 Good evening and welcome to the regular meeting of the Burlington Board of Electric Commissioners We meet every second or second Wednesday of the month 530 right here at 585 Pine Street if you can get here as always Ratepayers Burlingtonians are welcome to come down share your thoughts with us your concerns, whatever and Be a part of the conversation always welcome. All right. Well, so we'll start off here with The agenda first item on the agenda is the agenda. Do we have any changes or to the agenda this evening or additions or anything like that? No Item number two on the agenda is the minutes of the October 25th meeting barring any Substantivity if there are any clerical errors that can be directed towards the clerk But are there any substantive changes to the minutes? All right hearing none I want to take a motion Make the motion to approve October 25th minutes Motion has been made do I have a second second motion made and seconded Discussion of the motion Hearing none I'll all in favor of the approving the minutes of October 25th Indicate by saying aye. Aye. Those opposed say nay Did I sabot the minutes are passed Should I abstain from that one? Sorry. Well, you weren't commissioner. Yeah, so yeah, I'll have that noted Thank you From here on We'll go to item number three, which is public forum. This is a time for any members of the public to again speak ups Express your concerns or praise or whatever whatever whatever's going on Do we have we don't have anybody here in the room? Do we have anybody online? Well, folks nobody here this evening, but as you as you as I've already said Always welcome here second wednesday the month five eight five five. Come on down Join the conversation Moving on to item number four on the agenda the commissioner's corner. This is an opportunity for commissioners to Bring up anything that's been on their mind or since the last time we met or whatever I'm an open forum basically Nothing, right, I mean we just met two weeks ago, so Not a whole lot Okay, we'll skip that we'll go right cruising right along here to item number five the general manager update with the general manager All right. Well, good to see you again So soon and thanks for again for the meeting on the 25th Welcome to commissioner anderson. We already miss bob Hopefully he'll join us again sometime in a public capacity So a few items here in the report that I wanted to flag This item about act 44 and incentives is a little It's a little convoluted, but I'll just share that the kind of the upshot is We have a concern that some of our incentive programs may be disrupted or paused As early as december and potentially into january So this really relates to the fact that we're at the end of a three-year budget cycle We had this pilot program that was authorized by the legislature That runs through the end of this calendar year We have a new pilot program that continues that earlier pilot that runs for the next three years What we don't have yet is a puc order Implementing the incentives for january and we are starting to run low on our allowed levels for the current period So chris is monitoring those and james and others We're hopeful to be able to avoid disruption during this calendar year either by kind of Happen stance that we don't end up spending through because there may not be as much activity Or if we can somehow further complement our existing programs while we run them for the next month or so We're working very hard with efficiency vermont, which is in the same boat essentially To try to create a schedule that could be reviewed and approved by the commission that would get us clarity For january, but I do want to flag for the commission It's been our tradition every january to kind of come out and say here's our incentives for the year Here's our new incentives. Here's our amended incentives. I don't think we're going to have that this january I don't think we're going to have the regulatory clarity that we need My hope is for the major programs will basically continue them as we get into january Our goal is to reconsider some of them. I'll give an example with the heat pump incentives We've been pretty generous on the capital side Install a heat pump. You get several thousand dollars back Some cases with the low income benefit you can get up to 75 percent We know the federal government's coming in with tax credits rebates that are covering a real big portion of that Our our intent is to back off of some of our capital side incentives And that aligns well with some of the process that's happening at the state level And really try to find a way to support the operating cost to do a peak Rate or a peak bill credit or another type of program says if you operate a heat pump And you allow us to reduce it a little bit during peak We'll provide you a bill credit for example help make it cheaper to run or more competitive to run relative to fossil fuels That type of change and other programs like our super user incentive for people who drive more miles to switch to an eb I don't expect those january one That was our hope. I don't think it's going to happen So I think we'll be looking at something like a late winter early spring Incentives announcement and our goal between now and then is try to keep things steady because We know that if you disrupt the consumer marketplace with incentives It's very very negative for perception for anyone who's going to purchase during that time And just having stability there is really valuable. So I wanted to flag that that was the first item in the report We had a really nice event despite some really terrible weather at the solar test center at McNeil We were able to energize that facility officially cut the ribbon. It was raining. We had some good tents Mike did a fantastic job of setting us up for for the event despite the weather Real kudos to james for a lot of work on this the McNeil join owners for their support UVM's and a great partner the McNeil team Did a lot of work on this So what we have now is as you visit the wastewood yard, you'll see the solar is set up It's racked for 50 kilowatts of solar We don't have quite that much there at the moment, but we've got nine different types of panels All of which are subject to research purposes workforce training for university of vermont We had a student there who spoke about the benefit of having like a real world experience with solar As opposed to just learning about modeling in the lab So they're going to be really operating taking care of it. We expect some output It'll maybe be like the equivalent of like 11 homes worth of electricity production You know over the course of a year That'll be split between the joint owners and bed Financially so it'll be a few thousand dollars of benefit, you know nominally to The department but a really great partnership opportunity at McNeil and Obviously, we're hopeful we'll be able to do district energy at McNeil We're looking at this and whether we can build off of this We'll look for other opportunities to do efficiency at McNeil really try to focus on innovation as opposed to Just conventional wood chip combustion, which certainly we do and we do well But there may be opportunities to really utilize that site in creative and innovative ways Always with the full engagement of the joint owners We're