRIBE THE INTENTION WITHOUT USING THE WORD PRUDENCE.

GO FOR IT.

THE DICTIONARY HAS WHAT, WHY DON'T JUDGMENT JUDICIOUSNESS, WHY DON'T Y'ALL JUST GO ON TO ALL THE OTHER BULLETS? OKAY.

LET'S DO THAT AND GET BACK TO ME.

LET'S DO THAT.

UM, SO THE NEXT BULLET ITEM IS, UH, BEGINNING WITH IMPLEMENTATION OF RATES DETERMINED BY THE NEXT FULL RATE CASE.

LEMME FIND THIS, UM, THE COMPANY SHALL IMMEDIATELY COLLECT FULL CONTRIBUTIONS IN NATIVE CONSTRUCTION.

UH, I'M GONNA LET COMMISSIONER SCHWARTZ TALK ABOUT THIS.

WOULD YOU LIKE TO, YOU WERE THE ONE THAT WAS MOST CLOSELY, UM, WORKING ON THIS RECOMMENDATION.

SURE.

SO THIS WAS IN THE ORIGINAL, UH, RECOMMENDATION, SO THEY DIDN'T PICK IT UP.

UM, SO IT HAS TO DO WITH THE LINE EXTENSION OR NEW HOOKUP AND THE WAY THAT TEXAS GAS SERVICE HAS BEEN, UH, NOT COLLECTING CONTRIBUTION NATIVE CONSTRUCTION FOR, UH, SITUATIONS WHERE THEY, UH, HAVE CALCULATED THAT THE CUSTOMER THAT THEY'RE PROVIDING THE LINE EXTENSION FOR WILL, UH, DURING THE COURSE OF A DECADE, UH, THAT THEIR REVENUE WILL EQUAL THE AMOUNT THAT THEY'RE GONNA PAY FOR THE LINE EXTENSION.

AND IN THAT CASE, THEY WON'T COLLECT THE LINE EXTENSION.

SO THIS IS THE SAME AS WHAT, YOU KNOW, IT'S, UH, SIMILAR TO WHAT WE ASKED FOR PREVIOUSLY, WHICH WAS THAT JUST REALLY SPECIFIED IN, I THINK, CLEAR LANGUAGE TO, UH, ENSURE THAT THERE'S NO CONFUSION WITH STAFF ABOUT WHAT EXACTLY WE'RE ASKING FOR THAT THE COMPANY THAT WE ARE ASKING HERE, THAT THE COMPANY DOES IN FACT COLLECT FULL CONTRIBUTION NATIVE CONSTRUCTION FOR NEW HOOKUP AND DEVELOPMENT IN PARTICULAR LINE EXTENSION OR NEW HOOKUP.

SO IS THERE ANYTHING ELSE THAT WE'RE, UH, UNCLEAR ABOUT, OR THAT WE FEEL IS NEW ON THIS ONE? IJI JUST HAVE A CLARIFYING QUESTION BECAUSE THE, YEAH.

THIS IDEA OF CONTRIBUTIONS AND NATIVE CONSTRUCTION WAS SOMETHING ALMOST LIKE, I'VE NOT HEARD THIS TERM BEFORE.

SO JUST TO LIKE, JUST TO KIND OF SAY IT IS LIKE, ARE YOU AWARE OF THE TERM CAPITAL RECOVERY FEE? UH, I KIND OF UNDERSTAND IT IN THEORY, BUT OKAY.

I THINK LIKE, OH, CONTINUE, PLEASE CONTINUE YOUR QUESTION.

SO IS LIKE THE FEAR, LIKE MY KIND OF LIKE INTUITION IS THAT IS THE FEAR THAT THEY ARE CHARGING THIS, AND SO THEY MAY BE ART, LIKE, OR LIKE THIS IS GONNA BE PART OF THEIR GROSS REVENUE OR SOMETHING, AND SO IT'S GONNA GO INTO LIKE THAT GUARANTEED RATE OF RETURN THEY'RE GONNA GET FROM THE, FROM THE STATE, THE, OR FROM THE CITY.

THE IDEA IS THAT I DIDN'T REALLY EXPLAIN THE HIGH LEVEL.

THE, THE EXISTING CUSTOMERS, EXISTING GAS CUSTOMERS ARE SUBSIDIZING THE COMPANY'S EXPANSION INTO NEW AREAS.

SO LITERALLY ALL THE EXPANSION THAT THEY DO, AS LONG AS THE EXPANSION CAN BE PAID FOR BY 10 YEARS OF REVENUE, THAT WILL BE PAID FOR BY THE EXISTING CUSTOMER BASE.

SO THAT'S, THAT'S WHAT THIS IS ASKING TO CHANGE.

OTHER UTILITIES DON'T DO IT LIKE THAT.

THE AUSTIN UTILITIES DON'T DO IT LIKE THAT, BUT THESE GAS UTILITIES WILL USE A FORMULA LIKE THAT TO LET THE EXISTING CUSTOMERS PAY FOR THEIR EXPANSION INTO OTHER TERRITORIES, OR, OR ANY, IF YOU HAVE A, A NEW DEVELOPMENT AND EXISTING AREA, IT'S, IF IT'S NOT A EXPANSION TO A NEW SUB DEVELOPMENT, JUST A NEW HOOKUP THAT MIGHT STILL COST $4,000 WITH ALL THE PLUMBING FEES.

SO YEAH, THAT MAKES SENSE.

NOT IF THE COMPANY PAYS FOR IT, THAT CAPITAL AMOUNT GOES INTO RATE BASE.

AND, AND THE IMPLICATIONS ALL OF THAT, WHAT HE SAID, THE IMPLICATIONS OF THAT ARE THAT IF THE COMPANY PAYS FOR THE CAPITAL EXTENSION, THE ENTIRE COST, NOT TGS, THE DEVELOPER, ALL OF THAT.

NO, SORRY,

[01:35:01]

AND SO ALL OF THE CUSTOMERS PAY FOR A SHARE OF BOTH THE COST OF THE INVESTMENT AND A RETURN ON THE INVESTMENT MM-HMM .

BUT IF A SIGNIFICANT PORTION OF THAT CAPITAL EXTENSION COST IS PAID BY THE CUSTOMER WHO IS BENEFITING MM-HMM .

THAT AMOUNT DOESN'T GO INTO RATE BASED, AND THAT LOWERS THE RATE BASE AND, AND THE, AND A MARKUP ON IT IS NOT COLLECTED IN PROFITS.

THAT MAKES SENSE.

UH, COMMISSIONER SCHWARTZ.

AND JUST TO, JUST TO, UM, ALSO ADD TO THIS, THIS WAS ONE OF THE QUESTIONS THAT, UM, WE ASKED THE CONTROLLER'S OFFICE, AND THE RESPONSE WE GOT WAS, THIS IS A TERM THAT TEXAS GAS SERVICE WOULD NOT AGREE TO.

THE POLICY IN TGS TARIFF COMPARES THE REQUIRED CAPITAL INVESTMENT FOR A PROJECT TO THE ANTICIPATED NEW REVENUE THAT WILL BE GENERATED BY A LINE EXTENSION SAC IS REQUIRED ONLY IF THE PROJECT IS MORE COSTLY THAN 10 YEARS OF REVENUE.

SO THE, MY INTERPRETATION OF THAT IS, IT WAS IN OUR RECOMMENDATION BACK IN JANUARY, IT WAS ONE OF THE MOST SIGNIFICANT ONES THAT WE WANTED.

UH, MY ASSUMPTION IS THAT IT WAS DISCUSSED AND IN NEGOTIATIONS, THE GAS COMPANY WOULD NOT AGREE TO IT, BUT IT, IT ALSO, WE MADE THAT RECOMMENDATION MANY MONTHS BEFORE IN THE CASE THAT THE CITY MADE IN WORKING WITH OTHER CITIES IN THE TGS RATE CASE BEFORE THE RAILROAD COMMISSION.

AND MY UNDERSTANDING IS THAT THE RAILROAD COMMISSION POURED IT OUT.

SO THAT THIS IS, THIS IS WHAT I DON'T, I THINK MY UNDERSTANDING IS THAT THE, THIS IS PART OF CHANGE.

CREATING CONTRIBUTION IN NATIVE OF CONSTRUCTION IS SOMETHING THAT THE RAILROAD COMMISSION REFUSED TO CONSIDER.

SO I DON'T THINK IN THE RATE CASE, SO I DON'T THINK THAT WE ARE CAPABLE OF CHANGING THAT IN THE, I MEAN, IT WOULD'VE BEEN HELPFUL HAD, HAD MS. NORTON'S MEMO BEEN EXPLICIT ABOUT WHETHER THIS HAS ALREADY BEEN SETTLED BY THE RAILROAD COMMISSION.

BUT, UH, YES.

THAT'S NOT MY UNDERSTANDING.

MY UNDERSTANDING WAS THAT THEY, UM, THEY REFUSE TO ALLOW, UH, ACTUAL PAID DEVELOPER INCENTIVES WHERE THE COMPANY PAYS THE DEVELOPER AN INCENTIVE, UH, MONEY TRANSFER.

THIS CONTRIBUTION WAIVING THE CIAC IS NOT A, A, A PAID DEVELOPER INCENTIVE.

IT'S DOING WORK FOR FREE.

SO I, MY UNDERSTANDING WHAT RIGHT, THE, THEY'RE DOING THE HOOKUP AND LINE EXTENSION WITHOUT CHARGING THE CUSTOMER.

SO MY UNDERSTANDING IS WHAT THE RAILROAD COMMISSION RAY CASE HAD TO DO WITH IS JUST THESE DEVELOPER INCENTIVES THAT WERE PAID.

SO THAT'S THE, THAT WAS THE UPDATE IN, WE GOT THE, THE BULLET POINTS ON WHAT THEY HAD PUT INTO THE, THE NEW FRANCHISE AGREEMENT.

