 Welcome to the Burlington Electric Department Board of Electric Commissioners Meeting. This is the monthly April meeting, April 14th, 2021. First up on the agenda is the agenda itself. Are there any corrections, modifications, adjustments that folks should raise? Just that, I think I said this before, it looks like between eight and nine, it goes from 6.30 to 7.50 and it really should probably be 6.35 to 6.50. Thank you. Dream on. That's pretty optimistic view of the world. We're not certain how long the possible executive session might go. It says 15 minutes though. I'll correct that. Touche. I think she's got it. Okay, excellent. Thank you. Next up we have the minutes of the March 10th, 2021 meeting. So that is included in the packet of 60 pages. If any of you have substantive changes, recommendations, that'd be great to raise right now. Nope. I'll sit. Great. We have a motion and a second to approve. Second. All in favor? Yes. Commissioner Shagnan? Aye. Commissioner Modi? Aye. Commissioner Herendine? Aye. Commissioner Stevens? Aye. Commissioner Whitaker? Aye. Thank you. So next up is the public forum. And Lori, can you let us know if there are any members from the public? There are not. Okay. Well, for anyone who views this at some other time, please know you're welcome to join even remotely. And you're also welcome to just pick up and call the customer service line. Okay. Thank you. Thank you. Thank you. Thank you. Thank you. All right. Ken Erick's team is always ready. They have a great response time. It's like 20 seconds or 15 seconds. So please don't hesitate to reach out. If you have questions or comments, you can also just reach out to any commissioners. The next we have is commissioner's corner. This is a discussion. I do have one item, but I'll leave that for last, assuming that other commissioners would like to hear from you. I would say that I was the only commissioner who showed up for the penguin plunge dip where Burlington Electric went against Vermont gas. And I think had one more commissioner attended. We might have won that. But I do think they raised a lot of money, like $600 or something like that. It was a good event. It was actually a great event. Jen Green did a really good job. Neil Lunderville was there. He did a great job. He did a great job. And he did a great job. And he was part of the DET folks. That's fantastic. Can I ask when it was? In March, it was part of the spectrum was doing a fundraiser and a group of people agreed to jump in the lake every day for the whole month of March to raise money for Spectrum. And this was just kind of like an add on activity as part of that. So. Yeah, I can't remember when in March, but it was, it was really cold. Yeah, I had, of course, Jen, Jen sent out the note, like the day Yeah, it kind of slipped by me, but March 26, March 26. Okay. Some people went in more than once, even. So for the record, I will totally do that if I get more than a one-day warning. All right, next year. Other comments? You're on mute. Commissioner Harranty, still on mute. Thank you, James, for your response about the solar panels and snow. Also, folks, going through the stuff for the meeting tonight, I realized I got to have hard copy. I'm willing to come get it, but even if it's 60 pages, I got to have it. I want to mark things up and all that. So I'm making a strong request that just for me, a paper packet is prepared and I'll fetch it. I am happy to go ahead and make a copy for you. Okay, next time. Yeah, I will go in and make the copy. Commissioner Harranty, I apologize too for the very late delivery of it, but I also got you the answer to the heat pump question too, I hope. I don't think I've seen that and I had some notes about that, but I'll check. That was sent at 5.10. So again, I got sidetracked brutally, but I did get it out. Thank you. No, I was making a salad then. Okay. Thank you very much. That covers my questions. Thank you. Other commissioners? All set. So seeing none, I'll just say it was a real pleasure to be at the press event on Monday in which the results of our most recent analysis in terms of where we stand for the net zero city by 2030 results were released. Yes, probably, and general manager Springer, feel free to crack me. Yes, probably the pandemic helped a little bit, but still good news in terms of how much uptake there was of the many technologies that this commission has supported and said, let's go in that direction. And it was also just great to have Commissioner Moody on the other side of the camera. So many thanks to you all. The reality is without a broad overreaching federal or state mandate to address climate change, it's going to take many, many tools in the toolbox to make strides in reducing greenhouse gas emissions. And I do just want to nod my hat to Burlington Electric team for just keep on. And I appreciate it. So thank you. Yeah, let me add to that. I had a note here. That report is great. Super. And that's off. I did make a few comments about it, which I'll send to Lori. I've already typed them up. But basically, that thing has a lot of wallop. It's great. Thank you, Commissioner Herrington. You're like my metaphor. Okay. Wallop. Wallop. Power. Any other comments during commissioners corner? Okay, seeing none. So we'll move on to the general manager's update. This is an oral update and it includes the financials. Great. Good evening, everybody. We've got a packed agenda. I know we had a very light agenda last month, so we have made up for it for you this evening. Apologies. I expect we'll have a fairly full agenda as well next month, too. We'll cover the budget discussion separately, so I won't linger on that. And I know we'll appreciate the comments on the Net Zero announcement Monday from Chair Stevens, Commissioner Herrington. It's great to see Commissioner Moody there as well. I'm going to run through the slides that I had for that that we presented Monday at the City Council as well as part of a separate item, so I won't linger on that either. A couple of quick points. We did complete the tiering process at City Council on the 22nd of March, so that is been signed by the mayor. And we are now done with the tiering process. We're in fully in implementation mode one year ahead of schedule. Really pleased about that. Great work by Munir and Duke and Lynn Reagan to make that happen as well as all the different supervisors and employees who participated. We are intensively working on Phase 3 of District Energy. We are going to, I think most notably, be running a test at the McNeil facility to look at how it operates for a more sustained period of time at 54 megawatts, which it is rated to run at, but which we don't typically run at that level. We usually run around 50, and that will be helpful as we have had a number of conversations with the joint owners around McNeil and District Energy, and this will be a really useful exercise for us to be able to map out further the operational and financial pieces for how District Energy can work with the McNeil plant. We also continue to be engaged with our partners at VGS Evergreen UVM Medical Center and University of Vermont, and that process has continued to pick up pace and intensity, and we're working towards bringing that to completion in 2021, so we're excited about that. Just two other quick notes. It's Line Worker Appreciation Day on Sunday, April 18th. I actually got to go to Burlington Electric Department yesterday with Munir and have a nice outdoor meeting with our line crew, who I haven't seen in person in about a year, so it was great to be able to talk with them in person as opposed to over the team's technology. We'll have some great social media content going out on Sunday to celebrate Line Worker Appreciation, just as we did for our engineers week in February for our engineers at BED. In terms of the COVID and reopening, we're encouraging obviously all of our folks to make appointments who are eligible for the vaccine. We are looking at, you know, a period of a few months here where the state guidance is presumably going to be lessening, and we'll be working with the city, HR, and others, to determine kind of what the reopening plan and posture is for the city. We'll certainly be looking at some sort of a phased approach at Burlington Electric, and we will be, as I mentioned on Monday, hoping to provide some options and flexibility for folks where it's possible to continue with, you know, either remote work or telework, at least for a portion of time, not only for the benefit environmentally, which we're seeing in the net zero report in terms of reduced miles traveled, but also to take advantage of some of the work-life balance that can be provided through some of those technologies. So more to come on that. We haven't really fully kind of, you know, had those conversations yet, but something that'll take place over the course of the next several months. And lastly, we expect to bring you a draft update to the Strategic Direction 2021-2022 in May. We've asked for feedback from our respective teams by the end of this month. We should have that all together and synthesized and we'll bring updates. I expect that the vision, the values, the mission, which we've, I think, honed together with the Commission over a period of years, should more or less remain stable. And we're really looking at the strategic objectives for updates, where there are items that maybe have been completed or maybe outdated. We can move those on, and then we can obviously update or add where necessary. And that's everything I have for the moment. Questions from commissioners? Yeah, I just wanted to ask a quick question relative to the announcement the other day. And especially as we're the first in the nation really to have this program, the net zero in a fully realized path. Are you getting any inquiries from other cities, other municipalities around the nation, looking for some guidance or collaboration or anything like that? Or is this known out there in the world? That's a great question. I think the announcement Monday got really great coverage sort of locally and even regionally. But I don't think that the announcement from Monday really has totally been seen around the nation yet. I think we've gotten some folks who have definitely noticed it and taken notice of it from other states. And I know that in particular with our work with the Building Electrification Institute, with the Urban Sustainability Directors Network that Jen Green participates in with us, we do get a number of different cities who are looking to learn from what we're doing. And then obviously it's vice versa, there's a number of things going on elsewhere that we benefit from. I'm thinking I had one particular conversation over the summer with Madison, Wisconsin, where they were very interested in learning about the net zero roadmap and some of the things we were doing, but they had some programs that they had initiated that we hadn't thought of. So I think those types of exchanges are mutually beneficial, but certainly with the 100% renewable accomplishment and now more recently with net zero. I do think Burlington has looked at as a leader in many respects and we do get inquiries. And for a period of time, James served as our