conscious that we own 50 percent. We're not the sole, uh, you know owner of the plant So continuing to have that engagement will be critical, but this is a great project great partnership Anybody who hasn't had a chance to go visit it? Encourage you to do so and we just had an interview here today with Wptz Stewart led better on the subject that'll run over the next week or two a little bit of a longer form interview There was a lot of media coverage of the event So turning to district energy Big night at city council on november 20th We have the carbon fee that we've been working on for a really long time Which would be the first application of carbon pricing anywhere in the state of vermont And took a charter change and two town meeting day votes and really goes back to 2019 2020 really back to the implementation of the roadmap. This was one of the policy initiatives It's gone through six meetings of the toke and ordinance committee And it is now ready to be acted on at the city council. So that's happening on the 20th In addition, we have the district energy term sheets that were approved at the last commission meeting That have now been approved by the mcneal joint owners at their meeting on november 6th Those are going along with franchise agreement and an easement for 99 interval road as part of a package to the city council on november 20th I am certain that there will be some folks who are going to be vocally opposed to one or both of these items And I appreciate that I respect that our view is these would both be Really significant steps relative to our roadmap If our goal is to reduce fossil fuel use in the city of burlington Both of these things get us a big chunk of the way there in ways that really other initiatives can't So it could be a really significant night for us if we're able to advance those initiatives relative to our roadmap metrics And then lastly, we are working. We're not quite there yet in terms of bringing it to the city council But we are working on a charter change proposal for next town meeting day Our five million dollar line of credit that we have not utilized Counts towards our day's cash on hand metric for moody's It has not grown commensurate with inflation or our budget or any other metric. It's been stagnant It's in the city's charter That we can have five million for working capital for the department We're working with the ceo and the city's bond council thomas maloney who you may remember And our debt advisors at pfm To figure out if there is a way to put this on The ballot to look at probably doubling the line of credit amount Getting it more from five million to ten million. We have no anticipation of needing to utilize it It would be something we could draw on if we needed to but I don't anticipate doing that any foreseeable Scenario, but it would support a stronger day's cash on hand metric and put less pressure on us to raise rates to generate cash For that metric as part of our regular operating Principles so when we've looked out and you know emily can definitely touch on this more as we do the financials both for fiscal 23 and for the current fiscal 24 When we look out and think about the sustainability of our financials over the next three to five years This change along with some second tranche of our revenue bond Net zero revenue bond in an amount to be determined are the two pieces that really help us. I think when it comes to providing the cash And investment capital dollars that we need and supporting strong financial metrics while moderating rate pressure We have no illusion that this you know does away with rate pressure, but keeping it as moderate as possible So we're looking at all of those things But in case you hear about that that's something that we would bring to the board of finance before it goes to council But would be something we'd be looking to have a vote on town meeting day And obviously if it's authorized for the ballot We'll do what we always do in terms of trying to make sure burlington voters understand what it is and What the implications of it are or are not? I don't know if it'll attract as much attention as other items that we've had but You know, you never know That's what i've got Any questions No All right, hearing none. Thank you. Thank you hearing none. We'll move on to item number six the fy 23 audited financials with emily Thank you Just shake it. Thank you Share my screen here Okay, so Fy 23 results here. They are audited audited statements were issued on friday october 20 Is it the a seventh? Yes friday october 27th meeting the 120 days following our fiscal year That's the target set by our general bond resolution for the revenue bonds. So it's great that we made that date I want to acknowledge the accounting team. Did they did a great job this year um Preparing for the audit working with the auditors providing them all the information preparing the statements It was generally a really smooth year. Um, and that's all credit to them for that Um So this is uh, we'll start with the balance sheet in terms of context particularly for commissioner anderson we have Kind of two sets of statements ones for what's called the proprietary or enterprise fund that's sort of BED without the e eu And then as a result of a gas b standard change in fy 21 We were required to produce separate Fiduciary fund statements for the e eu activities. They used to be all bundled together So now we present separately Um, so the e eu statements are not quite The same you'll see, but they are separated separated. So these BED statements for the proprietary fund contain no Well, they do contain e eu activity, but the the e eu is also stated separately is the fiduciary fund So looking at the balance sheet we always start with the assets um kind of highlights here Capital assets net of accumulated depreciation increased um By just under three million dollars 2.897 million it's about three percent Um, largely that reflects the investments. We've been making with the proceeds from the 2022 a revenue bond Um, you can see there are our current assets our cash dropped um by Sorry, let me find all my All my notes Combination of things there, um, I'll go through the cash flow But generally our expenses, you know, our operating expenses grew more than our revenues grew Um, so we our cash levels dropped, which for the you know, as you know meeting to meeting, right? You've seen me report on cash and that's been tight Um But otherwise, you know current so current assets here went up a little bit not a huge amount um Again non current assets um Restricted deposits with bond trustees went down. That's largely the construction fund We've been drawing that down as we've been spending on capital projects Regulatory assets went up quite a lot from 1.8 million to just over 6 million Most of that is the new deferral of that lost winter energy Revenue accounting order accounting treatment for which we got approval. That's the 4.1 4.2 ish million dollar regulatory asset that was posted. So that's the reason for that big increase there Nothing big on the renewable energy standard inventory commissioner Anderson for your benefit in particular that is our bank so to speak of tier three credits and um tier one wrecks That we have available to use for compliance against tier one of the vermont