 I'm on vacation this week, so. Lori, if you can let me know who and whether or not we have a quorum. I see Jim, I see Bethany, Scott, myself, and Bob. Excellent, and do we have all of the BED team that we need? I think so. I think we're all set. OK, and Paul, thank you for being at the actual facility. So recording has started. Welcome to the regular Burlington Board of Electric Commissioners monthly meeting. This is August 11th and 5.30 PM. First up on the agenda itself is the agenda. And wondering if there are any recommending changes or edits or shifts to the agenda. Hearing none, we'll move on to the minutes. From July 14th meeting in July, if folks have had a chance to review them, if you have any substantive edits that you suggest. OK. We have a motion to approve. Second. All in favor and thank you, Lori, for roll call. Commissioner Shagman. Aye. Commissioner Herendine. Aye. Commissioner Modi. Aye. Commissioner Stebbins. Aye. Commissioner Whitaker. Aye. Thank you. Great. Next up, we have the public forum. And Lori, I don't know if we have anybody listening in or Paul, if anyone is physically at the building. Mr. Maloney is with us. I'm all alone here. OK. Good evening. Good evening. I suspect we may be waiting in later. But if there's something you'd like to say now, you're welcome to. No, I'll speak when requested. Speak when spoken to, I suppose. Great. And actually, just so viewers as well as the rest of the commission, if they don't know who you are, if you could just introduce yourself and where you work and why you're joining us. Certainly. My name is Thomas Maloney. I'm an attorney with Paul Frank Collins. I've been pleased to serve the city and the Electric Department, as well as other departments of the city, on a wide range of financing matters, primarily as bond counsel. And have been involved in the last couple of revenue bond issuances for the Electric Department, as well as prior general bond obligation issues that are done on an annual basis on behalf of the Electric Department. Yeah. And the manager had asked me to participate, as we've been reviewing, the bond resolution and the method of financing for new projects for the department and for the city. Thank you and welcome. So next, we have commissioners corner. Just for viewers, this is an opportunity for commissioners to bring anything up that they had thought of since the previous month, but in a less formal area. So we just have an opportunity to weigh in. Any commissioners want to share anything? I had a great time at the baseball game. Thanks, everybody. Great to see you all there. And we won. You're muted, Commissioner Herndon. Commissioner Herndon, you're muted still. You're muted, yeah. These aren't new questions or old ones. The latest for Winooski 1 looks like capacity factor and availability were the same, which seems to say we had a water problem. Just wanted to check if that's the case again. And number 2, there's another reference to Cambrian and Rye's stuff, and I wondered again if we know more about whether they're going to use heat pumps or gas. I would defer to Munir or James if they want to comment on Winooski 1. And my recollection from Cambrian and Rye's was that we do have at least some buildings that are looking at heat pumps as the primary, although I believe they were also looking at some natural gas for air tempering as well. So it may be a hybrid setup. But I know Mike Canerick is on and I can ask him to follow up with Chris Burns and we can get your more detailed written response on the Cambrian Rye's. Thank you. Mike, is that good on your end? Yes, it is. OK, thanks. Munir, go ahead for the Winooski 1 or James. Yes, of course James can add. But my recollection is it's a water issue. I don't believe we have any problems at Winooski 1. OK, thanks. Yeah, just a quick note. I mean, this has been a grim hydro year. Winooski 1 has not been doing as badly as some of the other hydro plants in the state. I've seen hydro plants for June and May and July that were down to a fraction of their normal output, off six standard deviations from average type of stuff. We have not been that bad, but we have definitely been affected by it. OK, thanks. Other comments or statements anyone or questions anyone wants to raise during the commissioner's corner? OK, hearing none, we'll move on to the general manager update and then shift over to the financials as part of that. And thank you again for the overall report that was shared on Friday. Thanks. Good evening, everybody. We've got sounds like rain and thunder outside. And I'll note for all the commissioners and certainly share this with folks that will have a Defeat the Peak event tomorrow that has been called ahead of time. So if you can encourage your neighbors and community members to participate in Defeat the Peak tomorrow, it's possible we'll have another event beyond that. But at least we've called one for tomorrow. So just wanted to note that up front from 4 to 7 PM and the partner on the nonprofit side is the Curtis Fund, which supports low-income Vermonters with scholarships for education. In terms of the general manager's update, I noted in the report we had Evergreen staff in town in late July for in-person visits with UVM Medical Center, UVM, the Intervail Center, and BED and VGS. Those were productive visits. We are continuing with our weekly joint owners meetings. And we're also continuing the operational work with all of those partners. Also in the intervening period, I believe this was last week on Thursday, Senator Leahy did put out a press release highlighting Vermont projects that he supported with federal funding requests that have been included in the Senate Appropriations Bill that is now moving and the District Energy Project request from Burlington Electric Department for 5.166 million for construction support was included in that bill. And so that is now moving in the Senate and obviously has a further process to go. But we're grateful to Senator Leahy and his staff for including that request in the federal appropriations legislation. And that'll be a big boost to the project. So we'll have more to report as we head into the fall. But I just wanted to provide the update there. We still have more work to go in Phase 3 before we're ready to reach the no-go or go decision that we're looking for in that phase of work. I also mentioned the clean heat standard. My understanding is this is something that will be considered in the legislature potentially next year, although perhaps it's a multi-year effort. And BED's interest is primarily in ensuring that it is working in tandem with our Tier 3 tools and that it doesn't undermine our ability to continue our important work on Net Zero. There is a great group of folks working on this in conjunction with the Energy Action