EWEB Board of Commissioners — June 17, 2025

0:04 June 17th. Do you want an electric board work session Emergency do what the security people say. Evaluation out and away from the building. And with that, we're good. I'm going to turn it over for our first agenda item, which is goal three P BPA products recommendation. President Baroski. Uh thank you. Good evening. Um this is uh Frank Lawson for the record, CEO and general manager. Joining me this evening are Brian Booth,

0:52 um, our chief energy resources officer, and Deborah Hart, who's assistant general manager and CFO. U, before we dove into the meat of the subject, I just wanted to do a couple of quick housekeeping items. I did want to introduce the board to Dedra Williams, um, who is sitting right over there. Um, she is our new chief people officer. So she's in charge of human resources, business continuity and safety for the organization. And see, she's been here about a month or so. So she's gently used um brand new, however you want to look at it. Really excited to have her. She comes from Alaska, worked for a utility in there, have a lot of operational background, so you'll get to know her a lot better. and I'll make sure that I introduce her also to

1:39 Commissioner Schllothberg who is um excused on absence this evening. I'll make a note of that. Kind of the opposite of Dedra. I did want to also acknowledge um just recently Ann Celebrated her 15th anniversary with e webb and so wanted to acknowledge that while I've had the opportunity. So congratulations and thank you Ann. Um we will get into the the subject matter. I I also wanted to point out that um this is kind of a a culmination of a lot of different people's work and acknowledge them. Um many of the members from Brian's team um a few are here this evening. Um Megan Kapper and Jonathan Hart and Ben Olrich are are all here. Um Aaron Orlowski

2:26 who's part of our communications and outreach staff is in the back of the room wanted to acknowledge their their work along with uh several members from Deborah's team including Adam Rue who's looked a lot of the financial issues and then some of the areas that you don't often think about on our customer side. So um Julie McGee's group, Anna Wade, some of the people you met with on the on the um conservation side looking u Juan Serpa Munoz who's also involved in a lot of the looking at at the opportunities and impacts of energy efficiency conservation demand response and some of those things. So u with that we'll we'll kind of dive right in. Um this evening just going to spend just a

3:11 little bit amount of time on the background not not a lot. Uh we'll focus mostly on the product recommendation and really the intention of a work session is to get your perspectives uh on the direction and the impact of the decision and and information that you might want further. Um so we'll we'll run through this fairly quick quickly. Um this this is um it has been a journey uh for uh the board um as well as staff. Uh really wanted to uh acknowledge commissioners uh and your contributions throughout this process. This goes back um very specifically to 2021 when we started our first electrification studies. um it

3:56 evolved into an energy resource study or we called it the IRP at that time of 2023. You can see how kind things have kind of picked up since then uh looking at the demand side um have really appreciated your thoughts and guidance and perspective along the way. Some of you um have have recently been part of that. Some of you in fact all of all of you um to one exception have been uh part of that entire journey. And so wanted to to thank you for that. Um really recognizing that we're we're at a point now where we're we're um making a key decision around a particular part of our supply chain. Um it is a part of our supply chain. It's not not the entire supply chain but a very important part

4:41 both financially as well as strategically uh for the organization. Uh, one of the things that, uh, we've done really since the the initial leaning um that we talked about at the beginning of May, we took a deeper dive into several different areas. The the the different colors here kind of represent some of the areas that we we looked at further. Everything from uh some of the contract details uh the components that make up the pricing of of the contract, how the contract impacts um operational aspects of how we manage our portfolio for example, how we uh can manage uh and mitigate issues associated with with peaking. So a lot

5:26 of things uh related to um how the contract has evolved and how that negotiation and the construct would work. Uh we also uh looked at um some of the strategic alignment. Um we had a meeting with our community table led led by um Aaron uh and and Brian who did some particular outreach to interested parties. Uh several of us met with with large key accounts as well um to try to to get some some broad perspectives on um the product uh the initial leaning and um now um after learning some more about that we'll we'll be we'll talk about our final recommendation coming up. Um as part of the process as we've

6:13 gone along just a reminder we kind of started out there are four main product choices that we have from Bonavville. uh load following block, a what's called block with shaping and slice. There are some slight different versions of the the block with shaping depending on the kinds of peaking services that you want. Uh with Bonavville, there were really two product selection choices that kind of emerged as probably the top match for EW's particular situation. we were trying to and have been wanting to balance flexibility on one hand with uh low cost um being able to handle different scenarios. Um and so um uh over the last several months we've really been focusing on the load

6:59 following option along with the block with shaping and the various options for peaking service that comes along with that. It's probably no surprise that those two really uh kind of emerged as the top candidates uh from an overall cost perspective. uh when you look at sort of the characteristics of the products and that in particular that orange area at the top uh which represents the the cost of capacity or the amount of capacity in this case that EW would need to procure in the sense of of looking at uh what the federal resource could do, what our net resources could do and then what gap do we have to fill when it comes to our ability to meet our customers demands at

7:44 at all time. And so the the two that emerged um under the present uh load profile that we have uh were load following and block was shaping with some peaking services. And so those um overall the ability to meet that capacity, meet that peak demand um in the most efficient way uh was um the the primary reason those two uh rose to the top as our as our best candidates. the way that they function uh slightly differently. Um and we'll come back to this um uh graphic um a little bit later. This is really the resource stack load with following. There's uh a net assumption that's made by Bonavville on

8:29 the left. That's the the green area at the lower part of that that chart and then Bonavville fills in the rest up to a contract limit. And that's something that is kind of a key part of the discussion. And then on the right, uh there's a little bit more flexibility for e webb to use the resources in in green and then the peak use uh and leverage the peaking service which is still a federal resource tapping into the federal resource to accomplish the same thing which is to meet uh your demand uh throughout the various periods. in this case um kind of a typical 24-hour graphic um as a as an illustration, but we'll come back to this when we talk about portfolio management and the impacts

9:14 operationally. The recommendation um has shifted from our original recommendation which was the leaning toward a um a load following option. Um our our recommendation at this time is to go with a block with shaping product and initially subscribing to a peaking service from Bonavville. And we'll get into the the specific drivers uh for that um um over the next couple minutes. primarily uh when this is really a summary of the fact that we started this is really a kind of a bridge slide that says we started initially leaning um and

10:01 by the way these were slight leanings if you recall there was kind of a 5248 one way or the other um we refined and took deeper dives into the uh cost the contract components the cost determinants uh really took a look at um how the different contracts drove our operational uh the operational side of e-web the impacts of those the complexities uh balanced with the ability to develop counter measures and uh one of the aspects that we really qualified over the last uh couple of months was the the means of methods that we would mitigate for cost uncertainty under a number of different futures. Um the uh load shaping under one scenario

10:47 was very uh narrow. It was very stable. Um but the the block with shaping had the ability to be both better and worse. And so we wanted to understand uh how practical the counter measures and mitigations would be to keep that on the positive side of of variance as opposed to uh the impacts from um situations that were unfavorable. So that was a big part of our deeper dive as well as the operational impacts. And then we also um looked at the community impacts. We looked at impacts uh and alignment with our strategic work uh specifically looking at areas that go beyond our present- day load which we we know will

