 of the Board of Electric Commissioners. This is Wednesday, May 12th, just a little bit past 5.30 p.m. First up on the agenda is the agenda itself. And I just wanna highlight that the agenda itself is going to change a bit. There's been, you know, for folks who may watch at some point, what has been discussed a few times now, including last Wednesday, is really trying to get a better sense of where we are for fiscal year 2022 budget. And what that means in terms of potentially moving forward with a rape case. Last Wednesday, we did have a special meeting so that the committee, the board could have an opportunity to see where we landed with the budget the last time we would have seen it, would have been our regular meeting in April. So we asked for an additional meeting that occurred last Wednesday to look at the budget and to get a sense of what the shortfall and the gap was. And at that meeting, there was no vote, just a discussion in FYI. Tonight, we were planning on discussing the budget and voting on a rape case. What we're going to do instead is basically have a further update from the general manager and the team at Burlington Electric with the goal of also having another special meeting next Wednesday. And I recognize, I apologize, Commissioner Moody, that this is being picked on an evening that you won't be able to join. But so there are some changes to the agenda, primarily that it's going to be discussion and not necessarily vote. And a general manager Springer, if you want to weigh in a little bit more and provide any further clarity to what I just said, I'd appreciate it. Sure, thank you. First, we appreciate that the commission will have met on successive Wednesdays for three weeks in a row under this schedule. And appreciate everybody's patience as we've developed the budget and the rape case. We are not prepared tonight to put forward a budget and rape proposal for a vote and we'll be prepared to do so next Wednesday if there is a special meeting agreed to. We would recommend, I believe, that the items six, seven, and eight, which were scheduled for a vote, all of which pertain to fiscal year 22, that those be not a vote. But as you mentioned, a discussion for this evening will provide additional detail as we can. And then we would propose that those three items be up for a vote at a special meeting next Wednesday. And further, I can say that between now and next Wednesday, likely on Monday morning, we will put out a public announcement about the proposed budget and rape case so that members of the public who are interested in weighing in with the commission would have the opportunity to do so at public forum next week. And so we can ensure there's some public process prior to advancing this to the city council on board of finance. And I just want to highlight, this is the first time in over a decade that we're talking about a rape case. And hence the repeated requests for special meetings and also the real desire to, as best as possible, alert and share and inform and communicate with the public that this is where we're at and everything does go up in price. And we've been incredibly fortunate that the team at BED has figured out how not to do that for over a decade. But that is the only change to the agenda for today. Correct? So, assuming nobody else has any other changes to the agenda, although commissioner Whitaker, I see your little BW keeps going. Did you want to say something? No, no, this must be me breathing. Yeah. I'm glad you're breathing, that's a good thing. Okay, so we're going to move on to the second item of the agenda, which is two parts. There are the approval or review and discussion of approval for minutes of the April 14th, 2021 meeting, as well as the minutes of the May 5th, 2021 meeting. And if folks saw any errors, content substance-wise, now is a great time to raise those concerns. And if there are editorial items, shoot an email to Lori. Let's see, this is Bob. I have one question about page 16 of the 14 April minutes. Wait a minute, let me find that. Yeah, on page six of the very last paragraph, the second sentence, I wasn't quite sure how to interpret it. There may be a question of just wording. I can work it out with Lori or should I bring it? Should I actually quote it to you? Is this the graph showed a business as usual as that? If you think it's just an edit change, that's a Lori question, but if you're not understanding it, then we should talk through that. Okay, I guess I'm not understanding it that there is a reduction of 9% compared with the net zero trajectory. Says whatever it says. I can clarify that. I see the sense that you're speaking about. So I think the presentation graph showed from the original net zero roadmap, a business as usual trajectory that would reduce fossil fuel use around 9%, had we not taken any of the additional steps outlined in the net zero roadmap, just business as usual trajectory is 9% reduction in fossil fuel use. So I think that sentence and maybe it needs an edit, we can clarify further, but I think it's just stating that the graph shows that case, the business as usual case, compared to the net zero case. Okay, the net zero should be better, right? Absolutely. Okay, it seems to say the opposite here. So yes, please have a look at it. All right, thank you. That's all. Thank you, commissioners. Any other observations or clarification, Franks and commissioners? Okay, hearing none, it'd be great if we, do we have to do this in two separate votes or can we do this in one to approve both sets? In the past, we've done it two separate votes. Okay, let's do two separate ones, just for consistency. So if someone could make a motion for the minutes of the April 14th meeting. I move that we accept the minutes as amended according to the discussion we just had of the April 14th minutes. I'll second. Great, Lori. Commissioner Shagman. Aye. Commissioner Herendine. Aye. Commissioner Modi. Aye. Commissioner Stevens. Aye. Commissioner Whitaker. Aye. Thank you. And if someone could make a motion for the minutes of the May 5th special meeting last week. I move that we accept the minutes of the April 5th meeting. May 5th. Jim second. Yes, I did. Yeah. Commissioner Shagman. Aye. Commissioner Herendine. Aye. Commissioner Modi. Aye. Commissioner Stevens. Aye. Commissioner Whitaker. Aye. Great, thank you. Great, so next we have the public forum. Lori, do we have anyone with us? We do. Excellent. Yes, I'm not sure how to pronounce his last name, but Daniel Montu. Hey, I don't really have anything to say. I'm just learning a little more about what the commission does. So consider me a fly on the wall. Thank you. Thank you. Well, thanks for joining. Are you a, do you pay bills into Burlington Electric? I do, yeah. So I guess this does kind of concern me. The electric vehicle stuff is pretty cool. Right there. That's all I got to say. All right. Well, thank you for joining, Daniel. Yes, thank you for joining. It's not often we get members of the public and we really appreciate it and do the task. And thank you. Well, we often joke, Daniel, also that, you know, part of the world of electricity is making sure that it's always working. And so it starts to become invisible. And so it's always unusual we have someone from the public because as long as it's working well, we don't typically hear from someone. So thanks for joining. Next up, we do have the commissioner's corner. This is our discussion opportunity. If anyone has anything to raise. Couple of quick things. This is Bob. Thank you, Laurie and Paul Alexander and Mr. Charbonneau, is that right? For actually getting me some hard copy last week. It turns out for me, it's great. I really was able to interact with all the stuff and otherwise I couldn't have. So thank you for that special effort. And I look forward to getting hard copy in the future. And as I've said, I'm willing to do some delay work myself if needed. Number two, James, you followed up a while ago on a question about economics of heat pump rebates. And I had sent in a reply asking something about gas and all that. It's not a rush job, but please do follow us for some time. We'll do it. Sorry, I was on vacation and I've been straight out a bit. So I will get back to you on that. All right, thank you. That's it. Any other commissioner comments? Okay. Commissioner Whitaker, no? No, I'm just saying nothing. No, acknowledging you. Okay. Thank you. I just want to ask the other commissioners in the event that we end up saying let's have a special meeting next Wednesday. Typically it's around the 5.30 time. Understanding that Commissioner Moody cannot make it. Can everybody else? Yes, I can. Yep. Yes, okay. And is there any sort of need to shift it to six or is that 5.30 standing time? Okay, great. 