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>> GARCIA: GOOD MORNING, EVERYONE. WE'RE GOING TO GO AHEAD AND GET STARTED. ALL RIGHT. WE'LL START THE MUNICIPAL UTILITIES COMMITTEE MEETING WITH A ROLL CALL.
>> CLERK: MA'AM, WE HAVE A QUORUM. >> GARCIA: WE'LL START
[Approval of Minutes ]
WITH APPROVAL OF THE MINUTES FOR THE MARCH 25 MUNICIPAL UTILITIES COMMITTEE MINUTES.MOTION. SORRY. IT'S A MOTION TO APPROVE, RIGHT, COUNCILMAN? MOTION TO APPROVE? PERFECT.
[Briefing and Possible Action on the following items ]
ITEM 2 IS CPS ENERGY ON THE IMPACTS OF INFRASTRUCTURE GROWTH TO TRANSMISSION PLANNING. WE'LL START OFF WITH -- WE DON'T HAVE A STAFF INTRO.I WAS LOOKING FOR BEN. NO PROBLEM. >> GOOD MORNING, ELAINA BALL, CHIEF STRATEGY OFFICER FOR CPS ENERGY AND I'M GOING TO TALK ABOUT OUR LOAD GROWTH AND WHERE WE ARE WITH LOAD GROWTH IN OUR COMMUNITY AS WELL AS THROUGHOUT THE STATE. BEFORE I BEGIN, I'D LIKE TO RECOGNIZE OUR CHAIR, DR. ROMERO, WHO IS IN ATTENDANCE HERE WITH THE CPS ENERGY STAFF.
SO TODAY -- AND I'LL OPEN, PLEASE STOP ME AT ANY TIME IF YOU HAVE QUESTIONS, CERTAINLY IF YOU WANT TO HOLD QUESTIONS UNTIL THE END, THE WHOLE TEAM IS HERE TO HELP WITH QUESTIONS AND ANY MATTERS THAT YOU MIGHT HAVE INQUIRIES ABOUT.
SO TODAY I WANTED TO SHARE THE DRIVERS FOR INFRASTRUCTURE GROWTH THAT ARE IMPACTING CPS ENERGY AND TALK ABOUT ERCOT. ERCOT IS THE REGIONAL TRANSMISSION ORGANIZAT OION AND THE OVERSEER OF THE MARKET THAT REPRESENTS LANDSCAPE AND INDUSTRY TRENDS THAT ARE IMPACTING THE ENTIRE STATE.
WE'LL ALSO SHARE OUR SYSTEM GROWTH, BRINGING IT HERE MORE LOCALLY.
WE WANT TO DISCUSS AND MAKE SURE YOU ARE ALL ARE A WAY OF A NUMBER OF PROJECTS AND IN PARTICULAR SOME PROJECTS SOUTH OF SAN ANTONIO AND THEY ARE TIED TO RELIABILITY THAT IS TIED TO SOME CON CONGESTION AND HAS ADVANTAGEOUS BENEFITS TO THE ENTIRE STATE. THEN WE'LL TALK ABOUT NEXT STEPS.
SO THE TAKE-AWAY IS WE'RE SEEING A LOT OF GROWTH. WE'RE SEEING A LOT OF GROWTH JUST NATURALLY. BEXAR COUNTY IS GROWING AND OUR REGION IS GROWING.
IT'S ONE OF THE FASTEST GROWING REGIONS IN THE UNITED STATES.
ADDITIONALLY, ENERGY DEMAND IS GROWING. OUR SYSTEM LOAD, WHICH DOESN'T INCLUDE LARGE LOADS SUCH AS DATA CENTERS, IS PROJECTED TO GROW JUST SHY OF 3% ANNUALLY OVER THE NEXT TEN YEARS. HOWEVER, WHEN YOU LAYER IN DEMAND, WE DO SEE AN INCREASE INTEREST IN DATA CENTERS NOT ONLY MOVING TO OUR REGION BUT MOVING THROUGHOUT THE UNITED STATES AND IN PARTICULAR INTO TEXAS. AND OVER THE NEXT TEN YEARS THEY ARE ANTICIPATED TO BE A SUBSTANTIAL PORTION OF THE INCREASE OF LOAD TO OUR SYSTEM.
WE'RE CONTINUING TO SEE A LOT OF RENEWABLE EXPANSION. THIS IS GREAT.
WE'RE SEEING MANY SOLAR AND STORAGE INTER CONNECTION REQUESTS NOT ONLY ON TO OUR SYSTEM BUT THROUGHOUT ERCOT. WIND AND SOLAR AND WE'RE SEEING CONTINUED INTEREST.
AS YOU ALL ARE AWARE, WE HAVE A POWER GENERATION THAT HAS GUIDED OUR PATH AND CONTINUES TO GUIDE OUR PATH. WE HAVE A NUMBER OF POWER GENERATION PLANTS IN CHEST OF 50 YEARS THAT HAVE REACHED END OF THEIR USEFUL PATH.
AND THAT'S ALSO GOING TO DRIVE SOME OF THE INFRASTRUCTURE NEEDS FOR THE UTILITY. SO THIS CHART IS ALREADY OUTDATED.
JUST ABOUT A MONTH AGO ERCOT HAD A LOAD FORECAST THAT ANTICIPATED 152,000 MEGAWATTS OF LOAD BY 2030. AND SO ERCOT IS CONTINUING TO REVISE THE FORECAST. THEIR FORECAST IS COMING A LITTLE BIT LOWER, BUT FOR
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PERSPECTIVES, LAST SUMMER ERCOT PEAKED AT 85 GIG WATTS.YOU ARE LOOKING AT A MOVE FROM 85 GIGAWATTS TO UP TO 130 TO 150 GIGAWATTS BY 2030. RIGHT NOW THERE ARE ALMOST 1800 ACTIVE REQUESTING IN ERCOT THAT TOTAL 346 GIGAWATTS. NOT ALL OF THAT IS GOING TO COME TO PASS. OUR HISTORICAL EXPERIENCE HAS BEEN THERE'S ALWAYS A LOT OF INTER CONNECTION APPLICATION AND REQUESTS AND WHERE IN THE TIMING ASSOCIATED WITH THOSE PROJECTS IS HIGHLY FLUID. SO THIS IS A LOOK AT WHAT'S HAPPENING THROUGHOUT THE INDUSTRY. THIS IS SPECIFIC TO LARGE LOAD AND DATA CENTERS IN PARTICULAR. THE TWO HOTTEST MARKETS FOR DATA CENTER GROWTH ARE VIRGINIA AND TEXAS. YOU WILL SEE SEVERAL OTHER STATES, BUT BY AND LARGE VIRGINIA AND TEXAS ARE THE MOST ADVANTAGEOUS OR MOST FAVORABLE PLACE FOR DATA CENTERS TO LOCATE. IN TEXAS WE HAVE A VERY BUSINESS-FRIENDLY CLIMATE SO WE DO SEE A LOT OF GROWTH IN OUR STATE NOT ONLY FOR THESE CUSTOMERS BUT IN GENERAL GROWTH IN MANUFACTURING, RESHORING AND EXPANSION IN OUR SERVICE TERRITORY AND THROUGHOUT THE STATE. SOME OF THE DRIVERS IN ADDITION TO BEING BUSINESS FRIENDLY ARE TRANSMISSION AND SITING PROCESS.
WE ARE SEPARATE FROM THE REST OF THE COUNTRY IN THAT WE DO NOT HAVE ROUTING THAT GOES THROUGH THE FEDERAL AGENCIES, ERCOT'S PROCESS TENDS TO BE QUICKER AND MORE EFFICIENT. YOU DO SEE THAT BEING A FACTOR AS TO WHY LARGE LOAD AND BUSINESSES ARE RELOCATING TO OUR STATE. SO OUR SYSTEM, THIS IS JUST ILLUSTRATIVE. OUR FORECASTED WE'RE UPDATING PERIODICALLY AND OF LOAD COMING, SO THIS IS CHANGING ALMOST WEEKLY. BUT RIGHT NOW IN -- LAST YEAR IN 2024, OUR SYSTEM PEAKED JUST ABOUT 5800 MEGAWATTS, BETWEEN 58 AND 5900 MEGA WANTS. THAT'S A SMALL POWER PLANT, SO IT'S A SUBSTANTIAL AMOUNT OF LOAD. AS YOU CAN SEE IN THE 2028 TIME PERIOD THE INCREASE THAT WE'RE SEEING IS TIED TO EXPECTED RAMPS OF LARGE LOAD WHICH INCLUDE DATA CENTERS BUT ALSO INCLUDE MANUFACTURING CUSTOMERS IN OUR NORMAL ORGANIC GROWTH OF OUR SYSTEM. SO WE HAVE A LOT OF GROWTH AHEAD OF US.
IT'S GOOD FOR OUR REGION, BUT IT IS VERY CHALLENGING BECAUSE WE HAVE A SUBSTANTIAL AMOUNT OF CAPITAL PROJECTS AND INVESTMENTS THAT ARE BEING PULLED FORWARD AND IT IS GOING TO REQUIRE QUITE A BIT OF WORK ON BEHALF OF THE UTILITY. REGIONALLY, WE'VE GOT A LOT OF TRANSMISSION GROWTH JUST AS BEING PART OF ERCOT. WE HAVE A COUPLE OF PROJECTS THAT WE'RE GOING TO HIGHLIGHT, BUT WE ANTICIPATE RIGHT NOW OVER THE NEXT FIVE YEARS AT LEAST 1.4 BILLION IN INCREMENTAL TRANSMISSION SPEND WHICH IS UNLIKE ANY SPEND RATE THAT WE'VE HAD BEFORE. A LOT OF THE DRIVERS ARE, AS WE TALKED ABOUT, CHANGE CHANGES TO OUR SYSTEM BASED ON LOAD GROWTH AND RETIRING GENERATION PLANTS.
