EWEB Board of Commissioners — September 3, 2024

0:01 all right I'm call to order the September 3rd 2024 meeting of the Eugene Water and Electric Board uh start out with an agenda any items on the agenda that address check just nope all right moving on to items from board members and general manager things um if for any reason that's the button I

0:48 got turn it off off computer off the microphone here turn it off go ahead all right apologize so um I just had a little incident where I blew my back up and for some reason I get too grumpy or I can't sit here any longer and I have to get up and leave it's nothing that anybody said but it's just didn't take so much sitting and then I'm done um two things uh just getting back to me Frank um a long time ago we've been I've been through two ice storms and snowstorm and every time I bark about the communication people their lines dragging our lines down and we talk about pushing it and I'm not going

1:34 to let that one go so I just want to just remind you that it's still in my little register of things to do and how we can progress I haven't heard anything back since then but how we can progress to um make them do their fair share because it's not fair for our rate payers to have to pay to replay lines that the communication lines are dragging down during storms so we want to get them to trim the trees just like we have to and the other thing is um we're going to get a report back that's not me are we GNA get a report back on the Watershed recovery fee for the uh yes commissioner Brown The Watershed uh recovery fee is scheduled as an I'll say extended correspondence item in October so this coming month and we've allocated a little time at that

2:20 point to answer commissioner's questions about the status and where it is um just generally the fee expires in I June or July of 2026 um we feel like there's still some obligations under the recovery aspect of its original definition um and we'll have more detail around where that stands in October and we'll follow up on the other item there was some potential legislative action around U right of way and trees and I'll follow up with Jason on that as well as staff on the communications um attachments so thank you and if you

3:07 want to stand you I'll just go to the back of the room and stand okay thank you all right do make yourself CT uh other Commissioners nothing Frank anything from you um just one quick update we do we did have um an introductory discussion with uh City of Eugene management and a couple subject matter experts on their climate strategies uh the initial meeting was really to review those try and understand them and uh we uh will continue having discussions about where the work overlaps the most and where we can get the most bang for the buck I don't have specific actions that came out of that other than um some more

3:53 followup on the specific strategies and where we might work together further right if there's nothing else we'll go on to the next item in correspondence Commissioners there were two pieces of Correspondence the first one was pretty brief we had um very few actions in our um audit letter from this past spring um part of standard practice is to provide updates um on those those specifically had to do with the the closing of work orders and classifications um and then the second piece of of Correspondence is um sort of initial introductory take on um what we're starting to see as potential

4:38 legislation in the 2025 legislative session um a few of the items were reported to the board and if you have any questions um you can air those now Jason has joined us uh via uh phone so if there were specific comments or or areas of Interest we'd be happy to hear those great any questions for Jason on the legislative update yeah uh just a quick comment I wanted to congratulate anybody who worked on the Columbia River treaty agreement because I know that when I went to DC in 2019 and then went again

5:23 in 2023 that was both times one of the major topics that we talked about and it was a little disheartening to see that so I was very pleasantly surprised to see that there was actually some movement on on that so thank you to all who have put in years and years and years of effort on that I I think that's generational because it's been going on for decades so it you it must have been your recent work that pushed us over the edge so thank you right uh other correspondents that covers it right y yeah okay any other comments if not we're going to move on to public input I neglected to do the facility safety and awareness start um at the opening so I'm going to hit that first and then I will speak to um our

6:10 plans for the public input um so very quickly for everybody in the room uh thank you for being here eweb management and sub subject man man matter experts are president in the room and virtually this meeting is being live streamed and recorded uh we ask folks to speak loudly and clearly and thank you for the audio system that with the microphones and the new setup in here it feels so much better uh visit access is limited to the board meeting room and restrooms restrooms are located on the first floor if you need them exit through the interior door at the back of the room and a security officer will direct you to the location in the event of emergency such as a fire or security incident please follow all instructions given by staff and if we need to

6:56 evacuate please proceed Cal calmly to the nearest exit and as as directed by staff and evacuate away from the building to the farthest points of the parking lines and then uh moving on to the public input um comments just want make sure I have things straight here we have four um folks here tonight to provide public input um welcome to those of you who are joining us to provide public input eweb is a public not for-profit organization whose Charter is to deliver drink drinking water and electricity to our community although this form is not used for an open back and forth dialogue Commissioners and staff value hearing diverse perspectives and receiving Community input speakers are asked to

7:42 keep their testimony relevant to eweb business and request that everyone share their comments in a productive respectful manner should speakers or audience members become disruptive they may be muted and or removed from the meeting when your name is called you'll have up to three minutes to provide your comments with that I'm gonna start the public ins input session and we will begin with Alan gorano who is joining us by phone and Allan this is the time for you to press six it star six there you are can hear you yep we can right thank you Hi H it's Alan or Alfredo Gano uh W one and I've been at a lot of meetings and you all

8:28 remember me I'm sure anyway um I've spoken a lot in the past about science only without Consciousness without awareness of the effects on humans moving forward with just science and just deficiency and what that actually the damage that can actually do to people I've said that a lot of times you know my opposition to these smart meters being forced upon us um it you know again it for us out here in the world it feels like coercion it feels I'm not even going to say all the words it feels like but you know what I mean um so yes we still are very opposed to having these things put on our house

9:13 uh houses um there there's still at least one person that is without power because they were refusing really strongly to not have a smart meter um they are harmful they even with the broadcasting turned off they still create electri magnetic frequencies in your house that are not very healthy to be around again it is the straw that breaks the camels back and some situations were already overloaded with tons and tons of electromagnetic pollution and I've said all this before but anyway the other thing I want to talk about is with our rush to Electrify everything like cars and every house and this and that and the other thing you know at some of the meetings it's been stated well we might run out of

9:58 electricity sources by such and such year well yes we very well might and what is that going to do is that going to push us towards nuclear power you know there's a lot of people that claim nuclear power is clean but it's only clean in the short run and that's if there's no accidents or nobody starts a war and it gets bombed um but you know in the long run the last I checked the halflife of plutonium was 250,000 years so that means in 250,000 years whatever ever waste product there is is only going to be half as dangerous as it is now what was the human race like 250,000 years ago we have archaeologists who whenever they find something underground they're like oh let's dig it up let's see what

10:44 this is future generations of archaeologists are going to hit Upon Our plutonium that we've buried or done whatever with we really cannot go into nuclear power it is not a clean energy let's do solar let's do wind power let's do whatever we can to not have to do nuclear and that's about what I've got to say thank you very much talk to you next time thank you Alan next up is Linda Kelly followed by Patty H did it hey good evening everybody my name is Linda Kelly and L Lord one I'm 74 and I am retired from working being

11:29 in the nonprofit arena for most of my adult life so thank you for the opportunity um to speak I am testifying to encourage you during your ratem efforts to adopt policies that will protect the most vulnerable eweb customers in our area from increasing energy costs and to make sure that the larger bigger energy users are definitely paying their share pay share um I'd also like to add that your limited bill assistance program um could be much more robust and Nuance to help people I've recently read about places who use a percentage of income payment

12:14 plan uh which seems to be a really good idea um your low-income program should have a mechanism to support heat pump retrofits and weatherization programs if possible um I'm lucky enough to be married to a person who has a good retirement he used to be a high voltage electrician for BPA as a matter of fact we put in a home heat pump last winter and I'm really thankful that we were able to afford it um even though little caveat our house is smaller we have a somewhat smaller unit put in and we were there was $1,500 less but we weren't eligible for the $2,000 tax which I think is a little strange but that's a fedal piece um I could not have done

13:00 this on my own retirement income um and would likely honestly struggle to pay for the ever increasing cost of energy along with every everybody else as we all try to adjust to the rising cost of nearly everything we rely on our public institutions to actively work to create the maximum possible Community benefits possible I worked with fine County for nine years as an agency relations person and I'm really aware and familiar with the struggles that so many people have I oversaw all of the food pantries and the meal sites for those years so um uh I'm aware of that struggle

13:45 definitely um so we're moving into an electric future as we just discovered and talked about the transition is enormous and there must be huge public Investments to get it done in time and at the scale the climate crisis demands I think we all are aware of that at this point you have the ability to make this energy transition fairer through Progressive rate making please consider changing your base service charges and look into that percentage of income um plan based on the ability to pay like a number of other electric utilities are doing um and make sure that the largest energy users are paying their Fe share um and not related to this but I

14:33 can't resist Please be aware of geothermal and what the opportunities are there as this person talked about nuclear is a very tricky option for base load and um Washington has just paced passed two bills I don't have the numbers in my mind um that would support geothermal development in Washington state so I really I am very much of a proponent that this is what we need to do for base loading future thank you Linda thanks so much next up is Patty Hine followed by Dennis Corner good evening president McCrae with and general manager Lawson my name is Patty Hine I'm a retired naval

15:19 officer and college instructor and the president of 350 ugs loal clate Justice organization thank you time for the public I would also like to was my support for you to establish a progressive gr design in connection with your new raing it's no secret that the effects of global warming are accelerating governments and institutions and organizations of all kinds face a looming deadline to make these changes from dangerous booing energy sources sa and reliable renewable energy and we just need to over the worst that we can soon e has an impressive climate action guide book with an exceptional staff board I submit that the energy transition that we

16:04 create as a community must include more support for those whose Rising energy costs represent a daunting bur everyone knows the energy crisis are going through what can we do to acknowledge this growing problem and address it with their latest thinking utilities across the country are trying new approaches I think e web should consider Innovative programs to Pro protect loow such as percent of income payment programs of fs and New Jersey cap or a cap on electric rates for low customers or a residential income graduated fixed charge system like Califor used with multiple tiers for residential

16:49 users at a time when the gap between the Haves and the Hales knots has not been this great since before the Great Depression when Trust in governments and public institutions feels unless it's good to know that our public utility is taking time to consider how to serve our most vulnerable Comm thank you Patty next is Dennis hner followed by a cochr hello again I'm Dennis hner of 4 3 and I'm going to read a letter that I sent you on on May 2nd and I'm doing this uh to have a historical public

17:34 record concerns that are expressed in this letter contrary to what is asserted in eweb Communications smart meters are not safe whether or not uh they are the radio is turned off the hazards are real serious and confirmed by evidence that is readily available and which you are or should be fully fully ined there your duty to serve your customers and the precautionary principle demands that you either do not deploy Smart Meters at all or that you at least allow customers a true opt out such that they may keep or receive an analog meter on their home or place of business my and other customers attempts to protect our rights to health

18:21 safety privacy and to be free of coercion have been meant with demeaning language and PR media broadside that implicitly associate me and others with threats of violence I personally have been surreptitiously surrounded at my home by security guards I have asked Mr Lawson for an explanation as to why I who have never uttered a threat of violence against anyone in that F have been singled out in that way no direct answer has been provided subsequently we did communicate about this thank you um so I presume the answer is simply because I disagree with your smart meter mandate and originally informed ebo with a certified letter and a sign on my

19:07 gate I received several repeated bullying threats which have impacted my health and well-being to disconnect my service I paid my bills regularly for over 20 years and such an action is unwarranted over those years I always respected eweb and your actions for the good of our community now I not only do not trust you and your false claims of serving and respecting customers I also believe that your dictatorial and unnecessary smart meter policy and implementation tactics are reprehensible now you're intimidating strong arm tactics against me and others have come to a head and you are demanding I comply with your mafioso pro

19:52 process or else you will fur without further notice disconnect me from electrical power service despite your obligation to serve your customers except those who don't pay their bills under extreme duress I'm going to take the step of agreeing to the installation of an unwanted and still dangerous radio transmission capability turned off smart meter on my house the company EF and all other addresses on this letter have liability for any and all harms done to me by your policy and actions State there a little bit more but if it's just if it's just quick yeah please finish up uh I was in anxious to date that any and all harms I may suffer henceforth

20:38 due to the installation of a smart meter on my bedroom wall this is my notification to you following a phone call to the meter customer support team this morning that I am choosing option two having been harassed and intimidated into doing so thank you thank you and last is iomy uh hello president McCrae and members of the Eugene Water and Electric Board thank you for the opportunity to testify tonight my name is a cochrum um and I am the Oregon Statewide energy transition organizer for the breach Collective and am raising my family here in Eugene

21:23 first I want to acknowledge the subsidy programs that EB already has in place I am an EB customer customer and have taken advantage of your EB rebate and plan to increase the efficiency of my home through your programs I have benefited greatly from having a heat pump which has been a game changer for my family in increasingly hot summers with their efficiency and ability to heat and cool I would urge you to expand the program for this fantastic technology they not only cut costs they are an important Appliance in the transition off of fossil fuels heat pumps are two to three times more efficient than gas or electri electric resist exist Alternatives and we keep the grid from becoming too overburdened uh because of this as households increasingly take advantage of EB's predominantly clean and

22:09 renewable grid I encourage you to expand your heat pump program including allowing low income natural gas customers to access low-income incentives to fuel switch to high efficiency electric heat pumps and also water eaters um I also wanted to stress that not all everyone has the same access to energy and efficient Technologies this past spring I helped to organize a weatherization workshop and heard stories of people struggling to pay bills and even one participant who hadn't been able to turn on her electricity for years the choice between heating or lighting and other Essentials should not be one anyone has to make and E EP should prioritize implementing Progressive rate design that reduces energy burden on middle to lower income

22:55 families including modifying Bas service charges to lower residential customers while raising commercial and Industrial customer costs uh based based service charges um allowing for self attestation and removing um applications and verification processes that provide barriers to to service expanding bill assistance income eligibility from 60% in line with other Utilities in the Pacific Northwest um and West Coast uh identifying energy burden homed and businesses in the city backing Outreach with those homes focused on retrofits with heat pumps and other efficient Technologies and more we are really

23:41 really lucky to have a publicly owned electric utility here in Eugene and I hope you continue to grow and improve your existing systems to address energy diverting which disproportionately affects already vulnerable and underrepresented communities particularly lowincome and black indigenous and people of color communities ities uh I apologize I have to run and have dinner with my family but I will be listening to the rest of this meeting online thank you so much and have a great night all right and with that I'll end our public input session and have a moment here for Commissioners to make comments if they choose Sonia I appreciate all the information tonight and uh look forward to our rate

24:27 design conversations and thank you for coming out I just will Echo Sonia I appreciate the comments um especially around Progressive rate design it's pretty clear to me that this board is supportive of making sure that we uh don't put loow customers in a difficult spot um and I'm looking for similarly to the our uh rate design conversations over the next few months and if there's nothing else then president please yeah I appreciate the comments as well I I think the the rate design is pretty significant point of Engagement with the community um and there's various strategic pieces there's

25:15 push and pull across different objectives and values and it'll it'll test this board um it'll it'll test staff to to bring the board the right kinds of information and it it probably won't be months it'll be years that we we work on this um in particular uh we'll we'll come out with some ideas um in the next few months and then we'll spend quite a number of of different work sessions and board meetings on different aspects of rate design so it's a significant effort it's incredibly important it's probably the one touch point that touches every single 200,000 people that that we serve so uh much more to come on that thanks John just had a quick question

