 Good evening and welcome everybody to the Burlington Board of Electric Commissioners Monthly Meeting. This is Wednesday, May 18th 5.30 p.m. And we are trying our first go around at a hybrid approach So there are several of us here in the room and then several of us on the screen. You'll see we're a little shy We have two commissioners who were unable to make it this evening due to an anticipated Issues, but we will kick in and apologies in advance. We're figuring this out So presenters will be sitting there and viewers will probably see the back of their heads But next time around we will shift the wires and the taping around so everybody can see everybody if you're viewing from home So first up on the agenda is the agenda itself if anyone has any suggested edits or modifications hearing none second is the approval or Recommended edits if it's content related To the minutes from last meeting April 13th, 2022 Wondering if either one of you identified anything you wanted to clarify or follow up on or or perhaps wasn't captured exactly as we had anticipated or meant Okay, so if someone could make a motion to accept is presented All in favor Wow, it's so weird we don't do roll calls. I'm like that was so fast Third is the public forum I Don't I see anyone from the public here in person No one on teams Okay, well for viewers, you know, you're always welcome to call in to join us now via hybrid You know our customer care team led by Mike Kennerick is always available to Answer your questions and don't hesitate to reach out Fourth is the commissioner corner This is the opportunity for commissioners if we don't see something on the agenda or if it doesn't fit appropriately within the agenda for commissures to raise anything or Ask questions or say thanks for any particular information. We got anything folks want to talk about Bob's in mid-shoe About lighting, I know we're not going to cover it tonight for good reason, but I just thought I would Quickly state what I think the process is we're going through we Follow certain recommendations about our lighting we decided to revisit that question and The recommendation we follow more or less is from the IES the illuminating engineering society They routinely over time update their recommendations So we're trying to find out what their latest recommendations are They publish some but others apparently Are kind of pre-publicized in the certain circles before they are formerly released and we're trying to see if that's so And then a third step would be when we get that straight Is there something going on in the field of lighting that might be coming up with new results, which would be a Contradictory to whatever the IES comes up. So I see that as sort of a three-step process What do we do? What does I yes finally say formally and what else is happening out there? Just my suggestion for the process Thank you and for viewers who might be new to this We went through a review process of probably in 2017 or so it was 2015. It was a two-part review and Since then over the last year or so in particular Several streets have been updated According to those standards and we did hear from quite a few of Berlin-tonian residents saying wow is this is this really what's needed? Do we really have to do this? It seems You know exceedingly bright More so than what they personally think is necessary on the other hand We've also heard from folks who have expressed concern about not having enough light So we have reached out. I think Andy has reached out Multiple times since maybe March I did call this morning and left a message. I Would add one to the IES to try and actually get some feedback so that we could actually find out what the updated standards may or may not be And if anything had changed, I Would just throw in one additional preamble step Commissioner Herndon, which is that we were going to have a sort of an overview so that you know, I think Bethany had not been part of our 2017 conversation and neither had Jim And so that all five commissioners could start the conversation at the same level of understanding of what this what the background was and We ended up for a couple reasons number one. We didn't hear back from IES But also we have a very full budget focused meeting this time. We ended up saying, okay, let's postpone this for now I guess a question to commissioners and staff is does it make sense in the June meeting to go ahead and at least start off with the Primer the overview And to start the conversation regardless of what we hear back or not from IES since it's been so many months I think the the update that Andy Elliston gave or the I guess Primer that he had given I think if I want to say back in January if that was the right meeting Or February it was somewhere in that time frame I think he had kind of given a bit of an overview of the current situation and some of the challenges and then we were Checking in with IES as you mentioned to try to see if we could get guidance relative to implementing the standards I don't have any objection to revisiting in June if that's the right time I think Andy would probably benefit from knowing more specifically what the Commission might be interested to hear about because I think We've done a little bit of a general primer on the situation as we've understood it from some of the neighbors who have been concerned I think we did a broader discussion back in 2017 if I remember I Know Paul certainly is engaged from a kind of a safety standpoint with Liability and with the city in terms of what our requirements are for lighting the streets So we could engage with Paul Andy others to provide some sort of a just a basic overview If that's what's most helpful and go from there or if there's more specifics that the Commission would like we can we can prepare that Well, I did have a comment that I sent to Andy, which was that if we get to anything like a decision we've got to be up to date and If folks are up to speed and I appreciate why they might not be But if they were we'd probably get pretty quickly to the decision point and so to go in without IES info at that point would be kind of Wouldn't be useful because we quickly hit a wall The background I leave it up to the folks who weren't up to here back there in 2017 We'll make a note for the agenda for June To cover that topic more general and then obviously if we have feedback from IES by that point we'll share that I think it might also be helpful for the June meeting to cover what what we're following now a little bit more in the details not just at a general level a little bit more like our 2017 conversation Because that'll that'll inform people for if and when we hear from IES and at some point We should come up with a plan besides for an entity that isn't responding So Bob if it's okay. I know this is an area that you've studied for a long long time If you don't mind participating also in terms of you know what ultimately is presented in June because you are steeped in this And if you look at the presentation or if you chat with Andy and Munir about what might be most helpful for folks Who may be first-timers discussing this that might be helpful Okay Thank you It's a mellow meeting so far Other items from the Commission Okay, so next up we have the general manager update. This is an oral update Great. Well, it's nice to be here in person with everybody. I Had a few items to highlight one of which is and we hope The commissioners will share this we have new net zero yard signs that are a few of us have put up at our homes in which we want to see around the community folks can go to Burlington electric comm slash yard sign and Sign up for one and we have customizable stickers So if somebody has done any of the measures that we have a sticker for we can put a sticker on the yard sign Saying something about the e-bikes or EVs or heat pumps So it's sort of like we've taken a big step towards net zero and then it tries to highlight the different measures that we have You know taken at a particular home or or a property Just part of an effort to try to make this, you know more community engagement in terms of the net zero goal the The achievements the you know taking taking different types of initiatives And then We're also we've been I think experimenting with different communication strategies with our customers I know we've talked about we've done radio ads digital ads One thing that we're also trying to focus on is using the bills, which is a great obviously communication opportunity with customers So we had a bill insert that went in this past month's bill Talking