 Okay, so I do believe, perhaps Scott thinks this starts at 5.30, but I think I mentioned it. But let's go ahead and start up. We do have a quorum. So good evening and welcome to the monthly Burlington Electric Commission meeting. We hold these usually typically every second Wednesday of the month. This was shifted back a little bit so that we could ensure that the October meeting included the results from the KPMG audit. So hence the two-week delay and we're starting at 5 rather than 5.30 because our general manager has some NPAs that he has to go to by 7. So with that explanation, we'll start up with the first item on the agenda, which is the agenda itself. Are there any proposed edits or changes? Okay. And then after that is minutes of the September 14th, 2022 meeting. If there are any content related edits or changes that were identified, great to raise them now. If it's just a typo or an edit, you can just shoot a note to the clerk via email. So we have one abstain. Motion to approve. Second. All in favour? Aye. And then we will move to the public forum. Which I don't know if anyone from the public is on the screen, Lori, do you know? Okay. Well, for folks who might be viewing at home at 3 a.m., you are always welcome to join us here second Wednesday of the month, except today. Or reach out to our great customer support team with Mike Canorek at the lead. Or any of the commissioners. Next up is the KPMG audit presentation. This is expected executive because we do end up usually, or every single time, having a conversation, just the commission and the auditors. This is a presentation and then a discussion and vote. And Emily, did you want to see us off of the red? Sure, I will just warmly welcome Scott Warnetsky and Heather Cuny from KPMG. Scott is our managing partner. Heather is the manager for our audit. And I believe they will be presenting some slides for the commission in public session, I think. And then at the appropriate time, the commission is free to move into executive session. And with that, Scott and Heather, I think you can share screen and present if you wish, or we can do that on our end, however you'd prefer to do it. Or is yours? Great. Thanks, Emily. I think we can handle that, Heather. What do you think? I think I can. It's been a few years now, using teams and remote meetings, so we've become adept at this over time. But nice to see everyone today, and thank you for having us. And as Emily mentioned, my name is Scott Warnetsky. I'm the partner on the engagement for BED. And you might recall, in previous years, there was another gentleman that was in front of you, given this presentation, gentlemen by the name of Brock Romano. And he rotated off of the engagement this year. And the reason for that is for rotation purposes within KPMG. We have rules within the firm that limits the tenure of a lead partner on a particular engagement to 10 years. So Brock has reached that time, I believe, probably through two roles, engagement, quality control review and partner, as well as lead partner. So that necessitated a switch for the lead partner role, and here I am. So nice to meet everyone, but I'm thrilled to have Heather joining me here today. And Heather should be a familiar face and who has been on the engagement for many years and is, quite frankly, continuing and bringing that institutional knowledge along with her to the engagement. So anyway. So with that, I figured I'll start us off here on our deck and move right into the next slide there and just reaffirm our commitment to BED. And that's providing essentially a better audit experience by focusing in on audit quality. And that's kind of what drives us every day in what we do in performing our audits. Number two is enhancing the client experience, and that includes implementation of different tools that we use in order to manage the audit, we'll say project manage the engagement, including the sharing of information and things of that nature. And that naturally will roll into productivity and being able to kind of work remotely and share with management information securely and be able to communicate and meet throughout the entire process. So that is our continuing commitment and we look to build upon that every year. Now with we're going to move on into I would say some of the more detailed communications here and you know what I'm about to talk about are some of the required communications when I say required, their communications that we as auditors are required to make to boards such as yourselves that oversee an entity's financial operation. So so I'll run through a few things here and then we'll get into a little bit more detail following these summarized comments. So as of today, we do have some outstanding matters. You can see there listed as far as being able to complete our audit work, but for the most part, you know, it looks like quite a few items there, but for the most part, you know, we are very, very far along and have received most of what we need for management in order to complete the audit. So over the next couple of days, we'll be finishing these off in order to issue the financial statements. No significant or unusual transactions to report. You know, I will maybe take this opportunity to highlight a change in accounting that occurred this year. I wouldn't say it's necessarily a significant or unusual transaction, but it's a change in the way management is looking at some renewable energy credits in the accounting for that. In the financial statements, there is some discussion as to the change, the effect of the change and the reason for the change. But high level is that management felt accounting for renewable energy credits on an inventory basis rather than expensing it right off the bat was more aligned to the way the businesses run and the way renewable energy, energy credits are used. So, you know, they went through a process, they've been management to, you know, document their position to bring in some underlying accounting guidance and some industry practices. And, you know, at the end of the day, we agreed with their analysis and the desire to change the accounting for those renewable energy credits. You know, it did have an effect on the prior year financial statements because when doing this under the accounting standard, you would go back and restate 2021, I would say it was a minimal effect, roughly around $400,000 or so, and that when you do see the financial statements is disclosed in the notes. There are some corrected and uncorrected audit statements that Heather will get into in a little bit. And then, you know, make you aware that there are some non gap policies, and that means there are certain accounting policies that are technically not in accordance with generally accepted accounting principles, but, you know, what I'll say there is that is, you know, not uncommon for entities of any size or any complexity, you know, they're going to kind of run the gamut of different things. But, you know, but we've in each case have found that they are essentially inconsequential to the financial statements and do not result in any audit differences to report. So when it comes to the auditor's report, once we complete our procedures, we do expect to issue an unmodified opinion on those particular financial statements, meaning to date, we haven't seen anything that would cause us to evaluate or reevaluate what our opinion would be on the financial statements. So once we do complete the procedures, we believe that we'll be issuing unmodified opinion. And then there have been no changes to our risk assessment or planned audit strategy that was developed back a couple of months ago. So moving on to some other communications here. So when it comes to significant accounting estimates, you know, we do evaluate those estimates and some of the inputs around those estimates, there are, I wouldn't say significant estimates when it relates to the BED's financial statements. There are, you know, some liabilities that derive from estimates such as the pension liability and the OPEB liability and things like that, but nothing significant in relation to the overall financial statements of BED. And then finally, you know, I'm not going to walk through everything on here, but this is where we would report other matters that were of concern to us, whether it would be any non-compliance with laws and regulations, any significant difficulties encountered during the audit, any illegal acts or frauds. So you can see here, it's a bunch of no matters to report, which is, you know, quite frankly, I'm sure what you come to expect and, you know, what we expect to see in all of our clients, quite frankly. Moving on, Heather, please. This is a continuation of the prior slide, and again, if we had any difficulties of management, disagreements of management, management consulted with other accountants, things of that nature, those would be reported to you here, but as you can see, there are no matters to report. And we will note to you that the, we do have certain written communications with management, and that would be the engagement letter and management representation letter, which is signed prior to the release of the financial statements. And rounding us off here with some of the required communications is independence. So, you know, we are nothing without our independence. You know, we are independent auditors, so we take great pride in making sure that we are independent with all of our clients, including BED. So here to report to you today that we are independent of the department. And, you know, there is no matters to report to the department as far as independence violations or things of that nature. And just high level, you know, we monitor that on a personal level, meaning folks with either, you know, folks with, you know, investments, making sure they're not investing in clients, including bonds of clients, whether it be familiar like family employment, you know, for example, maybe an independence issue, we monitor that. And also from a services point of view, making sure we're not providing services to an entity, an audit client such as BED that would impair our independence. So, and there's a whole, but there's a whole infrastructure behind that that kind of tracks that and ensures that we adhere to the overall independence standards for our industry, as well as KPMG's strict independence policies. So, and then we'll round it out with some inquiries at the end here. But I think Heather, is that your cue? It is. It is my cue. Thank you, Scott. So this slide here just walks through our uncorrected audit misstatements. There's one misstatement that we identified. And this is related to the Moran and Fram frame note. Currently, right now, it's recorded a combination between a non current and a current asset on the balance sheet and with an offsetting liability to be paid in future years. And we review the accounting treatment with management. And notice that, you know, there's no current accounting treatment that's been approved by the regulator that would allow us to conclude that there should be carried on the balance sheet as an asset. So the appropriate treatment with that it would be expensed during the current