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ALL RIGHT.THE TIME IS 2:09 PM ON THIS EIGHTH DAY OF DECEMBER, 2021.
WE'LL GO AHEAD AND CALL OUR CITY COUNCIL B SESSION TO ORDER.
MADAM CLERK, COULD YOU READ THE ROLE? COUNCIL MEMBER BRAVO HERE.
COUNCIL MEMBER MCKEE RODRIGUEZ.
ALRIGHT, GOOD AFTERNOON EVERYBODY.
WE DO HAVE, UM, MEMBERS OF OUR C P SS LEADERSHIP TEAM HERE, SO WELCOME.
UH, I ALSO WANNA MAKE NOTE, UH, AND WELCOME, UH, TWO OF OUR RAC MEMBERS WHO ARE IN ATTENDANCE TODAY.
BRENDA PACHECO, AS WELL AS DR.
THANK YOU VERY MUCH GUYS, FOR ATTENDING.
UH, AND, UH, I KNOW WE HAVE MANY OTHER GUESTS IN THE,
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UM, IN THE ROOM TODAY TOO.SO WELCOME TO EVERYONE WHO'S ATTENDING.
UH, LEMME TURN IT OVER TO CITY MANAGER ERIC WALSH TO GET STARTED.
[ ITEMS ]
THANK YOU, MAYOR.UH, GOOD AFTERNOON, MAYOR AND COUNCIL.
UM, SO, UH, TODAY WE'LL HAVE THE STAFF RECOMMENDATION DELIVERED BY THE PUBLIC UTILITY SUPERVISOR, UH, BEN GOZA, OUR CHIEF FINANCIAL OFFICER ON THE C P S RATE REQUEST.
UH, JUST A REMINDER, OUR CALENDAR OF EVENTS THAT WE HAVE.
WE HAVE B SESSIONS SCHEDULED NEXT WEDNESDAY AS WELL FOR ADDITIONAL QUESTIONS, BOTH OF C P S, UH, AS WELL AS, UM, UH, CITY STAFF.
UM, AND THEN WE ARE, UH, STILL SCHEDULED TO BRING THIS ITEM BEFORE THE COUNCIL AT A SESSION ON JANUARY 13TH, UH, IN, UH, IN 2022.
SO, WITH THAT, LET ME, UH, BEFORE, ACTUALLY BEFORE I TURN IT OVER TO BEN, IN ADDITION TO THE PRESENTATION, UM, YOU HAVE, WHICH WAS SUBMITTED OUT AND SENT TO YOU ON MONDAY, UM, THE PUBLIC UTILITY SUPERVISOR'S RECOMMENDATION TO MYSELF AS WELL AS, UH, EACH OF YOU, UM, IT'S A, UM, UM, 1314 PAGE.
VERY DIRECT, UH, A LOT OF GOOD INFORMATION.
THAT'S THE BASIS OF THE PRESENTATION TODAY, AND BEN WILL HIT EACH OF THOSE ITEMS IN THE PRESENTATION.
SO, GOOD AFTERNOON, UH, MAYOR AND COUNCIL MEMBERS.
AS, UH, THE CITY MANAGER MENTIONED, UH, I'LL BE LARGELY FOLLOWING THE REPORT THAT WE SENT TO YOU ALL ON MONDAY, TRYING TO TOUCH ON EVERY ONE OF THOSE AREAS, AND I'LL TRY TO, TRY TO DO IT AS BRIEFLY AS I CAN.
UM, JUST AS A REMINDER, THE TWO ACTIONS THAT YOU'LL BE ASKED TO LOOK AT IN JANUARY ARE A PROPOSED BASE RATE INCREASE OF 3.85% THAT IS BEING, UH, RECOMMENDED TO ADDRESS C P S AS IMMEDIATE FINANCIAL PRESSURE, UH, AND TO SUPPORT THEIR OPERATIONS AND MAINTENANCE CAPITAL PLAN AND ASSOCIATED FINANCING PLAN.
A SECOND ACTION WOULD BE TO, TO REQUEST THAT THE COUNCIL ESTABLISH A REGULATORY ASSET FOR THE WINTER STORM, U URI FUEL AND OTHER RELATED COSTS OF JUST OVER A BILLION DOLLARS.
THAT WILL ALLOW C P SS TO DI DEBT FINANCE, THE COSTS THAT HAVE BEEN PAID TO DATE, WHICH ARE ABOUT FOUR $18 MILLION.
AND BY DEBT FINANCING THAT WE'LL BE ABLE TO SPREAD THAT IMPACT, UH, TO OUR CUSTOMERS OVER TIME.
AND THAT DEBT FINANCING PERIOD IS RECOMMENDED AT 25 YEARS.
WHEN WE DO THESE RATE REQUESTS, UH, COMING FROM OUR MUNICIPAL OWNED UTILITIES, WE TRY TO LOOK AT A COMPREHENSIVE REVIEW LOOKING AT A NUMBER OF DIFFERENT AREAS.
SO WE LOOK AT EVERYTHING FROM THEIR OPERATIONS AND MAINTENANCE BUDGETS TO THEIR CAPITAL PLANS, HOW THEY INTEND TO FINANCE THEIR CAPITAL, UH, PROJECTS AND CAPITAL PLANS.
WE'RE OBVIOUSLY LOOKING AT THE RATE MODEL AND ALL OF THE INPUTS AND ASSUMPTIONS THAT GO INTO THAT.
UM, SALES FORECAST, REVENUE REQUIREMENTS, CREDIT CONSIDERATIONS.
UH, WE'RE LOOKING AT HISTORICAL FINANCIAL STATEMENTS, SO WE'RE TRYING TO GET A TOTAL PICTURE OF WHAT'S HAPPENING WITH UTILITY AND WHAT'S DRIVING THE NEED FOR THE RATE REQUEST.
THAT THEN BECOMES THE BASIS FOR OUR RECOMMENDATION TO YOU ALL.
UM, IN TERMS OF WHERE WE STARTED AND WHERE WE ARE TODAY, YOU SAW THIS SLIDE LAST WEEK.
SO, AS I MENTIONED, C P S DID PRESENT A DRAFT OR, OR SUBMIT A DRAFT RATE PLAN TO THE CITY, UM, BACK IN EARLY SEPTEMBER, THAT DRAFT RATE PLAN INCLUDED, UH, A BASE RATE INCREASE OF 13.4% IN 2023, FOLLOWED BY TWO PROJECTED INCREASES OF ABOUT 7% IN 2025 AND 2027.
UH, THE AVERAGE RESIDENTIAL BILL IMPACT IN THAT RATE CASE WAS ABOUT 11.1%.
IT WOULD'VE GENERATED BASE RATE REVENUE FOR C P S OF ABOUT 243.6 MILLION AND ABOUT $37 MILLION FOR WINTER STORM URI.
UM, AFTER RECEIVING THAT DRAFT, UH, UH, RATE CASE FROM C P S, WE HAD A LOT OF DISCUSSION.
UH, WE PROPOSED TAKING A DIFFERENT APPROACH AND REALLY FOCUSING ON C P S IS IMMEDIATE FINANCIAL PRESSURES AND NOT TRYING TO SOLVE EVERY ISSUE WITHIN THAT RATE CASE.
UM, THERE ARE CERTAINLY A NUMBER OF AREAS THAT WE'RE GONNA COVER WITH YOU TODAY WHERE THERE'S A LOT OF UNCERTAINTY.
TIME WILL PROVIDE CLARITY ON THOSE ISSUES, WHICH WILL HELP US BUILD A BETTER FINANCIAL PLAN GOING FORWARD.
UM, AND THEN CERTAINLY THERE ARE SOME BIG POLICY ISSUES THAT I THINK NEED MORE ANALYSIS AND, AND ARE GONNA HAVE A LOT MORE DIALOGUE WITH STAKEHOLDERS THAT WILL ALSO IMPACT THIS RATE PLAN GOING FORWARD.
SO TAKING THAT REVISED, UH, APPROACH LED TO THE REVISED RATE CASE THAT YOU SEE ON THE BOTTOM PART OF THIS SLIDE.
THE BASE RATE INCREASE THAT WE'RE RECOMMENDING IS 3.85% FOR 2023.
UH, THE PLAN DOES HAVE PROJECTED INCREASES OF 5.5% IN 2025 AND 2027.
UM, THAT AVERAGE RESIDENTIAL BILL IMPACT IS ABOUT, UH, 3.3%.
THIS REVISED RATE CASE IS WHAT I'LL SPEND THE REST OF MY PRESENTATION TALKING ABOUT TODAY.
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SPEND A LOT OF TIME ON THIS SLIDE.JUST WANTED TO GIVE YOU A FLAVOR AGAIN, OF THE F Y 2023 PROPOSED BUDGET.
THIS IS A SOURCES AND USES OF FUNDS COMING INTO C P S, JUST UNDER $3 BILLION.
ON THE LEFT HAND SIDE, YOU CAN SEE THE SOURCES OF FUNDS COMING IN.
UH, AND THEN ON THE RIGHT HAND SIDE, THE GRAPHIC SHOWS YOU HOW THOSE DOLLARS ARE BEING ALLOCATED.
UH, THIS BUDGET IS INCLUSIVE OF SYSTEM GROWTH, PROJECTED FUEL, THE PROPOSED BASE RATE INCREASE OF 3.85%, AND THE RECOVERY ASSOCIATED WITH ESTABLISHING THE REGULATORY ASSET FOR RENTER WINTER STORM URI.
SO AS WE START TO LOOK AT A LITTLE BIT MORE DETAIL HERE, UM, THIS SLIDE JUST GIVES YOU A COMPARISON OF THEIR OPERATIONS AND MAINTENANCE BUDGET AND, AND SPECIFICALLY I'M FOCUSING ON THE C P SS NON-FUEL OPERATIONS AND MAINTENANCE, OR O AND M.
SO IF YOU WENT BACK AND LOOKED AT THE PREVIOUS SLIDE, YOU'LL SEE FOR 2023, I'VE GOT 594 MILLION HERE ON THE PREVIOUS SLIDE WAS ACTUALLY 730 MILLION.
THE DIFFERENCE IS, UH, $136 MILLION OF O AND M COSTS FOR S T P.
UM, WE DIDN'T, WE'RE REALLY NOT FOCUSING ON THAT HERE.
THERE IS AN OPERATING COMPANY THAT RUNS THE, UH, THE SOUTH TEXAS NUCLEAR PROJECT.
C P S IS A MEMBER OF THAT BOARD.
THAT BOARD, YOU KNOW, ESTABLISHES THEIR OPERATIONS AND MAINTENANCE, BUT IT DOES, DOES COME INTO THE RATE MODEL.
UM, THIS IS ALSO NET OF CAPITALIZATION, AND WHAT I MEAN BY THAT IS THAT C P S HAS VERY LARGE CAPITAL PLANS.
SO THEY HAVE STAFF THAT SPEND A LOT OF TIME PLANNING, ENGINEERING, AND WORKING ON CAPITAL PROJECTS.
THOSE COSTS ARE ELIGIBLE TO BE FUNDED IN THE CAPITAL SIDE, NOT ON THE OPERATIONS SIDE.
SO THOSE COSTS END UP BEING ALLOCATED IN THE CAPITAL BUDGET, NOT HERE UNDER THE O AND M CATEGORY.
UM, A COUPLE OF THINGS I'LL JUST HIGHLIGHT HERE.
YOU CAN SEE IN FY 2022, A FOUR $97 MILLION LATEST ESTIMATE IS, IS WHAT C P SS REFERS TO.
THAT'S BASICALLY THEIR MOST CURRENT PROJECTION FOR THE CURRENT FISCAL YEAR.
UH, THAT'S DOWN FROM THEIR BUDGET OF 534 MILLION.
SO WHEN YOU SEE THE INCREASE INTO 2023, IF YOU LOOK AT IT AGAINST THE 2022 BUDGET, IT'S ABOUT $60 MILLION HIGHER THAN WHAT THEIR BUDGET WAS FOR THE CURRENT YEAR.
THE DIFFERENCE BETWEEN THE BUDGET AND THE LATEST ESTIMATE, UM, IS A LOT OF, UH, UH, SAVINGS DUE TO VACANCIES AND, UH, POSITIONS.
UM, IN TERMS OF THE PROJECTION ON THE O AND M GOING OUT, IF YOU LOOK AT, YOU'LL SEE A DROP IN 25 TO 27.
THAT IS LARGELY RELATED TO THEIR DIGITAL E R P PROJECT, AND I'LL TALK ABOUT THAT ON ON A SUBSEQUENT SLIDE.
SO JUST TALKING A LITTLE BIT MORE ABOUT THE O AND M SIDE ON AUTHORIZED POSITIONS, THEIR CURRENT, UH, ALLOCATION IS 3,370 POSITIONS.
THERE IS NO CHANGE WITHIN THE PROPOSED BUDGET OR IN THE RATE MODEL.
SO THEY'RE HOLDING THEIR AUTHORIZED POSITIONS FLAT, UM, BUT THEY HAVE OVER 400 POSITIONS VACANT TODAY.
SO THEY ARE AT RIGHT AT ABOUT A 13% VACANCY RATE.
SO WHAT THEY ARE PROPOSING OVER THE NEXT SEVERAL YEARS, AND ACTUALLY OVER THE NEXT 18 MONTHS, IS THAT THEY WILL BE FILLING, UH, UH, A MAJORITY OF THOSE POSITIONS.
THEY'LL MOVE FROM ABOUT A 13%, UH, VACANCY RATE TO ABOUT 5%, UH, AT THE END OF 18 MONTHS OR TWO YEARS.
AND THEN OVER TIME, WE'LL DECLINE TO ABOUT A 4%, UH, VACANCY RATE, WHICH IS MORE IN LINE WITH WHERE THEY HAVE BEEN HISTORICALLY IN TERMS OF COMPENSATION.
UM, AND THESE NUMBERS ARE WHAT I'M GONNA CALL GROSS NUMBERS.
SO, UM, CAPITALIZATION HASN'T BEEN APPLIED TO THIS, AND WE GAVE YOU GROSS NUMBERS SO YOU COULD GET A BETTER SENSE OF JUST WHAT'S HAPPENING WITH COMPENSATION.
SO THE FIRST LINE IS A MERIT GENERAL WAGE INCREASE, UM, AT, UH, 6.7 MILLION.
YOU SEE A PERCENTAGE THERE OF 2.5% OF PAY.
UH, BUT BASED ON THE TIMING OF WHEN IT GETS IMPLEMENTED IN C P S'S FISCAL YEAR, IT REPRESENTS ABOUT 2.5% OF PAY IN 2023.
THE NEXT CATEGORY ARE MARKET ADJUSTMENTS, UM, THAT I'M GONNA COVER ON THE NEXT SLIDE AND GO INTO A LITTLE BIT MORE DETAIL.
THAT'S 16.5 MILLION IN TOTAL, OR ABOUT 6%.
SO TOTAL COMPENSATION IN 2023 IS, UM, 8.5% OF PAY.
UH, A COUPLE OF THINGS TO HIGHLIGHT.
THEY DID NOT HAVE ANY COMPENSATION INCREASES IN THEIR CURRENT FISCAL YEAR, WHICH IS FY 2022.
UM, IN ADDITION TO THIS, ONCE YOU GET PAST 2023 IN THEIR FIVE YEAR PLAN, YOU HAVE A LITTLE BIT OF, UH, IMPACT FROM SOME OF THE MARKET ADJUSTMENT PROGRAMS THAT WE HAVE HERE.
IT IS PREDOMINANTLY JUST A 3% MERIT POOL BUILT INTO THE PLAN, 2024 AND OUT.
SO IF WE TAKE EACH OF THOSE MARKET, UM, PROGRAMS THAT I JUST MARKET ADJUSTMENT PROGRAMS THAT I JUST MENTIONED, THIS IS A LITTLE BIT MORE DETAIL ON THAT.
SO THE $8 MILLION YOU SAW ON THE
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PREVIOUS SLIDE THAT IS RELATED TO HARD TO FILL POSITIONS.UM, THEY'RE GONNA BE DOING MARKET MATCH STUDIES.
I'M GETTING A LITTLE BIT OF AN ECHO HERE.
THOSE ARE, UM, HARD TO FILL POSITIONS WHERE THEY'RE GONNA DO BE DOING MARKET MATCH STUDIES.
THEY, THEY'VE IDENTIFIED ABOUT 1,750 POSITIONS WHERE THEY'RE GOING TO STUDY THE JOB FAMILIES OF THOSE POSITIONS AGAINST THE MARKET, AND THEY'RE GONNA BE RECOMMENDING SOME ADJUSTMENTS THAT WILL TAKE THEM ABOUT 18 MONTHS TO DO.
SOME OF THE COSTS IS EMBEDDED IN F Y 23, SOME OF THAT IS IN FY 24.
YOU CAN SEE SOME OF THE ESTIMATED RANGES BASED ON SOME OF THEIR PRELIMINARY WORK THAT THEY HAVE DONE.
AND THEN WE GAVE YOU SOME EXAMPLES OF THE ROLES THAT ARE INCLUDED IN EACH OF THOSE CATEGORIES.
UM, MOVING TO THE, THE RIGHT HAND SIDE OF THE GRAPH OR TABLE, UM, A COUPLE OF OTHER THINGS INCLUDE A PROPOSED INCREASE IN THE ENTRY WAGE TO $18 PER HOUR.
THAT COST WAS LISTED AT $2 MILLION ON THE PRIOR SLIDE.
THAT WOULD AFFECT ABOUT 350 POSITIONS, PRIMARILY UTILITY WORKERS AND ENERGY ADVISORS.
AND THEN THE OTHER ADJUSTMENTS CATEGORY, WHICH WAS AT 6.5 MILLION COVERS, COVERS A NUMBER OF DIFFERENT THINGS INCLUDING, UH, ABILITY TO DO LUMP SUM RETENTION, UH, JOB EVALUATIONS WITH EQUITY ADJUSTMENTS AND SOME HIRING INCENTIVES.
ADDITIONALLY ON PENSION AND OTHER BENEFITS, THERE'S AN INCREASE OF ABOUT 53.6 MILLION AGAINST NOT THE BUDGET, BUT THE LATEST ESTIMATE.
UM, IT'S ASSOCIATED WITH PENSION EXPENSE AND OTHER BENEFIT COSTS.
UM, SOME OF THAT IS RELATED TO, UM, I'M GONNA CALL 'EM GOVERNMENTAL ACCOUNTING OR ACCOUNTING RULES.
AND YOU'RE GONNA SEE A RECOMMENDATION FROM US AROUND THAT.
SO YOU HAVE PENSION PLANS THAT YOU HAVE PENSION FUNDING THAT IS ACTUALLY DETERMINED, THAT IS STABLE.
AND IN THE CASE OF C P S, IT IS STABLE, IT'S NOT MOVING A LOT.
BUT THEN THEY ALSO HAVE, UH, ACCOUNTING OR, OR, UH, GAP RULES THAT THEY HAVE TO FOLLOW.
THAT CALCULATION'S VERY DIFFERENT.
IT'S NOT THE CASH THAT GOES INTO THE PENSION FUND, BUT NONETHELESS, IT IS SOMETHING THAT THAT, UM, NEEDS TO BE ADDRESSED.
AND IT'S ONE OF OUR RECOMMENDATIONS IN TERMS OF, OF, OF HOW WE MOVE FORWARD.
UH, LA ON THE NEXT SLIDE HERE, I WANTED TO TOUCH ON JUST THE EMPLOYEE INCENTIVE PROGRAM.
UM, THIS IS THE INCENTIVE SOMETIMES WHAT'S REFERRED TO AS THE BONUS PROGRAM.
UH, IT IS A PLAN THAT C P SS HAS IN PLACE OR HAS HAD IN PLACE, UH, OFTEN GETS A LOT OF ATTENTION.
UM, THERE IS NO E I P INCLUDED IN THE PROPOSED 2023 BUDGET OR IN THE FIVE YEAR PLAN.
THERE WAS SOME ACCRUED, E I P MEANING THAT, UM, UM, THEY'VE SET ASIDE DOLLARS, THEY'VE EXPENSED IT SET ASIDE DOLLARS ESSENTIALLY, UH, FOR FY 2020 AND FY 2021.
UH, BUT THAT WAS NOT PAID OUT.
AND SO AS PART OF THE PLAN THAT THEY HAVE SUBMITTED TO US, THE FY 2020 AMOUNT IS LEGALLY REQUIRED TO BE PAID AND WILL BE PAID EARLY NEXT CALENDAR YEAR.
THE AMOUNT IN FY 2021 OF 14.5 MILLION WILL NOT BE PAID AND WILL ACTUALLY BE RELEASED AND WILL BE, UH, UH, WILL FALL BACK INTO, YOU KNOW, ESSENTIALLY FUND BALANCE.
AND ESSENTIALLY THE E I P REMEMBER IS A, IS A PLAN THAT, UM, AS IT'S PAID OUT, IT WOULD GO TO ALL EMPLOYEE GROUPS.
SO, UH, EVERY EMPLOYEE GROUP WOULD BE GETTING SOME FORM OF PAYMENT OUT OF THIS.
UH, QUICKLY ON OUTSIDE SERVICES IS ANOTHER O AND M CATEGORY.
UM, THERE'S ABOUT A $22 MILLION INCREASE OVER THE 2022 BUDGET.
UH, A LOT OF THAT, UM, PROBABLY CAN BE LOOKED AT IN TERMS OF THE DIGITAL ENTERPRISE RESOURCE PLANNING, UH, PROJECT OR DIRT PROJECT.
UH, I WILL COVER THAT IN A LITTLE BIT MORE DETAIL ON, ON ANOTHER SLIDE, BUT THAT'S $18.4 MILLION.
UM, THESE THINGS I HAVE LISTED HERE, UM, ARE OBVIOUSLY A LOT MORE THAN 22 MILLION.
WE'RE JUST TRYING TO GIVE YOU A SENSE OF WHAT'S INCLUDED IN THIS OUTSIDE SERVICES CATEGORY.
UM, THIS IS WHERE THEY FUND A LOT OF POWER PLANT MAINTENANCE AND OVERHAUL WORK THAT ISN'T LARGE ENOUGH THAT IT'S GONNA BE CAPITALIZED OR PAID FOR OUT OF THE CAPITAL PLAN.
UM, THERE'S SOME IT AND SECURITY CONSULTANTS HERE, AND THEN YOU'VE GOT TRANSMISSION AND DISTRIBUTION MAINTENANCE AS WELL.
SHIFTING OVER TO THE CAPITAL PLAN, AGAIN, TRYING TO GIVE YOU SOME CONTEXT HERE.
IF WE LOOK AT THE PRIOR FIVE YEARS FROM 17 TO 21, ABOUT $3.2 BILLION, IF WE LOOK AT WHAT'S PROJECTED IN 23 TO 2027, IT'S ABOUT $4.3 BILLION.
AND SO WHEN WE LOOK AT THE, THE INCREASED CAPITAL SPEND, SOME OF THE O AND M COSTS, THAT'S WHAT'S DRIVING AND PUTTING A LOT OF PRESSURE ON FINANCIAL, ON CPSS FINANCIAL METRICS AND WHAT IS LEADING TOWARDS THIS REQUEST FOR A RATE, UH, RATE INCREASE ON 2020 THREES, 833 MILLION ON THIS NEXT SLIDE.
JUST SOME BROAD CATEGORIES HERE.
WHAT'S INCLUDED, 302 LITTLE OVER $302 MILLION FOR INFRASTRUCTURE MONITORS MODERNIZATION.
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AT EXISTING POWER PLANTS, GRID RELIABILITY ENHANCEMENTS, AND TECHNOLOGY IMPROVEMENTS.YOU'VE GOT OVER 240, ALMOST $243 MILLION IN CUSTOMER GROWTH.
$163 MILLION IN SYSTEM GROWTH, UM, 86 MILLION, UM, IN ENVIRONMENTAL LEGISLATIVE REGULATORY OR SPECIAL PROJECTS.
UH, KIND OF A BROADER CATEGORY.
AND THEN WE'VE GOT CIVIC IMPROVEMENTS AT $38 MILLION.
SO AS THE CITY COUNTY, UH, OTHERS ARE DOING WORK IN THE RIGHT OF WAY, THAT OFTEN IMPACTS CPSS INFRASTRUCTURE, THEY'VE GOTTA MOVE IT, ADJUST IT, SO THEY'VE GOT DOLLARS BUILT IN TO COVER THAT AS WELL.
ON THE NEXT SLIDE, UM, THIS IS KIND OF AN OVERVIEW OF CP S'S GENERATION ASSETS, AND I, I DIDN'T PUT THIS IN HERE, WANTING TO HAVE A BIG CONVERSATION ON GENERATION.
I PUT THIS IN HERE MORE TO MAKE A COUPLE OF POINTS, AND THAT IS, UM, WE JUST RETIRED TWO UNITS, THE D UNITS IN 20, UM, 18.
YOU'VE GOT THE SUM SUMMERS AND BROADENING UNITS THAT YOU CAN SEE KIND OF IN THE MIDDLE OF THERE THAT ARE SCHEDULED TO RETIRE IN A 24 TO 28 TIMEFRAME.
UM, WE'VE GOT CERTAINLY SOME DECISIONS TO MAKE ON THE REMAINING FLEET FLEET, PRIMARILY, UM, JK SPRUCE ONE AND TWO, UM, THAT WE'VE GOTTA MAKE SOME DECISIONS ABOUT WHAT WE DO WITH THOSE LONG TERM.
AND THEN YOU CERTAINLY HAVE PRESSURE FOR AS, UH, THE SYSTEM CONTINUES TO GROW ABOUT HOW WE MEET THAT ADDITIONAL GROWTH, UM, IN TERMS OF GENERATION OR, UH, PROVIDING ENERGY.
UM, I'LL NOTE THAT IN THE INFORMATION, SUPPLEMENTAL INFORMATION THAT C P S GAVE YOU ON FRIDAY, IF YOU WERE TO LOOK AT THE C I P LISTING, YOU'LL SEE ONE, UM, NEW GENERATION ASSET IN THERE IN 26 AND 27 FOR ABOUT $323 MILLION, OBVIOUSLY YET TO BE DETERMINED WHAT THAT IS.
BUT THERE ARE DOLLARS OUT IN YEARS FOUR AND FIVE OF THIS PLAN TO AT LEAST START THE CONVERSATION AROUND WHAT THAT NEXT COMPONENT NEEDS TO LOOK LIKE.
THE WHOLE GIST OF THIS CONVERSATION WAS JUST TO POINT OUT THE FACT THAT, YOU KNOW, WE ARE AT A VERY PIVOTAL POINT, I THINK, WHEN IT COMES TO GENERATION ASSETS AND NEEDING TO MAKE SOME DECISIONS, WHICH WILL THEN LEAD INTO, YOU KNOW, ONE OF THE RECOMMENDATIONS IN TERMS OF TIMEFRAME AND WHEN WE THINK THIS NEED, THIS WORK NEEDS TO OCCUR.
UH, COMMITTEE ON EMERGENCY PREPAREDNESS, THE MAYOR DID CREATE THAT COMMITTEE AFTER WINTER STORM ERY TO REALLY LOOK AT, UM, THE CITY AND BOTH UTILITY SAWS AND C P S IN TERMS OF HOW WELL WE PREPARED AND WHAT OUR RESPONSE WAS LIKE DURING THAT, UH, EVENT.
THAT COMMITTEE SPENT A LOT OF TIME, AND THERE WERE SEVERAL COUNCIL MEMBERS ON THAT COMMITTEE.
UM, THEY SPENT A LOT OF TIME GOING OVER A LOT OF INFORMATION AND ULTIMATELY PRODUCED A REPORT IN JUNE THAT WAS PRESENTED TO COUNCIL THAT INCLUDED RECOMMENDATIONS FOR ALL THREE ENTITIES, THE CITY C P S, AND SAWS.
WHAT WE HAVE LISTED HERE ARE SOME OF THE, UM, BROADER CATEGORIES AND PROJECTS THAT WOULD ADDRESS SOME OF THE THINGS THAT WERE RAISED IN THAT REPORT.
AND I'M JUST GONNA HIGHLIGHT A COUPLE OF THINGS HERE.
SO ON COMMUNICATIONS, LOOKING AT A, A DATA-DRIVEN PLATFORM THAT WOULD ALLOW INFORMATION FROM THE OPERATIONAL TEAMS TO WORK QUICKLY, BE ASSESSED BY THE LEADERSHIP, UM, REALLY PROVIDING GREATER SITUATIONAL AWARENESS.