ambassador, a plenipotentiary and was hosting tours not only from around the nation but around the world for people interested in 100% renewable accomplishment. We got to meet a lot of really, really neat people and I think we will again, it just got sidetracked. And we've still done stuff. We have an intern starting this summer who is from Jamaica. So Camise is joining us as a UNH sustainability intern working on multi-family EV charging guidelines and help. But I do kind of miss the meetings with the people in person. Nice, thank you. Other comments from commissioners? I had one other thing I'd forgotten to mention briefly. Let us know if you're having any trouble with your BED emails. I know that I had to change my password recently and I know that kind of prompt comes up periodically. We were advised by the city attorney we can only send materials to your Burlington Electric emails. But if you're having any issues whatsoever, let me know or let Laurie know. We will work with IT, make sure to get you up and running if there are any difficulties. So I have a question pertaining to your comment about the strategic initiative being reassessed on the yearly process with the team. When I look at the 2020-2021 direction dashboard as part of our meeting notes, I see a lot of the target as not being filled in. And some of it I can understand because it's hard to put a target to it. But some of it I feel like if we have tier three goals, we should be able to have a target for how many heat pump hot water heater rebates we might have. And perhaps I'm reading it incorrectly in terms of percentage reached. But I also just want to comment that I know we started with a dashboard that was like 10 pages long, which was too much. But this is one of the things that I've brought up a few times to discussion and raised with Emily is what is the most valuable data here to actually track and report? And what is the most valuable way to track it? And so I guess given how much we have to cover today, I don't know that we need to focus on the strategic direction dashboard specifically. But if you can put it in your thoughts for as you start to think about with the internal team, what modifications need to be made to the strategic plan and or rather not plan, because I'm the one who keeps saying don't call it a plan, the strategic direction, the one pager is the dashboard capturing that accurately? Is it and can we fill in those target numbers? And you know, how can we make this more useful in terms of really seeing where we're at? So I'll leave it at that. Definitely can come back to that when we present the updates next month. Great. Thank you. Any other questions for the general manager with regards to the general update? Okay, so moving. Sorry, go ahead. Oh, just said I'm all set. Thank you. So moving to the financials, I don't know if that'll be you, Darren or Emily? That will be Emily. Hi everyone. Good evening. Good evening. I'm going to start with sharing an update on loads as has become our norm. Get my screen up here for you. If that work is expected, you should now see a graph of loads from March 2020 to March 2021. Great. So we now have 13 months of data on how the COVID-19 pandemic has affected our loads in the Burlington Electric Service Territory. Can you make it bigger? Thank you. Is that any better? Would you like it so larger? So for March, we can see that we have continued the similar pattern that we've been seeing throughout the pandemic where residential sales have been higher than what we would normally project. Commercial sales in the purple are lower than what we would normally project. You can see now that we've got over a year of data, the commercial sales are following this nice logarithmic curve, hopefully trending ever more towards normal, whereas residential has been a little bit more up and down and all over the place. As a system in March, we were just under 1% down. So a little worse than February, but still sort of trending better and better every month as things go by. Certainly we're monitoring this closely and are optimistic as we proceed with the state's reopening plan that these effects will continue to mitigate, but a lot of uncertainty obviously in terms of will there be any sort of economic lingering economic impacts, how fast will businesses return, and then in what way will the economy reopen that is the same or different than the economy we knew in the local community before the pandemic. Will people keep working at home, for example, causing residential loads to be a little bit higher than normal for longer? And will that be offset by office space, perhaps, that remains unoccupied longer than normal? So that's where we stand as of March. And again, we're monitoring this every two weeks and we'll be watching it through the spring. May I jump in with a question? Of course. And this isn't so much for you, Emily, but more for Darren. Your comment about where will people stay at their homes? Will there be, and even Darren's comment earlier on how much more can we have people work from home as opposed to travel into an office? Darren is a member of presumably the leadership team of the city, and I recognize this is a little bit of scope creep, but it's not entirely because it does relate to our load planning or load forecasting. Is there any sense of whether or not there might be some shifts in terms of taking property that has historically been solely commercial and making it more mixed use so that portions of it might be more residential? Is there any sort of discussion or anything on that? I've been a part of a group focused on the economic recovery with a few different department heads and members of the REIB team as well at the city level. And there have been some preliminary conversations around what the office environments are going to look like, what types of things we might be able to do as a community to attract people who might be remote workers for the future. Certainly the Hula office space, which as we've discussed at this meeting is geothermal heated and cooled and we appreciate their focus on sustainability, but they have a workplace model that's very flexible. So there's some interest in whether there's need for additional kind of creative spaces like that to support startup businesses, to support people who might be remote work but need some level of conference space or office space. There's been some discussions on how we can purpose city buildings in the future if we do have some sort of flexible remote work policies. At Burlington Electric, we've hosted Change the Story for several years now in our offices. So that's an interesting model because there may be other opportunities to have creative use of city spaces that could support nonprofits, support the community. In terms of kind of the broader planning context, sort of what David White and his team would be doing, I don't think we've quite gotten there yet. And even the conversations I just outlined are very much in the preliminary stages, I think. Understood. And Commissioner Whitaker, are you raising your hand somehow? I see you're leaving. No. Okay. Sorry. Is there any discussion about, you know, whether or not some of the commercial space could be more helpful as residential space? I haven't heard that specifically yet. But again, these are kind of very early conversations. And while we started with some of those topics, we've spent a good chunk of time recently on looking at the federal resources that are coming and how we can make sure the city is prepared to utilize the programs that are coming. So I do think there's kind of a rich set of conversations that are ripe over the next several months. And that topic I haven't been a part of any conversations related to doesn't mean others haven't been discussing it. All right. Thanks for sidelining. Emily, sorry, please keep going. No worries. So then I'll flip to the February financial results. I'll just get my notes more visible for myself here. All right. You can now see the financial highlights budget versus actual February. Thank you. Good. I'll just make that larger for you as well. Okay. So February was a good month. We had a net income of $477,000. I'm sorry. That was the variance. The net income was $1.6 million compared to the budgeted net income of 1.1. So we were just under half a million better than budget. There'll be a few reasons for that as I'll discuss. Year to date, we are at just about, even with budget, only about $50,000 variance positive variance. So what happened in February is we just saw sales to customers were down. Loads were down as a system overall. So $133,000 unfavorable variance in sales with the commercial sales down and then offset by increased residential sales somewhat. REC revenues, power supply revenues were favorable. And February was a REC delivery month. So we had budgeted and received REC revenue in February. And other revenues, this is mostly EU, which as you well know by now gets offset by operating expense down below. Moving on to the expense side, power supply expenses were overall favorable. A number of things happening within here. However, transmission expense has been higher than budget, both from our Velco transmission under the Vermont 91 common agreement, as well as higher rates from ISO New England. Fuel expense was also up as McNeil produced 3% more in February than was budgeted. And then this was those higher expenses were offset on the purchase power side, where we had some wind facilities, wind contracts producing less than budget and our contract with Hydro could back the rate has gone down. So we saved some there as well. Emily, can you touch on or perhaps this is James, the transmission increases? Go ahead, James. I'm sorry, I'm spooling up. Do we have the one that has the breakdown of the transmission for me? Yeah, I can just tell you while I'm scrolling that ISO, well both ISO in New England and 91 VTA combined for $71,000 higher than budget in February. And I know that ISO New England is because the rate is higher. Right. So the rate came in higher, that's what I was looking for. The rates came in higher in June of 2020 than we expected. So when we do the forecast or the budget in February of 2020, we just have estimates from the prior year. And so the actual rates go into effect in June. The largest part of that variance is that the actual rates came in higher than we expected. You can get month to month variance in the load that we're obligated for. But in this case, it's largely price variance, not volume variance. With regard to Velco, that would take an entire explanation. I have to actually pull that one apart. Even pulling ISO and other out of that, it's a pain to look at Velco because of all the different moving pieces. I'd have to look at that one specifically to answer in detail why that one is above budget. And typically if we make our budget assessments and then we actually get the rate later, are we typically a little bit lower, a little bit higher? Just wondering for the next budget round, which is going to be our next conversation piece. I wouldn't describe it as systematic. I've seen the errors in both directions. So we use the most recent forecast produced by ISO New England that's available at