year or the current period in which it was recorded. And I know we've talked with Emily about this and she can provide some additional information relating to this and some things that the management's thinking about relating to this. It's considered an uncorrected misstatement. So management will not be correcting it. It's not a material error to the financial statements, but it is above our audit posting threshold. So we would be required to communicate that to you as well as to attach it to management's representation letter with them representing as well that it is not material to the financial statements as a whole. And I'm really not jumping to the end of the presentation. Sorry about that. The next slide here represents the corrected audit misstatement. And this is really just a reclassification issue when we were reviewing the financial statements. That position is really broken out in between three elements, one being restricted with bond trustees and the other unrestricted. And what was new for the department this year was tied into the new debt issuance. So typically when you've issued your bonds, most of that is allocated to your capital assets. And so this year, however, there's a large portion of that bond, almost all of it that's currently sitting within a construction account. It's unspent bond proceeds. And initially when management prepared the financial statements, the bonds associated with that were included with unrestricted net assets instead of offsetting the investment amount. So this is really just a shifting between financial statement captions. Nothing changed as a result of that in totality relating to net position. But it was a large item and management has corrected this. And that's a good question. Yes. If you go back to slides, can you explain why the determination was to not correct that? And what that means for, you know, next year? Will it be presented differently or? Scott and Heather, would you like me to address that? Or would you? I think, yeah, if you want to take a shot, we spoke at length about this. So Emily can definitely talk about this. Sure. Yeah. So as Scott just said, we KPMG and we consulted. We plan to seek approval from the Public Utility Commission to treat the Moran frame liability as a regulatory asset. So we would still have the liability on our balance sheet, but instead of the correct way this year without the regulatory asset approval is to expense it. We're agreeing to leave it the way it is right now with the expectation that will receive approval to treat it as a regulatory asset. So therefore it will stay on the balance sheet and not hit expense. If the PUC denies our request, the next year, yes, we would change to expense. And then we would have another uncorrected or Scott Heather can give me the right label, uncorrected misstatement because it would have been reported, you know, incorrectly in 2022 or no, help me here please. It would be expensive but then be flowing in the wrong account, wrong accounting period. So essentially you'd be recording a prior period expense as a current year activity. So it would almost be the reverse of this. Right. So we'd be expensing it next year, which would be improper because we should have expensed it this year. Right. So that's why we're leaving it uncorrected because it is our hope that it will stay on the balance sheet if the PUC approves our accounting order request. Can I answer it? Yes. Thank you. Rational behind calling it an asset versus an Yeah, so there's this term called a regulatory asset, right, which means it's it's a thing that you would otherwise have expensed, but you get regulatory accounting approval to treat it in a different way. So what we'll be filing for is a request to say, instead of taking a $950,000 hit to expense in one year, can we please amortize that expense over 10 years so that we have about $100,000 of expense, you know, each year and we just draw it out so that it doesn't affect the income statement in one year. And so if they deny it, then in three years, you would so this year it would be incorrect. The next year would also be incorrect. And in three years, you'd be fine. Okay. That's what I was that's where I was going. Is that asked to the PUC? Yeah, I believe so. I mean, we haven't done all of our we haven't prepared the filing yet, right, in which we will kind of need to go through each. The PUC has rules or standards for what meets that test. And obviously, we'll be reviewing each of the, you know, each of the criteria and, you know, making sure that we have a case to make. In general, off the top my head, I think the criteria are things like unexpected, unforeseen, not predictable, not likely to occur again, unusual, essentially, right, which I think this would, yeah, yeah. But if it doesn't, if they don't accept it, then there's a big life, big expense in that third year. In the second be next year. Yes. That's right. Sorry, what is that going to wreak havoc on? Well, certainly affect our net position and our income. Yep. Don't worry about it yet. Because it hasn't happened. Thank you, Heather. Please keep going. Thanks for explaining that Emily. The next few slides, we're going to walk through some of the audit areas that we that we have performed procedures for and outline some of the procedures that we did perform in each area. So at the top of the list, we have accounts receivable and revenue as part of our test work. We do select a sample of customer receivables to confirm their outstanding balance. We look at the accuracy of customer billings with the approved electric rates to make sure that that appears accurate. We select a sample of renewable energy credits to make sure that the revenue recorded is appropriate. And we look at the reasonableness of the EU activity as well. And as part of that, we're looking at both the revenue and the expense side. For cash and investments, we do send third party confirmations to your custodians for both your cash and investment balances. And that's both for your your debt related investments, as well as with Transco and Velco. We do submit. We do perform cash confirmations for those investments as well and look at the recorded dividends associated with that. And then finally, we look at the required presentation disclosure disclosures within the financial statements to make sure that they're appropriate and what needs to be disclosed has been. For expenses and inventory, we do perform some detailed procedures related to payroll expense, as well as other expenses relating to the consumption and purchase of wood chips relating to the McNeil side of things. We look at overall expenses relating to purchase power as well as transmission distribution, which aren't listed here to make sure that those costs do appear to have existed and that they're accurately reported. For UPIS and debt, specifically starting with UPIS, we look at the roll forward from last year to this year and review for significant additions both to what's been finalized and capitalized as well as within construction work in progress. And we do review to make sure those additions appear reasonable and particularly for those that have been capitalized and ready to be depreciated that the project was finished and that it does represent a capitalizable expense. We look at the appreciation expense to make sure that it appears reasonable based upon the useful lives that are in place for those assets and consistency with prior years given relationship to the change and fixed assets. Similar to the investments in cash, we do confirm all outstanding debt and we review compliance relating to the financial debt covenants for the outstanding debt. And then we review the related financial statement presentation and disclosures to make sure those are complete and accurate. For the post retirement benefits and pensions particularly as it relates to the pension plan. We do involve a KPMG actuary who reviews the evaluation report and the different assumptions that are included within the plan to make sure that they appear reasonable and consistent with industry practice. We will be testing pension contributions and we look at the related disclosures for both the GASB 68 which is the pension and GASB 75 which is the OPEB benefit disclosures which are quite lengthy and take up several pages as I'm sure you've realized in the financial statements. Some of the other general areas, you know, we've talked different areas about reviewing the notes and the financial statements making sure that what's been presented is conformity with generally accepted accounting principles as well as within industry practices. We do obtain legal letters from your external counsel as well as the city to make sure that there aren't any pending matters that could impact the amounts recorded in the financial statements or what's been disclosed. We also review for other significant commitments and contingencies through our review of our subsequent events to make sure nothing's happened after year end that should be reflected within the financial statements. One of the things we didn't talk a lot about this so far in this presentation is that the department was required to adopt GASB 87 which is the least standard this year. Management put forth an analysis relating to their implementation of the standard and found that there really were no material leases that would cause that would cause them to modify their financial statements that has an immaterial impact. So as a result you don't see anything within the financial statements relating to that. And then finally as Scott had mentioned we did review management's analysis relating to the treatment for those tier three credits to make sure that it appeared reasonable. As part of our audit we do review management's overall internal controls as it relates to the financial statements and the overall entities or in higher level controls that are in place relating to the accounting policies. During our review there was nothing that came to our attention that would indicate any significant deficiencies or material weaknesses. And as such we have none to report to you today. And I think that is the end of my section and I'll turn it back over to Scott. Great thank you Heather and I'll finish this out here relatively quickly and in front of you you see here a slightly called inquiries. And this is not something I'm going to walk through in detail. But more leave this here as something that you will see annually as questions or things to consider at the board level. And the way I like to think about it is we are making inquiries with management throughout our audit process. And maybe looking at the list below, for example, are there any significant unusual transactions? Are there subsequent events and things like that? So we've done that with management and we've gotten our answers from them. And this is here for you to the extent that you might be aware of anything that has occurred at the board level that we would need to be aware of. So not expecting anything but nonetheless we leave this here just as a placeholder and more as a kind of a particular file to say, OK, there are conversations happening at the board level, have the auditors been kind of