Austin Energy Utility Oversight Committee (AEUOC) Meeting Transcript – 3/25/2025 Title: ATXN-1 (24hr) Channel: 1 - ATXN-1 Recorded On: 3/25/2025 6:00:00AM Original Air Date: 3/25/2025 Transcript Generated by SnapStream ================================== Please note that the following transcript is for reference purposes and does not constitute the official record of actions taken during the meeting. For the official record of actions of the meeting, please refer to the Approved Minutes. [9:03:01 AM] Let me call to order this meeting of the Austin energy utility oversight committee. It's March 25th, 2025, and the time is 903. There is a quorum present before we start the agenda. Do we have any public speakers? >> Yes, we have three speakers. >> If the if you could go ahead and call the speakers, please. >> Camille white, I'm sorry. Camille cook. Kiba white. >> Mr. Cook is. >> You're on Netflix. >> Hi. Good morning everyone. Good morning, chair vela and members of the committee. My name is Camille cook and I work at public citizen's Texas office here in Austin on utility and clean energy policy. So I started working here about a year and a half ago. And one of the first things I got started on was the low resource generation plan update, and I saw it through to its end. That process was a real crash course in energy in Austin. You know where we are, what issues we're facing, the different answers to [9:04:04 AM] facing, the different answers to those issues and where it's ended. The city of Austin got some good wins through that process. One of those wins was the rfp for local utility scale batteries. That proposal just closed yesterday, and I'm really excited to hear about the proposals that I received. My one ask to y'all today is to keep a close eye on these battery proposals and those plans around batteries. As most of you all know, batteries are one of the best energy resources that is available to the ercot grid right now. That's why battery growth has been booming over the last couple of years, unfortunately, is pretty behind, and our utility could really benefit from a 100 or 150 megawatt increase in our load zone, at least. And just to reiterate some of the arguments you all heard at the end of last year, at the end of this process, batteries are useful because they offer a clean solution to our transmission congestion issues here in central Texas. That means they don't sacrifice parts of our community to air pollution in east Austin, and they can lower bills for our ratepayers. They they don't depend on natural gas prices, which have just gone over $4 for the first time in a while, and it doesn't seem like [9:05:04 AM] while, and it doesn't seem like they're going to lower. And not to mention they can come online. Batteries can come online much faster than pretty much all natural gas generation. So with all that being said, I'm excited to see this next phase of the resource generation plan, the implementation phase. And since there probably will be less opportunities for face time with E, I'm counting on you all to ensure that this plan is implemented to the will of the people. Thank you so much. >> Thank you very much, Mr. Cook. >> Kaiba. White. >> Good morning. I'm kaiba white, speaking on behalf of public citizens Texas office. Good morning. Chair, vice chair, mayor and council members. Good to see some new faces up here. I look forward to getting to know you and hopefully work on some of our key energy issues in the coming months and years. I just wanted to encourage you all to ask for an update at your next meeting on the solar standard offer program. We did get an update at our last electric utility commission meeting, and that program seems to be having [9:06:04 AM] that program seems to be having some really good success, which means that it might be coming to the end of its initial kind of pilot phase, and there may be a pause in the program. Hopefully that pause is very brief. And, you know, that's what we've heard from Austin energy, that they are hoping for it to be a brief pause. But, you know, sunset is going to happen. It is an opportunity for you all to engage and perhaps ask some questions. And there are potentially some things that could be tweaked in that program. For example, currently those installations are going in in front of the meter, which means that those commercial properties are not able to get a resilience benefit. That was a policy decision that Austin energy made. It is also, you know, there are pros and cons to it. So it might be something worth looking into. Additionally, we have been encouraging Austin energy to include a recycling requirement for not only that program, but [9:07:05 AM] for not only that program, but all of their local solar installation programs. We've done some research at public citizen and found that there are some really successful models of how to do this, and it usually involves collecting a fee on the front end and then having a single entity that does the collection and the recycling with 20mw already, you know, kind of slated for the solar standard offer program. And I think, well, on its way, you know, we are I think, you know, at risk of missing out on some opportunity to collect those fees now on the front end, that can then pay for those services, not only for the installations that are going in now, but for the installations that are already up around in our community. And of course, solar panels. You know, they do have a long lifetime and they are pretty durable. But things do happen. So this is actually a now problem that we should be working to solve. And you know. Surprisingly, actually, the [9:08:07 AM] Surprisingly, actually, the Texas legislature is looking at some bills that would, on the utility scale, require recycling for solar and wind. So I think this is the right time for the city of Austin to get a program up and running. And it can be done, I think, without any impact to general fund revenue and can just be paid for by those installations. So I'd love to work with any of you on that going forward. Thank you. >> Thank you very much, miss white. >> Stephanie Simmons. >> Good morning everyone. I'm Stephanie Simmons I'm here representing myself. And I am an owner and home of district eight. I'm here to talk to you about trees, which is my passion. And I'd like to talk to you and first give you the kudos that I know that you well deserve about the cleanup that happened after the 2023 ice storm, the tragedy that occurred [9:09:07 AM] storm, the tragedy that occurred in our urban tree canopy. Briefly on that point in 2019, there was a study from cali, Zaire, a concordia university graduate, that showed that if we can achieve a 40% tree canopy and a 60 to 90 meter radius, we can mitigate the urban heat island effect. And so we lost so many trees during that ice storm, and now we're trying to not only replace those trees, but we're focusing on increasing the canopy in the eastern crescent. And one of the things that I recently was a part of was the food and climate equity grant to help do that. And one of the limiting factors that we experienced with planting trees in the eastern crescent is the amount of power lines, overhead power lines. And so what what I'd like to make sure is, and when we look at the feasibility studies that are going to be coming out, is that the trees are not considered a negative factor solely in the modeling, [9:10:08 AM] factor solely in the modeling, is that we need to consider future trees and how we can accommodate them. So in the eastern crescent, with so many power lines having those buried, and I see that they're looking at 4 to 5ft below ground before hitting rock. The eastern crescent is a great place to bury those lines and account for future tree canopy to help mitigate that urban heat island. So I do want to make sure that when we look at the feasibility, the engineering is not solely looking at trees as negatives, which they can be when they're above ground with power lines, but power lines below ground and really enable trees to be planted where they need to be. And in underserved areas. Thank you. >> Thank you very much. Is that all the speakers? >> Yes, sir. >> All right then we'll go ahead and move on to item one, which is approval of the minutes from the January 28th, 2025 meeting. Can I get a motion to approve motion from council member Velasquez, second from council [9:11:09 AM] Velasquez, second from council member Ellis. All those in favor, please signify by raising your hand. That's unanimously approved. The minutes. Item two is an Austin energy overview. And I would like to call up our general manager for Austin energy, Bob khan, to make his presentation. Mr. Khan. >> Good morning everybody. Good morning. Chair vela. Vice chair Siegel. Mayor Bob khan, general manager, Austin energy, I want to thank you for the opportunity to present to you all today about the important role that we play in the community. But I want to start off the presentation with a video that we featured as part of our value of public power campaign late last year, and we'll share the English version. Of course, we have that in Spanish. Also. >> Austin energy is your community owned electric utility, bringing power to our vibrant city for more than 125 years. >> I think Austin energy is a giant benefit to the city. Instead of sending that money to the shareholders, they send it [9:12:10 AM] the shareholders, they send it back into the services that they provide. >> As a public power utility. We answer to you, the people we serve, and we are committed to providing clean, affordable, reliable energy and excellent customer service. Discover more about Austin energy and how we are powering our community. >> Okay. As a municipal electric utility, we. Exist. Austin energy exists not to generate profits for shareholders, but to serve the people of Austin. Public power means local control. I know you're all well aware of that. Decisions about our rates, programs and investments are made right here with transparency and public input. It means affordability. Our rates remain competitive and free from pricing, driven by maximizing profits and shareholder returns. And it means accountability. Our customers aren't just ratepayers, they're owners of the utility, and we operate with [9:13:11 AM] the utility, and we operate with their best interests in mind here in Austin. Public power has allowed us to lead in renewable energy, energy efficiency and reliability while keeping our rates and bills among the lowest in Texas. As the largest department of the city of Austin last year, our approved budget came in close to $2 billion. The price tag covers power supply, transmission, distribution and ercot costs. Debt service, o&m capital improvement projects, the general fund transfer, and more. So, our nearly 2000 full time employees serve a 437 square mile area, which is about a third larger than the city limits. We serve that area as a vertically integrated utility, which means we do everything from generation to transmission to distribution to customer care and billing. As you know, Austin energy operates Austin 311 just [9:14:12 AM] energy operates Austin 311 just last year between 311 and our utility contact center, we took over 2 million calls. That's a lot of calls. Austin energy oversees a diverse mix of more than 4600mw of total generating capacity. We remain a leader in renewable energy within Texas and the United States, with a significant portion of our electricity coming from wind and solar sources. Last year, about 72%. Our goal is to be carbon free by 2035, as you all well know, and we are very much an industry leader in our progress to that goal. If you look at what the United States and are doing, they're at about 43%. So we're well ahead in the game. Looking at our customers. No surprise here. As Austin continues to grow, so does our load growth on the left. The map shows how load has grown. Take off load as the amount of energy [9:15:12 AM] off load as the amount of energy consumed by our customers. It's broken out by parts of our service area, from about 5% of our load in downtown to about 23% in the northwest. On the right, you can see the load growth across our service area over the past ten years and has grown about 495mw, which is about 20% over the last ten years. And we're not seeing any signs of slowdown. In fact, as you can see on the left side of this slide, in this