Network. And there's a lot of receptiveness to ensuring that any clean heat standard proposal is going to work well with the Utility Tier 3 programs and we can have everybody doing more on reducing greenhouse gas emissions, which obviously the IPCC report this week has gotten a lot of attention and we all feel the need to continue to push as hard as we can in Burlington to do our part. And the clean heat standard could be a good new tool for some of the fuel companies if that is passed. We are obviously continuing with the rate case process. As I noted in the report, we'll have an investigation. We've confirmed that through the PUC process. The department has hired a consultant to look at our rate increase request. Again, we feel that the request is justified. In fact, we feel there's even some headroom between what could be justified and what was requested under the metrics that are used at the PUC. And our team will engage fully in that process and we'll keep you updated. But in the interim, August bills were the first bills that will have the surcharge included on them. And we have opened our energy assistance program. We've had some customers sign up. We wanna encourage more customers to do so. We've expanded the eligibility. So it not only is for folks who would be eligible and are participating in the state fuel assistance program but we've also expanded it to include section eight housing as well. We had some customers who may not have been paying their heating bill and therefore we're not on the fuel assistance program but we're gonna have them eligible through section eight housing. And Mike Canerick and the customer care team Andy Higby and others are working on that and doing outreach as well, trying to communicate that opportunity to our customers. And two other items, one was in the report, Act 151. We've had a proposal for decision from the hearing officer which is not a final commission order, as I would say but is certainly good progress on our Act 151 proposals. If those are ultimately approved by the commission that will give us a tool to enable the continuation of the green stimulus level incentives for things like heat pumps and could actually give us tools to even further increase our EV incentives and open up some new programs as well. And will help us use the efficiency dollars in tandem with the tier three dollars to do even more in some of those areas or maintain the green stimulus level beyond 2021. We've already committed to do it through 2021 but now we have potentially the opportunity to continue that in 2022 and 2023. This ties in to some extent with the conversation we'll have later on the revenue bond because if we do continue the green stimulus levels we expect to be able to meet and exceed our annual tier three compliance goals that the state has. And obviously that will be a bigger cash draw than what we would normally have and tier three itself is a growing compliance obligation year on year. And so part of the revenue bond proposal as a whole will address that point. So I just flagged that for later. And lastly as you've probably read we've had a strong recommendation from the city and from the mayor for indoor masking to resume for all folks whether vaccinated or unvaccinated we've changed the signage at our buildings to reflect that. Obviously for unvaccinated folks we've required masking all the way through the pandemic for folks who were vaccinated. We had previously not required masking it's still not required but it is now strongly encouraged. And Paul is holding up the new language there on his computer. So you can see what we've now got up. And I note that we've had a number of meetings that have returned to remote technologies for a variety of things where we had been in person. So we're certainly conscious of the Delta variant and looking to keep all of our folks and our customers safe as always during this new stage of the pandemic. And we'll keep the commission updated if there are further changes in city policy but that's the current city policy as of now. And I will pause there. Questions or comments? Seems to me like this would be a good time to consider or reconsider our meeting in person next month. Yeah, I chatted with Darren a little bit about this on Friday where we had left it. I think at the July meeting was that we were going to see how things evolve and to probably do perhaps an and both approach in September. Frankly, I mentioned that I have, my household is considered unvaccinated due to the age of my children. Personally, I'm very grateful that Paul Alexander is there. I personally do not feel that it's appropriate to ask or fire anyone to go in person. And this is a volunteer board. And I think the most that we can keep potential contacts limited is what I think makes the most sense. But I'm happy to hear other comments from the commission. Yeah, I think given the rapid change in evolution of this delta variant and whatnot, I think it would be wise to continue doing it this way for a while. Likewise, getting my age, I agree. Fair enough. So it's too bad, but it is what it is. The boobs can wait. I'm good. In terms of city policy, I believe we're fully able to continue with the way we're running the meeting this evening in September in terms of, we'll have a physical location for folks if they need to come in for public comment and desire to do so. Paul has staffed that this evening and last meeting I think Mike may have offered to do it for September. If the dates work out well and we'll make sure we have somebody at 585 pine but we are happy to continue with the remote meeting for September and we can continue to share any updated guidance as it comes out from the city as well. Great. And I also think, I mean, personally, is there a requirement from the city to have the meeting held also in public at the office right now? I believe so. And the reason is, is for folks who may not have access to remote technology to join us remotely that we have a location where they can come and participate in the meeting. Okay. Yeah, I was only asking because if that wasn't required I personally would be very happy with the staff also not having to go in in person, but. And then this week separate and apart from the meeting as well. And you know, Paul's our person who analyzes and assesses risks. So who better? If I might, that's a state requirement. So we're following governor's order on this. Okay. I did wanna ask, you know, it looks like, well actually did other commissioners have anything else they wanted to ask or mention? No, I'll say. Okay. I did wanna ask, you know, we're over a million now in arrearages. It's the highest we've been in. When I look at this graph, highest it's been in now. The graph is not coming up. Well, even then, you know, February 