Aug 10, 2026 Electric Utility Commission

[CALL TO ORDER]

[00:00:02]

SO I THINK WE HAVE QUORUM. LET'S CONVENE THE MEETING.

THIS IS THE ELECTRIC UTILITY COMMISSION. IT'S AUGUST 10TH, 2026 AND WE'RE STARTING AT 602.

SO FIRST WE HAVE PUBLIC COMMENTS. DAVID.

[PUBLIC COMMUNICATION: GENERAL]

I'M DAVID LEVAC CUSTOMER OF AUSTIN ENERGY. AND I WANTED TO INVITE EVERYBODY TO OUR CANDIDATE FORUM, WHICH IS AUGUST 22ND IN A COUPLE SATURDAYS AT THE PLUMBERS UNION.

IT'S GOING TO BE FOCUSED ON ENERGY AND AFFORDABILITY IN AUSTIN.

AND I WANTED TO GIVE YOU AN UPDATE ON THE HACKATHON EVENT THAT WE HAD A COUPLE OF WEEKENDS AGO.

WE HAD MANY PEOPLE COME AND PARTICIPATE. ONE OF THE VERY COOL PROJECTS THAT WE DID WAS A VISUALIZATION OF THE LOAD ZONE PRICE SEPARATION, WHICH IS PRETTY COOL. IN A COUPLE OF WEEKS, WE'LL KIND OF SHARE ALL THE REST OF THE THINGS THAT CAME OUT OF THAT EVENT AND TRANSITIONING TO TONIGHT'S AGENDA.

I LOVE THAT THERE'S A NEW WIND PPA THAT'S ON THE AGENDA TO BOUTTE.

THAT'S GREAT. AND I WAS WONDERING, IS THAT PART OF THE RFP PROCESS THAT ENDED IN JANUARY OR SOME OTHER CAPACITY STRATEGY? AND THEN FOR ITEMS FOUR, FIVE, AND TEN, I SEE THERE ARE INCREASED CONTRACTS IN THE BUDGET INCREASE REQUESTS FOR BUDGET FOR THOSE ITEMS. AND I'M JUST CURIOUS WHAT THOSE INCREASED AMOUNTS ARE DESIGNED TO ACHIEVE.

THOSE ARE MY COMMENTS. THANK YOU. LET'S TAKE ROLL CALL.

SORRY. OH BRADEN I SEE YOU ONLINE HERE. OKAY.

I DON'T SEE HERE. LAUREN. OKAY. OKAY, SIR.

HERE. HERE. JONATHAN. BLACK. I SEE HIM. OKAY.

COMMISSIONER. GILLETTE. I SEE COMMISSIONER COOKSEY.

I SEE COMMISSIONER READ THE ONLINE. NOPE. AND COMMISSIONER WHITE.

NOT YET. OKAY. GET THAT OUT OF THE WAY. PUBLIC COMMUNICATIONS.

OKAY. APPROVAL OF MINUTES. A QUICK NOTE THAT A VERSION TWO WAS PUBLISHED WITH A MINOR UPDATE.

[APPROVAL OF MINUTES]

[Items 2 - 7 & 9 - 10]

CAN YOU CAN YOU TURN OFF YOUR MICROPHONE, PLEASE? MAYBE. CAN YOU HEAR ME NOW? A LITTLE BIT BETTER.

OKAY. LET ME GET CLOSE TO THE COMPUTER. YEAH.

I'D LIKE TO DISCUSS ITEM NUMBER EIGHT EIGHT. OKAY.

ANY OTHERS? AND THERE'S A BANNER THAT JUST POPPED UP.

I COULDN'T READ IT WAS IN MICROPRINT. I THINK IT WAS CHANGING THE VOLUME.

OH, OKAY. ANY OTHERS BESIDES EIGHT? OKAY. WELL, DO WE HAVE A MOTION AND A SECOND FOR TWO, THREE, FOUR, FIVE, SIX.

SEVEN NINE AND 11, NINE AND TEN. MOTION. I'LL SECOND.

ALL IN FAVOR? AL. OKAY. SO WE GOT 2345679 AND TEN. LET'S TALK EIGHT.

[8. Recommend approval authorizing negotiation and execution of a wind power purchase agreement extension with Whirlwind Energy LLC, for the purchase and sale of up to 60 megawatts of electricity in an estimated amount of up to $10,000,000 per year, for a term of up to 20 years, for a total estimated amount of up to $200,000,000. Funding is contingent upon budgetary approval in future budgets.]

GOOD EVENING COMMISSIONERS PAT SWEENEY AND VICE PRESIDENT FOR ENERGY MARKET OPERATIONS.

THE QUESTION ON THIS ITEM. AL, DO YOU HAVE YOUR QUESTION? NOT SO MUCH A QUESTION. I JUST WANT TO DRAW ATTENTION TO IT.

THIS CONTRACT IS FOR 60MW OF WIND UP NORTHEAST OF POST, BUT I WANT TO STEP BACK AND RECOGNIZE THAT THIS WHIRLWIND CONTRACT WAS SIGNED IN

[00:05:02]

AND WE WERE JUST THEN COMING TO A SERIOUS RECOGNITION OF HOW MUCH AND HOW SOON CLIMATE CHANGE WOULD AFFECT US.

AL GORE'S INCONVENIENT TRUTH RATTLED ALL OUR CAGES AND DEMANDED IMMEDIATE ATTENTION.