ONE OF THEM WAS ON THIS IDEA THAT, YOU KNOW, THE DEVELOPER INCENTIVES AND THAT ALL IT SAYS REALLY IS ALIGNING WITH WHAT RAILROAD COMMISSION HAD ALREADY DECIDED, WHICH WAS PREVENTING THE COMPANY FROM PROVIDING THE DEVELOPER INCENTIVES UNDER CERTAIN CIRCUMSTANCES.

SO I THINK REALLY THE CX STUFF IS, IS IT'S IN THE SAME SPIRIT, BUT IT'S A DIFFERENT THING.

THAT'S MY UNDERSTANDING, UH, BY CHAIR ROBBINS.

UH, TWO THINGS.

ONE, UH, WHEN THE CITY OF AUSTIN, UH, WENT TO FULL CAPITAL RECOVERY FEE, THE ESSENTIAL, UH, ESSENTIALLY CAC WHEN IT WENT TO FULL CAPITAL RECOVERY FEE FOR AUSTIN ENERGY AND AUSTIN WATER, THERE WERE RATE DECREASES.

UH, THAT'S HOW EFFECTIVE THIS COULD BE.

UH, SECOND, UH, THE CURRENT SITUATION IS PROBABLY LOCKED INTO THE CURRENT RATE, WHICH IS WHY WHEN, UH, WE AMENDED THESE, UH, AMENDMENTS, UH, TO SAY, UH, THAT PERHAPS THERE SHOULD BE AN ADDENDUM TO THIS BULLET THAT SAYS A NEW RATE CASE WILL TAKE PLACE, WILL, WILL START NO LATER THAN JANUARY 1ST, 2028.

SO WE CAN START TO GET MOMENTUM TO GET THIS, UH, BAD THING REMOVED.

OF THE CONSERVATION PROGRAM SHOULD BE TRANSFERRED TO THE CITY FOR CONTINUED OPERATIONS.

ANY OTHER QUESTIONS OR DISCUSSION ON THIS BULLET POINT? OKAY, GREAT DISCUSSION.

UM, THE NEXT ONE HAS TO DO WITH ENERGY CONSERVATION PROGRAM.

BEGINNING IN JANUARY, 2027, THE COMPANY SHALL COLLECT A NEW TARIFF TO PLAN AND IMPLEMENT AN ENERGY CONSERVATION PROGRAM OPERATED BY THE CITY TO SERVE COMPANY CUSTOMERS.

UH, ALL PREVIOUSLY COLLECTED, BUT UNSPENT CONSERVATION FUNDS AND PREVIOUSLY PURCHASED EQUIPMENT FOR IMPLEMENTATION

[01:40:01]

SO THIS WAS SOMETHING THAT WE, UM, THAT WE RECOMMENDED THAT THE CITY TAKE, TAKE CHARGE OF THE CONSERVATION PROGRAM.

AS YOU KNOW, THERE IS NO CONSERVATION PROGRAM RIGHT NOW BECAUSE THE RAILROAD COMMISSION, UH, REJECTED THE ONE THAT WAS PROPOSED.

SO THERE'S, IT'S BEEN ABOUT AL I DON'T KNOW, AT LEAST SIX MONTHS, MAYBE LONGER.

IT'S BEEN A YEAR AND A HALF, A YEAR AND A HALF SINCE THEY'VE HAD A CONSERVATION PROGRAM, SINCE THEY'VE HAD A CONSERVATION PROGRAM.

SO, UM, I, AND I WILL ALSO COMMENT THAT THERE, THERE WAS DISCUSSION, UH, AMONG THE SUB QUORUM ABOUT, UM, WHETHER THIS SHOULD BE WORDED AS AUSTIN ENERGY TAKES OVER THIS, UH, PROGRAM, OR LE LEAVING IT VAGUE AS THE CITY COULD TAKE OVER IT.

AND THAT COULD, COULD MEAN AUSTIN ENERGY OR IT COULD BE A, A DIFFERENT DEPARTMENT.

UM, THE POINT BEING IT WOULD BE A, AN EFFECTIVE AND EFFICIENT ENERGY CONSERVATION, A REAL ENERGY CONSERVATION PROGRAM, RATHER THAN A SUBSIDY FOR GAS APPLIANCES.

UM, IT COULD INCLUDE WEATHERIZATION, UM, YOU KNOW, THINGS THAT ACTUALLY DO, UM, HAVE A RETURN, UM, ON INVESTMENT.

COMMISSIONER? OH, GO AHEAD.

GO AHEAD.

YOU GO.

I WAS JUST GONNA SAY, I DO HAVE A, A ONE SENTENCE AMENDMENT ON THIS ONE.

'CAUSE WE HAD, I GUESS, FEEDBACK FROM THE EMAIL, FROM, FROM MS. NORDEN TODAY THAT MAYBE THE CURRENT IDEA THAT'S IN THERE IS RELATED TO COLLECTING THE MONEY FOR THE PROGRAM VIA TARIFF.

AND IT SEEMED LIKE SHE WAS SORT OF, UH, MENTIONING THERE'S, THERE, FROM HER PERSPECTIVE, THERE ARE LEGAL COMPLEXITIES TO DOING THAT.

AND SO WE HAVE A SENTENCE THAT'S RELATING TO THE ORIGINAL IDEA, WHICH WAS ASKING FOR SOMETHING LIKE A 1% FRANCHISE FEE INCREASE TO FUND THE CONSERVATION PROGRAM.

SO WHENEVER, UH, I DON'T KNOW WHAT THE EASIEST WAY I NEED TO DICTATE OUT THE 20 WORDS THAT THIS SENTENCE IS.

UH, I THINK YOU MAKE A, A MOTION TO AMEND AND THEN YOU, UM, UH, YEAH.

SAY WHAT THE AMENDMENT IS AND THEN WE CAN SEE IF THERE'S A SECOND.

ARE WE AT THE POINT OF WANTING TO DO THAT RIGHT NOW? OR DO YOU WANNA, OKAY.

UM, MOTION TO ADD THE AMENDMENT.

CAN YOU READ WHAT IT IS THOUGH? OH, YEAH.

CAN YOU SAY WHAT IT IS? OKAY.

THE AMENDMENT IS, SO THIS WOULD BE THE SECOND SENTENCE.

SO, UM, AFTER THE WORD IN THE FIRST SENTENCE, TO SERVE COMPANY CUSTOMERS, PERIOD, THEN WE'RE ADDING AS AN ALTERNATIVE, AN INCREASE TO THE FRANCHISE FEE OF AS MUCH AS 1%, WHICH SHOULD BE APPLIED DIFFERENTLY TO DIFFERENT RATE CLASSES SHOULD BE COLLECTED BY THE CITY TO FUND AN ENERGY CONSERVATION PROGRAM FOR COMPANY CUSTOMERS TO BE OPERATED BY THE CITY.

IS THERE A SECOND? SECOND? I, OKAY.

UM, I'M GONNA ASK YOU TO REPEAT THAT.

UM, SO, AND, BUT WE'RE GONNA TAKE A VOTE, UH, ON THIS IS AN AMENDMENT.

IT'S BEEN MOVED AND SECONDED TO AMEND THE BULLET POINT ON ENERGY CONSERVATION PROGRAM WITH THE LANGUAGE THAT COMMISSIONER SCHWARTZ IS ABOUT TO READ AGAIN.

SO I'LL ONE MORE TIME PLEASE.

UH, AS AN ALTERNATIVE, AN INCREASE TO THE FRANCHISE FEE OF, AS, ARE YOU TYPING RIGHT NOW? YEAH.

OR OKAY.

OF AS MUCH AS 1%, WHICH SHOULD BE APPLIED DIFFERENTLY TO DIFFERENT RATE CLASSES SHOULD BE COLLECTED BY THE CITY TO FUND AN ENERGY CONSERVATION PROGRAM FOR COMPANY CUSTOMERS TO BE OPERATED BY THE CITY.

UM, AND INITIALLY, I, I HAD THAT YOU WERE ADDING THAT SENTENCE AFTER THE FIRST SENTENCE IN THAT BULLET POINT.

IS THAT STILL THE CASE? CAN WE MAKE THAT BIGGER PLEASE? OKAY.

I GO A LITTLE OFF.

RATE CLASSES SHOULD BE COLLECTED BY THE CITY TO FUND AN ENERGY CONSERVATION PROGRAM FOR COMPANY CUSTOMERS TO BE OPERATED BY THE CITY.

OR CAN WE SCROLL UP A LITTLE? OKAY.

SO I'M JUST GONNA REREAD THAT ONE MORE TIME.

UM, SO IT WOULD BE THE SECOND.

THERE YOU GO.

SO THE SECOND SENTENCE RIGHT AFTER TO SERVE COMPANY CUSTOMERS ON THAT THIRD LINE, AS AN ALTERNATIVE, AN INCREASE TO THE FRANCHISE FEE OF AS MUCH AS 1%, WHICH SHOULD BE APPLIED DIFFERENTLY TO DIFFERENT

[01:45:01]

EVERYBODY CLEAR? OPEN TO FRIENDLY LANGUAGE CHANGES? I JUST CAME UP WITH THIS.

YES, BECAUSE YEAH, .

IT'S BEEN MOVED AND SECONDED.

ALL IN FAVOR OF THE AMENDMENT AS READ BY COMMISSIONER SCHWARTZ, PLEASE RAISE YOUR HAND.

THAT IS EIGHT THAT AMENDMENT PASSES.

UH, CHAIR DAVIS.

1, 2, 3, 4, 5, 6, 7, 8, UM, AMENDMENT PASSES.