5.30. Okay, excellent, thanks. That'll help with the planning as we move forward. So next on the agenda item is the general manager update. This is Nora update. And then following that are the financials with Emily. So thank you, Darren. Thank you. Couple items to talk about in the update, obviously the budget, which we'll talk about a little bit more. So I'll refrain from getting into that right now. We had a couple other items that I did want to highlight for the commission. One of which is there's a lot of discussion at the city level, as there is in organizations across the country about return to work, what that looks like. And when I say return to work, I really should say return to the office because everybody's been working remotely very productively at BED. We've done a very, very good employee survey with the help of Jen Green and Katie Dory and Emily and our HR with the city, looking at kind of creating a baseline comparison between the August employee survey we did amidst the pandemic and now relative to questions such as communication, how much information people are getting, how connected they feel to their colleagues, but also asking some questions aimed at productivity during the pandemic from employees and supervisors. Do we feel like we've been more productive, less productive, similarly productive? If there were remote work options offered for employees who would be eligible, would they prefer to continue with that on a hybrid basis, on a more fully remote work basis? Would people prefer a full return to the office? A number of different questions like that. We're digesting the results this week. We don't have them fully tabulated and in kind of slide form yet, although I think we will in the coming weeks be able to share those with all employees and with the commission. I think it's probably no surprise that there is a significant number of BEDers who are interested in continuing with remote work options, even going forward from the July 4th date, which is the date that the state and the city have talked about as being kind of the full reopening date. So we are going to look at these survey results. We're going to explore options and we're going to maybe pilot some things and test some approaches before we settle on a permanent policy. But I think as we've noted with the NETZERO roadmap, we've seen a significant drop in emissions associated with driving, commuting and we would like to play a leading role as an organization within the city if we can in piloting continued remote work options so people can drive less and have the benefit of remote work where it's possible. And we recognize that some of our employees have had to be on site during the pandemic. For some of them, they may be able to take advantage of remote work in limited circumstances and some folks their job requires that they're on site. And so we want to make sure that whatever policy we would introduce would be fair and equitable across the workforce as much as possible. So that's one item. We'll share more on the results of that survey and any remote work thinking probably, certainly in the June meeting, we could talk to that if we'd like to have an agenda item around it or I can provide some updates in the GM report. In addition, I wanted to mention that the, you know, in terms of- Can I ask a question? Sorry. You know, as I read the department highlights, there's been a lot of effort and I support it to ensure that airflow is being improved in a variety of buildings that Burlington Electric provides support for. And I guess question just because we need you all to be breathing well as well. I assume you've all, you've looked at your own, you know, McNeil, BED here on Pine Street. You've looked at what those HVAC ventilation systems, how they're performing. Wondering if you could give a little quick update in terms of what that looks like as you start to think about returning to work. I would love to, but I don't want to rob Paul Alexander of his moment here. I'm going to ask Paul to give that update. Thank you, GM Springer. Great question, Gabrielle. So yeah, we long have brought in our HVAC contractor into both McNeil and especially Pine Street and replaced where we could the HEPA filters. We met with our energy services team, Bob Boland and Chris Burns were experts in that field and actually changed the airflow rate per minute, you know, cubic feet per minute and all that stuff too, to as high as we could. So it was efficient, but getting those air exchanges as Bob has explained to me. So, and we've also put some of the ultraviolet, if you will, we've got a couple of those filters, one in the lounge down at McNeil Station, lunch room, if you will, and also one at Pine Street, even though we've had very few people obviously in the building. So we've done all that we can do up to this point to making sure that the building is safe and air quality because we know it's a big issue with the mayor and the governor, et cetera. Well, yeah, right. And related to COVID, it's just, you know, that the building on Pine Street is a particular relic of a particular age that wasn't necessarily known for, you know, working with airflow, at least my interpretation, but. Yeah, and we even at the beginning of COVID, if you will, we installed some windows, you know, all the windows in the A building cannot be opened. They're all sealed. So we installed a couple in the B building just to increase some of the airflow when the governor was stating, try to keep windows and doors open while you're working when you can. Obviously for security reasons at night, we have to close those, but. So is it the sense generally that the buildings are appropriate, safe for workers to return? Yes, I would say absolutely. Thanks. Okay. Sorry to interrupt. Please keep going. Thanks, Paul. Paul, thank you very much. That's a great update. And Paul has been keeping us, you know, apprised during our leadership meetings and our all employee meetings about all the different COVID safety protocols and the center for safety team has done a great job in that respect. So just a couple other items. One is I mentioned, I think previously, we will try to provide a draft strategic direction update at the June meeting as well. We have collected some feedback. We just haven't had a chance to synthesize it because all focus has been on the budget as it should be, but we are looking forward to discussing that with the commission in June and then making any further revisions and having a final strategic direction adopted in July. And in addition to that, one last item on the GM report is district energy. We had a significant test at McNeil last week with OEM consultants on site from GE Alstom and great work by Dave and Paul and the entire team at McNeil. We were able to run at 54 megawatts for the entirety of the week last week. Typically we only run at 54 megawatts for a couple of hours for testing purposes, but this was different. This was really to test whether that operation is sustainable without issue and the plant is rated to run at that capacity but hasn't historically run at that capacity for longer periods of time. So with district energy, there are a couple of different ways we can operate and one of those ways would be to have 50 megawatts of electric capacity producing and then have the additional megawatts above 50 be providing additional steam for district energy. The alternative is you can operate at 50 as we usually do and you would see a little bit of reduced electric output as you use some of the thermal energy, some of the production for thermal energy for district energy. So the 54 megawatt test really gives us operational flexibility as we look at different economic and technical ways to have McNeil be a part of the district energy system. It's good news that we had that test and that it went well and it gives us some good discussion opportunities with the joint owners for further developments with district energy. So wanted to