 And welcome to we are we on the air or on recording CCTV is on and I'm also recording excellent okay so welcome everybody to the regular meeting of the board of electric commissions for BED in Burlington Vermont this is Wednesday November 4th starting up a little bit past 5 30 apologies for that and first up on the agenda is the agenda itself whether or not there any modifications or requested edits not from here great the usual problems but I'm on yes great good to see you congratulations thank you next up is the minutes of the October 14th 2020 meeting if folks have had a chance to read through them review them unfortunately I was not able to attend so I will be abstaining my vote of approval but we do have at least three other committee members here so I will let you all handle this next portion in terms of if their edits or changes done here I'll sit here I'm good here sorry yeah I'll sit here too great so then if we could have a motion to approve move to prove is presented and the second second all in favor I mission or shagman mission or Heron Dean hi mission or moody hi commissioner Stevens oh you're abstaining I'm sorry I'm gonna abstain okay thank you motion passes thank you next up we have the public forum I don't see any unusual abbreviated first and last names but that doesn't mean there isn't someone from the public here there is no one from the public thank you Lori well so for folks who might view at a later time please know that you're always welcome to give a call to the staff their hours are up on their website frequently starting at 730 and you're also always welcome to reach out to any of the five commissioners or attend our future meetings we have shifted back during COVID to our normal 530 Wednesday PM start time thanks Scott I think that's important next we'll move up to commissioners corner so anything anyone would like to say or add or contribute before we begin the meeting all good here Bob just hit the mute okay I was just thinking what the consequences of $100 per ton fee might be from up for me in my house and run through the numbers I did and it would be about $3,700 for that 10-year period is that paid upfront if you don't electrify I think I can I can address that this relates to one of the items in the update the policy would not apply to to you at your home who might be viewing could you give a little bit more background it wasn't the update but perhaps people weren't watching or you know didn't read in advance no absolutely so as part of our work on on net zero energy and on policy along we Burlington Electric along with the office of city planning and the permitting and inspections department have put together a proposal to the city council which will be reviewed potentially this coming or actually this month in the ordinance committee related to building electrification and decarbonization and it applies it's intended to apply to new construction projects so that's why I was addressing Commissioner Heron Dean it would not apply to an existing building or to an existing home but for new construction projects it would set up a structure where there would be if the building was going to connect to fossil fuels for for thermal needs there would be a policy where there would be $100 a ton fee on the carbon emissions that would be paid upfront to answer your question Commissioner Heron Dean based on the net present value calculation would be paid upfront as part of the building permitting process and that that's of course that's our proposal that hasn't been acted on yet as the city council okay thanks I didn't take it applied to me I was just running through some numbers okay thank you if I may also add Vermont has a goal of all new construction to be net zero by design by 2030 so in some ways this aligns nicely with that particularly because you know if by 2031 you can't actually even build a fossil fuel system within the within the building it's pretty much direct alignment yep second comment there's some stuff in our packet about electrification efforts in Cambrian rise but my impression was still that they have a lot of gas there or is that changing I think that for the for the update that was in the packet my understanding of what they're looking at is a significant heat pump investment that would handle a good chunk of the heating needs I believe there is still gas use envision there as well for some backup situations and possibly some some other thermal needs so it's not I don't believe it's being proposed as a hundred percent electric facility but I believe there is a significant investment being contemplated in heat pumps okay but that's great because not so long ago it was proposed as a hundred percent gas Chris Burns and our energy services team been working very closely and are working on making sure that that we can provide obviously incentives for buildings like that to move in the direction of heat pumps as well thank you for my corner I wanted to follow up on an email that was exchanged about a commissioner Herndon from you I was not part of the October meeting but I did see some emails I wanted to just make sure that they were addressed in a in a manner that met Commissioner Herndon's requests are you talking about the question of units well there was a question of units and there was there are a few other questions but yeah I'm happy to make the comment I'll let the system respond as it wishes I didn't see it as a pressing the thing that I wanted to well to press great yeah so we don't need a response right now okay thank you other commissioners Jim Scott okay Scott I'll trust you'll raise your hand or whatnot if you do have something to add so next up is the general manager's update this is our update followed by the fiscal year 2020 audit update and then financials so thank you Darren thank you so we will talk a little bit about our financials in a moment I did just want to note for the Commission that a year to date for fiscal 2021 we are seeing a positive variance for our budget which is certainly welcome something that we're happy to see but we are with Andrea's leadership doing even more precise forecasting relative to the remaining months of the fiscal year I know commissioners are very used to hearing the words this is a timing issue and we're bringing some some kind of greater structure to that phrase by doing enhanced forecasting to see what types of timing issues how they may play out in the next months of the fiscal year so we are seeing some challenges still ahead in this budget and not only challenges that may be structural related to timing issues but also continued challenges from COVID-19 whether that is still seeing lower sales than might otherwise be the case and that affecting revenues possibly seeing you know as we're as we're into what some are terming a potential third wave whether that will affect our ability to conduct