20th, February, sorry, February 2020. Can you, Darin or perhaps it's Emily or it's Mike. Where are we at in terms of the type of support we can give people and what we do for Burlington Electric? Because this is just going up further. It has reached a new peak. The good news is, is that the V-Rap program is open for renters. And actually we have a number of folks in the queue to receive that funding. The first tranche of that funding should be coming in this week. It's not reflected yet in the numbers that you're seeing. I believe we have around Mike can correct me, around 66,000 in arrearage funding that's coming in through that program. And the VCAP program, which we used in the prior, in the latter half of 2020 to help with over 300,000 of arrearage assistance. The VCAP 2.0 is now open and customers can access that over the next several months. And our team is doing a number of different outreach efforts to try to let customers know that V-Rap and VCAP are both open. And then whatever we don't end up being able to help customers with in arrearages through those two programs, we had secured our 1.3 million from the city that will come in. Emily is working with the city on that and we expect that those funds will be coming in sometime, perhaps in late September or October. So as some of those other programs begin to taper off and hopefully we get a number of Burlington Electric customers into those programs, we'll have additional city resources that we can dedicate a portion of with the hope that we will drive down the arrearage number significantly. And then also at the same time, we'll be looking in coordination with the water department at some point in that timeframe to resume the suspension of disconnect policy we'll be resuming disconnects for non-payment. Although as the commission knows in the winter time we have other restrictions around that that we follow as well, but we want to encourage customers who are behind to take advantage of these programs because that moratorium has ended. We're voluntarily continuing it for another few months to allow more customers to get into these programs before we would resume that at any point. Does it require? Go ahead. Does it require that those individual customers to initiate the process? Maybe how you do it. Obviously there are known entities. Does it require, could we take a more personal approach to them or how does that work? With the state programs, they do have to apply. And Mike, if you're able, maybe you could describe the process a little bit for VWRAP and VCAP. Sure can. The process there is that there are separate portals through which people apply and the program administrators have specifically asked us as utilities not to be working with the people on the specifics of how to do the portal work. There are numbers, 800 numbers for people to call. What we have done for both VCAP and VWRAP is we have put information on our website and we put information in print advertising on the front porch forum explaining where people should go to access the applications but also where they should go if they're having trouble. What are those phone numbers they can call? How can they get help? That said, we do have people who call in and our customer care reps do their best because no one likes calling somewhere and having someone say, sorry I can't help you call this number. So we try to lend a hand and get them going but we let them know if they need more significant assistance to take advantage of those resources. And I see on page 11, there's an overview of where these programs are at. I mean, if we're at a million plus in arerages and thank you to the BED team for securing these grants for the both VCAP too as well as VWRAP but if we're at a million plus and when I'm looking at what's available it looks like we have maybe 400,000 available in these grants if I'm including everything that really has been available or if that's just the second phase of the VCAP. My question is, is it this team sense? Do you have a sense of like that other 600,000 that we may not have grants for? Is that normal arerages? Is that sort of typical from what we see or? I think we would, and Emily may want to weigh in on this. I think in a typical situation we would have a couple hundred thousand of arerages potentially that we would be carrying at any given time. Our projections based on what we had received during the VCAP 1.0 and this version I think has more funding in it than the previous version although it is to a large extent it's first come first serve for utility customers around the state. We were projecting that we would get closer to about 800,000 in assistance through VCAP and then obviously some assistance through VRAP and that some of the remaining whether it's 600,000 or 500,000 or whatever it might be at that point what would remain we would try to address through the city ARPA funds and hopefully be in a position where the pandemic related arerages are more or less fully covered before we advanced to resuming disconnection for non-payment. Obviously those numbers are dynamic. They can change. They can spike based on different factors but that was what was in our budget plan and what we're planning to carry out. I would just add to that Gabrielle that the state programs. So VRAP has been up and running. VRAP was launched for a few weeks before our folks had access to the portal to actually begin reviewing applications. So applications kind of queued up in there for our customer care team to be able to review. So even though VRAP was launched roughly about a month ago, right? Mike or maybe even six weeks ago we just started be to be able to review and approve applications within the past couple of weeks and we'll be getting our first disbursement from the state for that money later this week at the soonest. And then with VCAP 2.0 there's $15 million available across the entire state what portion of that we will end up collecting or our customers will end up collecting is just an estimate at this point. And so I think what we did is Darren said was we kind of used our VCAP 1.0 experience to estimate a projection. But I think what we would then do is after these programs close at the state level later this fall assess where we are and then apply the city ARPA funds to make up the gap. Okay, great. Thank you Bethany. If I might chair Stevens to add on to what Emily said the VCAP 1.0 program last fall it kind of started slowly and then it really picked up and VCAP 2.0 as Emily said really just began and VRAP was kind of slow to start. They're really thoughtful people working on these programs and a lot of them are working in spaces they haven't even worked in before with support from companies providing these platforms. So we're finding despite great intentions and hard efforts they're