11:33 exist. And uh another key driver for the shift in recommendation had to do with uh the support of electrification uh the support of economic development and which of the two options gave us more flexibility. And so when you look at the the right side here, um we going to summarize the the reasons for the change in recommendation being we are still leveraging the the at cost federal resource um as as um in a significant way. Um while it's available um it is capped as far as its future capability to grow. That's actually different in this contract than it was in the 2011

12:18 contract which allowed for certain degree of growth. Uh we think it provides better um cost improvement potential. There's more upside. Uh we also think there's ways to mitigate the downsides to having some variability. Um and and you look at over the 20-year life of these contracts, there's there's very little financial difference between the different scenarios. uh when you back out and change the scale to be full scale um a few million difference um um or even even less than that and sometimes favorable over the the 20 year life of a contract. And so we uh got into really looking not as much toward the let's let's find other

13:04 sensitivities to run, but how does this really align with the organization and the future? And that's where we we got into kind of the overall strategic alignment and feel like block was shaping really facilitates sets up the organization to be um capable of supporting economic development, electrification, distributed generation and system optimization. Um, oftentimes, and this goes back to some of the commissioners been part of the strategy for a long time, um, this notion of synchronizing supply and demand and creating beneficial customer behavior that really can be shared across our organization and block was shaping really provides um, better links and abilities to do that.

13:50 One example, I said we would return to this and I just wanted to highlight how we looked at some of the operational changes. Um um this was something that we described early on as being able to how we would man the two products would manage peak. Uh what I don't want to talk about right now is the resource stack, but I want to talk about where eweb's management efforts would go. And if you look at the two u on the left side, you'll see the areas in yellow kind of highlight where eweb's portfolio management efforts would fall. And it is true under this initial sort of one-dimensional scenario uh load following is uh has a simpler objective when it comes to portfolio management. Um we're basically u

14:37 managing the the output that our dedicated resources produce. Now there there will be variance in that it there will always be times of surplus and times of deficit and so that still requires management on the right side that management occurs in the context of aligning uh our resources maximizing and optimizing our resources relative to load and that's under um a very initial baseline no growth scenario. When you add growth to this, and this this upper line will change. It will evolve over time. We just reviewed a forecast this afternoon that shows uh

15:22 summer peaks increasing uh 29% in the next 15 years, winter peaks increasing 20% in the next 15 years. So that line is not going to stay the same. Um it will move and when that happens, the management requirements shift also. And so what we would be faced with on the left side is trying to manage under two different fronts uh one on the resource side and then separately within the constraints that that has and then also with the constraints of the non-federal resource side uh we would end up with kind of a actually two or three different constraints we would be managing under whereas the right side um we would be expanding existing management uh of the resource. So it

16:08 would be a similar management effort expanded to meet the load. Whereas on the left hand side there's very different constructs to how you manage it the lower bar versus how you manage the higher bar. So there's there's actually a degree of complexity that gets added and one of the initial premonitions around load following that is that would be simple or simpler and under actual operations would probably not be. The other part of that is we we talk a little bit about countermeasures and how we would manage volatility. Um it is true uh load following under a number of different constraints is uh a bit more stable. Uh but we also there are pros and cons to that. It does attenuate some

16:54 of the signals associated with um kind of managing your your demand side. Uh we also looked at a number of different um options to mitigate for any kind of volatility tight market conditions capa changes in capacity markets and really looked at what those tangible options would be. um not sort of new technology um you know Apple's i nuke or anything that's dreamed up by by an entrepreneur but what are the things that we could do locally to mitigate that um those were available they were practical and it created um overall the opportunity to

17:40 actually improve the cost position overall relative to load following um with the peaking service and then through some of the mitigation techniques techqu. And these are these are listed generically intentionally um because there's there are some details in there that we did not want to disclose in a public forum. Um but um it does actually drive the cost the overall contract cost down as well as mitigate the volatility. And so um those were things that we have um assessed evaluated in the last month and a half as as part of the deeper dive. Um and um as well as when you start to look at this and I I apologize in fact this is

18:25 this is bright and of course yellow is solar because solar is yellow. Um but we we looked over the life of the the contract and projected out. Um and one of the aspects of the decision relates to not just the federal resource, but what's the load of non-federal resource that you have to procure in order to continue to provide the service and value to the to your community and to your customers. And you you can see that that varies a little bit um with the type of product load following on the left. Um block with shaping and a service by itself um uh as the highest one. But then some of the value of the more localized

19:13 specific mitigation options. And again, these are these are technology relationships that exist today, equipment that exists today um and using those um to mitigate for um resource adequacy, capacity issues, demand response, and some of those those things. And so we did look at uh the impact on non-federal resources overall. So in summary, we we had an initial leaning. Um we went through a series of deeper dives in a number of areas. Um looked at the the contract risks, looked at the billing determinants, uh very specifically looked at operational impacts,

19:59 um how different options would mitigate for volatility and uncertainty. And overall at this point feel like the block with shaping product uh as well as a initially subscribing to a peaking service likely a winter peaking service since that's where our our our peaks uh occur and the meeting and supplementing our resources in the summertime is cheaper and more available. um felt like that was the best option as far as its alignment with the organization, our direction, decision flexibility, uh and the ability to work with our community on some of the things that we know that they're interested and we know that this board is interested in. I'll I'll just conclude by saying these

20:45 are both good choices. Um, I think we have found along the way that we're fortunate in the Northwest to have access to to these carbon-f free resources. Um, there have been a series of of discussions and debates uh about the different aspects. I think one of the things I added in the backgrounder was a little bit more description for commissioners on the areas of the contract that we felt had some definitional or operational um risks to them or uncertainties I guess I would call call those. Um we highlighted that they they take different forms. Um I'm not sure that we could say one of these products is great

21:31 and one of them's horrible. uh they both have their degrees of of attractiveness. Um but ultimately we feel like the block was shaping along with the peaking service better aligns with the organization's strategy. The work we we are doing around rate design, AMI, load management, economic development. We know that there's there's going to be growth. there's people interested in developing and building in Eugene and this facilitates that um more with a block with shaping product than it does with a load following. And so with that, commissioners, I think we'd like to get hear your your thoughts, your comments. We can answer questions.

22:16 We can also if there's gaps or areas that you would like us to expand on further whether this is the forum or we can follow up uh we we'd be happy to do that. Uh we know that there's this has been a long journey that you've been involved either pleasurably or unpleasurably for um um probably in in pretty good detail for three or four years at least. Um and so um we appreciate that and would be happy to answer your questions or just hear your dialogue on different trade-offs and options. So um with that um President Barovski, I'll turn it back to you. There is some staff available um at least at least three people knowledgeable on the no four actually.

23:03 And then there's and and what Eric's on the phone and Erin's on the phone. So he's he's our I guess our contract expert. So there's there's a number of people available. Really like to get your your thoughts. Great. Thank you, Sonia. I see a lot of notes, so I'm going to go to you first. I have I have several questions. Um so just so I understand it before we get into kind of direction and our thinking. um when you talk about the summer peaking versus the winter peaking and we I think there was uh there was a slide a few back that kind of showed um what it would look like over time and how we expect there to be a 15% change on or 20% uh in winter it sounded like on on each side of things.