about water heaters and if you have an older water heater Maybe consider looking at renewable options like a heat pump water heater And maybe don't wait till it breaks because at that point if you're trying to switch from fossil fuel to a heat pump water heater There's gonna be an electricians gonna have to come out maybe do something with your panel And it may not be very feasible to do so we tried to target folks who may have a water heater ten years Older older who might be starting to think about a replacement. Let them know about our incentives We're gonna have further communications coming as a bill insert. I think in the June Bills which will cover some of the items we'll talk about tonight in terms of the rates and the energy assistance But also highlight our e-mower program our e-bike program and our EV program So we're looking to proactively communicate We certainly appreciate any efforts the Commission can make in terms of amplifying those messages front porch forum posts in your neighborhoods Etc to let folks know about the incentives the yard signs the different things that we're doing because we want to get the word out Second item the thermal charter change has been signed which was great and We had a Resolution that came forward we worked on with the mayor and city council Which was passed unanimously earlier this month that basically lays out what the work is gonna be for Burlington Electric going forward with the charter change So we have a few categories that we're going to explore New construction major renovations City buildings and then large existing commercial buildings So I want to be crystal clear because this has been a point of discussion We are not with the thermal charter change looking at existing residential or existing small businesses for application of that authority we're really looking at those other categories of buildings and We're going to report back to the city council July 18th will be our initial report back and then we're going to have work that'll flow from that Further and we're partnering with the permitting and inspections department on this work The building electrification institute nationally which looks at best practices around the country And we're going to try to come up with some thoughtful policy options for those different buildings to help us Accelerate adoption of renewable technology reduce fossil fuel use Through policy because incentives are part of the effort policy as part of the effort as well Another item i'm particularly excited about we had a great meeting myself emily mike canerich who's on teams with the trusted community voices program in the city Which is a group that meets with leaders from refugee and immigrant community who are Helping in burlington to give us feedback on our programs We discussed issues around language translation for customer incentives and programs How we could do a better job in terms of outreach to our diverse community We've got some great follow-up takeaways from that meeting CEDO our our colleagues at CEDO helped to facilitate those meetings and I think there are really great opportunities there to expand our outreach efforts in burlington around some of our different programs and also to take Feedback on how we're designing our programs from that group so Hoping to have more engagement with the trusty community voices program going forward This question scott. Yeah, actually um so over at That where I work We have the Vermont language justice center Just sort of came in under us same building. See the same office. Oh, okay So they're translating COVID stuff Ballots those sorts of things And I'm wondering if there might be a Synergy there Yeah, if you have a contact. Yeah, Alison Seager. She's right right on our site. She you can see number of staff members, so it's uh I want to say it's a government funded thing grant grant funded thing, but we're finding that It's starting to blow up people are wanting that service because we're really interested Whether it's customer surveys certain website information other documents that we want to make sure translated and then We had a good discussion around that, you know, in some cases there may be a literacy challenge in addition to a translation challenge And so in some cases we need members of community who can share the information in different ways as well But that'd be great. Love to follow up Thank you um I had an item here on federal funding I can report an update that we were not successful on the partnership with cito for the Battery storage project at Elmwood Avenue the temporary Shelter site. I am looking into one other option there that might be relevant for us to be able to help deploy battery storage For that site. It won't be with federal funding, but I'm looking into another option So hopefully we'll be able to make something happen there where we can have Battery storage bed can utilize it for peak reduction during peak events And it's available for the temporary shelter site to ensure that there's always power We're pretty reliable in terms of our service, but it's important that there would be power there 24 7 So we're partnering with the city on that and then lastly And uh, was just over there today, paul picna and emily and others We've been doing a lot of tours at mcneal and winewski one We've had several city counselors members of the legislature Coming through. I think there's really just no substitute for folks visiting the plant And visiting winewski one and visiting mcneal learning about sustainability learning about the operations how it works I think it demystifies things a little bit and I hear persistent things sometimes in the community or on social media and sometimes people think for example that the Plume that comes out of the cooling tower, which is steam is somehow a pollution plume And so we can we can talk about that when somebody's at the plant Interesting just to kind of take feedback from those tours and learn what people found Exciting and interesting and given that there continues to be a broader conversation around biomass particularly at the state level I think it's helpful for folks to be able to visit the plant And learn about how we operate why it's sustainable and why we believe it's a appropriate part of the renewable portfolio for for the community so a lot of appreciation particularly to paul rodney betsy at mcneal and dav mcdonnell who have all done tours with us Over the last few months and john clark at winewski one Those have been excellent opportunities for us to Engage and we hope to do more of that in the future And that is the update Any question since you were out at winewski one There's something in our text about Managing for fishing could you Managing for fish? Well, you know fishing I think the term was oh At winewski one Was that in the oh in the in the report here? Yeah. Oh, okay. I just wondered what it is. Yeah, and paul can jump in on this Okay, that I understand I thought you were starting to change this flow That was one of the things actually on one of the tours that somebody mentioned was learning about the fish ladder and how john clark Works with the state fish and wildlife and that they're able to track which fish are coming in and In some cases he's able to take them further up river where they have a better environment to you know That's stuff that I don't think people know generally about about the facility It is it's very interesting and and yeah, they do great work Thank you, and thanks also for the full team right up as well Really good to see just the the stats go up on I mean granted It's not as many as we need but on heat pumps and heat pump water heaters and the strategic dashboard So next up we have the beginning of the meat of the meeting financials. This is fiscal year 2022 march This is a discussion with emily And this is like the emily burn show This is the second episode of the emily burn show last But nice to see you all in person. Nice to see you. Yeah, so I will Share my screen I'm I have too many things over First I will one thing I wanted to quickly touch on before diving fully into the financials was the accounts receivable Detail this is nor this is in the in the packet. Um, just to sort of flag This chart that we applied the ARPA funds in april. So you see the arrearages dropping off For residential customers and then we did an application of funding for commercial customers in may and just that I think Wanted to flag that we will probably retire showing this graph now that we've sort of applied the arrearages that Disconnects are back or will be