capital work through the remainder of this budget on how it will affect our posture so our team is tracking the budget very closely tracking performance we're pleased with where we are I think year to date but we have a lot of work to do to have a positive result at the end of the fiscal year so I wanted the Commission to be aware we're tracking this closely relatedly again related to COVID we're doing some work with our Center for Safety team thinking through as we enter these cold weather months we've had a pretty strong effort with a rotation at Pine Street and obviously with our teams in the generation facilities to minimize unnecessary exposure to conduct work capital work particularly outdoors when possible but we are aware that in inclement weather we could have a situation where a number of folks who might be working outdoors on projects would be brought indoors we're going to seek to minimize congregation of employees indoors at 585 Pine Street and try to plan ahead when we see inclement weather to make sure that we only bring the necessary folks on site and keep folks you know on standby as opposed to having larger groups congregating indoors we also have a new updated city face mask policy that's I would say even more stringent and is going to ensure that there's many many circumstances where employees are working they're gonna have face masks on our Center for Safety team is acting as the health officers for Burlington Electric and ensuring compliance with that policy and all of our other health-related policies so we continue to be vigilant in the face of the you know rising COVID cases around the state and around the country that we've seen. Act 151 which was the Senate Bill 337 which allows us to spend a portion of our efficiency funds on on efforts and initiatives programs that are complementary to our tier 3 programs and our net zero energy programs we are engaged in some PUC and Department of Public Service process around what implementing that is going to look like for BED it requires going in and rethinking our our demand resource plan for efficiency our budget and potentially our rate for efficiency for the upcoming three-year period and we're working with the regulators on that we're gonna be proposing programs to seek to take advantage of the new authority that's been provided under that under that bill and I think it's conceivable based on the timelines I'm aware of that we may be able to provide a more thorough briefing on some of what we're thinking related to that at the the next time we gather with the Commission so more to come on on Act 151 but that's kind of the status of it at the moment. District energy we've been as the Commissioners know we had given some time for the UVMC team over the summer to address their you know level of work obviously was increased intensity due to COVID we had re-engaged with their facilities team more recently had very constructive conversations around advancing district energy with our partners at VGS and Evergreen and we're beginning to close out what we've termed the phase two work of this project and we're hoping to report out on it in the near future we had had some more recent conversations with UVMC that had to be or in the process of being rescheduled as as everyone's aware they've had a significant network outage issue that's affecting their entire team so we are standing by to reschedule some of those conversations and pick that topic back up in the near future when they are ready but I wanted to give the Commission a status update on that let folks know where we were and then finally I just wanted the Commission to know that we've been engaged in some great events with the community despite the pandemic over the last several weeks my canary and Brian Riley have been doing virtual visits with our fourth grade classes in the public schools in Burlington to kick off the calendar contest the net zero energy calendar contest for 2021 entries are going to do I think in the very near future and we'll we're looking forward to seeing some great artwork from the fourth graders we also had a great Halloween event with the lake monsters and outdoor socially distanced trick-or-treating opportunity where different lake monsters partners could could talk with members of the community and kids dressed up and came to different tables to trick-or-treat was a really successful event I think they planned for having two or three half-hour sessions they ended up selling out five sessions and appreciate Mike and James for being out there I was able to join for a little while as well and then lastly we did our annual contribution to CV OEO's warmth program recently to support our customers who may be facing a heating emergency or having challenges with paying their utility bills during the winter season we have bill inserts and messages to customers going out in our bills now to encourage customers to join us in supporting warmth and we also are continuing to advance the state's a rearage program as well for customers who may have fallen behind on their bills and are eligible for that assistance so just been a great series of events to engage with our community and our customers in these new ways that we've had during this period so I think that covers the items I was hoping to update from the report glad to answer any questions or or turn it over to Andrea for the financials did I see a hand raised by JG I'm assuming that's James Gibbons or was that an accident that was a a mouse though I was going to mention we also had a meeting with a group from Kerber stand and Jen Green I met with an international women's group talk about the mobility and sustainability oh those are really interesting meetings love to hear more at some point um Darren could you give a little bit more background on the with regards to information services the unexpected AMI system outages and then also what the DPS net metering data request was yeah I think I'd be happy to I think Emily might be better situated to give the update on the the smart grid outage that was touched on in the report and I would I would defer to James to talk about the net metering request sure hi everybody so yeah it was a we had an equipment failure actually and we had a backup and the system was architected in a we had assumed there would be an auto failover and there wasn't so to sort of make a a long story short we were able to restore to the backup get the network back going and our replacement device for the equipment that it failed has been ordered and we're expediting installation as soon as possible and what does that mean in a tangible way it meant that the um it meant that reads from the meters were being collected but not able to be sent back to the collection engine so to speak so the data was sort of sitting on the read on the meters but couldn't get back to us until the network was