last fiscal year, we saw both our summer and winter peak demand records set new highs. So not only are we experiencing a generalized load growth, but also spikes at times of peak demand. And we just passed what that winter peak demand in February 25th. An interesting thing is that over the years, and I think it's going to keep occurring, the winter peak is closing in on the summer peak. You know, you've seen with the extreme weather we've been having in the winter, [9:16:14 AM] we've been having in the winter, you know, as a result of climate change, which is a challenge. Like most Texas utilities, we experience our highest demand during the summer months, June through September. But instead of seeing that demand at the hottest time of the day, we usually see it when people come home from work and turn on the stove and they see units. And that's when we started our campaign for savings after sunset to encourage people to conserve on those particularly hot days. On the right is a look at our customers broken out by class or type. Last year, we increased the number of customers we serve to nearly 557,000 customers. And that's meters, right? That's how many meters we have. The year before, the utility had about 540,000 customers, a 2.9% growth rate of about 16,000 customers. We're constantly monitoring and reporting on our system reliability using key industry metrics. It's very common industry talk to refer to these [9:17:15 AM] industry talk to refer to these as Sade, sappi and Katy. But we're trying to get away from the acronym. So if you look at the top of the chart there, we've kind of used regular simple English. The bottom line is we want these numbers as low as possible. As you know, we outperform Texas utility industry standards in each major category in some cases by a lot. But we know interruptions can be disruptive. So we're doing the best we can to minimize those. A customer assistance program is essential for an electric utility because it helps ensure affordability, equity and community well-being. We know the need is there as we've now. We're now just a little over 70,000 cap participants. That's a 22% increase over last year. And last year, cap enrollment increased by 75% when we started our cap enrollment expansion efforts. Our goal is about [9:18:16 AM] efforts. Our goal is about 84,000 cap participants by the end of this fiscal year. So we're making great strides, but we got more to do. We also know that getting out to the community and letting them know what assistance is available can make a world of difference to our customers and the community. On any given day, we're hosting an affordable energy summit. We're working with the community partner organizations. We have about 40 of those that we work with, and we are not just doing outreach to cap, but we're doing other things to serve our community. For example, we participate in emergency preparedness events with our partner departments. We are there for stem day events in classrooms, trying to start kids early on, electrical safety and energy conservation, just to name a few examples. So we have nearly 40 ces or customer energy solution programs designed to save customers energy and money. Our conservation teams are also [9:19:19 AM] Our conservation teams are also making a difference in the community, not just through the rebates are providing, but also through their programing. We're proud to tell people that Austin energy's green building was the first of its kind in the country in 1991, and the U.S. Department of energy's energy star program was modeled on our early Austin energy star home program. We're continuing to see an interest in our conservation rebate programs and appreciate the council's financial support in making sure those options are available. In 2024, the weatherization program had a record 918 single family homes. Weatherize. I'm sure council member alter's happy to hear that he's been talking to us about that. And that's twice the number from fiscal year 23, where we did 454 homes and over 12,000 multi- family homes were units were weatherize also. That [9:20:19 AM] units were weatherize also. That is a lot 12,000 2024 was also a record for solar, with over 16mw of solar projects across the entire portfolio of our solar programs. 2025 also looks to be another record breaking year in terms of megawatt generation. The. So this is this is important. These programs the cap program, green choice E Wright rebates community solar are energy efficiency programs. These are the types of things that set us apart for the investor owned utilities. And most of the electric co-ops in this state. Last year. These are there are three that a lot of you are familiar with. Thanks to your support, we passed the resource generation plan unanimously. That was great. And now we're moving full steam ahead on implementation. The [9:21:19 AM] ahead on implementation. The panel, a wildfire detection system which you've all read about, we launched last year and has already started alerting staff to fires and sometimes even before the 911 dispatch. The camera system is also designed designed to alert us to structure fires also and our solar standard offer, which I know we had a question about, which we launched just two months ago, already has 15 projects and counting. It's going great. But the work didn't stop last year. In fact, just beginning and you'll see in the next slide. So here's what's ahead. We'll continue to update you on our resource generation plan implementation, which will cover a number of areas within the utility. The metal item, the underground feasibility study and overhead hardening studies. We have an update today and should have the results of those study studies later this summer. Those results will help set the course for resiliency planning [9:22:19 AM] course for resiliency planning in the future. Last month, you all secured funding by approving an interlocal agreement with Harris county related to the solar for all grant. Harris county is the lead for the Texas coalition that was awarded the grant. The federal pause on this grant was lifted, and the work continues to build on that program. So that concludes what I plan to give in the overview. I'll be glad to answer any questions. >> Thank you very much, Mr. Khan. Council member Laine. >> Thank you so much for this overview. It's so helpful to me as someone who's newer on the dais. I also want to highlight the wildfire detection rollout that you mentioned at the end. And what a relief that was to me to hear that that had already been rolled out and also to many in my district. And then I would like to ask a question about page six, slide six, which is it has the map and it's talking about the load growth. So I'm [9:23:22 AM] about the load growth. So I'm looking at the map and observing that the northwestern part of your service area had the greatest load growth in the city, in your service area. And that happens to be a lot of district six and neighborhoods that are adjacent. But in the etj but district six neighborhoods. My question is, you know, my personal observation in that district is that most of the growth up there has come from rapidly appearing apartment complexes that are largely along the 620 corridor between canyon creek, past lakeline mall and 183, and then all the way over to where it becomes 45. We've also seen some apartment growth in the Mcneil pond springs area, which is one of the areas where we have a title one middle school in that area. So I would say for all of those apartments that are [9:24:23 AM] those apartments that are popping up, there are a lot of families living in them and their income characteristics are significantly lower than what had previously been in that part of town. My question for you, I know you run a lot of programs that I really care about, with. Just one example of those would be the medically fragile list and how people are worked with during power outages. We also have the new children's hospital, which is drawing, will draw more families that do have medically fragile children to the area. So my question to you is if the greatest load growth has been in the area, in your service area has been in the northwestern part of the city, have you seen and I don't need an answer today, but this is on my mind. Have you seen a proportionate growth in customers participating in so [9:25:24 AM] customers participating in so many of these fantastic programs that you have, and many of which are intended to serve some of the lower income population pretty effectively, you know, and I, I love it that Austin energy is a national leader in so many areas. But I also know, and I know from the experience in district six that it is my highest priority that we are reaching our residents and the people, our customers. And so this is why, and I know that was a lot of context for a fairly short question. In the end, I am very interested to know if your program participation rates have increased in parallel with where the growth is happening. >> I don't know that we have the answer to that today, Richard, but that's something we can get back with the council member on. Okay. Well. >> I love that. And I know we're already going to be talking [9:26:24 AM] already going to be talking about reliability. And if it's available at the same time, that would be a great topic to add. Thank you. >> Okay. Sounds good. >> Council member Velasquez oh. >> Sorry, I didn't realize I was next. Thank you so much for the presentation. I, I wanted to ask a question that we have, and I know it's no surprise to anybody on this dais. We have a lot of development in district three. And just last week, the mayor and I were at a groundbreaking for the Sasha, which participates in the group as part of one of the green building projects. So we're excited to see that. How are we engaging with developers to ensure more of them are taking part of this program and being part of the of the green building programs? >> Green building? Richard, do you want to or Heidi, one of you? >> Hi, Heidi. >> Casper I'm actually the director of the green building program. [9:27:24 AM] program. >> Thank you for your service. >> Sure. So there are a number of different ways that we engage with developers. A lot of it's actually through zoning. So I'm not sure if you're familiar, but the zoning rules require a green building rating. So if you are looking for pud zoning, one of the tier one requirements is a green building rating. So a lot of it comes to us through that. We also work with housing and smart housing. So there's a understanding there that green buildings want to serve the underserved populations and that we want buildings to be affordable, not just to construct, but also to live and pay your utilities. So we partner with them through smart housing. And then we do a lot of education programs. We have a newsletter, we do a bi monthly seminar for professionals. So we [9:28:25 AM] seminar for professionals. So we participate in the aia summer school and do a lot of outreach there to try and drive some of the voluntary participation as well. >> Thank you. And any way that that our office, especially with all the development in district three, can help foster some of those conversations. Please feel free to reach out to us. Thank you. >> Thank you, council member, for highlighting those opportunities, because I know a lot of developers watch council very closely and want to make sure that they're aware of any energy efficiency opportunities, any a good building standard opportunities. Any other questions from the dais? Council member Siegel. >> Thank you, chair. And thank you, general manager khan, for all the good news. I just want to ask you to comment briefly on a couple of the questions that came up from the constituents. The first one was about echo's progress and ramping up battery storage. This is obviously very important on multiple fronts for resiliency. And also it kind of it needs to go hand in hand with solar growth, right. Battery and solar need to go together. And then the second question, if you could chime in briefly is the [9:29:27 AM] could chime in briefly is the feasibility of recycling all these solar panels. You know, if we're encouraging another 250, 50, 250mw of solar construction in the next ten years under the gen plan goals, have we studied the feasibility of local recycling. >> So on? Let me answer the first question first. On