EWEB Board of Commissioners — October 1, 2024

0:03 all right uh bring the meeting to October 1 meeting of the Eugene Water and Electric Board and we'll start with um I'm gonna say a few words um about the facility hey look I remember this time uh thank you all for being here tonight you EB management subject matter experts are present in the room and vir the meeting is being live streamed and recorded please speak loudly and clearly so everyone can hear you there's a mic now at the table here thank you for setting that up public testimonies welcome sign up forms are available at the back of the room here um if you haven't signed up please do testimony

0:49 will be um we're aiming for that at about 6:10 visitor access is limited to the board meeting room restrooms restrooms are located on the first floor if you need to use them exit through the interior door here at the back of the room and a security officer will direct you to the location in the event of an emergency please follow instructions given by staff and if evacuation is required please proceed to the nearest safe exit and move away from the building to allow clear access for First Responders uh and before I jump into agenda check just want to say thanks to the security team it is always here making sure things are are safe for us really appreciate your work uh agenda

1:34 check anything anybody wants to add modify barosi Sonia anything on the agenda you want to change no looks good to me all right items from the board members and general manager um so I'll start wherever a hand goes up please Browski thank you uh I had the privilege to cut the ribbon at our new water distribution station at the between the YMCA and Roosevelt Middle School on Saturday it was a well-run well uh coordinated event pretty good turnout considering that there was a a big tournament on the fields right next

2:19 door and about 300 classes going on at the YMCA so parking was a challenge but people still showed up with their wagons and and all kinds of exciting to get their water jugs and get them filled uh there were people from the c teams there uh to help talk about preparedness so I think it was a well done event and I was happy to be able to attend it yeah I uh I attended the um um Northeast neighbor group give a small little report but one of the things I'd like to see is I know that we've got six of the seven stations up now but I still don't think the majority of the community is aware of where they are what they're and I would you know at

3:05 least I'm in our neighborhood we've got sever got a lot of opportunity out there and I don't know if in the future once we get the seventh one in that we could take out a full page ad or do something in some public awareness thing to make sure that uh we get more people informed about their location and why they're there and what function they would serve in in after so I just would think that I know in my neighborhood they don't have a clue and you know we've had a lot of public Outreach and it just seems like the few people that come to get their PE jog maybe 10 and I've got 23,000 people out there so

3:53 Sonia just wanted to say that I'm sorry that I can't be there this evening but you're probably thankful that I'm not there I'm not feeling well so anyway I'll I'll be in and out and thank you for uh giving me a couple of extra seconds to respond I'm going to keep myself muted and we'll unmute as needed thanks sorry you're not feeling well glad you can join remotely sounds good we can hear you well um all right on to correspondence side oh yes I'm sorry yeah um president M Craig Commissioners good evening I had just a couple of items I did uh want to acknowledge um the good work that water operations and Engineering did did uh our Communications team emergency management team for the the launch of the the sixth of seven emergency water

4:38 sites uh we didn't recognize that we were going to be testing the traffic uh control plan uh but that's always a good test as well so I really appreciate your attendance as well commissioner barovsky um um commissioner Brown there's one very easy way we could get people to know where those are and that's to those 23,000 we could just shut off their water for a while and see how quickly they they they find out where those are I'm I'm I'm kidding do it okay we'll do it after your commissioner um I also wanted to acknowledge the fact that uh when it comes to Communications we've done a lot of really good work the last couple years uh and um the Northwest Public Power Association uh awarded eweb 2 excellence in Communications Awards uh

5:25 one for our pledge to prepare uh campaign and program and the other for a video describing where your electric costs go throughout the day and so wanted to congratulate that team um also wanted to uh congratulate Kelly hail and Ben olich who just recently completed the uh Western Energy Institute um business Acumen and effective leadership program this is a a program that um is developed it takes 10 months and a lot of of work with other utilities um a lot of teamwork with other utilities and learning um it's a commitment and an opportunity it's an opportunity for them and a commitment by them and so um we

6:10 are basically allowed two participants per year and uh congratulations to to Kelly and and Ben um saw their their final uh work product uh last week at the the annual meeting and Conference of the Western Energy Institute and uh final just general item I did want to thank uh Commissioners uh and staff for just your your commitment to resiliency and emergency preparedness I think it comes to mind uh as our hearts go out to those in the Southeast dealing with hurricane Helen and seeing all of its its damage and destruction U and the fact that that we're thinking about this

6:56 ahead of time uh making Investments um and and and planning um uh for both uh recovery and response as as part of that um we're all challenged in different ways uh from a resiliency perspective but I wanted to just take the opportunity to acknowledge our investment in that and thank the board for your your continued uh support and commitment in that regard so those were all my general items um president McCrae um there were no other comments we can jump into correspondents so um we allocated a little bit of of additional time uh this evening for correspondence we had a pretty healthy dose of of uh both content and and quantity of corresponden

7:44 this time um so we wanted to give Commissioners the opportunity to um ask questions and dive into a couple of these items there were I believe there were seven correspondence items in total just running through them briefly uh we did have um uh based on um some some public testimony uh and um correspondence that was received by the board and and myself around um how load is handled um at the local sort of individual residential small commercial level um with potential for electric vehicle and other kind of growth we did meet with members of the Emerald Valley

8:30 EV Association um thought it was a productive meeting uh we we got some some feedback um I think um we're looking at making a a change um to how we handle um the policy I think Commissioners have been familiar with for a while relative to distribution transformation and that's if you're the first or the last uh to add load up to the point where there's an infrastructure change you kind of bear the full brunt of that and we're we're looking to levelize and uh make that to where if it's a significant change requiring a main breaker upgrade that you would pay only for a share the share of the capacity that you might be adding not the full cost of of infrastructure

9:16 upgrade of a of a shared asset um we will uh we have some details to work out on that um but we will be bringing something back to the board uh next month uh for your approval and this is really a heads up and if you had any guidance for us regarding that we'd appreciate it several information items a couple related to um EB Enterprise systems um one is around the communications uh the extensive Communications regarding our go live change over in December uh the other some um relatively administratively based changes to our customer service policies those are really informational items for the board uh along with an

10:02 update uh on where we are with sort of the near-term mitigation and sort of long-term planning around the leeberg decommissioning action plan um and um e and also a little bit of a heads up that there's some s uh some significant um board actions coming up relative to approval of contracts on that the um final three me advance this there thank you final three items of Correspondence uh one has to do with a A continuing discussion from last month on system development charges um this is really an appropriate place to capture some uh

10:47 intent as far as what and why um in a policy uh simply because policy will tend to outlive um individual Commissioners or board members relative to their service we don't do it often um but it's it's good to have a policy that describes the intent and the process and the method by which this would take place and so our our recommendation is to um bring some things back for the board not lose the momentum around the discussion but also tie that with a a natural event that occurs uh and is a statutory requirement on the water side which is every 10 years we have to do a water master plan which would set out the course that would align with our

11:33 Capital Improvement plan and thus um an understanding of what's being added for capacity purposes within the system so it's a it's a natural and a good way to to align that um some updates uh also on the the Walterville um Canal 4bay repair where we stand on that um where um you know we we think we have a potential solution um obviously when we do that um FK plays a role in its approval and and therefore there's um some further actions relative to to making that happen and then um the final item correspondence uh I know

12:18 Commissioners did want to have a at least a discussion to understand where we're at with the water said recovery um uh plan and program and and fee um the fee expires in uh June of 2026 um we still have some ongoing commitments relative to um what is distinguished between Watershed recovery and and Watershed protection um I thought it was a really an excellent um sort of roster of all the things we've done the commitments we have left that fall into that category um we're not recommending uh any early termination of the fee because of the um the commitments that we have um but feel

13:05 like we're in appropriate position to uh probably right around the timing of the end of the fee look at um Watershed uh uh a watershed protection uh plan um which U would be a go forward plan based on um um risk assessments and likely um would include both the McKenzie and the will it and so um I'll take a breath and um would appreciate um any discussion that the Commissioners want to have relative to these items uh we have lots of names by them so there's lots of experts in the room on on these these topics and so with that uh president McCrae I'll just pass it back to you

13:50 great thanks and if it's um is it work for open it up to all of those items or should we go one by one joh again thank you um Frank about the contract $18 million um Tod 35,000 a week for 10 years so where do we come up with 18,000 18 million I mean because I know what would I would do if somebody gave me a contract and said it's for 18 million and I 10 years to spend it where do we come up with that number I don't know where exactly where we came up with the 18 million I will say if it's like a lot of our Consulting contracts it's going to be task driven and so this this is um an extended long-term sort of outer boundary over

14:36 that period of time um but the contract would have annual provisions and it would also have a very specific uh task orders that would be a part of that beyond that I would lean into to Karen or Lisa as far as additional details um although that that will that contract will actually come to the board at a future meeting if and so probably more details to come I can just ask ask about the expanded so does that contract those are just soft costs those are Consulting is there Engineering in there is it right away I mean is there what does that I mean that's a lot of money that's a big Consulting contract just I'll look it's a big it's a big contract for a long time oh I'm gonna actually pass to Lisa and Mark I think they can give you better detail than I can yeah and I see

15:22 Mark over there shaking his head he's ready to answer just to Cliff dobber well if we if we all get around and Shuffle maybe we won't exactly know where the answer is coming from so that's okay I'll come back yeah go definitely an intention grabbing number and it is a pro program manager for the decommissioning efforts and it's more like cradle to grave of the decommissioning process so the expertise that this project uh consultant will have will span for regulatory uh compliance guidance as we're preparing our decommissioning act application to to f as well as Environmental Studies that need to take place to support the action plan as well

16:09 as engineering design um for implementation of the action plan and then construction management monitoring after the work is complete so it's intended to cover the spectrum of U decommissioning related activities um so the proposals that we're reviewing have that gamut of expertise U presenting to us in their proposals U so it's a very diverse scope of services that we have the flexibility to tap into via that contract but also not an obligation we we've got that very clearly identified as well appreciate thank you great answer thank you you

16:54 that's it any other comments on that topic before we close that Sonia anything from you on that item um I had a comment on the rate and the for the electric vehicles come back to that in just a minute and I'll just um then add on that $18 million one I appreciate the foreshadowing of that amount and that we'll be taking a closer look at it in December it looks like um is this a typical project in terms of I mean I know it's not a typal project but um in terms of like oftentimes project management costs and the kind of Landing costs are 10% of the total and this is an enormous project right in terms of the total amount does it seem from your experience like this is kind of in the same ballpark of what we expect in terms

17:40 of the amount of project management and planning costs compared to actual construction good that's part of uh commiss Brown's question as well that a basis for that 18 million uh estimate is that overall strategic evaluation uh cost projection that that you've that you've been saying and and you're correct it's in that 10 to 15% range um of of uh and and our anticipation um is that we we'll have some controls over whether all of that um soft cost Associated goes to this particular consultant the contract could be written in a way where we've got a lot of discretion as to whether they

18:26 land in this contract or in others thanks Frank yeah commissioner McRae I would I would add that I'm not sure I would say that these are going to adhere to a typical type of construction ratio um part of that is because it seems like the landscape of which we're dealing with in the regulatory environment is pretty Dynamic and part of this role is to help navigate that the legalities of that the process of that and so um well I think it's it's maybe relative to a ballpark I'm not sure that over the life of this project that that would be a fair

19:11 assumption I'm glad we're getting help with it because it's a huge project that um Sonia I heard you had a couple items so I'm gonna look to you if you want to weigh in next okay I just wanted to say uh thank you to staff for meeting with the Electric Vehicle Association and looking into that issue it does seem like a a fairness issue and it's also one that prevents us from having the growth in that uh area that we want to see um from a community perspective so I appreciate uh the review there and I also wanted to say that um we should also be mindful when we Implement a new um process especially one that

19:56 if um over time it as it looked like from what I read um if you you know hit that Max on the capacity and then we have to install new capacity and then that cost then gets spread out to the group um it might be challenging for people to make investments not knowing what that you know oh now I'm getting this kind of reverse bill for this additional uh rate um I just wonder if I think that we have a demand charge on some of our other bills um and I and I wonder if there's something that we could have that's just smaller but it builds in you know the natural growth that a region would have so anyway I'll look to you and and your

20:41 expertise there but um just wanted to try to keep the shock factor out of it thank you yeah commissioner McCrae and I I um commissioner schlosberg had had a similar question pre to the meeting the the theide idea of this fee is that there's there's no sort of later reoccurrence of something based on a decision that your neighbors made um this is a levelized cost it's only it only applies when a customer were to make a major enough change that it would trigger uh a main breaker change um it's not just adding load where your neighbors if your neighbors do something