mention that and thank the McNeil team for all their work to conduct that test. And those were the updates that I had other than the budget, which I know we will discuss further. Commissioners questions for general manager Springer? Not yet. Nope, it's good. Good summary. Still got a no gas option. At district energy? Right. Yes, district energy is 100% renewable in this proposal. We're looking at McNeil as the primary and then we are exploring options for an electric boiler to be part of a backup system as well, which would run on BED 100% renewable electricity. So there's no additional gas infrastructure involved in this iteration or the proposal. Let me just press it. Does that mean no gas or does that mean no more gas? It means that district energy would not add any additional natural gas infrastructure and actually means less natural gas use obviously for the city because not only would we be providing renewable thermal energy to reduce gas use for customers, but also there's an efficiency gain when we provide a thermal relative to using a boiler, for example, for gas. So that the project would have both an efficiency piece that would reduce natural gas use and a renewable thermal piece. There's absolutely no additional natural gas use contemplated, but a significant reduction that is contemplated. Okay, so if you draw a boundary around the plant, the amount of natural gas coming in would be zero. Can I add? Go ahead, James. Go ahead. I was gonna say, it would not be affected by district energy if we used natural gas to ignite the plant or something like that. You know, we still put it, but it's not. We would not be combusting natural gas to produce district energy heat. All right, thank you. As you know, I'm interested in that. So I do have a question, and this is probably for Emily. Given the comment about updating the strategic direction dashboard, I'm gonna suggest, and first of all, it's helpful to see you winnowing down how many items are here from like two years ago. I'm gonna suggest that on the items like delinquent accounts greater than $500. If our target is really like not applicable, maybe we can put that in there. You know, obviously we'd like it to be zero, but is that reasonable, is that at all achievable? So I think for the like sort of gray spaces that aren't filled in, it'd be great to just, you know, if we think that setting a goal is not representative of any sort of data tracking, then let's just kind of call that out. So it's not like we're comparing where our actuals to something that we haven't set a goal. Does that make sense? Not really. I'm looking at you in the face. Okay, so I would just suggest like so for delinquent accounts greater than $500. I mean, our target would be zero, right? She froze up. I'm back. Sorry. You wouldn't believe I have 5G. Delinquent accounts greater than $500. Clearly we would like that to be zero. Is that at all what life is like? No. So maybe we just say not applicable or NA, some things so that it doesn't look like we haven't figured out what our target is, but rather recognizing that this is a data point that we're tracking. And that's gonna fluctuate and it's not entirely, I mean, to a degree within our control because I know the BED team does work with people who are delinquent to say, can we set up a payment plan? But if it seems like, you know, it's really out of our control, I'd rather be clear that this is a target that is not necessarily achievable or definable. The other thing I wanted to say is I wonder under target that innovates the net zero energy tier three program. If it doesn't make sense to perhaps start to look at the Synapse report and say, okay, number of residential heat pump installs we might need and put a range in there because I think even though, you know, it'll be a striking observation of just how far we have to go to achieve our net zero goals. So I'll throw that out there that, you know, we do have a model now that we can say, this is how many widgets and digits and gadgets we need to actually achieve these goals. And I think, you know, to the degree that Berlin-Tonians say we want certain end products, it's important to be like, and here's our goal and here's where we are and we're making progress, but I think it'll help the conversation when we come back perhaps next year or two years from now and we say, yes, new construction buildings need to figure out a way to heat them renewably. I think it'll be helpful to have that compare contrast in terms of what our target is and what our actuals are. Certainly a couple of thoughts on that. I think it's, the Synapse report certainly has high level targets, you know, for heat pumps and EVs, it's not gonna, I don't think, if I recall correctly, it broke them down in exactly the same way. So there's that caveat. And, you know, we're gonna be behind them. Like we, I think we need to be really clear that those were super aggressive and they're not monthly, they're annual, so we'll have to note that, fine. But I also think just to be very clear that like we know those are massively stretched goals and we are gonna be very hard pressed to accomplish them. So, yes, it's a target in the sense that Synapse said that's what it would take to be on a trend to get to net zero by 2030. It's not necessarily a target that we have said we think we can make this, you know what I mean, within a certain year. And the other thing I would call your attention to as probably like the most salient thing on the dashboard in terms of net zero is the percent of obligation, the percent of tier three obligation that we're meeting with program measures, which is to say, we are not, you know, to what extent are we covering our RPS obligation with actual tier three programs as opposed to RECs to, you know, to buy sort of, so to speak that megawatt hour equivalent in which 2020 we, you know, met that goal like three times over, which we're quite proud of. And I think the other piece of this is that as Darren has mentioned before, we have now for the past two years and plan to continually going forward engage Synapse to update you and us and the greater Burlington community on the higher level metrics of greenhouse gas emissions, carbon emissions, fossil fuel usage, et cetera, right? Which are the real end goal and the individual tier three programs are like the means to that end. So there's kind of a micro level here in this dashboard of like, how are the programs doing? But we're also reporting on a macro level about how are we doing on progress toward net zero? Points heard, so maybe I would suggest and I don't need to take up more of this meeting time, but I would suggest maybe as the team is thinking about looking back at the strategic direction for the June meeting and beyond, perhaps it would be more meaningful to have the global, you know, greenhouse gas emission goals, you know, across power, heating and ground transportation as compared to what's here. This is helpful to see, you know, what we're achieving. I mean, tier three is not necessarily, I mean, it's a climate goal direction, but it's not, you know, it was a negotiated political determination. So kudos to us to getting 283%, but it's not necessarily the same thing as saying, and if we really want to be net zero by 2030, if we reach tier three, we'll get there. So I'll just throw out there that as you guys are thinking for, you know, updating the overall one pager, which hopefully we can still keep it to one page, we'll see. You know, think about what makes the most sense for here. I love seeing the monthly progress, but you know, tracking data without sort of that and what are we comparing it to? It's always, you know, I'm always wondering, you know, what's the overall speedometer compared to where we are? So. Okay, and I'd like to back up that idea. I thought I would bring up the issue though at the meeting where we discuss the strategic plan and not tonight, but I second your concern. So I think you, we talked about that. You know how to reach me if you want to talk about it further. I think given the interest of time, we can keep moving and I really do appreciate that you keep tracking all of these, you know, so few utilities that I work with do. So, and particularly in this sort of framework. So thank you for that. Any other comments? Oh, finances. I don't think there were any other comments regarding