notified about this, so on and so forth. So to the extent that there's anything here that kind of piques your interest that you want to ask us about or mention to us certainly feel free. But I'm going to see this year every year as just as a reminder to maintain that open communication to the extent that there perhaps is something that you want to mention to to us. So with that, I'm going to move into some of our supplementary materials. Heather, before Heather starts up, can you you'll be sharing this at rest with us? If we haven't already, I'm not Emily. Is that you have the electronic version? I forget. Yes, I sent it to Emily last night. OK, yes. So yes, you'll have the electronic version. So here just leave you with that the print on the inquiries was pretty small. Yeah, I couldn't I couldn't read that at all. I can't either. Is that any better? Yeah, I don't know. I was all screened. A little better. Great, thank you. Yeah, I mean. This is not meant to be fine print, we're not attorneys, right, but. Anyway, yeah, so I'm going to leave you with the art, our transparency report and impact plan and what these are is first our transparency report provides some detail to our clients on KPMG's efforts around audit quality and also effort and also results of recent inspections. You know, as you probably know, we are, you know, we are kind of a regulated industry, if you will, we're overseen by the PCA OB and we also undergo peer reviews within within the industry. So, you know, obviously things come of that, that we're where we have initiatives to increase our art of quality and implement different programs around that in order to basically meet the expectations of our regulators. So there's the link below that can bring you to that report and and provide some information. But I think more importantly here, I wanted to share with you our 2022 impact plan and this is new. This is new about a month, two or three ago, you know, fairly recently and what this is is KPMG is essentially I would say ESG statement and it's our goals and desires around reducing our carbon footprint, our goals and desires around increase in the diversity of our workforce. And that's our Accelerate 2025 program or initiative, I should say. In the 2022 impact plan, we'll go into some detail. I think it's like 40 or 50 pages so about our goals and kind of what we're doing and how we're measuring ourselves against those goals and kind of where we are against those goals. So I leave this here for you. There's a link there. Once you get to the economy version, you can click on it and it'll take you to that report to let you know kind of what we're doing around those those broad areas. So with that, I guess that is the end of the presentation and I guess if there are any questions, we'd be happy to answer them at this time. Thank you. Do any commissioners of questions that they feel are acceptable for public viewing? I know I asked this question every time, but I think the public would be potentially interested. What is the largest discrepancy that might have persisted through your analysis? I mean, I think. So when you say discrepancy, I mean, we measure, you know, we have certain measures as far as when we identify and report discrepancies. So for us, a discrepancy is is an audit misstatement. You know, and that is something that through our procedures. We have found that the financial statements presented to us were essentially incorrect, right? So that's what I when you say discrepancy, that's what I think of. And, you know, we reported to you here today kind of what those discrepancies are, you know, as you know, our, you know, the ACPA auditing standards, which is what we follow and conduct this audit require us to report to you anything that we identify above a certain level. So that is what has been reported to you today. So I think as far as your question, what is the largest? It would be kind of what has been reported in this presentation. Well, let me put it in a different way. If anybody stole any money, how large would it have to be to be detected by what you've done? So we when we perform our audit, it's in order to perform, you know, reasonable assurance on the financial statements. We're not. We're not performing our procedures to guarantee, you know, absolute assurance. So, you know, is there, you know, are there, are there in material items rolling around there that we don't look at? I would say yes, right? So we have in our audits, this concept of materiality, which we will set a level, a monetary level at which we consider things to be in material and then below that would be, sorry, above that would be material, below that would be immaterial. So, you know, our procedures are designed, you know, that level is designed in order to, you know, ensure that we meet that standard of reasonable assurance. So, you know, oftentimes we get this question when it comes to fraud, right? So there are two types of fraud. There is financial statement fraud, which is kind of manipulation of results in the financial statements and then is also misappropriation of assets, right? Someone, you know, with their hand in the till, if you will, right? So I would say generally, you know, that misappropriation of assets, you know, the cash here with their hand in the till, for example, you know, we don't design our procedures to kind of uncover that because those are very, very small to a particular set of financial statements. You know, that would be obviously operationally something that would be very, very, you know, that folks would be very interested in. But in order for us to opine on the financial statements, you know, that is something that is very, very small to the financial statement. So when it comes to fraud, we design our procedures to uncover, perhaps, you know, any of the, you know, uncover things that would materially affect that financial statement is that is generally going to be kind of manipulation of results. So I know long kind of winded answer there of our hearts, kind of what we look at and what we don't look at. But hopefully that clarifies things. Yeah. Fair enough. In the deathless world of truth, the answer would have been a single number, but okay. I'm happy. Any other comments or questions? I wanted to ask, Brock spent a little bit of time with me last year we went through this. And one of the things that he had mentioned was, and this is a little different from financial statements, but just the, you know, how critical it is, which we've already discussed in the past, but for boards such as these for municipal utilities to really be focusing on cyber security, that sort of thing. I recognize that's not financial statement review, but just thought I'd, since he's not here any longer, I thought I would just sort of ask whether or not you had any perspectives like that in terms of what we should be really keeping an eye on besides your long list of inquiries, which we can't read. I know. Heather, would you mind stop sharing by the way so I can get the full screen, but you know, I think, you know, there are certainly a lot of things boards can think about and cyber security certainly is one of them. And that is something that quite frankly through the audit, you know, we do make some inquiries and we do. Well, we do determine whether there are events or incidents that would affect the financial statements, you know, but, you know, at the same time, you know, I think it's, you know, that is kind of something that is, you know, outside of the financial statements and I think should be ingrained within the organization itself because there are, you know, you have a lot of different, you know, there are different systems within the entity that are not financial related and that we're not necessarily interested in. And as a public utility, I mean, you know, obviously you have systems that are running your operations, right, that are just outside the financial realm. And when it comes to cyber security, you know, that is something that, you know, I would hope is, you know, top of mind, you know, to to the organization and and ensuring that you have the different processes and controls in place to ensure that you're fending off any potential attacks and things like that, you know, honestly, with my view, when it comes to like a public utility or any utility for that for that matter, you know, cyber security around, you know, the general ledger system is not nearly as important as it is around the, you know, the infrastructure and the operations, quite frankly. And then I just have one other question, which is we made a modification maybe four years ago. Jim Verdin wanted to make sure that some of the some of the reporting that was done on like pieces of paper for materials and supplies that we were, we had a better checks and balance system. And I know there were modifications to that, but I, you didn't mention it. So I'm assuming it's all taken care of, but is this ringing a bell, Taryn? Inventory cycling, yes. You could speak to it more specifically. Yes, so I do recall this. It was right when I when I joined VED and following Jim's passing, the team put together an inventory procedure and we worked with general services who performs inventory count to to review all the procedures, update the document. So we went through kind of a months long actually kind of internal review of the inventory procedures. Former finance director Andrea McNeil was involved in that when she joined. And that has become the the basis of the new process memo that we share. We share a number of memos basically documenting how we do things to with KPMG as part of the support we provide for their testing and procedures. And so that inventory procedure was was is one of those now. And so I would say, you know, going forward, we. You know, KPMG asks for and we provide, you know, annual inventory reports and any any information or testing or sampling that they wish to perform. You know, we respond to and so. So I guess my question is since they didn't since nothing was identified, it seems like that procedural change has addressed what was identified maybe five years ago. But so that's good. Yeah. Any other comments or suggestions? Otherwise, the last page. Thank you very much to our clerk. The last page of your packet. There is some language so that we can shift into executive session if someone wants to pull it up. I moved to to find that premature general public knowledge of KPMG's evaluation of the management with the commission would clearly place the Burlington Electric Department at a substantial disadvantage per title one, section 313 subsections A1 and A3 of the Vermont state statutes because such information may risk contractual relationships with the counter parties in the regular sale and purchase of energy and is considered an evaluation of the personnel. Second. All in favor. I defy it. Is that to act with the next one, too? Okay. I move that the commission enter into executive session to discuss the KPMG KPMG information with the commission under the provisions of title one, section 313, subsections A1A of the Vermont statutes. Second. All in favor. Aye. Aye. Okay. Are we going to a different room? Yeah, we'll go into a different room. And