CITY COUNCIL AND AUSTIN ENERGY SEARCHED FOR THE BEST AVAILABLE RESOURCES, AND IN 2006, THAT WAS WIND.

HE DEVELOPED THE GREEN CHOICE WIND PROGRAM, WHERE CITIZENS OF AUSTIN VOTED WITH THEIR OWN POCKETBOOKS TO SUPPORT CONTRACT AFTER CONTRACT THROUGH DIRECT SUBSCRIPTION.

THE EFFECT WAS POWERFUL, AND WE LED THE WAY TO A WIND REVOLUTION THAT'S REALLY POWERED TEXAS AND GIVEN REVENUE TO THOUSANDS OF RANCHERS AND RURAL TOWNS AND CITIES. SO THIS CONTRACT AND THE OTHERS FROM THAT ERA LED DIRECTLY TO THE RENEWABLE ENERGY WE HAVE TODAY.

AND I WANT TO PUT A PLAQUE ON IT. YES, I WANT TO RENEW IT.

BUT I ALSO WANT TO SAY THAT THE KIND OF PIONEERING EFFORTS ARE STILL MUCH NEEDED TODAY.

THE RENEWABLE HEADWINDS WE FACE ARE POLITICAL, NOT TECHNOLOGICAL OR ECONOMIC LIKE THEY WERE 20 YEARS AGO.

BUT WE MUST OVERCOME THEM WITH OUR BEST EFFORTS.

SO I WANT TO SAY THANK YOU, WHIRLWIND FOR 20 YEARS OF GREEN ENERGY.

THIS IS NOT ANY CONTRACT. IT'S REALLY A PIONEER.

SO PLEASE CARRY ON WELL INTO OUR FUTURE. AND THANK YOU VERY MUCH.

WELL THANK YOU. PAT, I DON'T KNOW IF YOU HAD ANY RESPONSE FOR THAT, BUT WE'RE GOING TO RESHAPE THE SENTIMENT.

THANK YOU. I DO HAVE A QUESTION. SO THESE ARE 20 YEAR OLD TURBINES.

SO IT SOUNDS LIKE THEY HAVE A LOT MORE LIFE LEFT.

THEY DIDN'T WANT TO DO A REPOWER. THERE THERE MAY BE SOME WORK IN THE FUTURE TO FOR LIFE EXTENSION, BUT THEY'RE STILL GOING STRONG CURRENTLY. OKAY.

WELL, ANY OTHER QUESTIONS ON NUMBER EIGHT. MOTION AND SECOND.

MOVE. APPROVAL. WE HAVE A MOTION WITHOUT SECOND WITH CHRIS KIRKSEY.

ALL IN FAVOR, SAY AYE. AYE. OKAY. GUESS WE'RE THROUGH WITH THAT.

THANK YOU. NUMBER 11 IS STAFF BRIEFING WITH LISA MARTIN.

[11. Staff Briefing on the Third Quarter Operations Report by Lisa Martin, Deputy General Manager and Chief Operating Officer.]

AND TONIGHT I'M HERE TO PRESENT THE OPERATIONS UPDATE FOR APRIL, MAY AND JUNE OR QUARTER THREE FOR FY 26.

NEXT SLIDE PLEASE. I'LL SHARE THE USUAL ENVIRONMENTAL AND RELIABILITY PERFORMANCE UPDATES.

NEXT SLIDE. OUR EXECUTIVE SUMMARY SHOWS WE HAD A 44% RENEWABLE PRODUCTION AND A 63% CARBON FREE PRODUCTION, BOTH AS A PERCENTAGE OF LOAD FOR THIS QUARTER.

AND OUR GENERATOR RESOURCE COMMERCIAL AVAILABILITY IS IN LINE WITH EXPECTED SEASONAL OUTAGES AS OF THE START OF THE OR.

THAT HAPPENED AT THE START OF THIS QUARTER. AND THEN YOU'LL ALSO SEE WHEN I GET TO THAT SLIDE, THAT OUR DISTRIBUTION RELIABILITY METRICS SHOW IMPROVEMENTS IN OUTAGE DURATION AND FREQUENCY COMPARED TO RECENT QUARTERS.

SO ALL IN ALL, IT'S A GOOD NEWS THIS QUARTER.

NEXT SLIDE PLEASE. ONE MORE. SO FOR FY 26 Q3, OUR CARBON FREE GENERATION AS A PERCENTAGE OF LOAD AVERAGED 63%. AS A REMINDER THAT AS A PERCENTAGE OF LOAD MEANS THE PERCENTAGE OF ENERGY USED BY AUSTIN ENERGY CUSTOMERS, THAT IS OFFSET BY CARBON FREE GENERATION SOURCES BY 2035.

OUR GOAL IS TO MATCH CUSTOMERS USE WITH 100% CARBON FREE ENERGY.

THE NUCLEAR GENERATION IS SHOWN HERE IN BLUE AND THE RENEWABLES ARE SHOWN IN GREEN.

AND AS YOU CAN SEE, THIS PERCENTAGE METRIC FLUCTUATES ON A MONTHLY BASIS.

YOU CAN SEE THAT EVEN BETTER ON THE CHART. ON THE NEXT SLIDE PLEASE.

AS A REMINDER, THE BAR CHARTS ON THE PREVIOUS SLIDE ARE THE SAME AS THE MORE JAGGED LINE ON THIS SLIDE, THE DIFFERENCE BEING THAT THE PREVIOUS SLIDE WAS SHOWING 12 MONTHS DATA.