23:51 How how does this one better serve that that difference versus just the load following? Yeah, I'll I'll start with that and then then maybe Brian can weigh in. Um, block with shaping um from an operational perspective gives us a monthly allocation that we can move around throughout the course of the month. Um, and so um it isn't prescriptive in the sense that Bonavville says each hour you have to do this and it's based on history. There's quite a bit of flexibility within the operating realm uh to do that. um that's on a monthly basis and then we can supplement that with a in the case that we we think there's more um value in a winter peaking service where we can call

24:37 on the federal resource so many times throughout the season for things beyond what we would normally be forecasting and experiencing. The reason that we think it's easier to fill the gap in the summer for us is just simply the buildout in the west um particularly around wind, solar and batteries. Battery in technology. Solar has created um a cheaper path toward capacity in the summer than it does in the winter. That's why we would choose winter over summer. We just think there's more value. Um there's also an annual product. Um, again, these give you so many shots to use it and if you spread that over a year versus winter versus summer, our likelihood is we would use it in the winter and then it would sort

25:23 of be devalued in the other parts of the season. The the the chart you saw there was a a 24-hour period. Um, so it was just sort of a snapshot example. Um um but there is a lot more flexibility than um when we look at that allocation from Bonavville, the monthly allocation moving things around to really optimize our own resources spec specifically resources that have flexibility like Carmen Smith. Carmen Smith uh has a lot of flexibility to it um to be able to shift and move load around um within the periods that we need it. um above the contract high water mark mark. Um that flexibility does not exist with load following and in fact with load

26:09 following Bonavville would provide us um forecasts for our own resources that would be very much diminished and conservative and based on a firm commitment that we would have to make. It wouldn't they would not allow the use of those very flexibly. So there's some differences in the product there. So in order to deal with uh more variance and weather and and such, this provides us with the opportunity to Okay, we didn't you know it it spiked at the beginning of June and we had two 90°ree days and three 90° days and then maybe it peters out for the rest of the month. So it's it's an ability to do that kind of within a month. And then what you were saying is in the summertime we have the

26:54 ability to have other flexible resources that we can fill in gaps as needed but less ability in the winter time because that's still we're still winter peaking facility even when we look out and again nobody has a crystal ball but um even when we look out in projections we're still winter peaking and there's less resources there because it's just cloudy. We think there's more liquidity in the capacity markets in the summer moving forward. That liquidity generally will relate to lower costs, more options that we have to manage our load. We don't have that same degree of flexibility in the winter. We are winter peaking along with a lot of other people are winter peaking in in the region and so um the it will be more beneficial to tap into the federal resource at that time than would be in summer. Go ahead.

27:40 Okay. Um, the one uh piece of color commentary to add, and I think Frank's pretty well nailed it, but maybe in my own words, when we're running the modeling on this, the model is picking the least cost resource. We give it the choice of paying bondable for this or build something else. In the winter, there are very few like firm carbon-f free resources out there. like they're there are not green peers that are cost-effective. Uh if we're dealing with a 40hour 72-hour, you know, winter cold snap in the summer, the problem is much different. We wind up with these, you know, afternoons that are exceptionally hot. And for dealing with an exceptionally hot afternoon, solar and batteries are very effective and they're

28:26 an off-the-shelf technology that simply doesn't exist uh to serve the winter. So the model looks at that and says, "Yeah, you could be pay BPA rates or here's this other alternative that we think is more affordable." Okay. Um just a little context like the amount of buildout on this in California is incredible. At last I saw we had 40 gawatts of solar now in the Kaiso footprint. Two years ago there was a few hundred megawatts of battery storage. When we visited the Kaiso in September, they were up to 10 gigawatts and now I believe they're at 15 gawatt. Like their pace of storage buildout is amazing. Are we seeing any impacts from um buyers

29:11 in uh kind of the the efficiency of solar and and any of that? I mean, I know we've seems like every summer we're starting to get more and more cloud cover just from smoke. I don't know if any of the models kind of take into that. Um but even maybe with that it still is more effective in the summertime. Yeah. It okay the footprint of it is so huge that a local fire would annoy us but would probably have very little impact on like the entire western grid. I think the other thing Commissioner Carlson um related to just I I'll call it diversity of resource is that the because of the flexibility to manage the resources the block with shaping really um inspires us to do more

29:56 with local generation which um in the cases where you can have transmission constraints or other things there's some benefit there. Um there is quite a bit of diversity in the in the summer resource blend specifically with other parts of the the west that I'm not not sure one wildfire smoke in but particular area would would cause an issue. Well that that was just two of my questions that took up quite a bit of time. So if you want to she has 18 left. Well I do have a lot. Um if we change um our we we make this decision obviously not tonight but uh we go with this recommendation if we my understanding is we have one shot to switch it at some point during

30:42 the contract term. Correct. Uh how much time do we have before if we did decide how quickly can that decision switch over? Is there any um and and is there any kind of restrictions on the ability to make that switch? Yes, we can switch on even years and we have to give three years notice. So, the soonest we could switch would be 2032 and we'd give notice in 2029. Okay. Sure. The the other thing about that, Commissioner Carlson, just um uh 2029 we will be barely 6 months into the contract into the new contract. So we we have a uh resource management obligation

31:28 uh over the next three and a half years. Then we would have a sixmon this isn't working out and then we would wait another 3 years. Um the the practical reality is that switching would probably be something that you would want to go through at least one billing determinant cycle or one billing cycle cost cycle from from BPA. Those tend to be historically they've been on two-year cycles. um um if there was any any question about the the way that the the rates are allocated. Um we don't think those are as as significant that they are a risk and if we did get into it um it would probably be in the in the same

32:14 amount of time frame. It would probably align pretty well if e webb had decided that at the end of some of the hydro licensing not to relic those. Those are decisions probably for the the late 20s, early 30s. So it it that kind of decision aligns pretty well with that. Commissioner Rob, thank you. I'll keep it simple. Um, two questions. In your background, you had something about RAP and the uncertainty it created. Could you expand on what that uncertainty is and why we're going to I guess it comes with a package, but why why that what is that uncertainty? Yeah, I think there's there's a couple ways to look at that. Uh, Commissioner, um, the how resources um, get

33:00 accreditation for their resource adequacy as part of the calculation. Um, e webb is not the balancing authority. Um, Bonavville is besides being a resource um marketer for the federal government, they're also our balancing authority and how they credit certain e-web resources um is part of that that sort of degree of uncertainty. We we think that it's fairly understood as to how that would would be and then how um that would that would be priced. The reason that we left it a little bit uncertain is that right now the western resource adequacy program is a program. It's under develop. It's developed but as new markets develop in the in the

33:46 west they will have their own resource adequacy requirements. So that is not specifically known what those would be. And so um how resource sort of generically how resource adequacy um is determined going forward is an area of of calculation uncertainty. That's going to be the same case independent of which product we pick. Um because if we're talking about non-federal resources, things beyond the contract high water mark, those are issues that we would have to address as part of being um a member of any either market or balancing authority territory. Okay, one quick other quick one. So process so we say go and to negotiate.