if you can turn the mic off and everything stop recording, we will be back in time. So you'll let us know when you're back up and running. Thank you. We have closed out of executive session and provided the information of the vote to our clerk. And thank you both very much for the time and also the work to review and thank you very much to Emily for getting everything over and continuing to man the or woman the ship with incoming and outgoing staff. So thank you. We were joking that none of you management are allowed to quit or get hit by a bus. End of story. So we did have a helpful conversation and I don't believe we have any further discussion on this. So we do need someone to make a motion. I make I move to accept the KPMG audit report. In a second. Okay. All in favor. Hi. Hi. I'm sorry. Who's seconded? Bob. Thank you. I do have a question. So this is before the final report has been submitted. When does it come? The financial statements. Your report. Our opinion. So I think it's going before the board. Emily, I think there's a date. Is it the next board meeting? All right. Yes, I will be presenting the audited financial statements to you all at your November 9th meeting. Is that your question, Commissioner Harranty? No, it's KPMG's report to us. Because I understood it. We're approving what seems to be coming, but it has actually has not come yet. Is that correct? The presentation that they gave tonight. The audited financials will include their their piece of it as well. Got it. Right. And we expect, I mean you will receive it in your packet for the November 9th meeting. And we expect and hope to issue the statements by Friday. But you're right, that was not the full report. That was the highlighted summary of the report. And is that all right? Is it all correct, Scott and Heather? Yeah, I would consider this our formal communications to the board, right, which were required to make to the board. You know, the actual opinion on the financial statements will be issued, you know, I would say very shortly, you know, so we'll be in the packet that you see. But I think the purpose of this meeting, I don't know, correct me if I'm wrong, was to was to give you our formal kind of, you know, presentation on the results, which is what we did. So, Commissioner Harranty's point is perhaps we should not have just made that motion until next month. No. Okay. I mean, it sounds like not much will change, but we will get the report. And Laurie, if you, as we talked about, if you could just make sure, oh, okay. So they did just, Laurie did just send us the PowerPoint that was presented tonight to our emails. Maybe just on that point, you know, you mentioned the things changing. So if there were things to change between now when we issue the financial statements, we would communicate that to you separately as well. So just to, maybe just to make that point. Okay. Thank you both. Have a good evening. Yes. Thank you. All right. You too. Thank you. Bye-bye. Thank you. Thank you. Thank you. So next on the agenda is the Commissioner's Corner. So this is for folks at home. This is a discussion opportunity for commissioners to raise anything that perhaps is not in the agenda, but that we wish to raise. Does anyone have anything besides me that they want to raise? Thanks for the Net Zero Energy Festival. That was a super success, and you may talk about that too, but I enjoyed it and so did my wife. Great band. That band was great. That singer. Sorry. And also, thank you for my award last time. It got me out of doing the dishes for one night. Yeah, I want to second Bob that is on that festival. That was a really good time, and for those who were there, I'm sure everyone got their fellow of it and got a full dose of information on EV and everything, electrification, and that was really cool and well done. Kudos to Adam and his group. Also, the employee appreciation lunch was really nice and we're well received, and that was really cool. I didn't know if my neighbor had come in, I'd come in a little bit late with she as she had gone on earlier, if you had any public comment or anything, but my next door neighbor has totally redone their their electric car. They've done the whole thing. They've got your sign in front of their house with every box checked. Pretty much. But she was supposed to come on tonight and want to raise concerns and unite briefly discussed. I was hoping maybe we could have a brief about the quality of utility to the house when you make these upgrades, not being whatever that service level is. She brought that up as being a hindrance to some folks in going electric with heat pumps and such and doing those things and that being a problem because that ends up, I think being on the customer's part and that can be more it can be a detriment to going full electric in your house and that sort of thing. Mike, first on the Net Zero Festival, thank you both and thank you for everybody joining us for that. What's the date? Save the date, 2023. We already have a take two in 2023. I think it's September 23rd. It is. It is September 23rd. 23rd in 2023. September 23rd of 2023. We will be looking to have our second event. We're going to try to make it bigger, better, even more engagement with the community. But we were really grateful for the turnout and grateful for the opportunity to talk with customers and see people enjoying these technologies, learning about them, great music, great food, all of that. Yeah, in terms of the conversation, and this may be of interest to Commissioner Shagnan as well, given his background in permitting issues. What we've learned, and I think is a live issue and is going to be a big issue over time, is that the 100 amp to 200 amp service, if you're putting in a heat pump, putting in EV charging, we've had some conversations with the city around that in terms of permitting, like whether it's a requirement going forward or is it something that's recommended because you could get to a point where you're putting these things in and you have enough at any given time, but if everything was being used all at once, you might have a situation where the service really wasn't able to accommodate it. There's some technology solutions, at least for EVs. We had a company through the Delta Climb business accelerator called DCC, and they have essentially a collar that can go around the charger and make sure that you're not using everything else at the same time you're trying to pull charging. Not aware of anything like that for heat pumps yet. And the one thing that I did want to mention, and we'll be tracking is the state Commissioner Stebbins knows about this, is putting $20 million in federal funds towards supporting panel upgrades as part of a broader electrification effort. So once those funds are available, I think there's some income limitations around them. We're going to be trying to make sure our customers know about it because that'll be a great opportunity if you're thinking about an EV, a heat pump to get that panel upgrade handled because we're talking thousands or in some cases could be even 10 plus thousand dollars of work. And that can be a real barrier to people taking the steps that we're encouraging here. Yeah. Anything else? I also loved the event and so did my daughters. So thank you. So I just wanted to give an update to everybody. At the last meeting we did spend a bit of time on the street lighting discussion. And I don't believe you were present. So I did say that I would breach out to someone who is an energy lighting expert and that I'd also connect with you Jim and then I'd connect with the rest of you to get a sense of where things fell. I did do all those things and the update is essentially in terms of finding an expert. We actually have an energy lighting expert who lives in the south end of Burlington. And while he does not feel like spearheading a large stakeholder initiative over three years with volunteers everyone saying what they would like more light, less light. He does not feel like doing that. He is more than happy to have a couple of meetings. He actually just walked along Richardson last night and have a couple of meetings and sort of talk through some of the nuances from his perspective that he sees in the IES standards. In terms of the number of conflicts in terms of whether the lumens are at 3000 or 2200 and what some other cities and nations particularly in Europe are doing. So that is something that I've mentioned to both the general manager as well as Munir just before the meeting. Thanks Munir. And I know that we are down several staff. So Munir hopefully when you have time maybe in the next three to four weeks if you have an hour here or there we could find some time that could work for you. Any of your engineers that should be invited to that conversation given that Andy has left myself and this expert and we could sort of kind of look at whether or not there were any other nuances that we could have looked into in terms of the IES standards just for the short term. So wondering if that would be an okay initial next step I have a few other ideas but Let me check out you said you this would not be a presentation to us. No this is more a discussion of you know this person is a national expert he basically looks at lighting you know in many many different scenarios from an energy efficiency and safety perspective etc. And it's just always following and reading all of the trends specifically to lighting. So it was more just a okay what are we doing how are we interpreting the IES standards and how would this how is this other person who this is what he lives and breathes 24-7 interpret it and is there is there room there to still be within the standards to address some of the concerns you know that we've heard from our legal council but perhaps also recognize that it's it's a big difference what the community is going through and whether or not it's the level of lighting is needed. So basically to to try and get a sense of from this other individual since he is an expert and he happens to live in the south end of Burlington what he sees and to have sort of more of a just a conversation with sort of the technical experts not a presentation although if any of you commissioners would want to come happy to have you join I'm thinking it's more probably within the nine to five hours of your normal work day that's that was actually where my question was going because I would like to great and if anyone else wants to come you're more than welcome we just have to do public notice and you can just let us know so that's okay if we whenever you happen to have a spare hour yeah I mean honestly you don't have any vacant positions right now I'm trying to see what's the best time that would work you know as you know I'm governing right now directly for the director of engineering director for great service director for generation and now the chief of field services last day is this Friday so I'm going to be tapped there too and also one of my engineer one of my one of the engineer staff is going to be leaving on four weeks leave so I don't know if November would be a good month I will say maybe the first week of December somewhere around there we can probably scan your