AND THIS VIEW SHOWS SEVEN PLUS YEARS. WE ALSO USE THIS VIEW TO FOCUS ON THE ROLLING 12 MONTH AVERAGE DATA.

THAT'S THE SMOOTH LINE SHOWN HERE. THAT ALSO SHOWS THAT WE'RE AT 63% CARBON FREE GENERATION AS A PERCENTAGE OF LOAD ON A ROLLING 12 MONTH BASIS, HOLDING PRETTY STEADY SINCE OVER THE LAST 18 MONTHS.

IN FACT, THIS TIME LAST YEAR, THE VALUE WAS ALSO 63%.

NEXT SLIDE PLEASE. NOW WE'RE GOING TO TURN OUR ATTENTION TO SOME GENERATION AND LOAD DATA SETS.

STARTING IN THE UPPER LEFT CORNER HERE, WE'RE LOOKING AT HOW MUCH ENERGY WE GENERATED AND HOW MUCH CUSTOMERS CONSUMED DURING THE QUARTER.

THE GENERATION STACK TOTALED 3.3 5,000,000 MEGAWATT HOURS, AND OUR CUSTOMERS CONSUMED 3.8 5,000,000 MEGAWATT HOURS.

[00:10:06]

MOVING TO THE TOP RIGHT, WE'RE LOOKING AT THE POWER GENERATION AS A PERCENTAGE OF CONSUMPTION.

HERE YOU SEE THAT RENEWABLES MADE UP 44% AND 19% NUCLEAR GENERATION AS A PERCENTAGE OF CONSUMPTION.

AND THAT'S THE TOTAL 63. THAT CARBON FREE. THE POWER GENERATION COST METRICS IN THE LOWER LEFT SHOW SIGNIFICANT INVESTMENT IN CARBON FREE RESOURCES AT 74%. THAT'S THE SUM OF THE NUCLEAR AND RENEWABLE PIE SLICES.

AND FINALLY, ON THIS SLIDE, LOOKING AT THE BLUE BAR CHART, YOU SEE THAT THE SYSTEM PEAK DEMAND FOR THE QUARTER WAS THE SECOND HIGHEST IN THE LAST FOUR YEARS, BUT NOT SURPASSING THE HIGHEST, THE HOTTEST SUMMER IN RECENT HISTORY IN 2023.

FOR WHAT IT'S WORTH, OUR PEAK THIS QUARTER HAPPENED JUNE 18TH, WHICH WAS A THURSDAY.

AND WE HIT 2839MW. SO UNLIKE ERCOT HITTING A NEW PEAK AT 91, WE WE JUST STILL MATCHED THAT. 2839 ERCOT'S NEW PEAK HAPPENED IN THIS QUARTER.

SO YOU'LL SEE THAT, RIGHT? DO YOU THINK WE'LL HAVE AUSTIN ENERGY? WE'LL HAVE NEW PEAKS THIS QUARTER. I DON'T THINK WE HAVE HIT A NEW PEAK YET.

BUT WE WILL DEFINITELY KNOW THE OFFICIAL DATA WHEN I COME IN ABOUT THREE MONTHS.

ALL RIGHT. LET'S MOVE FORWARD TO SLIDES AND MOVE ON TO GENERATOR PERFORMANCE.

SO THIS SLIDE SHOWS THE GENERATOR PERFORMANCE IN TERMS OF COMMERCIAL AVAILABILITY.

AS A REMINDER, COMMERCIAL AVAILABILITY IS A MEASURE OF HOW MUCH THE UNIT IS AVAILABLE WHEN IT IS COMMERCIALLY NEEDED.

SO THAT'S AND OF COURSE THAT'S DETERMINED BY THE ERCOT MARKET PRICES IN REAL TIME.

THIS QUARTER THIS REPORTING PERIOD IS FOR APRIL, MAY AND JUNE JUST AHEAD OF THE SUMMER PEAK SEASON.

AND COMMERCIAL AVAILABILITY IS TYPICALLY LOWER IN THESE MONTHS BECAUSE OF PLANNED MAINTENANCE OUTAGES TO PREPARE FOR THE CRITICAL SUMMER PEAK SEASON.

YOU'LL SEE IN OUR NUMBERS SHOWN HERE THAT ALL OF THESE RESOURCES HAD SOME SORT OF PLANNED SUMMER PREP OUTAGE THIS QUARTER.

NEXT SLIDE PLEASE. SWITCHING GEARS TO ELECTRIC VEHICLE CHARGING NETWORK METRICS, AT THE TOP, YOU'LL SEE THE OVERALL NETWORK OF 1300 PLUS CHARGING STATIONS HAD AN UPTIME OF 99% ON A 12 MONTH ROLLING AVERAGE, AND THIS HAS REMAINED QUITE STEADY OVER THE PAST YEAR.

THE OVERALL UPTIME FOR THE 30 DC FAST CHARGING STATIONS FOR THIS QUARTER WAS JUST OVER 94%, ALSO ON A 12 MONTH ROLLING AVERAGE. YOU CAN SEE THAT THAT TREND IS CONTINUING UPWARD OVER THE PAST YEAR.