34:34 So to me negotiate means give and take. And so give me an example of what you would give or what you would take or what would you come back to us and say this is what they want or this is or we give you cart blanc and you come back with a signed contract and we're done. I mean I just help me through this process because this is once in 20 years we've never done it. We'll never do it again. And and so tell me what negotiate means. ne negotiate um in the sense of a of a Bonavville contract really means um legal language. Negotiating legal language around um the issues that have already been at least um defined at a high level, but it it might be um which which products go into which bin, how some of the

35:20 determinants are calculated. Those those are um and mostly I would say mostly legal language. I think what we've put um in the resolution is I I'll say negotiate maybe it would be better described as work out the details and execute it um consistent with these um uh the characteristics of the product. Um, I don't know if you want to elaborate on that or or if if you need to, we can tap into um Aaron, but anything to add? I think you nailed it, Frank. Um, a little bit of interesting context is that we'll be part of a pretty small group of folks that take this product,

36:06 which makes for maybe a different negotiating dynamic. There's 140 Bonavville Utilities and 130 of them will choose load following. On the one hand, that means that they've got some pretty strong horsepower to make sure that the contract works for them. On the other hand, one of those utilities is just one of 130. So, if there's something for them that they don't like, tough. The other 129, if they don't agree, then there's probably no change to be made for us. We will we will get special attention. I'm not unhappy about it. Yeah. Go to my last real quick question. I was going to say the special attention it is not necessarily a bad thing if you think about negotiating

36:51 power in in the sense that those who are not part of the 130 the 130 tends to be a lot of those are utilities full requirement utilities. the the ones that are not tend to be the the Seattle, the Tacomaomas, the the large um customers um of Bonavville. So, one of the things we did consider was as part of the contract risk is are we going to be a lone wolf sit in the lone wolf situation and you could sort of be your your um some of the cost analysis, billing um negotiations that happen every every two years. would we be in a detrimental or minority position? Don't don't believe that's the case. Um but it does give us

37:37 a little bit more flexibility to work out some of the things like billing determinance and legal language. Okay. And real quick, so that follows my assumption that the load follow the like sub and lane electric and eud requirements. They're going to go to load following most likely and uh and so they're they're because they don't have generations. So they're going to have a different product than we are and there's a there's a real reason for that. So thank you that that helps me. Yeah, the the um they will likely go load following the decisions that a lot of those organizations make and in fact Lane Electric is part of of PNGC which is a conglomerated representative of a lot of those customers is that what do they do when they grow beyond their

38:22 contract high water mark? Um, and so they they will likely have to go with um some kind of either managed product through a PNG or a uh a tier 2 product from Bonavville. Well, Bonavville would just go out to the market. Bonavville cannot make resources. They can go buy resources from somebody else. In that case, uh we don't see a lot of value that they add. They're they're basically a pass through distributor at that point. Um, and so there's there's some downsides to the tier 2 using Bonavville for tier 2 and those organizations recognize that, but but you're you're right as far as the characteristics of where those organizations tend to fall. Tim,

39:08 thank you, Chair. Um, thank you so much for the presentation and this is um I've I've taken the moment to go back and watch some of the other uh presentations, especially before I was on uh on this board. And so, um, it's been a very consistent and appreciated, uh, method of moving forward and and being very clear and explaining this. And also, if I was in school for 20 years on this subject, I still wouldn't understand it. So, I appreciate you all very much explaining this in a very clear sense um, for for myself and for our community as well. Um, two questions. Um so as crystal balls existing um and with technology changing um and with resources um updating if e

39:54 webb is identifying new or improving ways to generate uh for energy generation would that be more challenging with load following than with blockless shaping? It would be much more challenging with load following and and part of the reason for that is under a load following scenario when you have other resources you have to be very specific with Bonavville what the purpose of those resources are. If they are dedicated to load you have to dedicate them to load and Bonavville will use that in their calculation for what they're going to supply on a net basis. If they are not dedicated to load, it creates a number of of other challenges. You you can't actually use them for load, you have to use them as

40:40 access for those generating resources to go to the market independently of your load. And so there's you meter this and you sell at that. It's very much bifurcated. That's part of when I showed the two different yellow areas. You're you're kind of managing on two different fronts in that scenario. And that's much more complicated than actually being able to pick and manage a set of resources which what we would be doing under block with shaping to meet our load and then manage either the surplus or the deficit as part of that. It it really becomes more complicated under load following. Yeah, thank you for the for the answer. And on the I think you answered it, but I'll ask it anyway. Um on the other side of that if the needs of electrification

41:26 or other needs grow that is also still more challenging with load with following than block shaping grant. Yeah absolutely. I think once once we get above the contract high water mark which is sort of the upper limit of what Bonavville would supply um we're kind of on our own in in that case. Um we could tap into Bonavville at this tier 2 level. They don't add add a lot of value. were sort of at mercy with their ability to go out and acquire resources. Um when we're really I I think one of the things that have where our thinking has really evolved has been um the alignment with what we think the community values are around electrification around economic development

42:11 um load management system optimization and that's very much restricted um to what we have today. what we would have today is today. Anything that changes that going forward, especially expansion, would be much more complicated and in fact almost disincentivized to to do. Um, and I don't I I we've we've had discussions around which of these are more facilitating, which ones create barriers. I I know there's a number of opportunities right now. We're looking at load growth in the area. those become more complicated and restrictive, not just electrification, but all kinds of of growth opportunities that the organization could have and the community could have basically. Yeah, I appreciate it. Thank you.

42:58 Thanks. Um, good presentation. I do have a question couple of questions as well. Um, you mentioned the downsides and can you just give an example of how you said we have opportunities to minimize the downsides and you didn't want to put them all out there because there's some that are trade secrets or whatever, but can you kind of give us some ideas of how managing the downside is something that's in our wheelhouse or in our capacity at this point? Yeah, we we have a a number of large local accounts that uh really through curtailment agreements, through load management agreements would receive credit for

43:43 meeting resource adequacy requirements and we have tested that. Um there we've tested the willingness to do that. Um and also the potential impacts on the contracts. those I don't want to get too specific but those those do create um and mitigate one of the the biggest original challenges which I I think was identified as this capacity gap and that capacity gap can be filled by doing local things um and um I think I'll probably just leave it at that and we we can there there are three or four specifically that we can highlight that could be used for that purpose. So an example of that would be a a certain user would sign a contract or would be

44:30 part of their contract that said you know if we need to call on you at during a winter peak or whatever and have you curtail your your operations then they would be required to do that and then we can show that to Bonavville and say this is a way that we can cut 20 megawws during a peak season something like that. That that's an example. Yeah, I I I think that um um there's obviously lots of details in in how that would work, but um in in general, it can be sort of curtailment opportunities like that. It can also be uh local distributed generation versions of that. It's it's based on a the ability to adjust on a net basis. And um by looking at those things specifically, we