the time we do the budget to produce that budget. And I don't know that it's got a systematic error one way or the other. And then against that we use forecasted load at the time of the Vermont peak for each month. So you've got a double forecast in there. It's not just be these load. It's loaded a specific time of the day slash month for each month times a forecasted rate. So again, you're never going to get it dead on. Velco has a lot of feedback loops because Velco is essentially a make-hole calculation. Velco collects from the Vermont utilities its actual cost of service less whatever it receives from anybody else. So if the New England transmission revenues are higher for a given month, it drives down the Velco transmission. What you're seeing here is they're going in the same direction, which is not typical. So that's why I say I have to pull that apart a little bit under normal circumstances. I expect to see ISO higher and perhaps Velco a little bit lower. So I'm actually particularly interested in the transmission fees other. And I don't remember us discussing that in detail as to why that particular line item is so high. I would have thought we would have talked about that and bulleted in detail. So I'm going to also check that one and respond to all of you. Great. Thank you. I really surprised we sit down as a group and discuss this and I don't know how that evaded our net. Emily, I'm sorry to get off on this tangent, but did you say Hydro-Quebec has will drop its rates? Yes. Hydro-Quebec's rates are changed every November 1st and they are a complicated index formula, but one of the inputs is natural gas prices. Another of the inputs is wholesale electric prices. So following natural gas and following wholesale electric prices will tend to drive Hydro-Quebec prices down as well. It is not only though it is indexed, but it is also buffered. So it doesn't go down one to one. It takes multiple years of the formula returning a lower value before it'll actually draw itself down to current market levels. Does that threaten McNeil in any way? In what context? I'm not sure. I understand that. Did it undersells McNeil? Well, it's being drawn down by the wholesale market prices. So you're already hearing us talk about the impact of the wholesale market prices on McNeil. That's what you're seeing here is a reflection of those low wholesale energy market prices on the future Hydro-Quebec contracts under an index formula. So I would not say it's a direct threat to McNeil because it's actually the low prices in New England driving the contract down, not the contract driving the low prices in New England. Just the regional pressure. Thank you. Does that answer your question, Commissioner Hermione? Yes. Okay. Thanks, Emily. Thanks, James. Emily, please keep going. Sure. No problem. Let's see. So we were in operating expense, I think, where we had an unfavorable variance of $200,000 for the month of February made up of higher than budget on some various items outside services, tier three, which is kind of a good thing to have a higher than budget actually, and less offset in part by less than EEU spending reimbursements, less than budget. And then we had some, we got reimbursed by the city here down another income for some hazard pay that we paid out to workers, employees who had been on site for a portion of COVID. So you're seeing that favorable variance down here and other income. We also received the proceeds from the local government emergency relief grant that we applied for from its CARES Act funding. We applied through the state that was $542,000. So those cash inflows are a big reason why our overall net income was positive in February. So it was a combination of, I would say, the headline here is REC revenues were a little bit higher than budgeted. And we received these one-time cash inflows in February as well. And I'd say if not for those, we would have been seeing a continued either a break even or marginal that loss position for February. Then moving on to capital spending. This is looking quite similar. I think we've ticked up a percent or two. A lot of this is timing. The generation budget is mostly spent through. Transmission is mostly spent through. This is Velco equity. And then distribution projects are being affected by timing. And in the general category, a lot of that is IT forward. We have kicked off those projects and we are now in implementation. So this will, the IT forward portion of this at least, will burn down a bit between now and June 30. Down to cash, we had a total of just under $9.5 million as of end of February. And our credit rating factors, adjusted debt service coverage is that 1.02. That is up from January month end, which was 0.86. This is a 12-month, these are 12-month averages. So I think what we're finally seeing here is some of the effects from the major turbine overhaul at McNeil and the low net income in 2019 that kind of carried, that effect carried through a lot of our FY20 results. Now that is washed out of it. And so we're really just seeing kind of from a sort of pandemic period, right? Results here in this 12-month average. And then cash was also up pretty significantly from January again because of those one-time inflows. We're at 126 days cash on hand, 12-month average. We were at 109 last month by way of reference. And I will pause there and take any questions or we can go into details on anything that are follow-up. Commissioners, so I have a question in terms of the rating factors. Any sense, any communications with, you know, the powers that be in terms of where our numbers are at and how that could impact us moving forward? By powers that be, do you mean like Moody's credit rating agencies? Yeah. Okay. I would say we, when did we last meet with them? We heard from them. They said that Moody's was in touch with a sort of a six months ago. Yeah, they were in touch with us recently about a methodology change, you know, a change in the way they evaluate environmental, social risk. And we're communicating with that about that. Communicating about that with us to inform us of how that may affect how they conduct their rating. It won't affect our actual, it doesn't affect their actual scorecard, but it's sort of a side rating that they assign. So, no, we haven't, we haven't been in communication with them. You know, we typically hear from them, I think, in the late spring when they do their annual, if they're going to do annual reviews. We did have the, sorry, we had the sector review earlier this year. Yeah, so we were in touch with them and I think it was the January, February timeframe around the sector review. It's not a BED specific rating, but it's a chance for them to look at our metrics relative to metrics elsewhere in the industry. Yeah, so they're familiar kind of with where we were as of that time and some of our plans and thinking, much of which, I think much of that question actually flows into the next agenda item as well on the budget. Okay. And the workshop that Emily mentioned was late February. So it's been in the first quarter, we've been in a couple of different forms of communication with them. Great. And this is micromanaging, but Emily, how are you doing with so many jobs? And will you be relieved of this job soon? Well, we'll see. I'll say I'm doing better this year at this time with two jobs than last year at this time. So thanks. Any other comments from commissioners? Okay. Thank you very much. We're going to move on to, we're behind by about nine minutes mostly because of me, sorry. Agenda item number six, fiscal year 22 draft budget. This is a discussion again with our stars, Darren and Emily. Well, I'll kick us off and then Emily is going to walk through some particulars with you and then we will be glad to discuss and answer questions. I submitted a cover memo with the budget this year. This is unusual. And I think it's kind of interesting if you look at what we just shared, everything looks pretty good. The net income is actually slightly above pace for the year. The Moody's metrics are all in reasonably good shape. In fact, the adjusted debt coverage ratio is about as high as I've seen it over the last year, year and a half. Cash on hand looks good. The debt coverage ratio looks good. Our current cash on hand at over nine looks really good. So I think that's kind of, we're in this space where if you just looked at those numbers this month, you would say everything's looking fairly reasonable. What our concern is, and we've talked about this, I think Commissioner Whitaker had a question on this last month. We've certainly had discussions on this previously, is we're now well into our 12th year without a rate change. The average retail price of electricity in Vermont, I believe, has gone up over 20% during that time. We've definitely seen some cost increases that other utilities would see, such as labor costs, health care costs, other different expenses that go up. And now with the pandemic, we've seen 2 million of impact on sales to customers from when it started in March of 2020 through today. We've got reduced capital contributions that certainly affect the net income statement. And then we have the arerages, which as the chart in the cover memo showed, even after over 300,000 of VCAP assistance that our customers were able to take advantage of in 2020, we still are pretty close to our peak levels during the pandemic of arerages. And that challenge has not been fully addressed. So when you add up all of those and you start to project out through the end of FY21, we are seeing the possibility of ending the year in a position where we won't have as much cash on hand as we might have expected going into 22. And where in FY22, some of these impacts really start to affect the budget overall. The budget that we presented has what I am thinking of currently as a gap essentially in net income and in cash on hand year end that in my mind and I think based on our metrics is probably at least in the three and a half to four million dollar range. We would typically want to end a year with around four and a half million cash on hand to be at our 90 day Moody's metric to go into the next year and get our three million dollar GEO bond allocation and then be able to spend through our capital program. It gets harder obviously if you're not generating net income significantly year after year. And even though we're in a good position on net income at the moment, we're not sure that that will remain the case through the entirety of FY21. So we've really been looking at putting together a budget where we did as much cutting and deferring as we could from the FY21 budget that we have left to manage and the FY22 budget. We've been treating the remainder of 21 and the start of 22 as essentially the same because really they do one flows right into the next and impacts the next. We have been working as we do that to maintain key projects. We can't afford to defer our IT forward projects. We had to get started on that. We certainly have generation distribution system projects that are critical. Our insurance rates, for example, have been going up significantly year after year. There are several insurance projects at McNeil that we are still striving to move forward