26:01 about heat pumps and just so I can understand it so it's my understanding that heat pumps aren't efficient they quit functioning when the temperature gets down below 25 28 degrees and they switch to a heat strip and they put an excessive burden on electric consumption is that correct there are different types of heat pumps commissioner um there is a crossover point at which it moves from a heat pump mode to a more direct and in many cases it's a resistive um type of heating um there are also high efficiency heat pumps that work down to lower temperatures um that crossover Point uh can can vary somewhat it's typically somewhere between 32 and 38 degrees depending on who installs it

26:46 for a standard heat pump but the type of heat pump does matter significantly in the in the comment that you're making it is part of the consideration when we look at incentives when we look at electrification um those loads will tend to be coincident with our Peak loads so we want to really be careful with that um and so um yeah it's it's unfortunately it's a depends answer um um now we've also looked at some studies you know how often do our temperatures here in Eugene drop below those points um as far as percentage and actually Brian I'll I'll show you a little bit later some correlation between energy use and temperatures and so we can we can see that that would affect it I just

27:32 want to make sure that we have that in the conversation because if we if we're going to use time to use charges and then the peak load and people are switching and they're using three times more the electricity because of that during during the peak periods then we could we could be uh not helping them so I just want to make sure that we we Factor all that in when we consider the heat pumps the type of heat pumps that in time of use right he heat pumps man in Peak will be an important aspect of heat pumps not just in the winter but also in the summer since they act as as basically air conditioners in the summer and so customer programs will have to be a part of that um also when we look at our resources and the various puzzle pieces we're putting together um could potentially uh start to include

28:18 some degree of utility or say eweb scale um storage that could help with some of that as well so um so that we as a utility can shift um our loads as well but it's definitely part of the consideration as you mentioned pleas Mindy actually just to to um uh continue with on that line of questions I have I am looking forward also to the rate design we've heard a bunch from people W for us a rate design I do think that this board is um uh interested in hearing more about that um I feel like we keep around in circles though around um lower income renters fact that the Energy Efficiency

29:05 upgrades their their rentals and stuff um and I'm just curious like I don't I guess we ever make any progress like when we talk about rate design are we GNA talk about something leas in forward I know it's not just an EB problem everywh problem but I just feel like we do keep kind of talking well re redesign is is corollary but it's not directly necessarily associated with incentive work with so there and there's two two sides to to that particular issue um the data that we have historically does show that um low income does not mean low low consumption

29:50 and so um I think we have to be um careful if we we say well somebody's low income because they don't consume a lot there are other ways and and it actually correlates pretty well with our standard distribution of of uh energy usage I think looking at incentives to increase efficiencies and and other programs is is a piece of rate design in the sense that it it develops your Revenue requirement which is your all you know overall what your rates are based on how you distribute those rates is really the rate design piece so they're related but they're um they're not directly the same thing and and both of those ends will be worked as we go forward I have a clarifying question

30:36 about low-income households um and consumption do you think it's fair to say that uh low-income households are in generally in leakier homes if they're renting homes or don't have funding to make upgrades and weather eyes that that consumption because heating is typically the largest consumer of electricity in a home correct me have I'm wrong there um that that may be a big piece of it is that people just don't have the funds or because they don't own the home don't have the capability to make uh weatherization improvements I don't think that's accurate from a general perspective because um we're not seeing significantly different distributions between limited income and say our normal population and so to say one is

31:23 characteristically different is probably um not accurate from the data we've seen however I I would say that you're going to see some of that you're going to see leak your homes rentals you may also see larger numbers of people living together to save money um which um is also uh a characteristic that we that we find in that particular segment so I'm not sure I would generalize it that way um but it is something that we need to look into a little bit further to understand what are the what are the key drivers but that and that would be one of them but there's it's not characteristically different from what we see across the population thanks and then to Brown's point about heat pumps and and addressing Peak it's certainly something

32:09 to consider when we have natural gas customers moving to Electric when we have folks who are on resistant heat or other lower efficiency modes of electric heating all those to the extent that those can be shifted to heat P so we'll see a reduction Peak right yeah ult yes that's correct ultimately efficiency independent of the fuel source is going to be incredibly important and and so when you think about conservation and efficiency uh weatherization and those kinds of things those are uh important uh aspects of how we can manage our supply going forward so um yeah yeah that's that's correct um and then there was one uh I think it was a brought up the question about

32:54 whether or not our incentives were available to Natural Gas customers my understanding is that as long as PE as residents are customers of eweb they can access heat pump incenters or is it only if they're heating primarily with electricity there are some incentives which are based on your primary heat Source being a certain percentage of as electric the the driver behind that is that Gas Utilities um and if you're a Natural Gas customer you pay a public purpose charge public service charge through Northwest Natural which gets funneled through the Energy Trust of Oregon and so those incentives typically would come through the Energy Trust of Oregon so that's that's the history

33:39 behind it um and many of our incentives are but some are limited so there's there's a few that are limited and I have to go into this specific roster to probably go down and share that but it's it is true some are not available if your primary heat source is natural gas that's helpful thank you for clarifying any other comments and if not we'll move on to board action uh looking at approval of consent calendar a move to adopt consent calendar a move by Brown second by Carlson any discussion not will vote all in support of adopting consent calendar a say I I passes unanimously consent calendar B

34:25 adopt consent calendar B moved by Brown second by Carlson any discussion seeing none all in support of adopting consent alen calendar B say I I passes unanimously um W that was quick good a go team um so in initial commissioner perspectives on the community interest letter um so we have a discussion are you g to kick that off or are we just going to step right in all right president okay my my intent was was to give an Commissioners wanted an opportunity to uh share their perspectives on the letter and that's that was the intent here so there was no

35:11 pre-plan okay um in terms of making sure that those who are listening have some background um we as a board received a letter a couple of months ago from a coalition of Partners at 18 signatures I think that were on that uh particular letter just encouraging us to take a number of actions uh related to energy efficiency uh rate design and um and electrification um I do feel like uh it'd be valuable I I don't actually have the letter up but I think I might pull it up just so I can touch on it a little more um specifically but while I'm doing that perhaps if anybody has comments and wants to start conversation sure thank you thank you

35:56 president okay um yeah I just would like to say thank you to the the people who sent us in the letter um it's a complicate as as you kind of heard in our our Preamble here with with public comment it's a a very complicated uh web that we'll be weaving with rate designs incentives our integrated resource plan and all of these things kind of mesh together so whenever we can get input from people that's great uh we want to acknowledge that or at least myself I'd like to acknowledge that the letter was seen read received and and uh you know looked at and and thought of

36:44 um we will be getting you know that's one perspective that we have we'll be getting a lot more perspectives from other industry experts that we have within the organization and other commity members as a whole so I just wanted to acknowledge that the fact that some of the ideas that in there sounded very intriguing um and it will be just for me it will be hashing out the the the give and takes of some of these things you know some of the uh ideas were know shift the cost to the higher higher income people or shift the cost to the higher load people and and I want to know what but that what

37:29 consequences those may have you know there's cost there's consequences that that our base thing has on our lower income people but then I also want to know what the uh what the other consequences may be to some of our other uh Industries or things like that that may be dissuaded from coming here because of high costs and and if we lose if we lose employers because of of being non-competitive that's something I would like to know too so this is one piece of information that I'm gaining uh but I know that before I make any decisions on these types of things I'm going to want to get a lot more information so that I can make the best reasons and productive decision for my constituents that I can that thank you for the

38:14 input thank you vice president rovski I'm just GNA very quickly read into the record for folks who are listening online the the punchline um of the letter that we received um they're specifically urging web to increase access to high efficiency heat pump Technologies starting with heat pump water heaters to establish Progressive rate design to ensure large Commercial Energy users paying their fair share to replace bill assistance programs with percentage of income payment plans and to better engage the community Through Outreach and education and they um elaborate on that through the rest of the letter um with that other comments from other Commissioners about this

39:01 I one more question please and and this is anecdotal because a lot of the input that we get is anecdotal you know it's like oh I know a person that did this I know a person that did that I had a conversation with somebody a uh uh landlord and I asked him about incentives for him uh weatherizing and making making his his units more energy efficient and I specifically asked him about the the heat pump water heat water heaters he said that his experience was that they do not last as long as a regular gas or electric water heater and that the cost even with the incentives

39:46 is it just does it doesn't make economical sense when you have a hot water heater a heat pump hot water heater that may last eight years that cost so much even with the in as opposed to going to Jerry's and buying one for $180 and putting it in there so I just didn't know if there was any research on how long and on the the durability of these of these new technologies as opposed to cost benefit analysis again it was an anecdotal thing but it was somebody who had rental stock and was not encouraged to put them in even with the even with that's the kind of information that would help

40:36 me I had a followup meeting and got a number of my questions answered with um some of the folks that drafted this letter but I did um out of that conversation I did have some other questions that kind of cropped up I'm hoping that staff can uh help I mean obviously we're going to talk about rate design that's going to be a multi-year conation so skip over a little bit of those um but I do do want to find out as we do talk about the natural gas customers some of my assumption had always been that the reason that some of those programs are limited and don't allow for natural gas customers is that we actually have to have payback over a time you know I me on the electricity that's used or reduced we're still getting some kind of electricity

41:21 that's that's being used in the in the systems and so if you have both systems s then maybe you're not getting the same kind of payback and maybe I'm incorrect in that assumption so I'm just throwing that out there challenging that um as we look at these nitty-gritty rate design type and and program questions um that's one uh I also do Wonder from a you know Community standpoint you know we have certain resources we do know that just our climate in general is getting more volatile and how can we use all of the resources that we have to the most um efficient extent possible recognizing

42:06 that sometimes you know using natural and I'm not advocating for natural gas but you know we do sometimes have natural gas in the region and those homes have it already and and is that more efficient than buying natural gas on the market I don't know maybe it is more efficient for us to pump it through electricity versus having natural gas all um so that's a question that that I have as we go through these very interested in these kind of differences between the the rate design I do question some of the uh the comparisons so the letter Compares Seattle City and light with eweb which I think that they're a very different Market than we are and so I don't know how we can kind of make some assumpt or

42:53 some adjustments to in size and um scale of that but from here it looks like eweb by and large is charging more than what Seattle City and light charges to our larger customers except for on the highest commerci the highest demand commercial side which I don't know that we have very many high demand commercial customers so I guess um as we look at rate design having an understanding of where our um customer breakdown is is also beneficial and then um we also talk quite a bit and and I heard from the group in the conversation that I had with them

43:39 about uh the base charge and my again my understanding was we have a certain level of charges that have to be paid no matter you know we have we just have fixed um assets that no matter if you supply one kilowatt of energy or a million kilowatts of energy you kilowatt hours of energy you still have to pay for those and so I think that's where the base charge is um primarily comes from but maybe that's not the entire piece of it so understanding that um again having that refresh R thanks that's yeah well I certainly I think the the letter was timely um when

44:26 we've looked back last few years and we've identified the puzzle pieces that we need to put together strategically there's a number of these that um some of it's Technology based some of it's making sure we have the right systems in place to work on both the consumption side the customer side and also the resource side so that we can really optimize the efficiency of how we're using resources overall um the the the interesting part of that the challenging part of that is that uh commissioner Carlson you you are correct there's a pretty significant amount of what we do to deliver or at least potentially even deliver the very first electron or the very first gallon of water there's there's a significant amount of fixed investment no matter how much you're

45:12 consuming there are other pieces to it that de definitely relate to uh Peak demand so for example the size of the wire is based on its peak um and so there are certain equipment that Peak really matters in the amount of cost that we incur and then there's others that you hear about which is just sort of the standard costs of energy um some of those are becoming more variable and so developing rate design that mitigates the risk of variability covering your fixed costs and doing that in an equitable way is going to be hard but you know what all the easy jobs are gone as far as as far as we know uh and so the the letter identifying certain key

45:58 interests uh I think is important consideration um and we'll we'll duly consider that as we dive into the very specific pieces uh of not just rate design but there were a couple other uh subjects of Interest with this group one of them is incentives which is how and what do you incent what kinds of return on those Investments do you want to have are you doing that simply for Energy Efficiency are you doing that for economic vitality and development those are things that ultimately come back to this board and the organization as to what role we want to have in the community relative to those issues and that's that's why rate design becomes such an interesting uh an important

46:43 topic because ultimately it reflects the organization's Direction the reason you see a lot of differences with Seattle is it's Seattle City council that actually drives how they price price their products and so so um I'll say there's a lot of political aspects to Seattle's pricing approaches um and and so you see differences between Seattle and a lot of other utilities not not just just eweb that's not to say we can't learn from Seattle we've talked about SMUD in California we've talked about sub next door all of these will provide opportunities for us to dive into these issues as well as the equity P piece of it which is um Equity not just uh from

47:30 sort of the traditionally underserved communities but also various different types of users uh within the commercial side within within the residential side and so um it will be an interesting journey and I I found the the letter informative and um things that will inspire us to bring bring these issues up as we as we walk down this course thanks I would just make one comment on the the water heater uh we also got a water heater about five years ago replaced ours with a heat pump with the incentives available from E web um and it's been great but it does they are more expensive than the office shelf conventional um but when you look at the lifetime of use I think there's a huge

48:15 sa cost savings especially when there's incentives available and I would just observe that one of the things about transitioning from our current Energy System to the lower carbon version that we need to move to um across the board there's a going to be a lot more investment in the generator or the Energy Efficiency and then less expense on the fuel right so when we're you know we're putting a lot of money into buying a heat pump to heat your home but less cost to operate it same thing with an electric vehicle more cost to buy electric vehicle but less cost to actually fuel it and that's pretty consistent um across the board with a whole bunch of Technologies we're going to make bigger upfront Investments and pay less to operate and I think there's a mind shift that collectively gonna have to make about the purchase price um

49:01 and it's something that we as eweb can help out with right we have um the ability to provide no interest loans on Bill financing that can help adjust that and make it easier for people to swallow that isad oh one other kind of building off of what you said too I think you know as we have education around these programs it's also going to be education of the installers themselves because I also had some somebody come in and quote a a heat pump water heater uh a number of years ago and they ultimately ended up talking me out of it um even even as I'm you know sitting here uh there were other reasons we have a small house and it's not quite the right space for it but I I think that that's going to be true

49:47 across the the space if there are benefits kind of long term for the customers how do we work with the installers who have you know been in trenched in installing one kind of thing they know it it's very easy for them it's maybe easier to just say hey it's new it's not going to work and then they can easily convince the person that they're working with there to go a different direction even if the DAT or anything else is otherwise because they're the person that's there they've already brought them into their home they're the last point so I know that's not you know necessarily what we do as policy but to the extent that whatever pathway we choose we need to have a robust education program in place for both the consumers and whoever is actually doing the installation

