EWEB Board of Commissioners — July 5, 2022

0:03 call the regular meeting of the eugene water electric board to order for july 5th 2022 the first agenda item receiving is an agenda check for anybody that has any questions or comments or wants to move anything around on the agenda if not then the next item is items from board members and general manager matt anything from you no okay john b no sonia cindy just wanted to thank commissioner borofsky for helping with the opening of the emergency water site at the lane center a few weeks ago so thank you yeah i forgot i totally forgot about that yeah it was it was a it was a really nice event it uh

0:49 started raining exactly when the media was there when we were making our our pitch and then immediately following that it stopped raining but there was it was attended by some local elected officials and uh it's a neighborhood emergency management people and it was i got myself a jug that was great thank you good for you thank you um the only thing i had was just an actual question of staff on those on those containers that you know is there any way that the commissioners can get some of those and hand them out to people in their wards because i mean if we have tons of them and uh and you know i could walk up and down the street and every third warehouse there's a lot of seniors in my

1:34 neighborhood and things like that just say make sure you get one because they're not come they're not coming to these events and i don't know another way they could get one i'll have to check on the inventory the inventory has been up and down through time and i don't know where we are right now but i think as we as especially as commissioners do outreach and i i was gonna talk to you individually about starting to do some neighborhood association meetings and things probably this fall would be good timing with a lot of the decisions we're making it would be good if if you had either access to or a certain amount of inventory that at your disposal but i'll have to check on what the the actual levels are at the moment does that mean if we were trying to target vulnerable populations it might be good

2:19 to work with if we have an inventory of things that can save people's lives why are they in the warehouse they should be in the homes so that's my point i think through time we've we've we've gotten inventory in and we've distributed all of that inventory and then we've been we reordered as we need to so i don't know where we are in that cycle so i'm not sure that we have tons of them to go to commissioner brown but i certainly think it's a good idea to have access to it okay um can anybody sign up for public testimony either in person or on the phone not skip that

3:04 um okay the next agenda item is going to be the consent calendar defend calendar move to improve consent calendar second second by carlson any discussion all in favor say goodbye by saying i and raising your hand hi passage unanimously rule against that calendar b seconded by carlson discussion none all those in favor signify by saying aye and raising your hand passes unanimously thank you um next item is city regime electrification response frank lawson well uh commissioners good evening for the record frank lawson general manager

3:49 you did receive although i'll admit it was not part of the normal board packet and that was simply because of the number of edits and the work that's going into developing a response for the city of eugene to summarize we received a series of questions from the city on june 3rd we have put together an internal process to develop um a number of things associated with those questions first of all we wanted to try to to interpret the questions and develop a series of questions that we could develop responses to that would be used not only with this response to the city but the general public and more of an faq type of approach and

4:35 so we've we've formulated that and also worked across different departments to start to formulate responses to those we wanted to give commissioners an opportunity to see where those responses were heading um that was the purpose of of this meeting um you did receive the initial draft although like i said this is still evolving a little bit and our commitment to the city was to get them responses at some point after this meeting i was targeting at the the end of this week but would be open to any any comments or

5:20 thoughts that commissioner's suggestions that commissioners may have the the questions themselves touch in a number of different areas i think based on the questions there's a recognition that electrification has impacts not just to e-web but to the electric system at large so the regional and in fact the western grid based on a number of the questions and also um local impacts um again just based on a series of questions that that we got from them and so i'd be

6:05 really just happy at this point president brown if commissioners wanted to uh offer comments or suggestions or ask additional questions on the process or or the responses okay i'll open it up for questions or comments or anybody john b thank you um and thank you for these responses um the way that i the way that i see these in the way that you guys uh put them together is i see them the questions as the the bumper sticker and and this is actually the thesis

6:50 or a synopsis of the thesis this is the cliff the cliff notes of the thesis let's put it that way um because and some of the things that the city's dealing with on this you'll hear and i'll just put it out there you know well if if we electrify then it's just then you're just burning coal in idaho right that's the bumper sticker and this clarifies that more and i really appreciate that because as a board member these are things that i've learned over the past year and a half that you know it's easy to have a sound bite but when you start digging into it it's a much deeper topic i guess one of the questions that i would have is

7:35 beyond the questions that the city of eugene asked are there more questions more bumper sticker questions that we could put into this faq that would help the conversation as far as as climate change and as far as electrification and as far as some of the other issues that our community is dealing with that we feel would be appropriate to put into this faq as well the simple very direct answer that is yes that's that's actually the reason that we developed the faq approach to begin with was that we wanted to be able to expand the topic list as things come up in fact there's there's more faqs i think there's 18

8:23 questions listed and there were not 18 questions in total from the city and so some of them we broke up into two two questions instead of one but we really tried to look at this as a little bit of a broader issue we we also tried to remove a bit of the editorializing in the question itself um that which um oftentimes if you watch um different entities operate there's there's a whole series of statements with within a question at the end and it's it's more about the question than it is about the the response to the question and so we wanted to be able to offer responses that had a foundation

9:08 that we could we could trace to so various studies or different things and that that that doesn't always lead to a yes or no answer it it leads to a an answer that doesn't necessarily draw the conclusion for you but it provides input to that okay thank you mindy that's a really cool first of all i like the way you said the bumper sticker question and then the part of the thesis and also it's a good point about um us putting more of our thoughts in that weren't addressed in the question because and you just don't know what questions to ask or what are good questions or what are good questions and so

9:54 i really appreciate the way that this is laid out and if there are opportunities for you to editorialize a little bit um i know maybe you're a little hesitant because of our joint meeting last time um but but i do think that like uh they only know what they know and what to ask so if there's more expertise or things like as an agency that we would recommend to them i think that that would be really useful too thank you i i would say that our responses do contain a utility perspective i wouldn't say that they're editorialized per se but they they approach the responses uh

10:40 very specifically from um from e-web as a as a utilities perspective and that's recognizing that that is different from a city's perspective or from um a certain group's perspective or from northwest nationals perspective or you know there's this is from our perspective based on what we know is going on um within eweb what's going on in the region from uh from a great perspective so it does have that perspective but i think we also want to in particular avoid taking positions based on those perspectives and we'll just provide the perspectives and let others

11:25 interpret that based on whatever decision they make and i would just add one other thing is that i think somewhere in here that we are whatever percentage we are and what our goals are i think really to highlight that too and that i know that it is edited in here but maybe make that a little bit more present that as utility i mean that makes us a little bit unique compared to some other utilities have these values of these goals and that internally we're going to be grappling with how do we make that happen on your trends and pressures i really appreciate where the sources of the information have been given to i

12:11 think it's it's pretty valuable for those groups to understand that it's not just us creating this information that it's widely vetted and then they don't think that we're you know you can trace the source anyway um and then two can we actually see the copy of the original questions i don't remember would you like to just see the differences between the two at some point the original questions are actually in the background memo and so um and then there's that's the the left column the middle column is kind of rephrased and then that bread at the top yeah oh okay yeah that was the original to do a side by side i did notice that but then i kind of skipped over that just went down to the question and answer part okay thanks all right

12:56 and some of some of the refinement to your point commitment carlson which is a really good one is that some of the refinement as we go forward we want to add a little bit more content to the sources piece of it there's a few places where we quote some dollars or we put percentages those come from sources but we don't always identify those those those have been done in different studies and things but that's that'll be part of the refinement that we go through yeah thanks john can you hear me okay cool uh i'm grateful that the city is formally inquired with eweb about the

13:42 implications of limiting natural gas use i know this has been at least from my perspective a long time coming i'm glad that we're getting this all written down and provided to the council and i think these responses will help to reduce misconceptions within the public and among other elected officials thanks for the effort on behalf of staff who have put in certainly a number of hours answering these questions um for me personally the format was a little bit hard to read with the questions stated that and referencing something you know a couple pages down but um that that may just be fine for others uh the questions are necessarily narrow right you can't possibly are the the

14:27 answers you can't possibly provide all the context but it can lead to questions about the bigger picture i like i find myself reading it reading the answer and it may for some bring up additional questions and so my question for you frank is um are we going to be are you going to be available for a discussion with the council or is that in the works of any kind and i hope we'll continue to offer to make eweb expertise available to answer questions during council meetings i think that real time feedback when they're having a conversation is as valuable and as important as this written statement of um responses that's all i have thanks yeah excellent point um commissioner mcrae so

15:14 um i will certainly make myself available as well as staff resources to the city of eugene and when they they need that i do know that they have a meeting coming up this later this month that i will plan to personally attend that has to do with with natural gas and electrification i also think that so while staff was a bit challenged by this one of the original requirements was to keep the responses to i think it was 150 words or less now that has to your point sometimes uh creates another series of questions and if those are created then let's capture those as well

16:00 that's where this can become more of a living document but we really wanted to try to be as succinct as we could we recognize that these are very complicated issues and they have to be a little bit of the cliff notes as opposed to the entire novel otherwise it just it won't fit on the rear bumper of your car at some point it'll wrap around the outside it'll look like a nascar and to be clear that wasn't a criticism that was just an observation of exactly that you had to make them short and i appreciate the effort that went into making them all very sensitive yeah but i think to answer your question directly we will offer further response to the city

16:45 either in written form if they want to continue a dialogue that way as well as providing real-time response for appropriate sessions of counsel thanks i'd like to close by said i really appreciate it i like the answers and everything but i also need to make sure that what everybody has said is absolutely headed there because uh your council's got to deal with police and land use and human rights they got they got to be experts in 20 different fields we get to be expert in just a couple and i hope that we are available with our resources both verbally and written to make sure that when we go down this path of electrification that we do it in such a manner that we were able to meet their expectations because if they go out and think that we can do something that

17:30 we really can't do it's we have to make sure we're staying right in that conversation and making sure they're educated about what what is real and what is not real in this in this to to do what we're doing because i don't want to see us getting into a place where we can't meet their expectations or if it gets you know dumped on the utility industry that we couldn't comply so i think it's important i like what you're doing and i want to do so thank you very much jonathan yeah just just a second thing too and then thank you for availing yourself to the city council if if they if they so desire um i do feel that by putting this out here we're going to get bumper stickers out