the batteries. We have our piece out, and I think we actually have the responses back in. And we're we're looking at those now. So we're reviewing those. And we do obviously plan to expand the battery program as far as recycling, I don't know. We Richard looks like he's ready to answer that question. Thank you I know we've looked at that. There are there are challenges. >> Yes. Good morning. Richard Lianes, vice president of customer energy solutions. And yes, we are working on recycling alternatives options. We're actually labeling. Or in the process of working to label solar panels, going out with, [9:30:28 AM] solar panels, going out with, you know, barcodes or information that could be scanned, that would give customers at the end of those solar panels use of life and, you know, instructions, proper instructions on how to recycle them. Also, there's the capability to partner with Austin resource recovery and launch a expanded recycling program commensurate with our expansion of solar programs. So we're working on that. >> And actually, Mr. Jensen, right quick to follow up on on council member Siegel's question, how long does a solar panel last? >> 15 to 20 years. I mean, you you do have examples of solar panels lasting even longer than that, but I'd say average useful life of a solar system 15 to 20 years. >> And on a on a trip out to west Texas last year, actually, we saw a bunch of those wind [9:31:29 AM] we saw a bunch of those wind mill graveyards where they're just, I mean, hundreds of used windmills kind of stacked up on each other. And I know that's kind of been an issue about what to do with windmills when they've lived their useful life. Is there anything going on with Austin energy with regard to the windmills disposal of the windmills after they're done? Those kinds of issues. >> That that's a factor, I think, that we would need to study further. I don't know that I'm aware of any active effort that we have right now, but I think partnering with Mikel anger of our energy market operations, we would look into that further. >> Thank you very much. Any further questions? Council member harper- madison. >> Thank you, chair. I appreciate it. So my team and I, we caught wind of something that I think could be exciting. It's a rebate question. I'm not sure who best to pose it. So we heard that the our convention center [9:32:29 AM] that the our convention center is on line to become the world's first zero carbon certified convention center, which is kind of cool. But that said, that means that everybody who associates, including vendors, including restaurants, have to comply with the specifications surrounding that certification, in which case, I'm sorry. >> Not I was agreeing with you. >> Okay. In which case most restaurants are powered by gas equipment is something that I thought about during the course of the discussion with staff and to align our convention center goals from an environmental perspective, they all need to switch to electric, specifically induction cooking. And so we have the benefit of having a restaurateur on our team. This change benefits both the environment and kitchen staff, but the reality is that [9:33:31 AM] but the reality is that induction equipment isn't yet widespread in commercial kitchens and tends to be more expensive than traditional gas options, in which case. Our rebate program, since induction cooking does qualify as beneficial electrification, replacing fossil fuels with electricity, does our current rebate program offer support for businesses making that switch? >> The short answer is no and not at current. However, commensurate with our resource and generation plan that council approved in switching from just megawatt reduction as a measurement from our programs to greenhouse gas reduction, there's the opportunity to introduce measures like that for beneficial electrification. So commensurate with our switch, which starts in 2027, we'd be able to introduce measures like that. >> And when you say measures you [9:34:31 AM] >> And when you say measures you mean the savings component. The rebate component. >> Yes, the savings component, the rebate component. The other thing I'd like to just point out very quickly, is that part of our offering with small businesses is we meet with them on a consultative basis and individually tailor for that small business. All the opportunities and capabilities that are available to them in their particular circumstance. So we'd be meeting with those constituents now in terms of what they're eligible for now and then mapping out in the future the conversion to greenhouse gas reductions in 2027 and the beneficial electrification measures that we'd be putting in place. >> I appreciate that, and I think, you know, for that, you know, kind of evergreen consideration that makes sense for long term and not just consideration for one operation, one construction, one business. Et cetera. But it does bear in mind the question about whether or not that's a financial hardship for businesses. Thank you. [9:35:34 AM] you. >> Yep. >> Well, thank you very much. Mr. Khan, for the presentation is excellent. And it's great to see the expansion of cap in particular is affordability being such a central concern and utilities being such a major cost of just the cost of living. It's great to see the expansion in cap. And again, just great to see that Austin energy has done so much good work over the last 25, 30 years, really optimistic about about the next 25, 30 years. >> I'm really happy we could do that because when you think about it, if we have 577,000m and nearly 80,000 of those meters are going to be capped program, it gives you something to think about. >> Yeah. Thank you very much. And let's go ahead and move on to item three a briefing on Austin energy's first quarter financial highlights with chief financial officer rusty magnus to present. And please correct me if I mispronounce your name, [9:36:35 AM] me if I mispronounce your name, sir. All right. >> Good morning. Chair, vice chair, committee members. My name is rusty magnus. I'm the chief financial officer here at Austin energy, and I am here to give you the first quarter financial report. This covers the three month period ending December 31st, 2024. Next slide please. This is the agenda that we won't go work all the way through. I just want you to be aware that Austin energy has given this entire presentation, pardon me, to the electric utility commission last month. Today I'll cover the executive summary and the financial health tab, and that will give you some perspective and overview of where Austin energy is. I will pause and take any questions and if and we'll go from there. Next slide please. So Austin energy has been performing very well compared to budget through the first quarter. Our operating income was favorable compared to budget by 7% or roughly $4 [9:37:38 AM] budget by 7% or roughly $4 million. That was roughly due to some warmer weather that we had in the first quarter. That generated some additional base revenues. In November, we went to the bond. That event, all the rating agencies reviewed Austin energy as a credit. These rating agencies, and specifically S&P, have reaffirmed our double a minus rating. Keep in mind that our intent is to get to a double a instead of a double a minus rating. Financial policies. We are substantially compliant with those policies. The next slide I'll walk through some key performance indicators and show you where we are performing better and where we may lack. And finally, the power supply adjustment. Through December, we are $111 million over recovered. Keep that number in mind as we go to the next slide please, because it has a bearing on our first kpi. You see that our target for days of cash on hand is 200 days. We're currently at [9:38:38 AM] is 200 days. We're currently at 194 days with the over recovery. That represents about 40 days of cash on hand. Once that money is returned, that days cash on hand falls from 194 to roughly 150 days. That is, by financial policy, a minimum of 150 days. And so we strive for 200 as we move across the kpis. Debt service coverage is 2.5, actual is 2.3. Operating margin exceeds our target 11% to ten, and our debt to capitalization has been stable, but still is above the 50%. As I said, we went to the bond market in November. We issued $241 million bond. It was very well received in the market. We were 6% or six X oversubscribed, and it was a very successful sale. And with that, I'll pause and take any questions that you might have. >> Quick question. There's a [9:39:39 AM] >> Quick question. There's a rating on the bonds. And then I believe there's an outlook on the bonds as well. What's the current outlook. Stable. Stable outlook. Yes. And the you said the Austin energy sold about $241 million in bonds. Is that what's. >> 241 million. >> And what are the bond proceeds used for? >> So at the end of the day, it goes to help finance our capital additions. How that actually occurs is we issue commercial paper as we build our plant. And then once we kind of cap out at commercial paper, we go into the long term debt market, into the bond market, sell bonds, take those proceeds, pay off the commercial paper and start the process again. >> Got it. So it's kind of like refinancing the commercial paper to a certain extent. All right. Thank you. >> You bet. >> Anything else? Thank you very much. >> All right. Well, thank you, Mr. Mendez. And let's go ahead. If there's no questions, let's [9:40:40 AM] If there's no questions, let's go ahead and move on to item four. Briefing on Austin energy's first quarter operations highlights. And Lisa martin will be presenting. And I believe she is virtual today. Miss martin, are you with us? >> Yes, sir. Can you hear me? >> We've got you. >> Wonderful. All right. And while they're bringing up my slides. >> All right, I believe the first slide is up there. Hey, there. Good to see you. >> Well, good morning, vice chair. Good morning. Chair. Vela. Vice chair. Siegel mayor and council members. I am Lisa martin. Austin energy's chief operating officer. Today I have the operations update for q1 fiscal year 2025, which covers the months of October, November and December 2024. Next slide please. I'm going to keep my remarks to the highlights on a [9:41:41 AM] remarks to the highlights on a few select slides. And then I'm here to answer any questions you have in terms of an executive summary. For the quarter, we had 43% renewable production and 65% carbon free production, both as a percentage of load for this quarter. Our generators were generally available with expected periods offline due to planned outages in preparation for the winter and minimal duration offline otherwise. And finally, our distribution reliability trends remained stable, showing similar outage duration and frequency as the past few quarters. Now let me jump into a few highlights. Next slide please. On this slide you'll see the carbon free generation by month. That's the jagged line. It shows the seasonality we tend to see each year with higher numbers. In the months when carbon free resources are most plentiful, and often when the load is the lowest. I also want to show this in terms of the rolling 12 month average data. That's the smooth line here. The period ending December 2024 shows 63% carbon free generation. As a percentage [9:42:42 AM] free generation. As a percentage of load. You'll see that the smooth line is trending down over time. Since its peak in mid 2022. While we expect there to be seasonal variation, we don't want to see the trend line go down and this is happening due to many of the challenges we discussed during the resource generation plan work last year. Growing load, renewable curtailments, transmission, congestion, all things that are part of our current energy landscape and our response needs to adapt to change the trend. I point this out because the resource generation and climate protection plan in 2023 that was adopted in December, helps enable the tools we need to reverse the trend and to maintain reliability and affordability along our path to our clean energy goals. As you heard from Bob, plan implementation is one of Austin energy's priorities this year. Next slide please. Here you see our distribution reliability metrics for q1. Bob showed a similar slide with fiscal year 24 results. The Orange and gray bars at the top show. Austin [9:43:42 