restored and then there was sort of a catch up period where the meters sent back all the information they had been holding but not able to transmit for that period of time great so help yeah so you'll end up catching it up later yes correct yep and it was you know a delay in the billing cycles that have been scheduled but the team was able to get caught back up uh very quickly right yeah and just to be clear it was not a it was not a distribution outage situation there was no issue with that this was a billing and and meter data issue right and also i think the meter continued to store the data we just couldn't obtain it in a real time date and james if you don't mind touching on the net metering data requests there was a very voluminous request and also all of the distribution utilities from the public service department regarding regarding net metering in particular there are requests for data related to calendar 2019 they asked us for information by tier of net metering or by class of net metering because net metering is now divided into a number of different classes based on size and location they asked us to provide the revenue impact of the lost revenues paid out in terms of citing adjusters and rec adjusters and then they also asked us to provide a valuation of how much people you save in the wholesale markets from those same assets and it was you know it's not something we had on hand it was worked ahead to be done to turn it into that valuation at the wholesale market level and to do it by net metering tier was a challenge too the Perlton Electric was able to provide all the requested data by the DPS and very quickly thanks james if I may um so it looks like the critical to everything BED the IT forward initiative is continuing working on contracts um and and that's sort of the summation at this point I just can't wait for it to kick in gear you're not the only one but yes there's a team of folks Emily and Munir and Sue and James and others who have been involved in the contract review scoping process and we are hopeful to be you know nearing the end of that in the not distant future and beginning implementation starting with our MDM okay thank you just keeping an eye on that Andrea thanks for joining you always have the most professional background I don't know where you are but thanks for giving us the financials yep I'm in my basement it looks great so I'll start with an update on FY 20 the last that we all got together KPMG joined us and they gave the update that the audit was going well they were getting the information that they needed and they planned to an issue in unmodified um or clean audit opinion and since then we finished up the audit and they did issue the unmodified opinion for BED and for McNeil um so that all kind of ironed out smoothly and I included the face of the financials in the commission packet and I was just I'm going to share my screen here and just touch on some highlights and while you while you're sure your screen I just want to make a nod to Jim because he certainly worked really hard on this so definitely yeah okay you're able to see my screen here okay so I'll start with the statement of net position um total assets for the year we're fairly in line with last year increased about 400k I'll just start at the top and call out some highlights capital assets decreased 1.1 million uh we had additions of about 4 million and then that's offset by a little bit of disposals and our you know annual depreciation cash pumping up the size just a little bit for these old man eyes sir thanks here we go um so cash and cash equivalents increased about 800k and that has a variety of factors that go into it and you'll see that when we get to the cash flow statement and restricted cash this is a new line item on here for energy efficiency utility when we became a fiscal agent essentially cash this 3 million dollars got put on our balance sheet we also have an equal liability when we get to the next page here restricted investments this this is deposits with bond trustees so this relates to our revenue bonds so it is our our debt service fund or debt service reserve fund and our renewal and replacement fund that decreased about a million dollars and that's primarily related to um in past years we had more than we needed and our renewal and replacement fund so consistent with the general bond resolution we were able to transfer some funds back into operations during the year and we'll evaluate that each year at June 30th just jumping to liabilities um liabilities are up 1.3 million um just i'll start at the top and work my way down current liabilities fairly in line with prior year you'll see this new addition which um has the offset on um in assets for the eu being a fiscal agent um just want to call out here net pension liability increased uh 1.3 million that's going to be related to increased pension expense not quite offset by contributions made to the plan plus an actuarial other items are involved there and then that is offset can i ask is this to try and address uh the frequent every year we wait for the city to respond is that is that what that is um so this net pension the net pension liability or the actuarial items the liability i i recall that every year we sort of wait for the city to give us a final you know estimate in terms of um what the cost will be with regards to pensions and then we have to you know make budget adjustments accordingly yep so that information does come from the city um we do get it towards the end of like closing out the year but um this and i think in previous years it might have been delayed but this year everything went pretty smoothly with getting the information that we needed and this is bed's portion of the total city wide net pension liability okay um and then for revenue bonds you can see decreased uh by 1.8 million that's just going to be due to the payments that we made during the year um everything else fairly consistent with current liabilities um i'll jump down in net position the total net position decreased 971k or 972k and that is um directly related to the net loss that we had for fiscal 2020 which we'll see now as i move to the income statement so i have it kind of uh i'm just going to jump down to the bottom so this decrease in net position or this is the net loss that we had for the year the 972k compared to a 1.4 million dollar loss the previous year um so just want to call out that despite you know working through the pandemic we still landed in a better year in 2020 than we were in in 2019 um operating revenues of sales to customers were down about 2.2 million this is uh pretty directly related to COVID um operating total operating expenses so revenues down 2.2 million um this is offset by operating expenses also being down by 3.3 million primarily related to uh production expenses and purchase tower expenses