* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [00:00:03] MAY 11TH, 2026. FIRST, LET'S DO ROLL CALL. UM, VICE CHAIR BRADEN. HERE. HERE. COMMISSIONER ALVAREZ. UM, LINE MAYBE. COMMISSIONER BELLAMY. COMMISSIONER BENAVIDEZ. COMMISSIONER BLACKBURN. THINK I SEE YOU? YEAH. COMMISSIONER GILLETTE. COMMISSIONER COURTESY HERE. COMMISSIONER REED. YEP. COMMISSIONER WHITE. I SEE HERE ONLINE. OKAY. UM, BEFORE WE BEGIN, LET'S DO A FEW HOUSEKEEPING THINGS. UH, I'D LIKE TO READ INTO THE RECORD THAT UNDER MEMBERS IN THE AGENDA, JOSH RHODES IS NOT LISTED AS THE EUC MEMBER. HE IS STILL RIGHT NOW, EUC MEMBER. AND THANK YOU FOR BRINGING ALL THE, THE GOODIES IN CASE WE RUN LATE. NO SLEEPING BAGS THOUGH, RIGHT? NO, JUST SNACKS. OKAY, JUST SNACKS. THANKS. APPRECIATE THAT. THAT'LL BE CORRECTED IN THE MINUTES. UM, ALSO, I'D JUST LIKE TO, TO MAKE A NOTE, MAKE SOME OPENING REMARKS. I'D LIKE TO ENSURE A PRODUCTIVE AND RESPECTFUL MEETING. SO I'D LIKE TO REMIND PEOPLE OF OUR DECORUM EXPECTATIONS. ALL COMMENTS AND QUESTIONS SHOULD BE DIRECTED THROUGH ME. I'LL, IF YOU HAVE A QUESTION OR COMMENT, PLEASE JUST SIGNAL ME AND YOU'LL BE RECOGNIZED. I ASK THAT ALL COMMISSIONERS, STAFF, MEMBERS OF THE PUBLIC SPEAK RESPECTFULLY AT ALL TIMES. PLEASE AVOID PERSONAL REMARKS, INTERRUPTIONS, OR CONFRONTATIONAL TONES. OUR GOAL IS TO MAINTAIN A PROFESSIONAL ENVIRONMENT WHERE STAFF CAN PRESENT INFORMATION WITHOUT HOSTILITY, AND COMMISSIONERS CAN DELIBERATE, DELIBERATE EFFECTIVELY. AND SO, THANK YOU FOR HELPING US UPHOLD A COURTEOUS AND COLLABORATIVE MEETING. UM, WE'RE GONNA HAVE TO DO THIS IN STEPS. UM, BASICALLY THE WAY I DIVIDED IT UP IS ALMOST SIX STEPS. SO FIRST IS ONE THROUGH 11. SECOND STEP WOULD BE 14 THROUGH 18. THIRD WOULD BE NUMBER 13. FOURTH WOULD BE 19 AND 17. UH, FIFTH WOULD BE I SAY 12, AND THE SIXTH STEP WOULD BE NUMBER 18. SO IF YOU MAY TO REPEAT THAT, I WILL, BUT I THINK IT MAY BE AVAILABLE, UH, FOR ITEM 13 AFTER LISA'S PRESENTATION, UM, I PROPOSE THAT WE BEGIN WITH A FIVE MINUTE ROUND, FIVE MINUTES FOR EACH COMMISSIONER TO TALK AND ASK QUESTIONS. ENSURE THAT EVERYBODY HAS AN OPPORTUNITY TO PARTICIPATE AND ASK QUESTIONS. AND THEN IF WE NEED TO REPEAT THE ROUND, WE WILL. UM, SO [PUBLIC COMMUNICATION: GENERAL ] FOR THE SPEAKERS, I'LL BEGIN BY CALLING THOSE WHO SIGNED UP TO SPEAK ON GENERAL TOPICS. AND IF WE HAVE NO GENERAL TOPICS, THEN WE'LL JUST GO WITH THE OTHER LIST OF SPECIFIC AGENDA ITEMS. AND SINCE WE HAVE A, A REASONABLE LIST HERE, WE CAN KEEP IT AT THREE MINUTES FOR EACH ONE. UM, LET'S START WITH EILEEN. YES, THANK YOU. HI, Y'ALL. UH, MY NAME IS EILEEN MCINNIS. I'M THE FOUNDER OF PARENTS CLIMATE COMMUNITY. UM, SO YESTERDAY WAS MOTHER'S DAY. AND DESPITE ITS SACCHARINE COMMERCIAL REPUTATION, IT TURNS OUT THAT MANY EARLY PROTOTYPES FOR MOTHER'S DAY WERE ROOTED IN ADVOCACY. SO IT'S IN THAT SPIRIT OF MOMS MAKING GOOD TROUBLE THAT I'M HERE TONIGHT INSTEAD OF AT HOME WATCHING STRANGER THINGS WITH MY 11-YEAR-OLD. UM, SO I'M HERE TONIGHT TO ASK THE EUC TO REJECT AUSTIN ENERGY'S REQUEST TO AUTHORIZE PRIVATE NEGOTIATIONS FOR THE PURCHASE OF NATURAL GAS PEAKERS. AND WHILE THERE ARE MANY FINANCIAL AND CIVIC-MINDED ARGUMENTS TO BE MADE AGAINST THIS PROPOSAL, AND MANY SMART, WELL-VERSED AUSTINITES IN THE ROOM TO MAKE THEM, THAT'S NOT WHY I'M HERE. I'M HERE BECAUSE RIGHT NOW WE'RE HEARING FROM AUSTIN ENERGY THAT GAS PEAKERS ARE NON-NEGOTIABLE, A NECESSARY TRADE OFF TO HELP POWER OUR ENERGY FUTURE. BUT AS PARENTS, WE KNOW THAT THE REAL NON-NEGOTIABLE IS THIS PROTECTING OUR KIDS FROM HARM FROM A WAY OF POWERING OUR WORLD THAT WE KNOW IS KILLING PEOPLE, INCLUDING CHILDREN, AND INCLUDING TEXAS CHILDREN. THE NON-NEGOTIABLE SHOULD BE MAKING CHOICES ABOUT AUSTIN'S ENERGY FUTURE THAT DON'T PUT COMMUNITY HEALTH AND OUR KIDS' CLIMATE AT RISK. EVEN IF GAS PEAKERS WERE THE MOST AFFORDABLE OR RELIABLE SOLUTION, WHICH THEY'RE NOT, WE CAN'T PROTECT OUR KIDS AND COMMUNITIES WITH TOOLS LIKE OIL AND GAS THAT HARM THEM. WE CAN'T CLAIM THAT WE CARE ABOUT AFFORDABLE ENERGY BILLS FOR LOWER INCOME AUSTINITES WHILE RAISING THEIR HEALTH BILLS DUE TO WORSENING AIR QUALITY OR THEIR HOME INSURANCE RATES IN THE FACE OF GREATER FLOOD AND WILDLIFE RISKS, WILDFIRE RISKS, RELIABILITY, SUSTAINABILITY, AFFORDABILITY, AND PUBLIC HEALTH. THESE AREN'T ITEMS TO BE WEIGHED AND TRADED OFF. THEY'RE DEEPLY INTERSECTIONAL. WE CAN'T HAVE IT BOTH WAYS. ASKING CITY COUNCIL FOR A BLANK CHECK ON GAS PEAKERS UNDERMINES [00:05:01] AUSTIN'S CLIMATE LEADERSHIP AND ERODES PUBLIC TRUST. OUR KIDS ARE WATCHING AND THEY'RE NOTICING THESE INCONSISTENCIES. THIS SPRING, MY NONPROFIT HAS BEEN WORKING WITH A CREATIVE ARTS AFTER SCHOOL PROGRAM AT DECKER ELEMENTARY. AND THE KIDS IN THIS PROGRAM ARE ASKING CURIOUS, ENGAGED QUESTIONS. WHY IS THERE A LANDFILL IN MY COMMUNITY? WHY IS THERE A GAS PLANT NEAR MY SCHOOL? AUSTIN KIDS DESERVE A PUBLIC UTILITY THAT HOLDS THE LINE ON NEW GAS INFRASTRUCTURE FOR THE SAKE OF THEIR HEALTH AND THEIR RIGHT TO A LIVABLE FUTURE. BUT EVEN MORE SO, WE OWE AUSTIN KIDS THE COURAGE TO LEAD WITH OUR FULL SELVES, WITH OUR HEADS, BUT ALSO WITH OUR HEARTS. THANK YOU. THANK YOU. TREY SALINAS. THANK YOU. GOOD EVENING. MY NAME IS TRACE SALINAS. I'M HERE ON BEHALF OF CCARE, WHICH IS THE COALITION FOR CLEAN, AFFORDABLE, AND RELIABLE ENERGY, WHICH INCLUDES, UM, THE CUSTOMER CLASSES FOR, UH, INDUSTRIAL AND COMMERCIAL, WHICH INCLUDES ADVANCED MANUFACTURING HOSPITALS, EVERYTHING FROM THE BIG USERS TO ALSO SCHOOL DISTRICTS, TO ALSO COFFEE SHOPS. UH, FIRST, UH, WE'RE ASKING YOU TO SUPPORT ITEM SIX, SEVEN, AND NUMBER 12. FIRST ON AFFORDABILITY, NEW DISPATCHABLE POWER IN OUR LOAD ZONE. WE'LL LIMIT THE UTILITIES EXPOSURE TO CONGESTION COSTS WITH A LOOMING WAVE OF DATA CENTERS SURROUNDING AUSTIN, TEXAS. ADDITIONALLY, THIS WILL HELP INSULATE AUSTIN ENERGY FROM INCREASING CUSTOMER BILLS BY HAVING A MORE DISPATCHABLE GENERATION IN OUR LOAD ZONE. SECOND, RELIABILITY. THE PROPOSED PEAKERS AND BATTERIES WOULD COLLECTIVELY WORK TO MITIGATE VOLTAGE SAGS AND ALSO PROVIDE BLACK STAR CAPABILITY IN THE EVENT OF A TOTAL OUTAGE. THIRD, CLEAN ENERGY. IF THE COMMUNITY IS GOING TO GET SERIOUS ABOUT GETTING OFF OF COAL, WE'RE GOING TO HAVE TO GET SERIOUS ABOUT CLEANER FORMS OF DISPATCHABLE POWER IN OUR ZONE. BOTH PEAKERS AND BATTERIES WILL DO THAT. ADDITIONALLY, THESE PEAKERS WILL OPERATE AT A LOW CAPACITY FACTOR AND ONLY BE USED AS A LAST RESORT, MEANING IN CASE OF EMERGENCY BREAK THE GLASS. LASTLY, PRESERVING AUSTIN ENERGY. LOCAL DISPATCHABLE GENERATION IS THE MOST EFFECTIVE RESOURCE AT REDUCING LIQUIDITY RISKS. IN AN EXTREME EVENT, AUSTIN ENERGY MIGHT NOT HAVE ENOUGH GENERATION TO MEET ITS F FINANCIAL OBLIGATIONS, BUT I THINK IT'S IMPORTANT TO REMEMBER THAT IF AUSTIN ENERGY GOES BROKE, THE CITY OF AUSTIN GOES BROKE. PLEASE SUPPORT ITEMS NUMBER SIX, SEVEN, AND 12. THANK YOU. BOB HENDRICKS. THANK YOU. I'M BOB HENDRICKS. I'M CHAIR OF THE, UH, AUSTIN SIERRA CLUB AND VICE CHAIR OF THE STATE SIERRA CLUB AND STATE COORDINATOR OF CITIZENS CLIMATE LOBBY. I UNDERSTAND THAT ELECTRICITY DEMAND IS RAPIDLY INCREASING. I UNDERSTAND THAT AUSTIN WILL NEED MORE GENERATION AND CAPACITY. I UNDERSTAND THAT OUR ENERGY SYSTEM MUST BE AFFORDABLE AND RELIABLE, AND I UNDERSTAND THAT AUSTIN ENERGY BELIEVES NEW GAS SPEAKER PLANTS ARE THE ANSWER, EVEN WHILE MUCH OF THE WORLD IS RAPIDLY MOVING TOWARDS SOLAR BATTERIES EFFICIENCY AND DEMAND RESPONSE, BECAUSE THOSE TECHNOLOGIES ARE BECOMING CHEAPER, FASTER TO BUILD AND CLEANER EVERY YEAR. AUSTIN ENERGY TELLS US THEY HAVE MODELS PROVING THEIR CASE, BUT THE PUBLIC CANNOT SEE THOSE MODELS. THIS COMMISSION, HIGHLY QUALIFIED CIVILIANS APPOINTED TO REPRESENT THE PEOPLE OF AUSTIN BY THE CITY COUNCIL, CANNOT SEE THOSE MODELS. WHY ARE THE ASSUMPTIONS REASONABLE? DO THE MODELS FAIRLY COMPARE CLEAN ALTERNATIVES? DO THEY FULLY ACCOUNT FOR FUEL, PRICE, VOLATILITY, CARBON COSTS, TRANSMISSION CONSTRAINTS, BATTERY IMPROVEMENTS, AND THE RAPIDLY FALLING COST OF SOLAR AND STORAGE? WE DO NOT KNOW BECAUSE THE PUBLIC IS BEING ASKED TO TRUST CONCLUSIONS WITHOUT SEEING THE EVIDENCE. AND THIS IS NOT A MINOR DECISION. THESE ARE POTENTIALLY MULTI-HUNDRED MILLION DOLLAR FOSSIL FUEL INVESTMENTS THAT COULD OPERATE ONLY A FEW HOURS A DAY. ONLY A FEW WORKS A YEAR, WEEKS A YEAR, WHILE LOCKING AUSTIN INTO DECADES MORE CARBON POLLUTION AND FINANCIAL RISK. MY GENERATION HAS ALWAY ALREADY WAITED TOO LONG WHILE THE FOSSIL FUEL INDUSTRY [00:10:01] SPREAD DISINFORMATION AND DELAYED ACTION. NOW, OUR CHILDREN AND GRANDCHILDREN FACE A WORSENING CLIMATE CRISIS OF HEAT, DROUGHT, FLOODS, FIRES, ECOSYSTEM COLLAPSE, AND ECONOMIC DISRUPTION. BEFORE AUSTIN PILES ONTO THAT DANGER. THE PUBLIC DESERVES TRANSPARENCY. WE DESERVE TO SEE THE DATA. WE DESERVE TO SEE THE ASSUMPTIONS WE DESERVE PROOF THAT ALTERNATIVES WERE SERIOUSLY STUDIED, NOT DISMISSED BEFORE THE ANALYSIS EVEN BEGAN. DO THE WORK, DO THE STUDIES, RELEASE THE ASSUMPTIONS, SHOW THE PUBLIC EVIDENCE, AND DO NOT ASK THE PEOPLE OF AUSTIN FOR A BLANK CHECK TO BUY UNSPECIFIED FOSSIL FUEL INFRASTRUCTURE THAT COULD DAMAGE BOTH OUR CLIMATE FUTURE AND OUR ELECTRIC BILLS FOR DECADES TO COME. THANK YOU. MATT WELDON. HELLO, MY NAME IS, UH, MATTHEW WELDON. I'VE DONE A, MY EDUCATIONAL BACKGROUND'S IN CHEMICAL ENGINEERING. I'VE DONE A CAREER CYCLE IN SEMICONDUCTOR MANUFACTURING. UM, I ACTUALLY SERVED ON THE EUC FROM, UH, 2018 TO 2022. AND, UH, I WAS A BIG, UH, AND PAINFUL TO ALL PARTICIPANTS IN CITY COUNCIL AND AUSTIN ENERGY PROPONENT, UH, OF REACH. AND SO A LOT OF MY COMMENTS HERE ARE JUST, UH, TO SAY THAT THIS IS ANOTHER OPPORTUNITY FOR THE CONCEPTS OF REACH TO BE APPLIED, UH, TO MAKE THIS ASSESSMENT, UH, TO AID IN THE ASSESSMENT, UH, OF THE ROLE THAT THE NEW PEAKERS CAN PLAY IN THE COMMUNITY. UH, I WILL PROBABLY BE ONE OF THE MOST SYMPATHETIC PEOPLE WHO WILL CLASSIFY THEMSELVES AS A VERY CONCERNED ENVIRONMENTALIST. UH, AND I HAVE A TALE OF GLOBAL TRAVEL I WANT TO SHARE BEFORE I'M DONE AT THE MICROPHONE. UH, BECAUSE I, I, UH, UH, I AM SYMPATHETIC ALSO TO AUSTIN ENERGY'S, UH, UH, NEEDS AND RI AND, AND ASSESSMENT OF RISKS BECAUSE, UH, TEXAS HAS CERTAINLY FIRED, UH, SENIOR PEOPLE, UH, WHEN THE LIGHT'S GONE OUT. WE'VE PROVEN AS A COMMUNITY THAT WE'RE NOT VERY TOLERANT TO THAT PARTICULAR FAILURE. SO I'VE READ BOTH, UH, DOCUMENTS THAT ARE GONNA BE PRE PRESENTED THIS EVENING. THAT'S THE SUM TOTAL OF MY RECENT, UH, UH, PREPARATION, UH, AL'S PRESENTATION AND, UH, THE AUSTIN ENERGY PRESENTATIONS. I LIKE BOTH DOCUMENTS. I THOUGHT THEY BOTH PRESENTED, UH, GOOD INFORMATION TO BE SHARED AND COMPARED NOW, WHAT COULD REACH BE DOING FOR US? BRAND NEW PEAKERS ARE GONNA BE MORE EFFICIENT, MORE CAPABLE UNITS IF, UH, AS DESCRIBED, THEY WILL RUN FIRST BECAUSE THEY'RE CLEANER, BETTER UNITS IN THE, UH, THE, THE SCENARIO THAT'S BEING USED BUT NOT YET SHARED. BUT THE SCENARIO THAT'S GONNA BE USED TO ASSESS THE MERIT OF THESE UNITS, WE SHOULD BE ABLE TO ALSO ASSESS THE VALUE OF THAT REDUCTION IN EMISSIONS AND ASSIGN A VALUE TO IT. 'CAUSE THIS IS WHEN THE CONCEPT OF REACH EMISSIONS HAVE VALUE PLAYS TOWARDS THIS PARTICULAR INVESTMENT. IF YOU CAN'T MAKE A CASE FOR IT BASED ON THE EMISSIONS AND THE RISK MITIGATION IN DOLLARS AND CENTS IN A FAIR COMPARISON, THEN WE SHOULD SEND THOSE DOLLARS ELSEWHERE. AND I JUST WANNA REITERATE, UH, I HAVE AN, YOU KNOW, I WANT AUSTIN TO BE THE LEADING CITY IN THE COUNTRY FOR AMBITION AND CLIMATE CHANGE. I THINK IT'LL BE GOOD FOR THE COMMUNITY. I THINK IT'S FOR GOOD FOR GROWTH. AND IF AUSTIN CAN'T DO IT, WHO CAN? I JUST HAD THE PLEASURE OF SPENDING THREE WEEKS IN, UH, NEW ZEALAND AND AUSTRALIA. FANTASTIC. NEVER BEEN THERE BEFORE. RECOMMEND IT FOR ANYBODY WHO HAS OPPORTUNITY. I WAS VERY FORTUNATE. EVERY TIME I'VE DONE INTERNATIONAL TRAVEL FOR THE LAST TWO DECADES, I COME BACK WITH A CLIMATE STORY. AND THIS IS NO DIFFERENT. APRIL 20TH RECORD RAINS, WE EXPERIENCED THEM PERSONALLY. THOSE RECORD RAINS WENT ON TO WELLINGTON AND THEY HAD FLOODING OF THEIR CENTRAL BUSINESS DISTRICT. AND, UH, IT AFFECTED 1800 HOMES. THEY HAD CLOSED STREETS, THEY HAD LINES, LANDSLIDES, 40 HOUSES. UNINHABITABLE. THANK YOU. YOUR TIME HAS CONCLUDED. OKAY. THANK YOU VERY MUCH. BUT LET'S BE AMBITIOUS. THANK YOU. THANKS, MATT. DAVID, VE GOOD EVENING, DAVID LE GOOD TO SEE Y'ALL AGAIN. DISTRICT SEVEN. BY SHOW OF HANDS, HOW MANY OF US HAVE CHILDREN? AWESOME. COOL. THANK YOU. AND HOW MANY OF YOU WANT YOUR CHILDREN TO [00:15:01] LIVE HEALTHIER, HAPPIER LIVES? YES, MOST OF US. VERY GOOD. I WROTE THIS POEM A FEW YEARS AGO AND I THOUGHT I'D SHARE IT WITH YOU. IT'S CALLED SOMETHING IN TOW. AND IT GOES LIKE THIS. THE NEXT GENERATION IS ON ITS WAY. HAVE YOU THOUGHT OF THEM TODAY? THEY WANT TO BE HAPPY, HEALTHY, AND STRONG WITH LIVES, WITH DREAMS OF LIVES LIVED LONG. ARE WE DOING THEM JUSTICE OR ARE WE THINKING OF JUST US? ARE WE MAKING A WAY FOR THEM OR ARE WE MAKING MAYHEM? OUR CHILDREN ARE SAYING, WHOA, REMEMBER, WE ALL HAVE SOMETHING IN TOW. I WOULD LIKE TO ENCOURAGE US TO THINK HARD ABOUT INVESTING MORE IN POLLUTING HARMFUL SOLUTIONS AS A CREATIVE AND ADVANCED CITY. I'D LIKE TO UNDERSTAND AUSTIN ENERGY INITIATIVES AROUND SOFTWARE TO ENHANCE GRID CAPACITY. IF WE CAN ENHANCE GRID CAPACITY WITH SOFTWARE AS IS REQUIRED BY FERC RULING 1920 AND TEXAS STATE SENATE BILL 1699 IS WORTH EVALUATING AND POTENTIALLY IMPLEMENTING. THANK YOU. THANK YOU DAVID. JEN KRIEGER. GOOD EVENING EVERYONE. UH, MY NAME IS JEN KRIEGER. I AM A DISTRICT FOUR RESIDENCE. I'M ALSO A FORMER AUSTIN ENERGY EMPLOYEE, AND I WAS A KEY TEAM MEMBER THAT DEVELOPED AUSTIN ENERGY'S ORIGINAL CO2 CAP AND REDUCTION PLAN THAT GOT INCORPORATED INTO THE VERY FIRST GENERATION RESOURCE AND CLIMATE PROTECTION PLAN TO 2020, WHICH WAS ADOPTED IN 2010. I'VE WORKED ON NEARLY EVERY CLIMATE AND AIR QUALITY PLAN THE CITY HAS ADOPTED SINCE 2007, EITHER AS A CITY EMPLOYEE, A CONSULTANT, OR AN ENGAGED CITIZEN. HAVING GIVEN MY TIME AND ENERGY TO ALL OF THESE COMMUNITY VETTED COUNCIL APPROVED CLIMATE AND AIR QUALITY COMMITMENTS, I AM DEMORALIZED TO SAY THE LEAST, THAT AUSTIN ENERGY IS AGAIN, TRYING TO FORCE THROUGH NEW INVESTMENTS IN FOSSIL FUELS WITH ITS PROPOSAL FOR NEW GAS PEAKERS AND AGENDA ITEM 12 ELECTRIC UTILITY COMMISSIONERS. I'M ASKING YOU TO NOT APPROVE ITEM 12. AND I'D ALSO LIKE TO REMIND YOU THAT YOU HAVE MORE AGENCY AND INFLUENCE THAN US REGULAR OLD CITIZENS THAT COME UP HERE AND TALK WITH YOU. I'M ASKING YOU TO DEMONSTRATE THAT AGENCY AND INFLUENCE BY ENCOURAGING THE COUNCIL MEMBER WHO APPOINTED YOU TO THIS COMMISSION TO IMPOSE MEDIATING CONDITIONS ON AUSTIN ENERGY'S DOGGED PERSISTENCE AND BRINGING MORE POLLUTING FOSSIL FUELS TO OUR COMMUNITY THAT WE'VE REPEATEDLY SAID WE DON'T WANT THEM. THESE FOUR MEDIATING CONDITIONS I'M ASKING YOU TO CONSIDER PRESENTING TO YOUR COUNCIL MEMBER ARE ONE, REQUIRE AUSTIN ENERGY TO PUBLICLY SHARE THE ENTITY IT PLANS TO PURCHASE FROM THE TOTAL GENERATING CAPACITY, THE TOTAL CONTRACT COST, AND THE LOCATION FOR ANY NEW GAS CONTRACT, JUST LIKE IT DOES FOR OTHER GENERATION CONTRACTS AND INCLUDING THE WIND AND STORAGE CONTRACTS ON TONIGHT'S AGENDA. THEY'RE ALSO REQUESTING YOUR APPROVAL ON TWO. I'D LIKE YOU TO ASK YOUR COUNCIL MEMBER TO DIRECT AUSTIN ENERGY TO PERMANENTLY RETIRE A MEGAWATT FOR MEGAWATT EQUIVALENT AMOUNT OF GAS GENERATION FROM ITS EXISTING OWNED GAS GENERATION. UH, UH, SO ONE TO ONE FOR WHAT IT PLANS TO BUY NEW, IT HAS TO RETIRE THAT SAME AMOUNT FROM EITHER DECKER OR SANDHILL. WHILE THIS WOULD DEEPER, MORE DEEPLY ENTRENCH US IN FOSSIL FUELS, WHICH I AM AGAINST, IT WOULD ALSO HELP US MEET OUR NEARLY 20 YEAR COMMITMENT. GOING BACK TO THE 2007 AUSTIN CLIMATE PROTECTION PLAN, IN WHICH CITY COUNCIL DIRECTED AUSTIN ENERGY TO CONTINUALLY REDUCE OUR CARBON EMISSIONS AND ACHIEVE CARBON NEUTRALITY FROM ANY NEW GENERATION THREE, I'M ASKING YOU TO ASK YOUR COUNCIL MEMBER TO REQUIRE THAT AUSTIN ENERGY, UM, UPDATE ITS EMISSIONS GUARDRAILS FROM THE CURRENT 2035 RESOURCE PLAN TO USE A ROLLING THREE YEAR AVERAGE BASELINE FOR DETERMINING THE MAXIMUM CO2 EMISSIONS. IT CAN EMIT ACROSS ITS ENTIRE GENERATION PORTFOLIO. AND FOUR, I'M ASKING YOU TO SPEAK WITH YOUR COUNCIL MEMBER TO REQUIRE THAT AUSTIN ENERGY MORE EQUITABLY DISTRIBUTE ITS POLLUTING RESOURCES LIKE GAS ACROSS ITS SERVICE AREA. THANK YOU. THANK YOU. OKAY, LET'S GO TO APPROVAL OF [APPROVAL OF MINUTES ] MINUTES. ARE THERE ANY CORRECTIONS [00:20:01] TO OUR LAST MEETING'S MINUTES? UH, I DID SEE IN SEVERAL PLACES WHERE IT SAYS, UM, AUSTIN TRANSMISSION LINE. THERE'S TWO S'S IN AUSTIN. THERE'S, THERE'S A, UH, TYPO. THERE'S A TYPO WHERE THERE'S TWO S'S IN AUSTIN. IT IS TO DO WITH A, A TRANSMISSION LINE. SORRY. AND I EVEN REMEMBER, OH, IT'S, UM, YOU KNOW, OUT WHERE THE CARS ARE. OH, A ROUNDABOUT. NO, NO, NO. UM, SORRY. UM, IS, ISN'T THAT WHAT OUR NEW LOGO LOOKS LIKE? CIRCUIT? YEAH. CIRCUIT. IS THIS THE RAIDS? THE CIRCUIT OF AMERICA? YEAH, THE CIRCUIT OF AMERICA. SORRY. IT'S BEEN A LONG DAY VOTE. APPROVAL WITH, UH, CORRECTING A TYPO WITH TWO S'S IN THE WORD AUSTIN IN SEVERAL LOCATIONS. DO WE HAVE A MOTION WITH CYRUS? DO WE HAVE A SECOND? SECOND WITH VICE CHAIR BRADEN? ALL IN FAVOR? AYE. AYE. OKAY. OKAY, NUMBER ONE. SO LET'S [Items 2 - 5 & 8 - 11] GO THROUGH 2, 3, 4, 5, 6, 7, 8, 9, 10, AND 11. ANYONE WANT TO PULL ANY OF THOSE? I WOULD LIKE TO ASK SOME QUESTIONS ABOUT THE STORAGE. UM, CONTRACT, BATTERY STORAGE ONE. OKAY, WHICH ONE WAS THAT? SIX. SIX? OKAY. SIX. YEAH. NO. YEAH. BATTERY STORAGE. A HUNDRED MEGAWATTS. OKAY. OTHERS? NO BRIEF QUESTIONS ON SIX AND SEVEN. OKAY. ANY OTHERS ONLINE? OKAY, SO WHAT ABOUT 2, 3, 4, 5, 8, 9, 10, AND 11? DO WE HAVE A MOTION FOR THOSE? AND A SECOND? MOVE APPROVE. SECOND. OKAY. CHRIS GILLETTE. MOTION. CHRIS KIRKSEY. SECOND. ALL IN FAVOR? 4, 2, 3, 4, 5, 8, 9, 10, AND 11. CYRUS, ARE YOU VOTING FOR? YEAH, YEAH, SORRY. OKAY, SO IT LOOKS LIKE WE HAVE OH, OKAY. SO WE HAVE YOU UNANIMOUS VOTE ON THAT. OKAY. SO LET'S TALK [6. Recommend approval authorizing the negotiation and execution of a battery storage agreement with OCI Energy, LLC, a wholly owned subsidiary of OCI Enterprises Inc., for up to 100 megawatts of electrical power capacity from a utility-scale battery facility, in an estimated amount of up to $8,250,000 per year, for a term up to 20 years, for a total estimated amount of up to $165,000,000. Funding: Funding is contingent upon budgetary approval in future budgets.] ABOUT SIX. WHO CAN DESCRIBE SIX GOOD EVENING COMMISSIONERS? I'M PAT SWEENEY, UH, INTERIM VICE PRESIDENT FOR ENERGY AND MARKET OPERATIONS. EXCUSE ME. HEY PAT. SORRY. UM, SO JUST TO BE CLEAR, THIS PROPOSED CONTRACT CAME OUT OF THE, ALL OF THE ABOVE. IS THIS ONE OF THE ITEMS FROM THE ALL OF THE ABOVE. RFP WE'RE TALKING ABOUT THE BATTERY. THE BATTERY, YES. YES IT IS. OKAY. YES. SO YOU, YOU GUYS GOT RESPONSES FROM THE, ALL OF THE ABOVE, RFP, INCLUDING SOME STORAGE PROPOSALS, AND, YOU KNOW, I GUESS I THINK I READ IN THIS OTHER PRESENTATION, YOU GOT SEVEN STORAGE PROPOSALS. WHY WAS THIS THE, WHY WAS THIS THE ONE YOU PICKED OR WHAT WAS SPECIAL ABOUT THIS THAT SAID, THIS IS THE ONE WE WANT? ECONOMICS AND LOCATION, ECONOMICS AND LOCATION. AND, UM, CAN YOU EXPLAIN TO US WHAT A TOLLING AGREEMENT IS AS OPPOSED TO A PPA? WHAT'S THE DIFFERENCE? UM, YOU STRUCK A LITTLE BIT OF A, A SLIGHT NERVE WITH ME BECAUSE I, I'M, HISTORICALLY I USE TOLLING DIFFERENTLY THAN THE WAY THE BATTERY, UH, REFERENCES ARE HISTORICALLY. I, I WOULD TELL YOU ABOUT A TOLLING AGREEMENT IS YOU TAKE FUEL AND YOU PAY A FEE TO CONVERT IT FROM THE FUEL FORM TO LIKE ELECTRICITY IN A POWER IN A GAS PLANT. THAT'S A OLD SCHOOL TRADITIONAL TOLLING AGREEMENT. BUT FOR WHATEVER REASON, TOLLING HAS BEEN ADOPTED. UH, AND YOU'LL SEE THIS A LOT IN REFERENCE TO BATTERY, UH, FACILITIES. THE TOLLING ASPECT, I THINK IS JUST, IS JUST A SIMPLE REFERENCE TO THE, THE FUEL IN THE CASE OF THE BATTERY IS ELECTRICITY. YOU, YOU'RE BASICALLY RENTING THE FACILITY IN THIS CASE IN EFFECT, RIGHT? AND YOU SEND BACK OUT ELECTRICITY AT THE TIME YOU DESIGNATE. SO IN THAT CONTEXT, IT SORT OF FITS THE GENERAL SCHEME OF POLLING IN THE FOLDER. BUT WE WON'T OWN IT, RIGHT? BUT WE WILL BE ABLE TO USE IT THE WAY IT'S, IT WORKS BEST FOR OUR SYSTEM, RIGHT? SO IF, IF WE DECIDE I'M GONNA BID THIS INTO FAST FREQUENCY RESPONSE, RIGHT? WE CAN DO THAT, RIGHT? WE'LL GENERALLY SEEK FOR THE HIGHEST, YOU KNOW, VALUE TO US, WHATEVER THAT MIGHT BE, WHETHER IT'S IN AN ERCOT, UH, UH, PACKET, UH, ERCOT, UM, PROGRAM, OR, UH, IF WE'RE ACTUALLY, FOR [00:25:01] EXAMPLE, TRYING TO TIME IT TO REDUCE OUR, OUR SYSTEM LOAD OR, OR THE, THE NET LOAD ANYWAY AND HITTING FOUR CP, SO, OR 12 CP IF THEY CHANGE IT, I'M SORRY, OR 12 CP IF THEY CHANGE IT. YEAH, EXACTLY. AND SO, UH, THE, THE CAVEAT WITH ALL OF THE BATTERY SYSTEMS IS IT'S NOT AN UNLIMITED USAGE. AND SO, UH, WE GET SO MANY SHOTS, IF YOU WILL, UH, PER YEAR OVER THE COURSE OF THE, THE CONTRACT. OKAY. AND JUST FINAL QUESTION, AND THEN ANYONE ELSE WHO WANTS THAT QUESTION? SO AGAIN, THIS WAS ONE OF SEVEN AND THE OTHER SIX IN YOUR GUYS' VIEW WEREN'T WORTH, THEY SIMPLY DIDN'T, THEY WEREN'T GOOD ENOUGH ECONOMICALLY OR LOCATION WISE. AND THIS ONE HITS THE MARK ON BOTH. OKAY, THANKS SO MUCH. YEAH. UH, ONE IS LOCATION. UH, WHEN YOU WERE, YOUR TEAM WAS SHOWING ALL THE POSSIBLE LOCATIONS THAT THINGS COULD GO, UH, IT WAS, IT WAS IDENTIFIED THAT HAVING POWER IN WEST AUSTIN COULD BE A REAL VALUE. IS, IS THIS BY ANY CHANCE OUT THERE OR WHERE IS IT LOCATED? SO BECAUSE OF WHERE WE ARE CONTRACTUALLY, I CAN'T GIVE YOU THE EXACT LOCATION, BUT I CAN TELL YOU IT'S NOT OUT WEST. IT'S NOT SOLVING THAT PROBLEM, NO. OKAY. AND CAN YOU TELL ME HOW MANY TIMES YOU, HOW MANY SHOTS A YEAR YOU GET OUTTA THIS? I'M AFRAID I CAN'T TELL YOU THAT SPECIFIC DATA POINT EITHER. IT'S CONSISTENT WITH THE AGREEMENTS THAT WE'VE DONE THUS FAR IN THE BATTERY SPACE. I'LL SAY THAT. BUT THE TOLLING AGREEMENTS LIKE RENT, I MEAN, THEY DON'T CARE HOW MUCH POWER YOU PUT IN AND OUT OF IT WITHIN THE NUMBER OF SHOTS THAT YOU GET. UH, WELL, THERE ARE TECHNICAL, THERE'S, THERE'S A LIMITATION BASED ON THE TECHNICAL, UM, UH, THE SCOPE OF THE, THE FACILITY, THE WAY IT'S SET UP, RIGHT? SO WE'RE RESTRICTED TO PUTTING IN, UH, ENERGY AT, AT WITHIN A CERTAIN LIMIT, AT A CERTAIN PACE. SAME THING WHEN IT COMES OUT. WE CAN ONLY DISCHARGE SO QUICKLY AND SO LONG. UH, AND THEN THAT CYCLE, THOSE CYCLES ARE LIMITED ON AN ANNUAL BASIS. RIGHT. BUT THEY'RE CHARGING FOR THAT. YOU'RE, YOU'RE TOTALLY, AUSTIN ENERGY IS TOTALLY RESPONSIBLE FOR THE COST OF THE ENERGY COMING IN AND GETS THE TOTAL VALUE OF THE ENERGY. WE, WE PAY TO CHARGE IT AND WE RECEIVE THE BENEFIT OF THE VALUE WHEN IT COMES OUT. MM-HMM . OKAY. AND IT'S, IT'S TO BE UP AND RUNNING BY 2030, THAT SEEMS KINDA LONG, BUT IS IS, THAT'S CONSISTENT FRANKLY WITH, UM, WHAT WE SAW IN, IN MOST OF THE OTHER RESPONSES, PLUS OR MINUS A YEAR. SO THAT'S, THAT'S ITS BEST AVAILABILITY. OKAY. THANK YOU. YOU BET. I HAVE A QUESTION, SO SURE. CAN THIS PROVIDE VAR AND VOLTAGE SUPPORT ALSO, UH, VOLTAGE SUPPORT? UM, WELL, I GUESS IN A TECHNICAL SENSE IT CAN AND IT WILL IN THE, WHEN IT'S IN THAT ACTIVE PHASE, BUT, UH, IT'S NOT, IT'S NOT SET UP WITH THAT INTENT. THE, THE ECONOMICS ARE NOT BASED ON THAT. AND FRANKLY, THERE'S SOME ISSUES WITH HOW ERCOT DIVIDES UP, UH, THE SPACE BETWEEN COM, UM, WHOLESALE OPERATIONS. SO IN OTHER WORDS, REVENUE MAKING, CHARGING AND DISCHARGING VERSUS SYSTEM STABILITY OR SYSTEM SUPPORT FUNCTIONS LIKE VOLTAGE SUPPORT. SO IT CAN, AND IT WILL TO AN EXTENT, BUT IT'S NOT A, IT'S NOT, THAT'S NOT THE DRIVER OF THE AGREEMENT. SO THIS IS GONNA BE SOMETHING LIKE EITHER ANCILLARY SERVICES OR ARBITRAGE ENERGY ARBITRAGE. RIGHT. OKAY. ALRIGHT. ANY OTHER QUESTIONS? JOSH, DO YOU HAVE, UH, JUST, JUST TO BE, THIS IS DIFFERENT THAN, THIS IS DIFFERENT THAN THE, THE JUPITER BATTERY. THAT'S A HUNDRED MEGAWATTS THAT WAS APPROVED A WHILE BACK, RIGHT? YES. IT'S A, IT'S A, IT'S LIKE THAT, BUT A, A NEW, A NEWER AND DIFFERENT, UH, UH, COMPANY. OKAY. THANKS. QUESTIONS ONLINE? NO OTHER QUESTIONS? DO WE HAVE A MOTION AND A SECOND? Y YEAH, I'LL MAKE THE MOTION. UH, AND I MEAN, JUST THIS, THIS IS A WELL KNOWN COMPANY. THEY, THEY'RE OPERATING A LOT ALREADY IN NARCO, SO I THINK, I FEEL PRETTY COMFORTABLE. WE HAVE A TRACK RECORD WITH THEM, RIGHT? WE, WE KNOW ABOUT THEM. THEY'RE DOING A LOT WITH CPS ENERGY AND, AND IN THE MARKET, SO, OKAY. FEEL PRETTY, PRETTY CONFIDENT THAT LEGITIMATE OR SECOND. OKAY. A SECOND. ALL IN FAVOR? UNANIMOUS. OKAY. SEVEN'S APPROVED. UH, SIX IS APPROVED. NUMBER SEVEN. IS THIS [7. Recommend approval authorizing the negotiation and execution of up to two power purchase agreements with Invenergy Renewables LLC, a subsidiary of Invenergy Renewables Holdings LLC, for a total of approximately 299 megawatts of electricity from two utility-scale wind facilities, in an estimated amount of $34,000,000 per year, for a term of 10 years, for a total estimated amount up to $340,000,000. Funding: $34,000,000 is available in the Operating Budget of Austin Energy. Funding for the remaining contract term is contingent upon available funding in future budgets. ] PAT YOU ALSO, OR IT PROBABLY IS , UH, RENEWABLES IN ENERGY. RENEWABLES. THE WIND AGREEMENTS, IS THAT RIGHT? YEP. NUMBER 7, 299 MEGAWATTS. YES. YEAH, SO, SO GLAD TO SEE THIS COMING ONLINE, THAT, THAT'S REALLY, REALLY GREAT. AND, UH, IT TALKS ABOUT MID 2026. SO IS, IS THIS SOMETHING THAT'S ALREADY BEEN BUILT AND THEY'RE JUST WAITING? IT IS. OR OR IS IT A REPURPOSE, A RENEGOTIATION OF AN THESE ARE EXIST, THESE ARE EXISTING FACILITIES. UH, THEY'LL COME ONLINE, THEY HAVE SOME COMMITMENTS AND THEY'LL, THEY'LL COME OVER TO US [00:30:01] AS SOON AS THOSE COMMITMENTS ARE COMPLETED. OKAY. WITH THE EARLIEST BEING TOWARDS THE MIDDLE OF THIS YEAR. SO THEIR PERFORMANCE AND THEIR AVAILABILITY OF WIRES AND EVERYTHING IS PRETTY WELL KNOWN TO YOU THEN? YES. MM-HMM . OH GREAT. THANK YOU. SO BASICALLY SOMEBODY ELSE'S PPA EXPIRED AFTER SAY 10 YEARS AND NOW YOU CAN PICK UP THE FACILITY, RIGHT? OKAY. THIS IS NOT A HARD ONE, IS IT? NO. DO WE HAVE A MOTION? A SECOND. I MOVE THE APPROVAL. AL MOTION SECOND. JOSH SECOND. ALL IN FAVOR? CYRUS. OKAY, I'M LOOKING UP ALL THE