the general manager update. So I think we can move on to financials. So that's back to you, Emily. You bet. You should be seeing the monthly COVID-19 load impacts. Yeah. Yes. Great. Yep. So as we normally do, sort of get all my screens organized here, there with me. So here's the COVID load slide we've been looking at for a year now, or better. This is showing with the addition of both March and now April here. We can see the continuation of the trend in April that we've been on where residential sales have been up. Commercial sales have been down and we've been net down as a system. In April, we saw the residential sort of increased sort of increased above expected levels change for the worse. And the commercial impacts are kind of right around where they've been a little worse than March, but around 5%, just kind of where they've been for a while. So as a system, we were down 3% in April. Just sort of speculating as to what's going on here. Shoulder season, less energies in general, longer daylights, more moderate temperatures. So just people are generally, since many of us are still home, we're using less electricity when we are home. And then the commercial sector has kind of been in a status quo kind of throughout the winter. And then I'm gonna flip over if I can to the financial results. Let me just, can you see the packet now as I scroll through? Yes, good, thanks. A little bit larger. Push this screen over here. Okay, so March, month and financial results, we had an overall net loss for the month of $678,000. We had budgeted for a net loss of $472,000. So we are $206,000 worse than budget. Year to date, our net, well, we're at a net loss, you're, sorry, net income year to date of 1.1 million versus budget of 1.3. So we are about $150,000, $160,000 under our budgeted net income based on actuals through March. What sort of happened in March is in many ways, a continuation of factors and trends that I've been reporting on and that Andrea was reporting on throughout the year. We see sales to customers down as we've been talking about all along, $45,000. We also had unfavorable budget actual variance on other revenues, most of that due to less than budgeted EEU reimbursements. Power supply revenues, there were none and we expected none, so nothing variable there. March not being erect delivery month. And then on the expense side, power supply expenses were kind of over across the board this month. Fuel was a little bit over budget because McNeil ran a little bit more than we had budgeted for in March. Wind production was down, so we purchased more power from Icing New England, so purchase power was up a little bit and then we've been seeing transmission costs over budget kind of throughout the year due to a number of factors that we've talked about previously. Icing New England's transmission rate changed. The Velco transmission costs can vary from month to month and was over again this month. And then the other thing we, there's like a category called other transmission that is also over budget. And essentially that is kind of like a forecasting problem where the actual is kind of susceptible to variance and so when you were relying on long-term averaging for budgeting, and so we get it right or we don't get it right and this is a case where there's just some variance in how the actuals have turned out. On the operating expense, you can see we were favorable from the month. There's a bunch of ins and outs kind of contributing to that overall positive variance of $84,000. We had some unfavorable variances in terms of tier three compliance and some outside services that we contract for. We had some favorable variances in materials and supplies and other areas where we have been proactively trying to limit spending. So an overall favorable variance there. And then coming down dividend income is what's bumping up this other income due to a true up that we did for January and February. So again, year to date, about 158,000 under budget. Coming down to capital expenditures, we are at overall 54% of budget through March. This is a bit deceiving in that we were also at 54% of spending in February. And so when I asked the team what was going on here, the trick to this is that we received almost $230,000 in customer contributions in March. So that is masking. It's making like look like we spent less than we did before in the distribution category. And that is sort of eating up the spending that occurred in the general category. So there's some offsets happening. So be assured that capital projects are progressing. We're just sort of static at the percentage of budget spent at this point in the year. And then coming down to the cash position and the Moody's rating factors, we are at 8.5 million, roughly 8.6 million in the operating fund, which gives us 122 days cash on hand and our adjusted debt service coverage ratio is at 0.96. And then I will just also perhaps add now that as we since we're three quarters through the fiscal year at this point and we've been actively and proactively forecasting, it's our sense that the trends we've been seeing throughout the year are really gonna probably maintain where sales are gonna probably continue to be down, transmission costs are gonna be up. We are proactively trying to limit expenditures on the operating side as much as we can. Our interest income is down due to very low interest rates. So and we've also talked about customer contributions to capital being down because projects that were scheduled are not happening due to COVID. So we are projecting a year end net loss when the pension liability that was unbudgeted is factored in and known, but we are projecting ending at a healthy cash position of 98 days cash on hand. That's the current projection. So with that, I'll take any questions. Commissioner's. Yeah, no, thank you, Emily. It's just a tough forecast, right? Yeah, it's been an interesting year for sure. But I think the team has been, we've been actively managing it as well as we can and everyone's been engaged and informed of the challenges and responding and pitching in and engaged and working through it. So I appreciate both the finance team's hard work and doing a lot more analysis and numbers of iterations maybe than we've had to do in the past and certainly James and his team's help on the power supply side and really the whole company, the linear and his team with the capital projects. So yeah, it's been a group effort for sure. So I just want to clarify the last bit that you said in terms of the pension, I just want to confirm that the budgets that we discussed last week and that we're going to go through again this week and next week for fiscal year 2022 in that you all did make a course correction. Okay, great. Yeah, that's right. Okay. And we don't know the actual amount but we did include an assumption around that liability which has had not been previously included. So it should be, you know, kind of more, we should land more about more closer to where we had budgeted than in previous years. If there aren't other questions regarding March fiscal year 21, I think it makes sense, you know, all of these items, this, the next agenda item fiscal year 2022 draft budget as well as a proposed 2021 rate case, all of them kind of are clearly interrelated. So unless anyone objects, I'm going to suggest we shift into six agenda item number six and perhaps we end up coming back to this if questions arise, but otherwise it seems appropriate to move forward. Agreed. Great, thank you. Is that you, Emily, or is that General Manager Springer? I can start and we can answer questions. I think the fact is we don't have a whole lot new to report from last week's update in terms of the budget assumptions. We've really been focused on knowing that we've cut or deferred, I think, as much as we responsibly can and we've locked down some variables around contingencies for different items, including a contingency for billback for the rate case because our understanding is, is that the department could billback for expert time and other staff time in the rate case. So we've added that to our assumptions, I think since last week's discussion. We've also done, I think the maximum that we feel we can to, we're planning to bring a revenue bond proposal forward for city approval and for voter approval in November. If it's approved in November, there's