being down compared to 2019 and total um non-operating revenue is down 1.5 million dollars compared to last year and that's largely related to the sale of the high gate plant that happened in f y 19 so those are the highlights in the income statement the cash flow is pretty small and there's a lot going on here but essentially your cash and cash equivalents this is what ties to your balance sheet um we were during fiscal 2020 we're up 3.9 million dollars in cash and that is a function of you know your operating activities your cap alone related financing activities your non-capital financing activities and your investing activities um i must start on this one can can you enlarge this yeah i have my glasses on thank you so this is you know the amount that ties into our balance sheet the amount of cash that we had at the end of last or at the end of f y 2020 um the 3.9 million is the increase during 2020 which is comprised of a lot of things that go into it but one item i'll just call out is the e eu roughly 3 million dollars that we received during the year to become the fiscal agent contributed to that and that's probably one of the bigger chunks there without getting into the weeds of the cash flow i'll probably jump into september financial results unless anyone has questions sorry i might have missed this because i wasn't in the meeting last week but the fiscal agent for the e eu dollars beforehand was efficiency vermont no the state had a separate fiscal agent and i do not i think it was bachelderan associates if i'm remembering correctly and now and now each e eu is going to be their own fiscal agent interesting yep thank you okay before i jump into the september results i'll just share this slide here which we've been showing each month showing the monthly covid impact so for september um you can see that we're down 3 um residential impact so for a while we were seeing residential sales that were up quite a bit now that the cooling season is behind us residentials come back to a more normal level which is good for our residential customers um commercial sales um have continued we kind of closed that gap a little bit further so it results in net down three percent we're envisioning october to kind of follow and be within that range this data is only through mid october so we'll we'll have an update there but you'll see that this down three percent is going to translate into our financial results in september okay so for the month of september we had a net loss of 343k compared to a budgeted net loss of 509k so 165k favorable sales to customers were down 195k so um the last couple of months we've had uh you know when residential sales were more than we're offsetting our commercial that was down it was kind of netting to zero um and this month we don't have anything really offsetting the covid impacts and this is a trend that could continue and we're just going to keep an eye on so sales to customers down largely related to covid other revenues this is related to ee yield there's a similar offset and operating expenses power supply expenses is favorable by 21k but there's a couple of things going on in there fuel expense is favorable by 182k and that truly is timing and is a function of the shutdown in september versus you know it's it's usually done in april so those budgeted dollars just didn't get shifted so that one truly is timing um and then that favorable 182k variance is offset by increased purchase power expenses and increased transmission expenses netting to the 21,000 operating expenses are favorable uh 434,000 um again largely timing related um and we are evaluating all of these items each month to make sure that um they truly are timing related to understand if it's you know kept savings or if it's going to come back um 234k relates to outside services 71 ish k is related to ee u and that's that offset up here and then we have some materials and supplies saving third timing related savings and um a little bit of labor and overhead true savings um that is pretty much most of the variance for september um year to date coming in at you know two million dollars versus budget of 1.3 so we're up 700k which is really good that we're off to a good start in the fiscal year um but we do expect a lot of this favorable variance will flip as we work through the year just something we'll you know continue to keep an eye on well and to clarify the the negative 509,000 budget that that was what had been updated during uh covid the budget was updated i want to say in april time frame um so yeah it did i'm like could you correct me if i'm wrong but i i believe it did have some impacts of covid factored in no actually we didn't assume covid impacts on sales to customers for example so we we as you may recall commissioners um presented a budget you know under normal circumstances and then did contingency planning on the side for how we would deal with covid impacts were they to continue but we did not build the budget assuming anything about um how long or how severe the pandemic would continue so that's that's a budgeted loss essentially based on the timing of expected inflows and outflows some some months we budget for a positive variance some we budget for a negative that's right with the update in april largely related to capital shifts because of f y 20 is that what i'm thinking of yeah yep and then it was an update to f y 20 itself like the remainder of the year not to the proposed f y 21 budget so does it make some sense um to i mean all the numbers are going up and as much as i hope that my children will not come back to five days a week of homeschooling does it make some sense not because i don't love them but it's just really hard to work full time while teaching and i'm not a good teacher does it make some sense to uh try to assess you know what it looks like if there's no vaccine until say next september yeah one of the things that we're working on is kind of re forecasting the period and then also looking at what are the risks what you know if it's not included in our forecast then what risks and opportunities do we have in quantifying those so that will be done as part of that exercise but we haven't specifically done it on sales to customers yet yeah and maybe you don't maybe don't focus on residential you focus on you know uvm and some of the major you know large uh c and i customers because that's uh clearly what you know ends up being impacted the most yeah absolutely any other questions on the income statement questioners all good here um just jumping down to capital spending uh actual spend 1.7 million compared to budget of 2.7 so down a million um if you remember back to last month i think we were under budget by about 1.1 million so kind of starting to close that gap we are expecting it to be timing um the the biggest um piece is this general plant and that is going to be related