ENERGY. . OKAY. SEVEN. OKAY. I APOLOGIZE. COULD YOU REPEAT THE FIRST AND SECOND, UM, WHO WAS THE FIRST AL, I THINK AND THEN JOSH WAS THE SECOND. THANK YOU. THANK YOU. OKAY, SO WE'VE GOT THAT. LET'S GO [Items 14 - 16] TO THE SECOND STEP 14 THROUGH 18. SO 14 IS A STAFF BRIEFING BY JOHN DAVIS ON, UH, FI 27 FORECAST. GOOD EVENING. I'M JOHN DAVIS, ACTING SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER ROSS ENERGY HERE TO PRESENT THE FIVE YEAR FINANCIAL FORECAST STARTING IN 27. AND JUST A REMINDER, IF YOU COULD JUST HOLD QUESTIONS UNTIL THE VERY END, 'CAUSE WE'VE GOTTA LINK THE AGENDA TONIGHT. SO JUST ASK THAT YOU BEAR WITH ME THROUGH THIS NEXT SLIDE, PLEASE. AS A REMINDER, IN THIS PRESENTATION, WE PRESENT OUR EXPECTATION OF FUTURE RESULTS, BUT THERE ARE MANY VARIABLES THAT WILL AFFECT US AND INCLUDING WHETHER AND MARKETS. SO PLEASE REALIZE THAT THE ACTUAL RESULT RESULTS WILL VARY FROM WHAT WE'RE PRESENTING HERE TONIGHT. NEXT SLIDE PLEASE. I'M GONNA START OFF WITH GIVING SOME PERSPECTIVE ON WHERE WE ARE IN THE FORECAST BUDGET PROCESS, ESPECIALLY THOSE THAT ARE NEW TO THIS PROCESS THIS YEAR. UM, AND THEN WE'RE GONNA TALK ABOUT SOME OF THE CHALLENGES THAT WE'VE BEEN FACING AND THAT WE FORECAST TO EXPECT TO CONTINUE FACING INTO THE FUTURE. WE'LL GO OVER SOME DETAILS OF THE FINANCIAL FORECAST AND THEN FINALLY WE'LL TALK ABOUT THE KEY PERFORMANCE INDICATORS THAT WE EXPECT RESULT. IF THIS WERE TO COME TRUE, NEXT SLIDE PLEASE. OKAY. UM, HERE'S JUST A BRIEF SUMMARY OF THE CALENDAR FOR THIS YEAR'S, UH, FORECAST BUDGET PROCESS. THE FORECAST, WHICH WAS DEVELOPED BACK IN JANUARY, IS USED TO INFORM THE BUDGET PROCESS, WHICH COMES LATER. SO WE SUBMIT THE FORECAST IN FEBRUARY. THE CITY MANAGER PRESENTED IT IN APRIL. AND HERE WE ARE TODAY AT THE GOLD STAR INDICATING TONIGHT'S EUC MEETING. THE NEXT BIG DATE THAT WE HAVE AFTER THIS IS THAT WE'RE SUBMITTING THE BUDGET TO THE CITY MANAGER A LITTLE LESS THAN A MONTH FROM NOW. CITY MANAGER'S GONNA PRESENT IT TO THE AUSTIN CITY COUNCIL ON JULY THE 16TH. AND THEN WE BEGIN THE PROCESS OF THE WORKING SESSIONS, UH, WITH THE CITY COUNCIL. AND THEN FINALLY WE END WITH A THREE DAY READOUT SESSION THAT, UH, ENDS ON AUGUST THE 14TH. NEXT SLIDE, PLEASE. AS I MENTIONED, CHALLENGES DO PERSIST, UH, FOR AUSTIN ENERGY IN TERMS OF THE INFLATION AND SUPPLY CHAIN. UH, SHORTAGES AND RATES ARE STILL NOT AT THE POINT TO WHERE WE'RE ABLE TO SEE THAT REVENUES ARE OFFSETTING EXPENSES. SO WE'RE SHOWING PROGRESS DUE TO THE RECENT BASE RATE INCREASES, BUT WE'RE NOT QUITE THERE YET. THE FORECAST ALSO SHOWS AN INCREASE IN THE LEVEL OF CIP EXPENDITURES REQUIRED TO CONTINUE PROVIDING SERVICE. AND TO SUMMARIZE THE STATE OF THE UTILITY AT THIS POINT, I WOULD SAY THAT OUR PLAN THAT WE PUT INTO PLACE FOR THE GRADUAL BASE RATE INCREASES HAS US ON THE RIGHT TRAJECTORY AND WE'RE MAKING GOOD PROGRESS, BUT WE ALSO SEE NO DECREASE IN THE ESCALATION OF EXPENSES AS WE CONTINUE TO PROVIDE UTILITY THE NECESSARY SERVICES. NEXT SLIDE PLEASE. THIS IS JUST AN ILLUSTRATION OF VARIOUS COMPONENTS OF THE ELECTRIC SYSTEM THAT WE USE IN OUR CONSTRUCTION. AND AS YOU CAN SEE THAT WE'RE EXPECTING 194% INCREASE IN THE PAD AND PULL MOUNTED TRANSFORMERS. THIS IS THE, UM, PURPLE LINE THAT YOU SEE THAT ENDS AT 194%. WE'RE SEEING ABOUT 164% INCREASE IN THE COST OF A CONDUCTOR WIRE. AND THEN POWER TRANSFORMERS HAVE INCREASED AT 111%. BASE RATES HAVE ALSO INCREASED OVER THIS PERIOD, AND WE'RE ONLY SHOWING THE PERIOD FROM 21 TO 25. UM, BUT BASE RATES HAVE ALSO INCREASED OVER THAT PERIOD OF TIME, A TOTAL OF 10% AND THE INFLATION RATE CUMULATIVELY SPEAKING FROM 21 TO 25, IS UP 21%. SO JUST TO GIVE YOU SOME PERSPECTIVE, THIS IS OBVIOUSLY ALL THE COMPONENTS OF OUR ELECTRIC SYSTEM. THESE ARE THE, SOME OF THE KEY ONES THAT WE'RE SEEING SOME OF THE SIGNIFICANT INCREASES IN. NEXT SLIDE PLEASE. [00:35:02] NOW WE'RE GONNA START GETTING INTO MORE OF THE DETAILS OF THE FINANCIAL FORECAST. UH, THE FORECAST INCLUDES AN ASSUMPTION OF AN ANNUAL 5% BASE RATE OVER EACH OF THE YEARS IN THE FIVE YEAR PERIOD. WITH THAT SAID, AUSTIN ENERGY'S BILL HAS A VARIETY OF RATES, INCLUDING THE BASE RATES AND THE POWER SUPPLY ADJUSTMENT RATE, BUT THE BASE RATE COMPONENT IS ABOUT 50% OF THE OVERALL BILL. AND THAT'S WHAT I'M REFERRING TO WHEN I'M REFERRING TO THE BASE RATE INCREASE. OUR GOAL WITH THESE INCREASES IS TO BALANCE THE NEED FOR INCREASED REVENUES TO COVER THE INCREASED EXPENSES WITHOUT CAUSING RATE SHOCK TO OUR CUSTOMERS. NEXT SLIDE PLEASE. HERE'S A SUMMARY OF THE FIVE YEAR CIP EXPENDITURES. YOU'LL SEE THAT OVERALL WE'RE ANTICIPATING A TOTAL FIVE YEAR SPEND OF 1.8 BILLION. UH, THIS IS UP ABOUT A HUNDRED MILLION OVER WHAT WE PRESENTED LAST YEAR. YOU'LL ALSO NOTE THAT MOST OF THE INCREASES IN THE CIP SPEND OCCUR IN THE TOP THREE CATEGORIES OF ELECTRIC SERVICE DELIVERY. SO THESE ARE INDIVIDUAL COMPONENTS THAT MAKE UP THE TOTAL ELECTRIC SERVICE DELIVERY, DISTRIBUTION, DISTRIBUTION, SUBSTATION, AND TRANSMISSION AS WE CONTINUE TO NEED TO PUT INVESTMENT INTO THE SYSTEM TO MAINTAIN OUR RELIABILITY. NEXT SLIDE PLEASE. THIS IS THE FUND SUMMARY. BASICALLY A CASH FORM OF INCOME STATEMENT FOR THE UTILITY. THE FUND SUMMARY, UM, FOCUSED ON THE SECOND FROM THE BOTTOM LINE, WHICH IS WORKING CAPITAL. IN THE PAST WE'VE SHOWN THIS AS EXCESS OR DEFICIENCY. WE'RE NOW DESCRIBING THIS AS WORKING CAPITAL. UM, SO JUST FOCUS ON THAT LINE AND YOU COULD SEE THAT IN 2026 THE BUDGET WE ANTICIPATED HAVING A DEFICIT OF 43 POINT A HALF MILLION AND THEN WE SHOW SOME IMPROVEMENT IN 2027, WE'RE ONLY SHOWING A ROUGHLY A MILLION DOLLAR DEFICIT AND THEN IT CONTINUES TO IMPROVE. YOU'LL ALSO NOTE THAT THE, UH, AUSTIN ENERGY RESERVE TRANSFERS ARE STARTING TO INCREASE AS WE'RE TRYING TO FOCUS ON REPLENISHING THOSE RESERVES THAT ARE REQUIRED BY CITY POLICY IN TERMS OF THE CAPITAL RESERVE, THE CONTINGENCY RESERVE, AND THE WORKING CAPITAL RESERVE. SO WE'RE ABLE TO NOT ONLY SHOW WITH THE BASE RATE INCREASES THAT WE'RE IMPROVING OUR LEVEL OF WORKING CAPITAL, BUT WE'RE ALSO ABLE TO START REPLENISHING THOSE RESERVES ACCORDING TO CITY POLICY. THIS IS A SUMMARY OF OUR KEY PERFORMANCE INDICATORS. UM, SO YOU'LL SEE THAT THE TARGETS HERE UNDERNEATH THE COLUMN, THESE ARE THE TARGETS THAT WE HAVE. THEY'RE WERE, UH, DESIGNED TO HELP US TRY AND ACHIEVE UH, THE NEXT LEVEL AND CREDIT RATING AGENCY FOR THE BONDS. WE'RE NOW RATED AT AA MINUS AND WE'RE TRYING TO GET TO AA. THAT'S ONE OF OUR OTHER FINANCIAL POLICIES THAT WE'RE TRYING TO MEET. SO OPERATING MARGIN REPRESENTED AS GREATER THAN OR EQUAL THAN 10% IS ONE TARGET DAYS. CASH ON HAND IS 200 DAYS. CASH ON HAND DEBT SERVICE AT TWO AND A HALF TIMES. AND THE DEBT TO CAPITAL RATIO, WE WOULD LIKE TO KEEP THAT LESS THAN 50%. AND YOU CAN SEE IN 2026 WE ARE SHOWING THAT WE'RE GONNA ACHIEVE THE OPERATING MARGIN DAYS. CASH ON HAND IS STILL FALLING SHORT DEBT SERVICE COVERAGE RATIO IS ALSO FALLING SHORT AND DEBT TO CAPITAL IS EXCEEDING THE GOAL THAT WE HAD SET ASIDE. BUT AS WE PROGRESS THROUGH THE FORECAST PERIOD, YOU'LL SEE THAT EACH OF THESE TARGETS IS GETTING BETTER OR THE RESULTS ARE GETTING BETTER. OUR OPERATING MARGIN IMPROVES DAYS. CASH FLOW ON HAND IMPROVES DEBT SERVICE COVERAGE RATIO ALSO IMPROVES. UM, AND THEN DEBT TO CAPITAL HAS A LITTLE BIT OF FLUCTUATION, BUT IN THE END WE ARE SHOWING SOME IMPROVEMENT FROM WHERE WE STARTED IN 2027. NEXT SLIDE PLEASE. THIS IS A NEW SLIDE FOR THIS YEAR. WE'RE TRYING TO SHOW A COMPARISON OF WHAT WE WERE PROJECTING LAST YEAR FOR THESE KEY PERFORMANCE INDICATORS VERSUS WHAT WE'RE PROJECTING THIS YEAR. LAST YEAR'S FIVE YEAR FORECAST PERIOD ENDED IN 2030. THIS YEAR'S FORECAST PERIOD ENDS IN 2031, BUT YOU CAN SEE IF YOU PICK EACH OF THESE CATEGORIES, OPERATING MARGIN. LAST YEAR WE WERE SHOWING 13%, UM, PROJECTED FOR 2027 AND NOW WE'RE PROJECTING 12% EACH ONE OF THE CATEGORIES OF THE OPERATING MARGIN. WE'RE STILL SHOWING IMPROVEMENT. IT'S JUST NOT AT THE SAME RATE THAT WHAT WE WERE PROJECTING LAST YEAR. , SAME THING WITH DAY'S CASH ON HAND. WE'RE SHOWING IMPROVEMENT FROM LAST YEAR'S. UH, UH, SORRY, WE'RE SHOWING IMPROVEMENT JUST NOT AT THE LEVEL, UH, AS WHAT WE WERE SHOWING LAST YEAR, LAST YEAR'S DAY'S, CASH ON HAND, WE WERE PROJECTING 154 DAYS BY THE END OF 2027 AND 225 DAYS AT THE END OF 2030. YOU COULD SEE THERE IN THE 2030 COLUMN. THIS YEAR'S FORECAST, WE'RE NOT QUITE AS OPTIMISTIC ABOUT WHERE WE'RE GONNA BE AND THAT'S PRIMARILY DRIVEN BY THE CAPITAL IMPROVEMENTS THAT WE NEED TO MAKE AND THE INVESTMENT THAT WE NEED TO MAKE IN OUR SYSTEM, WHICH DRIVES UP DEBT SERVICE COSTS. UM, SO THAT'S WHY THE OUTLOOK IS NOT QUITE AS POSITIVE THIS YEAR AS IT WAS LAST YEAR, BUT STILL SHOWING POSITIVE IMPROVEMENT, DEBT SERVICE COVERAGE RATIO, LIKEWISE, JUST NOT AS ROSY AS WHAT IT WAS LAST YEAR AND DEBT TO CAPITAL. UH, THE SAME. [00:40:06] AND THIS IS JUST A, A SLIDE TO LEAVE YOU WITH THAT. UM, YOU KNOW, WE'RE STILL PROJECTING THAT THE PRESENTATION TO EUC IS GONNA HAPPEN ON JU JULY THE 20TH, WHICH IS THE SOONEST DATE THAT WE CAN ACTUALLY HAVE THIS PRESENTATION POST CITY MANAGER PRESENTING THE BUDGET. WE'RE NOT REALLY ALLOWED TO PRESENT THE BUDGET UNTIL CITY MANAGERS PRESENTED IT TO THE CITY. SO THE EEC PRESENTATION MEETING WAS SCHEDULED ON THAT NEXT CLOSEST DATE AFTER THE CITY MANAGER PRESENTS THE BUDGET. UM, AND JUST AS A REMINDER, THIS IS THE FORECAST, THIS ISN'T THE BUDGET, SO WE'LL BE COMING BACK TO YOU THEN WITH THAT BUDGET AT THAT TIME. SO THANK YOU. OKAY. YOU WANNA MOVE ALONG TO 15 THE SECOND QUARTER? CAN WE ASK QUESTIONS OR? SURE, GO AHEAD. YEAH, SORRY. UM, SO WHERE YOU SHOW THE PERFORMANCE INDICATORS GETTING A A LITTLE WORSE, IS THAT JUST BASICALLY AS YOU SAID, INFLATION THINGS ARE MORE EXPENSIVE SO THEREFORE THERE'S LESS CASH THAN YOU THOUGHT THERE'D BE? IS THAT YES, THINGS ARE MORE EXPENSIVE AND WE'RE INVESTING MORE IN THE SYSTEM. SO THERE'S MORE CAPITAL PROJECTS THAT ARE ONGOING. SO THE INCREASES IN THE ELECTRIC SERVICE DELIVERY CATEGORIES, TRANSMISSION, SUBSTATION AND DISTRIBUTION, THOSE CATEGORIES ARE ALL INCREASING. SO THAT REQUIRES MORE DEBT SERVICE AND MORE CASH. UM, AND, AND IN ALL OF THESE, UM, NUMBERS THAT YOU'RE FORECASTING, I THINK YOU SAID THAT YOUR ASSUMPTION IS EVERY SINGLE YEAR THERE'D BE A BASE RATE INCREASE OF 5% THAT'S RIGHT. ALL ALL THE WAY TO THROUGH 2031. THAT'S RIGHT. OKAY. AND THAT'S ALL CUSTOMER CLASSES WOULD GET BASICALLY A BASE? YES. WE HAVEN'T DEVELOPED RATE DESIGN YET SINCE THIS IS JUST THE FORECAST, BUT YEAH, BASICALLY REVENUES NEED TO GO UP BY 5% BASE REVENUES IN ORDER TO COVER THE ONGOING EXPENSES. OKAY, THANKS. THANK YOU. NO QUESTIONS? YEAH. UH, PAGE 10, JOHN. UH, YOU'VE GOT PAGE 10 PAGE. YEAH. YOU'VE GOT THE, THE CHART OF KEY PERFORMANCE INDICATOR. I'M JUST, YOUR NET MARGIN IS GROWING A COUPLE PERCENT OR OVER TIME, YOU KNOW, 5% OVER THAT TIME. YES. IS THAT'S, WHAT ACCOUNTS FOR THAT? I MEAN THAT'S, THAT'S A, THAT'S A GOOD QUESTION AND, AND THANK YOU FOR ASKING THAT. IT'S A THING, BUT WHAT'S DOING THAT? SO WE'VE GOTTA OVERCOMPENSATE, IF YOU WILL, WITH MARGINS IN ORDER TO FUND ENOUGH CASH TO BE ABLE TO MAINTAIN OPERATIONS. AND SO IN ORDER FOR US TO BE ABLE TO FUND THE RESERVES, GET BACK IN COMPLIANCE WITH THE RESERVES FOR CITY POLICY, MEET THE DA 200 DAYS CASH ON HAND, WE'VE GOTTA OVERCOMPENSATE WITH INCREASED MARGIN TO PROVIDE THE CASH WE NEED TO BE ABLE TO FUND THOSE RESERVES AND FUND OPERATIONS. SO YOU'RE RIGHT. AND THAT'S A GOOD, GOOD QUESTION TO ASK. THAT'S WHY. AND THAT'S GOTTA INCREASE OVER AND ABOVE THE TARGET. IF WE WERE TO STAY AT TARGET AT 10%, THERE WOULDN'T BE SUFFICIENT ENOUGH CASH IN ORDER TO BE ABLE TO FUND OPERATIONS AND FUND THOSE RESERVES. SO, BUT SO THE INCREASE IN MARGINS REALLY COMING ON THE INCREASE IN RATES WITH COST MORE CONTROLLED IS THAT THAT'S THE GOAL. UM, WE'RE SEEING ESCALATIONS IN COST THOUGH, AND WE'RE ALSO SEEING AN INCREASED AMOUNT OF CONSTRUCTION THAT'S NECESSARY TO GO, YOU KNOW, MEET THE REQUIREMENTS OF THE VARIOUS PLANS THAT WE HAVE BEFORE US. SO THANKS FOR ASKING THAT. ALRIGHT, THANK YOU. DOES THE, DOES THE CAPITAL IMPROVEMENT PLAN POWER PRODUCTION, UH, INCLUDE AN ASSUMPTION OF ADDING PEAKING CAPACITY? NOT AT THIS TIME. UM, WE DON'T KNOW YET ALSO WHAT'S GONNA BE IN THE BUDGET AT THIS POINT. 'CAUSE OBVIOUSLY THERE'S A LOT OF ACTIVITIES RELATED TO THAT DECISION. SO AT THIS POINT IT DOES NOT INCLUDE THAT. THANKS. YEAH. ANY QUESTIONS ONLINE? OKAY, LET'S, LET'S NOW MOVE TO THE QUARTERLY FINANCIAL. THANK YOU. THANK YOU. I'LL SKIP THE INTRODUCTIONS. UM, NEXT SLIDE PLEASE. THIS IS THE SECOND QUARTERLY FINANCIAL PRESENTATION AND JUST FOR, UH, EVERYBODY'S UNDERSTANDING, THIS IS FOR THE SIX MONTH PERIOD, THIS ISN'T FOR THE THREE MONTH PERIOD ENDED IN MARCH. THIS IS FOR SIX MONTHS ENDED MARCH. SO I'M GONNA GO OVER AN EXECUTIVE SUMMARY AND THEN I'M GONNA TALK A LITTLE BIT ABOUT FINANCIAL HEALTH AS IT WAS MARCH 31ST. AND THEN I'M GONNA TALK, OR I CAN TALK SOME MORE ABOUT THE BUDGET TO ACTUAL DETAILS AND FINANCIAL STATEMENTS IF YOU GUYS WANNA DIVE INTO THAT. I'M GONNA TRY TO COVER, UM, WHAT I CAN IN TERMS OF THE EXECUTIVE SUMMARY AND THE FINANCIAL HEALTH AND THEN OFFER TO STOP THERE. UNLESS YOU GUYS WANNA GO FURTHER. THE FINANCIALS ARE IN YOUR PACKETS, SO YOU SHOULD BE ABLE TO SEE THE DETAILED FUND SUMMARY AND THE DETAILED INCOME STATEMENT. SO FEEL FREE TO LOOK AT THOSE IF YOU HAVEN'T ALREADY. UM, NEXT SLIDE PLEASE. IN THE EXECUTIVE SUMMARY, UM, OUR OPERATING RESULTS ARE INDICATING THAT OUR INCOME WAS $16 MILLION BELOW BUDGET, OR ABOUT 11% AS OF MARCH. UM, ALSO NOTE THAT IT WAS WARMER THAN NORMAL FOR THE SIX MONTHS ENDED MARCH, WHICH HELPED US IN THE FIRST QUARTER AND HAMPERED US [00:45:01] A LITTLE BIT IN THE SECOND QUARTER WITH THE EXCEPTION OF THE ONE SPIKE THAT WE HAD IN LOAD RELATED TO WINTER STORM FERN. THE BOND RATING, UH, REALLY NO UPDATES THERE. UH, THE LAST UPDATE WAS GIVEN IN THE FIRST QUARTER WHEN WE HAD RECENT BOND ISSUANCE. THERE'S BEEN NO CREDIT RAGING RATING AGENCIES ACTIVITIES. WE'RE STILL RATED AT AA MINUS FINANCIAL POLICIES. WE ARE IN SUBSTANTIAL COMPLIANCE WITH THE FINANCIAL POLICIES, NOT IN A HUNDRED PERCENT COMPLIANCE, WHICH I'LL TALK ABOUT HERE IN A MINUTE. AND THEN THE POWER SUPPLY ADJUSTMENT. UM, WE'RE CURRENTLY 124 MILLION OVER RECOVERED AS OF MARCH. WE'RE STILL WAITING TO SEE WHAT HAPPENS AS WE MOVE THROUGH THESE SHOULDER MONTHS TO SEE WHERE WE END UP WITH IN THE OVER COLLECTION. BEFORE WE MAKE ANY OTHER ADJUSTMENTS TO THAT, WE MADE AN ADJUSTMENT USING THE, UH, PSA, UH, ADMINISTRATIVE ADJUSTMENT MECHANISM, IF YOU WILL, IN DECEMBER. UM, WE'RE STILL BELOW 4 CENTS A KILOWATT HOUR FOR THE POWER COSTS. NEXT SLIDE PLEASE. THIS IS A SUMMARY OF THE FINANCIAL HEALTH AS OF MARCH, THE 31ST. AND THESE TARGETS THAT I'M TALKING ABOUT TONIGHT ARE BASED UPON WHAT WE'RE TRYING TO ACHIEVE TO IMPROVE OUR BOND RATING. SO THESE TARGETS ARE BASED UPON THE STANDARD AND POOR'S BOND RATING TARGET GOAL OF AA, BUT WE'RE ACTUALLY AT AA MINUS DAYS. CASH ON HAND TARGET IS GREATER THAN 200 DAYS. OUR ACTUAL AMOUNT AS OF THE END OF MARCH WAS 184 DAYS, OF WHICH 32 DAYS OF THAT WAS RELATED TO THE PRIOR SUPPLY ADJUSTMENT OVER RECOVERY DEBT SERVICE. THE TARGET IS AT GREATER THAN TWO AND A HALF TIMES MULTIPLIER. WE'RE CURRENTLY AT 2.3 TIMES, SO WE'RE NOT PERFORMING AS WELL AS WE NEED TO TO HIT THAT TARGET. OPERATING MARGINS, OPERATING MARGINS GREATER THAN 10% OF THE TARGET. OUR PERFORMANCE AS OF THE FIRST QUARTER WAS 22%. WE SAW SOME EROSION IN THE SECOND QUARTER, SO NOW WE'RE DOWN TO 10% FOR THE SIX MONTHS ENDED. WE FULLY ANTICIPATE THAT MOST OF THAT IS TIMING, UH, DUE TO THE DIFFERENCE IN THE WAY THE EXPENSES WERE BUDGETED VERSUS THE WAY THAT WE'RE EXPERIENCING THEM. OUR DEBT TO CAPITALIZATION RATIO TARGET, UM, IS LESS THAN 50% AND WE'RE ACTUALLY AT 58% AT THIS POINT IN TIME. NEXT SLIDE. THAT'S THE SUMMARY AS OF MARCH. SO THIS IS FOR THE HISTORICAL SIX MONTH PERIOD ENDING MARCH 31ST. HAPPY TO GO INTO THE INCOME STATEMENT AND THE, UH, FUND SUMMARY STATEMENT AS WELL, IF YOU WANT ME TO. ANY QUESTIONS ABOUT THE PHONE SUMMARY? OKAY. ONE QUICK QUESTION. SURE. CAN, CAN YOU REMIND US WHAT, WHAT THE AUSTIN ENERGY POLICY IS ON THE GENERAL FUND TRANSFER? IS IT A PERCENTAGE OR IS IT AN AMOUNT? IT'S 12% OF REVENUES AFTER REMOVING PURCHASE POWER COSTS, BASICALLY IN DISTRICT COOLING REVENUES. OKAY, SO IT IS A PERCENTAGE. IT IS A PERCENTAGE, YEAH. AND THAT'S THE, THAT'S THE MAX THRESHOLD THE CITY HAS UNDER OUR POLICIES. WHAT ARE THE MAIN POINTS THAT YOU'D LIKE TO BRING UP IN THIS MAIN POINT IS HERE? UM, THAT WE'RE SHOWING EXCESS DE EFFICIENCY OF DIFFERENCE, UH, BETWEEN ACTUAL BUDGET OF 24 MILLION. WE'VE TAKEN A LOOK AT WHERE WE'RE FORECASTED TO HIT FOR THIS FISCAL YEAR. WE BELIEVE, WE BELIEVE WE'RE GONNA BE ABLE TO CLOSE UP THAT GAP AND END UP HITTING THE BUDGET. SO A LOT OF THIS IS TIMING ISSUES. UH, YOU CAN SEE THAT BASE REVENUE IS ACTUALLY, UM, UP RELATIVE TO BUDGET THAT'S RELATED TO THE WEATHER PATTERNS THAT WE SAW WERE ROUGHLY 4% WARMER THAN NORMAL FOR THE SIX MONTHS INTO MARCH, WHICH HELPED US IN THE FIRST QUARTER AND KIND OF HAMPERED US IN THE SECOND QUARTER. UM, AND THE OPERATING INCOME, AGAIN, THAT'S A REFLECTION OF OPERATING EXPENSES AND THE TIMING OF THOSE. UM, SOME OF THIS HAS TO DO WITH THE WAY THAT WE RECOGNIZED, UM, UH, THE, UM, UH, CBC REVENUES BASED UPON AS EXPENSES ARE INCURRED. SO THOSE ARE TIMING DIFFERENCES. THE REVENUES ARE UP ABOVE AND THE OPERATING EXPENSES ARE DOWN BELOW. SO SOME OF THAT'S TIMING AND PLACEMENT IN THE INCOME STATEMENT. UM, OTHER THAN THAT, THERE'S NOT A LOT OF BIG SURPRISES HERE FOR US. SO, HEY, CAN YOU REPEAT SOMETHING ON THE GFT 12% OF REVENUES MINUS DISTRICT COOLING REVENUES, DISTRICT COOLING REVENUES ARE EXCLUDED AS WELL AS PURCHASE POWER EXPENSE. OKAY, THANK YOU. OTHER QUESTIONS? PS A PSA REVENUES PURCHASE POWER EXPENSE PURCHASE PSA REVENUES OR PURCHASE POWER EXPENSE. WE MATCH PURCHASE POWER EXPENSE WITH PURCHASE POWER SUPPLY REVENUES. SO IT'S DEFINED AS GROSS REVENUES, BASICALLY LESS POWER SUPPLY REVENUES, LESS DISTRICT COOLER REVENUES. THANKS FOR CLARIFYING. OKAY, SO THE, THE POWER REVENUES ARE JUST A WASH IN AND OUT. THAT'S RIGHT. YOU DON'T HAVE TO THAT'S RIGHT. YOU DON'T HAVE TO PAY A PERCENTAGE TO THE CITY ON [00:50:01] THAT. THAT'S RIGHT. OKAY. AND THAT'S WHY WE BACK 'EM OUT. WE CAN MOVE FORWARD IF YOU'D LIKE, PLEASE. OKAY. OKAY. I MEAN, DO YOU WANNA GO TO THE NEXT SLIDE OR, YEAH. OKAY. NEXT SLIDE PLEASE. OKAY. PARA SUPPLY ADJUSTMENT SUMMARY. SO YOU'LL SEE RIGHT HERE THE ACTUAL COST THAT BASICALLY THAT WE'RE PAYING INTO ERCOT FOR THE PPAS IS ARE THE GREEN COLUMNS, THE BUDGETED COSTS ARE THE PURPLE COLUMNS, AND THE BLACK BAR IS THE PSA REVENUE. SO TO THE EXTENT THAT BLACK BAR IS HIGHER THAN THE GREEN BAR, OUR PSA RATE THAT WE SET IS HIGHER THAN ACTUAL COSTS. YOU KNOW, WE'RE SETTING THIS PSA RATE AT THE BEGINNING OF THE YEAR AND OBVIOUSLY COSTS ARE GONNA FLUCTUATE, SO WE TRY TO HAVE GRADUAL ADJUSTMENTS TO THAT TO TRY AND KEEP IT FAIRLY STABLE. UH, AT THIS POINT, UH, WE'RE 124 MILLION COLLECTED IN THAT, UM, UH, COLLECTION OF REVENUES VERSUS EXPENSE, AND THAT'S WHY WE MAKE THIS PSA ADMINISTRATIVE ADJUSTMENTS TO TRY AND REFUND THAT OR COLLECT SOME IF WE FIND THAT WE'RE ALREADY SHORT. BUT ALSO REMEMBER THAT THIS IS THE RESERVE THAT WE NEED TO HAVE SET ASIDE IN CASE THERE'S SIGNIFICANT FLUCTUATIONS IN THE POWER SUPPLY MARKET. SO THAT'S WHY WE NEED, UH, SOME LEVEL OF RUBBER COLLECTION IN THAT TO KIND OF HELP DAMPEN THE EFFECT ON THE CUSTOMERS. NEXT SLIDE. COWBOY IMPROVEMENT PLAN. WE'RE AT 36% OF OVERALL SPEND. THIS IS THE MARCH 31ST, CIP, UH, LOOK, IN A PERFECT WORLD WE'D BE AT 50%, BUT OBVIOUSLY THE CONSTRUCTION SEASON, THE CONSTRUCTION PROJECTS DON'T NECESSARILY MATCH UP WITH THE BUDGET PERFECTLY. SO WE'RE AT 36% SPEND RIGHT NOW, UM, AS OPPOSED TO 50. THE PIE CHART ON THE RIGHT REPRESENTS WHERE THE FUNDING'S COMING FROM. SO DEBT, UH, IS IN THE BLACK, CASH IS THE GREEN AND CONTRIBUTIONS NEEDED. CONSTRUCTION IS IN BLUE, SO APPROXIMATELY 52% IS COMING FROM THE CASH PORTION AND 48% IS COMING FROM DEBT, WHICH IS PRETTY CLOSE TO AN IDEAL SPOT OF 50 50 FOR US. BUT THAT'S AS OF SIX MONTHS INTO, UH, MARCH. NEXT SLIDE PLEASE. NEXT SLIDE. HERE'S THE INCOME STATEMENT. SO WE LOOKED AT THE FUND SUMMARY, WHICH IS LIKE A CASH FORM OF INCOME STATEMENT. THIS IS AN ACCOUNTING FORM OF, UH, INCOME STATEMENT. SO AGAIN, OPERATING REVENUES ARE UP BECAUSE OF WEATHER PATTERNS. OUR OVERALL NET INCOME IS ACTUALLY, UH, $17 MILLION LOSS. IT'S, IT, IT'S IN COMPARED TO A $16 MILLION INCOME AMOUNT AS OF THE SAME SIX MONTH PERIOD ENDING 2025. BUT THAT IS A LITTLE BIT OF AN ARTIFICIALLY ADJUSTED NUMBER BECAUSE THAT INCLUDES AN ADJUSTMENT THAT WE HAD TO MAKE TO MOVE $30 MILLION INTO THE PRIOR SUPPLY RESERVE. WE RECOGNIZE THAT IS INCOME AND THEN TRANSFER IT INTO THE POWER SUPPLY RESERVE. SO THAT'S, THE 16 MILLION IS ACTUALLY ARTIFICIALLY HIGH. IT WOULD'VE BEEN CLOSER TO WHAT WE'RE SEEING FOR THE SIX MONTHS INTO MARCH OF 26. SO IF YOU TAKE THAT OUT, WE'RE PRETTY CONSISTENT WITH WHERE WE WERE LAST YEAR. NEXT SLIDE. AND THAT CONCLUDES OUR PRESENTATION. QUESTIONS. ANY ONLINE? I CAN'T TELL. NO. ANY QUESTIONS? UH, NO. NO. OKAY. THANK YOU, JOHN. THANK YOU. I'M JUST GONNA . OKAY. YOU CAN GET A COOKIE TOO. . OKAY. NUMBER 16 AND SECOND QUARTER OPERATIONS REPORT. LISA MARTIN. ALL RIGHT, THERE WE GO. ALL RIGHT. GOOD EVENING, CHAIR, T VICE CHAIR, BRADEN AND COMMISSION MEMBERS. I'M LISA MARTIN AUSTIN, USE CHIEF OPERATING OFFICER. AND HERE TONIGHT I'M, UH, GOING TO SHARE WITH YOU THE QUARTERLY OPERATIONS UPDATE FOR, UM, FY 26 Q2, WHICH IS THE PERIOD FOR JANUARY, FEBRUARY, AND MARCH OF 2026. NEXT SLIDE. I WILL FOLLOW THE STANDARD AGENDA. NEXT SLIDE. OUR EXECUTIVE SUMMARY SHOWS THAT WE HAD 46% RENEWABLE PRODUCTION AND 73% CARBON FREE PRODUCTION, BOTH AS A PERCENTAGE OF OUR LOAD FOR THE QUARTER. UH, TWO, OUR GENERATORS GENERALLY HAD A HIGH, HAD A GENERALLY HIGH COMMERCIAL AVAILABILITY EXCEPT FOR THOSE THAT BEGAN THEIR SPRING OUTAGE IN MARCH. AND WE ALSO HAD SOME UNPLANNED OUTAGES CONTRIBUTING TO THE NUMBERS THAT I'LL SHOW YOU ON A FUTURE SLIDE. BUT OUR NUMBERS ARE GENERALLY WHERE WE EXPECT THEM TO BE. UM, AND OUR DISTRIBUTION RELIABILITY METRICS ARE TRENDING STABLE. YOU'LL SEE THEY'RE THE SAME THIS QUARTER AS THEY WERE LAST QUARTER. UM, AND WE'LL TALK ABOUT THAT IN A FEW SLIDES AS WELL. NEXT SLIDE PLEASE. STARTING WITH OUR ENVIRONMENTAL PERFORMANCE FOR FY [00:55:01] 26 Q2, THE CARBON FREE GENERATION AS A PERCENTAGE OF LOAD AVERAGED 73%. THE NEXT SLIDE SHOWS IT FROM A ROLLING 12 MONTH AVERAGE DATA. THAT'S THE SMOOTH LINE HERE. YOU'LL SEE WE'RE AT ROUGHLY 63% CARBON FREE GENERATION AS A PERCENTAGE OF LOAD HOLDING STEADY SINCE THE START OF THE CALENDAR YEAR. THIS TIME LAST YEAR, THE VALUE WAS ALSO 63%. THE ONE THING THAT LOOKS DIFFERENT BETWEEN THIS YEAR AND LAST YEAR IS THE MARCH PERCENTAGE, UH, THIS YEAR, SORRY, IN 2025 IT WAS 87.5, WHICH YOU SEE AS LAST YEAR'S BLUE PEAK. UM, IN MARCH THIS YEAR, UH, IN MARCH, 2026, IT WAS 77%. YOU MAY RECALL WE HAD A SIGNIFICANTLY WARMER MARCH. IT WAS PLUS FOUR DEGREES FAHRENHEIT DELTA ON AVERAGE FOR THE MONTH, WHICH MEANS THAT LOADS WERE HIGHER ON AVERAGE. AND STP BEGAN ITS REFUELING OUTAGE THIS MARCH. SO THAT'S WHY WE SEE SUCH A BIG DIFFERENCE BETWEEN LAST MARCH AND THIS MARCH. ALL RIGHT. NEXT SLIDE PLEASE. UM, SORRY. CAN, CAN I DO A QUICK QUESTION? ABSOLUTELY. SORRY. UM, IF YOU DON'T KNOW THE ANSWER TO THIS, JUST SAY YOU DON'T KNOW, BUT, UM, ASSUMING THAT CITY COUNCIL AGREED TO CONTRACT THOSE TWO, UM, WIND RESOURCES, HAVE YOU GUYS, WHICH I GUESS ARE ALREADY OPERATING, HAVE YOU DONE ANY BACK OF THE ENVELOPE ESTIMATES OF HOW, HOW THAT, HOW MUCH THAT PERCENTAGE WOULD GO UP? OR IS IT TOO EARLY TO SAY? I, I, IF WE COULD SAVE THAT QUESTION TILL MY NEXT PRESENTATION, WE CAN TALK A LITTLE BIT ABOUT THAT. THANKS. ANY OTHER QUESTIONS WHILE WE'RE PAUSING? YEAH, I'M STILL TRYING TO UNDERSTAND WHAT HAPPENED IN MARCH. OKAY. I'M SAYING THE RENEWABLE, CAN YOU GO BACK DOWN BECAUSE OF, SO IT WAS A HOTTER MONTH, SO WE HAD MORE LOAD, UH, RIGHT. SO THIS IS, THIS IS CARBON FREE AS A PERCENTAGE OF LOAD. IT'S A HOTTER MARCH. HOTTER MARCH, OKAY. YEP. SO HIGHER LOAD AND THEN ALSO STP, WHICH IS A CONTRIBUTION TO THE CARBON FREE PERCENTAGE. UHHUH WAS, UH, IN OUTAGE FOR STARTED IT'S REFUELING OUTAGE AT THE END OF MARCH. OH, OKAY. SO IT PRODUCED LESS, SO THAT WENT DOWN THE PERCENTAGE. YEAH. OKAY. ALRIGHT. NEXT SLIDE PLEASE. ALL RIGHT. UM, SO STARTING IN THE UPPER LEFT CORNER IN Q2 26, OUR GENERATION TOTAL 3.3 MILLION MEGAWATT HOURS, UM, THAT'S DOWN JUST ABOUT 0.2, UH, MILLION FROM THIS QUARTER LAST YEAR. UM, WHILE LOAD REMAINED ALMOST THE SAME, UH, 3.22 MILLION MEGAWATT HOURS FROM 3.28 MILLION LAST TIME, UH, IN THIS QUARTER, WE HAD NO GENERATION SHORTFALL. UM, THE POWER GENERATION IS A PERCENTAGE OF CONSUMPTION. THIS IS WHERE YOU SEE AGAIN, THE 46% RENEWABLES AND THE 27% NUCLEAR TOTAL FOR 73% CARBON FREE FOR THE QUARTER. AND THEN OUR POWER GENERATION COST BY FUEL TYPE, WHICH IS IN THE BOTTOM LEFT. UH, THE FUEL COST METRICS SHOW SIGNIFICANT INVESTMENT IN AND USE OF CARBON FREE SOURCES AT 65%. THAT'S THE SUM OF THE NUCLEAR AND RENEWABLE PIE, UM, PIE SLICES AND THEN THE SYSTEM PEAK, WHICH IS THE LINE GRAPH. UM, THE SYSTEM PEAK DEMAND IN Q2 WAS 2,600 MEGAWATTS SLIGHTLY DOWN FROM THE LAST TWO YEARS THIS TIME. ALL RIGHT. UM, NEXT SLIDE PLEASE. WE'LL SHIFT INTO OUR RELIABILITY PERFORMANCE OVERALL. SO THIS SLIDE SHOWS GENERATOR PERFORMANCE IN TERMS OF COMMERCIAL AVAILABILITY. THE STP UNITS HAD A COMBINED COMMERCIAL AVAILABILITY OF 93% DURING THIS QUARTER. UH, UNIT ONE HAD A TWO DAY FORCED OUTAGE IN EARLY MARCH, AND THEN IT CAME DOWN FOR REFUELING TOWARDS THE END OF THE MONTH AND INTO APRIL. THE FPP UNITS HAD A COMBINED COMMERCIAL AVAILABILITY OF 97% FOR THE QUARTER. UNIT TWO HAD A 139 HOUR FORCED OUTAGE TO REPAIR A COMPONENT THAT'S A LITTLE OVER FIVE DAYS. THE SANDHILL COMBINED CYCLE WAS OUT FOR SPRING MAINTENANCE STARTING AT THE VERY END OF FEBRUARY AND ALL OF MARCH. SO THAT MAKES ITS COMMERCIAL AVAILABILITY DOWN, UH, 59%. UM, BUT AGAIN, THAT WAS EXPECTED BECAUSE WE'RE PREPARING IT FOR SUMMER. AND THEN