AM] bars at the top show. Austin energy compared to the Texas average from left to right, we have the average number of outages per customer. The average duration of outages in minutes in the center and on the right, the average time to restore service to affected customers. In all cases, lower numbers are better. And so Austin energy's metrics compare very well to the Texas average. But we know that our customers often only know their own experiences. And so when the trend lines at the bottom go up, our customers feel and experience it. As you can see, our trend lines are lower than they have been for the previous year, and they're remaining lower. This stabilizing is a good sign demonstrating good work from our teams, and much of this is a reflection of the end to end circuit work focused on the areas experiencing most frequent outages and in wildfire risk areas. However, there is more work to do. Distribution, reliability and resiliency is another major priority for Austin energy, and you'll hear a lot about it as the year progresses. Today, David will share the results of the [9:44:44 AM] share the results of the undergrounding feasibility study along with Arlan, and later this year, we'll share multiyear distribution plan with short and long term priorities. The ultimate objective of that work is to reduce the frequency and duration of outages experienced by our customers, and these metrics will show how we measure that. Next slide please. As I wrap up, I want to highlight that you can find the final approved 2023 plan posted online on the Austin energy website. The link here will get you there. Next slide. I also want to highlight that Austin energy wrapped up the last of the 82 action items identified in our winter storm Mario after action report at the end of last year. The final completion report is also published on Austin energy's website. And with that, I'll take any questions you have and the remainder of the slides are available to you for reference. Next slide please. >> Thank you very much, miss. Martin. Any questions? Councilmember Laine. >> Okay. So this was really [9:45:45 AM] >> Okay. So this was really interesting. I appreciated this presentation a lot. I have a question about slide four, which is the distribution reality. I'm sorry. Distribution reliability breakdown and graphs. I am wondering if you have available that I could look at at some point, a breakdown by geographies similar to page six. And I'm sorry, I'm looking trying to open to that slide while I'm talking which is not going well. Page six in the in the presentation on agenda item number two. And one of the reasons I'm asking this is because another thing that I noted in looking at this map is that so while the northwest area has had the highest load growth in a decade, it's not very far ahead of the northeast and southwest. And these are I heard your comment that about greater reliability or greater issues of [9:46:47 AM] reliability or greater issues of some sort in relation to wildfire, high risk areas. And I know that many of the areas where this growth has occurred are also high risk for wildfire. Based on what I see on the ground, I'm still working on figuring out how that fits into Austin internally. But what I want to point out is we have areas where there's high growth because there's land available for development, or there are fewer regulations of a variety of types, including environmental regulations. And then we also have areas where there's a lot of vacant land because of environmental regulations like endangered species and sos and that sort of thing. So if I heard correctly that your reliability data is showing less reliability in wildfire prone areas, I suspect that that's going to overlap with our higher growth areas and our most environmentally [9:47:49 AM] our most environmentally sensitive areas in Austin, so that was again, a lot of context for a question that I don't necessarily need an answer to on the spot, but I am interested in whether you have some of those reliability statistics with a map similar to this one from page six of item number two presentation. >> Yeah, thanks for the question. Council member. So my team is gathering some information specific to reliability data in your district so that we can meet, you know, early month. Regarding slide six on general manager khan's presentation, the map actually shows the distribution of load during the peak in fiscal year 24. So where you see that the northwest had the highest percentage, that means that that's where the most energy was being used during the peak of that fiscal year. The although there is growth happening across the entire [9:48:49 AM] happening across the entire service territory, the highest growth is actually in the northeast and in the southeast. That said, there is, you know, significant growth everywhere. And over the past decade, there was about 20% load growth is what that slide was showing. We what I was also saying is that when we work on our end to end circuit reliability efforts, we focus on two different major metrics. One is the areas where we have the worst outages and the other is wildfire risk areas. Sometimes those overlap and sometimes they don't. And so we're working on pulling kind of all those data specific to your area to be able to share and answer some of your questions. And hopefully we'll be able to answer your questions there. >> Thank you so much. That really helped me understand right now where I had gone astray. I really appreciate that explanation. [9:49:50 AM] explanation. >> Thank you. >> Any further questions from the diocese? Council member duchen. >> Thank you for your. >> Presentation, Lisa. I am not sure if this is a better question for you or rusty, but I was just curious about the overall strategy to return us to a aa bond rating. I'm looking at the balance sheet that was in his presentation that notes the significant increases in cash and operating reserves between 23 and 24, trajectory for 2025 as a as a means to create working capital and get to that goal, is that is that a fair understanding? Do we lose? Lisa. >> Committee members. Rusty Mangus, cfo that's a long walk for a yes. >> Okay. >> So the that is the plan, right? So we'll continue to build towards that aa rating, which means that we have to [9:50:50 AM] which means that we have to generate we have to manage our costs and generate enough revenue, build those cash reserves, mitigate risk and support our cip spend plan. >> And would the time frame of that be this year or next year? >> No, it will be ongoing. Okay, okay. Currently we are in the process of or we are in the process of developing a five year forecast that is going through the city process and that will be shared with the city manager at at that point in time. >> Okay. I look forward to that when that's available. Thank you. >> You bet. >> And before you walk back real quick, a question what's the difference in terms of interest rate between double a negative and a double a. >> Oh it's a matter of risk. Right. So there are certain metrics that they'll look at I can give you a bunch of acronyms, funds available for debt service and a leverage ratio of those. But in short, it is it's a combination of [9:51:50 AM] is it's a combination of effects, right. >> More in terms of the interest rate that someone would pay on, you know, double aa versus double a negative. >> So we you know, I'm not prepared to answer that off the cuff. Right. We I have seen that information. There is a delta and it becomes sizable over over a large portfolio in many years okay. >> No problem. I'll follow up with staff to clarify that. Thank you. Any further questions. All right. Well then let's go ahead and move on to item five again from miss martin, a briefing on distribution resiliency and the results of the underground feasibility study. Miss martin will open and then will pass the presentation on to Mr. David Thompson. And I'll go ahead and turn it over to you, miss martin. >> Thank you. Chair, as David and Arlene come forward, I'll just kick it off with saying that, you know, last year we [9:52:50 AM] that, you know, last year we spent a ton of time focusing on the resource generation and climate protection plan. And during that time we had extensive stakeholder engagement. And we heard time and again from our community that reliability is a top priority. And sometimes we had questions where people said, well, you're talking about reliability, but a lot of that has to do with the wires. We're like, yes, reliability has to do with all aspects of our system. And so there are aspects of our work that focus on every, you know, various measures of reliability and resiliency. And today, as I mentioned and as Bob mentioned, distribution reliability and resiliency is a huge focus. And so we're going to present to you step one of a multi-step effort towards a comprehensive distribution resiliency plan. And I'll pass it off to David and come back towards the end to answer some questions. >> Thank you Lisa. Good morning. Chair vice chair council members. Mayor. My name is David Thompson, vice president of electric system engineering and technical services at Austin energy. I'm here alongside Lisa [9:53:51 AM] energy. I'm here alongside Lisa martin, virtually Austin energy's deputy general manager and chief operating officer, and Arlan meir with 1898 and company, which is part of burns and Mcdonnell, to review the results of the underground feasibility study. This study, as Lisa had just stated, is just one step towards creating a comprehensive distribution resiliency plan. Next slide please. Our agenda for our agenda today, I'd like to start with providing a little background information to set the stage for Arlan. He will come up and then review the study and the results that his team did. And Lisa will wrap up with discussing next steps and opening up to any questions that you may have. Next slide please. You may have to scroll through a little bit one more time. Thank you very much. In recent years, Austin has created several reliability improvement programs, such as wildfire mitigation, underperforming feeders, and adding smart equipment to sexualize our system. While these efforts have historically been separate [9:54:52 AM] historically been separate initiatives, we now see the need to bring these together with lessons learned from both studies. That's the underground feasibility study you'll be hearing about today, and the overhead hardening study that will be presenting. I'll come back to present in may to develop one comprehensive distribution resiliency plan. This this living plan will outline how we make our grid more reliable and resilient for the decades to come. So today, again, you're going to hear about just one part or study that will feed into a more comprehensive plan. There are pros and cons of every approach, and we believe there may not be just one solution that solves every challenge that we run into. But by bringing all of these programs and studies and lessons learned together will yield the best overall solutions for our community. Next slide please. So how did we get here? Electricity has moved from being a luxury in the early 1900s to a necessity today. And during this time, what has also changed is [9:55:52 AM] time, what has also changed is our climate. Weather extremes are starting to become more common. Our Summers are getting hotter, our winters are getting colder, and that a cycle of droughts and floods and our grid has a need to be more resilient. As ever. In recent years we've seen winter storms such as uri and mora, where we've had up to three quarters of an inch of ice. And just in the last few weeks, we've seen extreme winds and wildfires and all this high growth. Being moving to Austin is as popular as ever, and adding other drivers such as the build out of ai, artificial intelligence, as well as electric electrification of just about everything. And with all those together, there's no signs of things slowing down. So we need to keep the lights on, but also protect our environment and doing and doing it while keeping things affordable. All of these are included in our values, and a is committed to fighting climate change and safeguarding our customers. Next slide [9:56:53 AM] our customers. Next slide please. Now I just wanted to, you know, cover why we were, you know here and you know and how we got here. I'd like to provide just a little bit of background to kind of set the table for our portion of the presentation. First, I'd like to talk about resiliency and reliability. I want to I want to provide some definitions for each, both in the traditional dictionary sense as well as the electric utility application reliability speaks to consistent performance and performance as intended. Reliability is how well things react to or I'm sorry, resiliency is how well things react to or recover. Spring back, if you will, from nonstandard events. With regard to our distribution system at a high level, we build, maintain and operate the system, provide stable and consistent service. And this is reliability. Resiliency takes it one step further and it includes system automation, hardening of our [9:57:53 AM] automation, hardening of our infrastructure and application of technologies to create a self-healing system, we need both. And how they come together will be our distribution resiliency plan. Next slide please. Finally, I wanted to give a brief overview of Austin energy system as background, which helps give perspective as we review the results of the undergrounding study today on your screen from left to right, we have Austin energy's transmission system, which is approximately 600 miles of lines. Those are those tall towers that you see that was not part of the study. It focused on distribution. Then we have about approximately 80 substations where power is transformed or stepped down to a lower distribution voltage. And finally you have the distribution system, which is everything you see to the right of your screen. And that's what the study focused on. It consisted of approximately 12,000 miles of distribution lines. 