to timing of it forward um as well as timing of a data center upgrade that we had budgeted and it will be done later in the fiscal year so i think that's why i was asking about it forward when you say later in the fiscal year i mean do we think we're going to roll this over into the next fiscal year or do you and that's probably not a question for you Andrea but Emily do you want to jump in yeah sure it's it's it's gonna it's a multi system multi-year effort right so it will be phased in um to both moderate the rate of capital spend but also to moderate the amount of effort involved by all of our staff will be working hard and needing to be engaged in implementing the multiple systems that we're contemplating purchasing so um so it's a yes and yes you know yes it will begin this fiscal year um we're targeting january for a kickoff um but then a yes it will continue for the next couple fiscal years as well okay that's helpful thank you one of the things that we're evaluating in terms of like the risks and opportunities that um could come out us during fiscal 2021 is if it forward you know timing shifted out of 2021 and into 2022 and if labor comes back to the p&l what does that look like for us things like that total operating cash uh 12.2 million compared to budget of 9.6 so we're up 2.6 million um up 3 million for the ban that was received in july versus the geo bond that was budgeted in december um we're also lagging a bit in capital so should be up 4 million um and then we're offset by kind of our beginning balance cash of where we started the year versus where we thought we were gonna end fiscal 2020 and total operating cash i know through the end of october um is about 11.4 and you know that that 12.2 down to 11.4 is pretty consistent if you look at the budget of you know what happens from september to october it also drops about that million dollars so and debt service coverage ratio 3.64 and adjusted of 0.91 that is up a little bit from last month and our days cash on hand of 154 is feeling pretty strong and that's going to again be largely related to receiving the geo bond or the geo the ban and um capital lagging a bit any questions on financial update okay that's all i have also congratulations Gabrielle thank you any any sense on uh if and when the 3.64 might raise some eyebrows i think we're okay with the 3.64 it's um we're gonna have to continue to track the adjusted debt service coverage ratio um because our our debt covenant is the 1.25 so we we have plenty of room with the debt service coverage ratio and then the the days cash on hand is another one that we're gonna want to make sure that we monitor closely that looks pretty good but thanks Andrea any questions from other commissioners okay so thank you uh both Darren and Andrea next up we have the BED 2020 property uh and the overall renewal discussion i couldn't tell if this was a vote or just a discussion but no longer asking for a vote just uh information and discussion can you see my screen yes but you might want to enlarge it for you know absolutely no one's elder no one's got worse vision than i can you see that yes yes okay uh if last night staying awake didn't put you to sleep this should this should do it so um i'm going to scroll through i gave you again the timing i apologize a little late um with with the meeting and moved up we're constantly in negotiations and paul plunk and hickock boardman this is still going down so these aren't final but darn close so that's why you just got the information uh just prior to the meeting so all that's background don't hesitate reach out and ask me any questions um just going to roll through these four slides of talking points and then answer any questions you might have um okay so what's covered uh this is the annual property boiling machinery renewal um that comes up every year uh you may remind remember a lot of stuff we went through last year this is physical assets so this is everything that's tangible from the buildings to computers to transformers it's all rolled up into one big number our current status our current property boiling machinery coverage um prior to last year we had we've had AIG as a single insurer on this policy which is a beast by by far our largest policy we ran into all kinds of issues last year with AIG at one point only going offering to write 30 capacity so paul plunkett worked very hard really quite frankly over a long time reached out to AIG still wanted 30 of our business start tech zerk and eges so that's somewhat unique we had four major property carrier carriers on on the line here on this policy one policy four carriers uh it's it's scheduled to expire on november 20th and we paid uh $579,330 last policy year if you will a substantial jump again for those that were around um we were in the 200 thousands for 10 to 12 years so that was a significant jump what's in the handouts again i'm going to talk with the talking points here but i also gave you the hitcock and bourbon cover letter that uh we got late last night with some revisions throughout today um just the same historical exhibit that i've always given you shows the last 20 25 years of our property bull and machinery history and a very handy chart a quota shared program chart that basically tells you who's placing what business what percentage and at what premium so that's all in your handout and can certainly answer questions based on that so what's new this year um again because of last year's surprise if you will we learned that 30 days i think before the policy came up paul and company's been working very hard with us a canvas 25 carriers we typically try to go out to bed every three years that's pretty much out the door it's probably happening every year now it happened last year we went up from 25 to 30 carriers uh we have the exact same four carriers uh that are going to write the business this year in addition paul reached out these are big hitters travelers liberty mutual harvard steam and bore boiler factory mutual um a lot of them declined or just prices were way too high so aig again this year we learned this about two or three days ago and wants to reduce their capacity again they write 30 percent of the mcneil and the non mcneil portion um they want to reduce that to 25 percent so that five percent we don't want to we want a hundred percent like we had last year uh so hickok and bourbon is in constant negotiations with them and the others to try to fill in this five percent the renewal premium is anticipated increase um from five seventy nine to six twenty nine and that's important to understand that excludes right now as we sit that that missing five percent the cock and bourbon estimates it might cost us another thirty grand it might not be that much but uh you'd better act conservatively to fill this void with aig so our total estimated premium for this policy year