THE PEAKERS WERE AT 99%. UM, AT SANDHILL, UH, TWO OF THE DECKER PEAKERS EXPERIENCED BRIEF OUTAGES IN MARCH TO REPAIR COMPONENTS AND THE COMMERCIAL AVAILABILITY WAS 92%. AND THEN NACODOCHES BEGAN ITS SPRING OUTAGE ALSO IN MARCH, PUTTING IN A COMMERCIAL AVAILABILITY OF 67%. NEXT SLIDE, WE'LL SWITCH TO THE ELECTRIC VEHICLE CHARGING NETWORK PERFORMANCE AT THE TOP. YOU SEE THE OVERALL NETWORK OF 1400 PLUS CHARGING STATIONS HAD AN UPTIME OF 99% ON A 12 MONTH ROLLING AVERAGE. THIS REMAINS PRETTY STEADY QUARTER OVER QUARTER. AND THE OVERALL UPTIME OF THE 30 DC FAST STATIONS THAT AUSTIN ENERGY IS RESPONSIBLE FOR, IT WAS UP THIS QUARTER, [01:00:01] 2% TO 92% ALSO ON THAT ROLLING 12 MONTH AVERAGE. NEXT SLIDE. THE PLUGIN EVERYWHERE NETWORK CONTINUES TO HAVE HIGH USAGE AVERAGING OVER 28,000 CHARGING SESSIONS PER MONTH. AND THE PEAK USAGE OCCURS AS, AS IT HAS BEEN FOR A WHILE BETWEEN 9:00 AM AND 2:00 PM WITH THE AVERAGE CHARGING TIME OF JUST ONE MINUTE, SHY OF THREE HOURS. AND FINALLY, OUR, UH, DISTRIBUTION RELI RELIABILITY METRICS SHOWN HERE ON THIS SLIDE. UH, THE BAR CHARTS AT THE TOP CONTINUE TO SHOW THAT WE ARE PERFORMING BETTER, BOTH IN DURATION AND FREQUENCY OF OUTAGES COMPARED TO THE TEXAS AVERAGE. AND JUST A REMINDER, LOWER NUMBERS ARE BETTER HERE. UM, IN TERMS OF THE LINE CHARTS AND THE FIRST TWO, YOU SEE THAT THE, UM, THE CHARTS HAVE BECOME VERY, YOU KNOW, IN THE LAST QUARTER TO THIS QUARTER, THEY'RE BASICALLY THE SAME. SO THAT STABILIZING TREND, UM, ALSO LEADS TO A STABILIZING TREND IN THE AVERAGE MINUTES TO RESTORE SERVICE TO AN AFFECTED CUSTOMER, WHICH IS SHOWN IN THE FAR RIGHT. SO WHEN SOMEONE WHO ACTUALLY HAS AN OUTAGE, HOW LONG ON AVERAGE ARE THEY, ARE THEY EXPERIENCING AN OUTAGE? AND SO THAT'S DOWN, UM, TO, UH, 78.98 MINUTES. UM, IF YOU TAKE A ZOOM OUT, UH, UH, FOR A MOMENT AND YOU LOOK AT THIS TREND OVER THE THREE YEARS THAT ARE SHOWN HERE, YOU CAN SEE THAT IT DOES HAVE A TREND IN THE DOWNWARD DIRECTION, WHICH IS WHAT WE WANT TO SEE, WHICH WOULD MEAN SHORTER OUTAGES OVERALL. UM, THAT PEAKS AT ABOUT A HUNDRED MINUTES, AND NOW WE'RE JUST UNDER 80. SO WE'RE GLAD TO SEE THAT, THAT DIRECTION. SO LISA, WHEN DO YOU THINK WE'LL HAVE ALL THOSE EXTRA RECLOSERS AND SOME MORE OF THE HARDENING AND MAYBE SEE A SLIGHT STEP FUNCTION FURTHER IN IMPROVEMENT? SO OUR PLAN IS TO BUILD THOSE IN OVER TIME, OVER THE NEXT 10 YEARS. AND SO WE HAVE, YOU KNOW, OUR ELECTRIC SYSTEM RESILIENCY PLAN HAS, UH, YOU KNOW, A CERTAIN PORTION IN THIS FIRST YEAR. THE NUMBERS, I THINK GO UP IN NEXT YEAR. AND THEN AFTER THAT WE HAVE TO BUILD THE REST OF THAT, THAT PLAN, UM, BECAUSE IT'S A LIVING PLAN BASED OFF OF, YOU KNOW, OPERATIONAL LEARNINGS. AND SO I ANTICIPATE THAT WE WILL SEE CONTINUED IMPROVEMENT YEAR OVER YEAR. UM, AND, BUT OF COURSE AT THE, THE END, ALL OF THE HARDENING, ALL OF THE COMPONENTS WORKING TOGETHER, UM, AT THE END, BUT I DON'T THINK WE HAVE TO WAIT THAT LONG. THANKS. OTHER QUESTIONS REAL QUICK? SO IT, IT WOULD JUST BE MORE OF A CONTINUOUS IMPROVEMENT RATHER THAN THE STEP FUNCTION THAT DAVE WOULD LIKE TO DO? YEAH, IT DEPENDS ON, ON A NUMBER OF OTHER FACTORS, BUT, UH, THESE TYPES OF, UM, UPGRADES THAT WE'RE DOING SHOULD SHOW, I MEAN, ONE OF THE, IF THEY'RE NOT SHOWING, UH, IMPROVEMENT IN THESE TRENDS RIGHT HERE, THEN WE NEED TO ASK OURSELVES IF WE'RE DOING THE RIGHT ACTION IN TERMS OF, UM, DISTRIBUTION RELIABILITY WORK. DOES, DOES THAT HAVE ANY SPINOFF BENEFIT IN TERMS OF BEING ABLE TO, TO MORE GRANULARLY ROTATE OUTAGES AND ALL? IS IT YES, IT DOES. THAT'S FICTIONALIZATION THROUGH RECLOSERS. UH, MID SPAN, ALONG THE MAIN LINE IS PART OF THE ELECTRIC SYSTEM RESILIENCY PLAN. AND THAT SHOULD ENABLE SOME ADDITIONAL FLEXIBILITY, UM, IN TERMS OF, UM, YOU KNOW, IF, IF WE HAVE TO HAVE CONTROLLED OUTAGES AGAIN, WE SHOULD HAVE SOME ADDITIONAL FLEXIBILITY THERE. I, I DON'T KNOW HOW TO ASK YOU HOW TO MEASURE THAT. IS THERE ? I MEAN, IT'S, IS IT BETTER? YES. BUT IS THERE A WAY TO KNOW WHAT PROGRESS LOOKS LIKE? WELL, PROGRESS IS GONNA START LOOKING LIKE HOW MANY HAVE WE INSTALLED IN TERMS OF RECLOSERS? OKAY. I THINK THIS IS YOUR LAST SLIDE. THAT IS MY LAST SLIDE. YEAH, YOU CAN GO TO THE NEXT ONE. ANY YEAH. ANY QUESTIONS ONLINE? I CAN'T TELL. NO ONE'S ON THE CAMERA. THEY CAN UNMUTE. WHAT ABOUT HERE? NOPE. NO HANDS RAISED. OKAY, THANKS. THANK YOU. NOW LET'S GO TO [13. Staff briefing on Austin Energy’s Resource, Generation and Climate Protection Plan to 2035 Implementation by Lisa Martin, Deputy General Manager and Chief Operating Officer and Lynda Rife, Senior Strategic Advisor – Rifeline. ] 13. IS THAT ME AS WELL? YOUR DISSERTATION? DID YOU JUST CALL IT MY DISSERTATION? WELL, IT'S PRETTY THICK. . I HAVE A LOT TO SHARE WITH YOU. OKAY. YEAH, THE JOKE IS, IS THE DISSERTATIONS ARE DONE BY WEIGHT, NOT ACTUAL THING. YEAH, I WAS GONNA SAY, I DON'T THINK THIS IS A DISSERTATION. I WOULD THINK THAT IF I WERE GETTING MY PHD IN THIS, IT'D BE MUCH THICKER, RIGHT? YES, YES. ALL RIGHT. GOOD EVENING, CHAIR, TUTTLE, VICE CHAIR, BRADEN AND COMMISSION MEMBERS. I'M LISA MARTIN, AUSTIN ENERGY'S CHIEF OPERATING OFFICER. I'M HERE TO PRESENT AN IMPORTANT ASPECT OF IMPLEMENTING OUR RESOURCE GENERATION AND CLIMATE PROTECTION PLAN TO 2035 WITH RISING ENERGY NEEDS AND A COMMITMENT TO CLEAN ENERGY TRANSITION. TONIGHT I'M GONNA PRESENT OUR STAFF RECOMMENDATION AS IT RELATES TO NEW UTILITY SCALE RESOURCES. LEMME JUST INTERRUPT. SO THE REASON, UH, NIKKI PRINTED OUT A HARD COPY OF THIS IS BECAUSE OBVIOUSLY [01:05:01] IT'S LONG AND DETAILED AND PROVIDES MANY PIECES OF INFORMATION, BUT SOMETHING FOR YOU TO TAKE NOTES ON SO WE CAN TRY TO SAVE UP THE QUESTIONS TILL THE END, AND SO WE DON'T HAVE AS MANY INTERRUPTIONS ALONG THE WAY, OTHERWISE IT'LL BE MORE TIME CONSUMING TO GO THROUGH IT ALL. SO PLEASE LEVERAGE WHAT YOU'VE BEEN GIVEN ON THAT. THANKS, THAT WOULD BE HELPFUL. THANK YOU. ALRIGHT. UM, SO TONIGHT I'M GONNA FRAME MY PRESENTATION. IN THIS WAY. I'M GONNA DESCRIBE THE CHALLENGES AND THE RISKS THAT WE'RE TRYING TO SOLVE ARE ALL IN STRATEGY OUTLINED IN THE GEN PLAN AND THE MISSION THAT WE HAVE TO MEET OUR, OUR CUSTOMER NEEDS. I'M GONNA TALK ABOUT OUR IMPLEMENTATION PROGRESS AND THE PROCESS THAT WE'RE USING TO TAKE ACTION. WE'RE GONNA TALK ABOUT WHAT WE'VE HEARD FROM THE COMMUNITY THUS FAR AND HOW THAT WORK WILL CONTINUE, HOW IT'S INCORPORATED INTO WHAT WE'RE SHOWING YOU TODAY. AND THEN I'LL END WITH WHAT'S UP NEXT. ULTIMATELY, YOU'LL SEE AND UNDERSTAND OUR RECOMMENDED SOLUTION, WHICH IS MULTI, UH, FACETED. I KNOW THAT A LOT OF THE, UM, CONVERSATIONS AND COMMENTS, Y'ALL ALREADY VOTED ON SOME OF THESE ITEMS, BUT I DO WANNA MAKE SURE THAT WE'RE TAKING INTO CONSIDERATION KIND OF THE ALL IN APPROACH AS I'M PRESENTING HERE TODAY. AND THAT GOES AS FAR BACK AS EVEN THE JUPITER BATTERIES THAT WERE APPROVED BY COUNCIL, UM, UH, LAST YEAR. ALL RIGHT, LET'S START OFF WITH SOME CHALLENGES AND RISKS. SO WHEN WE DID THE WORK TO ESTABLISH THE RESOURCE GENERATION AND CLIMATE PROTECTION PLAN, WE SHOWED YOU THIS SLIDE SEVERAL TIMES, AND IT WAS WITH THESE FACTORS IN MIND. SO JUST AS A QUICK REFRESHER, IN 2000 OR IN 2020, AND IN 2022, WE RETIRED OVER 725 MEGAWATTS OF LOCAL ENERGY RESOURCES. AND IN THE FOLLOWING TWO YEARS, WE HIT THREE NEW SEASONAL PEAKS FOR ENERGY USAGE. THAT, UH, DOWN VERSUS UP WHILE ALONG THE BACKDROP OF MANY MAJOR OR CUT MARKET CHANGES, INCREASED COSTS, AND SIGNIFICANT CONGESTION. SINCE WINTER STORM URI, WE HAVEN'T ADDED ANY UTILITY SCALE LOCAL GENERATION. WE'VE ONLY RETIRED 425 MEGAWATTS WORTH. THE ENERGY WORLD AROUND US WAS CERTAINLY CHANGING WHEN WE WERE COMING INTO THE ADOPTION OF THE 2035 PLAN. AND WE CERTAINLY NEEDED A PLAN TO BE ABLE TO ADAPT. AT THE END OF THIS, WE ADOPTED, UH, COUNCIL ADOPTED THE 20, UH, 35 PLAN. AND THEN NOW LET'S LOOK AT WHAT'S HAPPENED SINCE THEN. NEXT SLIDE PLEASE. THIS SLIDE HIGHLIGHTS THE CHALLENGES THAT KEEP COMING. FEDERAL CHANGES AT THE FEDERAL ADMINISTRATION LEVEL, UM, HAVE INCREASED COST AND CHALLENGES FOR RENEWABLE ENERGY PROJECTS. EXTREME WEATHER CONCERNS AND THE FOCUS ON RELIABILITY CONTINUES. THERE HAVE BEEN SIGNIFICANT ERCOT CHANGES AND CONSIDERATIONS DUE TO SOME VERY HIGH PROJECTED LOAD GROWTH, AND THERE HAVE BEEN SOME MARKET EFFICIENCY IMPROVEMENTS, BUT THE RISK OF HIGH PRICE EVENTS CONTINUE TO REMAIN. NEXT SLIDE SAID ANOTHER WAY. THE KEY RISKS IN THE 2035 PLAN HAVE INCREASED AND THEY'VE GROWN IN NUMBER. THERE ARE A LOT OF RISKS AND EACH ONE OF THESE IS A PROBLEM, BUT WHEN THEY STACK UP, THINGS GET PRETTY BAD. NEXT SLIDE, PLEASE. MY NEXT SERIES OF SLIDES ARE GONNA TELL YOU A LITTLE BIT MORE ABOUT WHAT WE SEE IN TERMS OF THESE RISKS AND SHARE SOME, SOME STORIES WITH YOU. SO WHEN WE SEE THESE RISKS SHOW UP IN REAL LIFE, WE CAN'T IGNORE THEM. SOME OF THEM YOU'VE BECOME PRETTY WELL VERSED INTO. I'VE SHOWN YOU THIS SLIDE MANY TIMES. UM, EVERY TIME I SEE LOAD ZONE PRICE SEPARATION, WHICH IS WHAT'S REPRESENTED HERE ON THIS GRAPH, UM, HAPPEN IN THE ERCOT MARKET, I FEEL LIKE IT'S A TARGET ON AUSTIN. THIS EXAMPLE HIGHLIGHTS FINANCIAL AND RELIABILITY RISK. AND IT CAN ONLY BE SOLVED WITH LOCAL RESOURCES, BOTH LOCAL GENERATION AND LOCAL TRANSMISSION UPGRADES. THIS IS THE RISK OF HIGH CONGESTION COSTS, AND OUR CUSTOMERS BEAR THE BURDEN OF THAT RISK ON MULTIPLE FRONTS. BUT THE BIGGEST CONCERN I HAVE ABOUT THIS, EVEN MORE SO THAN PASSING THOSE HIGH COSTS TO OUR CUSTOMERS, IS THAT THIS IS THE SIGNAL THAT WE'RE IN A SHORTAGE OF POWER AT AUSTIN. IF THE AMOUNT OF POWER OUR CUSTOMERS NEED IS HIGHER THAN THE AMOUNT OF POWER WE CAN BRING IN, PLUS THE AMOUNT OF POWER THAT WE CAN GENERATE LOCALLY, THEN WE RISK HAVING LOCAL POWER OUTAGES WHILE THE REST OF TEXAS HAS NO ISSUE. AND YOU CAN SEE THAT PRETTY CLEAR ON THE GRAPHIC HERE. UM, NEXT SLIDE, PLEASE. THOSE TYPES OF OUTAGES, IF WE HAD THEM HERE, BUT NOT ANYWHERE ELSE ACROSS THE STATE, WE WOULD CALL THEM LOCAL CONTROLLED OUTAGES. AND AS OUR ENERGY NEEDS CONTINUE TO RISE, THE RISK GETS WORSE. SO OUR MODELING SHOWS JUST HOW RAPIDLY THIS RISK IS GROWING. IF YOU TAKE OUR CURRENT PORTFOLIO, EVERYTHING WE HAVE TODAY, AND YOU ADD IN ALL THE CLEAN ENERGY ITEMS, THE BATTERIES AND THE RENEWABLES THAT WE'VE BROUGHT FORTH, UH, TO COUNCIL AND THEN THE ONES TO YOU TONIGHT, UM, WE STILL FACE AN AVERAGE OF 575 HOURS OF RELIABILITY RISK EVERY YEAR FROM 2030 TO 2035. [01:10:01] WHEN YOU ADD NATURAL GAS PEAKERS, THAT RISK REDUCES OVER 90% DOWN TO A NOT PERFECT, BUT A MUCH MORE MANAGEABLE 45 HOURS PER YEAR ON AVERAGE. AND THEN IF YOU TAKE THOSE PEAKERS AND YOU REPLACE THEM WITH THE SAME AMOUNT OF BATTERIES, THE RISK GOES BACK UP TO 475 HOURS PER YEAR. AND SO THIS IS WHAT OUR MODELING IS SHOWING US LOOKING FORWARD. BUT I ALSO WANNA SHARE WITH YOU THE STORY THAT WE'VE COME CLOSE TO THIS RISK OF LOCAL CONTROLLED OUTAGES HERE RECENTLY, IN OCTOBER OF LAST YEAR, WE HAD OUR LARGEST LOCAL GENERATOR WAS OUT FOR PLANNED MAINTENANCE AS IT NEEDS TO BE. AND WE HAD A TRANSMISSION LINE TRIP OUTTA SERVICE ON THAT PARTICULAR DAY. THOSE TWO RISKS STACKED UP. AND IF WE HAD HAD REALLY HIGH, UH, TEMPERATURES AND HIGH DEMAND, WE WOULD'VE RUN THE RISK OF NOT HAVING ENOUGH POWER TO SUPPLY FOR OUR CUSTOMERS. THANKFULLY, THAT OCTOBER DAY WAS MORE MODERATE, AND SO, UH, WE HAD MORE MODERATE DEMAND, AND SO WE WERE ABLE TO GET THROUGH. BUT HAD WE INSTEAD HAD VERY HOT TEMPERATURES, WE MAY HAVE HAD THE VERY DIFFERENT OUTCOME WITH THOSE LOCAL CONTROLLED OUTAGES. AND SO OUR TEAMS HAVE TO NAVIGATE THESE COMPLEX SITUATIONS ALL THE TIME. BUT THIS DAY WAS PARTICULARLY ALARMING AND MY TEAMS KEEP COMING BACK TO ME TO TELL ME ABOUT IT, TO REMIND ME ABOUT IT. UM, ESPECIALLY FOR OUR SYSTEM OPERATORS WHO ARE MONITORING THE SYSTEM 24 7 AND LOOKING FOR THESE TYPES OF SITUATIONS. AND THEY'RE REPORTING THAT THEY'RE SEEING THE RISK AND THE CLOSE CALLS MORE OFTEN WHEN THE POWER IS OUT BECAUSE OF LOCAL CONTROLLED OUTAGES, OUR RESIDENTIAL AND OUR SMALL BUSINESS CUSTOMERS FEEL THE BURDEN THE MOST AND WE HAVE TO PLAN TO ENACT TO AVOID THAT SITUATION. NEXT SLIDE PLEASE. SO THE NEXT ONE IS A RISK OF FINANCIAL EXPOSURE DURING A PERIOD OF EXTREME WEATHER. THE FINANCIAL PERFORMANCE OF AUSTIN ENERGY'S PORTFOLIO IS CRITICAL TO AVOID HIGH PRICE EXPOSURE IN THE ERCOT MARKET. THIS IS A REAL WORLD RISK THAT WE SAW IN WINTER STORM YURI IN 2021 IN JUST SIX DAYS, THE POWER COSTS TOTALED YEARS WORTH OF POWER UNDER NORMAL CONDITIONS WITHOUT GENERATION TO OFFSET THEM. THOSE COSTS GET PASSED DIRECTLY TO CUSTOMERS. AND WITHOUT OUR OWN GENERATION, ALL THAT POWER COST WOULD BE DUE TO ERCOT WITHIN SEVEN DAYS. SO FORTUNATELY FOR AUSTIN IN ENERGY COM CUSTOMERS, OUR THERMAL GENERATION SAVED OUR CUSTOMERS OVER $1 BILLION. ALTOGETHER. AUSTIN ENERGY'S GENERATION PORTFOLIO COVERED THE FULL COST OF POWER AND NETTED OUT A $100 MILLION IN EXTRA REVENUE. SO INSTEAD OF PASSING COSTS TO OUR CUSTOMERS, WE PASSED SAVINGS THROUGH REDUCED BILLS. IT'S IMPORTANT TO NOTE THAT TODAY WE HAVE LESS LOCAL GENERATION THAN WE DID BACK THEN FOR OTHER UTILITIES. THIS HAD A VERY DIFFERENT SITUATION. THEY HAD A VERY DIFFERENT SITUATION. SO AS YOU SEE FROM THE HEADLINES, BRAZOS AND RAYBURN HAD TO PASS ON EXTREME COST TO CUSTOMERS INCREASING THEIR BILLS FOR YEARS TO COME. AND BECAUSE MONEY WAS DUE TO ERCOT, WITHIN SEVEN DAYS, THESE COMPANIES HAD TO FILE FOR BANKRUPTCY. WHAT COULD HAVE BEEN CATASTROPHIC FINANCIALLY FOR AUSTIN TURNED INTO ULTIMATELY A NET BENEFIT BECAUSE OF THE THERMAL GENERATION FLEET. NEXT SLIDE. STAYING ON THE SAME TOPIC, BUT SHOWING YOU SOME, UH, FUTURE CAST NUMBERS. THE NUMBERS YOU SEE ON THE GRAPH COME FROM, UH, I'M SORRY, A BACK CAST THAT APPLIES A WINTER STORM URI SCENARIO TO FORWARD LOOKING CONDITIONS. THOUGH THIS TAKES INTO CONSIDERATION TODAY'S REDUCED MARKET CAPS FOR HIGH PRICES DURING EXTREME WEATHER. YOU CAN SEE HERE THAT IF YOU TAKE OUR CURRENT PORTFOLIO WITH THE ADDITION OF THE NEW RENEWABLES AND THE BATTERIES, IT PRESENTS A FINANCIAL EXPOSURE OF OVER $1 BILLION. THAT'S THE BLUE BAR. UM, AND THAT'S THE NET COST EVEN WITH OUR EXISTING GENERATION FLEET. WHEN YOU ADD IN PEAKERS, THAT RISK DROPS 48% OR $521 MILLION IN RISK REDUCTION FROM A SINGLE EVENT. AND THEN IF YOU TAKE THOSE PEAKERS AND YOU REPLACE THEM WITH THE SAME AMOUNT OF BATTERIES, THE RISK RISES. ONCE AGAIN, COMPARING THE BLUE AND THE GRAY BARS, YOU SEE THAT THE BATTERIES INSTEAD OF PEAKERS OFFERS ONLY MARGINAL RISK REDUCTION. NEXT SLIDE, PLEASE. SO WE KNOW RELIABILITY RISK IS RISING AND AFFORDABILITY RISK IS SIGNIFICANT, BUT WE ALSO HAVE ENVIRONMENTAL SUSTAINABILITY RISKS, BOTH THE RISK OF NON-ATTAINMENT AND THE RISK OF CLIMATE CHANGE. AND WE HAVE TO TAKE ALL OF THAT INTO CONSIDERATION. CLIMATE CHANGE CONTINUES TO CREATE EXTREME WEATHER HITTING CENTRAL TEXAS WORSE THAN EVER, AND BRINGING DIFFICULT AND SOMETIMES DEVASTATING RESULTS. WE'VE BEEN ATTUNED TO THIS ONE FOR SOME TIME. IT'S BEEN THE BASIS OF EVERY RESOURCE GENERATION AND CLIMATE PROTECTION PLAN FOR DECADES RIGHT FROM THE START. WE CARE DEEPLY ABOUT AUSTINITES AND WE CARE DEEPLY ABOUT THEIR HEALTH. AND IT'S WHY THE CITY OF AUSTIN AND AUSTIN ENERGY ARE LEADING THE PACK ON ENVIRONMENTAL PROGRAMS AND DECISIONS, AND IT'S SOMETHING THAT WE SIMPLY MUST CONTINUE. NEXT SLIDE PLEASE. [01:15:02] NEXT SLIDE. SO ALL THESE RISKS THAT I'VE JUST SHARED WITH YOU, LOOM LARGE, WE'RE AWARE OF THEM AND WE CAN'T, AND WE OH, AND WE UNDERSTAND THEM. AND SO WE CAN'T JUST SIT IDLY BY. WE HAVE A CALL TO ACTION. AND THAT IS MADE CLEAR IN THIS MISSION. TWO EQUALLY URGENT CHALLENGES, SOMETIMES JUXTAPOSED AGAINST EACH OTHER. AND WE CAN'T IGNORE EITHER. WE MUST MEET AUSTIN'S RISING ENERGY NEEDS WHILE ENABLING AN EQUITABLE CLEAN ENERGY TRANSITION THAT REFLECTS OUR COMMUNITY'S VALUES. NEXT SLIDE, PLEASE. THANKFULLY, ALL OF THAT'S BUILT INTO OUR 2035 PLAN. IT'S OUR ALL IN STRATEGY TO KEEP ENERGY RELIABLE, AFFORDABLE, AND CLEANER FOR EVERYONE IN OUR COMMUNITY. AND WE KNOW THAT MEETING OUR GOALS AND MITIGATING RISKS MEANS USING EVERY TOOL AVAILABLE AS THE ENERGY WORLD RAPIDLY CHANGES. THERE'S FOUR MAIN PILLARS TO OUR PLAN, AND WE'RE MAKING PROGRESS ON EVERY SINGLE ONE OF THEM. NEXT SLIDE, PLEASE. RIGHT, SO THIS IS A BIT OF AN EYE CHART. I DON'T EXPECT YOU TO READ IT. WE'VE BEEN WORKING THIS PLAN FOR OVER A YEAR AND WE'VE HIT SO MANY MILESTONES. I JUST WANTED TO SHOW 'EM ALL IN ONE PLACE. WE'RE EXECUTING ON ALL FOUR PILLARS OF THE PLAN. IF I'M JUST GONNA PICK OUT A FEW. UM, IN CUSTOMER ENERGY SOLUTIONS, WE'RE BREAKING RECORDS AND LOCAL SOLAR AND DEMAND RESPONSE, AND WE'RE INTRODUCING NEW AND INNOVATIVE PROGRAMS EVERY DAY IN THE LOCAL SOLUTIONS. WE CONTRACTED FOR THE LARGEST BATTERY STORAGE SYSTEM IN UTILITY HISTORY, AND WE KEEP ADDING. WE ADDED TO THAT. WELL, WE HOPE TO ADD TO THAT. UM, WITH COUNCIL APPROVAL LATER THIS MONTH IN DECARBONIZATION, WE'RE ADDING MORE WIND ENERGY THAT Y'ALL JUST VOTED UPON. AND IN INNOVATION, WE'RE STILL HOLDING FARM ON THAT GEOTHERMAL PILOT. THIS TIMELINE OF MILESTONE SHOWS THE VOLUME OF WORK THAT HAS RESULTED IN IMPLEMENTATION WINS. AND WE'RE NOT EVEN HALFWAY THROUGH THIS YEAR. NEXT SLIDE TO LOOK AT IT A DIFFERENT WAY WITHOUT THE EYE TEST. WE'RE WELL ON OUR WAY. DAVID. WE'RE GOOD. THANK YOU. WE'RE WELL ON OUR WAY TO MEETING THE NEAR TERM GOALS WHILE OVERCOMING GROWING CHALLENGES. THESE RESULTS, WHICH I'VE SHOWN YOU BEFORE, UM, ARE SHOW HOW WE'RE STAYING TRUE TO OUR COMMITMENTS AND OUR COMMUNITY'S NEEDS. WE'RE AT LEAST THREE QUARTERS OF THE WAY TO EVERY GOAL, AND WE HAVE TWO YEARS TO GO. SOME OF THEM WE'RE GONNA BLOW PAST, AND I GUARANTEE YOU WE'RE GONNA NEED EVERY MEGAWATT THAT COMES OUT OF THESE GOALS IN ADDITION TO WHAT WE'RE PROPOSING TODAY. NEXT SLIDE. THE PLAN HAS FOUR KEY PILLARS AND WE HAVE SOMETHING TO SHOW IN EACH AND EVERY AREA. SOLAR STANDARD OFFER INCREASED INCENTIVES, RESIDENTIAL SOLAR LEASING. OUR EXPERT TEAMS ARE CONTINUING TO PRIORITIZE CUSTOMER ENERGY SOLUTIONS THROUGH GREAT WORK AND INNOVATIVE PROGRAMS EVERY DAY. THERE ARE SO MANY ITEMS ON THIS ONE, IT'S PRETTY HARD TO FIT 'EM ALL ON THE SLIDE. NEXT SLIDE, PLEASE. BATTERY PROJECTS, LANDFILL, SOLAR, LOCAL TRANSMISSION WORK, PLENTY OF SUCCESSES IN LOCAL SOLUTIONS, MANY OF THEM HERE. UH, PART OF WHAT WE'RE HERE TO PRESENT TONIGHT. NEXT SLIDE. 65% CUSTOMER USAGE SERVED WITH CARBON FREE ENERGY AS WELL AS 60% CARBON EMISSIONS REDUCTION COMPARED TO OUR PEAK LEVELS, UM, IN 20 2007. AND THEN WITH RECORD LOW STACK EMISSIONS THIS PAST YEAR. IT'S JUST ANOTHER WAY WE'RE CONTINUING OUR COMMITMENT TO DECARBONIZATION. AND THEN THE LAST SLIDE, PLEASE, OR THE NEXT ONE, THE BATTERY DEMAND RESPONSE PILOT, ALONG WITH NEW INCENTIVES AND THE REQUIREMENTS FOR A DISTRIBUTED ENERGY RESOURCE MANAGEMENT SYSTEM, WHICH IS BUILT, UM, AND WITH AN RFI FOR THAT, UH, FOR THOSE REQUIREMENTS UNDERWAY, OUR CULTURE OF INNOVATION IS CRITICAL BECAUSE WE RECOGNIZE THE NEED FOR TECHNOLOGY EVOLUTION AS AN ENABLING FACTOR. YOU CAN SEE A LOT OF THE PROGRESS THAT WE'VE MADE ON THESE PAST FOUR SLIDES, AND THERE'S MORE TO COME. NEXT SLIDE, PLEASE. TO REDUCE THE RELIABILITY, AFFORDABILITY, AND ENVIRONMENTAL SUSTAINABILITY RISKS, WE NEED TO DEVELOP LOCAL SOLUTIONS WHILE CONTINUING OUR COMMITMENT TO DECARBONIZATION. WE NEED TO DO BOTH. UH, UTILITY SCALE RESOURCES HELP US IN, UM, IN BOTH OF THESE AREAS. AND WE HAVE A PROCESS FOR IMPLEMENTATION WITH FOUR KEY PHASES. WE RECENTLY PUT A LOT OF PROJECTS THROUGH THE FEASIBILITY AND THE PRE-DEVELOPMENT PHASES. UM, AS YOU CAN SEE IN THE, WELL, YOU CAN'T QUITE SEE, THERE'S A GRAY BOX BECAUSE OF THE COLORING ON THE SLIDE, BUT IN THE BOTTOM PORTION OF THIS SLIDE. AND, UH, THIS PRESENTATION INCLUDES THE STAFF PROPOSAL FOR ALL OF THAT WORK. WE STARTED WITH A BATTERY RFP, AND THEN WE LAUNCHED FOR SOLAR AND WIND RFPS. WE DID THE ALL RESOURCE RFP. AND ALONG WITH THAT PEAKER FEASIBILITY AND PRE-DEVELOPMENT DUE DILIGENCE WORK. NEXT SLIDE PLEASE. ONE OF THE LAST CHECKS, UH, OR ONE OF THE CHECKS THAT'S SET FORTH IN THE 2035 PLAN IS THE ALL RESOURCE RFP, WHICH WE INITIATED LAST YEAR OPEN TO ALL LOCAL RESOURCE TYPES. THE INTENTION OF THIS RFP WAS TO DETERMINE AND IS TO DETERMINE WHETHER CARBON FREE RESOURCES CAN BE USED TO EFFECTIVELY MEET THE ENERGY AND [01:20:01] RISK MITIGATION NEEDS OF AUSTIN ENERGY CUSTOMERS. THOSE NEEDS CALL FOR RESOURCES THAT ARE LOCAL TO REDUCE LOAD ZONE PRICE SEPARATION, AND COMBAT LOCAL RELIABILITY RISK LONG DURATION TO POWER THROUGH THE LONG HOURS, ESPECIALLY DURING EXTREME WEATHER CONDITIONS AND COMMERCIALLY PROVEN TO SUPPORT AFFORDABILITY AND ENSURE THAT THEY ARE PROVEN TO DELIVER. NEXT SLIDE. THIS ONE I SHOWED YOU DURING A PREVIOUS OPERATIONS, UH, UPDATE, UH, TO AT LEAST THE BEGINNING OF IT. WE RECEIVED SEVEN BATTERY STORAGE PROJECTS AND FIVE PROJECTS FOR VARIOUS NATURAL GAS TECHNOLOGIES. NOTABLY, THERE WERE NO PROPOSALS FOR LOCAL SOLAR, AND ALTHOUGH WE DID NOT RECEIVE SUFFICIENT OFFERS, UM, AS PAT MENTIONED EARLIER, THAT PENCILED OUT TO MEET OUR ENERGY AND RISK MITIGATION NEEDS. WE ARE RECOMMENDING A BAT THE BATTERY PROJECT THAT YOU VOTED ON TONIGHT FOR COUNCIL APPROVAL, UM, LATER THIS MONTH. AND THAT WILL BE THE THIRD, UH, BATTERY PROJECT ADDED TO OUR PORTFOLIO. NEXT SLIDE, PLEASE. OUR WORK HAS LED US TO RECOMMEND SEVERAL UTILITY SCALE ADDITIONS TO THE EXISTING AUSTIN ENERGY PO PORTFOLIO. JUST TO ORIENT YOU TO THIS SLIDE, THE EXISTING PORTFOLIO IS OUTLINED ON THE RIGHT SIDE, EVERYTHING THAT'S IN BLUE BACKGROUND AND WHAT WE'RE PROPOSING TO ADD, UM, IS ON THE LEFT WHITE PORTION OF THE SLIDE. COUNCIL HAS ALREADY APPROVED A LANDFILL SOLAR PROJECT AND TWO BATTERY PROJECTS, A TOTAL OF 150 MEGAWATTS. THIS WEEK, UH, SORRY, NOT THIS WEEK. NEXT WEEK WE HAVE FOUR MORE PROJECTS FOR COUNCIL TO CONSIDER A THIRD BATTERY STORAGE PROJECT, WHICH WILL ADD 100 MEGAWATTS TWO HOUR BATTERY TO OUR PORTFOLIO, TWO WIND PROJECTS, WHICH WILL ADD 300 MEGAWATTS OF ADDITIONAL WIND CAPACITY AND NEW NATURAL GAS PEAKERS. THE MODELING THAT I SHOWED YOU BEFORE, AND OUR MODELING OVERALL SHOWS A NEED TO ADD 400 TO 500 MEGAWATTS, BUT WE KNOW THE IMPORTANCE OF DOING AS LITTLE AS POSSIBLE. AND SO OUR RECOMMENDATION TO CITY COUNCIL WILL BE FOR THE LEAST AMOUNT THAT WILL GET US THROUGH THIS NEXT BIT, WHICH IS 400 MEGAWATTS. WITH ALL OF THESE PROJECTS, WE WILL HAVE ADDED APPROXIMATELY 1000 MEGAWATTS OF UTILITY SCALE ADDITIONS SINCE THE ADOPTION OF THE 2035 PLAN WITH 70% OF THAT BEING LOCAL. NEXT SLIDE PLEASE. US IN ENERGY IS A LEADER ON THE PATH TO CARBON FREE, AND OUR PORTFOLIO IS A HUGE PART OF THAT. THESE NEW RESOURCES WILL HELP BOOST THE PERFORMANCE THAT YOU SEE HERE. IN 20 25, 70 3% OF THE ELECTRICITY GENERATED BY AUSTIN ENERGY WAS CARBON FREE. AUSTIN IS HEAD AND SHOULDERS, AS YOU CAN SEE FROM THE GRAPH ABOVE, UH, THE REST OF ERCOT AND THE UNITED STATES, AND WE SHOULD BE REALLY PROUD OF THAT. BUT WE CAN'T STOP GOING. OUR CUSTOMERS ARE DEPENDING ON US TO CONTINUE TO DO OUR PART IN ENVIRONMENTAL SUSTAINABILITY. AND THE WHEEL CHART SHOWS THE BREAKOUT OF THE ENERGY MIX. THAT 73% CARBON FREE COMES FROM WIND, SOLAR, BIOMASS, AND NUCLEAR ENERGY. WE DO HAVE THE MOST DIVERSE ENERGY PORTFOLIO IN TEXAS, AND WE'RE ADDING BATTERIES AND GEOTHERMAL TO THAT MIX. NEXT SLIDE, PLEASE. SO I KNOW THAT SOME WILL BE EXCITED ABOUT THE NEW ADDITIONS, BUT ALWAYS ASKING, CAN WE DO THIS WITHOUT PEAKERS, WITHOUT NEW PEAKERS? AND THAT'S WHERE OUR TOOLBOX ANALOGY COMES IN HANDY. IF YOU HAVE A TOOLBOX FULL OF SCREWDRIVERS AND HAMMERS AND YOU COME ACROSS A FIX-IT JOB WHERE YOU NEED A WRENCH, YOU'RE GONNA HAVE A PROBLEM. THE DIVERSITY OF AUSTIN ENERGY'S PORTFOLIO IS A CRITICALLY IMPORTANT TRAIT, BOTH FOR OUR ENVIRONMENTAL GOALS AND FOR OUR RELIABILITY GOALS. IT HELPS US TO HAVE ALL OF THE TOOLS WE NEED TO ADDRESS THE BIGGEST RISKS AND PROTECT THE PEOPLE OF AUSTIN. SO THINK OF PEAKERS AS ESSENTIAL INSURANCE. THEY DON'T DISPLACE RENEWABLES AND THEY DON'T COMPETE WITH BATTERIES. INSTEAD, THEY COMPLIMENT THESE TECHNOLOGIES. PEAKERS ARE THE RELIABILITY BACKSTOP, AND ONCE WE SOLVE FOR THAT LOCAL RISK, IT CAN ENABLE MORE RENEWABLES, NOT ONLY INVESTMENTS, BUT ALSO HELP THEM TO BE A MORE EFFECTIVE HEDGE FOR OUR CUSTOMERS AS WE THEY'RE EXPECTED TO BE IN THE ERCOT MARKET. WITHOUT PEAKERS, THE GRID RELIABILITY FACES EXTREME RISK. AND FINALLY, PEAKERS PROVIDE THE NECESSARY BLACK START CAPABILITY THAT OTHER TECHNOLOGIES CANNOT. SO AN ERCOT WIDE BLACKOUT IS THE EPITOME OF THE BLACK SWAN EVENT. WE ALL HOPE THAT IT NEVER HAPPENS, BUT WE MUST PREPARE FOR THE DAY THAT IT MIGHT RELY ON. OUR EXISTING RESOURCES IS NOT A SUFFICIENT PLAN. THEY'RE SIMPLY TOO OLD AND THEY'RE SHOWING THEIR AGE MORE AND MORE EVERY YEAR. NEXT SLIDE PLEASE. IN PROPOSING ANY NEW PEAKERS, WE COMMITTED TO EMISSION GUARDRAILS, WHICH WILL SHOW UP IN MANY DIFFERENT WAYS. FIRST, PEAKERS DON'T DISPLACE RENEWABLES AS LONG AS THEY CAN REACH THE POINT OF CUSTOMER DEMAND. NEXT, BATTERIES COVER SHORT DURATION NEEDS, UM, AS [01:25:01] LONG AS THEY'RE CHARGED AND READY TO GO. IF THE PEAKERS ARE NEEDED TO MEET CUSTOMER DEMAND, THEN THE NEW MORE EFFICIENT UNITS ARE GONNA BE DISPATCHED FIRST, THEN THE SANDHILL PEAKERS AND THEN DECKER, AND ONLY IF NECESSARY. AND ALL PEAKERS ARE GONNA HAVE RUNTIME LIMITATIONS BASED ON THE AIR PERMIT RESTRICTIONS THAT WILL BE PUT IN PLACE DURING A PERMITTING PROCESS. NEW PEAKERS WILL ALSO HAVE THE LATEST EMISSION CONTROL TECHNOLOGY. ALL PEAKERS ARE GUIDED ALSO BY THE CARBON INTENSITY GUARDRAIL METRICS THAT WERE ADOPTED IN THE PLAN. WE KNOW THAT PEAKER UNITS RELEASE EMISSIONS, AND SO WE'RE LOOKING TO MOVE FORWARD IN THE MOST RESPONSIBLE WAY POSSIBLE. SO HERE'S A GOOD WAY OF THINKING ABOUT THAT. WHEN WE LOOK AT THE CARBON OUTPUT OF A PORTFOLIO WITH PEAKERS COMPARED TO THE ONE WITHOUT OUR CURRENT PORTFOLIO, PLUS ALL THE NEW ADDITIONS, WE SEE THE EQUIVALENT OF ABOUT 40,000 PASSENGER VEHICLES ON THE ROAD FOR A YEAR. THAT'S DEFINITELY IMPORTANT TO ACKNOWLEDGE. BUT THE ADDED ELECTRICITY OF THOSE 400 MEGAWATTS IS ENOUGH TO SUPPLY A QUARTER OF A MILLION TO 300,000 ELECTRIC VEHICLES FOR THE SAME YEAR. WE'RE TALKING A SIX TO SEVEN TIMES OFFSET. THAT TRADE OFF IS A PRETTY SIGNIFICANT BENEFIT, ESPECIALLY SINCE GASOLINE POWERED VEHICLES MAKE UP A MAJORITY OF THE LOCAL AREA EMISSIONS CONTRIBUTING TO OUR