18:15 of this out of this document certain people are going to say look at this and look at this and we're going to have bumper stickers that are going to come out of out of this document just so we're aware that people are going to come and say well eweb said this in their faqs and they may not you know that and they'll pull one out that will add fit there whatever they're trying to advocate for and so just kind of be ready for that as well i i appreciate you bringing that up commissioner the i think anytime you document something that that's a complicated issue especially one that where there's there's some differences of opinion on on those types

19:00 of issues people can take a response out of context and so we're trying to provide as much context as we can but it can be it can certain things can be lifted at in the wrong moments or at the wrong times with without that context to pursue a certain purpose or outcome we also have to be cognizant of the fact that well to commissioner brown's point that the city has a very broad set of issues by having a set of narrow but deep issues we have a different set of criteria that we're evaluating for example i have to sit in in meetings with

19:45 utility colleagues who are wrestling with a grid that's under under pressure and and a city council can look at this and we can look at this from eweb's perspective and say well eweb can do this look at the goals we have this is simple at the same time we we rely on a grid that has a whole separate unique set of challenges with it and so by bringing up those challenges we also need that it can it can be the other way around which is well you're you're now a climate avoider or climate denier because you're saying there's challenges in in your ability to do this and that's not necessarily accurate either so we have to be careful on both sides of the context issue that's why we're

20:31 trying to be really careful as to how we respond to these questions by by saying yes there's e-web issues there's grid issues there's there's customer issues and trying to balance uh the whole set of those but but you're right there there are certain things that people will extract for their own purposes there's also a study online anywhere that will support a counter argument to any of these you can find a peer-reviewed study almost anywhere that supports a particular case you want to make but we felt it was important to capture our thoughts as as a utility okay any other questions or comments just if commissioners do have particular

21:16 pieces or particular questions about a comment or statement like i said our intent is to respond back to the city and we'll we'll make those links a little bit clearer um in our response our memo back to the the city which um we're planning to send out by the end and will this become live on our website as well this became live actually today in draft form this is the draft but we will continue to refine a little bit and then get a formal document to the city and and commissioners will be copied on it so we can let it out yeah it's fine okay thank you thank you next agenda item is going to be number

22:01 eight uh goal number seven rate design fundamentals in the background debra well good evening commissioners uh my name is deborah hart i'm here with tia marie harwood our financial services manager and i think on the big screen big head behind me marianne mcelroy our billing operations manager uh this is just a meant to be a brief

22:46 overview of rate design fundamentals and with that i'm going to kick it off to tia good evening commissioners so tonight we are here to again as i was ever reading just some information about the third step in the rate making process which is rate design we will start with a quick overview of the rate making process itself as well as review eweb's rate making principles and the cost of service analysis will then provide information on basic rate design forms before opening it up for discussion so there are three main activities that are associated with the process of establishing customer rates the revenue requirement is the sum of all funding needs from our retail customers to support utility operations this provides

23:31 the basis for citing retail customer rates the cost of service allocation model for hosa is the method to equitably allocate the revenue requirements of the utility among the various customer classes this process provides the basic basis for rate design decisions and helps to ensure the customer pricing structure aligns with utility costs final step in the rate making process is the actual rate design which incorporates elements of the embedded cost of service analysis along with strategic direction values principles and short and long-term marginal costs the goal of great design is to develop rates that align these elements and providing customers with a fair and reasonable price for utility services and also allows individual customer

24:17 choice to consume conserve or make investment decisions without impacting other customers so pricing decisions are a fundamental responsibility of the board and you may recall seeing eweb's rate making principles in april of 2021 this framework has been established in determining prices for water and electric services keyword rates are to be sufficient to meet the reasonable ongoing costs of utility operations and all reasonable efforts will be taken to make rates affordable for its community owners eweb will send efficient price signals to customers that are cost based and minimize subsidies to allow customers to make investment decisions that are sustainable long term without unfavorably impacting other customers

25:02 e-web will charge its customers non-discriminatory prices and customer receiving like services will be treated equally and last but not least gradualism is the principle that ewa breed stability is maintained and to the extent feasible does not shift unnecessarily year to year so last september staff brought information on egypt's cost of service analysis to the board and i'd like to take a moment to recap how the kosa fits into eweb's rate making process hosa is a cost based analysis that allocates costs among customer classes and provides a unit cost output for use in the rate design process so again the revenue requirement provides the basis for setting our retail customer rates using the revenue requirement costs are

25:48 then segmented into the functional activities performed in the operations of the utility such as production transmission distribution and customer related these functionalized costs are then separated and classified by the primary driver for that cost this provides a basis for using cost allocation for rate design and the last step in the cosa process allocates the functionalized and classified revenue requirements to the different customer classes once costs are allocated the unit cost by customer is then used to recover the revenue requirement through fair and equitable redesign thank you team marie good evening commissioners i'm marianne mcelroy the billing operations manager

26:34 i'm here to provide you an overview of the most common utility rates for this presentation we will cover them in three groups flat lock and time differentiated some of these words or concepts may be familiar to you for this presentation our goal is to provide a baseline understanding of these basic rate options and increase your familiarity with the terminology used to describe them i will start with the simplest option flat rates this rate is rather self-explanatory it is a one size rate for all consumers of this product flat rates do not reflect the true cost of the product being consumed flat rates tend to be at a higher price to address risks and any volatilities in the production or distribution of the service being offered

27:19 flat rates are more commonly associated with water utilities as the marginal cost of water goes down and there's no delivery charge or the marginal costs for electricity go both up and down e-web does currently use flat rates for a portion of the products and services we provide for the electric utility uib currently uses flat rates for privately owned customer lighting and city of eugene street lights green power block rates are also an example of a flat rate and for the water utility e-web currently uses flat rates for fire line services block rates are our second category blocks can also be referred to as tiered the concept is the same the consumption is grouped and priced according to the

28:04 grouping for inclining tiers a higher rate is charged for each incremental block of consumption for declining a lower rate is charged inclining blocks have been popular in the utility industry because they encourage conservation and efficiency this means that the more you use the higher your bill will be so there is customer motivation to save money and consume less of the service at the higher price in addition to the unit costs per block there are also considerations for seasonal impacts and the transitions between different blocks that could also impact the customer bill e-web flattened our residential electric rate offerings in 2018 resolution 1821 because the existing

28:49 tiers no longer reflected our actual cost and penalized customers who had all electric households at that time commissioners supported a collapse of the consumption tiers agreeing that the tiers acted more as a price penalty for winter heating rather than a conservation incentive inclining blocks are still commonly used for both water and electric utilities however this is shifting as more utilities are utilizing new technology and ways to better align utility costs with customer preferences that enable greater choice and control over the utility bill in support of the state of oregon's water management and conservation plan our water utility uses inclining tiered rates currently to demonstrate our commitment to the conservation of this resource as shown by the table on this

29:35 slide the electric utility does apply both types of block rates and some of our general service offerings time differentiated rates are the final grouping simply stated these rates are intended to more closely align the cost of the utility with the impacts to the customer the day is broken out into two or three periods for example peak or off-peak whereby prices vary by period but remain consistent from day to day when it costs more to make or acquire the resource the customer plays an active role in contributing to that higher cost from the customer's perspective they are more interested in the inverse option when the costs are lower for the utility the costs are lower for the customer

30:20 time of use tou rates are becoming a more popular option for electric utilities you have did a small residential tou pilot a few years ago the information on this slide is taken from that pilot power hours pricing with a tagline to shift and save we learned a lot from that pilot one of the most impactful things was that the pricing signal was not significant enough to get people to change their behavior and we need to upgrade our meters and our billing system in order to be able to deliver a rate of this complexity at scale we currently have one commercial customer on an electric time of use rate commercial large primary as part of an extended proof of concept exercise in some places tou rates are aging out

31:06 as utilities face even greater risks and uncertainties in delivering critical services i read a headline recently that tou rates solved yesterday's problem under these circumstances utilities are embracing even more dynamic options of time differentiated rates here are a few examples real-time pricing rtp prices vary frequently hourly over the course of the day to reflect fluctuating electricity cost determined by wholesale electricity prices variable peak pricing vpp the day is broken out into periods of time peak period off-peak period where prices vary by period in addition for at least one of those periods the price changes daily to reflect system costs and conditions

31:53 critical peak pricing cpp a period of time in the day is called critical or a peaking event is identified when the price may increase dramatically to reflect system costs creek critical peak rebate excuse me cpr a period of time in the day where that same peaking event is identified when customers are paid for cutting back curtailing on electricity relative to the amount they normally use to our knowledge most of these rates are applied at electric utilities time of use and dynamic pricing are future conditional options for eweb at this moment and we are continuing to watch and learn from how other utilities implement these time differentiated rate structures

32:40 it would be a missed opportunity to not speak to prepay but it does not easily fit into any of the three basic buckets because it is not a rate prepay is an alternative payment option in which customers buy a dollar amount of electricity and utilities deduct energy usage from that balance as it is used consumers receive daily notifications about their balance via phone email and or text message plus additional alerts when they reach a low or zero balance they can add money to their account in multiple ways online payment location kiosks a zero balance results in a disconnection which typically occurs the following morning service is re-established in a few minutes or hours after a payment is received similar to our current best practices prepay plans can offer protections to

33:26 ensure that disconnections do not occur on weekends holidays or days with extreme temperatures to quote the department of energy the doe prepay has grained growing attention in recent years the industry is seeing an ongoing interest in deployment of prepaid programs around the country consumer surveys and market research show that prepay is poised for strong growth in the near term the growth is being driven by key technology and consumer shifts including the rollout of advanced metering infrastructure ami other smart grid technologies the emergence of the empowered consumer rising consumer interest in energy conservation and the increased use of prepay options for other services gift cards and prepaid wireless phone services as shown as the image on the slide although it should be

34:12 noted that unlike these examples electricity is an essential service e-web currently uses a form of a prepaid program with our water dispensing station where a customer can pay in advance for a quantity of water that is dispensed from a self-serving filling station off west first avenue at the cost of five dollars per thousand gallons this is also a flat rate currently prepaid programs are mostly available to electric and gas customers sorry so we have touched on where there are differences between how rates can be applied to water and

34:57 electric and while there are differences there are a lot of similarities from a financial perspective we're continuing to look at the near and longer term costs to provide water and electric services we'll also continue to partner with our operational colleagues in the power resources group to explore how more granular and use data from our smart meters coupled with the more integrated technology pes and help us better manage the assets that our customers have invested in while rates are a large portion of our financial toolbox there are others worth mentioning as a part of this discussion