UH, YOU SEE DOLLARS ALLOCATED SPECIFICALLY IN 23 AND 24 TO TALK ABOUT THAT PLATFORM OR TO LOOK AT THAT PLATFORM.
AND THEN YOU SEE SOME DOLLARS OUT IN 25 AND 2027 THAT COULD GO TO THAT DATA-DRIVEN PLATFORM, OR THEY COULD EVOLVE INTO OTHER AREAS.
UM, FOR EXAMPLE, THE RECLOSERS, WHICH IS ON THE NEXT LINE.
UM, I THINK THESE ARE A REALLY IMPORTANT INVESTMENT THAT C P S IS MAKING.
THE COMMITTEE MEMBERS, UM, THAT WERE ON THE C E P WERE RECALL THAT THERE WAS A LOT OF CONVERSATION AROUND THE LOAD SHEDDING.
HOW DID LOAD SHEDDING HAPPEN ACROSS THE CITY? YOU KNOW, WHY DID IT HAPPEN THE WAY IT DID? AND C P SS, I THINK, HAS REALLY BEEN FOCUSED ON THAT ISSUE.
UM, YOU'LL RECALL THAT IN TERMS OF CIRCUITS AND C P S OFTEN TALKS ABOUT CIRCUITS.
UM, THERE'S ONLY ABOUT 700 CIRCUITS.
SO WHEN YOU THINK ABOUT THE C P S SERVICE TERRITORY, THAT'S NOT A LOT OF CIRCUITS, WHICH MEANS THERE'S A LOT OF CUSTOMERS ON EVERY CIRCUIT, THESE RECLOSERS.
UM, AND, AND, AND THESE CIRCUITS ARE REALLY BROKEN DOWN INTO THREE TYPES.
YOU GOT CRITICAL, WHICH THEY TRY NOT TO, TO, TO HAVE IMPACTED AT ALL.
UM, YOU HAVE UNDER FREQUENCY LOAD SHED, WHICH MEANS THEY'RE REALLY THERE AS KIND OF A SAFETY NET.
THEY'RE GONNA TRIP AUTOMATICALLY IF IT'S, IF IT'S SINCE IT'S TOO MUCH DEVIATION ON FREQUENCY.
AND THEN YOU HAVE THE FIRM LOAD SHED, WHICH ARE THE ONES THAT TYPICALLY GET TARGETED IF YOU'RE HAVING A LOAD SHED EVENT.
UM, THESE RECLOSERS ALLOW C P S TO TAKE THOSE BIGGER CIRCUIT AREAS AND BREAK THEM DOWN INTO SMALLER AREAS.
SO, UM, THAT'S CERTAINLY GONNA HELP FROM A RELIABILITY STANDPOINT.
UM, COMMUNICATION TO THESE RECLOSERS WILL BE IMPORTANT.
THEY, I THINK THEY'VE GOT MORE WORK TO DO THERE, BECAUSE OBVIOUSLY IF YOU'RE HAVING A WINTER STORM URI TYPE EVENT, YOU STILL GOTTA BE ABLE TO MAINTAIN COMMUNICATION WITH THOSE RECLOSERS FOR THEM TO WORK PROPERLY.
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BUT THIS CERTAINLY WOULD BE AN ENHANCEMENT TO THE CURRENT SYSTEM.UM, IN TERMS OF RELIABILITY, YOU SEE $10 MILLION A YEAR THERE ALLOCATED, UM, THE ESTIMATE THAT THEY CAN DO ABOUT 144 OF THESE RECLOSERS A YEAR.
UM, THERE'S SEVERAL OTHER CATEGORIES HERE RELATED TO FREEZE PROTECTION, PLANT PERFORMANCE, AND RELIABILITY.
UM, THOSE ARE ALL CAPITAL ITEMS ON THE TOP.
IT'S TYPICALLY WINTERIZING, UH, INSULATING THINGS THAT ARE SMALLER COMPONENTS, THINGS THAT WE CAN'T FALL AROUND PREVENTING THOSE KINDS OF ISSUES FROM HAPPENING AGAIN.
AND THEN THE FUEL OIL IS SOME WORK THAT THEY WANNA DO ON SOME OF THE PLANTS IN ORDER TO MAKE THOSE, UM, UM, ABLE TO USE FUEL OIL, UH, IN THE EVENT OF AN EMERGENCY.
SO ALL IN ALL, JUST UNDER $200 MILLION OVER THE FIVE YEAR PERIOD OF TIME.
OTHER RESILIENCY IMPROVEMENTS INCLUDED, THERE'S DOLLARS IN THE, IN THE, UH, PLAN TO DEAL WITH CABLE REHAB TO, UH, REPLACE FAILING DIRECT BURIED CABLE TO REPLACE AGING POLES, TRANSMISSION REBUILDS, UNDERGROUND LINES IN AREAS WITH, WITH, UM, RELIABILITY ISSUES.
AND THEN STEEL GAS SERVICE REPLACEMENT IN TERMS OF THE FINANCING OF THE FIVE-YEAR CAPITAL PLAN IS $4.3 BILLION, AGAIN, OVER FIVE YEARS PROJECTED.
UM, THEY REALLY USE THREE SOURCES HERE TO FUND IT.
THE FIRST ONE IS CONTRIBUTIONS AND AID OF, UH, CONSTRUCTION.
THIS IS TYPICALLY DEVELOPER PAID FEES OR, UM, THEY CALL 'EM LINE EXTENSION CHARGES, UH, THAT DEVELOPERS WILL PAY.
YOU SEE, THAT'S THE FIRST LINE.
THEY ISSUE DEBT AND THEN THEY USE CASH FROM THEIR RENEWAL AND REPLACEMENT FUND, UH, TO FUND THEIR CAPITAL PLAN.
THEY HAVE A TARGET OF 60% ON WHAT WE CALL THEIR DEBT TO EQUITY RATIO.
THAT RATIO IS JUST SIMPLY MEASURING HOW MUCH LEVERAGE THEY HAVE OR HOW MUCH DEBT IS THE SYSTEM TAKING ON.
THEY'RE TRYING TO BE AT A TARGET OF 60% OR LESS IN TERMS OF HOW MUCH DEBT THEY'RE CARRYING.
THAT MEASURE FOR C P S CURRENTLY IS A LITTLE BIT ELEVATED, SO THAT'S WHY YOU SEE ON AN ANNUAL BASIS, THEY'RE ACTUALLY USING MORE CASH AND LESS DEBT TO TRY TO FUND THIS CAPITAL PLAN.
IT FUNDS THE CAPITAL PLAN, BUT ALSO DRIVES THAT, UH, AMOUNT OF LEVERAGE OR DEBT THAT C P SS IS CARRYING DOWN A LITTLE BIT OVER THE FIVE YEAR PERIOD.
AND OF COURSE, THE, THE DEBT TO EQUITY RATIO WAS IMPACTED BECAUSE YOU'VE GOT ADDITIONAL FOUR $18 MILLION OF UNANTICIPATED FINANCING THAT HAS HIT THEIR BOOKS RELATED TO WINTER STORM BUREAU.
SO THAT ELEVATES YOUR, YOUR DEBT CARRY.
UM, SO PART OF THIS IS TRYING TO ADDRESS THAT.
THE NEXT SLIDE JUST TAKES THAT $2 BILLION ROUGHLY OF, UH, DEBT AND GIVES YOU A ROUGH IDEA OF WHEN THEY WOULD BE IDEA OF WHEN THEY WOULD BE COMING FORWARD AND ASKING FOR APPROVAL TO ISSUE, UH, BONDS TO SUPPORT THEIR CAPITAL PLAN.
SO YOU CAN SEE IT RANGES THERE FROM FALL OF 2023 TO FALL OF 2028.
OBVIOUSLY, THEY'RE GONNA ADJUST THIS TIMING BASED ON ONE, WHAT THEIR CAPITAL PLAN IS DOING, BUT TWO, ALSO WHAT THE FINANCIAL MARKETS LOOK LIKE, AND WE'LL WANT TO TAKE ADVANTAGE OF INTEREST RATES WHEN WE CAN.
UH, THE NEXT SLIDE TALKS ABOUT THE DIGITAL ENTERPRISE RESOURCE PLANNING SYSTEM PROJECT.
THIS IS A VERY LARGE, UM, AND COMPLICATED PROJECT.
IT IS, UM, SET TO REPLACE THEIR CURRENT END OF LIFE LEGACY E R P SOLUTIONS.
SO THINK ABOUT IT IN TERMS OF THEIR CORE FINANCIAL SYSTEM AND ALL OF THE THINGS THAT ARE AROUND IT.
PLUS AN ADDITIONAL 50, UH, A LITTLE OVER 50 BUSINESS SYSTEMS THAT INTEGRATE INTO THAT.
THIS SYSTEM TOUCHES VIRTUALLY ALMOST EVERY PART OF THE C P S UTILITY IN SOME FORM OR FASHION.
SO IT'S COMPLICATED AND IT'S BIG.
UM, IT'S A SEVEN YEAR PROGRAM FROM 2022 TO 2028.
THEY'VE DONE SOME WORK ON THIS AND THINK THE ESTIMATED COST IS AROUND $300 MILLION FOR PURPOSES OF THIS RATE CASE.
IN THIS RATE MODEL, WHAT WE DID WAS FOCUS ON 2023 AND 2024 AND PROVIDED FUNDING THAT.
YOU CAN SEE THAT THAT IS PRIMARILY ON THE OPERATIONS AND MAINTENANCE SIDE.
WHAT THIS FUNDING WILL ALLOW THEM TO DO IS REALLY, UH, CONTINUE TO DOCUMENT ALL THEIR PROCESSES AND REQUIREMENTS TO DEVELOP THEIR PROCUREMENT, TO BE ABLE TO SOLICIT THAT AND GET RESPONSES BACK.
ONCE THEY HAVE THAT, THEY CAN START TO EVALUATE THE PLATFORM OR PLATFORMS THAT THEY'RE GOING TO BE, UH, UTILIZING.
THAT'LL TELL THEM MORE ABOUT COSTS.
IT'LL ALSO TELL THEM AND GIVE THEM OPPORTUNITY TO LOOK AT RISK.
WHEN YOU DO THESE BIG E R P SOLUTIONS, OBVIOUSLY, UM, IT PUTS A BIG, UH, IT PUTS A LOT OF PRESSURE ON YOUR STAFF AS WELL.
UM, YOU'RE GONNA HAVE A LOT OF STAFF ASSIGNED TO THIS PROJECT.
UM, YOU HAVE TO BACKFILL, SO YOU REALLY WANNA BE IN A PLACE WHERE YOU, WHERE YOUR STAFFING IS PRETTY STABLE, UH, GOING IN AND, AND I MENTIONED THEY'VE GOT A LARGE, UH, UH, VACANCY RATE TODAY.
SO THEY'LL GET TO EVALUATE ALL OF THAT AT THE END OF THE TWO YEAR PERIOD.
AND THEN ONCE THEY ASSESS THAT, UH, A MULTI-YEAR FINANCIAL PLAN CAN BE DEVELOPED AROUND THAT.
SO THAT'S WHY THERE'S ONLY TWO YEARS OF THAT THAT
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IS RECOMMENDED AS PART OF THIS RATE CASE.UM, AGAIN, 3.85% FOR 2023 PROJECTED RATES OF 5.5% IN 2025 AND 2027.
UM, YOU KNOW, THE ONE THING I COULD TELL YOU ABOUT RATE PLANS AND PROJECTIONS IS THEY'RE GONNA CHANGE.
UM, THAT IS ALMOST A CERTAINTY.
UM, THIS MODEL WILL CONTINUE TO BE UPDATED FOR NEW FINANCIAL INFORMATION.
UM, YOU'LL MAKE DECISIONS AROUND, UH, PLANNING WHAT HAPPENS WITH THE GENERATION FLEET.
YOU'RE GONNA GET MORE CLARITY ON SOME OF THESE OTHER ISSUES THAT ARE OUTSTANDING TODAY.
YOU'LL LOOK AT ECONOMIC ACTIVITY, YOU'LL LOOK AT GROWTH.
ALL OF THOSE THINGS WILL AFFECT WHAT HAPPENS HERE, WHICH IS WHY IT'S IMPORTANT TO CONTINUOUSLY UPDATE THIS.
AND THEN I HOPE GOING FORWARD, UM, THAT WE CAN HAVE MORE OF AN ONGOING CONVERSATION WITH C P S, UM, PARTICULARLY WITH, WITH THE COUNCIL AS WELL, BECAUSE THINGS DO CHANGE.
AND THE MORE WE ARE ABLE TO HAVE THOSE CONVERSATIONS, WHEN YOU GET TO A POINT WHERE YOU'RE HAVING A RATE CASE, THEN IT, IT, IT'S A LITTLE BIT OF AN EASIER PROCESS.
UH, I'M GONNA SHIFT OVER JUST REAL QUICKLY TO THE ECONOMIC AND RATE MODEL.
UM, THIS IS THE ACTUAL CASH FLOW MODEL DEAL.
DETAILS OUT THE FLOW OF FUNDS, WE'LL TALK ABOUT CREDIT RATINGS, AND THEN SOME KEY FINANCIAL TARGETS AND POLICIES.
SO, FLOW OF FUNDS, UM, UNDER THE BOND INDENTURE.
THINK ABOUT IT LIKE, UH, LIKE WE'RE FILLING UP BUCKETS HERE.
UM, AS REVENUE COMES INTO THE SYSTEM, IT'S GOTTA PAY FOR OPERATIONS AND MAINTENANCE EXPENSES FIRST.
THEN DEBT SERVICE PEOPLE OFTEN ASK, WHY NOT? WHY WOULDN'T BOND HOLDERS WANT TO GET PAID FIRST? INSTEAD OF O AND M, THEY ACTUALLY WANNA MAKE SURE THAT THE SYSTEM IS BEING TAKEN CARE OF BECAUSE THEY'RE MAKING A LONG-TERM INVESTMENT.
SO THEY WANNA MAKE SURE THAT UTILITY IS OPERATING AT AN APPROPRIATE LEVEL, AND THEN THEY'RE LOOKING AT BEING IN THAT SECOND, THAT SECOND UH, BUCKET.
WHEN YOU GO TO THE THIRD ONE, THEY ALSO WANT TO MAKE SURE THAT THEIR DOLLARS BEING SET ASIDE TO CONTINUE TO, UM, TAKE CARE OF THE SYSTEM FROM A CAPITAL INFRASTRUCTURE PERSPECTIVE.
SO IN THIS CASE, THERE'S A 6% REQUIRED TRANSFER OF DOLLARS INTO THIS, UM, INTO THIS CATEGORY, THEN TO CITY PAYMENT AND THEN, UM, TO WHAT WE CALL REMAINING RENEWAL AND REPLACEMENT.
SO, UM, CITY PAYMENT ONLY WOULD GET PAID IF THERE'S DOLLARS SUFFICIENT WHEN IT GETS TO THAT BUCKET.
AND THEN THE REMAINING R AND R, THAT LAST, UH, BUCKET IS REALLY IMPORTANT BECAUSE THAT IS REALLY HOW C P S AT THE END OF THE DAY MAINTAINS AND MANAGES THINGS LIKE DEBT SERVICE COVERAGE, HOW MUCH CASH WE'RE ABLE TO USE TO FUND THE CAPITAL PLAN PLAN, HOW MUCH LEVERAGE OR DEBT THE UTILITY'S TAKEN ON.
SO IT'S A REALLY, UH, IMPORTANT COMPONENT OF THIS OVERALL FINANCIAL MODEL.
CREDIT RATINGS, MANY UTILITIES ACROSS TEXAS WERE DOWNGRADED DUE TO, UH, WINTER STORM URI.
FITCH, UH, DID DOWNGRADE THEM, UH, FROM AA PLUS TO AA NEGATIVE WITH A NEGATIVE OUTLOOK.
SS AND P FROM AA TO AA NEGATIVE.
UM, OUTLOOK CHANGED FROM STABLE TO NEGATIVE, AND THEN MOODY'S MAINTAINED THE AA ONE RATING, BUT DID CHANGE THE OUTLOOK TO NEGATIVE.
SO STILL EVEN IN THE MIDST OF THE STORM, UM, THESE ARE STILL, UH, VERY GOOD RATINGS FOR, YOU KNOW, UTILITY OF CP S'S SIZE.
I'M GONNA, I'M GONNA GO THROUGH A COUPLE OF SLIDES HERE REAL QUICK, JUST TALKING ABOUT SOME KEY TARGETS HERE.
UM, I THINK IMPORTANT TO NOTE THAT, UM, AS YOU LOOK AT THIS, THIS IS BASED ON THE RATE PLAN.
SO THIS IS ASSUMING THAT, YOU KNOW, WE'VE GOT A THREE, 3.85% INCREASE IN 2023, FOLLOWED BY THOSE 5.5% INCREASES IN 25 AND 27.
I'D ALSO CAUTION YOU NOT TO TRY TO, UM, LOOK TOO MUCH AT AN INDIVIDUAL MEASURE.
WHEN WE DO THIS, WE'RE LOOKING AT EVERYTHING COLLECTIVELY BECAUSE THEY'RE ALL INTERRELATED.
AND AS YOU PUSH ON ONE, IT GENERALLY HAS AN IMPACT ON ANOTHER.
SO, DEBT SERVICE COVERAGE, UM, YOU CAN SEE IN 21 GETTING CLOSE TO THEIR TARGET OF 1.5.
AND, AND BY, BY TARGET I MEAN WE WANNA BE ABOVE 1.5 ON THIS MEASURE.
SO WE'RE, WE'RE, WE'RE GETTING CLOSE TO FALLING UNDERNEATH THAT METRIC.
UM, YOU CAN SEE THAT THEY JUST STAY ABOVE THAT METRIC FROM 22 TO 27.
ON THE NEXT SLIDE IS OUR DEBT TO EQUITY RATIO.
IN THIS CASE, WE WANT TO BE AS CLOSE TO 60% AS WE CAN, OR IDEALLY UNDER 60%.
'CAUSE THAT MEANS WE'RE CARRYING LESS DEBT.
SO, UH, OVER TIME YOU CAN SEE IT ELEVATES A LITTLE BIT IN 20 20, 23 AND 2024, BUT THEN IT STARTS TO WORK ITS WAY DOWN.
AS WE GET CLOSER TO 2027, OBVIOUSLY THAT LARGE CAPITAL PLAN IS PUTTING A LOT OF PRESSURE ON THESE METRICS.
WE TALK ABOUT THE ADDITIONAL R AND R DEPOSIT.
YOU CAN SEE IT GOING UP, UH, FROM WHERE WE ARE TODAY, NOT, UM, SURPRISING GIVEN THE LEVEL OF CASH FUNDING THAT'S NEEDED TO SUPPORT THAT CAPITAL PLAN.
IF I GO TO THE NEXT SLIDE, THIS IS THE AMOUNT OF MONEY GOING INTO THE RENEWAL AND REPLACEMENT FUND.
THE BLUE BAR ON THE BOTTOM IS THE 6% THAT'S REQUIRED.
THE ORANGES ON TOP IS, UM, THE ADDITIONAL AMOUNT THAT'S GENERATED, AGAIN, TO SUPPORT THE
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CAPITAL PLAN AND TO HELP C P S MAINTAIN ITS METRICS.UM, IT, YOU CAN SEE THAT IN A COUPLE OF YEARS IN 19 AND 20, THEY BENEFITED FROM SOME HIGHER OFF SYSTEM SALES, WHICH REALLY HELPED, UM, THEM MANAGE THEIR FINANCIAL SYSTEM AND REALLY PROBABLY PUT OFF HAVING TO COME IN AND ASK FOR A RATE INCREASE SOONER.
SO IT BENEFITED FROM HAVING THAT GENERATION FLEET AND BEING ABLE TO, TO SELL THAT POWER INTO THE OPEN MARKET.
YOU CAN SEE THE IMPACTS OF 21 AND 22 OF C O I D.
AND THEN WE'VE GOT THE FIVE-YEAR PLAN WITH, AGAIN, THOSE PROPOSED RATE INCREASES BUILT IN.
UM, I THINK THE, THE REASONABLE, UH, THE, THE INCREASE IN THE R AND R THAT YOU SEE, THERE'S PRETTY REASONABLE, AGAIN, WHEN YOU TAKE IT IN A RELATION TO THE CAPITAL PLAN, BECAUSE THAT'S REALLY WHAT WE'RE TRYING TO FUND HERE, AND TO GET THAT DEBT TO EQUITY RATIO, UH, TO COME DOWN A BIT.
THIS NEXT ONE IS, UH, SIMILAR, BUT IT ONLY LOOKS AT, UM, THE ADDITIONAL AMOUNT THAT'S GOING INTO THE R AND R, SO THAT EXTRA AMOUNT ABOVE THE 6%.
AND YOU CAN SEE, AGAIN, SIMILAR STORY HIGHER IN THE OUTER YEARS TRYING TO FUND THAT, UH, LARGER CAPITAL PLAN.
THE OTHER THING HERE, NET INCOME, WE DON'T USE NET INCOME TO DRIVE RATES OR THE RATE MODEL.
WE DO LOOK AT IT, IT'S A GAP BASED CALCULATION.
THERE ARE OTHER THINGS THAT RUN THROUGH THERE THAT ARE EXPENSE THAT AREN'T, AREN'T, THAT AREN'T REALLY RELATED TO THE RATE DIRECTLY, BUT WE CERTAINLY WANT TO PAY ATTENTION TO THIS AND SEE WHAT'S HAPPENING AND WHY IT'S HAPPENING.
UM, YOU CAN SEE NET INCOME BEING PRETTY TIGHT IN 21 AND 22, UH, EVEN LOW IN 24.
UM, BUT, BUT BEING IN A BETTER POSITION FROM 25 TO 27, AND THEN WHEN YOU SEE ALL THAT CASH COMING IN, I JUST WANTED TO PUT THIS ON HERE BECAUSE THIS TELLS YOU HOW MUCH CASH THEY'RE HOLDING AND IT, IT REALLY ISN'T ABOUT BUILDING RESERVES OR HOLDING BALANCES.
YOU CAN SEE HERE, STARTING IN 22, THEY'RE JUST AT ABOUT, I THINK IT'S 160 DAYS OR 175 DAYS.
UM, ALL THAT CASH IS GOING INTO THE CAPITAL PLAN.
IT'S BEING USED TO PAY FOR CAPITAL SO THAT WE DON'T HAVE TO ISSUE DEBT FOR ALL OF THAT.
UM, ON RATE DESIGN, UM, THERE ARE NO CHANGES IN RATE DESIGN IN THIS REVISED RATE CASE.
UM, THERE WAS SOME DISCUSSION ABOUT MAKING SOME MOVEMENT ON THAT, THAT HAS BEEN TAKEN OFF.
THIS SIMPLY TAKES THE 3.85% AND APPLIES IT TO THE RATES THAT EXIST TODAY.
SO WHETHER IT BE THE FIXED CHARGE OR THE VARIABLE CHARGE.
SO IT'S KEEPING THAT WHOLE STRUCTURE IN PLACE.
I THINK THAT'S REALLY IMPORTANT.
UM, IT FACILITATES THE TIME THAT, THAT WE NEED TO ALLOW THE RACK, UH, THE BOARD AND OTHERS TO REALLY STUDY CPSS RATE STRUCTURE, UM, AND TO DEVELOP SOME RECOMMENDATIONS AROUND THAT.
THERE'S BEEN A LOT OF CONVERSATION AROUND ENERGY BURDEN, WHICH I THINK IS A REALLY IMPORTANT CONVERSATION.
UM, BUT I THINK ONE THAT CAN'T HAPPEN IN, IN A TWO OR THREE WEEK TIMEFRAME, IT'S GONNA TAKE SOME TIME TO REALLY LOOK AT THAT, UNDERSTAND IT.
UM, THE OTHER BENEFIT YOU'RE GONNA GET, I THINK, IS THAT WHEN YOU DO RATE DESIGN, I'D RECOMMEND, AND I THINK I I, I THINK IT'D BE CLOSER TO BEST PRACTICE TO TRY TO DO RATE DESIGN OUTSIDE OF A RATE INCREASE.
BECAUSE WHEN YOU DO RATE DESIGN, IT'S ALMOST LIKE YOU'VE GOT A BALLOON.
AND I'VE GOTTA TAKE, I WAS, I WAS GONNA SAY, WE'VE GOTTA COLLECT $2 BILLION IN REVENUE, AND I WANNA LOOK AT COST OF SERVICE, AND I WANNA LOOK AT POLICY ISSUES, AND I WANNA LOOK AT HOW, HOW I CAN ADJUST THOSE THINGS.
AT THE END OF THE DAY, I STILL WANT TO COLLECT $2 BILLION, BUT WHEN I START PUSHING ON THE BALLOON, THOSE COSTS GO SOMEWHERE ELSE.
AND SO WITHOUT OUR RATE INCREASE IN THERE, YOU GET A LOT OF VISIBILITY INTO HOW THOSE COSTS ARE MOVING THROUGH THE DIFFERENT RATE CLASSES AND HOW THEY'RE IMPACTING DIFFERENT GROUPS.
SO I, I THINK THAT'S ANOTHER BENEFIT OF, OF REMOVING THIS FROM THIS AND JUST FOCUSING ON, ON THE CURRENT STRUCTURE.
UM, I'M GONNA TALK ABOUT IN A SECOND, AFFORDABILITY AND, UM, SOME OF THE UTILITY ASSISTANCE AND, AND WHY SOME OF THE RECOMMENDATIONS WERE MADE TO TRY TO DEAL WITH THAT IN THE INTERIM, SO THAT WE'VE GOT TIME TO STUDY THIS AND KIND OF DO THE ANALYSIS THAT WE NEED TO DO.
UM, SHIFTING OVER TO THE REGULATORY ASSET, AGAIN, WE'RE GONNA ASK YOU TO OR RECOMMEND THAT YOU, UM, ESTABLISH AN ASSET OF JUST OVER A BILLION DOLLARS THAT COVERS BOTH THE COST THAT C P S HAS PAID TO DATE.
IT ALSO COVERS THE DISPUTED COST.
UM, THE KEY HERE IS THAT C P SS IS ONLY ALLOWED TO RECOVER THE ROUGHLY $418 MILLION THAT THEY HAVE PAID TO DATE ON THOSE COSTS.
UM, THEY WOULD DEBT FINANCE THOSE OVER A 25 YEAR PERIOD.
THOSE DEBT SERVICE REQUIREMENTS WOULD THEN BE RECOVERED THROUGH THE FUEL CHARGE.
THE BENEFIT TO CUSTOMERS IS THAT BILL IS SPREAD OUT OVER A 25 YEAR PERIOD AS OPPOSED TO BEING PASSED THROUGH IMMEDIATELY.
UM, AND THEN WE HAVE BUILT INTO THIS, THAT THIS RECOVERY THROUGH THE REGULATORY ASSET WOULD BE EXEMPT FROM CITY PAYMENT CLEARED.
WINTER STORM URI WAS A UNPRECEDENTED EVENT.
UM, THE CITY MANAGER, I THINK, UH, MADE THAT RECOMMENDATION AND STATEMENT PROBABLY BACK IN MARCH THAT, THAT WE WOULDN'T BE LOOKING AT
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TAKING CITY PAYMENT ON ANYTHING COMING THROUGH THIS REGULATORY ASSET.WE DID BUILD IN SOME PROCEDURES AS THEY WORK THEIR WAY THROUGH RESOLUTION ON THE REMAINING ROUGHLY $587 MILLION IN DISPUTED COSTS.
UM, AS THOSE REACH RESOLUTION, THEY'RE GONNA BE REQUIRED TO COME BACK AND BRIEF THE MAYOR AND COUNCIL, UM, IF THEY'RE GONNA NEED TO RECOVER ADDITIONAL COSTS, YOU ALL WOULD HAVE TO APPROVE THE FINANCING FOR THAT.
UM, AND THEN WE WOULD BE INVOLVED IN LOOKING AT HOW THAT RUNS INTO THE FUEL ADJUSTMENT AND WHAT THE IMPACT TO THE AVERAGE RESIDENTIAL CUSTOMER WOULD BE.
SO THERE ARE, UM, ADDITIONAL STEPS HERE THAT WOULD HAVE TO HAPPEN BEFORE C P S COULD RECOVER ANYTHING BEYOND THE $418 MILLION THAT'S THERE TODAY.