45:16 identified three or four areas that would be um really low cost um opportunities to do that. Um uh lower cost than the Bonavville option. Okay, I'll just I guess put it that way. The the next question that I have regards to our generation and our the amount of generation that we're bringing to the table. Um and at what point do we tell them that okay so Carmen has this on its name plate but we're actually gener do they look back over like five years and say this is the average and then also with the the decision that I think we're going to be having to make about Walterville I mean we've already taken we've taken Leeberg

46:02 off of our contract is the is the timeline of implementing this and saying Walterville is a yay or a nay moving forward part of the discussion and you know will will we be on the hook for Walterville for 20 years even though we may take it offline. I'll talk about Walterville secondly you can talk about firm the firm side of how they um allocate our resources and then I'll answer the Walterville question. Yeah, let me take a stab at the first half of that. Um the way that Bonavville calculates our our net requirement, the amount that they are obliged to serve is based on

46:47 our expected load minus the firm capabilities of our dedicated resources. Carmen Smith on average puts out 20 megawws uh of electricity. It's got a name plate of 110 something like that. Um the firm output of it is based in a critical water year and that's more like 16 average megawws and under somewhat adverse uh water conditions we we couldn't run it up to 110. I believe the official number on that is is 60. Um so that that impacts our you know our ability to take from Bonavville. I am I answering your question? Yeah. I guess I don't want to be dedicated to a name plate a name plate megawatt from Carmen

47:35 when we see how the act the actual output that we're getting from our own generation you know and then on the other on the other side if we can ramp so if if we tell if they say okay you're on the hook for 10 megawws from Carmen but we find out that it's a good water year and we can get 25 megawatts from carbon. Are we free to sell that 25 watts and we're just responsible for putting 10 back to to our our load? Yes. Perfect. That's that's all the further I got to go on that one. I'll um I'll answer the the Walterville question in the context of not just Walterville but any resources any that are on our list

48:20 and called dedicated resource. Now Carmen is included in that. Walterville is included in that. Um and um Bonavville does this net requirement calculation and they they do it um um based on um I I don't remember if it's 2023 um or or not. Um we are on the hook for that if it goes away. Now we can do that through a contract. We can do it through a replacement resource. We could do it a number of different ways, but um entering the contract um we are on the hook for our um firm generation levels. That's um um and that's

49:08 um that has to do with the calculation of the contract high watermark. That's really uh true independent of the product that we pick that um that we are on the hook for our version our our now it does give us more flexibility to add and subtract resources under a block with shaping than it does load following. If you add a resource under load following, it either has to go to market, it can't go to load. um if it does go to load, you have to dedicate it and then you're locked into the future for replacing that if it goes away. Great. It's much more restrictive, I think, is what I would say on load following. If I could add just a little

49:53 bit of a there's kind of a story to tell here and that both parties have a responsibility. Ew's responsibility is to deliver our dedicated resources whether it comes from that actual resource or somewhere else. Bonavville's responsibility is to deliver what the contract says they will deliver. So for them, they have the same issue. If Grant Culie were to stop generating tomorrow, they still owe us, you know, firm power supply. They're on the hook to go out and replace that. If Kerman Smith were to stop generating tomorrow, same deal. We're on the hook to go out and replace that. So both partners can be kept whole, right? Their obligations. So my overall um leaning on this is is to go

50:39 with the the recommendation and my feeling on that. One of the things that helped push me to that one is the the top two there economic development and electrification. Um I think both of those are things that we're going to be looking forward to in in our community. We've heard electrification is something that is very valuable to our community and I think economic development is a way that that this community needs to move. our our area median income is low, lower than the state, lower than the federal. And if we can bring in new jobs, new businesses that may require power, um, usually the ones that require

51:25 the types of power we're talking about are doing highpaying and and good types of jobs. So for me, those are the ones that help tip it over there. So that's kind of where I'm landing. So back to you, Sonia. Thank you. Well, parts of my questions got answered, so that was great. Um, kind of building off a little bit more of the of how the products mesh. So, I just want to confirm again, regardless of which products we choose, the power generation that we have is set. We we have to replace that like you said. But I thought that with the peaking um with the the block was shaping, we have a little bit more uh

52:12 capability to uh take advantage of using our generation in times when um we have need. Right. Yes, that's correct. And the reason for that is that under block with shaping, we can run Carmen Smith how we want to. We can maximize its production at certain times of the day. for example, with um a a load following product from Bonavville, they give us the schedule and that's going to max whatever they think is the best schedule for them, which is probably going to be more around flat and certainty than for us and we might shape it a little bit more for our own benefit. So, um there is a diminished value with our own resources and how they operate under

52:58 load following versus Blancqua shaping. So there's an upside for us here. Um if we for some reason didn't have Carmen or other generating capabilities, do we have a downside? And what does that look like? Any So the downside if Carmen were to go offline for a period? Yeah. Under either contract, we have to have replacement power. So that could cost more. Would it cost more in one scenario the other or would it not really matter because we still have to replace that same I think from an opportunity cost standpoint it probably works out to the same I will say I think it's a simpler path under block with shaping and that we can replace it real time with whatever is

53:43 convenient to us under a load following contract it it's very rigid we we have to deliver something we've got to go through their process to you know validate that rather than simply serve our load the same way that we do every day. Okay. Um, so I'm starting to see more of the upside. I I would like to hear a little bit more about the process and what information because I kind we started out sort of at this path few months ago and then there was a flip and then we went back to this and I if you can just help me kind of dig in and I understand that they're two good options and so maybe it's just kind of a little teetering. It's not really a big swing perhaps, but um you know when it's

54:30 just a decision of this magnitude, it would make me feel more comfortable if we dug into that a little bit more. Yeah, I can elaborate a little bit and then and then there may be some others that would want to weigh into that. I I don't ever felt commissioner um before the initial leaning that um as a management team or personally that I had said, "Oh, this is the one or the other." I I think it was it was a pretty sharp peak there and there was a recognition that there was going to be different kinds of risks. There were going to be different kinds of value that was that was going to be realized one one versus the other. Um the the initial leaning was just that it was kind of a leaning and there were um some

55:16 things that um I guess upon further review and for me personally it was really diving into the operational impacts to the organization really how does this manifest itself on the street um on the street or in the in the on the trading floor or how we approach um markets. Um, we also I think some of the the customer feedback that we got around the flexibility of it and and just really kind of thinking about that and we got further clarification around how the some of the the contract determinants were were built. It it was um that in combination was we felt like the downside um of block with shaping was that it

56:02 could have more volatility to it. It it the other one was more certain. it was more stable the the load following. Once we dove into how that could be mitigated and and again in a practical way that downside was removed and so we really felt as a result of that that it created um a lot more flexibility. Um there was more upside than downside. Um yes, it's true load following is probably more stable under the constant environment that we're in under today. But I don't think the constant envir I I don't know did I just say today's world is constant the the minor volatility that we see today could is going to continue um in the future and so having

56:49 there there was really a qualitative value around uh flexibility and and I know that this board has talked about local control um I don't I looked at local control a little bit differently um as a as opposed to just being a able to make decisions around resources. It was local control from an operating perspective that I think ultimately kind of we had a lot of discussions around those tradeoffs and I think that ultimately tipped a little bit from this way to to a little bit from that way. We also um dug into questions that commissioners had um around how it would be implemented. Um, and so, um, up until our original