UM, UM, IF WE'RE GONNA MAKE AMENDMENTS, UM, THE BULLET BEFORE, UH, ON, UH, CAC, UH, WOULDN'T, UH, WOULDN'T WE WANT TO ADD THE SENTENCE ABOUT THE, THE RATE CASE GOING INTO EFFECT, OR EXCUSE ME, THE RATE CASE BEGINNING IN 2028 SO THAT THE CURRENT CA POLICY WOULD NOT BE LOCKED IN FOR A LONG TIME.

UM, ARE YOU MAKING THAT AMENDMENT? I WILL, I'M, I WILL COMMENT THAT, THAT, UH, IN THE APPENDIX, YEAH, THERE'S LANGUAGE OF THAT IN THE APPENDIX, BUT IT CAN BE ALSO INCLUDED IN THE, IN THE MAIN BODY.

SO CAN YOU MAKE, I'LL ASK YOU TO MAKE A MOTION FOR THAT.

UH, UH, ADD THE SENTENCE, UH, THE FULL RATE CASE.

A FULL RATE CASE, A NEW FULL RATE CASE SHOULD BEGIN NO LATER THAN JANUARY 1ST, 2028.

IS THERE A SECOND? SECOND? OKAY.

I CAN SECOND.

ALRIGHT.

UM, SO IT HAS BEEN MOVED AND SECONDED THAT ON THE PRIOR BULLET POINT, THE, THE ONE THAT STARTS BEGINNING WITH IMPLEMENTATION OF RATES DETERMINED BY THE NEXT FULL RATE CASE, UM, THAT IS BULLET 0.4.

UH, AT THE END OF THAT PARAGRAPH, A NEW FULL RATE CASE SHOULD BEGIN NO LATER THAN JANUARY 1ST, 2028.

ALL IN FAVOR OF THE AMENDMENT AS READ, PLEASE RAISE YOUR HAND.

JAMMING THROUGH THIS.

UM, CO WE ELECTED YOU AGAIN .

UM, OKAY.

MY GOAL IS BY EIGHT O'CLOCK.

WE GOT 10 MINUTES TO GO.

ALRIGHT.

SO THE NEXT BULLET POINT, I BELIEVE THAT'S THE LAST BULLET POINT IN THE, IN THE MAIN, UH, RECOMMENDATION IS ON LEAK DETECTION.

UM, THERE IS A BRAND NEW SECTION IN THE ORDINANCE ON LEAK DETECTION THAT, THAT WAS NOT THERE IN THE 2006 FRANCHISE AGREEMENT.

UM, VERY PLEASED TO SEE THAT GOT IN THERE.

UM, HOWEVER, IT IS A WHILE.

IT DOES, I THINK, MEET THE SPIRIT OF THE TRANSPARENCY THAT WE ASKED FOR IN OUR RECOMMENDATION.

IT, IT FELT LIKE IT WAS LACKING A LITTLE BIT IN TEETH.

UM, AND I KNOW THAT GET RECOMMENDING VERY PRE PRESCRIPTIVE, UM, METHODOLOGIES CAN GET, YOU KNOW, A LITTLE WONKY.

SO, UM, WHAT IS BEING SUGGESTED HERE, WHAT I'M SUGGESTING IS THAT THE COMPANY CONDUCTS ANNUAL EMISSION SURVEYS.

THIS IS SOMETHING THAT'S DONE IN CALIFORNIA AND, UH, THAT THEY USE TECHNOLOGY THAT IS CAPABLE OF MEASURING FLOW RATES FOR THEIR LEAKS AND CAN ACCURATELY IDENTIFY SOURCES AS COMING FROM HYDROCARBONS.

UM, AND THAT HAS MINIMUM DETECTION THRESHOLD.

SO THAT'S SOME PARAMETERS AROUND SENSITIVITY, UM, TO BE ABLE TO DETECT, UM, METHANE LEAKS.

UM, SO YEAH.

AND THEN THE ANNUAL REPORT, UM, WHICH THEY'RE GOING TO PROVIDE SHOULD, UH, SUMMARIZE THE EMISSIONS FINDINGS, UH, AND COMPARE THOSE TO NATIONAL, NATIONAL AVERAGES, UM, AND IDENTIFY NUMBER OF FREQUENCY LOCATIONS AND ANY INFRASTRUCTURE PATTERNS, UM, RELEVANT TO NATURAL GAS EMISSIONS THAT COULD POSE PUBLIC OR LOCAL HEALTH AND SAFETY ISSUES.

COMMENTS OR QUESTIONS ON THAT? YES.

VICE CHAIR ROBBINS? UH, I'M FINE WITH IT AND I HAVE ONE MORE BULLET POINT TO ADD WHEN THIS IS, UH, UM, WHEN THE COMMENTS ARE THROUGH.

UM, COMMISSIONER KENARD KENARD, UH, THANKS VERY MUCH.

I'M CONFUSED SLIGHTLY BY THAT PETRO,

[01:50:01]

UH, SOURCES LINE.

MAYBE I'VE MISUNDERSTOOD.

UH, BECAUSE IT'S NATURAL GAS LEAKS ARE BAD WHEREVER THEY COME FROM.

I KNOW THAT THEY WILL PREDOMINANTLY BE COMING FROM, UH, FOSSIL FUELS IN THIS CONTEXT, BUT EVEN IF IT WAS RENEWABLE NATURAL GAS, YOU'D STILL WANT TO DEAL WITH IT.

THAT IS A GOOD POINT.

UM, I THINK, UH, IT JUST HAS TO DO WITH, UM, THE SOPHISTICATION OF THE TECHNOLOGY THAT WE ARE, UM, THAT WE ARE REQUESTING TECHNOLOGY THAT IS THIS MEASUREMENT, UM, THAT'S ABLE TO IDENTIFY THOSE SOURCES TENDS TO BE MORE ADVANCED.

UM, YOU KNOW, THEY SAY THEY'RE DOING LEAK, UH, ADVANCED LEAK DETECTION OR INDUSTRY LEADING LEAK DETECTION AND REPAIR.

UM, AND THIS IS JUST ANOTHER WAY OF KIND OF, YOU KNOW, SHOWING THAT, DEMONSTRATING THAT OKAY.

IT, IT PROBABLY DOESN'T, IT PROBABLY DOESN'T MAKE IT, YOU KNOW, MY CONCERN PROBABLY DOESN'T MATTER, BUT, UM, JUST WANTED TO ASK CLARIFICATION.

APPRECIATE IT.

UH, COMMISSIONER SILVERSTEIN.

BUT FOLLOWING UP ON COMMISSIONER CONARD'S POINT, IF I'M, I AM ALSO INCLINED TO TAKE OUT PETRO BECAUSE IF THEY CAN SPOT LEAKS OF METHANE REGARDLESS OF ITS SOURCE, I'D LIKE TO HEAR ABOUT THAT.

I MEAN, THAT'S, THAT'S A GOOD THING.

EVEN IF IT'S, YEAH, YOU CAN'T TELL US FROM, IT'S, IT'S UP TO THEM TO TELL US WHETHER IT'S, THEY CAN SAY, THAT'S NOT MY FACILITY.

AND THAT'S NOT NATURAL GAS COMING FROM MY STUFF.

BUT AS LONG AS THEY FIND IT, I'D LIKE TO HEAR ABOUT IT AND HAVE SOMEBODY PUT IT BEYOND THE HOOK TO FIX IT.

SO, UM, ARE, ARE YOU SUGGESTING AMENDING IT BY TAKING OUT OUT THE SECOND, THE SECOND OF THE THREE BULLETS? OKAY.

I'M OPEN TO THAT.

I CONSIDER THAT FROM, WELL, POSSIBLY IF I CAN SUGGEST JUST THE REMOVAL OF THE WORD PETRO BECAUSE SOURCES IS STILL USEFUL, UNDERSTANDING WHERE IT COMES FROM.

I CONSIDER THAT A FRIENDLY AMENDMENT.

SO, UM, YEAH, IT'S BEEN MOVED TO REMOVE THE WORD PETRO SEC.

UH, DID, WHO MOVED IT? YOU MOVED IT.

COMMISSIONER KENARD MOVED IT AND YOU SECONDED IT.

EXCELLENT.

OKAY, SO ALL IN FAVOR OF REMOVING THE WORD PETRO IN THE SECOND BULLET POINT OF THIS, UM, UH, PART OF THE RECOMMENDATION, PLEASE RAISE YOUR HAND.

THAT'S UNANIMOUS.

THAT AMENDMENT PASSES.

UM, VICE CHAIR ROBBINS HAS AN ADDITIONAL BULLET POINT HE WOULD LIKE TO, AN ADDITIONAL AMENDMENT YOU'D LIKE TO PROPOSE.

UH, MS. GOODWIN, COULD YOU PUT THIS VERY SHORT PRESENTATION I HAVE UP, UH, IT'S NOW MR. CONNE, UH, HERE WE GO.

CAN THAT CHART? YEAH.

GREAT.

GOOD WORK.

SOME OF THEM ARE NOT, AND I DON'T THINK THAT'S FAIR THAT A LARGE INDUSTRY COULD, YEAH, THEY'LL PAY THE 5% ON THE FUEL, BUT IF, IF THEY DON'T DECLARE THE, THE WAY THE FRANCHISE FEE IS CALCULATED ON TRANSPORT GAS CUSTOMERS IS THAT IT'S AN EITHER OR.

UM, THE COST OF FUEL IS MORE THAN THE COST OF FUEL.

UH, THIS CHART, UH, THE BLACK LINE THAT RUNS THROUGH THE CENTER IS THE ACTUAL COST OF NATURAL GAS THAT RESIDENTIAL CUSTOMERS IN OUR SERVICE AREA PAID BETWEEN 2020 AND JANUARY OF 2025.

BUT LOOK AT WHAT'S HAPPENED TO STORAGE.

LOOK AT WHAT'S HAPPENED TO DEMAND FEES.

THERE'S ALSO A SECURITIZATION CHARGE FOR THE PIRACY THAT TOOK PLACE DURING WINTER STORM URI.