renewable energy standard We changed from an expense All expense accounting to inventory based accounting for tier one wrecks and tier three credits last year Equity interest that's our velco investment that went up modestly. We did Make an equity purchase in fy 23 But you can see sort of total assets, you know, there were some changes in current and non current But total assets are like just about the same at 185 million and three quarters roughly um Going down to deferred outflows. The big one here is the middle one pension amounts You can see that went up a lot um That's pretty much a lot of our control. That's a result of A report that the city's actuaries um produce every year under according to gasby standard 68 um and generally that's like Um Well, those are the deferred inflows But generally speaking the whole pension plan for the city the net pension plan liability went up a lot last year compared to the year before and part of that is some changes in the Expected return on investment rate that the pension board has kind of been putting into place over five years to make more So that's affecting The total pension liability But then the net part of that is The plan's sort of net position which is affected a lot by its investments So as it happened if you kind of do it a chart Of the dow Jones industrial average um from june That's right from july 1 21 to june 30 2022 was really good and then from july 1 2022 to this june 30 was not good So our pension liability dramatically decreased last fiscal year and then it completely swung the other way for this fiscal year, so Not only did it go up a lot, but it The starting point was lower if that makes sense because it had decreased for f y 22 So that's the you know, that's pretty much all of the change in the total deferred outflows um Now moving to the liability side of the balance sheet total current liabilities dropped about uh 1.2 million Most of that is like some timing of accounts payable At june 30 the rest of this is just the maturity schedules of our bonds overall Same with the non-current liabilities The revenue bonds and the deal bonds those are based on our the bond maturity schedules There you can see the 10 million dollar swing in net pension liability at 10 million dollar increase So that is accounting for the bulk of the change in both total non-current liabilities and total liabilities And then you can see again pension amounts on deferred inflows Changed by six million just if you have under six million dollars as well So what does all that mean if you look at the net position? um Little summary at the bottom That's kind of taking the net of the assets and liabilities for all four all three of those captions right there So net investment of capital in capital assets asset side in liability side, which is the assets and the debt that funds those assets Our position went up by five million dollars from 40 million six eight six to 45 408 And then you look at the restricted Net deposits with bond trustees that dropped a little bit again drawdowns And then sort of all the other assets and liabilities netted together is the unrestricted And you can see generally That declined so our net position For unrestricted declined, but all totaled up that's more than offset by the net investment in capital assets So our total net position improved from 63 point 172 million to 64 point 811 million and that's uh 2.6 percent Questions on the balance sheet Now we'll move to The statements of revenues expenses and changes in net position Better known as the income statement or the p&l Okay, so here A couple things that this will be hopefully the most sort of familiar territory It's the the territory that we cover each month when we do the financial review Um So you can see that sales increased from 48.9 million to 50.5 million That's largely result of the 3.95 percent rate increase that we put in effect In august 1st, uh 2022 recently approved by the puc Other revenues, um increased From 11.1 million to 12.4 million That is Largely actually program cost reimbursements from e eu REC revenues are in there, but they are not contributing to the increase They actually decrease slightly from 22 to 23 Not due to pricing, but due to volume of RECs available for sale Due to you know like as a result of production renewable generation production So you can see total operating revenues net of our little uncollectible account provision Increased from 59.47 million to 62.816 million Now we come down to the expense part of it Production expenses that that's everything related to our generation assets or 50 share of mcneal the gas turbine When you ski one our solar assets, so all of those expenses Roll up in that production line those expenses increased by Oh, we don't have a percent share. I'm sorry I'm 11. Sorry from yeah 11.32 9 percent 11.32 9 million to 12.17 million Hang on if I find the right piece of paper I do have A percent which I find this more useful. Here we go So that's 7.4 percent from 22 to 23 Purchased power which includes our power contracts capacity charges And transmission Decreased from 14.745 million To 13 and a half million that is a decrease of just under 8 percent That's a whole bunch of puts and takes in there as you know A lot of that was the amortization of that winter energy revenue shortfall But also we Received less production from vermont wind But we had had higher mystic capacity charges and higher hydra kebek Chargers as well And then transmission costs in there also increased by just over 400 thousand dollars so lots lots of contributing factors in purchase power, but overall Expenses decreased as a result of that accounting treatment Um What is in other power supply? ISO new England administration charges. I think we can skip that transmission. Oh, I just covered that I misspoke so the transubstant is separately separate. You can see that they're 8.9 up to 9.3 million that's a 4.7 percent increase Distribution or all of the expenses related to Operation maintenance of our distribution plant Street lights meters overhead underground all of that Those expenses actually decreased modestly from 3.3 million to 3.17 million Customer accounting service and sales Those expenses increased quite a bit from just under 6 million to 7.7 million most of that was due to Increased EU program activity expenses so as we saw Up here and other revenues So EU both provides revenue and its expense So they sort of net against each other in the operating the BED fund But they appear on the top and bottom of the Income statement. Sorry Oh went Administrative administrative and general Increased by quite a lot 36.4 million most of that however is the Pension expense adjustment that we took at the very end of the year I looked through all the other captions and they are They were pretty much the same as FY 22 like nothing really to remark upon in the in the Management disclosure Depreciation increased modestly about the same taxes about the same so Those were I think the really big highlights. Let me look down dividends or the dividends from our velco investment interesting come went up a lot because of interest rates Grant income decreased just because of the timing of grants and what we apply for and what we receive And our interest expense on debt went up Just according to the bond