UM, I DID WANT TO TOUCH ON, UH, TIMING.
SO, AND, AND I, I'M GONNA, I'M GONNA TOUCH ON TIMING HERE AND I WANNA BE REALLY CLEAR.
NOBODY'S ASKED ME TO LOOK AT THIS.
UM, NOBODY'S RECOMMENDING WE DO THIS.
I'M SIMPLY JUST WANTING TO MAKE SURE YOU'RE AWARE OF THE TIMING AROUND THE REGULATORY ASSET DISCUSSION BECAUSE C P S HAS IN, HAS PAID $418 MILLION IN COST, THOSE COSTS FOR FUEL.
UM, AND BY THE WAY, PUT THAT IN CONTEXT FOR A FULL YEAR.
C P SS HAS FUEL BUDGETS ABOUT A BILLION DOLLARS.
THEY GOT INVOICED THAT FOR ONE WEEK, SO IT'S JUST UNPRECEDENTED.
BUT NONETHELESS, THEY'VE GOT $418 MILLION THAT THEY HAVEN'T, THEY HAVE NOT PASSED ON TO CUSTOMERS THEY'RE HOLDING AT THIS POINT.
THEIR FISCAL YEAR ENDS ON JANUARY 31ST, 2022.
IF WE DECIDED THAT WE WEREN'T GONNA SET UP THE REGULATORY ASSET, WHICH WE'VE BEEN TALKING ABOUT SINCE THE SPRING, AS A WAY TO MITIGATE THE IMPACT TO CUSTOMERS, AND THIS WAS THE PLAN WE WERE GONNA DO, UM, WHAT C P SS HAS IN PLACE TODAY IS FUEL IS SUPPOSED TO PASS THROUGH CUSTOMER BILLS.
SO THE OPTION WOULD BE TO IMMEDIATELY BILL CUSTOMERS THAT PASSES THROUGH.
YOU WOULD SEE HUGE BILLS, WHICH OBVIOUSLY IMPACT THEM, UH, SIGNIFICANTLY.
UM, BUT THAT'S WHAT'S IN PLACE TODAY.
THEY'VE BEEN HOLDING IT BECAUSE AGAIN, WE'RE WORKING TOWARDS SETTING UP THIS REGULATORY ASSET.
IF I WENT A STEP FURTHER THAT'S ON THE LEFT SIDE, IF I WENT A STEP FURTHER AND JUST SAID UNDER A SCENARIO, UM, WE DIDN'T SET UP THE REGULATORY ASSET AND C P S GOT DIRECTION AND WAS TOLD YOU CAN'T PASS IT THROUGH THE CUSTOMER BILLS, EITHER THE $418 MILLION HAS BEEN PAID IT'S FUEL.
IT'S AN OPERATING EXPENSE OF C P SS, AND THIS IS WHERE THE ACCOUNTING WORLD AND THE BOND COMPLIANCE WORLD ARE GONNA CONVERGE AT THE END OF CP S'S FISCAL YEAR.
AND IT'S GONNA SAY, CPS, YOU DIDN'T DO ANYTHING WITH THIS.
IT'S GONNA HIT THE FLOW OF FUNDS, WHICH WOULD'VE MEANT THAT THERE SHOULDN'T HAVE BEEN ENOUGH MONEY FOR US TO HAVE GOTTEN CITY PAYMENT.
SO THAT HAS A DIRECT IMPACT THERE.
UM, AND THEN IT SETS OFF A WHOLE SET OF CASCADING ISSUES BECAUSE WE DIDN'T DEAL WITH OPERATING EXPENSES OF THE UTILITY.
THIS IS JUST A REALLY, REALLY, REALLY BAD SCENARIO.
AND, AND I'LL, I'LL STOP THERE, BUT, YOU KNOW, AGAIN, THE PLAN HAS BEEN GET THE REGULATORY ASSET IN PLACE.
YOU KNOW, I THINK THE POINT WE WANNA HIGHLIGHT IS JUST THE TIMING ON IT.
WE, WE NEED TO MAKE SURE THAT WE GET THAT IN PLACE BY THE END OF CP S'S FISCAL YEAR.
YOU KNOW, WHEN YOU TALK ABOUT BOND COMPLIANCE OR, UH, AN AUDIT AND A FISCAL YEAR AND THE ACCOUNTING RULES, YOU KNOW, THEY ARE WHAT THEY ARE, THEY'RE GONNA CONVERGE AT THE END OF THE YEAR.
SO, UM, THAT'S DRIVING THE TIMING ON THE REGULATORY ASSET PIECE FOR SURE.
UH, RESIDENTIAL BILL IMPACT, UM, THIS IS COMBINED ELECTRIC AND GAS FOR THE AVERAGE RESIDENTIAL CUSTOMER, ELECTRIC ONLY, AND GAS ONLY.
UM, THE TOTAL BILL INCREASES ANYWHERE FROM 3.3%, UM, TO, IF YOU'RE DOING GAS ONLY, IT'S 4%.
AND THAT'S BECAUSE YOU DON'T, AS A GAS CUSTOMER, YOU DON'T GET THE BENEFIT OF KIND OF SPREADING THOSE COSTS OVER THE ELECTRIC SIDE.
REMEMBER, A LOT OF THE WINTER STORM URI COSTS ARE COMING THROUGH.
UM, I HOPE I DON'T MAKE THIS WORSE, BUT I KNOW THERE'S A QUESTION THAT CAME UP ABOUT WHY DO, WHY ARE WE DOING A 3.85% INCREASE, BUT THE BILL ONLY GOES UP 3.3%? UM, I'M GONNA TRY TO GIVE YOU A ROUGH EXAMPLE AGAIN, I HOPE I DON'T MAKE IT WORSE.
UM, LET'S SAY YOU HAVE A BILL THAT'S $125, A HUNDRED DOLLARS OF THAT BILL ARE THE BASE RATES.
THOSE ARE THE RATES AND STRUCTURES THAT PROVIDE THE REVENUE THAT FUNDS CP S'S OPERATIONS, BUDGET, CAPITAL BUDGET, UM, AND THEIR CAPITAL PLAN.
THE OTHER $25 IS FUEL PASS THROUGHS, CITY PAYMENT, THINGS THAT DON'T DIRECTLY BENEFIT C P SS.
WELL, IF C P S NEEDS IN THAT SCENARIO, $5 MORE TO SUPPORT THE PLANS THAT THEY HAVE GOING FORWARD, THAT MEANS I NEED TO DO A 5% RATE INCREASE, A HUNDRED DOLLARS, THEY NEED FIVE.
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THAT'S A 5% RATE INCREASE.BUT THE TOTAL BILL IMPACT, THE $5 AGAINST THE TOTAL BILL OF 125 IS ONLY 4%.
SO THAT'S WHY YOU SEE THE DIFFERENCE.
AND THAT, AND, AND THAT'S IMPORTANT BECAUSE WE'RE ASKING YOU TO VOTE ON THE BASE RATE COMPONENT, THE PART THAT GENERATES THE REVENUE FOR C P S.
SO, UM, THOSE WERE NOT OBVIOUSLY MADE UP NUMBERS, BUT JUST THE WAY TO LOOK AT IT, IT'S, IT'S REALLY JUST, IT COMES DOWN TO MATH, AND THAT'S WHY YOU SEE THIS, THIS IMPACT AT 3.3%.
UM, THIS IS RESIDENTIAL BILL IMPACT AT, UH, MONTHLY, AT VARIOUS USAGE LEVELS.
UM, NON A D P AND A D P CUSTOMERS.
SO NINE 80 NON AFFORDABLY DISCOUNT PROGRAM CUSTOMERS ARE IN THE MIDDLE TIERS, THE MIDDLE TWO COLUMNS, THE AFFORDABILITY DISCOUNT CUSTOMERS ARE ON THE RIGHT HAND SIDE.
UM, YOU CAN SEE THAT A LOT OF THE IMPACT FOR THE A D P CUSTOMERS HAS BEEN OFFSET.
I'M GONNA TALK ABOUT THAT A LITTLE BIT MORE.
UH, I'M NOT GONNA SPEND ANY TIME ON THESE SLIDES.
WE'VE PUT THEM IN HERE JUST TO SHOW THAT WHEN YOU LOOK AT THE 3.85% INCREASE, IT'S RUNNING THROUGH REALLY ALL OF THE RATE GROUPS AT ABOUT THE SAME LEVEL, BECAUSE AGAIN, THERE'S NO RATE DESIGN OR RATE STRUCTURE CHANGES HERE.
UM, I DO WANNA TALK A LITTLE BIT ABOUT, UM, PAST DUE AMOUNTS.
SO THIS IS AS OF OCTOBER 31ST.
I'M LOOKING AT THE GRAPHIC ON THE LEFT, A LITTLE OVER $318 MILLION IN OUTSTANDING RECEIVABLES FOR C P S 178 MILLION OF THAT, YOU KNOW, THAT'S JUST NORMAL BILLING.
THEY, THEY BILL A CUSTOMER, IT TAKES TIME TO GET PAID.
YOU KNOW, THAT'S JUST SOMETHING THAT THEY SEE ALL THE TIME.
UM, A LITTLE BIT MORE UNUSUAL IS YOU'VE GOT A BIGGER GROUP IN THAT, UM, ORANGE COLOR THAT IS OVER 30 DAYS PAST DUE, BUT HASN'T GOTTEN TO THE POINT THAT THEY'RE ELIGIBLE FOR DISCONNECT.
THERE COULD BE ALL KINDS OF CUSTOMERS IN THERE, YOU KNOW, CUSTOMERS THAT, THAT, THAT JUST PAID A FEW DAYS LATE, FORGOT TO PAY THEIR BILL, PAID A WEEK LATE.
YOU KNOW, THERE'S A LOT OF THINGS THAT, THAT COULD GO INTO THAT.
BUT SOMETHING WE WANNA WATCH A LITTLE CLOSER, WHAT I WANNA FOCUS ON IS THAT LIGHT BLUE GROUP OF $72.1 MILLION OR 65,000 CUSTOMERS.
THESE ARE BALANCES THAT HAVE GOTTEN TO THE POINT THAT THEY'RE ELIGIBLE FOR DISCONNECT.
SO WE'RE, WE'VE TAKEN THAT AND BROKEN THAT DOWN ON THE TABLE ON THE RIGHT.
THERE ARE VERY FEW, UM, BUSINESSES THAT ARE IN THAT GROUP.
UM, C P S HAS CONTINUED TO WORK WITH THEM.
I THINK IN A LOT OF CASES, SOME OF THOSE BUSINESSES THAT, THAT HAVEN'T RESPONDED HAVE ACTUALLY GONE OUT OF BUSINESS.
UM, THE OTHERS HAVE GOTTEN ON PAYMENT PLANS.
SO I THINK, UM, WE DON'T SEE A LOT OF ISSUE ON THAT SIDE.
ON THE RESIDENTIAL SIDE, THERE'S THREE CATEGORIES THERE.
THERE'S THE, UH, CUSTOMER THAT'S NOT ENROLLED IN A, A DISCOUNT PROGRAM, AND THEY WEREN'T RESPONSIVE TO C P S.
SO DESPITE C P S REACHING OUT TO THEM, THEY JUST WOULDN'T RESPOND.
THIS CATEGORY AND THIS GROUP, OVER THE PAST, I WOULD SAY FOUR WEEKS, PROBABLY THREE OR FOUR WEEKS, HAS GONE DOWN SIGNIFICANTLY, MEANING THAT C P S HAS BEEN ABLE TO GET IN CONTACT WITH THEM.
UM, THEY'VE MADE PAYMENT ARRANGEMENTS, UH, THEY'VE GOTTEN ON A PAYMENT PLAN.
SO THAT'S GOOD NEWS THAT THAT NUMBER HAS CONTINUED TO COME DOWN.
THE SECOND GROUP IS A NOT ENROLLED IN AFFORDABILITY DISCOUNT PROGRAM.
UH, IT'S ABOUT 38.1 MILLION OF THE 72 MILLION, ABOUT 44,000 CUSTOMERS.
AND THEN WE'VE GOT ENROLLED IN A DISCOUNT PROGRAM ABOUT 12,000 CUSTOMERS OR $14 MILLION THAT, THAT'S OUTSTANDING.
UM, I'M GONNA TALK A LITTLE BIT ABOUT UTILITY ASSISTANCE IN SECOND, BUT I WANT YOU TO REALLY FOCUS ON THAT.
ENROLLED IN A D P $14 MILLION NUMBER AND THE 40 AND THE $38 MILLION NUMBER, THAT'S ISN'T IN A D P.
SO BACK ON NOVEMBER 18TH, UH, YOU ALL AS THE, AS THE CITY COUNCIL DID APPROVE $20 MILLION IN ARPA FUNDING, UM, TO PROVIDE EMERGENCY UTILITY BILL ASSISTANCE FOR SAN ANTONIO RESIDENTS, IT WAS FOCUSED ON THAT FIRST GROUP THAT THE CUSTOMERS, THE $14 MILLION THAT ARE THE, THE SAN ANTONIO RESIDENTS IN THAT CATEGORY THAT ARE BEHIND, UM, THAT WAS OUR FIRST PRIORITY.
SO IN THAT CASE, UNDER THIS PROGRAM THAT YOU ALL APPROVE, C P S CAN PAY THE FULL BALANCE THAT THEY OWE AS LONG AS IT WAS INCURRED BETWEEN MARCH 1ST, 2020 AND SEPTEMBER 30TH, 2021.
THOSE ARE THE ARPA GUIDELINES THAT WE'RE FOLLOWING.
UM, FOR CUSTOMERS THAT AREN'T IN AN AFFORDABILITY PROGRAM, MEANING THEY'RE AT OR ABOVE 125% OF FEDERAL POVERTY, UM, THEY CAN DO UP, UP TO A THOUSAND DOLLARS IN BILL CREDITS.
SO THIS IS AN IMPORTANT, UM, AMOUNT OF FUNDING THAT C P S CAN USE TO HELP CUSTOMERS GET BACK ON TRACK THROUGH PAYMENT PLANS AND THROUGH DIRECT ASSISTANCE WITH THIS PROGRAM.
IN ADDITION TO THAT, THE AFFORDABLY DISCOUNT PROGRAM, THE AMOUNTS THAT A, A RESIDENT OR A HOMEOWNER COULD GET WERE INCREASED.
AND IF YOU LOOK AT THE COMBINED ELECTRIC AND GAS, I WON'T GO THROUGH IT FROM THE CURRENT RATES.
THESE ARE THE DISCOUNT AMOUNTS.
SO YOU GOT THE CURRENT DISCOUNT, THE
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PROPOSED DISCOUNT, IF YOU GO TO THE ADDITIONAL AMOUNT THAT A CUSTOMER CAN GET THAT IS IN AN AFFORDABILITY DISCOUNT PROGRAM, IT'S $3 AND 84 CENTS.THE NUMBER LOOKS FAMILIAR, IT'S BECAUSE THAT'S THE PROJECTED IMPACT OF THE 3.85% BASE RATE INCREASE.
UM, IT'S NOT OFFSETTING THE WINTER STORM ERY COMPONENT, WHICH IS SMALLER, BUT IT'S OFFSETTING THIS BASE RATE INCREASE.
ADDITIONALLY, IN THE RATE MODEL AND IN THE BUDGET, THERE'S ABOUT, UM, THERE'S FUNDING TO INCREASE THE AMOUNT OF, UH, ENROLLMENT OR CUSTOMERS THAT ARE ON THESE PROGRAMS BY ABOUT 14,000 CUSTOMERS.
SO I MENTIONED THERE WAS A LOT OF CONVERSATION WITH ENERGY BURDEN.
WE KNOW THAT THE RATES ADVISORY COMMITTEE AND OTHERS WANNA HAVE LIKE A LOT OF CONVERSATION ABOUT THE RATE STRUCTURE.
UM, WE THINK THAT IS ABSOLUTELY NEEDS TO HAPPEN, UM, AS PART OF THAT RATE, UH, STUDY.
SO THIS RATE CASE, WHILE WE'RE FOCUSING ON CP S'S IMMEDIATE FINANCIAL NEEDS, WAS REALLY ALSO TRYING TO SAY HOW CAN WE MITIGATE THE IMPACT TO LOW INCOME CUSTOMERS IN THE SHORT TERM AND PROVIDE TIME FOR THOSE GROUPS TO DO THAT STUDY.
AND IT FOCUSED ON THREE THINGS.
LET'S ADDRESS THE OUTSTANDING BALANCES.
WE'RE USING THE ARPA FUNDING TO DO THAT.
YOU SAW $14 MILLION THERE FOR AFFORDABILITY, DISCOUNT CUSTOMERS.
THERE ARE PROBABLY SOME OF THE NON A D P GROUP THAT PROBABLY NEED TO SIGN UP FOR THE AFFORDABLY DISCOUNT PROGRAM.
C P S CAN HELP THEM WITH THAT.
TRY TO OFFSET AS MUCH OF THE RATE IMPACT AS WE COULD.
SO THAT WAS THE SECOND PART OF IT.
AND THE THIRD PART WAS INCREASE THE AMOUNT OF FUNDS SO THAT IF THERE ARE CUSTOMERS THAT WE NEED TO SIGN UP AND PUT ON THESE PROGRAMS, WE CAN DO THAT.
SO IT WAS REALLY MEANT TO DO AS MUCH AS WE COULD IN THE SHORT TERM TO MITIGATE THE IMPACT OF THIS RATE INCREASE THAT'S NEEDED TO SUPPORT C E P S FINANCIALLY, AND THEN ALLOW THE RATES ADVISORY COMMITTEE AND OTHER GROUPS THE TIME THAT THEY NEED TO DO THAT WORK ON THE REVISED RATE STRATEGY.
UM, I, I WON'T GO THROUGH THIS AGAIN.
AGAIN, I, I KIND OF COVERED THIS BEFORE ON THE APPROACH AND HOW WE'RE LOOKING AT, AT THIS, UM, THE BENEFITS, I'M JUST GONNA HIGHLIGHT A COUPLE OF THINGS.
AGAIN, THE, THE FOCUS HERE WAS ADDRESS T P S'S IMMEDIATE FINANCIAL NEEDS.
UM, ALLOW TIME FOR THE ANALYSIS AND DIALOGUE AND THE POLICY ISSUES, AND LET'S HAVE SOME TIME SO THAT THESE AREAS OF UNCERTAINTY CAN EVOLVE AND WE CAN GET A BETTER UNDERSTANDING OF WHAT WE'RE DEALING WITH.
YOU CAN PUT A BETTER FINANCIAL PLAN TOGETHER.
THAT FIRST ONE, IN TERMS OF ADDRESSING C P S'S IMMEDIATE FINANCIAL NEEDS IS IMPORTANT BECAUSE IF, IF WE'RE NOT ABLE TO DO THAT AND WE DON'T KEEP C P S IN THE RIGHT FINANCIAL POSITION, THE POLICY ISSUES, THE OTHER ISSUES THAT BECOME A LITTLE HARDER TO DEAL WITH AND MORE EXPENSIVE TO DEAL WITH.
SO I THOUGHT THIS WAS A REALLY A GOOD APPROACH TO TAKE BECAUSE IT'S REALLY NOT A STEP.
IT IS NOT THE STEP, IT IS A STEP, IT'S STEP ONE.
THERE ARE MANY STEPS THAT WE'RE GONNA HAVE TO DO AS WE LOOK AT ADDRESSING ALL OF THE ISSUES THAT YOU SEE ON THE RIGHT HAND SIDE OF THIS SLIDE.
SO I MENTIONED THAT WE'RE NOT, UH, GONNA TAKE CITY PAYMENT ON ANY RECOVERIES THROUGH THE REGULATORY ASSET.
UM, THAT PROJECTED VALUE OF THAT WAIVER IS APPROXIMATELY $98 MILLION OVER THE PRO PROPOSED 25 YEAR BOND FINANCING.
WE WOULD TAKE CITY PAYMENT ON THE BASE RATE INCREASE.
UM, THE NUMBERS I'M GIVING YOU HERE ARE NET, UH, NET MEANING THAT, UH, WE'RE GONNA GET ADDITIONAL REVENUE, BUT WE ALSO HAVE A VERY LARGE, UH, EXPENSE BUDGET OURSELVES.
EVERYTHING FROM STREETLIGHTS TO OUR FACILITIES THAT WILL GO UP.
SO THE NET PROJECTED INCREASE TO US NET INCREASE TO US FOR F Y 22 IS ABOUT 5.2 MILLION AND JUST UNDER 9 MILLION FOR A FULL FISCAL YEAR IN, UH, 2023.
AND THEN I'LL WRAP UP HERE WITH JUST SOME, UM, RECOMMENDATIONS.
WE, UM, OBVIOUSLY SPENT A LOT OF TIME LOOKING AT THIS RATE MODEL AND THESE BUDGETS, AND, AND WE RECOMMEND AND DO SUPPORT A 3.85% INCREASE IN THE ELECTRIC AND GAS BASE RATES TO TAKE EFFECT MARCH 1ST, 2022.
WE RECOMMEND AND SUPPORT ESTABLISHING THIS REGULATORY ASSET OF JUST OVER A BILLION DOLLARS FOR THE WINTER STORM URI FUEL AND OTHER RELATED COSTS.
I THINK THIS IS A, A VERY GOOD MECHANISM TO HELP MITIGATE THE IMPACT TO C P S ENERGY CUSTOMERS AND TO DO IT IN A COST EFFECTIVE WAY.
UM, WE'RE RECOMMENDING THAT AS PART OF THAT THEY BE ALLOWED TO RECOVER THE $418 MILLION IN COST THAT THEY HAVE PAID TO DATE.
UM, THEY WOULD ISSUE DEBT ON THAT AND BEGIN TO RECOVER THOSE DEBT SERVICE REQUIREMENTS THROUGH THE FUEL ADJUSTMENT COMPONENT OF BILLS BEGINNING IN MARCH 1ST, 2022.
AND THEN WE'VE GOT SOME ADDITIONAL RECOMMENDATIONS TO C P S ENERGY THAT AREN'T DIRECTLY RELATED TO THE, TO THE AMOUNT OF THE, OF THE RATE.
UM, WE'RE RECOMMENDING THAT C P
[01:00:01]
S ENERGY DEVELOP A TIMELINE FOR THE DISCUSSION OF THE GENERATION PLANNING OPTIONS.UM, YOU KNOW, GIVEN THE, UH, APPROACHING RETIREMENT OF SEVERAL GENERATION PLANS ALONG WITH UPCOMING KEEP CAPITAL INVESTMENT DECISION POINTS FOR EXISTING GENERATION ASSETS, I MENTIONED, I THINK WE'RE AT A PIVOTAL POINT.
UM, THERE'S OBVIOUSLY A LOT OF INTEREST AND A LOT OF THOUGHTS ABOUT WHAT THAT SHOULD LOOK LIKE IN TERMS OF GENERATION PLANNING GOING FORWARD.
UM, I THINK IT WOULD BE IMPORTANT FOR US AND FOR, FOR THE COMMUNITY TO SEE A TIMELINE IN TERMS OF WHEN WE NEED TO GET THAT DONE AND ACCOMPLISHED BY, UM, THERE ARE SOME CLEAR, UH, DECISION POINTS THAT NEED TO BE MADE BY CERTAIN POINTS IN TIME.
UH, JUST AS IMPORTANT IS, UH, RATE DESIGN.
I MEAN, THERE HAS BEEN A LOT OF CONVERSATION AROUND RATE DESIGN, ENERGY BURDEN, UM, HOW C P S RECOVERS ITS COST FROM DIFFERENT CUSTOMER CLASSES.
UH, THAT WORK WILL TAKE TIME, AND I THINK IT'S IMPORTANT THAT A TIMELINE BE ESTABLISHED THERE AS WELL, SO THAT EVERYBODY HAS A CLEAR UNDERSTANDING OF, OF WHEN THAT WORK IS GONNA OCCUR AND WHEN, UH, WHEN WE CAN EXPECT TO SEE RECOMMENDATIONS COMING OUT OF THAT PROCESS.
UH, WE'RE ALSO GONNA RECOMMEND THAT C P S STUDY TOTAL COMPENSATION LEVELS TO INCLUDE PENSION AND BENEFIT PLANS, UM, THAT PROVIDE FOR TOTAL COMPENSATION THAT ALLOWS C P S TO MAINTAIN AND RECRUIT TALENT, BUT THAT ALSO RECOGNIZE THAT IT'S A PUBLIC UTILITY.
UM, I MENTIONED THAT THE E I P, UH, PROGRAM WA WAS, WAS NOT INCLUDED IN THE PLAN.
UM, I DO THINK THEY, THEY PROBABLY NEED TO TAKE A STEP BACK AFTER THIS AND LOOK AT THEIR COMPENSATION AND HOW IT'S STRUCTURED AND, AND WHAT THEY WANT TO DO THERE, BUT HAVE A PLAN IN PLACE.
AGAIN, THAT ALLOWS THEM TO RECRUIT, MAINTAIN TALENT, BUT ALSO RECOGNIZE AT THE END OF THE DAY, C P S ENERGY IS A PUBLIC UTILITY.
THIS NEXT ONE IS ON THE TREATMENT OF GAAP DETERMINED PENSION EXPENSES.
THIS IS, AGAIN, I MENTIONED THERE'S A FUNDED, THERE'S A, A GAP, G A SS B BASED, UH, EXPENSE THAT'S A LITTLE MORE VOLATILE.
UM, IT ISN'T SOMETHING I THINK WE NEED TO SPEND A LOT OF TIME ON TODAY, BUT IT'S SOMETHING THAT WE CERTAINLY WANNA CONTINUE TO WORK WITH ON THE STAFF, UM, TO, TO LOOK AT HOW WE WANNA LOOK AT THAT FROM A RATE PERSPECTIVE SO THAT IT'S NOT CAUSING UNINTENDED, UH, UH, CHANGES OR VARIANCES THERE.
BUT THAT'S SOMETHING THAT WE CAN WORK WITH THEM ON GOING FORWARD.
UM, ON THE DIGITAL ENTERPRISE RESOURCE PLANNING SYSTEM, I MENTIONED LARGE COMPLEX SYSTEM.
WE THINK THAT AFTER ADDITIONAL INFORMATION IS OBTAINED, THEY CAN THEN ASSESS THEIR PLAN AND DEVELOP A MULTI-YEAR PLAN WITH, WITH HOW THEY WANNA MOVE FORWARD.
UM, MENTION THE OVER 400 VACANCIES THAT C P SS ENERGY HAS TODAY.
UM, I THINK THERE'S A GREAT OPPORTUNITY TO PARTICIPATE OR HAVE THEM PARTICIPATE IN THE CITY'S READY TO WORK WORKFORCE PROGRAM, UH, BOTH TO LOOK AT THOSE VACANCIES, BUT THEN AS THEY HAVE THEIR NORMAL ATTRITION GOING FORWARD TO CONTINUE TO PARTNER WITH THE CITY.
SO I THINK THERE'S A GREAT OPPORTUNITY THERE.
AND THEN LASTLY HERE, UH, WOULD BE TO DEVELOP A PUBLIC BUDGET DOCUMENT THAT OUTLINES C P S ENERGY'S FINANCIAL PLANS FOR THE UPCOMING FISCAL YEAR.
YOU KNOW, THI THIS, THIS ONE HAS COME UP A FEW TIMES, UM, AS I'VE DONE RATE CASES BEFORE, UM, THAT TEND TO COME UP IN TERMS OF, THERE'S NOT A DOCUMENT THAT YOU CAN POINT TO THAT SAYS, HERE'S MY BUDGET, THIS IS WHAT I PLAN TO DO.
UM, I KNOW COUNCILMAN BRAVO ACTUALLY BROUGHT THIS UP AND I DON'T REMEMBER.
I THINK THE, I CAN'T REMEMBER THE ITEM.
I THINK IT MIGHT HAVE BEEN, UM, A BOARD APPOINTMENT ITEM.
I THINK HE RAISED THAT ISSUE AS WELL.
UM, SO I, I JUST, I THINK THERE'S A WAY TO BALANCE C P S, UH, THE FACT THAT THEY'RE UTILITY, THEY'VE GOT CLEARLY SOME INFORMATION THAT PROBABLY IS PROPRIETARY AND CONFIDENTIAL, BUT THERE'S A LOT OF INFORMATION THAT ISN'T.