50:34 P thanks Frank and then Mindy sorry do you want to respond to that or do you want me to come back to you I I'll go go ahead I think the so first of all I I haven't read Consumer Reports on on heat pump water heaters so I I don't I don't know about about lifetimes we did in our electrification study looked at three three areas of potential benefit or Cost U one was the decision maker the customer in this case uh the community which was benefited through eweb and um and then the sort of larger Community which is where there can be some environmental um benefits or costs depending on on the particular type of of decision that you're making and heat pump water heaters were one of the areas

51:19 where there was both significant benefit to the customer and to eweb in the recovery in in the additional electrification um Revenue that was that was gained for that um also understanding the potential that requirement to do um load shifting or Peak shaving be able to control that so it it was one of those areas where there was this benefit and part of the reason that we we U have a an incentive associated with it that you can either go down to Jerry's and just buy directly or you can buy online and have it delivered so if you don't want to deal with contractor right away you can oh it happened to be here already um please help me install it so there's there's ways ways to look at that U as well but

52:06 I would say um the path does matter to policy so you don't want to have policy that is not implemented because of certain barriers so I think it is a consideration U as something to mitigate um but um yeah I think I think there's other opportunities to look at that those those kinds of programs as Welly and I guess I I don't want to be confused of what I was talking about with my anecdote the anecdote kind of went to Mindy's comment earlier of how are we going to get around to getting the the rental stock weatherized because if the

52:52 if what you said was yeah I put it in and I'm I'm making same savings over the years but in the rental stock it's a different equation and so for us to figure out that piece is the hard part getting that person to realize that oh maybe your your apartment will be more marketable if you can show that it its energy costs are $100 less than the guy next door those types of things are what I'm I'm getting to and and getting over that hump is the hard part not I understand the efficiencies and all of that how that works out in the long run it's Rob is Mindy was saying and trying to figure out how do we get that landlord that property management

53:38 company those people to look at it that's that's why I brought that up it wasn't that I'm saying that heat heat pump water bums heaters are AR aren't good it's getting landlords to figure out that they are good s thank you I'm sorry can go toque I don't actually have anything very significant to say other than that I really appreciate the letter and I know now is not the time to get all the answer the questions answered that were in the letter but I really look forward to delving a little more deeply into those questions as we get into rate design and as we've heard from public testimony those questions are um still being asked so I know that um they these

54:25 questions have been brought up and I confident that they will be part of our discussion and I only raised the issue because of your comment and reminding myself of what happened to me when I tried to go out to to get a a heat pump I I will also know you know we we are also in this kind of unfortunate you know that we have the renters are disconnected because they're the ones that are paying but the owners own the building so you know we have that disconnect we also have a disconnect and that it would be better from a community perspective in my opinion if we could require the rental units that are over a certain age maybe 1980 and older to have

55:10 some kind of efficiency um you know uh score that's put on them and you know but we are not the ones that can do that that's a city council sort of thing so we have a disconnect there in terms of the and limitation for what we can require um but that doesn't mean that we can't play nice with our Eugene neighbors and maybe there's something to that effect that you know we could ask them to implement if there was some interest it just seems like the only way that we're going to get that out there is for there to be transparency in what that rental stock actually looks like and it's very hard for new renters especially in a rental cramped Market where they don't have a lot of options to begin with I mean they're going to be lucky if they find something regardless

55:55 so if there's not a lot of competition they're kind of just taking what they could get Frank yeah I think the City of Eugene recognizes the importance uh of rentals in the community based on the content of their strategies and and recognizing that that's that's both a need and a challenge and in in the situation that Eugene is in where um you have basically a landlord's Market um and and the stock is very restricted um whatever happens from a landlord's perspective gets passed on to the consumer and why wouldn't they in this type of Market because um there isn't competition for somebody to go somewhere

56:40 else um I will say that the challenge I mean we have had an I would say an appropriate amount of energy efficiency work in rental stock if you look at look at our history relative to the number that we do in residential overall it's a typically runs around 18 to 20% of our residential base which is um residential being a certain segment of a certain segment so um it hasn't been um neglected but there's also how much money do you throw at at a landlord um for really doing what and this was a comment from a past commissioner who was very much um concerned about rewarding

57:27 people for the bad behavior um and well I don't necessarily share that I think it's a more complex issue um there are yings and yangs to looking at different sectors and segments within our population but the City of Eugene does have it and recognizes it it's a challenge and something that think they feel like is is an important part of what they have to do John thank you that's a good conversation I I agree with most everything that's been said here but there's one thing I haven't heard everything we've talked about money nobody said where this money is coming from we've just raised rates the highest the greatest percentage we have in five

58:12 six years we still have a deficit and we're talking about more money and whether it's a loan this blone whether it's a subsidy to this or whatever it's money and where does that money come from comes from the rate PES and so you gotta you gotta keep that perspective because we're going into territory that's going to really be what our average bill is going to go $40 a month $4 a month after year plus or okay it's significant that's a huge amount it's a huge amount I've seen people at the podiums tell me they can't afford a $3 R rate increase when we've done this in the past but uh even if it's 30 I I don't care how far I'm obious significant amount of money to a lot of people on Big income and we're talking about progr s and things

58:57 now that are going to also in to raise that and if if we we say that you know we're going to use less electricity where we going to get the money to to sub it was financially feasible that everybody could be doing right now makes no economic sense it has to take a Subs so we have to keep that in mind in this conversation that uh this is again my old saying Death By A Thousand Cuts because rates are going where worked so hard to keep them down for so many years and now work trajectory that uh it's very long from my perspective I think that's part of the reason we're getting uh asked to consider Progressive ring is that exactly that so that we don't sync especially lower income households that are going to or burdened by increasing rates but also um as Frank alluded to a

59:42 number of these Technologies uh benefit the utility like overall eweb um has has an incentive to to do some of these things they're financially benefit utility well there's an upfront cost there's a very significant long-term benefit utility saw mody to some degree um I think the heat pump water heaters was one of those right there's an incentive on the front end but to the utility as a whole it's a benefit and not likely to push up on rates can you confirm that well it's the the tradeoff is the near-term versus the long term the the the payback in many cases was looked at over the life of the asset which tends to be in some cases I don't know exactly for heat pumps but

1:00:27 I'm just say say 10 years so you're looking at a recovery over 10 years so there is a a near-term rate impact um to to the programs we're talking about even even if there's a long-term benefit and buffering the utility in the long term and buffering the resident in the long term from increasing rates because they're using less electricity using that heat water and it's a it's complicated as you said a number of times the the tension I think that commissioner Brown brings up is is absolutely correct it's one of the tensions that we feel there the the more things you try to do as an organization the the more that the people some sector or or people in general uh are financing and and so

1:01:13 there's a there's a part of just General Revenue requirement and just importance of keeping the general rates low versus adding particular programs for particular purposes those are tradeoffs and those have to be uh vetted with with each other so because it he he's right that many of these things do cost there's an upfront cost to them and how do you um wrestle the tension there um over near- term and long term then I have one question one more question then to you Sonia um Mindy said she was pretty confident that we would be as we're talking about rate design I think that we'd also talk about rentals and incentives to rental are those I

1:01:59 know they're very closely related there's overlap there but as we're talking about rate design generally over the next year is incentives for rental households and low-income households a part of that or is that something that we could or should peel off separately and wrestle in the shorter term maybe something we could address within a year instead of years so there's there's two things and and I don't know if you know is this but our board agenda report is starting to fill up for 2025 already um there's one that relates to what commissioner schlosberg asked for and that's that we're going to have a number of different customer service policy reviews um in 2025 and that's where that particular topic would would

1:02:44 come up directly um rate design and the distrib distribution of how your costs um cost causation is analyzed and allocated that rate design separate from that will be customer programs um and part of those part of the reason you have those in parallel is um you want to understand from a customer perspective the segments themselves the customers as individuals where the opportunities and where the costs are so that's why it's important to do those in parallel they're separate but they're in parallel and the customer service policy review is is is in the near term and some of that is because of a new system that we

1:03:29 have and how we want to implement it and some of it is driven by the feedback that we're getting okay so it won't be years yeah it will be year yeah yeah singular okay other comments on this topic yeah I'm sorry s go ahead um I'm curious so we have I mean we have a ton of incentive programs other than the sewer system one I haven't ever heard the the um septic tank sorry replacement I haven't ever heard of any of them running out of funds have we had any that have run out of funds and how frequently does that happen well the um I I'll say the one that's probably um I'll say challenged

1:04:14 the most as part of the Green Power program and the solar incentives um those typically have an annual budget and so U now we did extend um I think it was last year we did um put additional funds um in that but that one has historically been been challenged so are heat pumps the duckass water pump the duckass water pumps heat pump water heaters there we go I I'll probably get with staff to get you more specific answer that generally um those are budgeted in in both an internal way and also through the incentives that we received from Bonville power Administration and I say receive from them we actually pay

1:05:00 Bonville and they pay us back the money so it's basically coming from us it's Recycling and different programs have deemed amounts and different returns and um notice some of the reports that you get start to look at a you know a kilowatt hour or a megawatt hour savings per dollar invested um and so we manage within that budget and and actually we're to submit to Bonville this year for more incentives because we're doing more work so um I would say generally we're not fund Limited in those programs those kind of s deemed established programs um but you know we have to I'll I'll I'll get back to you um the next quarterly

1:05:46 report we'll have more detail with okay that's great I mean just when we're talking about you know funds available who's going to pay for what and how I mean it suggests to me if we're not running out that we have more capability to provide more but they're not taking advantage of that and that's up upon us to figure out why you know why are we not having such a robust system when when I was talking to the group in this followup I remember they said they released $4 million at the state level and it was gone in like a few hours so yeah I I will say we're fully subscribed so I I don't want to in fact we go back to bonaval for additional funds most of the time so we're we're pretty fully subscribed okay so when you say fully subscribed we run out by June or we just

1:06:31 we have to just keep going back to Bonville and saying hey we need it's it's a per we historically have periodically just gone band gone work through the bonab bill program and said you know we have these project we submit project by project so it sort of Cycles throughout the year but we haven't told any customers hey you wanted to put in a duckass heat pump and you can't or have I don't I don't believe so but let me follow up sure all right the reason another reason I'm asking is I want to know how do we have good ideas of what the stock in the area looks like and what that Delta difference is that we really want to change how many homes don't have Windows how many homes don't have you know a duckus heat pump like what is that difference that we need to do to actually help the the worst off yeah I'm

1:07:18 I'm going to steal a little bit Brian I know is behind me he's probably rolling his eyes already um but the demand side potential assessment which was part which was a study that was commissioned by your direction as part of the the last integrated resource plan we'll look at exactly what the potential is in the community for Energy Efficiency conservation and demand response and the first results will be later this year perfect because the energy that we don't have to buy out on the market is the first thing that we should do we should absolutely try to invest in the community first because it's way more costly to sort of transmission maybe not all the cases but we're going to figure out how many layers there are to the cost so we'll understand there's so much

1:08:03 available at this cost there's so much available at this cost so um so we can make those comparisons because you're you're right also it's more stable to not use it than to go out on the market and you know be at the whim of whatever it looks like for the next 15 years okay I'm done thank right we'll move on to the next topic then which is number nine resolution number 2414 about Trail bridge EPA exhibit a updates

1:09:05 all right good evening Commissioners I'm Brian Booth the energy resource officer here at eweb it is my pleasure to introduce uh from my side over Aon Bush power analyst here at eweb and Megan C energy resource manager they're the real experts on this one so without further Ado I'm G to pass it to Megan and before I pass it to Aon excuse me I just want to say that this is um a required step in our communication to BPA to receive cost-based uh Federal power for our change in uh trailbridge operations so I'll pass it off to Aaron hey hi everybody uh and hopefully I was listening intently to your discussions hopefully I remember everything I'm supposed to say here uh I would say in general uh what Megan is

1:09:50 pointing at is this is about our bondable contract um there's a lot of moving pieces and we're just trying to provide Von buet and Clarity moving forward so um just a little table setting uh the goals again about vable contract and replacement power uh talk a little bit more in depth about trailbridge operational commitments that we have bonaval requirements for receiving replacement power uh for those changes in operations uh timeline that looks at kind of bond of those contract timelines and our timelines for trailbridge uh and then ultimately that board resolution um so as I just said and Megan did the goal tonight is really to talk about getting updates to our bonaval contract

1:10:35 uh for those operations changes at trailbridge so basically because this is a forward-looking thing we need to provide Bono with Clarity and certainty about what is going to be happening at trailbridge and that's what we need to do in order to get replacement power from bonable right they don't want to give us replacement power if the thing is still generating they only want to do it if we actually need the power um just of note here there's two specific time periods for the bonable contract that we're looking at one is that 2026 to 2028 time frame uh that's under the current contract so replacement power over the next three years and then the post 2028 so under the new contract kind of that tier one lower cost uh based power uh under that provider of choice contract um so diving a little bit

1:11:20 deeper into the trail bridge commitments uh so as you're all aware Trail bridge is the re-regulation facility for Carmen Smith and as part of the kmen Smith uh license requirements basically said uh e you need to install permanent Downstream passage uh for fish at trailbridge Via the spillway so basically modify the spillway at Trail bridge pass all of the water through that instead of the termid which would mean ceasing generation at Trail bridge so basically spilling all the year round for fish passage um but that implementation has been delayed due to Dam safety concerns um and so while there were some initial kind of interim measures as part of the F license there's additional kind of in I'm calling interim it's not the official term uh spill that would basically

1:12:07 reduce Trail bridge to the minimum generation we've done testing to see how little water you can put through it and not kind of wreck the the turbine um and spill the rest of it through the spillway so basically starting in the near term we'll be passing as much water as possible through the spillway um and reducing generation to minimum and continuing that until that Downstream passage is in place the permanent solution uh so looking at the bonnaville side so trailbridge is a dedicated resource in our Bonville contract so basically that means for Bon's perspective we're using Trail bridge to serve 's load um and because bonaval is a federal agency that' got statutes uh in order to remove resources like that from our contract they have to meet

1:12:53 these statutory requirements or we can ask for administrator discretion uh but we do believe that trailbridge can we can demonstrate that trailbridge meets some of these um the listed briefly here it's loss obsolescence retirement don't want to get hung up on those details but basically if you can show that the resource you've lost it due to something outside of your control like a FK license or a natural event obsolescence um is something where you know that's beyond repair and you can't get replacement parts and retirement does consider the economic viability of it it's just no longer viable to run it but in general for us uh the distinction here between trailbridge and leeberg right leeberg has stopped working we couldn't run water through it um and so there was no generation and so for trailbridge is