clunky when they start and then everybody who's involved gets the hang of it and then they start moving along. So hopefully there will be, I hope a significant and rapid increase in the funds that our customers are benefiting from and that we're seeing. Mr. Whitaker, did you wanna say something? No, I think that there's like a bigger issue about getting some of these people getting, making sure that people get taken care of and that, but then also reminding them that they do have to pay, right? Like I think a lot of people haven't paid for a long time they're putting it at the bottom of their list. So let's get some of that, the back payments paid off but then also maybe have a goal of by the spring of next year that people have been caught up and then it's not winter, but that they start paying. Cause that's, it's a big jump and it's been up for a long time. And I think it's, we need to make sure that the electricity bill is also a priority for folks. Yeah, absolutely agree. And we will still, even when we resume disconnection we will still have the budget payment plans that we've put in place during the pandemic. So if we can help everyone catch up with their arrearages if they are still struggling or for some reason we weren't able to address somebody who had an arrearage or maybe they fall behind later on we will have good plans in place for our customer care team to work with them. But that is the goal is to get everybody back on the schedule of paying their electric bill. And can we send that message? Like I don't know if it's okay to do that or not but like that now there's help now but the goal is that by this that people start paying again that some of this assistance is gonna dry up and not be available. So we need to start to be more sufficient. Yeah, that's absolutely right. That is the message. And go ahead. Sorry, Commissioner. I'm thinking about it more on a psychological level at this point where there's people that are way behind and I'm wondering if people are just embarrassed and scared to make that phone call even though they might know and they just too get that kind of like I'm way too deep into this now and there's a hesitancy to call us and that's I think a group that I'm worried about is not gonna needs a more personal touch and I'm not sure how personal we can get with people and say, hey, you know, you but here's a way out of this, you know and us initiate that conversation so that they can initiate what they need to do on their end. I think when we get through the state programs which have the requirements that Mike mentioned for the applications when we get past that and we still have a reserve of folks who have arrearages outstanding and we're moving to using the ARPA funds we may have additional flexibility in the use of those funds provided they are for pandemic related arrearages that we don't have in the state program because these are all coming from in some cases different funding sources with different types of requirements and restrictions and so I think the folks you may be talking about if they don't end up taking advantage of the state programs which we certainly want them to and all of our communications we're saying these are limited time, they are first come first serve this is a chance to clear the arrearages that you may have and we will eventually resume disconnections but for folks who don't take advantage we're not gonna let them fall through the cracks we have the city funding through ARPA that we'll be able to reach out to them and help them with and then at that point when we've exhausted those monies we should have cleared the backlog and everybody hopefully will be starting fresh and able to pay their bill as we go forward. Other discussion on this? Just a quick note that Emily it looks like you still have three additional positions that are out there and noting how long there's a graph in here also the number of days that positions have been opened we're at a record high for that as well and we're not alone, it's nationwide but just have you had some good applications come in or? Yeah, we're advertising for the IT director position now and we've reviewed, we started reviewing applications this week with our search committee we have a fairly, yeah, I'd say a pretty sizable pool and we've identified some folks that were definitely interested in interviewing so so far this search is looking like a stronger pool than we were able to attract for the finance director in January when it was certainly a different picture with the pandemic, so yes, optimistic so far. Well, Emily, thank you for just continuing to handle so much as well as to the rest of the team who I know is also helping pinch hit but it's a long time now that you've had these multiple well, the finance position in particular, so thank you. One last question for me, do we have any interveners in our PUC rate case? No, not that I'm aware of, just the Department of Public Service and I think there were only two comments filed of which one I don't even think was a customer, so. Interesting. Okay, thank you. So unless there's any other questions specifically about the GM update from commissioners, otherwise we'll shift over to Emily's overview. Actually, Chair Stebbins, there was not a financial review included in this packet and the reason for that was that we have only preliminary unaudited financials at the time the packet was due to be issued for June 30, which is not unusual. You have had preliminary June financials presented to you at prior August meetings when you have had held August meetings. However, due to the timing for this meeting with our preparation for the audit, we just didn't feel we had enough entries in for period 12, we hadn't closed period 12 and so I didn't feel comfortable presenting results even though they would be clearly caveated as preliminary. I'm not sure they would be representative enough to present to the commission. Yeah, I see that now. I guess I was looking at all of the other financials but that's the next part of the conversation. I did want to just say one thing about the strategic direction I'm pulling it up now, sorry, dashboard. And I appreciate it. I see that you keep sort of over time tweaking it and refining it to make it hopefully less work, putting it together, but more meaningful. The net zero energy goals, if it's possible, we have the 2020, in the second column from the left, we have the estimated number of heat pumps we need, et cetera. And then the column, the two columns to the far right, we have sort of where we're at in terms of yearly actuals. Is there, could you add a column that says, percent to goal, just because it'll be an easier, like, okay. And this is why we need a revenue bond. I think it might be helpful to communicate that we need other tools