REGIONAL NON-ATTAINMENT RISK, IT'S A LOT EASIER TO PUT TOP OF THE LINE EMISSION CONTROL TECHNOLOGY ON A CENTRALIZED UNIT THAN ON HUNDREDS OF THOUSANDS OF VEHICLES DRIVING THROUGHOUT AUSTIN DAILY. AND SO THE SELECTIVE CATALYTIC REDUCTION TECHNOLOGY, WHICH WE WOULD USE, EVEN THOUGH IT'S NOT REQUIRED BY THE STATE, WE WOULD COMMIT TO DOING IT, AND WE'VE ALREADY DONE COMMITTED TO DOING THAT. IN THE PLAN, IT REMOVES 80 TO 95% OF THE LOCAL EMISSIONS OF KNOX. NEXT SLIDE PLEASE. THE 2035 PLAN SETS CLEAR EXPECTATIONS ON HOW TO INCORPORATE COMMUNITY VALUES INTO RECOMMENDATIONS THAT PRESENT TRADE-OFFS, ESPECIALLY WHEN IT COMES TO IMPLEMENTING NEW UTILITY SCALE RESOURCES. SO ACROSS THE BOARD FOR ALL OF OUR RESOURCES, I'VE HIGHLIGHTED THEM HERE AND THEY ARE FURTHER SPELLED OUT IN THE 2035 PLAN. WE ARE COMMITTED TO WORKERS, WE'RE COMMITTED TO PROTECTING LOCAL AIR QUALITY, AND WE'RE COMMITTED TO INCORPORATING EQUITY INTO CITING CONSIDERATIONS. WE'VE DONE ALL THOSE THINGS DURING OUR WORK THUS FAR, AND WE'RE COMMITTED TO CONTINUING TO DO SO. NEXT SLIDE, PLEASE. NOW I'M GONNA SWITCH GEARS A LITTLE BIT. SITE EVALUATION CAN BE A DIFFICULT TASK BECAUSE FOR LOCAL SOLUTIONS TO BE EFFECTIVE, THEY HAVE TO BE CITED LOCALLY IN AND AROUND OUR SERVICE AREA. OUR TEAMS USED A PRACTICAL PHASED APPROACH TO IDENTIFY AND SCREEN POTENTIAL SITES FOR THREE UTILITY SCALE TECHNOLOGIES, UTILITY SCALE, SOLAR UTILITY SCALE, BATTERIES, AND PEAKERS. NEXT SLIDE. WE DID THIS IN THREE PHASES. THE FIRST PHASE RESULTED IN APPROXIMATELY 400 SITES ACROSS OUR SERVICE TERRITORY. THEN WE SCREENED IT DOWN TO ABOUT 60, AND WE LANDED ON A SHORT LIST OF 14 SITES FOR DEEPER DUE DILIGENCE AND COMMUNITY FEEDBACK. NEXT SLIDE. THESE ARE THE SLIDES THAT WE SHARED DURING THE COMMUNITY ENGAGEMENT WORKSHOPS, AND I WANTED TO, UM, MAKE SURE THAT WE SHARED THEM WITH ALL OF YOU. SO THIS SLIDE SHOWS THE APPROXIMATE 400 SITES ACROSS OUR SERVICE TERRITORY IN PHASE ONE. NEXT SLIDE HERE IS THE SECOND SCREENING WITH APPROXIMATELY 60 SITES. AND NEXT SLIDE. THEN WE OVERLAY THE PUBLICLY AVAILABLE INFORMATION RELATED TO LARGE NATURAL GAS PIPELINES. THAT'S THE REDDISH LINES YOU SEE HERE. AND THEN NEXT SLIDE, WE OVERLAY MAJOR TRANSMISSION CORRIDORS FOR AUSTIN ENERGY. SO WHILE NOT ALL TECHNOLOGIES REQUIRE ACCESS TO NATURAL GAS, EVERYONE NEEDS ACCESS TO TRANSMISSION, THOSE GRAY LINES ARE PRETTY IMPORTANT. AND THEN NEXT SLIDE. WE SHORTLISTED THE SITES DOWN TO THESE 14, AND THIS IS WHERE HE PAUSED TO CHECK IN WITH THE COMMUNITY. SO NOW I'M GONNA TURN IT OVER TO LINDA RIF, WHO'S GONNA PRESENT ON THE COMMUNITY ENGAGEMENT WORK. EXCUSE ME. THANK YOU LI LISA. AND, UH, GOOD EVENING COMMISSIONERS. GLAD TO BE HERE. MY NAME'S LINDA RIF AND I GET TO ASSIST AUSTIN ENERGY ON THEIR COMMUNITY ENGAGEMENT. AND, UH, THE PURPOSE OF THESE WORKSHOPS WAS THIS, UM, THIS NEED FOR LOCAL GENERATION AND STORAGE FOR LOCAL RESOURCES. AND SO IT REALLY WAS FOCUSED ON THE SITE SELECTION PROCESS AND THEN ALSO KNOWING THAT IF YOU WERE GOING TO BE IN NEIGHBORHOODS, HOW DO YOU END UP MITIGATING AND BEING A GOOD NEIGHBOR IN THAT PROCESS? SO AUSTIN ENERGY CAME TO ME BEFORE THOSE FINAL DECISIONS WERE MADE AND ASKED IF WE COULD DO EARLY, UM, INPUT BEFORE FINAL SELECTION OF THOSE, UH, THOSE SITES WERE THERE. AND SO THAT'S WHAT THESE COM UH, DIFFERENT GROUPS WERE, WERE THERE FOR. SO WE, UH, DID A LOT OF OUTREACH ACTUALLY. UM, [01:30:01] WE HAD 172,000 CUSTOMERS THAT RECEIVED EMAILS. WE ACTUALLY RESEARCHED 84 STAKEHOLDER GROUPS, ELECTED OFFICIALS, COMMUNITY GROUPS, SCHOOLS. UH, WE DID NOT TALK TO EVERYBODY AT THE SCHOOL, BUT THE PRINCIPAL AND, AND THE MAIN PEOPLE GOT SOME INFORMATION THAT WE INVITED THEM. AND THERE WAS ALSO A FOLLOW UP CALL. THERE WERE SOCIAL MEDIA POSTS, UM, 30 OF THOSE ON NEXTDOOR FACEBOOK, X, INSTAGRAM, AND LINKEDIN. UM, AND THEN ALSO ON THE SPEAK UP AUSTIN. SO A LOT OF PEOPLE WERE INVITED. WE HAD, UH, WE WERE AT THE MONTOPOLIS REC CENTER, CONCORDIA UNIVERSITY DECKER MIDDLE SCHOOL. AND THEN WE ALSO HAD A VIRTUAL WORKSHOP. AND I WANNA TAKE THE TIME TO THANK THE COMMISSIONERS THAT SHOWED UP AT OUR MEETINGS AND ALSO SOME OF THE AUDIENCE MEMBERS. THANK YOU FOR, FOR BEING THERE. WE DID HAVE A LOT OF SELF-IDENTIFIED ENERGY NERDS AS THEY TOLD ME THEY WERE REFERRED TO, BUT UH, WE ALSO HAD QUITE A FEW NEIGHBORHOOD ASSOCIATIONS THERE AND OTHER PEOPLE, BUT THEY HAD AN OPPORTUNITY TO COME. NEXT SLIDE, PLEASE. SO WHAT WE ASK AT ALL OF THESE DIFFERENT GROUPS IS WHAT IS MISSING IN THE EVALUATION CRITERIA OR THE SITE SELECTION PROCESS? NEXT SLIDE, PLEASE. SO WE, WHAT WE HEARD IS DISTRIBUTE POTENTIALLY IMPACTS FAIRLY AND DEMONSTRATE HOW COMMUNITY INPUT SHAPES THOSE DECISIONS. FURTHER, CONSIDER THE THREAT OF WILDFIRE RISK DUE, THE IMPLEMENTATION OF BATTERIES. CONSIDER PROXIMITY TO EMERGENCY SERVICES AND PROXIMITY TO SCHOOLS. ONE, THEY WANNA CLOSER ONE FARTHER AWAY. AS YOU CAN IMAGINE, INCLUDE HEALTH, ENVIRONMENTAL, AND EQUITY ANALYSIS CONSIDERATIONS. CONSIDER PERPETUATING IMPACTS ON LOW INCOME COMMUNITIES DUE TO LOCATION OF EXISTING NATURAL GAS PIPELINES AND CONSIDER IMPACTS ON OUTSIDE CITY CUSTOMERS IF YOU'RE PUTTING UTILITY SCALE RESOURCE SITES JUST ON THE EDGE OF YOUR SERVICE AREA. WE ALSO ASKED NEXT SIDE, PLEASE, UH, PLEASE, WHAT ARE YOUR CONCERNS IF THIS ONE OF THESE SITES WAS POTENTIALLY SELECTED? AND HOW CAN AUSTIN ENERGY BE A GOOD NEIGHBOR IN AN AREA WHERE THOSE SITES ARE SELECTED? NEXT SLIDE PLEASE. WHAT WE HEARD IS EQUITY AND DISPROPORTIONATE BURDEN CONCERNS THAT EAST AUSTIN AND VULNERABLE COMMUNITIES ARE GONNA BEAR A LOT OF IMPACT. AND THEN WE ALSO HEARD ABOUT CONCERNS ABOUT RATE PAYER AND TAX RATE, PAYER TAX BURDEN AS WELL. WE TALKED ABOUT, UH, CONSTRUCTION AND COMMUNITY DISRUPTIONS, TRAFFIC, UH, NEIGHBORHOOD CHARACTER IMPACTS, HEALTH AND ENVIRONMENTAL IMPACTS, UH, WHICH AIR POLLUTANTS, NOISE, SAFETY RISKS, AND THEN THE PEAKER UNITS, SPECIFICALLY SOME EMISSIONS AND, AND MISSION CREEP. UM, MEANING THAT WOULD WE USE THEM ONLY WHEN NEEDED OR WOULD THEY BECOME, WOULD THEY BE USED MORE OFTEN? AND THEN WE ALSO, UM, HEARD ON WHAT NEXT SLIDE, PLEASE. WHAT WE HEARD ABOUT BEING A GOOD NEIGHBOR. WE, UH, SAID THAT TO GAUGE THE COMMUNITY EARLY AND ESTABLISH, UH, EDUCATION PRIOR TO SELECTION SITES, SUPPORT THE FIRE MANAGEMENT TRAINING FOR AUSTIN FIRE DEPARTMENT, SET CLEAR GUARDRAILS ON EMISSIONS OPERATIONS AND ON LONG USE OF FACILITIES, MITIGATE IMPACTS AND SHARE BENEFITS LOCALLY. AVOID CONDEMNATION WHEN POSSIBLE, IMPLEMENT PUBLIC FRIENDLY LANDSCAPING AND CONSIDER VOL TONIC. I DON'T KNOW HOW TO SAY THAT. ANYWAY, THAT WAS A NUDE WORD FOR ME, BUT THAT'S BASICALLY PLANTING UNDER SOLAR, SOLAR FIELDS TO, YEAH. . THANK YOU. THANK YOU. UM, PROVIDE AIR FILTERS FOR RESIDENTIAL HOMES AND ENSURE THE GAS SUPPLIES CLEAN TO LIMIT GREENHOUSE GAS EMISSIONS. WE HEARD SOME OTHER THINGS TOO, SO I DON'T WANNA SKIP THAT. UM, NEXT SLIDE PLEASE. UM, WE, THEY SAID JUST CLARITY ON NEEDS, GOALS AND ALIGNMENT, SOME TECHNOLOGY SPECIFIC EVALUATION AND QUESTIONS, SOME COST AND RISK TRANSPARENCY AND PROCESS TRANSPARENCY AND ALTERNATIVES. UM, REALLY THEY WERE LOOKING A LOT AT CUSTOMER ENERGY SOLUTIONS, AND WE HAD SOME PEOPLE, UH, FROM AUSTIN ENERGY TO ANSWER SOME OF THOSE QUESTIONS AS WELL. THE NEXT STEP ON PUBLIC ENGAGEMENT, NEXT SLIDE, PLEASE, IS TO, UM, AS THESE SITE SELECTIONS ARE DETERMINED, WE WOULD GO OUT AND SPECIFICALLY TALK WITH THE NEIGHBORHOODS THAT ARE, THAT ARE ADJACENT TO OR CLOSELY IMPACTED BY THE SITE SELECTIONS AND BEGIN THOSE DIALOGUES WITH THEM TO CREATE BENEFIT PLANS, MITIGATION PLANS. SO THAT WILL HAPPEN LATER THIS YEAR. AND WITH THAT, I'LL TURN IT BACK OVER TO, TO LISA FOR NEXT STEPS. MY SLIDE, OH, SORRY, . ALL RIGHT. UM, SO WE ARE, UM, GOING TO, UH, PRESENT A SIMILAR DECK AT THE UTILITY OVERSIGHT COMMITTEE ON MAY 19TH. AND THEN, UM, THESE, ALL THE THREE ITEMS, THE THREE RCAS THAT, UM, YOU ARE CONSIDERING WILL BE ON THE, UH, UP FOR CITY COUNCIL CONSIDERATION ON, UH, MAY 21ST. AND I THINK THAT BRINGS TO THE END OF MY DISSERTATION, AND WE CAN ANSWER QUESTIONS. [01:35:01] LET'S GO AROUND. AND SO, AL WHY DON'T WE START FIVE MINUTES FOR YOU. FIRST. YOU'RE TALKING FIVE MINUTES. OKAY. WELL, THERE'S A LOT HERE AND IT, IT'S A, IT'S A LOT AND IT'S A BIG, UH, PRESENTATION. LISA, THANK YOU. UH, SOME OF IT I LIKE, SOME OF IT I, I HAVE QUESTIONS ABOUT, BUT, UH, I GUESS THE FIRST THING, JUST TRYING TO TAKE IN AN ORDER, UH, GOING BACK TO PAGE NINE ON THE PRICE SEPARATION, THAT'S A, A SLIDE THAT WE SEE ALL THE TIME, AND IT'S REAL, AND I, I, I DON'T DOUBT THAT HAPPENED. UH, AND IT HAPPENS WITH SOME FREQUENCY THAT'S UNKNOWN TO ME. I SEE IT ONCE IN A WHILE WHEN I LOOK ON THE ERCOT MAP, BUT THE ONLY WAY TO REALLY TELL IS HOW DO YOU AVERAGE THIS UP OVER A WHOLE YEAR AND THIS WAS 15 MINUTES, AND YOU SAY, WELL, THIS LASTED EIGHT HOURS. OKAY, MAYBE IT, I DON'T KNOW IF IT STAYED THAT EXTREME ALL EIGHT HOURS, BUT THERE'S ALSO TIMES WHEN ENERGY IS FREE IN ERCOT, UNIFORMLY. THERE'S TIMES WHERE THERE'S NO CONGESTION. THERE'S EVEN SOMETIMES WHERE THERE'S A HIGHER PRICE IN OUR RENEWABLE AREAS THAN THERE IS IN TOWN. I MEAN, THAT'S NOT THE NORM, BUT IT HAPPENS. I'VE SEEN IT. I, I, YOU KNOW, SCREEN SHOOT THOSE THINGS. BUT THE QUESTION IS, THIS LOOKS LIKE A REALLY SERIOUS TRANSMISSION IMPORT CONSTRAINT INTO AUSTIN, UH, WITH GENERALLY FAIRLY EVEN PRICING ACROSS THE STATE. UH, SO IF WE HAD MORE TRANSMISSION IMPORT CAPACITY, WOULD WE STILL BE LOOKING AT THAT SAME PICTURE? YEAH, THERE'S, THERE'S A COUPLE OF WAYS TO SOLVE THIS. AND ONE OF THEM IS ADDITIONAL TRANSMISSION IMPORT CAPACITY. AND THE, UH, COMPLIMENT TO THAT IS TO ADD ADDITIONAL LOCAL RESOURCES. AND WE BELIEVE STRONGLY OUR WORK AND OUR EXPERIENCES HAVE SHOWN US THAT WE NEED TO MOVE FORWARD ON BOTH OF THOSE ANGLES. UM, YOU'LL RECALL, AND SOMEONE ASKED ME ABOUT THIS TODAY, UM, IN A, IN A NEWS INTERVIEW ABOUT THE OUTAGES THAT WE WERE, UM, REQUESTING IN THAT WEREN'T MEETING ERCOT CRITERIA FOR TRANSMISSION UPGRADES MM-HMM . AND SO PART OF THE ISSUE, RIGHT, IN TRYING TO INCREASE OUR TRANSMISSION IMPORT CAPACITY IS SOMETIMES WE CAN'T EVEN TAKE THOSE LINES OUTTA SERVICE TO DO MAINTENANCE AND UPGRADE WORK ON THEM, UM, BECAUSE OF, UH, INSUFFICIENT LOCAL RESOURCES AND THAT CREATE RELIABILITY RISKS. SO THERE'S A NUMBER OF WAYS TO SOLVE THIS. THE ANSWER IS BOTH, AND NOT JUST EITHER OR, BUT ANY OF THE SOLUTIONS WE'RE TALKING ABOUT TRANSMISSION PEAKERS, MORE BATTERIES, UH, ARE MORE OR LESS ON A TIME ON A FIVE YEAR TIMEFRAME. I MEAN, WE, WE CAN'T HAVE A PEAKER HERE TOMORROW TO SOLVE TODAY'S PROBLEMS. UH, WE CAN'T HAVE TRANSMISSION, BUT WE CAN HAVE A LOT MORE TRANSMISSION IN FIVE YEARS, OR WE CAN HAVE PEAKERS IN FIVE YEARS, OR WE CAN HAVE MORE BATTERIES IN FIVE YEARS. YEAH. SO WE'RE REALLY NEED TO BE, I THINK, LOOKING FOR WHAT'S IT GONNA LOOK LIKE IN 2030, NOT WHAT, YOU KNOW, WHAT DOES IT LOOK LIKE TODAY? AND, UH, IT JUST SEEMS THAT WE'RE, WE'RE, WE'RE IN A, WELL, I'LL GET TO THIS IN MY PART, BUT WE'RE TRANSITIONING TO A MORE OUTWARD REACHING UTILITY THAT HAS MORE RENEWABLE RESOURCES ACROSS THE STATE THAN WE EVER WERE IN THE BEGINNING. UM, BUT LEMME LEMME GO ON THE NEXT, IF YOU HAD SIX HOURS WORTH OF BATTERIES AT A, YOU KNOW, I DON'T KNOW IF THAT'S ALL OF OUR POWER, IF THAT'S ALL 300 OR ALL 3000 MEGAWATTS, OR IF THAT'S JUST SOME PORTION OF OUR POWER THAT'S AFFECTED THERE, BUT, UH, IF YOU HAD A LARGE FOUR HOUR BATTERY, HOW MUCH WOULD THAT HAVE BEEN MITIGATED? SO THIS IS REFLECTING WHAT THE LOAD ZONE PRICE IS, WHICH IS THE AVERAGE OF ALL OF THE NODES WITHIN OUR ZONE. SO ALL EVERY MEGAWATT THAT WE HAVE TO SERVE IS PAYING THE HIGHER PRICE AT THIS PERIOD OF TIME. AND AS YOU NOTED, THIS ONE LASTED FOR OVER EIGHT HOURS. SO, WHAT WAS YOUR QUESTION AGAIN? HOW, WELL, I GUESS THE QUESTION IS HOW OF, OF ALL THOSE EVENTS AND ALL THOSE HIGH PRICE SPIKES THAT DO HAPPEN, HOW MANY WITHIN A YEAR ARE ONE HOUR, TWO HOUR, THREE HOUR, FOUR HOURS, EIGHT HOUR? IS THIS A, IS THIS AN OUTLIER SO FAR OUT THAT IT'S A SINGLE CASE? AND HOW MANY OF THOSE OUT THOSE SPIKES WOULD BE SERVED BY HAVING A FOUR HOUR BATTERY OF, OF THE SAME CAPACITY OF YOUR PEAKER? I GUESS IN THIS CASE, YOU'RE SAYING YOU'RE GONNA HAVE LOOKING FOR A 400 MEGAWATT PEAKER, 400 MEGAWATTS OF PEAKER UNITS. YES. SO YOU'D BE LOOKING AT 400 [01:40:01] TIMES FOUR HOUR BATTERY. IF YOU HAD THAT AS A COMPARISON, HOW, HOW MANY OF THE EVENTS DURING THE YEAR WOULD BE SOLVED BY THAT FOUR HOUR BATTERY, AND HOW MANY EVENTS WOULD BE LEFT OVER THAT ONLY THE PEAKER COULD FULLY SATISFY? AND IF THE PEAKER ONLY RAN AT THOSE TIMES, WHAT, WHAT'S THE ECONOMICS OF DOING THAT? YEAH, SO, UM, IF WE HAD 400 MEGAWATTS OF FOUR HOUR BATTERIES MM-HMM . RIGHT? THAT WOULD SOLVE SOME OF THIS, RIGHT? THIS WAS AN EIGHT HOUR EVENT MM-HMM . AND THE EVENTS HAPPEN, YOU KNOW, OF ALL DIFFERENT DURATIONS AND TIMES, BUT WHEN WE'RE AT OUR WORST, THEY, THEY HAPPEN A LOT, RIGHT? FOR A, FOR A LONG DURATION. UM, IF WE, THE, TO BE ABLE TO DO THAT, YOU HAVE TO THINK ABOUT, THAT'S LIKE FOUR JUPITER BATTERY PROJECTS, RIGHT? AND THAT'S ONLY GONNA SOLVE FOR HALF OF THIS TIME PERIOD. SO WHAT IS THAT FIVE MINUTES? YEAH. OKAY. SO WHAT, WHAT WE'RE, SORRY, ALARM. SO WHAT WE'RE SEEING HERE IS THAT THE COST THAT WOULD TAKE TO PUT THAT MANY BATTERIES IN THEN INCREASES OUR OVERALL PORTFOLIO COST AS A WHOLE AND STILL DOESN'T MITIGATE THE RISKS FOR THE LONGER DURATION EVENTS OR THE EXTREME WINTER EVENTS. SO PUTTING THAT MUCH INTO BATTERIES AT THIS TIME IS NOT ADVISABLE, UM, WITHOUT HITTING INCREDIBLY UNECONOMIC RESULTS AND NOT NECESSARILY MITIGATING ALL OF YOUR RISKS. BUT COULD, COULD YOU SHOW US HOW MANY ARE GREATER THAN FOUR HOUR EVENTS IN A, IN A YEAR? YOU'RE ASKING IN JUST HOW MANY TIMES THIS HAPPENS? YEAH. THAT ARE GREATER THAN FOUR HOURS. I DON'T KNOW THAT I HAVE THE, THAT INFORMATION OFF THE TOP OF MY HEAD. WHAT WE HAVE DONE IN TERMS OF, UM, CONGESTION RISK IN THE PAST AND, AND LOOKED AT IT THAT HISTORICAL, IS THAT THIS, SO THIS DAY WAS $5 MILLION, RIGHT? IN 2022 IT WAS OVER 135 MILLION. AND IN 2023 IT WAS OVER 150 MILLION OF CONGESTION COSTS. SO THAT'S A LOT OF DAYS THAT ARE AT FIVE TO, LET'S JUST CALL IT 10 MILLION MM-HMM . FOR THE, FOR THE TYPE OF DURATION, OR IT'S A LOT OF, YOU KNOW, IT'S A LOT OF SHORTER EVENTS. YEAH. WELL, AND THOSE WERE ESPECIALLY BAD YEARS. THEY WERE, THEY WERE. AND WE ANTICIPATE WE'LL HAVE MORE OF ABOUT THAT, WHICH DOESN'T MEAN THEY WON'T, CAN'T COME BACK, BUT THEY WERE, THEY WERE KIND OF OUTLIER YEARS. I, I, I ANTICIPATE WE'LL HAVE MORE YEARS LIKE THAT MOVING FORWARD. YEAH. I HATE TO SAY IT, BUT I ANTICIPATE THAT WE WILL, BECAUSE THAT FEEDS INTO THE NEXT QUESTION. THE CHART WITH RELIABILITY RISK IS A SIMILAR QUESTION OF, OKAY. IS, IS, IS THIS PEAKER? I THINK IT'S ON THE NEXT PAGE. YEAH. THE PEAKER IS 400 MEGAWATTS. THIS IS 400 MEGAWATTS. AND IS THAT COMPARED TO 400 MEGAWATTS OF BATTERIES ON THE THIRD COLUMN, 400 ADDITIONAL MEGAWATTS OF BATTERIES IN ADDITION TO THE BATTERIES THAT HAVE ALREADY BENEFITED, WE ALREADY HAVE THE 240. AND YOU'RE, YOU'RE PROJECTING THAT THOSE 400 MEGAWATTS OF FOUR HOUR BATTERIES, FOUR HOUR THAT ARE E WOULD ONLY RE WOULD ONLY REDUCE THE RISK BY A HUNDRED EVENTS. THAT IS CORRECT. I, I'D LIKE TO SEE MORE ABOUT THAT, I GUESS IS THE QUESTION. UH, GO ONTO THE NEXT, YEAH. YEAH, WE'LL GET SOME MORE TIME. COMMISSIONER, UM, WE HEARD FROM, UM, JOHN DAVIS THAT, UH, THE EXTRA PEAKERS WERE NOT INCLUDED IN THE FINANCIAL FORECAST, UM, THAT WAS PRESENTED. MY QUESTION IS, UM, ARE THE TRANSMISSION IMPROVEMENTS THAT YOU SPOKE ABOUT JUST NOW INCLUDED IN THE FINANCIAL FORECAST? UM, THERE ARE, UH, UH, ABOUT 560 MILLION IS WHAT IT LOOKED LIKE, IF I REMEMBER THAT SLIDE CORRECTLY, OF, UM, TRANSMISSION IMPROVEMENTS THAT ARE BAKED INTO THE FINANCIAL FORECAST. AND LAST MONTH, DAVID TOM CHISHOLM SAID THAT ABOUT 60% OF THEM, I REMEMBER THAT CORRECTLY, WAS GOING TO, UH, CONTRIBUTE TO IMPORT CAPACITY, UM, IMPROVEMENTS OR REDUCE ESSENTIALLY CONGESTION, EITHER ACROSS OUR SYSTEM OR INTO OUR SYSTEM. AND SO, UM, YES, BUT THAT'S A ROLLING FIVE YEAR CAPITAL IMPROVEMENT PROJECT, AND SOMETIMES THE TRANSMISSION PROJECTS, THE, THEY TAKE LONGER TO GET THROUGH ALL THE REGULATORY APPROVAL PROCESS. SO THERE ARE MORE IN, YOU KNOW, CONTINUED YEARS. WE'RE ALWAYS DOING TRANSMISSION UPGRADE WORK. [01:45:01] OKAY. SHORT ANSWER IS YES. THANK YOU. SO, EXCELLENT. SO YEAH, IF WE COULD STAND THIS, UH, SLIDE QUICKLY, CAN YOU JUST DEFINE RELIABILITY RISK HOURS? IS THAT LIKE THE HOURS THAT YOU SHOWED ON THE PREVIOUS SLIDE? OR THIS IS SOMETHING DIFFERENT? WHAT, WHAT IS THIS ACTUALLY SHOWING? YEAH, THIS ISN'T PRICE. THIS IS SO, OKAY, SO THIS IS THE RELIABILITY. RISK HOURS ARE THE HOURS. WHEN YOU SAY THAT THE AMOUNT OF GENERATION THAT YOU CAN PRODUCE LOCALLY, PLUS THE AMOUNT OF, UH, GENERATION THAT YOU CAN IMPORT IS LESS THAN THE CUSTOMER DEMAND. THAT'S THE SITUATION WHERE WE WOULD HAVE TO INSTITUTE LOCAL CONTROLLED OUTAGES. GOT IT. ON THE PREVIOUS SLIDE, IT'S A SIGNAL OF A RELIABILITY THAT WAS PRICED. THIS IS RELIABILITY, BUT THEY'RE SHOWING SIMILAR THINGS. WELL, BECAUSE IT'S, THE MARKET IS AN ECONOMIC MARKET TO PROVIDE FOR A RELIABLE RIGHT. ENERGY SERVICE, THE ELECTRIC RELIABILITY COUNCIL OF TEXAS, RIGHT? SO THEY'RE BOTH THE SAME. THE THE PRICING IS A SIGNAL OF RELIABILITY ISSUE. IT'S THAT IN THE PREVIOUS EXEMPT FOR THOSE EIGHT DAYS, IT JUST MANIFESTED IN HIGH PRICES, NOT IN LOCAL CONTROLLED OUTAGES. WHEN WE COUNT THE, WE WOULDN'T COUNT THAT HOUR. WE COUNT THE HOURS THAT ACTUALLY SAY WE'RE, WE'VE, WE DON'T HAVE ENOUGH POWER BETWEEN WHAT WE HAVE HERE AND WHAT WE CAN BRING IN COMPARED TO WHAT THE CUSTOMERS NEED. OKAY. SO, UM, HERE'S MY BIG QUESTION. IN ALL THE OTHER RCAS YOU'VE BROUGHT TO US, YOU'VE GIVEN US A COMPANY, A BASIC, AT LEAST SOME DESCRIPTION OF THE TECHNOLOGY, AN APPROXIMATE LOCATION, UM, AND SOME SORT OF COST. AND HERE, UM, AND I'VE GOTTA TIE IN SOME BEING I'M GOOD DECORUM, BUT HERE YOU'RE ASKING US TO PROVE SOMETHING WHERE WE, I MEAN, NOW YOU'VE MENTIONED 400 MEGAWATTS, BUT THAT'S THE FIRST TIME WE'VE HEARD IT. YOU'RE NOT GIVING US WHAT THE TECHNOLOGY IS. I MEAN, I KNOW YOU MIGHT NOT BE ABLE TO SAY THE EXACT LOCATION. I GUESS IT'S 14 POSSIBLE PLACES, BUT IT JUST SEEMS IT, CAN YOU UNDERSTAND WHY THERE WOULD BE SOME CONCERN ABOUT APPROVING, UM, AN RCA WITHOUT A LOT OF THOSE DETAILS, INCLUDING THE ULTIMATE COST? SO THE RCA THAT YOU HAVE SET BEFORE YOU IS THE PUBLIC FACING RCA. RIGHT. AND IT JUST SPEAKS MORE IN DIRECTIONALITY. ITS MAIN PURPOSE IS TO ALLOW FOR US TO HAVE AN ITEM FOR YOU TO DISCUSS TODAY AND ALSO FOR, UM, THERE TO BE AN OPPORTUNITY FOR PUBLIC COMMENT. BUT THE, AS THE RCA DESCRIBES, UM, THE PARTICULARS OF THE, UH, PROPOSAL TO BE SET FORTH IN FRONT OF COUNCIL IS COMPETITIVE MATTERS. OKAY. AND SO IT'S, IT'S, IT WILL BE THOUGH A CONTRACT, UM, THAT WILL BE DISCUSSED BY COUNCIL AND EXECUTIVE WOULD BE A CONTRACT FOR UP TO 400 MEGAWATTS AS A MAXIMUM, OR THAT'S JUST A AVERAGE. SO AS WE, AS I MENTIONED, WE STUDIED AND, AND OUR STUDIES LOOK LIKE WE NEED BETWEEN 400 AND 500, BUT WHAT OUR PROPOSAL TO CITY COUNCIL WILL BE IS UP TO 400. OKAY. THANK YOU FOR SAYING THAT PUBLICLY. THAT'S, THAT'S HELPFUL. , WE'LL GET TO YOU. I GOT A COUPLE MORE QUESTIONS. UM, IF THAT'S, IF WE'RE DOING IT THAT WAY, RIGHT? OR DO WE WANNA WE'LL JUST GO TO JONATHAN. LET'S GO TO JONATHAN. I'M LOOKING AT THE LINE HERE. HE STILL HAS TIME. I STILL HAVE TIME. I DIDN'T KNOW IF, IF I COULD ASK OTHER QUESTIONS. OKAY. HAS A TIME CONSTRAINT THOUGH. OKAY. WELL, KAY, WELL SURE. OKAY. KAY. BUT GO AHEAD AND ASK ONE Y YOU'RE OKAY. LET'S JUST START FIVE MINUTES. I'M NOT TRYING TO INTERRUPT YOU, CY. I WAS JUST, OH, OKAY. OKAY. SO JUST LET ME, LEMME CONTINUE. I'M STILL ON THE CLOCK. UM, I FEEL LIKE I'M AT THE SENATE, WHICH I WAS AT TODAY. UH, I ONLY GOT TWO MINUTES THERE, SO THANK YOU. UM, UH, SUMMARY OF, SO YOU DID AN ALL RESOURCE REQUEST FOR PROPOSALS. YOU GOT THESE BATTERY STORAGE PROJECTS WE ALREADY DISCUSSED. YOU GUYS ONLY LIKED, YOU ONLY THOUGHT ONE THAT PENCILED OUT, BUT YOU DID GET SOME PROJECTS FOR NATURAL GAS TECHNOLOGIES. ARE THE PROJECTS THAT YOU'RE DISCUSSING TODAY TAKING TO COUNCIL, WERE THOSE IN RESPONSE TO REQUEST FOR PROPOSAL OR THESE ARE SEPARATE FROM THOSE? SO WHAT WE ARE BRINGING TO COUNCIL, UH, IS NOT A PROJECT PROPOSAL THAT CAME OUT OF THE ALL RESOURCE RFP. IT INSTEAD CAME OUT OF OUR, UM, PEAKER FEASIBILITY AND PRE-DEVELOPMENT DUE DILIGENCE WORK. OKAY. AND YOU DIDN'T GET ANY, DID YOU NOT GET ANY LONG DURATION BATTERY TECHNOLOGY RESPONSES THAT MADE SENSE? WE DID NOT GET, IT DEPENDS ON WHAT YOU DEFINE AS LONG DURATION, UH, FOUR HOURS OR GREATER. WE DID GET A FEW OFFERS FOR LONGER THAN THAT. THEY DID NOT MAKE SENSE AS VALUE ADD TO OUR PORTFOLIO. OKAY. AND DID YOU NOT GET ANY GEOTHERMAL PROPOSALS? WE DID NOT GET [01:50:01] A GEOTHERMAL PROPOSAL. UH, NO, NOT THAT WAS ONE THAT COULD BE EVALUATED. OKAY. IT WASN'T READY FOR PRIME TIME OR WHATEVER. IT WASN'T. OKAY. THAT, THAT'S, UM, THAT'S USEFUL. UM, IN THE, UM, IN THE RESOURCE PLAN THAT, THAT A BUNCH OF US WORKED ON, WE WERE GENERALLY HAPPY WITH. THERE WAS A REQUIREMENT THAT YOU GUYS DO COMPARE, UM, YOU KNOW, A, A VISION IN THE FUTURE WITH PEAKERS AND A VISION WITHOUT IT, A CARBON FREE IS, ARE YOU SAYING THAT YOU HAVE PERFORMED THAT ANALYSIS AND THAT'S WHAT YOU'RE PRESENTING? SO DO YOU, DO YOU FEEL LIKE YOU'RE MEETING THE SPIRIT OF THE GENERATION PLAN TONIGHT IN TERMS OF BE, WE BASICALLY SAID BEFORE YOU INVEST IN PEAKERS, YOU HAVE TO LOOK AT AN ALTERNATIVE OPTION. IS THAT BASICALLY WHAT YOU'RE PRESENTING TO US? DO YOU FEEL LIKE THAT'S, YOU'RE MEETING THAT REQUIREMENT? I DO FEEL LIKE I'M MEETING THAT REQUIREMENT, YES. OKAY. BOTH FROM THE ALL RESOURCE RFP AND FROM, UH, SEVERAL OF THE ANALYSIS SLIDES SHOWN HERE. OKAY. YOU, YOU KNOW THAT WE'VE GOT A RESOLUTION THAT ASKS FOR AN ADDITIONAL ANALYSIS, SO I'M JUST, YOU KNOW, THAT, BUT I'M AWARE, UM, I FEEL LIKE MORE ANALYSIS MIGHT BE NEEDED. IT'S JUST MY POSITION. SO I'LL, MY FIVE MINUTES ARE UP. , DO YOU WANT YOUR FIVE MINUTES NOW? YEAH. THANK YOU. UM, I GUESS MY FIRST QUESTION, UH, YOU HAVE SAID THAT THESE, UH, THAT THIS CONTRACT, ALTHOUGH I, I GUESS MAYBE MY FIRST QUESTION WILL BE, IS THERE AN ACTUAL CONTRACT THAT YOU'RE TAKING FORWARD, OR I THINK WHAT YOU'VE TOLD US IS THAT YOU WANT AUTHORIZATION TO GO NEGOTIATE TO THEN GET TO A CONTRACT, BUT YOU HAVE NOT IDENTIFIED A COMPANY YET. IS THAT ACCURATE? OR IS THERE AN ACTUAL CONTRACT YOU'RE TRYING TO TAKE FORWARD? SORRY, LEMME JUST MAKE SURE I UNDERSTAND. IS YOUR QUESTION WHETHER OR NOT THERE'S A CONTRACT ALREADY TO BRING TO COUNCIL? YES. NO, THERE IS NOT A CONTRACT TO BRING TO COUNCIL YET. OKAY. SO I'M, I'M CURIOUS AS TO WHY YOU'RE SKIPPING FORWARD IN THE PROCESS. WHEREAS WITH THE WIND SOLAR BATTERY CONTRACTS THAT WE SEE Y'ALL DO AN RFP, YOU GET TO A POINT WHERE YOU'RE CLOSE, YOU HAVE, YOU HAVE A PROPOSAL, THERE'S INFORMATION TO SHARE, AND THEN YOU GO TO COUNCIL TO FINALIZE IT AND EXECUTE IT. BUT IN THIS CASE, THERE'S NOT EVEN ANYTHING TO START WITH. WHY THE, WHY IS THIS DIFFERENT? SO, UM, WHEN WE DO ALL OF OUR RFPS, WHEN WE ASK FOR A TECHNOLOGY, COME ONE COME, ALL RIGHT? WE GET, UH, A LOT OF DIFFERENT OFFERS TO BE ABLE TO COMPARE TO EACH OTHER. WE CAN, UH, EVALUATE ALL THOSE OFFERS, PICK SOMETHING THAT LOOKS LIKE IT'S VALUE ADD TO OUR PORTFOLIO OR MULTIPLE ITEMS, AND THEN WE BRING THEM FORWARD. UH, MOST OF THOSE CONTRACTS WHEN DURING THE RFP, THEY PROVIDE THE, UH, TERMS AND CONDITIONS IF YOU WILL, THAT ARE ASSOCIATED WITH THEIR PRICE. AND MOST OF THAT IS BAKED IN. AND THEN WE FEEL COMFORTABLE THAT WE CAN BRING THAT FORWARD TO COUNCIL. IN THIS CASE, DURING THE ALL RESOURCE RFP, WE DID NOT GET ANY PROPOSALS FOR NATURAL GAS PEAKERS THAT ARE DEEMED VIABLE ECONOMIC VALUE ADD. AND SO, UM, INSTEAD, AS PART OF OUR DUE DILIGENCE, UM, WE'VE HAD BEEN HAVING CONVERSATIONS WITH A LOT OF DIFFERENT MANUFACTURERS. AND SO WE'VE DONE SOME OF THAT WORK AND NOW WE NEED TO GO TO COUNCIL AND SEEK AUTHORIZATION, UM, FOR, UH, YOU KNOW, A CERTAIN DOLLAR AMOUNT ULTIMATELY TO, UH, TRY TO ENTER INTO A CONTRACT WITH, UH, ONE OR MORE MANUFACTURERS OF NATURAL GAS PEAKER EQUIPMENT. AND I, I GUESS A FOLLOW UP THERE, WHY ARE YOU NOT DOING THE SAME WITH OTHER TECHNOLOGIES SUCH AS LONGER DURATION STORAGE? LIKE WHY, WHY IS ONLY THIS ONE GETTING SPECIAL TREATMENT? I DON'T UNDERSTAND WHAT YOU MEAN BY SPECIAL TREATMENT. WELL, YOU'RE SEEKING TO DO A CONTRACTING PROCESS WITHOUT AN RFP. YOU COULD GO BACK OUT AND DO AN RFP SPECIFICALLY TO PURCHASE PEAKERS LIKE THE CITY DOES ALL THE TIME FOR OTHER EQUIPMENT LIKE Y'ALL DO FOR OTHER EQUIPMENT. I'M CURIOUS AS TO WHY, WHY ARE YOU SKIPPING THAT PROCESS? WE ARE NOT SKIPPING THAT PROCESS. WE DID AN RFP, UM, AND IT FOR, YOU KNOW, WHEN WE GOT PROPOSALS FOR PEAKERS, THERE WERE SOME PROPOSALS FOR LONG DURATION STORAGE AS, UH, COMMISSIONER REED DEFINES LONG DURATION STORAGE AND NONE OF THOSE WERE VALUE ADD TO THE PORTFOLIO. RIGHT, I UNDERSTAND. AND I GUESS I'M ASKING, GIVEN THE, THE PROPOSALS YOU HAD FOR PEAKERS WERE NOT A VALUE ADD, WHY ARE YOU PURSUING THEM AND NOT ONE OF THE OTHER TECHNOLOGIES [01:55:02] OR MULTIPLE OF THE OTHER TECHNOLOGIES ARE, ARE YOU, ARE YOU ASKING WHY I DON'T DO ANOTHER RFP BEFORE I MOVE FORWARD? THAT WOULD BE ONE OPTION THAT TO ME WOULD MAKE MORE SENSE THAN WHAT YOU'RE PROPOSING. UM, BUT YEAH, YEAH, I MEAN, IT SEEMS LIKE THAT'S THE, THE PRACTICE THAT THE CITY IS TO DO COMPETITIVE PURCHASING PROCESS, AND THAT IS NOT HAPPENING HERE. SO WHAT WE NEED TO DO TO MOVE FORWARD TO ADDRESS OUR CHALLENGES AND OUR RISKS ARE TO, WE, WE KNOW THAT WE NEED TO ADD, UH, NATURAL GAS PEAKERS TO OUR PORTFOLIO AND, UM, WE DID THE COMPETITIVE SOLICITATION FOR SOMEONE ELSE TO COME IN AND LOOK AT, UH, YOU KNOW, AN OFFER THE PROPO TO BUILD IT FOR US. AND, UM, THAT, THAT IS NOT THE PATH THAT LOOKS LIKE IT'S VIABLE. AND SO INSTEAD WE ARE LOOKING TO GO PURCHASE THE LONG LEAD TIME EQUIPMENT OURSELVES, AND THEN WE WILL HIRE SOMEONE TO COME IN AND, UH, ENGINEER DESIGN AND INSTALL IT. SO, UM, THERE, THERE IS COMPETITION. IT'S JUST THROUGH A DIFFERENT FORM. WELL, BUT IT'S NOT THROUGH THE ESTABLISHED PROCESS. AND IT SOUNDS, UM, YEAH, IT