35:43 eweb is looking to incentivize customer behavior tools like fees or charges rebates loans or credits can also play a role in achieving that outcome and those options also involve board direction so working with you all and understanding how these financial tools work together is where we can support your ability to provide strategic direction and how we implement them in finance we do focus on the numbers but that is only um that's only a portion of effective rate design and implementation there's a natural tension between how these numbers interact to tell a story to

36:28 answer the strategic questions for example the sufficiency principle states that rates must be sufficient to cover utility operations and that may strain our affordability principle the efficiency principle may drive us to pull out one of those other tools rather than rates to incentivize customer behavior and this is where the board helps us with the options against our values strategic direction and the natural tension that exists between those rate making principles so this is the last of a three part series and we hope that the presentation tonight has provided a a basic um understanding of rate design and that

37:14 coupled with the earlier presentations on rate making principles and cost of service have provided a foundation for a fairly complex topic we really do appreciate the board's interest in these topics is rate design and implementation can be an ongoing discussion for the foreseeable future we're actively working on increasing uh access and utilization of our smart meter data to help us have better insight about customer consumption and even with the delay in reaching the mass deployment finish line we're making progress and translating the data to useful to a useful context the recent ees demonstrations

38:01 for our new technology platform have provided inspiration for how that platform will be able to support operational efficiencies and the opportunity to provide new products and services some of which could use the rates that we talked about we talked about this evening and finally [Music] as you can see by the theoretical electric products advertised on the slide we will need the board's direction to ensure we continue to move in the right direction to meet our strategic goal of dynamically synchronizing our supply and demand and that we'd like to open it up for questions leave frank's hand to go up well i was

38:46 on vacation so feedback surprise just a little bit of context for the board you know why why are we starting to talk about rate design and part of it is that from a timing perspective it's probably going to be in 2023 that we start to lay out a more specific road map around pricing especially on the electric side um how will we start to look at the fixed charges versus time of use versus some of these other things and and the reason it becomes more of an issue on the electric side is that starting to see more dynamics in the supply chain in the supply

39:32 and as as this group knows the the prices vary by minute they vary by hour pretty significantly by season and the carbon content also changes by uh by that same kind of dynamic and if we really want to be able to electrify if we want to be able to make good resource choices we're going to have to provide this mechanism that that incentivizes consumer behavior because the consumer piece of it is part of that synchronizing so probably within in 2023 we'll get a lot more specific around a roadmap we might not implement it in at the end of 2023 but it'll certainly start to because we have a

40:18 we're doing our ees project as well for our enterprise system and some other things but we will definitely get into a lot more specifics around what this looks like just some context okay open it up we've got 12 and a half minutes left but we are running a little ahead of schedule so a couple of quick comments i appreciate the series of conversations that we've had thank you i do hope that as we look at the more dynamic types of pricing proposals that we consider equity as i know you all will but i just it you're saying again i mean people who are you know older and not tech savvy my parents are visiting right now and i think of them going i don't even know

41:03 why is my goal showing up like they don't have the ability to deal with some of those pricing models so to the extent possible that we offer options for people who are very tech savvy and can you know mitigate pricing and help with pardon and you know meet their values also other types of options that people can opt into that meet their needs and capabilities i think it's going to be really close we talk about how we dynamically look at all these systems together and that's not an easy challenge so i appreciate that you are aware of that and looking into it thank you and and i think that options is a key here our ability to provide our customers with choices

41:50 i'll jump in if i could real quick i want to thank you very much i really appreciate it having been tiered breaks and things like that we had whatever started we got rid of them one of the things that was really eye-opening to me is we had a time to use study we allowed the patients to take these little devices home that measured when your consumption was and replay this little game about whether or not who could contest to see who could save most money and i ended up getting my utility shut off because i owed you 35 bucks and i saved and then i just put a door hanger on myself but if by those that haven't had electricity those that haven't done that that really sold me and on how easy it is to adapt behavior modification and just say okay don't run the dryer you know what do you

42:35 is that's still available for the commissioners that haven't been able to experience that have one of those time to use meters put in your house not at the moment right i'm just thinking because it would for me we can't do an analysis i don't know if i i believe that most of the if not all the commissioners have a smart meter upon their house but we can do analysis where we look at the time of use and you can see where the the usage uh the usage patterns are we can that data is available but we don't have a program like that it was to me it was helpful very helpful and and eye opening is saying okay i can save money just just by being consciously aware of it you get that little meter up there and you look at how much money you're spending no no

43:21 no don't turn the dishwasher on you know things like that so uh yeah but thank you very much i i'm looking forward to that the other question real quickly is people have always asked me how come our flat rate is so low compared to like lane electric but really 20 something in there you know 50 percent higher than we are and well actually lane is 50 bucks and is really high and is that the equitable thing i mean because i know that disreport that affects the lower income people um so we have we have brought that up over over my time here at eweb and it will be something for the commissioners to talk about maybe even as early as this fall whether or not

44:07 the basic charge needs to change for some there is a perception and for some folks there is an issue that it does impact some of our low-income households more but i think we've got some data yeah i could find that pretty specifically we we showed that um based consumption there was no differentiation in levels of consumption and income level so yeah there were just as many high consumers of electricity that had low income as as opposed to just because you were a low cons lower amount of consumption didn't mean you were lower income and so and if you have a higher basic charge it

44:52 tends to to shift that a little bit to lower consumers the the challenge is and this is this may be a good opportunity for the board to discuss this this fall is that across utilities in the northwest for the basic charge you see everything from zero to almost 60 dollars across utilities the if you would truly align it with cost you're going to be closer to the 60 than you are to to zero and that's that's because of all the fixed costs it takes to deliver that first electron um but there is this perception and a lot of the ones with zero are the ones that are governed by city councils by the way um and who don't want to

45:37 um sort of wrestle with some of the issues that i know passports here have um if you consume less than about 1400 kilowatt hours a month you are actually being subsidized by those who consume more than 1400 kilowatt hours a month and that's because when you're not consuming that amount you're not covering all your fixed uh costs and so um anyway there's there's some work to be done but that's just one basic step that we're going to start talking about in the fall that you have anything for us uh just thanks to the staff for the presentation it was super clear um yeah i appreciate the work we went into that

46:23 and i appreciate the uh kind of chunking out this uh all this material for us and it took it in small amounts so we can digest it thank you anything from mindy or john b yeah i would i was intrigued by the prepay and the thing that intrigued me about it was the opportunity to maybe use pre-pay help defer deposits those deposits are something that are onerous especially to low-income people or new businesses i know when i opened one of my new business i had to pay 2500 in deposit you guys kept for a year right and as a new business that's

47:09 something that is cash flow is something that's harmed so if there would be a way that we could say we need a deposit for you because we don't know if you're a good if you're a good risk or not and i understand that that's that's a business practice that is is time you know shown to work but if you could say if you go on to prepay and do prepay for a year that would satisfy our requirement for uh the deposit and i would hope that's something that we could look into because i know especially with with the housing thing as it is the first months last months and if you have to pay a 200

47:54 eweb deposit you could parse it as saying yeah you have to pay 200 but that's going to go towards your first months you know rather than we're going to keep that for a year hoping that you'll be good that would be something that i hope we could look into if prepay isn't an option that we're we're pursuing indeed um it is an option that will that we're very intrigued by and we'll be looking into with our new technology platform and absolutely one of the major benefits is that that could be in lieu of a deposit because that's something that i've i've dealt with on a business level and i've i've known low income people that that struggle

48:39 with that as well and so anything we can do to help with equity in that form whether it be pre-pay or other areas i i think that's that's something that i'd like to pursue if prepaid in a pre-pay arrangement we are not issuing any credit right so why would we need to deposit and so um i think deborah hit it correctly it's it's for us it's an issue of getting that platform um developed and and completed but repay is definitely one of the methods that's on the plate and and i would hope that you would not just say if you're prepay you've got to prepay forever say you know if you prepay and you're good you know you've got your thing in standing for six

49:25 months or 12 months whatever our deposit thing is now then you could roll into a credit type of uh of an account rather than always having to prepay certainly although many prepay customers that's their becomes their preferred mechanism but certainly we have we have options there for sure up there one last thing though about i know that we're focusing on electricity for the most part obviously we look at water rates but looking forward we've been very fortunate so far in the water side we haven't had to curtail water but i think it's coming so i just want to make sure that we're prepared

50:10 for that at some point that we may have to do that and having a mechanism in place to do that would be beneficial okay is there anything else you need from us not at this time did you get what you needed yeah what we needed for this presentation this evening well i certainly hope we didn't get up into the next week's edition okay thank you very much okay i need to run things by people we're an hour ahead of schedule we can pull it and uh the next agenda item is 45 minutes that'll get us back and we can knock that one out that's what they think it's it is 45 minutes and what's the will of the group

51:09 all right thank you extra agenda item is the long-term financial plans capital planner good evening commissioners and everybody in virtual land uh tonight we're going to look for some board concurrence and direction on the various inputs to the long-term financial plan in order to begin the process to develop the next proposed budgets and pricing schedules for 2023 um but it was nice of deb to do all that massive detail behind the scenes but we're going to go at a very high level tonight so karen and i are going to look at some of the the assumptions and and things that go into the long-term financial plan and

51:54 the capital plans alicia our our wizard of math modeling behind the scenes we'll spend a few deal of time talking about the financial model all these assumptions impact the expected rates so so those kind of things and deb's going to come back up and wrap us up so details of the nitty-gritty of the financial plan but i just want to do a high overview of where we're at in the process this year last month we got together and talked about the the capital plan in particular uh have presented a number of assumptions and principles that go into that plan

52:40 we we heard some feedback from that we incorporated that and now we're back to to summarize what we did and to see the impacts from those assumptions on how they did flesh out a couple of things uh that i wanted to talk about uh tonight to covered um both of these things uh were were brought to the board uh in 2021 we brought a bunch of principles we were asking for more money essentially in the capital plan and we're given some boundaries and so forth to go over