despite their cost because we know they're important for maintaining our coverage and hopefully maintaining affordable rates. And obviously we want to invest in net zero. So the budget before you is a work in progress. It's not a final. It will be developed further over the next couple of weeks. It does include some assumptions around a revenue bond. We talked on Monday at the press event with the mayor about the idea that we want to pursue a revenue bond in 2021 that would be available partly during FY22 and for future years to help fund strategic electrification and net zero initiatives and infrastructure. This budget does not yet include a rate case, but we are actively explaining or exploring and planning for a potential rate case in FY22. We want to do everything we can to keep that rate case as reasonable as possible. And that's why we haven't put a number forward yet because we're trying to get all the other pieces together before we would come forward with that. But I expect we will be asking you in May not only to recommend our budget to the city council and board of finance, but also a rate case to the city council and board of finance. And just lastly before Emily can jump into some of the particulars, we are still pursuing and advocating for additional arrearage assistance for our customers. We know that reducing that backlog of unpaid bills is not only critical for our customers who are struggling in the pandemic, but will also make it easier for us as a utility to have more cash on hand to not have to, you know, have rates maybe be as impacted as they otherwise would be. And to the extent that we come forward with a rate case, please be assured we are also going to come forward with several ideas related to how to mitigate the impacts of that rate case, particularly for our low income customers because we understand this is a challenging time to look at raising rates. And in particular, we want to be able to mitigate the impact both short term and over the long run for our low income customers. So I expect we will bring you a plan for that in May as well. So with that sort of lengthy preamble, let me turn it to Emily for some details on the budget. Yeah, thanks, Darren. And I will share just a portion of your packet relates to this. So I'm just going to walk through some of the high level assumptions about what is included in this budget at this stage, this draft. So starting with sales to customers, you'll see that's a little bit down from what we had budgeted in F. So here's FY 21 budget. Here's the FY 22 proposed budget at this stage. So the sales to customers number right now does assume some COVID-19 impacts continuing through FY 22. The model we've been using kind of tapers them off and slowly over time. So that's about a $680,000 variance if compared to a situation where we would assume sales at a no COVID level. So the revenue side is in this budget is assuming some form of low level COVID impacts continuing that would result in a net yeah, net decrease in sales compared to what quote unquote normal for those for the month. Um, EU reimbursement in miscellaneous other revenue is also up slightly. So that's a positive. This is assuming approval of additional EU spending on through Act 151, which is pending now with the PUC. So that's an assumption we've incorporated. Rec revenues are also up. Emily, can you just just for the record? Can you explain briefly what the EU process what that PUC proceeding is? Sure. So the legislature passed a law last session called Act 151, which allows utilities to dedicate a portion of their approved budget to complement strategic electrification programs. So we have a pending docket with the PUC proposing, you know, what those programs would be and how much money we are allocating or would allocate if approved to those new programs. So we've we've assumed, you know, adoption or approval of our proposal in the budget at this point. Thanks. Sure. Okay. So and then as Darren mentioned, you know, in this sales of customers, there is no rate increase at this point assumed here. Moving on to expenses. Fuel is up a little bit about just under 6% from FY 21. Part of that most of that is is wood, and that's a little bit higher on price of wood, a little bit higher on volume of wood, both happening there. Transmission drop down here as we've just discussed is up quite a bit. And this is again, continuation of the trends that James just mentioned, both the Velco agreement and the ISO New England transmission tariffs are projected to be increased quite a lot. Moving down to O&M operations and maintenance expenses, this line item is up overall, I believe about 20 and that's not right. I think it's down 17.5%. That's not right, my math is wrong. But just embedded in here are workforce costs, you know, so we've been saying, assume normal workforce costs, no change, the number of FTEs. We've assumed COLA increases, cost of living increases, merit increases. We've also incorporated in here the an assumption around our annual pension liability. This has been something that we've not budgeted for in previous years that is included here, you based on a three-year average of past pension liability expenses. So there's an additional 1.2 million in labor overhead that's appearing in that line as well. And there's also some investments and key things, you know, our tier three budget, which does hit this operating and maintenance line is up 51%, $228,000, so significantly from FY21. There's money in here for improvements at McNeill. There are additional support and maintenance contracts with IT Forward because we're going to be for a short period of time sort of maintaining old systems and paying for new systems at the same time that will shift as the new systems are implemented. So a number of things driving the increase here. Yeah, I just want to say for commissioners, this is something that's been raised like three times over the last three years of like, aha, and now we owe what? So while 18 to 19 to 18 to 21 looks big, it's better for us to plan it and so I appreciate that from the team at BED because it keeps happening after we budget and after we approve the budget and then we all of a sudden get our bill, so. Yeah, thanks. So I'll skip some of this, you may notice interest expenses down a lot. Interest rates as you may all know are down quite a lot, so that's hitting some revenue here. But overall, this all adds up to a net loss. So this is the gap, part of the gap that Darren was talking about. I'll move on now to capital and I won't go through this list because it's like four pages long, but there is a list in your packet of all the capital projects included or proposed in the current budget. The total capital budget is about $8 million when you net out the customer contributions. I'll just show you where you can see that the bottom of this list, right? So the total plants 9.3 if you take out the customer contributions, you're right around $8 million. And that is in line with our current, with our past sort of average level of capital spending over the past three years or so. McNeil, there's about $700,000 worth of investment in McNeil, including some critical insurance required projects. We are making another equity investment in VT Transco of $1.1 million. We've got investment in the Winnieski-1 Hindrow of just under a quarter million dollars. We have investments in electrification and R&D, including more public EV chargers, potential fast charger, around $200,000. $3.6 million invested in distribution, including some SCADA network investments. Excitingly, an electric bucket truck, our first. With the help of a VW grant is included in the capital budget. You can see about $1.5 million in various IT forward projects included. Also some AMI and smart grid investments here. So it's a robust capital budget that I think is investing in broadly across all areas of the plant. And then I'll just kind of go back up here to cash and financing. So that's the second page of this. So just key to note here, we have a beginning cash balance assumed up here in yellow of $5.5 million. Obviously, this is subject to change in terms of how we close out FY21. And we are doing everything we can to close out FY21 in as strong a position as possible because that sets us up the best for FY22. The other things to note here are, we are assuming an annual, here we go, general obligation borrowing of $3 million. As was the case last year, this May we will be asking the commission to approve a bond anticipation note. So that will be the city's new practice where every year they issue a bond anticipation note that has like a 12 to 16 month timeline. And that's what you will be approving. And then that will be rolled into a general obligation bond to kind of refinance that bond anticipation note. So it's the same $3 million taking a different form of debt financing. And then additionally, this is as Darren mentioned, we've assumed a $3 million revenue bond for purposes of discussion in this budget. And so I think as Darren mentioned, as we look at this draft budget and the gap, there's sort of a number of levers still to pull. And we're confident we can present a revised budget to the commission in May that maintains a healthy cash position as of June 30 and delivers on ratings metrics that are where they need to be. But to do that, we probably need to do a combination of including an assumption potentially for a rearage relief from the state or city that's not included in this budget. Potentially re-looking at the sales to customers revenue assumption and what level of COVID impact should we assume. A rate increase, as Darren mentioned, with mitigation measures to help low income customers. And then what is the most reasonable amount to assume for a revenue bond? I'll end and turn it back to discussion. Emily, if I could just make one quick addition on the revenue bond. We haven't determined yet sort of what the total revenue bond number would likely be. We're assuming that it would be potentially well beyond 10 million if it's a multi-year kind of infrastructure investment. You know, we did an 11.3 million bond for efficiency in 1990. So certainly there's the potential to support a larger revenue bond for electrification. So in this budget, we're just assuming that if the revenue bond was advanced and approved later this year that 3 million would be what we could draw down for projects that are planned in this budget. And we've also made the assumption that if it was not approved, some of those projects or initiatives would have to be deferred and some of them might have to be funded by cutting in other areas. Thank you. Commissioners, questions, comments, observations. Yeah, tough times, right? Like a lot of things converging at the same time. I'm also thinking about the Burlington residents who just got their property tax adjustments too, which is but presumably... Well, to clarify, it's a property assessment. Brutal. It's a property assessment. I keep telling myself it's an assessment. We're not sure how it's going to come out in the taxes. Right. It's just, I think that it's unfortunate timing, but maybe this, by the time this comes out, people will be over that last one. There's never probably a great time