ADDITIONALLY WE'RE PUTTING IN NEW SWITCHING STATIONS AND CORRIDORS INTO OUR SERVICE TERRITORY WHICH ALLOWS US TO IMPORT MORE POWER AND ALLEVIATE CONGESTION BETWEEN THE WIND PRODUCERS AND GULF COAST AND AS WELL AS SOLAR APPROXIMATE OUT WEST.
ONE OTHER ITEM -- PRODUCTION OUT WEST. YOU WILL BE SEEING ERCOT CURRENTLY IS UNDERTAKING A STUDY TO DETERMINE -- THERE'S A NEED TO BUILD ADDITIONAL HIGHWAY THROUGHOUT THE STATE, TRANSMISSION HIGHWAY.
OUR HIGHWAY IS 345KV, BUT RIGHT NOW ERCOT IS REVIEWING AS THEY ARE LOOKING AT STATEWIDE EXPANSION OUT TO THE WEST AND CREATING A HUB AND SPOKE EFFECTIVELY IN OUR SERVICE TERRITORY AND THEN DISTRIBUTING POWER THROUGH THE OTHER PARTS OF THE STATE. PUTTING IN A NEW EXTRA HIGH-VOLTAGE BACKBONE OF '65KV. THIS IS A FAIRLY SUBSTANTIAL DEVELOPMENT.
WE'LL BE ABLE TO MOVE MORE POWER THROUGHOUT THE STATE. IT DOES EXIST IN OTHER MARKETS BUT THIS WOULD BE NEW FOR TEXAS. WE DO HAVE SEVERAL PROJECTS
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THAT COME THROUGH OUR SERVICE TERRITORY THAT WE WOULD POTENTIALLY BE INVOLVED IN RELATIVE TO THE CRUX ACTIVITIES. -- CONSTRUCTION TRYSTS.ONE THING I DID WANT TO HIGHLIGHT, OF OUR TRANSMISSION PROJECTS ON THE BOOKS OVER THE NEXT FIVE YEARS, THIS IS GOING TO INCREASE OUR ABILITY TO GROW ANOTHER THOUSAND MEGAWATTS OF LOAD GROWTH THROUGH 2029. I KNOW YOUR OFFICES GET REQUESTS FROM MANUFACTURERS, DATA CENTERS, OTHER BUSINESSES COMING TO OUR REGION IN EXCESS OF 1,000 MEGAWATTS. WE'RE WORKING DILIGENTLY TO WORK WITH DIFFERENT CUSTOMERS DEPENDING WHERE THEY ARE LOCATING, THE NATURE OF THEIR LOAD RAMP SCHEDULE, WORKING TO GET THEM BRIDGING POWER AND HELP, BUT THIS PLAN WILL GET US ANOTHER THOUSAND MEGAWATTS.
OUR SYSTEM PEAKS AT ABOUT 6,000, SO WE'RE TALKING ABOUT A 20% EXPANSION OF OUR SYSTEM IN THE NEXT NOW FOUR AND A HALF YEARS. THESE ARE SOME OF THE PROJECTS THAT ARE PLANNED THROUGH THIS PERIOD OF TIME. WE'VE GOT SOME REGIONAL PROJECTS THAT ARE TIED TO TRANSMISSION CONSTRAINTS THAT EXIST DOWN SOUTH.
YOU MAY BE AWARE THAT WE HAVE -- WE HAD ORIGINALLY PLANNED TO RETIRE THE BRAWNIC UNITS AT THE END OF MARCH. WE DID REQUIRE TWO OF THE UNITS. ERCOT REQUESTED WE KEEP ONE OF THEM RUNNING SO WE ARE IN OVERHAUL WORK FOR THAT PLANT AND WE HAVE SOME OTHER PROJECTS ERCOT IS FOCUSED ON. ONE IS THE SECOND ONE, SPRUCE TO PAWNY TO TANGO THAT WILL ALLEVIATE SOME OF THE CONGESTION BETWEEN THE GULF COAST AND OTHER PARTS OF THE STATE. A LOT OF WORK THAT IS WELL BEYOND JUST WHAT WE NEED IN SAN ANTONIO. IT'S REALLY IN SUPPORT OF THE ENTIRE STATE.
SO NEXT STEPS, WE ARE -- IF YOU ARE WATCHING OUR BOARD MEETINGS, WE ARE PUTTING FORWARD A NUMBER OF RFPS AND AWARD RECOMMENDATIONS FOR EVERY ASPECT OF OUR INFRASTRUCTURE NEEDS. FROM TRANSMISSION LINES TO CONDUCTOR TO TRANSFORMERS, PLANS FOR ALL OF THE GENERATION WORK THAT WE'VE GOT PLANNED, AND SO ALL OF THIS IS IN SUPPORT OF THE SIGNIFICANT INCREASE IN LOAD AND IT IS GOING TO REALLY DRIVE A LOT OF PROJECT WORK AND INVESTMENT. SO WITH THAT, I'LL OPEN IT UP TO QUESTIONS. JUST WANTED TO GIVE YOU ALL AN UPDATE ON WHERE WE ARE
WITH LOAD GROWTH. >> GARCIA: GREAT. THANK YOU TO ALL THE TEAM FOR BEING PROACTIVE. THAT'S MY FIRST QUESTION. IN TERMS OF LAND ACQUISITION, HAVE YOU ALL ALSO I GUESS TAKEN THE LEAD ON BEING PROACTIVE IN SOME OF THOSE AREAS? THE REASON I'M ASKING, A LOT OF THE RESIDENTS THAT WE GET CONCERNS ABOUT, THEY ARE ASKING ABOUT, WELL, ARE THEY GOING TO PUT SOMETHING IN MY BACKYARD. OR IF THEY PUT ONE OF THE SUBSTATIONS IS IT -- AGAIN, THEY ARE CONCERNED ABOUT THE NOISE, WHAT IT LOOKS LIKE AESTHETICALLY.
TELL ME HOW YOU GO ABOUT THE LAND ACQUISITION AND WHAT YOU ARE DOING TO ALLEVIATE
THE COMMUNITY'S FEARS BEFORE YOU DO THAT. >> ANY TIME WE GO INTO A NEED TO EITHER UPGRADE ON EXISTING LINE OR SEEKING TO BUILD NEW INFRASTRUCTURE, IT DEPENDS ON THERE'S KIND OF A COUPLE OF DIFFERENT PROCESSES, ONE THAT'S INSIDE THE CITY OF SAN ANTONIO AND ONE OUTSIDE THE CITY OF SAN ANTONIO, BUT EFFECTIVELY THEY HAVE SOME OF THE SAME STEPS. WE DO GO THROUGH A COMPREHENSIVE PUBLIC INPUT PROCESS AS WELL AS A ROUTING AND SITING PROCESS.
ONE, TO ENSURE WEEK SERVE THE RELY NEEDS OF THE SYSTEM, LOOK AT THE ENVIRONMENTAL IMPACT, THE IMPACT TO, YOU KNOW, THE RESIDENTS AND THE FOLKS IN THE AREA. AS WELL AS THE OVERALL COST OF THE PROJECT BECAUSE WE WANT TO MAKE SURE THAT WE'RE TAKING ALL OF THESE THINGS INTO CONSIDERATION.
AND WE DO HAVE EXTENSIVE PUBLIC INPUT PROCESSES FROM, YOU KNOW, THE INCEPTION OF THE PROJECT AND SO WE WOULD VERY MUCH -- I THINK THROUGH OUR GOVERNMENT RELATIONS FOLKS WE TRY TO MAKE SURE EVERYONE KNOWS WHEN THOSE ARE HAPPENING.
BUT IT IS OUR INTENT TO BE AS INCLUSIVE AS POSSIBLE, TAKING ALL THOSE VARIABLES INTO CONSIDERATION. AS FAR AS LAND ACQUISITION, WE DO TRY TO BE STRATEGIC LONG TERM, BUT WE ALSO HAVE TO BE CAREFUL THAT WE DON'T GET TOO FAR AHEAD OF THE SYSTEM NEEDS AND THEN HAVE, YOU KNOW, EXPENDED MONEY ON BEHALF OF OUR CUSTOMERS
THAT'S NOT USED AND USEFUL. >> GARCIA: GOT IT. THANK YOU.
REMIND ME, DOES ERCOT HELP PAY FOR ANY OF THESE SPECIFIC NEW INFRASTRUCTURE
NEEDS AND WHAT IS THE COST SHARE THERE? >> IT'S A REALLY GREAT QUESTION. SO TRANSMISSION, WHICH IS, YOU KNOW, FOR US IS ANYTHING
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138KV A AND UP FOR OUR SYSTEM. TRANSITION IS A SOCIALIZED COST IN THE STATE OF TEXAS. SO ALL OF THE CONSUMERS, ALL OF THE LOAD-SERVING AREAS PAY THEIR SHARE OF THE TRANSMISSION COSTS OF THE SYSTEM BASED ON THE PROPORTIONATE LOAD. SO FOR US HERE IN SAN ANTONIO, THAT'S BETWEEN 6 AND 7%. SO ALL OF OUR COSTS GO INTO THE BUCKET.WE PAY 6 TO 7% OF OUR SHARE, AND THAT PROCESS IS COMPLETELY GOVERNED BY THE
PUBLIC UTILITY COMMISSION. >> GARCIA: AND THEN MY LAST QUESTION IS ABOUT DATA CENTERS. I KNOW THAT IN VIRGINIA THE MILE -- I THINK THEY CALL IT DATA CENTER MILE AND IT CAN TECHNICALLY POWER HALF A MILLION HOMES IS WHAT I HEARD ON ONE PODCAST. I KNOW WE HAVE SOME PROJECTED SYSTEM LOAD INCREASE BY 31% HERE. I'M JUST WONDERING, ARE THERE -- OR IS THERE POTENTIAL NEW REQUIREMENTS IN PARTICULAR WITH SOLAR THAT MIGHT HELP TO EASE UP THAT? DO YOU KNOW OF ANYTHING? ARE YOU AWARE OF ANY?