UH, AND ALL OF THESE GREATLY INCREASE THE COST OF DELIVERED FUEL.

UH, THIS IS, UH, NOW WE, THE RESIDENTIAL CUSTOMERS PAY 5%, UH, FRANCHISE FEE ON NATURAL GAS FUEL ON STORAGE, AND ON DEMAND RESERVATION.

THERE'S NO, UH, 5% FEE ON SECURITIZATION.

BUT EVEN SO, IT'S LIKE IN 2025, UH, THAT MAY BE LIKE $7, UH, PER MCF AND LESS THAN HALF OF IT IS ACTUALLY FUEL.

NOW SOME OF YOU ARE THINKING, WELL, THAT'S INTERESTING, BUT WHAT DOES THIS HAVE TO DO WITH ANYTHING? UH, AND WHAT THIS WE RESIDENTIAL CUSTOMERS ARE PAYING 5% ON, ON THIS AND TRANSPORT GAS CUSTOMERS,

[01:55:01]

YOU CAN EITHER TELL US WHAT YOU PAY AND WE'LL KEEP IT CONFIDENTIAL, OR WE WILL ASSUME THAT IT'S LINKED TO THE HOUSTON SHIP CHANNEL INDEX.

AND IF THEY'RE TELLING US WHAT IF THEY'RE TELLING THE CITY WHAT IT ACTUALLY COSTS, THEN STORAGE AND DEMAND FEES ARE PROBABLY INCLUDED.

IF THEY'RE LINKING IT TO THE HOUSTON INDEX, IT PROBABLY ISN'T.

AND SO IF YOU GO TO THE SECOND SLIDE, I'M SIMPLY SUGGESTING THAT AN AMENDMENT TO THE CURRENT, UM, SUGGESTED FRANCHISE LANGUAGE, UH, IT CONSISTS OF, UH, TWO ADDITIONAL WORDS.

UH, AND IT BASICALLY SAYS, UM, UM, 125% OF HOUSTON SHIP CHANNEL INDEX.

FRANKLY, I DON'T THINK THAT'S ENOUGH TO TRULY COMPENSATE, BUT I THINK IT WILL BE FAIRER IF THEY HAVE TO PAY SOME OF THE FRANCHISE FEE ON STORAGE AND DEMAND, UH, CHARGES.

AND IF THEY PROTEST AND SAY, WELL, WE DON'T REALLY DO THAT, THEN THEY CAN JUST TELL THE CITY TO KEEP IT CONFIDENTIAL AND TELL THEM THEIR TRUE COST AND THEY'LL BE FINE.

SO I, I DON'T, I DON'T SEE THIS AS UNDULY HARMING LARGE CUSTOMERS.

UH, I'M SIMPLY TRYING TO GET SOME MEASURE OF FAIRNESS.

AND SO, OKAY, SO THIS, THIS IS, I HAVE, I HAVE A WORDING IF, IF WE GET THAT FAR, BUT I JUST WANTED TO EXPLAIN IT.

THIS, THIS SECTION IS IN SECTION 1.18 OF THE FRANCHISE ORDINANCE, UH, IN THE CURRENT DRAFT ORDINANCE.

IS IT ALL TEXT IN THERE, AMENDMENT? UH, IT'S JUST THE GREEN.

NO, I THINK HE SAID HE HAS WORDING FOR AN AMENDMENT.

UH, THE, THE TWO WORDS THAT I HIGHLIGHTED ARE THE ONLY ADDITION TO THE LANGUAGE AND WHAT I'VE GOT, AND I'LL READ IT AGAIN.

UH, SECTION 1.18 SHOULD BE AMENDED TO REQUIRE THAT TRANSPORT GAS CUSTOMERS WHO DO NOT PROVIDE FUEL COSTS BE CHARGED 125% OF THE HOUSTON SHIP CHA CHANNEL GAS COST INDEX.

I'M, I'M GONNA, I'M GOING TO TYPE THAT WHAT YOU JUST SAID.

I'M GONNA TYPE THAT AS A POTENTIAL AMENDMENT.

BUT FIRST I, I WANNA RECOGNIZE COMMISSIONER FARMER, DO YOU HAD OH, WE'RE, OH, WE ARE.

OH, YES, YES.

OH, ABSOLUTELY.

ABSOLUTELY.

I, I, I THINK YOUR VOTE'S RELEVANT.

I THINK, UH, I , I'M, I MEAN, I DON'T WANNA, I DON'T WANNA DO LIKE A, A STRAW.

THE ONLY, THE ONLY, UH, EQUIVOCATION.

HOW ABOUT, HOW ABOUT THIS? WE'LL DO THUMBS, THUMBS OR THUMBS, LIKE, HOW'S PEOPLE FEELING? UH, COMMISSIONER SILVERSTEIN STILL HASN'T COME BACK WITH ANY, UH, UH, SUGGESTIONS ON I AM, I AM OUTTA RESPECT FOR COMMISSIONER FARMER'S TIME.

RIGHT? I , BUT NOT, YEAH.

HAVE A GREAT EVENING.

I WOULD LOVE FOR YOU TO STAY AND VOTE, BUT I WOULD LOVE MORE FOR YOU TO SAY GOODNIGHT TO YOUR FIRST GRADER.

THANK, THANK YOU SO MUCH.

WELL, ARE WE GONNA LET HIM, ARE WE GONNA LET THIS GUY VOTE OR WHAT? UH, I DON'T THINK WE'RE CLOSE.

HASH OUT.

YEAH, I DON'T CAN CAN WE VOTE ON THE THINGS WE AGREE ON? WE'VE ALREADY VOTED ON, UH, ON THE AMENDMENTS.

WE HAVE TO APPROVE THE THING AS A, IT'S ONE ITEM WE CAN VOTE ON ONE ITEM.

WE CAN'T VOTE ON SEPARATE THINGS UNLESS THERE ARE AMENDMENTS TO THE ONE ITEM.

ALRIGHT, I'M SORRY.

[02:00:01]

GIVE YOUR CHILD THE REGARDS, UM, FROM THE, FROM THE COMMISSION.

NOT GONNA LIE, WHAT YOU JUST SAID, 40% OF THAT WENT OVER MY HEAD.

I DON'T, I DON'T FEEL LIKE I'M IN A POSITION TO, TO SUPPORT THAT BECAUSE I DON'T KNOW WHAT I'M SUPPORTING.

IT SEEMS BRAND NEW TO ME AND I'M A PROCESSOR.

I NEED TO KIND OF PROCESS THINGS THAT AMENDMENT.

I, I DON'T WANT TO KEEP PEOPLE HERE ANOTHER HOUR WHILE I LEARN WHAT THAT MEANS.

, MY APOLOGIES.

UM, I DON'T THINK IT WOULD TAKE SOMEONE LIKE YOU AN HOUR TO FIGURE THIS OUT, AND I, YOU IT WOULD'VE BEEN OPTIMAL HAD WE PUT THIS IN THE ORIGINAL PACKAGE, BUT I DIDN'T HAVE INFORMATION UNTIL THIS AFTERNOON AND I HAD TO NAG TO GET THAT.

UM, OKAY.

CAN, CAN YOU READ AGAIN? I DO WANT TO YES.

GIVE THIS, UH, AN OPPORTUNITY TO, UM, TO BRING FOR A VOTE.

SO THE WORDING AGAIN, YOU'RE, YOU'RE SUGGESTING AN ADDITIONAL BULLET POINT AND PLEASE, I'M, THAT WHOLE THING IS NOT, I GUESS THAT WHOLE THING WOULD GO TO THE APPENDIX PORTION WHERE WE'VE GOT SUGGESTED NO, UH, IT WOULD BE A BULLET POINT, ALL OF THAT.

OH, NO.

WHAT'S ON THE SCREEN RIGHT NOW WOULD BE IN THE APPENDIX.

THAT WOULD GO TO, UH, THE APPENDIX.

DISCUSSION QUESTIONS? COMMENTS? YES.

CAN YOU PLEASE READ AGAIN WHAT YOUR BULLET POINT IN THE MAIN RECOMMENDATION WOULD BE? SECTION 1.18 SHOULD BE AMENDED TO REQUIRE THAT TRANSPORT GAS CUSTOMERS WHO DO NOT PROVIDE, I'M A FAST TYPER.

YOU CAN GO FUEL COSTS BE CHARGED 125% OF THE HOUSTON SHIP CHANNEL GAS COST INDEX.

THAT'S IT.

COMMISSIONER SILVERSTEIN? I THINK THIS IS A GOOD IDEA BECAUSE IT GETS IT.

TRANSPORT CUSTOMERS SHOULD NOT ONLY BE PAYING FOR THE COST OF THE FUEL ITSELF, GIVEN THE SIGNIFICANT INFRASTRUCTURE AND HANDLING COSTS REQUIRED TO GET IT TO THEM.

SO THEY SHOULD PAY MORE AND THEY SHOULD, UM, BE PAYING FRANCHISE FEE ON THAT.

SO DO YOU SECOND THE, UM, SURE.

SO IT'S BEEN MOVED AND SECONDED THAT SECTION 1.18 SHOULD BE AMENDED TO REQUIRE THAT TRANSPORT GAS CUSTOMERS WHO DO NOT PROVIDE FUEL COSTS BE CHARGED 125% OF THE HOUSTON SHIP CHANNEL GAS COST INDEX.

ONE OTHER THING THAT WOULD HELP ME VICE CHAIR ROBBINS IS IF THERE WERE A VERY PITHY WHEREAS CLAUSE THAT, UH, SAYS BASICALLY WHAT COMMISSIONER SILVERSTEIN YOU JUST EXPLAINED.

UM, WELL SINCE, UH, COMMISSIONER SILVERSTEIN IS ON A ROLL, UM, DO YOU WANT TO, IF YOU WOULD TAKE A STAB AT IT, WHAT YOU JUST I'M STILL, I'M STILL WRITING MY OTHER AMENDMENT.