to raise rates, but we're conscious this is a particularly challenging moment. And just from a timing perspective, what we would plan is likely to include something with the budget recommendation. It would go to City Council Board of Finance. If it was approved, it might be something where we would file in the middle of June with an assumed starting point for the rate to actually change of August 1, 2021. So this would still be a number of months out from implementation at the PUC level and on customer bills, just to give you a sense of the timing that we're looking at. That's pretty quick though. Three months? Yeah, that's real quick. Yeah. Well, there's a provision. That's not for the end of the rate case, but there is a provision that allows for municipal utilities to file and actually have the rates change after 45 days of filing, even though the rate case is still pending. And then there is a true up if the PUC determines a different rate is appropriate. But so you can have a change on customer bills as early as August 1, we certainly would plan a very, very rigorous communication effort starting in May, if this is in fact included with our budget recommendation to let customers know exactly what we're proposing, exactly when it might take effect, what the mitigation measures are for low income customers and give folks several months lead time, obviously, before anything would change on their actual bills. Other thoughts from commissioners? Yeah, I've been good with this for quite a while now. Honestly, after 12 years, that's just a fantastic run. But there's nothing else in our lives that the cost of has gone down or stayed the same. Nothing, nothing in the world. So it's something that we can be very, very proud of for all of this. But you can't keep cutting and scrimping and robbing Peter to pay Paul and just to keep this thing to keep the utility afloat. And I think the record of 12 years of not having that, and that should be part of the PR on this is that, and then that really should take a lot of the sting out of it. Folks should realize, this is the only bill in your life that has not gone up, and well, guess what? We got to do it. So I've been at peace with this for a couple of years now at least, that this is going to have to happen. So that's my two cents. Appreciate that point. We certainly would try to communicate the financial value that's been delivered for customers over those last 12 years as we seek a potential change this time around. Commissioner Heron Dean, you showed up. I suspect you have some comments. Nope. Okay. Commissioner Whitaker and Shaggan, you don't know this, but the other three commissioners went through a process of sort of getting to understand what the commission role was, maybe 2017 or so. And one of the pieces there was to help be voices and conduits of information to our communities. So if we do end up needing to discuss a read increase, I hope all five of us will be assisting in that in terms of why and how, and not just leaving it out for the staff and the team, because 12 years is a long, long time to go. Besides like, you know, milk, which frankly should have gone up for a long time now. I don't know what else has not gone up. I want to ask, just well, to check. No other commissioners have comments or questions right now. Okay. So I really appreciate, Darren, your cover letter. It's very thoughtful. Your comment that investor-owned utilities and co-ops were eligible for certain pandemic relief programs, but munis are not. Is there anything that could be done about that at the federal level that we should be working on? Yeah, it's an interesting point. Originally co-ops were not eligible. It was just investor-owned utilities that were eligible for the paycheck protection program, which was where you had your, essentially your workforce costs, your labor costs covered. And then if you kept people employed, you had those costs forgiven. It was a loan that was forgiven. So investor-owned utilities were originally eligible. It was expanded to co-ops. It was never expanded to municipals. And, you know, I don't want to suggest that we haven't received some assistance because we certainly have. Emily mentioned the local government grant that we received via the city through the CARES Act program that was funded by the legislature. So that's certainly been of help. We've received a little bit of FEMA assistance. And, you know, we've certainly sought opportunities where they exist. But there are definitely some programs like the Paycheck Protection Program that other utilities were eligible for. And we were not. I did have some limited conversations with our delegation around that. I think kind of munis fall into this odd area where we're not treated as utilities in certain programs. But we're not municipalities receiving direct aid either. So in that one instance, we certainly were not able to benefit. So since I represent BED on the policy committee at the American Public Power Association, is this something that we should be advocating for? I mean, hopefully we only have a pandemic once every 100 years. The last time was the Spanish influenza. But you never know. Is this something that should be put to the list or added to the list? I think they were definitely advocating for it. And I think if you want to, you know, raise it in that context, it's certainly appropriate. They definitely, the APPA, the NEPPA, the New England Public Power, we're all familiar with this challenge and advocated for direct aid. And, you know, I'm certainly sympathetic and understanding of the idea that when you're trying to get these bills crafted and get aid where it's most needed, utilities may not be the first thought. And in a lot of cases, it's a rearage assistance that is funded. And that's critically important. But certainly having that context, bringing it up at the federal level with the APPA makes a lot of sense to me. So I really appreciate your thoughtfulness. I appreciate you all trying to cut everywhere you can. I also appreciate that at some point you can overcut. And, you know, this is just my personal opinion. And if nobody else agrees with me, I'm happy to leave it be. But if the next step is you guys are going to work on this for another month, and then we have to vote on something when it comes to us in May, I personally wouldn't mind a check-in like a week before we're supposed to vote. Because I feel like things are really moving a lot in terms of what's happening at the federal level. We are still waiting for whatever the specific rules may be for some of the federal dollars. Things are certainly shifting at the state level. I wonder if folks would want that or be amenable to that. Personally, I would, as much as these are robust 60-page overviews and reports and incredibly thoughtful cover letters, I personally wouldn't mind a little more discussion before I have to vote on something. And I wonder how other commissioners feel about that. So to be very clear, would there be some support to checking in before our next May meeting where we have a vote? I guess for me, it would depend on if the staff had the information updates and the analysis done that we could, that they could share with us. Agreed. Okay, yes. But definitely yes, so that, you know, just to give us some time to think about it before voting on it. Yeah, exactly. Yeah, I think that makes sense. There's no way that, I mean, the federal, any building back better investments in infrastructure. Well, no, the new one that they're talking about, they have talked about great investments and things. I don't, that wouldn't, because it looks like there's the challenges both operating and capital. So even if there was a capital investment from the federal level, it would still be in trouble. And anyways, that's beyond a month out. Right. Yeah, that's definitely, it's something that we're interested in for certain, but we don't anticipate it mitigating the immediate challenge with this budget. Well, so I'll ask the staff, Darren and crew, do you think you'll have a sense, you know, before the day we need to vote? I think there could be merit in talking a week ahead of time. I can't guarantee we would be able to present a fully fleshed out final budget draft for you to review, but we can certainly update and will have updated by that point several assumptions. I think we will potentially have been able to re-forecast one last time what FY21 looks like based on the March financials. So that'll be another data point that we'll have. We will probably know what the sales forecast will be for 22. Emily mentioned there's significant COVID impacts in there now. We may update that. We may have a sense, we may not have an exact number for a proposed rate case, but we might be able to give you a sense of where that is. So I think there's merit in checking in. I would say we won't have a final prepared budget for you, but we'll be able to give you some updated data from where we are now, and then certainly we'll have a final prepared budget ready to go for the main meeting. And maybe this will prepare everybody more for that conversation if we have another check-in before then. If we do, if you had any even round numbers for what a rate case might look like, would that involve, would that be an executive session discussion? No, I don't think so. We'll be very transparent. I think in all likelihood we could probably justify a rate case that will be larger than what we asked for in all likelihood. That wouldn't surprise me. Just let me check on the timing. So you still will be expecting a vote on the budget next month. When would there be a vote on a rate increase? We would propose it to be simultaneous. Yes, then let's meet. I think the next month's meeting is supposed to be on May 12th, so if it makes sense we could perhaps plan something for the week prior. Say goodbye. I'm making life tough. I have the opportunity potentially to see both my son and my daughter in Maine somewhere in that time frame, and I've seen one of them two years ago and one year and a half ago, but I'll do what I have to do. Does it necessarily have to be on a Wednesday? Well, anyway, what am I talking about? Never mind. It's Zoom. I'm going to suggest that we ask Laurie, our clerk, to help coordinate with the BED team what makes the most sense. It may end up being that for them it's May 6th or something that they actually feel better about the numbers. Personally, to me, rate increase, I do need a little more fleshing out of what that is, even if it's just a range. It could be a rate increase range of A to B, and then also if in that analysis, I understand it's more difficult for commercial industrial customers, but for residential customers, if it could be presented as and a bill increase of A to B, because residential customers don't really know, they're not living a rate, they're living what they pay their bill. We're going to have a residential average customer impact in a dollar amount, for example, ready to go, and we will have, as well, that's a piece of our information that we're using to try to develop that low-income customer mitigation, is to know what the rate impact might be on customers and then be able to develop something that would help