SOUNDS LIKE THERE'S NOT A LOT OF ACCOUNTABILITY THERE, BUT THAT'S MORE OF A COMMENT THAN A QUESTION. WE ARE FOLLOWING ESTABLISHED PROCESSES, COMMISSIONER WHITE, WE ARE FOLLOWING ESTABLISHED PROCESSES. OKAY. AND IN TERMS OF THE CITING, WHEN DOES AUSTIN ENERGY INTEND TO IDENTIFY THE SITES? I DON'T, OR THE PEAKERS, I DON'T KNOW AN EXACT TIMELINE ON THAT. SOME OF IT, UM, DEPENDS ON A NUMBER OF FACTORS RELATED TO, UH, REAL ESTATE MATTERS AND, UM, YOU KNOW, UH, IN OUR CONNECTION APPROVALS AND, UM, LOTS OF OTHER ITEMS BEFORE WE, A LOT OF OTHER HURDLES BEFORE WE CAN DEFINITIVELY IDENTIFY SITES. AND HAS AUSTIN ENERGY IDENTIFIED A NUMBER OF HOURS THAT THESE NEW 400 MEGAWATTS OF NEW UNITS COULD RUN WITHOUT, UH, EXCEEDING THE GUARDRAILS IN THE RESOURCE PLAN? UM, IT, THE AMOUNT THAT THESE RESOURCES RUN IS HIGHLY DEPENDENT ON THE NUMBER OF WHAT YOU LOOK AT IN TERMS OF LOAD GROWTH. UM, IW WOULD, UM, LIKE TO JUST SHARE WITH YOU THAT AS WE DID PUT IN, YOU KNOW, LOAD GROWTH BOTH HERE IN AUSTIN AND IN, UM, ERCOT, WE DID NOT PUT IN THE THREE TO FOUR TIMES THAT, UH, ARE COMING OUT IN THE LATEST ERCOT UH, LOAD FORECASTS. UM, WE PUT IN A MUCH MORE MODERATE, UM, AMOUNT. AND I'M SORRY, JUST, JUST ONCE YOU'RE TAKING MY FIVE MINUTES, I'M, I'M SO SORRY. NOT TRYING TO BE RUDE, BUT I, I'M JUST WONDERING ABOUT THE GUARDRAILS IN THE PLAN, NOT ABOUT THE MARKET CONDITIONS. I DO NOT SEE THOSE LIMITATION. THE, THE 400 MEGAWATTS OF PEAKERS DO NOT EXCEED ANY OF THE GUARDRAILS IN THE PLAN. UM, AND WE ARE, I'M NOT WELL, I I'M TALKING ABOUT THE ADMISSIONS. YOU'RE ON BORROWED TIME AT THE ADMISSIONS. OKAY. MY LAST QUESTION IS JUST HOW MUCH MONEY ARE YOU REQUESTING AUTHORIZED BE AUTHORIZED? SO I, UM, AM NOT AT LIBERTY TO SHARE WITH YOU, UH, THE NOT TO EXCEED AMOUNT THAT WILL BE HANDLED DURING COMPETITIVE MATTERS. OKAY. THAT'S THE COMPETITIVE MATTER. OKAY. I AM NOT LEAVING. I'M JUST OKAY. I'M AN OLD COMMISSIONER BLACKBURN. YEAH. UM, APPRECIATE IT. SO I HAVE, UH, THREE QUESTIONS. UM, FIRST ONE, UM, OUTSIDE OF A YURI TYPE EVENT WHERE YOU NEED THAT KINDA LONG DURATION, HOW ARE YOU EXPECTING THESE PEAKERS TYPICALLY TO RUN? FOR EXAMPLE, IS THIS GONNA BE, ARE YOU THINKING THIS WILL BE LIKE A SUMMER, AFTERNOON, EVENING TYPE, UM, DISPATCH SCENARIO? AND ULTIMATELY, I MEAN, CAN YOU GIVE US AN IDEA OF HOW MANY HOURS AND THE CAPACITY FACTOR THAT YOU'RE, UM, ANTICIPATING THESE RUN? SO WE, UH, WE ANTICIPATE THAT, THAT THEY'RE GONNA RUN AS THE ERCOT MARKETING CONDITIONS REQUIRE. RIGHT. UM, WE ANTICIPATE THAT THAT WILL HAPPEN MOST OFTEN, LIKE YOU SAID, DID WE LOSE THEM DURING HOT, UM, SUMMER DAYS, UH, WHEN THE BATTERY STORAGE IS NOT SUFFICIENT TO COVER THE NEED OR WHETHER IN TERMS OF DURATION OR IN QUANTITY. UM, WE ANTICIPATE THAT ESSENTIALLY ANYTIME THAT OUR DEMAND INCREASES SUCH THAT THE ERCO MARKET PRICES INCREASE, UM, THE, THESE RESOURCES WOULD BE RUNNING. OKAY. YOU'RE BACK. [02:00:01] DID YOU HEAR ME? I DID. NOT SURE WHY I CUT OFF, BUT, OKAY. I I I'M HEARING YOU. ALL RIGHT. UM, AND, AND THE AMOUNT THAT THEY RUN, AGAIN, IS VERY DEPENDENT ON WHAT YOU FORECAST IN TERMS OF, UM, OF LOAD AND WHAT ELSE IS OUT THERE. BUT, UM, WITH THE AMOUNT OF LOAD GROWTH THAT WE'RE SEEING, UM, AND LIKE I SAID, WE, WE MODELED SOME MODERATE, UH, LOAD GROWTH, WE DO ANTICIPATE THAT THE NEW PEAKERS WILL RUN ABOUT AS OFTEN AS OUR CURRENT PEAKERS AND THEN OUR OLD PEAKERS WILL RUN LESS. GOTCHA. OKAY. UM, NEXT QUESTION. SO SINCE THESE UNITS, YOU'RE NOT ANTICIPATING THAT THEY'RE GONNA BE ONLINE UNTIL 2030, WHICH IS STILL QUITE A WAY, IS A WAY, YOU KNOW, ONE OF MY CONCERNS THAT I'VE EXPRESSED TO YOU BEFORE IS, UM, YOU KNOW, THE RISK OF HAVING A STRANDED ASSET WHERE WE'VE INVESTED IN SOMETHING THAT, YOU KNOW, ULTIMATELY WE DON'T USE FOR THAT LONG JUST BECAUSE OF THE RAPIDLY CHANGING DYNAMICS IN THE ENERGY MARKET. HOW ARE YOU THINKING ABOUT BALANCING, UM, YOU KNOW, PUSHING OUT FINANCIAL COMMITMENTS AS LONG AS POSSIBLE WHILE STILL KEEPING OPEN THE OPTION TO HAVE THESE IN, IN THAT TIMEFRAME? YEAH, SO, UM, OUR, UH, FORECASTING AND LOOKING INTO THE FUTURE SAYS WE'RE GONNA NEED THE EVERYTHING THAT WE'RE PRESENTING TO YOU TODAY AND MORE. AND SO, EVEN IF I JUST USE THE SMALL EXAMPLE OF SAYING THAT OUR MODELING SHOWS US THAT WE NEED FOUR TO 500 MEGAWATTS OF PEAKERS TO MITIGATE THE RISK, UM, BUT WE'RE ONLY ASKING FOR 400, RIGHT? WE ALSO ARE GONNA BE ADDING ADDITIONAL, UH, RENEWABLES AND WE'LL BE ASKING, ADDING ADDITIONAL, UH, BATTERY STORAGE. UM, BUT EVERYTHING THAT WE'VE PRESENTED TO YOU TO Y'ALL IS ABOUT A THOUSAND MEGAWATTS OF ADDITIONAL, UM, CAPACITY, WHICH WE THINK WILL, IS, IS GOOD TO GET US THROUGH THE NEXT PERIOD OF FIVE YEARS. BUT WE'LL ALSO SEE HOW IS THE LOAD GROWING ALONG THAT TIME? HOW IS THE ERCOT MARKET DYNAMICS CHANGING? AND WE'LL BE CONTINUING TO LOOK THROUGH AND SEE WHAT ELSE DOES OUR PORTFOLIO NEED. UM, AS GROWTH CONTINUES, I ANTICIPATE THAT, YOU KNOW, SOMEONE ASKED ME ONE TIME, WHAT IF TECHNOLOGY CHANGES COMPLETELY? MY, UM, UNDERSTANDING OF MARKET CONDITIONS NOW IS THAT WE'RE GONNA NEED EVERYTHING. WE'RE GONNA NEED EVERYTHING WE HAVE NOW, EVERYTHING WE'RE PROPOSING, AND THEN WE'RE GONNA NEED MORE. THE QUESTION IS, IS WHAT TYPE DO WE NEED IN THE FUTURE? AND THAT'S DEPENDENT ON HOW THE MARKET CONDITIONS CONTINUE TO EVOLVE. ALL RIGHT. APPRECIATE IT. UM, UH, THE NEXT QUESTION. SO YOU, YOU SHOWED EARLIER THAT I THINK CURRENTLY WE'RE AT LIKE 73% CARBON FREE AS A PERCENTAGE OF LOAD. UM, THE GOAL IN, IN 2035 IS TO GET THAT TO A HUNDRED PERCENT. HOW DO YOU, HAVE YOU DONE ANY MODELING ON HOW THE ADDITIONAL, UH, THESE PEAKERS WILL KIND OF AFFECT THAT TRAJECTORY? AND THIS WAS COMMISSIONER REEVE'S QUESTION. THANKS FOR ASKING. 'CAUSE I FORGOT TO COME BACK TO IT. NO, IT'S ALL GOOD. UM, SO LET ME JUST CLARIFY. UH, THE 73% IS, UM, HOW 73% OF ALL THE ELECTRICITY THAT WE GENERATED, UH, WAS CARBON FREE. THAT COVERED 65% OF OUR LOAD DURING THE SAME TIME PERIOD. UM, WHAT WE SEE AS WE LOOK AT, UH, MOVING FORWARD, AND IT'S, THERE'S A QUESTION ABOUT, WELL, HOW ARE PEAKERS AND KEEP ME HONEST HERE, HOW ARE PEAKERS AFFECTING THAT PEAKERS DON'T IMPACT THAT NUMBER IN A NEGATIVE WAY BECAUSE, YOU KNOW, PEAKERS DON'T DISPLACE RENEWABLES. SO IF THE RENEWABLES CAN GET FROM WHERE THEY'RE PRODUCED TO HERE, OR THEY'RE PRODUCED HERE LOCALLY, THEN THEY ARE GONNA SERVE OUR NEEDS FIRST AND THEY'RE GOING TO INCREASE THE NUMBERS. UM, WHAT WE SEE IN MODELING, UM, WHICH TENDS TO OVERSTATE THE VALUE A TINY BIT, UM, IN, IN CER IN THE NEAR TERM, WE SEE THOSE NUMBERS GET UPWARDS OF 80, 82%. UM, AND THEN AS POWER PURCHASE AGREEMENTS ROLL OFF, WE SEE 'EM COME BACK DOWN TO AROUND 75%. WE, UM, WE NEED TO CONTINUE TO DO MORE ON RENEWABLES, UM, AND CARBON FREE GENERATION, ESPECIALLY AS OUR LOAD CONTINUES TO GROW TO, UM, UH, REACH THE CARBON FREE PERCENTAGE OF LOAD GOAL OF A HUNDRED PERCENT. UM, BUT ONCE, AS I SAID BEFORE, THE THE, SO THEY DON'T, SO PEAKERS DON'T HURT THE GOAL. I ANTICIPATE PEAKERS ARE ACTUALLY GONNA HELP THE GOAL BECAUSE WHEN WITH, WITH PEAKERS HELPING US COLLAPSE THE LOCAL RELIABILITY RISK AND THE LOAD ZONE PRICE SEPARATION, THEN INSTEAD OF OUR CUSTOMERS HAVING TO PAY FOR THE ADDED CONGESTION COSTS THAT COME DURING PARTICULARLY BAD YEARS, THEN WE CAN USE THAT TO INVEST IN ADDITIONAL RENEWABLES. AND IT MAKES OUR EXISTING RENEWABLES, UH, MORE VALUABLE IN THE ERCOT MARKET AS WELL. SO THEY'RE PRODUCING, UH, MORE AS WELL. IT'S A BIT OF A BALANCING ACT. ALRIGHT, THANK YOU LISA. I APPRECIATE IT. DAVE, I'LL, I'LL STOP THERE. [02:05:01] OKAY. THANK YOU COMMISSIONER ALVAREZ. I WILL, DO YOU HAVE A, THANKS. I HAVE A COUPLE QUESTIONS. UM, YOU KNOW, I THINK, UH, ONE OF THE, ONE OF IT I THINK, UH, COMMISSIONER BLACKBURN ALLUDED TO IS LIKE, HOW LONG IS IT GONNA TAKE TO, IF IF THE PEAKERS GO FORWARD, LIKE HOW LONG WOULD IT TAKE TO DEVELOP THAT KIND OF DISTRIBUTION OR THAT GENERATION CAPACITY? AND IS THAT 20, 30 TIMEFRAME THAT COMMISSIONER BLACKBOARD MENTIONED, UM, THE TIMEFRAME? OR IS IT KIND OF UP IN THE AIR BASED ON LAND ACQUISITION OR WHATEVER? SO, UM, TERMS OF THE LONG, THE LONG LEAD TIME IS THE EQUIPMENT, UM, AND THEN WE ANTICIPATE THAT WE WOULD BE ABLE TO, YOU KNOW, IF WE GET APPROVAL, UM, THIS MONTH, THEN WE ANTICIPATE THAT WE COULD HAVE THEM ONLINE IN THE 2030 TIMEFRAME. THAT IS CORRECT. YEAH. AND THE REASON I WAS THINKING ABOUT THOSE FOR THE SAME REASON OTHERS HAVE MENTIONED IS, WELL, HOW MUCH OTHER KINDS OF GENERATION CAN WE GET ONLINE IN THAT TIMEFRAME? AND, UM, AND ARE WE LOOKING AT ONE SITE OR MULTIPLE SITES? IS THAT, IS THAT SOMETHING THAT, OR SO WE EVERYTHING ON THE TABLE? YEAH, NO, WE DEFINITELY DON'T WANT 'EM ALL IN ONE LOCATION. UM, OKAY. PUTTING ALL YOUR EGGS IN ONE BASKET IS NOT, IS NOT GONNA HELP US. UM, ESPECIALLY AS WE HAVE CONSTRAINTS ACROSS OUR SYSTEM. UM, AND SO, UM, THERE'S 14 SHORTLISTED SITES. WE ANTICIPATE TWO TO FOUR OF THOSE SITES. WE'RE GONNA HAVE TO, UM, YOU KNOW, CONTINUE TO DO SOME FURTHER DUE DILIGENCE. THE MORE SITES YOU HAVE, YOU KNOW, THE HIGHER THE COSTS CAN BE, BUT THE ADDED BENEFIT FOR, UH, THE LOCAL GRID AND SERVING OUR CUSTOMERS. SO. AND HOW MUCH, UH, PEAKING CAPACITY DO WE HAVE AT DECKER AND SANDHILL AT THE MOMENT? UH, RIGHT NOW WE HAVE 200 MEGAWATTS OF, UH, 1970S ERA PEAKING CAPACITY AT DECKER, AND WE HAVE, UH, 300 MEGAWATTS OF, UH, OF PEAKING CAPACITY AT SANDHILL. UM, AND JUST SITE THROUGH IT. AND THERE, THE, THE FOUR OF 'EM WERE FROM THE EARLY TWO THOUSANDS, AND THEN TWO OF THEM FROM 2010. AND SO NONE OF NONE OF WHAT WE'RE CONSIDERING NOW WOULD RE WOULD REPLACE ANY OF THAT. RIGHT. SINCE THEY'RE, ESPECIALLY THE 1970 SEVENTIES ONES. SO IT DEPENDS ON WHAT YOU MEAN BY REPLACE. SO IT, UH, WE DON'T HAVE THE ABILITY TO SAY TODAY THAT WE WOULD RETIRE EXISTING RESOURCES, UM, BECAUSE, UM, AS I STARTED MY PRESENTATION, WE'RE, WE'RE OPERATING FROM A DEFICIT. UM, WE SHUT DOWN 725 MEGAWATTS OF, OF RESOURCES AT DECKER. UM, THAT WAS A GOOD THING FOR OUR, UH, LOCAL AIR QUALITY. UM, THOSE UNITS WERE VERY OLD, BUT, UH, A PROBLEM THAT WE STARTED TO SEE MANIFESTING, UM, VERY QUICKLY, UM, AT THAT POINT IN TIME. SO WE, THE PLAN, UM, SPECIFICALLY STATES THAT WE WILL AVOID PREMATURELY SHUTTING DOWN OUR EXISTING RESOURCES. THE, UM, OBJECTIVE AND WHAT WE SEE IN, UM, AS WE, UH, MODEL THIS OUT IS THAT, UH, THE NEW RESOURCES RUN, UM, FIRST, RIGHT? RIGHT. AND THEY PRODUCE, THEY'RE, THEY'RE GONNA PRODUCE, UH, FEWER EMISSIONS, UM, AND MAKE FOR BETTER AIR QUALITY. AND THEN THOSE OLDER RESOURCES YOU HAVE KIND OF IN YOUR BACK POCKET FOR THE WORST DAYS, UM, WHEN YOU ABSOLUTELY NEED THEM TO RUN. YEAH. AND THEN MY LAST QUESTION, UM, IT KIND OF GOES BACK TO THAT RELI RELIABILITY RISK, UH, SLIDE, RIGHT? WHERE WE WERE TALKING ABOUT WITHOUT THE PEAKERS IT'S 575, AND WITH THE PEAKERS IT'S 45 OR OBVIOUSLY MUCH LESS. BUT THIS ALSO, IT SEEMS IN THAT ANALYSIS OF RELI RELIABILITY RISK HOURS, IS THAT WE STILL HAVE FAYETTE ONLINE. IS THAT 'CAUSE, 'CAUSE OBVIOUSLY I THINK IT'S RE REMOVING FAYETTE FROM, FROM OUR PORTFOLIO IS, IS OBVIOUSLY KEY TO MEETING OUR CARBON FREE GOALS, BUT LIKE HOW DOES THAT AFFECT THE RELIABILITY HOURS SORT OF ANALYSIS? OR AGAIN, DID THAT ANALYSIS ASSUME FAYETTE IS STILL IN OPERATION? RIGHT. OKAY. SO, UM, I THINK I UNDERSTAND YOUR QUESTION. STOP ME IF I DON'T. UM, THE, THE ANALYSIS THAT YOU'RE TALKING ABOUT IN TERMS OF RELIABILITY RISK HOURS IS RELATED TO LOCAL RELIABILITY, AND FAYETTE IS NOT CONSIDERED A, IT'S NOT A LOCAL RESOURCE FROM THE PERSPECTIVE OF, UM, BEING ABLE TO, UH, YOU KNOW, IT, IT'S, IT'S JUST ANY ONE OF, OF ALL THE DIFFERENT RESOURCES THAT ARE OUT THERE ACROSS, [02:10:01] UM, TEXAS THAT ARE OUTSIDE OF OUR LOAD ZONE. SO IF THEY WOULD WERE TO BE RUNNING, UM, WHICH THE MODELING ASSUMES THAT IT'S SHUT DOWN, UM, YOU KNOW, AT ABOUT HALFWAY THROUGH, UM, THE, THE 10 YEAR PERIOD, IT, UM, IT WOULD JUST BE ONE OF THE MANY RESOURCES THAT WE'RE TRYING TO IMPORT IN. BUT IT REALITY, UM, BECAUSE OF THE WAY THAT WE RUN, UH, FAYETTE, REALLY WE'RE TRYING TO BRING IN MUCH MORE, UH, RENEWABLES BEFORE FAYETTE EVER, YOU KNOW, RAMPS UP. GOT IT. OKAY. THAT, THAT'S ALL I ALL I HAVE CHAIR. THANK YOU. THANK YOU, COMMISSIONER RHODES. ALL RIGHT, THANKS. UM, AND THANKS FOR ALL THE, THE INFORMATION. I, I WAS CURIOUS IF YOU COULD PULL ON A COUPLE THREADS, UM, THAT YOU WERE, WERE TALKING ABOUT. UM, SO IT LOOKED LIKE IN 2022, IN 2023, THERE WAS OVER OR CLOSE TO A MILLION, MILLION AND A HALF. IN TERMS OF CONGESTION COSTS. CAN YOU JUST, WHO, WHO PAYS FOR THOSE CONGESTION COSTS? CONGESTION COSTS JUST GET PASSED DIRECTLY TO CUSTOMERS THROUGH THE PSA RATE. ALL RIGHT. SO, SO WE PAID, SO IF WE HADN'T HAVE HAD THE LOADS ZONE PRICE SEPARATION, WE WOULDN'T HAVE PAID THOSE CONGESTION COSTS. IS THAT RIGHT? THAT'S CORRECT. OKAY. SO I KNOW, I KNOW YOU, I KNOW WE CAN'T SAY LIKE, I KNOW CYRUS, YOU ASKED LIKE HOW MUCH THE, UH, THE PEAKER COSTS WE USED TO USE. LIKE I KNOW THINGS ARE MORE EXPENSIVE RIGHT NOW. WE USED TO USE LIKE $600 OR $700 A KILOWATT OR, UH, YEAH. UH, THEREABOUTS. SO I THINK IT'S LIKE FOUR OR FIVE YEARS WORTH OF CONGESTION COSTS OR SOMETHING LIKE THAT FOR LIKE, LIKE 400 MILLION OR SOMETHING LIKE THAT, OR 500 MILLION. AGAIN, THESE ARE JUST NUMBERS I'M JUST MAKING UP USING PREVIOUS STUFF, SO IT'S LIKE THAT'S OKAY. UM, I'LL SAY THE BACK OF THE ENVELOPE MATH, IT LOOKS LIKE AN EXTRA ONE AND A HALF GIGS OF WIND OR THREE GIGS OF BATTERIES, , IF WE DIDN'T HAVE THOSE COSTS USING THE, THE STUFF FROM THE, UH, UH, FROM THE, FROM THE THING TODAY, UM, ONE OF THE POINTS YOU HAVE ON HERE IS IT ENABLES MORE RENEWABLES. UM, CAN YOU, CAN YOU PULL THAT THREAD A LITTLE BIT? LIKE HOW, HOW WOULD HAVING A PEAKER HERE ENABLE MORE RENEWABLES? YEAH. UM, AND SO THAT'S WHAT I WAS, UH, TRYING TO EXPLAIN, BUT IT'S WORTH EXPLAINING TWICE. UM, SO IF WE HAVE THE ABILITY TO COLLAPSE THE LOAD ZONE PRICE SEPARATION, UM, TO COLLAPSE THE, THE LOCAL RELIABILITY RISK, UM, IT'S GONNA ENABLE NEW, MORE RENEWABLES IN A, IN A COUPLE OF DIFFERENT WAYS. FIRST THEN AS YOU JUST DID SOME BACK OF THE ENVELOPE, YOU COULD TAKE THOSE CONGESTION COSTS AND INSTEAD, INSTEAD OF PASSING THAT TO THE CUSTOMERS, YOU COULD, YOU KNOW, INVEST IN ADDITIONAL RENEWABLES TO INCREASE OUR, OUR CARBON FREE AS A PERCENTAGE OF LOAD GOAL. UM, BUT THE OTHER THING ABOUT IT IS THAT IN THE WAY THAT THE ERCOT MARKET WORKS, RIGHT, WHEN WE HAVE LOAD ZONE PRICE SEPARATION, THE PRICE THAT WE'RE PAYING FOR CUSTOMER TO POWER TO SERVE OUR CUSTOMERS IS MUCH HIGHER THAN THE REVENUE THAT'S GENERATED BY OUR RESOURCES, MOSTLY THE RENEWABLES, UM, OUTSIDE OF OUR LOAD ZONE. AND SO WE ARE PAYING A CONTRACT PRICE FOR THOSE RESOURCES THAT ARE NOW RECEIVING A REVENUE AT A DEPRESSED RATE, AND WE'RE PAYING EVEN HIGHER FOR CUSTOMERS. SO THAT'S HIGH COST, HIGH COST, LOW REVENUE. IF WE COLLAPSE THE LOAD ZONE PRICE SEPARATION, THEN THOSE RENEWABLES, RIGHT? EVERYTHING KIND OF BALANCES OUT A LITTLE BIT BETTER AND IT BECOMES A MORE EFFECTIVE HEDGE FOR OUR CUSTOMERS. AND SO WE ACTUALLY GET WHAT WE ARE HOPING FOR OUT OF THOSE RENEWABLES BECAUSE OWNING GENERATION OR CONTRACTING FOR GENERATION AT ITS CORE ISN'T A HEDGE FOR YOUR CUSTOMERS AGAINST POWER SUPPLY COSTS. AND, AND IN ADDITION TO THAT, RIGHT, THEY'RE RENEWABLE, SO WE GET THAT ADDED BENEFIT. SO WE'RE TRYING TO SOLVE THE LOAD ZONE, THE LOCAL ISSUE SO THAT WE CAN MAKE THE USE OF THE RENEWABLES MORE EFFECTIVE IN A NUMBER OF DIFFERENT WAYS, AND THEN WE CAN INVEST IN MORE. OKAY. UM, YEAH, 'CAUSE I MEAN, I LIKE, I MEAN, I'LL BE HONEST, LIKE I DON'T ACTUALLY, I DON'T WANT A NEW PEAKER, BUT I MIGHT WANT THE THINGS THAT THIS THING CAN GIVE ME, IF IT CAN GET MORE RENEWABLES, IF THAT'S THE ACTUAL GOAL IS TO GET MORE OF OUR ENERGY FROM, FROM RENEWABLES IN THIS THING LETS US DO THAT. I MEAN, IT'S KIND OF COUNTERINTUITIVE, BUT IF THAT'S ACTUALLY THE WAY IT WORKS, GIVEN, UM, HOW ERCOT WORKS, I MEAN THAT'S, I MEAN, I THINK IT'S, IT'S, IT'S INTERESTING HOW, HOW IT WORKS THAT WAY. I, I, THERE'S ANOTHER THING, WE, WE'VE TALKED ABOUT FAYETTE A LITTLE BIT HERE. UM, I KNOW WE DIDN'T, WE SAID YOU HAD TO MODEL IT SUCH THAT, YOU KNOW, FAYETTE WAS RETIRED, BUT DO YOU HAVE ANY INDICATION OF WHICH WAY THAT [02:15:01] WOULD GET, WOULD WOULD WE BE ABLE TO RUN FAYETTE EVEN LESS IF WE HAD MORE, IF WE HAD MORE GENERATION HERE? AND I'M NOT TALKING ABOUT RELIABILITY HOURS, BUT I KNOW THAT LIKE A LOT OF TIMES THE WAY WE RUN IT IS BECAUSE OF THE PREFERENTIAL CONGESTION REVENUE RIGHTS, IT ACTS LIKE FINANCIALLY, LIKE IT'S IN OUR LOAD ZONE. SO IT LIKE HELPS WITH THE LOAD POCKET PRICE SEPARATION. BUT LIKE, IS IT POSSIBLE WE COULD RUN FAYETTE EVEN LESS IF WE, IF WE HAD MORE STUFF HERE? I KNOW WE DIDN'T LET YOU MODEL IT, SO MAY NOT KNOW, BUT IS THAT, IS IT POSSIBLE? SO WE'VE, WE'VE ASKED THIS QUESTION AND, AND IN, IN THEORY YES, RIGHT? YOU'RE PUTTING MORE RESOURCES IN FRONT OF FAYETTE IN THE STACK. YEAH. SO, SO THEN YOU ARE FULFILLING ENERGY NEEDS WITH CLEANER RESOURCES THAN WITH FAYETTE. UM, AND SO YES, IF, YOU KNOW, IF IT HELPS TO SERVE THE NEEDS, THEN, THEN, YOU KNOW, FAYETTE WOULD RUN LESS. OKAY. JUST ONE FOLLOW I KNOW, ADMIT, ADMIT TOM, BUT JUST ONE FOLLOW UP, I, HOW FAST WILL THE PEAKER BE ABLE TO START PEAK, UH, SOME VERY FAST, RIGHT? THEY CERTAINLY CAN START WITHIN THE 10 MINUTE TIMEFRAME, BUT DEPENDING ON THE TYPES OF PEAKERS, WHETHER IT'S AN AIR DERIVATIVE OR IT'S A RECIPROCATING ENGINE, UM, SOME OF 'EM ARE VERY, VERY FAST. WELL, I JUST, WITHIN FIVE MINUTES. YEAH, BECAUSE I JUST, I, I LOOKED UP ON THE EIA TODAY AND IT TAKES LIKE FAYETTE LIKE 12 HOURS TO START. YEAH. AND SO IT'S LIKE IF WE HAVE TO RUN FAYETTE FOR A COUPLE HOURS IN THE AFTERNOON, WE'VE ACTUALLY HAD TO RUN IT LIKE ALMOST HALF A DAY JUST TO GET TO THAT POINT. SO IF THIS THING COULD EVEN THROW FAYETTE OFF THE STACK, EVEN FOUR, AND MAYBE WE DON'T HAVE TO RUN IT FOR 12 HOURS TO WARM IT UP. I MEAN THAT, I DON'T KNOW. THAT SEEMS REASONABLE TO ME. THANKS. THANKS, LISA. I APPRECIATE YOU WALKING US THROUGH ALL THIS INFORMATION. UM, MY QUESTION IS, ON SLIDES 10 AND 12, THOSE BAR CHARTS ABOUT RISK, UM, I WAS REALLY STRUCK BY THE DIFFERENCES BETWEEN THE AUSTIN ENERGY ALL IN PORTFOLIO PLUS PEAKERS AND THEN THE BATTERIES INSTEAD OF PEAKERS. CAN YOU HELP ME UNDERSTAND WHY THERE IS SUCH A STARK DIFFERENCE BETWEEN THOSE TWO NUMBERS? IS IT LIKE, WHAT ARE THE CHARACTERISTICS OF THE TECHNOLOGIES THAT CAUSE THAT DIFFERENT OUTCOME? OR IS IT KIND OF THE CIRCUMSTANCES IN WHICH THOSE RESOURCES WOULD BE DEPLOYED? LIKE WHY ARE THOSE SO DIFFERENT? YEAH, IT'S THE, IT'S THE CHARACTERISTICS OF THE TECHNOLOGY. UM, AND SO IN THESE CASES, RIGHT, THE BATTERIES HELP FOR AS LONG AS THEY HELP, RIGHT? THEY HELP FOR THEIR, THEIR CHARGE. SO IF IT'S A TWO HOUR BATTERY, IT HELPS FOR TWO HOURS. IF IT'S FOUR HOUR BATTERY, IT HELPS FOR FOUR HOURS. IF IT'S THE BASE, UH, DISTRIBUTED BATTERIES, THAT'S FOR AN HOUR AND A HALF, RIGHT? UM, WHEN YOU, AND, AND, AND THOSE ARE ALL BAKED INTO EVEN THE BLUE BAR. UM, BUT THEN WHEN WE ADD ADDITIONAL BATTERIES, RIGHT, WE'RE ALSO USING SIMILAR DURATIONS AND THEY HELP, BUT THEY DON'T HELP ENOUGH TO REDUCE THE RISK. SO THEY, THE UM, LOCAL CONGESTION SITUATION THAT WE WERE TALKING ABOUT WITH, UH, VICE CHAIR BRADEN LASTS LONGER THAN THE DURATION OF THE, THE BATTERIES, UH, FREQUENTLY ENOUGH AS WE LOOK INTO THE FUTURE, AS IN, IN THE EXTREME WEATHER SITUATION, THOSE ARE LASTING, THOSE EVENTS ARE LASTING FOR DAYS, RIGHT? SO THIS ONE MODELS A SIX DAY EVENT, YOU CAN RUN YOUR BATTERIES. UM, AS A MATTER OF FACT, WE DID RUN OUR BATTERY DURING WINTER STORM URI, BUT ONCE IT WAS DISCHARGED, YOU CAN'T CHARGE IT BACK UP WITHOUT EXACERBATING THE SITUATION. SO IT'S THE TECH, IT'S THE NATURE OF THE TECHNOLOGY AND NOT, UM, YOU KNOW, BEING A, HAVING THE ABILITY FOR PERPETUAL SUPPORT, UM, TO COVER THOSE LONGER DURATION NEEDS JUST 'CAUSE IT'S THE FINITE DURATION. THAT'S RIGHT. IT'S GONE. YEP. LISA, THANKS FOR THIS PRESENTATION. IT PROVIDED ME A LOT OF CLARITY ON, UH, SLIDE 12. YOU SHOW A MODELED EXPOSURE OF A LITTLE OVER A BILLION DOLLARS IN THE CASE OF A WINTER STORM, YURI FEBRUARY, 2021 SCENARIO FOR BOTH THE ALL-IN PORTFOLIO WITHOUT THE ADDED PEAKERS AND THE ALL-IN PORTFOLIO WITH BATTERIES INSTEAD OF PEAKERS. CAN YOU TELL US HOW THAT COMPARES WITH THE UTILITIES CASH ON HAND? BECAUSE THAT, THAT'S COST THAT'S GONNA BE INCURRED IN JUST A FEW DAYS. THAT WOULD BE DUE TO ERCOT AT THE END OF THE WEEK OR THE END OF THE MONTH. SO WOULD THE UTILITY HAVE THE MONEY TO PAY THAT? STEWART, DO YOU WANNA COME HELP ANSWER THIS ONE QUESTION. OKAY, THANK YOU. GOOD EVENING. STUART RILEY, AUSTIN ENERGY GENERAL MANAGER. UM, RIGHT NOW I BE, IF I REMEMBER FROM JOHN DAVIS'S PRESENTATION, WE'RE AT ABOUT 185 DAYS CASH ON HAND [02:20:01] RIGHT NOW. UM, A A DAY, UH, IS THREE AND A HALF TO $4 MILLION. UM, BUT WE DON'T KEEP ALL OF THAT IN, IN, UM, WORKING CAPITAL BASICALLY. SOME OF THOSE AREN'T AS LIQUID. UH, WE WOULD GO TO THE CITY OF AUSTIN TREASURY DEPARTMENT TO BE ABLE TO ACCESS THOSE FUNDS. THAT CAN TAKE DAYS. SO IN TERMS OF THE ACTUAL AMOUNT OF WORKING CAPITAL WE HAVE RIGHT NOW, I THINK IT'S PROBABLY ABOUT $260 MILLION, SOMETHING LIKE THAT. ? NO, JUST IN TERMS OF WORKING CAPITAL. TOTAL WORKING CAPITAL, WE JUST TOTAL WORKING CAPITAL. SO YOUR, TO YOUR QUESTION, UM, WE WOULD NOT BE ABLE TO PAY OUR BILLS TO ERCOT IN TERMS OF OUR, UM, OUR, OUR PAYMENTS DUE TO ERCOT, UH, THE COLLATERAL THAT WOULD BE DUE TO ERCOT, UH, ALL WITHIN THREE DAYS. AND WE WOULD NOT BE ABLE TO PARTICIPATE IN THE ERCOT MARKET AT THAT POINT. UM, AT THAT POINT, SOMETHING DRASTIC WOULD LIKELY HAVE TO OCCUR TO ENABLE US TO STILL BE ABLE TO OPERATE IN, IN THE ERCOT MARKET, BUT IT WOULD DEFINITELY EXCEED THE AMOUNT OF CASH THAT WE HAVE. UM, AND WE WOULD ALSO LIKELY BE LOOKING TO THE CITY OF AUSTIN, UM, CA HOW, HOW MUCH CASH ON HAND ARE, UM, COLLEAGUES AT CITY TREASURY HAVE THAT ARE NOT AUSTIN ENERGY RESERVES, BUT CITY OF AUSTIN RESERVES AS WELL. THANKS FOR THAT. UM, AND I APOLOGIZE FOR THE MORBID QUESTIONS HERE, BUT WHAT HAPPENS TO A PUBLIC UTILITY WHEN THEY GO BANKRUPT? WHAT COULD HAPPEN TO OUR, OUR PORT OR, UH, GENERATION ASSETS, UM, IF THAT HAPPENED? WELL, UM, WE DO HAVE ENTERPRISE RISK ANALYSTS AND, UH, AND A TEAM HERE THAT'S, THAT'S KIND OF RUN, RUN THE TRAPS ON THAT. AND I CAN'T SAY I REMEMBER ALL THE STEPS THAT WOULD OCCUR, BUT YOU KNOW WHAT, AFTER WINTER STORM URI, UM, CO-OPS THAT CAME OUT OF BANKRUPTCY, THEY SECURITIZED THAT DEBT. THERE'LL BE, YOU KNOW, THERE WERE, UM, PUBLIC POWER ENTITIES LIKE CPS ENERGY, I BELIEVE THEIR, UM, THEIR NET EXPOSURE WAS SOMETHING SIX OR $800 MILLION THAT THEY HAD TO SECURITIZE THAT THEY WILL BE RECOVERING FROM THEIR CUSTOMERS FOR 30 YEARS. SO SOMETHING WOULD HAVE TO HAPPEN TO KIND OF BRIDGE THAT GAP. AND THEN WE WOULD HAVE A LOT OF, UM, DEBT THAT WE WOULD HAVE TO PASS ON TO OUR CUSTOMERS FOR A LONG PERIOD OF TIME FOR SOMETHING LIKE THAT. THANKS FOR THAT. UM, ON THE RELIABILITY RISK HOURS, COULD YOU EXPLAIN, UM, HOW THAT'S MODELED? THANK YOU. UM, SO RELIABILITY RISK HOURS IS, UM, IT'S, IT'S A FAIRLY SIMPLE MATH EQUATION WHERE YOU LOOK AT HOW MUCH GENERATION IS, IS GENERATED LOCALLY, UM, PLUS WHAT YOUR TRANSMISSION IMPORT CAPACITY IS. AND THEN WHEN THAT NUMBER IS, UM, LOWER THAN THE CUSTOMER DEMAND FOR THE HOUR, THEN IT'S A RELIABILITY RISK HOUR. UM, AND IS THIS MODELING RECENTLY REFRESHED? UH, IS THIS, ARE THESE NUMBERS FROM THE OCTOBER, 2024 OR, OR MORE RECENT THAN THAT? NO, NO, NO. THIS IS, UM, THIS IS REAL MODELING WITH REAL OFFERS AND REAL OPERATING CHARACTERISTICS FROM THE, ALL THE PROJECTS THAT ARE BAKED INTO THIS, PLUS OUR EXISTING PORTFOLIO PLUS, UH, NEW NATURAL GAS PEAKERS OR ADDITIONAL BATTERIES. SO THIS IS REFRESHED MODELING, UM, TAKING INTO ACCOUNT, YOU KNOW, THE UPDATED, THE UPDATED MODELING CONDITIONS AND, UM, THE ENERGY LANDSCAPE CONDITIONS. THANK YOU. AND CAN YOU TELL US A BIT ABOUT THE PROCUREMENT PROCESS FOR THE DEVELOPMENT THAT YOU'RE GOING THROUGH WITH THE NEW PEAKING CAPACITY? I GUESS YOU'RE TALKING TO MULTIPLE VENDORS FOR ALL THE IMPORTANT EQUIPMENT? UM, YEAH, A LITTLE ABOUT THAT WOULD BE GOOD. UM, YEAH, SO, UM, OUR TEAMS ARE TALKING TO MULTIPLE VENDORS TO SEE WHAT'S OUT THERE IN TERMS OF, UH, WHAT TYPE OF MODELS ARE AVAILABLE, WHAT THEIR PRICING IS, WHAT THEIR OPERATING CHARACTERISTICS ARE, UM, AND ULTIMATELY TRYING TO FIGURE OUT WHAT COULD MEET OUR, UM, OUR COMMUNITY'S NEEDS. AND, UM, AND THEN PART OF THE, UM, ITEM FOR COUNSEL ON THURS, I'M SORRY, NOT THIS THURSDAY, NEXT THURSDAY, UM, WILL GIVE US THE AUTHORIZATION TO ENTER INTO A CONTRACT OR CONTRACTS WITH VENDORS. UM, YOU KNOW, THEY'LL HAVE A CEILING DOLLAR AMOUNT THAT'LL ALLOW US TO ULTIMATELY, UM, NEGOTIATE THOSE FINAL TERMS AND THEN PUT DOWN THE MILESTONE PAYMENTS WE'D BE TALKING ABOUT. THERE'S, THERE'S RESERVATION PAYMENTS, DEPOSITS, [02:25:01] AND THEN MILESTONE PAYMENTS AS WELL. SO, UM, YOU KNOW, WE'VE BEEN DOING OUR DUE DILIGENCE WITH, UM, A NUMBER OF DIFFERENT MANUFACTURERS, UM, AND ARE WORKING TO GET COUNSEL APPROVAL FOR ONE OF THOSE. THANK YOU VERY MUCH. THANK YOU. SO LISA, IS THE INITIAL REQUEST TO COUNSEL JUST FOR THE POWER GENERATION EQUIPMENT, OR IS THERE A TIMING FOR GOING BACK TO COUNSEL FOR, SAY, THE BALANCE OF PLAN EQUIPMENT OR MAYBE AN EPC CONTRACT, SOMETHING LIKE THAT? SO OUR, OUR AN OUR PLAN AND ANTICIPATION IS, THIS IS INITIAL REQUEST IS FOR ESSENTIALLY THE LONG LEAD TIME EQUIPMENT. UM, AND THEN, UM, WE WOULD BE, UH, DOING A COMPETITIVE SOLICITATION FOR, UH, A CONTRACTOR, WHETHER IT'S AN EPC CONTRACTOR OR IT'S A DESIGN BUILD OR WHATNOT. UM, AND THEN WE ANTICIPATE THAT THAT WILL ALSO BE GOING TO COUNCIL. I DON'T KNOW THE EXACT TIMING OF HOW LONG THAT PROCESS IS GOING TO TAKE. UM, BUT, UH, WE'RE, OUR, OUR HOPE IS THAT WE WOULD BE BRINGING SOMETHING BACK TO COUNCIL BEFORE THE END OF THE YEAR FOR THAT. UM, I, I GUESS I DID WANNA SHARE THAT ONE OF THE REASONS WHY THE COST OF THE ACTUAL EQUIPMENT IS COMPETITIVE IS BECAUSE IT'S, IT'S, IT'S ESSENTIALLY LIKE WHAT'S THEIR COST OF A, OF THE WIDGET? MM-HMM . THE THING THAT WE'RE LOOKING TO BUY THE LONG LEAD TERM EQUIPMENT AND THEY HAVE A HIGH DEMAND FOR THAT EQUIPMENT. AND SO, UM, WHAT PRICE THEY QUOTE TO US ESSENTIALLY, RIGHT? WE DON'T WANNA PRICE