UM, UH, DO YOU WANT ME TO DO IT IN REAL TIME OR? UH, YEAH, IF, IF YOU HAVE SOME WORDING THAT YOU CAN READ, THAT WOULD BE GREAT.

UH, WHEREAS SOME LARGE TRANSPORT GAS CUSTOMERS MAY NOT BE PAYING THEIR ADEQUATE SHARE OF FRANCHISE FEES.

DOES THAT SOUND PITHY ENOUGH? I'M SO SORRY.

WHAT'S A TRANSPORT? WHAT'S A TRANSPORT GAS CUSTOMER? THANK YOU.

WHAT IS THAT? TRANS, SO, SO WE ARE RETAIL CUSTOMERS.

A TRANSPORT CUSTOMER IS SOMEBODY LIKE A LARGE INDUSTRIAL CUSTOMER WHERE WHAT THE, ALL OF, ALL OF THE TGS IS DOING FOR THEM IS DELIVERING A GIGANTIC SLUG OF GAS.

IT IS CARRYING GAS THROUGH, THROUGH THE PIPE SYSTEM TO THE INDUSTRIAL CUSTOMER AND HANDING IT OVER.

THEY'RE NOT DOING ANYTHING ELSE WITH IT.

AND THE ACTUAL GAS CAN BE PURCHASED FROM

[02:05:01]

A DIFFERENT ENTITY.

IT'S COMING FROM FROM DIFFERENT ENTITY.

SO THEY'RE JUST , BUT VIA THE PIPELINE.

SO, SO TGS ISN'T DOING PROCUREMENT AT ALL.

ALL THEY'RE DOING IS, IS PICKING IT UP AT ONE END AND SHOVING IT THROUGH THE PIPE TO THE OTHER.

UNDERSTOOD.

THANK YOU FOR THE CLARIFICATION.

UM, I, I AM I, I GUESS WHAT'S STICKING WITH ME IS THE MAY NOT BE PAYING.

SO SOME MAY, SOME LARGE CUSTOMERS MAY NOT BE PAYING THEIR ADEQUATE SHARE IS NOT AS PERSUASIVE.

AND OKAY, I UNDERSTAND YOUR POINT.

AND THIS IS AN EITHER OR THING.

UH, THE, LET'S SAY $3 A UNIT, RIGHT? AND SO THE, THE, UH, THE CUS THE GAS, THE LARGE INDUSTRY CAN EITHER REPORT, YEAH, WE ARE PAYING $3 TO, UH, AND, AND THEN THE CITY SAYS, OKAY, I'LL GET 5% OF THAT ON THE FRANCHISE FEE.

OR THEY HAVE THE OPTION TO SAY NO, WE ARE NOT GOING TO DECLARE, IN WHICH CASE THE CITY WILL ASSUME, WELL, THE HOUSTON SHIP CHANNEL INDEX SAYS THAT YOU MIGHT BE PAYING $3 OR TWO 50 OR WHATEVER.

AND THAT'S OKAY.

BUT THEN WE DON'T KNOW THAT THAT HOUSTON SHIP CHANNEL INDEX IS GOING TO BE PICKING UP THE STORAGE FEES AND THE DEMAND RESERVATION FEES.

WE, YOU AND I ARE PAYING FOR THAT, BUT THESE LARGE CUSTOMERS WHO ARE NOT TELLING THE CITY THE EXACT COST, WHO ARE OPTING FOR THAT HOUSTON SHIP CHANNEL INDEX ESTIMATE, THEY MAY NOT BE PAYING THAT.

WE DON'T KNOW.

THAT'S VERY HELPFUL.

SO I AM, I AM SUGGESTING A MODIFICATION TO THIS AMENDMENT TO INCLUDE THE HOUSTON SHIP CHANNEL INDEX DOES NOT INCLUDE STORAGE AND DEMAND RESERVATION RESERVATIONS, DEMAND RESERVATION FEES, FEES.

THEREFORE, SOME LARGE TRANSPORT GAS CUSTOMERS MAY NOT BE PAYING THEIR ADEQUATE SHARE OF FRANCHISE FEES.

THAT IS, I MOVE TO INCLUDE THAT BULLET POINT IN THE WHEREAS CLAUSE, THAT WAS SECOND.

JUST READ.

SECOND.

ALL IN FAVOR OF AMENDING THE RECOMMENDATION TO INCLUDE, INCLUDE THAT WHEREAS CLAUSE 1, 2, 3, WE'VE GOT SIX HERE.

SEVEN.

GREAT.

UM, THAT AMENDMENT PASSES.

AND THEN THE AMENDMENT, I'M JUST GONNA ALSO READ THE ONE THAT YOU ORIGINALLY, THE WORDING VICE CHAIR ROBBINS SECTION 1.18 SHOULD BE AMENDED TO REQUIRE THAT TRANSPORT GAS CUSTOMERS WHO DO NOT PROVIDE FUEL COSTS BE CHARGED 125% OF THE HOUSTON CHIP SHIP CHANNEL GAS COST INDEX.

SO YOU MOVE THAT.

IS THERE A SECOND? SECOND.

COMMISSIONER LUKI SECONDS.

ALL IN FAVOR OF THE ADDITIONAL BULLET POINT THAT I JUST READ, UM, TO BE ADDED, PLEASE RAISE HANDS.

1, 2, 3, 4, 5, 6, 7.

THAT AMENDMENT PASSES.

AND IT TOOK ME 11 MINUTES TO UNDERSTAND THIS.

NOT AN HOUR .

WOW.

I I TOLD YOU YOU WERE A QUICK STUDY.

EVALUATE THE QUALITY AND PRUDENCE OF TGS CAPITAL EXPENDITURE PLANNING, MANAGEMENT, AND EXECUTION.

UM, SO THAT, THAT BRINGS US, UH, I'M GONNA KEEP GOING.

IT BRINGS US TO OUR APPENDIX OR IS THERE ANOTHER A MINUTE? NO, NO, NO, NO.

DO YOU WANNA GO BACK TO MINE? YES.

INSTEAD OF THE BULLET AT THE TOP OF PAGE TWO, I OFFERED THE FOLLOWING, UM, BEGINNING IN, AND YOU WON'T LIKE IT, BUT THIS IS WHAT I'M OFFERING AS AN ALTERNATIVE.

BEGINNING IN DECEMBER, 2026, THE COMPANY SHALL AN ANNUALLY FILE WITH AUSTIN FINANCIAL SERVICES, A REPORT DETAILING THE COMPANY'S EXPECTED CAPITAL IMPROVEMENTS AND ACTUAL CAPITAL INVESTMENTS FOR THE PRIOR, FOR THE, UM, CAPITAL IMPROVEMENTS FOR THE COMING YEAR AND ACTUAL CAPITAL EXPENDITURES FOR THE PRIOR YEAR.

AND THEN THERE'S TWO SENTENCES ABOUT THE, THE CITY, YOU KNOW, CONFIDENTIALITY AND PROPRIETARY INFORMATION.

THE CITY WILL HIRE A CONSULTANT TO REVIEW MULTIPLE YEARS OF ACTUAL AND PROJECTED CAPITAL EXPENDITURES AND

[02:10:01]

THIS REPORT SHALL BE SHARED WITH THE PUBLIC OTHER TGS CITIES IN THE RAILROAD COMMISSION.

THE THIS DIFFERS FROM, UM, IT, IT INCLUDES THE WORD PRUDENCE BECAUSE IT IS TALKING ABOUT LOOKING AT BOTH ANTICIPATED EXPENDITURES AND ACTUAL INVESTMENTS SIDE BY SIDE TO SEE IF THERE IS A COHERENT PLAN ON COMPETENT MANAGEMENT APPAR, FROM WHAT WE CAN TELL, IT ALSO, IT, WHAT IT DOES NOT HAVE IS SAYING WE'RE GONNA COLLECT AN ANNUAL TARIFF BECAUSE IT IS CRAZY TO BE DOING, TO BE COLLECTING MONEY FOR A ESSENTIALLY A ONE-TIME REPORT.

BECAUSE THE POINT IS YOU NEED TO DO THIS OVER MULTIPLE YEARS TO DETERMINE A PATTERN.

AND, AND YOU DON'T WANT TO BE INCREASING COST GRATUITOUSLY THAT ARE JUST GONNA BE GOING INTO THE, THE, THE GENERAL FUND OR SOMETHING ELSE.

SO I VIEW THIS AS MORE LIKE A SINGLE YEAR ANALYSIS RATHER THAN AN ONGOING EXERCISE.

AND IT DOESN'T RAISE FRANCHISE FEES AND IT DOESN'T COLLECT ADDITIONAL TARIFF MONEY.

IT JUST, THIS IS ESSENTIALLY AN INSTRUCTION TO THE CITY ON A WARNING TO THE COMPANY RATHER THAN SOMETHING THAT SAYS, GIVE ME MORE MONEY.

SO THIS, THIS IS, IS TO, IT'S FUNDED.

HOW IS THE FUND, THE, THE, AS MS. NORTON POINTS OUT IN HER MEMO, THE CITY CAN HIRE A CONSULTANT AT ANY TIME.

THAT DOESN'T MEAN THEY WILL RIGHT.

BUT THE, THE GOAL, THE, THE GOAL HERE IS TO, FOR US TO GIVE THE SENSE OF WHAT WE THINK THE CITY SHOULD BE ASKING FOR, NOT MERELY TO THIS, THIS IS, THIS IS THE, A WINDMILL I THINK IS WORTH TILTING AT AND HAS THE POTENTIAL TO ACTUALLY BE ADOPTED RATHER THAN SAYING, WE WANNA RAISE THE TARIFF TO, TO HIRE A CONSULTANT TO DO SOMETHING THAT IS NOT SOUND REGULATORY PRACTICE.