1:13:40 still operating today and it will be operating in the future and the whole point of this resolution and the thing here is that we need to create as much certainty for bonaval saying hey we're forward looking here this is what's going to happen and that's what can determine us getting replacement power in the future um so I've got the timelines here uh eweb and trailbridge on the top and bonal on the bottom so starting with Bonville uh you can see those two time frames for the contracts on the lower right uh so it's that 2026 rate periods that's the current contract a few years of uh Power and then starting in 2028 the new uh bonaval contract and for both of those time periods uh just bonaval processes they take a long time they've got a lot of stuff going on uh and so

1:14:26 there's literally deadlines to submit requests next month by the end of this month um and so that's kind of what's driving you know delayed doing this as long as possible to get as much certainty as we could we're at the end of the road and saying okay this is what it is bonable here's what we can uh guarantee we're going to do um on that trail bridge side so what does it actually mean uh upper left so that minimum generation so basically spilling everything that we can uh with the current configuration and running the rest through the the power plant to that minimum generation amount uh for bonal purposes we're guaranteeing that we're going to implement that by October 2025 uh likely that will happen much sooner but again that's just the bonable deadline and on the the upper right hand corner that permanent Downstream passage

1:15:11 is the goal um by 2030 but you'll notice that the construction phase uh overlaps with that new contract period and so that's where we need to work with bonable to figure out like what is the appropriate amount how do we reflect this appropriate um and then put a load Bank in here in the middle um you know Carmen and Trail bridge are at the end of a radial transmission line and when that line goes down there's still water coming into the reservoirs and it needs to go somewhere um we are improving habitat for fish that if we spilled the water over there it would not be great for the fish habitat so instead the goal is to put water through the turbine and dissipate the energy of a load bank that's situated there there might be some beneficial overlap while that's not something that's designed for the bondable contract uh we might be able to

1:15:57 kind of have some Synergy where it helps us meet some our contract requirements um so in general I just want to kind of reiterate this is there's a lot of stuff that is going on here we work closely with Generation Um and trying to reflect what we know and they've worked on with all the interested parties um and this is really just a bonable specific thing trying to give mod Clarity um so in that context uh it's basically affirming things we've already said we're going to do uh they list it out in a little more detail in the memo um and in that operations document but happy to answer questions but in general just recommend uh moving the motion uh this is something we be working with Bonville to get replacement power in the

1:16:42 future great thank you any questions I've got more questions than we've got time you totally lost me and Confused me I've been following this since 2008 so um so you're GNA stop you we're going to stop generating at uh Trail bridge for Downstream passage instead of the the $40 million floating Downstream passage thing that will do so what fish are going down there because no fish are going up there so what what what is going Downstream and Lisa is on to answer all of the fish related questions yeah good evening Commissioners uh so uh what fish are moving Downstream we do have a temporary fish passage in place there a temporary tra and Hall in the spawning Channel

1:17:28 That's Pro that both chanook and buol trout would be moved from that temporary um trap and hall though we expect it to be mostly shinook um bull trout have been angled from just below Trail bridge down and put up stream of Trail bridge dam for the last many many years and so that will continue as well so we have interim Downstream passage for all species and uh including the two listed fish species bull trout and shuk Sam thank you and so what's the downstream passage constructing so Downstream fish passage from a permanent s sense will be modifications to the spillway there at trailbridge Dam so rather than that floating fish screen for Downstream passage that was in the 2008 settlement

1:18:14 agreement the uh revised and restated settlement agreement has Downstream passage via the uh modified Spillway so in that sense once we make uh modifications to the spillway way to improve um fish passage conditions then and also um complete construction of Upstream passage so we need both Upstream fish passage via the Trap and Hall which is the current license requirement and downstream fish passage via modifications to the spillway complete before we can shut Trail bridge off completely and the reason for that is we need uh to be able to move the water um Downstream and the only two ways to move water are either through the power plant or down the spillway so when the spillway is closed for construction we need a safe way to move

1:19:01 water through the project and my last comment and question is that so that means we're going to continue trap and hall for the next 10 years the temporary tra and Hall will be in place until permanent uh fish passage is constructed both upstream and downstream fish passage that's the plan we're gonna okay we're going to continue to operate that the way it's running right now okay thank you I'm not supp it but it's just seems like a whole lot of stuff that is kind of very expensive few fish that are artificially thank you frk yeah just independent of the the various approaches to to fish management the the point of this is to basically

1:19:47 cast a reservation with bonnaville that says we would like to have cost-based tier one power replacement for this particular Trail Bridges future that's that's the actual official filing that we have to make with baville and that's why we're doing this now is because of bonab Bill's deadlines um the history of why and how relative to fish um there's lots of history and knowledge um in the in The Ether Weare up there with with Lisa and others but the the point of this particular reserv resolution is to make that sort of Legally St autorally required reservation with Bonville to get replacement power if that clarifies it thank you

1:20:33 groski thank you um you kind of a little bit with around here I understand that why we're doing this is to so that we can get the power replac from bottom that's that's the uh but but to me we're losing a 10 megawatt name plate generation resource you know that's currently putting out 3.3 megaw basically losing that clean energy that we've invested in our customers have invested in for years and years and years bu building in um couple questions if if for some reason tra and Hall isn't the option that ends up being built and that there

1:21:18 is a fish ladder that is built could the trail bridge be re energized as part is that an option once we pull this lever yeah I'll take that one commissioner Browski uh the current plan is to cease generation at trailbridge in order to continue generating at trailbridge we would need a different method for Downstream fish passage other than the spillway the alternate method would be a floating fish screen which in and of itself is so expensive that it probably does not um balance out the generation we would gain from trailbridge if we're my question is is if we've all seen what's going around if if we're if we're mandated by another

1:22:04 agency to put in that more expensive fish ladder does that necessarily mean that trail bridg is when we pull trigger and say the BPA we're not using Trail bridge anymore is there any way to bring it back if we can get the fish up and down so separately from the pieces that Lisa is talking to on the mechanics of moving fish up and down with bonal I would expect that they will put some openers in the language that says hey if you don't meet this we're gonna have a clause that like you no longer get the replacement power um so I I think there is a li like very very small risk of anything averse with bonable specifically on this um so like

1:22:51 for leeberg for example in our letter from leeberg so there's an we made a request that said hey leeberg meets all of these requirements X Y and Z and we took fun a while but we got a letter back that said yep we agree you're going to get replacement power but if leberg comes back online we res send replacement power and I think that's basically what would happen in this case and then the last thing in the slide before this you you mentioned ewb installs load Banks has that been what's the cost of load Banks and has that been factored into our cost of Licensing for Carmen is that going to be something that's going to come to us in a year or

1:23:36 two and say oh you guys we have to do load Banks and it's another $5 million I'll take that one as well um I think the current estimate for the load bank is 20 million it is included in all the budget um numbers that you've been seeing for the last um couple of years uh with slight adjustments here and there so that won't be that won't be added on at some point if I could get a memo as to what the heck a load bank is that would be helpful it's a go ahead I was gonna say it's that's my my joke answer but it's basically like resistance heat and you just literally dissipate the energy via resistance in so you're not using it right so it it's just literally a place

1:24:22 you can send the energy to for the electricity it's for the generation for the electricity from the power plant so basically we have so I don't know if Lisa want to get into this but the the because it's on that transmission line and you have water that's incoming you have to pass the water right um there's basically we need to pass it through the generator at times rather than hurt harm fish and so when you pass it through but there's no transmission line like the power's got to go somewhere um and so that's what the load bank is for is when you have to run water through the turbine but you don't need the power because you don't have somewhere for it to go you send it to the load B that be could that be batteries uh it is go ahead yeah batteries are

1:25:07 essentially it's a a battery Bank yeah a little more information on that would be helpful for me thank you I mean that's not the technical term but um but that's a good way to think of it big regulator jump but if it's I mean the Battery Technology is coming on so if we could load back into a battery and then use that battery for for hours or ground thank you yeah I would entertain a motion to adopt um resolution number 2414 is there a

1:25:52 second move by Brown second by schlosberg any other discussions hearing none plug in your nose oh my nose but yes all in support please say I I passes unanimously with a note of one nose held right um moving on to item number 10 resolution number 24 about eweb avoided cost prices update Mr booth and

1:26:41 Hart all right uh we do have the treat of a rare power planning triple header tonight this is phase three so I hope you all are enjoying the show thus far uh joining joining me for the next one is our planning supervisor in recovering power trade Jonathan Hart uh who's here to talk about avoiding cost uh good evening Commissioners sounds like this is working uh tonight I'm going to talk about avoided cost pricing in short eweb must publish a forecast of avoided cost prices every two years we have done so many times um and it's time to do it again uh normally we manage this update through correspondence alone uh but this year staff have updated the methodology for how we calculate avoided costs and uh wanted to walk through that update and

1:27:26 provide opportunity for the board to ask questions before we pass this year's resolution um so just some quick reminders here perpa is a federal law passed in 1978 in the wake of a national energy crisis it contains several facets that attempt to align National energy Supply with demand including aspects that work to create um market for resources developed by non-utility power producers uh it does this by requiring all electric utilities like eweb to buy Power from facilities that qualify under the law at avoided cost should they seek to do business with us avoided cost is a complex topic uh but for this conversation let's define avoided cost as the price that holds our retail

1:28:11 customers harmless um to support perpa Oregon law requires that eweb file a 20year non-binding forecast of avoided costs every two years every two years uh think of these prices as a jumping off point for what eweb might pay for incremental Generation Um historically e webs avoided cost has been low given our Surplus resource positions uh but the times they are a change in and uh and staff believe that it's time to update our methodology for calculating avoided cost to reflect uh one we need to maintain alignment with our perpa publication requirement so there is a requirement we do this um but two maintaining avoided costs uh as a

1:28:58 relevant generation valuation tool avoided cost doesn't have to be used for just perpa alone um updating this rate can serve multiple purposes um so what's driving our change in methodology uh since our 2023 update was published uh we have seen changes in ewe's portfolio needs and the Northwest Energy landscape uh which can both impact the calculation of our avoided cost uh for EB's needs our 2023 IRP indicated uh that we might need more resources soon the IRP also uh contained an action plan that directed staff to develop a resource acquisition framework and to explore the maintenance of existing resource contracts uh eweb is

1:29:44 also engaged in a development uh of a Northwest resource adequacy effort which will result in emergent portfolio capacity requirements for e web um uh thinking about the Northwest Energy landscape uh uh regulations like the Washington climate commitment act have been very impactful to Northwest Energy markets what we pay for electricity in in some situations um as our changes in Regional load and resource balances there's been over the last couple of years a lot more demand and at times less Supply due to you know closures of coal plants and things like that uh also there are grow concerns about the pace of transmission development in the region which indicates that the location

1:30:30 of resources May begin uh to matter more uh you know relative to where you can get transmission access so this year's methodology update tries to account for those sorts of things or reflect these sorts of changes in in what we're doing so um which elements are specifically are shifting is a simple table that shows how these factors have shifted since the 2023 update uh eweb is still obligated to provide a 20-year forecast so that hasn't changed um avoided cost still includes energy value uh but 2025 includes some additional value streams in the form of uh environmental value uh Rex and carbon uh

1:31:15 capacity value uh potential transmission savings those sorts of things um in 2023 we used spot market prices for energy that's a forecasted price that comes through like our Aurora tools that we're using for the IRP uh but given incredible runup in what we see in forward market prices the 2025 update includes a blend of these forecasted prices but also forward Market Energy prices that are being transacted uh today so we're kind of evolving the way we think about the value of energy in the near- term and for the long run um finally instead of publishing a single avoided cost we are breaking out avoided cost by generator type uh because we believe that that added definition will help clarify the

1:32:01 different gener what that different generators produce different value streams uh for eweb given their specific characteristics um this is a pretty common practice uh for other utility avoided cost Publications like Portland OR Pacific or uh in the state of Oregon okay so this is very large table of data um which we're going to break down for you real quickly First Column uh these are our existing avoided cost prices from 20123 again it's a single price for 20 years generally low and stable this was based on a specific forecast at that time uh the next four columns reflect the avoided cost that we are proposing for the 2025 update uh we have four

1:32:47 different resources and now I'm got something popping up on my screen that's not very helpful uh biomass or a Coen type of resource a wind and two types of solar um you can see that to start pricing for all of these resource types are higher than our singular 2023 pricing signaling that the value of these resources to eweb has grown at least in the near term um for periods Beyond 2028 prices reduced substantially uh this reflects the fact that Beyond 2028 the value of incremental resource is not clear to eweb uh we are current working on our 2025 uh BPA product decision um our BPA product decision could have a substantive impact on EB's forecasted

1:33:33 avoided cost um and so until we have certainty in the space staff believe that it is um uh prudent to maintain a conservative energy only perspective for periods Beyond 2028 uh at least for now until we have more certainty for where we're going uh Beyond those periods um thinking about the application of these prices this is the last slide before the resolution slide uh these prices reflect the best information that we have today and can be applied to multiple purposes including uh perpa generators uh nonp perpa independent generators because those can exist too uh and customer generation programs uh these prices are indicative forecasts

1:34:18 and they are subject to revision as needed new information about 's needs or the Northwest Energy landsc Cape could trigger an update uh on an as-needed basis uh if a qf a qualifying facility under the perpa ACT wishes to seek a perpa contract with eweb uh avoided cost is again the place to start uh but pricing will be determined for the generator based on its unique generator characteristics uh contract terms will be subject to negotiation and board approval uh same logic applies for non- qf resources and customer programs again these are uh good and helpful indic indicative prices but uh everything still comes back here for final decisions uh so this is the end of the

1:35:04 presentation uh but this update requires formal approval as such a reg solution has been drafted for your consideration and I'd be happy to take any questions that you have what's the risk for us if any of the data in here is not I mean it's a forecast so you know it's inevitably going to be wrong in some way or another but what is there any rest task if it's drastically wrong in one way or another um so uh generally speaking I don't think that there is risk here the state requires us to publish a forecast of what we think our avoided costs are but it's a forecast taken at a specific period in time it's indicative we've

1:35:50 thrown up an idea uh for independent power producers to consider what an idea for what we think we would pay but if they had interest in coming to us uh we would have a specific discussion about their generator and then we would bring those things back to the board for further discussion and review great that's all I needed to know that because it means my level of attention to it is be pretty limited I'm going to move uh to approve resol resolution 2413 uh which directs staff to file an updated set of avoided cost prices with the op these prices will serve as e web's forecast of avoided costs until such times the board approves new values got a motion any discussion you have something second I'm gonna go to

1:36:36 Browski for well she put a motion on the floor a second okay seconded by Brown um yeah so I've got a few questions um you explain the difference in pricing for 25 26 and 27 it's because those the value is higher out there for this type of of resource it's higher in the market so that's why the cost us it's the that was one of my questions when I saw that that it drops down quite significantly so you anticipate that once we get a BPA contract and and some of those uncertainties are known that we'll come back and revisit this again or we going to wait 20 more years and put it back out there um so uh we have to at least