7000 of those are underground, and approximately 5000 remain overhead. There's [9:58:54 AM] 5000 remain overhead. There's about 175,000 poles and about 90,000 transformers split between overhead and underground. For those keeping track, that means approximately 58% of our distribution lines today are are already underground. Now I'll turn it over to Arlan to present the findings of the underground feasibility study, which focused on what it would take to underground the remaining 5000 miles of overhead distribution lines. Thank you all. >> Okay. You're my heights. I don't have to mess with the microphone. Hi. Thank you all for having me here today. Aalsmeer with 1898 and co. And I'll talk about in a second. I live in Kansas City now, but I was a ten year resident of Austin in Round Rock. So I'm actually really happy that our company got selected and able to be here to present the results of the study to you today. The underground feasibility study [9:59:58 AM] underground feasibility study results are a culmination of about a year's worth of effort. We, our team, performed a lot of different analytics, spoke with a lot of folks from Austin energy, constant meetings and collaboration about what are the objectives of undergrounding for this, for this Austin energy, what types of challenges they may face, along with bringing forth some of the expertise and knowledge that that our team has gained over the years from helping our clients reevaluate. What is the distribution system look like going forward for us? So I mentioned 1898. In co, we are a part of burns and Mcdonnell. Burns Mcdonnell was founded in 1898. We've got about nine. Professionals, a pretty large design engineering design firm, pretty highly regarded in terms of power, especially our group in 1898 is kind of the consulting arm where we perform a lot of different studies financial analyzes, asset [10:00:58 AM] financial analyzes, asset management, planning, data analytics, technology, sort of, you name it, where it kind of deals with power and kind of leading into design and engineering. So on our team, we help our clients do what I call data driven capital portfolios, where we help them evaluate what sort of investment strategies and what kind of insights can we get from those looking across our entire system. You heard David mention got 5000 miles of distribution lines, lots of poles, lots of wires, lots of things that are geographically dispersed. And how do we invest in the system to achieve different objectives. Right. And that can vary from reliability. Could be resiliency, could be sort of financial return if you will. We then move into a portfolio development justification. So oftentimes we'll break the system up into different sections. Evaluate each section and say what do we do with this section. What if we underground it. What if we rebuild it? What if we add some grid modernization or other type of renewable technologies? So [10:01:59 AM] of renewable technologies? So that's the type of part of the system. And then sometimes we'll also help them actually move over and manage and execute that program and sort of put wood and steel in the ground if you will. Our. From an undergrounding perspective, we've included that as a study or one of the alternatives, if you will, across lots of different utilities around the country. However, as you all are aware, I'm sure resilience has been an ongoing topic, at least for the last decade, and just continues to grow year after year. So we've done work for A.P. Texas, Texas, New Mexico, power, teco, encore, Baltimore gas and electric. Actually some Canadian utilities, all of them have asked us, hey, when we go to do this capital portfolio, what role does undergrounding the overhead, the existing overhead system play? So thinking about the study itself, we broke up the entire system into about 5000 sections, if you will. Not [10:03:01 AM] 5000 sections, if you will. Not necessarily a mile, but it just kind of works out. There's about 5000 miles and about 5000 sections. We estimate the cost to underground each of those sections individually, based on what we can kind of gather from a desktop review of the system. And the first goal is to calculate the benefit of undergrounding. Right. What is the lifecycle benefit of taking something overhead and putting it underground? And we look at that individually on a section by section basis. One of the major items, of course, is reducing future costs, right. How are we avoiding future outages associated with equipment repairs, the costs associated with pole inspections, cost associated with with maintaining vegetation. Right. And on top of that, one of the, you know, main reasons I think undergrounding comes up is how does it affect customer outages, how are we reducing those in the future? How are we taking vegetation if we can, out of the mix, whether out of the mix? Right. That's one of the things that undergrounding does for us from a reliability and a resilience perspective. We did convert [10:04:02 AM] perspective. We did convert those outages to a monetary value for use in a benefit cost ratio, which I'll mention here in a second. But an undergrounding section, a sections benefit, if you will, is reducing those future costs and reducing customer outages from that monetized fashion. We compare each sections benefits to the undergrounding cost, and we develop a ratio Wright benefit divided by cost. And so you can look at all the sections. We've got about 5000 and about 33 of those had a benefit that exceeded cost, a benefit cost ratio of 1.0 or greater comes out to about 120 miles or so. So in order to put all this together, I mentioned a few things that we did, but we also put a lot of core data into this analysis. Again, to try and get a good desktop review of the. The poles and wires from geospatial information system. We're looking at the existing [10:05:04 AM] We're looking at the existing equipment age and how does that equipment age. If you leave it sort of overhead, how does it age if you put it underground? We used the way the system protection sort of works to break up those sections. We looked at historical outages, we looked at those causes. We bring in customers, customer type. We attach them to all the different sections of the system and all the different assets. We're looking at tree canopy and vegetation density, right. That differs throughout the system. We're looking at physical connectivity. If this particular section of line goes out, all these downstream customers are going to go out, right. In some cases we look at road access. If structures are closer to the road, they're a little bit easier to repair, a little bit easier to replace proactively as well. We involve that. And then we looked at flood FEMA flood Zones as well to assess risk from that perspective. So thinking about the benefits little graphic on the right kind of sums it up. We're looking at [10:06:04 AM] of sums it up. We're looking at total lifecycle benefits from a sort of long term net present value. Look long term present value. Look excuse me where we're taking the avoided future energy costs repairs and whatnot. And we're taking the avoided future out customer outages and putting those together to create that benefit numerator, if you will, in that bcr looking at the types of costs right. There's equipment failures poles conductor fails, transformer replacements Wright storm and weather event. We're avoiding those types of events. When you go underground and you want to capture those benefits. I mentioned vegetation and pole inspection and maintenance costs as well, right? If you don't have the poles, you don't have to necessarily worry about that element. And then from a future customer outage perspective, you're. Avoiding equipment outages because you're essentially making brand new equipment, right? You're avoiding it for some period of time. You're avoiding most vegetation outages. Portion of the types of outages that are that your customers see. And then we use the department of energy's interruption cost [10:07:04 AM] energy's interruption cost estimator, the ice tool ice calculator, to apply that sort of societal benefit for those avoided outages to this benefits calculation. We have a couple of slides on some of the interesting data that we were able to kind of gather and put together. One of them is depth to sort of rocky soil. I remember I'm from Louisiana, where crawfish can just dig holes in the front yard without a real problem, but I tried to do some stuff in the backyard when I moved to Round Rock and I hit. I hit rock pretty quick, and I didn't know anything. Well, no one told me, I guess, so I didn't know anything about it. And my neighbors were like, yeah, no, you're gonna need some machinery if you want to try and do anything to any sort of depth. >> So it's called Round Rock. >> Oh. Oh, sorry. Round Rock. Well, I thought there was just the rock that was there on settlers. >> You're asking us to rely upon your credibility, and it's called Round Rock. [10:08:06 AM] called Round Rock. >> Noted. Thank you. All that to say, when you go to underground, you are looking to go about at least 3 to 4ft deep. And so as you can see, some sections of the system you hit that, you hit rock, rocky soil pretty darn quick. You have to bring in other equipment takes longer costs more, that sort of thing. Right. You can imagine. We also had one of our environmental teams who's actually sits here, sits in Austin conducting environmental impact of the area, looking at lots of different critical habitats, preservation areas, even archeological sites and cemeteries. Because when you start to start to do work around cemeteries, some people are concerned about that. The people that should be right. And when you underground, you have to kind of reroute now and do some other things. But there's quite a significant element of environmental risk and uncertainty, if you will, around the area with golden cheek [10:09:07 AM] the area with golden cheek warbler and cast stones, and you have wetlands and preserves and a lot of things to consider. We you know, we heard stories of, hey, if these birds are nesting in happen to happen to have made a nest in the poll, can't touch it, right. You can't deal with it. So there's a lot of it just contributes to the uncertainty of the work in general. And of course, undergrounding. If you're going to make large moves with overhead equipment. We also got our teams out to look at the system. We visited over 40 different sort of sections across the territory where we I think we looked at 400 some odd poles as well. We try to distribute that across the different districts, including unincorporated, so that we could