21:27 to load the Transformer or whatever that's that's taken out of it now it's it's almost like on the water side we have a a charge per meter size this would be just a levelized cost that's occurred over time that we've levelized across the system um it's a little bit different in that if you make a decision then um you're paying your portion of it and that's all so that's going to be that per ramp upgrade B but anything you're neighbors do is not going to impact you and that's that's part of the intent of this and vice versa if if you're making an investment to upgrade the system you're making your proportional

22:13 investment you don't have to pay the full rate right right that's correct perfect thank you apprciate the responsiveness to the interested parties that have brought that to us and this just to be clear and I think that um after meeting with the the Emerald Valley Electric Vehicle Association um it was never intended to be punitive to a particular application um it came across that way um we we understand that because one of the requirements I say requirements one of our requests relative to an incentive um that we were supplying was to contact and have this assessment done um however when you look at any kind of of decision that a

23:00 customer would make that would upgrade the breaker that that that would be where this would apply it wouldn't just be in one particular area and it's a pretty substantial change that would um in all likelihood um require a permit require an electrician and likely they would have to contact eweb in in most cases that we can think of to pull the meter to actually make this change so um we didn't want to say call us um and then be punitive about it oh yes so um there were some reasons like I say there's some details to work out but but the the goal here is to be fair um so that if you make a decision you pay your PO your portion and you're not affected

23:45 by your neighbors or you're not affecting your neighbors based on your decision um thank you uh the ones that I wanted to comment on are number five uh the memo on sdc's thank you that was very helpful it it kind of put things into contact context I know I kind of was a little bit uh aggressive at the last meeting regarding the SDC charges and I I appreciate the the well reasoned demo that was out there and I look forward to moving forward with a policy that will help us get there uh I realized that you

24:32 know it was kind of we didn't raise rates for years and years and then it was like oh we're behind the the queue again and we need to to get there um and I'm looking forward to the conversation on that going forward so that that is fairly distributed amongst our customers and new development and so thank you for that memo and then on the Watershed recovery and restoration Plan update again just a fabulous memo and the uh I would I would put it out there to anybody who wants to dig into the stuff and read into that memo and see all the good work that that $3 a month has done to our Watershed and the families and the wildlife and everybody that's live

25:18 lives up the McKenzie or drinks water out of the McKenzie it's just a really great memo and it just goes to show and highlight the good work that that a lot of the people that are in this room that are up River and that care about our Watershed are doing so thank you very much for that anything from you for me thanks um yeah I had the same thought on the stc's and looking forward to the next conversation iteration on that yeah please Frank just just a sort of an informal head nood and I'll I I I think um we can we can ask um commissioner Carlson as well it seems like the board is supportive um for bringing back this transformation fee concept that we that

26:05 was presented um relative to Shared Transformer load and I'm I'm kind of getting the impression and I've got head head nods and then the other one is looking at sdc's um as a policy to to kind of get the dive into the discussion that was started which is um these These are capital costs that either have created um capacity or will create capacity to some degree we're not building specifically in all cases for capacity uh however if you're putting infrastructure in the ground for 75 years you want to build in a little bit of capacity the question then becomes how is that paid for and by whom and when and so th some of those

26:51 philosophies um can be uh sort of debated and and captured in policy as well as as maybe the process for this next time so that's the intent I'm I think the board is generally supportive of that based on on what I'm seeing and and the the conversations that we had individually including mine with commissioner Carlson yeah it looks like you're proposing bring that back December or January December or January if depending on I'll say that the meeting load is is is pretty heavy um over the next few months we nor Al do a policy review in December we may want to do an abbreviated version of that because of of your departure president McRae or

27:37 capture s of your thoughts uh separately but it may not be um in December it might be in January we'll we'll just have to to see how the agendas work out okay it looks like there's support for that but and and there's there's an upcoming schedule for that okay great thank you yeah and then the only other one I wanted to take a couple minutes and just talk about the McKenzie Watershed recovery um the plan and and that search charge that has been in place and one I want to say thanks to the board that was that voted to enact that before I was on this board um as someone who's worked on Wildfire recovery uh in the McKenzie it's been really helpful to have eweb right there

28:23 with resources to be able to make things happen so um just from my work life it's been amazing to watch what eweb is capable of and I agree with you the list of accomplishments here is kind of Staggering um and and also the the match right and if I'm reading this right it looks like um and I hope staff will correct me if I'm misunderstanding this but there's um been 7 point almost 7.2 million as of um the end of August that have been spent through the sear charge and then grants and partner reimbursements leveraged on the order of six million do I am I reading that right that I thought it was Lage more like 12 million yeah but um okay I'm not the numbers person but I can double check

29:09 that for you president McCrae we we've leveraged that money well I guess is yeah guess simp answer would be yeah exactly it's it's amazing to see how effective our staff have been at leveraging every dollar that e web's uh customers have put on the table have been matched at least once in maybe uh multiple times uh and um so one of my questions is do we see more opportunity like that coming down the road I know that's something that we talked about when we when this topic came up maybe four months ago um I think there was board support for looking at the possibility of kind of repurposing that fee like letting it sunset as it's intended but potentially

29:54 um considering another sech charge like that to to support Watershed protection efforts in the wamit since we will soon be taking water from the wamit um and so there's part of my question is does that make sense in terms of the potential for grant funding for water head protection measures or other investment measures that we're looking at taking over the next five or 10 years I know that's kind of a confident question does that does that make sense do we do we see opportun over the next five or 10 years where if we had a similar available funds that we could leverage them similar to what we've done up the

30:39 McKenzie well i' just say my view of it is that the fund that we had will have met its purpose or water recovery we will have a new set of work to be done for Source water protection on the wamit has not been fully identified yet won't be for some time we need to write the plan for that first then look for funding streams for it if it is if if what we see as opportunities or traditional Source water protection work to me that is work that needs to be rate funded by the entire customer base um I believe that that's part of our multiple barrier approach to save drinking water it needs to be something that's embedded in our regular funding system as something that's a secure you know year-over-year

31:25 allotment if there are opportunistic things that come up I I certainly believe the fee and Susan kiman too has been uh a lot more like at the ready for us to kind of spring on those types of opportunities I don't know what those might be yet for the wamit um we have to see what the priorities are for that water source I guess what I talked what we talked about all of us in the metmo one of the big things that it's been really good to Leverage is for Acquisitions because that's not something you can plan for in a single year I think the whole board has seen how sometimes those negotiations can start and then end up years later so that was definitely one of the advantages of this rate fee is that we knew we had some money that we could

32:11 plan for we also had funding that we could use to leverage for grants that require a match of 25% or so it was no money's ever guaranteed um until you all approve the budget for the following year however that money can be something that's you know in the back of our head is a potential to be able to be used for those kind of GL grant leveraging opportunities so that's definitely some of the advantages of having that kind of money so there's creative ways we could go about doing that um with the repe is one of those as safe to say that the water quality in the coast fork and the Middle Fork have more potential for improvement than the water quality in theeni you know um we have a surprised guest that I know we were going to have

32:56 we have the executive director from the Coast Fork Watershed council is here and so I'm wondering if she might want to be speaking to that during public comment for the coast Fork yes there are more opportunities for I know we know back and forth so I don't know if that's not appropriate but I imagine during public comment that you are speaking speak for the middle board but in the coast for yes there are more opportunities and I feel probably what we're just starting like Karen said we're just starting the preliminary investigations into what we'll do for Source water protection within the coast fork and the Middle Fork I think for those where we've been kind of more um opportunistic with land owners that wanted to work with us in the McKenzie on the coast Fork it'll be more strategic I think our partners have already been doing an amazing job of identifying those landowners that have

33:41 those improvements that need to be made and they've also been building those relationships as part of the upper L stewardship Network and so I think they have a lot of that base layer ready so that when we come in and we're ready to invest in that area it's going to be very strategic and a lot easier for us to have those connections made so I'm looking forward to it yeah if that answered your question yeah thanks yeah I do just want to chime in on the water quality front just just to be clear that um the wamit is an excellent source of water for our another drinking water treatment plant and so from a treatment perspective um I I just want to be clear I don't have any concerns at all about our ability to treat that that that doesn't mean that we won't have different challenges for Source water protection in that Watershed uh but for treatment GNA be cover yeah yeah no I

34:28 appreciate the clarification Frank yeah president McCrae I I wanted to to distinguish between make it pretty clear there's a difference between a fee and a fund and so there are um you can create funds and part of what this this fee approach did was it created a fund that was U flexible within the purposes of of uh in this case Watershed recovery how you actually finance a fund can vary we we can use Alternative forms of financing we look we can look for Grants we can we can create that um through the general rate base um um but it it is different between a fee and a fund and at some point we want to not be

35:14 I was going to use an example we we don't want to be Comcast where there's you know 16 lines on a bill that have all these different different aspects to them um and so when we use fees we want to be um precise we want to be be um you know targeted with those um but the diff there is a difference between a fund and a fee and we can create funds in a number of different ways that can then be used for specific purposes which could be um for things like like this so just wanted to differentiate between those two John thanks um you know getting to to

35:59 kind of where Matt's going um you know I think I've seen the real success of this fee and sitting on the Watershed Council for the last three and a half years uh I've seen the opportunity that we had to leverage and have that that those dollars available and knowing whether it's a fee or it's a you know part of our rate structure that we we would automatically put in there I think we've got a great story to tell with that I think that if we wanted to move forward and continue a fee for for Source protection we've got a good story to tell and a track record to show how we've done it I also think that the Partnerships that are out there right now are in probably one of the strongest positions they've been in in years what

36:46 with the the council and and the Staffing that it has but also the the fact that the upper wam Soil and Water District has now have a tax base to it so they've got that at funding that are going into these watersheds as well it's kind of a three-prong approach as far as being able to go after those grants and being able to hire the people and the project managers and the contractors to do the work it's like we are in such a great position partially because of this fee but also because of the work of our partners that are going forward so I would be in favor of looking at this going forward as a as we get closer to the the fee sun setting doing an

37:32 educational reach out to our community and our customers showing them the work that we've done and the opportunities that we have for the whole Watershed as a whole so I put that up um I know it's really not on the agenda that we're going to be debating or discussing this Fe but I feel like we enacted this fee in the wake of a disaster to um fulfill need that we saw at the time and we were already doing um Source Protection work and perhaps maybe what we've learned through this process is there's more opportunity to do different kinds of source Protection work but I think if we enact a fee on our Second Source it's really just a rate increase because the fee was like a

38:19 a shortterm targeted uh way to invest in recovery so I think that if we want to budget more towards Source protection that's one thing but I just feel like if we if we do a fee it's it just feels like it's not really an honest uh way to go about funding that work thanks any comments from you Sonia uh nothing nothing new I I agree with what Mindy said on it it does feel a little um like we need to tread lightly there but I also do believe that

39:04 the you know the work that we've done up there is absolutely necessary and that we've done a great job leveraging uh you know an investment to get other dollars back into the state that we typically you know leave and go to other opportunities so I'm glad that we're doing this work and I look forward to this discussion around rate design and perhaps we can put a pin in that thought for future conversations around rate design and whether this is a fee or not thanks well I agree with you in terms of the short-term targeted nature of the Watershed recovery fee and I guess I would propose the same thing that we have a shortterm limited to five years or something on that order to make a

39:49 quick upfront investment in the the two watersheds that we're going to begin taking water while um and I also would would propose that we wait until this current fee ends to begin a new one that we not have them overlap um and it feels like to me that the being able to forecast for our partners that we are are going to be collecting These funds and we are going to put some funding aside for a short duration for um short-term opportunities uh for leveraging Grants and taking opportunities to to purchase land that um having more than just a few months of of Headway for them to anticipate that

40:34 would be helpful so um I guess I I would look to see if there's support for asking staff to bring back a proposal for a short-term specific uh fee just for that purpose John well i' probably pound in the drum louder than most people that have been in this table for the last decade or so about water un that that's an aside but I also understand that affordability and go look what our water rates are going to do we I we have to look at this in a holistic approach rather than just say what's have feet right now we've got dairies up there we've got Urban runoff we've got short Mountain we've got a whole lot of sources of pollution that we don't have on the McKenzie and so before we go do this I think we if we're going to do it we need to do it right and better late and long in my opinion I don't think