53:25 the few items just wanted to highlight real quick though the rate increase boundaries the limiting the two to four percent average annual inflation rates that remains the same uh overall there's really no changes to the the capital projects and karen's going to talk more about that we did the board agreed to focus on increased capital funding to address risk-based project spending for resiliency and compliance that's still the focus of the capital plans and probably the the biggest changes or the differences that we're bringing are a couple items i wanted to highlight one is the lieberg

54:10 uh tonight what's presented the short-term impacts mitigated so approximately 20 million dollars is in the plan to to address any of the things that may come up in the very short term that we would need to do from a damn safety perspective and uh in at least as early as august the teams from generation and finance will be bringing details about how the four options that will be looked at how those will happen so at that time those rates would be additive on fundamental perceiving

54:55 we felt that was important to really focus on the basic uh capital planning uh the assumptions that go into to make sure that we're focused and doing the best of things that necessarily the other thing uh the board brought up was the concern about supply chains and how does that impact our projects and again karen's going to get into some more detail on that but kind of the short story is that the teams looked at the capital plans and supply chains and found there's a relatively short term impacts on that to change the scheduling and so things like that particularly again this backgrounder covered most of the updates the business and economic

55:40 assumptions pretty well uh and and alicia is going to get into that a lot deeper i believe i just want to highlight a couple more items uh again the board uh some bleeding back from the board last time was concerns around are we accounting for inflation correctly the groups went back and took a more conservative approach to inflation and raise the the inflation rates and in some cases extended out a year was increased rates um you kind of see that from the highlights there another thing that was uh added a little different this year i think is the

56:25 electric revenues ev vehicle low growth is included at a very much level these forecasts will likely be adjusted as our irp evolves and our knowledge of ev and sales maybe ev's increases over time so i do believe we've got time to adjust those but they were factored in this time and then finally the electric revenue assumption does not include revenue from leeburg from generation for the next 10 years assuming any long-term mediation solution the league work now will take time so uh leeberg is removed oops congratulations

57:11 so at this point i'm going to pause see if there are any questions concerns or have compared with those i've got a question about what's the basis for changing your forward price curve on uh from 55 to 85 bucks a megawatt your last slide 51.85 yeah yeah 51 to 85 what's the basis but i mean that's a huge swing and that's got us in trouble what how's that the so the forward price curve right now is is really elevated that's driven by natural gas prices um and part of that has to do with supply chain pressures part of that has to do with impacts from

57:57 the international market and then part of it has to do just with weather volatility so we're seeing the near future higher and then it reverts back down to the to the mean as you go further out in the plan president brown we we're trading five years out and those are the numbers we're seeing so the prices of electricity is going up because of the shortage of gas and things like that or the the gas supply thank you i just was wondering because that factors into carmen and everything else and so thank you any other questions or comments before we move forward yeah yeah a quick question related to the wholesale price it's not really related to this conversation necessarily but i'm

58:43 curious if we're seeing that kind of increase in wholesale prices five years out is that driving in investments in new generation in the region um commissioner mccray not necessarily we are most investments in new generation is driven by organizations irps and so it may affect some of the choices that they're making but much of that is driven by either regulatory or carbon legislation or other things so just because we've seen a little bit of shift in the supply curve doesn't mean

59:28 that utilities are going out and starting to construct new sites that it's a much more longer term play than that and so we have seen a couple of utilities that that tend to be more long almost wholesale utilities looking at certain expansion into things like small modular reactors and things like that but a simple sort of shift in that sort of near to mid-term curve is not driving additional expansion at this point great thanks and then uh being a non-expert in capital and financial plans this all looks pretty sound to me thanks for the presentation

1:00:14 comments before we move forward uh good evening commissioners and general manager lawson i'm karen kelly chief operations officer for the record with me tonight online is wally mccullough engineering supervisor for water and tyler nice electric division manager they will field any questions i can't answer and last month they provided a detailed presentation of the respective capital improvement projects last month so tonight's just going to be an overview to help set the stage for the long-term financial plan discussion that will follow with alicia so with over 1 billion in assets at uweb how do we know we're working on the right ones those are the questions we ask ourselves continuously and the answer really is around planning and

1:01:00 lots of it we have the 20-year master plans that are updated every 10 years and turn into 10-year capital plans which are updated annually and these are done to meet our customer expectations on the stewardship of their resources so to do this planning we must consider employee and public safety consequence of failure probability of failure current condition and operability anticipated future condition custer demand customer demand and load both present and future regulations and compliance and life cycle costs consider all of this while leaving flexibility to address emergent needs and much much more to safely meet those customer expectations and eweb strategic plan with the goals that you see on your screen

1:01:45 which include the completion of all compulsory work maintaining reliability and increasing resiliency so this is a very big task if i haven't made that clear so just to recap our goals again we complete all compulsory work this is mandated or must do work and we strive to maintain reliability by replacing old assets as many systems are nearing the end of their useful life reliability must also include modernizing finding new ways to increase efficiency and expand our capabilities and we must do all of this along with balancing capital needs with our regular operations and maintenance needs and then third we must also increase our resiliency by harden hardening our infrastructure and systems or in other

1:02:30 words decreasing our vulnerabilities improve our redundancy and again create flexibility the 10-year water capital improvement plan really hasn't changed since last year in terms of the overall projects but it has increased some in project scope and cost wally gave you a good amount of detail in last month's presentation so again this is just an overview of notable projects from the scope schedule budget view or in other words our type 1 2 and 3 buckets in type 1 work we have the compulsory service and pipeline work emergent and planned minor facility work information services and fleet this includes our normal customer driven service and development work as well as

1:03:16 main replacements driven by city street projects including pole street which was approved by the board last month as well as 8th street and a project on crest lorraine and chambers both of which are coming to the board in september type 1 also includes minor facility work including the highland derived pump station which the board is see in august and type 2 includes our base level reservoir and associated transmission main work and lastly type 3 is our second water treatment this slide shows the total estimated difference in the 10-year plans between 2022 and 2023. you see right there at the top we're estimating an increase of 28 million in this next 10-year plan

1:04:02 primarily due to the increase in inflation which alicia will discuss later in the presentation also impacting our 10-year water plan is the move of budgeted eweb enterprise solution or ees work from operation and maintenance back to capital in year 2023 and in information systems or is from operation maintenance to capital for the 10-year period the is funding move is mostly from capitalizing software as a service where it was previously funded from operation and maintenance projects the rest of this slide highlights some of the main differences between the two plans and just in case you're trying to add this up it won't add up it's only notable differences so first off we have pipe and service work which is increasing by about 6

1:04:49 million due to inflation next up which i found pretty interesting uh the base level reservoir work what we learned during east 40th was that um we could actually revise some of our estimates and also if we moved the gap years between east 40th and going to hawkins reservoir that would also reduce our inflation costs so it ended up being basically a net zero estimated change in cost next up is transmission work which we see about a 1 million increase due to inflation and then we are expecting a reduction in ami costs by 3 million with the completion of deployment in 2024 and then second source was increased by 7 million also due to inflation

1:05:40 and this third slide for water is basically a look at the cip from the project purpose or driver view and comparing the single budget year of 2022 to 2023 there's an increase of 3 million due to an increase in project scope and cost for developing the bertelson property and getting communication equipments out of the headquarters property to support the sale the increase in is capitalization of software and inflation also play a role here moving on to the electric side the 10-year plan content and scope also hasn't changed much but the schedule did a bit due to emergent work bumping out projects in the current year along with some supply chain issues so for type 1 work we're turning up the dial on renewal and replacement in both

1:06:25 generation and electric divisions including regular service and compulsory work and we continue to watch and utilize our key performance metrics to establish and inform replacement programs for assets including cable transformers relays polls fleet equipment etc for type 2 work we are planning to enhance resiliency to meet our highest impact load and this includes risk-based work on our resilient spine including substations that are at the end of their useful life such as hayden bridge international paper thurston and curran and the international paper turbine overhaul as well as restarting ami deployment in 2023 with expected completion in 2024. we continue to manage work to emerging trends such as meeting new and

1:07:10 ever-tightening compliance requirements around dam safety and wildfire planning regulations as well as seismic standards we will also be working to include changes expected with increased electrification impacts our type 2 work also includes strategic initiatives mentioned in the water section such as the eweb enterprise solution the roosevelt operations center expansion and the headquarters move out three work centers around carmen smith improvements to comply with license requirements i just want to note again here as rod had mentioned that the 10-year cip does include 20 million spread out with two-year 2 million per year for the liber near-term risk mitigation measures but the work happening now in the triple

1:07:55 bottom line analysis will add to this amount to meet the long-term project resolution based on board direction later this year so the total estimated difference between 2022 and 2023 10-year capital plans is an increase of 132 million primarily due to the increase in inflation but also from updated engineering estimates supply chain related costs and some of the same changes that i mentioned before with is and ees mentioned in the water section with costs moving from operation and maintenance to capital including overhead adjustments the rest of this slide again highlights some of the main differences between the two plans and its only list notable impacts does not add up entirely

1:08:42 electric infrastructure is increasing by 71 million due to inflation increased equipment costs and updated project estimates next we're increasing ami by 5 million with the expected completion of the deployment program in 2023 or early 2024 the current delay on deployment has led to increased meter costs from supply chain issues and inflation fleet is increasing by 7 million to reduce the age of system and account for inflated prices and generation is increasing by 11 million also due to reducing the age of system and addressing inflation again when looking at the capital improvement plan from the project purpose or driver view and comparing the single budget year of 2022 to 2023 there

1:09:28 is an increase in the electric plan of 15 million due to project delays from supply chain impacts shifts in project schedules due to compulsory or emergent work such as the 2021-2022 international paper loop project and again the increase in inflation as with water an increase in project scope and cost for developing the burleson property and getting communications equipment out of the headquarters property to support the sale plays a role as does the increase in is capital needs and inflation so with that i would like to thank all the folks involved in developing these capital plans which includes operations engineering purchasing finance and i'm sure many others and we'll open that up for more discussion

1:10:13 thank you very much good presentation a little sticker shock there but we'll get over it um questions comments all right i'll thank you i've got questions oh i knew you would good budget man so changing the is software from operation and maintenance to capital on both the water and electric side what drove that um and if it's capital can it be depreciated differently uh just talk a little bit about that and i have a couple of would you like me to answer that rod i don't have an answer but i'm sure you could give a whole one so give the