>> THERE ARE A NUMBER OF ITEMS IN FLIGHT RIGHT NOW REALLY TO HELP WITH THIS LOAD GROWTH THAT IS HAPPENING. AND, YOU KNOW, DATA CENTERS GET A LOT OF ATTENTION AND AIR IN THE ROOM BECAUSE THEY ARE COMING SO SWIFTLY AND BRINGING LARGE REQUESTS. EVEN FOR LOADS THAT MAY BE MANUFACTURING RELATED.
THE TEXAS LEGISLATURE IS CURRENTLY -- THERE'S A BILL, SENATE BILL 6, WHICH IS MOVING THROUGH THE LEGISLATIVE PROCESS, WHICH SEEKS TO DO A NUMBER OF THINGS RELATIVE TO LARGE LOAD. ONE IS TO ENSURE THAT THERE IS SOME SKIN IN THE GAME BY PEOPLE REQUESTING REQUEST FOR LARGE LOAD SO THERE IS MORE LOAD FORECAST ACCURACY, NOT DUPLICATION, TRIPLY INDICATION, CREATING FALSE LOAD. BUT ALSO ENSURING SHOWS LOADS BRING BACK UP GENERATION AND HAVE SPECIFIC PROVISIONS FOR ISLANDING DURING EMERGENCY CONDITIONS.
SO THAT'S ONE EXAMPLE. BUT RELATIVE TO RESOURCES, ABSOLUTELY I THINK WE HAVE, YOU KNOW, WE HAVE THIS STEEP PROJECTION OF GROWTH, BUT WE ALSO ARE ADDING RESOURCES IN ERCOT, PARTICULARLY SOLAR AND STORAGE AND WIND AT PRETTY HISTORIC RATES.
WE AT CPS ALSO OPERATE NUCLEAR FACILITIES. WE ALSO OWN NUCLEAR FACILITIES. WE RECENTLY HAVE ADDED SOME GAS ASSETS, MAKING SURE WE HAVE A DIVERSE PORT FOAL THOUGH THAT HELPS PROTECT OUR CUSTOMERS FROM MARKET CONDITIONS THAT CAN BE VOLATILE AND WE'RE TAKING STEPS NOT ONLY ON THE GENERATION SIDE BUT THE TRANSMISSION SIDE TO READY OUR SYSTEM AND BRING ON CUSTOMERS OF ALL KINDS OF TYPES TO BRING DEVELOPMENT TO THE REGION.
>> GARCIA: THANK YOU. I JUST WANT TO THANK RUDY BECAUSE YOU ALL ARE ALWAYS AVAILABLE WHEN WE HAVE POTENTIAL ECONOMIC DEVELOPMENT PROJECTS AND I KNOW THAT ALEX LOPEZ IS WATCHING THIS ONLINE TODAY. I APPRECIATE YOU BEING SO FLEXIBLE. COMMENTS? COUNCILMEMBER COURAGE.
>> COURAGE: THANK YOU, CHAIR. I'D LIKE TO GO BACK TO WHAT YOU MENTIONED ABOUT UNIT CITY SHUT DOWNS. CAN YOU GO OVER THAT AGAIN?
>> CERTAINLY. ERCOT ULTIMATELY HAS A COUPLE OF FUNCTIONS.
THE FIRST FUNCTION IS TO ENSURE A RELIABLE ELECTRICAL SYSTEM, A TRANSMISSION SYSTEM IN THE STATE OF TEXAS. THEY ALSO HAVE A RESPONSIBILITY TO OVERSEE AND MANAGE A FAIR MARKETPLACE.
IN THE SPIRIT OF RELIABILITY, THEY HAVE JURISDICTIONAL AUTHORITY TO LOOK FOR REMOVALS OF ASSETS, EVEN SEASONLY, FROM THEIR RESOURCE STACK AND DETERMINE WHAT THE IMPACTS ARE TO RELIABILITY AND ERCOT TRIES TO LOOK FOR ALTERNATIVES.
THEY REALLY WANT TO WORK WITH MARKET PARTICIPANTS, FOR US IT'S ECONOMIC AND AGE-RELATED REASONS WE WANT TO SHUT DOWN INTERESTS AND TRY TO FIND WAYS TO DO THAT.
IF PROJECT THAT I MENTIONED AROUND THE SOUTH CORRIDOR RELIABILITY CONSTRAINTS, WE DO HAVE SOME CONSTRAINTS. SO THEY REVIEW THROUGH THE REGIONAL TRANSMISSION PLANNING PROCESS, YOU KNOW, A LOT OF CONTINGENCIES, WHAT COULD HAPPEN IF THIS ELEMENT WENT OUT OR WE HAVE THESE KIND OF EXTREME CONDITIONS. AND DEEMED FOR THE NEXT TWO YEARS, THAT THEY DO NEED TO DO A RMR, WHICH IS RELIABILITY MUST RUN CONTRACT FOR ONE OF OUR BRAUNIG UNITS. THE COST WILL BE AS I
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DESCRIBED ON THE TRANSMISSION SIDE. BUT THE REASON IS TO HAVE THAT UNIT AVAILABLE AND TO ADDRESS RELIABILITY CONCERNS, AND THEY CAN DO THAT FOR ANY RESOURCE IN THE STATE THAT MAY SEEK TO WITHDRAW WHILE OTHER ALTERNATIVES ARE CONSTRUCTED. DOES THAT MAKE SENSE?>> COURAGE: I UNDERSTAND THAT. HAVE THEY INDICATED ABOUT
THE INTRODUCE UNITS? >> WE HAVE -- SPRUCE UNITS? >> JUST AS A REMINDER, WE ARE INTENDING TO RETIRE SPRUCE 1, IT'S ALSO REACHING ITS END OF LIFE.
SPRUCE 2 WE ANTICIPATE IN OUR PLANNING TO REPOWER THAT UNIT WITH NATURAL GAS.
BUT ALL OF OUR UNIT RETIREMENTS WHICH INCLUDES THE RECENTLY RETIRED BRAUNIG UNITS, OUR SUMMERS UNITS ARE COMING UP NEXT AND THEN THE SPRUCE CHANGES, WE'VE CONVEYED THAT TO THE MARKETPLACE WITH TRANSPARENCY.
BUT AS WE GET CLOSER TO THOSE DATES BASED ON CONDITIONS IN THE MARKET AND THE RELIABILITY OF THE GRID, THIS IS ALWAYS A POTENTIAL THAT COULD OCCUR.
>> COURAGE: DO WE ALSO MONITOR OTHER RESOURCES OF OTHER ENERGY PRODUCERS TO MAKE SURE THAT WE FEEL LIKE WE'RE GETTING A FAIR DEAL WHEN IT COMES TO LIMITATIONS ON WHAT WE WANT TO DO OR NO LIMITATIONS ON OTHERS THAT ARE IN A SIMILAR SIX?
>> YEAH, THIS IS THE GREAT THING ABOUT HOW THE MARKET OPERATES INN THE STATE OF TEXAS. THERE'S SOMETHING CALLED A CAPACITY DEMAND AND RESOURCES REPORT THAT GETS PUBLISHED TWICE A YEAR. EVERY MARKET PARTICIPANT CAN SEE THE CAPACITY, EXPECTED DEMAND AND RESOURCES AVAILABLE AS WELL AS ANY ANNOUNCED RETIREMENTS. SO WE HAVE VISIBILITY INTO WHAT EVERYBODY ELSE IS DOING FROM A RETIREMENT OR CONTINUED OPERATION PERSPECTIVE.
>> COURAGE: ONE THING I'M CONCERNED ABOUT IS THE LARGE DATA CENTERS.
WE HEAR WHO OUR LEGISLATORS HAVE A CONCERN ABOUT THAT AND I HEARD YOU MENTION SOME KIND OF LEGISLATION THAT MAY IMPACT THOSE CENTERS COMING INTO TEXAS.
I DON'T HAVE CONFIDENCE ANYTHING IS GOING TO BE PASSED ON THAT.
WHAT FROM PROJECTIONS FOR DATA CENTERS THAT WANT TO COME INTO BEXAR COUNTY?
>> I DO THINK SENATE BILL 6 IS A WELL THOUGHT-OUT BILL THAT ADDRESSES THE LOAD FORECAST ACCURACY THAT WE ALL NEED, SKIN IN THE NAME, BACKUP GENERATION, INTER CONNECTION TWICE, THOSE ARE MAYBE A LITTLE CONTROVERSIAL, BUT THE -- SKIN IN THE GAME AND CREATING DEMAND FORECAST DRIVERS THAT ARE INACCURATE.
SO I DO THINK THAT THAT IS, YOU KNOW, THAT IS IN PLAY AND I THINK GENERALLY IS WELL THOUGHT-OUT APPROACH. RELATIVE TO OUR LOAD FORECAST, ON SLIDE 6 OF YOUR MATERIALS, THIS SHOWS -- WE'RE SHOWING 2026. OBVIOUSLY WEAN IN THE MIDST OF 2025 -- WE'RE IN THE MIDST OF 2025. I MENTIONED OUR PLANT PHOTOGRAPHED IS SHOWING ABOUT 6,000 MEGAWATTS. WE WERE AT 5800, 5900 LAST SUMMER. THE LINE ON THE BOTTOM SHOWS OUR PLANNING FORECAST WITHOUT THESE LARGE LOAD DATA CENTERS. THE GREEN LINE ON THE TOP INCLUDES OUR PROJECTIONS ON WHAT WE BELIEVE THE DATA CENTERS TO WE KNOW WE CAN EFFECTUATE. THERE MAY BE MORE INTEREST OUT THERE THAN THE GREEN LINE, BUT BASED ON ALL THE TRANSMISSION WORK WE'VE GOT GOING ON, REMEMBER I MENTIONED THE THOUSAND MEGAWATTS WE'RE WORKING TO BUILD CAPACITY, THIS IS WHAT
WE CAN ENABLE. >> LET ME JUST ADD. STAND RIGHT THERE.