AND I THINK IT'S IMPORTANT, A STEP FORWARD TO BE ABLE TO CREATE SOMETHING THAT ALLOWS THE COMMUNITY TO UNDERSTAND, UH, IN MANY CASES, THE GREAT WORK THAT C P SS IS DOING.
AND, AND, AND, AND, AND UNDERSTAND BETTER WHAT IS THE PLAN GOING FORWARD.
UM, SO THAT WAS OUR LAST RECOMMENDATION, AND I BELIEVE, YES, MAYOR AND COUNCIL, THAT, UH, CONCLUDES MY PRESENTATION.
UM, I DO WANT TO THANK MY STAFF AGAIN.
UH, RUSSELL HUFF IS OUR ASSISTANT DIRECTOR OF REPUBLIC UTILITIES.
UH, JEFF POLAND IS OUR ADMINISTRATOR OVER PUBLIC UTILITIES.
UM, MORRIS HARRIS IS BACK HERE.
UM, THESE GUYS LED THE TEAM THAT DID A LOT, A LOT OF WORK IN A VERY SHORT PERIOD OF TIME.
UH, I CAN'T BEGIN TO TELL YOU THE AMOUNT OF VOLUME OF WORK THAT THEY, THEY HAVE WORKED WITH THE C P S TEAM ON.
I'M PROUD OF THE WORK THAT THEY'VE DONE, UM, AND REALLY APPRECIATE, UM, THEIR EFFORT AND THEIR WORK.
AND THEN I AGAIN, WANNA THANK RUDY AND THE TEAM.
I THINK OVER THE, OVER THE PAST, I GUESS IT'S A LITTLE BIT OF A BLURB, BUT I GUESS OVER THE LAST THREE OR FOUR WEEKS, UH, WE'VE SPENT A LOT OF TIME TOGETHER WITH THE TEAM KIND OF VETTING THROUGH THIS AND GETTING TO THIS TO A POINT WHERE WE HAVE, WE GOT THIS REVISED RATE CASE.
SO WITH THAT MAYOR COUNCIL, WE'RE HAPPY TO ANSWER QUESTIONS.
THANK YOU VERY MUCH, UH, FOR THE PRESENTATION.
BEN, I, I DO WANNA ACKNOWLEDGE A FEW OTHER FOLKS THAT ARE IN THE ROOM.
MACKEY IS HERE, AS WELL AS VICE CHAIR JENNY GONZALEZ.
UH, AND I KNOW THAT THERE IS A GROUP OF REAL ESTATE COUNCIL SAN ANTONIO LEADERSHIP, UH, THAT ARE WATCHING, UM, THE SESSION FROM THE CHAMBER.
[01:05:01]
ACKNOWLEDGE THEM.UM, THANK YOU VERY MUCH, UH, FOR A VERY THOROUGH PRESENTATION, BEN, AND I'M GLAD TO SEE, UH, BECAUSE WE WEREN'T THERE, YOU WEREN'T THERE, UH, A COUPLE OF MONTHS AGO, UH, WHEN DISCUSSION STARTED.
BUT WE ARE NOW ARRIVED AT A POINT WHERE YOU ARE COMFORTABLE AS, UM, THE PUBLIC UTILITY, UM, UH, LIAISON TO THE CITY, UH, MAKING A RECOMMENDATION ON BEHALF OF THE CITY.
AND IT'S A GOOD FRAMING OF THE CONVERSATION AS FIDUCIARIES OF THIS CITY AGENCY, UH, AND WHAT WE HAVE TO DO.
SO LET ME JUST, UM, KIND OF MAKE SOME COMMENTS, AND YOU CAN TELL ME IF I'M STEERING OFF TRACK.
THE RATE REQUEST THAT WE'RE LOOKING AT RIGHT NOW IS, IS WHITTLING AWAY ALL OF THE OTHER PLANNING ELEMENTS THAT WE WOULD BE LOOKING AT IN THE FUTURE, AND REALLY FOCUSING ON WHAT ARE THE IMMEDIATE FINANCIAL NEEDS OF THE AGENCY TO KEEP IT, UM, ON TRACK FROM AN OPERATIONS AND MAINTENANCE STANDPOINT.
UH, MAYOR, I WOULD AGREE WITH THAT STATEMENT.
UH, WHICH I THOUGHT WAS VERY HELPFUL FOR US TO SEE.
UM, SO THE ELEMENTS THAT WE'RE NOT TALKING ABOUT, UH, ARE INCLUDED, UH, LARGELY WITHIN THE DISCUSSIONS AT THE BOARD OF TRUSTEES, AS WELL AS THE RATE ADVISORY COMMITTEE.
UH, AND THAT IS RELATED TO GENERATION PLANNING AND RATE DESIGN RATE STRUCTURE.
UM, AND WE KNOW THAT WITH REGARD TO THE REGULATORY ASSET THAT IS INCLUSIVE OF, UM, REVENUES THAT MIGHT BE NEEDED TO COVER THE COST OF THE WINTER STORM, TO BE CLEAR, AND I DON'T REMEMBER WHAT SLIDE IT WAS, THE $418 MILLION THAT HAS ALREADY BEEN PAID AND FUEL COSTS DURING THE STORM ARE RELATED TO THOSE, UM, COSTS THAT C P S HAS DEEMED AS FAIR, UH, REASONABLE, UH, WHICH WERE NOT IN DISPUTE.
THE OTHER PART OF THAT, UH, $1 BILLION INVOICE ARE THOSE THAT ARE DEEMED UNCONSCIONABLE, UM, OR IN ERROR, FRANKLY, UH, THAT ARE, ARE BEING LITIGATED AND WE SHOULDN'T BE PUTTING ON THE BACKS OF OUR CUSTOMERS, UM, BECAUSE THEY'RE IN DISPUTE.
THE OTHER ELEMENTS OF THE RATE THAT IS NOT PART OF THIS REQUEST ARE, AGAIN, GENERATION PLANNING RATE, DIRECTION RATE DESIGN, GET ALL THAT RIGHT? YES, SIR.
SO IF WE COULD GO, I THOUGHT IT WAS VERY HELPFUL FOR YOU TO INCLUDE A SLIDE 14, WHICH GOES TO THE GENERATING UNITS.
UM, CLEARLY THERE ARE POLICY DISCUSSIONS THAT WE NEED TO HAVE AT THE BOARD, AT THE COUNCIL, AND AT THE RATE ADVISORY COMMITTEE RELATED TO THIS SLIDE, WHICH WE'VE SEEN BEFORE AT THE BOARD.
BUT THIS SHOWS THE MAGNITUDE AND THE URGENCY OF THOSE DISCUSSIONS.
AND FRANKLY, THE, UM, THE FISCAL REALITY OF IT, THERE IS A LOT OF GENERATING CAPACITY THAT C P S IS STANDING TO LOSE, UH, OVER THE NEXT 10 YEARS.
UH, AND FRANKLY, OVER THE NEXT 25 AND 40 YEARS, IF YOU THINK ABOUT THOSE POLICY DISCUSSIONS, WHAT WE DO, HOW WE SPEND THE REVENUES, UH, TO ADDRESS THAT, HOW WE DEAL WITH THE GROWTH ARE ALL RELATED TO THOSE DISCUSSIONS THAT WE HAVE NOT YET COME TO A CONCLUSION ON.
MACKEY AND JANIE ARE HERE, BUT THE, THE IMPORTANCE OF THE RECOMMENDATION AND THE TIMELINE OF THOSE OTHER DISCUSSIONS IS, IS CRITICAL AS WELL.
SO IF WE CAN GO TO, UM, SLIDE, UH, ACTUALLY, YOU DON'T HAVE TO BRING IT UP.
THE SLIDE WHERE YOU TALKED ABOUT THE FORECAST, YOU SAID IT VERY CLEARLY, BUT I THINK IT'S WORTH RESTATING THERE'S A THREE AND A HALF, OR EXCUSE ME, 3.85 BASE RATE INCREASE THAT THERE IS, UH, REQUEST AND RECOMMENDED THIS YEAR.
THERE ARE PROGRAMMED OR, OR FORECAST RATE ADJUSTMENTS, UM, IN THE NEXT 10 YEARS OR SO AT REGULAR INTERVALS TO DEAL WITH THIS SLIDE AND, AND RATE STRUCTURE, RATE EQUITY ISSUES.
BUT THOSE ARE FORECAST AND, AND WILL BE PROGRAMMED AFTER SOME DISCUSSION TO DEAL WITH THESE ISSUES, RIGHT? THAT IS CORRECT.
THEY'RE THERE FOR PLANNING, BUT OBVIOUSLY AS I MENTIONED THERE, THERE'S NO DOUBT THEY'RE GONNA CHANGE.
I MEAN, NOT JUST BECAUSE YOU'RE MAKING GENERATION DECISIONS, BUT YOU'RE GONNA UPDATE FINANCIAL INFORMATION, YOU'RE GONNA UPDATE PROJECTIONS, YOU'RE GONNA LOOK AT ECONOMIC ACTIVITY.
ALL OF THOSE THINGS COULD EITHER, UM, PUT PRESSURE ON RATES OR TAKE PRESSURE OFF OF RATES.
IT DOESN'T MEAN THAT IT'S ALL ADDITIONAL COSTS.
SOME WILL GO UP, SOME WILL GO DOWN.
SO TO BE ABUNDANTLY CLEAR, AND I I I, I DON'T WANT, UM, ANYONE TO LEAVE WITH THE IMPRESSION THAT THIS IS A RECOMMENDATION ON FIVE AND A HALF PERCENT INCREASES IN 2025 AND 2027.
THOSE ARE DISCUSSIONS WE HAVE YET TO HAVE.
BUT IT DOESN'T IN ANY WAY TAKE AWAY FROM THE REALITY THAT REGARDLESS OF WHAT THE RATE REQUEST IS OR WAS THIS YEAR, THAT THERE WEREN'T GOING TO BE ADDITIONAL NEEDS FOR THE UTILITY LATER ON THAT WE'RE GONNA HAVE TO TALK ABOUT AND ADDRESS.
UM, LASTLY, THE ONLY QUESTION I HAVE, UM, IS SLIDE
[01:10:01]
SLIDES 24 THROUGH 26.UM, THESE ARE THE FINANCIAL TARGETS, UM, FOR THE UTILITY.
I MEAN, IT'S A VERY SIMPLISTIC SLIDE, BUT YOU GET A SENSE OF WHERE THESE THINGS ARE MOVING, THE TRENDS, UH, WHICH ARE THE FUNDAMENTALS OF THE FINANCIALS FOR C P S.
UM, DOES THIS INCLUDE THOSE FORECASTED RATE INCREASES? IT DOES.
SO THIS IS THE TREND LINE WITHOUT ADJUSTMENT BASED ON THE SNAPSHOT OF FINANCES TODAY? THAT'S CORRECT.
WELL, AGAIN, I, I THINK, UM, THE UTILITY INDUSTRY IN TEXAS, MAYBE IN THE UNITED STATES, BECAUSE OF A LOT OF THINGS, NOT JUST WINTER STORM HAS IN A BEEN IN A STATE OF CHAOS.
UM, I THINK YOU'VE HELPED US HONE IN WHAT ARE, WHAT IS THE ISSUE THAT WE'RE TRYING TO SOLVE RIGHT NOW.
SO I'M, I'M GRATEFUL FOR ALL THE WORK, UH, THAT I KNOW BEN COREY, UH, RUDY FRANK, EVERYBODY HAS BEEN LEANING INTO OVER THE LAST SEVERAL MONTHS.
UM, I HAVE NOT BEEN, UM, READY TO MAKE ANY DEFINITIVE STATEMENTS ABOUT THIS UNTIL I SAW YOUR STAFF RECOMMENDATION, BEN, BUT, BUT I THINK THIS IS VERY GOOD WORK.
IT, IT IS THE REALITY OF OUR FIDUCIARY RESPONSIBILITY.
AND SO, UM, LOOKING FORWARD TO THE CONVERSATION, CONTINUED WORK UNTIL WE GET THIS, UH, TO THE COUNCIL.
SO, UH, WITH THAT, LET ME GO OVER TO, UH, THE DISCUSSION.
WE'LL START WITH COUNCIL MEMBER ROCHA GARCIA.
THANK YOU, MAYOR, AND THANK YOU BEN.
AND I DON'T HAVE TOO MANY QUESTIONS TODAY, PROBABLY BECAUSE YOU SENT A REALLY NICE MEMO AND, AND THE PRESENTATION AHEAD OF TIME.
UM, I DO HAVE SOME, AND ALSO Y'ALL SAT ME NEXT TO ERIC WALSH NOW, SO I THINK I ASKED ALL MY QUESTIONS BEFORE
UM, BUT SLIDE NUMBER EIGHT, 6.7 MILLION.
UM, CAN YOU REMIND ME WHAT THAT OTHER WAS AGAIN? SO THE OTHER IS GONNA INCLUDE, UM, ITEMS SUCH AS A LUMP SUM RETENTION, AND IT WAS THE PREVIOUS SLIDE, SORRY, SLIDE NUMBER EIGHT THERE.
THAT 6.5 IS GONNA INCLUDE, UM, ITEMS SUCH AS LUMP SUM RETENTIONS FOR EX EXISTING STAFF, UH, JOB EVALUATIONS WITH EQUITY ADJUSTMENTS, UH, HIRING INCENTIVES.
THERE WERE A NUMBER OF OTHER THINGS THAT WERE INCLUDED IN THAT CATEGORY.
AND THEN, UM, I APPRECIATE THAT.
I, I THINK THAT WE MIGHT OURSELVES HAVE, UM, WE MIGHT BE FIGHTING OVER EMPLOYEES, RIGHT? AS A PUBLIC UTILITY AND EVEN WITH SAWS, UM, AND, AND THE CITY AND THE PUBLIC SECTOR, BECAUSE I'D BE AFRAID THAT POACHING WOULD START OCCURRING, RIGHT? AND SO WE KNOW THAT PEOPLE ARE INTERESTED IN, IN SEEING, AND I'VE SEEN IT IN AND MY TWO YEARS ON COUNCIL AND, AND BEFORE THAT PEOPLE LEAVE TO GO WORK FOR C P S OR FOR SAUCE.
AND SO, UM, JUST REALISTICALLY SPEAKING, OUR HR FOLKS MIGHT HAVE TO, UM, MAKE THAT VERY CONSIDERATE, UM, TAKE A VERY CONSIDERATE APPROACH, RIGHT? LIKE, WHAT ARE WE GONNA DO? SO JUST, UH, F Y I AND THEN ALSO ON FREEZE PROTECTION, AND ERIC ANSWERED THIS, UH, FOR ME.
UM, BUT YOU HAVE SPECIFICALLY ON THEIR FREEZE PROTECTION, AND SO IT'S PIPES, AND I THINK YOU HAVE $10 MILLION BUDGETED A YEAR, UM, I WANNA SAY SAY FOR FREEZE PROTECTION, BUT SHOULD WE HAVE BUDGETED MAYBE MORE UPFRONT BECAUSE OF WHAT HAPPENED DURING YURI, AND I'M SORRY, I DIDN'T WRITE THE SLIDE NUMBER.
MAYBE IT WAS 33, SOMEWHERE AROUND THERE.
MAYBE IT'S IN THE BUDGET WHERE YOU HAVE 2.64 MILLION FOR COMMS. SLIDE 15.
SO SHOULDN'T THAT BE REVERSED? SO THEY'RE, THEY ARE DOING A LOT OF WORK.
THEY HAVE ALREADY DONE A LOT OF WORK.
SO THEY, THEY CONTINUE TO DO WORK.
UM, SOME OF THIS, UM, IS ON THE CAPITAL SIDE, YOU'LL ALSO SEE THERE'S SOME IN THAT O AND M CATEGORY, THERE'S ALSO FREEZE PROTECTION WORK GOING ON THERE.
SOME OF THAT WORK IS SMALLER DIAMETER PIPES, SMALLER SECTIONS OF PIPE THAT THEY CAN'T, YOU CAN'T PUT IN THE CAPITAL PLAN.
UM, SOME OF THE STUFF, AND I, AND I'LL, I'LL LOOK IF I'M NOT DESCRIBING IT RIGHT, BUT I THINK SOME OF THE STUFF THEY'VE DONE, THE, THE MOST IMMEDIATE THINGS THAT THEY CAN DO MOST QUICKLY, SOME OF THE STUFF WILL REQUIRE MORE WORK, MORE DESIGN, MORE TIME.
AND THAT'S THE STUFF THAT I THINK YOU'RE SEEING IN 2024.
BUT I THINK THEY ARE TRYING TO ADDRESS AS MANY OF THE ISSUES THAT THEY HAVE BEEN ABLE TO IDENTIFY THAT HAPPEN WITH THEIR PLANTS, UH, IN THE N NEAR TERM AND DOING THAT AS QUICKLY.
AND THEN AGAIN, SOME WORK MAY REQUIRE A LITTLE BIT MORE TIME BECAUSE OF DESIGN AND OTHER ISSUES.
AND THEN ON SLIDE 39, DO YOU HAVE A SLIDE THAT SHOWS WHAT THE INCREASE IN, IN BILLS WOULD BE RIGHT NEXT TO THE AFFORDABILITY DISCOUNT PROGRAM ADJUSTMENT BY ANY CHANCE? LIKE A SIDE BY SIDE COMPARISON? I HAVE A SLIDE THAT GETS CLOSE
[01:15:01]
TO THAT FOR THE AVERAGE RESIDENTIAL BILL.WHERE, WHAT SLIDE IS THAT? ACTUALLY SLIDE 35.
SO THIS SLIDE LOOKS AT OH, A D P CUSTOMERS.
SO THIS SLIDE LOOKS AT DIFFERENT, UH, USAGE LEVELS HERE.
AND THEN THE GAS, C, C F THERE IS THE NEXT COLUMN.
UH, BUT YOU CAN SEE, UH, THE NON AFFORDABILITY DISCOUNT, UH, CUSTOMERS THERE IN THE, THE MIDDLE TWO COLUMNS.
AND ON THE FAR RIGHT, BECAUSE MOST OF THE BASE RATE OR NOT MOST OF THE BASE RATE INCREASE HAS BEEN OFFSET WITH THAT ADDITIONAL DISCOUNT.
THAT'S WHY YOU'RE SEEING THOSE LOWER PERCENTAGE IMPACTS THERE FOR THOSE CUSTOMERS.
AND NOW I'M GONNA GO TO REGULATORY ASSET.
AND SO, UM, SPECIFICALLY IT'S COSTS OF, UH, SERVICE RECOVERY, CORRECT? I'M SORRY, I DIDN'T HEAR THE SECOND PART OF IT.
IS IT, IT'S, IT'S BASICALLY SPECIFIC TO COST OF SERVICE RECOVERY.
WHEN, WHEN YOU, UM, WHEN, WHEN YOU'RE DOING REGULATORY ASSETS.
SO, SO THE REGULATORY ASSET IS A, UM, THIS A MECHANISM THAT YOU'RE SETTING UP TO, TO BE ABLE TO CAPTURE COSTS THAT ARE NORMALLY OPERATING COSTS THAT WOULD JUST PASS THROUGH IMMEDIATELY.
UM, IT'S AN ACCOUNTING, UM, MECHANISM THAT YOU CAN SET UP THAT ALLOWS THEM TO DEBT, FINANCE THESE OPERATING COSTS, AND THEN TO RECOVER THAT OVER TIME.
THAT'S ESSENTIALLY WHAT IT'S DOING.
SO THEY DON'T GO ON ON OUR CURRENT INCOME STATEMENTS AS EXPENSES.
SO, AND THAT'S WHY WE'RE ABLE TO THAT.
BUT HOW DOES THAT TRANSLATE TO THEN, FOR INSTANCE, THE 14% CITY PAYMENT? WHAT'S THAT EFFECT? SO THE, THE, THE REGULATORY ASSET WOULD BE EXEMPT FROM CITY PAYMENT.
SO AS IT MOVES INTO THE ASSET AND THEN IS RECOVERED THROUGH THE FUEL ADJUSTMENT, OVER TIME, THAT PORTION WILL BE EXEMPT FROM CITY PAYMENT.
SO DO WE EVER GET THAT BACK ON THE, ON THE REGULATORY ASSET? WE WOULD NOT, BECAUSE WE DON'T DEEM THAT TO BE SOMETHING WE WOULD'VE NORMALLY GOTTEN ANYWAY.
BECAUSE IT WAS SUCH AN UNPRECEDENTED EVENT.
THAT'S WHAT WE RECOMMENDED, THAT THAT CITY PAYMENT NOT APPLY TO THAT AT ALL.
THANK YOU FOR HELPING ME UNDERSTAND THAT.
AND THEN WHEN WE WERE TALKING ABOUT CREDIT RATINGS, UM, AND REMIND ME, I THINK YOU, YOU EXPLAINED ONE TIME WHY WE WANT TO MAKE SURE THAT C P S HAD A GOOD CREDIT RATING, BUT IS THAT BECAUSE IT'S ESSENTIALLY A PUBLIC UTILITY THAT'S, IT'S IT, UM, OWNED BY THE CITY? YEAH.
I MEAN, I THINK THAT, YOU KNOW, WHEN YOU LOOK AT, UM, WELL, I GUESS TWO THINGS I'LL ADD THERE.
ONE, AS A UTILITY, YOU KNOW, THEY'VE GOT VERY STRONG CREDIT RATINGS AND YOU SAW THE SIZE OF THE CAPITAL PLAN, AND THEY'RE GONNA BORROW ABOUT $2 BILLION TO SUPPORT THAT CAPITAL PLAN BY HAVING GOOD CREDIT RATINGS.
OBVIOUSLY THEY'RE GETTING BETTER COST OF BORROWING LOWER INTEREST RATES ON THAT SIZE OF THE PROGRAM.
THAT'S REAL DOLLARS FOR OUR CUSTOMERS.
UM, IN ADDITION TO THAT, UM, WE OWN C P S ENERGY, WE'RE PARTNERS WITH C P S ENERGY.
UM, 28% OF OUR GENERAL FUND BUDGET COMES FROM C P SS ENERGY.
UM, UH, THAT'S GONNA IMPACT OUR RATINGS AS WELL TO SOME DEGREE.
UH, NEXT WE HAVE COUNCILWOMAN BERDA.
UM, I, I BROUGHT THIS UP LAST TIME WE TALKED, BUT I WANNA TALK A LITTLE BIT MORE ABOUT THE COMMUNICATION PLAN.
UM, WE'RE, UH, JUST, YOU KNOW, MAKING SURE THAT WE'RE COVERING ALL, ALL OUR BASES.
UM, AS IT WERE, HAVE WE IDENTIFIED CHALLENGES SPECIFICALLY IN COMMUNICATING FOLKS WITH, UM, WHO ARE NOT CONNECTED TO DIGITAL MEDIA? I MAY NEED A LITTLE HELP ON THIS ONE.
WE KNOW THAT, UH, OUR, THE EXPECTATION IS THAT IN ADVANCE OF, YOU KNOW, WHAT WOULD BE THE MOST EXTREME PART OF THE WINTER.
UH, YOU WANNA SEE THE PLAN, THE COMMUNITY WANTS TO SEE THE PLAN.
AND, AND NOT ONLY DO WE HAVE A WRITTEN, YOU KNOW, PLAN THAT'S BEEN REVISED AND UPDATED AND TAKEN INTO ACCOUNT ALL THE, ALL THE FEEDBACK WE'VE GOTTEN THUS FAR, BUT OUR, UH, BUT WE'LL ALL, BUT, SO WE'LL SHARE THAT PLAN, BUT WE'LL ALSO EDUCATE THE COMMUNITY ABOUT WHAT'S IN THAT PLAN AS WELL.
SO WE'RE ACTUALLY GOT SOME PUBLIC FACING, UH, MATERIAL THAT WE'RE GONNA BE WORKING ON, YOU KNOW, TO, TO LET 'EM KNOW WHERE IT'S AT, TO, YOU KNOW, EDUCATE THEM ON WHAT'S IN IT.
AND SO WE'VE GOT A, A PRETTY ROBUST, UH, APPROACH TO, TO GETTING THAT OUT, GETTING IT TO YOU IN FULL, AND GETTING IT OUT TO THE COMMUNITY, UM, YOU KNOW, AT A HIGH LEVEL.
UH, SO, UH, I'D BE INTERESTED IN SEEING THAT SPECIFICALLY.
AND THEN, UM, YOU KNOW, UH, I THINK LAST TIME YOU MENTIONED THAT YOU MET WITH THE HIGHEST USERS, WAS THAT RIGHT? YES, MA'AM.
UM, AND CAN YOU TELL ME WHO ARE, WHO ARE THE TOP, YOU KNOW, THREE OR FIVE USERS? WELL, I MEAN, IT'D BE THE, THE FOLKS THAT YOU, YOU WOULD KNOW THAT ARE AROUND THE COMMUNITY.
IT'S, UH, YOU KNOW, USAA IS HBS.
THE, THE FED, YOU KNOW, THE FEDERAL GOVERNMENT IS, UH, YOU KNOW, THE J B S A IS ONE OF OUR LARGEST USERS.
UH, UH, UH, THE CITY IS A BIG USER.
[01:20:01]
UH, THE SAWS IS A BIG USER, SO WE'VE GOT A LOT OF, OF MAJOR CUSTOMERS THAT WE MEET WITH ON A REGULAR BASIS.I HAD ALREADY KIND OF PRESENTED, UH, OUR, OUR APPROACH TO RATES, UH, BEFORE WE'VE GOTTEN TO THIS PLACE.
SO, UH, WE'VE GOT A MEETING, I BELIEVE IT'S TOMORROW OR RIGHT, IT'S, YEAH, WE'VE GOT ANOTHER MEETING TOMORROW TO, TO UPDATE THEM ON WHERE WE'RE AT.
UH, AND I KNOW COUNCILMAN BLA SAID, ASKED US TO MEET WITH MICROSOFT.
THEY'LL BE IN THAT MEETING AS WELL.
UM, 'CAUSE THEY HAVE A BIG PRESENCE IN MY DISTRICT.
UM, AND THEY SAID THAT THEY WERE NOT INCLUDED IN THE LAST, UH, THE LAST ROUND, I GUESS, OF, OF COMMUNICATIONS.
I'LL CHECK THE LIST, BUT I'M ALMOST POSITIVE THEY WERE INVITED.
I, WE'LL, WE'LL VERIFY TO MAKE SURE THEY'RE THERE TOMORROW.
AND, AND I'LL SET UP A MEETING WITH THEM IF I HAVE TO OFFLINE AND, AND WE'LL UPDATE THEM.
UM, SO OF COURSE, COMMUNICATION AFFORDABILITY ARE LARGE CONCERNS FOR ME.
I'M ALSO CONCERNED WITH THE, THE NEGATIVE OUTLOOKS ON OUR CREDIT RATING.
I UNDERSTAND THAT THE CREDIT RATING IS, UM, YOU KNOW, I THINK AT LEAST ONE OF THEM, IT WAS LOWERED, UH, AFTER THE STORM, AND THE REST ARE MAYBE STAYED STABLE, BUT THE OUTLOOKS ARE NEGATIVE.
CAN YOU TALK ABOUT WHAT THAT IMPACT, HOW THAT WILL IMPACT, UM, OUR, OUR FINANCING? SO I, I, UM, IT'S SLIDE 23, IF YOU CAN PULL THAT UP REAL QUICK.
UM, TWO LOWERED C P S ENERGY'S CREDIT RATING, UM, THAT WAS COMING OFF OF THE WINTER STORM URI, AND IT WAS NOT JUST C P S, THERE WERE UTILITIES ALL OVER THE STATE THAT GOT THEIR CREDIT RATINGS LOWERED.
UM, I WOULD SAY ON THE OUTLOOKS BEING NEGATIVE, FROM MY PERSPECTIVE, NOT SURPRISING.
I MEAN, UM, WINTER, WINTER STORM URI HAD AN UNPRECEDENTED IMPACT AMONG, YOU KNOW, UTILITIES ACROSS THE STATE.
UM, WHEN YOU LOOK AT THE MARKET AND ERCOT AND HOW ALL OF THAT OCCURRED, I DON'T KNOW THAT I CAN SAY THAT THAT MUCH HAS BEEN FIXED.
THERE'S A LOT OF CONVERSATION HAS HAPPENED, BUT, YOU KNOW, THERE'S STILL A RISK THERE THAT, UM, A SIMILAR IMPACT COULD HAPPEN IN THE FUTURE.