occurring again so that this will be We'll probably wait till the end of the fiscal year, but then this will go away But anyway, just wanted to flag that so we'll dive right into the financials. Um, so march was another good month for us Net income for the month was 397,000 is compared to a budget of 886 So 471,000 better than budget or a niche Rephrase that net income was a negative 397,000 which is better than a negative net um budgeted 886,000 By 471,000. Um, so you're at a date where 1.4 million dollars ahead of budget On the revenue side sales to customers is up 115,000 dollars Primarily that is residential at about 103,000 and the balance is the commercial is up Other net revenues were down 61,000 dollars primarily driven by the eu And february is not a rec month. So there's no rec revenue in march. Excuse me But I forgot what year what month i'm talking about Um, so then i'm moving on to the expense side also very favorable Energy prices are still up. That's the primary driver between behind the favorable results in power supply budget There was production was below budget for the month and wood chip costs were higher for the month primarily driven by diesel prices But because the energy prices were so good, they made up for both of those Unfavorable directions on the power supply side Additionally, the gas turbine was called on to run on march 29th with a net benefit to be due to the higher energy prices Transmission costs were under budget as well as wind and when you scheme one, um production was over budget the operating expenses were down or Were to the good of 74,000 dollars primarily driven by labor at labor overhead And outside services being below budget Taxes are down for the same Same explanation as every month due to the pilot change that happened At the beginning of the fiscal year And other income was down this month due to contribution customer contributions being lower than budget The the wind rec revenue is that more A symptom of The market or is that more a symptom of how much was actually generated? I believe it's production, right? Yeah, it's it's not market. Yep Um, so that's the summary for the month. So for the year sales to customers Are ahead by 136,000 dollars last month. We were about right on budget Um Residential is still up compared to budget and non-residentials are down compared to budget we're below budget on other revenues Due to customer billings in the eu And we're under on power supply by 49,000 as the result of the rec production that we just touched on Power supply year to date is ahead of budget by 1.86 million, which is about 8 percent below budget Purchased power costs are down transmissions down and fuel costs are down total for the year Our operating expenses are also below budget by 1.27 million Not much of a change from last month. That's about eight and a half percent below budget Similarly a variety of things labor outside services materials are all under budget And our other income for the year is down Same as we talked about in prior months the ARPA assumptions and customer contributions that have not come in that were assumed in the budget Is there any questions on the income statement For the month or year to date Not I mean I think we're doing great so like it's a good year so far. I think um The rec sits definitely. Yeah helpful. Yeah. Yeah, high energy prices are definitely to our favor so I guess you know one thing I just mentioned is the power supply variance being the 1.8 million And really driving quite a bit of the favorable variance year to date As we talk about the f y 23 budget This type of performance Is a bit more baked into the f y 23 budget So we are looking at the energy forwards for f y 23 being high or higher Than what they were in f y 22 which were higher than what we had projected So that's just it's a a key point. I think for as we think about the f y 23 budget is Having these higher power supply energy market options when we're running At high price times in the winter particularly when McNeill strong production And we're net long and we're able to sell excess power for the benefit of our customers Is an assumption that's baked in more in the f y 23 budget than it was in this budget So it's a good thing for us, but I just wanted to be Clear about that Oh, where did where did james come from? Uh, just a quick one which is that the The forwards the the prices for the coming winter when we did the budget last year were very low Is there and says they were about six and a half cents Or winter power Right now they're around 21 cents for winter power. So, you know, now that we actually are seeing that Something forecast is now seeing that Forward market do that we can reflect in the budget last year. There was no Visibility to that happening the actual prices this last winter came in around 16 cents the working cents a kilowatt hour During january and february And I suspect we'll touch on this a little bit when we're talking about next year's budget But it'll be helpful. I think for viewers to have a sense of why we feel comfortable assuming that those prices will remain higher Yeah, I think we should touch on it when we get there certainly capital spending Um, so year to date we're about 43 Percent of the way through our capital budget. Um, a lot of this is just due to timing of projects the McNeill overhaul occurred in april so that will consume significant chunk of our remaining Capital to date. Um, and if you recall that we talked about in prior months there There are a couple things that aren't going to happen this year that were initially built into the budget including Purchase of Velco equity. There we go Of 1.15 million dollars. There was there are some it forward projects that aren't going to occur until f y 23 and the electric bucket truck Um, probably won't come is not going to come in this fiscal year or not next fiscal year either Yep, that would be cool That's supply related. Yes We want it the vendor uh has a delay and and I think we have um two other utilities in vermont that are going to get the same Uh vehicle and have a grant as well So we're anticipating it in the summer of 23, I believe but that'll be fiscal 24 So Yeah, we were hoping to have it sooner And real quick our cash at the end of march was 10.69 million at the end of february. We were at 11.9 Um credit rating factors are good. Um compared to last month The service covered ratio is up to 5.47 From 5.26 last month adjusted debt service coverage is at 1.5 up from 1.43 last month And our day's cash on hand is 138 which is slightly lower from where we were last month at 145 But all in all We're in a good good position coming in to march Thanks Great All right, what's act two Is the budget right? Yes. So do you want me to share it to you? I have um, I have it open So next up uh, well if you have do you have the current sorry? That's okay. We're lorry Sent everyone. Okay. Uh, no if you want to drive it. That's great. You've already got it up there So next up is um the fiscal year 2023 updated draft budget. This is a discussion and a vote And I think we're gonna if it's okay, um, well, how would the commission like to proceed? We have slides on the budget and the rate proposal Would you like those all together or would you like us to do the budget first and then pause? They're obviously intertwined But they're two different decision points, right? Correct Pause, okay. So we'll run through slides. I think through seven and then we'll take a pause um, great Okay slide one So just going into fy 23 No surprise to the commission and Emily, I don't you want to join too at the table here. Um No surprise the commission or anybody listening, uh, high inflation environment Uh, you know last several reports above eight percent. We're certainly seeing that in um our supply chain and In addition to, you know, high inflation We've talked about the energy forwards or our unprecedented levels That's potentially a positive for us in that we're you know long on power We're able to sell and benefit from that but uh, there are other kind of pieces of volatility for us You know wood procurement Which does have a component related to diesel fuel Diesel is incredibly expensive right now It's even more expensive on the east coast and it's diverged from gas pricing pretty significantly So where you might see 450 at the pump on gas we're seeing north of 650 on diesel So that's obviously as an input for wood procurement. That's gonna all things equal drive the price of wood higher So we're grappling with those pieces FY 22 we had the seven and a half percent rate change we Had