41:20 right now if we start talking about extending this fee that's fair because you got to look what we're doing the water we for the next five to 10 years just to fund the second source and the Second Source isn't going to be run in full capacity so what is 7 million gallons a day which is a third of our capacity and so I'm just thinking holistically that I'm not opposed to it but I want for me I want more information about why and how and what does this do because it compounds that rate increase and the affordability factor is really getting you know back home Death By A Thousand Cuts we're we're raising r R we're raising rates and uh we're going to raise it significantly and water is another commodity that you can't you know they don't have a choice on so um I'm not

42:06 opposed to it but I need more information before I support it okay others in terms of um asking staff to bring back I'm not hearing support for that all right we'll move on then to the next item which is public in public input in person or by telephone um so we're going to start with um the the people on the phone and I'm going to give a quick introduction before we get started um and just say welcome to all to the public input session of this meeting eweb is a public not for-profit organization whose Charter is to deliver drinking water and electricity to our although the form is

42:52 not used for an open back and forth dialogue Commissioners and staff value hearing diverse perspective and receiving Community input speakers are asked to keep their testimony relevant to Better Business and requests that everyone share their comments in a productive and respectful manner should speakers or audience members become disruptive they may be muted and or removed from the meeting uh at this time we have five individuals one person on phone and four here in person if you're here to speak in person and you haven't signed up um please do so we can get you in the queue when your name is called you'll have up to three minutes to provide your comments there's a clock up front here and a table with a microphone and we'll begin the public input session now and we'll start by Alan with Alan gazano who's on the phone

43:39 and then Jared W will be next Alan you wanna go ahead and unmute yourself hi can you hear me yeah go ahead thanks Ellen okay hi so this is your um your favorite um Canary in the mind speaking here and of course I'm to speak about the smart meters that have been imposed upon us and even though you know I'm going to say Canary in the mind because I'm going to share with you my personal experience of what's happened since my meter was in was installed while I was in broadcasting mode and I walked by that meter or was anywhere near that meter in my house I felt an intense pressure on my head which disappeared when it went off of

44:24 broadcasting mode which obviously it was only on for a little while I've also experienced flickering lights more frequently than usual which is almost never um the waste and expense that you went through with the excuse of we need to replace it because there's no spare parts when the analog meter breaks down it's like you know it made more sense to leave it in place until it breaks down and then replace it that would have saved a lot of time and money and that added expense CES out of our pockets and our bills came out of our pockets you're talking about legal fees you're talking about fees and rate increases for all these projects well how much did you spend on legal fees to fight us how much

45:12 did you waste on this whole smart meter program that most of us did not want how much and now you want us to pay more you should have used that money for all these other necessary projects so in also in case of a catastrophic flood as we've seen in the Southeast recently how would the digital meters hold up versus the analog once they're inundated with water I don't know if the analog meter would survive but I know for sure that digital meter would not survive and that would be more expense to TI to re end time to replace it and then you talking about wanting us to pay extra for meter readers if we don't want to have our meters in broadcast mode we've been paying for that all along

45:57 how could you add that on to our bills now anyway you're we feel like you're using our health and well-being to cut your corners and make more profit when you talk about electrifying everything like cars and everything like that where's that power going to come from I definitely don't want to pay for my neighbors you know whatever neighbors might be able to afford an electric car we low-income people we can't afford electric cars we won't be able to afford them when they're used because you'll they'll need new batteries which cost the same as a regular car cost used so we've got to rethink a lot of this stuff you know and please stop using our money against us use it for the things we all need and want together thank you so much

46:44 I'll see you talk to you guys next month thank youone and next is Jared wbr followed by Amanda gillbert good evening my name is Jared wbite I am the executive director of the McKenzie Watershed Alliance the alliance is the fiscal sponsor of the McKenzie Watershed Council I'm also an eweb Custer and I reside in Ward one um I'm here tonight to thank the board and eweb for their Innovative Source water protection program uh this funding and this leadership has provided a high functioning partnership uh within the McKenzie heard a lot about that already this evening um and it really set the stage for a remarkable um response in support of private land owners and

47:30 nonfederal public lands following the holiday Farm fire EB investments in sourcewater protection have helped leverage over $18 million in restoration dollars flowing through the McKenzie so these are grants outside of of grants that the that EB is sourcing um aside from this leverage funding I want to take a moment to really highlight um how this Source water protection investment has has made the McKenzie partnership more effective itive following the holiday Farm fire the establishment of the rate fee in support of the the work within the McKenzie um allowed Partners to take a much more strategic approach um this allowed for uh focus on areas such as Quartz Creek that allow that had been longtime water quality and H uh Hab

48:16 wildlife habitat um priorities um allowed for more strategic investments in Source water protection um dedicated funding also provides flexible funding to complete critical pre-project work like design and permitting and this literally shaves years off project development and makes our ass to thirdparty funding sources extremely competitive eweb uh leadership and the work in the mckeny has helped other NOS um to begin to take on bigger and more complex projects across the entire upper W lit um through the through the newly formed upper lament stewardship Network which has also been mentioned a couple times this evening um so thank you once again um for E web's longtime support and Forward

49:01 Thinking Source waterer Protection Program we're extremely appreciative of this support in our Watershed and support the structure of a dedicated funding source such as a rate fee um to maintain this work moving forward whoever e web decides to move forward um we look forward to Future Partnerships so thank you once again we really appreciate everything that e has done to support our work and our partners work work within the maeni thank you next is Amanda Gilbert followed by T sheer hello my name is Amanda Gilbert and I'm the executive director of the coast for bamet water Council um I am

49:46 not NE web customer I am a city of Cottage Grove customer so I already drink the water that is intended for to be coming from the Second Source um I would like to encourage the council to also continue with the rate fee or whatever other funding mechanism that they choose to deem appropriate and expand the spending to both the middlefork and Coast Fork once the Second Source has gone through in the coast Fork we would use it to help leverage Federal match for our funding for example Le our working lands program currently works with our a a and farming

50:31 and Forestry to help move programs and Farms to a more resilient and restor regenerative agriculture program through this we've received 56,000 from nrcs to do just Outreach in our Watershed over the next 5 years with with the fees once the Second Source is implemented we can do so much more with this art already in hand and the Outreach we could go straight to on the ground activities without having to do the Outreach

51:17 and having the relationships with the farmers and the Egg Community is necessary to get the work done you can't just knock with doors um so again I would like to thank you for your time and consider keeping this fun going however you choose and next Miss Shard followed by Joshua Korn hey people it's me you go check otherwise known as Tiana Shepard I'm award seven and I'm um with Eugene forj I'm the coordinator for the 4J e web education partnership I'm here to thank you as always um we're just

52:02 embarking on school year 2425 and just a little bit about the end of the year last year we were able to bring the electric vehicle challenge back for the first time since before covid um on a school day so it was a field trip it was actually amazing it turned out beautifully so we already have a date for the beginning of June of this 2025 so I'll share that soon we're getting in you know gearing into our salmon season right now and so I just came from our salmon teacher Workshop right before this and we're have tank set up this Friday chillers are delivered and we're for trips starting soon um stay tuned for uh either coming to A Fish Creek trip or a salmon release trip the board's always welcome and yeah it's our most successful program we have uh 53

52:47 tanks out in the classrooms this year so we have a couple people sharing because they're new and they're feeling a little nervous about being responsible like that but we're hoping to get them on next next year um so yes it's very um successful program with fish and wildlife's fish eggs to fry program um I'm continuing to do the Eco experience newsletter it's really a great way for me to reach all people in 4J not just teachers and so I'm starting to be looked at us kind of like oh what did Tana think about that if it has to do with climate or conservation in the district I'm working with um High School group of forj climate Justice team and they have a lot of big action um plans for this year we've been tackling Transportation other things but in particular they want to hold our district accountable for the climate

53:33 action plan 2.0 that the city has in particular around water quality Transportation food waste and reduce re reuse strategies so we're going to be working on that um they have a clothing swap coming up and they're going to do two of them this year so that's kind of exciting and um I was able to meet the new bethl person that is in this position so bethl finally has someone her name is Sherry that I can't think of her last name but I think she's going to be lovely and I'm kind of helping on board her a little bit and um I also would like to comment on how exciting it is to see the new emergency water station being um built right now at Kennedy Middle School that's where my H my house is my offices and so I've been taking little footage of it and I plan to make a little video about the Water

54:18 emergency stations so that the um students and teachers know more about it and they can share it with their families so it's kind of cool and thank you for bring that to West Eugene we've been a little underserved out there with that kind of thing in general in Eugene West Eugene is kind of underserved so I appreciate that as being a West Eugene citizen um so I think that's kind of my my long and short for now but I just want to thank you again for your support and we can't do it without you so thank you and last is Joshua Cor so recently I went on a backpacking vacation and um you know I I I take full

55:06 responsibility for the fact that I forgot to pay my eweb bill before I left and my power was shut off I as I said I take full responsibility for that but uh what came next really gets into the smart meter debate uh we've been l LED as the community here have been led to believe for the last 11 years that there was some consumer benefit to having a smart meter installed on our homes this proved to be completely false uh as soon as I came out of the Wilderness I was informed by my house sitter that the power was shut off and I immediately

55:51 paid the bill and got that taken care of it happened to be uh Friday night and Saturday morning when I was taking care of that and uh and I was very disappointed that the most obvious benefit that I could imagine for a smart meter is that once the bill was paid and the billing issue was completely solved then why wouldn't this super smart amazing piece of equipment technology immediately flipped my power back on but no it took literally approximately three days before I I actually had power restored and it

56:36 wasn't until I actually returned back to my home and on Monday was able to contact customer service at which point they told me that it because of the terms of use the terms of service for eweb once the power is shut off it requires a customer to call into the customer service and and authorize the billing again for the account which seems a little ridiculous to me considering I literally just paid the bill isn't that an authorization in itself I authorized I you you guys don't have have any authorization on my card

57:21 anyway I'm paying the bill anyway just like all customers are paying bills when we get them and and so this was very disappointing and uh and and to me it makes no sense and it proves that these this technology serves no benefit to the consumers and only serves to cut your costs and uh and and provide a technology which has yet to be proven safe to the community and the public at large so thank you all right and um that will end the public input period and this time Commissioners are given opportunity to

58:06 make comments if you so choose any all right John I'd just like to thank everybody for coming out I really appreciate people coming up and acknowledging our contribution many many years the only time somebody would come to that Podium is to complain and that's say thank you so thank you for saying thank you and uh T especially I I know that we are faced with pretty big decisions on Carmen and trailbridge fish passage and so if there's going to be any more opportunities great article in today's paper but if there's going to be any more opportunities for you going up there I I think if you could notify us if we could uh if you haven't seen the fish passage and what we're going to up

58:53 against at sometime I think you see it because we're going to make one think a huge financial decision depending on how it goes so you ought to go go see what it does and how we have the traff all now and what fish ladder May propose so they coordinate that maybe you know take two groups of Staff e staff to to get us down there so that that would be a nice notification of if you're going to do it again this year and if not that's okay too but thank you again for coming up and acknowledge us and we'll do what we can to protect the water but we also have to make sure R beers can afford to trade water so thank you yeah many I just have one comment um Hannah when you mentioned that you're excited about the water station that's happening at Kennedy middle middle

59:39 school and John you mentioned earlier about how many people in your W don't know where the water stations are I do think that there's a opportunity for some kind of partnership with schools to let people know where these water stations are and information could go out through students home to family um I know not everybody has a child in school but to me that just like a big opportunity to part there that materials and all sh all right yeah I Sly like to thanks folks for taking the time to come and provide testimony uh both in person here and and over the phone um so with that we'll move on to our next item approval of consent under a

1:00:26 R motion to adopt by Brown second by barowski any conversation onent calendar aone I'm gonna ask for a vote consent calar a support say I hi hi pass is unanimously moving on to calendar B voice from move consent calendar B move by Brown s a second I'd like to pull item I'll second the motion to adopt it but then we'll go to conversation and for he's gonna ask

1:01:12 about item eight I'm just making it weird AR it's all right we'll be okay yeah please okay um item eight is just a resolution regarding our annual investment policy uh there is a a small change that that I think was uh mandated by the state but it has to do with environmental social and government governance um I'm just happy to see that that is part of our investment policies I know that at the City of Eugene and some other entities around there's been some local uh some local discussions about uh the city's investment policies and counties policies and I'm just happy to see that