mitigate. Absolutely, we will be able to talk about that. Excellent. I'll leave it at that, and Laurie, thank you for having the fun task of coordinating pieces. There's a judgment call here, a policy call in terms of, it's been 12 years since we have raised rates. In the energy world, there are some people who feel that you raise rates a little bit more so that you don't have to go back again and again and again, and then in light of a pandemic, maybe you don't, maybe you do it incrementally. I feel like commissioners should just be aware that as our team goes and thinks about how to approach this, those are different pieces to discuss. That's absolutely true. We could probably justify, as I mentioned, a particularly large increase and then try to stay out of the process maybe for a few years. That's not the approach we're currently taking. We're trying to go for something that would be more modest, understanding the impact that it may have, and then the other piece I would just make the commission aware of is there's legislation, I believe, heading to the governor's desk that has been promoted by VEPSA but would affect BED as well, that would allow for municipal utilities to approve with their local, with the commission and the city council in our case, approve up to 2% rate cases annually up to five times without going to the PUC in the future if this bill is signed by the governor. If we do have a rate case this year and in the future we want to plan for more modest regular updates of our rates up to 2% annually, that potentially would be available to us for future years so that we continue to adjust on an incremental basis as opposed to building it up and then having to go in and have a bigger number. Just another consideration we'll know certainly by the time we meet next whether that bill was signed, I think. I believe I voted on that bill. Thank you, we are running over but this is important and I really appreciate all of your time. So we're going to move on to number seven, assuming that we've got our next steps and tasks, Laurie and crew, great, thank you. And apologies, Commissioner Heron Dean. Agenda number seven, net zero roadmap update, this is a discussion. Yes, so what I was hoping to do and I'll try to be as expeditious as I can be understanding we're running a little past time is to walk through some of the slides that we presented on Monday with the commission and I'm going to share my screen here in just a moment. Get these slides pulled up. Happily since this is with the commission there are certain slides I can skip, this being one of them. No need to introduce you all to BED, I think we can move right past this one. So we started and we always start pretty much all these presentations talking about efficiency. The couple of things here that I just want to point out is year ends 2020, if you take the COVID impacts out, we are 8.6% lower today than we were in 1989. If you add the COVID impacts back in we're 12.3% lower than in 1989. So it gives you a sense of what those COVID impacts have done in terms of our consumption. Certainly over that period of time US and even Vermont consumption has gone up and we are seeing continuing to see in excess of 10 million in avoided costs for customers through our efficiency investments and the green stimulus which started in 2020 continues in 2021 is covering 100% of efficiency upgrades, electric efficiency upgrades with our affordable housing providers and we're covering weatherization projects up to 75% at rental properties. So there's some good efficiency programs that are in place along with our partners at VGS and efficiency Vermont. These two calendar contest photos are from prior years we had a virtual calendar contest this year obviously we weren't able to gather in person. Here's the updated you've seen this previously but the updated slide looking at the efficiency compared to sales and the impact of efficiency and you can see the COVID impacts at the very end where both sales and the kind of the cliff there drop off in 2020 but just a visual representation of the numbers that we were looking at on the last slide. Here is our 2020 renewability and supply pie charts. As I think we've talked about in prior years we have more than 100% of our energy needs that are covered by the supply chart on the left. So you can see we're a little over a third with McNeil, a little over a third with Hydro, both large and small, the small being Vermont based Hydro, a slice from PV and then a little less than a third from the three different wind projects that we have contracts with makes up the generation portfolio and then the renewability portfolio on the right. The Hydro 25% is Hydro Rex that are retained from our own generation resources and then we have purchased or banked Rex covering the remainder of that. This is updated from probably the last time we ran through. We have a little over 8.6 megawatts of solar installed as of today and we've got another pretty decent chunk of solar projects pending that would take us to 9.4 megawatts when those are completed. So a couple years running we've been number one in Burlington for solar per capita in the northeast. We're number five in the nation as of 2020. So certainly continued strong growth in solar in the city. I think we covered this last year so I won't talk about it too much but we did look back with the 2018 Synapse data at the climate action plan that the city had had and the emissions data from 2010 and 2013. This emissions data includes non-Burlington vehicle travel. The roadmap as you'll recall focuses on the transportation sector only on Burlington resident travel so that's a difference between the climate action plan and the roadmap. So for this you'll see emissions figures that are different than the road map emissions figures but we had met and exceeded the 2016 climate action plan goal based on that look back from the 2018 Synapse analysis. This is our vision statement. You all are incredibly familiar with it. I won't spend too much time on this but this was just orientation for folks who are not familiar with the net zero energy vision and some of the steps we've taken with the city council and different departments and partners over the course of the last year and a half or so since it was released and again this is just the look at the different technology pathways. As I mentioned you take non-Burlington travel out of the equation and buildings becomes the major focus of the roadmap. The piece here that I think is worth flagging is we have in here a 5% roll for alternative transportation and reduced vehicle mile travel. Obviously that played a much bigger role in 2020 and we'll touch on that with some of these numbers. So this is from the new Synapse analysis. We worked with Synapse to get 19 and 20 emissions and fossil fuel use data for Burlington. On the left is the original road map with a business as usual trajectory and the green line which is the net zero trajectory. Business as usual would take us to about a 9% reduction in fossil fuel use by 2030 and as you can see in terms of fossil fuel use we are slightly ahead of pace in terms of the road map in 2020 and then similarly on this next slide you can look at the emissions trajectory on the left the original road map scenario and on the right that we're actually ahead of pace in terms of emissions reduction in 2020 compared to the road map. So some some things to take away you know from this analysis I think important to note that we were lower in fossil fuel use and emissions in both 2019 and 2020 so it wasn't as if we had increased in 2019 and then only the pandemic brought us down. We were on the right path in 2019 and we accelerated in 2020. Emissions were down more than 15% in 2020 compared to 2018. If you break that down further natural gas was down a little bit more I think than 10 and a half percent from 2018 levels. That's not whether normalized I want to note and then gas and diesel consumption was down 23.6% percent and the reason for that is partly the vehicle miles per vehicle in the 2020 pandemic impacted year are estimated by synapse as being 6400 roughly compared to a baseline of 8000. We also saw a reduction in the number of vehicles that were registered in Burlington between 2018 and 2020 so that has some impact in terms of gasoline and diesel consumption and then we are seeing adoption of EVs and that's having an impact as well. If you want the exact numbers it was 182,000 metric tons of CO2 in 2020 compared with the roadmap goal of 190,000 and as we'll talk about in some of the next slides while we're making good progress on strategic electrification the roadmap is incredibly ambitious in its pace given that it's such a big goal in such a short time frame and we're not quite on pace for some of the roadmap goals related to things like heat pumps and EVs and as we stressed at the event on Monday and at City Council and we want to be really clear obviously there is an emissions rebound risk when the economy reopens. We're currently still impacted by the pandemic. We're still seeing vehicle mile travel that is going to be reduced in 2021 compared to a typical year and the remote work, the telecommuting, the walk bike transit options could all help with mitigating the rebound. I know there's consideration for continuing fare free transit. I know that as I mentioned the city hopefully other employers are also looking at remote work options and I know the mayor on Monday spoke of continuing to build out the dedicated bike lane network in Burlington as part of his vision for climate work in 2021. We also need to keep making progress with EVs and heat pumps and other technologies to receive kind of a trajectory in the future that's going to look the way that we hope it will and I have talked with Synapse as well about doing some retrospective work in the future looking back at the pandemic and getting even more granular vehicle miles traveled data to help us understand what some of the differences were in 2020 and maybe even in 2021 relative to a typical year. So they're excited to keep working with us on this. These are all things that you're aware of. These are our different incentive programs. I think one of the things I stressed at the council meeting is just that so many of these programs include an enhancement for our low and moderate income customers and a number of them are continuing to see uptick in terms of participation broadly from the green stimulus but also in terms of low moderate income customer participation. We were glad to be hosted by Linda Provost on Monday at her home. She is a Chevy Bolt driver and she was able to take advantage of the low moderate income customer rebate. She's one of our EV drivers in the city and it's great to see that that rebate is playing a role in helping more folks afford electric vehicles. These are just some different projects that we highlighted that are underway and in particular I wanted to mention that the work of expanding access to EVs, we're in good partnership with Car Share Vermont. They're Sparky on the top right which is parked at Main Street in St. Paul and available for folks to use with a flow charger that's dedicated for Sparky, the Nissan Leaf that BED helped to provide. But we