at the puc a demonstrated need of 11.8 last year So if we had gone just for everything we needed last year, we would have asked for the 118 We asked for 75 so we knew there would be a piece Even if even if there were no other upward pressure There would be a piece that we would have to come back for this year to make that whole We have a ibew contract expiring at the end of the fiscal year So we'll have some new pieces related to that as we go forward Good cash position. We had this strong mcneal production. That's a benefit to us We're gonna start fy 23 in a better position than I think we thought we would When we were planning the fy 22 budget. So that's a positive The net zero revenue bond is a positive If we were trying to design this budget Without the bond and do everything we were talking about doing here You would be seeing a double digit rate request, which is something we're able to avoid Thanks to the financing and capital from the bond. So I want customers to know I want the commission to know that continues to be a key source of capital A key driver of keeping rates reasonable in the near term and continues to be a good decision I think for us and for the community and We saw just a moment ago great Metrics in terms of our credit rating Key metrics a 1.5 on ad scr is something we haven't seen in this meeting. I think since probably 2018 or 2017 so That's a great metric. I don't know that it'll stay quite at that elevated level through the Duration of fy 22. It's not my expectation that it will but I believe we'll end the year higher than we projected and we're in a position to With our rate request as well Have a continued improvement in that metric and keeping our days cash on hand metric above the a rating as well So we're always focused on those metrics. I think we've seen vast improvement in 22 And we've designed the 23 budget to build on that So I'll jump in with some of our key assumptions and a high level overview of the budget So we're assuming operating revenues of 63.6 million which is about half five percent higher than the FY 21 budget Should be higher than f y 22. Sorry. I just got that There it does include the rate increase of 3.95 that we'll discuss later effective august 1st in response to inflation and the other uncontrollable cost increases that the company's facing There is assumed increased kilowatt hour sales to customers as the sort of effects of covid 19. We assume start to Go away over time. And we've also included increased rec sales Operating expenses are at 64.5 million about 1 percent higher than the 22 budget and one of the big the big cost pressures within there include the wood fuel costs as Darren alluded to sort of Increased diesel prices that suppliers are facing result in an increased cost there Our transmission costs are up nearly nine hundred thousand dollars Purchase power and james may want to jump in but is Lower by 2.6 million and that's really due to the anticipated high energy forwards So we've been receiving additional funds as a result of the current high energy prices And we anticipate based on the futures markets for that to continue Into the next year's budget. So we've built that in to the f y 23 budget There is an increase of 134 thousand dollars to the city indirect allocation. So the costs Allocated to us by the city going up We've also included An additional fte a sort of project manager and business analyst But we're funding that by reallocating contractual services that are currently in the budget to fund that Our interest expense is about 30 percent higher than was in the f y 22 budget. That's due to the net zero energy revenue bond that we adopted And so the result of all of that is a net income of about 1.23 million Which is about 424 thousand dollars higher than the f y 22 budget We'll pause there if there's any questions or anyone else has anything to add I asked a while ago what fraction of our budget was debt service and it's kicked up Not off the top of my head We'll work on it during the meeting and then return. Yes All right Um, so to keep going sort of over that high level overview This also includes the energy assistance pilot rate that's been talked about at previous meetings Um, we're seeking approval of the of 18 month pilot rate for low-income customers to offer them a discount of 12.5 percent For f y 23. We will fund that Using the remaining ARPA funds that we have after the applications to cover arrearages that we're outstanding So our moody's metrics for the f y 23 budget our debt service coverage ratio We've 3.91 with an adjusted debt service coverage of 1.26 In anticipated days cash on hand of 104 days We'll pause there for questions I know we talked about this last month but um remind me what our estimation was in terms of likely uptake of the uh energy assistance I think we had budgeted based on an assumption James can correct me if i'm wrong of uh somewhere between like 800 to 1500 customers participating Uh, which was based on participation rates. We saw from gmp and vgs Not on our current participation rate with the energy assistance program, which has been low and climbing sort of steadily That was somewhere north of like a hundred k or so correct. That's correct Um, so this is probably a familiar slide. I know it's been in presentations in prior years. Um, but just demonstrating that We've sort of kept um controllable costs down as to where they were projected to be You sort of use f y 16 as the baseline with average growth and the bulk of that is How much would you say that's like the inflation compared to This slide may be less relevant in future years. I think we've we've kept it as sort of a it was originally put in I think to reflect the reorganization that happened When nil was general manager and we had A buyout and we had a kind of flattening of some of the cost structure that was built in And so we had compared this period prior to f y 16 with the period after and there certainly is a delta that's Reasonable in terms of how we managed controllable costs, but I think and we kind of have this parenthetical in here Um, I think the period of 07 to 16 Uh, the inflation during that period of time is not really comparable to the inflation that we're seeing now So this may just be a less relevant or less useful comparison As we go forward than it was in the past Well, also if I recall with the restructuring it was mostly estimated to have like a financial benefit of like two to four years I want to say three right and so we we've we've certainly not about that We've not grown at the pace that we were growing at that point on this particular metric but I think it'd be fair to say that that's sort of now baked in and Um, we we might not present this slide next year Perhaps is that that was your take? Yeah, I think we all agree on that James made a point about it as well. So It may have served its purpose All right, we'll go on to um capital spending. So we've got about a 9.1 million dollar anticipated capital investment Of course, so at 11 percent of net utility plant and service It includes the three million dollar general bond general obligation bond and 5.7 from the revenue bond The balance of that is you know cash spending included in that capital spending our additional EV chargers a new electric fleet vehicles I'm purchasing some This I'm keeping this bell co bell co equity. I'll get there Um an additional distribution and IT system upgrades and general plant maintenance Looks like the bulk of the increases in distribution That's partly revenue bond projects And transmission is going down that much Yeah, that's the It's not the it's not the transmission expense. It's the equity investment in velco. I'm getting it from velco Okay, which is based on the equity calls that velco chooses to issue and their own debt to equity ratio and financing structure Okay, so like that does right, okay Wrap this wraps up the budget piece. Um, obviously important for us to continue with all of the various net zero initiatives um I won't touch on all of these but I do want to note that we do have in the budget the plan to Double funding that's available for customer incentives for electrification, which was part of the revenue bond proposal um, so that's included Continued, you know strong incentives across all of our different categories um, we have funding for two other vacant positions that we hadn't filled during the pandemic that we're hoping to repurpose and fill in the energy services and sustainability areas to add to our staff capacity for net zero we will have We've actually I believe we've ordered the