try and get a sense of the different types of situations that exist throughout the system. And our team recorded lots of observations around asset condition, how our structure is configured, what sort of right of way conditions do you have? Are there any, I guess, technical engineering [10:10:09 AM] guess, technical engineering sort of challenges that you can kind of lay eyes on. So we got to see some pictures of some of those things that that Austin energy folks have spoken about and really got to use that when it comes to elaborating on the technical and engineering challenges that they see out there. So, you know, I mentioned uncertainty, right? I think that there's information that can be gathered regarding some of these uncertainties just at a at a general level, they affect planning, engineering costs and time, if you will. And I think that some things just require sort of site specific evaluation to estimate the cost of a section. You don't sometimes you don't kind of know until you get over there what's actually happening and what actually needs to be done to underground a section of the system. Some of these things include telecommunication, relocation costs. I think those are you think you have like 30 some odd telecommunications providers in the city, and you can drive around and see them attached to [10:11:11 AM] around and see them attached to all kinds of poles. How do you handle secondary and customer services? Right. When you when the when the wires leave the go to the house. There's another consideration that happens there. If you've ever had work done on your electrical panel right. It's okay. Well, you're responsible for that. Usually I did have somebody trench that that wasn't me. It worked out. Worked out well. You have tight space within easements, right? When you look for the underground area where you're going to go underground, what else is there? Are there other sort of city works and whatnot around? And then how do you acquire additional easements as necessary when you need to reroute? Those are those can get expensive. What about contracting? Right. If you have to hire vendors or other vendors to kind of do the work or do project management to do large scale usually involves some contracting type costs. You have some dense areas, critical root Zones that need to be considered as well. Obviously high customer density. So that contributes to traffic costs and traffic management and whatnot. And then [10:12:11 AM] management and whatnot. And then of course I mentioned environmental risks. So all of those are things that in order to build a project and a good cost, you have to kind of go in there and really evaluate what that situation looks like. So what are the recommendations with all of this? H98 and co is not currently recommending that Austin energy undertake a system wide undergrounding of the overhead distribution system. One of the major reasons is cost. With our cost estimate, it's about probably 50 billion to move it all underground, which is a pretty, pretty high price tag in my opinion. And I know we have a few sections that do show the benefits exceed costs, right. But it's also possible that other solutions might still yet provide better cost benefit for a pretty good resilience return. So a benefit cost ratio 1.0 doesn't [10:13:11 AM] cost ratio 1.0 doesn't necessarily mean you need to underground this, but it does mean, hey, you can consider this area when you're trying to evaluate what is this whole area of the system sort of need to look like in the future? There are wide range, of course, of technical challenges. I mentioned a few recently, telecom, rocky soils, which I should have known about traffic control, underground easements, acquiring permits and whatnot. That said, and this is kind of similar to what we end up recommending with with a lot of the clients that we talked to when we do comprehensive analyzes, there are areas that I think are highly strategic. You can make a highly strategic approach to undergrounding. One of our utilities is in the state of Texas. And they said, yeah, you know, we understand that we've got a lot of other work to do first before we start spending money on undergrounding, but we want to make sure that highway evacuation routes. So when it comes to hurricanes, right. Those are underground. So they started making a process with the PUC and their resilience plans to underground going, you [10:14:12 AM] plans to underground going, you know, across highways and whatnot. So that's just an example of a highly strategic reason why you may need to underground in certain areas and why they make sense. So that sort of concludes my presentation and recommendations. But happy to take questions. >> Well thank you very much. Very interesting presentation and findings. And council member Fuentes. >> Yes, thank you. I thank you for the information. I believe council member Ryan and I both brought forward items regarding exploring, undergrounding our our power lines. And, you know, part of what you have laid out here and really honing in on just the financial cost that it would take for us to do a system wide approach to undergrounding, but laying out that there are at least 33 sections where the benefits far outweigh the costs. The item I brought forward specifically asked the city to take a look at where there are city led projects underway or proposed further down the line. So, anticipating where the projects where the city is already going to be going [10:15:13 AM] already going to be going underground, either with project connect or with our our mobility projects, our corridor projects, etc. Did have staff had the opportunity to take the 33 sections where the benefits are outweigh the costs and interplay, where the city has projects going on in the upcoming years and where that portion might make sense for us to take a look at. >> I can take that one. Council member Fuentes, this is Lisa martin again. So I'll take that question. And then if we could go back to the presentation, I've got a couple more slides to present. But yes, our, our so they have not taken the 33 sections and overlaid them with the other projects in general. But we have continued to work with the other aspects of the city departments to discuss where we have opportunities to dig once. And that continues to be an effort in coordination with, again, other city [10:16:14 AM] with, again, other city departments and through the Austin utility location coordination committee, so that we ultimately can make sure that whether it's project connect or other transportation major projects or Austin water projects that we are coordinating as a whole. And so, yes, your work under that resolution is underway. And one of the next steps with some of these sections is to take a look and see if you know, how does this overlay with other city projects. >> Okay. And if staff can share those 33 sections that have been identified offline, I'd be interested and curious to see where those are. Thank you. >> Okay. Thank you. If you could put the presentation back up. I'm so sorry. To help navigate, there's one more slide and chair. Can I just continue the presentation I've got I've got two more slides. >> Please go ahead. >> Please go ahead. >> Thank you. All right. So we all share the same key objective which is reliability plus resiliency. And the question is [10:17:14 AM] resiliency. And the question is how do we achieve that given these study results. So first and foremost we continue supporting underground service design for new development. Austin as you may know maintains an underground standard. And although it's not required, many developers are opting for that standard to aid in the value, esthetics and desirability of their new developments. We, of course, continue to focus on the highest priority risks wildfire and trees too close to the wires, which is problematic during a number of different weather conditions wind, ice, drought, etc. And so our tree trimming and wildfire mitigation programs have those risks at top of mind. We will continue to examine where strategic underground conversions make sense, and we will do that in conjunction with the results of the next study, which is the overhead hardening study, which will provide additional resiliency solutions to consider some which may be less costly for similar benefit, we will engage with stakeholders to find out what they think about all of this, what their preferences [10:18:15 AM] this, what their preferences are, and we'll incorporate their feedback. And remember, today's results are only step one. We still have work to do to develop a comprehensive distribution resiliency plan. Next slide. Here's the general flow for that work. So right now as council member Fuentes was discussing, our teams are continuing to analyze the undergrounding results. And 1898 is currently working on the overhead hardening study. We expect we'll be able to share those results with you in may. And then we'll use both studies, further analysis and stakeholder engagement to inform both the near and long term priorities. Later this year, we'll return to present the distribution resiliency plan for your review and feedback. And so thank you for that pivot. And with that I'll take any other questions you have. >> All right mayor. >> I actually think she just answered my question. So thank you. >> Councilmember Laine. >> Thank you so much. I look forward to seeing that when it comes. I also share the concerns of council member Fuentes and just want to elevate also projects that might be underway [10:19:18 AM] projects that might be underway by campo ktma, Travis county, but also Williams county, Williamson county, all of these other kind of transit entities. You know, there are at least as far as northwest goes, it's still probably may not be feasible because of the rock and other factors. But just to make sure we're considering where there is opportunity. Thank you. Look forward to hearing more in may. >> Thank you. >> Thank you very much. Council member. Any other council member? Duchen. >> Thanks for your work on this presentation and I look forward to the overhead study as well. I'm curious, as part of and this is maybe a better question for Arlan, this I'm curious as part of the feasibility analysis that you guys performed, I noticed that flood and some other emergencies were considered as part of that. We've been asked that a couple of our community listening sessions about the feasibility of addressing. Underground transmission via specifically wildfire risk. So [10:20:21 AM] specifically wildfire risk. So I'm curious if that came up. I know it sounds like you looked at, you know, flood plains and atlas 14 and different other emergencies. How much was topography, wind and other characteristics as you analyzed these different sectors or sections? Part of the analysis. And if not, is that something that we can include in the overhead study? >> One of the things I. When it comes to wildfire, we didn't specifically include wildfire in the study. One of the things that our company is doing is trying to evaluate wildfire risk, because our company does a lot of planning. We do engineering, right. What does that mean for us as a company as well? One of the things that I'd like to tell our clients when wildfire comes up is, you know, especially in the state of Texas now, where this is slowly becoming more and more of an issue. Right? We've had several. Right. And then some, you know, [10:21:22 AM] Right. And then some, you know, public and notable. If you identify a high wildfire threat area and you are concerned about, you know, utility- infrastructure causing any sort of issues, then you should probably consider a plan and you probably don't need a cost benefit analysis necessarily to take you there. Right. That's going to get you some of the quantitative element. But as a utility, I usually recommend evaluating that and determine where those are. How much does that cost to do. And. Over what period of time are you willing to sort of kind of work with these types of risks? Right. Because depending on how many miles you've got and how many go through different areas, some of our utilities go through lots of miles of high wildfire areas, and you've got to still kind of chunk away at that sort of thing. So that's thinking about wildfire. Was there another element of question that you had that I missed? >> The only other