SO FROM A RATING AGENCY PERSPECTIVE, SOMEBODY THAT'S TAKING A LONG-TERM VIEW AT BOND HOLDERS, INVESTING IN UTILITIES, I THINK THE, THE OUTLOOK JUST SIMPLY SAYS, WE'RE STEPPING BACK.
ONE, WE WANT TO SEE HOW SUCCESSFUL C P S IS WITH THIS RATE CASE.
I THINK THEY UNDERSTAND THE FINANCIAL PRESSURE THAT THE UTILITY IS UNDER ONE, TWO, WE KIND OF WANNA SEE WHAT HAPPENS IN THE TEXAS MARKET MARKET OVERALL.
UM, AND THEY'RE GONNA MONITOR ALL OF THOSE THINGS FOR A BIT OF TIME BEFORE THEY MAKE ANY FURTHER DECISIONS.
SO I, I, I THINK, UH, AND I THINK IT WAS, UH, I THOUGHT I MESSED THIS UP.
IT WAS S AND P THAT I BELIEVE HAD THEM ON NEGATIVE WATCH AND ACTUALLY REMOVED THE, WHICH IS A MORE SEVERE, ALMOST INDICATING WE'RE GONNA DOWNGRADE YOU.
THEY REMOVED THAT ABOUT MAYBE A MONTH AGO AND MOVED IT TO NEGATIVE OUTLOOK, WHICH IS ACTUALLY POSITIVE MOVEMENT.
SO, UM, I THINK THE CONVERSATIONS HAVE BEEN IN THE RIGHT PLACE.
I THINK THE DIALOGUE HAS BEEN IN THE RIGHT PLACE, BUT I'M, I'M NOT SURPRISED TO STILL SEE THEM AT NEGATIVE OUTLOOK.
WHAT DOES THE OUT NEGATIVE OUTLOOK MEAN FOR US, THOUGH, IN THE SHORT AND THE LONG TERM? IT DOESN'T NECESSARILY, I WOULDN'T SAY AFFECT, YOU KNOW, WHEN THEY'RE OUT PRICING BONDS, UM, I THINK INVESTORS ARE UNDERSTAND THAT THAT'S THERE AND WHY IT'S THERE.
UM, BUT THEY'RE STILL LOOKING AT THE RATINGS THAT YOU SEE HERE.
THE AA NEGATIVE FOR FITCH, THE AA NEGATIVE FOR S AND P AND THE AA WANT FOR BOOTIES.
AND THAT'S A LOT OF WHAT'S GOING INTO THE BOND PRICING.
UH, I WAS PLEASED TO SEE THAT, UM, C P S ENERGY ISSUED SOME BONDS IN I IN NOVEMBER, OCTOBER, OR SOMEWHERE IN THAT TIMEFRAME.
UM, THE, THE NUMBER OF INVESTORS THAT WERE, UM, SEEKING TO GET THOSE BONDS THROUGH THE UNDERWRITERS WAS HEALTHY.
UM, SO THAT'S ALSO A GOOD INDICATION THAT THE MARKET OVERALL, I THINK UNDERSTANDS THEY'RE SOPHISTICATED, THEY UNDERSTAND WHAT'S HAPPENING.
SO I THINK THAT'S A GOOD PICTURE AS WELL.
SO I MEAN, I, I'M LOOKING AT, UM, THE, SOME OF THE INFORMATION THAT YOU SENT AND BEFORE THE WEATHER EVENT, UM, ONE OF THEM WAS ALREADY NEGATIVE, THE OUTLOOK WAS ALREADY NEGATIVE.
DO YOU KNOW WHY THAT WAS? I BELIEVE THAT WAS ON, IT WAS FICH.
AND THAT WAS MORE RELATED TO, I THINK, CONCERNS AROUND, UM, CONCERNS AROUND, UH, SOME OF THE PRESSURE THAT C P S ENERGY WAS FACING FINANCIALLY.
UM, YOU KNOW, UH, THEIR ABILITY TO GET A, A, A RATE CASE APPROVED TO SUPPORT THEM FINANCIALLY.
SO THERE WERE SOME CONCERNS FROM FITCH AROUND THOSE AREAS.
I DON'T KNOW, COREY, IF YOU WANT TO ADD TO THAT.
UM, YEAH, THAT YOU'RE EXACTLY RIGHT.
UH, BEN, THOSE WERE SOME OF THEIR EARLY CONCERNS.
AND I THINK THE WINTER STORM KIND OF PUSHED OVER THE, THE EDGE OF THE OTHER ONES.
UM, BEN'S RIGHT, I THINK THE, THIS CONVERSATION HERE, YOU KNOW, THE RATING AGENCIES ARE WATCHING, I THINK THIS IS IMPORTANT FOR US BECAUSE IT HAS BEEN SO LONG, AND THAT'S A LOT OF THE CONVERSATIONS WE HAVE WITH THE RATING AGENCIES IS, HEY, HOW'S THAT GOING? IT'S BEEN EIGHT YEARS, AND THAT'S KIND OF ATYPICAL FROM A UTILITY PERSPECTIVE THAT'S PUBLICLY OWNED.
SO THESE CONVERSATIONS ARE HELPFUL.
I THINK THE PAST TWO MEETINGS HAVE BEEN HELPFUL AND THE DIALOGUE WE'VE HAD WITH THE READY AGENCIES SO FAR, UM, WE SHARED WITH
[01:25:01]
THEM THIS REVISED PLAN THAT WE'VE, THIS APPROACH THAT WE'RE TAKING, UH, YOU KNOW, THEY'VE BEEN RECEPTIVE TO THAT.WE BEGAN THOSE DIALOGUES A COUPLE WEEKS AGO.
UH, AND, YOU KNOW, WE LOOK FORWARD TO ANSWERING ANY OTHER QUESTIONS.
SO IS, UM, THE PLAN MOVING FORWARD, IS THAT, I MEAN, ARE WE, DO YOU THINK THAT THIS PLAN IS GONNA IMPROVE, UH, OUR OUTLOOK AND HOPEFULLY EVENTUALLY OUR CREDIT OR CP S'S CREDIT RATING? I'LL SAY ABSOLUTELY.
I THINK THAT THIS IS A, WOULD BE A POSITIVE FOR THE RUNNING AGENCIES, UH, NO QUESTION.
UM, THE OUTLOOK ALSO REFLECTS THE, THEIR PERSPECTIVE OF THE ERCOT MARKET BROADLY.
THOSE ARE FACTORS WE CAN'T CONTROL.
UM, BUT THERE'S NO QUESTION THAT THIS WOULD BE A, A POSITIVE FROM THAT PERSPECTIVE.
YEAH, AND I WOULD ALSO ADD THAT I, THAT I BELIEVE THIS IS A VERY SOUND APPROACH.
I MEAN, I KNOW COREY MENTIONED THAT HE'S HAD SOME PRELIMINARY CONVERSATIONS WITH THE RATING AGENCIES, BUT THIS, THIS APPROACH OF KIND OF FOCUSING ON THIS IMMEDIATE NEED, I, I THINK FROM A BUSINESS PERSPECTIVE, UM, IS SOUND.
AND IT REALLY ALLOWS US TO ADDRESS SOME OF THE OTHER ISSUES THAT ARE REALLY IMPORTANT AND ALLOW US TO HAVE THAT CONVERSATION.
UM, I THINK THE IMMEDIATE FOCUS WOULD BE ON TRYING TO REMOVE THE NEGATIVE OUTLOOK UPGRADES, I THINK ARE TOUGHER, UM, TO GET BACK TO WHERE THEY WERE BEFORE.
BUT I THINK CERTAINLY GETTING THOSE NEGATIVE OUTLOOK ADDRESSED IN THE SHORT TERM WOULD HOPEFULLY, UH, OCCUR.
COUNCIL MEMBER KEO, HDA, COUNCIL MEMBER SANDOVAL.
THIS, THIS WAS A VERY THOROUGH PRESENTATION, AND I THINK IT GIVES US A LITTLE BIT MORE CONFIDENCE IN CONSIDERING THIS AS, AS WE GO FORWARD.
UH, THAT SAID, I DO STILL HAVE SOME FEW CONCERNS AND QUESTIONS, UM, THAT I, UH, THAT I'D LIKE TO SHARE WITH YOU.
AND I KNOW I'M STILL WAITING ON SOME, UH, A DATA REQUEST FROM, FROM C P S.
UH, I'LL SHARE WITH THE GROUP THAT, UH, WE KNOW THAT THE RATE INCREASES A 3% BASE, SORRY, 3.85% BASE CASE.
WHAT I WAS HOPING TO SEE IS HOW THAT AFFECTS OUR RANGE OF USERS, WHETHER THEY'RE GAS, ELECTRIC, AND DEPENDING ON WHETHER THEY ARE, UH, BUSINESS, RESIDENTIAL AND WHAT RANGE OF USAGE THEY'RE IN.
SO FOR, UM, REALLY LOW USERS VERSUS HIGH, UH, HIGH USERS.
SO I THINK THAT'S IMPORTANT FOR US TO UNDERSTAND THE, THE ACTUAL IMPACTS TO, TO OUR CONSTITUENTS BEFORE WE MOVE FORWARD ON THIS.
UM, SECONDLY, I'D LIKE TO GO TO YOUR SLIDE 44, WHICH, UH, I THOUGHT WAS VERY THOUGHTFUL AND I, I REALLY APPRECIATE, UH, FOR SOME OF US WHO SUPPORTED THE, THE CREATION OF, OF THE RACK AND REALLY HAD SOME HIGH, UH, EXPECTATIONS OF, OF THE PRODUCT OF THAT GROUP.
UH, THIS IS REALLY WHAT I WANTED TO SEE COME OUT OF THE RACK.
AND, AND I UNDERSTAND IT'S NOT GOING TO HAPPEN WITH THE 3.85, UH, RATE DESIGN CONSIDERATION, I'M SORRY, RATE INCREASE CONSIDERATION.
UH, BUT I WOULD LIKE TO KNOW, WHEN CAN WE SEE THIS TIMELINE? WHEN WOULD YOU EXPECT US TO BE ABLE TO SEE THE TIMELINE FOR THE REVIEW OF RATE DESIGN AND THE DISCUSSION ON GENERATION PLANNING? I MEAN, IT, IT LOOKS LIKE GENERATION PLANNING IS, IS REALLY URGENT, AND CERTAINLY EQUITY AND RATE DESIGN ARE URGENT AS WELL.
YEAH, I MEAN, I THINK I WOULD DEFER TO C P S TO REALLY TALK ABOUT THE DEVELOPMENT OF THOSE TWO TIMELINES.
SORRY, COUNCILWOMAN, THERE'S A REASON THAT, UM, THE RAC WAS APPOINTED AS A KIND OF A TWO YEAR TERM WITH THREE, YOU KNOW, CONSECUTIVE TERMS AS A, AS A, A, A TIME HORIZON FOR WHEN OUR RAC, HOW LONG OUR RAC MEMBERS COULD SERVE.
UH, I WOULD EXPECT, AND AND WE'VE HAD CONVERSATIONS, UM, WITH OUR, WITH OUR BOARD THAT, UH, THE GENERATION PLANNING CONVERSATION SHOULD HAPPEN OVER THE NEXT YEAR.
WE GOTTA GET SOME DECISIONS MADE AS A COMMUNITY ABOUT THE FUTURE OF OUR GENERATION, UM, PLAN.
AND SO, AND THE RAC WILL BE RIGHT IN THE MIDDLE OF THAT.
THEY'VE GOT, UM, A GENERATION PLANNING SUBCOMMITTEE.
YOU KNOW, I WOULD EXPECT A 12 MONTH, YOU KNOW, HORIZON FOR THAT DISCUSSION TO TAKE PLACE IS, IS REASONABLE, UH, FOR THE, UH, UM, RATE DESIGN CONVERSATION.
WE COULD DO A RATE CASE THAT'S REVENUE NEUTRAL AT THE END OF THE DAY AND RESTRUCTURE RATES, YOU KNOW, HOWEVER THE COMMUNITY DECIDES IS, IS, UH, IS APPROPRIATE.
SO, YOU KNOW, I, IT, IN REALITY, I THINK IT MAKES SENSE.
UH, AS BEN MENTIONED, UH, YOU KNOW, WE'VE GOTTA BE COMING IN MORE FREQUENTLY.
IT, IT'S A DISSERVICE TO THE COMMUNITY, DISSERVICE TO US DISSERVICE TO YOU TO WAIT EIGHT YEARS TO HAVE THIS CONVERSATION, UH, BECAUSE THEN, YOU KNOW, WE FIND OURSELVES WHERE WE ARE, UH, TODAY, UH, AND THERE BEING SOMEWHAT OF A SENSE OF URGENCY IN, IN THE NEED.
UH, BUT, UH, BUT, UH, IF WE COME BACK INTO TWO YEARS AT A MINIMUM, I THINK WE COULD HAVE SOME REAL, REALLY THOUGHTFUL CONVERSATIONS OVER THE NEXT 12 TO 24 MONTHS ON, UH, THE, UH, UTILITY BURDEN ISSUE AND BE READY TO, TO, TO REALLY LOOK, DIG INTO THAT AS A, AS PART OF A RATE CASE IN THAT TIMEFRAME.
THANK YOU FOR, FOR CLARIFYING.
UH, RUDY, I DON'T KNOW IF YOU AND I WILL BE AROUND IN 24 MONTHS IN THE, IN THE ROLES THAT, THAT WE'RE IN.
SO, UH, WOULD APPRECIATE THAT HAPPENING, UH, SOONER
[01:30:01]
RATHER THAN, THAN LATER.UM, BUT WILL WE BE GETTING, UH, SOME SORT OF MEMO, UH, FORMALIZING, UH, A A A TARGETED TIMELINE? YEAH, I, I'D LIKE TO HAVE THE CONVERSATION WITH THE RAC ON SETTING A TIMELINE THAT, THAT MAKES SENSE.
YOU KNOW, REED WILLIAMS, OUR CHAIRS, YOU KNOW, HAS A PRETTY GOOD, UH, IDEA OF HOW HE THINKS WE CAN GET TO THOUGHTFUL DECISION POINTS.
UH, AND AGAIN, THEIR CHARGE IS TO GIVE OUR BOARD, UH, FEEDBACK AND, YOU KNOW, SO WE'LL TRY TO PUT 'EM ON A TIMELINE THAT WORKS FOR THEM, BUT, UH, QUICKLY.
UM, I WANTED TO GO TO, UM, YOUR SLIDE NUMBER 20 AND JUST, UH, WANTED TO MAKE SURE I WAS UNDERSTANDING THAT YOU'VE GOT THE 3.85 BASE INCREASE, UH, LISTED UNDER FY 2023, BUT IT TAKES EFFECT IN 22 F Y 2022.
IS THAT RIGHT? YES, THAT'S, UM, THE C P S ENERGY'S FISCAL YEAR ENDS ON JANUARY 31ST.
SO YEAH, IT'S, IT'S THERE, IT'S THERE.
THANK YOU FOR, FOR CLARIFYING.
AND THEN ON SLIDE 13, YOU'VE GOT TWO A NUMBER OF BUCKETS AND THEY ALL SEEM VERY IMPORTANT.
UH, BUT I WONDER IF THERE'S NOT SOME OVERLAP BETWEEN THE MODERNIZATION CATEGORY AND THE ENVIRONMENTAL REGULATORY CATEGORY.
UM, I'D HAVE TO GO BACK AND LOOK.
COUNCILMAN, I, I DON'T RECALL OFF THE TOP OF MY HEAD, BUT WE CAN CERTAINLY LOOK AT THAT JUST IN TERMS OF WHETHER THEY'RE, THEY'RE KIND OF IN BOTH CATEGORIES OR SHARE, UH, YEAH, OR MAYBE I JUST NEED TO UNDERSTAND BETTER WHAT A LITTLE BIT, WHAT THE, WHAT THE DIFFERENCES ARE.
BUT IF THERE'S SOME, SOME FURTHER EXPLANATION YOU COULD SEND THAT WOULD BE, UH, APPRECIATED.
AND THEN, UM, IF YOU COULD, UH, PLEASE, UH, PLEASE HELP ME UNDERSTAND A LITTLE BIT, UM, ON SLIDES NINE AND 10, UM, WHAT ARE THE ADDITIONAL, THERE'S PENSION AND SOME OTHER BENEFITS.
COULD YOU EXPLAIN A LITTLE BIT WHAT THE OTHER BENEFITS MIGHT BE? YEAH, SO THAT INCLUDES THEIR EMPLOYEE BENEFITS GRAMS. UM, THERE'S SOME, UH, COSTS RELATED TO THAT G A SS B PENSION ISSUE THAT I MENTIONED THAT'S, UH, THAT A PENSION EXPENSE.
UM, IT DEALS WITH HOW THEY CALCULATE INVESTMENT GAINS AND LOSSES ON THEIR PENSION PLAN THAT AFFECTS THAT NUMBER.
UM, AND THEN I THINK THEIR LIABILITY PLAN WAS IN THERE AS WELL, IF I RECALL CORRECTLY.
UM, SO HOW WOULD THAT COMPARE TO SAY, TO, TO US THE CITY, LIKE ON A PER EMPLOYEE BASIS? IS THAT, IS THAT A BIGGER INCREASE THAN WHAT WE MIGHT HAVE ON A PER EMPLOYEE BASIS? SO, SO TWO THINGS.
ONE, THE, THE 53 MILLION'S GOT A COUPLE OF DIFFERENT THINGS IN THERE, ROLLED UP INTO ONE.
UM, UH, THE PENSION EXPENSE ISSUE REALLY AFFECTS C P S DIFFERENTLY THAN IT AFFECTS US SINCE THEY'RE A UTILITY.
UM, IT AFFECTS US MORE LIKE ON OUR AIRPORT FUND, THINGS LIKE THAT.
SO THERE ARE TWO DIFFERENT PENSION NUMBERS I'LL GIVE YOU.
ONE IS YOU GO, YOU HAVE AN ACTUARY TELLS YOU THIS IS HOW MUCH MONEY YOU NEED TO PUT INTO THE FUND, BASICALLY, OR YOU HAVE A CONTRIBUTION RATE THAT'S SET.
THAT FUNDING'S PRETTY CONSISTENT.
THEIR FUNDING INTO THE PENSION PLANT DOESN'T MOVE A LOT EITHER BASED ON AN ACTUAL DETERMINED FUNDED LEVEL.
THEY ALSO HAVE TO COMPLY WITH THIS ACCOUNTING RULE, THIS G A SS B STANDARD THAT MAKES THEM EXPENSE CERTAIN COSTS.
AND IT LOOKS AT THESE INVESTMENT GAINS AND LOSSES AGAINST MARKET VALUE OF INVESTMENTS.
THAT VOLATILITY, WHEN YOU'RE TALKING ABOUT INVESTMENTS IN STOCKS AND REAL ESTATE AND THINGS LIKE THAT, IT'S GONNA MOVE A LOT.
AND IT WILL, IT WILL MAKE THIS EXPENSE NUMBER MOVE A LOT.
IT'S ALMOST LIKE, UH, LIKE AN ACCOUNTING DEPRECIATION EXPENSE, RIGHT? IT HITS YOUR INCOME STATEMENT, BUT THERE'S NO CASH GOING OUT THE DOOR.
IT'S EXPENSED THAT'S HITTING THEIR, THEIR STATEMENT, BUT IT'S, IT'S HITTING THE RATE MODEL, AND THAT'S THE PART WE WANNA GO WORK ON.
'CAUSE I, I'M NOT SURE IT'S A NON-CASH KIND OF AN EXPENSE THING TO SEE HOW WE CAN WORK ON THAT SO THAT IT'S NOT IN THE FUTURE GONNA CAUSE ISSUES AS IT INCREASES AND DECREASES.
AND G A S B CHANGED THIS, I'M GONNA NOT REMEMBER.
THIS HAS PROBABLY BEEN IN PLACE FOR EIGHT YEARS.
THANK YOU FOR TRYING TO EXPLAIN THAT TO ME.
IT'S JUST, IT'S HARD TO, UH, MAYBE IF I CAN SHOW YOU THE DIFFERENT, UH, HOW AN ACTUARY LOOKS AT IT, NOT AN ACTUARY LOOKS AT IT, WHAT THAT NUMBER LOOKS LIKE AS THAT REPORT IS PRODUCED VERSUS WHAT THIS IS DOING.
YOU, YOU KIND OF SEE THE DIFFERENCE.
[01:35:01]
ALRIGHT, BUT I CAN'T COME UP WITH A BETTER WAY TO TRY IT.WHEN YOU SAID BENEFITS, I THOUGHT IT WAS SOMETHING SIMPLE LIKE, UM, YOU KNOW, BUS PASS
SO THAT'S WHAT I WAS THINKING.
SO, UM, BUT UH, MAYBE, MAYBE THIS ONE'S THE EASIER, UH, FOR ME TO UNDERSTAND, UH, BLESS YOU, IS WHAT IS THE DIFFERENCE BETWEEN THIS E I P PROGRAM AND, UH, THE MERIT INCREASE PROGRAM? LIKE, COULD YOU GIVE ME A SIDE BY SIDE WHAT, YOU KNOW, ONE PROFESSIONAL WOULD GET UNDER ONE IN VERSUS ANOTHER? I DON'T HAVE A SLIDE.
THE E I P UH, INCENTIVE PROGRAM, UM, THE, THE, THERE WAS A PLAN SET UP THAT YOU HAD TO HIT CERTAIN METRICS IN ORDER TO GET THIS INCENTIVE, WHICH WAS A ONETIME INCENTIVE WASN'T BUILT INTO YOUR BASE.
AND IF I RECALL CORRECTLY, IT'S TIERED BASED ON EMPLOYEE GROUPS.
SO EXECUTIVES GOT A HIRE, UH, INCENTIVE.
UM, DIRECTOR'S GOT A DIFFERENT INCENTIVE AND IT WORKED ITS WAY DOWN.
THE, THE MERIT POOL THAT THEY'RE TALKING ABOUT HERE IS MUCH LIKE OUR MERIT POOL.
IT'S LIKE A 3% POOL OF DOLLARS.
EVERYBODY GOES THROUGH AN EVALUATION ON THE SALARY SIDE.
AND IF YOU'RE A BETTER PERFORMER, MAYBE YOU GET, I DON'T KNOW, ON THE UPPER END, FIVE OR 6% ON THE LOWER END, YOU'D GET ZERO IF YOU'RE NOT, YOU KNOW, DOING YOUR JOB.
SO, SO WHAT WOULD THE PERCENTAGE BE UNDER E I P? AND IT VARIES BY EMPLOYEE GROUP AND I DON'T KNOW, UM, IF, IF LIKE 5%, OH NO, IT'S, YEAH.
THEN
UH, SO IN THE ENERGY SPACE, COUNCILWOMAN YOU, WE THERE, THE, OUR OUR E I P PROGRAM REALLY WAS TIED TO, YOU KNOW, DID WE MAKE OUR FINANCIAL METRICS, DID WE HIT OUR RELIABILITY TARGETS? DID WE HIT OUR SAFETY TARGETS? THE THINGS THAT ARE IMPORTANT TO OUR BUSINESS, KIND OF A BALANCED SCORECARD WOULD DRIVE WHETHER OR NOT, YOU KNOW, WE GOT, YOU KNOW, THE, THE INCENTIVE AS PART OF OUR OVERALL COMPENSATION.
SO FOR INSTANCE, EMPLOYEE, UH, UH, EXECUTIVES MIGHT GET 12%, WHEREAS THE RANK AND FILE, THE, THE, YOU KNOW, AND IT KIND OF TIERED DOWN FROM THERE.
SO IT COULD BE 12%, 8%, 6% FOR FRONTLINE EMPLOYEES BASED ON, YOU KNOW, KIND OF YOUR ACCOUNTABILITY TO, TO MEETING THOSE METRICS.
SO, UH, AS BEN MENTIONED, AS PART OF THIS CONVERSATION, I'M HOPING, UH, TODAY WILL BE THE LAST TIME WE HAVE TO TALK ABOUT E I P, UH, AS WE'RE KIND OF MOVING AWAY FROM IT, UH, GOING FORWARD.
AND, YOU KNOW, LISA LEWIS, UH, MY CHIEF ADMINISTRATIVE OFFICER HAS BEEN TASKED WITH KIND OF REVAMPING OUR ENTIRE, UH, COMPENSATION SYSTEM.
WE GOTTA STAY COMPETITIVE WITH THE MARKET.
I GOTTA FIND WAYS TO BRING FOLKS TO C P S ENERGY AS OPPOSED TO OTHER UTILITIES.
AND, UH, BUT WE ALSO HAVE TO DO THAT, UH, AS A PUBLICLY OWNED ENTITY.
AND I HEAR YOU LOUD AND CLEAR.
I KNOW THAT'S BEEN THE ISSUE WITH D I P IN IN PREVIOUS CONVERSATIONS.
AND WE'RE GONNA BE THOUGHTFUL ABOUT WHERE WE GO FROM HERE.
UH, AND, AND WE WILL OBVIOUSLY HAVE THOSE CONVERSATIONS AS PART OF THE CITY DISCUSSION.
YEAH, THIS IS THE FIRST TIME I TALK ABOUT E I P, SO THANK YOU FOR, WELL, AGAIN, WE'VE BEEN TALKING ABOUT E I P SINCE DOLE BEBY, YOU KNOW, WAS HERE 10 YEARS AGO.
SO, UM, SO IT'S, IT'S BEEN A LONG STANDING DISCUSSION.
COUNCIL MEMBER SANDOVAL, COUNCIL MEMBER COURAGE.
UH, THANK YOU BEN FOR ALL THE WORK THAT YOU AND YOUR STAFF DID.
AND, UH, I'LL THANK CP S'S STAFF.
'CAUSE I KNOW YOU, YOU ALL HAD WORK HAND IN HAND TO KIND OF PUT ALL THIS TOGETHER.
OBVIOUSLY, UH, YOU'VE PUT THIS TOGETHER, LOOKING AT IT FROM THE PERSPECTIVE OF THE CITY, HOW WE SEE IT, HOW WE FEEL, UH, WE CAN AS A CITY, UH, UNDERSTAND WHAT C P SS IS GOING THROUGH FINANCIALLY AND, AND HOW WE CAN MAKE OUR DECISION.
UH, AND I FEEL LIKE IT'S, IT'S BEEN A GOOD PRESENTATION.
I THINK YOU'VE COVERED ALL THE IMPORTANT POINTS.
UH, I STILL BELIEVE, UH, YOU KNOW, THAT THE, THE 4% FIGURE THAT, UH, IS BEING, OR THE 3.85 THAT BEING PRESENTED IS, IS VERY REALISTIC.
UH, YOU'VE LAID OUT THE ACTUAL NEEDS THAT ARE GONNA BE MET, THAT ARE IMMEDIATE AND THAT ARE SIGNIFICANT TO C P SS ENERGY.
OF COURSE, THEY'VE BEEN DOING THAT TOO, AND TRYING TO HELP US UNDERSTAND THAT.
UH, AND WE NEED TO, TO DO OUR JOB AS, AS A COUNCIL IF WE APPROVE THIS TO HELP THE PUBLIC UNDERSTAND IT TOO AND HELP EDUCATE THEM.
UH, ARE THERE, ARE THERE ANY STONES UNTURNED SO FAR, UH, REGARDING ALL OF THIS THAT, UH, YOU KNOW, ARE SOME UNKNOWNS THAT, UH, MAY CHANGE THE EFFECTIVENESS OF, OF WHAT'S GOING FORWARD WITH THIS RECOMMENDATION OR HOW QUICKLY WE MAY BE REVISITING? ANOTHER RATE I ISSUE? I MEAN, COUNCILMAN, I THINK THERE ARE CERTAINLY A NUMBER OF CHALLENGES FACING C P S ENERGY THAT WE'RE GONNA HAVE TO KEEP, UH, WATCHING VERY CLOSELY WITH THEM.
THEY INCLUDE, YOU KNOW, WHAT HAPPENS WITH, UH, PANDEMIC BAD DEBT, YOU KNOW, THE, THOSE OUTSTANDING BALANCES.
UH, WE HAVE PROVIDED ARPA FUNDING, YOU KNOW, THEY'VE GOT, UH, THEY'RE WORKING WITH CUSTOMERS ON, UH, PAYMENT PLANS.
THAT'S AN AREA WE'RE GONNA HAVE TO WATCH VERY CLOSELY.