TO ANSWER YOUR QUESTION A DIFFERENT WAY, COUNCILMAN, WE'VE PROBABLY GOT 20 DATA CENTER PROJECTS POTENTIALLY IN THE QUEUE. TEN THAT ARE REALLY PROJECTS THAT ARE SIGNING CONTRACTS AND DOING THE THINGS THAT THEY NEED TO DO TO GET US COMMITTED AND THEY COMMIT THEIR FINANCIAL RESOURCES SO WE CAN GET THEM GOING.
AND I THINK THAT'S PART OF THE CONVERSATION AT THE STATE LEVEL.
ERCOT IS GETTING A LOT OF CRITICISM BECAUSE THEY ARE PUTTING A MARKER DOWN AND SAYING, HEY, WE THINK THIS IS A REASONABLE FORECAST. IF YOU JUST LOOK AT OUR EXPERIENCE, 50% OF THE POTENTIAL PROJECTS WE THINK ARE REAL PROJECTS, SO I
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THINK THE AMOUNT OF LOAD ERCOT CAN EXPECT IS SOMEWHERE BETWEEN 50 AND 100%. YOU KIND OF PUT A PIN IN YOUR PLANNING EXERCISE AND PLAN TO WHATEVER NUMBER YOU THINK IS MOST REASONABLE. SO I DON'T THINK OUR EXPERIENCE IS MUCH DIFFERENT THAN WHAT YOU ARE SEEING ACROSS THE STATE.WE'RE A VERY, VERY ATTRACTIVE MARKET FOR DATA CENTERS.
>> COURAGE: WELL, IS WHAT YOU ARE SAYING THEN OUT OF THE 20 POTENTIAL, YOU THINK
TEN WILL PROBABLY GO THROUGH? >> AT LEAST.
>> COURAGE: AND THE CAPACITY FOR USING ENERGY IN THOSE PLACES IS TREMENDOUS.
DO WE HAVE A DIFFERENT EVALUATION ON BETWEEN LET'S SAY A MICROSOFT DATA CENTER AND A CRYPTOCURRENCY DATA CENTER AND THE AMOUNT OF ENERGY THEY ARE GOING TO USE AND IS THERE A DIFFERENT WAY OF MAKING SURE THAT GROWTH PAYS FOR GROWTH AND IF THEY ARE GOING TO BE USING A TREMENDOUS AMOUNT OF ENERGY IN ONE AND MAYBE A LOT IN ANOTHER, BUT NOT QUITE AS MUCH, IS THERE A WAY OF BALANCING THAT SO THAT OUR RATEPAYERS DON'T END UP PAYING FOR ALL OF THAT IN THE FUTURE? I'M GOING TO TURN IT BACK OVER TO ELAINA, BUT I THINK THE DATA CENTER COMMUNITY OR STAKEHOLDER COMMUNITY HAS NOT DONE A REAL GOOD JOB OF DEFINING THE DIFFERENCE OF A 100-MEGAWATT AND 1,000 CRYPTO CURRENCY FACILITY. TWO VERY DIFFERENT TINES OF PROJECTS. THE SECOND PROJECT IS THE ONE THAT REALLY HAS GOTTEN THE ATTENTION OF THE LEGISLATURE. SO YEAH, DEPENDING UPON HOW BIG OF A SCALEWISE THESE FACILITIES ARE, CHANGES HOW WE PLAN FOR THEM.
BUT IT'S NOT A REGULAR CUSTOMER. IT DOESN'T GO THROUGH THE REGULAR PROCESS BECAUSE TOO MANY OF OUR -- INTERNAL PARTS OF OUR ORGANIZATION HAVE TO COME TOGETHER TO GET IT RIGHT. I'M GOING TO TURN IT OVER TO
ELAINA AND LET HER TALK THROUGH THAT A LITTLE BIT. >> I FIRST WANTED TO SHARE, WE DO NOT HAVE ANY CRYPTOCURRENCY CENTERS IN OUR SERVICE AREA.
NOT THAT THERE MAY -- YOU MENTIONED A PARTICULAR PROVIDER.
WE WORK WITH ALL OF THEM. WE HAVE INTEREST FROM ALL THE MAJOR AND OTHER TYPES OF DATA CENTERS. SO RUDY HIT THE NAIL ON THE HEAD.
THIS IS A VERY COLLABORATIVE KIND OF HIGH-TOUCH PROCESS THAT WE GO THROUGH AND WE'VE BEEN DOING IT IN WAVES. WE'VE BEEN STUDYING THE PROJECTS IN WAVES BECAUSE IT'S NOT JUST ABOUT THE GROSS AMOUNT OF ENERGY, IT'S ABOUT WHERE YOU ARE SIGHTING ON OUR SYSTEM. THERE'S A LOT OF PROJECTS THAT HAVE BEEN -- THEY'VE SECURED LAND OR SEEKING TO EXPAND FACILITIES OR INHERENT CONSTRAINTS.
BASED ON WHERE THEY ARE IN THE BUILD CYCLE, THOSE PROJECTS MAY RAMP FURTHER IN THE FUTURE THAN OTHERS WHO ARE IN A NON-CONSTRAINED PART OF THE SYSTEM.
UNFORTUNATELY IT'S NOT AS EASY AS JUST AN IN AND OUT FROM AN ENERGY PERSPECTIVE, BUT WE DO GO THROUGH A VERY THOROUGH PROCESS. I'VE GOT BEN JORDAN FROM MY TEAM AND HE LEADS OUR EFFORT ON LARGE LOAD AS WELL AS INTEGRATED PLANNING.
>> COURAGE: ONE LAST QUESTION. WITH WHAT WE HAVE IN DATA CENTERS, WE KNOW HOW MUCH ENERGY THEY USE, THEY ARE TELLING US THEY MAY USE MORE, BUT CAN YOU TRANSLATE LET'S SAY A MICROSOFT DATA CENTER TO THE NUMBER OF
HOUSEHOLDS WORTH OF ENERGY THEY USE ON A MONTHLY BASIS? >> I'M NOT GOING TO BE SPECIFIC ABOUT A PARTICULAR CUSTOMER, BUT, YOU KNOW, IN GENERAL, YOU KNOW, AS WE LOOK AT ENERGY AND IT KIND OF DEPENDS ON THE TIME OF YEAR, BUT A MEGAWATT CAN POWER TWO HOMES. YOU CAN USE THAT AS A SCALE. ONE THING THAT IS UNIQUE ABOUT TRADITIONAL DATA CENTERS AND THE AI LEARNING CENTERS, THEY TEND TO BE HIGH LOAD FACTOR, THEY RAMP UP, GET TO HIGH OUTPUT AND STAY THERE.
WE AS RESIDENTIAL CUSTOMERS, WE DON'T TYPICALLY HAVE THAT SAME PROFILE.
WE'LL SEE A PEAK IN OUR USAGE AND THE REST OF THE PERIODS WE'LL SEE IT QUELL.
THE ACTUAL CONSUMPTION PROFILE LOOKS VERY DIFFERENT.
>> COURAGE: THANK YOU. >> GARCIA: COUNCILMEMBER WHYTE.
>> WHYTE: THOSE ARE GREAT QUESTIONS. I JUST HAVE TWO QUICK QUESTIONS. A LOT OF GROWTH DRIVEN BY COMMERCIAL AND INDUSTRIAL USERS, WHAT DO WE DO IF ANYTHING TO MAKE SURE THE RESIDENTIAL FOLKS AREN'T
SORT OF BEARING THE COST OF THAT? >> WE GO THROUGH WHEN WE SET UP ANY OF OUR STRUCTURES, OUR RATE STRUCTURES, WE LOOK AT COST OF SERVICE, COST OF
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SERVICE DRIVERS, AND WE HAVE DIFFERENT CLASSES OF CUSTOMERS.THOSE LARGE CUSTOMERS HAVE A SPECIFIC STRUCTURE THAT'S TIED TO THEIR CHARACTERISTICS THAT THEY HAVE AND WE WORK VERY HARD WHEN WE GO THROUGH COST OF SERVICE STUDIES TO ENSURE THE DRIVERS OF COSTS ARE BEING APPORTIONED THEIR PORTION OF COSTS. WHAT SOME OF THE ACTIVITIES THAT YOU SEE GOING ON AT THE LEGISLATURE RELATIVE TO THESE LARGE BLOCK LOADS ARE DIRECTLY AN ATTEMPT TO ENSURE THERE ISN'T ANY CROSS SUBSIDIZATION BETWEEN CUSTOMERS.
AT THE SAME TIME I WILL SAY WE ALSO ARE MODELING AS WE BRING ON THOSE CUSTOMERS, THEY DO CONSUME A LOT OF SALES, AND THE MORE SALES WE CAN SPREAD ACROSS FIXED COSTS THE MORE HELPFUL IN CONTROLLING COSTS FOR ALL CUSTOMERS.
THERE IS THAT SIDE THAT'S IMPORTANT TOO. >> WHYTE: SORT OF TIED TO THAT, THOUGHTS LIKE THESE NEW INVESTMENTS, FUTURE RATE INCREASES, IS IS THAT
SOMETHING THAT'S BEEN DISCUSSED OR NOT? >> WELL, AS I MENTIONED ABOUT THE TRANSMISSION INVESTMENTS, OUR TRANSMISSION INVESTMENTS GO THROUGH THE STATE PROCESS. SO THAT IS A UNIQUE AND SEPARATE DRIVER.
YOU KNOW, THE COSTS ASSOCIATED WITH ALL THE GROWTH THAT WE'VE GOT, IT'S PART OF OUR BUDGET, OUR BUSINESS PLAN THAT WE HAVE SHARED WITH THIS BODY THAT HAVE BEEN PART OF THE DISCUSSIONS. THE THING WE'RE WATCHING IS THE GROWTH IS STARTING TO TICK UP. ALL THE QUESTIONS YOU ARE ASKING ARE THINGS WE WANT TO STAY ABREAST OF AND WE WANT TO MAKE SURE WE'VE GOT PLANS THAT REFLECT IT AND THAT WE ARE ENSURING FAIR COST ALLOCATION.