would go up to six fifty nine six eighty five that's a big number similar to last year our total insurable value and that means from the finance department where we get a statement of everything that we are trying to ensure that we own uh will be capped at 175 million that's just the way it was last year our total fully scheduled tiv if you will is 258 so uh it's not as shocking as it sounds because obviously the mcneil station alone is 181 million and because the pine street mcneil and wenuski one hydro they're separate locations it would be pretty difficult to have one loss to take out all those properties at the same time so you can think of it that 175 million basically is covering the mcneil station at a full replacement i put in this last bit this is just for my own sake um as shocking as the some of these premium numbers appear to be um just three years ago uh we went out in our normal three-year bid and we got bids uh the second closest bid to aig at the time was trawlers at five hundred fifteen thousand and some change and then livery mutual and chubb were going to combine at 683 so um i think i remember using the same language last year we had it good if you will that we were in the 200 thousands for like 10 to 12 years and now we're in something that is high but it's not uh outside the realm something we already were quoted just two or three years ago so um cognizant of time um the proposal hickok and boardman that they're working with not just today but future options to consider if we're going to continually have these premium increases of significance um i already mentioned prior that they've gone back they've appealed aig's decision to lower their capacity by five percent and to try to offset offset that if you will by raising our deductible we have six or seven different layers of deductibles the lowest being 25 000 for just common property around around the building up to the turbines what they call property equipment breakdown of 250 000 so we're considering raising that from 250 000 to 500 000 in exchange for aig to write us that five percent capacity uh in lieu of this another option that we don't typically want to do but we could lower the actual tiv our total insurable value by the same amount of premium that that would offset which would be seven million dollars of our tiv to offset this five percent change so that's on the table also and then a host of other things that aren't going to happen tomorrow but i think in the next three months 12 months these are things that we're going to consider uh with hickok and boardman leading the charge to combine with the city i'm not a big fan for dilution of limits meaning the more people you have on your policy there's just more more people are spreading that wealth around uh but to combine with the city on their directors and officers insurance that protects you as the commissioners and us uh eliminates perhaps our professional liability we started i signed up for professional liability insurance in 1997 and that's a very unique coverage for our engineering department only um and so we never use it but it's there and so we may uh if we have to save some money it's about 25 grand eliminate our our pl insurance and join with the city on their pl coverage because it's under their dno uh we have a five year environmental pollution policy we might move that just to save some cash to three years uh we're exploring some and again not today but some workers comp and auto we are with the city um on their workers comp and auto uh through travelers and so those are some things that if if might help both parties if we were to break away and if that's an option saves us a many money and doesn't hurt the city we might consider that we might even combine with the city on a property policy uh every insurance company has what is called a minimum premium so um some premiums are too high for us but if we were to combine with the city we might now meet that threshold and finally um continue diligence on completing carrier engineering recommendations so our any insurance company who has has their own engineers they're sent out to to study specifically the McNeil station obviously with the plant the boilers and um give us a host of recommendations we've we've worked very hard Manera company we've worked very hard in trying to cross those off the list I think we had 21 last year some of them just aren't possible or feasible or certainly uh within the not within the confines of our municipal utilities budget constraints so there's some things that in a perfect world we'd love to do um but we just don't have the money to do it so the all those things that Hickok Mormons working on and we will work together on to try to keep this premium in somewhat in check and um we're getting to the end here I know Lori's happy about that the impact on the budget so our 21 fiscal 20 fiscal 21 budget amount was 560,000 and change remind you that that budget gets put together in January of 20 and then gets adopted in June of 20 and uh because the policy renews it used to renew 10-1 it got moved to 10-11 11-1 11-20 last year was pretty chaotic with the moving of the dates but we had four months at the current known amount of 579 and then eight months at the projected amount so that that's how you end up with the 560 so as a math major there's a lot of ways you can spin a number but basically that increase that we're expecting to see this 629 that's without the 5% or the 659 with that 5% capacity will range you can see over here anywhere from 8.7% up to 17.7 big numbers but not shocking I mean I read insurance and risk management magazines every day this is long been protected we were thinking anywhere from 10 to 15 to 20% that we would see an increase even on top of what we got hit with last year so I'm not comfortable with these but they're certainly well within the range and my closing no I think I'm clapping I think I can more than share that but for our excellent loss history and experience and we do that plan is well run I know it was built in 84 with the shutdowns every year and all the maintenance we do on it if we had a poor loss history Paul Plunkett made it clear that our only option would most likely be to self-insure meaning those four carries that we have on the line right now would probably pull out and we would be dollar for dollar paying for any losses that is the end of it and I'm willing and ready to answer any questions mistress hi this is Bob the TIV is a small fraction relatively small fraction of what we consider to be our total stuff if we even approached ensuring all of that would it be cost prohibitive no in fact that's great question Bob so we've asked that we always for years had 100% of our values but that's when we were at 225, 250 this is the most that they will write us 175 million based on their capacity so and because it's what in a statistician