interest schedules So coming sorry coming down here You can see the increase in net position was and that's basically the same as net income 1.638 million compared to 1.9 million Last year and then that net position at the very bottom ties to the net position that we just discussed on the balance sheet Questions on the income statement All right, this one is the busiest the cash flow But it is understandable so It's it's actually kind of looking at cash flows, you know like From different perspectives. So the top little section Is the cash flows from our operating activities kind of the day-to-day stuff So you can see that we got more cash from sales to customers, right because of that revenue increase because of the rate increase We talked about we got more cash from other revenues mostly EU which we talked about So a lot of these are translatable right back to the income statement that we just talked about And then you know from those cash inflows you deduct all the payments made for the various operating activities that we have to fund and So the most interesting thing is if you look at the net cash provided by operating activities You can see in 2022. It was 8.616 million 2023 was only 2.5 million So even though and we've talked about this the accounting adjustment for the winter energy revenue shortfall Makes our expenses less, but that doesn't make the cash inflow any greater if you know what if you can follow me right because um We still received less cash revenue from winter energy sales Even though we are able to get accounting treatment to record less expense for that same period And that as you know, we've been talking about the cash position every month and there you can see kind of at a comparative basis The net cash provided in fy 23 compared to fy 22 and then the next little section is sort of Your cash related to your your capital expenses your capital assets your bonds your borrowing and all of that And that one you can see the sign completely flipped from net cash in of 11.7 million to net cash out of 12.8 all of that is due to the construction fund from the 22 revenue bond Flowing in in fy 22 and you can see only 5.65 million flowed in In fy 23 because we didn't do anywhere near the amount of new debt issuance. So that that makes sense Non-capital financing that's the pilot basically so that goes up as much as the payment and move taxes does cash flows and we're investing that's You know the amounts in the construction fund And a couple of our other investments that we have invested in t-bills. So this is kind of You know what happened with those what did you deposit with the bond trustee in the construction fund or what did you withdraw? What was your interest on those? So you can see that one Had a big sign flip as well because instead of depositing with bond trustees. We were withdrawing And so then then these cash and cash equivalents at the beginning of the year these In the end of the year these tie right back to the cash on the Balance sheet. So it's sort of another way of getting to the cash that's on the balance sheet And then the bottom is just really a reconciliation which I won't it's sort of like check your math that That all of these things tie out. So we won't I won't walk you through that Questions on cash flow And then we'll briefly go over The eu statements as I said they look quite a bit different So for the eu is a very simple statement of net position simple balance sheet assets liabilities As we've just discussed e eu spending was up a lot in fy 23 So you can see that reflected in the lower cash balance the cash change from 3.7 to 1.8 million Ars about the same ap, you know, it's just timing. So really most of the new story here is the Decrease in cash related to increased e eu program expenditures And then the final page is Kind of a simple income statement for the eu So here you can see the energy efficiency charge collections from customers the revenue we get From the forward capacity market and the regional greenhouse gas initiative For efficiency savings So Overall total additions decreased By about half a million dollars most of that due to a lower eec charge And then you can see payments for programs jumped as we've been talking about And the rest of it's Pretty small potatoes and not a lot of change from year to year So that's what I had on the walkthrough of fy 23 I need questions on that Move on to number seven the september Fy 24 financials notes on these See everything, okay So september fy 24. Yes, okay, so in september this is a little small but um Our Net income was five hundred and thirty nine thousand dollars Compared to a budgeted net loss of four hundred and eighty two thousand dollars So we did quite a bit better than budget by just over a million dollars Reasons for that are essentially like three big ones First one is sales to customers was higher than budget by 216,000 Both residential and commercial sales were were up Other revenues was were down most of that was eu it wasn't direct delivery month The second big reason was power supply expense net power supply expense was favorable to budget by 454 thousand dollars number of reasons Contributing to that Fuel was favorable by 283,000 So mcneal ran a little bit at the beginning of september when it was hot and then Was offline the rest of the month essentially for a fall maintenance outage Uh, so we saved on fuel compared to budget Transmission expense was also favorable by 125 thousand dollars Most of that due to cool weather in august which meant that the peak load was lower and that affects the transmission rate for the september period And then we also had a minor Favorable variance and purchased power We had lower wind production Which created savings, but less mcneal and less wind production also meant that we had higher iso exchange expenses than budget Yeah, you said the three three factors the middle factor is there So the first factor was sales. Yep second factor is power supply and then I haven't gotten to the third one yet Okay, you said that okay, so it was a component of sales I think I used that there's a component of sales that was down I think maybe it was the EU. Oh, that's yeah other revenues. Yeah, sorry Mentioned three things so far, but only two of them were the big three Is there is there a why for the down and is it just just you know blips or changes in activity Or yeah, EU is kind of driven by what customers are up to right like what our building owners doing What are homeowners doing with appliance replacements or heat pumps or whatever? If there was like a yeah grand why or I don't know normal fluctuation great, okay, not that I know of yeah Not one of the big three was sort of every other everything else that's operating expense. That was only $106,000 Worse than budget which in that line is is not a lot of variance the third big reason for the Better than budget performance was in Other income and deductions where you can see the $606,000 favorable variance Most of that is the grant revenue that we received for the electric bucket truck Being recorded in September So those were the big contributors to the Million dollar favorable variance so year to date we're at a net income of about 2.6 million Paired to a budgeted net income of $900,000. So that's 1.674 better than budget I'll say at this