1:01:58 there is a section in our policy that we're adopting tonight that does uh address environmental social and government so I just wanted to point that out that there is something in our policy that it may not go to the exact extent that everybody would like but just know that we are looking at it and having its part of our policies and our investments so with that I would move to improve the Full Slate of that calendar all right yes please go ahead Sonia sorry I I couldn't insert into the mix there I had a quick question about the Turner and Townsen contract um I noticed that there was a

1:02:44 very very Stark difference between the two bids and I wanted to find out if we had had any experience um with Turner and Townsen before um just the fact that there it was more than four times lower than the the local bid um I just wanted to hear some thoughts from staff on why those two were so drastically different because it it gives me a little bit of pause wondering if if they can actually provide the services that we're requiring president McCrae yes please would you like step comment yes I was just looking to see who is on that yeah yes so um Turner and Townson amcl we

1:03:32 have been working with for a year now um we had talked with them prior to engaging and uh I think that that what happened with that is that they were more familiar with the scope of work the other consultant uh the scope of work that they proposed was far beyond what we needed for the work and that's why they're did was so much higher okay great thank you great thanks MRA just a just a point of order for clarification sure um um commissioner Brown um put forth that uh a motion to approve you seconded that everything in between there would

1:04:18 probably I I think we should just consider as discussion as opposed to pulling an item specifically which would have required um a new motion and so I think if um just for clarification on on minutes we just had a motion we had a second and then we had discussion including comments from commissioner barovsky and a question and staff response from a question from commissioner Carlson and staff response if that if that's helpful that's I think how we'll direct the minutes to to rep the conversation all right so move to adopts uh consent calendar B from Brown seconded by me and we had discussion

1:05:05 moving to a vote that in all those in support of adopting consent calendar B say I hi all right you um all right and the next up is the presentation on the draft 2025 electric G bu longterm Financial plans Joshua complication where she goes think I'm supposed to be here Frank

1:05:52 well I you were behind barovsky I couldn't see you I was like where where did she go Hing up here good evening president McCrae and Commissioners Deborah Hart for the record uh with me this evening are Aon Balmer the acting finance manager Alicia bores the acting fiscal superviser and then we also have the rest of the budget staff here who really did the heavy lifting that made this presentation possible and they uh will be available for questions as well so last time you saw the long-term Financial plans was back in July and we had brought them with their um respective

1:06:37 assumptions this evening we here to review the updated plans and are seeking board Direction on the 2025 draft budgets next month we'll be returning with a more detailed draft budget document along with proposed pricing uh changes and we'll hold the first of two public hearing on prices uh the second public hearing on prices will be held in December at which point we'll be asking to adopt the pricing proposals and approve the final 2025 budget document with that I'm going to pass it over to Aon Deborah good evening so starting off with everybody's favorite topic of inflation and we'll do a quick look back

1:07:22 at the inflationary environment that we've come come through in recent years as it is a contributing factor to the large increases being proposed uh next year so with uncomfortably High inflation over the past several years the board has implemented rate changes as staff have managed increasing costs to capital projects and operational programs in the charts on the screen we can see a significant disparity as developed in recent years between eweb rate increases and utility specific inflation measurement annual inflation as measured by the Consumer Price Index in August was 2 and a half% which is much more in line with the federal uh Reserve Target however measures specific to eweb services for

1:08:08 electricity and water are still slightly elevated indicative of continued pressures in the energy and water sectors upcoming year rate increases proposed for both utilities will Aid in EB's ongoing investments in reliable and resilient infrastructure they will sustain our 247 products and services as well as navigate increases in power costs with an expected double digigit increase and power cost from the Bonville power Administration turning to the electric long-term financial plan so since July uh we have refined projections and sharpened our pencils at the request of Commissioners we see cash positions

1:08:53 pressure the rate trajectory in Year One of the plan as days cach approaches Target in 2025 we've modeled use of the power Reserve to maintain working cash at Target and this is notable as the only item below Target otherwise forecast measures meet or exceed targets plan assumes a 10-year compounded rate increase of 50.5% that's inclusive of funding for leeberg decommissioning and risk reduction measures and there's an 11% Revenue requirement increase proposed for 2025 with the impact separated into a general increase in February and a BPA pass through next fall which we'll touch more on in later

1:09:39 slides the plan contains $634 million in capital Investments over the next 10 years with several notable projects bulleted on the screen and financing is modeled to support the capital plans and we see total debt level increase over the term of the plan peing in 2032 at $361 million so when we last presented the long-term financial plan in July uh we discussed the need for a 15% Revenue requirement increase since then we've come down to 11% being proposed for 2025 several factors changing Electric's proposed Revenue requirement are noted

1:10:24 on this graph relief was found from updates in bpa's forecast rate change uh while updates to bpa's forecast generation added some additional rate pressure as mentioned previously cach positions pressure the rate trajectory in 2025 and Reserve updates including a modeled use of reserves in 2025 were an effective means at easing the rate trajectory which I'll cover more on the next slide and finally uh Management's commitment to affordability has been on special display in the last several months as we have met to identify lowrisk one-time operational savings that improv the 2024 ending cash

1:11:09 position so with the cash pressures driving increases in 2025 these savings significantly Aid reductions in the revenue requirement for next year everyone's favorite I here is the summary of key metrics for the electric long-term financial plan this was also included in your packets and I want to highlight that this is a stressed model with annual contribution margin risk tolerance of 10 a half million in the first five years then returning to expected conditions in the back half the red shading indicates a metric is below Target yellow shading indicates that a metric is within 10% of Target and so following some volatile

1:11:54 energy Market exposure earlier this year we've modeled use of the power Reserve to maintain working cash Reserves at Target that's our one red uh box on the screen this is a great example of how and why reserves can mitigate risks the power Reserve is modeled below Target in 25 and then comes back to Target in 26 and replenishment of the power Reserve in the following year is permitted by Financial policies for reserves looking to the bottom row of the table again cash positions in 2025 are are the primary pressure point in the plan and driving the near-term revenue requirement needs of 11% in 2025 and 5% in 2026 with future

1:12:41 increases tracking to inflationary forecasts looking to the second line from the bottom on BPA increases our BPA rates are forecast increase in October of next year which we're estimating to translate to about four to a 4% increase for eweb customers Management's proposal includes mitigating the overall impact of 2025 of the 2025 increase by splitting this into two smaller increases that is deferring the portion attributed to BPA until October the plan assumes future BPA increases every other year beginning in 2028 Each of which translates two and a half% for EB

1:13:28 customers some other notable items uh from the uh the chart here in the first two years of the plan we use rate stabilization funds for capital projects drawing the rate stabilization fund to Target at the end of 2026 this reduces the need for financing in 2026 which is still substantial at over $90 million and this will and that financing will support Capital investments in the Years follow inflation assumptions for the electric long-term financial plan vary for Capital onm and labor they are conservative in relation to the latest overall CPI index measures we've seen uh and yet in line with sector specific CPI

1:14:20 indicators refunding for leberg is modeled with increases in 2026 and 2027 it is rejected those increases are sufficient to fund the decommissioning efforts in their entirety that's into the 2040s which is Beyond the Horizon of this table also Walterville Capital activity is modeled in 25 and 26 and Reserve targets are escalated over the plan to model increasing requirements to mitigate risk switching to the water utility we've updated the water uh utility plan assumptions in a manner similar to The Electric System all metrics are above Target though the plan models that debt service coverage becomes strained as a

1:15:05 result of modeling a large debt issuance in 2026 and that is to fund the wamit water treatment plan we are modeling a 10-year compounded rate trajectory of 77% again to fund significant Investments that will replace aging infrastructure and improve our resiliency that includes an increase in the revenue requirement for 2025 of 8% the 2025 Revenue requirement and the overall rate trajectory have improved since July's presentation there are areas where operational savings identified in the electric utility benefited the water utility due to shared services allocations in addition operating performance through the summer has

1:15:50 improved Reserve projections uh benefiting future periods in the longterm financial plan plan contains $359 million in capital Investments over the next 10 years 10 years again with notable projects uh included on the slide and with financing modeled to support the capital plan's total debt levels increase over the term of the plan peaking in 2031 at $233 million here is the water table summary of water long-term financial plan key metrics again highlight that this is a stressed model we've modeled consumption

1:16:35 at 95% average in the first five years that's that gives us a contribution margin risk tolerance of about $1.3 million per year before that reverts back to expected conditions in the back half again yellow shading indicates when metrics are nearing targets and stresses in the plan are due to large investments in a second treatment plant as well as water storage projects the water utility long-term financial plan assumes a substantial amount of conventional borrowing to fund Capital priorities which puts pressure on debt service coverage measures and requires a higher rate trajectory in the early years of the plan that said rate increases have been smoothed wherever

1:17:21 possible and water rates are expected to remain comparatively low among Regional utilities even with these significant Investments with debt service coverage becoming the rate driver in the back portion of the plan we are modeling a draw down of the rate stabilization fund throughout to reduce borrowing and manage debt service coverage metri also here Reserve targets are escalated over the plan to model increasing requirements to mitigate risk and the 10year rate trajectory is displayed at the bottom of the table and with that I will pass it off to Alicia thank you Erin good evening Commissioners with the board Direction on the long-term Financial plans assumptions and strategic and

1:18:07 operational goals this evening's presentation Begins the discussion on the budgets and prices for the upcoming year the next set of slides in this presentation will provide an overview of the 20125 draft budgets to include operations and maintenance Capital Investments and Debt Service needed to accomplish the goals and priorities we will also review the change in Revenue requirement and preliminary impacts on customer bills please beginning with the electric utility the electric draft budget is 7 million more than 2024 the larger graph on the slide shows the distinct bu budget excuse me distinct buckets for the budget comparing 2025 and 2024

1:18:56 starting with capital the capital budget spending increase is attributed to addressing resiliency and near-term regulatory requirements in our generation projects as well as to address the backlog of work as it pertains to pu required Corrections major projects for the 2025 electric capital budget include Carmen Smith relicensing Walterville Spillway and forve repairs leeberg decommissioning data center security and storage transmission and distribution infrastructure rep Replacements and the Burleson property expansion just to name a few The Debt Service increase is attributed to the debt issuance earlier

1:19:41 this summer purchase power accounts for the bulk of the operations and maintenance budget for the utility and has its own bucket on the graph the bucket is also split between BPA purchase power costs and Market purchases though there is an anticipated increase in BPA costs overall the year-over-year reduction in purchase power is a result of lower Market purchases from lower market prices I will also note that along with the reduction in Market purchases there's an offsetting reduction in wholesale sales revenue as well for your reference the smaller graph on the right illustrates the estimated change in BPA purchase power

1:20:27 costs over the next few years as compared to the estimate from last year the upcoming BPA rate increase is a three-year rate impacting Q4 2025 through Q3 2028 because the anticipated rate increase in 2025 only impacts Q4 the change is seen more so in years 2026 through 2028 then finally additional omm budget is needed next year to support new technology service and infrastructure next Slide the overall Revenue requirement for 2025 electric draft budget is 11% which is comprised of a 7% General

1:21:13 increase and an anticipated 4% BPA pass through increase the rate proposal tonight includes mitigating the impact of this increase on customer bills by splitting it into two smaller increases deferring the portion attributed to BPA until October the 7% General increase is necessary to meet Reserve targets as well as allow the utility to adjust to inflation and the new cost of doing business the graph on the right shows EB electric rates position among comparators preliminary cost of service analysis results show a $13 increase for residential customers with this increase uf's

1:21:59 position would remain mid-tier among Regional utility comparators given Mutual pressures being experienced across the Northwest as I mentioned the $13 residential increase is a preliminary estimate and the final cost of service uh analysis results will be presented in November next slide so diving into the electric rate proposal for tonight the rate impacts for the next few years are shown on the slide with an indication of when BPA rate pass through occurs as well as whether the rate increase includes leeberg rate action as we've mentioned the 2025 rate proposal includes mitigating the impact of an 11% increase on customer bills by

1:22:45 splitting it into two smaller increases deferring the portion attributed to BPA until October actual rate increases will depend on the final rates from BPA and would be done strictly as a pass through so the benefits of a pass through in this manner is that it significantly redu reduces the annual action in February and spreads the required overall increase to customer bills across a broader period allowing for gradualism and greater transparency around the utilties BPA costs moreover customers will receive the actual pass through amount which may not be the 4% estimate we have at this time next