[01:40:01]
UH, THE OTHER BIG ONE THAT, THAT OBVIOUSLY COMES TO MIND RIGHT OFF THE BAT IS, IS WHAT THE RESOLUTION OF THE ROUGHLY $587 MILLION IN DISPUTED CHARGES FOR WINTER STORM URI.WHAT DOES THAT, HOW DOES THAT GET RESOLVED AND WHAT DOES THAT LOOK LIKE AND HOW DOES THAT IMPACT THAT? SO THERE'S TWO OF THOSE AREAS THAT THERE'S A LOT OF UNCERTAINTY AROUND, UM, THAT CERTAINLY, YOU KNOW, WE NEED TO CONTINUE TO MONITOR AND, AND BE ENGAGED WITH C P S ON.
WELL, BECAUSE WE'RE SETTING ASIDE A $1 BILLION, UH, REGULATORY ASSET, DOES THAT ASSUME THAT WE'RE GOING TO LOSE AND HAVE TO PAY THE OTHER 500 MILLION? AND THAT'S WHY A BILLION IS BEING SET ASIDE? NO, ABSOLUTELY NOT.
UM, THE ONLY PORTION OF THIS RATE CASE, UH, IT ONLY ASSUMES THAT C P S IS GOING TO RECOVER THE $418 MILLION THAT, UM, THEY HAVE PAID TO DATE.
IT, IT CLEARLY, UM, RECOGNIZES THAT THAT $587 MILLION IS STILL IN DISPUTE, AND IT IS NOT FACTORING IN, IN ANY WAY RESOLUTION OF THOSE COSTS.
SO IF, UH, C P SS ENERGY'S UNSUCCESSFUL AND LOSES ALL OF THAT, AND THERE'S ANOTHER 500 MILLION THAT NEEDS TO BE PAID, DOES THAT MEAN WE'D BE LOOKING AT INCREASING THE REGULATORY ASSETS SOMEWHERE DOWN THE LINE AND MAYBE HAVING A RATE ADJUSTMENT TO PAY FOR THAT ADDITIONAL ASSET? YOU'D HAVE TWO IMPACTS.
YOU WOULD HAVE, UM, THE REGULATORY ASSETS ALREADY THERE AT A BILLION.
YOU WOULD JUST BE INCREASING THEIR AUTHORITY TO RECOVER THOSE COSTS THROUGH THE FUEL ADJUSTMENT.
YOU WOULD HAVE TO AUTHORIZE THE ADDITIONAL FINANCING TO ALLOW THAT TO HAPPEN, UM, TO ALLOW THAT TO BE RECOVERED OVER TIME.
AND THEN SECONDARILY, YOU'LL GET A LITTLE BIT OF AN YOU, YOU WILL GET AN INDIRECT IMPACT BECAUSE THAT'S DEBT YOU'RE ISSUING, THAT'S HITTING THE BALANCE SHEET.
TALK ABOUT THE DEBT TO EQUITY RATIO, UM, YOUR LEVERAGE POSITION THAT WOULD PUT MORE PRESSURE ON THAT, WHICH WOULD DRIVE THE NEED TO HELP GET THAT BACK DOWN OVER TIME.
YOU KNOW, I, I THINK IT'S IMPORTANT FOR US ALL TO REMEMBER THAT WE'VE ONLY GOT A COUPLE OF LEVERS WHEN IT COMES TO WORKING WITH OUR UTILITIES.
AND ONE OF 'EM IS RATE, AND THE OTHER ONE IS APPROVING FINANCING.
UH, AND I, AND I THINK THAT'S THE WAY IT SHOULD BE.
UH, I DON'T THINK THAT WE SHOULD BE ENGAGED IN TRYING TO MANAGE THE OPERATION OF OUR UTILITIES.
HOWEVER, THROUGH RATES AND THROUGH FINANCING TO A CERTAIN EXTENT, WE DO OFFER POLICY, UH, DECISIONS THAT THE COUNCIL MAKES THAT I HOPE THE, UH, UTILITIES TAKE TO HEART AND, AND UNDERSTAND FROM OUR DISCUSSIONS ABOUT THESE THINGS, UH, ANY DIRECTION THAT WE THINK THE UTILITIES NEED TO BE GOING IN, WHETHER IT'S, UM, ADDRESSING, UH, THE WINTER STORM OR WHETHER IT'S ADDRESSING ALL OF THE PEOPLE WHO HAVEN'T PAID THEIR BILLS AND, AND WE'RE TRYING TO RECOVER THAT, UH, WHETHER IT'S ADDRESSING, UH, A NEED FOR A BETTER MIXTURE OF ENERGY, WHICH IN EFFECT, UH, AFFECTS THE RATES DOWN THE LINE.
SO I THINK A LOT OF WHAT WE'RE TALKING ABOUT, ALTHOUGH WE'RE NOT TRYING TO MANAGE THE, UH, THE ENTERPRISE, I THINK CONTRIBUTES TO AN UNDERSTANDING FROM THE, UH, THE UTILITY, WHAT THE, WHAT THE COUNCIL WOULD LIKE TO SEE HAPPEN, AND HOW WE CAN WORK TOGETHER TO MAKE THOSE THINGS HAPPEN, UH, SO THAT WE CAN JUST GET OVER THIS HUMP, MEET THE OBLIGATIONS THAT WE HAVE, AND, AND PREDOMINANTLY GROW OUR ABILITY TO PROVIDE ENERGY, UH, WHETHER IT'S WATER OR, OR ELECTRICAL ENERGY, GAS ENERGY FOR THE CITIZENS OF SAN ANTONIO.
I THINK WE'RE GOING IN THE RIGHT DIRECTION WITH THIS.
UH, I HAVE A QUESTION, THOUGH.
HAS IT BEEN FINALLY GIVEN A, A SEAL OF APPROVAL, SO TO SPEAK, FROM THE RATE COMMITTEE, OR ARE THEY STILL LOOKING AT THESE? THEY, UH, COUNCILMEN ARE STILL LOOKING AT IT.
UM, THEY JUST HAD A MEETING LAST WEEK, I BELIEVE THEY'VE GOT ANOTHER ONE THIS THURSDAY, AND I BELIEVE THEY'RE SET ON THE 16TH, WHICH IS NEXT THURSDAY TO, UM, TAKE A POSITION ON THIS RATE CASE.
IS WHAT I UNDERSTOOD FROM THE CHAIR.
AND I'LL SAY THAT I'LL HAVE THE SAME QUESTION ABOUT THE BOARD.
THE BOARD HAS NOT FINALIZED THIS AS WHAT THEY'RE GOING TO ASK THE COUNCIL FOR, ALTHOUGH IT LOOKS LIKE WE'RE GOING IN THAT DIRECTION.
SO THE BOARD IS GOING TO WAIT TO HEAR FROM THE RACK BEFORE IT MAKES ITS RECOMMENDATION TO THE CITY COUNCIL.
IS THAT CORRECT? TIMING IS IMPORTANT AND WHEN, UH, THE VOTES GET TAKEN BETWEEN THE BOARD AND AND COUNCIL, SIR.
SO, UH, BASED ON THE NEXT WEEK, UH, NEXT WEEK'S RAC MEETING, THEY'LL MAKE THEIR RECOMMEND RECOMMENDATION TO THE BOARD, UH, WITH, YOU KNOW, AND REED'S GOT A REALLY GOOD KIND OF PROCESS FOR HOW HE WANTS TO DO THAT.
UH, AND THE BOARD WILL, UH, HAVE AN OPPORTUNITY TO VOTE RIGHT BEFORE COUNCIL DOES ON, UM, JANUARY 10TH.
COUNCIL WOULD VOTE ON JANUARY 13TH.
SO THE, THE BOARD WOULD SEND OVER THEIR RECOMMENDATION, UH, IN ADVANCE OF THE COUNCIL VOTE.
YEAH, I WAS ENCOURAGED WHEN YOU WERE COMMENTING THAT WE KNOW THIS RACK IS NOT A ONE-TIME SHORT-TERM
[01:45:01]
COMMITMENT.IT'S A LONGER TERM COMMITMENT FROM C P S ENERGY TO LOOK AT RATE STRUCTURES, ENERGY STRUCTURES, THINGS LIKE THAT.
SO ONCE WE GET BEYOND THIS, AND HOPEFULLY ONCE WE DETERMINE THE CONDITION WE'RE GONNA BE IN WITH THE LAWSUITS THAT ARE PENDING, I, I HOPE WE'RE GONNA BE LOOKING MORE TOWARDS SOME MORE POSITIVE, UH, STRUCTURAL CHANGES OR IMPROVEMENTS TO THE ENERGY MIX OR, OR ADDRESSING CONCERNS THAT PEOPLE HAVE BEEN SAYING FOR YEARS.
WHAT IS A FAIR RATE STRUCTURE FOR EVERYBODY TO PAY? WHAT'S THE BEST ENERGY MIX TO PROTECT OUR ENVIRONMENT AND CONTINUE TO PROVIDE THE ENERGY THAT WE NEED, AND AT THE SAME TIME DOING ALL THIS AT A COST THAT EVERYBODY CAN AFFORD.
SO, UM, I KNOW WE'VE STILL GOT OUR WORK CUT OUT FOR THIS, BUT I JUST WANT TO THANK C P S ENERGY AND BEN FOR THIS PRESENTATION AND THE DIRECTION WE'RE HEADING IN.
I'VE GOT, ACTUALLY GOT SOME QUESTIONS FOR RUDY.
UM, I GUESS SOME QUESTIONS AND COMMENTS AND, AND BEFORE, I'M GONNA RUN THROUGH SEVERAL QUESTIONS, RUDY, BEFORE I GET YOU TO ANSWER.
SO ONE OF MY QUESTIONS IS, WHAT IS YOUR PLAN TO GET CREDIT, GET C P S ENERGY, OR GET CREDIT AGENTS CREDIT CREDIT RATINGS AGENCIES TO CHANGE THEIR OUTLOOK FOR C P S ENERGY FROM NEGATIVE TO POSITIVE? UM, WHAT'S YOUR PLAN TO RETAIN EMPLOYEES AND ATTRACT NEW TALENT FOR C P SS ENERGY TO BE SUCCESSFUL AS AN ORGANIZATION? UH, WHAT IS YOUR PLAN TO MAKE SURE THAT C P SS ENERGY IS POSITIONED TO BE ABLE TO INNOVATE AND STAY AT THE FOREFRONT OF THE, THE EVOLVING ENERGY INDUSTRY? UM, WHAT'S YOUR PLAN TO BECOME LESS CARBON INTENSIVE IN YOUR OPERATIONS? UH, WHAT'S YOUR PLAN FOR C P S ENERGY TO TAKE A HARD LOOK AT THE ORGANIZATION AND, AND TRY TO DETERMINE WHAT YOUR BLIND SPOTS ARE? AND I THINK THAT THE BEST WAY TO DO THIS IS TO FIND AN, TO, TO HIRE OR CONTRACT WITH AN INDEPENDENT, UM, INDUSTRY EXPERT AND DO A HEALTH CHECKUP OR, OR A A, A HEALTH INSPECTION OF C P S ENERGY AS AN ORGANIZATION.
AND, UH, MAKE A LIST OF RECOMMENDATIONS OF WHAT C P S ENERGY, YOU KNOW, SHOULD DO IN ORDER TO EXCEL.
AND, YOU KNOW, WHEN I LOOK AT C P SS ENERGY AS AN ENTITY, UH, WELL, SO FIRST OF ALL, I THINK THAT C P S ENERGY SHOULDN'T BE THE ONLY ONES INVOLVED IN THAT.
I'D LIKE TO SEE MAYBE, UH, THE MU SOME MEMBERS OF THE MUNICIPAL UTILITY COMMITTEE INVOLVED IN, IN DEVELOPING THAT R F P AND THEN EVALUATING THE RESULTS OF THAT.
AND THEN ONCE YOU DO HAVE THAT LIST OF RECOMMENDATIONS, BRING THEM TO THE MUNICIPAL UTILITY COMMITTEE, JUST LIKE YOU'VE DONE WHERE YOU BRING, UH, THE RECOMMENDATIONS FOR THE, THE, FROM THE COMMITTEE ON EMERGENCY PREPAREDNESS, AND YOU SHOW US EVERY MONTH THESE ARE, THESE WERE THE LIST OF RECOMMENDATIONS, AND THIS IS OUR PROGRESS TO DATE ON, ON MEETING EACH OF THESE RECOMMENDATIONS.
UM, BECAUSE RIGHT NOW WHAT YOU'RE DOING IS YOU'RE ASKING FOR THE PUBLIC TO INVEST MORE IN THEIR UTILITY AS, AS A, AN INDEPENDENT ORGANIZATION.
AND I THINK IN ORDER FOR THEM, FOR, FOR THE COMMUNITY TO, TO HAVE THE CONFIDENCE IN INVESTING IN C P SS AS AN ORGANIZATION TO INVEST MORE THAN THEY ALREADY ARE, THEY, THEY NEED A, UM, THEY NEED TO SEE A ROADMAP THAT SHOWS THAT YOU, WITH A, WITH A, A SET OF COMMITMENTS ON WHERE, WHERE YOU'RE HEADED, UM, SO THAT THEY CAN FEEL CONFIDENT IN THAT INVESTMENT.
AND WHAT I WOULD LIKE TO SEE BEFORE YOU ALL COME FORMALLY TO, TO CITY COUNCIL AND ASK FOR A VOTE ON THIS IS SIMILAR TO, YOU KNOW, WHEN, WHEN THE CITY GOES AND, UM, WHEN SOMEBODY APPROACHES US AND THEY SAY, HEY, YOU KNOW, WE WANT A, WE WANT A, A TAX BREAK ON OUR, OUR, UH, FUTURE TAXES.
AND WE, WE PROMISED TO DO X, Y, AND Z.
YOU KNOW, RECENTLY THE SPURS, THEY WANTED TO INVEST IN THE HUMAN RESEARCH, OR THEY BUILD A HUMAN RESEARCH INSTITUTE OUT IN LARA.
AND WHEN THEY CAME TO US, THEY DIDN'T JUST ASK FOR A TAX BREAK.
THEY SAID, LOOK, THIS IS HOW MANY JOBS WE'RE GONNA CREATE.
THEY SAID, THIS IS, UH, HOW MUCH WE'RE GONNA BE ABLE TO CONTRIBUTE TO THE COMMUNITY IN TAXES GOING FORWARD.
THEY SAID, WE'RE GONNA BUILD OVER THE AQUIFER AND WE'RE ALLOWED TO HAVE A HUNDRED PERCENT IMPERVIOUS COVER, BUT WE'RE GONNA LIMIT IT TO A SMALL FRACTION OF THAT.
WE'RE GONNA DEVELOP 50 ACRES, BUT ONLY, WE'RE ONLY GONNA ON 25 OF THE ACRES, WE'RE GOING TO DEVELOP IT INTO PARKLAND, AND WE'RE GONNA PAY FOR THAT, AND WE'RE GONNA MAINTAIN IT, AND WE'RE GONNA OFFER IT FOR THE COM.
IT'S GONNA BE OPEN TO THE PUBLIC TO USE, WE'RE GONNA HIRE PEOPLE FROM THE WORKFORCE, THE CITY'S WORKFORCE DEVELOPMENT PROGRAM.
AND SO I WOULD LIKE TO SEE A PACKAGE THERE OF WHAT IS IT THAT YOU ARE OFFERING FIRM COMMITMENTS? WHAT ARE YOU GONNA DO? UM, AND SO WHEN IT'S, I LIKE BEN, YOU KNOW, SOME OF THOSE RECOMMENDATIONS THAT YOU PUT FORWARD, UM, YOU KNOW, BUT I, I NEED TO SEE FIRM COMMITMENTS ON WHEN THAT RATE ADVISORY COMMITTEE IS GOING TO LOOK AT RATE STRUCTURE,
[01:50:01]
WHEN, WHEN IS YOUR DEADLINE FOR THEM TO BE ABLE TO BRING FORWARD RECOMMENDATIONS.SO, PASSING IT TO YOU, PASSING THE MIC TO YOU.
ALRIGHT, COUNCILMAN, THERE'S A LOT GOING ON THERE.
UH, I THINK, YOU KNOW, THE, AS FAR AS THE RATING AGENCIES GO, YOU KNOW, WE HAVE CONVERSATIONS WITH THE RATING AGENCIES, YOU KNOW, VERY FREQUENTLY, EVERY TIME, YOU KNOW, WE HAVE TRANSITION IN OUR LEADERSHIP TEAM, COREY'S TALKING TO THE RATING AGENCIES TO SET THEIR MIND AT EASE THAT WE'VE GOT SUCCESSION PLANS IN PLACE, YOU KNOW, TO MAKE IT WORK.
SO I THINK, UM, SUPPORT FROM OUR OWNER GOES A LONG WAY IN FIRMING UP OUR RATINGS.
THEY NEED TO KNOW THAT WHEN WE FEEL LIKE WE HAVE A NEED, WE CAN COME TO OUR OWNER AND THEY'RE GONNA BE SUPPORTIVE OF THAT REQUEST.
SO, SO I, I MEAN, I THINK THAT THAT PROBABLY HAS MORE IMPACT THAN ANYTHING ELSE DOES ON OUR, ON, ON ULTIMATELY ON, ON OUR RATINGS.
UM, AGAIN, THIS IS OFFICIALLY DAY 31 OF MY TENURE AS, UH, INTERIM C E O.
SO A LOT OF THESE, WHAT YOU'RE ASKING ME FOR, UH, ARE GONNA TAKE A LITTLE BIT OF TIME FOR ME TO PUT TOGETHER.
BUT, UH, BUT THE THINGS THAT I'M DOING RIGHT NOW, I THINK WILL MOVE US IN THE DIRECTION, UH, IN A LOT OF THE DIRECTIONS THAT YOU'RE TALKING ABOUT HERE WITH EMPLOYEES.
I'M ASKING THEM TO TRUST THAT, YOU KNOW, THIS IS STILL A GREAT ORGANIZATION TO WORK FOR AND TO, YOU KNOW, NOT BE SO QUICK TO TAKE THOSE CALLS THAT ARE COMING EVERY DAY FOR OUR MOST TALENTED EMPLOYEES.
UH, AND WE'RE LOSING FOLKS, YOU KNOW, UNFORTUNATELY TO OTHER OPPORTUNITIES.
I'M NOT GONNA SAY THERE ARE BETTER OPPORTUNITIES, BUT THERE ARE OTHER OPPORTUNITIES, UM, THAT, UH, YOUR, YOUR BEST PEOPLE ARE GONNA ARE, YOU KNOW, ARE GONNA GET CALLS ON.
SO, UH, SO I'VE GOT, YOU KNOW, I SPENT, YOU KNOW, MY, MY SIX 15, UH, UH, UH, MEETING WAS AT OUR UNDERGROUND NETWORK GROUP, AND MY SEVEN 30 MEETING WAS AT OUR GAS, YOU KNOW, UH, UH, LEAK, UH, SUPPORT GROUP.
YOU KNOW, LETTING THEM KNOW THAT WE'RE GONNA BE OKAY AND THAT WE'RE GONNA MOVE FORWARD TOGETHER AS A TEAM BECAUSE WHAT WE'RE DOING HERE IS IMPORTANT.
SO THAT'S HOW I, YOU KNOW, ATTACKED THE EMPLOYEE MORALE ISSUE, IS THAT I COMMIT TO THEM THAT I'M GONNA DO WHAT I, WHAT I CAN DO AS A LEADER, UH, OF THE ORGANIZATION TO LOOK AT THEIR OVERALL COMPENSATION AND MAKE SURE WE'RE COMPETITIVE WITHIN, YOU KNOW, RE THE, THE REASONABLENESS THAT, UH, THAT WE HAVE AS A PUBLICLY OWNED UTILITY, UH, AND INNOVATION.
I THINK C P S ENERGY HAS ALWAYS HAD A BRAND, AND OF COURSE MY VOICE IS, HAVE BEEN TALKING A LOT TODAY SINCE EARLY IN THE MORNING.
UM, WE'VE ALWAYS BEEN KNOWN TO BE AS INNOVATIVE UTILITY AS ANY UTILITY OUT THERE.
AND I'LL STAND BY OUR TRACK RECORD ON BEING EARLY ADOPTERS OF WIND BEING THE NUMBER ONE UTILITY IN THE STATE OF TEXAS.
NUMBER FIVE, ACROSS THE COUNTRY IN SOLAR.
WE, WE GIVE SOLAR TO OUR CUSTOMERS EVERY WAY THAT, THAT THEY CAN GET IT.
UH, AND WE HAVE REBATE PROGRAMS THAT ARE AS INNOVATIVE AS ANYTHING THAT YOU'LL FIND, CERTAINLY ANYWHERE IN TEXAS AND ACROSS THE COUNTRY.
BUT THAT'S THE BRAND WE ARE AS A UTILITY.
I CAN TELL YOU, EVERYBODY SITTING IN THIS ROOM IS COMMITTED TO BEING THAT AS A LEADERSHIP TEAM, UH, BECAUSE WE KNOW THAT'S WHAT OUR, UH, COMMUNITY EXPECTS OUT OF US.
AND SO WE'RE GONNA KEEP DOING WHAT WE'RE DOING, UH, AND YOU KNOW, AND SET THAT PATH FORWARD WITH OUR BOARD BECAUSE ALL OF THESE THINGS THAT YOU'RE ASKING FOR, COST MONEY, EVERY ONE OF 'EM, AND I CAN'T, YOU KNOW, WE'VE TALKED ABOUT THE NEED TO REBUILD TRUST.
I CAN'T REBUILD TRUST IF MY SERVICE LEVELS ARE, ARE DECLINING BECAUSE I'M HAVING TO PICK AND CHOOSE, YOU KNOW, WHETHER OR NOT I'M GONNA DO, SPEND A REGULATORY, YOU KNOW, REQUIRED $31 MILLION ON WINTERIZATION OR REPLACE POLES THAT ARE, THAT ARE, THAT ARE 50 YEARS OLD.
SO, UM, SO AGAIN, THE THE TONE AND, AND THE CONVERSATIONS THAT I'M TRYING TO FACILITATE FROM C P S ENERGY'S STANDPOINT OR WANNA PARTNERSHIP WITH THIS ENTITY, OUR OWNER WITH ERIC, YOU KNOW, WALSH AND BEN GOZA, YOUR LEADERS, YOU KNOW, ALL I CAN DO, SIR, IS TRY TO, TO, TO, TO, TO FIND THE, THE, THE COMMON GROUND THAT HAS A COMMUNITY OWNED ASSET, UM, HELPS US MOVE FORWARD IN THE DIRECTION THAT EVERYBODY FEELS GOOD ABOUT.
YOU KNOW, UH, WE WOULDN'T BE HERE IF WE DIDN'T THINK THAT THAT, THAT THIS, YOU KNOW, MODEST REQUEST WILL MOVE US IN THE RIGHT DIRECTION.
I, I'VE BEEN, UM, I'VE BEEN TRYING TO FIND THE RIGHT, THE RIGHT, UH, ANALOGY.
I FEEL LIKE WE'RE, YOU KNOW, WE'RE NOT A A, A BIG SHIP THAT'S, YOU KNOW, OFF COURSE, WE'RE KIND OF, WE'VE KIND OF HIT A LITTLE SANDHO IN THE MIDDLE OF THE OCEAN.
UM, AND IT'S OUR JOB TO, YOU KNOW, TO TO, TO GET THE S**T MOVING.
BUT IN THIS CASE, IT'S GONNA TAKE A LITTLE PUSH FROM THE COMMUNITY, YOU KNOW, TO GET US TO WHERE WE NEED TO BE, TO, TO, TO BE THE ASSET THAT YOU NEED US TO BE.
SO, CARBON INTENSITY, YOU KNOW, WE, THE, OUR NUMBERS ARE DROPPING.
I MENTIONED THE NEED TO TALK ABOUT GENERATION RESOURCES.
THAT'S A BOARD CONVERSATION, THAT'S A RAC CONVERSATION.
THAT'S A, QUITE FRANKLY A COMMUNITY CONVERSATION, UM, THAT WE GOTTA GET ON THE RIGHT TRACK.
AND SO, YOU KNOW, ALL I CAN DO IS COMMIT TO YOU, YOU KNOW, IN, ON DAY 31 THAT I'M COMMITTED TO THAT, TO THAT PATHWAY TO GET US WHERE THE COMMUNITY WANTS US TO BE IN A WAY THAT'S, THAT KEEPS US RELIABLE AND ALSO KEEPS OUR RATES AFFORDABLE.
I GOTTA KEEP AN EYE ON THOSE TWO THINGS, UH, AS WELL,
[01:55:01]
AND ORGANIZATIONAL BLIND SPOTS.I, I THINK, UM, YOU KEEP COMING BACK TO THE, THE ISSUE OF CULTURE, AND I WANT TO TALK TO YOU ABOUT, SPEND A LITTLE BIT OF TIME ON THAT.
YOU KNOW, RIGHT NOW, THE CULTURE OF CP, LOOK, WE'VE GOT 3000 GREAT EMPLOYEES AT C P SS ENERGY.
THE GUYS I, AND, AND LADIES I WAS TALKING TO THIS MORNING, WERE THERE AT SIX 30 IN THE MORNING READY TO GO, YOU KNOW, HAPPY TO SEE ME, YOU KNOW, READY TO GET, GET ON THE JOB.
YOU KNOW, THE, THE, SO, SO THE, THE ORGANIZATION CULTURALLY FOR THE FOLKS THAT ARE ON THE FRONT LINE, THEY'RE DOING THEIR JOBS EVERY DAY.
YOU KNOW, THE THINGS THAT YOU SEE IN THE PAPER, YOU KNOW, THE, THE MEDIA STORIES THAT, THAT ARE BEING COVERED RIGHT NOW, THAT'S NOT A CULTURAL ISSUE.
THAT'S INDIVIDUALS WHO, WHO DON'T RECOGNIZE THAT THEY'RE A PART OF A PUBLICLY OWNED ENTITY.
I SET THE TONE, I, I SET THE ACCOUNTABILITY FOR MY LEADERSHIP TEAM AND FOR OUR, AND FOR OUR MANAGERS.
I KNOW WHAT THE, YOU KNOW, THE THINGS THAT WE NEED TO DO TO GET THEM TO RECOGNIZE WE'RE A, A, A UTILITY COMPANY OWNED BY OUR CUSTOMERS.
THAT IS WHO WE ARE FUNDAMENTALLY.
THAT IS WHAT WE ARE FUNDAMENTALLY.
AND SO, IT'S MY JOB TO ENSURE THAT FROM AN ORGANIZATIONAL BLIND SPOTS, THAT EVERYBODY IS COMMITTED TO THAT AS A, AS A, AS A GUIDING PRINCIPLE.
YOU KNOW? AND, AND SO AS FAR AS OUTSIDE VIEWS, LOOK, WE GOT SO MANY, YOU KNOW, COMMITTEES RIGHT NOW, YOU KNOW, GIVING US INSIGHT INTO HOW TO DO, DO A BETTER JOB, YOU KNOW, UM, THE, THE, THE, THAT'S KIND OF A CONVERSATION I THINK WE NEED TO HAVE BETWEEN COUNCIL AND THE BOARD.
WE'VE GOT A PERSONNEL COMMITTEE, UM, IF THERE'S A DESIRE TO LOOK INTO, UH, PROVIDING, YOU KNOW, UH, UH, UH, INSIGHT AND, AND, UH, AND RECOMMENDATIONS.
YOU KNOW, AGAIN, I'M, I'M A NEW C E O, BUT I'VE BEEN IN THIS BUSINESS 25 YEARS.
I'VE SEEN THIS INDUSTRY FROM MULTIPLE VANTAGE POINTS AND, YOU KNOW, I'M GONNA BE HUMBLE AND, AND TAKE WHATEVER ADVICE ANYBODY HAS TO GIVE ME.
I'LL JUST CLOSE BY SAYING THAT, THAT I WOULD SUSPECT THAT RATING AGENCIES WOULD PROBABLY HAVE MORE CONFIDENCE IN THE ORGANIZATION ALSO, IF THEY SAW, UH, AN INDEPENDENT INDUSTRY EXPERT THAT WENT IN AND DID AN EVALUATION AND MADE RECOMMENDATIONS.
UH, UN UNPACK THAT, THAT, THAT'S INTERESTING, RIGHT? HAVING AN INDEPENDENT INDUSTRY EXPERT COME AND GIVE YOU, YOU, DO YOU WELCOME SOMETHING LIKE THAT? I MEAN, WOULD YOU BE ADVERSE TO, I I DON'T, IT WOULDN'T BE ADVERSE TO IT.