point that as of q1 Things look good But I do want to give you a heads up that we have We're continuing to forecast and we've got some concerning things in the forecast Mostly in the power supply area Um Energy forwards are down Which is bad for us because we're assuming excess energy to sell in the winter We're projecting about a 1.4 million dollars more expense in In purchase power for the remainder of the year Hydro-cubec prices are linked to the forward so that like we've got a little bit of an offset and that the hq prices down But that's nothing compared to the 1.4 million Dollar projection at this point And then we're also projecting 815 thousand dollars Less in rec revenue for the remainder of the fiscal year Because of the lower wind production lower mcneil production That we've seen sort of earlier in the calendar year So Things are good at this point, but we are pretty cautious Going into the winter a lot of it will as it always does depend on those winter energy prices So we budgeted for them this year, which we hadn't been able to NFY 22 sorry NFY 23 because we didn't know about it I think I'm trying to think about the forecast. I think like month to month we sort of budgeted a flat rate for mystic But in actuality like it goes up and down depending on sort of loads in new england So some months were worse off like september. I know The mystic charge was actually better than we had budgeted But that's not going to always be the case and I think I don't remember if uh, yeah the the better The there was a short term betterment, but if you look back to the history of mystic We're not ready to say that it's going to be better for the year than we projected If you will So like you say it's month to month variation and not not yet a Any kind of vision that it's going to be cheaper than we thought for the year for the fiscal year Which one to see that that we you know, it seems like we got Call there Yeah, I think we're forecasting it to be a little bit higher than we've budgeted but but I mean a little bit like a hundred thousand or less Yeah, this is not the same situation as prevailed last year where we didn't know it was going on and therefore we had zero for it Now we're looking at the difference between what we've projected and what it's going to come in at and that's looking to be Relatively small. I again like I say briefly. I thought maybe we could forecast a reduction. I think that's premature Thank you, james other questions on Kind of the operating statement. Oh, sorry the income statement Okay, let's go down to capital spending um through september Um, sorry in september we spent 1.467 million compared to our budget of 2.3 We're about 13 percent through the capital budget for the entire year This the general line which was overinflated previously For the bucket truck is now kind of the net correct amount. So that amount's sort of back in line with where it should be Most of the variance here is in uh production. I think timing of McNeill projects And then moving down to cash we had as of september 30th 8.893 million In the operating cash that compares favorably I'm happy to say to our budgeted cash number about eight and a half million Um, so as I said last month that reflects the bucket truck grant and the three million dollar geo issuance That both occurred in september And you know the higher sales and the reduced expenses, right that we just discussed So that brings us to a 12 months ended debt service coverage ratio of 4.39 adjusted debt service coverage 1.45 And 135 days cash on hand includes my report It's a little high at the moment To kind of what we project might ultimately be just to set fair expectation But yeah, we're we're delighted to see those numbers. Yeah I did want to just one mention kind of one other thing to preview we had discussed Um, we are already starting to plan for the f of 25 budget season um and I did a presentation for employees kind of on sort of bd's sort of budget 101 um And uh Obviously, I know you all have like been through the budget several times except for commissioner Anderson Lots of budget experience But I would was uh proposing to to give you a version of that presentation because I did some stuff where I looked at historical trends Which I think could be interesting As we kind of head into the budget discussion for f y 25 So I'll uh figure out with darin the best month I was thinking maybe in january when we do our budget kickoff But we'll try to fit it in on an agenda when there's not too much other stuff So just wanted to preview that Any questions? Thanks all right, um That moves us on to agenda item number eight this skata oms dms project overview with linear Feel free to explain any and all acronyms All right, good evening My name is muneer gasti. I'm the manager for utility services And engineering and kind of go over one of our fiscal year 24 projects The advanced distribution management system project this is really Three phases projects, which will include the year A new supervisor control and data acquisition system, which is called skata Plus an outage management system plus a distribution management system The s s supervisor control and data acquisition system What's what's the skated what the function of the skata system? It will provide real time in monitoring and control of the electric distribution system for our system operators We have over 200 plus over 200 devices in the field that's out controlled by the skata system And this would allow our system operators to control the electrical distribution systems Remotely without the need to dispatch our line crews So technically they can open any breakers devices in the field from our control center And sectionalized the outage The current skata systems that we have was purchased over 10 years ago The last up that was last upgraded in year 2016 And is considered past its end of life And we have currently very limited vendor support Through march 2024 It's hard to believe right? Yeah seems like yesterday. Yes, we did that. Yeah So in april 2023 be it put out a request for a proposal for a new advanced distribution management system and adms This new adms will have many of the same skata functions as our legacy system Along with new enhancements of an outage management system and oms And the distribution management dms This this functionality will enhance system operation while providing Better system better reliability and power quality for our customers The outage management system or the oms will provide the ed with the following functions Outage locate locations. The system will leverage advanced Advanced metering infrastructure the mi system the customer information system cis interactive voice response the ivr And all the skata connected field devices to provide the location where the default is Or the abnormal condition on our system Uh, uh, there will be a new customer outage Portal a new website that will provide customers with outage locations as well as estimated time of restorations That we currently don't have And the mobile crew management which Provide us with a real-time location of our crews to optimize workflow as well as outage restorations Uh customer as for customer call handling the system will leverage the ivr to manage the large volume of Outage calls and provide the ed customer