1:23:35 slide moving on to the water utility uh the Water Utility draft budget is 13 million more than 2024 a graph on the slide shows the different buckets for the budget comparing 2025 to 2024 capital and onm budgets show increases as compared to the prior year whereas Debt Service and water shed recovery budgets remain flat to the prior year the capital budget spending increase is attributed to replacing seze okay seismically vulnerable and aging infrastructure I'm going to start that over just in case you all were distracted uh the capital budget spending increase is attributed to replacing seismically vulnerable and aging infrastructure improving

1:24:20 reliability as well as optimizing the system major projects for the 2025 water capital budget include new water reservoirs at College Hill risk-based main Replacements design and permitting for the wamit water treatment plant finishing deployment of Ami meters for the water system and the Burleson property expansion again just to name a few additional onm budget is needed next year to support new technology service and infrastructure the overall Revenue requirement for the 2025 water draft budget is 8% this overall increase is necessary to ease pressured targets that are a result

1:25:06 of substantial amount of conventional borrowing to fund once in a generation type projects as well as the water treatment plan as you have just seen in the long-term financial plan update similar rate increases are needed for the next few years these gradual rate increases will better position the utility to meet near-term bumps in debt service this overall increase will also allow the utility to adjust to the growing disparity from historic inflation and again uh adjust to the new cost of doing business the graph on the right shows e web's water rates position among comparators preliminary Cur cost of service analysis results show a $3 increase for residential customers with

1:25:53 this increase e web's position would remain comparatively low among Regional utilities even with significant Investments and economic pressure and I will note again that the $3 residential increase is a preliminary estimate and the final cost of service analysis results will be presented in November and with that I will turn it over to Deborah to discuss affordability thank you and uh I appreciate we're overtime so I will try and talk 1.5 speed and uh bring us to a close here uh so to address the limited income customer owner built Bill impacts e web has maintained a customer care program for many years that provides assistance for

1:26:38 bill payment and weatherization programs um included in the in the top graph uh here is not doing a very good job here am I are the combined Water and Electric uh bills for residential customers at some of our comparator utilities as well as the median income of the area and average annual utility bills the annualized average is then compared as a percentage of median household income that's that green line that you see here um the state of Oregon defines affordable as a utility bill that is under 6% of median household income uh while 3.4% is considered a but

1:27:24 we do recognize that we have customers for which uh the utility burden is much higher uh the goal of our customer care funding is really to help push people from burden to unburdened and part of the work that uh that we'll look towards doing this year is looking at how we distribute those funds as well to better address that need um historical funding for customer care is shown in the bar chart at the bottom here uh it's also worthwh to note that an additional 200 to 300,000 in donations come in and are distributed through our Energy share assistance that's been our historical average through that program uh the nhi

1:28:11 indicator here is that green line that you see um as an affordability measure head in the way the mhi has trended downward slightly over the past 10 years it's really a function of EB's Bill growing at a slower rate than the median household income in our for the average residential customer the total projected 2025 bill increas is less than a dollar per day for electricity and with that uh next steps this evening we have a public hearing scheduled right after this and then we'll answer any questions and look for

1:28:56 Bo Direction on the 2025 budgets and crisis next month we'll be back here with the more detailed draft budget document along with proposed pricing changes that'll be the first of two public hearings on proposed prices the second public hearing on prices will be in DEC and that is the point at which we will be asking the board to adopt pricing proposals in 2025 budgets and with that I to hand it back to you president M um so the next item will go to the public hearing and then we'll come back to commissioner conversation so I'm going to open a public hearing on the upcoming year 2025 budget assumptions and long-term financial plan have anybody here

1:29:42 to topic no all right I'm GNA close the public hearing on upcoming year5 budget assumptions and long-term financial plan will'll go to commissioner discussion on the topic we have um questions of Staff you for that presentation I just have a couple of quick questions on the um the electric pricing um well first of all I want to commend you on being able to um make it so that our um increase is not going to be as much as we forecast it's really fantastic that you were able to do that

1:30:27 and it's going to save a lot of people a lot of money so thank you for for doing that um I also want to commend you for putting in dollar amounts for rates I know that's something that we've asked for a lot because we've seen the graph but it is really helpful to see what the dollar amounts are and um my question is on the um the graph where it just lists all the other electric utilities and that ours is going to go up about $13 don't anticipate that other utilities are also going to increase we do anticipate that other utilities will increase we just don't have those numbers so this is based on kind of their current this is what we know today so it's not really like we can say like oh look we're

1:31:12 inching up but after everything shakes out we could be further to the left yes um yeah that's all again thank you for um really honing in that budget and making so that we don't have to increase rates as much thanks Brown couple questions um so we're projecting 90% water year correct for our budget and we've had some pretty robust discussions here over the years about with PRS about wisdom of doing that spending money that we have collected and we used to use 85% they raised 90 because it raised rates on that much but we didn't make 90 this year that bud shortfall correct so

1:32:00 what's the budget impact if we only have an 85% water year next this year next year that I mean you don't have to answer now but it seems like we're trending that way um and I'm just wondering you know basically we're passing a budget spending money we haven't collected and if we don't collect it then we have to cut something like buiness wisdom of what that 5% differential because of decades budgeted on 85% after I think was after Enon and we got into pretty serious financial trouble and so answer now that's fine I don't know what 85 is uh but I I do understand uh that uh the forecast for the water year that we've got at this point uh is working off of where we're at today from

1:32:47 a regional water standpoint so we're going into a water year uh that's I I'll say already kind of short if you will and so uh the generation forecast that we have have a degree of conservatism to them for because we've got uh experience that uh we're going into the water year a little short so there is an I'll say I've got a degree of comfort that we've got some conservatism in that respect captured then on Water I noticed we got a 77% increase average over the next 10 years plus minus and we had a significant cost increase in Second

1:33:32 Story water treatment so you went from 70 now it's at 100 and if we follow that Trend and we're not going to build this for a few more years are we are we assuming we have a constant cost of 100 million on Second Source or are we going to did we inflate that to keep the trend that we've had that the last years if we move the Second Source buildout within the plan we would create inflationary assumptions in conjunction with wherever it's moved to the plan but uh we didn't model say variations on the Second Source timing uh that in this in this go round okay because I mean that

1:34:17 totally that cost escalation from where we were at 70 now to 100 million totally exceeded the market inflation rate and even mod infrastructure inflation rate that you presented before I was wondering if we use that same inflation rate over the construction period in this budget model or we're just keeping the cost hundred million so I'm looking at what your debt Services Bond funding 78 million in 2026 so is that just Second Source and then that accommodation to Second Source and reservoirs

1:35:02 things 2026 financing I think is by and large Second Source but there are other storage projects that are happening in that time frame that would be very supported by and then the 57 million two years later also has the balance of that in there so are we just assuming Second Source is still $100 million I guess is what might because right now it's 100 million and we're projecting out four years from now is it still going to be 100 million in the ballpark is what I'm getting in terms of checking some notes I'm seeing a little bit north of a 100 million uh for Second Source uh so yeah because I mean conceptually the dollar amount isn't great but any commodity that goes up that much compounded period of time so it's like

1:35:50 any commodity is going up 8% 9% 9% 9% % that's pretty significant so we went from about 98 million to 107 million when we delayed that project by three years so we are capturing those delays and an inspected rise in cost um but I would want to take it offline and look in detail at the notes before I comment on um want to just y the side my my point is is that I would rather go from he went from 15 we went to good for you I don't want to go from 11 have to go to 15 so I'm just bring that up because we've experienced it so thank you I appreciate it and I if I could just circle back to your water your

1:36:36 question it's somewhere in the ballpark at five to six million a year in uh in a difference in our budget if we were to um look at a contribution margin risk tolerance that incorporated 85% uh we will I can firm up those numbers for you and assign a percentage one of the ways that um we do have available is through the power reserve and that maybe helps us balance between what we think of as a reasonable or more likely outcome conservatism and then we can go to those reserves which we're modeling and we did this year um for those more extreme events uh and we have modeled um just north of $20 million in

1:37:24 Reserve Target increases over the 10year plan not all to the power Reserve but to address increasing risks um in our in our business thank you rowski thanks um yeah echoing what M said about you guys going out and hearing what we had to say about the rates and and bringing it down 4% um something that would help me explain this to my constituents is some some concrete examples so I'm looking under an operational savings you guys saved about 1.8% in operational

1:38:11 savings to me that if if you could have tangible things that staff went in and looked and said hey we we knew that the rate increase was going to be high and so we decided this and and I mean 1.8 if you know if we're doing if if going up $3 I see 1.8 as being $2 less a month basically that was realized through operational savings and so if I could have concrete things that you can say hey we decided or we sharp under a pulum this is how we did it that helps me to say hey we looked under every Rock here are some of the you know here are some

1:38:56 of the bugs we found under the rocks and and we were able to utilize those for savings so that would be helpful for me in explaining this to my constituents when they come to me and say an increase sure you did everything and I could say well we did so that would be helpful for me but again um I'm encouraged by the the drop of 4% from 15% when we first saw this to 11 the other thing that I'm very encouraged by was the I mean were taking a really big bite here in 2025 that's going to pay off because that's baked in for the next 10 years

1:39:43 with it basically for eternity the the thing that that really peaked my interest was the fact that you said with these types of increases with our 11% here 53 and then kind of to me acceptable increases Le is going to be totally funded without going into debt service and to me that's something it was a decision that this board made back before to prund it and this is kind of the impacts of that is this big bite at the Apple up front but to know that that's something that we're not putting onto a future board board is is very encouraging to me and so when I heard that that just really made me feel good

1:40:29 um that we stood up as a board and saw our commitment to this project when we made that decision to decommission and know that that was going to be a 202 200 to $250 million Chunk we were responsible and decided to pre fund it so that was very encour so thank you I forgot to push my button thanks John so anything from you yes I I had a couple of questions I'm putting things in the chat but I think that may not be the best strategy um I'm very thankful for staff going through and and taking a deeper look and

1:41:14 um and also with that I also want to think about the Optics a little bit of having a rate increase in October and then 3 months later having another rate increase of uh you know another four or 5% so I'm just curious will we as a board have to vote in October to raise it to pass on the BPA rate increase and then have to vote again in nove in February well I guess we would vote in December um to raise the rates in February correct how does that work yeah commissioner Carlson um there is already board policy in place that allows staff to pass through BPA specific rate

1:42:00 increases when they occur uh which is in October October 1st and so that would require no board action um since that is already in board policy the the only board action would be in December when the board is approving the 20206 um budget and potential raate actions does that answer your question yes it does thank you okay um I appreciate that I think I'll still want to sit on it maybe a little bit because you know even though yeah we we won't have to vote on it again you know having the message go out

1:42:47 oh the rates are increasing and then just another 3 months later they're increasing again I think we just need to be very careful on the messaging there and I also appreciate that we don't know exactly what the BPA rate is going to be so instead of you know preemptively raising it because maybe it's unlikely but it would be nice if BPA could also go back and sharpen their pencil and see if it's you know possible to not have a 4% rate increase so um again thank you for looking at that um alternative and then I just had a quick question um and I don't think think anybody on the panel can currently answer it but if if we can get some thoughts later so we said that you know a number of our customers are energy burdened above that 6% level and

1:43:33 I'm curious if we have any if we track any data when customers apply through the income program um to suggest that the amount that we are giving actually brings them down in the not energy income uh energy burdened category uh by giving them the the onetime amount that we do per year I'm just curious what that what that Delta is for them um so if we do have any data I'd like to see that after the fact that's it thank you very much for all of your work on this and great presentation Frank yeah uh commissioner Carlson we'll get you some data on the um the the uh information on customers that are

1:44:18 burdened and and how the programmatic qualifications work for that and and some additional data we we do recognize I think an opportunity uh to change how those funds are distributed because of that question that you raised and and so we're going to be looking at um one establishing the funding level which we I think we have a pretty good feel for but then also trying to look at ways to uh make that a little little bit less of a blunt instrument um in how we distribute those those funds based based on needs so more to come on that your question is very appropriate in its timing um I did um on your first question relative to

1:45:04 the Bonville and splitting out the pass through um I think we um we agree with your message your your comment around the importance of messaging uh we have uh started coordinating with our Communications team on what how that that looks um we also think there's a benefit uh to splitting out and kind of highlighting and making the bonnaville portion of what we do very transparent uh maybe more transparent than it is um when we just meld all the rates together so there's potentially some benefit to uh kind of daylighting the Bonville