1:37:23 publish uh a new avoided uh cost schedule every two years uh but there's nothing to stop us from publishing a new schedule on an as-needed basis it is common for uh say investor owned utilities to publish new avoided cost rates for example whenever they update their IRP uh in 2025 we're making a bondil product decision and not necessarily a full IRP but that could be a period of time in which it's appropriate to revisit this um I guess I just want to know a little bit more about the small qfs um there any small qfs that we have contracts with I think it's in the mem what said we don't have any contracts with any small qfs as of right now is that correct that's correct we don't have any so small and small qf is three

1:38:08 megawatts or less is setting a base base price at that is so uh so to be clear um and it it is complicated so e web's board does not have specific policy around the sizing or generator types that qualify um under we don't have a small qf type of program that is a state policy that applies specifically to investor owned utilities uh if the board should decide to have a program like that which is a thing that could do it uh would potentially be beneficial if for some reason we saw a large flux of small generators coming in and you didn't want us to bring every one of those contracts to you for consideration so so the language on the small qfs that's in the memo isn't in the

1:38:54 resolution it is no it is not in the resolution it is uh it is background information uh to explain that while the state of Oregon requires us to publish uh these avoided cost rates the state of Oregon has many other sorts of of I think sometimes useful uh regulations that do not apply to eweb because we're our own uh regulating body and and this you may be able to help me with this one just so I know where where and what is small qf is or what what range we're looking at what's the Coen plant that IP has what kind of what kind of power are we getting out of the Coen plant is that would that be under three mag no it is a the type of power is biomass which would be a qualifying facility but it is too

1:39:40 large to be a a qf oh it's it's not too large to be a qf it would not be for state of Oregon purposes considered a small qf perfect thank you so how many how much anybody know much we get from that one just so I have in my mind what senica does this much the name plate on that has moved around over the years but I believe it's about 25 average we get uh it's 25 name plates 16 17 average so I know so maybe some of like if a somebody decided to do a a a solar farm out you know by the airport something like that that may qualify as a under three oh absolutely and again

1:40:26 the size threshold in this specific situation uh shouldn't matter but if they were to go to uh firk and seek uh a qualified facility designation as a renewable resource um and then they wanted to sell that resource to us we would be obligated uh to uh purchase their output uh uh though again we would calculate the value of their resource potentially along the same lines is our avoided cost that we have published um and any sort of term or tenor for that agreement the other conditions associated with that would be subject to your approval clarifications right move by Carlson second by Brown any other

1:41:12 discussion not all in support say I I passes unanimously thank you thank you Commissioners thank you uh moving on to number 11 system devel charge methodology evening president McCrae Commissioners general manager Lawson we're here tonight to talk with you about water system development charges and for the record I'm Karen Kelly chief operations officer with me tonight is Wally MCA water engineering supervisor Adam Rue rates manager and also on the

1:41:58 screen behind you is our consultant uh Deb gardi with gardi Rothstein group Deb has expertise in infrastructure finance and utility management rate and fee setting and affordability Financial Planning and public involvement related to these topics she is our go-to expert uh on sdc's throughout uh the Water community so glad to have you here so all right just a brief agenda here we're going to talk about a little bit on the history of sdc's in Oregon and eweb we'll talk about the methodology methodology changes that we're proposing what the results show for different customer classes and the next steps um

1:42:45 following our presentation we'll have time for question and answer uh we'll be asking you though for your feedback on these methodology changes and if approved in general um we'll be asking you for agreement to provide public notice of these changes so that we can start the 90-day clock um that moves towards approval which includes a 60-day comment period so just a little brief here on the history so SDC act started in Oregon in 1989 and it provided a uniform framework for the imposition of sdc's um this provides Equitable funding for orderly uh excuse me infrastructure growth for development here at eweb um our history started in 1996 when the board approved

1:43:30 sdcs that went into effect in 1997 and those were based on meter size in 2016 we provided a revised project list and enacted tiered rates for both base and higher elevations and then in 2019 we combined the 58 and 3/4 meter sizes into a one less than one inch meter size for a specific rate for that and then we also provided a new calculation of SDC charges for accessory dwelling units uh less than 800 square ft if you remember a push back then I do about adus and trying to accommodate that as a a growth type so sdc's are important to us here at EB because they do help offset the cost of new development and recover a fair share of the costs of existing and

1:44:16 planned infrastructure that provide capacity to serve New Growth that I'm going to hand it over to Wally he you Karen to be here to uh talk a little bit about something has to do with water tonight um might talk a little bit about uh some of the projects that the sdc's offset the cost for um overall in the big picture um our water Capital plan is really not geared toward um system expansion or growth and as such there's relatively few projects that are actually included in the stc's um project list which is included in the board backgrounder and kind of summarized on that screen on the the

1:45:01 right side um and it on that table you'll see kind of a category and that's basically the driver between the majority of the the projects and kind of mirrors our Capital plan it's really replacement resiliency driven not projects um but majority of the ones on the list actually have a dual Ben b a dual benefit of replacing existing capacity also having a little bit of growth growth embedded in them kind of a low allocation for exess capacity that can makes them eligible for stc's you look at the list kind divided into three main areas say one would be our kind of resiliency and optimization

1:45:47 projects that would include our new water treatment plant on the L River um has redundant project but it is providing excess capacity and provide service to meet future growth in the system have a couple transmission projects our 23rd on Alder and our 42 in um phase three transmission main it's kind of our continuation of our Riverfront connector um both of these kind of inherit in them have exess capacity to meet future growth um and demands in the system the next phase area projects I would say would be all of our replacement projects these are facilities base level reservoirs uh

1:46:35 pump stations we'll see on the list a couple of our base level reservoirs on there but we also have some upper level reservoirs theam at 975 Pump Station City View 1150 Pump Station these are all kind of just replacement of existing facility Le but inherent with those Replacements there's um well they don't increase the overall capacity of the system to do provide capacity for future growth again making them eligible for stc's I see Deb nodding her head back there which means I'm saying this right so thank you and lastly would be our kind of our distribution projects all of our main Replacements the easy one is our what

1:47:20 are main improvements these are all of our new subdivision works so that's 100% growth um eligible for stc's even on our normal main Replacements there's a certain percentage where we upssize the mains this is we have a lot of four and six inch pipe or new standards 8 inch pipe provide some excess capacity that makes it eligible percentage of those improvements are eligible forcs um lastly I just want to mention is when we're funding these project through the sdcs that could be done both in funding for offsetting some new the construction cost and also providing Debt Service

1:48:07 on turn it over to Adam de de yeah yeah thanks Wally um so in addition to updating the project list the uh SDC update is an opportunity to look out how how you design the stc's so you've been talking about rate design a bit tonight and a progressive rate structure what's being proposed for the sdc's is a progressive structure for single and um unit and middle housing that's based on the size of the dwelling unit for larger multif family and non-residential so your general service category it's still based on water meter size but the the um the system impact of

1:48:56 each meter size is based on the actual use of existing customers as opposed to a theoretical capacity Factor uh that's actually you know the current sdc's are based on uh older meter standards and the the uh current modern meters are um able to deliver uh higher capacity and so we're seeing that too in the water use analysis next slide please so for residential the single unit in the middle housing this was really initiated to support affordability particularly for smaller homes thus the progressive nature of the structure what we found in our 2022 SDC

1:49:42 study that the state funded was that um sdc's have a greater impact on smaller homes in terms of % of the develop velopment cost and developers told us that um going to a progressive structure would um help incentivize building smaller homes and that's particularly the case when it's not just one system um you know sdcs can be charged for water Wastewater parks and transportation the City of Eugene initiated uh Progressive rate structures for parks and um local waste water and so um uh

1:50:27 looking to do this for water would um um make have an impact in terms of uh on those smaller homes making those more for affordable for developers to construct um so the analysis is based on a regression analysis of 40,000 existing customers uh eweb customers and that's how we develop the estimated in pcts and related that back to square footage of the home and so what's proposed is a 4 tier Progressive structure that mimics the city of Eugene's uh structure for uh Wastewater and parks and what it does is it provides a lower sdc's for the first

1:51:15 two categories that are below the average uh unit size and then a progressively higher SDC uh for uh the larger homes and as I mentioned general service still based on meter size but re-calibrating those factors and the base level of use to now reflect the fact that residential is no longer included and um the higher uh average water use for any given meter size relative to residential so it starts with a um it's still a progressive based on meter size but it starts at a higher level for the base

1:52:01 meter size uh reflecting the the actual use or impact um of those meters and then as it Go steps up with each meter size it's a steeper incline which is reflective of the actual use of those um meters and with that I'll turn it over to Adam thanks um so attach or this slide is showing the results of the capital projects Wally mentioned and the new methodology changes that walk through in her slides just for some Contex on this one these are the four different user Stranges for residential on the left small less than one in meter size

1:52:48 so the current is the same for all of these different Welling unit sizes the proposed though is the changing methodology that the Bas so as you can see the smallest charge is actually a decrease from our current SBC charges that increases for larger change of methodology being discussed the bottom line on this chart shows the residential average so that's kind of speaking to um well always discuss the projects and the overall increase this rate or this SBC chge hasn't been updated in about eight years so that's the cumulative 54% increase so we got

1:53:35 some feedback from a prior fee update earlier this year talking about a phasing in so recommended tax forward is for phasing and similar to the feedback got ear going uh for the two smaller units that were a decrease or a less significant increase phasing in in the first years the updated chares year one but for the larger units that had a more

1:54:23 imp proposal this reflects year one two and three taking the total increase and dividing it by three and going forward we look to imply apply CPI in those too so don't get stuck in the same thing having to catch up I think the goal here is to come up to catch up for the years of not updating Fe transition appro methodology resal similar or a slightly different change for the general service which is based

1:55:08 onity of the also going out more impactful for the larger units this one we're recommending phing in for all of the different sizes based in for the three years just reflects that the full increase being faced inally over the three inflationary and just for some more context this is a slide that that I put together some other local utilities or

1:55:56 local areas thatc firstly context of the current yeah so that basically concludes the slides um next steps are we're attempting to initiate a public hearing this month uh really right now if possible but first we need your feedback on the proposed methodology changes and then if you do have support for that we would um initiate that required public notice then we would come back to the

1:56:42 board for adoption in December after we received public comment and then the sdc's would go into effect in February so with that we will open up Q&A great thank you I know Sonia has questions or comments and then Brown um generally I uh appreciate the approach um the methodology the progressive PR Progressive approach um I like the gradualism that is proposed I am curious a little bit about um the scale especially on those 240% increase say if we have a 4 in size um pipe

1:57:27 that's being installed what what what size of a building does that support is that you know is it and is it only commercial or is it only um it residential buildings with you know 100 units in it if you can just give me a sense of the scale that that would support um if anybody's familiar with the big new apartment complexes there going out a will Creek Road for example um one of those phases uh uses a 4in meter uh if you're looking at a couple hundred apart so it's pretty good size project I I guess when this comes back maybe something would be helpful is kind of on like an estimate of a per unit basis because looking at

1:58:13 $180,000 versus $56,000 but if it's spread over you know 200 units then maybe it's really in line with what you know we're supporting with one unit on the other cost size um I'm also curious uh looking at the comparison slide where Springfield is because they're our closest neighbor and so I'm curious what their system development charges look like they're very similar to uh our new um rates they actually in we we um went to a tiered um system similar to what the city buene is doing for their parks and Wastewater fees they actually went to a per square foot basis like $2 a square foot for their base level and $3

1:59:00 I believe for their upper level and if you work that out with the numbers it's right around the same very similar to what virus is and so we tried to match more of Eugene because that's what Eugene is doing instead of kind of looking regionally and saying hey let's just make it easy for contractors to work in the region to operate okay um all right those are my questions thank you thank you um I'm this going to be hard to sell for me um go back to my old analogy of death by thousand CS Here We Go Again affordability and regardless of the methodology it's the results these increases are astronomical and it's it's hard for me

1:59:45 to grasp them I mean I don't care how you got there I do care how you got there and thank you for for doing it but why it would just kind of go on son why don't we have comparators like Springfield Junction City Cottage Grove Salem Coralis some of the other communities that I think are more comparable than lakeo some of those for like that how come we don't have those comparators sure we can get them Deb do you have any feedback on that I I have anecdotal feedback yeah and you know I provided what I had uh which was you know more from uh further north but U certainly that information can be collected and then the percentage of increase is and you say it's for

2:00:32 capacity uh it's it's to increase capacity but isn't water consumption going down per capital consumption is going say yes it's generally our water demands are going down um or level some point and we'll be presenting that in a water master plan but um I think the the message would be that the cost increases are not due to the capacity or the growth it's it's really related to the um in Deb could probably explain this more it's the the the vi value of the capacity it's

2:01:18 increased so much since the 2016y of date as the primary driver for the increase yeah I can add to that Wally um you're absolutely right that the um for an average residential unit the um estimated use per dwelling unit did decrease some compared to when we did the study uh before however because you haven't kept the cost haven't been kept current with the you know quite significant inflation that we've had since that time and so they uh just the cost per unit of consumption has gone up

2:02:05 more um you know clearly than the consumption uh for on the residential side had decreased so that was a you know so yes there we're still seeing that Trend but we also have eight years of inflation and um uh so that's what's reflected in the residential on non-residential that is not the case so the non-residential use per uh meter is actually higher when we look at non-residential exclusively and separate from residential so really this is bringing uh the proposed uh structure and um meter factors uh would

2:02:52 be bringing non-residential or general service into better alignment with the actual use of those meters my last question it's an example for so you use S Clara placing it what's its current capacity is it 10 or 15 CL Reservoir yeah it's 20 million gallons okay and we're replacing it with five so how can we use CC fees and say that increases capacity if we're taking $20 million gallons out of service replacing with five and we're using SDC Fe to cover that how does that increase capacity I'm not sure that we actually replacing that with five that's what I thought your slide said did not maybe I misread

2:03:43 it five million gallons oh yeah I think um that's not been determined yet Wally I can I can add I can add on this too um so Under Oregon law we can recover capacity cost from growth either from existing facilities or new facilities or a combination of the two we just can't recover the same capacity so if through both components of the fee so if you've got an existing Reservoir that you're replacing um that's serving growth we can recover those costs we're just not going to include it in the reimbursement component we're going to include it on the project list so that's what we've done is any of those there while there is a reimbursement fee that's part of

2:04:29 this updated methodology um it doesn't include any of the facil the value of the facilities that are being replaced we've included the growth share of those facilities um in the Improvement fee because it's much more expensive to replace a facility today than it was compared to what uh eweb paid for it years years go well thank you I'm maybe in the future I'm I'm not grasping it and tonight it's probably not a good night for me to try and grasp it but I'm I'm I'm confused about that taking 20 million out replacing it with five and then charging this if I were building and developing I would probably question that but if you have an explanation we'll find another time for you to explain it to me but