care team with a web-based interface to record the outage calls and create outage tickets Outage notifications customer notifications Emails and or text messages Alert will be emailed to customers affected by outages The last part of this project would be the distribution management system or the dms And this is mostly for for the enhancements of our reliability And uh provide our system operators really with a tool for them to be trained Uh, you know, they can simulate outages on our system and and and get trained on how to restore services Uh, so we'll have uh, we'll get we'll obtain trained simulator for our system operator And then the really the neat function which was the most important function I believe is the automatic fault location isolation and service restoration Which is basically the system by itself will isolate will isolate the end the the outage And restore service to Most of the customers have not been impacted by the outage And all this will happen automatically without the our system operator Uh, and then the last the benefit would be the distribution system optimizations tools For voltage and power quality We would be able to really adjust the voltages based on the mi Informations for voltage that we we can obtain and we have interface with So we don't have to run for the whole year for instance distribution system at its highest voltage So we can you know, that will be optimized based on the lowest voltage on the end of the feeders And just as a note obviously when we talk about automations, it's not going to happen overnight The recommended approach is basically to run it to run it in advisory mode Um for like a year to do to you know to get trust it and make sure you you have run through all the possible scenarios Uh, so basically it will provide the dispatcher with This is how where this is how you should isolate and restore the system In writing step by step and they will review it and if everything is correct. They will implement it And and after like a year to two everybody, you know, if we believe everything is worked out And if it's working the way we want it, then we'll switch it to the automation mode Have you chosen a vendor yet? I know what you said you have in the process Yeah, we are in the process of That You know the project timelines we We're right now. We're targeting To come back on december 11 For presenting the vendor selection as well as for your recommendation for of contract terms to the city council You know the the phase one it's going to be this keda implementations And we hope to have that implemented by this, you know late winter spring of fiscal year 24 And along with that we're going to have we we're going to install a new skeda video wall And that one will be in the new And it will be installed in the new dispatch area, which is the former auditorium Right now it's under really constructions To accommodate the new the new dispatch center will be in this room behind you And then the phase two and phase three will be happening Which are the dms and the yms will be happening in fiscal year 25 26 So minera you're looking to change a lot of the switches or can they be retrofitted? No, we're not changing anything. No switches in the field. No good It doesn't involve a different some sort of new equipment that that will do exactly what you're Well, I mean yeah, we're gonna have really new software system here installed in the control room And new servers I have a question which I don't Know is necessarily embedded in this processor in this RFP or what you're looking for, but I'm just curious if there is a connection so As you're talking about these outages and thinking about outages and isolating them and is there um Is there any? I'm thinking about resilience and thinking about like community resilience and thinking about different um customers and being able to identify to make things up like fire stations versus non-occupied office building Is there some of that? Are you that's the system as it starts to isolate or show you more? Is that Something you don't already have and it's going to provide or is that something that's completely different? Right now. Sorry about the ignorance in that minute right now All this we have it in really in a procedure step by step procedure We have an outage here. This is what you do where our system operators. They follow that So we're going to take all this and try to input it into the new system So the system by itself based on the information they receive from the mi From the cis from the phone calls They will try they will locate the fault and then based on our how we resource the system They will implement that automatically got it. So you're gonna you're gonna give it kind of that intellect of like What is a preferred paths within? Yes, hopefully it can be smart and how much how much, you know, you can put on this device for power Because there's limitations on how much you can put Other questions Sounds like a very ambitious project. I'm looking forward to watching it come through If anybody to get a chance you get a check out the the skate walls around the call Yeah, and also I forget to mention this is really cross departmental Team projects, you know, we got Employee from engineering dispatch Customer care it they're all involved in this project Any other questions But having been through situations like this myself If you're coming up to end of life on your software, it's going to take a while for this implementation to be like set Do you have backup plans for well contingency plans? Yes, basically, uh, the critical pass is phase one, which is gonna be done with We're hoping that to get it done before our made the support ends Any others Thanks, man. Yeah, thank you All right now to um agenda topic number nine and when we've all been waiting for only comes once a year Always a big moment. Well, it's a big moment. He's got five minutes for your for your viewing pleasure The clock doesn't start telling you my screen up. Oh, come on bd 2023 property and Okay, I don't know what industrial being that means means renewal Discussion vote with Boiler and machinery Boiler and machine. Thank you. Yeah, that acronym can be tricky Okay, good evening all um Thank you for that intro I think you've all been through this before except commissioner Anderson So I had heard earlier today through ebay tickets. We're going like 300 dollars a piece that might have changed Last couple hours, but so this is the annual property boiler machinery It's the beast of our insurance line So I come in front of you for a couple reasons one legal had weighed in a couple years ago because It spans over two fiscal years So it's one reason and just the magnitude of the dollar amount. I think that it's just Due diligence to come in front of you Even though it's a budgeted line item and it's been adopted I think it's only right. So that's why you see me once a year here for this talk so These just the timing sometimes the electric commission depending on when the meetings fall in this case, you're first up So I will be asking for Again, this is a not to exceed amount the final amount This is common this line renews on november 20th And so the underwriters for the other carers take you right to the last day typically are right up to it so Today I'm going to present the Not to