question I had was you mentioned that the it [10:22:24 AM] was you mentioned that the it would cost about 50 billion to bury all of our existing lines. And obviously that's not realistic. And I would imagine the overhead study is going to tell us some different conclusions about how to address some of these challenges. But I am curious if there's a way to quantify the existing investment we've made and the 7000 or so lines that we have buried, can I assume just roughly that that's an investment that exceeds that value? >> I'd have to talk to the utility. Probably not. Especially if it's Greenfield. So Greenfield being new sort of expansion. Hey, we were getting new neighborhoods, you know, put everything underground, right. And it's already there and it's ready to go. And you've got neighborhoods around the area that have been underground for many years. And so undergrounding in a Greenfield spot is, is usually a lot cheaper on a dollar per mile basis than it is to take something that's kind of already [10:23:24 AM] something that's kind of already there and then try and bury it with mentioned telecom and lots of other things today, but so probably not that much. But I don't know how much off the top of my head. >> Okay. Thank you. >> Yeah. You're welcome. >> Council member. >> Council member. Duchen. I'm sorry. I just wanted to go ahead really quickly. Just that. So wildfire risk is at top of mind for all aspects of our reliability and resiliency. And so our existing programs do focus our efforts on wildfire risk areas. And again, the theaters that have the largest outages. So those two areas, as we continue to move forward with these studies, we will continue to look at the benefits of reduced wildfire risk. And I think you'll see that mostly in the overhead hardening, where some of the measures to mitigate risk will include things like covered conductors or equipment that produces less sparks or things like that. >> Thank you Lisa. Yeah, that'd [10:24:24 AM] >> Thank you Lisa. Yeah, that'd be valuable to understand. And I look forward to that study, because it'd be useful to be able to answer that question next time as it comes up from constituents. >> Thank you. Thank you, miss martin. Councilmember alter. >> Thank you. I wanted to just get clarification on the study. As we look at the cost benefit that is for undergrounding existing wires, correct. That's it's all about taking the infrastructure we have and moving it underground. >> That is correct. >> So I'm I'm curious kind of in the individual just speaking kind of alluded to it right at the end about Greenfield development. What kind of rules we have in place or might need to put in place for new development to do the undergrounding from the beginning? Because I imagine the cost benefit is very different when you're comparing costs, you know, startup costs to overhead versus just putting it underground. [10:25:24 AM] underground. >> You are correct. Council member. So it's a lot less expensive to install underground to begin with. You can certainly have some of the challenges that we talked about in terms of the environmental sensitivities and the rock and various things, but it is less expensive to do it upfront. And we do maintain an underground standard. And so. Is the undergrounding standard. As we move forward then have that option. Of course it is not required, but of course it's in y'all's purview to make policy changes regarding that. >> I think that's an interesting question I'd like to explore further. I'm not necessarily saying we require it everywhere, but in areas where it makes sense, especially, you know, as I think about the northeast planning district that councilmember harper-madison is working so diligently on, it seems like that area, given the map of where the bedrock is, it might make sense to incentivize undergrounding new development [10:26:27 AM] undergrounding new development in that area or other areas where we know we're going to have that high growth and can better utilize that form rather than overhead. So I don't know if that would be, you know, a I don't think it'd be through zoning, but just where if we could have a kind of follow on conversation about what policy levers we might have to either go as far as require or better incentivize the undergrounding. I'd be interested in having that conversation. >> Yeah, sure. Understood. And I was just going to say that, you know, Heidi was talking earlier about cloud requirements and green building. And part of the pud requirements is they get built for different areas like the Mueller neighborhood. It is all underground. And colony park might I believe it's also all underground. And so, you know, I know northeast planning district is not all within the city, but you know, there are there are certain conversations that can [10:27:27 AM] certain conversations that can be had. Absolutely. >> All right. Thank you so much. >> Thank you very much. And just to follow up on, on councilmember ultra's question, my sense and from prior conversations, I had a very similar conversation with the staff the other day, is that the majority or almost exclusively in terms of new development, folks are choosing to bury the lines for new development. Can can y'all comment on that? >> David, could you speak to that, please? >> Yes, that is correct. While they're not required to, many do choose because, you know, again, if you do it up front, the cost differential is not near as as great. And it provides some esthetic, you know, for their, you know, for a neighborhood or so forth. So it's a lot of new development is, is choosing to go underground. >> Yeah. And I mean I'm again, just off the top of my head, I'm thinking about the grove, a handful of other any kind of multi-acre kind of larger [10:28:32 AM] multi-acre kind of larger development. I can't think of one off the top of my head that has overhead lines. >> Yes, sir. >> Can you think of a new one that did not use underground? >> I not off the top of my head. Sometimes it'll be along the streets or so forth. They may, you know, not bury that. But of course when they go into their development or so forth, it's typically underground. >> Great. Thank you very much. Any other questions from the council member? Harper-madison. >> Thank you, I appreciate it. You know, one of my questions I had intended to ask off the record, but I was inspired by council member alter's line of questioning. So to his point, that is certainly on the list of points of consideration for us with the northeast planning district. How best best to maximize the opportunity to get infrastructure right from the start. And, you know, I think it was you guys that introduced me to the term double digging. That said, though, I think about to his point about specific projects or region specific, I have all of 12th street with all exposed power lines. Aside from the esthetic displeasure, there [10:29:32 AM] the esthetic displeasure, there are other implications. But truth be told, you know all of 11th street, which was a part of the urban renewal effort, doesn't have exposed power lines. And I can just tell you unequivocally that the retail outcomes, pedestrian traffic, all the all the. But given that, I don't know that there's going to be as much comprehensive redevelopment of the African American cultural heritage district is a 12th street like a from I-35 to Springdale, would that be, you know, the kind of thing that would be eligible for some standalone considerations as a project. So to our benefit, to our detriment, you know, the court of public opinion has lots of thoughts about the fact that there's almost just one developer that owns most of 12th street. I personally, you know, just in conversations with infrastructure folks like y'all and other people doing projects around revitalization around the country, you know, they're saying exactly what I'm saying, which is what an opportunity one developer for the city to have [10:30:35 AM] developer for the city to have to partner with, one developer for us to have to, you know, so that makes sense to me. That said, I know that they're wanting to move forward, you know, at some point with the redevelopment of what was the epicenter of the African American cultural heritage district at some point, which will be massive redevelopment. And I just I can't help but see the alignment for the city to work directly in conjunction with a developer like that who's going to redevelop, which for all intents and purposes, is a downtown city block. You stand in the middle of 12th street at Chacon. You see downtown, you're downtown. So my hope is that, you know, those sorts of projects. I don't know that we have a whole ton of them in the city for consideration, but that those sorts of projects get their own sort of special considerations given the sensitivity of the, of the initiative. >> Lisa, do you want to take that or. >> Do you? I looked at you because she's on the screen. But, you know, I just figured you were like a placeholder. You know, when you do an interview, you just sort of stare at the [10:31:36 AM] you just sort of stare at the camera. Dude. >> I think I think we have a lot to dig into. I mean, we're just evaluating the results of the undergrounding. And so, you know, even the 33 sections, you know, where does it make sense? Not we'll have some look at some other alternatives. But I do think there is a place for that. And we just need to discuss as a community where, where it makes the most sense. >> Well, I appreciate that response and I think it's going to be helpful moving forward as my staff and I work through some real comprehensive community revitalization policy. I'd love to get your feedback on what we should be working in from a policy perspective, just to sort of codify some of these considerations, you really wouldn't think about how much impact exposed power lines have on a community's ability to be successful from a commerce perspective, but it really it's yeah, it's not good. Thank you. >> Yes, ma'am. >> And piggybacking on that, that comment question from council member harper-madison, we went to the north Lamar area to basically do a walk along the [10:32:36 AM] to basically do a walk along the street, look at the distribution and the transmission lines. Actually, those are the transmission lines there. And I had the exact same thoughts as you. Council member looking to the future. You know, there's these huge transmission lines that started about 51st street and go up Lamar really almost the entire length of Lamar until it ends there at the close to I-35. And I just don't see how we're going to build the corridor that we want to build when we have so much lines in the right of way, kind of taking up that precious right of way again, thinking about light rail once it goes up that direction, if we want light rail, we need to make room for the vehicles. We need to make room for bike lanes, nice sidewalks. And there's these huge metal poles that are 150ft high. You know, maybe not that high, but very right in the middle of the right of way. And we talked about that. And, Mr. Thompson, I don't know if you wanted to just kind of comment on some of the, the [10:33:37 AM] of comment on some of the, the complications that arise from, from, you know, burying some of the, the distribution lines and the transmission lines, too. >> I appreciate that there are there you know, it's not as simple as just putting underground because, you know, again, as if a service. I think Arlen talked about this a little bit. If the service is coming in from the top and now you have to convert it to underground, there's work that actually has to happen on every single service you may find, because anytime you touch something, you have to bring it up to code. So there may be a lot of things. And you know, you know, I think Arlen touched on it is a lot of times, you know, you can look at at a macro level, but you really got to get out there on every single project to see what what it would take and what the impact would be. Obviously, you know, if we're if we're going to put stuff definitely along that corridor, everything's out front anyways. But in others, if it's in the rear lot, you know, if we're going to put it in, it really would make sense to move it to the back or sorry, to the front on the transmission, I'll just say is we have very little underground transmission and there's very little underground