1:45:49 impact uh on eweb um especially as we go into a new contract period And so um there's some importance and some challenges with communicating it but also there's some opportunities with um splitting out the bonabo portion um as well so um we we agree with the importance of the communications that you mentioned great points Frank uh I appreciate that staff were already looking at that and I and I do agree that splitting that out um now that you've highlighted that benefit seems like it could be helpful for the community to understand what is in our control and what is more outside of our control um yeah I appreciate that staff are already looking at maybe tailoring

1:46:36 The Limited funding that we do have to you know make the most impact where it's needed on the uh customer cares program yes agreed and I'll just take the moment to make a couple comments um one as always thank you for taking complex financial information and making it digestible and you sliced this information in a bunch of ways ways that are relevant to us so um as I was blown away by your Collective ability to do that so thank you um andon we could go to the like the second slide that you had that showed just kind of historic um interest rates in the sector and yeah I I'm going to show my ignorance here but

1:47:21 I continue to be baffled by back that we had no rate increases for several years in a row on both sides and this was before I joined the board so I I won't expect to understand it but it's fascinating to me it feels like it didn't do us favors where I feel like in art now paying for um that step taken may maybe not and and and if there's a a different explanation that will help me wrap my head around it I'd love it but I can't help but think that this is part of the reason that we're not now see you know in in such a tight spot because clearly the same Capital Investments were on the horizon uh Second Source was on the horizon um anyway it's it's fascinating to me um I similarly

1:48:06 appreciate the effort to try and um push down the that next year's rate increase um yeah please Deborah well I just wanted to share um during these time periods when we were able to hold rates there were a couple of things going on that um that uh made that possible one is that we did have um cash reserves more than we do today that we were able to make prudent investments in to reduce borrowing to pay down our Pur obligations so that is part of the way that we did it and then in each of those years as we look at what a revenue requirement is um we were fortunate enough to be able to manage it such that our Revenue requirement didn't demand

1:48:51 that we raise those rates yeah um so that that is essentially how we manage those years yeah yeah it makes sense that I I I understand that that makes sense um yeah all right commissioner McCrae you know it's it's it's an interesting dilemma when you think about the the tradeoffs between cost causation when that is occurring the fact that we can in some cases be over collecting or under collecting and kind getting back to commissioner Brown's question around you know mitigating for uh various uncertainties and and scenarios and it's part of the reason we do have certain reserves it's

1:49:36 we have some conservatism think because as Aon referred to it as a stressed model so we do put some of that we bake it in but we also have reserves that can mitigate for that the the flip side of that is when reserves get too high because then you're holding your customers money and I think that's what we saw in the in the 2013 to 2015 Range we we were sitting on a lot of cash and it wasn't our cash and we weren't ready to make the Investments that we're making today and so there was there's some some fiscal management and a recognition that um um we um it is our it is not our money and we have to be able to plan and work around that and

1:50:22 and um be able to manage that appropriately so there's I I feel really good about the work that that this team did and not just his team but all the partners they have out in the utility not just understanding oh here's a number but what's driving that number um and what are the scenarios and the risks around that number um feel really really confident in in the team and what they what they sort of wrestled through uh this year not not just this year but in particular this year yeah thanks no and I can appreciate the efforts involved too in maintaining uh no increase in rates for a period of years must have been taken some serious work you know not withstanding what you just said that there's there were extra cash

1:51:08 rers and I'm certainly not advocating that we you know over collect as you as you pointed out I it just like to me that's the opposite of gradualism which is one of the principles and I'm so I appreciate some of the it absolutely it's a it's a you look at that and you go it's a fair question um what was behind the the reason that there's a Divergence in those lines it's it's a absolutely fair question thanks for the discussion anything else on this topic I had a quick comment there yeah please you know because I was on the board kind of back when we started uh well not as long as John Brown but you know back when a lot of the conversation around affordability hit we had we had more of

1:51:53 a reputation for having higher rates and I don't hear that from customers as much but you know there's there's so much that we couldn't have anticipated in having the pandemic and the skyrocketing inflation that we've had over the last couple of years I think we were on a great trajectory until these shocks hit our system and I appreciate you know the the concept of you know we're going to have shocks to the system we should plan for that maybe we could have built that in but to the affordability point I really do think it is it is critical that we are spending the money that we need when we need it and we're not taking that money from people who need it to get by month to month so I appreciate the thought there and I I I

1:52:40 still stand by what we've done over that time given the information that we knew at the time thanks anything else on this thank you all appreciate the time and uh we'll go to a break

2:02:51 2024 meeting of the Eugene Water electric sword and we're going to go for the next topic which is rate design initial priorities and drivers Frank president McCrae Commissioners good evening uh for the record I'm Frank Lawson CEO and general manager joining me up here is Adam Rue EB's rates manager and before we get into the presentation itself I wanted to um provide a quote that uh was that I heard last week um it was a speaker at the Western Energy Institute annual meeting and the quote was when someone puts forth policy they open themselves up to critique and so we'll talk a little bit about policy and a forward-looking um

2:03:38 aspect of rate design which um quite honestly we know will bring out various opinions and perspectives from people uh the opposite of that is when you don't do that you just leave everybody with some sort of vibe that doesn't uh provide much usefulness and so uh the intent is to actually talk about some specifics uh this will be probably the fourth or fifth time we've talked about rate design in general over the last couple of years and we're going to focus on a couple of things this evening one of them is rate design and why are we talking about rate design and why are we doing it now um we'll talk a little bit about some of those tradeoffs that come when you talk about rate design design uh approach and processes we are putting

2:04:25 together a plan for how we want to evolve our rates over the next uh three to five years and we want to gather some feedback from Commissioners on your thoughts on that and and our approach to it strategically uh we started the plan in uh the one the Strategic plan we have now in 2018 um commissioner Brown and Carlson were probably most involved in some of those although this board has reviewed aspects of the Strategic plan over the last several years and the second phase of the Strategic plan um listed as one of the tools uh rate design and um so really dating back it'll it'll be a

2:05:11 number of years more than five years ago uh we started talking about rate design and its importance in in what we're doing and specifically I think what we recognized was the fact that we needed our customers to help us help them uh in particular in the near term on the energy side in the longer term also on the water side we're going to see volatility and scarcity with the Commodities that we provide and it's going to show up in in pricing in carbon content and availability and in order to solve that problem the most effectively we are going to have to have customers or the demand side of that equation uh

2:05:58 participate with us to optimize that um we also recognize um consumption matters in that equation and that consumer Behavior Uh is really uh an effective and efficient way to um to to mitigate some of those challenges the reality of it is personal economics do Drive behavior and so thus rate design becomes one of the important tools that we have at our disposal because people care about their rates it affects every single one of our 200,000 customers and the rate design will eventually Inspire and reward for the behavior that is necessary for us to deliver value to our community in the form of economic environmental and

2:06:44 social value and so there's this the Strategic reason behind why we are actually looking at our rates differently and rate design is highly strategic um it's not that we feel bad about where we are with the rates now but we feel they're a tool that we're going to need to use going forward to help continue the delivery of our products and services in fact if you look at the mission the mission was crafted around inspiring customer owners to invest and rely on us and the investment really is participation in our programs and our services and help helping us help them so redesign fits uh I think it's really appropriate that this discussion

2:07:30 follows a meeting where we're talking about financial planning we're talking about budgeting um eventually that leads to analyzing our costs and where the what is causing those costs um Adam has a really fancy model around cost of service analysis and how you break up those costs into different bits and pieces and then rate design is really the method of which we recover those costs and and so there are different ways that you can look at how you want to recover those costs and how you want to set the priorities for which you recover uh those costs and um while these um are not in particular mutually

2:08:17 exclusive there are tensions between different priorities and different aspects of rate design um and those sort of three c three are categorized as really cost alignment U behavioral and then social Community priorities um the extremes of which when you think about looking at them so if you're you're absolutely cost aligned um you're going to really be looking at how you divide up very particular costs this has happens to be more cost associated with cost now not in the future um whereas a behavioral model would start to to recognize the fact that again if if behavior is influenced by personal economics and you wanted

2:09:03 someone to consume a product in a certain way you would start to drive your prices to guide them or Inspire them in that particular way and so there is some difference between cost alignment uh and behavioral costs um at least in the near term the the intent of Behavioral um cost priority drivers is that you will reward people for doing things that that um helps the organization helps the community um economically socially environmentally um there's also we recognize social Community priorities those come into play uh in the sense that a utility bill is a touch point for

2:09:50 most of our community if not all of our community and um there are certain pressures to use that touch Point uh to fulfill broader Community priorities and that um uh can create some tensions between true actual costs and or future behavioral priorities or areas of interest from an organization so kind of where eweb is is sort of estim at to be now we we tend to have a cost orientation um when you hear about kosa analysis cost of service and we're really looking at what are the main drivers of our costs um there's fixed

2:10:37 and variable components there's there's demand charges uh which tend to do with the size and the capacity of the infrastructure um there's also potential levels of service these are things that for example there's water pumping charges on the water side that's because the cost of service to get the water up to higher elevations is is higher and so there's we as an organization have tended to be uh oriented not exclusively you do see some social components in there some behavioral components in there um um and so but we we have tended to be um aligned not it doesn't go all the way to the top we're not absolutely aligned with cost uh but we tend to have

2:11:23 been historically um in in more of a a priority around cost alignment if we look at the behavioral opportunities associated with our strategic plan and recognizing that volatility scarcity the really the appropriate um and efficient use of the commodity is going to be more important going forward you have to start to pull in a behavioral piece to that um that is driving um the future of cost alignment um toward the benefit of the individual consuming and also uh toward the community at large and so we see the future position and priority migrating

2:12:09 sum from a true cost alignment to looking at some of the things that would be associated with um behavioral um intended pricing some of that includes time of use for example I think the Commissioners are very familiar with the fact that the the time of which you consume energy has a big influence on the cost of that uh commodity at the time Peak versus off peak for example summer versus winter for example um different uh six o'clock in the evening versus midnight and also the carbon content of that energy varies significantly depending on what resources you are procuring to to fulfill that time of use

2:12:56 as an example demand response programs uh where we can um use that to shift and work with customers to to shift energy consumption how that affects the efficiency and conservation programs we have uh that can be more rewarding than it is today um and then looking at some of the other pieces of associated with with what could could uh Drive beneficial Behavior a lot of it at this point uh is around some specific tools that we think uh would work um I will I will note that that I asked commissioner sort of informally for your where you saw your your priorities falling and so

2:13:41 without getting too specific um the triangle in the upper right hand corner you don't have to necessarily look at the exact numbers there um but if you look at the general shape it is very familiar with the Strategic direction of which the organization is headed so the general shape up in the upper right corner was I think good news for for me in the sense that it's pretty close to the blue triangle that we identified strategically a number of years ago and why actually we're talking about rate design now so I didn't see a big student body left from the from the Commissioners that were we're gonna want to go somewhere else um staff has has been working on a a rate design plan um

2:14:29 that has a number of different process components to it and I I won't go through all of these other than than to mention the importance of recognizing that there's different phases to rate design that's going to require quite a bit of homework quite a bit of research investigation analysis some modeling um there's some initial analysis and data that we need to gather relative to sort of consumer Behavior where our system is where our costs fall fall today uh we might want to start some migrations um we have to understand consumption patterns um probably in more detail than we do today again one of the other tools that we've talked about uh which we now have at our our disposal uh from a from

2:15:15 a technology perspective of course is is smart meters and the ability to look at consumption detail consumption patterns in more detail we have to to back that up with the data and the analytics of it then kind of leveraging that into looking at different pricing models and their overall impact um in really two very specific areas one is the participant themselves and how can we actually reward someone for uh beneficial behavior and then at some point does that create a benefit that is also shared with the with the community at some level and so um really the the intent there is that

2:16:03 uh some people will have more flexibility some organizations and businesses have more flexibility um they might not be able to participate in one level but there should be some shared benefit um across all customers um at some point and then finally getting into the very specifics of the rate and the programs that um eventually uh support a new rate structure whether and I'll I'll get into kind of a few a few more specifics there um kind of what's what's next is a few of these things uh are are in flight there's um the plan that that we're looking um along with really kind of a rate design directional statement

2:16:50 um I know rate design is something that if you probably ask around there's lots of people with lots of opinions about it um we want to come up with the direction that the board is comfortable with as far as kind of capturing the priorities of the rate design um kind of using that trilemma diagram as as kind of how we see the priorities can be differentiated we're in process of looking at a what's was termed a demand side potential assessment that looking at the ability on the demand side for uh conservation as well as What's the total capacity and capability of our community um relative to Energy Efficiency and conservation but also relative to um