meeting here if that should work if we know who should be in this meeting we can send the invite okay great and then the other piece so I did drive around last night at 9 30 I actually think I was freaking some people out because I didn't have my lights on because I was trying to see really what it was like and yeah so I looked a little odd at 9 30 at night but kept turning my car on turning it off because the lights kept anyway long story short I was just trying to get a sense of what the real lived experiences of this and it is pretty strikingly different there is one street that is Morse Place which I would say is I mean it looks like it doesn't have any lights it looks like you know you're maybe in you know the Northeast Kingdom in some forest you know there's like one light it's really dark and then there are like Ferguson Lyman is sort of medium ish you know some lights and that's sort of what most of them are like and then the two streets that have been updated Richardson and then Scarf are really really bright and that's even with the difference and I guess I just for the record having actually gone out there I can understand why you know the neighbors would be like was this much necessary so hence why I wanted to take the time to have that conversation with the expert because it's it's a significant difference and it's not just the number of poles it's also that if you think about it they had lights probably in there that were like 25 years old so they those have degraded over time so even if you just replaced light bulb it would have seemed brighter let alone adding in all those other factors so with that I would like to make sure that we don't just move on with lighting Lyman according to our current plans until we've actually looked at this a bit more I am worried that that we're going to end up going down the same path which is really to take a street that sort of medium lit right now and just kind of make it like very very very I mean it's it's really quite bright so I know that Munir had said he's good with sort of postponing the the lighting part to spring I'd like to just say if it's possible I'd really like to not have us be putting in all these lights if we're still having this conversation and the only challenge I would speak to on that I agree that it would be very helpful to have a conversation very helpful to engage and ensure that people have a clear understanding of what we're doing and why and they have an opportunity to engage with us and if there are things we can do that we've kind of done ahead of time that we've done you know after the fact that that will be helpful too in terms of you know this poll is right outside my window or can it be angled this way or can we use different pictures I think we want to have that conversation ahead of time the only challenge for us is because it's part of our capital budget and because materials are challenging at the moment and there's this standard that basically says when you do the work on the street you're supposed to do this postponing beyond spring could be challenging I think waiting until spring makes good sense but if we got to that point we didn't have consensus it'd be we'd either have to violate our own standard or or do something else I don't know what so that's the only thing I just wanted to flag I hear that I also just think and I hear that concern and hopefully we can figure this out before so that we don't hit that but honestly I do not think the south end neighbors want the entire neighborhood to look like Richardson and Scarf and I think we will just end up hearing that we'll end up hearing quite a bit from a lot of people if we do that to Lyman and Morse and Ferguson and all of the other streets so and I it's a lot of money and it you know putting in polls that I don't know folks should go and drive around take a look just see how bright it is and I'm not I do hear the concerns I recognize that again the standards are recommendations and the trick is how can we you know the trick is if we're going to do something else differently how do we identify that and how do we make sure that that's with something reliable so but in the interim we will hold off until spring we'll have this meeting we'll see where that goes and we definitely need you to have a director of engineering yeah I'm just to clarify we're gonna start you know if if the weather is nice we're gonna start the electrical installations but we're holding off on the lighting until the spring because there's you know two separate things so can you explain the well the electrical wires to the houses is it going to be fed from different places yeah I think we may not be able to hold off until the spring depending on what the line crews have will work right so like these lines that go from you know talking about all this one is mostly underground so it is going to be going in from the poll in the conduits to a handhold and then from the handholds going to go you know there's transformers in the utility hold that's going to go to each of the houses underground to feed their service and we're going to remove their service from the existing you know wires area wires from behind the houses so that piece we're going to have to start doing yeah and I have to check with the obviously I haven't get into the drawing of the project yet but I will get there I will take a look at it this week or next week to see if we can I believe there's one or two street lighting right now to see how we're going to keep them on you know while we're removing the existing infrastructure yes electrical moving forward lighting not yet I know you mentioned like so the brightness of the light stuff I mean is it considered unsafe or is it just considered that it's too bright because they're not used to it I mean I as we have to look at the safety factor I mean I know you I've been on all these streets and drove on all these streets and you know I rather see somebody walking on the sidewalk be able to see somebody walking on the sidewalk and coming across an intersection did not see it you know and have that capability I know there's it's a fine line but I think we really have to keep that in mind is that safety factor I really do I mean I agree with you like anybody getting to adjust to the brightness of it and get used to it but I agree with you I guess I'd say if you're a driver I mean cars have headlights and so that is ideally why you would see a pedestrian walking well I yeah I don't agree with that you don't agree with that I don't agree with that because I I had an intersection cold chest there just last night that way was not lit the intersection wasn't came upon came on to it with my truck gray headlights brand new truck and I didn't see the person till I was on top of them and they're in dark clothes so the headlight things yeah my headlights are going towards the sidewalk I'm going to see them but hopefully I'm not going towards the sidewalk I'm staying on the road right you know what I mean so I just think it's I think we really have to look at the safety factor yeah is it you know is the brightness unsafe I I went on I don't think it is but I mean that's just my opinion well I think that's the other piece that this expert mentioned is that he keeps saying more and more reports about how if areas are overly lit at night that it impacts human sleep and therefore it leads to human health issues so that's what a lot of other cities and states and nations are starting to grapple with so hence why I just for me I'd like to hear a little bit more about to your point the conflict like that is one of the nuances in the IES tensors is what level of conflict might there be in terms of number of pedestrians number of cars that sort of thing let me chime in I think any info from the expert as early as we can subject to constraints is a good idea in the longer term I sent a note around a while ago about we had to have a a mission statement and maybe that was the wrong term because I didn't mean something that was only you know 17 words long but a position maybe that's it and it's going to cover all these issues and more I would think and it's a real spaghetti nest so but if we don't sort it out it'll blow up in our faces before we can start but we I think we have to do that in the medium term if we're going to do anything agreed and that's why I was sort of you know throwing out there that I'd like to have this conversation and try and figure this out which is a compressed timeline but before before spring when you know or delay lime until after spring but I understand that then you run into other issues so with that just clarify something so when you say a mission statement you mean like a policy directive well that we're setting lighting to accomplish these goals or to balance things in this way okay thank you for asking I'm afraid mission statement was an improper description it's I would think of it more as a position statement why are we pursuing this why do we why do we think lighting is important and why are we pursuing a policy that might make a lot of changes and which will bump up against things like safety versus dark skies safety versus sleep ecological health human health all of that stuff so I'm afraid it's getting bigger all the time and I hope it doesn't get too big but it's it's some position why we would like to do stuff about light versus nothing well it seems to me what's going to be the crux of your conversation is that balance between an IES or whatever the standard that it has some ambiguity to it but we want to stay in there legally and protect ourselves at the same time balancing that out with the aesthetics of of what is you know reasonably too bright not bright you know you know right there in the middle of Goldilocks and trying to try to bring that those two things into balance with each other I think is hopefully the goal of what then discussion is going to be just want to clarify too is we are designing the streets in the residential area to meet the local with the streets which has the low pedestrian activities because there's three different classifications one is for high medium and low and we are designing it to the low and the same thing on the sidewalks and this is the lowest you can find in the IES standards for residential streets yeah and the other areas you know the determination of the conflict level those are some of the pieces that this individual said you know this is how I've heard it viewed analyzed assessed and you know this is sort of the range so being mindful that it's 616 I wanted to give you an update and I know you have to get to an NPA meeting I actually the NPA meeting we were scheduled to join we had to postpone so I apologize I know we had that time constraint we were planning to present on the Charter Change proposal and it wasn't quite ready so we're going to the NPAs but it's going to be probably mid November to kind of like early December so apologies for starting early when we could have otherwise this was a late breaking development so we can go till nine please Lori will stay as long as you like now that's a look anyway that was my update I promise to follow up I'm glad that we have this expert in town who if I get my dreams granted