1:11:04 that was not something that we decided that's driven by an accounting standard general generally accepted accounting standards is it there was a change in that yes okay and then does that does that affect how we can depreciate the software because in the past software was tough to depreciate yeah we'll we'll have a useful life attributable to software that may vary depending on the kind of software if we know we're going to use it for three years or five years or seven years what have you so yeah because we're capitalizing it we will be able to depreciate it from those costs so then that could get offset a little bit somewhere somewhere else on the depreciation schedule

1:11:49 um so for me anytime i look at a long-term financial plan whether it's a capital plan or just a long-term financial plan with with income and and requirements one of the things that's put in there is is risk and and what i mean by risk is what your buffer is and and that's something that we talked about last year you know do we have a higher amount of risk at which means higher rates or a lower amount of risk so where is that built into this plan the the amount of extra room that you're putting on these does that make sense it does and alicia

1:12:34 is going to cover our contribution margin risk tolerance uh as soon as rod hands it off okay very good so that that gets me started can i can i clarify the question are you talking about how are we managing risk within the the periods that we're managing or how are we looking at risk from an overall relationship between our ability to borrow our ability to cover costs or so i guess risk may not have been the the correct term i i i've used that in in other budgetary things that i've seen there's a you know you cannot adjust the percentage of risk that you're that you're willing to

1:13:21 live with and and by doing that it especially on a multi-million dollar budget if you if you adjust that by a half a percent that could be 20 million dollars you know give or take you know so that's what i was talking about and when i say risk it's hard because we have risk all through our terminologies right now the the one thing that's a little bit different in in our industry is that we we don't have a marketing risk for example we don't have consumer behavior that's going to impact or you know we're pretty immune to economic um swings for it for example we do have the ability that we'll talk about later which is we build in some of that

1:14:06 relative to wholesale prices and all those other things through this contribution mortgage and risk factor but we're not like a retail organization where we would have a lot of revenue risk for example because of of general economic conditions and i think i think it kind of goes back to when we were talking about turning those dials that we had that discussion before where do you turn that dial to to figure out where it's where it's right and and that would be in the long term financial plan at some point right one way you're getting that too is historically type one type two projects are pretty well known so you win some lose some you know over the time it's averaged out so we don't have like a 23 you know margin we add on to for the

1:14:52 buffer or something like that that's kind of what you're getting as well yeah time three i mean these are big projects and so many like we were winners on the at least 40th project for instance but hermann and yeah that's where you get into those slides they couldn't impact but those are the ones we bring back to the right more details so hopefully we're touching on those things in the corner thank you questions and comments um i've got a question about um the uh your assumption on inflation for non-labor uh you know that's been a sticking point with me and so we're up 23 million from

1:15:40 last year to this year in the 10-year plan because of inflation but you're only using three to five percent inflation going forward are you comfortable with that costs i mean knowing that i think general construction is 20 and 30 in the last 24 months i mean how comfortable are you with that number because if that doesn't play out these numbers are going to be worse i'm comfortable from a perspective of looking at history and again it's kind of the same conversation where these things average out i would defer to deb though so she's got sources of government labor stats and all those kind of things that they lean on to to get those exact this was non-labor your

1:16:25 category was just materials and there's one that steels up and anything petroleum-based is up and you know any construction material is up like off the charts and forecasts are and again um you can order this you can fill in the forecasts are that get those in the long term we see that in in various forecasts that that inflation will return to something more towards our historical average this year we did do three years of the five percent on our capital and i do hear you it's it's a risk um but to your earlier point that's one of those um dials when we when we increase our

1:17:12 inflationary assumptions we put more pressure elsewhere on the plan and the federal reserve has been very aggressive and has continued plans to manage that inflation downward i would i would say that based on my conversations with deborah looking at even pasts you know there were times in the in the 80s where there was significant volatility and inflationary numbers within some of these you saw over time two or three year averages where they were within the range that the fed is going to be aggressive to manage

1:17:58 the word in the long-term financial planet i think we're pretty comfortable with where those are landing what you do see is is some acknowledgement in the in the next few years that there's some volatility that's driving some of the the more immediate projects so that's affecting some of our scheduling some of our you know moving the dominoes around turning the dials a little bit but in the long term i don't think that we have any basis to move too far away from from what that historical number has been okay thank you thank you everything for the regulars nope thanks for the presentation um i don't hear any other information we

1:18:44 still haven't we're gonna do a musical chairs thing alicia's table with me this evening uh but we do have the new physical services supervisor aaron ballmer who you may recognize from when he was the general accounting supervisor and um i'm sorry and our newest water analyst as well and the financial services manager so there's a whole host of finance people to answer questions

1:19:29 but with that alicia voorhees please okay thank you deborah good evening commissioners as deborah mentioned my name is alicia voorhees i am a finance analyst lead for fiscal services we presented the 10-year long-term financial plans to you in october 2021 was the last time we presented since that time we have continuously monitored the plans we have the opportunity tonight to revisit the plans with you and provide an updated snapshot tonight we've discussed the current priorities assumptions and investments guiding the financial plans and the following slides show the 10-year outcomes of those plans as a quick review proposed plans wasting the 4 escalation rate for non-labor o m

1:20:16 costs for 2023 and a two and a half percent rate the following year and the two percent rate thereafter through the leader of the plan we assumed a 5 escalation rate for capital costs for years 2023 through 2025 and then a three percent rate for the remainder of the plan the labor assumptions have been indexed to a combination of inflation factors and expected labor labor market comparators we've updated the 2022 projected year-end performance and associated cash levels that flow into these metrics every spring we implement an internal process to review and recalibrate our o m costs to include baseline and service level increases

1:21:05 these increases may be for one year a few years for the full 10 years but regardless the process allows us to establish a new baseline upon which we escalate for the remainder of the time horizon also in the spring we update our sales and revenue forecasts for each utility last year for the water utility we went back to our normal relatively conservative assumption around consumption as we had been tracking close to pre-pandemic levels here today through the end of may this year well real consumption was on average eight percent above budget across residential commercial and wholesale we historically used 95 of the five-year average of consumption for the water

1:21:51 utility for sales and revenue forecasts and have continued to do so with this plan this provides for a contribution margin risk tolerance of approximately 1 million dollars per year turning to the rate trajectory prior to last year we had not had a rate increase since 2016 for the residential water customers in 2017 for commercial customers based on board feedback this plan we are showing you tonight presents a smoother rate trajectory than the one you saw last fall as a result of efforts to refine the plan you're projecting a 10 year compounded rate increase of 63 however excluding second source the compounded rate trajectory falls to

1:22:36 approximately 33 percent and is within the bounds of inflation rate allowable forecast range because of heavy mid 2020's investment and cash flow needs the initial six years rate increases are steeper than the latter four years of the plan as you'll see in a couple slides later when we show the bill comparison there is a there is potentially a bit of headroom in the rate trajectory this plan models utilizing 14 million of rate stabilization funds in 2023 as it allows for us to defer borrowing until we need to use those funds if we were to have a strong financial year we can evaluate the use of the rate stabilization funds and

1:23:22 potentially use them in a future year but it allows us to have flexibility and conservatism built into the plan we are modeling bond issuances of 78 million in 2024 70 million in 2027 and 21 million in 2030. the higher bond issuances are a result of heavy mid 2020's investments in cash flow needs looking at the financial metrics please note that yellow indicates we are approaching our target if we were to see red here that would indicate we have not met that metric as such you can see that all key water financial metrics remain within board policy through 2032. we approach our cash targets in the first two years of the plan due to the

1:24:08 use of the rate stabilization funds and the initial higher inflationary pressures we approach the debt service metric target in the second half of the plan due to the large debt issuances in 2024 and 2027 assumed in the plan to fund the second source treatment plan we've updated the assumptions to the electric utility in a similar manner to the water utility using updated cash balances a recalibrated 2023 o m budget updated capital investments and updated sales and revenue in 2022 a four percent reduction in consumption was modeled due to pandemic impacts

1:24:53 we are no longer modeling a reduction in consumption related to the pandemic and this is roughly aligned with 2021 actual consumption and 2022 projections here today through the end of may retail consumption has been above budget by roughly 5 furthermore this plan now includes future electric completion load growth from the transportation sector we have modeled a conservative growth based on lower than base case consumer ev adoption rate we are modeling a contribution margin risk tolerance of approximately 15 million per year which provides for conservative assumptions around risk associated with generation also market prices changes in load as well as credit exposure

1:25:43 there's a similar contribution margin risk tolerance through 2027 and then we've modeled expected condition in years 2028 through 2032. so we're modeling more conservative assumptions in the earlier part of the plan if you recall from our main board meeting you approved increasing the power reserve target from 17 million to 21 million due to increasing wholesale price risks therefore in addition to the conservatism built into this plan we also have reserves available to offset risk so as we've talked about earlier tonight this plan assumes an average of 85 dollars per megawatt hour melted mid-sea market price in 2023 decreasing to 60 dollars per megawatt hour in 2032.