2:17:35 demand response potential um and then getting into U more consumption metrics so these are really 2024 2025 items uh continued and probably quite a bit of of customer engagement I called this community table to or part du as the movie would have would have said um we the the community table approach that we're using with the energy resources planning is really a phenomenal idea a way to to really use a focus group um to get some opinions from across the community and then looking at some of our our first sort of pricing products um um in in 2020 late 2025 for

2:18:22 some implementation in 2026 and some of those will be initially maybe some realignment between fixed and variable costs um some potential looking at u a residential demand charge for example and um not sure if we'll be ready for time of use in that time frame but closely thereafter and so um kind of just a few conclusions um the reason rate design is is important and why we're looking at that e economics will inspire the behavior think necessary to deliver value um our rate design efforts are going to be really focused on rewarding for utility specific consumption we're

2:19:07 really not looking at rates to solve um broader Community uh priorities um we're looking at this as a utility specific um issue we do think that um that that behavior needs to look into the future as far as projecting costs not just today um and that we have some key tools to to use I should say you know clarifying that other than through the the benefits realized by certain uh forms of consumption um we won't be using it for the the broader uh effort but it's really around the delivery of our products and services and making sure that those are are Equitable and

2:19:53 they're done in a way that benefits the community very specifically um and so with that there were a few sort of policy comments in there but um would be interested in in getting commissioner perspectives on rate design our next touch point will probably be in December uh when we come back and and talk more specifically about what we think some of the the the key rate design priorities will be um and what some of the next actions are going to be president McCrae great and by the way I I didn't do this but this is Adam's Coosa diagram just just just remind you

2:20:38 so where all those costs go anyway so we're supposed to ask a question about the Costa so that we can get Adam to exactly that's why it's in the reference section I'm hearing all right uh great questions comments Sonia do you have anything sorry I'm in um not anything real specific I mean I I think that the the direction that we're going um seems in alignment with what the board is looking for um and I look forward to more comments there although I was starting to look at at Adam's diagram so if you did flash it back up there I appreciate it

2:21:27 thanks all right yeah I'm I'm really glad to see us going in this direction because I think that um behaviorally we can get the things that we want to get um and then just with a caveat about economics will inspire the behavior necessary I think in general that's true but I also think for a certain segment of our Comm community that um kind of the values behind the behavioral changes that we're asking for I think is another thing that will inspire people so people who have maybe a stronger conservation ethic or um environmental ethic or uh yeah I think that that it allows them a way to um not only save money but also kind of

2:22:14 make the changes that um that F of the community is asking for or that we as a utility are trying to accomplish I think not just economics well for everyone it's economics but for other people values I'm really pleased thank you my microphone um yeah I think that this is going to be an interesting conversation over the next few years it looks like um I guess couple of the comments that I would say is I would hope that we will look out to I mean obviously we're not inventing the wheel here um there's communities

2:23:00 there's utilities everywhere that are looking at at these types of models so I would hope we would look at Best Practices and find out what are the levers that are actually turning the we the wheel in the direction that we want rather than and being able to present when we go out and ask for feedback from the community say hey this is is what we've seen in this market or this market and obviously different economic markets will play into that but again tap into what is out there in the market um already so that we might be able to even accelerate this faster than than three to four years I did have a question on the slide that you put up uh for what's next on

2:23:46 December 2024 you mentioned a record of decision um can you talk to me more about what that might mean I mean we've had a couple of records of decisions since I've been on the board and and they were warranted in those those instances but I'm seeing here a record of decision with a five-year plan on it I would definitely need to have more information on that before I would would uh just hand over the reins of the of the buggy to to the general manager without having the so it's buy Frank it's a very Dynamic buggy at the moment so um record of decision um commissioner

2:24:31 barovsky might not be the right term in in this case um we generally use records of decision at a management level to capture a decision what it's meant what it you know the logic behind it the impact going forward um really it's for the record in in this case it's more of a an agreement with the board around hey this is the direction that we're going this is what we're doing rate design and this is why we're doing it this is its purpose this its priority so it's a little bit I maybe record of Direction I I don't I don't know it's a little bit different you're not handing the rein over to the general manager it's more of

2:25:16 a directional document at that point okay and and I'm and I'm comfortable with that saying go down this direction in the past records of citizens has basically taken away our you know we said okay trust you go and take it um and on a on a topic like this with the knowledge that we're in you know we're just in the beginning stages of it it would have to be a lot more clear for me to give you the rign to the bik yeah and I think I I probably used that that descriptor in the sense that there's nothing in policy that says a board reviews a rate design plan for example and so having the intent and I'll come up with

2:26:02 a fancier term for it the the intent is that the board and the organization are aligned on the direction that rate design is going um and that that can be the logic and the direction can be captured that's that's the intent thank yeah I'm I'm very pleased with the direction this is going and I remind some that I think was eight or 10 years ago you handed out these meters to Bo others and we got to actually live Behavior mod application and see what it could do and it was eye opening for an old guy like me that's used to incandescent light bulbs you know when you change out the LEDs you make sure you know when you're run a dishwasher and your dryer and everything else and it's actually really easy to accommodate

2:26:47 to to adapt to this Behavior modifcation even old people and uh that's you know and so that I'm I'm glad that we're kind of going this this way and everything else and I I'm looking forward to uh seeing where we go I just hope it'll take another eight years to to get to where know because I agree with you commissioner the the whole where we are strategically is putting the pieces together and we've been putting pieces together we have EES and new C system a new Finance system the metering has has been through a covid uh epidemic rate design is a piece of that puzzle and um therefore it's

2:27:33 important strategically I I also recognize um commissioner schlossberg's perspective which is there is community value here that we have to recognize we have to keep in mind some of the other policies that we've agreed to around equity for example and so um there there are other components and policy components that we have to include in this and blending those those together I I think are it it is going to be a challenge there's going to be tensions um but that's why we want to try to capture the purpose of why we're doing rate design and the overall intent of it and um what we did learn from your study as well is that initially there's this

2:28:20 peak of interest in the fact that you can go out and change a light bulb and see some results after a while though you get bored with that and there's this Chasm that's created to where there is no longer an an incentive to do it unless that incentive can be sort of recaptured and rekindled um and value can be placed on it and um absolutely to commissioner barovsky to your point our intent is to go out and learn what the world is doing what's working and what isn't what are what's a good participation level what's a what's a mediocre participation level you know how impactful can some of these programs be um we also know that that in this area we're not going to be just in

2:29:06 the Box thinking we're going to be looking at other areas to explore that that maybe are a little bit on the i w say bleeding edge but but maybe the the Leading Edge um of that so absolutely agreed I think that was I thought that was in here somewhere that I had put we're gonna do some comparisons uh I just have one question if you go to the last slide not quite to Adam's slide sorry Adam this one yeah that that one thanks um at the very bottom it says other than through beneficial consumptive behavior electricy and drinking water rate design will not be used to advance broader social priorities and I agree I think we're all want to be focused on the utility and what the utility can do about consumption of water and

2:29:53 electricity but I'm curious where you see that boundary like what is that goes up what what are the things that are kind of off the table to try and influence through our rates well one of the requests that we've got and I don't particularly think it aligns with what we're trying to do with rate design is this notion that um different customers should pay different rates based on their own characteristics and I'll just throw come in as an example that in some of the proposals have had um income based rates and um I don't feel like that's the proper use of rate design in the in the Strategic direction that we're going um that doesn't mean that we're not going to

2:30:39 look seriously and continue to evolve our assistance to help in in what what was mentioned earlier we recognize and I think our program recognizes that our Commodities are more of a burden to some in our society than others and we want to make sure that we're doing what we can to to help unburden those but I don't personally believe that that happens in rates and so um that would be an example because you could also look at it and say a different approach was well we're going to use rates to inspire um small businesses so small businesses pay a small business rate and other people's pay a business rate so that's what I meant by looking at broader

2:31:24 Community issues as opposed to we want to use this to optimize the efficiency of the delivery of our Commodities to the point where we recognize drinking water electricity do impact the society that's where our focus is going to be not straying from that great thank you clarify other questions comments and that's where we'll get some public input in the future question all right we'll go on to our next topic thank you uh the next one is the annual Dam safety program update it's D by the way just to

2:32:13 clarify safety follow no on the hey you wrote it this way could be the safety of Dam's program update I did that's yeah BS water impoundment program yeah fancy words good evening Commissioners I'm Lisa CR generation manager joining me up here tonight is Laura om man she is our chief Dam safety engineer and also our GM safety program supervisor and to my left we have Mark zeger he's our generation engineering supervisor we are here to provide um our annual update on

2:32:59 our owner Dam safety program tonight we're going to talk about the program in general um the issues we're facing and our approach to resolving those issues a bit about Emergency Management and continued challenges so for background uh the Federal Energy Reg atory commission or fur requires that owners of um dams with a high or significant Hazard potential have a robust and focused Dam safety program the purpose of dam safety program is to protect life property and the environment by uring that all dams are constructed operated and maintained as safely and effectively as is reasonably possible uh as you're aware the Carmen

2:33:45 Smith and leeberg Walterville projects up in the Kenzie River Are CL classified either in their entirety or in part as high Hazard by FK and therefore an owner's Dam safety program is a requirement there are several uh components to the program as shown on the graphic in the right uh these include having an overarching Dam safety policy which we do have a board policy that the board approved uh defined responsibilities uh required training reporting recordkeeping Etc and then of course uh continuous Improvement now eweb Dam safety program has evolved significantly over the last many years um although we had a dam safety program prior to 2019 in that year we established a

2:34:30 separate Department that's focused solely on Dam safety and that was uh something we did following recommendations in an audit report by the uh Association of dam safety officials and in the past uh five years we have continued to expand and improve a prer program for example we have staff that are focused solely on Dam safety which we'll talk about just a little bit more uh we have consultant teams which you learn more about from Laura later and we meet with um the executive leadership monthly and also do this annual update to the board to ensure that uh Dam safety issues are understood at the highest levels of the organization and as required by FK an audit of the program to evaluate its

2:35:15 Effectiveness is required every five years the last audit was done in 2009 19 out of which we developed um some significant changes to our program the next audit is due this fall so that's coming up in actually just a couple of weeks an audit report uh following that audit U will be provided both to eweb and to FK and then we will incorporate recommendations from that audit into our program terms of Staffing uh the dam safety department consists of five permanent staff this includes Laura Omen to our right um um she is our chief Dam safety engineer that is a formal designation by FK it needs to be approved by them and it has specific requirements um and responsibilities I'm

2:36:00 happy to report tonight that FK has recently officially approved Laura as our chief Dam safety engineer and I wanted to take this time to congratulate her and eweb and then also to very much and sincerely thank Mark sinu who has been acting as Chief Dam safety engineer for the nearly the last two years in addition to all of his other duties so thank you very much Mark uh Laura also serves as the supervisor of the dam safety uh team that includes engineering and Regulatory staff and I'm also happy to report that we are finally fully staffed we've hired some excellent folks over the last couple of years and um we're in great shape moving forward with that I'll handed over to Laura for more specifics

2:36:46 thanks Lisa good evening Commissioners um we're start with the Carmen Smith project in the generation division that reports to Lisa the licensed deployment team works on capital projects to provide fish passage flow release structures and fish habitat all these projects have a dam safety design component which is evaluated by FK also in the generation division that reports to Lisa the dam safety team monitors and evaluates Dam safety improvements that are required for safe operation of the project in addition we provide guidance to the licensed deployment team regarding Dam safety aspects of the license required projects we now have two systems in place in support of the fish passage and Dam safety projects at

2:37:32 Carmen Smith these are the dam safety owners uh Dam saf owner Dam safety representative and the board of Consultants um first the dam safety owners representative in response to feedback from FK and from our agency partners we have corn fourth Consultants under contract as dam safety owner representative the scope of this contract is to be an extension of the dam safety team leveraging their Dam their depth of dam safety experience and helping us to efficiently navigate the complex regulatory requirements of FK damp safety the board of Consultants process is a FK requirement since July of 2021 and it's comprised of a team of four independent Consultants who are experts

2:38:17 in the field of damp safety the VOC reviews final designs and advises whether we have adequately addressed all Dam safety concerns prior to review and approval to construct project this process allows for expert review and guidance but also provides us with an opportunity to work directly with FK staff on the proposed designs boc meetings provide FK staff with earlier and more frequent review of project designs the combination of The Damp safety owners rep and the board of Consultants is intended to expedite design and construction of the Carmen Smith license required fish passage and habitat enhancement projects while efficiently navigating the dam safety regulatory requirements and