a certain time window in FY 22 where we can have projects and expenditures that would appropriately fit under the revenue bond, be covered by the revenue bond. We've budgeted as much as we responsibly can to be covered with the assumption that the revenue bond goes through. We don't wanna be overly aggressive, particularly on a timeline basis because there are certain expenses that the timing of which just doesn't allow for them to be included in a revenue bond that would only be available for at most half a year. We can be, I think the commission can know that we would, if that revenue bonds approved I have significant flexibility in FY 23 to include projects and other kind of expenses, primarily net zero related because that's our focus with the revenue bond. But that's a wide variety of things that we do that those would be a kind of wider base in FY 23 than they would be in FY 22. But we've certainly looked at doing the maximum that we feel we responsibly can with the revenue bond. So that's kind of another assumption that we've made in the budget and we've continued to refine. But the biggest piece is we are also assuming some state of rearage assistance, some city a rearage assistance and pandemic relief funding associated with the city's federal funds. We originally had submitted two requests to the city related to the ARPA funds. One was focused on a rearages which we've submitted the full kind of current amount at 1.3 million. And that is included in the mayor's recommended expenditures that have been shared with the board of finance and which we expect the city board of finance and council will act on in the coming month or so as their budget process moves forward. We also had put forward that we've seen a 2.1 million loss of revenue from sales that were lower than budget due to the pandemic. And our understanding at this point in time is that that request will likely not be funded by the city. And that's something that we've been waiting on to be able to present you all with a rate case number. I do want to just speak to as well to just some of the framework of thinking around the rate case and the budget. I feel like there are multiple pieces here that are in tension with each other and that we've been working to resolve. Obviously coming out of a pandemic we want to keep the rate case number low for our customers. We understand folks are struggling coming out of the pandemic in many circumstances. It's a challenging time. So that argues in favor of trying to keep the rate case as low as we possibly can. We know that our Moody's metrics, as Emily just pointed out, particularly around the adjusted debt coverage ratio have not been as strong as we need them to be. Anything we do on the rate side that's lower than what we need jeopardizes that adjusted debt ratio doesn't help us fully recover on that front. We know sales are down even before the pandemic significantly. We've been looking at this, we were looking at it today. We had about 340,000 megawatt hours of sales a few years ago and we're down near 310 now. And that's multiple millions of revenue year over year that's not coming in. Partly that's a result of delayed projects, projects that maybe went offline and haven't come back online or project additions that we had expected that haven't happened yet. So sales on a raw basis are lower, even pre-pandemic and certainly post-pandemic they're even further affected. So we know that if we don't have a rate case that's reasonably close to what we need the Moody's metrics could be affected. Day's cash on hand in FY22 and the adjusted debt coverage ratio. We're conscious that we've been out for 12 years and when we go in the Department of Public Service will wanna fully scrutinize everything and so we're preparing for that. And then obviously just we're conscious that there is more going on in Burlington than just our rate case. We understand there are a variety of different issues. There's the reappraisal. I know the water department is also looking at a rate restructuring kind of at the same time. I know there's a variety of financial pressures that our customers may feel as Burlington residents. So all of these things are in tension with each other and our thinking has been to provide a rate number that's as close to what we need as we can get while still being respectful that we don't wanna impact customer bills too much coming out of the pandemic. We understand that this provision is now passed where we could have rate cases in the future at 2% or less that would not need to be litigated in front of the PUC. So we're gonna put a rate number in front of you for the litigated rate case that's our hope we'll be able to utilize that provision in the future where we would have local approval of smaller rate cases as opposed to a larger number. And as mentioned before, but I think it bears just reiterating we are budgeting for a low income relief program that would offset the rate case impact for FY22 on our customers who are enrolled in the state fuel assistance program and seek relief from us. We will be able to provide something for them as we explore a longer term, a low income rate that we hope could be in effect by FY23 and beyond to help customers who need further assistance. So I think that last week I suggested that the number we were looking at is in the mid to high single digits. I don't have anything to change that at this point. I think that had we been successful getting some additional funding on the ARPA funds, we might have been able to lower that number a bit in FY22 and maybe looked at doing a two stage rate adjustment in 22 and 23. But without that, we really can't lower the number substantially in 22 without getting below the 90 days cash on hand that we know we need to continue with our A rating metric from Moody's. So that's kind of the framework of discussion that we've been having and the considerations. And as mentioned, our plan would be to have a number and a final budget presented to you via a packet by Friday or Monday morning at the latest. And then to follow that with a public announcement about the rate case and the context for it by Monday morning at the latest as well. Thank you. Questions from commissioners? Yes, may I ask a couple? Do you want to be any more explicit about the possibility of COVID funds through the city? Yeah, I mean, I think the proportion that we're assuming in the budget would be the 1.3 million in ARPA funds that could go towards offsetting customer arrearages and providing pandemic relief. For example, helping perhaps to fund that low income relief program that I just mentioned could be another use of those funds. So we are expecting to include those in the budget. That still needs to be approved by city council and board of finance, but it's in the mayor's recommendation and so we have confidence to include it in the budget. And then on the flip side, we had submitted and are not confident of receiving anything towards the 2.1 million in lost sales from the pandemic. Right, there had been some hope over the last few days, but that did not materialize. Commissioner Marendey. Okay, and then just a second question. Death spiral, short term I see the issues. When I think longer term, meaning what, two years, we have city center potentially coming online and a number of other electric demands that are kicking in as part of net zero. So I'm not worried about a death spiral, but of course, I wonder who you say you're not either. No, I think I completely appreciate the question. I do think that sales to customers have several avenues for rebound. One of which is just to get back to a normal year, no COVID impact would help us with sales to customers. Even the FY22 budget, although it assumes lesser COVID impact maybe than we've experienced over the past year plus, we are assuming some COVID impacts in that budget. And just to get past COVID impacts would be one positive. And we're roughly a 75% commercial, 25% residential energy split for Burlington Electric. So when residential use is up 8% and commercial is down 5%, that doesn't help us on an overall system basis as you've seen. So just getting back to pre COVID levels there would be helpful. The project additions that you've mentioned and others could certainly increase sales to customers. And obviously the electrification work that we're doing is increasing