SO IN THE FUTURE, COULD WE SEE A BREAKDOWN OF THAT? THAT'S GOOD NEWS THAT IT'S GETTING BETTER. BUT YOU KNOW, ARE THERE CERTAIN CHARGING OUTLETS OR SITES THAT ARE WORSE THAN OTHERS? AND ARE YOU ASKING SPECIFICALLY ABOUT THE DC FAST FOR IT TO UNDERSTAND A LITTLE BIT MORE ABOUT WHAT'S OUT AND WHEN I CAN ASK THE TEAM TO PROVIDE THAT IN FUTURE REPORTS. THANK YOU. AND JUST AS A REMINDER, UPTIME IS A MEASURE OF WHEN THE CHARGING STATIONS ARE OPERATIONAL AND AVAILABLE FOR USE.

OKAY. NEXT SLIDE PLEASE. THE PLUG IN EVERYWHERE NETWORK CONTINUES TO HAVE HIGH USAGE, AVERAGING OVER 31,000 CHARGING SESSIONS PER MONTH.

PEAK USAGE CONTINUES TO BE BETWEEN 9 A.M. AND 2 P.M., AND THE AVERAGE CHARGING TIME IS THREE HOURS AND SEVEN MINUTES.

NEXT SLIDE PLEASE. OUR FINAL SLIDE IS THE DISTRIBUTION RELIABILITY METRICS SHOWN HERE.

THE BAR CHARTS AT THE TOP SHOW OUR PERFORMANCE COMPARED TO THE TEXAS AVERAGE.

IN THE CENTER, YOU'LL SEE THAT WE CONTINUE TO PERFORM TWO TIMES BETTER THAN THE TEXAS AVERAGE IN TERMS OF OUTAGE DURATION.

OUR TREND LINES TOWARDS THE BOTTOM OF THE SLIDE ARE TELLING A POSITIVE STORY AS WELL, AND THIS QUARTER'S DATA IS BETTER THAN THE PREVIOUS QUARTER.

YOU CAN SEE THAT IN THE DISTINCT TIP ON THE TAIL END OF EACH TREND LINE, ESPECIALLY ON THE FIRST TWO.

THIS MEANS THAT OUR OUTAGES ARE FEWER IN NUMBER AND SHORTER IN DURATION, AND OVERALL, THE AVERAGE MINUTES TO RESTORE SERVICE TO AFFECTED CUSTOMERS.

THAT'S THE FAR RIGHT TREND LINE. IT'S SHOWING IMPROVEMENT AS WELL.

AND YOU CAN SEE THAT IN THE OVERALL DIRECTION OF THE TWO YEAR TREND LINE.

WHEN YOU LOOK KIND OF ZOOM YOUR EYES OUT A LITTLE BIT, BUT LET'S FOCUS ON THAT FAR RIGHT TREND FOR A MOMENT.

THIS QUARTER SHOWS THAT CUSTOMERS WHO ARE AFFECTED BY OUTAGES EXPERIENCED 78 MINUTES OF OUTAGE ON AVERAGE,

[00:15:07]

SO THIS EIGHT MINUTE IMPROVEMENT IS DUE TO OUR RESILIENCY PLAN WORK, INCLUDING REPLACING FUZES WITH TRIP SAVERS, WHICH ARE ESSENTIALLY FUZES THAT CAN HAVE THE ABILITY TO RECLOSE ALONG WITH TREE TRIMMING, RECONSTRUCTING AND INSTALLING ANIMAL GUARDS TO PROVIDE SERVICE CONTINUITY ON THE AUSTIN ENERGY ELECTRIC SYSTEM.

IT'S ALSO A NOTEWORTHY TO SHARE THAT 31% OF OUR OUTAGES THIS QUARTER WERE DUE TO SCHEDULED WORK.

SO YOU CAN SEE OUR RESILIENCY PLAN AT WORK THERE.

AND SO THAT SHOWS UP, YOU KNOW, IN NOT SO LOW FREQUENCY ON THESE NUMBERS, BUT CERTAINLY WILL BENEFIT OUR CUSTOMERS IN THE COMING MONTHS AND YEARS.

AND THAT WRAPS IT UP FOR THIS QUARTER. I DO WANT TO TAKE A MOMENT TO THANK EVERYONE ON THE TEAM WHO CONTRIBUTES TO THE WORK BEHIND THESE METRICS, WHETHER THEY'RE KEEPING OUR SYSTEM OPERATIONAL OR TRACKING THE DATA TO HELP US MAKE A DECISION, MAKING INFORMED DECISION MAKING, WE RELY ON THEM TO SERVE OUR CUSTOMERS WELL.

SO, CHAIR TUTTLE, I'LL TAKE ANY QUESTIONS. YOU MAY HAVE.

ANY QUESTIONS? YES. YEAH. TWO. TWO. LISA, ON SLIDE NUMBER SIX ON THE RENEWABLE PERCENTAGE. IT'S GOOD TO SEE THAT FLATTENING OUT.

AND WE'RE OF COURSE HOPING TO RAISE IT. I, I JUST GAVE MY APPRECIATION FOR THE WORLD WHEN PROJECT, BUT ON THE A WEBSITE, THERE'S A HUCKLEBERRY COMES UP IN ANOTHER YEAR AND THEN THERE'S A WHOLE BUNCH OF SOLAR CONTRACTS THAT COME UP WHEN THOSE, YOU KNOW, WE'RE, I, I AT LEAST COUNTING ON THOSE BEING RENEWED AND BUILDING ON THAT.