2:05:14 like I said this is going to be a hard SP take these great increases posing rovski yeah okay thank you um yeah so I worked on helping to develop the city's sdc's for transportation in Sor input on that and my take on this is just because the state says you can include the included in an SDC thing in my view doesn't mean you have to you know all along when we've been talking about I'll just take the second Second Source

2:05:59 plant all along we've been saying that we don't need that for capacity we've got plenty of capacity at Hayden Bridge serve our needs 50 years in in the future there's enough capacity at hayen Bridge that's resiliency and so to put 21% of the cost of of the new treatment plant over almost $17 million on this project list I can't I I would I'm going to make a motion to move that from you know if if if that's appropriate I don't know if I'll get the the votes but the project list needs to be paired down to things that are actually increasing capacity now yes we have the ability to increase capacity with that new thing but it's

2:06:45 that being driven that's being driven by resiliency same with some of these same with some of these other other storage tanks right we we can use them under State Statute put them into our SDC methodology for me that is not appropriate especially when we're looking at community that is having a hard time building new homes because of costs and bringing in new businesses because because of cost like like commissioner Brown says one thing on top of another on top of another before you even put a shovel in the ground on a lot

2:07:31 of projects in this community you're into it for hundreds of thousands of dollars in sdc's and permit fees and so as a commissioner on this board I want to do everything I can to make sure that we're not trying to backfill our our Capital costs on the backs of of new development and new houses okay so to me the way that that happens is by pairing down the the project list the city it was parks and and and Rack or Park we'll take Parks we want to build this many parks great I I can build $200 million worth parks and I can put it all on you know a good percentage of that on the

2:08:16 developers but you just you're dissuading so many people as far as the the progressive part of it I I agree that that's a great way to go but if I've got a 1500 foot house and I've got a 1500 one square foot house it's exponentially larger so maybe the square foot methodology is better and then the other question I had was was you talked about you put up the the thing about what our rates were now and then the the 800 foot one is going down I thought we already did that when we when we did sdus didn't we have a lower rate for 800 and Below why is it why was

2:09:04 it on that chart the same go back up there you go so 800 currently 800 square foot is 2276 but you said that three years ago we we did an incentivize one to lower that for 8 years which are 800 foot or less where is that I think we we changed it in 2019 where we could calculate 800 do an estimate on 800 square feet or less was in the back might have more INF heat that was specifically for so so this is for any 800 square foot structure um the the Adu special rate we came up with was just for an Adu so just

2:09:50 where you have a primary house you're adding a unit uh part of that consideration there for an extra low rate is that of course you're you're not adding an irrigation component when you had Adu like you're probably eliminating some some some irrigation so that's why I qualified for an extra special rate so yeah I don't know where the for me I don't know where this how this moves forward last motion I had to hold my nose this one I would stick my head in the sand before I would vote without some CH Indy and I'll come to you that workk just to be clear you're not looking for emotion tonight you're just you're just

2:10:35 getting direction from us yeah um I just have a question is is part of the reason that these changes are so big in addition to changing the methodology is just that we haven't kept up with it over the years so we're running into that same proc as we did I can't remember what the last one was but yes it's that combined effect here of the large Capital escalation cost escalation over eight years since the last time it was updated combined with the kind of more Progressive grade design methodology which is trade-offs that I think that and alluding to the earlier conversations you know if something goes down something goes up somewhere always

2:11:22 that tension of overall so whatever Direction We Choose Or what whatever whatever the the board ends up deciding to do we have a mechanism in here that it will go up gradually every year so we're not faced with this again in like eight years like we haven't K one did clarify that um so this year we introduced this idea of collecting all of the fees to that single timing in the spring sdcs was a larger project but going forward the board should expect to

2:12:07 see sdc's with after any sort of staged in increase a routine CPI increase every year to avoid those or to impart that's it Frank so appreciate the uh we asked for feedback and we're getting feedback I I would one thing that I would point out is some of this is an issue when you have a list of projects who's going to pay for it who's going to pay for it so if you think about we have 25 projects and these are projects that are on the capital plan the sdc's are a mechanism to which the developers pay a portion of that

2:12:52 if the if the sdc's are too low the ray payers pay for it the consumers pay for it so this isn't an issue of of just oh this project belongs or not if we're doing the project it's a matter do developers pay for a portion related to capacity and if not and you still do the project someone else pays for it so sdc's are a mechanism to help collect through a different mechanism for projects that we're doing and some of this is on us it was it was not a timely update at a time when the value of capacity installed existing

2:13:38 capacity and building new capacity has gone up dramatically so you see not just methodology but you see significant numbers and so short of pulling projects off of a project list altogether this is a mechanism by which the developer pays for a portion of that Capital work versus the consumer it's a it's a dividing line it's a mechanism thank you that was be my question is really our conversation is how much of our capital projects do we want to fund through new development versus funding through rates right I mean that's what we're pushing more of that Capital cost to new developers it

2:14:25 go this route right um I'm looking at these and to me these absolutely follow the concept of progressive rate design right we're looking at smaller homes have a smaller development charge so it meets at least the idea of trying to buffer smaller homes which I'm just going to coarsely assume are probably not the wealthier families I I don't know if that's a fair assumption correct me if I'm wrong there but anyway it feels like it meets that I have two questions um when we look at general service because that gets up to some um really large sizes and really big bumps in cost are all general service um like 4 in lines are those all

2:15:11 for multif family or are those also serving like industrial uses and other uses is there a distinction between yeah commercial industrial and residential general service I think I'm mixing words here that I'm just technical distinctions general service includes all U residential four four units and larger and Industrial and Industrial so there's would be the really very large apartment complexes would be branch and um large industry so to the extent that we're trying to support the construction of housing in this in our community because there is a we've

2:15:57 talked about right big pressure to try and build more housing more affordably would it make sense for us to separate the general service that's feeding apartment buildings or condos compared to general service for commercial or industrial is that something we could do looking to Deb see if she has feedback from Elsewhere on that um we certainly can um the uh yeah we just have to tease that out of the data to uh be able to you know look at a sample of of multifam relative to the meter size separate from commercial and Industrial but yeah if if we can get the data to do that we can certainly um have uh two

2:16:43 different uh subclasses of general service I think that would be worth considering at least as a you know for for staff to tease out a little bit and see if that is something that would help us meet our Housing Development goals um and then the other question I have is I don't see an estimate here and maybe it's because it's hard to do an estimate of the overall Revenue that would come in through stc's from where we are today and what we would project the difference would be um with these with these changes I don't have a sense is that $1 million is it couple million dollars I think our current budget's around 800,000 be bump to like a million a

2:17:28 million from 800,000 20% 20% increase in sdc's so while these rates are the the rates are bumping up significant the total revenue that we're talking about is it really $200,000 a year yeah I think that's the okay I can get back to you that would be helpful because it these numbers suggest that like we're you know pushing a whole bunch of extra costs onto new development and what I think I heard you just say is maybe not so much if it's just shifting a couple hundred thousand dollar that would be useful to to useful feedback I mean I can imagine that being possible given um uh your 4 inch line

2:18:14 there just may not be that many of those that happen each year and so it's a huge jump in the total cost per project but if we're only doing one every four years it's not really substantial in how we're Shifting the cost to development those are my questions you have there thanks apprciate hearing all that and kind of having some time to think about all those comments and one of the thank you for saying the thing that I struggled to say earlier which was is there a distinction between commercial and the residential side because it was EX same thought that I was having of is there a difference there because you know one one thing it's one thing to incentivize these smaller

2:19:00 units but then if you have a large commercial building that has smaller units in it which in my perspective are actually more energy efficient they use few resources and less land and you can get more people into a smaller space and more affordably then we should incentivize those and so to the extent that we're Progressive in that particular category I'm far more nervous about that is it that's we need lots more of those projects I know everybody's big Adu but they're so much less energy efficient than what an apartment complex could be fit more people into um that's one concern I have I do you know the more I've thought about it since you talked about the

2:19:45 square foot I am very curious what that um you know kind of possibility would look like and to the extent that we could do something with um a CPI adjuster and even spread the the cost out even further I mean if we haven't touched this in eight years could we have even more gradualism than just a three-year time cycle on that to mitigate some of that um impact and then um yeah I also think it would be helpful to know what portion like how much are we raising and how much are we putting on rate pairs versus new development that would also rate

2:20:34 pairs Frank yeah just one more piece of context Ju Just because a project is eligible to receive SDC funds doesn't mean we fully fund it in fact if you think about $800,000 a year versus the size of our Capital plan it is mostly on the backs of break payers already I don't exactly know the percentage but we so in the so then in the chart that's in the in the appendix where it says that the new treatment plant 21% of it is eligible for stcs and there's a $17 million charge to that you're we're planning on funding $17 million with the new plant with

2:21:19 sdc's So currently we're generating closer to a million is about what we expect in sdc's a year but 17 million of that would be eligible but in order to fund that we would have had to have collected and historically we have not collected as much in sdc's as we are permitted to fund or are eligible for SDC funding so so the answer is no we're not spending 17 million but on that but the methodology that is being proposed to us would there's $58 Million worth of of eligible Pro or $58 million it's 20% of the of the project list that is eligible

2:22:06 for sdc's and by raising these sdc's we're trying to we're trying to get to $58 million through sdc's is 20% of the capital cost is that am I wrong on that no that's correct that is the the Improvement fee portion of the SDC um and I think the part of the point is that the um you know that's spread over the planning period here which is basically build out and that 21% represents the future growth share of that future uh capacity and because everybody benefits from that um redundancy and resiliency and the

2:22:51 sdc's uh will trickle in over time and so they can be used to pay off debt once the facilities are constructed that becomes kind of reimbursement that can be used to fund other things uh but for purposes of establishing the SDC that amount is what is calculated as the U growth related share right so so the way that I understand sdc's is you have a project list which here comes to $292 million you figure what what percentage of that is eligible for system development charge reimbursements from new capacity take the 280 million 20% of it is 58 million

2:23:38 okay in in 20 years I need to raate raise $ 58 million to get to that I have to charge these prices but those are the prices right there that we have to charge to get to $58 Million worth of sdc's does that am I am I wrong in this no that's correct if we build out to the if we use all the excess capacity gets used so that's the Assumption that's being that all of the excess capacity gets used but the rates are based on trying to raise $58 million so so when I go and build a project today I'm trying my rate is based on trying to get $58 million over 20 years whether we get to $58 million we don't know that but the rate I'm paying is based on the

2:24:25 assumption that we're going to spend $58 million on new capacity over 20 years over how long it takes 203 million a year now we're not growing at a speed to meet the capacity so it's being funded by I mean I mean in terms of in terms of what you have to say um so I'm GNA come to you but first i'm gonna ask the

2:25:10 team what you need from us to take the next step whatever that looks like think we we need to come back to you with the items that you've asked for then have another discussion okay great thank you I'm just curious I mean given your explanation which thank you that made it a lot more clear to me on how it was funded um because I was I was not clear that it was exactly tied to it in the 20% so for me I I think that it's maybe too high especially initially for what doing and I'm curious if others have that because might be a about a

2:25:55 valuable a valuable piece of feedback for you all to take if we're looking at 20% we either take the project list down or we say it's not 20% and I'm curious if there's interest from others in saying we need that total Pi that we're trying to fill to be or if we're still I think that's a good question I'm going to note that we're at time on this topic but um so happy maybe we just do one more round would that be useful and then we'll um we're expecting another conversation with you next month or the following um so one more round I guess I just don't have a clear sense of how many of these general

2:26:41 service 4 inch projects we do like on average a year and overall like how much does a project like that cost right so it cost like millions of dollars these numbers that we that that you're putting forth sound like a lot of money but what's the scale of a project like that so I just need a little bit more context I think that would be helpful me and like what are most of our um like where do most of our sdcs like what what tier what category that would just be some helpful Roski yes that that's one my questions that I was going to have what what percentage are we looking at on these the second thing

2:27:27 is I I totally agree with Sonia as far as a a longer phasing of this and we're jumping into we're trying to we're trying to build for 20 years out and fund it at year three so we've got 20 years to to do this and we can come back with the methodology again if we find out well we're we're really calling by here but I think with the CPI and a longer a longer ramp up on this it might make it a little bit more palatable because like I said we're we're funding projects in the future we're looking at being able to service debt with this this $58 million doesn't include the cost of the the extra cost of the debt I

2:28:14 don't believe so if we're if we're servicing debt on on the uh second treatment plan it's an $884 million thing is that include the debt cost or not the 84 million on the second we don't know because we haven't decided how we're going to fund it yet that would have to confir that's the capital cost I don't believe that is carrying costs so for me making it more gradual then the square footage something as well if that's if that's I know it's tied right now to City of EES but doesn't have to thank you R and i' like to some more information too the only thing that

2:29:00 makes any economic sense are the subsidized projects right now homes for good and we wave those SDC P so who eats those I mean how I mean when we do these big projects I know a lot of the the subsidized projects they get the sdcp L and so is that put back on the 1500 sare foot bedroom sh out home or I mean who's who's paying for those SDC because that there's lot conventional financing go was waved it would just be not offsetting the overall if if there's a capacity that's being consumed by a project and that capacity requires Capital funding and you're not getting the funding from the traditional Source pays for it

2:29:48 PS a different yeah I'm just want to make that point that that that in the future as we go forward trying to finance traditional projects it's sort of the campus projects is almost nonexisting so it's lot more frequency of of sdcp being we right and then so just to be clear we cannot wave SDC fees in years where we have good financial performance we can issue a grant in lie of of that but legally we can't wait this you just take one account put it

2:30:37 right I guess that's all then thank you for the appreciate the feedback we'll also get more on the other local comparators for you too thank you when do you think you'll initiate the public hearing is that starting are we going to start that process because that was one of those slides that you said I don't think we're ready okay that's thank you that's all you got John hey I'm sorry you guys are pushing my buttons tonight it's our goal hey um got a proposal to do a break now and take 10 minutes is that okay with you Brian I support all right okay with the rest of the board okay so we'll take a 10 minute break and be back at 10

2:42:54 2024 meeting of the Eugene Water and Electric Ford uh Mr Booth I think we're gonna hear from front all right good evening Commissioners I'm Brian Booth back up here uh this is the annual resource update or the state of resource planning that youb is in the legion first off I do want to give a whole boatload of thanks on this one this is one of those presentations where I get to do all the presenting of other people's very hard work I name a few names that would not fit in the margin on this one Ben ol eron Bush John crer

2:43:42 folks on the ERS team uh Juan uh who's quarterbacking the demand response potential assess also Daniel Davidson and marcian Rosales for the forecast and Eli ban for the transmission work and frankly more people who I not pulling for memory let's go ahead and jump into it uh overview of what we're going to talk about tonight uh the regional outlook for electricity demand generation and transmission the eweb Vol labor demand trajectory we'll do the Action Plan update uh what's new since our last IOP we look at Comm manide potential assessments uh modeling tool development and improvements uh we'll touch on resource acquisition strategy and execution and nerd out a little bit