sales and is playing a small role in counteracting some of the trends we're seeing. We're hopeful over time it'll play a larger role. And obviously the more kilowatt hours we can use on the system with the relative same fixed costs, the lower the rate pressure is helps us. So I do have hope for rebound in several aspects relative to sales to customers. Thank you. Commissioner Blinker? Yeah, I was just going to ask about the timing of when the rate, when the increase would take place. Absolutely. So our plan, which we'll communicate with customers in that public announcement and obviously we'll utilize other means, the important message on the bill, for example and any other kind of opportunities we have to alert customers, you know, North Avenue News column and others. But the plan would be to bring the rate case approval to you on the 19th. We would speak about it on the 20th at Board of Finance and bring it to city council and Board of Finance for their approval on the 24th of this month. Assuming we have that approval. Our plan is to file no later than June 15th with the PUC and to have that would then set up a scenario where a surcharge would begin appearing on bills for energy used in August. And the surcharge would be kind of a temporary rate impact subject to the PUC fully reviewing and approving or changing our rate as proposed. And that process could take several months or more, could carry through the end of the year, for example. But because we're a municipal utility, there is a 45 day provision that would allow us to have that rate surcharge on the bills starting with energy used in August. So our budget assumes that we have that revenue change starting in August as well. Okay, yep, no, that sounds good. And then I'm also wondering if, you know, assuming everything flies through people, you could do some sort of calculator about like what it means to me. So that if I, because I think, you know, obviously people are gonna be upset about it, but at the end of the day, it's probably only a handful of dollars for most residential customers. And so if there's a calculator and people can put in, you know, I usually pay $50 or I usually play $70, what does the rate increase mean to me? And then that way that might help people understand and manage the impact a little bit. I think people will understand it in general, they may forget that it's been 12 years, but if you put in what you pay and then it's two bucks, you know, I think that will help diffuse any concerns that people have. No, that's a great idea. I mean, we're certainly planning to communicate kind of what the average residential bill impact will be, but if there's an opportunity for us to be more granular for folks, that clearly would be helpful. We're certainly looking at a bill impact, average residential bill impact that's lower than $5 per month, but there's kind of a wide variety of range there, whether it's $3, $4 or $5, whether these federal funds had come through. So we might be in a position to put something like that out there to help folks and we'll certainly communicate kind of what the average residential bill impacts would be. And also we'll communicate on the 12 years as well. I mean, I don't mean to minimize the financial impact, but we do want to convey the value that's been delivered by holding rates steady for 12 years and other costs clearly have gone up. We're certainly still gonna be lower than the rate of inflation, for example, was over that period of time. So I know in a lot of cases, utilities compare their costs to the cost of inflation and if you're holding rates and costs at or below the rate of inflation, you're generally doing a pretty reasonable job. We'll be able to make that case even after a proposed rate case as well. Right, and I think people, we also want to reassure people that all the net zero stuff that this is, that did not cause this, that this is a function really of COVID and changes in energy sales and things like that. And I think any effort to clarify that point will be important. Totally agree with you. Yeah, really, we're gonna try to focus in on the fact that we've done a fairly reasonable job with controllable costs in holding those lower than they were projected to be over a long period of time. And a lot of cases, it's really the uncontrollable costs, whether it's the COVID impacts, transmission has been a cost driver, which is something that we can't directly control. And then obviously just the cost of doing business, colas, you know, healthcare pension and other items like that are playing a role as well. I would argue that the net zero items actually over kind of the business case of them, there are some of the better investments we can make in the long run because they will contribute revenue back to the utility and that's a positive and we'll certainly make that case. Definitely agree with you on that point. So I think I saw commissioner Moody's initials light up. I just wanna flag, I know Mike Canerick's listening. I do think it would be helpful besides a press release which hopefully you all will share with the five commissioners. You always share it with me, I appreciate that. But this is a little bit different than just an FYI in terms of a ribbon cutting. So please do plan on sharing it with all five of us so that we can understand how things are being communicated and we can follow up and ask questions or clarify or whatnot. I think it would be great if we actually did have front and center on Burlington Electric's homepage or some way on the website that articulates what commissioner Whitaker was just saying. And it doesn't have to be a calculator per se because I think then you have to have quite a bit more work but you could just have a table. If your monthly bill averages between 20 to 30, 30 to 40, 40 to 50 and just so people can get a quick snapshot. And I think it'll also be really important to articulate if anything net zero helps by driving towards increased electric use that is then shared by all. But I also think it would be helpful to explain why the approach of not just one year but one year plus perhaps a follow-up year and in as lay person term friendly a manner as possible. Yeah, no, I certainly agree. I think we'll work, our team will work, Mike, James, Emily, myself will work on something that would help customers, whether it's a calculator or a table or something further, something to help customers understand what the bill impact would be at certain usage levels. Again, on an average basis, we're expecting it to be less than $5 a month but folks use different amounts, they'll have a different impact. So we want to share that information and the net zero piece, definitely agree on, definitely want to make that point. And I do think that we are looking at a mid to high single digit rate change this year because we've held rates in part because we've held rates steady for so long, there's probably a case to be made that instead of waiting, whatever it might be another two years, three years, four years and then having another mid to high single digits or hopefully never a double digit rate case, although we've had those in the past at BED that doing kind of smaller, steadier incremental changes is better for our customers and better for our own kind of financial health over time and being able to kind of keep pace with the cost of doing business that do increase could be a benefit going forward. So I certainly want to create the expectation for our customers that we're not looking to go another 12 years or 10 years without a rate change that was kind of an extraordinary set of factors and just this is not necessarily kind of the easy explanation but just for the commission's benefit. In my review of BED's financials, I think that we probably would have had a rate case back in 2015 or 2016, had we not had at least a couple of things happen, one of which was reorganization that helped keep those controllable costs reasonable going forward in a way that they were not projected to be. The second was we had rec markets that were significantly above historical levels and provided a real cash boost for the company that really kind of sustained us over a period of time. And then more recently, I think we might have had some pressure for a rate case in 2019, 2020. We were able to do some things like the blend and extend with the Sheffield