SO JUST, I WILL RECOGNIZE YOU IN ONE MOMENT.

UH, VICE CHAIR.

SO THIS WOULD BE THE IN PLACE OF, IN, IN PLACE OF THE, THE BULLET THAT THE ONE THAT WE HAVE NOW YES.

THAT SAYS BEGINNING IN JANUARY, 2027.

CORRECT.

THE COMPANY SHALL COLLECT A NEW TARIFF FOR INCREASED FRANCHISE FEES.

HIGHER, NONE OF THAT.

I MEAN, WE, THE, THE, I DO NOT KNOW WHAT THE CITY AND THE OTHER TGS CITIES WITH WHOM WE WERE ALLIED TOOK TO THE RAILROAD COMMISSION TO PROTEST THE 65% INCREASE IN CAPEX OVER FIVE YEARS.

SO THE AMENDMENT THAT YOU'RE PROPOSING IS TO REPLACE THAT BULLET POINT WITH THE LANGUAGE THAT YOU, YOU JUST READ.

UM, WE'RE GONNA SEE, IS THERE A SECOND TO THAT? I WILL SECOND IT.

SO NOW WE CAN OPEN DISCUSSION ABOUT IT.

VICE CHAIR ROBBINS ONE, THE CITY MARIA NORTON, THE COMPTROLLER HAS TOLD ME AS MUCH AS THEY DON'T HAVE THE MONEY TO DO THIS IN THE GENERAL FUND, SHE'S ADAMANT ABOUT THAT.

SO IF IT'S GONNA COME FROM ANYWHERE ONE TIME OR MULTIPLE TIMES, IT HAS TO COME THROUGH THE GAS RATES, HAS TO, UH, SECONDLY, WHILE I DO, LIKE, I LIKE THE WAY YOU HAVE WORDED THE MOTION UP TO THE POINT WHERE YOU SAY THAT THIS IS A ONE TIME THING, UH, UM, ONE IS BETTER THAN NOTHING, BUT HAVING IT, I DIDN'T ACTUALLY SAY IT'S A ONE TIME THING, BUT I DON'T WANT IT TO BE AN, IT SHOULD NOT BE AN ANNUAL THING BECAUSE YOU DON'T GET ENOUGH INFORMATION IN A SINGLE YEAR TO CONDUCT A SENSIBLE ANALYSIS.

MAYBE NOT, BUT THEN YOU WANT IT TO BE BIANNUAL.

EVEN THEN IT, THE MONEY WOULD HAVE TO COME THROUGH THE GAS, A GAS TARIFF OR GAS FRANCHISE FEE.

NOW, I'M, I'M NOT TRYING TO FIGURE OUT A WAY TO, YOU KNOW, SPEND MORE MONEY.

I'M TRYING TO FIGURE OUT A WAY TO STOP THE BRIDGE FROM NOWHERE.

AGAIN, BETWEEN 2020 AND 2023, UH, THERE WAS A 63% INCREASE IN PLANT COSTS.

THERE.

THERE'S NO WAY I CAN BELIEVE THAT ALL OF THAT IS, PERSONALLY, I DO NOT BELIEVE ALL OF IT IS JUSTIFIED.

AND THE PROBLEM IS THAT EVEN IF WE HAD THIS ANALYSIS, THERE IS NOTHING WE COULD DO.

[02:15:01]

AND, AND THERE IS NO GUARANTEE THAT IF WE HAD THESE REPORTS, IT WOULD CHANGE WHAT HAPPENS AT THE RAILROAD COMMISSION.

BUT IT IS CERTAINLY CONSTRUCTIVE TO TRY TO EXAMINE THE PATTERN OF EXPENDITURES, ACTUAL LAND PLANNED SIDE BY SIDE OVER MULTIPLE YEARS TO SEE IF IT APPEARS THAT THEY KNOW WHAT THEY'RE DOING AND TO SEE IF THERE ARE WAYS TO LOWER THAT 65% CRANK OF CAPEX.

UH, I SAW COMMISSIONER SCHWARTZ, YOU HAD YOUR HAND UP.

DO YOU WANNA MAKE A COMMENT? I, YEAH, JUST A GENERAL QUESTION.

SO FROM WHAT I UNDERSTAND FROM LOOKING AT THIS, WE WERE MORE INVOLVED WITH IT A FEW MONTHS AGO.

AUSTIN IS THE PRIMARY REGULATOR ON THIS STUFF, AND OUR, THEORETICALLY THEY HAVE APPELLATE JURISDICTION OVER IT? NO.

SO THE, THE RAILROAD COMMISSION DOES EVERYTHING WE HAVE.

BUT IT'S AN, IT'S AN APPELLATE, IT'S AN APPELLATE JURISDICTION.

IS THAT CORRECT? NO.

THE, THE RAILROAD COMMISSION DOES RATES AND THE RAILROAD COMMISSION DOES.

OH, THANK YOU.

MADAM CHAIR.

THE RAILROAD COMMISSION DOES RATES, THE RAILROAD COMMISSION DOES CAPEX, THE RAILROAD COMMISSION DOES PRUDENCE, THE RAILROAD COMMISSION DOES CONSERVATION.

THERE'S ESSENTIALLY NOTHING LEFT THAT WE'VE GOT EXCEPT, UM, WHERE THEY DIG UP OUR STREETS AND, AND ALLEYS MM-HMM .

AND, AND HOW MUCH WE CHARGE THEM FOR THE PRIVILEGE OF SERVING OUR CUSTOMERS.

THAT'S WHAT THE, THAT'S WHAT THE FRANCHISE FEE IS.

FOR THE USE OF OUR LANDS AND ACCESS TO OUR PEOPLE.

BUT THE, THE STATUS OF AUSTIN AS THE LARGEST TGS CITY DOESN'T PROVIDE US WITH COUNSEL, WITH STATUS AS BEING THE REGULATOR OVER THIS.

THE THEORETICALLY YES.

IN PRACTICALITY, VERY LITTLE.

I MEAN, IT, IT IS ALMOST AUTOMATICALLY APPEALED TO THE COMMISSION.

UH, AND THE COMMISSION, UH, IS NOT TERRIBLY CONSUMER FRIENDLY, UH, GIVEN THE SITUATION.

UH, I AGAIN JUSTIFY THIS, UH, YOU ARE CORRECT, COMMISSIONER SILVERSTEIN, THAT WE CAN, UH, EVEN IF WE FIND THE BRIDGE TO NOWHERE, WE CANNOT ORDER IT TO BE STOPPED.

THE GOAL HERE IS TO GET IT ON RECORD AND TO GET IT ON RECORD VERY EARLY RATHER THAN AFTER THE FACT.

IF THE MONEY'S SPENT AFTER THE FACT, AFTER A FIVE YEAR PERIOD, UH, WHEN THEY'RE COMING IN FOR A RATE CASE, IT'S A LOT DIFFERENT THAN IF YOU SAY UP FRONT, WE DON'T THINK THIS IS NEEDED AND WILL IT WORK? I CANNOT GUARANTEE THAT IT WILL WORK ANY MORE THAN YOU TOOK THE RISK FOR YOUR SOLAR CELL, UH, COST EFFECTIVENESS WHEN YOU BOUGHT IT.

UH, I MEAN, WE ARE TRYING TO DO SOMETHING NEW AND WE WILL, I, WE WILL TRY TO MAKE IT WORK, AND IF IT DOESN'T, WE WILL TRY SOMETHING ELSE.

SURE.

UM, OKAY, GOOD DISCUSSION.

IS THERE, UM, COMMISSIONER KENARD OR COMMISSIONER LUKI OR COOK, ANYONE ELSE HAVE COMMENTS ON THIS PARTICULAR AMENDMENT? NOTHING FROM ANYTHING.

UM, I, I JUST, I'M GONNA SPEAK FIRST.

UM, I THINK THAT THE TWO OF YOU ARE SAYING SOME OF THE SAME THINGS AND THE GOAL BEING THE SAME.

UM, RECOGNIZING THAT WE ARE IN A POSITION OF NOT HAVING A LOT OF LEVERS OR TEETH TO REALLY, YOU KNOW, AFFECT THIS WHEN THEY, YOU DO THESE CAPITAL IMPROVEMENTS, THESE EXPENDITURES THAT BALLOON OUR, OUR GAS BILLS, BUT WANTING TO HAVE SOMETHING THAT CAN BE SHOWN AS A PATTERN AS, UH, YOU KNOW, HERE'S A CASE TO BE MADE FOR A LOT OF THINGS HAPPENING, OR THERE'S THINGS THAT ARE NOT BEING MANAGED THE WAY THEY SHOULD BE MANAGED.

THAT SORT OF A THING.

SO I THINK THAT YOU'RE BOTH TRYING TO ACHIEVE THE SAME THING.

AND I THINK THAT IS, THAT IS PROBABLY THE BEST THAT WE CAN HOPE TO DO IS GET SOME, UH, SOMETHING, ESTABLISH A PATTERNS, GET IT ON RECORD, AND HAVE SOMETHING TO TAKE, UM, FOR INTERVENERS

[02:20:01]

TO TAKE TO RATE CASE.

UM, SO I WOULD LIKE TO HEAR YOUR PROPOSED LANGUAGE ONE MORE TIME, UM, FOR THIS AMENDMENT.

UM, JUST IF YOU COULD READ THAT ONE MORE TIME AND THEN WE CAN SURE.

HAVE SOME FINAL COMMENTS AND TAKE A VOTE.

ESSENTIALLY MY LANGUAGE IS AN ATTEMPTED REWRITE OF ITEM 4.9 IN THE, THE, THE DRAFT CONTRACT OR WHATEVER FRANCHISE AGREEMENT.