SIGNAL TO THEM BY PUTTING, SAYING WHAT WE'RE ASKING COUNSEL FOR AUTHORIZATION FOR. WE ALSO DON'T WANNA PRICE SIGNAL TO DESIGN BUILDER, UH, DESIGN CONTRACT COMPANIES WHO ALSO OFTEN BASE THEIR PRICE BASED OFF OF THE COST OF THE LONG LEAD TIME EQUIPMENT. AND SO THAT'S KIND OF THE NECESSITY FOR, UM, THE, THE COMPETITIVE MATTERS COMPONENT OF THIS. THE, THE EXECUTIVE SESSION COMPONENT. IT'S ULTIMATELY TO TRY TO, UH, MAXIMIZE AFFORDABILITY FOR OUR CUSTOMERS SO WE CAN SPEND THEIR DOLLARS AS, UH, PRUDENTLY AS POSSIBLE. ARE YOU, DO YOU HAVE PLANS THAT IF MAYBE THE EPC THING TAKES A LITTLE BIT LONGER THAN YOU HOPE THAT PROCESS THAT YOU'RE GONNA START LOOKING AT, YOU KNOW, TRANSFORMERS CAN BE LONG LEAD ITEM SWITCH SWITCHGEAR GOT TO BE A LONG LEAD ITEM FOR A WHILE. I MEAN, IS THAT SOMETHING ELSE THAT YOU MIGHT HAVE TO CONSIDER IF THE, FOR WHATEVER REASON THE EPC PROCESS TAKES TOO LONG? UM, SO IT'S POSSIBLE, UM, WE WOULD LOOK TO SEE, WE HAVE, UM, YOU KNOW, THERE'S LOTS OF LONG LEAD TIME EQUIPMENT THAT WE NEED ON OUR SYSTEM, UM, INCLUDING THE ONES YOU JUST TALKED ABOUT, TRANSFORMERS AND SWITCHGEAR. AND SO, UM, THE QUESTION IS, IS WHETHER OR NOT WE CAN DO THAT UNDER EXISTING, UH, CONTRACT AUTHORITY WITHOUT IMPACTING OUR, UM, YOU KNOW, TRANSMISSION SUBSTATION AND, YOU KNOW, DISTRIBUTION NEEDS. OKAY. UM, WHAT YOU WANNA SAY? DO YOU ? OH, OKAY. UM, YEAH, SO, UH, STEWART WAS ASKING THAT. I JUST SHARE THAT, UM, AS WE LOOK AT THE, UM, FORWARD MODELING, AGAIN, IT ALL DEPENDS ON ALL THE ASSUMPTIONS THAT ARE BUILT INTO IT. THE PORTFOLIO THAT HAS PEAKERS IN IT DOES HAVE A POSITIVE NPV OVER TIME, UM, WHEREAS THE, UM, YOU KNOW, COMPARED TO THE PORTFOLIO WITHOUT IT, EITHER ONE WITHOUT IT. GOOD. UH, DO YOU, DO YOU GUYS HAVE A TECHNOLOGY PREFERENCE, YOU KNOW, AERO DERIVATIVES VERSUS RECEPTS OR JUST WHATEVER? I WAS GONNA SAY MORE EFFICIENT NATURAL GAS PEAKERS, IF THAT'S SPECIFICALLY WHAT YOU'RE TALKING ABOUT. BUT, UM, AS YOU KNOW, UH, GIVEN YOUR BACKGROUND, THERE'S A NUMBER OF DIFFERENT TYPES OF, UM, PEAKERS. AND SO WE'RE LOOKING AT BOTH THE AERO DERIVATIVE, UH, TURBINE TYPES, SO THE TYPES THAT ARE ON THE SIDES OF AIRPLANES FOR, AND I DON'T KNOW WHAT I MEAN BY SAY AN AIR DERIVATIVE, UM, ON THE AIRPLANE WING. AND THEN ALSO RECIPROCATE ENGINES, WHICH ARE MORE COMMONLY LIKE POWERING A CRUISE SHIP. SO WE'RE LOOKING AT BOTH OF THEM. OKAY. UM, I THINK THAT'S IT. OKAY. I ALSO JUST WANTED TO ADD THAT PART OF THE COMPETITIVE, WHAT'S DIFFERENT ABOUT THE COMPETITIVE NATURE OF WHAT WE'RE DOING HERE IS IN TERMS OF JUST BUYING EQUIPMENT FROM VENDORS WHO AREN'T NECESSARILY USED TO THEIR PRICING BEING, UH, COMMUNICATED PUBLICLY. AND SO WE DON'T WANT TO LIMIT THE VENDOR POOL THAT [02:30:01] WE HAVE TO WORK WITH TO THE VENDORS THAT ARE COMFORTABLE WITH THEIR NUMBERS BEING PUBLIC. BY EXPANDING THAT POOL AND NEGOTIATING WITH SEVERAL VENDORS THROUGH THIS PROCESS, WE'RE ABLE TO GET THE BEST DEAL FOR OUR CUSTOMERS. THAT IS WHAT MAKES IT VERY DIFFERENT FROM LIKE THE PPA SITUATION WHERE WE GET A FIRM OFFER ON A WIND OR A SOLAR PPA AND THERE ARE CHARACTERISTICS OF THAT THAT INVOLVE LAND AND SIZING. THEY'RE VERY DIFFERENT. THIS IS JUST A, LIKE LISA SAID, A WIDGET. THIS IS THE COMPONENT AND IS THAT VENDOR'S COMPONENT PRICE FOR WHAT THEY'RE SEEING. AND WHAT WE'RE SEEING RIGHT NOW IS THOSE PRICES ARE CHANGING EVERY 30 DAYS SINCE WE STARTED THIS PROCESS, THE PRICES HAVE AT LEAST DOUBLED POSSIBLY MORE. AND, AND, AND, UM, THE VALUE IS STILL THERE. UH, AND, AND WE REALLY CAN'T AFFORD NOT TO MOVE FORWARD AS, AS QUICKLY AS WE CAN AND, AND DO IT IN IN SUCH A WAY THAT'S A DIFFERENT PROCESS, BUT IT'S ALL AIMED AT GETTING THE BEST DEAL FOR OUR CUSTOMERS AND, AND ENTERING INTO THIS COMPETITIVE SITUATION WITH THESE VENDORS TO BE ABLE TO GET TO THAT BEST OUTCOME. BUT WE DON'T WANNA ARTIFICIALLY LIMIT THAT POOL AS WELL. SO I JUST WANTED TO MENTION THAT. THANKS. SO STUART, YOU MIGHT HAVE TO STAY UP THERE STILL . UM, YOU MIGHT AS WELL BE ON HOT STANDBY. UM, SO IF YOU COULD CLARIFY FURTHER, I THINK WE GOT MORE FROM YOU JUST A SECOND AGO ABOUT WHAT'S DIFFERENT THAN THE NORMAL PROCESS THAT WE SEE WITH RCAS. AND THOSE YOU CLARIFIED ARE NORMALLY PPAS AT THE END OF THE LINE, YOU KNOW EXACTLY WHAT YOU HAVE, WHO IT IS, WHERE IT IS, ET CETERA. RIGHT? THAT'S KIND OF CONSIDERED THE BASELINE NORMAL THAT FOLKS ARE USED TO SEEING. AND WHAT I THINK I HEARD YOU SAY, AND I WANT YOU TO CORRECT ME OR REFINE IT, IS THIS IS SPECIAL. YOU WANT TO HAVE THE INCREASED POOL OF VENDORS THAT WON'T TALK TO YOU UNLESS YOU KEEP THE PRICES CONFIDENTIAL TO BENEFIT AE CUSTOMERS. BUT THAT PART OF IT, THAT'S SIMPLY A STAGE WILL STILL GO THROUGH COMPETITIVE, UH, BIDDING AND NEGOTIATIONS ALONG SOME NORMAL CITY OF AUSTIN PROCESS. IT, IT, IT, UM, SO STATE LAW ALLOWS ELECTRIC UTILITIES TO, UM, ENGAGE IN, UH, TO DECLARE SOMETHING A CRITICAL BUSINESS NEED. UM, AND, AND BY DOING SO, WE CAN ENGAGE IN WHATEVER TYPE OF COMPETITIVE PROCESS WE NEED TO ENGAGE IN TO GET CUSTOMERS THE BEST PRICE THAT WE CAN. THE REASON WHY THIS IS ONE OF THOSE SITUATIONS IS THE HIGHLY COMPETITIVE NATURE OF THIS SPACE AND THE LIMITED VENDOR POOL. UM, IT'S VERY DIFFERENT FROM A POWER PURCHASE AGREEMENT WHERE THERE ARE LIMITED OFF TAKERS FOR POWER PURCHASE AGREEMENTS. IF YOU'RE A WIND DEVELOPER, SOLAR PPA DEVELOPER, UM, AND YOU'RE LOOKING FOR AN OFFTAKER AND AUSTIN ENERGY IS A GREAT OFFTAKER, THIS SITUATION IS A LITTLE BIT DIFFERENT. WE ARE TRYING TO PULL THESE PEAKER VENDORS TO THE, TO THE TABLE TO, TO WORK WITH US. THEY HAVE SO MANY OPPORTUNITIES TO DO BUSINESS, UM, ENGAGING THEM IN THAT KIND OF VERY TIME INTENSIVE, VERY COSTLY FORMAL SOLICITATION PROCESS IS NOT GOING TO YIELD ALL THE RIGHT VENDORS IN THIS KIND OF SITUATION. SO IT'S A VERY DIFFERENT TYPE OF SCENARIO THAN WHAT WE NORMALLY ENCOUNTER WHERE WE'RE IN KIND OF THE DRIVER'S SEAT WHERE WE'RE GETTING PPA OFFERS, UM, FROM THIS KIND OF SITUATION WHERE IT'S VERY MUCH A, UH, A SELLER'S MARKET AND WE'RE JUST TRYING TO WORK, UH, AS MANY ANGLES AS WE CAN WITH THESE SELLERS TO DO A COMPETITIVE PROCESS INTERNALLY TO, UM, TO GET TO THE BEST DEALS THAT WE CAN POSSIBLY GET TO. I THINK IT'D BE GOOD TO HAVE A SUMMARY OF THAT FOR THE OVERSIGHT COMMITTEE. 'CAUSE THERE'S GONNA BE PUBLIC COMMENT AND THAT HELPS EXPLAIN AND CLARIFY. YEAH. AND I, I, I, YEAH, WE, WE WILL TALK ABOUT THAT PUBLICLY WITH THE OVERSIGHT COMMITTEE AND WE'LL, WE'LL SHARE AS MUCH PUBLICLY AS WE CAN WITHOUT INHIBITING OUR ABILITY TO DO THAT. AND YOU DO MENTION THAT THE NORMAL PROCESS IS TO DO, I MEAN, ANY OTHER PUBLIC POWER UTILITY IN TEXAS, THEY DO ALL OF THOSE THINGS, UM, IN CLOSED SESSION. UH, THEY DO THEIR PEAKERS IN CLOSED SESSION, THEY DO THEIR PPAS IN CLOSED SESSION. WE TRY TO DO AS MUCH AS WE CAN PUBLICLY. THAT'S WHY WE'VE GOT THIS POSTED HERE. WE'VE GOT THE PUBLIC ITEM POSTED AT COUNCIL SO THAT SPEAKERS CAN SPEAK TO IT. UH, SO WE ARE TRYING TO BE AS TRANSPARENT AND PROVIDE AS MUCH OPPORTUNITY FOR PUBLIC INPUT AS WE POSSIBLY CAN WHILE ALSO PROTECTING THE COMPETITIVENESS ON OUR CUSTOMER'S BEHALF. OKAY. LET ME GET LISA BEFORE I RUN OUTTA TIME. SO LISA, IS IT TRUE THAT MOST OF A E'S POWER IS IMPORTED FROM THE EASE, YES OR NO? YES. OKAY. IS IT ACCURATE THAT LARGE INDUSTRIAL AI DATA CENTER GROWTH TO THE EAST COULD CONSUME POWER BEFORE IT [02:35:01] GETS TO US AGGRAVATING OUR IMPORT CAPACITY PROBLEMS? TRUE. SO WE COULD HAVE A SITUATION WHERE ALL THIS AI DENTIST DATA CENTERS OUTSIDE THE BORDER, YOU HAVE NO CONTROL OVER CITY OF AUSTIN AND SUCH. NOT, BUT YET IT'S WORSENING OUR IMPORT CAPACITY. THAT IS TRUE. OKAY. SO THAT MAKES EVEN IT MORE IMPORTANT TO HAVE INSIDE THE FENCE RESOURCE. YES. IT'S WHY WE CANNOT JUST EX UH, RELY ON EXTERNAL RESOURCES AND IMPORT CAPACITY INCREASES. OKAY. AND THEN IF AE DOES NOT BUILD THIS, IS IT POSSIBLE OR PROBABLE THAT SOMEONE WOULD JUST TAKE THE ECONOMIC OPPORTUNITY BECAUSE OF THAT PRICE SEPARATION AND JUST BUILD RIGHT OUTSIDE THE BORDER AND MAKE A BUNCH OF MONEY AT THE EXPENSE OF AUSTIN ENERGY CUSTOMERS? 'CAUSE THE AE CUSTOMERS WOULD BE PAYING THE LOAD ZONE ELEVATED PRICE, BUT YET A GENERATOR SAY NAME A COMPANY A GENERATOR, IPP COULD BUILD A, A GAS PLANT RIGHT OUTSIDE OF IT, SERVE IT AND MAKE A LOT OF MONEY. AND YOU WOULDN'T HAVE THE ADVANTAGES OF CONTROL OR GUARDRAILS OR BLACKSTAR. AND IT WOULD COST MORE CUSTOMERS AND IT WOULDN'T SAVE ANY EMISSIONS AT ALL BECAUSE IT WAS JUST SIMPLY BUILT RIGHT OUTSIDE THE BORDER. IT IT, THEY COULD BUILD INSIDE OF OUR SERVICE TERRITORY TOO. OPEN ACCESS TO TRANSMISSION, PASS THE INTERCONNECTION PROCESS. ANYONE COULD COME IN AND BUILD IF THE ECONOMIC OPPORTUNITY LOOKED LIKE IT WAS GONNA BE LASTING RIGHT, THEN SOMEONE COULD COME IN AND WE WOULDN'T, THEY WOULDN'T, I'M SPECULATING, BUT I DON'T KNOW THAT AN OUTSIDE PARTY WOULD PUT ON THE SAME TYPE OF EMISSIONS CONTROLS THAT WE WOULD, THEY WOULDN'T PUT ON THE SAME TYPE OF GUARDRAILS THAT WE WOULD. UM, AND, UH, WE WOULDN'T HAVE ANY CONTROL OVER WHETHER OR NOT IT WAS RUN AND HOW IT WAS RUN. OKAY. MY TIME, THE AIR CUT MARKET WOULD CONTINUE TO DO THAT. HOW ABOUT IF WE DO ANOTHER ROUND? 'CAUSE I DON'T THINK EVERYBODY WANTS TO DO IT AND SAY THREE MINUTES. OKAY. WELL, I'VE GOT A FEW QUESTIONS. SURE. STARTING WITH THAT ONE. YOU'RE SAYING SOME, I THOUGHT WE HAD AN EXCLUSIVE TAR. YOU WON'T EVEN LET SOLAR PEOPLE SELL POWER. SO HOW COULD SOMEBODY BUILD A GAS PLANT WITHIN THE SERVICE TERRITORY? SO I'M GONNA LOOK AT MY REGULATORY FOLKS TO MAKE SURE I'M STAYING HONEST HERE TO TAKE, TAKE ADVANTAGE OF THAT, THAT THAT'S A NEW CONCEPT. WE HAVE THE EXCLUSIVE RIGHT TO SELL POWER WITHIN OUR SERVICE TERRITORY NOT TO PRODUCE POWER, RIGHT? OH, BECAUSE IT'S WHOLESALE VERSUS RETAIL. ALL RIGHT? YEP. SO IN THE WHOLESALE MARKET, RIGHT, THERE'S OPEN ACCESS TO, TO TRANSMISSION AND ANYONE WHO WANTS TO CAN PUT IN A REQUEST TO BUILD, UM, NEW AND INTERCONNECT IN A PLACE WHERE THEY WOULD LIKE TO. AND UH, AND SO THEY COULD THEN PARTICIPATE IN THE WHOLESALE MARKET. THEY WOULD, I'M GONNA GET STUART UP HERE TO CLARIFY. SO THEY COULD GO A, A POWER PLANT RIGHT NEXT TO MY HOUSE AND AND SELL. WELL, I THINK THEY HAVE TO TIE YOU THE TRANSMISSION, WOULDN'T THEY? ? AND, AND SO FAR NOBODY HAS, UM, PURSUED THAT AVENUE. ALTHOUGH THERE, THERE'VE BEEN SOME THAT HAVE TALKED ABOUT IT OVER THE YEARS BECAUSE THE PERCEPTION IS THAT AUSTIN ENERGY COULD ALWAYS COME ALONG AND BUILD GENERATION AND COLLAPSE THE LOAD ZONE PRICE BECAUSE WE CARE ABOUT HAVING CUSTOMER, LOW CUSTOMER BILLS. SO THEN WE COULD COLLAPSE THE LOAD ZONE PRICE AND THEN, UM, THEIR ENERGY ARBITRAGE WOULD BE RUINED. BUT IF THEY DID KNOW THAT WE COULDN'T, IF WE WERE PROHIBITED FROM IT OR WE NEVER WERE GOING TO BUILD NEW LOCAL GENERATION, THEN THAT OPPORTUNITY WOULD BECOME MORE ATTRACTIVE AGAIN. WOULD THEY HAVE TO TIE IN AT TRANSMISSION LEVEL? NO. OKAY. AND TRANSMISSION COULD ACCOMPLISH THE SAME THING IN COLLAPSING THEIR PRICE. IS THAT A OR I'M SORRY, ASK THE QUESTION AGAIN. COULD, COULD TRANSMISSION ACCOMPLISH THE SAME THING AS IN COLLAPSING THEIR PRICE? TRANSMISSION IN WHAT WAY? IN BRINGING MORE IN IMPORT CAPACITY IN LIKE IF YOU BROUGHT A 3 45 LINE TO MARSHALL FORD OR SOMETHING. YEAH. SO ALL OF THOSE DYNAMICS COULD ULTIMATELY, UM, CREATE A SITUATION WHERE THIS, THIS IS A LITTLE CRAZY, BUT OKAY, IT'S POSSIBLE. LEMME ASK YOU BACK TO THE RELIABILITY RISK HOURS. MM-HMM . I'M REALLY HAVING TROUBLE WITH THAT BECAUSE YOU GOT SEVEN. IF, IF WHAT YOU'VE DESCRIBED IS LOAD AND GENERATION ARE EQUAL, SO YOU'RE, YOU'RE LIKE ONE WAT AWAY FROM A BLACKOUT OR ONE WATT AWAY FROM HAVING TO SHED LOAD. AND YET I'M NOT AWARE OF ANY LOAD SHEDDING HAPPENING EXCEPT YURI. AND, AND HERE IT SAYS 575 HOURS PER YEAR. THAT'S LIKE 6% OF THE TIME WE WOULD BE CURTAILING PEOPLE AND RIGHT. THAT'S, THAT'S THE WHOLE POINT. THAT DOESN'T HAPPEN. SO WHAT THIS IS LOOKING INTO THE FUTURE WITH A LOAD GROWTH WITHOUT ADDITIONAL, UH, LOCAL RESOURCES. SO WHAT IS THE RELIABILITY RISK HOUR NOW? RELIABILITY ZERO. SO, NO, UM, WE, WE LOOKED BACK A COUPLE OF THE PAST YEARS, RIGHT? WE, [02:40:01] FOR THE LAST THREE YEARS LAST, YEAH. AND THEN LIKE 15 AND 15, 15 AND 15, WE THINK MAYBE 15. I THOUGHT IT WAS A LITTLE BIT HIGHER THAN THAT ONE YEAR, BUT, UM, SO IT WAS LIKE 15 HOURS ONE YEAR, 30 HOURS ANOTHER YEAR. SO THE IDEA THAT THAT, UM, WE EVEN HAVE ANY RELIABILITY RISK HOURS IS CONCERNING. BUT YOU KNOW, THERE'S A LOW NUMBER YOU CAN MANAGE 'CAUSE NUMBERS AREN'T EXACTLY PERFECT, RIGHT? YEAH. IMPORT CAPACITY IS NOT, IT'S, IT'S A FACTOR OF, RIGHT. UH, RATINGS ON LINES AND LOTS OF DIFFERENT THINGS, BUT IT MEANS THAT WE ARE CLOSE. AND SO RIGHT NOW, THE SIGNAL TO US AGAIN IS THAT, YOU KNOW, YOU SAID SOMETIMES IT HAPPENS IN 15 MINUTES, SOMETIMES IT HAPPENS FOR EIGHT HOURS. THE LOAD ZONE PRICE SEPARATION, THAT IS ERCOT SAYING YOU NEED MORE SUPPLY HERE. AND WHETHER YOU GET IT FROM BRINGING IT IN OR YOU GET IT FROM BRINGING IN THROUGH, THROUGH INCREASED TRANSMISSION IMPORT CAPACITY, OR YOU GET IT FROM INCREASING THE LOCAL GENERATION, YOU'VE GOTTA BE ABLE TO DO SOMETHING, TAKE ACTION HERE, UM, TO, TO REDUCE THAT, UH, TO BRING THAT PRICE SIGNAL DOWN. AND, UM, AS WE'VE MENTIONED, RIGHT? WE'RE, WE'RE LOOKING TO DO BOTH AND WE WANNA DO IT WITH AS CLEAN ENERGY AS WE CAN AS POSSIBLE HERE LOCALLY, BUT WE DON'T SEE ENOUGH OF THOSE RESOURCES, UM, TO BE ABLE TO ADD TO THE, TO THE, UH, AND THEY DON'T, THEY DON'T ALL FULFILL THE, OR SOLVE THE RISK. SO WE NEED THE ADDITIONAL LOCAL PEAKERS AT THE SAME TIME AS WE'RE INCREASING OUR TRANSMISSION IMPORT CAPACITY. BUT, BUT YOU'RE SEEING THIS RISK HOUR AS IT'S NOT A, WE'RE NOT WITHIN 20% OR WITHIN 10% OF BEING CLOSE. WE'RE YOU'RE, YOU'RE CALCULATING IT, RIGHT? THIS IS RIGHT EQUAL AS A, AS A AS A MODELING EXERCISE. THIS IS CALCULATING AS A MODELING EXERCISE. YES. OKAY. WHY DON'T WE GO, DO YOU HAVE ANY QUESTIONS? OKAY. CYRUS, DO YOU HAVE ANY FOLLOW UP? UH, ONE QUICK QUESTION. SO WHAT'S THE ANSWER TO MY QUESTION? WITH THOSE NEW WIND RESOURCES, HOW MUCH ADDITIONAL PERCENTAGE AS A PERCENTAGE OF LOAD DOES THAT GET US? I, I, I DON'T KNOW. ON A, A RESOURCE BY RESOURCE BASIS WHEN WE PUT IN THE ALL IN RIGHT PORTFOLIO. SO ALL, ALL OF THE PORTFOLIOS THAT WE MODELED HAVE ALL OF THOSE NEW RESOURCES AND LIKE I SAID, IT, IT GOES UP TO A LITTLE OVER 80% AND THEN AT SOME POINT WHEN SOME OF THE, UM, EXISTING RESOURCES GOES BACK. SO THAT INCLUDES THAT. YEAH. OKAY. UM, SO THIS IS, THIS IS THE CHART, THE PAGE, THE NUM ONE ON PAGE 10 THAT'S GIVING ME THE REAL HEARTBURN AND MY SPIDEY SENSES ARE UP. AND I'LL JUST TELL YOU THAT. AND, AND THE REASON, BECAUSE WHEN WE WENT THROUGH THAT EXHAUSTING, UH, MODELING PROCEDURES WE DID WHEN WE HAD LIKE 19 OR 20, JOSH WILL REMEMBER DIFFERENT PORTFOLIOS WITH ALL KINDS OF, YOU KNOW, THIS ONE HAD 200 MEGAWATTS OF PEAKERS AND THAT THERE WAS ALL, YOU GUYS WERE CONSISTENT. YOU ALWAYS SAID 300 TO 400 MEGAWATTS OF PEAKERS IS WHERE YOU GET THE BEST RESULTS IN, IN TERMS OF RELIABILITY RISK HOURS. BUT I DON'T REMEMBER IT BEING THIS EXTREME ON THE DIFFERENCE BETWEEN GOING ALL IN ON BATTERIES VERSUS GOING PEAKERS. AND THAT'S WHY I FEEL LIKE THE PUBLIC, IT WOULD BE GOOD TO GET SOME ADDITIONAL, UH, MODELING OR ANALYSIS. 'CAUSE THIS, THIS JUST SEEMS SO, UM, EXTREME TO ME THAT THE DIFFERENCE BETWEEN THOSE TWO NUMBERS. UM, 'CAUSE I REMEMBER WE ALSO MODELED ONE THAT WAS SORT OF IN BETWEEN, THAT WAS, YOU KNOW, NOT 400 MEGAWATT SPEAKERS, BUT 200 MEGAWATTS WITH MORE BATTERIES AND IT GOT YOU TO A PRETTY GOOD RESULT. AND WHEREAS THIS SEEMS VERY, THE ONLY THING THAT WORKS IS THESE PEAKERS AND IT JUST, IT'S GOT MY SPIDEY SENSES UP. THAT'S ALL I'M GONNA SAY. FAIR, FAIR ENOUGH. AND, AND I DON'T THINK YOU NEED ADDITIONAL MODELING TO, I THINK I CAN ANSWER IT WITH TWO POINTS. ONE, I THINK THAT DURING THAT TIME PERIOD WHEN WE HONED THINGS DOWN, UM, I THINK THE MAX THAT WE MODELED FOR, FOR NEW PEAKERS WAS 200 MEGAWATTS. SO THAT'S ONE THING THAT WAS 300. OKAY. OKAY. UM, BUT THE OTHER, THE, THE MAJOR DIFFERENCE BETWEEN THAT MODELING AND THIS MODELING THAT I THINK IMPACTS THIS IS THE LOAD GROWTH, THE, THE, THE GROWTH THAT WE'RE SEEING IN TERMS OF LOAD BOTH HERE LOCALLY AND, UM, ACROSS ERCOT. AND SO IT'S, IT'S CHANGING THE DYNAMICS PRETTY DRASTICALLY. AND, AND MAYBE THAT'S SOME OF MY UNCOMFORTABLENESS WITH THIS DISCUSSION IS I DON'T KNOW WHAT YOUR ASSUMPTIONS ARE ON LOAD GROWTH. NOBODY BELIEVES 367 GIGAWATTS ARE COMING BY 2031, RIGHT? WE DON'T EITHER KNOW, RIGHT. WE DIDN'T MODEL THAT. SO LIKE IT'S FOUR WITHOUT DOING, I MEAN, I'M NOT CITY COUNCIL, I'M NOT THE DECISION MAKER, BUT IF I WERE A CITY COUNCIL, I WOULD WANT TO SEE ALL THOSE ASSUMPTIONS. [02:45:01] UM, SO WE, I DON'T KNOW WHAT YOU CAN SHARE AND WHAT YOU CAN SHARE. YEAH. WE MODELED ABOUT A 50% INCREASE OVER CURRENT DAY LOAD OUT IN 2035, I THINK WHEN ERCOT ERCOT PROJECTIONS ARE SHOWING LIKE THREE TO FOUR TIMES IN 24 TIMES IN 2032. SO WE DIDN'T EVEN COME CLOSE TO THAT. YEAH, THOSE WEREN'T THE REAL PROJECTIONS. THOSE, THOSE, THOSE WERE JUST LIKE, IF, IF ALL THESE LOADS COME, THIS IS WHAT IT WOULD BE. RIGHT. SO THEY'RE STILL RIGHT. SO WE'RE JUST SAYING IF EVEN A SMALL PERCENTAGE OF THAT COMES, WE HAVE, WE HAVE EXACERBATING SITUATIONS. OKAY. THAT'S HELPFUL. THANK YOU. THANK YOU. OKAY. BUT DO YOU HAVE ANOTHER THREE MINUTE FOLLOW UP, JONATHAN? JONATHAN, DO YOU WANNA TAKE THREE MINUTES? NO, NOTHING MORE FROM ME. THANK YOU, LISA. I REALLY APPRECIATE IT. OKAY. THANK YOU COMMISSIONER. COMMISSIONER ALVAREZ, DO YOU HAVE ANY FOLLOW UP QUESTIONS? YEAH, JUST, UM, ONE, UM, THERE WAS ONE WHERE WE SAID KEY RISKS HAVE INCREASED AND GROWN IN NUMBER. UM, YEAH, I WAS JUST CURIOUS, I GUESS, WHAT ARE THE FEDERAL CHANGES THAT HAVE AFFECTED THAT? IS THAT LIKE THE LACK OF FUNDING FOR RENEWABLES OR WHAT, WHAT ARE WE TALKING ABOUT THERE, I GUESS? YEAH. UM, AND SO I, I WROTE THAT OUT ON THE SLIDE BEFORE. IT'S ONE OF THE NEW RISKS WHEN WE DID A, UH, WHEN WE DID A RISK ASSESSMENT, UM, WITH OUR, OUR TEAM OF EXPERTS, UM, WE, UH, NOTED THAT, UH, A LOT OF CHANGES AT THE FEDERAL LEVEL ARE MAKING IT, UH, MORE COMPLEX TO DO RENEWABLES, BUT ALSO INCREASING THE COST. SO THAT IMPACTS, YOU KNOW, SOME OF US HITTING OUR GOALS AND ALSO GETTING, UM, YOU KNOW, UH, ECONOMIC, UM, AND VIABLE OFFERS FROM, UH, YOU KNOW, RENEWABLE DEVELOPERS THAT ARE, ARE MAKING PROPOSALS HERE TO US DURING OUR, IN OUR RFPS. ALL RIGHT. THANKS. THANK YOU. BU ARE YOU THERE? DO YOU WANT THREE MINUTES GOING ONCE, GOING TWICE. JOSH JUST LIKE TO REMIND EVERYONE THEIR SNACKS OVER HERE AND I WOULD LIKE TO OPEN THEM UP TO AUSTIN ENERGY AND, UH, FOLKS IN THE, UH, THE AUDIENCE IF YOU'D LIKE. UM, SERIOUSLY, PLEASE. I DON'T WANNA TAKE THIS HOME. UM, UH, QUESTION SOME, WE'VE, SOME WE'VE TALKED A LITTLE BIT ABOUT LIKE, UH, TRANSMISSION COMING IN AND I KNOW THAT THERE'S, LIKE, THERE'S A LOT OF TALK ABOUT THESE NEW 7 65 LINES, ALTHOUGH I KNOW I THINK THE PUC HAS ONLY ACTUALLY APPROVED THE WESTERN PART OF THE LINES AND THERE'S LIKE AN EASTERN LOOP THAT THEY'RE STILL LOOKING AT, BUT, AND THEY'RE, IT DOES LOOK LIKE, I MEAN, IT'S JUST DOTS ON A, IT'S, IT'S STRAIGHT LINES ON A, ON A MAP RIGHT NOW, BUT IT DOES LOOK LIKE THERE'S SOME THAT COME OUT. IT LOOKS LIKE THEY GO TO THE WEST OF AUSTIN. UM, DO Y'ALL HAVE ANY INSIGHT ON WHAT THOSE LOOK LIKE? THEY HAVEN'T STARTED LIKE EVEN THE ROUTING STUDIES FOR THOSE, HAVE THEY? YEAH, I'M LOOKING AT PAT BECAUSE WE WERE HAVING THIS CONVERSATION. DO YOU WANNA COME ANSWER THAT ONE? ? HE CAN DESCRIBE IT BETTER THAN I CAN, BUT NO, THEY'RE, THEY STILL HAVE A, A BUNCH OF WORK TO DO ON ROUTING. YEAH. SO, EXCUSE ME. SHORT ANSWER ON, I THINK ON YOUR, THE LAST PART OF YOUR QUESTION IS NO, RIGHT? WE DON'T, WE DON'T HAVE THE DETAILS MM-HMM . UH, PARTICULARLY RELATIVE TO AUSTIN AND THAT ROUTING, UH, REALLY ALL THE ROUTING IS STILL YET TO BE DETERMINED BOTH THE WESTERN AND THE EASTERN SEGMENTS. UH, BUT UH, WE HAVE A SENSE IT'LL BE NEARBY. UH, THAT'S WHAT IT INDICATES, BUT WHERE AND HOW IT CONNECTS IS UNCLEAR. I, I THINK THE KEY THING TO REMEMBER THOUGH IS THAT ALL, ALL OF THAT IMPROVEMENT WITH THESE SEVEN 60 FIVES SHOULD HELP, UH, BRING IN, UH, ENERGY AT A BETTER COST, YOU KNOW, FROM REMOTE AREAS, RIGHT? BUT IT STILL HAS, IT'S NOT GOING TO DIRECTLY IMPROVE OUR LOAD ZONE. IT'S NOT IN THE LOAD ZONE. IF, IF IT CONNECTS TO OUR PERIMETER, WE STILL HAVE THE CHALLENGE. IT'D BE LIKE HOOKING A FIRE HOSE TO YOUR, TO YOUR HOME, RIGHT? WHERE YOU NEED A GARDEN HOSE. AND SO THAT MEANS THAT WHATEVER HAPPENS WITH THE 365, I'M SORRY, THE 7 65 LINES, IT WON'T IMMEDIATELY OR DIRECTLY IMPACT THE INTERNAL ISSUES WE HAVE WITH THE LOAD ZONE, THE LACK OF RESOURCES AND THE TRANSMISSION CONSTRAINTS IN THE LOAD ZONE, RIGHT? SO THERE'S A, AN OPPORTUNITY TO POTENTIALLY [02:50:01] TAP INTO THAT, BUT WE HAVE TO MAKE IMPROVEMENTS THAT WOULD ALLOW FOR WHATEVER BENEFITS MIGHT COME FROM THAT. SO, BUT GENERALLY WE SHOULD HOPE TO SEE BETTER PRICING FOR EXISTENCE ON OUR REMOTE RESOURCES THAT ARE CURRENTLY CONGESTED. BUT THERE'S ALSO A BIG ASTERISK WITH THAT. IF YOU LOOK CLOSELY AT THE ERCOT INFORMATION, A SIGNIFICANT PART OF THE, UM, PROJECTED, UH, NEW LOAD GROWTH ASSOCIATED WITH DATA CENTERS AND SO ON, A SIGNIFICANT PORTION OF THAT GEOGRAPHICALLY IS SHOWN TO BE CITED IN THE WEST TEXAS AREA. AND SO THERE'S A LITTLE BIT OF THAT ISSUE POTENTIALLY OF SORT OF SIPHONING OFF THAT MIGHT OCCUR BEFORE IT EVEN ARRIVES HERE. YEAH. 'CAUSE I KNOW THAT, THAT, THAT DOTTED LINE WILL ACTUALLY BECOME LIKE A WEB OF LINES THAT THEN THEY'LL TRY TO FIGURE OUT AND HAVE A WHOLE BUNCH OF FIGHTS WITH ABOUT WHERE IT GOES. UM, AND I GUESS LIKE, JUST TO THAT THOUGH, IT'S LIKE, LIKE YOU SAID, LIKE IT WOULDN'T REALLY HELP THE LOAD ZONE UNLESS WE'RE ABLE TO GET IT, YOU KNOW, INTO LIKE THE LOAD ZONE. AND SO I GUESS THAT WOULD EITHER BE LIKE UPGRADING OUR EXISTING, THE EXISTING TRANSMISSION LINES THAT RUN THAT AWAY OR DOING GREENFIELD, LIKE TO BRING, TO BRING THAT, TO BRING THAT IN. AND I GUESS ONE COULD, COULD WE, GETTING GREENFIELD T TRANSMISSION THROUGH WESTLAKE I THINK IS GONNA BE A PRETTY BIG, UH, IF WE'RE TALKING ABOUT FIGHTS RIGHT NOW, THAT'S GONNA BE A REALLY BIG FIGHT. UM, BUT HOW, SO WHAT WE HAVE TO DO, LIKE WE HAVE TO UPGRADE THE, THE EXISTING TRANSMISSION LINES AND LIKE, CAN WE DO THAT? YOU'RE NOT TALKING TO THE TRANSMISSION EXPERT, BUT I THINK IN GENERAL, YOU, YOU CITED ONE EXAMPLE THAT'S, THAT'S A STARTING ISSUE WITH JUST THE SEVEN 60 LINE, 7 65 LINES THEMSELVES, RIGHT? THE DETAILS OF THE SIGHTING GOING FROM THE DOTTED LINE ON THE MAP TO AN ACTUAL ROUTE. AND SO WE'D HAVE THAT SAME CHALLENGE, RIGHT? AND IT, I THINK THE ULTIMATE ANSWER WILL DEPEND ON WHERE IT ENDS UP, YOU KNOW, RELATIVE TO OUR SYSTEM, UH, WHAT ROUTES ARE ACTUALLY CHOSEN, AND THEN HOW DO WE GET THERE, RIGHT? WHETHER THAT'S THROUGH SOME COMBINATION OR ONE OR THE OTHER OF A, YOU KNOW, DIRECT PATH THAT WE MAKE A CONNECTION TO, UH, A NEW ONE GREENFIELD, OR A COMBINATION OF THAT PLUS EXISTING UPGRADES, RIGHT? OR UPGRADING AND, UH, EXISTING LINE LINES, WHICH WOULD PROBABLY ALSO BE PART OF THE EQUATION, I THINK. SO DO YOU WANT TO ADD TO THAT? YEAH, I WAS JUST GONNA ADD, UM, THAT, UM, IN THEORY, RIGHT, ADD INCREASING OUR TRANSMISSION IMPORT CAPACITY IS SOMETHING WE COULD TALK ABOUT DOING AS IS. IT'S JUST VERY SIMPLE. BUT I JUST WANNA, UH, POINT YOU BACK TO THE PRESENTATION THAT DAVID TOM CHISHOLM DID LAST MONTH FOR ELECTRIC UTILITY COMMISSION, TALKING ABOUT THE SIGNIFICANT HURDLES THAT IT TAKES TO GET THOSE, UH, PROJECTS APPROVED THROUGH THE ERCOT PROCESS. AND THEN IN MANY CASES, UM, BECAUSE WE'RE TALKING ABOUT THE BOUNDARIES OF THE, YOU KNOW, OF OUR SYSTEM, WHICH IS OUTSIDE THE CITY OF AUSTIN, IT ALSO REQUIRES CERTIFICATES OF CONVENIENCE AND NECESSITY, WHICH REQUIRES THE PUBLIC UTILITY COMMISSION TEXAS PROCESS AS WELL. SO THAT'S WHY TRANSMISSION ACTUALLY TAKES, ALTHOUGH TAKES A LONG, LONGER TIME THAN ANYTHING ELSE TO GET DONE. UM, AND, UM, THERE'S, THERE'S SOME PRETTY HEAVY, UH, REGULATORY CHALLENGES AND HURDLES TO GET IT DONE, UM, WHICH WE'RE NOT UP FOR, WE'RE NOT, WE'RE UP FOR THE CHALLENGE. IT'S JUST NOT, UH, AS EASY AS ONE MIGHT HOPE. THANKS, LAUREN. THANK YOU. PRETTY GOOD, CHRIS. OKAY. I DON'T, I DON'T HAVE ANY FOLLOW UPS ON THAT THEN. OKAY. I THINK WE'LL CLOSE ON THIS PART. AND SO THE NEXT STEP CHAIR TITLE? YEAH, YOU ASKED FOR A TIME REMINDER WHEN WE'RE ONE HOUR OUT FROM THE 10:00 PM THANKS. OKAY. [Items 17 & 19] NEXT STEP WAS 17 AND 19, UH, AL YOU CAN GO FIRST OR I CAN GO FIRST. DO YOU HAVE THE PRESENTATIONS IN A CERTAIN ORDER? THAT'S HARD TO, TO PUT. OKAY. AL YOU GO FIRST. OKAY. THANK YOU ALL VERY MUCH. AND, AND THANKS FOR, FOR HANGING AROUND AND BEING PART OF THIS. IT'S, UH, MY CONTRARY, UH, POINT OF VIEW IS THERE'S TRYING TO FIGURE OUT WHAT THE PEAKERS ARE SUPPOSED TO ACCOMPLISH. AND HERE'S FIVE THINGS THAT PEAKERS CAN ACCOMPLISH AND DO RATHER REGULARLY, BUT THE QUESTION IS, IF WE HAVE PEAKERS THAT WERE GOING TO BUY THAT ARE GONNA COST TWICE AS MUCH MONEY AS THEY COST LAST MONTH, AND WE'RE GONNA RUN 'EM ALMOST NEVER, HOW DO WE, HOW DO WE JUSTIFY THAT? I, I WOULD LIKE TO SEE, AND I WOULD LIKE TO ULTIMATELY ASK FOR A REAL STUDY ON HOW THAT PENCIL'S OUT. UH, THE THINGS THAT PEAKERS ARE GOOD AT ARE BRINGING POWER IN THE LOAD ZONE, ESPECIALLY IN THE AFTERNOONS WHEN WE NEED IT, OR WINTER MORNINGS. UH, THEY DEAL WITH DAILY PRICE SPIKES. THEY PROVIDE ANCILLARY SERVICES. THEY HAVE BLACK START [02:55:01] CAPABILITY, AND THEN THERE'S THE LOOMING SEVEN DAY PROBLEM. NEXT SLIDE, PLEASE. UH, POWER IN THE LOW ZONE. WE'RE AT A CRITICAL BALANCE AND, AND I THINK, UH, DAVE SHOWED THAT IN HIS PRESENTATION. WE'RE, I THINK IF YOU ADD ALL THIS UP, WE'RE MINUS A HUNDRED MEGAWATTS. SO WHAT WE BRING IN PLUS WHAT WE GENERATE IN TOWN MINUS WHAT WE EXPORT, THE LITTLE BIT THAT WE EXPORT IS, IS JUST ABOUT OUR PEAK LOAD. SO WE DON'T HAVE A LOT OF LEEWAY, UH, THAT'S FOR SURE. UH, NEXT SLIDE. BUT WITH THE NEW PEAKERS WOULD BE, WE WOULD BE, WOULD WE BE REPLACING DECKER ADDING TO THE FLEET? AND IT SOUNDS LIKE WE'RE ADDING TO THE FLEET. SO A LOT OF THIS THAT I WROTE A COUPLE DAYS AGO MIGHT HAVE SHIFTED, BUT RIGHT NOW WE'VE GOT, UH, 500 MEGAWATTS OF PEAKERS ALREADY IN TOWN. WE'VE GOT THE COMBINED CYCLE PLAN