I THINK THAT'S A CONVERSATION.
MC, GIMME THE THUMBS UP IF MY BOARD'S BEHIND IT.
SIR, I'M, I'M WILLING TO, TO ACCEPT WHATEVER.
LOOK, I, I'VE BEEN A PART OF MULTIPLE C E O TRANSITIONS OVER THE COURSE OF MY CAREER IN, IN THE PRIVATE SECTOR AND THE PUBLIC SECTOR.
WE'VE HIRED, YOU KNOW, SOME HIGH PRICE, YOU KNOW, MCKINSEY'S AND BAIN COMPANIES AND ALL THESE CONSULTANTS TO COME IN AND DO ORGANIZATIONAL ASSESSMENTS ELSEWHERE.
I THINK IF IT'S DONE RIGHT, IT COULD BE HELPFUL.
SO, UM, YOU KNOW, I, AS I'M LISTENING TO THE, TO THE QUESTIONS AND YOUR ANSWERS, AND AS I WAS THINKING ABOUT TODAY, UM, I, I THINK EVERYBODY IN THIS ROOM WILL AGREE WITH ME THAT, YOU KNOW, EVERYBODY HERE HAS GOOD INTENTIONS, RIGHT? AND THE, UH, THE WELL OF GOOD INTENTIONS IN THIS ROOM IS BOTTOMLESS, RIGHT? UM, BUT I THINK ALSO THAT IT'S REALLY IMPORTANT THAT WITH THOSE GOOD INTENTIONS, WE NEVER UNDERESTIMATE THIS BODY'S CAPACITY TO DO HARM.
AND SO, UM, AND, AND RUDY, I'M, I'M GONNA GIVE YOU SOME, DON'T TELL ANYBODY, BUT I'M GONNA GIVE YOU SOME OF MY PERSONAL MEDICAL INFORMATION RIGHT NOW.
I HAD A DOCTOR'S APPOINTMENT TODAY FOR A CHECKUP, AND, UH, MY DOCTOR SAID, UM, THAT I NEED, UH, TO DRINK FEWER SODAS, UH, HAVE MORE LEAFY GREENS
AND, UM, I TOLD HER, YOU KNOW, YOU'RE KILLING ME HERE, DOC, RIGHT? UH, AND SHE SAID, NO, I'M TRYING TO SAVE YOUR LIFE AND MERRY CHRISTMAS.
HERE'S YOUR REFERRAL TO YOUR CARDIOLOGIST FOR A STRESS TEST.
RIGHT? UM, AND I'M A MAN OF THAT AGE, RIGHT? WHO I'M, I'M STARTING TO HAVE TO DO THINGS THAT JUST, I DON'T, I DON'T WANT TO DO, BUT THEY'RE NECESSARY IN ORDER TO KEEP THIS ELITE PHYSIQUE, YOU KNOW, AND MAINTAIN IT.
SO, THINKING THAT, YOU KNOW, AND, AND I WAS, YOU KNOW, AND I'M SITTING HERE THINKING ABOUT THAT AS, AS I'M LISTENING TO YOU, BECAUSE, YOU KNOW, THE RUB FOR US IS, UM, THAT, YOU KNOW, WE, WE, I THINK WE, WE ALL TAKE OUR OATH VERY SERIOUSLY, RIGHT? THE, THE POLITICIANS', UH, HIPPOCRATIC OATH OF DO NO HARM TO YOUR CONSTITUENTS, RIGHT? UM, AND, YOU KNOW, THE QUESTION IS, IS DOES THIS RATE INCREASE, DO HARM TO MY CONSTITUENTS? UM, OR AM I DOING HARM BY NOT, UH, YOU KNOW, UH, GIVING YOU THE OKAY FOR A RATE INCREASE, RIGHT? AND SO, UH, I HAVE TO GO BACK TO MY NEIGHBORHOODS, UM, AND EXPLAIN THIS, RIGHT? AND I HAVE TO EXPLAIN, AND I'LL GIVE YOU AN EXAMPLE OF A NEIGHBORHOOD THAT YOU ALREADY KNOW CALLED
[02:00:01]
OAK MEADOWS.LAST TIME I GAVE YOU A HARD TIME BECAUSE OAK MEADOWS LITERALLY WAS IN A POWER OUTAGE WHEN YOU WERE SPEAKING FROM THE PODIUM.
YOU GUYS WENT LIGHTNING FAST AT THE SPEED OF LIGHT AND, UH, FIXED IT.
AND MY, WE HEARD TODAY FROM MY NEIGHBORS, THEY'RE DELIGHTED.
THEY LOVE YOU GUYS, EVERYTHING'S BACK TO NORMAL, RIGHT? BUT, UM, I GOTTA GO BACK TO THEM AND OTHER NEIGHBORHOODS WHO ARE LESS DENIED, DELIGHTED, RIGHT? AND EXPLAIN TO THEM WHY IT IS A RATE INCREASE, IS THE ONLY WAY TO GO IN THIS INSTANCE.
AND THEY'RE NOT GONNA UNDERSTAND ANYTHING THAT WE SAW ON THAT POWERPOINT.
THEY'RE EXPERTS IN THEIR OWN LIVES, RIGHT? THEY'RE EXPERTS IN RAISING KIDS AND, YOU KNOW, UH, AND DOING ALL THE THINGS THAT ARE IMPORTANT TO THEM.
AND, UM, I'M NOT SURE THAT THAT'S GONNA WORK.
AND SO WHAT I NEED YOUR HELP WITH IS AN EXPLANATION THAT I CAN TAKE TO MY CONSTITUENTS.
AND HERE'S WHAT I'VE, I I'M GATHERING, IF WE DON'T GRANT THIS RATE INCREASE, THINGS ARE GONNA BE REALLY BAD FOR YOU GUYS, RIGHT? FOR C P S.
AND THE RAMIFICATIONS WILL BE FELT FOR MANY, MANY YEARS GOING FORWARD.
WHAT I'M HEARING YOU SAY IS THAT IF WE DON'T GRANT THIS RATE INCREASE, WE ARE GONNA PAY MANY, MANY MILLIONS OF DOLLARS IN THE FORM OF INTEREST PAYMENTS TO NEW YORK BANKS AND INSTITUTIONAL INVESTORS.
AND THAT MONEY WILL NOT BENEFIT SAN ANTONIO.
AND WE'RE GONNA DO THAT BECAUSE THE RATING AGENCIES ARE GONNA DOWNGRADE OUR CREDIT RATING, RIGHT? AND BASICALLY, IT'S JUST SENDING MORE MONEY OFF AND NEVER SEEING IT, THE EQUIVALENT IN MY MIND, OF JUST GATHERING MILLIONS OF DOLLARS, PUTTING 'EM IN A PILE, AND THEN LIGHTING 'EM ON FIRE, RIGHT? THE ALTERNATIVE TO THAT IS FOR ALL OF US TO SWALLOW A VERY DIFFICULT PILL AND INCREASE THE RATES A LITTLE BIT.
AND I KNOW THAT FOR SOME PEOPLE IT'S A LITTLE BIT, AND THAT, FOR, FOR OTHERS THAT LITTLE BIT, IT MEANS A LOT, RIGHT? I, I RECOGNIZE THAT.
DID I ARTICULATE THAT THE RIGHT WAY? I THINK YOU WERE VERY ACCURATE.
AND IF I DON'T GRANT THE RATE INCREASE, I'M DOING MORE HARM TO THEM LONG TERM, BECAUSE THIS ONE ASSET PAYS FOR ONE THIRD OF OUR BUDGET.
THAT'S MORE THAN A MILLION DOLLARS A DAY, RIGHT? THAT YOU GUYS PRODUCE.
AND WE NEED THAT MONEY TO BE ABLE TO PAY FOR POLICE OFFICERS, STREET SIDEWALKS, AND ALL THE OTHER THINGS THAT ARE IMPORTANT TO THEM.
SO, SIR, WE ONLY DO THREE THINGS WITH THE MONEY THAT WE, WE, WE BRING IN THROUGH OUR RATES.
WE INVEST IN OUR SYSTEM, WE GIVE IT, WE PAY DEBT, AND WE GIVE, UH, WE GIVE CITY THEIR, YOU KNOW, THE CITY, THEIR, THEIR REVENUE, UH, SHARE BACK.
THAT'S ALL WE DO WITH, WITH, WITH OUR, WITH, WITH OUR REVENUE.
UH, AND I THINK EVERYBODY UP HERE GETS IT, RIGHT? YES, SIR.
AND OUR STRUGGLE IS HAVING TO, TO TRANSLATE ALL THIS, UH, TO OUR CONSTITUENTS.
AND, UM, I'M GONNA NEED YOUR HELP, UH, TO DO THAT.
SIR, I NEED YOU AT MY H OA MEETINGS SO THAT YOU CAN HELP ME TAKE THAT HEAT.
'CAUSE SOME PEOPLE ARE JUST GONNA REFUSE TO UNDERSTAND THAT, RIGHT? NO MATTER WHAT, BUT WE OWE IT TO THEM TO GIVE THEM AS CRYSTAL CLEAR AND EXPLANATION AS POSSIBLE.
SO THANKS FOR YOUR HARD WORK, BEN.
UM, I THINK IT'S FAIR TO SAY ALSO THAT WHAT YOU'RE ASKING US TO DO, BEN, WITH THIS RECOMMENDATION, WHICH IN TURN IS THE CITY MANAGER'S RECOMMENDATION, IS THAT WE INCREASE THE RATES NOT JUST FOR EVERY SAN ANTONIO OUT THERE, BUT FOR EVERY CITY EMPLOYEE, RIGHT? THAT WE INCREASE OUR OWN RATES.
I MEAN, ERIC, YOU'RE GONNA BE PAYING MORE IN, IN, UH, YOU KNOW, IN ENERGY.
UM, ALL MY COLLEAGUES AND I ARE GONNA BE PAYING MORE IN ENERGY.
ALL THE TEACHERS IN SAN ANTONIO ARE GONNA BE PAYING MORE IN ENERGY, BUT ALL THE C P S EMPLOYEES TOO, RIGHT? AND SO THIS IS NOT SOMETHING THAT SOMEHOW, YOU KNOW, LINES THE POCKETS AROUND HERE.
I MEAN, THIS IS SOMETHING THAT'S GONNA IMPACT US AS WELL.
UM, AND I'M SENSITIVE TO THAT.
SO, UM, YOU'RE GETTING ME CLOSER AND CLOSER, UH, TO HAVING TO MAKE THIS THIS VERY DIFFICULT, UNCOMFORTABLE POSITION.
UM, BUT I STILL NEED SOME MORE INFORMATION THAT YOU AND I ARE GONNA TALK ABOUT OFFLINE BEFORE I CAN GIVE YOU THE NOD.
THANK YOU, BEN, FOR THE PRESENTATION.
UM, FROM SPEAKING TO CONSTITUENTS TO READING THE FITCH CREDIT REPORT RATING, IT'S CLEAR THAT C P S HAS LOST PUBLIC TRUST AND MUST BUILD IT BACK IF THEY ARE TO BE FINANCIALLY SOLVENT MOVING FORWARD.
I'VE ASKED OVER 150 OF MY RESIDENTS IF THEY WOULD SUPPORT A C P SS ENERGY RATE INCREASE.
AND A ASTOUNDING 94% OF FOLKS HAVE SAID NO.
SO, WHAT CAN C P S ENERGY DO AS PART OF THIS RATE, INCREASE PROF PROCESS TO BUILD BACK PUBLIC TRUST? AND, AND THIS LEADS ME TO SEVERAL REQUESTS THAT I WOULD LIKE C P S ENERGY TO COMMIT BEFORE WE MEET AGAIN ON DECEMBER 15TH.
UM, FIRST I STILL NEED THE BUY ZIP CODE BREAKDOWN THAT I REQUESTED DURING THE LAST B SESSION AND SECOND CCP ENER THAT C P S ENERGY WILL HOST AT LEAST TWO COMMUNITY OUTREACH EVENTS IN EACH DISTRICT.
AND I WANNA THANK, UH, JULIA FOR REACHING OUT TO OUR DISTRICT ABOUT COORDINATING ONE TOWN HALL IN DISTRICT FIVE.
UM, BUT IT GIVES ME CALL, UH, PAUSE AND CONCERN, UH, RATHER HEARING THAT, YOU KNOW, BIG BUSINESS HAS BEEN ALREADY CONSULTED AND PRESENTED THIS PAY RATE INCREASE, BUT OUR NEIGHBORS HAVEN'T.
UM, THIRD, IN REGARDS TO ADDRESSING THE UNDERGROUNDING LINES IN AREAS WITH HISTORIC RELIABILITY ISSUES, I WOULD LIKE C P S ENERGY TO COMMIT TO WORKING WITH PUBLIC WORKS
[02:05:01]
AND TRANSPORTATION TO DEVELOP A PLAN THAT WILL NOT ONLY PROMOTE ENERGY RELIABILITY, BUT ADDRESS PEDESTRIAN ACCESSIBILITY AND SAFETY ISSUES WHERE POLES INHIBIT SAFE PEDESTRIAN ACCESS.UH, IN DISTRICT FIVE, UM, A LOT OF THE AREAS WERE BUILT BEFORE THOSE CITY CODES.
SO THERE'S LOTS OF C P S POLLS IN THE CENTER OF OUR SIDEWALKS.
UM, LAST C P S ENERGY TO AGREE TO WORK WITH THE MUNICIPAL UTILITIES COMMITTEE RATE ADVISORY COMMITTEE, THE CITIZENS ADVISORY COMMITTEE, AND OTHER RELEVANT COMMUNITY STAKEHOLDERS TO DEVELOP A MORE EQUITABLE RATE STRUCTURE AND PRESENT IT TO CITY COUNCIL BY THE END OF 2022.
UH, AGAIN, I WOULD REALLY LIKE TO SEE THAT ZIP CODE BREAKDOWN BEFORE THE NEXT MEETING, SO I CAN HAVE AN UNDERSTANDING OF HOW THAT'S GOING TO IMPACT MY CONSTITUENCY, WHO IS DISPROPORTIONATELY ENERGY BURDEN, UM, MOVING FORWARD.
AGAIN, THAT THERE'S TWO COMMUNITY OUTREACH EVENTS IN EACH DISTRICT.
UM, I, I, I WAS A BIT CONCERNED TO SEE THAT THERE WAS ONLY ONE VIRTUAL TOWN HALL IN THE LAST PRESENTATION.
BUT AGAIN, THANKS JULIA, FOR REACHING OUT TO COORDINATE A COMMUNITY MEETING WITHIN DISTRICT FIVE.
UM, UH, AGAIN, C P S ENERGY SHOULD COMMIT TO WORKING WITH PUBLIC WORKS AND TRANSPORTATION TO DEVELOP A PLAN THAT WILL NOT ONLY PROMOTE ENERGY RELIABILITY, BUT ADDRESS PEDESTRIAN ACCESSIBILITY AND SAFETY.
WOULD IT BE POSSIBLE IF WE CAN GET A MAP OR A SPREADSHEET SHOWING, UH, THE AREAS WITH HISTORIC, UH, RELIABILITY ISSUES? IS THAT SOMETHING THAT WE CAN GET? YEAH, WE, WE'VE GOT OUR, WHAT WE CALL OUR WORST PERFORMING, YOU KNOW, UH, CIRCUIT LIST THAT WE WORK OFF OF EVERY YEAR TO CREATE A PRIORITIZED LIST OF, OF, UH, YOU KNOW, UH, MAINTENANCE, YOU KNOW, UH, UH, PLANS.
I, I, WE'LL HAVE TO FIGURE OUT HOW TO ALIGN IT TO ZIP CODES, BUT I, I'LL WORK WITH, WITH RICHARD AND WE'LL GET THAT DONE.
AND, AND IF I COULD GET AN ANSWER NOW OR OFFLINE, IT'S, UH, HOW ARE THE LINE EXTENSION FEES CALCULATED AND CAN C P S ENERGY INCREASE THE FEE FOR NEW LINE EXTENSIONS TO HELP MAKE UP FOR THE REVENUE LOSS? I MEAN, WE, WE, OUR GOAL IS COST RECOVERY.
OUR GOAL IS TO, UH, THERE'S REVENUE WE GET FROM EVERY TIME WE EXTEND A LINE THAT COMES IN FOR EACH CUSTOMER.
UH, AND SO YOU FACTOR IN THE AMOUNT, AMOUNT OF REVENUE YOU GET, AND THEN YOU CALCULATE, YOU KNOW, KIND OF A DIFFERENCE, AND THE CUSTOMER PAYS THAT DIFFERENCE.
AS OUR RATES ARE RAISED, UM, YOU KNOW, AGAIN, RIGHT NOW WE'RE WORKING OFF OF, OF RATES THAT ARE EIGHT YEARS OLD, SO WE'RE NOT GETTING FULL COST RECOVERY RIGHT NOW, JUST BECAUSE, UH, COSTS HAVE GONE UP, YOU KNOW, TO, TO, TO CONSTRUCT.
SO AS OUR RATE IS INCREASED, THAT, UH, CONTRIBUTION WILL ALSO COME WITH IT.
AND WHILE I UNDERSTAND THAT WITHIN THREE WEEKS, WE CAN'T DEVELOP A MORE EQUITABLE RESIDENTIAL AND COMMERCIAL RATE STRUCTURE.
UM, A A AGAIN, I WOULD LIKE C P S, UH, ENERGY TO COMMIT AND WORK WITH THE MISSILE UTILITIES COMMITTEE, THE RAC, THE CITIZENS ADVISORY COMMITTEE, AND OTHER RELEVANT COMMUNITY STAKEHOLDERS TO DEVELOP, UH, WHAT THAT WILL LOOK LIKE.
UM, I KNOW FOR THE LAST SEVERAL YEARS, DR.
MEREDITH MCGUIRE HAS BEEN COMING TO EVERY CITY COMMITTEE MEETING, UH, PRESENTING HOW INEQUITABLE THE PAY RATE STRUCTURE IS.
SO THIS IS A CONVERSATION THAT HAS BEEN ONGOING AND PRESENTED FOR YEARS.
AND A TWO YEAR TIMELINE ISN'T, UM, SUFFICIENT FOR MY CONSTITUENCY WHO HAS TO BEAR THAT BURDEN OF THIS INEQUITABLE PAY RATE STRUCTURE.
SO, SO AGAIN, THAT'S A PRIORITY FOR ME, UH, AND IT'S, UH, VERY IMPORTANT FOR THE TRANSPARENCY PROCESS TO BUILD BACK THAT TRUST WITH MY CONSTITUENCY.
UM, AND I WOULD ALSO LIKE TO, TO HIGHLIGHT, RIGHT, THAT IF WE CAN PROJECT RATE ADJUSTMENTS THROUGH THE FISCAL YEAR 2027, I THINK IT IS POSSIBLE THAT WE CAN PROJECT, UM, A NEW RATE STRUCTURE AGAIN, WHERE OUR RESIDENTIAL USERS AND SMALL MOM AND POP BUSINESSES ARE PAYING A HIGHER RATE THAN LARGER USERS.
UM, SO, YOU KNOW, I THINK THAT'S SOMETHING THAT NEEDS TO BE CONSIDERED, AND I WOULD LIKE TO SEE A PROJECTED TIMELINE OF POTENTIAL AGENDIZED DATES WHEN THESE CONVERSATIONS ARE GOING TO TAKE PLACE.
UM, SOMETHING MORE CONCRETE IN WRITING, UH, NOT JUST A RECOMMENDATION THAT WE'RE GOING TO DO THIS.
I, I NEED TO SEE IT IN A, A WRITTEN COMMITMENT THAT WE ARE GOING TO LOOK AT THE PAY RATE STRUCTURE.
UM, I WANT TO THANK ALL THE VOLUNTEERS OF THE RATE ADVISORY COMMITTEE, THE CITIZENS ADVISORY COMMITTEE, AS WELL AS ALL THE MEMBERS OF THE COMMUNITY WHO CONTINUE TO PROVIDE THEIR INPUT, UH, REGARDING THIS PROCESS.
AND WHILE I UNDERSTAND, UH, THAT THIS IS A COMPLEX PROCESS, THERE'S A HUGE OPPORTUNITY TO DO RIGHT BY COMMUNITY AND SHIFT THE PARADIGM ON HOW RATE ADJUSTMENTS ARE HANDLED HERE IN SAN ANTONIO.
UH, COUNCILMAN MCKEE RODRIGUEZ, THANK YOU SO MUCH, AND THANK YOU SO MUCH, BEN, FOR THE PRESENTATION.
UM, I WANNA START OFF BY ECHOING, UH, COUNCILMAN CASTILLO.
UM, I THINK OUR COMMUNITY WOULD BENEFIT FROM MORE EQUITY BASED, UH, RATE STRUCTURE.
IF YOU USE MORE, YOU SHOULD PAY MORE.
UM, SO THOSE WHO USE LESS ENERGY, SUCH AS OUR SMALL BUSINESSES AND OUR RESIDENTIAL CUSTOMERS, UM, THEY SHOULDN'T BE CARRYING A DISPROPORTIONATE AMOUNT OF THE COST BURDEN.
[02:10:01]
AND I'M SURE THAT OUR CONSTITUENTS AND SMALL, UM, BUSINESSES WOULD APPRECIATE THIS RELIEF SOONER RATHER THAN LATER.SO, UM, I WOULD LIKE A COMMITMENT FROM C P S, UM, TO RESTRUCTURE RATES WITHIN SIX MONTHS.
IS THAT SOMETHING WE CAN DO, COUNCILMAN? UH, I THINK THE WORK OF THE RATE ADVISORY COMMITTEE THERE SET UP AS REALLY AS AN INDEPENDENT ENTITY.
UH, I'VE ASKED REED WILLIAMS TO BE HERE NEXT WEEK, UH, AND HE CAN ANSWER, YOU KNOW, WHAT TIMELINE HE THINKS IS REASONABLE, UH, FOR THE RATE ADVISORY COMMITTEE TO DO THEIR WORK.
WE'VE SPENT A LOT OF TIME EDUCATING THEM ON OPTIONS, UM, THAT OTHER UTILITIES HAVE TAKEN TO TRY TO ADDRESS THESE ISSUES.
UH, BUT, YOU KNOW, I I, I'M NOT SURE SIX MONTHS IS REALISTIC.
I THINK, UH, IT'S GONNA TAKE A LITTLE MORE TIME THAN THAT, BUT I'M NOT GONNA, UH, SPEAK FOR, I, I'VE GIVEN YOU KIND OF A RANGE BECAUSE I, I, I WANNA MAKE SURE THAT THE RATE ADVISORY COMMITTEE, YOU KNOW, ONE PIECE OF FEEDBACK WE'VE GOTTEN IS THEY'VE FELT, HAVE FELT RUSHED THROUGH THIS PROCESS.
UH, I DO NOT WANNA MAKE THAT MISTAKE GOING FORWARD ON LONGER TERM, UH, YOU KNOW, THOUGHTFUL DISCUSSIONS.
I WANT TO BE HELPFUL AND, YOU KNOW, GIVE THEM THE, THE TIME THEY NEED TO DO THEIR JOB.
SO, UH, SO I, I WOULD PREFER, UH, THE, THE CHAIR OF THE RATE ADVISORY COMMITTEE TO ANSWER THAT QUESTION.
MAYBE NEXT WEEK CAN SOMEONE, UH, REMIND ME WHEN ARE WE EXPECTED TO VOTE ON THE PROPOSED RATE IN CRA? JANUARY 12TH, JANUARY 13TH, 13.
SO THAT'S COMING UP, AND I THINK, YOU KNOW, WHETHER THIS PASSES OR, OR TO FAIL, I THINK HOW WE GET THERE MATTERS JUST AS MUCH AS THE RESULT.
AND I THINK THE DISTRUST THAT EXISTS IN OUR COMMUNITY, NOT, AND IT'S NOT JUST C P S, THERE'S DISTRUST WITH THE CITY, THERE'S DISTRUST WITH, UH, COUNCIL, SOMETIMES THERE'S, AND I THINK WHEN WE SAY, OH, WE'RE GONNA, WE'RE GONNA PROMISE TO DO THIS AT SOME POINT, WE'VE DONE THAT A LOT AND PEOPLE DON'T SEE RESULTS AS MUCH AS THEY WOULD LIKE TO.
AND SO IT'S GONNA BE A REAL STRUGGLE, UM, WITHOUT, AS COUNCIL MC CASTILLO WAS SAYING, THE AGENDAS PLAN AND TIMELINE, I AGREE, WE NEED A TIMELINE OF DISCUSSION OF GENERATION PLANNING OPTIONS, AND WE NEED A TIMELINE FOR THE REVIEW OF REDESIGN.
I'M GLAD TO SEE THAT AND THE RECOMMENDATIONS, BUT THEY'RE JUST RECOMMENDATIONS UNTIL THEY HAPPEN.
UM, I ALSO WANT TO THANK JULIA AGAIN FOR REACHING OUT FOR THE, UM, TO COORDINATE THE TOWN HALL.
AND I THINK COUNCILWOMAN IMPALA HAS BROUGHT UP A WONDERFUL POINT ABOUT, UM, THIS PRESENTATION SPECIFICALLY.
AND I'M THINKING ABOUT, YOU KNOW, IF YOU CAME AND YOU DID THIS, UH, PRESENTATION FOR MY CONSTITUENTS, THEY WOULD HEAR NONE OF IT, AND YOU WOULD GET THE EXACT SAME RESPONSE AS THEY WOULD'VE WITHOUT EVER RECEIVING ANY OF THIS INFORMATION.
AND SO WE HAVE TO BE CAREFUL ABOUT OVERLY ACADEMIC AND INDUSTRY SPECIFIC LANGUAGE, UM, BECAUSE I THINK THAT'S JUST AS IMPORTANT IN COMMUNICATION AND PERSUASION AND IN TRYING TO GET, UH, OUR CONSTITUENTS TO FEEL COMFORTABLE WITH US AT THIS POINT, THEY NEED TO UNDERSTAND IN LAYMAN'S TERMS, AS COUNCILMAN PLI WAS SAYING, IT DOESN'T HAVE TO BE THIS COMPLICATED.
AND I KNOW I'M LOOKING AT YOU, BUT I KNOW YOU DIDN'T PUT THIS PRESENTATION TOGETHER.
UM, BUT I JUST THINK THAT WHEN WE'RE DOING THE TIMELINE, JULIA, UH, OR WHEN WE'RE DOING THE TOWN HALL, UM, I WOULD LOVE MAYBE TO SEE IT IN ADVANCE AND MAYBE GIVE SOME FEEDBACK.
'CAUSE COUNCILMAN, WE, WE ARE, UH, WORKING ON THAT PRESENTATION FOR THE PUBLIC, SO WE'D BE HAPPY TO SHARE THAT WITH COUNCIL AND GET ANY FEEDBACK YOU HAVE BEFORE WE GET THERE.
AND I, I'M ALSO A LITTLE, EH, ABOUT THE TOWN HALL SITUATION BECAUSE IT IS, AGAIN, EARLY JANUARY WHEN WE'RE VOTING.
AND SO I'M CONCERNED THAT WE MAY NOT BE ABLE TO DO, UM, AS MUCH OUTREACH AND WE MAY NOT GET THE RESPONSE THAT WE WOULD HAVE NORMALLY WITH, I I WILL TELL YOU, MY CALENDAR AND MY TEAM'S CALENDARS ARE FILLING UP QUICKLY FOR THE NEXT TWO WEEKS.
WE'VE GOT A LOT OF MEETINGS, UH, ON SCHEDULE.
WE'RE HAVING OUR OWN COMMUNITYWIDE TOWN HALL IN PERSON AT THE C P S ENERGY HEADQUARTERS, UH, NEXT WEEK, RIGHT AFTER OUR BOARD MEETING ON MONDAY.
UH, SO THAT, YOU KNOW, AND, AND WE GOTTA USUALLY GET A PRETTY GOOD, UH, SHOWING AT THOSE.
AND SO, UM, SO, SO THAT WILL REALLY KICK OFF.
UH, THAT'S THE BOARD KINDA LISTENING, UH, INPUT SESSION.
UH, AND THEN WE WILL BE DOING NOT JUST YOUR OWN INDIVIDUAL TOWN HALLS, WE'LL ALSO CONTINUE TO HAVE EVENTS IN YOUR DISTRICTS AS, AS WE GO.