>> WHYTE: AND THE COUNCIL'S NEW POLICY THAT WE'VE TALKED ABOUT BEFORE WHERE WHEN THE OUT OF MARKET SALES -- WE'RE GOING TO BE REINVESTING THOSE DOLLARS INTO CPS. IS THAT WHAT YOU TALKED ABOUT WITH THESE TYPES OF
INVESTMENTS? >> WE ABSOLUTELY HAVE LOOKED AT AND VERY MUCH APPRECIATE THE ACTION THE COUNCIL HAS TAKEN RELATIVE TO RETURN BACK SOME OF THOSE FUNDS.
SOME OF THE EXAMPLES OF PLACES THAT WE'RE GOING TO LEVERAGE THOSE DOLLARS ARE IN RELIABILITY PROJECTS FOR GENERATION WHICH IMPROVE SERVICE TO ALL CUSTOMERS.
GRID AUTO MAKES CLOSURES THAT HELP SHORTEN FREQUENTLY AND LENGTH OF OUTAGES.
NOT TAKING THOSE DOLLARS AND FUNDING INFRASTRUCTURE FOR A LARGE LOAD.
>> WHYTE: THANKS, CHAIR. >> GARCIA: COUNCILMEMBER CABELLO HAVRDA.
>> HAVRDA: THANK YOU. DISTRICT 6 IS KNOWN AS DATA LANE.
WE HAVE SO MANY DATA CENTERS. EVEN THOUGH IT'S NOT EXACTLY EMERGING IT'S BEEN DIFFICULT FOR US TO WRANGLE IT. WE WORKED CLOSELY ON IT, RUDY AND US. I WANT TO TALK SPECIFICALLY ABOUT NEIGHBORHOODS.
DO YOU GUYS WORK WITH DSD OR WITH PLANNING TO FIGURE OUT WHERE THE BEST LOCATIONS ARE FOR DATA CENTERS? BECAUSE THEY WANT TO GO WHERE THEY WANT TO GO, I
KNOW THAT. >> SO WE DO TRY TO PROVIDE PROSPECTIVE CUSTOMERS A GENERAL VIEW OF OUR SYSTEM AND WHERE THERE'S CAPACITY, WHERE THERE MAY BE MORE CAPABILITY TO RAMP, BUT ULTIMATELY THE DECISIONS WHERE A NEW BUSINESS COMES IS UP TO THEM. WE AS A UTILITY CAN'T DIRECT THEM.
YOUR POINT IS VERY VALID IN THAT AS WE'RE LEARNING ABOUT DIFFERENT DEVELOPMENTS, COORDINATING WELL BETWEEN THE DIFFERENT GROUPS AND WE DO WORK WITH CITY AND PLANNING, BUT WE AREN'T IN THE DRIVER'S SEAT TO TELL THAT PRIVATE ENTITY WHERE
BEST TO PUT THEIR -- >> HAVRDA: MAYBE THERE'S -- I'M LOATHE TO START A NEW ZONING CATEGORY, BUT MAYBE BECAUSE IT'S BEEN -- AT LEAST IN MY AREA IT'S BEEN PRETTY DISRUPTIVE TO THE NEIGHBORHOODS. THEY TAKE A LONG TIME TO BUILD, VERY LOUD, IT'S JUST BEEN A LOT OF WORK TO GET DATA CENTERS IF THEY ARE ANYWHERE NEAR A NEIGHBORHOOD. I THINK WE NEED TO LOOK MORE CLOSELY AT THAT. IT'S SOMEWHAT ALARMING GIVEN MY EXPERIENCE WITH DATA CENTERS THAT WE'RE GOING TO INCREASE -- DID YOU SAY IT WAS GOING TO DOUBLE IN,
LIKE, THREE YEARS THE ELECTRIC CONSUMPTION? >> YEAH, HERE IN SAN ANTONIO WHERE YOU ARE SEE THE FIVE-YEAR OUT LOOK, WE BELIEVE IT'S GOING TO BE ABOUT 5800 TO MAYBE 7100 WITH DATA CENTERS. BUT ERCOT IS SEEING A SIMILAR PROFILE WHICH IS WHAT I THINK YOU ARE POTENTIALLY LOOKING AT HERE WHICH IS GOING FROM 85 GIGAWATTS, A SUBSTANTIAL AMOUNT OF GROWTH.
>> HAVRDA: A LOT OF QUESTIONS ABOUT COSTS HAVE WITHIN SOMEWHAT ANSWERED
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ALTHOUGH I DON'T THINK I UNDERSTOOD WHAT YOU MEANT BY SALES AND DIVVYING IT UPACROSS THE CITY. CAN YOU EXPLAIN? >> HIGH-LOAD CUSTOMERS THAT INTERCONNECT AND JUST HAVE A LOT OF KILOWATT-HOUR SALES AND DATA CENTERS, BUT ALSO MANUFACTURING WHERE THEY ARE THINKING ABOUT SOME OF OUR LARGE MANUFACTURERS.
WE HAVE THOSE TYPES OF LOADS THAT ARE GROWING AND THAT ARE RELOCATING AND THAT ARE BUILDING HERE. THOSE TEND TO HAVE A LOT OF SALES SO REVENUES ONCE WE GET UP TO FULL SCALE WE'RE SEEING RETAIL SALES THAT MAY BE IN EXCESS OF THE COST TO CONNECT. SO THAT ADDITIONAL REVENUE GETS SPREAD ACROSS THE ENTIRE COSTS OF THE UTILITY. AND THAT CAN HELP MUTE COSTS INCREASES OUR RATE ACTIONS.
CAN'T ELIMINATE, BUT YOU ARE GETTING INCREASED SALES. >> HAVRDA: SO IF THEY ARE JUST BEING DISTRIBUTED ACROSS, THEY ARE -- THE REGULAR CPS RATEPAYER IS
PAYING FOR THEM. >> THEY PAY FOR THE INTER CONNECTION BETWEEN THEIR PROJECT TO THE GRID. AND THE TRANSITION UPGRADE --
>> HAVRDA: CALCULATE CENTERS. >> OR ANY -- DATA CENTERS.
>> COME, THE WAY -- I'VE SAID FROM THE GET GO, UNDER OUR LEADERSHIP WE CAN'T ALLOW OUR EXISTING CUSTOMERS TO SUBSIDIZE LARGE LOADS. THEY'VE GOT TO PAY THEIR FAIR SHARE. OUR PROCESS ALLOWS FOR THAT. WHEN FOLKS GET FRUSTRATED THAT IT MIGHT TAKE FOUR OR FIVE YEARS TO GET THROUGH THE TRANSMISSION PROCESS TO SERVE THEM AT FULL FREIGHT, FOR WHAT THEY ARE ASKING FOR, IT'S BECAUSE WE PLAN OUR SYSTEM IN A WAY THAT ALLOWS US TO KEEP RATES AFFORDABLE.
IF WE HAD ALL THIS CAPACITY SITTING OUT THERE THAT WASN'T BEING UTILIZED AND BUILT EVERYTHING THAT NEEDED TO BE BUILT SO WHEN A DATA CENTER SHOWINGS UP WE CAN CONNECT AND GET GOING, THAT WOULD BE A CONDITION UNDER WHICH RATEPAYERS ARE SUBSIDIZING.
ANIMAL. THAT'S WHY IT'S IMPORTANT TO BE BOLD.
IF WE OVERBUILT OUR SYSTEM, THEN YOU ARE GOING TO HAVE A SITUATION WHERE CURRENT
RATEPAYERS ARE PICKING UP THE COSTS. >> HAVRDA: I DO HEAR FROM THEM AND UPSET THEY ARE NOT DOING IT FAST ENOUGH AND THAT'S THE ANSWER.
THAT'S THE BEST ANSWER YOU CAN GIVE. I THINK I ONLY HAVE ONE MORE QUESTION. AND IT'S MORE ABOUT, LIKE, RESOURCES, NOT SO MUCH COSTS BUT PULLING RESOURCES AROUND IT. IS THAT SOMETHING THAT'S
HAPPENING. >> TALK TO ME MORE ABOUT YOUR QUESTION.
>> HAVRDA: THE DATA CENTERS ARE VERY CLOSE TO NEIGHBORHOODS.
THERE'S ONE NEIGHBORHOOD STRONGLY AFFECTED. DOES THAT MEAN THAT THEIR ENERGY IS ANY LESS RELIABLE OR EFFECTIVE? THAT'S A QUESTION THEY ASK A
LOT. >> IT'S A GREAT QUESTION. WHEN WE ARE LOOKING AT INTERCONNECTING A LARGE CUSTOMER WHETHER IT'S A DATA CENTER OR ANY OTHER CUSTOMER, WE DO PLANNING STUDIES NOT ONLY ON THE TRANSMISSION BUT DISTRIBUTION SYSTEM IN THE AREA. AND A BIG PART OF WHY WE ARE HAVING TO SLOW PEOPLE DOWN POTENTIALLY OR TURN THEM DOWN IS BECAUSE OF OUR PLANNING CRITERIA OBJECTIVES TO ENSURE WE DO NOT EVERY SEE IMPACT RELIABILITY OR PUT AN AREA AT RISK DUE TO OVERPRESCRIBING IN THAT PORTION OF OUR REGION.
>> HAVRDA: THANKS SO MUCH. >> GARCIA: ANY FOLLOW-UP QUESTIONS? THANK YOU SO MUCH, I APPRECIATE YOU. I WAS ALARMED WITH THE AI STATISTICS THAT I HEARD THE OTHER DAY AND HOW MUCH POWER AI SEARCH COMPARED TO GOOGLE SEARCH. I APPRECIATE YOU THINKING AHEAD.