also are working with Car Share to expand opportunities to have more EVs in their fleet and locations around the city that'll make them more accessible for more Burlingtonians. So we're excited to see some progress on that in the coming months. Also we've rolled out 14 EV match chargers as part of our pilot program coming out of the Delta Climb business accelerator and these are at multifamily buildings, rental properties around the city of Burlington. At least 10 of them are available to the public as well as to building residents. So this is a great way to expand the Level 2 charging network to help more renters and more members of the public be able to access charging. And I think Emily mentioned some of the items here as well, the exploration of more fast chargers, the bucket truck, the electric bucket truck that's coming, and some of these other pieces as well. And then this is the participation across city government. The Chevy Bolt on the bottom left there is from the Burlington Fire Department that they helped, that they procured with assistance from BED's rebate program. We've been working with the city on making sure that we can use the internal carbon pricing tool to evaluate city fleet purchases. Increasingly the city fleet purchases are becoming more and more electric as we move forward and more vehicles are available. And obviously policy work is critical. We're very close to finalizing I think the rental weatherization standards in the course of the next month. And I know that there's work underway on the charter change and the renewable heating requirement ordinance as well that will hopefully be moving forward in the coming months. Those policy changes are very important to complement the incentives. So this is something that I think I'm taking tremendous pride in this particular slide for BED. And I know I think the commission will as well. Tier three, which is not quite as ambitious a pace as our roadmap, but is itself a fairly ambitious trajectory for requirements for utilities to do work, reducing emissions and fossil fuel use for their customers and the transportation and the heating sectors. In 2019, we met about a third of our tier three requirement with program measures, incentives like the EV incentives and the heat pumps. And we had solar wrecks that met the remaining two thirds of that requirement. In 2020, we tripled the state requirement with programs alone. So a major boost in 2020. The electric buses played a role in that. The geothermal system that we talked about at Hula played a role in that. The green stimulus boosting heat pump adoption played a role in that and the different EV programs and e-mowers and e-bikes. And I know Commissioner Herendine is going to say something about this. So I'm going to preemptively say that I know very much that the lifetime reduction of emissions and the comparison to a certain number of cars coming off the road for one year could be challenging comparison in some cases. But we've used it in the past. And so we wanted to just continue to be able to reference that metric. But to be clear for anybody viewing this program, the reduction of emissions in 2020, what we're talking about is the lifetime reduction from those measures would be the equivalent of taking 8,500 cars off the road for a year. So I think that's a great accomplishment tripling the tier three requirement in 2020. This is just another representation of what that looks like and some of the different programs. You can see we have 70 low moderate income rebates that are part of the tier three total rebates at this point, which has been growing. The chart on the left is the different EV rebates. And you can see their growth. The chart on the right is public charging. You can see we had a dip during the pandemic that has not rebounded to pre-pandemic levels as of yet. Hopefully it will in the near future. And here you can see this is, I think, important, maybe goes to some of the conversation we're having around data and metrics. So we look at how many EVs do we have registered in Burlington. We only had partial year data for 2020. But our best estimate, based on our incentive program and the partial year data, is approximately 362 at the end of 2020. If you were on the roadmap pace, you would have had about 548 at the end of 2020. So on the right, you can see the roadmap pace. And we're keeping some pace with it, but we're a little behind on the EVs relative to what the roadmap would have us be doing by 2020. Similarly, with heat pumps we've seen on this graph, the green stimulus really boosting adoption of the residential heat pumps. You can see when the green stimulus came in, the adoption rate really took off. Overall, we have about doubled the residential heat pumps between 2018 and 2020. And yet the roadmap goal would have had us close to 4,000 heat pumps. And we have a little less than 1,000. We have 891. So we're off of pace for what we would want to be with residential heat pumps, which to me just shows exactly how ambitious the roadmap is and that even if you're making good progress, doubling the number in a two-year period takes even more to get on the roadmap pace. Similar, some similar metrics on e-bikes and e-mowers continuing to grow. This slide looks at those different low and moderate income customer incentives as well as our pre-owned EV incentive. And I think you can see in 2020 we really saw some progress in terms of customers being able to take advantage of those different incentives, in particular the heat pump with the green stimulus. We had a number of low moderate income customers be able to utilize that incentive in 2020 for heat pump installations. We've talked about this a little bit. This is from our IRP. This is the slide that shows the decreased rate pressure as we move towards net zero. If we were to upgrade our system to 103 megawatts from where it is today, looking at all of the costs of doing so, but also the additional revenues that would come in, I think the revenue bond that we're talking about is interesting to me because it would potentially align much better our investments in net zero with the revenues that we will see from net zero. Right now we've been funding our tier three budget annually in our operating statement. But really if you think about it, the revenues from a new electric vehicle or a heat pump or a geothermal system are coming back to the utility over a 10 or 15 year period. And that really lines up much better with a debt service model of paying for it than it does with a upfront payment in each year's budget. So I think that that's something to consider as we move forward with the revenue bond. And then this is my last slide. These are next steps that we talked about on Monday. I mentioned the mayor had talked about the dedicated bike lane. We talked about the policy changes. We're certainly looking forward to completing the phase three work with district energy. And we talked about the revenue bond and the green stimulus. We've talked during this meeting about pursuing these opportunities related to state and federal funds for climate and energy. And we are going to plan to update with synapse annually at this point. So hopefully every January, February we're gathering this data with them and our partners like VGS and others. And then we're able to put it together and have an update for the public, for the commission, for the city council in the April or May time frame each year to track our progress. And that's pretty good because I know at the state level the emissions data is only current through 2016 right now. So having estimates for 2020 puts us a little bit ahead of the curve in terms of seeing our progress in Burlington. And in terms of those challenges ahead, I just want to reemphasize the mitigating emissions effect, the rebound effect coming out of the pandemic. That's a new challenge I added to this slide. The other four continue from the prior year when we updated the council and the commission. I believe in July of 2020. I will stop sharing my screen here, come back to you all and glad if there are any questions or discussion on that, glad to answer them. Well, I'll repeat my comment that I think this is great. And I do have some comments which I'll send on. I'll only mention one. And I've been reluctant to get into this because I studied it over the years and decided for a while it didn't matter, but it may matter now. I have a Wall Street Journal article a couple of weeks old comparing a Tesla and a RAV4. Bottom line is that the energy greenhouse gases to produce these two items are different so that even though the Tesla has much lower greenhouse gas emissions directly, it doesn't actually cross over until about two years. So in a program in which you're building them very fast and bringing them in very fast, you may be at the point where the crossover point is barely crossed or maybe not crossed at all. So there is a pulse from building all this stuff up which probably isn't being counted now, I'm not sure, but it's out there. So it's a tweak and there are all kinds of people who are worrying about these tweaks and this particular one looks like it might be significant. I think I read that same article. And I think one of the points I took away from it as well is that for some customers, the plug-in hybrid obviously has much less battery in it in the RAV4 than the Tesla does, which is fully electric. And if you're utilizing the RAV4 primarily on electric, you may have a pretty reasonable carbon footprint case even comparable to or better than in some cases a full electric vehicle, which is interesting because I think in Europe they're moving in the opposite direction of saying if it's not fully electrified, they're potentially not going to incentivize it beyond 2025. But there's a pretty good use case for plug-in hybrids based on some of the data in that article, having less of a carbon footprint during the manufacturing process perhaps. Darren, can I mention something real quick too? In our Act 151 programs, we have proposed differentiating our incentives for plug-in hybrids based on range, so the longer ranges. But we also have proposed differentiating our incentives on AEVs based on different qualities about AEVs, more efficient, whatever. And we got thoroughly shot down on differentiating our incentives on all electric vehicles by the state regulators from a not wanting to interject confusion at this point in the market. Well, I'm just saying we actually wanted to do that as an additional differentiator and we just could not get that through. It's an additional consideration that'll filter in over time. Yes. That I think they were willing to grudgingly grant. Okay. Anyway, great stuff. Thank you, Commissioner. Other thoughts? Questions? Good work. It's impressive. It's also really challenging to your point about the number of heat pumps we need. You know, we're not talking 1x, 2x, 3x. We're talking like COVIDX. We're talking, you know, figure out the virus, figure out a vaccine not in 10 years, figure it out in one year. And thus far we have yet to convince humanity to make that change. But maybe we will. And we just got to keep pushing in. And Darren, if you wouldn't mind sending an email follow-up about how the revenue bond discussion went before the city council, I'm just mindful of the time, and how that could help with moving this transition more quickly, give a little more context. I think that'd be really helpful. You and I have had a chance to talk about it in our one-on-one check-ins that I don't think all the other commissioners have heard. And it's yet another very creative idea of how to make the finances work for this transition for more Burlingtonians. So yeah, I'd be glad to follow up on that. I don't, we didn't get into much detail at city council on that point yet. So more to come, but we're glad to follow up further on that. If it's too soon, you can do it at a future meeting rather than via email. But I do think we should explain how that helps the transition and the path on the roadmap. Excellent. 