1:26:32 this plan does not include revenue from libre generation throughout the plan and as karen mentioned earlier the plan includes a 2 million per year leeward investment indexed with inflation for near-term risk reduction measures a triple bottom line analysis for leeward is scheduled for presentation to the board in august and great impact of the analysis will be presented to the board at that time returning to rate trajectory until last year the electric utility had not had a rate increase since 2016. we are also showing you an electric plan with a smoother rate trajectory than the one you saw last fall the plan assumes a 10-year compounded rate increase of approximately 38 percent which falls within the

1:27:17 compounded inflation rate forecast range as you will see in the rate trajectory there is an assumed bona fill rate increase every other year of two and a half percent for ewo customers that's a function of an assumption we use for bonneville costs increasing every other year at six percent the actual rate increases for e-web customers will depend on the final rates from bpa that are expected in the summer of 2023 and would be incorporated in eweb's rate trajectory with 2024 changes the last couple rate adjustments have been below that and if this is the case again for this next rate period we will then pass on the lower rate increases to ewo customers the plan models utilizing 22 million of

1:28:03 rate stabilization reserve funds for capital work in 2023 and 2024 as it allows us again to defer borrowing until we need those funds we are modeling bond issuances of 83 million and 2025 44 million in 2028 and 38 million in 2031 capital investments looking at targets as you can see all key electric financial metrics remain within board policy through 2032. these cash is strained throughout the plan starting in 2025 and this is due to our use of cash in the first two years of the plan to fund high capital investment years followed by high debt issuance in 2025 with continued high capital investment

1:28:49 years despite the high debt issuances we are not as highly leveraged in this plan shown here are the bill comparisons for electric and water separately for electric up has jumped from the 7th lowest among the 17 comparators to nearing the highest quartile that being said i would like to point out that six of the comparators in the middle of the slide all use the same provider for electric so the jump year over here is exaggerated to an extent also we do not know what increases look like for these comparators in the coming year for water you can see eweb in the same spot we've been in in recent years as in

1:29:35 the lowest quartile not reflected here we have completed analysis incorporating the impact of the second source treatment plant and projecting out to 2032 and the result is that we remain in the lowest quartile among the comparators this exemplifies our commitment to balance affordability with future necessary infrastructure investments as it pertains to a combined residential comparison eweb remains in the middle of the pack and so that brings us to board discussion number three to get your feedback on the long-term financial plan and revenue requirements

1:30:21 you very much uh going to the conversation around leiberg i mean we know that any of the four options has 10 times the amount that's planned in the budget i mean i feel like some of these numbers we're looking at are so skewed that it's not even going to be yeah i mean if our day's cash is constrained now when we bump that in there it's going to bump that it's going to bumps a debt service coverage ratio i mean it's going to impact all of these um why are we holding off i'm not putting a higher minimum in there we're having these conversations now it's just literally because next month we're having the conversation and then moving forward we'll have the numbers in there or is there another reason

1:31:07 sorry i'm looking at frank who's answering really you are right that metrics will be strained but the metric that that will be more strained and will result in uh rate increases is the debt service coverage so as we correct for debt service coverage we'll also then be correcting for cash at the same time um we will come back with each of the scenarios we'll come back with their own rate trajectory so that you can see that um in august yeah it literally is next month we also wanted to establish a baseline based on on the previous planning mechanisms so that we could basically show this is going to be the impact of leeberg we do have some some feel for it lieberg

1:31:54 is going to stress debt service coverage uh some of that will be dependent on the timing of borrowing for for that um we'll have an impact on that which which some of that we can't just stick a number in because the different options that the board will consider will have different time frames some of them even outside of the 10-year window so we wanted to make sure we flushed through that before we brought it to the board so our choice was to establish a baseline this month and then highlight what those changes are going to be next month and i know president brown mentioned sticker shock earlier i would also say just a reminder the process is to help set the next year's budget and so

1:32:40 regardless of the choice that's made for rainbow in the next couple years the next couple of year budgets are not going to be greatly impacted so what we're trying to do here is establish that baseline so we can get this budget going too as well did that in that first slide sorry and then on the net service coverage ratio and just thinking about inflationary i impacts when we look at the targets that we set and i think sort of i think you answered my question but i'm just going to ask it anyway just to make sure that i'm on the same page you said that we reset the target last last month work um for one of them to deal with some of those pressures

1:33:27 because that's that's a standard number i mean this is a set figure that we you know made a while ago but now we're seeing inflation and if this is supposed to cover some level of variance and now our variance is growing how do we impact that so have we have you done that look on that and that change that we made addresses it for anything that we need or are there some of these other metrics that we need to look at based on these other inflationary changes so the adjustment that alicia was referring to was the target for the power reserve and that is reviewed on an annual basis and so in there we're capturing catching price risk credit risk and so that was the metric that was updated we have some conservatism for the other risks in our contribution margin risk tolerance as

1:34:13 well as our inflationary assumptions so so you don't need to look right now at changing any of these other kind of reserves because we have a number of different reserve types we evaluate the reserves in in the spring before we come to you all with any recommendations and i don't i don't see a significant changes in what would drive target changes that we did not address okay all right i would just add that over time commissioner carlson as we review that in the in the spring for example the capital reserve is based on what we see as the annual depreciation roughly for the amount of capital we have in service

1:35:00 if we start to get into massive differences between replacement costs and original costs that which is an inflationary input over time you might see that the you might see that start to to increase as we see wholesale market impacts which is what was mentioned earlier as those prices increase the risk goes up because now so you have to allocate for that risk so you'll see those go up or down over time inflation will have an impact over time but not in one particular year and not in how we model it in the long term financial plan thank you questions or comments

1:35:46 a question or two so what's 150 million in water uh in bond issuance in that five-year span is that a second source and the reservoir projects i'm just wondering generally okay and then uh what's going to be the uh balance of our rate stabilization funds after we take 36 million out of them zero so we're going to wipe our way the target it'll be target 5 after we take everything out so we're starting over we're just kind of taking all that cash out of there and just a general comment i've been here for a while and we were worked really hard to get us to the left of the curve and now we're way back to the right on the electric thing and that's not your fault but it's disappointing to me because the affordability thing this

1:36:32 is not a commodity that people have a choice on and you know they have to make decisions on you know food and everything else they can't you know and then here we go again we'll wait for to the right and so hopefully we can somehow address this because it's uh it's troubling for me to see our rates get where they are compared to everybody else's doctor president brown one thing i wouldn't i would touch on that it's probably more appropriate to do that kind of analysis at the beginning at the end of the year or the beginning of the year we have put in our increase we have not put in the increase of our comparators and so you know if you were to assume that

1:37:17 they're going to be you know dealing with the same inflationary factors we are we would we would probably end up in roughly the same position but at this point in time we have sort of forecasted forward our increase without anybody else's increase so so the people that are like fully subscribed to audible they get a six percent they gotta somehow deal with that and we only have to deal with two and a half right there's it's a timing issue and then most of those that we jumped over were pacific corps and i know that they're going to have some significant increases between now and the end of the year as well so it's it's a little bit deceiving to do it right now where we're sort of saying our our prices are going up but we're assuming nobody else's is that's why we

1:38:02 sort of jumped past six or seven of them yeah well i mean sonya hit the nail on the head and with once we tell lieberg in there we're gonna what you do we're gonna be all the way through i mean it's gonna be hard for me to say our utility costs of our burden is uh greater than seattle lieberg is going to have a significant impact um and and it's it's going to be a no impact um other questions comment john d yeah um first comment is um the water rates and the leveling of those i really appreciate that when you brought this to us last fall we were looking at double digit increases and i'm i'm

1:38:49 really glad that you were able to flatten that curve and make that a little bit more even though the water you know it's a smaller bill it's still those were high numbers and i appreciate you guys taking the input that we gave you and being able to work with those numbers um when you come back next month with leeward will that affect our bond rating if we hit a higher one and if if so could you bring that assumption back to us as well so our um what we are working towards is bringing you back a rate trajectory that is

1:39:35 compliant with foreign policy as it is today so the rates to cover leeburg will have to be sufficient to cover the debt service and actually it goes to as as it gets more expensive it actually is two times the debt service to maintain that debt service coverage to supplement that just a little bit so those were established by the board to target certain bond ratings right and so if that that's where the actual board targets came from so to maintain that bond rating to maintain that ability to borrow over time with good rates that's why debt service coverage is important

1:40:21 to maintain that if the board were to sacrifice that and say well instead of two to one we're okay with 1.75 to one or something like that that would have a detrimental impact on our bond rating thus driving our borrowing costs up so that's why we've been very diligent in staying with those particular metrics because we do know that this kind of business you are borrowing pretty consistently over time to maintain your assets and then um just to go into commissioner brown's talk about the rate stabilization yeah we're driving it down to zero but from what i heard you guys say we're over budget on both water and electric assumptions so

1:41:08 some of that you know when you do your marginal beginning working capital at the end of the year some of that could go back into you know when we reallocate our reserves we can choose to allocate those to the rain stabilization which is what we did two months ago so we're drawing it down to target um and if the utility has us has an expected year as opposed to what we budgeted for with conservatism that would give us an opportunity to not draw all of those funds out and have them available for future use yeah that's just because the other opposite what i just said is you can use

1:41:53 it all we can throw it back or we can use less and keep it in there so yeah there's that history we have been able to sort of replenish those because we we have had conditions or spending levels that have allowed us to do that throughout history it has not always been that way it has been there have been situations where one utility or another has drawn on reserves so we've been fortunate in recent history to be able to do that but that has not always been there my last question is so this is a long-term financial plan is it updated every year or when will it be updated again it'll be actually updated in october for you all and so this is the big

1:42:38 refresh for this year for you all but we monitor that uh year-round but you're you're going to build your base you're going to build your budget off of this one i'm going to take feedback from you all there will be some updates there will be some fine-tuning as the capital budgets get loaded um we'll refresh prices and so your direction coupled with any changes um that we see in our assumptions as well we'll come back to you all in with in october thank you for for staff is pretty much a living document now we will also bring back next month some of the impacts of of leeburg

1:43:23 again garnering direction and then when we get into here's the rate direction then we'll bring it back again so it's going to be pretty periodic when as ron said if you bring back a 200 million dollar labor project that's not gonna we we've got two million built in for for liberty for next year's budget we're not going to start throwing rate increases for lebrons in our next year as well well the only exception would be if the board wanted to be more proactive with knowing that sooner rather than later now i'm not advocating for that but the board could decide and well hey we're looking at at least a 200 million dollar bill starting at some point down the road we might as well get started sooner rather than

1:44:08 later that could impact the board's discussion but rod's right i mean historically this has been used to set the nest the next year's budget and there probably no no other reason other than the board wanting to be proactive with lieber to do that to change that um i'm curious about the so i mean we're we have inflationary costs that are out there we're projecting i guess i encourage us to look at are there certain projects that we could push out and there's right now we're dealing with these costs or just going through the roof i feel

1:44:54 like at some point it's got to tip over the other side we're getting inflation we're probably going to go into a recession are we gonna get to the other side of that and have costs go down and maybe some of these projects are better to hold for a bit or do we think that no it's just gonna keep going up and up and up and it's better to get them in now before the cost continues to go up and obviously that's very difficult question i mean that's the crystal ball sort of question but as we have so many projects that are on our plates i think it may be worthwhile to have a discussion around that if we think there might be an opportunity for some of those costs to get to the other side of it and be in a better buying position whereas right now we're just at the mercy of everything