exceed amount and then next monday night the board of finance and then on 20th typically it's a consent agenda on november 20th So that's how those three will line up in order So let's see the recommendation here Is tonight to ask you for you to renew our property boiler machinery insurance or approve it We have four carriers. This this line is so large. Typically you have one insurance carrier writing writing one line of business This is our 22nd year with aig or aig supported with ziric star tech and aegis So it runs from a november 20th of 23 through 24 And again, I mentioned a not to exceed premium of seven seven seven 78 683 and 70. So that is a large number Okay Again repeating what you've probably heard before what's covered. It's the tangible assets things you can put your hands on physical assets So and it covers perils Fire lightning smoke explosions fire, of course being our biggest concern particularly with the mcneil station Inside outside property furniture computers and so on the things that it typically doesn't come in what we call tnd Transmission distribution poles overhead lines underground lines That's common not just for us but any utility particularly in northeast because of snow loads and winter weather and stuff So, um, like I mentioned our current status is with those four carriers They write on a equal paper if you will and they have what's called a pro quote a share They share in the losses and share in the premiums, but in general we consider it's on aig paper It's expiring like I said November 20th. We currently pay up annual premiums a little over 683,000 What's the new one? Yep seven a little over seven uh 78 Yes, it's huge What's in your handouts and I'm not going to cover all of them today I wish I have specific questions, but hick augen boardman as you know is our insurance agent And they represent the city too in many lines including workers comp and auto We're on This particular line with them. I have the bd property bulletin machinery. There's a two tab Excel exhibit that talks about the history of this line all the way back for the last 22 23 years If you've looked at that it's quite a spike in 2019 That's when we went from the mid 200 000s to the upper 500 000s and so on so that's where we are today a significant increase almost exponential The third item in your handout was hick augen boardman again a that Structured chart we call the pro quota share program that shows the four carriers and their assets and their shares of those losses And the last thing is a cover letter which i'll cover bits and pieces of that today from myself to you all um points of interest So our insurance agent hick augen boardman through paul plunkett Amy merit has have worked diligently with those existing four carriers This starts about a day after we renew It takes quite a while to negotiate these terms and conditions They're still in negotiations, which is normal with them to finalize capacity. That's the largest amount that an insurance company is willing to write And our total insurable values how much we actually property We have to ensure Deductibles and premiums and so there's a lot of things on the table that we're looking at to increase or decrease Trying to keep that premium down at the same time offer coverage The just pure numbers Be remiss of it and mentioned it so this premium Increasing from lashers amount from 683 if you will to a not to exceed to emphasize that 778 million Which is 6.4 percent higher than we had estimated at renewal on 1120 in our fiscal 20 year budget 778,000 those are sentences. Yeah, did I say you said million? Oh, yeah, sorry It's bad, but it's not that bad. Yeah, thank you. Yeah, sorry So Through our insurance agent there was a possibility again of achieving a lower renewal premium It won't be a lot I'm going to sit here and pretend to guess at it but I've asked paul to maybe quantify that if I had to guess just sitting here maybe 20 to 30,000 I did another decrease, but it's not going to go down by 100,000 Using deductible options and last-minute pricing still to be finalized So similar to last year the total amount of property that's on our policy will be capped at 175 million Versus our current fully scheduled tiv if you will of a little over 319 million So a good question to ask and I think some people have asked tonight You know, so why is our why are we increasing of the total amounts capped because it's pure Exposure loss pure statistics probability if you have 10 locations and you're ensuring 400 million dollars of property Versus 200 million, but each of them are capped. You're still going to see it's an increased exposure to those underage of the insurance companies So you can expect to see your premiums go up our tiv our total insurable value went up by 21% this year So that's why that as alarming as this is quite honestly, I thought it was going to be worse. So If there was no rate increase the insurance companies with which there wasn't they had flat increases We had our total insurable value went up by 21% Even though it was capped But that exposure that risk to those underwriters and those there's a lot of property out there And you could have losses at multiple locations and so on so that's that determined pardon who determines the You said you said the value of the property went up Yeah, that's a great question. So that comes every year from our finest department So they tracking if you remember the little blue stickers Jim remembers in his time But it's beyond computers and desks and filing cabinets So that all rolled up into one big number and I get those every year typically between april and june from emily's group That's how we that's a real number. So it's not just made up. It's everything the insurance companies need to know that in case you had a total loss so Yeah Okay, considerations from hickock and boardman. I think that's a fair question saying as we see these go up What are we doing to try to reel this in or mitigate it? so bullet item one continued diligence with our current carriers those four they're running right writing it right now Towards increasing their capacity meaning can you write a little bit more while course lowering the rate? Especially that relates to the mcneal Neal assets the mcneal station, of course is a higher risk much different than the building we're sitting in here So that of course makes up a large percentage of our premium Another thing they've been looking at us for a while, but a little more seriously now separating bd's. We the city Beth knows us of commissioner anerson, excuse me Separating bd's auto workers cop from the city's program. So as long as it doesn't hurt either entity Those are similar exposures. We share the same auto policy with the police department and so on So they're looking into that ours renews seven one the city's has a 1231. So It helps have the same broker work though. So we're looking into that What we've really done in kudos to moneer and particularly paul picnic He's still here and his crew rodney dollar. We spent a lot of time looking at captives If you don't know much about vermont used to be third in the world for the captive market vermuda came in islands And right here vermont captive insurance solution the vca they do a lot with the captives this year We've moved to number one. So