714, Commissioner Whitaker, you jinxed us. Other questions or comments? Hearing none, we'll move on to agenda item number eight. This is the MOU between the distribution utilities. This is a discussion with a possible executive session. Go ahead, Darren. I don't believe we will need an executive session. That's the good news. We can get into this in public session. When we originally were bringing this forward, we weren't sure what might have been made public by this point at the PUC. I believe folks may be familiar, but may not have seen the news that global foundries filed for a certificate of public good, I believe, from the PUC that would allow them to operate as something called a self-managed utility. In that characterization, they would essentially move from being a Green Mountain Power customer to being an independent utility. They are connected directly to the Velco system, I think unique among most customers of other distribution utilities. They are in that position. They obviously are a critical manufacturer for the state, job creator and supporter for the state, and I believe in other facilities that they may have in other states, there's an option that looks similar to this, where they can manage some of their own power supply and directly sort of manage some of their utility related costs. What the MOU before you describes is a conversation between the various distribution utilities and GMP. This also came up in the context of my service on the Velco board, because Velco will need to have agreements with global foundries and GMP related to infrastructure to serve global as an independent customer. This is an attempt to essentially try to hold harmless as much as possible the customers of the other distribution utilities from cost shifts that might present as a result of this transaction, if it moves forward at the PUC. Ken Nolan, who many of you know, former BED or now the GM of VEPSA, was really the lead for the distribution utilities in helping to corral and negotiate this with Green Mountain Power, who is very thoughtful in putting together a package of measures to help mitigate potential cost shifts to the other distribution utilities. And our goal along with this has been certainly to make sure that our customers are held harmless, that there are not cost shifts related to our share of the transmission system that would be foisted upon Burlington customers as a result of this or that if there are that those are mitigated or compensated in any way possible. In addition, we certainly value being a franchise utility and serving the entirety of Burlington and all of the customers within. And we understand and recognize the unique circumstances of global foundries, but there's some effort in this memorandum to really catalog that and make clear that this is not an endorsement of a, for lack of a better term, kind of a retail choice model in Vermont where utilities are not franchise territories and where customers are able to do different things related to power supply than what their utility might be doing. We've certainly made investments in being renewable and moving towards net zero that include all of our customers being involved. And we think the Vermont utility model of regulatory structure really works well and has been proven to work well over a period of years. So I think the MOU really attempts to catalog that as well as hold customers harmless. James and Emily spent a great deal of time working with the other distribution utilities and GMP and Velco on this. They may have something to add. And then I think we'd be glad to answer questions if you have them. The only thing I would add is that there are a couple of different effects. There's the potential change in how transmission costs are allocated because this won't reduce Velco's transmission costs or increase it, but it does affect the formulas that are used to recover those costs. It could have implications for utilities that are exposed to standard offer and Rygate power and things like that, which BED is not right now, obviously, and doesn't expect to be. So there are different positions between the different utilities. We have intervened in the docket. Bill Ellis has intervened on our behalf. We're not expecting an active, particularly active role, but we do need to be there to make sure that we're in a position to comment if something does change between what we've negotiated here and what finally gets approved by the PUC. And the MOU includes some transition mechanisms to soften the impact to, if not always to remove them, to delay them and have them not occur immediately. So that's the other thing people are looking for. Well, is the bottom line here that if some of these costs that might come down on us are pushed back, that global foundries will have to eat them? I'm sorry, can you try that again? I missed that. Yeah, okay. The model I have, pretty simple, is there are a number of fixed costs out there for the whole system. Global Foundries is going to be able to avoid some of those, so the rest of us are going to have to pay more. And if we don't want to do that, if we don't want to do that, then we want to push it back at Global Foundries. Is that what's going on? The MOU has a structure whereby GMP insulates the other utilities from the economic impact. So if you think about a standard offer, it's allocated to all the Vermont utilities based on retail sales. That doesn't affect us by using it as an example. GMP is agreeing to continue to include Global Foundries retail sales in their retail sales for a period of time to buffer the effects on the other utilities of this change. For us, it's GMP is agreeing to set aside a pool of funds to compensate us for increased Velco transmission costs because Global Foundries will be paying under a different structure than they do currently as part of GMP. And that payment structure is lower than what they pay as part of GMP, which assigns the shortfall to everybody else. So it sounds like there's a hit. GMP will take a hit for a while. Over time, the hit will erode and the costs will come down to other utilities. Is that correct? Eventually, the costs will be picked up by the other utilities, in this case the ED, at some point in the future when these monies set aside are eventually gone. Now on the flip side, we're better off than if Global Foundries pulled out of Vermont today, in which case all of those costs would transfer to us immediately with no buffering. So that's really the quid pro quo is that they're agreeing to buffer the effect if we sort of don't approach it actively. Okay, what's a rough slate of time that they would buffer it? I think they figured their math on about five years, Emily. I'm doing my memory. I believe that's right, those five years. I just wanted to add to Load James that we didn't actually agree that we would take any particular positions relative to this at the PUC. We are a party at the PUC. We will monitor and weigh in to protect our interests as needed, but this provides a framework really for that. I misspoke, I apologize. Yes, we have no restrictions on the positions we can advance at the PUC as a result of signing this document because we're concerned about the precedent and the ability to avoid Vermont's renewable standards and things like that, that might imply as well. I think five years, but what they are actually proposing to do is it would be calculated based on the actual effect of pulling out Global Foundries and treating them as a separate customer of VELCO, which would reduce VELCO's total payments. They'll calculate the amount and compensate. So it actually will go for as long as it lasts, but the estimate was, I believe, five years. It's like it's the neighborly thing to do. So what's the issue? There is no issue other than it's a contract. We're considering this to be a contract that affects power supply costs because it's impacting transmission and it's a revenue stream that offsets the impact on transmission. And so, and because the duration is probably around five years, we talked to Bill Ellis and the correct, we think, approval structure is well-earned until electric commission approval is the only approval that's required. You've done your homework and struck a reasonable deal. I believe we have based on my experience. Agreed. Yeah, from a policy perspective, I mean, the challenge is always it's, what am I trying to say? It's only been a very long day. How we share are and how we pay for our pooled resources. And to the extent that we have one large entity that steps away, it's the concern that you always hear in California if they have their own grid and they have their own batteries and they have their own solar and generation and geothermal or whatever, that's where the conversation becomes challenging because for the vast majority of us, we don't have that option. So, to the extent that you have certain entities that can step outside of certain monopoly structures, then it makes the monopoly structure less effective for all is my sense. But it does sound like you guys have really done what you can. Were we supposed to process wise? Were we supposed to vote on this? Or what does this mean? We were seeking your vote in order to authorize our signature to participate in this MOU. And commissioners, where are you? I'll make a motion to sign the MOU. Second up. Second. Second. Laurie. Commissioner Shagman. Aye. Commissioner Modi. Aye. Commissioner Herndy. Aye. Commissioner Stebbins. Aye. Mr. Whitaker. Aye. Thank you. I'd love to know how that evolves. So, please let us know how it shakes out numerically and what that looks like in terms of power supply costs specifically, James, what you're talking about. So, last on the agenda is number nine, commissioners check-in. If there are any items that commissioners want to mention or flag before our next meeting, besides our understanding that we should be seeing a follow-up from Laurie in advance of our next meeting for sort of that check-in in terms of the next year's budget. No, I'll say that. I'll say that. Jim, good to have you with us. Should we motion to adjourn? Please. Second. Laurie. Commissioner Shagman. Aye. Commissioner Modi. Aye. Commissioner Herndy. Aye. Commissioner Stebbins. Aye. Commissioner Whitaker. Aye. We adjourn at 7.28. Thank you. Thank you. Thank you all. Your guys are doing great work. Thank you. Let me know if you have any questions in either of those emails.