1:45:41 there's there's some kinds of inflation that are called sticky inflation which tends to only go one direction it tends to go up at greater or lesser rates it doesn't tend to be indexed to a commodity that comes back down i would say part of the reason that you see numbers that are somewhat dampened they're they're not fully to the dynamic extent that we're seeing right now is that we do recognize that um there's there's kind of a long-term play in this if if there's always going to be inflation the more you put off the project the more expensive it's going to be you know that the only exception to that would be if there's negative inflation and

1:46:26 there there could be some projects where we would look at that might have a very high content of of a commodity which you know copper or steel or something that that we might say it it could uh it could be worth the risk to look at this in 2027 instead of 2025 but but generally speaking the further out to the right you go the more expensive it gets like with the water plant that we move down the road now it's 20 million dollars more extensive okay right i just wanted to hear that the exception the the very it really is an important point that the exception to that is if we're pushing up against metrics that we just physically can't afford to do so those are the dials that uh rod and karen talk about when when

1:47:13 they say those risk-based projects those are the ones that you can turn the dials on there's compulsory there's strategic and then there's risk based and some of those you might just have to say gosh we we are pushing up into a period that's very difficult for us to afford and the other piece of that is do you have the resources to be able to execute on those so there's there's a number of dials that will probably have to be turned another question to comments matt yeah a few things thanks for the conversation this has been super helpful i'd like to reiterate borofsky's comment about flattening the the curve on the rates for electric um i'm sorry for the the water rates and and bringing those down smooth them out a little bit um i also wanted to point

1:48:00 out and i think it was said earlier for you know brown you brought up the uh our rate or the cost of electricity compared to others and how it's jumped from the lower lower quartile to the upper target tile but that whole line it's very flat right so it doesn't we don't have to move up very much for it to leapfrog past like six different utilities that all pay the same amount so it's i for me anyway i i don't have it doesn't bring me a ton of heartburn i feel like we're in a good spot there um i have a couple of questions one is um how over what time period would be the likely to finance a lieberg project is that a

1:48:45 30-year loan what does that look like so um typically if you were to borrow for that i'm thinking that would be a 25 to 30 year repayment cycle depending on which alternative we the board selects that that will determine when that borrowing occurs whether it's within the 10-year window or outside of the 10-year window i mean either either way you have to address it in your long-term processes but typically you would bond that at a 25 to 30-year period if i'm requirement for debra

1:49:35 yeah the pros and cons if you could extend it out as much as possible during opportunities of good good rates uh good borrowing rates then that sort of has a positive impact on on your customers especially if they were gaining benefit during that time which in this case they're not depending on what the borrowing conditions are at the time uh we're gonna we're gonna have to evaluate the period of which we're be paying those bonds okay thank you and then uh i mean it seems to me like the the rates interest rates are especially good right now compared to what they're likely to be a year or two from now um it's interesting that we brought up the topic of you know starting to put

1:50:20 money towards leeward i'm curious the downside of doing that like to me if we can extend that and begin chipping away at that uh fairly large expense that makes sense to me that i'm curious your thoughts about the downsides of doing so um so i guess the downside of to just sorry rephrase the question the downside of doing that sooner rather than later oh starting to put money towards lieberg whether it's taking out the loan now i don't know if we can do that if we're not actually doing the work or starting to just put money aside knowing that

1:51:05 we're going to have that large expense uh in the next five years that we're going to start working on well i think the downside is it puts a burden on your customers potentially at times that are favorable or unfavorable we we know that our customers are coming off of a coveted period there's now some forecast that there could be recessions in the next couple of years and do we want to hit them at a time of recession or would we want to wait until there's some recovery after that so it would be really more of a bored decision around at what point do you want to start placing that burden on the customer base that we do have with respect to the question about borrowing earlier

1:51:50 we do start a clock for how long we have to spend down bond funds which is why one of the reasons why in these plans you see chunks of borrowing that that as we spend down we'll borrow more and that's what the liber those are what i expect the libra alternatives will look like it won't be all borrowed at once um the yield curve is uh flat so um rates are going up now and they're higher than they were the last time we borrowed but we don't see them continuing on a steep trajectory we are talking with our financial advisor from piper jaffrey

1:52:35 in the next couple of weeks and part of that discussion will be some strategy around borrowing as well great thanks i do hope that if it seems like there's an opportunity or an advantage to starting that payment or borrowing early that uh we'll have a chance to to chew on that and i appreciate all this diligence uh among the whole team just weighing all of these factors and helping us to understand it thank you okay yeah just on this electrical and the comparisons in the past we had that being targeted to our area of median income as well uh that would be helpful because

1:53:23 you said you put us up against seattle well yeah in seattle they're making one and a half to two times what we're making here so if that chart could be put in there that was in the background and we're about three and a half percent um our what our utility burden is is roughly three and that's a combination of the electric and the water cost relative to your median income right thank you okay thank you very much do you need anything else from us well i had a conclusion slide if alicia wants to advance but uh but we've answered a lot of questions the plans here were developed to adhere to the key financial metrics manage rates to

1:54:08 inflation and address the investment priorities that karen outlined earlier the combined investment to achieve the strategic and operational goals is just over 900 million utilities combined over the next 10 years with 100 million of that right now in 2023 um the average annual rate increase excluding the secondary the second treatment facility stays at 2.89 and for the electric utility 3.25 and so we're just this evening we were just looking for any further guidance from the board as we moved into fall to develop the

1:54:54 budget and pricing proposals thank you all we're going to wrap it up and go from there now it's uh we're behind the break so you're done and we want to take a five minute break or we got about 50 minutes scheduled again we have carl with 30 and then a couple twenties they're tens um what do you guys want to do right for five or go you just go i'm good go baby build the board okay with it but just keep going thank you guys

1:55:56 thank you good to go good to thank you go for uh having me on this uh what looked like a long evening so i'm glad you guys are coming into that time um so that's just another update for you on our water food restoration efforts and really just focusing on the funding side of things mostly so that's what we're going to focus on tonight and i'm just going to slide it i know you've seen them any time just to remind you of the different uh of our plan and the different kind of buckets of work that we're doing the near term risk base work is in full fledge right now it'll start cleanling off and then over the next year or two and that's really getting at erosion and really our focus is uh revegetating riparian areas uh that are in steep and

1:56:41 burned areas so that in order to do that you need to control invasives you need to get rid of fire fuels that might impact those those areas are affecting that investment is really first and foremost for us but there's also water quality monitoring and other things as part of that risk-based efforts um and then the resiliency you're on the tour you saw a lot of different news uh a lot of tributary work happening starting this year and the acquisitions really we have an opportunity to run an acquisition start looking at carbon concentration as a as a way to manage those lands for and partnership with the university of oregon it's true this is a little bit

1:57:27 outdated i apologize for that i people are on vacation so i couldn't get this updated so really uh like the agreements are up to 130 right now invasive vegetation we're over 32 35 the wheels were starting to wind down just to give you a sense of this is the work that's being done with the properties of river that have come in through the pure auto fundamental program really the meat of the slides are these uh so i want to kind of talk through this graph real quick i know it's kind of busy but obviously the funding sources are on the left so this this slide shows you kind of what we've spent today and so these are uh funds that have either come to e-web and reimbursed our costs or there's funds that are just cost share or go

1:58:13 directly to their so they don't actually uh add they're not repaint us in any way so for example the fema funds you see there that 1.3 million that is uh and these that cash is not in hand yet but congress did approve that payment so we should get that that's for reimbursement for emergency response work um so you see that money flows by the color of it to the from the left to the to the actions on the right so it's it's i know it's pretty busy but it's hard to represent all this money uh in a way that hopefully you guys can get a grasp of where things are going what they're going for i want to highlight the pure water partners this is uh basically

1:58:58 business as cascade pacific rcmd and you approved that consent item earlier this year that's where money is going out to our partners that are doing the work on the ground so they're working with landowners or designing the work then assign the work to our contractors which you can see down below and then that working was done and they managed that work so really this is the uh the wheel that makes everything happen um this the next slide is really looking forward uh and so a lot of these funds are still in play they're not for sure or enhanced for example um you know the the big piece that is coming in that's obvious is the septic assistance money so the the money that is for sure that we have in hand is business oregon that the legislature approved at 1.4 million so into the

1:59:44 county then to us through our septic assistance program the dq funds is one that is rfp out for a grant that we're submitting to a request for 1.7 million and that money has a little bit more flexibility to it and so that's not for sure but that i'm just trying to represent kind of the things that are employed that we feel pretty confident or good about um the other piece on here is the fema funds which is a hazard mitigation grant planning grant so we don't know we haven't heard yet on this one good early on feedback that this was something that they were interested in funding those funds are basically flowing through to pay for uh you know pure water partner that's so that you

2:00:29 know so i'll kind of talk through how these fonts are used in the next couple of slides and um let's see right stop me if i guess we'll come back i'm sure you won't so that that female box that i just highlighted this planning money is basically uh this is an example of an area where we've worked with a lot of landowners that's starting to make a contiguous area and these colors on here i didn't want to um the legends they're really kind of meaningful us for example the red boxes are our burn assessments that were done earlier in the emergency response figures there are different phases of as we build the database that we're tracking all this work in the gis piece of it it's different versions of that database moving through time so the blue is the

2:01:15 more recent uh version three or four that we're in so it's just a way that we're tracking this work um and who we've touched so it really uh unfortunately doesn't have a lot of me much meaning for you guys as it does for us um and so basically the fema funds will pay for us to take an area like this where we have contiguous landowners and design a restoration across all those tax lots or marshals then uh and then basically do the the effort to do the design and get it ready then once it's ready then we submit submitted for a project grant then fema pays for implementation of that work across all these uh so that's what that uh that fema planning money is going to be used for this is another area just to show you the blue river area these are all the

2:02:01 property owners we're working with the fema funds also pay for us to kind of fill in those gaps where we have a it's contiguous mostly but there's a couple of land owners that we could just fill those pieces in and make a more picture so that money is also used for outreach and trying to sign these folks up and do them in the program so those are we have seven of these uh focus areas that we're working on and i'm gonna show you all seven but those are just two examples of how that grant has gone in the um see a bucket of work i know you're we're familiar with this now this is a picture of south fork and you've seen this slide a number of times i just want to kind of repress your memory once more i've seen finrock phase one you've seen deer degree south fork you've seen this slide many times where