in the toolbox, but maybe just mull that over, how you see fit. Certainly, we'll do. Thanks, so, okay, moving on to the revenue bond, this is a discussion and vote and I'm assuming Darren, you'll lead it off. Very glad to. So just to frame this up, and as mentioned earlier, we have Thomas Maloney for any questions related to the bond process. But to frame it up, this tonight is a discussion about recommending to the city council that they place the question of the revenue bond on a November ballot for voters. And that if that is approved, we would come back to the commission and the council with a resolution related to issuance of the bond. And then subsequent to that, I believe the timeframe is we would be looking to issue the revenue bond in March or thereabouts in 2022. So just to give you a sense of the timeframe, where we are today and where we're heading. As you'll recall, we included in the FY22 budget, essentially a half year of projects related to the revenue bond, assuming that we are successful, moving it forward, we would begin to have access to the revenue bond for essentially projects sometime likely in December of this year, and certainly for the second half of the FY22 budget, as long as the commission and the council are able to issue a resolution related to it after the voters would vote on it. The revenue bond is doing a few different things. And in one case, it's supporting tier three and net zero and doing so in a slightly indirect way. And so I'll just describe a little of the thinking here. Myself, Emily and James will be able to answer questions, but partly if we were to step back from net zero, I think commissioner Herendine kind of got to this a little bit earlier with his emailed questions. Even if we were not pursuing net zero, we are under financing relative to our need. We do have a debt schedule that includes paying off several different issuances over the course of the next several years and removing them from our debt service. We are getting 3 million a year from the GO bond, but we are doing net of customer contributions capital that's typically been closer to 8 million a year. So we're really under financing our capital need, which means we're spending out of cash and we're putting more pressure on rates relative to what we could. So the revenue bond as one thing is helping to fund a number of projects that are needed for a reliable system separate and apart from net zero and taking some pressure off of rates by doing that. And that's an important piece. However, when we think about net zero, there's a number of different pieces here that are gonna be critical. The technology upgrades that are in here are gonna help us with dynamic rates as the commission knows, even as we've dived into some dynamic and interesting rate designs, much of that work is being done through a manual process that's not sustainable as we reach scale. And so these technology system upgrades are gonna enable much more creative thinking and much more dynamic rates in the future than what we have with our technology systems today. In terms of the grid, we've used the IRP which had a net zero case for grid upgrades that Muneer and his team, Andy Elliston, worked on in tandem with James and his team. And we have a number of net zero related grid projects that would help us in a scenario where we are pursuing electrification and we are gonna see increased usage and we need to strengthen the grid as we move from a 60 to 65 megawatt peak today to something that could be 80, 90, 100 megawatts as we go forward, ultimately could be as big as 140 megawatts in the most extreme case. So we have several projects that are in here that are helping to move the grid to a place where it can accommodate additional electrification. Those are net zero projects that we wouldn't be pursuing absent our efforts at electrification work. We also have a number of capital projects that are specifically related to net zero that are included in the revenue bond. The proposal to convert the gas turbine, which is a peaker plant that we run on the waterfront to renewable biodiesel and away from oil, which is important for us, would generate new renewable energy credits from that plant and would make that plant renewable. It's the only plant that we have any affiliation with that's not renewable. And even though it doesn't really count towards our portfolio because we're actually over a hundred percent renewable relative to our load, we think it's important to convert it and have it be renewable. In addition, keeping McNeil and Winooski one in good operating condition with improvements that are needed or replacements that are needed there, their backbone generation resources for us and supporting net zero capital projects, the electric bucket truck, a variety of charging stations, various policy and planning related investments are all kind of included here. The piece that I think we would have included if it was viable, but we worked with Thomas Maloney to come up with this proposal and I think it accomplishes much the same goal is we weren't able to include the tier three projects in the revenue bond because we're not clear if they would qualify as tax exempt financing under the revenue bond resolution. However, under the GEO bond authority, which is as I understand it broader, we believe we can essentially free up capacity through the revenue bond that we would have otherwise had to use the GEO for these projects and use the GEO bond capacity to fund an acceleration of tier three work. And what I mean by that is last year we did triple our goal relative to tier three. This year we're on track again to exceed the tier three goal and the tier three goal is a reasonably ambitious and ever increasing goal, but it's a state goal. It's not the Burlington 2030 trajectory. And so we know we're gonna need to go above and beyond tier three and bank credits as we do for future compliance or potentially trading at some point which may be viable. And we are going to need to be able to fund that in a sustainable way. And by using the GEO bond, we can actually assume a doubling of our tier three funding relative to what we would need just for compliance over the period of time that we're looking at spending through the revenue bond which is 2022, half a year, full year 23, full year 24 and half a year 25. And we can do essentially a much bigger portion of tier three projects and accelerate our progress there. I mentioned earlier that the Act 151 could lead us to having heat pump incentives that are at green stimulus levels for the next several years and EV incentives that are even bigger than they are now. We're already exceeding our tier three goals each year. We may well exceed them even more. And if we don't want that to put a strain on us from a cash