UM, BEGINNING IN DECEMBER, 2026, THE COMPANY SHALL ANNUALLY FILE WITH AUSTIN FINANCIAL SERVICES, A REPORT DETAILING THE COMPANY'S EXPECTED CAPITAL IMPROVEMENTS FOR THE COMING YEAR AND ACTUAL CAPITAL EX INVESTMENTS FOR THE PRIOR YEAR.

THEN THERE'S TWO SENTENCES ABOUT THE COMPANY'S RESPONSIBLE FOR CONFIDENTIAL AND PROPRIETARY, BLAH, BLAH, BLAH.

THE CITY WILL HIRE A CONSULTANT TO REVIEW MULTIPLE YEARS OF ACTUAL AND PROJECTED CAPEX AND EVALUATE THE QUALITY AND PRUDENCE OF TGX CAPITAL INVESTMENT PLANNING, MANAGEMENT, AND EXECUTION.

THIS REPORT SHALL BE SHARED WITH THE PUBLIC OTHER TGS CITIES AND THE RAILROAD COMMISSION.

SO, BECAUSE SINCE IT SAYS MULTIPLE YEARS MM-HMM .

IT DOESN'T, IT MEANS MORE THAN ONE.

BUT IT DOESN'T SAY, WAIT FIVE YEARS.

GOTCHA.

VICE CHAIR ROBBINS, TWO THINGS.

ONE, UH, UH, COMMISSIONER COOKS HAD A QUESTION OR COMMENT.

THE OTHER IS THAT, UH, I COULD GO WITH BIANNUAL IF THAT WOULD BE A FRIENDLY AMENDMENT TO YOUR FRIENDLY AMENDMENT.

UM, SURE.

UM, AS LONG AS IT DOESN'T MEAN THAT BIANNUAL IS IN THE CYCLE OF THE REPORT, IT SHOULD NOT BE OF REPORT PERFORMANCE.

IT SHOULD NOT RESTRICT THE PERIOD OF TIME THAT IS BEING RE FOR OVER WHICH CAPEX ARE REVIEWED.

IN OTHER WORDS, EVERY TWO YEARS YOU COULD DO A REPORT ABOUT FOUR YEARS WORTH OF CAPEX.

THAT, THAT, THAT, THAT, YEAH, I'M FINE WITH THAT.

COMMISSIONER COOK, DID YOU HAVE A COMMENT OR A QUESTION? UM, NO, I KEEP GOING BACK AND FORTH.

I THINK.

GO AHEAD.

GET IT OUT THERE.

I THINK THE, YEAH, I'LL JUST VERBALIZE IT.

I THINK LIKE, IT SOUNDS LIKE THE, THE DIFFICULTY IS LIKE HOW TO ACTUALLY MAKE THE CITY DO, LIKE, DO THIS BECAUSE EITHER IT'S LIKE WE SAY IT COMES FROM THE RATE AND IT SOUNDS LIKE IT'S GONNA BE DIFFICULT 'CAUSE IF IT'S A ONE TIME THING OR WHATEVER, OR, UM, THEY'RE GONNA HAVE TO TAKE IT OFF THE GENERAL FUND, WHICH THEY MAY ALSO HAVE A LOW CHANCE OF TAKING OUT THE GENERAL FUND.

BUT REGARDLESS, LIKE IT WOULD BE GOOD.

LIKE IT'S, AND I ALSO, AND THEN I HAVE A QUESTION, WHICH IS, UM, WHAT IS THE UTILITY AND LIKE PUSHING FOR IT OF HAVING LIKE THIS CONTRACTOR, THE PERSON WHO ANALYZES THESE ANNUAL REPORTS, BE FROM THE CITY AND NOT BE SOME OUTSIDE PARTY.

LIKE, JUST THINKING OF LIKE, IS IT GONNA BE LIKE, HOW, LIKE WHAT IS THE UTILITY OF PUSHING FOR, LIKE, THIS IS GONNA BE A CONTRACTOR FOR THE CITY VERSUS A CONTRACTOR FOR SOME LIKE TERI OR SOME OUTSIDE ORGANIZATION WHO IS LIKE DOING THIS.

BECAUSE I WONDER LIKE IF THE CITY'S EVEN GONNA WORK IS EVEN GONNA BE INTERESTED IN BEING LIKE, YES, WE'RE GONNA HAVE SOMEONE WHO'S GONNA LIKE BE UNDER LIKE THE POLITICAL HOT LOT, LIKE HOT SEAT FOR GOING FOR CLEARLY DOING SOMETHING THAT IS GONNA TRY AND GO UP AGAINST LIKE THE RAILROAD COMMISSION OR TGS.

DOES THAT MAKE SENSE? UH, MARIA, GO AHEAD.

MARIA NORTON HAS TOLD ME, UH, AS MUCH AS THEY DON'T HAVE THE STAFF TO DO THIS THEMSELVES MM-HMM .

IF THAT IS ANY HELP.

SO THAT'S WHY I, UH, THAT'S WHY THIS IS DISCUSSED AS A NEED FOR A CONSULTANT MM-HMM .

AND IN THERE ARE MANY, UM, CONSULTING FIRMS THAT DO THIS KIND OF WORK IN THE ELECTRIC INDUSTRY, AND I ASSUME IN THE GAS INDUSTRY AS WELL.

SO THEY SHOULD, IF THEY PUT ON AN RFP, I'M SURE THEY'LL GET MULTIPLE PROPOSALS.

AND IS THIS SOMETHING THAT IN Y'ALL'S EXPERIENCE, LIKE THE CITY WOULD BE WILLING TO TAKE UP? UH, CURRENTLY, WELL, I DON'T WANT TO SPEAK FOR THE CITY.

UH, THE STAFF, UH, TO DATE HAS OBVIOUSLY BEEN RESISTANT TO THE IDEA BECAUSE THEY DIDN'T, UH, PUT IT IN THE FRANCHISE OR COME UP WITH AN ALTERNATIVE.

UH, BUT THAT DOESN'T MEAN THE CITY COUNCIL WON'T BE INTERESTED AND WE ARE APPOINTED BY THE COUNCIL TO GIVE THEM ADVICE.

SO THAT'S WHAT I HOPE WE WOULD ADVISE.

COMMISSIONER SCHWARTZ.

AND WE JUST CUT THE COST IN HALF.

IT, IT'S, IT'S EVERY TWO YEARS, BUT OVER LOOKING AT MORE DATA.

IF WE'RE ONLY DOING IT EVERY TWO YEARS.

SO , WELL,

[02:25:01]

SO IT'S, IT'S A REAL STUDY AS OPPOSED TO, HUH? THIS IS A 10 PAGE LIST.

COGNIZANT OF THE TIME.

COMMISSIONER SILVERSTEIN, WOULD YOU KINDLY READ THAT ONE MORE TIME? INCLUDING THE FRIENDLY CHANGE TO THE BI BIANNUAL, JUST FOR THE RECORD, SO THAT WE CAN TAKE A VOTE ON THIS AMENDMENT PLEASE.

BEGINNING IN DECEMBER OF 2026, THE COMPANY SHALL ANNUALLY FILE WITH THE CITY A REPORT DETAILING THE COMPANY'S EXPECTED CAPITAL IMPROVEMENTS FOR THE COMING YEAR AND ACTUAL CAPITAL INVESTMENTS FOR THE PRIOR YEAR.

INSERT TWO SENTENCES ON CONFIDENTIAL AND PROPRIETARY INFORMATION AND PROTECTION.

EVERY TWO YEARS, THE CITY WILL HIRE A CONSULTANT TO REVIEW MULTIPLE YEARS OF THE COMPANY'S ACTUAL AND PROJECTED CAPITAL INVESTMENTS AND EVALUATE THE QUALITY AND PRUDENCE OF THE COMPANY'S CAPITAL EXPENDITURE, PLANNING, MANAGEMENT, AND EXECUTION.

THIS REPORT SHALL BE SHARED WITH THE PUBLIC OTHER TGS CITIES AND THE RAILROAD COMMISSION.

TELL ME, THIS IS ABSOLUTELY NECESSARY FOR, FOR YOU TO SAY BEFORE WE IS GONNA WANNA BE PAID.

GET MONEY IN FOR IT.

YEAH, EXACTLY.

UH, OKAY.

WE COULD, WE DON'T HAVE TO PRESCRIBE THE AMOUNT, BUT WE SHOULD SAY SOMETHING LIKE THIS COULD CON THE FUNDING COULD COME FROM A TARIFF OR A SLIGHT INCREASE IN THE FRANCHISE FEE.

THAT'S ALL.

USE THE WORD DEDICATED.

SAY, SAY YOU'RE FRIENDLY.

UH, WHERE WOULD WE PUT DEDICATED IN THE SYNTAX? UM, AT THE END OF, OF MY AMENDMENT, ALTERNATIVE AMENDMENT, WE WOULD SAY FUNDING FOR THIS CONSULTANT'S WORK WOULD COME FROM A DEDICATED TARIFF OR INCREASE, SLIGHT INCREASE IN THE TGS FRANCHISE FEE.

I COULDN'T HAVE SAID IT BETTER.

THIS IS WHERE WE SING KUMBAYA.

, YOU STILL WITH THE SMART? YES.

WE HAVE ANOTHER ONE.

IT'S JUST MOVING US ALONG.

SO NO, IT'S NOT A QUESTION.

SO ARE WE PUTTING THAT IN THE, THE APPENDIX AND THE, WHAT'S GOING ON WITH THAT AND THE TOP BULLET POINT? I THINK I, I WROTE IT TO GO IN BOTH PLACES.

AND THAT, THAT WILL REPLACE THE EXISTING BULLET POINT, THE ORIGINAL ONE AROUND THE CONSULTANT? CORRECT.

UM, JUST FOR THE RECORD MM-HMM .

THE MO THE MOTIONS THAT WE HAVE, SAY JANUARY 20, 27 AND THE APPENDIX SAYS DECEMBER 1ST, 2026.