AT 300. SO WE HAVE 800 MEGAWATTS OF FOSSIL GENERATION THAT WE'VE COMMITTED TO CLOSE. SO WE'VE GOT A, WE'RE, WE HAVE A GAP OF THE GAS PLANTS THAT WE CLOSED AT DECKER TO MAKE UP FOR, AND WE HAVE WHAT WE COMMIT TO CLOSE. SO WE NEED TO BRING A LOT MORE POWER INTO TOWN. NEXT SLIDE. UH, AND WHAT I'VE TRIED TO SHOW IS THAT WE'RE TRANSITIONING FROM A VERTICAL INTEGRATED GAS-BASED UTILITY THAT SERVED A MODERATE SIZED CITY. HISTORICALLY, ALL OF OUR GENERATION WAS IN TOWN. IT WAS AT, AT, UH, HOLLY, IT WAS AT DECKER, IT WAS AT SANDHILL. A LITTLE BIT OUTSIDE WITH, WITH FAYETTE AND THE NEW PLANT. BUT MOSTLY WE GENERATED STUFF IN TOWN FOR A CITY OF THREE TO FOUR OR 500,000 PEOPLE. NOW WE'VE GOT A MILLION PEOPLE AND WE DON'T WANT TO GENERATE THAT MUCH IN TOWN. WE'RE TRYING TO GET TO RENEWABLES. SO WE'RE REALLY HAVING TO REBUILD OUR, OUR WHOLE UTILITY TO FOCUS OUTWARDLY INSTEAD OF INWARDLY. AND WE'RE AT A PAIN POINT. I MEAN, THE, THE MAP THAT I JUST SHOWED YOU FROM DAVID SHOWS WE'RE ABOUT EQUAL. SO, UH, WE'VE GOT A LOT OF WORK TO DO TO, TO MAKE THAT TRANSITION. BUT WE'RE SPENDING $500 MILLION A YEAR OVER THE NEXT FIVE YEARS ON OUR OWN IMPORT CAPACITY. SO THIS IS CONNECTING OUR LOAD ZONE TO THE OUTSIDE WORLD. THEN ERCOT IS SPENDING 33 BILLION STATEWIDE FOR THE 760 5K LINES. AND THAT'S GONNA LAY ON TOP OF THE GRID THAT WE ALREADY HAVE. SO IT, IT CAN REALLY DRAMATICALLY REDUCE PRICE SEPARATION. NEXT, NEXT SLIDE. BUT THE NEXT THING THAT PEAKERS DO IS THEY WORK ON THE DAILY PRICE PEAKS AT THE AFTERNOON. EVERYBODY GETS HOME FROM WORK. WELL, RIGHT NOW, BATTERIES IN ERCOT ARE PROVIDING DAILY 10 AND 10% OR MORE OF THOSE PRICE PEAKS. SO THAT'S BITING INTO THE MARKET THAT PEAKERS USED TO PROVIDE. AND IF WE HAVE BATTERIES AND WE COMMIT TO USING THEM FIRST, WHICH WE WOULD, THAT WOULD ALSO REDUCE THE RUNTIME ON OUR OWN NEW PEAKERS. NEXT SLIDE. HERE'S, UH, AN EXAMPLE OF, UH, THIS IS THE, THE PICTURE FROM THE GEN PLAN, BUT IT'S A SIMILAR THING THAT LISA SHOWED. UH, WE HAVE TERRIBLE PROBLEMS WITH IMPORT CAPACITY RIGHT HERE IN AUSTIN AT THIS MOMENT. AND THE PRICE WENT TO NEARLY 1200 BUCKS, BUT IT LASTED ABOUT FOUR HOURS. UH, NEXT SLIDE. NEXT SLIDE PLEASE. NEXT SLIDE. OKAY, BUT THE WIDTH OF THIS IS ABOUT FOUR HOURS. SO THERE'S A LOT OF DIFFERENT SOLUTIONS TO THIS, ONE OF WHICH IS HAVING A PEAKER. BUT, UH, THERE WE GO. THESE CHANGE EVERY 15 MINUTES. AND, AND THIS CHART ON THE LEFT IS IN INDICATES THE, THE CONGESTION PROBLEMS WE OFTEN HAVE. IN THIS CASE, WIND IS REALLY, REALLY HIGH. AND SO THE PRICE OF WIND IS DEPRESSED, UH, AND THE PRICE IN OUR AREA IS INCREASED, BUT SOME OTHER TIME DURING THE YEAR, UH, THE SLIDE ON THE RIGHT SHOWS, UH, THE WHOLE ERCOT MARKET IS ZERO. SO THE WHOLE STATE IS ENJOYING FREE ENERGY. SO WHAT REALLY MATTERS IS AVERAGING IT UP OVER THE WHOLE YEAR. NEXT SLIDE. UH, AND SO THE SOLUTION TO THESE PRICE SPIKE PROBLEMS WILL BE THE ERCOT TRANSMISSION GRID WHEN IT COMES IN. AND, UH, AS IT'S DEVELOPED, WE NEED TO CONNECT TO IT. WE DON'T KNOW EXACTLY WHERE IT'S GONNA LAND YET AND WHERE WE COULD BUILD A SUBSTATION OR HOW WE COULD BUILD A 345 KILOWATT LINE OUT TO IT. BUT THAT'S SOMETHING THAT'S A WORK IN PROGRESS AND WE NEED TO BE FOLLOWING THAT AS [03:00:01] ERCOT IS, YOU KNOW, GIVING BETTER DEFINITION TO WHAT THAT IS GONNA LOOK LIKE. UH, OUR BATTERIES EAT THOSE PRICE SPIKES FOR BREAKFAST AND DINNER. AND THEN WE HAVE THE, UH, CUSTOMER RENTERS G SOLUTION GUYS ARE DOING A GREAT JOB. WE HAVE PROGRAM AFTER PROGRAM FOR SOLAR AND BATTERIES AND DEMAND RESPONSE. WE'RE GONNA HAVE IN FIVE YEARS, WE SHOULD HAVE VEHICLE TO GRID. UH, AND ALL OF THOSE ARE BEING IMPLEMENTED QUICKLY. THE FIFTH THING IS HEDGING. IF YOU GO TO THE NEXT SLIDE. WHOOPS. THE NEXT SLIDE DOESN'T SHOW HEDGING. GO BACK. UH, SLIDE. OH, I, OKAY. EXCUSE ME. UH, I GOT LOST HERE. GO AHEAD. NEXT SLIDE. SO THIS TALKS ABOUT THE TRANSMISSION GRID, UH, AND IT'S A FAMILIAR ONE FROM ERCOT. THEY APPROVED IT THIS LAST DECEMBER. AND, UH, IT SHOWS A MAJOR POINT, UH, AROUND BELL COUNTY AND ALSO ONE NEAR SAN ANTONIO. THERE'S ALSO SOME FUTURE ADDITIONS THAT MIGHT BRING MORE POWER AND CONNECT US TO THE COAST, BUT IN ANY, IN ANY EVENT, WE CAN LOOK FOR THIS IN ABOUT FIVE YEARS AND GOING FORWARD TO REALLY MITIGATE THE PRICE SEPARATION. NEXT SLIDE. AUSTIN ENERGY, AS I SAID, IS PUTTING 500 MILLION. AS I SAID, DAVID, DAVID SAID, WE'RE PUTTING 500 MILLION INTO UPGRADES. AND IF WE KNEW WHERE TO CONNECT TO THE 7 65, WE'D PROBABLY HAVE TO ADD ANOTHER PROGRAM TO ADD TO THIS NEXT SLIDE. HERE'S A, HERE'S THE PRICE SPIKE FROM THE GENERATION PLAN. IT SHOWS IF YOU HAD A FOUR HOUR BATTERY, YOU COVER JUST ABOUT ALL OF IT. IF YOU HAD A SIX HOUR, IF YOU HAD TWO FOUR HOUR BATTERIES AND YOU OFFSET 'EM, YOU COVER ALL OF IT. SO THE QUESTION IS, IS THESE ARE BAD, THEY HAPPEN, BUT HOW MANY OF 'EM LAST LONGER THAN SIX HOURS? AND THAT'S, I'D REALLY LIKE TO SEE SOME ANALYSIS OF THAT. NEXT SLIDE. CUSTOMER ENERGY SOLUTIONS. UH, RICHARD GENESEE AND THE GROUP ARE JUST, ARE POUNDING THESE OUT. THEY'RE, THEY'RE DOING GREAT AND I'M JUST GLAD TO SEE YOU ADD A WHOLE LIST OF THEM THAT YOU SHOWED. AND, UH, WE JUST NEED TO KEEP THAT UP AND TRY TO BRING THESE TO SCALE. NEXT SLIDE. THE FIFTH THING IS HEDGING. AND, UH, WE DO A LOT OF MARKET. UH, 70% OF THE ERCOT MARKET IS BOUGHT IN THE DAY AHEAD. AND SO IF IN THIS PRICE SPIKE WE HAD BOUGHT IN THE DAY AHEAD, OUR PRICE WOULD BE DOWN IN THE $80 RANGE. NOW, I DON'T KNOW WHAT AUSTIN ENERGY DID THAT DAY, AND I DON'T KNOW WHAT AUSTIN ENERGY PAID, BUT I'M JUST SAYING MOST OF THESE SPIKES CAN BE HANDLED BY HEDGING OR, OR ROUTINELY ARE, AND THAT'S JUST MORE MARKET OPERATIONS. SO THAT'S ANOTHER THING THAT TAKES CARE OF THE PRICE SPIKES. UH, NEXT SLIDE. THE THIRD MARKET THAT, UH, PEAKERS REALLY ADDRESS IS ANCILLARY SERVICES. THEY USED TO BE CALLED ON TO RAMP UP AND DOWN 'CAUSE THEY'RE THE ONES THAT CAN RESPOND THE FASTEST. UH, BUT WITH BATTERIES IN THE ERCOT MARKET, BATTERIES HAVE JUST DOMINATED THE ANCILLARY SERVICES MARKET TO THE POINT THAT IT'S HARD FOR ME TO IMAGINE HOW YOU WOULD MAKE MONEY WITH A NEW GAS PEAKER WHEN BATTERY PRICES HAVE GOT THE ANCILLARY SERVICES DOWN TO, YOU KNOW, SIX, FIVE OR $6 A MEGAWATT. SO MUCH OF THAT SERVICES BEING DONE BY BATTERIES INSTEAD OF PEAKERS. NUMBER. NEXT SLIDE. BLACKSTAR. UH, THE BLACKSTAR THAT WE HAVE, WHICH IS CRITICALLY IMPORTANT, IS A DECKER. AND THOSE PEAKERS ARE ADMITTEDLY VERY, VERY OLD, BUT INSTEAD OF BUYING A NEW PEAKER FOR BLACKSTAR, UH, WE SHOULD EVALUATE MOVING BLACKSTAR CAPABILITY TO, UH, SANDHILL, WHERE WE'VE GOT SIX, SIX OF 'EM. PICK THE BEST, THE BEST TWO AND OUTFIT 'EM TO BE BLACK STAR. IT WOULD SEEM THAT COULD COST A LOT LESS THAN BUYING NEW PEAKERS. AND NUMBER NEXT SLIDE, THE SEVEN DAY PROBLEM. THAT'S THE BIG ONE. THAT'S THE ONE THAT WE START EVERY CONVERSATION WITH URI IN TEXAS. AND IT, IT REALLY HITS EVERYBODY RIGHT IN THE GUT 'CAUSE PEOPLE LIVED THROUGH IT AND MANY PEOPLE DIED IN IT. UH, BUT IT'S EXTREMELY, EXTREMELY RARE AND IT'S NOT THE KIND OF STORM THAT HAPPENS OFTEN. AND SINCE THEN, WE'VE HAD GREAT IMPROVEMENTS IN ERCOT. ERCOT HAS DONE A LOT OF THINGS ON RESERVE MARGINS. WE'RE RUNNING A LOT HIGHER MARGINS THAN WE USED TO. WEATHER'S ASIAN OF PLANTS REAL TIME CO-OP OPTIMIZATION PLUS BATTERIES, BETTER LOAD FORECASTING, BETTER WEATHER FORECASTING. SO THERE'S A LOT OF IMPROVEMENTS THAT MAKE URI LESS LIKELY IF IN AN IDENTICAL WEATHER SITUATION. BUT THE NEXT SLIDE, IT'S ALSO THE ONLY STORM THAT REALLY COMPROMISED OUR WHOLE GRID IN THE LAST DECADE. ALL THE OTHER STORMS THAT HIT AUSTIN HIT [03:05:01] THE DISTRIBUTION GRID. THEY KNOCKED DOWN POLES AND WIRES. THEY HAVE ICE BREAKING DOWN TRANSFORMERS, BUT THEY'RE NOT A YURI EVENT. THEY DON'T AFFECT ERCOT DURING ALL OF THOSE OTHER STORMS. THERE WAS PLENTY OF POWER AVAILABLE. IT JUST, WE HAD WIRES DOWN THAT WE HAD TO FIX. SO LOCAL DISTRIBUTION IS, IS THE ISSUE. AND, AND PEAKER DOESN'T ADDRESS THAT AT ALL. NEXT SLIDE. HERE'S A ERCOT GRAPH OF YURI, UH, YURI'S WAY OFF ON THE EDGE THERE. UH, IT WAS MANY, IT WAS NINE DAYS LONG. MOST STORMS ARE ONE TO THREE, AND IT WAS SEVEN DEGREES ON AVERAGE, COLDER. SO IT WAS, IT WAS A HUGE EXTREME. IT, IT DOESN'T MEAN IT COULDN'T HAPPEN AGAIN, BUT IT WAS WAY OFF THE CHART. NEXT SLIDE. AND DURING THAT TIME, WHAT REALLY FAILED WAS THE GAS GENERATION. THIS IS THE OUTAGES, UH, CHART FROM ERCOT AND IT SHOWS GAS GENERATION WAS THE PRIMARY OUTAGE. NEXT SLIDE. THE BIG THING THAT WE HEAR ABOUT IS THE ECONOMIC DISASTER. UH, THE CO-OPS THAT WENT BANKRUPT, THAT WAS, THAT WAS SERIOUS AND THAT'S SOMETHING YOU REALLY WANNA AVOID. BUT THAT WAS AMPLIFIED BY TWO CRITICAL THINGS. NUMBER ONE, OUR MARKET CAP USED TO BE $9,000 A MEGAWATT HOUR AFTER YURI, THAT WAS REDUCED TO 5,000. SO THAT WOULD CUT THE RISK OF AN IDENTICAL EVENT IN HALF. BUT THE OTHER PART WAS THE PUC IMMEDIATELY RAISED THE OFFER PRICE TO 9,000 MANUALLY AND THEN FORGOT ABOUT IT. AND IT STAYED AT 9,000, I THINK FOR FIVE OR SIX DAYS EVEN AS POWER CAME BACK. SO IF THEY HADN'T DONE THAT AND THE OFFER CAP WAS 5,000, THE TOTAL RISK WOULD BE ABOUT A THIRD OF WHAT REALLY HAPPENED. I MEAN, IT'S STILL A HUGE RISK. I'M NOT SAYING THAT, BUT I'M SAYING INSTEAD OF 18 BILLION BEING SPENT ON ENERGY, IT WOULD'VE BEEN 6 BILLION. SO THE RISK IS A THIRD. AND WHEN WE LOOK AT TRYING TO MODEL AGAINST, WELL, WHAT DID YURI DO? WE SHOULD MODEL AGAINST, WELL, WHAT WOULD IT HAPPEN IF YURI HAPPENED? NOW, UNDER BETTER MANAGEMENT CIRCUMSTANCES, ALSO AUSTIN ENERGY MADE A HUNDRED MILLION ON YURI. THAT'S GREAT BECAUSE YOU GUYS KEPT THE POWER GOING AND THAT MADE US MONEY. BUT IT, IT DIDN'T HELP HOW MUCH POWER WE HAD AVAILABLE IN TOWN BECAUSE ERCOT SAID HOW MUCH YOU HAD TO CURTAIL. IT DIDN'T, IT DIDN'T HELP OUR LIGHTS STAY ON, BUT IT HELPED OUR BUDGET STAY SOUND. BUT OUT OF THE A HUNDRED MILLION, A 200 MEGAWATT PEAKER WOULD'VE BEEN ABOUT 6 MILLION. SO IT'S A SMALL PORTION OF WHAT A NEW PEAKER OF THAT SIZE WOULD COST. THAT'S MY, MY FOURTH. OH, I'LL INVITE YOU, PLEASE TO, YEAH. OKAY. SO GOING ON. NEXT SLIDE. SO THE SEVEN DAY SCENARIO IS, IS SORT OF THE LAST STRAW. IT'S LIKE YOU'VE GOTTA HAVE IT BECAUSE OF THIS. AND THE THING IS, IF ERCOT IS OPERATIONAL, AUSTIN ENERGY CAN IMPORT POWER. THE RISK IS FINANCIAL, AND IT, IT CAN BE EXTREME OR IT CAN BE MANAGEABLE, BUT THE POWER'S THERE. IF T'S CONSTRAINED LIKE IT WAS IN YURI, THEN THEY DICTATE THE ALLOCATION OF RESOURCES AND THE ADVANTAGES THAT WE MADE MONEY FINANCIALLY, BUT IT DIDN'T REALLY PROVIDE THE POWER FOR LOCAL USE. WE COULDN'T CONTROL AND SEND OUR OWN GENERATION TO OUR OWN PEOPLE. AND IF ORCUTT THAT'S DOWN, UH, SPEAKERS WON'T WORK, WE'LL NEED THE BLACK START. SO NEXT SLIDE. BATTERIES AND SOLAR ARE WHAT ARE DOMINATING THE ERCOT QUEUE. AND, UH, ALL, ALL THE MONEY IS GOING INTO THAT BECAUSE THAT'S THE MOST ECONOMICAL POWER SOURCE THERE IS. AND WHAT THE BATTERIES USING THEM TO PRE, TO POSITION THE SOLAR POWER AT TIMES THAT WE NEED IT. UH, IN THIS CHART, GAS HAS FINALLY CREPT UP ABOVE WIND FOR THE FIRST TIME IN A LONG TIME. SO I DO ACKNOWLEDGE THAT NEXT SLIDE. BUT THE BATTERY PRICES ARE COMING DOWN FAST. AND SO THE COST OF THE TOLLING AGREEMENTS AND THE COST OF RENT IN A BATTERY IS GONNA BE COMING DOWN QUICKLY. AND BY 2035, IT SHOULD BE HALF OF WHAT IT IS TODAY. UH, AND CATL AND CHINA JUST SIGNED A, LIKE A THREE GIGAWATT CONTRACT FOR MAKING SODIUM BASED UTILITY BATTERIES. SO THESE ARE, THESE WILL COME ON AND HELP FURTHER REDUCE THE PRICE. NEXT SLIDE. PEAKERS ARE THE MOST EXPENSIVE. AND THIS IS A, THE LAZAR CHART THAT FROM LAST YEAR, THE MOST CURRENT CHART FROM THEM, BUT IT SHOWS GAS POWER IS MOST [03:10:01] EXPENSIVE FROM PEAKERS AT 149 TO WELL OVER $200 A MEGAWATT HOUR. THIS IS FOR NEW PLANTS. OBVIOUSLY IF YOU HAVE A PLANT LIKE SANDEL THAT'S PAID OFF, YOU CAN RUN IT MORE ECONOMICALLY, BUT BATTERIES AND STORAGE ARE THE MUCH, MUCH LOWER COST FOR POWER YEAR ROUND. SO WHAT WE REALLY NEED TO LOOK AT IS WHAT IS THE YEAR ROUND ADVANTAGE OF HAVING A PEAKER THAT COSTS A LOT TO RUN AND THAT YOU HARDLY EVER USE. NEXT SLIDE. THE CAPITAL COSTS ARE GOING UP, AS STUART SAID, THEY DOUBLED LAST MONTH. SO , THAT'S A SCARY SITUATION, BUT THEY'RE EXTREMELY EXPENSIVE. I WAS BASING MY ESTIMATES ON 200 MEGAWATTS RATHER THAN 400 MEGAWATTS BECAUSE I THOUGHT YOU MIGHT BE CONSIDERING REPLACING DECKER, BUT NOW I, I SEE THAT THIS WOULD ALL HAVE TO BE INCREASED. SO WE ARE PROBABLY TALKING ABOUT FOUR TO $500 MILLION PLANT OR PLANTS. NEXT SLIDE. SO MY ASK FOR CITY COUNCIL IS TO HAVE A REALLY DETAILED STUDY OF ALL OF THESE OPERATIONS AND CONSTRAINTS AND LOOK AT WHAT IT WOULD YOU WOULD REALLY MAKE WITH A PEAKER THAT COSTS YOU HALF A MILLION, HALF A BILLION DOLLARS, RUNNING AS LITTLE AS POSSIBLE. AND I HAVE A, A RECOMMENDATION THAT WE CAN, I'LL ASK TO VOTE ON LATER THAT ASK FOR A, A MORE DETAILED STUDY OF THIS BEFORE WE COMMIT TO DOING IT. NEXT SLIDE. AND THAT'S MY RECOMMENDATION. OUR BATTERY FLEET WILL DISPATCH EVERY DAY AND SHAVE PEAK LOADS. THE 500 MILLION IS A LOT OF MONEY FOR A PLANT THAT WILL LIKELY NOT RUN VERY MUCH. AND IT'S HARD TO IMAGINE THAT PAYING FOR ITSELF. SO THAT'S MY PRESENTATION. I'M OPEN TO QUESTIONS AND CHALLENGES FROM STAFF AND COUNCIL COMMISSION. I, I KNOW TIME'S GETTING SHORT, BUT THE, THE RESOLUTION THAT, UM, YOU PUT FORWARD, AND I KNOW, UH, I BELIEVE MYSELF AND EVA ENDORSED IT, RIGHT? UM, IT DOESN'T ACTUALLY SAY DON'T BUILD A PEAKER. IT SAYS, I BELIEVE IT SAYS CITY COUNCIL, DO AN ADDITIONAL ANALYSIS AND LOOK AT THE ALTERNATIVES, BEERS VERSUS ALTERNATIVES BEFORE YOU COMMIT TO ANY FURTHER INVESTMENT. IS THAT BASICALLY WHAT IT SAYS? YEAH. OKAY. YEAH. OTHER QUESTIONS? WE'VE ALSO SUMMARIZED, WE'VE GOT IT DOWN TO ONE PARAGRAPH. SO THAT'S, UH, THANKS FOR THE EDITS. OKAY. QUESTIONS? ANYONE ONLINE? OKAY. ALRIGHT. WELL HOW ABOUT IF WE GET THROUGH THIS AND THEN WE COME BACK TO VOTE ON IT? OR DO YOU WANT TRY ON THE RESOLUTION? YEAH. OH, YOU'RE THE CHAIRMAN. LET'S DO MY PRESENTATION. 'CAUSE I THINK THAT THEY CAN MEL TOGETHER, SO, OKAY. OKAY. NEXT PRESENTATION PLEASE. NUMBER 19. OH BOY. YOU CAN REALLY SEE THAT. OKAY. UM, SO WE'RE MATCHING UP WITH RMC TO DEVELOP A WORK GROUP. I JUST WANT YOUR SUPPORT ON THAT AND MAYBE QUICKLY, IF WE CAN DO IT, GET AN UNDERSTANDING OF WHO MIGHT WANNA PARTICIPATE. WE CAN HAVE FIVE AT MOST. IF SOMEBODY DROPS OUT, THEY CAN'T REALLY BE REPLACED. SO THE IDEA IS TO EXPLORE AND LEARN MORE ABOUT GRID LEVEL STORAGE AND THE TRENDS AND ITS APPLICATIONS. AND OVER TIME, YOU CAN'T SEE THIS VERY EASILY, BUT THE, THE DISCUSSION FOR A LONG TIME HAS BEEN ON LOAD ZONE PRICE SEPARATION, MITIGATING THAT. YOU CAN DO IT IN MANY DIFFERENT WAYS THAT WE'RE JUST REPEATING HERE A LITTLE BIT. UM, VISUALLY, I TRIED TO TO SHOW THE A GEN FLEET ACROSS TEXAS, UH, FOR EXAMPLE, SOME WEST TEXAS, UH, SOLAR PLANTS IN YELLOW, THE LOAD ZONE IN A BLUE CIRCLE OR OVAL. YOU CAN ADD TRANSMISSION AS AL HAS BEEN TALKING ABOUT. YOU COULD REDUCE THE AVERAGE LOAD ZONE PRICE, MAYBE YOU ACROSS THE DIFFERENT NODES WITHIN THE LOAD ZONE. YOU COULD HAVE RESPONSIVE LOAD LOCAL GENERATION, EEDR, ALL THE THINGS THAT HAVE BEEN WORKED ON OR ARE BEING WORKED ON RIGHT NOW. YOU COULD TRY TO REDUCE THE TIME DURATION OF THE LOWER THAN CONTRACTED PRICE AT THE GENERATION NODE, BUT IT SEEMS LIKE LOOKING AT THAT SOME MORE THAT THAT'S NOT THE BIG BIG FACTOR HERE. AND I JUST ASK THE QUESTION, WHAT OTHER THINGS CAN WE DO? SO THE LARGEST RISK LOOKS TO BE AE CUSTOMERS WITHIN THE LOAD ZONE. THAT LOAD BECOMING VERY HIGH FOR LONG DURATIONS. NEXT SLIDE. [03:15:02] SO GOING OVER THESE AGAIN. UM, THE POINT IS WE'D LIKE TO SEE WHAT STORAGE CAN DO. KIND OF ZOOM IN ON STORAGE BECAUSE GO TO THE NEXT SLIDE. WE'LL JUST CUT TO IT REAL QUICK. UM, THIS IS JUST A CONCEPT, AND I KNOW I DON'T HAVE THE PLACEHOLDERS IN THE RIGHT PLACE, BUT AS THE TECHNOLOGY CURVE DRIVES PRICES DOWN FOR THE TECHNOLOGY, IT OPENS UP NEW APPLICATIONS. SO ONE THAT WE'VE TALKED ABOUT OR HEARD ABOUT FOR YEARS FOR C AND I CUSTOMERS IS BEHIND THE METER DEMAND CHARGE REDUCTION STORAGE, EVEN AT HIGHER PRICES FROM THE PAST HAS PENCILED OUT FOR THAT. BUT WHEN WE TALK ABOUT UTILITY SCALE FOR AN AUSTIN ENERGY, WHAT WOULD BE THE PRICE THRESHOLDS? AND I KNOW THAT WE WOULDN'T WANT TO GET IN TO COMPETITIVE DATA, BUT WE JUST WANT TO GET A VISION FOR A ROADMAP OF, AS THE PRICE CONTINUES TO DECLINE, WHAT NEW OPPORTUNITIES ARE ENABLED IN THAT FROM THAT TECHNOLOGY AND HOW COULD IT EXPAND? BECAUSE I THINK THIS IS GONNA BE, WE MANY PEOPLE THINK THIS IS GONNA BE ONE OF THE BIG LEVERS IN THE FUTURE, AS AL POINTED OUT POTENTIALLY IN HIS PRESENTATION. SO WE WANT TO GET A WORKING GROUP TOGETHER WITH RMC AND WORK IN THIS IN MORE DETAILS. WHO WOULD WANT TO PARTICIPATE? I, I THINK AL AND I ARE DEFINITELY IN SURE. WE HAVE THREE MORE SLOTS. CHRIS GILLETTE. OKAY. ANYONE ELSE? ANYONE? UH, WE DON'T HAVE TO SOLVE THIS NOW, BUT WE HAVE THREE, RIGHT? EVA OR JONATHAN MAY WISH, OR WELL MIGHT WISH TO. WELL, WE'LL WORK ON IT LATER. SO I'M THROUGH WITH THIS. WE'LL, UH, DAVE, YOU'LL NEED A FIRST AND A SECOND AND A VOTE TO ESTABLISH THE WORKING GROUP, AND THEN YOU CAN ESTABLISH WHO'S GONNA BE ON THAT WORKING GROUP AT A LATER TIME. SOUNDS GOOD. THANKS. GREAT. OKAY. SO DO WE HAVE A MOTION AND A SECOND? I HAVE A MOTION. I MAKE MOTION I SECOND. OKAY. ALL IN FAVOR OF CREATING THIS WORK GROUP. AYE. OKAY. WE HAVE AT LEAST TWO. OKAY. YOU DON'T KNOW WHAT KAI IS DOING ON THAT, BUT WE HAVE JUST ABOUT EVERYONE ELSE. OKAY. SO I THINK WE'RE DONE WITH 19. WE'LL FOLLOW UP WITH TRYING TO FIND TWO MORE IF THEY WANT TO PARTICIPATE. AND THE RMC IS WORKING PRETTY ACCURATE. THEY'RE DOING A, A SIMUL. THEY'VE ALREADY DONE ONE, I THINK. OKAY. SO NOW WE GO TO THE FIFTH STEP, AND THAT'S THE VOTE ON 12. ITEM 12 [12. Recommend approval implementing of Austin Energy’s Resource, Generation and Climate Protection Plan to 2035 for the addition of efficient, local, natural gas-powered peaker generation units. ] RECOMMENDATION TO APPROVE IMPLEMENTING AUSTIN ENERGY'S RESOURCE GENERATION AND CLIMATE PROTECTION PLAN OF 2035 FOR THE ADDITION OF EFFICIENT LOCAL NATURAL GAS POWERED PEAKER GENERATION UNITS. LET'S HAVE A DISCUSSION ON THIS. I THINK I, I TIPPED MY HAT, WHICH IS TO SAY I WOULD PREFER WE DO AN ADDITIONAL ANALYSIS. I'M, I'M, YOU KNOW, RIGHT. I'M NOT CONVINCED BY THIS, WHICH DOESN'T MEAN IT'S NOT, YOU KNOW, IT DOESN'T MEAN THAT I'M DISTRUSTING JUST MEANS I THINK THERE SHOULD BE SOME SORT OF THIRD PARTY ANALYSIS, SAME ISSUES. I THINK THERE'S TIME. UH, I UNDERSTAND THE PRESS GOING, BUT I THINK, I THINK IF WE TOOK AN ADDITIONAL MONTH OR TWO, IT WOULD MAKE THE PUBLIC AND COUNCIL. SO I'M NOT, UH, I, I CAN'T, OTHER COMMENTS AL LIKE CYRUS, YOU KNOW, I BELIEVE WE NEED A A, A REAL THIRD PARTY STUDY THAT SHOWS THE OTHER OPTIONS THAT ARE OUT THERE. AND, AND I'M NOT CONVINCED BY THIS AND I'M NOT CONVINCED TO WRITE A BLANK CHECK AND SAY THERE'S NO, THERE'S NO PRICE, THERE'S NO CAPACITY, THERE'S NO NOTHING. AND, AND JUST GO FOR IT. I, I CAN'T, I CAN'T LOOK FOR THAT. SO I, I WOULD LIKE TO SEE IT FURTHER STATE. DOESN'T MEAN IT DOESN'T MEAN I COULDN'T BE CONVINCED. RIGHT. BUT I WOULD FEEL MUCH BETTER IF THERE WAS A THIRD PARTY ANALYSIS THAT LOOKED AT 400 MEGA PEAKERS THE ALTERNATIVE OR SOMETHING IN BETWEEN. RIGHT. IF YOU HAD A LITTLE MORE, UH, YOU KNOW, YOU HAD THOSE OPTIONS BEFORE YOU CYRUS. YEAH. SORRY, I'M NOT SURE YOUR MICROPHONE IS WORKING. SO FOR THE, OKAY, SORRY. UM, THANK YOU. I'M JUST SAYING, IT DOESN'T MEAN ONE COULDN'T BE CONVINCED. IT'S JUST LIKE THAT EXTRA ANALYSIS, A THIRD PARTY ANALYSIS THAT WOULD LOOK AT SOME OF THESE SAME FACTORS, I THINK WOULD BE VERY USEFUL AND WOULD ALLOW, UM, INPUT AND ALLOW VARIATIONS RIGHT ON, ON WHAT, WHAT THEY PREFER VERSUS WHAT OTHER PEOPLE MIGHT PREFER. SO I THINK IT WOULD BE USEFUL. WE'RE TALKING ABOUT THINGS THAT ARE FIVE YEARS OUT. WE, WE NEED TO BE LOOKING AT 5, 10, 15 YEARS OUT AS THE OPERATING [03:20:02] WORLD OF THESE THINGS AND WHAT'S GONNA BE AVAILABLE THEN THAT'S LIKELY NOT, NOT PIE IN THE SKY, NOT FUSION, BUT UH, WHAT'S, WHAT'S THAT WORLD LIKELY TO BE LIKE, NOT WHAT IT IS NOW OR WHAT IT WAS A COUPLE YEARS AGO. YEAH. CESAR, DO YOU HAVE ANY POINTS, DAVE? YEAH. ON, UH, THIRD PARTY MODELING. I WASN'T ON THE ELECTRIC UTILITY COMMISSION WHEN THE, UH, GIN PLAN WAS BEING WORKED ON, BUT THERE WAS THIRD PARTY MODELING FROM ASCEND ANALYTICS, RIGHT. THAT LOOKED AT THIS, YOU KNOW, THIS EXACT ISSUE AND, AND PRODUCED I THINK CHARTS THAT WERE VERY SIMILAR ON, UH, UM, UH, LOOKING AT DIFFERENT, UM, PORTFOLIOS AND WHAT THE FINANCIAL IMPACT OF EXTREME WEATHER OR, YOU KNOW, THOSE KINDS OF SCENARIOS WOULD BE. SO, AND, AND I THINK THAT THE RESULTS THAT WE SEE HERE TODAY ARE MORE OR LESS IN LINE WITH WHAT SAND ANALYTICS CAME UP WITH, UM, UH, A, A YEAR AND A BIT AGO. UH, SO, UM, YEAH, IT, IT, IT SEEMS LIKE THERE HAS BEEN THIRD PARTY ANALYSIS THAT IT'S BEEN REFRESHED VERY RECENTLY AND THE RESULTS ARE MORE OR LESS IN LINE OR DON'T SIGNIFICANTLY, UH, CHANGE WHAT WE SHOULD THINK ABOUT THE, THE RELATIVE MERITS OF THE, THE DIFFERENT, UH, TECHNOLOGIES IN THE PORTFOLIO. SO THE SUGGESTION IS TAKE THAT BASE, MAYBE HAVE THAT THIRD PARTY BE ABLE TO HIT THE GROUND RUNNING AND UPDATE THE ANALYSIS. I'M, WELL, UH, I, I BRING UP THE, THE OLD THIRD PARTY ANALYSIS TO SAY THAT IT, IT VALIDATES WHAT THE, IT, IT, IT VALIDATES THE MODELING THAT WE'VE SEEN TODAY. IF THE MODELING THAT WE SEE TODAY WAS VERY DIFFERENT FROM WHAT ASCEND CAME UP WITH A YEAR AGO, I WOULD SAY, OKAY, YOU KNOW, WE NEED TO REDO THIS. BUT, UM, THERE WAS A PROCESS WITH A THIRD PARTY MODELER THAT THE UC WAS VERY INVOLVED IN. UH, THEN I THINK AN ASK FOR A REFRESH ON THAT MODELING IS VERY REASONABLE BECAUSE SO MUCH HAS CHANGED IN THE WORLD AND THE IN POWER IN THE LAST YEAR AND A HALF. UH, AND SO AUSTIN ENERGY DID REFRESH THE MODELING INTERNALLY AND IT'S MORE OR LESS IN LINE WITH WHAT THE THIRD PARTY CAME UP WITH, UM, BACK THEN. SO, TO, TO ME, I, I, I THINK THAT, UH, I'M COMFORTABLE TAKING THE MODELING AS YOU KNOW, MORE OR LESS, UM, UH, YEAH, I, I'M COMFORTABLE MAKING A DECISION BASED ON THE, THE MODELING THAT WE'VE SEEN TODAY. OKAY. CHRIS? UM, I, I DON'T KNOW. I, I JUST, I'M CONCERNED THAT WE CAN STUDY THIS A WHOLE BUNCH OF DIFFERENT WAYS AND IN THE END WE'RE GONNA END UP RIGHT WHERE WE ARE AND WE'LL HAVE WASTED SOME TIME THAT WE MAY OR MAY NOT HAVE. I KNOW IT'S A LOT OF SPECULATION, BUT THAT'S, THAT'S JUST THE WAY THIS IS, THAT'S THE BUSINESS. THIS IS, I MEAN, I TEND TO AGREE WITH COMMISSIONER KIRKSEY. I MEAN, I THINK YOU CAN ALWAYS GET MORE AND MORE AND MORE INFORMATION AND AT SOME POINT YOU JUST HAVE TO MAKE THE BEST DECISION YOU CAN, JOSH. YEAH, I MEAN, I'LL PROBABLY CONCUR. I MEAN, IT JUST LIKE, LOOK, A LOT OF THINGS HAVE CHANGED, BUT IT DOESN'T, I DON'T THINK ANY, ANY, I DON'T THINK THAT MANY THINGS HAVE CHANGED IN THE DIRECTION THAT WOULD CHANGE THE RESULT THAT, THAT WOULD, THAT WOULD TIP IT OVER TO, TO SOMETHING ELSE LIKE THE MAJOR DRIVERS OF IT IN TERMS OF LIKE LOAD AND LIKE, UM, UH, JUST AND LIKE THE COST OF TECHNOLOGIES AND LIKE, YOU KNOW, ALL THESE, ALL THESE OTHER THINGS. LIKE I DON'T, I DON'T SEE, THERE'S NOTHING THAT'S LIKE BLINKING RED THAT SAID, OH, THIS, THIS MIGHT ACTUALLY, THAT LIKE THIS WOULD BE A GOOD INDICATION THAT IT WOULD CHANGE THE RESULTS THAT WE HAD BEFORE. LIKE IF THERE, IF, IF WE HAD HAD A, YOU KNOW, IF THE PRICE OF, YOU KNOW, IF IF SOMEONE HAD COME OUT WITH A LONG DURATION ENERGY STORAGE PRODUCT THAT COST A 10TH OF WHAT IT DID TODAY VERSUS LIKE WHEN WE DID THE STUDY, THEN, THEN YEAH, DEFINITELY WE, WE SHOULD LOOK AT THAT. BUT I MEAN, I DON'T, I DON'T SEE, I DON'T SEE ANYTHING THAT WOULD LIKE MATERIALLY LIKE CHANGE THE DIRECTIONALITY OF, OF THE RESULTS. THE NUMBERS OBVIOUSLY WOULD BE DIFFERENT BECAUSE THE INPUTS WOULD BE, WOULD BE DIFFERENT. BUT I DON'T SEE, I DON'T SEE IT CHANGING, CHANGING THE DIRECTIONALITY. OKAY. I FOLLOW UP. SURE. I MEAN, I GUESS WHAT DOES CHANGE IS THE RISK TOO. LIKE WE CAN GET MORE INFORMATION AND I DON'T SEE THAT CONTRIBUTING A LOT TO I GUESS WHAT SEEMS LIKE A REASONABLE SOLUTION, BUT THE PRICING RISK AND THE RELIABILITY RISK CONTINUE TO RISE. [03:25:01] SO I JUST, ONE OTHER THOUGHT, I I, IT SEEMS THAT THERE'S SOME POINTS OF VIEW THAT THIS IS A HUGE STEP BACK, YOU KNOW, GOING, GOING WITH PEAKERS AND I THINK WE HAVE TO REMEMBER THAT'S ONLY BEEN A FEW YEARS SINCE WE, UH, RETIRED DECKER THAT WAS 725 MEGAWATTS, BUT ABOUT LESS THAN 20 YEARS AGO WE ALSO RETIRED HOLLY, WHICH IS ANOTHER 550 MEGAWATTS OR SOMETHING LIKE THAT. SO, YOU KNOW, WE'RE LOOKING AT ALMOST 1300 MEGAWATTS OF INSIDE THE FENCE, INSIDE THE FENCE OF GAS FIRE GENERATION THAT'S NO LONGER HERE. AND, AND THOSE UNITS USED TO RUN ALL THE TIME. YEAH. SO IT'S, I DON'T FEEL LIKE THIS IS A STEP BACK. UH, IT'S A SECURITY BLANKET MORE THAN ANYTHING. YEAH, I MEAN, I, I MEAN I GUESS IT GOES BACK TO LIKE, I MEAN, WHAT ARE YOUR, YOUR ACTUAL GOALS HERE, RIGHT? IT'S LIKE, I MEAN, I MEAN, I DON'T, I DON'T WANT TO HAVE MORE GAS IN IT. I DON'T WANT TO HAVE A PEAKER. BUT IF I, BUT IF IT GIVES US MORE OF THE THINGS WE ACTUALLY WANT, IF IT ALLOWS US TO GET MORE RENEWABLES BECAUSE WE SQUASH THE PRICE, WE HAVE MORE MONEY TO SPEND, UM, IT ALLOWS US TO LIKE MAYBE BE ABLE TO DO SOME UPGRADES ON TRANSMISSION BECAUSE WE CAN TAKE 'EM OUTTA SERVICE BECAUSE WE'LL BE ABLE TO MEET THE LOAD FROM INSIDE. LIKE, I MEAN, SO I, IT IT'S, IT'S VERY COUNTERINTUITIVE THAT LIKE SOMETHING LIKE THIS COULD LIKE ACTUALLY GET US CLOSER TO OUR GOALS. BUT I MEAN, IT'S JUST WITH THE WAY THAT LIKE LOAD ZONE PRICING WORKS, I MEAN, IT IS JUST, IT, THE WHAT THE COST FOR, FOR, FOR AUSTIN ENERGY CONSUMER FOR AUSTIN ENERGY CUSTOMERS MATTERS AT, AT THE NODES INSIDE THE LOAD ZONE. AND SO IT'S LIKE, I MEAN, YEAH, I MEAN PAYING, PAYING $150 MILLION A YEAR IN CONGESTION COST DOESN'T SEEM, DOESN'T SEEM GREAT. I MEAN, WE GOT, WE'VE BEEN, WE'VE BEEN TALKING A LOT ABOUT LIKE RATE INCREASES AND PUSHING BACK ON LIKE, YOU KNOW, RATE INCREASES. WE'VE TALKED, I MEAN WE'VE GOT A LOT OF LIKE DR AND EFFICIENCY PROGRAMS AND BATTERY PROGRAMS. I FORGOT, I FORGOT THE OTHER DAY WE HAD TWO DISTRIBUTED BATTERY PROGRAMS GOING. NOT ONE. UM, BUT I MEAN, I KNOW SOME, YOU KNOW, I, I KNOW LIKE IF WE, IF WE BUY A PEAKER, WE'RE GONNA HAVE TO, YOU KNOW, WE'RE GONNA HAVE TO PAY FOR IT. SO, I MEAN, SOME OF THAT, YOU KNOW, SOME OF THAT MONEY WILL, WILL GO THERE. BUT I MEAN, LIKE, I DON'T KNOW THE, IF THIS, IF IT'S LIKE MEDICINE, IF IT'S LIKE YOU'VE GOTTA TAKE MEDICINE IF OUR LOAD'S ZONE IS SICK AND WE GOTTA TAKE MEDICINE SO THAT WE CAN GET BETTER, UM, GET THE THINGS WE ACTUALLY WANT. I MEAN, THAT'S WHAT IT KIND OF FEELS LIKE. I DON'T KNOW. ANYWAYS, IF WE HAVE MORE MONEY TO SPEND ON OTHER THINGS THAT WE ACTUALLY WANT TO SPEND MONEY ON, JUST, BUT I DUNNO IF WE HAVE TO SPEND MONEY ON THIS TO ALLOW US TO, TO DO THAT. I DON'T KNOW THAT THAT'S WHERE THIS CONVERSATION'S LANDED FOR ME. GO AHEAD. I, LET ME ADDRESS, UH, MOSTLY CHRIS. UH, BUT THE ASCEND STUDY WAS DONE IN CONJUNCTION WITH THE LAST GENERATION PLAN. I DON'T REMEMBER THAT IT WAS TERRIBLY DECISIVE, BUT IT, IT KIND OF REINFORCED THAT AUSTIN ENERGY'S NUMBERS WERE ABOUT RIGHT. BUT AGAIN, THAT GENERATION PLAN WAS BUILT ON HUGE CONGESTION. IT WAS BUILT WITHOUT ANY VISION OF A FUTURE TRANSMISSION GRID THAT WOULD BE FIVE TIMES BIGGER. IT WAS BUILT WITH NO BATTERIES AT ALL. I MEAN, JUST A FEW DOZENS OF MEGAWATTS OF BATTERIES GETTING STARTED, BUT THE BATTERIES WEREN'T A THING AT ALL DURING THAT TIMEFRAME. SO I THINK THAT THAT BATTERIES TRANSMISSION AND A LOT OF DISTRIBUTED ENERGY THINGS THAT ARE COMING INTO SCALE NOW, WERE NOT PART OF THAT STUDY AND THAT TIME AT ALL. SO I, I THINK IT DOES BEAR ANOTHER LOOK. LET'S GET, IN MY OPINION, JONATHAN, RAUL, DO YOU HAVE COMMENTS? AND, AND JUST TO REMIND OURSELVES, WE'RE WE'RE ON 12 STILL? IS THAT WHAT WE'RE DISCUSSING? YEAH, THEIR RESOLUTION. OKAY. YOU HAVE YOUR HAND UP, BUT WE DIDN'T HEAR FROM YOU BEFORE. WHAT DO YOU HAVE? I, HELLO. OKAY. I GUESS I'M WONDERING, UH, AND, AND I, I UNDERSTAND YOU ARE TAKING UP 12 RIGHT NOW, BUT WHAT YOUR INTENTION IS WITH THE RESOLUTION THAT WE WERE PUTTING FORWARD, 'CAUSE IT SEEMS LIKE 12 KIND OF, UH, WOULD LOGICALLY COME AFTER. SO JUST CHECKING TO SEE OUR SCHOOL GONNA BE ABLE TO TAKE THAT UP OR YES, WE'RE GONNA TAKE THAT UP. CHECKING, THINKING. IT MAY HAVE TO EXTEND, IF WE GO BEYOND 10 O'CLOCK, WE'LL HAVE TO HAVE A VOTE TO EXTEND BEYOND 10 O'CLOCK. [03:30:01] SO WE JUST WANTED TO, TO TRY TO HAVE A MORE FULL DISCUSSION ON 12 ALSO. SO IS THERE ANY, THERE'S BEEN SO MANY GOOD POINTS AND I AGREE WITH SO MANY OF THEM. UM, JONATHAN, RAUL, WHAT ARE YOUR COMMENTS ABOUT THIS? I MEAN, I'LL, I'LL WEIGH IN, BUT, UH, I MEAN, HONESTLY, I DON'T THINK WE HAVE THE INFORMATION TO MAKE AN INFORMED DECISION, YOU KNOW, 'CAUSE WE CAN'T SEE THE INFORMATION THE COUNCIL'S GONNA SEE, RIGHT? IN TERMS OF ACTUALLY EVALUATING THE NEED, RIGHT? LOOKING AT ALL THE PROJECTIONS AND THE GENERATION AND ALL THE, YOU KNOW, ALL THESE THINGS YOU HAVE TO LOOK AT IN TERMS OF, 'CAUSE AGAIN, I'M NOT CONVINCED FOR FOUR TO 500 MILLION IS THE RIGHT AMOUNT OF SPEAKERS, RIGHT? BUT WE DON'T HAVE THE DATA TO SAY IT'S 300 MILLION OR IT'S 200 MILLION. I MEAN, 200 MEGAWATTS OR 300 MEGAWATTS VERSUS 400 OR 500 MEGAWATTS. AND, BUT I MEAN, I STILL THINK THOUGH THAT EVEN IF WE DO THIS STUDY, WE STILL WON'T BE ABLE TO SEE THAT DATA. YOU KNOW WHAT I MEAN? AND FOR ME, IT'S LIKE, IF YOU CAN'T SEE THAT DATA, YOU KNOW, THAT'S REALLY WHAT YOU NEED AS A DECISION MAKER TO, TO REALLY DECIDE, RIGHT, WELL, WHAT ARE THE RIGHT NUMBERS AND WHAT'S THE RIGHT TIMING, YOU KNOW, FOR THIS? 