he'll figure out everything for us and we'll be fine I doubt that'll be the case but we're gonna kick the ball to the next point which will be maybe the first week of December and thanks again for your flexibility I know Burlington Electric would prefer someone else to take this challenge on but I appreciate both of you guys working on this and yeah way too few engineers okay thank you Manir and did you do did your team do something to the light fixed or outside my house I swear they did something seems dimmer yes I love it thank you he hasn't gone to my house yet I'm waiting I love it thank you I'm like oh you love it now it's dimmer no it's dimmer oh it's dimmer okay just have to get a reposition and cool her off that's what it's been for 12 years okay thank you Manir all right and a compliment to Gabrielle she became a investigative reporter and tracked down some interesting stuff good work thanks lucky that we I happen to work in the industry and I happen to know some energy lighting people but um anything else in commissioner's quarter otherwise no okay so next agenda item is the update and wow we have some four doozies at the top don't we yeah we do so James is off today but I think in the next meeting November meeting we'll have an agenda item to talk more about the winter there's really two challenges at play there's there's reliability and there's pricing the reliability challenge is significant enough that ISO New England has entered into this contract to keep a liquefied natural gas tanker parked outside of a combined cycle power plant in Massachusetts and wants to keep that tanker full to the point that they used natural gas from that tanker I understand in July and August which is not the winner obviously and we've received pro rata share charges for that beyond $100,000 in charges unbudgeted and and unplanned for so that they could bring in a more full tanker to sit there as we enter the winner just to me that's the most dramatic kind of realization of how challenging the New England reliability issue is in the winner and just to recap it's you know we have a significant amount of natural gas capacity in terms of power plants but when the winner comes a lot of that gas pipeline gas is being used for thermal for heating for other applications we don't have enough to run all the power plants in New England and so you have constraints they're bringing on you know when coal runs in New England that tends to be you know during that period oil fire generation certainly for us we run McNeil heavy in the winner as you all are aware because the prices tend to be high but that also helps to displace our reliance in the region on natural gas by having McNeil but it's a severe challenge it's it's persisted for a number of years the solutions that have been discussed none have been implemented in a meaningful way offshore wind is at scale could be a help but it seems to always be a few years off and there's nothing kind of immediate there bringing in a large amount of hydro from Canada there hasn't been support for a particular transmission route and there are some who would oppose that on other grounds and then there's no interest I think which we would share that lack of interest in bringing more natural gas pipelines into New England so we're left with this challenge so on the one hand it's reliability challenge we don't expect there's a very low likelihood of having a severe reliability event but in the event of a significant multi-day cold snap that's not out of the question and there's certainly been some planning around that with the utilities in Belco and ISO New England on the other hand the cost side is what we're really focused on where we have these unbudgeted you know charges as every utility in the region does from ISO New England for this tanker program that they've implemented for this winter and next winter and then we don't know what that's going to look like when it actually hits December, January, February and they're really going through liquefied gas there on the other hand it makes running McNeil 24-7 in the winter we got our McNeil team here as important as ever prices are fluctuating the forwards were up they're down a little bit they may come back up but our budget certainly relies to a heavy extent McNeil performing a strong winter run and prices being reasonably high because that's what we had a projection for in the budget so those are variables and risks that we see and James will give a fuller detailed presentation but I didn't want to let the opportunity go by without at least mentioning it and we'll we'll dig in more in November happy to answer questions if there aren't any now so I have a question BED doesn't use natural gas correct so how can we have to pay so we're that's this is the whole thing of being connected to the regional grid is even though we don't use it and it's not for our customers we still pay reliability charges and we still pay capacity charges so we're still connected unless we want to island Vermont or island Burlington which may be compelling in certain respects but being connected to the grid they can charge the utilities for these winter reliability programs a few years ago they were paying to keep oil on hand at specific plants and there were charges related to that that I'm sure were passed through as well yeah so it's a difference between what's in our portfolio versus you know being part of the grid itself overall network yeah exactly if this isn't any question all of the utilities that are part of this don't have a say in these decisions that are made at this top at this level where we go whoa whoa wait a minute we don't need no tanker I mean there's significant concern I think among the utilities about this and and you know how much transparency there is into what was negotiated and what the pricing is and there was supposed to be a meeting and James probably give you more details there was supposed to be a market participants meeting where I so knowing was going to get more details on it there's there's definitely other ways to have recourse you know through FERC and elsewhere on these types of things but at the end of the day ISA New England says hey we're charged with reliability and this is our option and ISA New England has pointed out you know somewhat pointedly that state policies moving us towards more renewables are leaving them with a more challenging situation in terms of reliability because what they like is dispatchable resources that can ramp up and down and right now that's natural gas is what they look at as the major resource and you know we've retired nuclear plants in the region that tended to run 24-7 there's pressure as you all know which we certainly don't agree with but there's pressure on the biomass plants you know Rygate and McNeil there's folks as part of a biomass task group of the climate council who would like to place limitations on those plants which I think is is not appropriate given where we are and given that you know the replacement for that is very clearly burning more natural gas which we don't support so yeah there's there's challenges there in terms of the transparency in terms of the program but at the end of the day they also do have that responsibility and that's why they're taking that step I don't like it or enjoy the fact that Burlington customers have to pay for that that's not something that we that's not aligned well with with where we are yeah but BED stands to make money by selling the power from McNeil if the prices are strong we will definitely because we have an access position we would definitely benefit presuming McNeil is able to run and all of our other resources are running at projected levels we have an outage at McNeil I was I was able to visit Paul took me around for check out the greats the new and old greats that are you know being replaced which was one of the issues we were running into over the I mean it was a summertime right where we would have these great challenges when we were running we're planning to start up probably in November we've been stockpiling would Betsy and her team doing a great job in terms of procurement James and his team working with them and Paul Rodney and the whole group to make sure we have enough wood and that we are ready to go in November and if something is goes wrong when we go to start up we'll have a little bit of time to get things right before we really hit the high price period yeah it's going to be I notice Emily you attended a FERC New England winter gas electric forum wonder if there was any discussion about that or was that a helpful forum or I mean I think all of the issues that Darren just outlined were very much were discussed it was a meeting of the FERC commission so it was their meeting their agenda their panel you know invited panelists whom they questioned and a full full crowd audience you know listening in at the Hilton not an easy problem to solve immediately right for all the reasons Darren just mentioned well and your term immediately I mean all of these projects take a lot of time if it's whichever you want you know if it's offshore wind or if it's a pipeline from Canada I mean none of these are flip the switch and it's also probably as we increase electrification right it's exacerbating that problem of production right I mean we really and we really have to think about winter production that's where I think that some of the conversation at a very general level we want more solar we want more wind to to meet electrification great and and we support that but that doesn't necessarily help this winter challenge purely so we need to think about the resources that can come online in the winter you know and we have McNeil we have you know Rygate in in Vermont you know offshore wind might have a better winter profile than solar for example hydro from Canada would have a better profile I think than you know some other resources so the probable answer is we need all of that and then some because we're still heavily reliant on fossil fuels in the New England grid and to get there at scale we probably need everything in you know all of those solutions that we talked about coming online in the winter if the like the electrification that heat pumps things like that that's reducing the use of gas for thermal right correct correct that is possible I mean I think we'd see a higher winter peak on the electric side it's possible it could reduce on the gas side and whether that nets out on a kind of BTU basis interesting to look at electric is heat pumps are more efficient generally I think then you know looking at burning at 80 percent efficiency in a boiler so there could be a beneficial delta in some respect there 2.3 to 2.8 efficiency levels compared to like an 80 or 90 percent furnace or boiler right but I mean it also argues that the one thing that we haven't talked about is the demand response and the energy efficiency which is why the time of use rate for EVs is you know all of that and the exploration of the storage where all of that it really matters but agreed agreed there's that legislative you know legislative issues we're engaging as we move up towards the session the things that we're kind of keeping an eye on you know I