BUT ARE THERE PROVISIONS CONTRACTUALLY WITH THOSE WHERE WE SORT OF HAVE FIRST DIBS, OR ARE WE AGAINST HAVING TO BID AGAINST THE MARKET AND DATA CENTERS WHEN THOSE THINGS COME UP FOR RENEWAL? DO WE HAVE AN AN IN ON THAT? COMMISSIONER OR VICE CHAIR? BRADEN. I'M, I'M NOT AWARE OF ANY PARTICULAR OPTION IN THE CONTRACT THAT GIVES US KIND OF FIRST RIGHT OF OF EXTENSION.

YOU, YOU BRING UP A GOOD POINT. I THINK PART OF OUR STRATEGY MOVING FORWARD, AS WE DO CONTINUE TO WORK AGAINST GROWING LOAD AND OTHER CHALLENGES ON OUR PATH TO 100% CARBON FREE AS A PERCENTAGE OF LOAD. IT DOES INVOLVE RENEWING A NUMBER OF THOSE POWER PURCHASE AGREEMENTS.

AND SO I'LL, I'LL DISCUSS THAT WITH OUR ENERGY MARKET OFFICE TEAM.

OKAY. I MEAN, I GUESS THERE'S SITUATIONS WHERE IMAGINABLY A BETTER OPPORTUNITY WOULD COME ALONG AND YOU'RE MONITORING ALL THOSE, BUT WE DON'T HAVE AN INSIDE TRACK ON KEEPING THE ONES WE HAVE NECESSARILY.

IS THAT. WHAT I HEAR? NOT THAT I'M AWARE OF, BUT I'LL HAVE TO CHECK INTO THAT.

OKAY. THANK YOU. AND ON NUMBER 12 THE RELIABILITY.

AND YOU DON'T JUST PUT THIS OUT IN THE PRESS RELEASE A COUPLE OF DAYS AGO REGARDING THE THREATS FROM THE GOVERNOR IT JUST SEEMS LIKE AUSTIN ENERGY HAS A REMARKABLE RELIABILITY RECORD COMPARED TO THE TEXAS AVERAGE, AND ALSO A REMARKABLE RATE AVERAGE COMPARED TO TEXAS.

HOW ARE WE ORGANIZING TO TO DEFEND THE INTEGRITY OF AUSTIN ENERGY AND THE UNITY OF AUSTIN ENERGY AND THE UPCOMING LEGISLATIVE SESSION? I DON'T KNOW THAT I'M I'M, YOU KNOW, AT LIBERTY OR THE BEST PERSON TO RESPOND TO THAT QUESTION.

VICE CHAIR. BRADEN, I DO APPRECIATE YOUR RECOGNITION OF ESSENTIALLY THE VALUE OF PUBLIC POWER AND ESPECIALLY AS IT SHOWS IN OUR REPORTS HERE WITH THE RELIABILITY METRICS. OKAY. WELL, ALL I CAN SAY IS WE SUPPORT YOU 100% IN THAT AND WE'LL HAVE TO KEEP WORKING ON IT.

THANK YOU. THANK YOU. OTHER QUESTIONS? OH, ACTUALLY SINCE ONE OF THE QUESTIONS BEFORE WAS THE. THE 20 YEAR OLD WIND FARM THAT STILL IS IS CONTINUING TO DO JUST FINE.

AND YOU'RE RE-UPPING THE CONTRACT. ARE THERE ANY CASE STUDIES THAT YOU ALL MIGHT DO THAT WOULD HELP DESCRIBE? BECAUSE SOMETIMES THERE THERE'S MISINFORMATION ABOUT THE QUALITY OF THE POWER, ITS VARIABILITY, ITS LIFE. IT WOULD BE USEFUL IF THERE WAS A LIGHTWEIGHT WAY TO SORT OF PROVIDE MORE PUBLICLY THE INVESTMENTS YOU'VE MADE IN THAT TYPE OF POWER, THOSE TYPES OF POWER AND WHAT YOU'VE EXPERIENCED.

[00:20:02]

YOU KNOW, WE ARE A LEADER IN CARBON FREE AND WE TALK ABOUT IT IN OUR ANNUAL REPORT.

AND I THINK PROBABLY MANY, MANY TIMES YOU'VE SEEN THE SLIDE THAT SHOWS THAT IN THE LAST FISCAL YEAR, 73% OF OUR GENERATION WAS CARBON FREE. AND SO THERE'S A NUMBER OF DIFFERENT WAYS, I THINK, THAT WE TRY TO PLUG THAT IN TO MAKE SURE PEOPLE ARE AWARE OF HOW SERIOUSLY WE TAKE YOU KNOW, THE COMMITMENT TO ENVIRONMENTAL SUSTAINABILITY.

AND CERTAINLY WE WOULDN'T HAVE THE METRICS THAT WE HAVE TODAY.

YOU KNOW, SOMETIMES WE FOCUS ON HOW MUCH MORE WE HAVE TO GO, BUT WE'RE, WE'RE REALLY ARE HEAD AND SHOULDERS ABOVE A LOT OF OTHERS.

AND I THINK THE METRICS YOU SHOW TODAY ARE BECAUSE OF ALL THE INNOVATIVE WORK ACROSS THE TEAM, THE EARLY ADOPTERS, THE VOLUME THAT WE'VE ADOPTED HERE AT AUSTIN ENERGY.

THANK YOU. OKAY. THANK YOU. LISA. NEXT WE HAVE NUMBER 12 STAFF BRIEFING ON THE THIRD QUARTER

[12. Staff briefing on the Third Quarter Financial Report by Stephanie Koudelka, Chief Financial Officer.]