ITEM NUMBER 2, THAT IS ALSO CPS ENERGY ON THE EVOLVED ENTERPRISE RESOURCE
PLANNING. >> GOOD MORNING. I'M THE CHIEF ENERGY OFFICER AT CPS AND I WILL PROVIDING AN UPDATE ON DIGITAL TRANSFORMATION EFFORTS, OUR ERP ENTERPRISE RESOURCE PLANNING INITIATIVE. FOR THE AGENDA I'LL PROVIDE A BIT OF BACKGROUND TO REMIND YOU OF THE CURRENT STATE OF TECHNOLOGY AND SOME OF OUR GOALS. HIGHLIGHT SOME OF OUR RECENT PROGRESS, REMIND YOU ALL OF THE INVESTMENT SUMMARY AND WELCOME ANY QUESTIONS THAT YOU HAVE.
HERE YOU CAN SEE A SIMPLISTIC VISUAL OF WHAT IS IN REALITY A VERY COMPLEX
[00:40:03]
TECHNOLOGY SYSTEM THAT SUPPORTS ALL ASPECTS OF OUR UTILITY.AT THE CORE IS OUR CURRENT ERP, WHICH IS A PRODUCT FROM SAP.
THAT TECHNOLOGY WAS ACTUALLY SELECTED IN 1998 AND DEPLOYED IN 2001.
TODAY WE ARE EFFECTIVELY USING ALMOST A 25-YEAR-OLD TECHNOLOGY PLATFORM.
OVER TIME WE HAVE ADDED MANY OTHER BUSINESS APPLICATIONS THAT ARE HEAVILY INTEGRATED WITH THAT CORE SAP TECHNOLOGY. AND THEN IN THE OUTER RING WE ALSO HAVE A NUMBER OF OPERATIONAL SYSTEMS, THOSE SUPPORT THINGS LIKE OUTAGE MANAGEMENT SYSTEM, OUR TRANSMISSION AND DISTRIBUTION SYSTEM, ALL OF OUR METERING INFRASTRUCTURE. AND YOU'LL NOTICE THE RED ARROWS THAT YOU SEE ACROSS ALL OF THESE CIRCLES AND THAT IS REALLY REPRESENTATIVE OF ALL THE AMOUNT OF DATA INTEGRATIONS MOVING BORED. IN TOTAL WE HAVE ABOUT 400 SYSTEMS ACROSS OUR ECOSYSTEM WHICH MAKES IT QUITE CHALLENGING TO PROVIDE REALTIME ACCESS TO RELEVANT INFORMATION TO OUR VARIOUS BUSINESS AREAS.
ONE OTHER THING THAT I WANT TO CALL OUT HERE IS OUR CURRENT ERP PLATFORM, THAT'S SAP THAT YOU SEE IN THE CENTER HERE, WILL REACH END OF STANDARD SUPPORT FROM OUR VENDOR AT THE END OF CALENDAR YEAR 2027. SO AS WE TOOK A LOOK ACROSS ALL OF THE CHALLENGES THAT I JUST MENTIONED, NOT ONLY THE NEARING END OF SUPPORT DATE WITH OUR CURRENT CORE TECHNOLOGY PLATFORM, BUT ALSO ALL OF THE COMPLEXITY AND CHALLENGES IT RENTS TO US FROM AN OPERATIONAL PERSPECTIVE, WE EMBARKED ON A BROADER DIGITAL TRANSFORMATION STRATEGY.
OUR CUSTOMERS AND EVOLVING WORKFORCE. ALSO LOOKING AT OUR ABILITY TO IMPROVE HOW WE PRESENT DATA TO OUR CUSTOMERS, WHETHER THROUGH OUR ONLINE SEVERAL SERVICE CAPABILITIES AND PORTALS OR DIRECTLY THROUGH OUR BILL.
ALSO LOOKING AT OUR ABILITY TO DEPLOY NEW PRODUCTS AND SERVICES THAT REQUIRE CHANGES TO OUR RATE STRUCTURES. ALSO LOOKING AT HOW THESE TECHNOLOGIES CAN IMPROVE OUR OPERATIONAL EFFICIENCY. ALL OF THESE ARE KEY OUTCOMES WE HOPE TO ACHIEVE THROUGH OUR ADDITIONAL EFFORTS.
ALL OF THESE THINGS ARE VERY MUCH ANCHORED ON OUR VISION 2027 STRATEGY AND WE HAVE BUILT OUT OUR HORIZON 2050 STRATEGY AS WELL. I WANT TO HIGHLIGHT ALL OF THE WORK THAT OCCURRED IN CALENDAR YEAR 2020 AND RAMPED UP OVER THE PAST COUPLE OF YEARS. YOU WILL SEE ALONG THE LEFT-HAND SIDE A NUMBER OF DIFFERENT PLANNING ACTIVITIES THAT WE HAVE SUCCESSFULLY COMPLETED.
I MENTION THE WORK THAT WE DID TO DEVELOP OUR OVERAFTERNOONING DIGITAL STRATEGY, BUT WE ALSO BROUGHT IN A NUMBER OF DIFFERENT ENTITIES HELP US UNDERSTAND OUR CURRENT LANDSCAPE AS WELL AS LOOKING AT HOW WE CAN LEVERAGE NEW DIGITAL TECHNOLOGIES TO IMPROVE OPERATIONS. WE HAVE BEEN WORKING THE LAST COUPLE OF YEARS ON STRATEGIC VENDOR PARTNER SELECTIONS.
THAT STARTED WITH OUR TECHNOLOGY PARTNER SELECTION WHICH IS ORACLE AS WELL AS ACCENTURE. LEADING US UP TO OUR GLOBAL DESIGN PHASE WHICH WE KICKED OFF EARLIER THIS MONTH. SO THROUGH ALL OF THIS PLANNING ACTIVITY, WE HAVE BUILT OUT A PARTNER ECOSYSTEM THAT YOU CAN SEE VISUALLY REPRESENTED HERE AND I'LL KIND OF HIGHLIGHT SOME OF THESE KEY STRATEGY PARTNERS FOR US.
AS I MENTIONED, ORACLE IS WHO WE SELECTED TO REPLACE NOT ONLY THE S.A.T.
TECHNOLOGY BUT A NUMBER OF OTHER TECHNOLOGIES. IF YOU RECALL THAT HAVE BEEN INTEGRATED WITH THAT SAP PLATFORM. TO PREPARE WE BROUGHT IN PRICE WATERHOUSE COOPER TO HELP BUILD OUT OUR CHANGE MANAGEMENT STRATEGY.
ACCENTURE WAS SELECTED AS IMPLEMENTATION PARTNER. THAT WAS APPROVED IN JANUARY OF THISSER 82. WE HAVE RECENTLY ON BOARDED GATERRER IN, INDEPENDENT VERIFICATION VALIDATION. THAT IS OVERSIGHT TO ENSURE ALL OF THE VENDOR PARTNERS
[00:45:09]
ARE WORKING TO ACHIEVE THE OUTCOMES WE HAVE IDENTIFIED AND FOCUS ON OUR ABILITY TO IDENTIFY RISKS EARLIER SO WE CAN DEVELOP THOSE STRATEGIES TIMELY.SO THIS VISUAL REALLY JUST SHOWS HOW ALL OF THESE KEY PARTNERS WORK TOGETHER.
ACCENTURE IS ON BOARD BRINGING A LOT OF EXPERTISE AND LARGE-SCALE TECHNOLOGY IMPLEMENTATION PROGRAMS. OF COURSE OUR CPS ENERGY TEAM PLAYS A CRITICAL ROLLING BRING ALL THEIR BUSINESS -- ROLE TO ENSURE THAT WE'RE CONFIGURING THE TECHNOLOGY WHICH IS ORACLE TO WORK FOR US IN THE RIGHT WAY.
AND IMPARTER IN PROVIDING THAT INDEPENDENT VALIDATION SUPPORT.
WE USE THE TERM ONE TEAM BUT WE ALSO APPLY THAT TO THIS VENDOR ECOSYSTEM WITH ALL OF THESE PARTNERS THAT WE'RE ALL AIMING TO ACHIEVE THE SAME GOAL AND OUTCOMES.
YOU CAN REALLY SEE AT THE BOTTOM HERE THE FOUNDATION THAT WE'RE TRYING TO LAY WHICH IS A TECHNOLOGY ECOSYSTEM THAT IS REALLY ALIGNED TO UTILITIES BEST PRACTICES THAT IS TECHNICALLY SOUND AND HELPING US ACHIEVE NOT ONLY ALL THE REQUIREMENTS FOR OPERATIONS TODAY BUT ALSO INTO THE FUTURE.
SO WHAT WILL THIS TRANSITION LOOK LIKE. AS I MENTIONED, WE SPENT A NUMBER OF YEARS DOING A LOT OF THE IMPORTANT PLANNING WORK, BUT NOW WE ARE TRANSITIONING INTO OUR IMPLEMENTATION PHASE. THE BALANCE OF THIS YEAR FOR US IS GLOBAL DESIGN WHERE WE'RE BRINGING INTERNAL TEAMS TOGETHER WITH PARTNERS TO LAY OUT HOW THE TECHNOLOGY WILL WORK IN OUR FUTURE STATE.
THAT SHOULD WRAP UP AROUND Q4 OF THIS FISCAL YEAR FOR US.
THEN WE'LL START ROLLING UP OUR SLEEVES AND MOVING INTO THE CONFIGURATION AND TESTING OF THE NEW TECHNOLOGY. TO DEPLOY FUNCTIONALITY AS EARLY AS POSSIBLE AND CONTINUE DEPLOYING AS OFTEN AS POSSIBLE.
WHAT WE DID NOT WANT TO DO IS TAKE OUR PROJECT TEAM AND STICK THEM IN A ROOM AND SAY HEY, GO DO ALL OF THIS WORK AND WE'RE GOING TO FLIP A SWITCH THREE OR FOUR YEARS LATER. YOU'LL SEE WE'VE LAID OUT A PHASED APPROACH FOR OUR IMPLEMENTATION. OUR FIRST GO LIVE WILL OCCUR AT THE END OF OUR FISCAL YEAR 2027, WHICH IS FOCUSED ON A LOT OF OUR CORE BACK OFFICES FUNCTIONS.