think we're supportive of the efforts to have a clean heat program of some sort that would help move the heating fuel dealers and providers more in the direction of renewables that may come back this year we'll certainly do what we can to support that doesn't directly affect us necessarily in terms of our utility but it'll probably have a role to play in supporting VGS's direction as they're trying to move towards more climate programs the thing that is a concern I think the two things that are concerned are if there were changes to the renewable energy standard that were disadvantageous to us or if there were efforts to disadvantage McNeil and ironically I find this challenging this biomass task group is proposing restrictions that could limit our ability to do district energy which is just the opposite of what a climate focused effort would want we would want district energy in my view regardless of your view of McNeil as a whole because it makes the plant more efficient it decarbonizes significant amount in Burlington and the discussions and there was one today and there are more coming and this is just a task group that would report up to a climate council that would make recommendations perhaps to the legislature or the administration so there are many steps along that process and we'll certainly weigh in with our thoughts but if there were efforts to restrict district energy which we're still actively working on we have a meeting next week with VGS to go over some pricing issues we have the Evergreen team in town next week working on kind of completing some of the engineering and design work and we had a first meeting of the 501C3 board that is going to govern the Evergreen process which I've reluctantly been named president of and Neil is on it with us as well as Catherine Shad from the city and Megan Tuttle from the city as placeholders for what would ultimately be customer seats on the board if the medical center or UVM or others join up so that effort continues a pace we still have challenges there but we certainly wouldn't want to see restrictions placed on district energy by the climate council or the legislature and then in terms of renewable energy standard we're already over 100% renewable our hope would be that state law continues to recognize that and doesn't put provisions in that would limit the use of our existing resources or require us to buy more expensive renewables to replace the renewables we already have that's probably at least a two-year conversation from what I understand the department of public service is doing a multi-month engagement process that'll probably last well beyond the current upcoming legislative session and but I anticipate there'll be conversation around it some environmental groups are talking about trying to ban biomass renewable credits from counting in Vermont which would also be I think a very negative message in our view we don't necessarily always utilize those for our compliance here because they're worth more in other markets for the time being but we've talked with the commission and continues to be my view that as those markets converge and pricing in Vermont gets closer to pricing in Connecticut or New Hampshire we would all things equal love to use those credits here and the price for tier one wrecks which is what we use for our own compliance has increased from like I think it was a tenth of a cent well up to over a cent now so a really exponential increase given that there are a lot of utilities now that are procuring these credits in Vermont so it's not unthinkable that over a several year period you would have a convergence where our market and their market might line up to the point that you would say okay we'll retire the McNeill wrecks for Burlington so I wouldn't want to see a change that would limit us from doing that the tenth to a penny over what time frame was that probably like a two to three year period yeah it really did ramp up so the movement is in the direction you would want to see in order for those to align eventually and the pricing in other markets has actually kind of stabilized slash come down and so the delta is still there there's still a benefit to our customers to sell as opposed to use here but it's a less of a delta than it used to be and it's move the directional movement means we could potentially use McNeill wrecks at some point which I would love to do for Burlington our number for selling is like half a cent when we sell it would be like it's still probably like three cents versus a little over one cent so there's still a pretty decent delta there or James would use megawatt I'm using kilowatts so he would say thirty dollars versus you know eleven dollars per megawatt hour I always use kilowatt hour for some reason I don't know because state law uses that but James uses megawatt hour so so those are things we'll watch and we'll engage on brief note of thanks Commissioner Moody for joining us the appreciation lunch for employees at McNeill we loved having you we had a great time outdoors lucky for the season that we got good weather little windy Laurie helped us organize we had a lot of folks who joined us from McNeill and also from pine street to recognize employees who had served up to 40 years of service for Greg Thayer and 35 for Cheryl Mitchell and then for newer folks like myself it was our five-year anniversary so yes it was a good time and lastly this IBEW pension retro issue another really interesting one so we had I think we've discussed this with the commission previously there had been an arbitration result that had led to a forward liability and a lump sum retroactive liability based on conversations we had had with the city attorney and the city back in this time of year last year we had an agreement to share the retroactive cost pro rata so BED was paying around 435,000 of it and the and the total is about 1.3 million we've paid as of last year we had paid 100,000 towards it we have another 150,000 in our current year budget that was scheduled to be paid for it and then we got a kind of notice a few weeks ago from the city that they were looking at this again and then they think that there is assertion that that BED might owe the entire amount they had retained outside council who had worked with us on the arbitration to look into this I believe other departments may have pushed back on the portion of their budget that was being affected by this and that was what raised the issue and there may have been a lack of clear communication to those departments during their budget season about this that's so there's some moving pieces here we've noted in the audit a footnote I believe correct that expresses that there could be a reopening of this issue we had previously gotten PUC approval to treat as a regulatory asset this 435,000 if this is reopened we'll have to get new accounting treatment at the PUC and also we would need some sort of repayment plan from the city that was a number of years in length in order not to impact our kind of annual projections in a meaningful way so this is a challenging issue I continue to engage on it as does our team and I don't know what the outcome will be as of right now but we'll keep the commission updated certainly material costs so we wanted to raise it with you as soon as we knew about it but we don't know the outcome yet our 100% of the IBEW employees at BED yes that's that's a that's accurate there's kind of a discussion around around that issue of like who caused the liability which is IBEW employees BED employees but how would how would the fund have treated it you know because we're part of a fund was there what we had asked is was there a policy a written policy or a precedent that we could point to this was at this time last year we were going it's actually a little before this time last year we were going into our rate case we had said is there a policy written policy or precedent we can point to because initially the city attorney had said we think it's all going to be your responsibility and we needed that for the rate case to be able to say okay we need the accounting treatment we need to show why it's our responsibility because we're part of a fund it's not just BED employees it's all Class B which is school district DPW all these different employees and at the time they had not identified a written policy or precedent over a multi-month process that went through three different city attorneys because there was turnover at the time from Eileen Blackwood Justin St. James was acting and then we had Dan Richardson and it was Dan and earlier in his tenure that had finally made the decision that it should be shared for Arata and that was what we had gone on based on that with the PUC and now it's kind of being looked at again so we'll see where it lands and we'll obviously work through whatever eventuality I will say I know we're heading into the financials the good news since I haven't shared any the good news is it was a good employee lunch great that zero event well the good financial news on top of those good news is that I think and Emily's going to walk through some some stuff in a few moments but I think our FY22 when we review that with you will be very strong performance we've talked for such a long time about some of the metrics that we've wanted to improve and some of the you know net income operating income I think you're going to see the results of the hard discussions that we had about needing to raise rates originally and some of the other improvements that we've made are going to yield a really strong result for FY22 so I'm excited about that conversation pending the completion of the audited financials later this week so that's just a preview and then so far despite these mystic charges which are definitely an unbudgeted pressure I'm excited about how we're doing in fiscal year 23 year to date knowing that there's still that significant winter variable that could throw us off course or keep us on course for a strong outcome but I think BED is in better financial position right now based on everything that I've just mentioned assuming that all holds then we've been in a number of years maybe dating back to 2017 so that's something that hopefully collectively we all can take pride in I know this isn't a good reason to be in a good financial position but reduce staff is that contributing yeah and frankly vacancy savings is not insignificant it's not something we've planned for obviously and not something we're looking to keep long term but I think we're in a point now over the last couple years where we've seen pretty regularly between six and 14 employees at any given time are going to be having a vacant position out of 119 120 so yeah there's some room to move there and it's actually that plus our strong financial performance giving me I think the confidence to work with our team to put together a package that we're hoping to take to the city council in either late November early December to add a few additional positions knowing that we're not full at any given time and that we have a few acute needs that we'd like to address and we were going to address over a few years and I think this is an opportunity to not do a wait and see but to