position, this is a way to fund that in a more sustainable manner. So what we've assumed in this proposal is essentially a doubling of the tier three compliance in each of those periods that I mentioned. And that will facilitate additional progress on that zero relative to what we would be doing just to meet state goals. And so that's all included in our thinking here with the revenue bond. And I think one thing I wanna highlight is we're always trying to keep strong rating metrics. We're trying as always to keep rate pressure low for customers. We had a 7.5% rate proposal this year. It's our first in 12 years. It's coming off of the pandemic. Our current five year modeling shows that rate pressure will exist in each of the next several years, but likely at more moderate levels than what we saw this year. We see the 7.5% as hopefully a high water mark and we see more frequent rate adjustments at more moderate levels for the next several years. If we were to undertake all the projects here, whether they're for reliability or for net zero or for technology systems and do so without the revenue bond and continue to essentially under finance our system, our analysis is just an FY23 alone, you would have about 18.5, pretty much 18.5% rate pressure to accommodate that type of system upgrade and that level of tier three acceleration. And so absent that, you'll see rate pressure that's far below what we saw this year. Something that's more moderate than what we saw this year, but if we don't pursue the revenue bond, we're gonna either have the choice of having to cut dramatically on our capital spending, curtail our tier three spending or face rate increases that are untenable for customers. So I think we see this as not only a great opportunity to make more progress on climate and net zero, but a way to sustainably finance our system needs both for net zero and for traditional reliability. So I'll pause there. I invite Thomas to make any comments that he has because we've talked with him about this and he has expertise and then we'd be happy to answer any questions from the commission. Certainly, as General Manager Springer had indicated, we were looking at two elements of the financing. One is the revenue bond payable solely from the revenues of the electric department. And so when you do have the voter approval, it can be up to, I think the request is for a $20 million revenue bond issue that would need to be initially approved as a valid item by the city council. Then that would go to the voters and a majority vote would be required. Once the approval is in place, then it's up to this board of commissioners as well as the city council to approve the actual issuance of bonds. And it's expected to be issued in a number of series. Need not be issued all at once. It's really a question of when do you need the money? How do you expect to spend it? So assuming that the ballot question is approved by the voters, everything comes back to this board of commissioners as well as the city council. There were certain elements of the projects that did not appear in my professional view fit within the existing bond resolution. The electric department has a bond resolution that was adopted in 1981 in order to make amendments or changes to that that have any that are of substance requires approval of your bond holders, which can be an expensive endeavor. What we would likely do is that the next issuance is try to at least implement those changes. In particular, one was to extend the time within which to complete your annual audit. But primarily the projects that could be financed under the revenue bond authority is not as expansive and broad as what you can finance under the three million annual general obligation authority. And so that was our recommendation in consultation with the management of the electric department is to say, do those things that are direct to the plant as part of your net zero energy program. And those that are more on the tier three types of projects use your GEO authority. Again, each city council approval is all indebtedness does. The GEO side will generally cost you less money because you're issuing using the current AA3 credit rating of the city, whereas the electric department's revenue bonds are gonna be slightly higher. You still have a good rating at the current AA3 level. But that was the thought of trying to bifurcate the elements of the program, those which can clearly fit within the revenue bond issuance and those which would then fall within the general obligation annual borrowing that's down for the electric department. Thank you. So, commissioner Herrington, you had sent a list of questions via email, but we could start with that or Bethany also has a hand up. Since Bob, you've had so many, Bethany, maybe we'll start with you first. Yeah, and mine's a super simple one for the first one anyways, which is are we borrowing against our revenue stream that we get from the rate payers or are we borrowing against, or is this gonna increase taxes in some ways? This is against the electric department's revenue. And the GEO bond, which is different, but which we're talking about here, the GEO bond is through the city, although we pay the debt service on our portion of it, but the revenue bond is exclusively backed by the electric department. Okay. If I may, yes, the revenue bond, the 20 million is solely payable from the revenues. When the city issues a GEO bond, it's still to be paid back by the electric department from revenues, but the backing is the full faith and credit of the city. And so if the electric department does not have sufficient revenues to make the payment, then it would be due from the taxpayers. Right, but that's why it's a little bit cheaper, right? Cause you have more behind you. That's correct. Less expensive on the GEO side. Okay, thank you. Let me say this list. We don't have to be... Mr. Stebbins is connected? Yes, I think we lost Chair Stebbins, maybe for the moment. Okay. Do we need her to go through the questions? Especially if you've already submitted them in writing, Bob. Right. And I don't intend that we should necessarily discuss all of them. I'll just leave it as a backdrop. I do have a couple of questions in general, which follow on this. Is it possible to say what fraction of the 20 million goes for anyway? And what fraction goes for NCE? Yes, and with the caveat, there are some projects like the technology projects that are gonna support kind of in both scenarios, but Emily has a rough breakdown that she can share relative to that. Yes, that's right. If you exclude things such as the distribution upgrades that we will be making anticipation of growing loads under the net zero energy roadmap, about 12.9, about 13 million of it, would be projects that we would be seeking to do