GOOD EVENING COMMISSIONERS, I'M STEPHANIE KOUDELKA, I'M AUSTIN ENERGY'S CHIEF FINANCIAL OFFICER.

AND LIKE LISA, I'M PRESENTING ON THE THIRD QUARTER FOR FISCAL YEAR 2026.

OUR FINANCIAL RESULTS FOR THE PERIOD ENDED JUNE.

NEXT SLIDE PLEASE. WE HAVE A STANDARD AGENDA THAT YOU TYPICALLY SEE EVERY QUARTER.

I'LL RUN THROUGH A QUICK EXECUTIVE SUMMARY. WE'LL LOOK AT SOME METRICS THAT WE REVIEW TO GET CLOSER TO OUR AA BOND RATING.

WE'LL LOOK AT SOME BUDGET ACTUALS AS WELL AS SOME FINANCIAL DATA AND REPORTS.

NEXT SLIDE. STARTING WITH THE EXECUTIVE SUMMARY, COMPARED TO BUDGET, OUR OPERATING INCOME DID NOT MEET OUR EXPECTATIONS BY ABOUT 4 MILLION. THAT'S REALLY DUE TO TIMING OF OUR TRANSMISSION REVENUE AS WE GO IN THROUGH INTERIM RATE CASES.

IT'S HARD TO PINPOINT EXACTLY WHEN THOSE WILL GET APPROVED BY THE COMMISSION.

SO WE HAVE LESS REVENUE THAN EXPECTED THROUGH JUNE.

MOVING ACROSS THE PAGE TO OUR BOND RATING. NOT MUCH MOVEMENT THERE.

IT'S BEEN AT DOUBLE A MINUS FOR SEVERAL YEARS BY STANDARD AND POOR'S.

THAT IS BELOW OUR TARGET OF DOUBLE A. THE GOOD NEWS IS WE DO HAVE A STABLE OUTLOOK BY ALL THREE RATING AGENCIES FOR FINANCIAL POLICIES. SIMILAR STORY FROM LAST QUARTER WHERE SOME SUBSTANTIALLY COMPLIANT.

WE DO HAVE SOME OF OUR INDIVIDUAL RESERVES THAT DON'T MEET TARGETS, BUT OVERALL WE ARE IN COMPLIANCE WITH OUR FINANCIAL POLICIES.

AND FINALLY FOR DAYS CASH ON HAND. AS OF THE END OF JUNE, WE'RE AT 188 DAYS CASH ON HAND.

JUST A NOTE THAT DOES INCLUDE OVER UNDER RECOVERY FOR OUR PASS THROUGH RATES FOR FOR THE POWER SUPPLY ADJUSTMENT, WE ARE OVER RECOVERED IN TERMS OF DAYS. CASH ON HAND ABOUT 31 DAYS.

NEXT SLIDE. THESE FOUR METRICS ARE THE ONES THAT WE TYPICALLY REVIEW WITH YOU EACH QUARTER JUST TO TARGET MOVING AGAIN CLOSER TO A DOUBLE A RATING.

I'LL START WITH DAYS CASH ON HAND, WHICH I JUST JUST MENTIONED.

WE'RE AT 188 DAYS AS OF THE END OF THE QUARTER.

AGAIN, THAT INCLUDES ABOUT 30 DAYS OF OVER RECOVERY IN OUR POWER SUPPLY ADJUSTMENT PASS THROUGH RATE.

AND WE'VE NOTED THAT AT THE BOTTOM OF THE SLIDE HERE, MOVING ACROSS THE PAGE TO DEBT SERVICE COVERAGE, WE HAVE MET THE TARGET. SO THAT THAT IS GOOD NEWS.

BUT AS WE CONTINUE WITH OUR RELIABILITY AND RESILIENCY PROJECTS AND OUR CAPITAL PLAN WITH THAT SIGNALING TO US AS WE CONTINUE TO ADD DEBT TO OUR PORTFOLIO, IS THAT OUR BASE RATES REALLY NEED TO KEEP UP WITH COSTS TIMELY SO THAT WE CAN COVER THOSE DEBT SERVICE PAYMENTS APPROPRIATELY.

FOR OPERATING MARGIN, WE ARE ABOVE TARGET THERE.

WE DO EXPECT TO SEE THAT OVER THE NEXT SEVERAL YEARS AS OUR FINANCIAL HEALTH PLAN TO GET HEALTHY.

OVERALL, THAT IS NOT A SIGNAL OF HEALTH. THAT'S A SIGNAL OF GETTING HEALTHY.

SO YOU DO NEED MORE OPERATIONS MARGIN TO TO GET TO FINANCIAL HEALTH.

AND FINALLY, IN DEBT TO CAPITALIZATION, 57% IS WHAT I'VE SHOWED YOU IN PREVIOUS QUARTERS.

AS THE UTILITY CONTINUES TO BE MORE LEVERAGED CAPITAL PROJECTS, WE'RE HEARING AN ECHO ABOUT THAT IS A TARGET THAT WE NEED TO CONTINUE TO ALSO WATCH CLOSELY.

[00:25:02]

THIS IS OUR BUDGET FUND SUMMARY, WHICH IS OPERATING RESULTS FOR THE UTILITY IN OUR FUND SUMMARY THROUGH JUNE.

I HAVE HIGHLIGHTED FOR YOU HERE THAT WE ARE SHOWING A DEFICIT OF 23.