level three charger first in the city for Replacing the current one here at 585 pine and we are exploring an option at a lower kw rating for the marketplace garage Which would use the existing infrastructure and add a new level three there as well We'll continue to try to roll out additional level three chargers as well as level twos We mentioned or emily mentioned the two fleet evs We're looking at Maybe a truck if paul can find one and jeff, uh, but certainly if not potentially electric suvs We'd really like to have an electric truck in our fleet in the near future It's important for us to model new technologies and and adopt new technologies And there's certainly some compelling electric vehicle truck options that are now being offered. They're tough to get but um I wanted to mention too that One initiative that really came to us from our line crew Was replacing their their gas chain saws and pulsars with electric so we're we're When are we funded half of that this year and half next year? So we'll be fully electric on the uh chain saws and pulsars we're we're pleased with that and um the Converting the gt to biodiesel we're going to start that work uh in f y 23 And the community ambassador program there is something in emily Area that is going to potentially Help us to further our outreach Uh, you know kind of similar to the trusted community voices program to have folks that we're engaging with Who can help us with outreach to uh different parts of the burlington community? So that's a new initiative for us as well. That's part of the budget so We can pause there. Uh, the next piece of this is related to the rate change proposal Sorry go ahead Recognize our ace financial analyst, Cheryl Mitchell who's here And who has provided the answer to your question commissioner harondine That service principle and interest are 12 percent of our total use of cash. So total use of funds um How technologically challenging is it to convert the gas turbine to biodiesel? Paul picnic says it's very easy It's right pa sarcasm there I'm hearing some sarcasm. Do you want to come up for a moment? Um So we are actively seeking a partner to help With the biodiesel conversion. Uh, we're thinking of a staffed approach preliminarily preliminarily our title five permit allows to for up to b20 Um conversion under the current permit We're hopeful that we can get some sort of conversion Out of tremendous amount of engineering And uh capital expenditures required for upgrades and then Time that with the title five permit renewal That is up any way to go up to a b100 conversion. Um, I do want to know that this is um You know, the planning is in its infancy infancy There's two entities that we have partnered with in the past that um have not been able to give us proposals and timelines to date Um, so there may be some struggles, but I do think the general plan is sound Uh, and hopefully we can we can pull it off. So some sort of b5 to b20 conversion Stepped up to b100 and the the next couple here at the following year Oh, sorry percent of uh percent of biodiesel so b20 would be 20 percent Um, what's the you know cost factor that you know generates a bunch of money Just having it from iso new england So you need From a cost benefit potentially we could gain exposure in a rack market. Um, if it's renewable Um, and then just adding to our 100 percent renewable portfolio You know, I think there's some value added there certainly meets our emissions and values and goals as an organization Uh, does the price of biodiesel converge with diesel more or less? You know in the current climate, I'm not sure everything's we have a voice from above. Yeah, James might have an answer Well, it probably is but I don't know if that's permanent at the end of the day We don't really operate that for energy. So the cost of fuel isn't that critical component You know, it's really the the capital cost in the business case around the capital cost Is what I think we need to be focused on more than the energy price Um And I was thinking a little bit about, uh, you know, if you, um upgrade your furnace or whatnot you end up having to Uh, you know take into consideration Certain technical factors like whether or not your basement gets too cold to go up to be 100 or You know the viscosity and all that. Absolutely. Is that is also a similar Issue concern. Yeah, absolutely We are we're going to thermally wrap the gas turbine Well, we're at an advantage because our fuel oil tank is indoors So we're at a huge advantage there um One potential struggle that we're going to be faced with for a uh step Say b20 conversion is a tank agitation may be required. So that could add to the costs And that could hurt the cost benefit analysis, but um, we're just not there yet to fully Understand if that's required. Uh, but I assure you we are we are trying You can't just shake it That's funny, right? Yeah 100,000 gallons. I know Giant stir Christian, so, uh, I know the answer to this but anyway, uh When I hear biodiesel in general I do wonder about supply and I haven't done the numbers I should On the other hand, this is a small use So I guess when you say be not worried about the price too much That's based not only on thinking about your own use which probably doesn't affect it very much But what's out there in the world regarding the biodiesel future? Yeah Yeah purchasing has helped us out with uh supply chain considerations Um, you know, we're we're tentatively being told that supply May not be an issue And Having that said in an ideal world, let's just say There's 48 out, you know, it's a system emergency 48 hours until biodiesel trucks gonna show up Ideal world we can still burn diesel fuel. Um in that case, obviously There's an impact to reporting, but um, you know, the the goal would be we wouldn't lose full functionality of diesel Um as a fuel You know if we could pull that off from an engineering perspective Was really more to the point that the the unit's primary revenue streams are from the board capacity market for reserve market Neither of those markets require material amounts of operation for energy And to the extent that it does on energy it's usually at very very high price time So what we would do is the the cost of biodiesel would be factored to the bid price It would effectively start the unit a little later than it currently starts today at all in terms of market prices But we won't lose money on it because it wouldn't run At a time where the cost of biodiesel wasn't economically Right it's mostly on standby correct Thank you. Sorry that was a digression, but it's unusual to see that proposal So thanks for your work on it. I don't imagine it'll be easy I don't think it will be but We're aspiring to get it done Thanks So we had just gotten to the end of the budget presentation. Do folks have questions about it? I we should not be voting on the budget Without having the rate Discussion because the two are yeah, I was going to say What were you going to say about rates that sort of connects with this before we get Yeah, we're a bridge that connects them. They're happy to go through the rate slides if that's helpful now Yeah Well, I do have a question which may or may not Work right here When I was looking at the residential Electricity used for the last several months It turned out that Compared to the budget more was used whether it was colder than average or warmer than average And then I said, okay, that's just pandemic noise Um, so first question is it pandemic noise and the second question is if so Is pandemic noise duly handled in the budget Or post post pandemic noise Hopefully I would say the answer to both of those questions is yes Right and that's I mean, but this is our Speculation but just speculation based on observation of sales to customers throughout the pandemic Generally speaking most months residential use has been higher than we had would have previously forecast without a pandemic and Commercial most of the time has been below what we had budgeted or predicted most of the time But now more than two years into this event Who knows what life will bring right, but we're here in our first hybrid meeting for example um, it sort of is appearing to us based on sales that More people being home more of the time than before the pandemic Is a reasonable assumption And and as you saw in Emily's presentation, there was a note that Kilowatt our sales in the budget Are projected to be up a little bit Um because of what we think is going to be A long-term effect or at least an effect for the next 12 months Of that trend continuing where residential