57:34 leaning, there were some different perspectives out there. Maybe you had formed your own perspective that I'm sure everybody here did. Um, and then it was it was kind of a tailoring, I guess, um, that that has happened over the last month and a half. So, I guess along those lines, is there information that you expect to get or other analysis that you think will be done that might swing it anymore or this is I I don't I don't personally, but the other two can weigh in. I I think we have um really over the last se several years and in particular since since January um I I think we have scenarioed and sensitivity this thing to death. Um and

58:19 looked at all the different kind of options. I know this group over here is probably going, "Yeah, we're really tired of it." Um, and ultimately I don't think it came down to the difference between uh, oh, there's this number versus that number. I think we and and probably it's expected that that they're very close because at the end of the day, we're still getting 80% of our supply from a single supplier. It's what are we going to do qualitatively uh, from a product perspective that gives us the most strategic flexibility going forward. And and there's not a scenario that we can run still that will tell us any more than we know already. We we know brackets. We know mitigation. We know sensitivity. What if load grows faster? What if load grows so slower?

59:04 What if the markets are tight for capacity? What if they're not tight? We've they have uh and out there have done and provided us with um all of the things I think we we need at this point. And I don't see another scenario that that we would run. So I guess along the lines of the scenarios, one of my questions was just are there scenarios. So you run hundreds of scenarios, thousands of scenarios maybe. Um I'm assuming this scenario is kind of a 90% plus is the best option in in that case. Are there extreme scenarios or scenarios that give

59:50 you pause that say actually this one would have been better? Like there are situations in which you know we could foresee in the future that actually the other one would have been better. Go ahead. I take a turn Frank. Um yes I and that is a extreme that that we tested and I believe is in the deck and that would be if we were to have some kind of extreme capacity pricing in the future like the thing that block shaping doesn't deliver as much of is that wrap capacity. uh if some of these you know alternative solutions that we've found were to not come to fruition if we found ourselves in like a severely adverse you

1:00:35 know capacity market so if like batteries are become a problem yes we can't get lithium I don't know they start exploding yeah you're going down sort of there are I mean I'm being blip here but I really do want to understand because I I it's such a major decision that But I I just want to understand in which where the risks are for each of them. So the the upside capacity cost is the risk and that was also our focus in the counter measures. So Commissioner Baroski you'd asked last time what my recommendation had been. Uh and I had shared that it was to go with load following and to get ready to switch to block shaping at the

1:01:20 first opportunity. The reason for that was that I I saw block was shaping as a qualitatively superior product, but I while I could see a path to it being less expensive, I wasn't positive we could get there by Q4 of 2028. With the work that we've done since then, we've looked at several different options. We've racked our brains. Each of these is worth, you know, a seven figure value on average and probably double that in risk reduction. Yeah, we can land this. we can make it both qualitatively and quantitatively superior. I I think also Commissioner Carlson um there are certain sensitivities that that Brian mentioned where you can say well this one this one responds to that

1:02:05 sensitivity um more favorably than the other one. I think the the challenge to that um in in all of the different scenarios is that sensitivities don't happen in isolation. And so, for example, if you have a a tight capacity market, there was likely growth. And which one of these simultaneously can handle growth better than the other? So, you're you're dealing with um bands of different sensitivities. Some of those in many cases are at tension with each other. And so we we ultimately went through a lot of different combinations of sensitivities and landed on what we thought was um reason a reasonable future as a baseline and then sort of

1:02:51 turn dials uh around that. Um the um but at a really a a a capped market extreme uh capacity costs the um load following product is less sensitive to that situation. Now less sensitive means a few million a year. So 2 million a year for e webb is a 1% rate impact. So it's almost within these margin of errors that when we take a step back, we're talking about it. I I I did we focused in on all these things and you saw variance. When you take a step back and do a do a zero at the bottom and you realize that's 92 million, you kind of

1:03:36 go, okay, this is a pretty tight band of sensitivity that we're looking at. Yeah. Because the other if we can we go back to that other slide that has the the range for each of the options. I will see what I can do. This one? Yes, that one. Yeah. So, this is the high and the and oh, it's it starts at 85 and goes to 99, goes down to zero. And you can kind of those really worstc case scenarios are some of the sensitivities in the square boxes. We didn't really comment on that too much. And you can see there's a pretty tight band across there. overall there's there's some of these on on the right side it's it's actively managing that and I think we would actively manage so what pros and cons of of the

1:04:23 two and you ask which one might be different in a different scenarios I I under if if you're a good organization you're managing that risk in whether it's load following or and there's different kinds of risks so um the the goal would be to this is not just oh one decision we we set it and forget it. There's things that we would be doing to look at scenarios going forward and various action plans not associated with Bonavville that we'll be talking to the board about um in August or September um actions outside of the Bonavville contract. So more to come there just to make sure I have that that

1:05:09 chart correct. So the three graphs that are on the the right hand side the darkest one is just block with shaping and then the one to the far right is that adding the plus loader how how no these are so we actually on on this graph internal we had the very specific different counter measures associated with each one of those bars. They're they're all three block with shaping and a peaking service. Oh, okay. But there's different countermeasures that we've done. And so there's it's combinations of different local countermeasures that we could do. So those are just different different versions of a approach to to mitigating the the volatility. Yeah. So we're looking at a difference like if you were able to hit the best case

1:05:55 scenario that's 89.8 per year versus I mean 92.1 on the load volume. So, it's really not it's a pretty tight band. And part of that was, you know, the the reason I said we can sensitivity this thing and scenario it to death. And it seems like there's a pretty tight band. How does this fit strategically with what we're trying to do? Pretty tight, but then there is more lower potential. Yes. On each. Yeah, that's absolutely true. And um that's um that's a great conclusion. One is very narrow with not a lot of potential to it. The other one provides potential and it would be up to us to realize that

1:06:40 potential to keep costs lower. I mean that's that's ultimately what we want to do with any product that we're choosing is whenever we have the opportunity to keep the costs lower for our customers. That's always our goal, right? So I mean if we can both deal with variability and have resiliency in it with that option and have a potential since the upside is not that much than than making it more to the you know the lower cost option. Yeah. The other way I look at this commissioner is that the block was shaping and PLVs gives us more tools to do that and especially under conditions like electrification, load growth, economic development, you know, all these things that maybe we don't know going forward,

1:07:27 there's just more arrows in the quiver with that product than there are with u load following. Is there an upper cap on how much the load or you know for in terms of like economic development is there a cap on how much benefit we get from this model in terms of growth? Um well the um under a load following scenario the tier one product is capped it. So, anything above tier one, the the contract high water mark, we're going to be out there managing, procuring. Um, if we leaned into Bonavville for that, that's an option. Um, but it's probably a more expensive option.