the maximum probable loss so 175, 175 million is the most they're willing to risk even though they know that these are at three different locations so we long talked about what if we lower it to 150, 125 they're saying the exposure is still out there so we can chop up that pie as much as we want they're only going to show us 175 and their underage is going to rate us out that okay but when they say they won't go above that limit presumably somebody would if you paid for it and I guess the argument is that's megabucks right yeah that's that's megabucks and quite frankly they they're they're told by their parent companies and their board of directors they don't want any more capacity so even if we were willing to pay 175 because when they have a loss in that in that world of boilers they had a significant one not obviously in the United States it cost them 254 million dollars so when they have a loss with a biomass plant it's going to be significant so they don't want to take on anymore and no one's even discussed what that might be would definitely be cost prohibitive well I'm sorry to push this but I will anyway we're working through Hickock and Boardman they're kind of brokers to their larger insurance world and they have come up with their favorites that have worked for us for a long time but if we started from scratch I'm not I know that's not easy and just said we want to find a collection of companies that would cover our TIV a real TIV can we do it or would it just be so expensive it would be so expensive or just really they wouldn't have won any interest on it so remember we went out to 25 they went out to 25 carriers and you wouldn't want to place your business with a carry that's a you know a ambassador movies isn't well rated so these are the big players and the only ones that are even willing to look at us and if they price it would be I'm afraid to guess 7,800, 900,000 would be it'd be significantly higher okay thanks welcome anybody else sorry are you given a are we looking at these four choices two of which expose us to some degree uh what meaning what Scott they'll be the same the same there's two there's two options without the missing that five percent there's two options with the that's a great yeah we're hoping um with Hickock and Boardman probably by the end of this week not early next week we'll know whether we can we can negotiate with with AIG to to write us that additional five percent so that we would have the same coverage that we had last year if they're unwilling to do that that's when Hickock more might negotiate where we might start trading a little bit by either lowering our TIV or we'd end up going with five percent less and we don't want to do that so um some of the other carriers Aegis has also shown some interest in that covering that five percent if AIG doesn't so that's to be determined but it's really not two options it's just we want the full five percent added back in and we'll know shortly in a day or two I would think and what what are your you I'm sure on that there was a slide where you had that listed but what um I guess I'm looking for do you have a specific um route that you want to go with that of something that's we're with what that give and take is going to be to get that five percent yeah the it was um 30 well I don't want to say not to exceed but it was probably Paul Plunkett wanted to be conservative mentioned 30 grand to get us to do that um he said might be a little bit less but he thinks it's going to be around around that number and that would get us to the 659,685 quote gotcha so that's the most that we would expect and again uh years past it wasn't to waste people's time but it's just a significant amount that we want more information it's one year deal and it's already in the budget so that's why we're not asking for a vote and we're going to be consistent with the board of finance and city council along those lines too and is that does that number our just our portion of do the do the joint owners also have some some yeah great question yeah that's the full cost and so it gets split based on the property value so the main meal station will pay 50 percent of whatever gets charged the main meal station and used to be like 72 percent if I had to guess or something it's fairly significant so how much how much would that cut the 659 off relative to what you had budgeted what 579 yeah it would be um I don't have those numbers right in front of me but it would be about 72 percent about 36 percent of that number would be charged to the joint owner so yeah I can get that breakdown for you and send that to you anything from commissioner shagman thank you paul is the driving force here um the biomass plants are generally getting older and therefore the insurance companies are seeing more claims or yeah great question start to look at this the heating system like what's what's driving this yep very question so I knew you I wish I could show you my chart right here um what's driving it reduce yeah you can imagine I won't show reduce capacity what's driving it reduce capacity the hard market adverse claims on our industry no question about it so not obviously not main meal station but across the united states in general biomass plants with that age and with things that can go wrong even though ours has been knocked on wood very good the investment portfolio of very poor in this industry extreme weather wildfire catastrophes um that makes the carriers very selective so even though we may go out to 25 you've got the same three or four carriers are even willing to quote us and all that all that combination all those factors drives the rates right up through the roof and that's what we're facing with now so last year we're seeing again this year and it's hard to predict where hopefully it's going to suffer we'll never see the mid 200 000s again but be nice to get down to about 400 grand and also some consistency um I really appreciate your you know forward looking bullets that are are trying to figure out how to how to try to bring this in a little bit so it's not like oh every year yeah it's it's kind of shocking and disturbing but it's it's not I a follow-up question so you mentioned fires and all that that's a broader insurance concern right that's not biomass plant oh right yeah but no absolutely not just biomass in fact just in general you know you may think that we're a separate piece of the pie but it's no different than your homeowners if you pay homeowners for 30 years never have a loss and all sudden your rates go up by 10 percent there's been an exposure it could be on the golf course golf call course down south florida golf course all those things are are impacted so same with your auto insurance so you've never had if your 60-year-old son's driving the red Camaro you know what boom you're going to see an increase in premium even if