use will be higher You know, but not by huge amounts, but higher than we were would have been predicting in our on our you know prior pre-pandemic load forecasting models And the commercial side i'm guessing a slow increase over time. Yeah, exactly But not Um a false. I mean we keep waiting and it's just a it seems to be a slow Like that's right opening. Yeah Do you want to drive? I want you to drive. Great. You're you're the boss Okay, this is a slide we had last year. Um, oh, well, yeah, we'll start with the headline We're proposing a 3.95 percent rate change. Um, we had talked I think last meeting about 4.9 percent Part of the reason we're able to lower it to 3.95 is based on those updated energy forwards. So that is If there was a risk a prime risk in this budget, it would be one of two things either we had Let's say mcneil offline for a significant period of time during the upcoming winter for reasons that are out of our control Which is a risk generally, but it's a heightened risk in this price environment or secondly that We had such a mild winter that the high energy forwards did not materialize I think all the other dynamics that are causing those prices to go up are going to be in effect And likely to continue to be in effect during the winter. So I think the prime risks would be one of those two things happening Even in a normal winter if mcneil wasn't running at normal capacity during the winter You'd see an impact. It'll just be heightened in this budget if that happens So that's the risk the benefit is If if things go as we project the 3.95 percent gets you The moody's metrics that you saw the 1.23 million net income that you saw And does so at a lower ask of our customers than what we were projecting to need Last month and I think in in this inflation environment 3.95 is is a pretty good You know rate increase and certainly as we think about things like Folks who are driving electric compared to people who are paying at the gas pump The volatility at the gas pump is extreme and prices For other commodities such as natural gas are increasing pretty dramatically. So we have a relatively stable Cost structure here that I think benefits our customers overall so Oh, sorry go ahead To your point about if we have a mild winter So, you know a net income of 1.23 million isn't a huge cushion Asking the voice from above which james you would love to know what it's like Wondering If you look back over like the last 10 years of a of a mild winter You know what what that looks like It it would it could be a fairly significant impact on the budget not not well well above six figures But there's not much we can do about that. We're you know, there's a constraint to almost we can ask for in rates We're not allowed to put in whatever we want for energy assumptions in rates either So we're kind of hamstrung. We're still exploring potential transaction that would reduce some of that risk if we can Um But you know, what does a mild winter look like if the disruption in the Ukraine is still going on? What is a mild winter look like if it's not? Um, what does it look like if the disruption in the Ukraine is still going on and it's not a mild winter? That's that's actually an ugly scenario. It's worse than we've seen it or at all worse for other people better for us Because again, we have excess renewable energy But if it's I mean just for for context, I think last winter where we saw a significant benefit was not a particularly cold winter And we still saw that benefit It was it was very slightly warmer than normal winter and we saw record prices As far as I'm saying if there's any disruptions on top of that and winter is normal or colder than normal You know, if you get seriously expensive But again as long as the meals online and other resources are performing reasonably we have access energy Yeah, I think the key uh for perhaps Viewers who might be thinking about this is the fact that to your point We can't just go in and say we think we should have a higher rate increase because of this risk So it's threatening this needle That's right. That's right. And obviously all things equal. We're always happy to hold the rate increase lower But we're doing so based on what we know about current markets. So it's it's based in reason Hypothetically if uh, you know, it was a mild winter if gas prices were lower recs were lower, etc Have there been areas in the budget that you've looked at that you could say this could be postponed for a year or I mean we would go through if it was a significant variance not just a mild variance, but a significant variance We would likely mid-year go through the type of exercise We went through during the pandemic where we adjusted our expenditures We postponed certain expenditures and we do everything we could within reason to keep expenses low Um, we might not be able to mitigate the entirety of the impact But we would do everything we could to to try Okay, okay back to I think we'll go to the second slide on there Um, so this was something we presented last year. This is just the timeline of our rate changes um, and obviously We have a second rate change now in 22 after 21 I think it's my expectation and our team's expectation that we will have rate changes regularly like we've talked about But our goal and our commitment is is that we're trying to make them more moderate than what we saw with the 2021 7 and a half percent. I think we've we've done that this year I'd love to get to a point where we're even more moderate than what we're proposing this year But certainly we'll we'll always try to look at things like inflation and other You know metrics as a way to judge whether we're Keeping costs low or whether costs are too high I think next slide Is kind of to that point. Um, this is only through february I would note this does not include gasoline prices for example or they might be Kind of moving off the chart a little bit But uh, if you compare our rates at the bottom in the dark green To things like housing like medical care like inflation vehicle prices You can see the increases and some of those increases would be even higher if we were showing them through march april or may Um, but we've been able to hold our rate trajectory Well below the rate of inflation over the period of time that's uh, you know represented in this graph which is I think a 12 year period So I think we we continue to have kind of a good value proposition relative to Some of these other cost metrics that we look at Show admission like going to the movies. Yes I remember with our team we put that together last year. I think it was yeah price of going to a movie Or the flint Interesting So residential rates We have here On the top two lines a projection. Uh, these are not actuals for new england and other vermont utilities Those trajectories could actually be higher when we start to look at actuals. So those are just projections But as you can see on the dark green We continue to be well below the state average and the new england average in terms of residential customers What you see with the blue line that diverges, uh, is our energy assistance program rate and so we can we'll talk about that a little bit more But with the new energy assistance program being a 12.5 percent discount Even when you factor in the seven and a half and the 3.95 Those customers who are participating that program all things equal are going to see a lower cost Now when they start that rate in the Uh july it'll be july the 12 and a half percent discount than they would have before our most recent rate increases So we're providing Hopefully some material assistance for our low-income customers who are participating in that program Um, so on this slide again I have to make the caveat that the other new england utilities and the vermont utilities lines are projections Those could actually be higher. Um, but in terms of commercial industrial This would show us being a little higher than the vermont average lower than the new england average um So we'll have to see what that looks like when we see other utility Rates actually come in and we can certainly update that um And then on the next slide total rates we continue to be lower than the vermont new england averages on total rates um Which is just a helpful metric. Um, I think on the next slide Uh, just another representation of each of those in terms of where we are currently in blue Where we are proposed after the 3.95 percent in dark green You can see we're lower on the residential side than any of the other state averages including the vermont average Uh, and on commercial