that's significant little tiny vermont that goes all the way back to howard dean days So So we're looking at that because people say we are in vermont. Why aren't you at least exploring a captive? And so they've worked we are working hard with hickock and bourbon with fm global There's two different types. There's many different types of captives But fm global did give us a quote for what they call guaranteed cost program. That's basically our current insurance We have now that's just traditional insurance that came in at 973 thousand 285 dollars That's 25 higher than are not to exceed quote. So just to give you an idea There's not a lot of players in the in the world and in our market And so that's a really good quote on the flip side. They have a captive program Those numbers are forthcoming that could be you know down the road months or even a year down the road But we're looking into that into what we call rent a captive Which is sort of like the building block of a captive program You can go then to a single cell captive and on and on there's numerous types of captives where basically you ensure the Your parent company and you're basically sharing those losses You just set aside a little bit of your premium and over time with no losses Which we haven't had any a long time. Um, you can build some equity and save some money So that's I tell the analogy of like, um, bless you of renting or buying a house So why do people if you're renting over and over for 30 years, so I'm throwing money away Why not buy a house? But if you can't afford that house, you're going to rent for a while And so that's a very quick analogy of captive Okay, uh back to my slides. I'm looking at lorry We're examining I can mention the possibility of a single cell captive in addition to fm global I won't name them but another company we reached out to and that quote was just it was out of the out of the market So minimum premium of a million dollars and so on so we didn't go down that path very long Some of the things I talked about you can always just like your homeowners your auto you can Consider increasing your existing deductibles. We're looking into that mcneal from a million dollars to 2 million And the gas turbine from 550,000 up to a million I think that's a typo on my point. I think they should say 500,000 So those are some of the things we do you would never want to raise deductible like to 5 million But at some point there's a break-even point where if you save enough premium, it's worth increasing those Um, and we've also asked the current carriers to increase the cap that we've talked about already from 175 million to 200 million Especially given like I mentioned before the total insurable value growth of a little over 23 percent of mcneal So the rest is just numbers and soon I'll get to the resolution I mentioned before that our fiscal 20 year budget amount of 711. There's again a typo 711,410 Producing February 23 So we do the budgets in january or february and the line renews on november 20th So if you can picture we've got Four or five months the five months at one amount from july to november or so and then remaining years So your annual budgets made up of two different insurance policies to make up that amount So we saw again big numbers Um That this not to see premium amassing you to approve tonight of 778,683 Would amount to a 6.4 percent change in our estimated renewal premium that I'd guess back in january working with the broker Or a 13.9 increase over our expiring premium Okay, um, and the last point is the amount the amount that I put in Uh, we put in a three percent Um Excuse me two percent increase in our total insurable value and a five percent We had guessed that five percent pick up more than back in january of this particular line So when you add those together, uh, I say only amounts to a 3.85 percent increase in our Right now as we stand in our fiscal 24 budget on the slide on so percentage wise not a lot premium It's still like around 90,000. It's a big ticket item And below here i've got your motion and but i'm here to answer any questions in my app Let the record show 11 minutes 45 seconds That's as fast as I can do it We got a timer right here Questions questions Thank you Is always very through and uh Do diligence paul appreciate all your work and and and paul Again any questions If not, then i'll entertain a motion If this is so desired I can't see the screen. So someone of you guys are gonna have to take it off Even with our glasses. I will be able to read it. I think I can read it I make a motion to recommend the city council that darin springer BED general manager or his designees authorized to renew bd's property b&m insurance for the period of of november 20th 2023 through november 20th 2024 with a not to exceed premium of 778 683 and 70 cents as outlined in this memo subject to review and approval of the city attorney's office and the board of finance and the city council We have a motion. Do we have a second second? Motion and second and discussion on the motion Hearing none and all those in favor say Say aye. Aye. All those opposed cna Guys have it the motion passes Thank you paul. Thank you very much. Good job paul. Very good work. That's always Just a couple That brings us to item number 10, which again is another opportunity for commissioners post meeting to any last-minute thoughts or ideas or things to want to bring up Other than Anything could I reference one thing? I know it's not technically the right moment It's in the report, but it's kind of buried and it's it's actually fairly significant. I don't know that we've touched on it fully BED was awarded a significant DOE grant Department of energy We have it here. It's called the building giants Which has an acronym of a building grid edge integration and aggregation network of thermal storage Great acronym But really it's a it's a grant is it 1.2 million roughly Yep So Where we are able to use it to enable a lot of end use devices like we think about the heat pump pilot program That we're doing right now with sensible devices for example This could really enable this in kind of a much bigger way And not only in the heat pump context, but in other contexts. So I see james on the screen His team was the lead in working on this grant with finance and with others And I think we were the only entity in the state of vermont that received one of these grants this round It was a very competitive process So I probably should have elevated that to the top of the report But I didn't want to miss the opportunity to flag it and james maybe has a comment or two as well Oh, just to freddy freddy and emily did an awful lot of work on the pre and post too So again, I want to say that but it's a 1.2 million, but it is a match So we there that is the the actual grant portion is 1.2. The project is is more like 2.4 So it's a it's a pretty good size project And yes, we were the only entity of all of the vermont utilities that did get an award under that grant offering They're all jealous Yeah, thank you freddy That's good news um anything else Going once going twice I'll entertain a motion Make the motion to adjourn Motion made do I have a second? Motion and seconded All in favor of adjourning Aye. Aye. Anybody opposed? We stand adjourned. Thank you everyone. Thank you