SO INCLUDING THE BLOCK WALKING AND DOOR HANGERS AND ALL THE OTHER THINGS THAT, UH, YOU'VE ASKED US TO DO.
SO I THINK WE'RE GONNA HAVE, UH, YOU KNOW, WE'VE GOT A PRETTY ROBUST SCHEDULE.
I THINK, UM, OUTREACH AND THE COMMUNICATION PIECE IS GONNA BE, UM, SOME OF THE MOST CRITICAL OVER THE NEXT MONTH AND SOME DAYS.
UM, I AM, I WILL SAY I AM STILL A LITTLE FRUSTRATED, A LITTLE IMPATIENT ABOUT THE RATE STRUCTURE AND ALL THAT STUFF.
AND I UNDERSTAND THAT IT'S GONNA TAKE TIME AND IT'S, YOU KNOW, IT'S INDUSTRY THAT I'M NOT A PART OF AND MAYBE I DON'T FULLY UNDERSTAND, BUT THE IMPATIENCE I FEEL IS THE SAME IMPATIENCE THAT MY CONSTITUENTS FEEL.
SO I JUST WANTED TO RELAY THAT.
[02:15:01]
UH, MCKEE RODRIGUEZ, COUNCIL MEMBER PERRY.UM, BEN, I THINK THIS WAS YOUR DAY HERE AND I'LL, I'LL, UH, UM, ASK YOU A FEW QUESTIONS HERE.
I JUST WANNA SAY, AND THERE'S BEEN SOME TALK ABOUT THIS, ABOUT THE, THE PROCESS.
YOU KNOW, WE HAD A, WE HAD A, UH, PROCESS CHART FROM C P S ABOUT ALL THESE DIFFERENT, UM, COMMITTEES AND WHAT HAVE YOU, THAT'S GOT A PART TO PLAY IN THIS.
AND IT SEEMS LIKE IT'S ALL SWIRLING AROUND.
IT WOULD'VE BEEN GREAT TO SEE ONE LINEAR LINE.
OKAY, HERE'S WHERE WE'RE GONNA, EACH ONE OF THESE COMMITTEES ARE GONNA MAKE A DECISION, UH, INSTEAD OF JUST KIND OF SWIRLING AROUND HERE.
BUT HAVING SAID THAT, UM, YOU'RE A PART OF THIS PROCESS ALSO.
AND, AND WHEN I LOOKED AT SLIDE NUMBER FOUR, UM, THERE'S SOME BIG DIFFERENCES HERE ABOUT WHAT C P S CAME IN WITH AT FIRST, AND I DON'T UNDERSTAND WHY THE YELLOW BOXES ARE THERE.
THEY SHOULD HAVE BEEN FILLED IN AS WELL.
AND THEN WHAT, UH, WHAT YOU HAVE, UH, COME UP WITH IN THE LOWER PART.
UH, TELL ME WHAT, WHAT DID THEY MISS OR WHAT, WHAT ARE WE MISSING HERE THAT, THAT'S A BIG DISPARITY BETWEEN THOSE TWO LINES? SO COUNCILMAN, LET ME KIND OF DESCRIBE THE PROCESS HERE IN TERMS OF HOW WE GOT TO, UM, THAT REVISED RATE CASE.
SO THE DRAFT CASE THAT WE GOT FROM C P S, WHICH IS THIS TOP PART, UM, IT HAD AND LOOKED AT TRYING TO SOLVE A LOT OF ISSUES THAT I THINK REQUIRE MORE TIME.
IT HAD, UH, ON THE CAPITAL SIDE, FOR EXAMPLE, UH, DECISIONS AROUND WHAT TO DO WITH THE SPRUCE TWO COAL PLANT AND POTENTIALLY REPOWERING THAT.
UM, IT HAD SOME OTHER GENERATION THINGS BUILT IN.
UM, IT HAD UNCERTAINTIES AROUND THE WINTER STORM BUR COSTS THE PANDEMIC DEBT.
THERE'S JUST, THERE WERE A LOT OF THINGS WRAPPED UP IN THAT RATE CASE.
AND WHAT WE SUGGESTED TO, TO C P S, AND, AND I WANNA CLARIFY SOMETHING YOU SAID A LITTLE BIT WE SUGGESTED TO C P S WAS, LET'S TAKE A DIFFERENT APPROACH.
WE KNOW THAT THE GENERATION POLICY ISSUES AND CONVERSATION IS GONNA TAKE LONGER, AND I DON'T MEAN LONGER IN TERMS OF YEARS BECAUSE I, I GAVE YOU THE OTHER SLIDE.
I THINK THAT NEEDS TO, A TIMELINE NEEDS TO BE DEVELOPED AND WE NEED TO ADDRESS THAT, BUT THOSE POLICY ISSUES WEREN'T GOING TO BE DECIDED IN THE NEXT THREE WEEKS AND SHOULDN'T BE.
SO WE RECOMMENDED THAT THOSE THINGS BE REMOVED AND THAT WE FOCUS ON WHAT WE KNOW TODAY.
WHAT DO WE NEED TO DO TO SHORE C P SS UP FINANCIALLY AND STABILIZE THE ORGANIZATION? GIVE US TIME, US BEING THE BROADER US, THE COMMUNITY, THE RAC, THE BOARD TIME TO LOOK AT EVERYTHING FROM RATE DESIGN GENERATION PLANNING GENERATION PLANNING, UH, INCLUDES, YOU KNOW, WHAT, WHAT, WHAT DOES A REPLACEMENT FOR SUMMERS AND THE BROADENING UNITS LOOK LIKE? WHAT DOES, UH, OUR, OUR, HOW DO WE MEET OUR FUTURE DEMANDS AND ENERGY NEEDS GOING FORWARD? UM, WHAT DO YOU DO WITH SOME OF YOUR EXISTING FLEET TO INCLUDE SPRUCE, RON AND SPRUCE TWO, IT GIVES TIME FOR ALL OF THOSE ELEMENTS TO, TO, UM, BE ANALYZED AND TO BE WORKED ON.
SO ONCE WE TALKED ABOUT THAT REVISED APPROACH, WE WORKED TOGETHER ON COMING UP WITH THIS REVISED RATE CASE, WHEN WE LOOK AT IT THROUGH THAT LENS, LET'S NOT TRY TO SOLVE EVERYTHING.
LET'S NOT TRY TO EXACTLY, UM, GUESS EXACTLY WHAT'S GONNA HAPPEN WITH PANDEMIC BAD DEBT.
LET'S PROVIDE TIME TO DEGENERATION PLANNING.
LET'S FOCUS ON WHAT WE KNOW TODAY AND GIVE US A RUNWAY AND TIME TO ADDRESS THESE OTHER ISSUES.
SO THAT'S THE BIGGEST DIFFERENCE BETWEEN WHAT YOU SEE ON TOP AND WHAT YOU SEE WITH THE REVISED RATE CASE.
YEAH, AND, UH, I'M STILL CONCERNED THAT WE'RE EVEN WHAT WE KNOW TODAY THAT WE'RE PUSHING THIS THROUGH A LITTLE BIT TOO FAST TO, YOU KNOW, I JUST GOT THIS PRESENTATION, UH, UH, LATE, LATE MONDAY EVENING, AND, UH, IT'S TOUGH TO GO THROUGH.
THESE ARE A LOT OF NUMBERS IN HERE AND, UH, I LIKE NUMBERS.
UM, BUT, UM, IT, IT'S A LOT TO DIGEST IN ONE DAY'S TIME TO BE READY FOR THIS MEETING.
BUT, UM, I I, I, I STILL HAVE A CONCERN ABOUT THAT, THAT WE'RE PUSHING THIS THROUGH.
EVEN, EVEN YOU'RE SAYING, YEAH, A LOT OF THINGS WERE IN THAT WE'RE RECOMMENDING PULLING OFF.
AND SO THAT REDUCES THESE PERCENTAGES IN THAT IN, UH, THIS NEXT YEAR PLUS I, I'M STILL LOOKING AT 25 AND 27, AND I DON'T CARE WHAT ANYBODY SAYS.
IF YOU'RE LISTING OUT THERE THAT WE'RE PROJECTING ADDITIONAL RATE INCREASES EVERY TWO YEARS FOR THE NEXT FIVE YEARS AND 25 AND 27, THAT'S PUTTING THE SIGNAL OUT TO OUR CUSTOMERS THAT
[02:20:01]
HEY, YEAH, BE EXPECTING ANOTHER RATE INCREASE.YEAH, IT MIGHT CHANGE, BUT YOU KNOW, WE'RE, WE'RE PROJECTING MORE RATE INCREASES COMING OUT HERE, AND WE'RE NOT JUST TALKING THREE POINT, UH, THE 3.85%, WE'RE TALKING ABOUT FOUR 14% OVER THE NEXT FIVE YEARS.
UH, C P SS FIRST CAME OUT WHEN, WHEN I WAS PRESENTED, THIS WAS A 10%, I DON'T KNOW FOR HOW MANY YEARS THAT WAS, BUT WHEN WAS OUR LAST RATE INCREASE? EIGHT YEARS AGO? 20, UH, 20 14, 13.
AND HOW MUCH WAS THAT RATE INCREASE? 4 2 5.
SO WE HAD A RATE INCREASE OF 4.25.
I DON'T KNOW HOW, HOW FAR WAS THAT PREVIOUS TO THAT BEFORE WE HAD A RATE INCREASE EIGHT YEARS AGO? I'VE GOT IT SOME, UM, WELL, THE POINT I'M TRYING TO MAKE IS IT WAS 4.25% EIGHT YEARS AGO.
NOW, WITHIN EIGHT YEARS, WE'RE PROJECTING OVER 14% OVER THE NEXT FIVE YEARS.
AND I, I KNOW THERE'S A LOT OF THINGS THAT NEED TO BE DONE, BUT ARE WE REALLY DOING THE MOST CRITICAL THINGS OVER THE NEXT FIVE YEARS AND STILL LOOKING AT THE AFFORDABILITY RATE ACROSS THIS ENTIRE CITY? WHERE, WHERE, WHERE DOES THIS NOW PUT US COMPARED TO OTHER CITIES IN TEXAS WITH OUR RATE STRUCTURE? ARE WE STILL THE MOST FAVORABLE RATE STRUCTURE? HAVE WE BENCHMARKED THESE NUMBERS TO SEE WHERE WE'RE AT AGAINST OTHER CITIES HERE IN TEXAS? I, I'D LIKE TO SEE THAT IN SOME KIND OF A CHART ALSO WHERE THIS WOULD PUT US OVER THE NEXT FIVE YEARS COMPARED TO OTHER CITIES.
OR WILL WE BE, WILL WE STILL BE THE MOST AFFORDABLE PLACE TO LIVE HERE IN TEXAS, ENERGY WISE, UH, IN, IN POWERING? SO I'D REALLY LIKE TO LIKE TO SEE THAT AS WELL.
THAT GIVES A GREAT PICTURE FOR 23, BUT I'D LIKE SOME HISTORY ON THAT.
WHERE, WHERE HAVE WE GROWN, UH, OVER THE LAST FIVE YEARS OR SINCE THE LAST RATE INCREASE? YOU KNOW, SHOWING THE METRICS AGAINST THAT, NOT JUST WHAT WE'RE PROPOSING, BUT WHAT IS OUR HISTORY BID AND WHERE ARE WE GONNA BE OVER THE NEXT FIVE YEARS? WHAT ARE OUR PROJECTIONS AGAIN WITH THESE RATE INCREASES? SO COUNCILMAN ON THAT ONE, I BELIEVE C P S PROVIDED SUPPLEMENTAL INFORMATION ON FRIDAY THAT HAS VERY DE DETAILED HISTORICAL INFORMATION.
SO THIS IS ACTUALLY A SUMMARY.
LOOK, WHAT YOU'LL ACTUALLY SEE IS THE FLOW OF FUNDS, WHICH IS VERY DETAILED.
I THINK THAT WENT OUT TO YOU ALL ON FRIDAY.
UM, YOU KNOW, THERE, THERE THE AUTHORIZED POSITIONS.
AREN'T WE FUNDING THE FULL NUMBER OF POSITIONS EACH YEAR? UH, OR ARE WE NOT FUNDING THOSE POSITIONS EACH YEAR? SO MUCH LIKE US, THEY HAVE AN, A BUDGET THAT IS BASED ON A COMPLIMENT OF POSITIONS, BUT YOU ASSUME SOME TURNOVER, SOME VACANCY RATE.
AND, UH, FOR THEIR FISCAL YEAR 22, I MENTIONED THE ADOPTED BUDGET WAS AROUND 534 MILLION.
THE LATEST ESTIMATE ON SLIDE, UH, SIX WAS, UH, 4 97.
UM, THEY'RE CARRYING OVER, UH, 400 VACANCIES TODAY.
UM, THAT'S ABOUT ALMOST 13% OF THEIR AUTHORIZED POSITION COUNT.
SO THAT'S GENERATING THAT SAVINGS, BUT THE BUDGET WOULD'VE FACTORED IN A, UM, LOWER LEVEL OF, OF VACANCY RATE.
THE PLAN IS, YOU KNOW, BASICALLY PRESENTED TODAY AND WHAT THEY'VE GIVEN US IS TO GET THAT VACANCY RATE DOWN FROM ALMOST 13% DOWN TO ABOUT 5% OVER THE NEXT TWO YEARS.
AND THEN ULTIMATELY I THINK THE GOAL IS TO GET BACK TO 4%, WHICH IS, UM, MORE IN LINE WITH WHERE THEY'VE BEEN HISTORICALLY.
AND GETTING IT DOWN TO THAT AT A COST OF ABSOLUTELY.
I MEAN, BUT I, YEAH, I I THINK IT, IT OBVIOUSLY THERE'S A COST TO FILLING POSITIONS, BUT, UM, IT IS, IT IS AIMED AT RESTORING THEIR OPERATIONS BACK TO WHAT I WOULD CALL CLOSER TO PRE PANDEMIC LEVELS.
UM, YOU KNOW, AS YOU HAVE VACANCIES, JUST LIKE WE'RE IMPACTED WHEN WE HAVE VACANCIES, UM, THERE ARE ELEMENTS OF THINGS THAT AREN'T GETTING DONE TO SOME DEGREE OR ARE BEING PICKED UP IN OTHER AREAS.
THIS IS MEANT TO START TO MOVE THAT BACK TO A MORE YEAH.
CALL IT MORE REASONABLE VACANCY LEVEL.
UM, LIKE SLIDE 11, UM, OUTSIDE SERVICES, AREN'T THESE JUST NORMAL BUDGET ITEMS THAT ARE DONE YEAR AFTER YEAR? I GUESS I WOULD'VE LIKED TO SEEN IN THIS PRESENTATION EXCLUSIVELY.
WHAT ARE WE ADDING TO THE BUDGET TO FORCE A RATE INCREASE? BECAUSE I, I, I DON'T KNOW WHAT TO COMPARE THIS TO.
THESE ARE JUST NUMBERS THAT I THINK IS JUST IN OUR REGULAR BUDGET EVERY YEAR.
SO ARE THEY INCREASED OR DECREASED OR WHAT, UH, IN THE FUTURE? SO WHEN YOU LOOK AT OUTSIDE SERVICES, ONE OF THE BIGGEST AREAS WHERE YOU'RE GONNA SEE AN INCREASE IS THIS DIGITAL ENTERPRISE RESOURCE PLANNING SYSTEM.
[02:25:01]
DOLLARS BEING SET ASIDE THAT ALLOWS THEM TO, UM, DO THE PLANNING, THE ASSESSMENT, THE BUILDING OF THE REQUIREMENTS FOR A VERY LARGE SCALE, UH, TECHNOLOGY REPLACEMENT OF A LEGACY SYSTEM.UM, SO THOSE ARE PRIMARILY, I THINK THEY SPEND A LITTLE BIT IN 22, BUT MOST OF THAT IS GONNA BE AN INCREMENTAL INCREASE FOR 23 AND 24.
AND THEN ON, UH, GOSH, I'M OUT OF TIME.
YOU KNOW, I, I AGREE WITH A LOT OF MY COLLEAGUES HERE ABOUT THE, YOU KNOW, THAT I WANT TO SEE, UM, I WANT TO SEE A MORE EQUITABLE RATE STRUCTURE AND, AND YOU KNOW, WHO PAYS WHAT MATTERS.
AND THAT, THAT WAS SOMETHING THAT I WANTED TO SEE WHEN I FIRST WENT BEFORE THE C P SS ENERGY BOARD YEARS AGO WHEN I WAS ASKING FOR A NEW PUBLIC PROCESS WHERE THE PUBLIC COULD, UM, EVALUATE HOW C P S ENERGY IS OPERATING AND SHARE IDEAS ON HOW THEY THINK THEY COULD IMPROVE OR HOW THEY COULD CHANGE GOING FORWARD AND BE ABLE TO CHALLENGE EACH OTHER'S IDEAS, RESPECT, UH, UH, RESPECTFULLY IN PUBLIC.
UM, AND, UM, AND I WANT TO THANK THE MAYOR FOR HAVING LED ON THAT EFFORT AND CREATING THIS RATE ADVISORY COMMITTEE.
YOU KNOW, BUT WHEN I, WHEN I FIRST WENT BEFORE THE BOARD, I DIDN'T GO TO THEM AND SAY, HEY, HERE ARE MY IDEAS, TAKE MY IDEAS AND IMPLEMENT THEM.
RIGHT? WHAT I DID WAS, I SAID, LOOK, THE AMERICAN PUBLIC POWER ASSOCIATION HAS A GUIDE ON BEST PRACTICES FOR PUBLIC PARTICIPATION FOR PUBLICLY OWNED UTILITIES.
AND SO DON'T DO WHAT I'M SAYING, JUST FOLLOW THEIR GUIDE IN WHEN YOU CREATE THIS NEW PROCESS.
AND, AND SO THAT'S WHAT THE BOARD DID AND THAT'S WHAT THE MAYOR DID WHEN THEY CREATED THIS RATE ADVISORY COMMITTEE.
AND SO, AT THE SAME TIME, RIGHT NOW, WHAT I'M, WHAT I'M SAYING IS, I'M, I'M COMING BEFORE YOU AND I'M NOT JUST SAYING, HEY, DO X, Y, AND Z BECAUSE COUNCILMAN BRAVO THINKS THEY'RE GOOD IDEAS.
WHAT I'M SAYING IS LET'S GET AN INDEPENDENT INDUSTRY EXPERT TO COME IN AND EVALUATE THE ORGANIZATION AND MAKE SOME RECOMMENDATIONS BECAUSE A LOT OF US IN HERE AREN'T EXPERTS.
UM, BUT SO, BUT WE'D LIKE TO SEE WHAT THE RE EXPERTS BELIEVE SHOULD BE DONE TO MAKE SURE THAT C P S ENERGY IS A HEALTHY, UH, ORGANIZATION.
AND SO THAT THE COMMUNITY, WE NEED THAT KIND OF TRANSPARENCY WHERE THE COMMUNITY CAN HAVE FAITH IN INVESTING MORE IN THIS, IN THIS UTILITY THAT WE OWN.
UM, AND THEN BEN, I HAVE ONE QUESTION.
UM, YOU SHOWED THAT WITH A, IT BECAUSE 13% OF C P S ENERGY'S REVENUES COME BACK TO THE CITY, UH, THAT WITH THAT THREE, WITH, WITH THE PROPOSED RATE INCREASES, THAT WE ANTICIPATE GETTING AN INCREASE IN REVENUES OF $5.1 MILLION, IS THAT CORRECT? UH, THAT IS CORRECT.
THAT'S, UH, SLIDE 42 IS, UH, $5.2 MILLION FOR THE REMAINDER OF OUR CURRENT FISCAL YEAR.
AND SO ONE OF MY COLLEAGUES HAD POINTED OUT THAT, UM, THE CITY WILL ALSO HAVE AN IN, UH, INCUR AN INCREASE IN WHAT WE HAVE TO PAY IN ELECTRICITY.
SO DOES THAT, DOES THAT TAKE THAT INTO ACCOUNT AS WELL? IT DOES.
I, I NETTED THAT ADDITIONAL EXPENSE FOR US OUT OF THAT NUMBER.
UM, I HAVE, SO IPADS ARE HAVING A CHALLENGE SINKING.
UM, COUNCILMAN PERRY'S, UH, WITH MINE ON THE SPEAKER QUEUE.
I KNOW HE'S IN, IS ANYBODY ELSE IN THE SPEAKER QUEUE? OKAY, THEN WE'RE ACCURATE WITH THE EXCEPTION OF COUNCIL MEMBER PERRY.
SO GO AHEAD, COUNCIL MEMBER PERRY.
UM, BEN, UH, I'VE GOT A BUNCH OF OTHER QUESTIONS AND I'LL GET WITH YOU LATER ON THOSE, BUT ON SLIDE NUMBER 42, UH, WHAT WOULD THE IMPACT BE IF WE DIDN'T TAKE, UM, F Y 22 AND 23, UM, THAT 14% FROM C P S ON THAT INCREASE ONLY? I MEAN, YOU HAVE THE FIGURES THERE, 5.2 AND 8.98, IT WOULD, THAT, THAT WOULD JUST MEAN REDUCING OUR GENERAL FUND BY THOSE NUMBERS, RIGHT? THAT WOULD BE REVENUE.
UM, SO A FULL YEAR IS ABOUT $10.1 MILLION, I BELIEVE.
UM, YEAH, 10.1 MILLION FOR 2023.
SO YOU'RE SAYING FOREGO THAT THAT INCREASE TO US ONLY THE INCREASE OF THE 14%.
[02:30:02]
SO IN OTHER WORDS, THE CITY FOREGO THAT 14% ON THE INCREASE, IS WHAT I'M SAYING?OKAY, WELL, IF SOMEBODY COULD GET THOSE NUMBERS, THAT WOULD BE GREAT AT SOME POINT IN THE FUTURE.
I GOT ANOTHER COUPLE QUESTIONS HERE.
UM, YOU MENTIONED IF WE DON'T WIN IN COURT ON THAT, THAT OTHER OUTSTANDING BALANCE, CAN WE, CAN YOU PUT SOME NUMBERS AND FIGURES TOGETHER WHAT THAT WOULD DO TO, UH, THESE CHARTS THAT YOU HAVE IN HERE ABOUT INCREASES AND INCREASES AND WHAT HAVE YOU THAT WOULD HAVE TO COVER THAT COST IF WE DON'T WIN IN COURT AS A WORST CASE SCENARIO? I THINK THAT'S IMPORTANT FOR EVERYBODY TO SEE THAT IT'S STILL HINGING ON, YOU KNOW, THE COURT WHETHER WE COME OUT AHEAD OR NOT.
UM, BUT I'D LIKE TO ACTUALLY SEE WHAT THOSE NUMBERS WOULD BE IF WE DON'T, WE, WE, WE CAN PROVIDE SOME INFORMATION I GUESS ON THAT.
THE, THE OTHER, UH, ON THE OTHER ONE, LEMME GET BACK ON THE CITY PAYMENT QUESTION.
I, I WAS DOING IT HERE ON MY PHONE AND IT DOESN'T LOOK RIGHT, SO LET ME, LET ME JUST MAKE SURE WE GET THAT RIGHT.
AND COUNCILMAN, IF I MAY, IF THERE'S ANY, UH, REALLY, UH, SHARING OF INFORMATION AS IT RELATES TO VARIOUS OUTCOMES OF LITIGATION, WE PROBABLY WOULD DO THAT IN EXEC.
WELL, I I'M JUST SAYING WORST CASE SCENARIO, IF WE'RE NOT SUCCESSFUL ACROSS THE BOARD, WHAT WOULD THAT DO TO THESE FIGURES IN THESE TABLES? AND, AND THAT'S JUST A LEVEL OF TRANSPARENCY.
IT, YOU KNOW, THAT'S A WORST CASE SCENARIO.
AND WE WOULD RELAY WORST CASE SCENARIOS WHEN IT RELATES TO LITIGATION.
UM, AND BEN, WHEN IS THE LAST TIME WE LOOKED AT ACTUALLY DIVESTING OURSELVES AS C P S? WHEN'S THE LAST TIME WE LOOKED AT THAT? UM, YOU SAY DIVESTING IN TERMS OF YEAH, SELLING, ACTUALLY SELLING, NOT OWNING C P S.
WHEN'S THE LAST TIME WE LOOKED AT THAT? PROBABLY, UH, UM, I WANNA SAY LATE, LATE NINETIES, I WOULD SAY AROUND MAYBE AROUND 99, 2000, SOMEWHERE IN THERE.
AND WAS THERE A STUDY PUT TOGETHER OR AN EVALUATION OF, OF THAT? HOW WAS THAT LOOKED AT AND HOW WAS THAT PRESENTED? I'M, I'M GONNA DO MY BEST OFF OF MEMORY HERE, COUNCILMAN.
'CAUSE UM, I, I'M A LOT OLDER THAN I LOOK, SO I'VE BEEN AROUND A LONG TIME, SO I'M GONNA TRY TO DO MY BEST.
UM, I BELIEVE THAT WAS ABOUT THE TIME THAT TEXAS PASSED THE ABILITY TO HAVE COMPETITION IN THE STATE, RIGHT? UH, WE HIRED AN OUTSIDE FIRM, UH, THAT WAS WORKING WITH A CITY THAT LOOKED AT A COUPLE OF DIFFERENT OPTIONS.
ONE WAS SHOULD WE OPT INTO THE OPEN MARKET? UM, SECOND WAS, SHOULD WE KEEP THE CURRENT STRUCTURE IN PLACE? AND THE THIRD WAS A DIVESTITURE OF C P SS.
UM, ULTIMATELY THAT, THAT, UM, FIRM'S ANALYSIS INDICATED BACK THEN THAT WE SHOULD RETAIN OWNERSHIP OF C P SS AND THAT WE SHOULD NOT, UM, THAT WE SHOULD NOT, UH, OPT INTO THE, UH, UH, COMP COMPETITIVE MARKET.
BUT THAT WAS IN, GOSH, PROBABLY LIKE TWO, 2000.
I'M THINKING 2001, SOMEWHERE IN THERE.
YOU KNOW, MAYBE WE NEED TO TAKE A LOOK AT THAT AND DUST IT OFF AND, UH, TAKE ANOTHER LOOK AT THAT AS, AS AN OPTION.
THERE'S ALWAYS OPTIONS OUT THERE, I THINK.
I THINK WE NEED TO, YOU KNOW, FOR OUR RATE PAYERS AND EVERYBODY ELSE, WE NEED TO TAKE A LOOK AT THAT, THAT IS AN OPTION OUT THERE.
UM, C P S IS A BUSINESS AND WE, WE HAVE TO CONTINUE TO LOOK AT THAT AS C P S RUNNING ITS DAY-TO-DAY OPERATIONS.
AND YES, THERE'S POLICY ISSUES THAT WE CAN, UM, INFLUENCE AND THAT KIND OF THING FROM CITY COUNCIL, BUT AT THE END OF THE DAY, WE NEED TO RECOGNIZE C P S AS A BUSINESS AND LET THEM RUN THEIR BUSINESS WITH AS LITTLE GOVERNMENTAL INTERFERENCE AS POSSIBLE, IN MY OPINION.
THANK YOU COUNCILMEMBER PERRY.
I HAVE NO OTHER, UM, Q IF I'M CORRECT, THEN I WILL SAY THANK YOU, UH, TO EVERYBODY WHO'S PARTICIPATING IN THE DISCUSSION.
[02:35:01]
YOU CERTAINLY TO OUR C P S, UH, LEADERSHIP TEAM, UH, AND BEN FOR A VERY THOROUGH, UH, PRESENTATION.[EXECUTIVE SESSION At any time during the meeting, the City Council may recess into executive session in the Presidio Conference Room or the B Room to consult with the City Attorney's Office (Texas Government Code Section 551.071) and deliberate or discuss any of the following: ]
UH, THE TIME IS NOW 4:35 PM THERE WILL BE NO EXECUTIVE SESSION TODAY.EXECUTIVE SESSION ITEMS THAT WERE POSTED FOR TODAY WILL BE CARRIED OVER TO TOMORROW, THURSDAY, DECEMBER 9TH, 2021, THE CITY COUNCIL MEETING, UH, AT THAT TIME, AND MAY BE CONSIDERED AT ANY TIME DURING TOMORROW'S MEETING.
THE TIME IS NOW 4:35 PM AND TODAY'S MEETING IS NOW IN RECESS.