anyway for reliability reasons or needed investments and continued maintenance at our generating plants for technology upgrades for systems that need to be replaced or upgraded anyway. So it's about 64% or something, 65%. There's a caveat as well on that answer that I should have mentioned too, which is based on Thomas Maloney's advice, we moved the tier three items to the GEO and moved some of the GEO traditional items to the revenue bond. So that percentage of projects that are business as usual versus NCE in the revenue bond may seem a little high, but be aware that they're unlocking millions of dollars in additional spending under the GEO for tier three that otherwise capacity may not be there. I think you're muted, Commissioner Herndy. Is there any reason? Is there any? Hello. Okay. Is there any meaningful comparison between the 1990 bond and this one in terms of overall benefit costs, payback time, those in particular? We looked at that and I don't think that any of us are familiar enough with the details of the 1990 bond issuance to make that type of comparison. We know the general level of issuance was 11.3 million and we know that kicked off our efficiency program and that there were a significant number of benefits that continue to accrue based on the efficiency program, but I just don't think that any of us have enough direct familiarity with how that was issued and the thinking behind it to make that type of comparison. I think we could have, the cost side is easy. It's the benefit side that would require an awful lot of digging to try to figure out. And the benefit of a reliability project right off the bat is hard to describe anyway. Sure. Actually, there's some numbers and what you handed out if you're willing to buy them, which indicates that something pushing four times as much B was generated for one unit of C from the 1990 activity, no discounting. We're always willing to buy our own numbers. Okay, so we don't know. That one we're gonna say we couldn't make that comparison. At least certainly not in time for tonight's discussion. Perhaps with more time, we could make some educated thought around that. Do we have any sense of what the payback time quote unquote would be for the new bond? Emily might have some thoughts here that the payback, I don't know that we think of it entirely in terms of payback. I mean, there's a payback on the tier three investments certainly with a lot of the other projects we're thinking of it more in terms of what their lifespan is, what their useful lifespan is, relative to the debt service that we'll be paying. And the goal is to have the kind of portfolio of projects have a youthful life that's close or exceeding the debt service length. Right, we don't wanna borrow for things with a lifespan of two years over 20 years. We'd much rather borrow for a lifespan of 25 over 20 years if we can do it. And we've looked at the average lifespan of the total package of measures and it exceeds the 20 year debt service. It could be cool. Okay, well, I'll come out with one more statement of the issue. If I were a super cynic, I would say, okay, here's some expenditures we're gonna do for this goal and net zero. It's gonna cost more than if we didn't pursue net zero. How much more? And let me say personally, I'm already convinced it's worth it, but I'm talking about a skeptic who might ask. Well, let me reverse that a little bit. And in doing so tackle one of the questions that you had over email that I think we do have a good answer to, which is, I think you had asked essentially, how much more progress are we gonna have on net zero relative to the baseline? And we can make a reasonable comparison there looking at the spending rate under tier three if we were just to do the amount that's required for state compliance versus the amount we're actually pursuing under this plan. And relative to a rough estimate from the policy and planning team of what it would cost if we were doing all of the roadmap measures through tier three, which just to be clear, we are not. We've always talked about having a variety of measures that are gonna help us towards net zero. Some of them are city policy measures like the rental weatherization standards. Some of them may be other investments. We think of Senator Leahy's federal funding that I mentioned earlier, but if you were to take the net zero roadmap and ascribe an annual spend that would try to get you there through tier three. We have a estimate of that. And then I have percentages based on the compliance rate and based on the rate that we have now under the revenue bond. And roughly speaking for 2023, 2024, 2025, under the compliance only scenario, you're getting between 11 and a half and 13 and a half percent of the net zero spend just by spending what you would on tier three normally. Under our proposal here, you're getting between 23 and 27.3% of the spend rate that you would need. So you're seeing a significant, essentially a doubling of the amount of spend and the percentage that you would be doing to make progress towards net zero. It's not alone going to get us to net zero, obviously. And I do leave room for the idea that we could easily pursue a second revenue bond that would start in the second half of 2025 and carry us through 2028. And as Thomas said earlier, we might want to pursue a broader revenue bond resolution. So we could pursue tier three projects under that next revenue bond. And in that revenue bond, BED and the commission might decide based on whatever progress we've made towards net zero, doubling tier three isn't good enough. We need to triple it at that point or quadruple it to be able to get where we need to go. But we know we're making a big dent relative to what we would be doing otherwise with this particular effort. And the other thing I would say is we aren't going to do the net zero grid projects if the load doesn't materialize. That would be imprudent. That's not something we'll pursue. The funding is in this revenue bond based on the assumption that we continue to pursue electrification measures. They continue to offer revenue through sales and that that revenue is going to support and that load is going to support those grid upgrades. And the IRP analysis suggests that the revenue coming in relative to the debt service on those upgrades is a good thing for ratepayers relative to business as usual. So I think we can make the case that this will support additional progress towards net zero and that if we're pursuing those grid upgrades, we're doing so because there's a business case for them to speak to the skeptic who might ask. All right, I hope this is my last question. This is another indication that I don't understand financial matters. We need money. We can get it through a rate hike or we can get it through