2:39:08 objectives we discovered sink holes in trailbridge Reservoir in May of 2021 the you have immediately started an investigation and this included die testing diving inspection geophysical surveys Geo technical investigation and installation of monitoring equipment we finished the geotechnical drilling program in 2023 the sinkhole Discovery has had immediate impacts on both operations and our ability to design to advance the design of permanent fish passage at trailbridge damp the cause of the sink holes and the risk posed need to be fully understood before we can continue with any design and construction at trailbridge Dam based on the results of the syho investigation eweb our consultants and

2:39:55 the board of Consultants agreed that the S hols are unlikely to progress in a way that would cause failure of the dam this investigation report was completed and submitted to FK for review in May of 2024 to increase the confidence in this determination the boc recommended that we perform a semi-quantitative risk analysis focused on the trailb sinkholes f agreed with this recommendation and suggested that a quantitative risk analysis which is more comprehensive was more appropriate F also asked that we include the proposed trap and Hall facility at trailbridge into the quantitative risk analysis both of which we are now planning to do based on availability of FK staff and

2:40:40 our consultants and subject matter experts the earliest we could schedule that risk Workshop was November 4th through the 8th of 2024 the workshop participants will include eweb staff FK staff our SLE investigation consultant team the Trap and Hall design consultant team and the board of Consultants the workshop is Then followed by a written report that documents the findings the report is reviewed by the board of Consultants the report is revised based on board of consultant recommendations and then the report is finalized and submitted to FK for review and approval we expect this process to in excuse me to inform how we move forward on the Trap and Hall facility design next

2:41:29 slide applicable to both the Carmen Smith and the Liber Walterville projects you have submitted an updated site specific seismic Hazard analysis to firk in November of 2022 a seismic Hazard analysis or sha is an evaluation of the likelihood and intensity of earthquake induced ground motions it helps to us estimate the potential risk posed by earthquakes to infrastructure and therefore to human life this information is applicable to existing structures at both Carmen Smith and leeber Walterville projects and also needs to be applied to the license required infrastructure designs at the Carmen Smith project we received F approval with comments in July of 2024 and this allows us to move forward on several

2:42:14 projects at Carmen Smith we can now restart several FK license required project designs and at Walterville we'll we will work with our consultant to finish the stability analysis of the of Walterville Canal sections and this includes the forb next slide Liber Canal Libra Canal uh has been shut down for power generation since 2018 the Liber decommissioning action plan or ldap is managed by the generation engineering staff the ldap includes near-term risk reduction measures related to Dam safety the Libra canal still serves as tributary and Stor storm water conveyance specifically Cogswell and Johnson Creek flows into the canal from

2:43:01 these tributaries can D dramatically increase during wet weather periods in January of this year EB removed the turbine from one of the LI power generating units allowing for passage up to 1,000 CFS through the libr powerhouse this has greatly increased this the discharge capacity from the L Canal for Bay and is an important tool to help manage wet weather flows in the canal the Walterville forway has areas of known seepage which the dam safety team and operations staff have been closely monitoring for a long time we monitor with the seepage weer that has real-time monitoring and alarming on February 27th of this year

2:43:48 this seepage we experienced a dramatic increase in seepage and the alarm system notified operation staff of the increase operation staff were on site within minutes and inspected the Weir to verify the increase in the seage it became necessary to dewater the canal and at F's Direction it has remained dewatered since then we have been working with the consultant to determine a viable repair concept for the forb the repair goal is to decrease seage and allow us to continue to operate the project through the license term which is the year 2040 um Fork inspections Fork inspects our hydroelectric projects annually and

2:44:34 this year we completed the annual inspection at Carmen Smith in July and Le Walterville in September and uh no outstanding results there you up and next slide um we have two B required projects due this year that help the public and also our local emergency managers to prepare for Dam safety emergency next Slide the first project is Dam safety public Outreach brochure um every five years e web is required to provide a public Outreach brochure to Property Owners adjacent to our hydroelectric projects and those who live in the inundation zone of our projects the content of the brochure includes situational awareness aess for

2:45:19 living next to canals and dams activities that can jeopardize safe operation of the canals and Dam safety emergency planning and the brochure will be mailed to Residents this fall next Slide the second project is the emergency action plan functional exercise um eweb eweb has an emergency action plan which details procedures for the case of a dam safety emergency we update this annually and review with our local emergency managers annually such as the city county and U River fire departments this year we'll be doing a functional exercise this is also a fiveyear f requirement where we test the functionality of our emergency action plan by simulating an emergency and walking through um how we would react to

2:46:07 it uh the exercise is scheduled for this fall and we anticipate participation from our local emergency managers such as the county and the upper upper McKenzie fire district slide back to you great last slide and unfortunately this is the exact same challenges slide I had in last year's update um although we have made a lot of improvements um and have put a lot of effort into safety program and in particular in recruiting and hiring staff which we've been very successful at despite that we do still face some challenges um as you've all heard many times from us and you heard it earlier today from from other folks the regulatory environment continues to change um and with respect

2:46:55 to Dam safety the industry keeps learning more about seismic hazards and other Dam safety vulnerabilities by way of an ex of example you probably have heard um over the last few months Nationwide there have been a couple of catastrophic Dam failures associated with SE severe flooding so uh all of that uh means that requirements are getting stricter uh which adds both time and effort to accomplishing Pro um projects now in terms of resourcing uh the dam Safety Professional Community is really small and frankly there are just uh too much work uh to do and not enough people to do it uh Burke um and other organizations including consultant teams continue to have um pretty significant

2:47:40 Staffing shortages we're really fortunate and that we now have a fully staed team but again the dam safety profession is a relatively Niche field and there is a learning curve um associated with with profession uh the increase in Dam safety issues and scrutiny also creates Financial demands as you heard a lot of generation talk through um budget discussions this evening everything costs more as complexity increases and then we also have schedle urgencies related to license requirements at Carmen Smith that are currently hindered by our dam safety issues and then underlying all of this is a ing infrastructure um there was a hydro boom in the 60s and uh some of our projects

2:48:25 lber and Walterville significantly older than that and stuff's just getting old needs to be um replaced and upgraded with that that's the end of formal presentation we'll move to questions thank you questions Brown thank you very much very informative and congratulations on your acknowledgement from tur I'm glad they can give something like that um this question just kind in if you want to answer this question on the side that's fine but um the trail bridge R War s an investigation talks about um SCH the workshop scheduled and following Workshop um and reviewed by us

2:49:11 submit develop SLE plan and determine the proposed traffic H facility can move forward as design does that mean the ladder's off the table or we still have the option of doing trap and hall or do you want to I because I know there's some questions about yeah I'll this if you don't want to answer it that's we'll answer it at at a really high level um tra and Hall is still the requirement of our FR license and uh we are continuing to move forward um with doing what we can do uh for the Trap and Hall uh you know we still have the outstanding uh requests from agencies and others to do something different I just was thinking about budget and the economics of it and whether or not we we continue to go down trap and Hall spend

2:49:58 money on that Pursuit is that conversation yeah I mean that's something we will need to consider um but we have been working towards a trap and hall for many many years we are fortunately nearly at a place where we think that we kick that design free and actually make some some real forward progress the Trap and Hall design how that relates to the other matters is still yet to be seen othersi um great it sounds like that come together meeting that's happening in November me it sounds encouraging it

2:50:46 sounds like one half of f is kind of talking with the other other half hopefully now Dam safety and and the design and I'll reach hopefully they realize our situation solve it have the bo say yep go ahead move forward send it off to FK and then we can move on forward and that's kind of what I heard from your yeah just to to clarify the workshop in November is specific to Dam safety so it's SP um uh division of dam safety and then in addition to that our Board of Consultants our Consulting Engineers and um and EB uh FKS uh division of hydrop and compliance is not a participant in that it's a it's very much a technical

2:51:31 uh Workshop to ensure that all the dam safety needs are evaluated with respect to the Trap and hall right and that's that's what I'm saying it would be a sign off that yes the the problems you're having with the sinkhole can be can be remediated and you can move forward decide just what you're going to get out of that correct that's what we're hoping okay and that that's good that's what I'm and and then also just to clarify B uh d2s DM safety we'll still need to approve it after that we'll get an indication at the workshop but we won't get a formal no yeah you yeah send you put it all together she writes it up and sends it to work after all the and that's encouraging um as far as the five-year audit report is that

2:52:16 something we see we certainly can share it with you um I don't know if the two I wasn't generation manager at the time we did the 2019 um audit but we certainly can provide it it might be I'm I'm not certain it might be classified as CI information which mean that it it would go to the board under a separate cover and not be public but maybe Mark Aura can speak to that just uh referring to the last audit we did uh have a special session where to go through I can't I actually can't remember if that was public for if it had to be for C reasons um separate I I don't know what the the rest of the board and maybe that could be a one-onone or something like that

2:53:01 but that' be something I'd be interested in son anything from you no thank you all right thanks yeah thank you for for the presentation appreciate it congratulations all right e the crowd tonight no they're saving it up for the two on ones uh all right so the next item is future board agendas president uh McCrae and Commissioners just a couple of upcoming notes uh we do have a work session in a couple of weeks um very couple couple

2:53:48 very specific topics U just a reminder we've also pushed out the November meeting um by a week since it fell on Election night and so that's that's of note and um I will be working um president McCrae with you and vice president barovsky um on November and December which are sort of overbooked at this at this time and if anybody can volunteer for a later flight then uh we'll give you some kind of travel credit um but um yeah we're going to have to look at those agendas and see what things we might need to be flexible on um I did want to get Commissioners take on the correspondence discussion

2:54:34 tonight U we do a lot of things that are recurring and if providing information through correspondence and then making sure we allocate time for those discussions is that is that a effective use of time as opposed to taking agenda time when we when we could be diving into deeper issues is was that productive I guess is what I'm asking okay um so that's that's an option we can explore but um we'll have to roll up our sleeves a little bit and take a look at at November and December but um other than that I don't have too many specific comments any questions or comments from Commissioners on the agenda I'm not going to be here for the work

2:55:20 session unless there's a hurricane someplace by the way I'm going to try and do it remotely but I don't don't know about the logistics and then the December meeting i' make it an anual to be here just to be someplace else and so I'll be doing that REM you do everything you need to attend the work session monly if you can yeah I mean I'll have this with me but that's and I'll have Internet it's just a matter of pretty easily so then I can just follow up my yeah I was I was going to suggest commissioner McCrae it will be recorded and so we'll have the recording and then um potentially we can follow up with uh commissioner Brown um after the fact and

2:56:05 see if there's any additional comments um what we all lose out is is your active participation in the in the process so we we will all feel sad about that virtually all right thank you right um comment yes please go ahead son um I noticed on the December uh agenda there was a kind of an update on Dei and just I've been hearing and seeing other reports from uh larger well large government entities and such that are now using deib

2:57:00 this is Rod um yeah you're right there's various ways to to label and and um be is belonging um so that that's a a common term that's that's used in the industry if you will um but the general principles are all the same sorry great thanks I was on mute when I said that anything else onia nope uh board wrapup I have a I have a question and a comment a question is about the ethics webinar that you put in your note to us I'm curious is there a

2:57:47 date that we have to have that done by is it Daniel it's just one time within a commissioner's term so it's a new um it's a new bill that was signed into law and so the the webinars are just now becoming available as commissioner Brown pointed out October is already full but we found some openings in November and December I didn't see a deadline on that but I I would say the sooner the better thank you and then something I forgot to say at the beginning um my comments is that I attended the um the documentary on the College Hill Reservoir at the Art House and um I know that in the

2:58:34 interview with the filmmakers they expected to go into making that documentary web was going to be like not happy about it but featured prominently in it Laura farling was highlighted in it and I thought it was a really great to the college Reservoir and um it was a fantastic movie so it does look others just a comment on that you know I appreciate that um I think the filmmakers went into this thinking we were going to be protective and resistive and defensive and um even though we don't always like to just jump out in in the

2:59:22 public in some at some times um I think it was a real good lesson that being transparent being open communicating with people um in a lot of different forums um you know you kind of have to trust that they're they're not going to take things out of context and and um portray them in a certain way but I have to commend staff and Laura and others who participated in that um one of our was the other one Karen that was in the film do you remember one of pump and rest Vortex yeah yeah so they were they were great and so thanks for the

3:00:10 comment all right anything else on the night being