actually take some action to address some key challenges where we we have you know in one case we have a situation where we might have some pending retirements and getting a position filled early makes that transition easier in other cases I think we are continuing to focus on net zero and you know we added the equity analyst position the engineer position and energy services there might be room to add another position that looks at some of the regulatory aspects so this won't be an enormous increase in staff I think we're talking you know three to four but for us that's a big deal particularly if we can get those positions higher given the vacancy and turnover could stabilize things for us a little bit it's great to have the savings but it's really taking a toll yeah so I am worried about that yep I think we are we are challenged and I think you know we have we have some longer term structural challenges that we have to address we've tried to address a little bit with the city but there are certain aspects of our package overall that we offer that are not as competitive as I would like them to be our vacation offering for example is not competitive with the marketplace we've tried to address that a little bit with the city with HR I think that needs to be an ongoing conversation we just changed our remote work policy so we're now at a maximum three days a week in the office two days remote and that's the maximum some folks are one day four days some folks are full time in the office and some folks have been that way throughout the pandemic because they are working in the field or working in the generation or you know have to be in dispatch but we're competing with utilities that are offering up to 100% remote work in Vermont for some positions so that change could change our competitiveness for certain positions and that's something that is also a challenge I think for us the default is that you come in and get two weeks and I'm aware of others that are offering three, four, five weeks in some cases or depending on your seniority you might come in with more if you were leaving a position with more so that comes up in some of our recruiting conversations I think many years you know seen this where folks are saying hey I have currently four weeks and the most we can offer is two or in some cases three you know that ends up being a significant factor in recruitment two plus sick plus sick that's correct and holidays or just and holidays yeah so it's not if you look at it overall it's a little more competitive but people for whatever reason they they focus on that vacation time uniquely and ends up being a challenge well the markets changed a lot too it has well and I mean unfortunately we're not alone with this challenge but it no it doesn't make it any easier to bear through it so we'll continue have those conversations try to make improvements and be as competitive as possible yeah but anyways that was my segue to the great financials that you're about to hear about yeah I was just going to say it's it's challenging I feel like it we've had a few situations now in our in it is a very unique relationship the Burlington Electric Department with the city because I feel like we've now had at least three or four agreements that then it shifts it's very challenging to manage to a budget that way financials thank you Emily okay so July we're gonna we're gonna cover two months so we're gonna do a little catch-up first is July net loss for the month and the year of 1.1 million compared to budget and net loss of 446,000 so we did worse than budget key thing to note here was that we incorrectly recorded a 1 million dollar wreck purchase that we have subsequently fixed it occurred in 2022 we've included it in 2022 we found this during the process of preparing the 2022 financial statements so July expense here is overstated by a million dollars so actually we came in better than budget and you'll see it it will have been it was corrected in August so when I get to August the year to date will include the fix so that so just be aware of that but you know the sales to customers numbers are are exactly what they are right there just pretty much on budget only over by about 15,000 dollars miscellaneous revenues were under budget mostly EU power supply expense over budget by a million that's where that wreck purchase is hitting fuel was also over budget McNeil production was higher than budget we also had 21,000 of that mystic natural gas iso new england winter reliability charge hitting in July and wind production was also over budget and then O&M expense was favorable by almost half a million dollars mostly just due to timing in the tax row similar theme to last year the payment in lieu of taxes to the city was the bill we received was less than what we had projected so we're going to save $240,000 less than budget on the year so every month you'll see a better than a better than budget number there on the tax line I'll just zoom down here to capital spending overall 8% of budget we made our budgeted Velco equity investment in July so that's the big transmission 91% we have another small equity call coming in December and then in the other capital plant areas projects are taking place or not taking place still experiencing a lot of supply chain delays that's affecting particularly the distribution area production McNeil was running here so they're in an outage now so we'll see that budget we'll see spending bump up there in September and October cash position was 5.9 million as of July 31st and then I'll say let's not review these Moody's metrics they're fine but again the million dollar transaction in the wrong place I'm going to switch now to August like that's not what you were promising a minute ago well they're good for August too but at least they're good and it's right that's right let me zoom in on this I'm sorry I didn't mean to foreclose are there any questions about July I think you can just go now okay yes Bob you're no longer you're no longer showing that pandemic impact graph and when I look at the numbers it looks like budget and actual use are pretty tight yes and I can just so we all know what Bob's talking about I think he's talking about well there's the total sales to customers which for July oh wait which month am I in I'm in August okay this got both of them right so July we're right about on budget you can see August was a little bit better on budget for sales and then we do the residential right for our FY 23 budget we sort of budgeted in this kind of COVID impact we've been seeing so we budgeted residential like a little bit higher than we would have before the pandemic and I don't think we changed commercial actually I don't think we budgeted for commercially lower we just kind of followed the usual so when you see residential higher than budget just kind of have in your mind that that's like even better than the new normal COVID residential that makes sense it's interesting that you didn't change the commercial huh it's interesting that you didn't change the commercial because that's what I've heard from a city councillor actually that a lot of the commercial areas are sort of back to regular whatever that means yeah yeah I think we I mean we certainly saw significant impacts in commercial right during the worst of the lockdown but after that they kind of bounced back a little more quickly and you know it's hard to shut a big building down like completely right so even if it wasn't fully occupied I think as we've discussed before it's still being climate controlled to some level right so and then the arrears is also like the collection issue is salt going away a little bit too um I would what did we that's in the area and I was in here yeah it's better it's not pre-pandemic level we've started issuing you know notices customer care has had some capacity issues and so I don't know if we have actually initially like done any disconnects yet due to the sort of capacity issues related to kind of putting a knocker or putting a door knocker on and kind of making that final step don't we start to head into the winter when we can't yes I yeah yes we can still give notice we just don't shut off right yeah so here's August let me make that a little bit bigger for you oh I made it 4 000 percent sorry not that blind I know which pad of my computer not really getting along right now there we go okay um so sales to customers um generally on budget other revenues for the month also where am I budget actual oh yeah other revenues generally on budget power supply revenues these are rec sales rec revenues 250 260 000 under budget this is due to the lower wind and McNeil production that we saw last year affecting rec sales in this year power supply expense was better than budget fuel was favorable that's a portion of that 658 000 delta McNeil was offline for part of the time or production was less than budgeted that was offset by an increase in the wood price that we made to secure at a adequate supply for the winter which has been effective the forestry team has been doing a great job so we expect to have a full yard going into winter but we are paying a bit extra per ton for the wood capacity was unfavorable by 100 000 we experienced 120 000 dollar winter reliability charge for that Everett terminal in August and purchase power was favorable including the adjusting credit of the the million dollars for the rec purchase ONM was unfavorable by 180 000 again mostly timing we're earlier in the year and then gain loss this is a favorable variance that that's also timing so we're at overall we did 197 000 dollar better than budget for the year we're at a net income of 1.2 million compared to a budget of 1.7 so about 477 under budget and then capital spending for August overall was 17 percent so you can see some additional project spending happened in distribution and ID forward makes up a good portion of the general line again timing of those is always a factor August 31st we were at 6.6 million dollars in cash which is 101 days and here are the Moody's metrics for the 12 months ended in August 3.88 on the debt service coverage and 1.09 on the adjusted debt service coverage and you can see the three-year averages there as well excuse me any other questions nice to land the plane on empty or just a little yeah thank you for your work Bethany you're staring deep no I'm just looking through some of the data yeah any questions or comments yeah some real surprises there I mean with the and then yeah the July the 1 million yep although that's just numbers meaning it's not an inflow outflow anyway it was an outflow but one that we wanted to make right yeah it was it was a surprise that we weren't planning for right it was favorable yeah no and I'm looking forward to when we can get the FY 22 full-year numbers I think you'll appreciate those as well that is the last item on the agenda after I mean there's the commissioners check-in which is just our opportunity to loop back if anything else is remaining thank you Emily well I just have to say I wish I could wave a magic wand so that you guys had some good solid staff and but I can't so thank you for your work we have a good team welcome to adjourn yep second all in favor