2:44:29 on the 2025 energy resource study so let's jump right into it the regional Outlook uh things are growing uh there's a lot on this graph let me go ahead and walk through it we've got three different colors and Each of which has three different lines the green line is the annual energy forecast the solid one being this year's Regional energy forecast the dash one being last year's Regional energy forecast and the extra faded dashed one being the 2022 Regional energy forecast above that we have the summer peaks in Orange and the winter peaks in Blue uh this comes from our friends at Pac who presented last year that's crystal ball uh and her

2:45:16 team big Takeaway on this is that by load growth in the region is is up it is growing um it is up substantially from last year and last year was up substantially from the year before that uh between electrification between data center load growth there is a many many gigawatts of expected new consumption in the Northwest on the flip side of that expectations for New Generation coming online are similarly um stack graph uh lays out all the different types of Generation by name plate in color from the bottom up we have expected wind generation solar PV offshore wind showing up in the next decade on top of

2:46:02 that we have other Renewables Renewables Plus Storage which is typically battery storage in Red Storage by itself and in Gray a traditional peaking capacity the two lines on this are the prior years expected uh resource growth TR trajectories there we go I can enunciate um like the load forecast the generation forecast is all so up from last year to meet those projected loads and last year's was up from the forecast before that so transmission uh here's the fun part uh we could go ahead and build these things by connecting them and getting electrons from point A to point B is a well maybe even more of a

2:46:47 challenge now than it is to build the generation I there are three cues in the Bondville system the first is line load interconnection that is hey I've got a load I want to put it here can I get service second cue is transmission service requests that is you come in you got a point of delivery you've got a point of receipt hey Bonville can I get transmission from point A to point c as point A to point B so if I'm Pacific Corp for example I want to put a wind Pro here hey Bonville I want to deliver the power from that wind project to my service territory can you wheel it across your system the third queue is the generation in interconnection small generators less than 20 megawatts and

2:47:33 large over 20 megawatts I those are similar to the line and load but with generation hey Bonville I want to drop a generator here can youer the growth on this is uh pretty substantial on the line and loow interconnection requests we've seen it Grow from about a gwatt of requests back in 2017 to more like 8 gws in 20123 that is a lot more and in terms of transmission capacity that's several 500 uh MBA lines on the transmission service requests there's two things going on here we have study requests in Orange and the Q in blue which is things that

2:48:18 are queue and Studies have not yet been initiated for uh these numbers are getting even bigger so here we've got well many many tens of gigawatts of new uh tsrs that are in the queue and the studies are very slowly working through that uh the third one I say The Best For Last um is to just astronomically large numbers uh these are the generation requests total gws that are being requested per year going from a couple gws back in 2017 up to north of 100 gws of new generation interconnection requests in

2:49:03 2023 now a little bit of nuance to this uh we have reasons to think that the generation and interconnection queue is being banned for lack of a better term with projects that would like to build and are going out of their way to get into the queue and the the hopes that they can make it through um that said there are almost certainly many tens of gws of real for this we've been told anecdotally the wait time for a large generation large generator interconnection is something like 10 years right now uh on the flip side of this uh transmission execution uh here we have a Pacific Northwest Transmission buildout uh how many miles of 500 KVA uh K

2:49:49 circuit had been built by decade um whole bunch of the existing system was built out back in the good old days when things like permits were pretty easy to come by uh so starting out at 2600 miles in transmission line back in the 60s and then uh declining over time down to one whole mile of transmission thus far in the 2020s so the takeaway here the takeaway here is that the demand for transmission is going up exponentially and yet our track record for building it is certainly gone down exponentially now I don't want to be like too down on Bonville for this as you know Bonville is expecting substantial rate increases uh

2:50:35 particularly on their transmission side in order to go out and meet this increase growth they are doubling their Capital Improvement plan I frankly think they'll need to double it several more times to be able to meet the new uh loads and generators that are looking to inter connect here in the Northwest yeah they they are working on it but to be able to work through this queue it is going to take a long time all right so on a lighter note uh let's flip over to the local EB load trajectory here again we have two sets of two lines we have uh EBS load in average megawatts and glue this is with

2:51:20 our Baseline conservation assumptions and then we have that same load growth gross of Energy Efficiency in the dash line right above that line up in Orange is our Peak L Peak load hour forecast Peak out load forecast again the solid line being withd conservation and managed charging that's a a new one in that top part and the dashed line being without conservation and manage charging so the takeaway there being I managed charging and conservation being worth something like 100 megawatts of on Peak savings to us one more line to put on this I in Gray we have our tier one Bondville

2:52:06 allocation this thing's going to squiggle around by a couple of megawatts over the next few years while it gets finalized this is our best guess at the moment um key here is that eweb has the last 15 years I've pretty successfully met all of our load growth with Energy Efficiency we do not project that we're going to be able to do that I forever and in fact a an inflection point is going to occur sometime in the next several years around 20128 when our load growth starts to outpace our ability to achieve Energy Efficiency so looking at in the future this Gap difference between our load forecast and our bond abil one that is the problem that the energy

2:52:51 resource study sets out to solve in the least cost way possible so let's dive in for just a second on load the fundamentals here any we uh here we've got a scatter block every day for the last five years uh on the x- axis we have our average daily temperature and on the Y AIS we have our average load for the day so this dot right here represents a day where we had 170 average megawatts of load the average temperature was something like 52 53 deg now there's a trend here and this is information that we use in our load forecast every day and if uh I were to draw a trend line through that data it would look something like that if I I

2:53:37 did just draw a trend line that's not mathematical don't hold us to it um the key takeaway here is that our loads tend to bottom out right around 60 degrees and then when it's warmer than 60 air conditioning starts to kick in our load slowly Rises and when it's colder than 60 heating starts to kick in and our load similarly Rises looking into my crystal ball we think that this curve could become oric curved in the future uh we know that we're going to have additional base load consumption we think electric vehicles here in Eugene will continue to grow at the I'm looking your way it's like a 40% annual growth rate we see in EVS these

2:54:22 days uh so we do expect to sell more and more power period at the same time with electrification of heat uh heat pumps you expect to have somewhat more sales here on the heating end and also significantly more sales on the pool so more heat pumps more air conditioning rankly more hot days uh we do expect to have more summer cooling load all right this one it's a lot of lines to look at bear with me for just a second this is the official forecast of what that looks like so our peak hour megawatts by month across the x-axis and separate lines for every five years in

2:55:07 the coming decades the key takeaway from this is that the spread uh between these lines gets bigger and bigger and bigger particularly in the summer so that that is all of that additional uh summer load that we expect to have at the same time our power supply resources are uh well our portfolio is getting smaller this is somewhat deliberate with the last BPA contract uh my predecessor and the team uh set out and acquired contracts to serve our load through our current BPA contract so we have ourc Pacific and State Line wind power purchase agreements expiring in 27 fondik expiring in

2:55:53 28 uh when the BPA contract rolls over that same year the IP code generation expires uh I should say the joa The Joint operating arrangement for that expires but of course the asset will still be there so we'll be uh entering into negotiations on how we might extend that contract but it's certainly not a ging our load forecast during this period it's the black line right now we're in a pretty good place uh the market is frankly smoking hot and we've got extra power to sell and we are I'm happy to say making some money by selling wholesale power uh that said our position in the next few years will change as these contracts roll off and we find ourselves potentially in the

2:56:39 position of having to replaced them all right we did not take an inter or break so we can take a second to ask if there's any inter questions because next it's going to be moving on to the problem solving uh piece of this rather than the uh the problem measuring and uh your monitoring of it great thanks any questions OSI right I have just a couple it'll be quick um the geography of the region when like for the first couple of graphs that is Pacific North generally is it is it the Pacific Northwest power pool is that the geography we're looking at the BPA

2:57:24 footprint it would be British Columbia Washington Oregon Idaho corners of Wyoming Northern California okay thanks and then when you referenced manage charging that's just that's per okay and then what's the Assumption about uh building electrification as we're looking at that I know we have an electrification study that has a couple scenarios we could point at this was the modest electrification study we're using as our Baseline right now so that is significant number of electric vehicles and some additional heat Pops I do think potential for additional winter load could be low we recognizing that in the base forecast sorry we're not recognizing that in the

2:58:09 base forecast now great thanks all right that was a quicke break have time yeah all right so let's jump on to the action plan and the 2025 ERS update uh so some IRP action plan key deliverables we've got the demand side potential assessment which includes a look at electrification Energy Efficiency demand response and when I left off this list uhal solar um we are looking at modeling tool development and improvements rate design and and pricing road map which more to come on that one uh we're also looking at a resource acquisition strategy we're working on our bondal power contract maybe sometimes too much it seems I believe in

2:58:55 Megan and Aron way uh our IP contract we recently extended to go through the end of 2028 we've just had initial talks with Sierra Pacific of course we have these miscellaneous wind contracts that are rolling off we have I always hope the potential that to partner with youo their generation uh other things that are just in the hurn um is not lost on me that my personal goals for the year very closely mirror the things on this list so Frank I would like to say that they're mostly on time and uh but these coming soon so first off the demand side potential assessment uh the dspa uh it draws from both regional and local data

2:59:41 sources to estimate the potential for electrification Energy Efficiency demand response uh such as smart rates and rooftop solar we have a vendor in the door that's Lighthouse energy Consulting Ted light is the guy's name so Lighthouse yeah um T's great we're feeling great about him and we're getting to work on that uh eweb staff uh we have been able shout out to our is folks we have been able to link our regional land information database of Lane County arid data with E's customer information system so from that all the things the county assessor knows we can link up with the house so if a house is 3,000 square feet or 1500 sare F feet it has a permit for an electric heating

3:00:28 system versus a gas heating system is it single family home is it multif family all of these pieces we are now able to tie it to the customer level which is also we now have EV registration data at the Transformer level so from the state nice job one uh we now have the number of electric vehicles and plug-in hybrids and where they are located the schedule for this we have a couple of uh phases with this information coming in with the conservation potential assessment expected in December uh demand response shortly after that and then the electrification and solo potentials uh coming in next

3:01:14 March so I couldn't help but uh share the of the uh the electric vehicle map here I bigger dots mean more EVS smaller dots mean fewer EVS red is fullon electric vehicles and yellow is uh plugin hybrids not only is this a super cool like situation report for what's going on in Eugene now but we can use the same information tie it to what we know about the customer in order to predict who is more likely who's most likely to get electric vehicles in the future so we can take this data and say for example someone with a single family home and electric heat is probably six times more likely to buy an e that sell them with an apartment okay where are all those

3:02:00 single family homes with electric key let's put them on the feeder let's then project where we're going to have additional EV growth service territory so we can then serve that in the most efficient way possible going forward all right uh Juan ends every single one of his presentations with a Far Side cartoon so I had to give a little tribute to one since this is really all of his work I also it has Frank's name in it so it check in two boxes and the third uh certainly the first part of this presentation was a little scary so sorry about that uh we are working to solve problem all right so one of those other things we're using to solve the problem uh is that BPA contract you all saw this

3:02:46 last month we're looking at a menu of different BPA contracts that offer different things to us I from the bottom up uh the blue parts are the BPA portion that would be served under any of these contract options like with slice block lot shaping or only or load following uh well the gray portion is something that we would need to serve ourselves now as with everything you get what you pay for so something like load where BPA just meets it all that is the Platinum Service uh that is the undercoding uh that is the leather upholstery we need to make a value proposition on whether that's worth it to

3:03:32 us so in order to fill those gaps uh here we have the Denny's menu of supply side resources that are available to us we have added a couple of new ones that I want to point out so from last year we are looking at offshore wind uh we have added geothermal generation some familiar faces from last year traditional local wind uh local solar East Side solar smrs traditional gas peer with the optional cration uh the $6 eggs in the basket well about very popular to customers is not on the menu uh battery storage it's the other big another note uh on these is that

3:04:18 there has been very substantial inflation in these prices since the 2023 ITP cost of copper is way up cost of Labor is way up plus or minus 50% inflation across the board on this not all resources are that bad I'm told the battery storage is is not that bad but others are somewhat worse all right so as with everything the devil is in the details on these it's not like we're just going out and buying megawatts and all megawatts are the same and we just write somebody a check and the power shows up for us um let's take a look at what the details on one of these types of resources look like uh this one is an

3:05:05 example of Columbia River Gorge wind wind project that we happen to have H access to the production data on and here we grafted out a a frequency chart we're on the x-axis we have the percentage of name plate that's being generated in any given hour and on the y- AIS we have the frequency that's percentage of the hours in which that name plate was being generated so let let me translate this um for this particular project it generated 100% of its name plate like 0 2% of the time now going backwards uh the average generation of this project was 25% of name plate uh 63% of the time I it was below the

3:05:55 mean 50% of the time it was below 12% of the plate and of course you know the the mode for this data set the most popular outcome was a generation of of zero now this is not meant to be a knock on wind power certainly it produces PL electricity and when it does it pushes fossil fuels out of the system it is me to demonstrate the gorge wind uh we really can't count on it during critical hours now fortunately the very smart people at the power pool are also aware of this and have been doing hard math for us to help us figure out exactly which types of wind can be counted on during fls so Zone one over here that's where Gorge wind is located uh they

3:06:41 have indicated the qualifying capacity contribution that's 2cc there Zone when January is 5.6% of name plate and it tends to stay in those kind of single digits up March uh for most of the winter good news is outside of Zone one uh wind can be pretty good looking at zone two 3 four we're seeing contributions qcc contributions in very strong double digit percentages so things like Wyoming and Montana wind they're quite attractive it gets us back to that transmission problem we talked about earlier but certainly if we could drop one of these in and get it here that'd be a nice resource to

3:07:28 have all right so solving the puzzle uh for those of you who don't uh daily enjoy optimization engines it can feel a little bit like a Ru Goldberg machine like this self-operating napkin I assure you it does feel a little bit like that to us to but not this bad uh it is really setting up to achieve you know fairly simple things it's just a whole bunch of numbers and information that has to go into it so we can model it let me talk about uh the portfolio building uh and how the model thinks about measuring and choosing a portfolio I here we have a a financial portfolio example where we have two investment types Bonds in the bottom left and

3:08:14 stocks in the top right now based on this data set which is 1977 to 2011 let me say I'm not a certified financial advisor and a past performance does not guarantee future returns all right now I can actually talk about this I based on this data set we can see the performance of different combinations of stocks and bonds so if you had a portfolio of 100% bonds it would have yielded a rate of return of 9% and had a standard deviation at a measurement of risk of also so just about 9% if you had a portfolio of 100% stocks you would have seen a better rate of return around 12 and a half percent but of course a higher risk level a higher