SO FINANCIAL MANAGEMENT, ALL OF OUR HUMAN RESOURCE MANAGEMENT, SUPPLY CHAIN, BUDGETING ANCHOR COMPONENTS FROM A EVERYTHING CUSTOMER. SO ALL OF OUR CUSTOMER BILLING, ALL OF THE CUSTOMERS' ACCESS TO THEIR INFORMATION THROUGH OUR ONLINE CAPABILITIES, AS WELL AS SOME ADDITIONAL FUNCTIONALITY FROM A WORK MANAGEMENT PERSPECTIVE.
SIX MONTHS LATER WE'LL HAVE THIRD AND FINAL RELEASE WHICH IS REMAINDER OF ASSET MANAGEMENT AND ADVANCED FIELD SERVICE CAPABILITIES. THAT LAST RELEASE IS TARGETED FOR END OF FISCAL YEAR 2028 WHICH IS A REMINDER END OF CALENDAR YEAR 2027. I MENTIONED THAT SAP END OF STANDARD SUPPORT DATE IS 2027 SO OUR TRANSITION PLAN KEEPS THAT IN MIND AND HELPS ENSURE WE'RE MITIGATING THAT RISK APPROPRIATELY. OUR INTERNAL TEAM MEMBERS PLAY A CRITICAL ROLE.
AS I MENTIONED WE DON'T WANT JUST TO BRING IN ALL THE INTERNAL EXPERTISE AND HAVE THEM GUIDE US, BUT THEY HAVE A ROLE TO PLAY BUT OF EQUAL IMPORTANCE IS BRINGING IN THE RIGHT PEOPLE FROM ACROSS THE ORGANIZATION. YOU CAN SEE THE APPROACH THAT WE'VE TAKEN THERE. ALMOST 40 INDIVIDUALS HAVE ACTUALLY MOVED INTO OUR PROGRAM TEAM AS FULL-TIME DEDICATED RESOURCES. WE REFER TO THOSE AS OUR GROUP LEADS AND TRACK LEADS, SO THEY BRING DOMAIN EXPERTISE AND VARIOUS PARTS OF THE ORGANIZATION. THEY WORK WITH OVER 200 SUBJECT MATTER EXPERTS THAT ARE TAPPED FOR THEIR EXPERTISE OVER PARTICULAR DOMAIN AREAS OR BUSINESS PROCESS AREAS. AND ALL OF THESE INDIVIDUALS ARE WORKING THROUGH A NUMBER OF WORKSHOPS. WE ACTUALLY HAVE OVER 300 WORKSHOPS IN OUR GLOBAL DESIGN PHASE WHICH GOES THROUGH Q4 OF THIS YEAR TO LAY OUT FUTURE WAYS OF WORKING AND HOW WE WILL CONFIGURE THE TECHNOLOGY TO WORK FOR US.
WHAT ARE THE OUTCOMES WE EXPECT TO ACHIEVE. AS I MENTIONED, WE HAVE THREE RELEASES THAT WE HAVE LAID OUT, AND HERE I JUST HIGHLIGHTED SOME OF THE OUTCOMES THAT WE EXPECT WITH EACH OF THOSE RELEASES. 1, IN AUDIO] SEVERAL
[00:50:09]
SERVICE CAPABILITIES. GET OUR FIELD TEAMS ACCESS TO INFORMATION THROUGH REALTIME THROUGH MOBILE DEVICES IS A KEY COMPONENT IN THIS FIRST RELEASE.ALSO LOOKING AT HOW WE CAN START TO EXPAND REALTIME WORK ORDER AND DISPATCH CAPABILITIES. SECOND RELEASE IS EVERYTHING CUSTOMER.
HERE WE WILL BE LOOKING AT ENHANCEMENTS TO THE CUSTOMER EXPERIENCE, IMPROVED INSIGHT TO DATA AROUND ENERGY USAGE WITH APPROPRIATE NOTIFICATIONS THAT CUSTOMERS CAN OPT IN FOR. AS WELL AS PROVIDE A BETTER AND FASTER SERVICE AS WE'RE RECEIVING INQUIRIES FROM CUSTOMERS.
RELEASE 3 IS ENTERPRISE ASSET MANAGEMENT, WHERE THEY WILL BE LOOKING FOR ADDITIONAL AUTOMATION TO PROVIDE FOR WORK ASSET AND DISPATCH MANAGEMENT.
JUST A QUICK VIEW INTO THE INVESTMENT, SO OUR LAST TWO APPROVED RATE CASES WERE KEY REQUIREMENTS FOR THIS INITIATIVE. THE FIRST ONE IN 2022 HELPED FUND A LOT OF OUR PLANNING ACTIVITY WE HAVE FULLY COMPLETED.
AND NOW WE'RE IN OUR FISCAL YEAR 2026 SO WE'VE MOVED TO THE RIGHT-HAND BAR AND YOU CAN SEE THE FUNDING TO SUPPORT NOT ONLY THE TECHNOLOGY INVESTMENT BUT ALL OF THE INTERNAL LABOR, THE OVERSIGHT AND IMPLEMENTATION SERVICES THROUGH CONCLUSION OF THE PROGRAM, AND WE ARE CURRENTLY ON TRACK AND IN LINE WITH THE TOTAL PROGRAM COST OF 304 MILLION. WITH THAT, I WELCOME ANY
QUESTIONS. >> BEFORE WE GET TO QUESTIONS, THEN I'LL TURN IT BACK OVER TO EVAN, I JUST WANT TO TAKE A MOMENT AND NUMBER ONE THANK THE WORK OUR BOARD HAS DONE ON THIS. THIS IS A MONUMENTAL EFFORT AND QUITE FRANKLY OUR 25-YEAR-OLD SYSTEM HAS HELD US BACK IN TERMS OF THE THINGS WE CAN DO TO IMPROVE OUR OVERALL CUSTOMER EXPERIENCE. SO, YOU KNOW, UNLESS YOU ARE EVAN, NOT A HUGELY SEXY PROJECT, BUT IT'S FUNDAMENTALLY IMPORTANT, AND SO THE MANNER IN WHICH WE WENT ABOUT PLANNING FOR THIS PROJECT, YOU KNOW, WE BROKE IT UP INTO STAGES. LET'S DO THE PLANNING WORK AND PAY FOR THAT AND THEN WE'LL PUSH FORWARD ONCE WE FEEL WE'VE GOT A GOOD PLAN. THAT TOOK COLLABORATION, CHALLENGING US ON ASSUMPTIONS AND WHAT WE THOUGHT IT WAS GOING TO COST, THEN TOOK COURAGE BY COUNCIL TO HELP US PAY FOR THIS.
BUT WE DID IT RIGHT. SO I WANT TO JUST REINFORCE, WE HAVE TRIED -- OUR APPROACH HAS ALWAYS BEEN AND WILL ALWAYS BE WITH ME AND OUR BOARD THAT WE'RE GOING TO BE TRANSPARENT WITH THE COMMUNITY ABOUT WHAT OUR NEED IS AND THEN HAVE TOUGH CONVERSATIONS WITH OUR BOARD AND CITY COUNCIL ABOUT HOW WE GET THERE.
I THINK THIS IS AN EXCELLENT EXAMPLE OF THE PROCESS WORKING THE WAY IT SHOULD AND I JUST WANT TO SAY THANK YOU TO COUNCILMEMBERS AND CITY STAFF FOR WORKING WITH US ON THIS. THERE ARE GOING TO BE TOUGH DAYS AHEAD, BUT WE'RE GOING TO DO THIS RIGHT BECAUSE WE FOLLOWED A GOOD PROCESS TO GET HERE.
I WANT TO REASSURE COUNCIL ABOUT HOW WE'VE SET UP THE GOVERNANCE MODEL TO GET THIS
PROJECT RIGHT. >> GARCIA: THANK YOU. I'LL START OFF WITH THAT BECAUSE YOU DID HAVE SUPPLY CHAIN MANAGEMENT. AND I UNDERSTAND SAP IS OLD AND I DON'T THINK THE CITY USES IT ANYMORE, OR MAYBE THEY DO.
WELL, SO BUT ALSO ORACLE HAD THAT BIG CLOUD BREACH AND 6 MILLION RECORDS ESSENTIALLY IN MARCH OR APRIL IT WAS ANNOUNCED, THEY DENIED IT, BUT IT WAS THE LARGE LARGEST SUPPLY CHAIN HACK. AND SO HOW ARE YOU GOING TO MAKE SURE THAT SOMETHING LIKE THAT DOESN'T AFFECT US? I KNOW IT WAS ON THE USER END, BUT ON HERE YOU DO HAVE ENHANCED ANALYTICS ACROSS KEY FUNCTIONS, I'M WORRIED ONE OF THOSE WOULD BE VULNERABLE TO CYBER ATTACKS. HELP ME UNDERSTAND HOW YOU ARE GOING TO BE PRESSURING ORACLE TO MAKE SURE SOMEBODY DOESN'T GAIN ACCESS TO OUR
POWER. >> OUR CYBERSECURITY PROGRAM IS FULLY INTEGRATED BOTH ON THE PHYSICAL SIDE BUT CERTAINLY FROM A TECHNOLOGY PERSPECTIVE AS WELL.
SO WE'VE BEEN VERY THOUGHTFUL ABOUT BOTH THE REQUIREMENTS THAT WE LAID OUT ON THE FRONT END AS WE INITIALLY BUILT OUR RFP THAT ORACLE AND A NUMBER OF OTHER VENDORS RESPONDED TO TO REALLY PUT THEM ON THE HOOK TO, YOU KNOW, PUT SOME
[00:55:05]
CONTRACTUAL LANGUAGE BEHIND WHAT THEY SAID THEY WOULD DO FROM A DATA SECURITY PERSPECTIVE. WE ALSO HAVE LAID OUT AN ARCHITECTURE WORKING WITH ACCENTURE AS OUR PARTNER AND ORACLE TO ENSURE WE HAVE THE RIGHT TYPE OF SECURITY IN TERMS OF HOW WE ARE CONNECTING TO THE ORACLE SHROUD.SPECIFICALLY LOOKING -- CLOUD. SPECIFICALLY HOW WE WANT TO ENCRIPT DATA MOVING BACK AND FORTH BETWEEN THEIR ENVIRONMENT AND FROM A DEVICE PERSPECTIVE, FIELD MEMBERS THAT MAY NOT HAVE THEM TODAY BUT ALSO THOSE THAT ARE ALREADY EQUIPPED, YOU KNOW, MOBILE DEVICE MANAGEMENT IS KEY.