NOW THIS IS ONLY MODEL WORDING, BUT DO WE WANNA HOMOGENIZE THE, THE DATES? SURE.

THE DATES SHOULD BE FROM THE DRAFT ORDINANCE.

UM, WHAT WAS IN THE DRAFT ORDINANCE DECEMBER, 2026 THEN LET'S KEEP THAT.

SO THAT WOULD MEAN THAT THE VARIOUS, ALL, ALL THE DATES ARE DIFFERENT.

ALL DATES ARE DIFFERENT.

THEY DON'T NEED TO ALL BE THE SAME 'CAUSE THEY DEAL WITH DIFFERENT COMPONENTS.

BUT, WELL, THE, THE AMENDED MOTION THAT ALLISON JUST HAD, THAT WAS DECEMBER.

AND THEN THE ONE FOR, UM, ENERGY CONSERVATION SAYS, UH, IN THE MOTION JANUARY, 2027.

AND IN THE APPENDIX, IT'S, UH, DECEMBER 1ST, 2026.

SO SHOULD WE CHANGE THE APPENDIX TO SAY JANUARY, 2027? I THINK WE SHOULD KEEP THE DATES THAT WERE IN THE DRAFT ORDINANCE UNLESS THERE'S A COMPELLING REASON WHY WE'RE SAYING THEY NEED TO CHANGE.

SO WHATEVER, HOWEVER WE STANDARDIZE THAT, I THINK

[02:30:01]

I DON'T THINK THESE WERE IN THE DRAFT ORDINANCE.

ITEM ITEM 4.9 CLEARLY SAYS BEGINNING IN DECEMBER, 2026.

ALL OF THEM.

ANYWAY.

WELL, THIS ONE IS SPECIFIC MM-HMM .

UM, AND I THINK THERE ARE ONES LIKE ENERGY CONSERVATION, WHICH WASN'T IN THE ORDINANCE.

SO, UM, IT IS LATE AND I, AND I WOULD MAKE THE SHEET.

OKAY, LET ME LET, LET ME BACK UP FROM THE DATES.

THE, THE AMENDMENT THAT WE ARE TALKING ABOUT BEFORE WE GOT SIDETRACKED ON DATES IN THE DIFFERENT PARTS OF THE DOCUMENT.

CAN, CAN WE VOTE ON THAT AMENDMENT THAT WAS READ? YES.

OKAY, LET'S DO THAT.

ALL IN FAVOR OF THE AMENDMENT THAT WAS READ INTO THE RECORD, UM, BY COMMISSIONER SILVERSTEIN AND VICE CHAIR ROBBINS, PLEASE RAISE YOUR HAND.

THAT AMENDMENT PASSES.

NOW LET'S DEAL WITH DATES.

UM, FIRST DATE, THE FIRST DATE WAS THE ONE THAT WE JUST DID, WE JUST APPROVED THE SECOND DATE, UH, BEGINNING IN JANUARY, 2027, AND IT ADDRESSES ENERGY CONSERVATION.

AND IN THE APPENDIX IT'S DECEMBER 1ST, 2026.

SO I DON'T SEE THAT IN THE APPENDIX.

WHERE IS THAT? UH, 12 EIGHT BEGINNING ON DEC.

IT WAS DONE AT THE BOTTOM OF THE PAGE.

GOTCHA.

AND SORRY, IN THE, IN THE MAIN RECOMMENDATION IT WAS 20 JANUARY, 2027.

SO SHALL WE CHANGE THAT IN 12 EIGHT, JANUARY, 2027 IN THE APPENDIX? UM, YEAH.

DO WE NEED TO VOTE ON THAT? IT'S JUST STANDARDIZING THAT LANGUAGE.

ANYTHING ELSE? NOW, DO WE VOTE ON THE ENTIRE RECOMMENDATION? YES.

I JUST WANNA THANK EVERYBODY FOR, FOR YOUR STAMINA AND STICKING IN TONIGHT.

THIS WAS, THIS WAS A LOT.

UM, BUT IT'S IMPORTANT WORK AND I THINK, UM, I, I'M, I AM PLEASED WITH WHERE WE'VE GOTTEN TO AS A COMMISSION.

YAY US.

SO NOW, UM, I'LL ENTERTAIN A MOTION TO APPROVE THE, UH, RECOMMENDATION AS AMENDED.

I SO MOVE SECOND AND SECONDED.

ALL IN FAVOR OF THE, UH, RECOMMENDATION ON THE TGS FRANCHISE.

I WILL ASK, UM, COMMISSIONER SILVERSTEIN, WILL YOU PLEASE EMAIL ME? UM, JUST SO I HAVE THAT, THAT, UM, LANGUAGE, I'LL ALSO REVIEW THE, THE, UM, VIDEO AND I WILL GET THE UPDATED RECOMMENDATION OVER TO MS. GOODWIN FOR POSTING SPECIAL, SPECIAL COMMENDATION TO COMMISSIONER LUKI.

AGENDA ITEMS. UM, MS. GOODWIN, CAN YOU TELL US WHAT DO WE HAVE FOR MAY SO FAR? WE HAVE A BRIEFING FROM AUSTIN WATER ON THEIR, UM, THEIR QUARTERLY HIGHLIGHTS REPORT, AND WE'LL HAVE A BRIEFING.

ALL RIGHT, FANTASTIC.

UM, SO THAT BRINGS US TO FUTURE

[FUTURE AGENDA ITEMS ]

YES, MA'AM.

WE, WE ASKED AUSTIN WATER TO INCLUDE DROP PLANS IN IT WON'T BE INCLUDED.

THAT WILL COME SEPARATELY.

YOURS AND, UH, CHAIR DAVIS' REQUESTS.

LOCAL RESOURCES AND GENERATION INVESTMENTS.

UM, THERE'S A BRIEFING ON SOLAR STANDARD OFFER, UH, A BRIEFING ON GREEN BUILDING RESIDENTIAL UPDATES, AND A BRIEFING ON, UH, LOCAL RESOURCES AND GENERATION INVESTMENTS.

LAST ONE AGAIN, PLEASE.

[02:35:01]

YES, COMMISSIONER.

AS, AS MS. EVERHART SHOULD EXPECT, I'M HERE TO ASK IF WHAT THE, THE STATUS IS OF THE AUDIT AND PLAN FOR THE DISTRICT HEATING AND COOLING DISTRICT ENERGY AND COOLING .

AND AS YOU WILL EXPECT, SAME ANSWER YOU AN UPDATE WHEN WE HAVE IT.

I THINK IT'S IMPORTANT FOR US TO GO THROUGH THIS LITTLE DANCE.

SO IN PUBLIC , UH, AND COMMISSIONERS OTHER ITEMS FOR FUTURE AGENDA ITEMS? YES.

VICE CHAIR AGAIN, I'D LIKE TO, UH, FIRST ON GREEN BUILDING.

UH, THE GREEN BUILDING PROGRAM WILL BE TAKING, UH, OFFICIAL INPUT TO CHANGE ITS STANDARDS DURING THE MONTH OF MAY.

AND THIS WILL BE THE OPTIMAL TIME FOR IF WE HAVE ANY RECOMMENDATIONS ON IMPROVEMENTS IN ENERGY, WATER, OR MATERIALS.

UH, THIS WOULD BE THE TIME, THE BEST TIME, NOT THE ONLY TIME, BUT THE BEST TIME WE COULD DO IT AS A COMMISSION.

I WOULD MAKE A SUGGESTION THAT THIS BE POSTED NOT JUST FOR DISCUSSION, BUT FOR ACTION.

YEP.

UH, SECONDLY, UM, I WOULD LIKE TO TAKE UP GREEN CHOICE.

UH, UM, I WASN'T READY AT THIS MEETING, BUT I WILL BE.

THANK GOODNESS.

AND, UM, THIRD, UM, WE NEED TO START REVIEWING, UH, ALTERNATIVE ENERGY CONTRACTS THAT, UH, WERE NOT TAKEN TO OUR COMMISSION.

WE MORE RECENTLY.

OH, THAT'S RIGHT.

UM, WE WERE GOING TO GET, UH, JUST A, AN OVERVIEW OF THE LANDFILL SOLAR AND THE, UH, BASE POWER.

SO LISA'S GOING TO GIVE THAT, THAT'LL BE PART OF, SHE SAID LOCAL GENERATION INVESTMENTS.

THAT'S, AH, THAT'S WHAT THAT IS.

IT'S ALL GEN PLAN.

OKAY, PERFECT.

UM, I'M GONNA BRING THIS UP, UH, FOR CONSIDER, JUST FOR PEOPLE TO THINK ABOUT.

UH, I DID TALK WITH ONE OF THE AUSTIN ENERGY EXECUTIVES AND HE MADE THE COMMENT THAT, WELL, I CAN TELL YOU SOME OF OUR THINKING, BUT SOME OF THIS IS CONFIDENTIAL, ET CETERA.

UH, AND YOU KNOW, A COUPLE TIMES IN THE PAST, EITHER THE ELECTRIC UTILITY COMMISSION OR THE RESOURCE MANAGEMENT COMMISSION OR BOTH HAVE HELD EXECUTIVE SESSIONS TO DEAL WITH CONFIDENTIAL INFORMATION THAT COULD NOT BE RELEASED TO THE PUBLIC.

THAT'S A DARN GOOD IDEA.

AND MAYBE WE OUGHT TO CONSIDER DOING THAT IF, YOU KNOW, UM, I, I VERY MUCH WANT TO SUPPORT ENERGY STORAGE, BUT IF WE CAN FIND WAYS TO MAKE IT CHEAPER AND WE NEED TO HEAR THEIR REASONING FOR WHY THEY DID THINGS A CERTAIN WAY TO UNDERSTAND THE ECONOMICS, THEN YEAH, WE SHOULD CONSIDER EXECUTIVE SESSION.