transmission just really in the, you know, in the United States. [10:34:38 AM] you know, in the United States. The reason, the reason for that is, of course, cost. It is it is significantly more expensive to underground. And that is something that public utility commission does not typically reimburse us for. So that being said, is, you know, I think we just look at section by section, digest the results of it, and then work with our community to figure out, you know, the projects that make sense. >> I appreciate that. And in particular, I think we need to be very opportunistic about the segments that we underground. Again, if we're going to do project connect and run the and move the water utilities and do all that kind of stuff like that. In other words, if we're opening up the street anyway, then I think it makes a lot of sense to look at the overhead lines and decide what we want to do with them and decide if that's the opportunity we want to bury him, especially in the context of creating a great street and really facilitating. As council member harper-madison mentioned, that retail environment, a positive pedestrian environment where retail is going to be successful, where people are going to enjoy the streetscape, those kinds of opportunities. I look forward to exploring some [10:35:40 AM] look forward to exploring some of those as we move down the road, and a couple of other questions with regard to the telecom companies that also have their their wires along our poles, who bears the cost? If we were to bury lines, who bears the cost of moving those wires? Are they our costs? Are the telecom companies pay for that themselves? >> I'll take that, David. >> So vela the design criteria manual has requirements in it related to pole attachments. And so all of the service providers who attached to our poles, they if we do an underground conversion then they are required to cover that cost as well. It's part of the municipal code. I can't imagine that it would be a very easygoing effort in terms of oh yeah, no problem, I'll just cover those costs. So I think legally we've got a stance, you know, in terms of code, but I it would it would be a battle. I think the as you [10:36:41 AM] a battle. I think the as you noted or have noticed on some poles, there's a lot of times there's a lot of different communication providers who are attached to poles, sometimes five, six, seven different communication providers. And there's a process for which you notify them because they have to move in the order that they are attached. And there's a process and a notification system that you communicate to them. And they have a certain timeline to move, you know, whether it's from one pole to another pole or from, you know, in this case, from a pole to underground, it's quite cumbersome. It's coordination with a lot of different efforts, different entities, and certainly bears into some of the uncertainty. We wouldn't want to just assume that it would be easygoing and all the costs would be covered. I hope I've answered your question, even though it's a complicated space. >> No, no, I appreciate it. And again, that's I think, one of the less obvious complications from burying lines is, is, you know, dragging all the telecom [10:37:42 AM] know, dragging all the telecom companies along with us underground. And with regard to the location of the lines, like, for example, in my neighborhood, the, the, the transmission lines are in the backyard. Is that a is that the typical kind of arrangement throughout Austin, or what is kind of the standard, and how would we do it nowadays to in terms of the location of, of where we would put transmission lines? >> Yeah, I can I can take that. Lisa is that was a legacy practice. You know, where you know, it was put in the backyards, whether it was distribution or transmission keeping, you know, the, the, the, the front yards, you know, clear. And so it was kind of tucked behind there and from a standpoint as even connecting to every single because a lot of times they were overhead services. So those wires that were strung across her through the backyards, not through people's front yards, that is not the practice anymore. Industry wide. We try to put everything out in the front. It's not always possible, but we do our best to do that for both [10:38:43 AM] do our best to do that for both transmission and distribution, for accessibility, so that, you know we can restore power faster when things do occur. >> Great. And then out of curiosity, the cost ratio, there were those 33 segments that were over one. Where again, from the analysis the benefits seem to outweigh the costs. What was the ratio for a more typical segment? You know, how much more would it cost than the benefit that that we are projecting? >> Yeah. Or Arlen just said we'd have to take a closer look. I know we're all still digesting the results of that and the and the other sections, so we may have to get back with you on that one. >> Great. And then finally, I think, you know, again, we're we're theoretically looking at these things and estimating costs and whatnot. And again, I understand that we're not in any position to, you know, spend $50 million to bury every single electric line in the city of Austin. That said, what about a select pilot project? You know, and I'm sure that there would be [10:39:44 AM] and I'm sure that there would be some volunteer neighborhoods out there that would be first on the list to say, please come to our neighborhood. I just think that an attempt in a limited scale, maybe in a couple of different areas, might help us kind of flesh out some of the concerns, might help us realize that this is easier than we thought. This is harder than we thought, whatever the case may be. What about that as a as a possibility? >> Yeah, you make some very. >> Valid points. Tirz vela. And I think that when we bring a comprehensive distribution resiliency plan, I would imagine it will have some select undergrounding areas. So we can, as you said, test it out, see how it works. We're going to have to look at that and see can we justify undergrounding compared to hardening alternatives. But there may be some places where the quantitative and the qualitative benefits put it at the top of the list. And so our intent is to have not a plan that would [10:40:47 AM] to have not a plan that would say every last thing we're going to do over the next, you know, so many years. But it would have, you know, what's the next year, perhaps two years out and then kind of longer term priorities so we can take into consideration best practices, lessons learned and adapt our plan as we go forward. So I think that approach makes sense and we just need more results from the next study to be able to look at this comprehensively. And then when we come back towards the end of the year, I imagine the comprehensive distribution resiliency plan will have a few strategic undergrounding locations we can use as a pilot. >> Great. Well, I appreciate that. And like I said, my sense would be the neighborhoods would compete with each other to be the pilot neighborhood for bearing lines. Councilmember Laine. >> I will start by voicing my love of pilot programs, even in full knowledge that my part of the city is not an easy area for this, so we would not be getting [10:41:49 AM] this, so we would not be getting a pilot. I'm pretty confident, but I really find them to be quite valuable in an effective use of resources. So I do support those. So going into my question, this has been overall so informative and including the questions and the sequencing considerations and that sort of thing. If we are Austin, it is quite clear that Austin energy is driving the process for every entity that's on the lines that they serve, where they choose to underground, it will drive more. And I know that we are also trying to come up with a citywide plan. So I'm going to elevate that and a significant portion of my district, which is in the city of Austin. And there are also Austin addresses that are in the etj that are served by psc and not Austin energy. And when I walk around and look at utility lines, which I became much more adept with after after Yuri, I see that there are a lot of lines in district six that [10:42:49 AM] of lines in district six that are shared between Austin energy and psc because as I think is because we're crossing each other's territories and that's ended up to make sense. My question is, is there a point in this process where we are developing, like the citywide feasibility, or are we developing an Austin energy feasibility because it's not at all the same thing in my part of town. And I feel like there was one other piece of this that might come to me. But please, thank you. >> Councilmember Laine, if your question is asking whether or not we have any control or jurisdiction over pec and whether they underground their lines, is that what you're asking? >> No, and I well understand. It might not be a question for Austin energy, but perhaps for our consultant or to pick up with the mayor. I'm not quite sure where we would pick it up, but pec, I don't know. Off the top of my head, the percentage [10:43:51 AM] top of my head, the percentage of my district that is served by pec, but it's not small and I will pull up the map. And as I'm driving around and start to notice what parts of the pec territory have overhead lines. But really my question is, do we as a city, are we including the city areas that are not served by Austin energy? When we look at feasibility of this type of thing and perhaps the consultant knows, perhaps it's a question for the mayor, I'm not really sure. >> Well, I'm not sure. I'm not sure either. But I will say this the feasibility of being able to do something like this when you don't have jurisdiction or control over someone becomes manifest. You don't have the feasibility. And so when the drag act was passed and created, the various Zones that specifically allowed for the continuation of monopolies and that included co-ops and municipally owned utilities, my [10:44:53 AM] municipally owned utilities, my guess is that we would run into real probable problems on any form of feasibility, just because of the limited, the limited control, limited jurisdiction. >> That makes all kinds of sense. And so I would just elevate that in our communications with our Austin residents. And in fact, everyone who has an Austin address, even though some of them can't vote that that we include them in the communication so that we can highlight that. And I also specifically towards I know councilmember duchen shares my concern around wildfires. Some of the new utility lines that have run through the endangered species preserve in the upper half, the northern half of that preserve are shared lines between, well, they at least are pec. They might be shared between pec and Austin and energy. So that feasibility part is important to that conversation too. And I just wanted to elevate those concerns. I don't know if other parts of the city are in that same situation of having power service provided not by Austin energy, but okay. [10:45:54 AM] energy, but okay. >> Thank you very much. Any further questions? Well, then, thank you very much for the presentation. That was very interesting, very helpful. We'll digest it and look forward to the hardening study results. When those come back. Mr. Meyer thank you. Thank you mayor I'm sorry. Thank you. And item six through nine are Austin energy memos that have been released to mayor and council since our last meeting. They are listed just for public information. We're not going to present or comment on those. However, I did want to thank city management for putting those in the backup. It's a really easy and I think as a general committee practice, that seems like a great idea because those memos to mayor and council fly around everywhere and we can miss them. And it's a great opportunity to get a second look to make sure that we're up to date. Also helps the public be able to just look at one agenda and pick up a lot of information. And then so with that, let's go ahead and move to item ten, identifying items to discuss at future meetings. Again, I'm always available for [10:46:55 AM] Again, I'm always available for my colleagues to shoot ideas over. If anybody has any ideas right now we can discuss, but if not, we can go ahead and adjourn the meeting of Austin energy at 1047