MAKING SURE IF THAT END POINT EVER BECOMES COMPROMISED WE HAVE THAT ABILITY TO WIPE THAT DEVICE AS SOON AS WE'RE MADE AWARE THERE IS AN ISSUE.
WE ALSO HAVE BUILT A VERY STRATEGIC PARTNERSHIP WITH ORACLE.
THEY ARE EXTREMELY INVESTED IN OUR SUCCESS BECAUSE THEY ARE MAKING A WHOLESALE SHIFT FROM SAP TO THEIR PLATFORM. AND THAT GIVES US ACCESS TO THEIR LEADERSHIP TEAM AT THE HIGHEST LEVELS, AND THAT REALLY ALLOWS US TO HAVE THE RIGHT LEVEL OF DIALOGUE AS THESE THINGS COME UP OR WE'RE SEEING CONCERNS TO ENSURE OUR INFORMATION IS
SAFEGUARDED. >> GARCIA: AND I ASSUME THOSE DEVICES ARE -- LOG-IN
TO VPN AT THE VERY LATEST. >> THAT'S CORRECT. >> GARCIA: ON SLIDE 4 YOU HAVE UNDER STRATEGIC OUTCOMES CLOSING OF -- YOU HAVE EXPANDED CUSTOMER SELF-SERVICE AND PAYMENT OPTIONS. AND DO YOU ANTICIPATE CLOSING ANY OF THE CENTERS WHERE PEOPLE COULD PAY THEIR BILLS LIKE AT HEB OR ANYTHING LIKE THAT? I'M CONCERNED BECAUSE A LOT OF OUR SENIORS DON'T REALLY HAVE ACCESS. IF THEY DO HAVE ACCESS TO TECHNOLOGY, IT'S THEIR PHONE AND IT'S TINY. AND SO HOW CAN YOU HELP ME MAKE SURE THAT I DON'T FEEL LIKE THE SENIORS ARE GOING TO BE DIGITALLY DISCONNECTED?
>> WE HAVE TODAY AND WILL CONTINUE TO OPT IN FOR A PAPER BILL.
WE'RE A LEADER IN TERMS OF CUSTOMERS, LEADER IN THE INDUSTRY IN TERMS OF CUSTOMERS THAT ARE ELECTING FOR THE PAPERLESS OPTION, DESIRES TO HAVE A BILL PHYSICALLY MADE TO THEM, THEY WILL CONTINUE TO HAVE THAT OPTION.
ADDITIONALLY THIS YEAR WE ACTUALLY EXPANDED OUR PAYMENT CAPABILITIES.
NOW NOT ONLY CAN A CUSTOMER GO INTO HEB, BUT THEY ALSO HAVE A QR BAR CODE THEY CAN TAKE INTO A NUMBER OF OTHER MERCHANTS TO PAY THEIR CPS BILL IN MORE LOCATIONS THAN JUST HEB. SO WE'RE CONTINUING TO MAKE SURE THAT WE HAVE EQUITABLE WAYS FOR OUR CUSTOMERS TO ENGAGE AND THE PAYMENT CAPABILITIES AND WHATEVER
WAY IS MOST SUITABLE FOR THEM. >> GARCIA: ON THAT SAME SLIDE, YOU ALSO HAVE ENABLE REALTIME DECISIONS. CAN YOU GIVE AN EXAMPLE
SOMETHING YOU WOULD BE ABLE TO DO IMMEDIATELY? >> ONE OF THE THINGS WE TALK ABOUT IS PUSH NOTIFICATIONS TO OUR CUSTOMERS. IF THEIR JUDGE -- IF THEIR USAGE IS TRENDING ABOVE NORM, LET ME KNOW SO I ASK HAVE MORE CONTROL OVER WHAT USAGE LOOKS LIKE. THAT WOULD BE AN EXAMPLE OF PROVIDING THE REALTIME
INFORMATION SO CUSTOMERS ARE MORE EMPOWERED. >> GARCIA: THANK YOU SO MUCH. START WITH COUNCILMEMBER WHYTE.
>> WHYTE: THANK YOU, CHAIR. BRIEFLY, ON SLIDE 7, HAVE YOU ALL ASSESSED WHETHER OUTSOURCING TO SEVERAL VENDORS MAY OFFER BETTER
COST EFFICIENCY THAN DOING IT IN HOUSE? >> AS WE WENT -- WHEN WE WENT THROUGH BOTH THE TECHNOLOGY EVALUATION SELECTION PROCESS AND IMPLEMENTATION PARTNER EVALUATION SELECTION PROCESS, WE HAD OVERSIGHT TO HELP US NOT ONLY BUILD THOSE RFPS BUT PROVIDE RECOMMENDATIONS HOW WE SHOULD STRUCTURE. ONE OF THE KEY COMPONENTS IS BALANCING THE RISK THAT COMES WITH CPS ENERGY NEEDING TO MANAGE A POOL OF VENDORS.
AND WHATEVER VALUE THAT MAY RETURN VERSUS GOING WITH A SINGLE VENDOR APPROACH FROM AN IMPLEMENTATION PERSPECTIVE. BECAUSE WE WANTED TO STRIKE THE RIGHT BALANCE, ONE OF THE REQUIREMENTS THAT WE DID PUT INTO THE IMPLEMENTATION PARTNER RFP IS A SUBCONTRACTING REQUIREMENT OF 20%.
SO THERE ARE AT THIS TIME THREE SUBCONTRACTORS BEHIND ACCENTURE THEY HAVE DEFINED THE SCOPE OF WORK THEY WILL BE PERFORMING. THAT ALLOWS US TO CREATE
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THOSE OPPORTUNITIES FOR OTHER PARTNERS TO BE PART OF THE IMPLEMENTATION TEAM WHILE WE CONTINUE TO JUST HAVE TO HOLD ACCENTURE ACCOUNTABLE FOR DELIVERY INACCORDANCE WITH THE SCOPE WE'VE DEFINED. >> COUNCILMAN, THE ONLY OTHER THING I WOULD ADD IS OUR BOARD HAS REALLY GIVEN US DIRECTION THAT THEY WANTED TO SEE A BALANCE. THE WORK THAT OUR INTERNAL EMPLOYEES ARE GOING TO BE DOING IS REALLY MAPPING OUT THE PROCESSES THAT EXIST TODAY AND HOW WE'RE GOING TO DESIGN THEM GOING FORWARD. THEN WE'VE GOT ALL THE EXTERNAL RESOURCES DOING WORK THEY DO TO MAKE SURE THAT WE'RE PURCHASING FITS THE NEEDS OF OUR ORGANIZATION. AND THEN WE ADDED AN INDEPENDENT VERIFICATION CONTRACTOR TO MAKE SURE THAT EVERYBODY IS DOING WHAT THEY ARE SUPPOSED TO BE DOING.
THAT'S KIND OF AN AUDIT PROVISION THE BOARD HAS IMPLEMENTED THAT I THINK COUNCIL HAS BEEN PRETTY VOCAL ABOUT MAKING SURE WE'RE LOOKING A THE THAT THE RIGHT WAY. I THINK IT'S A GOOD MIX. WE DIDN'T OVERHIRE A BUNCH OF EMPLOYEES INTERNALLY, WE'RE PULLING EMPLOYEES FROM THE BUSINESS TO MAKE SURE WE
GET OUR PROCESSES RIGHT. >> WHYTE: OKAY. AND SOMEWHAT TIED TO THE OVERSIGHT ON SLIDE 11, WHAT SORT OF CONTROLS DO WE HAVE IN PLACE TO PREVENT THIS
$304 MILLION NUMBER FROM GOING UP? >> SO RUDY JUST MENTIONED AND I DISCUSSED EARLIER THE ROLE GARTNER PLAYS. THEY ARE LOOKING AT ALL ASPECTS, CAPABILITIES OF ORACLE AND MAKING SURE THEY ARE ON TRACK SO WE CAN
IDENTIFY AND MITIGATE THEM -- >> WHYTE: SORT OF REALTIME OVERSIGHT. YOU LET IT GO TOO FAR DOWN THE ROAD, IT'S GOING TO BE
TOO LATE. >> I GET AN UPDATE FROM THEM.
WE'RE ALSO BRIEFING OUR TECHNOLOGY AND RESILIENCE COMMITTEE, WHICH IS SUBSET OF OUR BOARD ON A QUARTERLY BASIS AS WELL. WE HAVE A LOT OF EYES ON PROGRAM PERFORMANCE AS WELL AS ENSURE THAT WE'RE STAYING ON TRACK FROM A BUDGET
PERSPECTIVE. >> GARCIA: ANY OF MY OTHER COLLEAGUES?
COUNCILMEMBER COURAGE. >> COURAGE: OKAY, HOW ARE WE PAYING $304 MILLION? WHERE IS IT COMING FROM? ARE WE GOING TO HAVE TO HAVE A RATE HIKE TO PAY FOR THAT.
>> ALL OF THIS WAS INCLUDED IN OUR LAST -- ON THE LEFT WAS OUR 2022 RATE INCREASE AND THE BALANCE FROM AN EXECUTION PERSPECTIVE IS PART OF THE 2024 RATE
INCREASE. >> COURAGE: SO WE'RE NOT EXPECTING TO HEAR FROM CPS
NEXT CYCLE TO SUPPORT THIS. >> NOT TO SUPPORT THIS TECHNOLOGY.
>> COURAGE: THANK YOU. >> GARCIA: WONDERFUL. THANK YOU SO MUCH, EVAN AND THE TIME IS NOW 11 07:00 AND WE ARE ADJOURNED.
* This transcript was compiled from uncorrected Closed Captioning.