23 MILLION THROUGH THE END OF THE PERIOD. YOU'LL SEE IN THE BUDGET COLUMN THAT WE BUDGETED MORE OF A DEFICIENCY AS OF THE END OF THE QUARTER.

THAT IS MOSTLY DUE TO US RECEIVING THAT NUCLEAR PRODUCTION TAX CREDIT.

I THINK YOU HEARD THAT THROUGH OUR BUDGET PRESENTATION THAT THAT WAS RECEIVED IN FISCAL YEAR 2026.

SO THAT HAS IMPROVED OUR RESULTS. BUT JUST KEEP IN MIND, WE ARE STILL AT A DEFICIT AND WE STILL PROJECT TO BE AT A DEFICIT OF ABOUT 20 MILLION BY THE TIME WE REACH SEPTEMBER. AND THAT IS A YEAR THAT WE HAD A 5% BASE RATE INCREASE.

SO JUST WANT TO PINPOINT THAT WE'RE STILL PROJECTING DEFICIT EVEN WITH PTC.

NEXT SLIDE. THE POWER SUPPLY ADJUSTMENT GRAPH THAT WE TYPICALLY SHOW YOU.

I THINK THIS QUARTER IS JUST MOST IMPORTANT TO MENTION THAT OUR COSTS ARE UNDER BUDGET FOR THE PERIOD BY ABOUT 6%.

AND WE'VE JUST OVERALL SEEN A MILDER MARKET AT LEAST THROUGH JUNE.

AS YOU'RE ALL AWARE, WE'VE HAD SOME PRETTY WARM WEATHER OVER THE PAST COUPLE OF MONTHS. SO WE'LL SEE HOW NEXT MONTH KIND OF SHAKES OUT WITH RECOVERY, AS WELL AS WHERE OUR COSTS ARE AGAINST BUDGET.

THAT BLACK LINE THAT'S HOVERING, THAT'S REPRESENTING THE REVENUE THAT WE RECEIVED THROUGH OUR POWER SUPPLY ADJUSTMENT.

NOTHING OUT OF THE ORDINARY WITH THE WAY THAT LINE IS MOVING THIS QUARTER.

THAT'S JUST FOLLOWING USAGE PATTERNS. NEXT SLIDE.

THIS SLIDE IS OUR CAPITAL IMPROVEMENT PLAN. YOU'LL SEE ON THE LEFT ARE $422 MILLION CIP BUDGET.

AS OF THE END OF JUNE, WE'VE SPENT AROUND 58% OR 245 MILLION OF THAT.

IT. TYPICALLY AT THIS POINT IN THE FISCAL YEAR, WE'LL COME UP WITH A CURRENT YEAR ESTIMATE TO SEE HOW CLOSE WE'LL GET TO THAT $422 MILLION BUDGET. THIS YEAR WE'RE PROJECTING THAT WE'LL SPEND ABOUT 90% OF OUR ORIGINAL BUDGET PLANS.

AND THAT'S MOSTLY JUST DUE TO TIMING OF PROJECTS AND THEY'LL MOVE INTO SUBSEQUENT FISCAL YEARS.

NEXT SLIDE. OH, SORRY. EXCUSE ME. ON THE FINANCING SIDE, THE PIE CHART SHOWS YOU HOW WE PAY FOR THE ASSETS THAT WE'VE BOUGHT THIS FISCAL YEAR.

WE'RE AT 42% DEBT THROUGH JUNE, AND THE REMAINDER OF THAT IS COMING FROM CASH, EITHER THROUGH OUR BASE RATES OR REVENUE FOR CASH FOR THESE ASSETS OR CONTRIBUTIONS FROM OUR CUSTOMERS. NEXT SLIDE.

SO I'M SORRY, YOU PROBABLY SHOWED US IN A CHART PREVIOUSLY.

SO WHEN. THE DEBT RATIO DEBT TO CAPITALIZATION IS AT 57.

YOU'RE TRYING TO GET TO 50 WHEN THIS IS 42%, IS THAT AN INDICATOR OF IT'S BEING WORKED DOWN FROM 57 TOWARD 50? THAT IS AN INDICATOR THAT IT WOULD COME DOWN, EXCEPT THAT THEN WE ALSO HAVE TO TAKE INTO ACCOUNT NEW LEVERAGE THAT WE'RE ADDING INTO THE PORTFOLIO. SO WE'LL BALANCE THAT. WELL, THAT HAS BEEN RUNNING CLOSER TO 60%.

THE PIE CHART FOR DEBT. SO THIS QUARTER, WE WERE ABLE TO SEE THAT WE HAD CONTRIBUTIONS COME IN FOR SOME OF THE PROJECTS THAT WE'VE SPENT ON THINGS LIKE TEX-DOT PROJECTS.

SO WE'VE HAD AN INFLUX OF CONTRIBUTIONS FROM CUSTOMERS.

SO WE'VE BEEN ABLE TO TAKE DOWN THAT LEVERAGE A BIT.

BUT THIS IS THE FIRST TIME IN MANY QUARTERS THAT WE'VE SEEN SOMETHING LESS THAN THAT, 55 TO 65% LEVERAGE.

SO YOU ARE CORRECT. BUT IT'S JUST A TREND FOR THIS QUARTER THAT WE'RE SEEING.

OKAY. THANK YOU. NEXT SLIDE PLEASE. AND FINALLY, I'LL END WITH A COUPLE OF STATISTICS THROUGH THE END OF JUNE.