industrial We're a little closer to mid-tier. Um in terms of total rates. Uh, we're still in kind of the bottom third Even after the proposed increase So question that we always want to get to I know is what is the actual impact for customers on their bills? For a residential customer the proposed increase would be about a three dollars and ten cent increase for an average residential bill For small general, which I believe represents, uh, roughly A little more than two thirds or of our commercial customers The increase would be about 350 on an average bill And then I think we have one more slide. So this is going to that point about the energy assistance program Um, if you took both of our recent our seven and a half percent and our 3.95 that's proposed both of those rate changes um, that added About eight dollars and 95 cents to customer bills for low-income customers who would be participating in the energy assistance program the bill credit starting in july would be Ten dollars and 65 cents. So they're actually going to be saving a little bit relative to the bill impact from the rate changes um The program which you've already approved and the city council has already approved and is going to the puc for approval Uh, and there we have it 800 to 1500 residential customers are that's what we based our assumptions on as as I mentioned earlier And uh, 185 of federal poverty continues to be the metric that we're using for participation. So That's obviously a critical program for us for our low-income customers. We're going to do everything we can to help increase the participation rate from where it's been And I believe that was our last rate slide What's the process of? you know when we filing to Actually and I know we can we can actually implement it before it gets what's that what's that time? Correct So we're anticipating something very similar last year where uh, if you all advance it this evening We will discuss it at the board of finance tomorrow at our budget presentation there The board of finance and city council would review and vote on it on june 6th at their meeting on june 6th We would file with the puc mid june It would go into effect on customer bills as a surcharge starting august 1st Uh, there's a 45 day window and then it goes on as a surcharge. So people would see it on their bill in august It would go through puc review Um last time that took uh several months. I don't know if it'll take the same But sometime towards the end of the year, uh, the puc review would be likely to conclude And if it's approved then it would just stay on bills and be incorporated into rates If there's any divergence in terms of what they approved That would get refunded to customers at that point in time Or or any change would flow to customers at that point in time We think again this year not by quite as large a margin But we think there's some headroom in what we're asking for relative to what we could ask for I think this year it's probably less than a percentage point Whereas last year it was seven and a half compared to 11.8 But that still means we're hopefully making a very reasonable ask within the regulatory context And that it would be likely to be reviewed and approved assuming our assumptions are are correct You mentioned earlier about Asking more regularly for rate increases Just curious as to what you mean by regularly yearly by year by annual annually annually I think it's prudent for us now that we're on this course to adjust rates annually You know some of the utilities that have what's called an alternative regulation plan GMP and vgs actually adjust components of their rates quarterly They have fuel costs that go up or down quarterly Sometimes they have storm costs that are reflected in different ways We go through a more traditional regulation process where you would make a rate adjustment based on a request But I think it's in order to avoid a scenario in the future where we end up needing a larger request And we certainly you know heard from folks that even at the 7 and a half percent after 12 years of no increase was still a burden I think it makes sense to try to have smaller increases on a more regular Basis just to cover the cost of inflation and the cost of continuing to invest in our workforce You know annual colas things like that Rather than let them pile up at some point and then have to make a larger request So I just think it puts us on a more sustainable footing from a financial standpoint. My hope would be I don't know if it'll be next year or or the year after but my hope would be We get to a point where we're able to utilize the 2% or less Rate changes that don't have to go through puc approval that municipal utilities are allowed to ask for and electric cooperatives Because that would mean that we're we're saving time in terms of the process But we're also asking for a very Relatively small amount. So we'd love to get to that type of trajectory in the near future Any questions have you heard any response from the press release that went out today? No, I will say we've been more proactive about communicating with With the city council and with customers who expressed interest during the last Rate change. So we've certainly engaged in multiple meetings during the course of the year with UVM and UVM medical center because they're obviously large customers changes in our rates have a significant impact on their budget So they've been well apprised of where we thought we would land and we had been telling them that we thought 4.9 was a potential So now that it's 3.95. It's it's a slightly less impact on their budget We've certainly indicated to the council earlier in the process what we thought was going to be The proposed change and and now we'll we'll be bringing that to them at a slightly lower level So I think we've done a little more proactively And I my hope would be that customers can look at that and look at the relative moderation in terms of the request and That folks feel like it's a reasonable request particularly paired with the energy assistance program, but Our release did make note of every opportunity folks have to weigh in Including this evening, but also our board of finance presentation our city council presentation and then the PUC process Um last year we did not have a customer Engage with us during the PUC process And has this gone out via like front porch forum and Any of that yet? Um, no, I don't think so. I think we had the news release But I don't think we've had a front porch forum post we are going to have Bill insert as I mentioned that'll kind of be a fiscal year 23 update From me and it'll have a page on this and then a page on some of our incentive programs So that'll go out to every customer in the course of june We also have in the north avenue news that same column will run So we're going to let folks know through north avenue news And we'll have this up on our website try to make other efforts to let folks know about it I'm just thinking in the future should energy ever be inexpensive And you just probably know Um So There's the price of this kind of energy. There's price of efficiency and the price of other kinds of energy like gas And the one that seems to carry the most weight is the competing energy price So i'm just reflecting on that so, uh the way the agenda is structured is that we had the 22 23 updated draft budget discussion and vote and then at the tail end agenda and number nine as opposed to 2024 rate case discussion of vote And then you guys have the general obligation in between those Is there a reason why we shouldn't? You know vote on both of these Right now and that's what I thought yeah, we can okay Do folks have more questions or comments or Are you ready to vote? Did we discuss the geobond? No, that that that's what I was saying Um, the fact that really we're going through agenda item seven and nine and then we come back to eight We don't really have a presentation on the geobond. Um, it's I think it's boilerplate right same as it always is Happy to answer questions Would someone like to make a motion Guys there are only two of you and I can't do it I'll make the first one you will go back and forth there I make a motion to approve departments fiscal year 2023 capital and operating budgets as presented second All in favor hi. Hi well, um We can do both Make a motion to recommend to the board of finance and the city council to authorize and direct the chief administrative Offer officer to pledge the credit of the city by issuing a bond up an anticipation note or bonds in an amount No, no, no, we're doing