1:08:16 Okay. All right. Second round, John. I'll try and be brief. So, this is a 20-year decision. So, we're making decisions for future boards and um I know that some future board may determine that Karman doesn't make any economic sense and they want to sell it or we have a contract coming up with Sierra Pacific that uh is coming right around the corner and that may not be in our portfolio or the UFOs u cogen I mean all those different decisions that can affect our capacity to produce peak and everything else. Are any of these products or any of your recommendation more restrictive or less restrictive on allowing future boards to make those decisions? I mean, if some if the board four years from now says Carmen's upside down, let's sell it, which may make economic sense. Um, is there a restriction they can't do that by doing this?

1:09:02 I I that particular scenario um we can decide um which resources in one case are dedicated to load or whether how we're using it in in the other case. They relate to our overall net requirement from Bonavville whether it's um Kerman Smith and um or some other resource that's future board's free to make that choice. Um, and under either scenario, there's there's not a difference. I I think the the value of some of those resources, whether they're some of the local resources that that you mentioned, how those fit into a profile, how those are used is different

1:09:50 um under the the two scenarios. um partially because how we address capacity is a little bit different between those two. But future boards will will probably have um I would say overall likely more flexibility under a block with shaping because we will have demonstrated the the peaking and flexibility of Carmen specifically if that's what you were asking about. Whereas if it's operating under load following, it's its performance is going to be very much attenuated and driven by a schedule from Bonavville. Okay. Thank you. I'm going to support also what Commissioner Robs said and support the recommendations. So that's I'm done. Yeah. Thank you. Um

1:10:35 are you hoping for just questions tonight or are you hoping for feedback as well? I'm just both I guess. And and you can actually ask Sonia questions if you if you would like. I mean, I just you can ask each other questions. Just I I appreciate it. Yeah. I um I I'm gonna I have a question and a comment and I did this before and so I hope it it lands the same exact way, but um are there questions that we as a commission have not asked or are there comments that you're hoping to make to highlight to us and or anyone who's listening um that that hasn't been addressed yet? some some of the questions that that come to mind to me that that haven't

1:11:20 been asked by the board and it's it's really an ancillary kind of question is um the the detail actions and what happens between now and 2028. So so this is a contract that starts in 2028. There's a number of different things that we have to do to prepare for that. Um the um we still have a contract that we're operating under. Now there's a series of actions that we have to to execute to get ready for the new one at the same time not cannibalize the existing one. And so um one of the the things that that we think about is what aligns with our sort of organizational strengths and weaknesses now. Uh what bridges that um that period of time um

1:12:06 better than the other. Uh it's probably easier to bridge to a block with shaping and active management of that contract than it would be the other one. Um uh neither are impossible to to manage. Um and we we'll have a series of actions that that we talked to the board about that's related to this, but um I I think that and and that and you you know there's there's always an organizational psychology component that you haven't asked about. um that just something related to which of the the products facilitate sort of focus organ I I think there's opportunities with both although one is more attenuated than the other which is load following so it it kind of

1:12:52 has a tighter boundary um in some ways that can be good and all console can be restrictive neither of these is business as usual and we need to uh work on our change management to be able to make sure that we're preparing ourselves for 2020 28 um uh independent of which product it is. Um and so um I I I think that we we also have um an internal communications education process to go through external communications outreach um what does this mean uh for for customers um for different kinds of opportunities for demand response for all the all of the products and services that we've talked about. what does this mean for

1:13:37 that? How does that manifest itself? Rate design, all those things that you're you're intimately familiar with at this point. Um, and so a lot of the questions that come to mind for me, um, this and it really kind of started out this way. This is one piece to managing a supply chain and and it's it's just one piece. There's a lot of other things that that um um relate to that. We've we've tried to look at the the impact of that. Um but those those are things we will expand on um um in the next few months.

1:14:22 I uh appreciate that. Yeah. I I mean you and your team, you're looking 20 years into the future trying to figure out what the federal um process might look like, what our environment might look like, what uh exists in energy generation, what even e-web might look like. And that's a really hard path to follow. And so I appreciate it. It's this is there's very clearly considerations for so many different aspects of that. Um, and I uh I hear the the the perspective that load with following provides a focus and provides a clear direction and provides like guardrails to ensure that there's a a very clear path forward. But I think we're we're heading into an environment in which flexibility will be incredibly important. Um, and the ability to adjust

1:15:07 and Brian you've even commented adjusting on the fly same day if there's a significant challenge if something dramatic happens. Um, I think that that that is just a a tantalizing sort of goal to to have to to be able to be flexible and and um bring that to ourselves and as a community. So, um I'll be supporting um unless there's another huge uh uh change in between now and then, I'll be supporting I really hope not. I really hope not. I hear that. But I'll I'll be supporting staff recommendation. Thank you. Thanks. Thanks, Commissioner. I I I do think um one of the things that that you you touched upon is the the fact that in one option or another

1:15:53 there could be guard rails, there could be sideboards, guidance. Um I I really think that um it's up to the board. It's up to ex you know the leadership of the organization staff to to do that under any scenario. Um I mean we we we know that both of these contracts have to be managed. They they have to be managed with a very clear set of principles and outcomes and intentions. And those are things we are going to have to refine and under either product and and so when do we get into situations when we want to procure a resource and when we don't these these are things that have to be actively managed. The block was shaping

1:16:40 to me feels like it's it's a more active more I was going to say offensive. It's it's more offense. The other one seems defensive almost. Let's get our ducks in a row until we know what we do. That seems a little more defensive. The other one seems like let's go on offense, let's control our own destiny, and let's let's take control and own that. And that's it. It it has that feel a little bit um just from an organizational psychological perspective. If I can add a a a difference um it sounds more like the difference between actionary and reactionary. I think that that I think is that I think is the goal. So, thank you. Okay. I have a couple more questions and

1:17:25 then a comment. Um or just actually one quick question. So with load following or excuse me with the recommendation, how does that play with our ability to hedge like we have been in the past? Um we've been fairly successful with our hedging program over the years. Uh, is that something that the recommendation would give us more opportunity to lean into? If I field that one. Go ahead. I will embellish probably. Um, I do think the block was shaping very much. It maintains the same spirit of what we've been doing. Uh, because our product from BPA would it would meet our load in an

1:18:11 average month, which is different than what we get now. We would expect our our book, our trade volume to get substantially smaller. We wouldn't be dealing with like the spring runoff that flows through our our slice product, right? Like we get a lot of surplus slice that we're out marketing in the spring. We would no longer get that. So, our trade volume would go down pretty substantially, but we would still be trading. We would still have the opportunities to hedge where we think it's appropriate. Okay. Um, so that so that leads me into The other reason that I feel positive with going with the recommendation and and that's the organizational side um we've built it from what I can see we've built a a really functional organization

1:18:58 and part of that is our training floor. It's our hedging. It's our all of the things that are going on in these in these rooms in this building here. And to me, it's not just I mean, those are people that are doing that. And if we could go the other way, frankly, I think some of those people are going to go away if we went with load following. I mean, I think that the the jobs that those people are doing are are vital to not only them, their families, and our community, but also the flexibility that we have going forward. Whereas you you mentioned that if we hit a peak and we had to go out and procure that, are we going to have the people in the