he's had a spotless record so here's a question is this basically for McNeil and if so did refactor it was that factored into that economic balance done from McNeil when you say for for McNeil Bob yeah that's what's driving the increase so if if we were just trying to ensure this building or just when it's gone what when it's going hydro we'd have separate rates and it would be cheaper but it's it's one policy covers all our exposures with different premiums the windows going hydro I think I chaired last year it's usually about 15 cents per $100 of coverage so versus about eight or nine cents for a normal 100 percent coverage for this building and those kind of things so it does get all priced separately based on the exposure okay so we just heard the financials it's great to see you know September a little bit higher what does this look like in terms of budgetary impact if it ends up being on the higher end of the outcome I remember you asked me that last year um you know yeah we have a contingency you know it's not like I we budgeted what is is think I budgeted 551 thousand for this line office is going to be higher so that money's going to come from somewhere but as finance has taught me it's one pool of money it's going to it's going to come from us one place or another so we don't we haven't looked at that yet which is okay I'm just well no I know Andrew's group they we've been they they they know this potential increase and so it's there but we do have a contingency fund I don't pretend to know how much that is but so can you guys give us an update since we're not voting can you give us an update in our December meeting absolutely great and also yeah beyond um Paul what the results are uh to the finance team if you can give us a sense of the you know budgetary adjustments that may be required yeah no problem great thank you and I'll send out to you um some of the breakdowns on the McNeil piece and um try to pronounce Gulf coast better next time I didn't even stay up late we knew where you were going good thank you thanks so much Paul are you welcome so next up we have a non-disclosure agreement this is velco veic and Vermont distribution utilities are to use this is to discuss cyber security issues this is a discussion and a vote and Emily thanks for team this up yeah you're welcome um so this uh non-disclosure agreement that we're bringing to you um tonight is the result um of a puc docket or a puc order that was issued in September um closing out a docket that dates back actually to I think 2007 so it was quite a lengthy um regulatory process on this but the puc um came out with six total um the principles those what they called it um relating to cyber security for utilities and two of them are mentioned in the the memo the cover memo here and in the agreement related to information sharing among the Vermont distribution utilities velco vepsa and veic and the department of public public service so essentially in order to implement the practices and principles that the puc ordered the order refers to under terms of appropriate non-disclosure agreement to protect confident confidentiality and sensitive cyber security information which if released could have obviously negative impacts on grid reliability and grid security um so this agreement was prepared by primarily I think velco took the lead on authoring it with input and feedback and comments from all of the parties so we are seeking commission recommendation to the city council to authorize the general manager of bed to execute it there's no financial impact here whatsoever the reason that we're seeking council approval to execute is because there is an indefinite term here which we anticipate will extend beyond one year which is our you know limit of contracting authority without prior approval um I think that I think they've summarized everything um so happy to take any questions and would ask for a recommendation or a motion to recommend to to forward for council to approve execution any questions comments from commissioners so generally from my perspective go ahead Bob well as usual the question is is is there any downside at all to this I don't see it that was the question is there any downside we should about this uh none that I would that I would be able to identify now okay so my question was like I mean I think this makes sense I can understand the background um and the rationale for it I guess my question is uh I don't see sort of like an end point or a check in point and uh I think checks and balances are good and and any thoughts on that is there a sense of like is there a point at which just to make sure nothing's gone awry we revisit the agreement I could maybe jump in on that point just briefly um for for uh for this type of agreement you know being that it's a non-disclosure kind of intended to facilitate information exchange among the utilities with the regulator there probably wouldn't you probably wouldn't want to have a date by which there was an expiration because we want these the obligation if we share sensitive information or other share it with us we would like that obligation to continue essentially in perpetuity um lest there be some opportunity to disclose potentially harmful information uh because the agreement expired and somebody didn't choose to renew it so typically we would agree that you know we wouldn't have a contract for power for example in perpetuity but um for something like this there's a benefit um in terms of protecting our sensitive information sure makes sense so uh I think 27 of the pdf packet if if someone if there are any further uh discussion points um we can we can take those on otherwise if someone wants to make a motion I don't have to pack whoops wait a minute I don't have the packet in front of me but I I moved that uh that uh staff be uh also rise to follow through on this proposal does that work I'd like some more specificity in that language all right well you know where so I think I think there's what it says is the board of electric commissioners recommend that the city council approve this resolution um to execute execute the non-disclosure agreement with the other entities yeah that's what I meant yeah but it can't come from me I'll second that motion commissioner shagman hi commissioner herindy hi commissioner moody hi commissioner stevens hi thank you mash passes thanks and that brings us to commissioners check-in um any items to bring up is that your hot water heater in your background darin that is my solar hot water heater glad to show it off I know I like doesn't sound like there are any comments or questions move to adjourn second commissioner shagman hi commissioner herindy hi commissioner moody hi commissioner stevens hi thank you we adjourn 643 thank you everybody at bed I know you guys are working hard thank you yes thank you thanks everybody all right be well