wind project that you all are familiar with and others that helped lower some costs there as well. So we've had a number of kind of opportunities that we've utilized over the course of the last 12 years that have helped us avoid coming in for a rate case sooner than we have. But I don't think those are necessarily replicable over the next 12 years. And so I think our plan is to kind of small incremental adjustments on a more regular basis to keep up with the cost of doing business. And as a customer, I think people prefer to see a 2% increase on the bill than a 7.5% in a given year for our commercial customers. Those smaller, more incremental changes are easier to budget for. And for our residential customers, the impacts are certainly less. So we'll certainly do our best to speak to that in a compelling fashion and really try to lay out that path forward. Great. I might also add, you know, I don't know when your next customer survey is. I feel like it should be coming up soon because I feel like I haven't seen one in a couple of years. It was delayed a little bit because of COVID, but it's coming up. Maybe that's a question to ask. Certainly. How do you prefer to manage or to see your municipal utility work with you to provide affordable, reliable, renewable electricity in a safe way? And Mike is the lead on that survey. I know he's listening in. So duly noted, I think for Mike. Other questioners? Thank you. Got it. So thank you, Darren. You've covered a number of my concerns, chief of those being the one-two punch that we're starting out with. So I get it, when you say, you know, when you're coming up with these numbers and talking about what the department needs, and I put that in quotes, what is that? Can you define that in terms of this is just enough to get us by and we can kind of squeak through along as opposed to we got more money than God and we can do everything we want to do. And what's that in between? Or where does this proposed rate increase? Where does that put us in a or if you can project or sort of project what income would be gained from that increase? If you can project sort of like where, can you be more granular about what footing that puts us on? Absolutely. Especially in light of all these things that have been delayed, delayed, and this, can it get us back to some of these projects and things that have been, that we've been sort of putting aside, can those, you know what I mean? Where does that land us? And furthermore, looking at, Gabriel gave me some of the specific numbers you're talking about and is that enough or is it, you know what I'm asking here? I know it's a little convoluted question, but. No, absolutely. I'll speak to a couple pieces of it and I'll defer to James and Emily because we have been running those kind of forecasts and looking at it. I think when we talk about what we need, there is a calculation that the Department of Public Service would use to say this is how much, you know, your revenue should be coming in relative to your operational expenses. And under that formula, we could justify a 12.5% rate case, which we're not gonna file. That doesn't necessarily mean that's the right number. That means that's the number that fits the department's metric, but it's a proxy for something that, you know, I don't wanna dismiss out of hand. We also look at, in terms of need, we look at the Moody's metrics, you know, the days cash on hand being at 90 or above. I take that very seriously. I think if we drop significantly below 90 days cash on hand, then we're not really having enough cash on hand to, you know, responsibly fund our operations and make sure that if we run into a hitch that we have enough to manage. So the 90 days cash on hand is a metric that we take very, very seriously. You know, we want improvement in the adjusted debt ratio. So that's another metric when we look at the rate case and we think what do we need? We're probably not gonna do a full improvement right back to the metric for adjusted debt that we would like to be at all in one shot, but we're gonna make a positive step forward with this rate case, hopefully combined with some COVID recovery to getting that metric closer to where it should be for the long run. And I'll just speak briefly to the projects because I think that's one of the balancing acts that we've had to do here is, I don't wanna say we should cancel or cut our IT forward project, for example. That's been too important. It's underway, we've had a lengthy RFP process. We all know how critical that technology is gonna be to run our operations and to make sure that we can function as a company for the next decade plus. So we're not cutting that. That's continuing in this budget. So there are key projects that we're continuing to fund. The green stimulus and the net zero incentives that are partly funded from tier three and partly funded from the energy efficiency utility, those are fully funded in this budget. We're gonna continue to invest in those incentives. So I do think that's part of our message as well is that in order to do all these critical things, keep safety and reliability strong. We need to make these investments and we need the rate change to help us continue to make those investments. But let me turn to James and Emily for some more granularity, perhaps on the cash flow projections and some of the balancing that we're doing there. I was gonna let Emily go first because she always criticizes me for always jumping in. So I was very quietly sitting here waiting. She still didn't go first though. No, I didn't. I mean, I think Darren covered it fairly well. I think that the budget and rate increase that you'll see next week, we have carefully considered sort of all of those things that Darren mentioned our intention and kind of in the end prioritized in our analysis, making sure that we're maintaining that healthy financial condition is kind of, that one out as sort of like the primary thing that we need to ensure to be good fiscal stewards and managers of our electric utility for the citizens of Burlington. And that's why we're asking for the rate increase that we'll be asking for even in this difficult time because if we don't ask for that as you implied, Scott, then we're not doing our duty here. And so that said, I think the budget will project continuation or improvement and some of those key metrics, we won't see deteriorations in those in the budget that's proposed. But I also add that we're watching long-term, there's still a lot of uncertainty in the long-term, right? I mean, sales to customers being like a huge one. We know that, well, you know, a lot depends on how the pandemic hopefully comes to an end or how it evolves if COVID remains with us and how that will impact our society and the functioning of our institutions and businesses and homes and residents. But also kind of what happens with those key projects and facilities that came offline, will they come back online and when, and when will we start to see those deteriorations that downgrade kind of made up for with strategic electrification and the great progress that we have been able to make throughout all of this, which has been great with the green stimulus and tier three on the net zero strategic electrification investments. That's just one. But we also have, I think, a fair bit of long-term planning still to do in terms of the long-term capital budget and the revenue bond and how that will factor in to sort of our long-term financing strategy, if that makes sense. James, what would you add? I would just add that as a person who's done an awful lot of rate cases in my career, I don't know how many I've done, probably 30 plus. We're being very, very careful about using rule of thumb mathematics like the department is talking about in times this uncertain. So, just plugging numbers into the rate case math that they're used to seeing and coming out with a 12% with this many things that are uncertain doesn't seem prudent either. So, I think we're looking at the potential recovery of sales, as Emily mentioned, the potential for the revenue bond. There's still a few things we may be able to do to help on the future periods. So it does seem prudent to not ask for what you could mathematically justify in difficult times. Thank you. Any other comments or questions for commissioners? Okay, I just wanna, if you could repeat