ON THE RIGHT THERE I'M SHOWING YOU AVERAGE NUMBER OF CUSTOMERS.

OUR CUSTOMER GROWTH OVER THE FISCAL YEAR IS IN LINE WITH OUR PROJECTIONS.

WE SAW A 1.7% INCREASE OVER THE YEAR. OUR SALES HAVE BEEN RELATIVELY FLAT OVER THE SAME PERIOD.

WE'VE HAD PRETTY SIMILAR WEATHER PATTERNS EACH FISCAL YEAR.

SO SOME CONSERVATION AND JUST VERY SIMILAR WEATHER TO HAVE FLAT SALES YEAR OVER YEAR.

ON THE LEFT SIDE, OUR INCOME STATEMENT, I'VE HIGHLIGHTED TWO THINGS TO SHOW YOU HERE FOR FISCAL YEAR 2026.

I'LL START WITH A $33 MILLION IN NET INCOME. AGAIN, THAT IS BETTER POSITIONED THIS FISCAL YEAR SO FAR DUE TO THAT NUCLEAR PRODUCTION TAX CREDIT THAT WE RECEIVED, WE WOULD BE AT A LOST POSITION FOR THE NINE MONTHS OF THE FISCAL YEAR WITHOUT THOSE PROCEEDS.

[00:30:04]

WE HAD ABOUT 25 MILLION MORE OVER THE FISCAL YEAR IN OPERATING COSTS.

SO JUST KIND OF JUST SHOWING YOU, AGAIN, THE PRESSURE THAT INFLATION AND INCREASED COST IS PUTTING ON AUSTIN ENERGY, WHICH IS SUPPORTING OUR TIMELY BASE RATE INCREASE NEEDS.

NEXT SLIDE PLEASE. WELL THAT IS THE FINAL SLIDE.

OH THERE WE GO. THAT CONCLUDES MY PRESENTATION.

HAPPY TO TAKE YOUR QUESTIONS. QUESTIONS. I CAN'T SEE ANYONE RAISING THEIR HAND ONLINE.

AL. JONATHAN. NO I'M GOOD. THANK YOU. THANKS FOR THE PRESENTATION.

LAUREN. ANYTHING? THANK YOU. OKAY. WELL. THANK YOU.

OKAY. WITH THAT, WE'RE THROUGH 12. SO WE HAVE ANY DISCUSSION OR ACTION ITEMS OR FUTURE AGENDA ITEMS. I'M JUST WONDERING IF IT WOULD BE WORTHWHILE TO GET TO HAVE A DISCUSSION FROM STUART OR SOMEONE ABOUT THE GOVERNOR'S INITIATIVE, OR SOME OF THE THINGS HE'S PLANNING ON.

IT MAY BE TOO EARLY TO TELL WHAT THE PLAN OF ACTION SHOULD BE, BUT THE.

DO YOU FEEL COMFORTABLE HAVING ANY DISCUSSION ON THAT? AND I GUESS WE'RE JUST TAKING THE ITEMS RIGHT NOW, AND WE'LL FOLLOW UP WITH YOU WHEN WE'RE AVAILABLE AND READY TO DO ANY BRIEFINGS. THANK YOU. OKAY. YEAH. AL, DO YOU HAVE YOUR HAND UP? I CAN'T TELL. OKAY. FUTURE ITEMS. I'D LIKE TO SEE AN OVERVIEW AND MAYBE KEY INHIBITORS TO GETTING TO

[FUTURE AGENDA ITEMS]

I THINK WE'RE GOING TO HAVE AN ADA MS UPDATE NIKKI, SOMETIME IN THE FUTURE OF THE ADVANCED OR AUTOMATED DISTRIBUTION MANAGEMENT SYSTEM, AND I DON'T KNOW WHAT ELSE TO CALL IT, BUT THE BIG FIVE UPDATE ENERGY EFFICIENCY DEMAND RESPONSE, LOCAL SOLAR BATTERIES, TRANSMISSION. I MEAN, LAST SESSION WE HAD A TRANSMISSION UPDATE, BUT COULD WE GET A DASHBOARD? I THINK WE USED TO GET FAIRLY REGULAR DASHBOARDS ON SOME OF THE PROGRAMS. AND WHY DON'T WE TALK OFFLINE ABOUT WHAT WE COULD GET WITH THAT? WHAT ABOUT YOU ALL? WHAT WOULD YOU LIKE ON FUTURE AGENDA ITEMS? AL. I THINK YOU'RE MUTED. I THINK YOU'RE STILL MUTED.

YEAH. AL, WE CAN'T HEAR YOU. I'M SORRY. ONE THING I'D LIKE TO BRING BACK ON THE TABLE IS GEOTHERMAL.

IT SEEMS TO KEEP ROLLING OFF. BUT I'M INTERESTED IN THE STATUS OF GEOTHERMAL PROJECT AND ALSO THE STATUS OF OF THE EVOLUTION OF TECHNOLOGY AND HOW WE SEE THAT POTENTIAL GROWING.

SO A STAFF REPORT ON GEOTHERMAL IF POSSIBLE. ANOTHER GOOD ONE.

OKAY. ANYTHING ELSE? JONATHAN. LAUREN. OKAY, SO I THINK WE'VE HIT A NEW RECORD.

LET'S END THE MEETING. IT'S 636. FORGOT.

* This transcript was compiled from uncorrected Closed Captioning.