1:19:45 office upstairs that's going to have the the knowledge and the ability to be able to do that to the best for the organization and I don't want to lose that. Um and so that's the other part of it that helps me lean into that. I see the quality of people that are working in this building and working for this organization and there may be changes. Obviously, you know, Brian alluded that we may not be doing quite as much, you know, trading and so that there may there's obviously going to be gives and takes, but I think the organization that's been built that I've seen over the last 5 years is strong and being able to give up that knowledge just to be able to say, I don't have to worry about that because this is my I've got

1:20:30 load following and I can be I can be Blley Lane or sub or whatever and and be a lot leaner and meaner. That doesn't feel to me what e webb is. And so that's the other part that helps me lean into it. I just wanted to say that. Commissioner Barowski, a couple of the sort of uh key interested parties from a customer perspective um commented about their perceptions of e-web strengths and part of that is is what you mentioned. Um there there is there would be more risk with the load following option in particular two forms of risk. One is um transitioning from the existing contract to the new contract. Um that would be

1:21:16 one. Um the other one um which I think is something to to manage going forward is um as the as Brian mentioned as the book changes we also have to be very intentional with what our um desired outcomes are. Um it it may not be to leverage lots of length at different times. it might be to optimize our delivery to load um and and minimize that or or grow that. I mean we have to we have to be really intentional with um how we want to develop those capabilities, refine those capabilities, especially um as we look at what our role might or might not be relative to

1:22:01 the development of new markets in the west. So there's there's some areas there. Um load following in the near term and I say near-term being the next 3 to 5 years does not have the flexibility um that block shaping has in in um intentionally making decisions around that. All right, Zonia and we're at seven minutes. I mean my my last couple of comments were actually relatives of the other questions. uh logistically what are the differences between what our current is and what the recommended is. So I think they kind of dove into that um a little bit although you were talking more about kind of how we get there and I'm

1:22:46 thinking more about how does this actually operate differently than than how um this other product would. So I heard that you said fewer trades and that sort of thing, but can can you give me a little bit of a picture of the operational? Yes. Yeah. Yeah. What does that look like? How is it different? So what we get today, we have slice block where half of our output from Bonavville is just a flat block and the other half is slice which is meant to be like a a virtual version of the federal hydro system. it operates within the constraints of you know the actual federal system. If there's an outage uh at one of the generators then we lose generation on slice. If there's a whole bunch of snow melt then we get

1:23:32 additional generation through slice. Um it's very much like owning our own little like you know few percent share of the federal system under block shaping. Bonavville's obligation to us is based on our forecasted load. So if our forecasted load for December is 325 megawws making up a number and our dedicated resources add up to 25, Bonavville is going to deliver us 300 megawws. But we can shape that day-to-day within prescribed limits. We can run it up to our one and two our median peak or we can run it down to 60% of that 300 megawws. I can do math. That's 180, right? Um, it's probably

1:24:19 more the other, but I I think I get what you're saying. So, we get this this pool of energy that we can dispatch within the rules. And so, from the staff perspective, I mean, that's that's still balancing the load. We're still involved in it. Whereas load following, we don't have the staff as much following that. We are told you you have this amount and if our demand goes up they provide it up to a point. Yes. Underload following staff would be focused entirely on meeting our dedicated resource obligation. So if the contract says e webb 5:00 p.m. today you're going to deliver us 80 megawws because that's what your combined dedicated resource stack says you can do. Staff's job would

1:25:05 be to deliver 80 megawws. Doesn't matter if Carmen's offline. we'd be out, you know, in the market finding it somewhere. Okay. But we would have this uh this much smaller responsibility and under that scenario, it's it's more about managing kind of the day ahead and that day whereas we now uh under the present scenario and to to some extent with a different kind of resource under block with shaping we are several days weeks ahead. I mean, we're managing throughout the course of a month or even a little bit more around a season to to your point. Um, so it's the the amount of of management uh it's just more flexible. I I I think it's very

1:25:50 restricted under load following and if you don't hit your target, you're faced with pretty severe penalties from from Bonavville. They will they will take the worst of a couple different scenarios and charge you for that. Okay. So if um it seems like it's you know if we did load following following we lose a lot more staff. So it's a lot easier to certainly lose a lot of responsibility and scenario um from where we currently are but once we're I mean if we went to load following it would be a lot harder to switch back because we would lose a lot of the other capability and internal knowledge that we have. Yes, that was certainly something that was on my mind thinking about the strategy of going load following and then switching. Yeah,

1:26:36 you wouldn't you wouldn't be able to ramp up again because I keep staff skills fresh. My my favorite analogy on this and maybe it's just because we're down in, you know, the University Corridor Oregon here is is beavers. They really have to chew on something to keep their teeth from like growing out of control. Uh our wholesale operations are very much the same. what would we be doing during that four years to keep their teeth uh sharp and and the again we have to have good staff to get that lower that lower piece. So how you know how are we so it's great to have the human resources person here. How are we developing those capabilities as folks transition on? And I mean it's just I it seems to me that we have we've talked about this before. we have an aging uh

1:27:23 utility employee resource and we need to be bringing in people to get up to that skill level to be able to hit those numbers. So anyway, those are the things that I think I think Commissioner Carlson, it's it's exactly um I mean it's spot on that sort of the the questions that you're asking. I think a lot of this um still holds around uh staff development, secession planning. Um it is easier tra to transition from a staff capabilities where we are now to managing within a new market construct than it is to just go out and try and I'll say grow it on your own if if that goes away. So from a decision and staffing perspective, it is more it it

1:28:10 is more flexible to go with block with shaping than than to um uh really risk the diminishment of staff that comes out of load following. Um now we also recognize that it it's a position like any other. You have to recruit effectively. You you have to be an attractive employer. Um the the flip side of some of the other things is is Bonavville is in a tight labor market as well and leaning into them may or may not solve that problem over the long term. Um we you know those are things we hope are are uh temporary. Um and and they'll they'll do the same thing. Great. Thank you. I feel very comfortable with the recommendation. Uh

1:28:55 I appreciate you indulging me in the questions and I can see somebody's done. So I get it. Thank you. Yes. One one more comment, President Barovski. Um just for the the um public to be aware and also for you to be aware, I do have a um private appointment set up with Commissioner Schllober uh before the uh July board meeting to go through a lot of of these same kinds of of pieces of information and answer any questions that she may have as well. So, just for the record. Great. Ryan, Frank, say just one more inspirational thing. Um, just wanted to say how tremendously proud of staff I am on this. Uh, someone who wasn't called out earlier and is remoting in from, uh, from Portland,

1:29:41 Aaron Bush. Um, incredibly talented and we were very lucky to have um, a huge strength that we've been able to flex in making this pivot was how far we've come on the the analytics part of this. A couple years ago, we were doing a long-term modeling through Aurora, and to do a a fresh scenario run, the computer had to go for a week. We've now gotten to the point where I call these guys in for an 8:00 meeting. We talk through an idea and they say, "Yeah, can I have that to you at 3:00?" That's that's how we were able to run these analytics and make this pivot in such a short runway. We're in an awesome spot. So, thank you all.

1:30:26 Thank you, commissioners. Thank you. And with that, we'll close. We'll see you in a few weeks.