the timing, we're looking at Friday slash Monday, we would get our packet and Monday press release with Wednesday special meeting. That's correct. Okay, and we will be receiving packet and draft press release before the press release goes out. Mike, are you still on? I am indeed. I am indeed. Yeah, that would be the plan to get a draft press release probably done by Friday. I think the idea, Gabrielle, was to invite you to have a quote in there as well on behalf of the commission, make sure we're ready to go with the press release and then probably send it out sometime Monday morning. And would that have specificities in terms of the rate case numbers? Yes, it will. And we will have, I just wanna make sure we're looking at the packet with the details and the press release so that we can get back to you with questions. We did commit what four or five years ago to helping communicate where and when Burlington Electric takes different turns. So really wanting to make sure that we understand this and that we are strongly questioning you if we have any concerns, but otherwise strongly explaining why this is prudent and necessary and in the best interest of all Burlingtonians. So just wanna make sure that timing works out. Yeah, and just to provide more detail, you'll receive the full packet that you normally receive for the budget, which has a significant amount of detail. You will, with the press release, we'll be summarizing some of the key points related to the rate case, related to the pandemic impacts and the other impacts and the fact that we've had the 12 year run that we've had and what this means for us. And then I expect as well to have a slide presentation that we'll be able to run at the commission meeting, that we also will run at the Board of Finance, which will go through some of the high level pieces of the budget and we'll also have some unique slides that we've created for the rate case specifically, comparing, as I mentioned, the kind of the BED rate trajectory to other staple costs and inflation, comparing BED residential rates to other utilities in Vermont. So you have that comparison, looking at our rates as a whole and residential and commercial compared to Vermont and New England, looking at bill impacts, average residential customer bill impacts, projected low moderate income customer bill impacts and the relief that we'll be providing there. So we'll have a very comprehensive set of materials to provide to you. Okay. Thank you. I do have a question. Is there any actionable item here for anybody except Gabrielle regarding the press release? Are you suggesting, Bob, that you would like to have a quote, for example? No, and I'm also not suggesting that I even review this thing. I'm just asking what you expect. Okay, well, I think with the release, we were gonna provide it to folks, so you have some of those key points. I think to the point that Chair Stebbins just made, we want you as commissioners to have all the information that we're presenting to the public so that if you do get questions from customers, that you're able to provide them with that information. So that's my hope is that the press release will be our very best summary of those points, but you'll get more detailed information as part of the packet as well. Okay, that's great, but we're not gonna be giving you comments on the press release, right? I don't want, I'm not asking to do that. I'm just making sure that I'm hearing some ambiguity here, so I'm trying to get it straight. Yeah, so the ambiguity is probably coming from me. I do not want a fellow commissioners to feel like they are not part of this communication. So if you would like to look at it, please do. There is no pressure. I consider that my job first and foremost, but if you skim it and you're great, let's leave it at this to leave it as unambiguous as possible. When Mike has it drafted, he will share it with me. I will share it with you all. If we do not hear anything back with, Mike, is that good? If it's not good for Mike, Darin, perhaps you could let me know. I think that sounds like a very reasonable approach. That works for me. Okay, thank you, Mike. So no reply means you're good. I think we're on agenda item number eight, and I really appreciate what I was gonna say was, I know this has been a lot of work for you all, refining and refining and refining these figures. And just thank you, and also thank you to the fellow commissioners who each time I'm like, let's have another special meeting. You're like, sure, sign me up. So thank you, as well as to everybody else who's like, great, we'll work on another Wednesday night. Appreciate it. I think this is important though, and Burlington Electric does a great job, and it's really, I mean, it's held repeatedly nationally in great accolades in many different areas, not just net zero, but other areas. So this is us doing our due diligence. So moving on, agenda item number eight, we have fiscal year 2022 general obligation bond. This is a discussion and vote. This is our standard yearly discussion and vote. Am I understanding that correctly? Emily, is there a reason we should delay that as well to next week, or can that move forward now? I think it would be best if we delayed to next week because we include the GEO bond as a source of funding within the budget. I think it may not be a material difference, but I just think from a protocol standpoint, I think the commission might, yeah. I would recommend that the commission vote on it next week after you've received the full budget binder, sort of that includes the GEO bond as a source of funds for capital. Yeah, yeah. Okay, great. I'm gonna assume the commission is in agreement with that because that does make sense. So let's move on to commissioners, check in anything else commissioners would like to discuss. Otherwise, we're gonna see you again in a week. Not really, I guess I was just driving around today noticing just anecdotally that all the whole gas prices, gas, short or whatever thing going on. And in light of our, I kind of wonder, was kind of fantasizing about, had we, not only as a nation, whatever, had we been more, and hopefully that's where we're heading more electrified, how much less of a problem this would be because I can just think of all the people out there that are driving their electric cars going, yeah, this is not a big deal for me. Yep, no problem. And I'm kind of wondering if this whole thing, this gas thing might be a light of fire under somebody's more people's butts to kind of rethink their, you know, what kind of cars they own, just anecdotally. Or maybe own a car at all, shall we say. There's always cars there. There's always cars there. They'll hack the electric system. This is a note I just wrote to myself, I'll ask the question, what percentage of our budget is debt surface roughly? Should I repeat that? No. Emily, I'll get it to you just in a moment. Yeah, just that it principle and interest show up in different places in our financials. Yeah, so just very roughly it's about $8 million. And if you, as a percentage of out of operating expenses, which is not really the same as, you know, our budget, but just roughly. So it's, it's, you know, eight, how else could I do that, right? Eight. Would you prefer to not do this under pressure and follow up with an email once you've. Oh, what are you talking about? Why would I do such a, such a sane and logical thing? Is that? Well, hey look. What's saying it's just being recommended. No. If you're willing to run with the eight million, that's good enough. I can work from there. Are you? No, I would be happy to follow up with an email to get you a very accurate answer. That's a little more fair. All right, thank you. No further questions. Anybody else? Just on a quick follow up note, commissioner Herendine, while I was doing this, I multitasked and got your response. So you should be all set. If you have any questions, let me know. Thank you. Any other comments? Motion to adjourn, please. So moved. Second. Mr. Shagman? Aye. Commissioner Herendine? Aye. Commissioner Modi? Aye. Commissioner Stevens? Frozen. Frozen. She's thinking about it. That 5G, yo. Didn't we get a quorum anyway? Commissioner Whitaker? Aye. Commissioner Stevens? Aye. Thank you. We adjourn at seven o'clock on the nose. See you soon. See you soon. Thank you. Thank you all. Appreciate it.