'CAUSE IF WE COULD HOLD OFF A YEAR AND DO THESE STUDIES, THAT'D BE GREAT, BUT WHAT WOULD THE COST, WHAT WOULD HAPPEN WITH COST? SO, UM, BUT I THINK, YOU KNOW, IN THE END, WE'RE GONNA NEED SOME SPEAKERS TO ACTUALLY BE ABLE TO MEET OUR OVERALL GOALS IN THE 2035 GENERATION PLAN. UM, IT'S KIND OF AN INSURANCE POLICY, RIGHT? SO THAT AS WE'RE BRINGING ALL THESE OTHER RENEWABLES, YOU HAVE THIS INSURANCE POLICY THAT PROTECTS YOU FROM VERY BAD FINANCIAL OUTCOMES. AND, UM, I THINK IN WHAT THE LAST 2020 AND 2022, WE REMOVED 700 MEGAWATTS AND WE WANNA REMOVE ANOTHER 800 MEGAWATTS. I MEAN, I THINK THOSE ARE LIKE SOME BIG NUMBERS, RIGHT? AND I MEAN, IN MY GUT, I JUST THINK, WELL, YOU GOTTA HAVE SOME SOMETHING TO MITIGATE THAT LOSS AND MORE EFFICIENT PEAKER UNITS THAT YOU DON'T HAVE TO USE. YOU DON'T, YOU KNOW, YOU CAN JUST FIRE 'EM UP WHEN YOU NEED 'EM. I THINK THAT MAKES MORE SENSE THAN IF WE'RE ABLE TO THEN TAKE OFF, UH, TAKE OFF THE GRID OFF OUR PORTFOLIO, SOME OF THESE, UM, LESS EFFICIENT PLANTS THAT RUN ALL THE TIME. RIGHT? SO, SO I'M TORN. I MEAN, I, I REALLY DON'T THINK WE HAVE THE INFORMATION TO MAKE A DECISION ON THIS PARTICULAR ITEM, BUT I ALSO, YOU KNOW, SO I WOULD BE INCLINED TO ABSTAIN, BUT I THINK THAT'S, I DON'T KNOW, I CAN'T SAY THE WORD I WANNA SAY, BUT IT'S, UH, COP OUT I GUESS IS WHAT I'LL SAY TO LIKE, ABSTAIN. BUT I THINK I'M GONNA SUPPORT IT. BUT JUST BECAUSE I THINK WE'RE GONNA NEED SOME KIND OF PEAKERS IN THE MIX AND BECAUSE WE CAN'T SEE ALL THE PRIVILEGED INFORMATION DUE TO COMPETITIVE MATTERS, THEN I DON'T THINK THAT I'LL EVER ACTUALLY GET THE INFORMATION I WANNA SEE BE INFORMED ENOUGH TO, TO VOTE. BUT I THINK PEAKERS NEED TO BE PART OF THE, YOU KNOW, PART OF THE, UH, MIX HERE. AND SO THAT'S THE ONLY REASON I'D BE VOTING FORWARD. , CAN YOU HOLD, UH, JONATHAN HASN'T BEEN ABLE TO SPEAK FOR A WHILE, JONATHAN, DO YOU HAVE ANY COMMENTS? SURE. I, I GENERALLY CONCUR WITH MOST A LOT OF THE COMMENTS THAT WERE MADE, UM, BY THE FOLKS ON THE RIGHT SIDE OF THE ROOM, DAVE, TO YOUR, TO YOUR RIGHT. UM, ON THE THIRD PARTY ANALYSIS BIT, I, I THINK THAT, YOU KNOW, WE'VE, IT, IT MAY BE WORTH ASKING AUSTIN ENERGY IF THEY CAN SPEND A SYN UP TO REFRESH THAT ANALYSIS, BUT THAT SHOULDN'T, UM, HOLD UP THIS PROCESS KNOWING JUST THE TIGHT TIMELINES. AND THEN, YOU KNOW, MY OVERALL THOUGHTS ON THE ISSUE, LIKE NOBODY WANTS TO HAVE TO BUILD A GAS PLANT, I THINK, UH, EITHER ON THE COMMISSION OR AT AUSTIN ENERGY. BUT IF THAT IS THE REALITY, IN ORDER TO KEEP BILLS REASONABLE AND KEEP THE LIGHTS ON, I, I DO THINK WE HAVE TO BE PRAGMATIC ABOUT IT. UM, AND YOU KNOW, ONE, WE'RE WE'RE LOOKING OUT FOR THE RATE PAYERS OF THE CITY OF AUSTIN, BUT ALSO, YOU KNOW, FROM A CLIMATE PERSPECTIVE, IF AUSTIN ENERGY IS ABLE TO BE A UTILITY THAT IS, YOU KNOW, 78 OR 80% DECARBONIZED WHILE STILL BEING BEST IN CLASS IN TERMS OF COST AND RELIABILITY, THE REST OF TEXAS AND ERCOT WILL TAKE NOTE OF THAT. YOU CAN, YOU CAN HAVE YOUR CAKE AND EAT IT TOO. UM, AND, AND, AND WE WILL FIGURE OUT THE, THE REMAINING PERCENTAGES OF, OF THE DECARBONIZATION PICTURE. BUT [03:35:01] PERHAPS, YOU KNOW, TECHNOLOGY AND ECONOMICS ARE JUST NOT QUITE THERE AT THIS MOMENT. , THANKS. YEAH, I GUESS I DO NOT SEE THE EXTREME URGENCY. I DO AGREE THAT LOCAL RESOURCES ARE NEEDED AND IT SEEMS LIKE AUSTIN ENERGY HAS BEEN MOVING TO PUT THOSE IN PLACE. UH, I WOULD LIKE TO SEE THESE NEW CONTRACTS FOR STORAGE AND OTHER RESOURCES HAVE TIME TO TAKE EFFECT. AND, UH, YOU KNOW, I THINK FURTHERMORE, I AM REALLY JUST NOT COMFORTABLE WITH THIS. UM, OPEN ENDED, UM, TOTALLY BEHIND CLOSED DOORS, YOU KNOW, PROCESS OF NEGOTIATING. I THINK IF AUSTIN ENERGY IS GONNA GO DOWN THIS PATH, UH, TO GET NEW THINKERS, THEN IT SHOULD AT LEAST HAVE TO GO THROUGH A MORE TYPICAL TRANSPARENT APPROACH AND PROCESS. AND THAT WILL BE A TWO STEP PROCESS WHERE FIRST THEY GET SOME SORT OF GO AHEAD TO GO OUT FOR, FOR BIDS AND WHETHER THAT NEEDS TO BE SOME SORT OF MODIFIED PROCESS SO THAT THE THINGS RESPOND AND STAND UP. BUT I THINK IT'S, UH, JUST REALLY NOT APPROPRIATE TO SAY, GO DO THAT AND HOWEVER MUCH YOU HAVE TO PAY, UH, YOU KNOW, YOU CAN PAY, I ASSUME THERE'LL BE SOME SORT OF LIMIT, BUT, UH, YOU KNOW, NOT REQUIRING THEM BACK FOR APPROVAL OF A CONTRACT JUST FEELS ENTIRELY WRONG PROCESS TO ME. I, I GUESS I ALSO DON'T REALLY BUY THAT THIS WAS A LIMITED OPTION. YOU KNOW, I THINK BACK TO 10, 11 YEARS AGO NOW, AUSTIN ENERGY WAS ABSOLUTELY AGAINST WHAT THEY NEEDED WAS A NEW COMBINED CYCLE, UH, GAS PUMP. AND THERE WAS A LOT OF INTENTION ABOUT THAT. AND THE END OF THE DAY, CITY COUNCIL DID REQUIRE AN INDEPENDENT THIRD PARTY TO REVIEW THAT, AND THAT ANALYSIS SHOWED THAT IT WAS ABOUT A WASH COULD GET THE, THE GAS PLANT WHERE THEY COULD GO WITH WIND AND SOLAR AND ECONOMICALLY BE OPPOSITE. AND AT THAT POINT, THE PROPOSAL WAS JUST DROPPED. AND BY THE NEXT TIME THERE WAS A RESOURCE PLANNING PROCESS, THE UTILITY WAS NOT ASKING FOR A NATURAL GAS COMBINED CYCLE PLANT. IN FACT, THEY WERE SAYING THAT THAT TECHNOLOGY WAS NO LONGER WHAT WAS, YOU KNOW, PROFITABLE, MOST PROFITABLE IN THE MARKET. UM, SO, YOU KNOW, I THINK THEY HAVE A LOT OF INFORMATION. I THINK THEY'RE RIGHT ABOUT A LOT OF THINGS. I ALSO THINK THAT NOBODY'S PERFECT AND GIVEN WE'RE NOT GONNA GET ANY OF THE INFORMATION AND THAT IT'S ONLY GONNA BE CITY COUNCIL MEMBERS THAT SEE IT, I THINK IT'S REASONABLE TO, GIVEN THAT THERE BE, SO WHAT WE HAVE A SITUATION HERE IS NUMBER 12 IS SAYING MOVE AHEAD. YOU'RE, YOU'RE NOT CONTRACTING, BUT YOU'RE MOVING AHEAD. AND THE STEP AND AL'S RESOLUTION VERSION TWO IS SAYING, WAIT AND STUDY IT MORE, BASICALLY. RIGHT? YEAH. RIGHT. AND SO ITEM 12 AT THE OPTIONS, LOOK AT OPTIONS. SO I, THIS IS ONE OF THE MOST DIFFICULT THINGS I'VE EVER FACED HERE, AND NOBODY, I, I AGREE WITH SO MANY POINTS. YOU KNOW, JOSH, IT WAS, AND WE DON'T REALLY WANT TO DO THIS, BUT IS IT SOMETHING THAT IS JUST PRUDENT FOR THE COMMUNITY? RIGHT? AND IT'S LIKE, UH, I DON'T WANNA SAY, UH, A LESSER OF THE BAD OPTIONS BECAUSE ON THE OTHER SIDE, I'VE NEVER SEEN THE VELOCITY OF NEW PROGRAMS TO TRY TO MAKE INSIDE THE FENCE, UH, ENERGY EFFICIENCY, DEMAND RESPONSE, LOCAL SOLAR BATTERIES. AND I KNOW THAT THEY CAN'T, THERE'S A BIG LIST THERE. THERE'S A BIG LIST OF ALL THE THINGS. AND EVEN IF YOU GO TALK TO ROGER DUNCAN WHO STARTED THE GREEN, SO MUCH OF THE GREEN MOVEMENT AND ENERGY EFFICIENCY AND, AND PIONEERED AND MADE AUSTIN ENERGY A LEADER BACK WAY BACK WHEN, WHEN HE WAS GENERAL MANAGER, I DON'T EVEN THINK WHEN HE STARTED IT OFF AND GOT MOMENTUM, HE HAD THIS DEGREE OF VELOCITY OF ATTEMPTS TO TRY TO MAKE IT WORK. RIGHT? AND I DON'T HAVE AN ANSWER. YEAH. I WANNA BE CLEAR THAT WHEN I'M MAY SEEM CRITICAL. AT THE SAME TIME, I'M APPRECIATIVE OF ALL THE WORK THAT'S BEEN DONE AND ALL THE PARTS OF THE GEN PLAN THAT HAVE BEEN, THAT ARE BEING MET WHERE THEY'VE GONE SORT OF BEYOND, YOU KNOW? SO I'M NOT MEANING TO BE, UH, NOT MEANING TO SAY THAT, YOU KNOW, AUSTIN ENERGY IS, [03:40:01] IS SOMEHOW, UH, UNDERMINING THE GEN PLAN. I'M JUST SAYING WE SHOULD BE REALLY CAREFUL. THIS IS A HUGE DECISION. WE SHOULD BE VERY CAREFUL. MM-HMM . UH, AND MORE ANALYSIS WOULD BE HELPFUL. UM, AND I'M, I'M TROUBLED BY THE SORT OF WIDE OPEN NATURE OF THE RCA BEFORE US. UM, SO I, I'M NOT GONNA BE ABLE TO SUPPORT IT, BUT IT DOESN'T MEAN I DON'T RECOGNIZE ALL THE OTHER STUFF THEY'RE DOING. I THINK THE OTHER THING THAT, TO YOUR POINT IS A LOT OF STUFF IS REACHING SCALE THAT WE'VE TALKED ABOUT FOR YEARS. YOU KNOW, DEMAND RESPONSE AND ELECTRIC VEHICLE CHARGING AND, AND MANAGED VEHICLE CHARGING AND POTENTIAL FOR VEHICLE. YOU KNOW, THESE ARE THINGS THAT WE TALKED ABOUT IN 2010, BUT NOW PEOPLE ARE, HAVE THE SOFTWARE AND THE, THE COMPATIBILITY AND THE ABILITY TO SPEAK TO THE HOUSE THROUGH THE INTERNET SO THAT, UH, WE'RE ACTUALLY ABLE TO BRING THESE THINGS AT SCALE IN A WAY THAT WE NEVER COULD HAVE. SO I, I'M, SOME OF THE THINGS THAT AUSTIN ENERGY IS DOING ARE THROUGH THIRD PARTIES, LIKE BASE POWER, I THINK THEY CAN SCALE FASTER THAN MAYBE OUR OWN PROGRAMS AND USING, UH, WHAT'S THE OTHER ENERGY HUB? MM-HMM . UH, THEY DO THIS NATIONALLY. SO THEY CAN BRING NATIONALLY PROVEN SOLUTIONS TO AUSTIN, TO A TOWN THAT WANTS 'EM. AND I THINK THEY CAN SCALE QUICKER THAN IF WE TRIED TO INVENT ALL THOSE LITTLE THINGS OURSELVES. SO I THINK WE'RE AT THE CUSP OF A LOT OF IMPROVEMENTS HERE ON, ON THE DEMAND ON THE CUSTOMER SIDE. SO, WHICH IS TO SAY IT'S A DIFFERENT WORLD. YEAH. BUT I MEAN, I, I GUESS I JUST, I DON'T SEE IT AS LIKE EITHER OR LIKE A ZERO SUM LIKE GAME IN TERMS OF LIKE THESE PROGRAMS THAT THEY'RE, THAT THEY'RE DOING AND PUSHING AND PUSHING FORWARD. I MEAN, LIKE, I, I DON'T KNOW. I MEAN, LIKE I SAID, I DON'T, LIKE DAVE SAID, I DON'T THINK HE, ANY OF US SITTING HERE LIKE ARE SITTING AROUND WHO REALLY, REALLY WANT A GAS PEAKER. 'CAUSE I THINK IT LOOKS COOL. LIKE, AND I DON'T THINK ANY ANYBODY SITTING OVER IN THE CHAIR ACTUALLY WANTS ONE EITHER. IT'S JUST LIKE I, BUT I MEAN, IF IT'S LIKE, IF IT IS, IF IT'S, YOU KNOW, PART OF THE, IF IT'S JUST PART OF THE THING THAT LETS US GET MORE OF WHAT WE WANT, SO WE DON'T HAVE TO SPEND MONEY ON CONGESTION, WE CAN SPEND MORE MONEY ON THESE PROGRAMS OR SPEND MORE MONEY ON GETTING MORE RENEWABLES, LIKE, UM, YOU KNOW, MORE PPAS MORE MORE OTHER STUFF. BECAUSE, YOU KNOW, WHEN OUR, WHEN OUR PRICE IS DIFFERENT, LIKE, IT, IT MAKES A DIFFERENCE. AND ALSO WHEN THE PRICE IS ZERO, IT MAKES IT, IT, IT, IT'S NOT GOOD FOR AUSTIN ENERGY WHEN THE PRICE IS ZERO ACROSS THE WHOLE STATE. 'CAUSE WE'RE ACTUALLY PAYING 35 OR WHATEVER THE PPA VALUE IS, LIKE FOR ENERGY PRODUCED OUT WEST. AND YOU KNOW, IT'S LIKE, YOU KNOW, THE ONLY TIME IT WORKS IS BEST FOR US IS WHEN IT'S LIKE HIGHER OUT THERE OR S REALLY, BUT, UM, I MEAN, FINANCIALLY ANYWAYS, THERE, THERE'S LOTS OF OTHER BENEFITS PULL POWER TO THE WEST. WELL, RIGHT, BUT SUPPORT OUR RENEWABLES. WE WON'T GET THE POWER, BUT DON'T WELL, YEAH, BUT I MEAN, BUT IF IT ALLOWS US TO GET MORE RENEWABLES, LIKE EVEN IF THOSE RENEWABLE RENEWABLES ARE OUT WEST, I MEAN, THEY'RE STILL OFFSETTING OTHER THINGS THAT WOULD BE PRODUCING. AND A LOT OF THAT'S PROBABLY GAS AND OTHER TYPES OF STUFF. AND SO IT'S LIKE, IN TERMS OF A CARBON ACCOUNTING BALANCE, I MEAN, THE CRITERIA AIR POLLUTION, THAT'S, THAT, THAT'S A D THAT'S ONE THING. BUT I MEAN, THAT'RE GONNA PUT ON THE BEST AVAILABLE, COMMERCIAL BACKED WHATEVER, UM, STUFF. BUT IT'S LIKE IF, IF, IF HAVING THIS HERE TO RUN A FEW HOURS LETS US GET MORE RENEWABLES THAT OFFSETS CARBON ELSEWHERE. I MEAN, I, I THINK THERE'S A LOT OF THIS. LIKE, I THINK ONE, I THINK THEY LEFT A LOT OF THE MATH ON THE TABLE WHEN IT CAME TO SOME OF THE, SOME OF THE ACCOUNTING LIKE THAT. BUT I MEAN, I THINK IT, IT MAY ACTUALLY GET US FURTHER ALONG IN OUR GOALS THAN WE THINK. OR IF, IF WE JUST LOOK INSIDE THE LOAD ZONE HERE VERSUS LIKE LOOKING LIKE OUTSIDE THE, THE MARKET AND THE SYSTEM, THE DYNAMICS OF HOW THE WHOLE THING LIKE OPERATES. UH, I REALLY THINK THAT THIS NEW PEAK CAPACITY IS A NET POSITIVE FROM A CLIMATE AND SUSTAINABILITY PERSPECTIVE. AND, UH, THE REASON FOR THAT IS THAT AUSTIN ENERGY IS, UH, DOING SO MUCH FOR CLIMATE AND SUSTAINABILITY. WE JUST TALKED ABOUT A LOT OF DIFFERENT PROGRAMS, BUT WE TALKED ABOUT JUST 20% OF, OF ALL THE THINGS AUSTIN ENERGY'S DOING RIGHT NOW, AND THEY'VE DONE SO MUCH IN THE PAST TOO. UM, AUSTIN ENERGY'S AN INCREDIBLE VEHICLE FOR CLIMATE AND SUSTAINABILITY ACTION. AND IT'S A MODEL, UH, FOR THE REST OF THE STATE AND THE COUNTRY. AND IF AUSTIN ENERGY HAS A, A VERY BAD EVENT FINANCIALLY OR IN RELIABILITY, IT'S NOT GONNA BE A GOOD MODEL ANYMORE. IT'S GONNA BE, UH, THE OPPOSITE OF THAT. AND, UM, YOU KNOW, MAYBE EVEN IT, IT, IT, IT WON'T BE ABLE TO DO ALL THE GOOD THINGS THAT IT DOES IF, UH, YOU KNOW, THE WORST HAPPENS FINANCIALLY. [03:45:01] UH, AND THEN EVEN IF, EVEN IF, UH, THEY BUILD THIS PROJECT AND IT TURNS OUT TO NOT BE NECESSARY, WHICH I DON'T THINK IS THE CASE. BUT EVEN IF THAT HAPPENS FROM A CLIMATE AND SUSTAINABILITY PERSPECTIVE EVERY OTHER, UM, IT, IT, IT, IT WILL BE, UH, UH, IT, IT WON'T BE, IT WON'T BE USED. UH, AND IT'LL BE, UH, YOU KNOW, UH, AN ARGUMENT THAT CLIMATE PEOPLE CAN USE, UM, YOU KNOW, FOR NOT BUILDING GAS CAPACITY. BUT I DON'T THINK THAT'S GONNA HAPPEN. I I THINK THAT, UH, YOU KNOW, IT IS JUST NECESSARY TO BUILD THIS, UM, TO, TO AVOID RISKS THAT, UH, ALLOW AUSTIN ENERGY TO CONTINUE BEING, UM, YOU KNOW, A VEHICLE FOR, FOR CLIMATE SUSTAINABILITY ACTION. WELL, INSTEAD OF 12 AND, UH, THE REST, UH, RECOMMENDATION FROM AL BEING A POSITIVE AND NEGATIVE, IS THERE SOME WAY TO NOT HAVE A OVERLY HEAVYWEIGHT ANALYSIS, EXTRA, HAVE SOME ASPECT OF THIS MOVE FORWARD, BUT HAVE THE COMMUNITY'S CONCERNS ADDRESSED? AND IF THEY NEED TO BE IN PRIVATE, THEN THEY'RE GIVEN TO THE COUNCIL AND WE CAN WE COUNT ON THE COUNCIL OR THEIR STAFF TO RELAY THOSE IN A WAY THAT IS CONFIDENTIAL IN THE, THE WAY THAT'S NEEDED FOR COMPETITIVE REASONS, BUT YET ASSURES THE COMMUNITY THAT IT'S BEEN SCRUBBED AND ANALYZED TO A GREATER DEGREE. IS THERE SOME WAY WE COULD WORK THAT AND CHAIR TITLE? I JUST WANNA DO A TIME CHECK AT 9 53. AND I ALSO WANNA SAY THAT WE ARE ON ITEM 12, AND SO WE NEED TO TRY TO KEEP THE CONVERSATION TO ITEM 12 AT THIS TIME. AND THEN WHENEVER YOU'RE DONE WITH YOUR DISCUSSION, THEN A MOTION AND A SECOND, AND THEN YOU COULD TAKE YOUR VOTE. BUT, UH, IF WE'RE GETTING THAT CLOSE TO 10 AND YOU'RE NOT ON THIS VOTE YET, THEN WE NEED TO GO AHEAD AND VOTE ON THE 10:00 PM EXTENSION. THANK YOU. OKAY, THANKS. I, I'M NOT SURE WHAT UH, YEAH, I THINK WE CAN, WE HAVE TO BUTTON UP ONE AND THEN MOVE TO THE OTHER AND WE'LL PROBABLY STILL HAVE TO GO BEYOND 10 O'CLOCK. WELL, I THINK YOU'RE LOOKING FOR, CAN WE DO SOMETHING TO 12 TO MAKE IT, UM, YEAH. SO NIKKI, CAN WE MODIFY OR SUGGEST MODIFICATIONS TO 12 OF, OF AN RCA THAT YOU ALL PUT ON, YOU MAY MAKE A RECOMMENDATION TO VOTE YES OR NO. AND THEN IF THERE'S AN ADDITIONAL MOTION, IT WILL BE INCLUDED, UH, ON IN THE MINUTES. OKAY. SO YOU COULD SAY, NO, WE, WE WANT MORE STUDY. OR YOU COULD SAY, YES, BUT WE WANT MORE STUDY . I GUESS I KNOW WHAT YOU'RE LOOKING FOR. I DON'T KNOW THAT WE CAN GET THERE BECAUSE I THINK IT'S THE, THE RESOLUTION IS SAYING GO FORTH, GO FOR MORE STUDY. GO. YEAH. THE, THE, THE RESOLUTION 12, WHICH IS WHAT WE'RE ON, IS GIVE AUTHORIZATION TO AUSTIN ENERGY TO MOVE FORWARD ON THE POTENTIAL. IT DOESN'T SAY IT, BUT IT'S BASICALLY A 400 MEGAWATT PEAKER OR A VARIETY OF PEAKER PLANTS, RIGHT? YEAH. UM, SO WE COULD, WE COULD SAY, AND WE HOPE IT GETS STUDIED MORE IN QUESTIONS OR ANSWERED, BUT IT DOESN'T, IT'S STILL, AYE, IT'S NOT BINDING. IT'S NOT BINDING. YEAH. SO I DON'T, I DON'T KNOW THAT WE'RE GONNA BE ABLE TO GET THERE. SO. WELL, AND I GUESS IF YOU VOTE YES ON 12, THAT KIND OF PRECLUDES YOU FROM ALSO VOTING YES. ON MY RELU. I MEAN, YOU CAN'T HAVE IT BOTH WAYS. NO, I'M, I'M NOT SURE ABOUT THAT. OH, WELL I THINK THAT YOU COULD MODIFY IT AND SAY WHILE 12 IS VOTED AND, AND IT WON'T BE A UNI IT WON'T BE UNANIMOUS FOR SURE. RIGHT, RIGHT. UM, BUT THAT GIVES A SENSE OF THE HOUSE AND THEN IT ALSO GIVES A SENSE OF HOW MUCH APPETITE THERE IS FOR MY RESOLUTION AWAY. YEAH. I DUNNO. IT'S KIND OF THE INVERSE. UH, WE COULD PROBE THAT UNLESS YOU CAN. SO NIKKI, YOU SAID IT UP SOMEHOW. SO YOU SAID WE COULD DO AN AMENDMENT, NO, NOT AN AMENDMENT, BUT A MOTION. A MOTION. YOU'RE SORT OF ATTACHING A SENSE OF THE HOUSE TO IT IN A, IN A NON-BINDING WAY. IS THAT WHAT YOU ESSENTIALLY, THE WAY THE RECOMMENDATION READS TO COUNSEL ON THE COUNCIL AGENDA IS IT HAS THE DATE AND IT SAYS THE ELECTRIC UTILITY COMMISSION RECOMMENDED OR NOT RECOMMENDED WITH THE VOTE, AND THEN WHOEVER'S ABSENT. AND THEN IF THERE'S A LINE OF A SENTENCE THAT IS A MOTION, THEN THAT WILL BE INCLUDED IN THE MINUTES, BUT NOT ON THE COUNCIL. OUR CA CA [03:50:04] WELL, IT MAY BE IN THE MINUTES, BUT THEN WE COULD REFINE YOUR PROPOSAL. WELL, MINE WOULD BE MOOT IF YOU VOTE YES ON NO, YOU JUST MODIFIED TO SAY WE MAY HAVE VOTED YES ON 12, BUT WE WANT YOU TO, IN, IN, UH, EXECUTIVE SESSION OR WHATEVER, SCRUB THIS MORE AND MAKE THE COMMUNITY FEEL LIKE IT HAS THE DATA IT NEEDS TO FEEL COMFORTABLE. IN MY SIDE CONVERSATIONS, I BELIEVE AUSTIN ENERGY HAS HEARD SOME OF THE CONCERNS WITH THEIR NUMBERS, AND I'M SURE THEY'LL, UH, PRESENT MORE DETAILED INFORMATION TO COUNCIL. BUT I DON'T THINK IT, I DON'T THINK YOU'RE GONNA FIND THE, I THINK THERE'S GONNA BE, I THINK YOU SHOULD CALL THE QUESTION ON THE VOTE. AND IF SOME OF US CHOOSE TO SAY NO, THAT'S OKAY. IT'S NOT, THE WORLD'S NOT GONNA END. UH, CITY COUNCIL STILL IS THE ULTIMATE DECISION MAKER AND THEY'RE GONNA HEAR FROM VARIOUS PEOPLE. AND, UH, THAT'S THE WAY POLITICS WORKS. RIGHT? I KNOW YOU'RE LOOKING FOR I UNDERSTAND. I'M THE SAME WAY. I ALWAYS WANNA, I JUST SPLIT THE DIFFERENCE, BUT, WELL, I'M NOT ACTUALLY, I'M JUST TRYING TO GET THE COMMUNITY, ALL OF US TO UNDERSTAND AND FEEL CONFIDENT IN THE ANALYSIS, BUT YET NOT HAVE ANALYSIS PARALYSIS. MM-HMM . UM, AND IT'S A DEEPLY, IT'S A, IT'S A DEEPLY, I'M NOT SURE ABOUT THE TERM I WANT TO USE, BUT LIKE JOSH WAS SAYING, IT'S NOT LIKE WE'RE ALL EXCITED ABOUT THIS. IT'S A MATTER OF IS IT JUST PRUDENT WAY TO RUN THE UTILITY? YEAH. AND I GUESS MY, MY WAY OF VIEWING IT IS WE'RE TRYING TO GIVE GUIDANCE TO COUNCIL, RIGHT? SO IT'S, AGAIN, SO PART OF IT IS LIKE, BEFORE Y'ALL VOTE, 'CAUSE DO THIS ANALYSIS RIGHT? AND REVIEW IT AND WEIGH IT. BUT THE WAY IT'S WORDED NOW, IT'S AE DO THE ANALYSIS, COME BACK TO THE COMMISSION, WE'RE GONNA HAVE THIS WHOLE THING ALL OVER AGAIN AND WE'RE STILL GONNA HAVE, YOU KNOW WHAT I MEAN? IT'S GONNA, SO FOR ME IT'S LIKE, CAN WE GIVE GUIDANCE TO COUNCIL TO SAY, IF YOU'RE GONNA DO THIS THING WITH THE PEAKERS, MAKE SURE YOU DO THIS ANALYSIS OR ASK FOR IT BEFORE YOU PROCEED. RIGHT? SO FOR ME, THAT'S WHERE, TO ME THAT'S WHERE THE MIDDLE GROUND WOULD BE. 'CAUSE IF WE'RE JUST HAVING IT COME BACK TO US, WE'RE JUST STUCK IN THE CIRCLE YEAH. CYCLE RIGHT. OF, UH, OF ANALYSIS. AND, UH, WE MAY HAVE MISSED SOME WINDOW OF OPPORTUNITY, MAY OR MAY NOT. I MEAN, THAT DOESN'T MEAN THE ANALYSIS WOULDN'T ALLOW OTHER MORE FAVORABLE OPPORTUNITIES TO ARISE EITHER. RIGHT? IT'S NOW 59. SO AT 10 O'CLOCK YOU'RE GONNA NEED TO MAKE A VOTE ON, OKAY, I MAKE A MOTION TO EXTEND BEYOND 10 O'CLOCK. SECOND, ALL IN FAVOR, . I, I THINK THE REALITY IS, YOU, YOU HAVE TO VOTE ON 12 AS GIVEN MM-HMM . AND IF IT GOES TO COUNCIL, YOU KNOW, SIX TO FIVE OR WHATEVER IT GOES TO, OR SEVEN TO THREE OR WHATEVER IT GOES TO MM-HMM . IT GOES THAT WAY. AND THEN COUNCIL HEARS OUR VOICES TOO, AND IT'S UP TO THEM TO SAY, WE WANT TO KNOW MORE. I MEAN, WE'LL CERTAINLY BE SPEAKING TO THEM AND AUSTIN ENERGY WILL BE SPEAKING, YOU KNOW, THEY'LL, THERE'S A LOT AIMED AT COUNCIL TOO. AND THEY'LL HAVE TO DECIDE, DO WE JUST PASS THIS ALONG? DO WE ACCEPT IT AS IS OR DO WE WANT TO KNOW MORE? I MEAN, I, I DON'T KNOW THAT WE HAVE ANY MORE AND, AND THEY MAY DECIDE THEY WANT AUSTIN ENERGY TO MOVE FORWARD, BUT AUSTIN ENERGY NEEDS TO COME BACK TO THEM AT SOME POINT WHEN THERE'S MORE SPECIFIC NUMBERS. LIKE THEY CAN, RIGHT. YOU CAN ALWAYS, THEY COULD CHOOSE NOT TO MOVE, YOU KNOW, THEY HAVE THE ABILITY TO MM-HMM . CHANGE THE RESOLUTION THEMSELVES. A WIDE VARIETY OF VOICES. YES. RIGHT. AND THEY HAVE THE ABILITY TO MAKE IT STICK IN A WAY THAT WE CAN NOT JUST STICK SOMETHING ONTO THIS ITEM 12 AND HOPE THAT IT FLIES, YOU KNOW? YEAH. WELL, KABA, YOU HIT YOUR HAND UP BEFORE, IT'S NOT UP NOW. ARE YOU STILL THERE? DO YOU WANT TO COMMENT SOME MORE? OKAY. WELL, I, I, MY CONCERN IS FINANCIAL RISK, LOAD GROWTH, YOU KNOW, MANY OF THE THINGS THAT ARE PRUDENT FOR THE COMMUNITY IN THE LONG RUN OR COULD BE CATASTROPHIC. RIGHT. HOW ABOUT WE, DO WE HAVE A MOTION? AND A SECOND? I MOVE APPROVAL OF ITEM 12. SECOND, DO WE HAVE THIS, THIS VOTE? WHO IS VOTING FOR ITEM 12? [03:55:09] OKAY, SO I COUNTED EIGHT. THERE WERE TWO. LET'S MAKE SURE WE, HERE'S THE GHOST OF KAVA. SO, WELL, I HAD, I HAD, I GUESS I CAN'T SEE EVERYONE IN HERE. WE HAD IFFERENT HANDS SAY, CAESAR, RAISE YOUR HAND IF YOU SUPPORT THE RESOLUTION. OKAY. THANK. OKAY, THEN I THINK YOU HAD RAUL TOO. YES. ONE POINT. THANK YOU. OKAY. THOSE WHO OPPOSE WITH MUCH GOREMAN MUCH RESPECT, EMMA? NO. OKAY. SO THREE, SO EIGHT TO THREE. OKAY. THANK YOU. A DIFFICULT CONVERSATION. OKAY. SO LET'S GET TO VERSION TWO OF AL'S RECOMMENDATION. IS THERE ANYONE MODIFICATION TO THIS THAT WE'D LIKE TO DESCRIBE AS STRONGLY AS I FEEL ABOUT THIS? I, I DON'T KNOW THAT IT MAKES SENSE TO PURSUE IT. OH, OKAY. I MEAN, AGAIN, UH, CITY COUNCIL CAN LOOK AT THE AGENDA. THEY CAN SEE THAT SOME OF US THOUGHT THIS WAS A GOOD IDEA. IF THEY, IF CITY COUNCIL DECIDES THEY WANNA DO AN EXTRA RESOLUTION, YOU KNOW, AN EXTRA ANALYSIS, THEY CAN, THEY CAN DO IT. RIGHT. SO I DON'T, I DON'T THINK WE NEED TO. OKAY. SO DO YOU WANT, IF WE BRING FORTH THE RESOLUTION, YOU KNOW, THREE TO EIGHT , IT SAYS KIND OF MOVED. SO I GUESS, UH, I SHOULD WITHDRAW THIS RESOLUTION OR TABLE THAT I GUESS WITHDRAW IT AS THE YEAH. WITHDRAW OUR TABLE, TABLE WITHDRAWN AS THE APPROPRIATE REALITY TO DO. OKAY. SO THEN I THINK THAT GETS US TO OUR LAST ITEMS, WHICH IS YOUR RECOMMENDATION. UM, SO WE LEARNED TODAY THAT AUSTIN ENERGY'S BUDGET RECOMMENDATIONS ARE GONNA COME FORWARD IN JULY TO US. AND WE DO HAVE A JUNE MEETING. IS THAT CORRECT? UM, SO I WOULD PROPOSE JUNE 8TH, WHAT? JUNE. JUNE 8TH. JUNE 8TH. I WOULD PROPOSE MOVING THIS EXACT SAME RESOLUTION TO JUNE 8TH BECAUSE I'M REALLY TIRED AND I'M FLYING OUT IN THE MORNING . UM, UH, AND WE CAN STILL HAVE THE [18. Discussion and possible action on a recommendation to require a separate public meeting on any rate increase proposed for FY2027 and to initiate a rate case process with FY2026 as the test year. (Sponsors: Reed, White) ] SAME DISCUSSION ABOUT RECOMMENDING A RATE CASE IN 2027 AND HAVING A PUBLIC HEARING FOR ANY MM-HMM . UH, BUDGET FOR ANY PROPOSED RATE INCREASE, UH, SEPARATE FROM THE BUDGET PROCESS. SO I FEEL LIKE THIS SAME LANGUAGE WILL STILL BE APPROPRIATE IN JUNE AND I KNOW IT'S LATE. UM, AND I KNOW YOUR PLANS DON'T INCLUDE ME , SO, SO THIS WILL BE TABLED TABLED, YEAH. IF WE COULD, IS THAT, CAN WE JUST DO THAT, CAN WE JUST TABLE AND MOVE IT TO THE NEXT MONTH? ABSOLUTELY. OKAY. AND I'LL LEAVE IT AS IS UNLESS YOU DIRECT ME OTHERWISE. NO, I'LL LEAVE IT AS IS. SO, NIKKI, YOU'VE ALWAYS BEEN WONDERFUL. UM, HAVE I MISSED ANYTHING OR DO ARE WE DONE? ONCE YOU ADJOURN THE MEETING, WE WILL BE DONE. WE HAVE TO START WITH THAT. THANK EVERYONE FOR THEIR INPUT, THEIR PATIENCE, THEIR, THEIR CONCERN WITH OUR COMMUNITY AND POTATO CHIPS AND JOSH ESPECIALLY. WE APPRECIATE THAT THIS MEETING'S ADJOURNED AT 10 0 5. THANK YOU. THANK YOU. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.