a bond which in the end produces a rate hike. Is there any concern legally for how far we go in the second option direction? Well, like every time we need money, we can try to float a bond. When do we say that's enough? Well, just to add a quick point to the front one too though, which is that we can't just do a rate increase to give ourselves $10 million of cash this year. That's not an option at any level. So if you, you know, cash has to be generated over time typically under rates, not in a single lump sum. You know, that would be a 20% rate increase for one year and then you'd have it go away the next year. You wouldn't do that. As to the second question, I leave that to Emily or Darren but the first one, we just couldn't do a rate structure to make $20 million available tomorrow. Well, you wouldn't spend 20 million tomorrow either you'd spend some fraction of it. You really couldn't make it available over three years or anything like that. It's a couple of things I would say and I know you mentioned the word legally. So Thomas can weigh in as well if he has thoughts and Emily should as well. But from the standpoint of the rate payer, as I mentioned, we have debt schedules that are going to conclude over the course of the next several years. And under the revenue bond, we have the option to pay interest but defer principle for up to five years. And we can essentially let some of those other debt schedules expire. And when we take up the full debt service from the revenue bond, you're filling some of that gap. And so it's a smoothing effect essentially for the rate payer relative to an abrupt rate hike as you would describe in one of the scenarios. The other thing to keep in mind here is from a Moody's rating perspective, there is a metric called the debt ratio which looks at your overall debt ratio relative to essentially some of your financial position. We have been for an A rating, the A rating range as I understand it is 60% to 80% with the lower end of that range being better from a Moody's standpoint. We have been increasingly improving in that metric and are down near the 60% range. So the kind of the low end being the better end of that range, even with the revenue bond, we will stay in that A rating metric range. So we're not taking an action here that would put us in an irresponsible place relative to our Moody's rating, relative to our debt metric. So I think that's an important thing to share with the commission but I don't know, Emily or Thomas, if you have other thoughts. All right, thank you. Looks like commissioner Stebbins is back online too. A little pixelated, but still here. And maybe frozen. Yeah. Pixelated and frozen. Yeah, the Y here isn't pretty. The Y face. Maybe shut off your camera. It's not great here. So if I go off the camera, that's why. But you're here, that's good. Is this better? We can hear you. Yep. No. Commissioner Stebbins, are you there? Well, we're waiting for their discussion or I'm not sure where we're going from here with the next question or clarification was on it. I'm done. Can you hear you? Can you hear me? Yes. Okay, sorry. So I've heard some of this conversation. I did have a conversation with a general manager springer on Friday about this. So hence my silence and letting others sort of talk through their questions. Are there additional questions from people that perhaps I haven't been able to see that you've raised your hands because I keep going in and out with poor Wi-Fi? No. Okay, and I just also want to make a note that this is not necessarily about actually, this is to be able to place it on into the next step of the process, not necessarily to vote on the bond itself. Just a clarification of what the purpose of this vote is. And I'm wondering if the commission wants to discuss this further or do you feel comfortable with making a motion? I'm comfortable. Me too. Yep, me too. As am I. Okay. Is there suggested language? There is. You have to scroll down through your packet. Our phenomenal clerk gave us language so that we really put together the first two. I think it's on the memo that Darren sent. It was on the memo. That's on the memo. The last, I believe the last paragraph of the memo. Yeah, I didn't write it up specifically as a motion, but I do think that the motion would be to recommend to the city council that it place on a November election ballot the question of before voters for BED revenue bond issuance at 20 million. I don't Thomas, do you have? I think that, yes, I think that the question would be that the commission moves to recommend to the city council that approves placing the revenue bond ballot question for revenue bond and amount not to exceed $20 million to be placed on the ballot for a special meeting to be held in November. And then from there, the city council would approve the warning if we need to approve the warning. And that would be hosted at the end of needs to be posted within a 30 to 40 day time period prior to the special meeting. I would make the motion as described by council. Second. Commissioner Shagman. Aye. Commissioner Herondane. Aye. Commissioner Modi. Aye. Commissioner Stebbins. Aye. Commissioner Whitaker. Aye. Motion passes. Thank you all very much. Thank you. It's got a long ways to go. So let's see how it moves forward. But I also just, one thing I did hear was a question from commissioner Herondane about, how long do we keep doing this? And I'll just throw up there that if we're successful in efficiently and strategically electrifying, you know, our transportation sectors and our heating and cooling sectors specifically, then we should get to a place where frankly, our bills are in a stronger place and our budget is in a stronger place overall. Assuming that we can address the arrearage piece of things. So, which we will. And you guys are working on that. So I don't mean that as tongue in cheek, but I'm just saying, you know, really with KWH and KW going up overall, we would see an improvement overall. So next we have the commissioner's check-in. Is there anything, last conversation items that people want to raise before we adjourn? I will tell you one reason I'm talking about, critics, besides my own personality type, I'm in touch with a number of old friends from a technical school in the Hudson Valley, who are all now quite old and they're very skeptical. So I'll be using this on them. Would this be RPI? My sources don't allow me to reveal. Okay, all right, everybody would like to have dinner. If we could have a motion to adjourn, please. I move that we adjourn. Second. Commissioner Shagman. Aye. Commissioner Herendine. Aye. Commissioner Modi. Aye. Commissioner Stebbins. Aye. Commissioner Whitaker. Aye. Meeting adjourns at 641. Thank you. Thank you. Thank you again. Thank you, everybody. Thank you. Good night.