the right. Oh, sorry Try that again I make a motion to recommend to the board of finance and the city council the authorization to pursue a rate case with the Vermont public utility commission In the amount of 3.95 for services rendered beginning august 1st 2022 All in favor hi Uh and thank you. I know you guys, uh, I mean we got this I think saturday at about noon And I know you guys were really pushing to try and figure out how to get that rate increase as low as possible So thank you While also doing everything else like making our gt run on biodiesel Not you guys But thank you and it's it's never Great to say. Hey, here's a rate increase, but uh, the reality is things do cost more as the years tick by So, uh, second to last on the agenda agenda number eight is the fiscal year 2023 general obligation bond This is a discussion and vote and this is as was mentioned earlier A repeat visitor every year, but go for it. Emily Sure, so at a high level, this is um to authorize the city to Pledge their credit to issue a three million dollar general obligation bond to make electric capital improvements at bed And there's a motion for you If you agree Well Yeah, I just uh for for folks who you know for viewers who may not have ever heard the background on this I I'd like them to not be like, oh, yeah, three million. They said sure. Can you give a little bit more background? just Sorry, I'm putting you on the spot. Sure. So the um The city issues a geo bond every year three million of dollars This would direct three million dollars of that geo bond to bed To support the capital projects that were outlined in the budget. We just adopted and any risks or concerns that viewers should know about I don't believe so. No, it's been part of the department's capital financing structure for I believe quite a while. It's authorized a number of years. Right. It's authorized under the city charter. Yep Yep, it looks like since 2012 Thank you and Yeah, I was going to say I think it's been here since before I started and I think I started in 2012. So Okay Okay, now we've given information. So thank you Oh, okay. Well, I can make a motion Uh, I moved to recommend to the board of finance and to the city council to authorize and direct the chief administrative officer to pledge the credit of the city by issuing the bond anticipation note Four bonds in an amount of three million dollars for the 2023 fiscal year to be used for capital improvements additions and replacements And for the efficient and economical operation of the electric department I'll second that motion All in favor. Hi Uh, thank you. So last on the agenda is commissioners check-in. Um And also just thank you for doing all the prep work last month as well because I uh, if we hadn't had that sort of deep dive into the budget Um, this wouldn't have gone as smoothly. So just understanding the pros and the cons and the things that need to be weighed up. So thank you Um, commissioners check-in anything to follow up on I've already done this, but I'll do it again. Thank you Mike for Digging in the question into the question of how much btv stat info would be available to the public Turns out not not a lot. But anyway, thank you for the answer I went on the website today And I guess I knew this but Our performance, uh report wasn't issued in 2021 At least it's not on the website We hit a website only version. It wasn't a It wasn't a report. Uh, but there is a 2021, uh, performance or sorry There was a report issued in 2021. We have not yet issued one in 2022 to cover 2021. I think that's what you're Well, uh, but I look at one that's in the works, um for 21 data There's a list Going back to around 2009. Yeah, if you click on each one, right that list ends at 2020 Yes, so that would be right because we haven't issued one in 22 and that would cover the 21 Report the last one we issued was last year and it covered 20. Okay, uh, Sorry about that. Well Make sense As usual, I was trying to get Access to as much info as I could on the Synapse recent report and all that Some of that's in the state the stuff you presented and I think then presented city council Is there is there anything else? I think it's in the dashboard. Um, that we've shared, uh, the number of the metrics that are Relevant are in the But which is Uh, but I will ask so there is there is that graph Is showing the Um trajectory if we're yes good and we have a little Segment for the first year and then we saw something about a segment for the second year, but I don't know if I can find that I'm happy to uh, yeah, I think it was in the presentation that I'm right, right I'm happy to send you the The slide if that's helpful. No, I if it's in the presentation. I know how to get it But the question is is it on the website? Oh, no, it's not on our website No, it's it's posted on the um Board docs for for the board of finance city council For the evening what we presented it and it would be potentially in the updated PMR when we issue that Um, but it's not currently on our website. That's right and that PMR will come out Um, Mike and I I don't I think Mike's on teams. I don't know if he can chime in but he and I have been discussing it Uh, trying to get together we we went away from doing a printed version So it is only online now But he and I have been discussing trying to get that together a lot of stuff has been held up just to get through the budget and rate Uh piece here, but um, it's something that we've been actively talking about trying to get up in the next month or so Uh, you've since what I'm yeah, this is Go ahead, Mike Hi there Can you guys hear me as Mike? Yes. Yep Yeah, I just wanted to say bad things for the kind comment commissioner herring dean always glad to get you information And um, we have a meeting actually next week Darren myself Emily About the PMR the reason that the 2020 report was on the website But not as a PDF was we changed how we were presenting it to reform out We think in the long run will be More informative and we plan to do that again soon to capture what happened in 2021 Part of what we were waiting on was our synapse report for this year So I expect the next several weeks we'll have that report up and we'll be sure to let you know Yeah, you get the drift as a bookkeeping Type person. I'd like to think that's in there for somebody who wants it Absolutely, and it's it's known to most of us, but it's not there yet Absolutely Thank you If I recall correctly, it's usually in about june that you and I go before the City council and give sort of an update and that's usually when we also give the PMR If stop doing that, I think or at least they have over the past few years We used to be that the PMR actually came out town meeting day And we used to issue it on town meeting day That's no longer been viable because our synapse update doesn't typically come to us until april Because they're looking at data as a you know year end december 31st So it takes several months to get all the relevant data So the last couple of years I think we've been looking at the PMR being something that we publish in the may june timeframe I don't know if they're going to restart the kind of the annual updates that we have been doing Or not but if if they did it would be helpful to have that kind of simultaneous But I haven't heard anything Yeah, me neither normally there's some coordination for dates I asked last year and I think last year they had decided not to proceed with it I don't know if that was a pandemic related, you know challenge that maybe we'll start that again Well, what I'm hearing is Mike, it would be great when that's up and ready And and also it sounds like perhaps The format if if it was still possible to have a pdf that was downloadable that might If it wasn't a huge amount of work that might be helpful for folks who tend to print information like that in a sort of pdf way am I Am I understanding what you're saying commissioner herondina? Well, I hadn't put it that way, but I think I think it's great. I mean, I'd like it to be accessible. Should it be downloadable? Seems to me that's probably marginally easy to do. So why not? But maybe it's not But if it isn't I'd like it to be on the website Right, so Mike, maybe you can look into that and just let us know how it goes now that you've heard sort of what the What the ask is Absolutely Thank you, Mike Other items No Okay, well, thank you everybody. Thanks a lot for your hard work And as always feel free to reach out to viewers To Mike Kenner or anybody else here at the team All in favor Hi, thank you 657 may 18. Thank you everybody