3:08:59 standard deviation and more like 177% now the numbers are interesting but like the trend here shouldn't surprise anybody like the stock market goes up and up and up uh over time and it produces better rates of return than bonds over a long enough timeline uh well bonds tend to be lower performance but also safer now on this line we have every combination of stocks and bonds you could choose from now what's interesting about this is not that a portfolio that's high in stocks produces more returns than a portfolio that's low in stocks but that there's a curve in this this curve right

3:09:44 here there's a funny thing that happens in the market where when the market tanks people tend to flee stocks and buy bonds for safety which then drives up the price of the bonds so there is this thing that happens an interaction between the two uh where they hedge against each other you get this power of diversification so in this case had our investor chosen a portfolio that actually had more stocks in it they could have increased their rate of return while also reducing risk so counterintuitively buying a portfolio of only bonds was not the least risk thing they could have chosen they could have gotten essentially free returns by increasing their allocation

3:10:30 of stocks we're doing very very similar math of electricity only it's not just two products that we're measuring against each other it's a whole bunch but this is six-sided shape we've got six different resarch ources on here um the portfolio that we would recommend to you like over there is probably not going to be that we go in 100% on any one thing we will likely not come back to a portf come back to you with portfolio that says Hey by only Gorge wind or by only local solar only batteries there is going to be diversification benefits between these resources and I would hope we'd land on a portfolio that comes out somewhere

3:11:15 here in the middle something that diversifies risk while also serving our needs all right so that computer uh one of our goals for the year of course was to uh up our game on the Computing side uh this is the dashboard for Aurora I yeah there's a lot going on here we brought in one of the smartest people we know in the H de GES uh PhD from tooma power to help us get upgraded and upgraded we did so we spent several months with her uh improving our aora skills building out her model so that it could be faster stronger more robust jumped all buildings in a single bound that kind of

3:12:00 thing in addition to getting upgraded on Aurora we've gone out and gotten skills and complimentary models uh the team has gone out met with other planning teams around the region to find out what software packages they use and have gotten trained up in that the team has addition to getting better at that's gone out and gotten trained in what's best which we were using uh at risk which is excellent and intuitive for mon Carlo like Risk measurements and also our in-house BPA product class um all these put together kind of in the beta testing stage here so I was warned not to overpromise uh but certainly our beta testing is very very impressive at the moment and the models that used to take us a week to run are

3:12:46 now taking minutes by being able to run this thing in minutes we can really answer questions so if I ask hey what if we did that if Frank asks hey what if we did this theoretically we can answer that on the phone and do real time tweaking to be able to answer this thing in the best way possible all right so wrapping this up on the timeline side uh we will be back uh in December with initial results of BPA product analysis quantitative analysis piece of this so some some graph numbers uh we are launching the community table engagement uh next month October 4th I

3:13:31 believe um following that we'll be back with the complete results of the BPA product analysis in February and we'll be bringing a recommendation to you in April for decision action plan op option in June is aign contract next December all right so I just uploaded everything that keeps me up at night to you last 25 minutes any questions yeah wow that's really exciting I mean it was scary but then I had hope so thank you um

3:14:18 I I am curious because you know there's a certain amount that's under our control and then there's this giant elephant in the room of what else is happening that's completely outside of our control giant storage data storage places they going up and consuming all the power that that's really scary to me and and we don't have any control over that uh the other side of that is you know we do have some data so we can monitor it I appreciate that you're taking the risk management approach have all this new software to help run

3:15:09 things I'm curious in all of that I'm I'm assuming it does but does it look does the system look at the um ability have a resource to generate just using historical data or is it looking at okay we project that Oregon is going to look a lot more like nor California did in the 20 years so does it incorporate that as well yes uh we are incorporating climate change uh predictions into our load forecast um as with everything there's always for improv if we don't know exactly how that will impact hydr production we don't know exactly how that will impact wind production um the models are all over the place I've seen some that say Hey this is going to look like San Diego in 20 years

3:15:54 which doesn't sound that bad um and others would say it'll be more like Central America and we'll get 120 inches of rain just great for hydr production bad for solar and really bad for our happiness in general okay that's also fascinating range options in years I mean that's so hard to predict and also and assuming that Monte Carlo thing has some element of guessing what others do versus what we do because they are in tide no matter what yeah so that is a that is Aurora's skill Aurora is the price forecasting software and it essentially builds like the most cost-effective system for the

3:16:39 west coast and then we can use the interactions between all the generation gets built to predict the price of power go so that is our price for Jas model that's trying to figure out all that uh interconnectedness and there's not like a it's not like the stock market necessarily where there is a feedback load in somewhat real time or or do you think of the pricing mechanism as somewhat like the stock market in terms of Futures by contracts out it feels similar but separate to me they haveo last discussion earlier you probably could have Gile of that there was so much nerd on they did um but the

3:17:24 take away from that is that uh Aurora is forecasting market fund so if we were to build a system for the West Coast what should the price of power be what we're seeing in Market forwards right now is very different we're seeing frankly a fe dominated market prices that don't make any fundamental sense it is the cost of getting power it is the cost of getting certainty it is driving the market right now okay and then couple uh dates of the community table is are those events that we're having other people be involved with because if they are I'd love to yes and I believe there's been some discussion around

3:18:09 uh how we can have board members there of course if there's three or more of you that makes things complicated so there will be more to come on that okay all right all right and then um I say this a little bit in just but I'm gonna throw it out there I'm very curious what these giant data centers I mean what is the cost of a cat video is that literally what they're storing it's just videos of random stuff and it's eating up all the electricity or are there bigger things at play that are are taking off this capacity yeah I would say the cloud computing General while cat videos do dominate a unfortunate percentage of the internet uh all things cloud computing go through

3:18:54 dat every time we pick up our phone Every Time We Touch our computer the websites that are being ran that we're interacting with data centers are doing that process uh you probably read in the news about AI data centers yeah I just gonna say AI it's a big future piece of that and Bitcoins yes Bitcoin mining being a big one too I have all kinds of color commentary on the uh benefits of Bitcoin and how it's a great use of society's resources but I'll save that for another day yeah I was one thing that um was not on Brian's calendar that's we have a work session in October and part of the work session in October is to um talk to

3:19:42 the board somewhat about the um the business model piece of the electric side but a lot of it around the qualitative tradeoffs in a portfolio and some of that gets back to your concern commissioner Carlson which is there's this piece of the region that is kind of not within e web's purview but we are subject uh to the grid and its vulnerabilities and its strengths and we can leverage that um but we also want to have a discussion with the board around trade-offs between flexibility and capacity and do you want to manage risk or in this way or do you want to look at a different kind of qualitative trade off and so that that's in October and that definitely feeds into how you might

3:20:30 approach something where you feel there's a vulnerability and how much do you want to mitigate that versus pay for that right there's there's going to be tradeoffs there so um that's in O that's coming in October and that was that is thank you very very clear um my main question really is around the community table engagement what what is that g to look like and are we asking people for what they want or we bearing this both so we are educating and asking for feedback on Community Values things

3:21:16 like those qualitative discussions um there are pieces in qualitative analysis just to name a view like how much do we value local control versus just paining the keys to BPA and asking them to deal with the keys how much do we value sustainability there's a difference between 95% carbon three portfolio and 99 or 100% I'm pretty comfortable with doing math and I'm much less comfortable with telling the community like what their values are this is a nice opportunity to hear from some of our more interesting community and how will we the

3:22:01 on so I guess I'm just maybe that process hasn't been yeah but I'm just curious about that it is very much a work in process um the intent is to bring back a report from the community table I would imagine stag as a report works as we would keep that Community table processed and get back to timeline keep it going really for a year long so through next Bron um I concur with Mindy's comment as very good presentation um the community tape engagement is not going to be

3:22:48 obligatory on us but I don't want us to get set up to say that we didn't follow the recommendations things such as that and I'm weigh in on that commissioner yeah the the this is not an Advisory Board um the community table an Advisory Board generally comes back with some sort of consensus opinion this is this is a working group that we wanted to establish to be able to get a variety of opinions on um including some that that this board has said is important from an equity and inclusive perspective so it's it's primarily around staff wanting to gather differences of opinions um that we might historically have not but it's not obligatory on the

3:23:33 board at all our intent is to use this to provide information back to the board on what we've heard from a variety of sources and so um I noticed you had some fossil fuel resource options in there like uo um so I would guess that's still on play but more importantly to me is how are you going to evaluate the environmental impacts of certain resources like offshore wind with the whale migrations or Westside solar and taking production land out of you know out of agricultural use and things like that how are you going to measure that and what's going to be most important or is that our our I think that some of the things you mentioned very difficult measure and those come

3:24:19 down to a qualitative decision um the environmental portion of this analysis we of course have our 95% carbon fre goal all portfolios will be compliant with 95% carbon fre we also have a silal cost of carbon calculation so if it were to say hey build some gas it would be because that was dramatically less expensive than the Alternatives and let still fall in that 95% carbon yeah I get that I'm looking at the impact on the environment of of longterm I mean creating offshore there's pros and there's cons same thing with solar Farms on agricultural land and each one of those has a environmental cost yeah and and some to

3:25:06 some people may be greater than to others and how are we as a group going to evaluate that VI however that ends up so that is a great question and I wish I had a great answer for you I think the reality on some of those is that it's very hard to matter I couldn't tell you the the dollar impact of building storage wind certainly there's lots of neighbors who don't like looking at wind turbs and I don't know how to put a price on that there is some consumption of Farmland that it's uh it's got to be outside the scope of the math on this one until we figure out a way to measure that I'll just say some of that will start qualitatively and you know we'll we'll look and and you know you hear even public testimony

3:25:51 this evening um we have to be really careful with the terms that we use and someone referenced nuclear and said well nuclear is not clean no it's not clean it's we have to be careful not to call nuclear clean for example because it does have environmental impacts so does wind it can be carbon free or it can be low carbon so we some of this we really have to wrestle through start starting qualitatively and then we have to start to look at scenario Planning and Building Port sample portfolios and understand the tradeoffs exactly like you're saying this might have this benefit it might have a reliability component it might have a resiliency component it might have a transmission which also has net impacts fish impacts

3:26:36 from Hydro I mean we're going to have to weigh through those portfolios when we get to the options and test what those qualitative values really look like presentation yeah I mean we we see the cost of of the impacts the tangible one to me is the mitigation that we're having to do for the fish on all the on the dams right that's in our face every every month almost um so one of the things that I took away from when had this presentation when crystal ball was here the load in increase the region and she

3:27:24 said that the near term one was almost all because of the data FS I think that that last time it was like a 3% increase year year over year and she said that it was all majority based on uh those types of uses that information is good to know because in this community we hear all the time not all the time we hear that electrification is going to cause the grid to fail and that what we're seeing in all of these scenario plannings that we're doing for is all because of electrification and when in

3:28:10 fact El ification is just a very small portion of it and it and it's gradual and and incremental whereas if you throw a huge data Farm on there if if the increase on the region is 3% due to data Farms that's good knowledge to have to be able to share with the community because I hear it again it again oh if everybody drives electric cars and we Electrify all of our building stock the GDs we're going to have brown outs and it's going to fail and and that's not in my view that's not NE neily the case because it's incremental and we can build to that and and plan for that so knowing that percentage that is would be

3:28:55 would be helpful for me if if we have it kind of built in there and I saw one where it was a it was it might have been Elon built one down in Georgia somewhere and they could the power company couldn't serve it because of the transmission so he just brought in 28 semis with generators in them and he's running CH diesel generators to power his AI server Farm because it was going to be three years before they can serve them he said well I don't want to wait three years so he's got 28 semis filled with diesel generators running to power

3:29:42 with Bitcoins and X so that to me is one of the points that is good to get out to the public when they say that the grit's going to fail because of electric cars we talked a little bit about lobbying perhaps we could educate our legislators on this impact if they don't already know that wasn't necessarily the list but if that something we are concerned up which it seems like we should be um there's some opportunity there because it's the only way that we have any influence of right commissioner Carlson I would love

3:30:27 to tap into this group to help with that um there's a number of us at panck um Pacific Northwest utility conference committee and what makes that kind of a unique group is it is both investor owned utilities and consumer owned utilities and also indust Partners like BPA for example and one of our concerns it what what's going to cause the grid to to be strained and potentially even even fail is the fact that you're going to not be able to synchronize supply and demand um there will be an outstripping and it not particular to electric vehicles in your case but there are a

3:31:12 lot of administrative and policy hurdles with building transmission with building Generation Um which causes other unintended consequences if even locally if you think the energy crisis of 2001 here in Eugene sub fired up diesel generators because there was a shortage of Supply it was a bad Hydro year on they bought them they there there are are consequences to to some of these this this planning and so um now we have started reaching out to and I

3:31:58 say we the industry has started reaching out to more and more um Commissioners to more and more legislators around different different things that can be done um both state by state and potentially federally so we'll get back to you on that because this is the time that they're drafting bills that get submitted for next year's if there's anything to do I mean you got to Tee It Up because it takes years for something to actually go from what I heard from this we are already a decade behind most of the issues we're talking about here will tend to be regionally which then becomes either group Regional groups um pools or State Interstate agreements or

3:32:44 potentially federally um state by state it's it's a little bit more challenging but um there's some specifics and we'll we'll get back to you on that thanks for the presentation thank you all good right future board agendas so president McCree the only thing that I wanted to uh get your take on and it seems like it has at least in a couple of individual comments um that I I asked Commissioners about um wanted to um I

3:33:31 know we reached out about a potential work session in a couple weeks it seems like because of the topic and the fact that we have a work session scheduled in October we'd like to have maybe a an extended work session in October to cover um both some of the qualitative updates that Brian was talking about as well as the business model discussion there's some overlap there and so the The Proposal would be to do that on October 15 and maybe go from 5:00 to 7:30 or somewhere in there um and just extend that since that's already on the calendar seems like has General success I know one commissioner may may or may not be telecommuting in from somewhere um but um seems seems like it has

3:34:16 General support yeah everybody that um the other thing um just a number of of different strategic sessions to be added or will um in 2025 plus I'll get with staff and talk about some of the the ways that we can review just generally customer programs and customer service policies throughout 2020 but you'll notice actually 2025 is starting to um you you won't really mind that's starting to fill up um it sounds like barsky's

3:35:01 problem right so there's 2025 I think we're gonna have to and and maybe we can start this next month or so really focus in on what what we want to get done in 2025 um there's some a few really big things that we need to do and we need to concentrate on those things that's all I have to say great thanks uh wrap up any comments questions just for the record I'm gonna be out of the country on the work session and my best to i i i i schedu my before you schedu

3:35:46 yours I'm sorry oh that's great I miss where you're going I'll just make sure I have my list of John Brown acronyms and common phrases that I can throw out and just so that we feel his presence that's a solid plan otherwise it'll be Death By A Thousand Cuts right FR get on all right meeting jour after how many years is this done you've got to have at least a few