2:02:46 this is the future work that's the 2023 the fit and rock phase two and coarse creek and the center future in that so these are we also have a fema design grant for the floodplain work starting if we're successful to get that grant starting to do those designs and those out projects so this is the uh kind of the crystal ball projection of our busy slides it really just shows you how the partnership works in a way and in order to get as much money as we can leverage from these projects on the right uh sometimes money has to flow through us sometimes it flows to us sometimes the forest service gives it to us then we send it to someone else so um one of the so this is uh the fema money

2:03:31 down here is another one that we're waiting to hear on but this is a project grant so this is going for work that's already been designed we're getting permits for in courts creek and fenrox too and if we don't get that uh grant or it gets reduced we do have other options uh for example uh up on top is the uh mercury de fazio funds that were through preparations so those funds are going to flow through fed rock phase two so um we may have some little room there every fema decides to dial back we're not as successful some it will have an impact if we don't get the fema money it's not didn't want to talk through this for service money because you're going to be seeing that coming before you over the

2:04:16 next couple of months and so for service will be when you have a master uh agreement with the forest service where they can push us money or we can send them money so that in this case uh they're going to be uh sending 750 000 to us and then we'll be uh combining that money with oregon watershed and asphalt board money to do street project which is basically slated for sourcing larger blood plumbing there's a lot of times where we are sending money to the forest service and you'll be seeing uh one of them in these they're called spa special project agreements with the forest service under the master agreement where uh we are paying for like their engineers to work overtime because you know they'll have some of the fte because they're supporting all these projects really it's more funding their staff to

2:05:02 work with our projects otherwise they're not getting involved about a takes priority they're the ones that have the expertise to do this work on that nif whiff on the left that's a that's a basically a placeholder um that's that bridge money when we were out on courts creek and uh basically the llama national forest had this as their top priority to replace that bridge we're standing on and the region took that money out and sent it back to dc so we're out that money so there's three different options we're looking at right now to replace that money that was lost and the two of them basically have it flowing through us uh and then it goes to the forest service and then they pay they do the work they manage the contracts but we're gonna to be able to get this funding has to be a utility or somebody other than the

2:05:48 federal government i just want to highlight the carmen smith obviously funding going for the deer creek plane restoration project and also talk about the carmen smith a little bit the the t-line transmission line work they're doing is going to be a source of large wood that will then float there is some good coordination between us and the wordpress um i think i'll just stop there acquisition is being leveraged

2:06:45 i love the funding church i really do i love seeing where it came in all the different groups that we've partnered with and where that money goes first you know it's complicated so thank you for recognizing it this way but i really appreciate this and i hope that if we have um to have any of those neighborhood meetings that this can be a reference one if we get comments or questions about i just remember our river meeting last year why are you working with all these people and it's like well but you do a lot more here's why so i really appreciate that thank you well adam's the one that made these graphics and he's awesome that's all yes well

2:07:30 definitely looking back on that earlier somebody commented that impact they like magnify the power of what we're doing i also really another man had to say though yeah but these charts are kind of uh remarkable this is the busiest hardest working chart i've ever seen in my life

2:08:16 but it seems it seems reasonable given your team is also the busiest hardest working crew and this is the busiest hardest working partnership i've ever seen i don't know how you do it all carl and i know there's a bunch of people working with you and but i also recognize your leadership as an individual and how much you contribute to um you know pointing the direction for the whole crew really appreciate all the effort you put in here to keep this moving and all the funds that are being applied to make our watershed you know more resilient in our water better and um anyway it's remarkable thank you for the work and thanks for this overview

2:09:06 yeah thank you carl and and your staff and being a liaison to the watershed council i get to see a lot of these projects a little bit more in and detail good work that's going on and the recognition that eweb has with all of those partners that are up there all of those little uh logos really appreciate what we bring to the table at least that's how they represent it and i really think that we need to invest in a ankle monitoring bracelet that will shock carl if he ever even thinks about leaving the organization

2:09:51 his grant writing and his team's grant writing abilities are up there and so i really appreciate what you're doing i know the people upriver appreciate what you're doing and all the people that you partnered with there and it really shows when when you uh get to sit in some other meetings and appreciation that they have for e-weapon help to leverage because that's what this all is it's none of these none of these groups could do it on on their own and us having the ability to be the either the conduit or the person that can put us over the ledge is really important so thank you very much all right i guess i would just like to point out that one of the key staff that we hired keegan

2:10:36 was amazing as we hired a grant specialist and uh i've never worked with someone in the grant writing scheme where you're always up against a deadline and stressed out and she's so calm relaxed and just like you feel oh you feel really okay anyway she's awesome all right thank you thursday for carl thank you very much uh comment the question the comment is and i know that we had my figure on that septic fund for years and it's not going away so i expect you to spend every penny of that every penny of it and we'll get you some more but i think you know knowing how many of those subject tanks up there were failing before this catastrophe and things such as that i really appreciate that we've got a lot of money there

2:11:30 and my question is knowing that we own thousands of acres but a significant amount of timberland along with town and that's owned and now that the canal may not be around are we if we give any thought to trading any of that you know there's some pretty significant temper companies and really high interest in that trading that and you know you put the limitations on just people turning you know clear cutting and things like that for some of the lands that may be more critical than watershed recovery efforts you guys haven't really thought about that um you know the generations land the source protection program manages that force for conservation amazing you know 80 100 yeah

2:12:34 just thought the thought process that we have a significant resource up there that was i guess actually and susan you probably a year before yeah the smith is mitigating their credits and then using a portion of libra some restrictions there they're writing that in right now they're writing it into their wildlife mitigation plan that they'll submit to ferc um so they're using not all of it but a good percentage i think it's like 80 of the land for their wildlife mitigation plants um so yes yeah permits methods okay thank you well that's it and then uh well thank you very much and uh ten minutes so i was just trying to yeah you did it you did it you fall out of

2:13:19 the park and i echo that uh let's think about the ankle so there may be a little significant there maybe you were sitting in a bed or something you're not going anyway for a while all right thank you well thank you very much but you're going to be such a wonderful job and representing so well doing that you you really appreciate it thank you nixon item correspondence and board agendas frank president brown thank you there were seven items of correspondence this month so we appreciate the ford's diligence all of those were informational except one one asked for some guidance and this can be provided either this evening or when we have our

2:14:04 our one-on-one check-ins and and that had to do with the new commissioner orientation there were some changes with that so if you have any feedback on that you can provide those two to me either offline this evening there was one item of correspondence i just wanted to make special note of and that was um as as most of you know um kelly hale joined e-web about i don't know a month and a half ago or something and one of the things that she included in here was uweb's role in the city's climate action plan 2.0 and one of the pieces of that

2:14:49 that you'll notice is that we sort of we have segmented out and identified where uf is both explicitly called out or just maybe implicitly would be impacted by the different elements of the plan um we also identified um where there are items in the plan that we are working on and the actions that we'll take with that will be we will report those quarterly so if it's in the app 2.0 and we are working on it it will get reported we are also working on things that may not be in the climate action plan and those will be reported on a different interval maybe annually so we tried to segment this out and

2:15:34 there are some things that may be in the plan that we're not working on and we'll continue to monitor those but we wanted to be pretty clear with the board and the public where we are working and what results we're getting um and so um and then uh went through the different sections of the plan building electrification transportation et cetera and you have identified in certain chapter paragraphs or chapters so it's given an id and and highlight it as to what we're doing so i wanted to thank kelly for kicking that off and there are a number of different departments around the utility that are now involved in that that tracking and that work so

2:16:19 um kelly's going camping tomorrow she's probably listening but uh anyway wanted to thank her for that and just point out that as one of the highlights of correspondence and then other than that would just be open if you had any questions on any of the other items on that um we have not shared this particular summary the city of eugene specifically other than if they were to go out and read it on the website we will um interact with them in a number of different ways over time including our ordering meetings and and just periodic updates

2:17:05 we will likely do something like this where we do kind of more of a full report out i don't even know if the city of eugene has anybody in that room not necessarily i'm not sure if they do it maybe whenever you have your whole meeting or whatever that happened it would it might be interesting to share it with them we need to we're into like september october now schedule our second meeting they just can't seem to make it a priority so we've gone through tony and i have given them tons of iterations and

2:18:10 anything for the good of the order uh you just a couple of uh comments i also wanted to call out that uh memo by kelly hale that's uh that framework that she's put together is really helpful i think for all of us to kind of understand how things are fitting together and where there's more work to do and where things are getting done so thanks to kelly for that and really all of the correspondence items they're so much in our packet that um really keeps us all aware of what's going on and i just want to acknowledge all the effort that goes into things that we don't even spend a whole bunch of time talking about during these meetings but keep us all up to speed so thank you to staff for for all the work that goes into those and then also to the uh the technical staff that makes this hybrid

2:18:56 system run it's uh it's pretty flawless it's it's working really well so thank you all for the effort to to make that function that's all i have thanks uh i want to thank the board chair for getting this out early thanks real quick um you don't have to get back to me now i just it's a long time ago we had an asset allocation on who at the headquarters and it started out the conversation was 86 percent water for electric and i was just wondering if you could get back to me on that how that's going to work on the course

2:19:41 building when we get that money which department is going to get it because sometimes the percentage changed i mean and i'm going to be fighting for water uh and who gets the money you can just get back to me on that i'm quick for labor and the other thing is we have a request and a head nod to get a four hour meeting before they leave our decisions amongst us and can we do that because this is july and i think august is going to be a big meeting this is going to be a big meeting it is it is in the calendar is something that we need to schedule so i'm going to work with staff and provide some options for the board yeah if we could get that centered later because that's trying to carve out four hours amongst five of us it's not going

2:20:27 to be easy anything else from you frank uh just just one thing um i did want to thank uh rod price and the executive team i was actually on vacation for two weeks and appreciate all the all the help from rod and and the team um a lot of it reflected in this meeting so it was great materials and great presentations so thank you very much there were no outages at all the whole two weeks you're gone i guess i'll see you later ron approved our request for the the meeting in uh in maui you see that come across your desks all right we did not see there are checks and balances built

2:21:13 into the system it's just a rounding function come on rod also approved the purchase of an anklet for carl i think okay i got the buzzer where