SPEAKER_10

Meeting of the Sustainability, City Light, and Arts and Culture Committee will come to order.

It is 9.31 AM.

I am Tanya Wu, chair of the committee.

Will the committee clerk please call the roll?

SPEAKER_11

Vice Chair Moore?

Vice Chair Moore?

Council Member Morales?

Council Member Saka?

Council Member Strauss?

SPEAKER_06

Present.

SPEAKER_11

Chair Wu?

Present.

Chair, there are three members present.

SPEAKER_10

Thank you.

If there is no objection, the agenda will be adopted.

Hearing no objection, the agenda is adopted.

We will now open the hybrid public comment period.

Public comments should relate to items on today's agenda and within the purview of this committee.

Clerk, how many speakers are signed up today?

SPEAKER_11

We have zero remote speakers and one in-person speaker.

SPEAKER_10

Great, each speaker will have two minutes.

We will start with our one in-person speaker.

And a quick reminder, public comments, you'll be given two minutes.

Within the 10 seconds left of your time, speakers, mics, you'll hear a chime, 10 seconds, and then your mic will be muted if you do not, and your comments within the allotted time to allow for us to move on with the meeting.

So the public comment period is now open, and we will begin with the first speaker.

SPEAKER_11

The first person speaker is Alex Zimmerman.

Thank you.

Sorry, sir.

Let me get the timer ready.

One moment.

My apologies.

SPEAKER_13

It's OK.

No problem.

Yeah.

My name Alex Zimmerman, and I come today because culture, what as I see right now in Seattle, I live here for 40 years, but for last 20 year, culture what is half Seattle right now, nothing to do with American culture.

It's a fundamental changes what the Seattle have for last 20 years.

And for last 10 year, they jump out totally in everything.

They forgot what is mean.

with the people or buying for the people.

Totally forgot about this.

They don't use constitution, open public, public, public up.

Do you know what it's mean?

And nothing what is belong to America.

You're not American city.

It's not surprised me.

So couple day ago, we have a new movie what has come to market.

What is Seattle number one?

What is talk Seattle number one reach?

In number, stupid, idiotic city in America.

This is exactly what is I come and speak every day here for many years.

So, guys, how we can change this?

How we can bring Seattle back to American culture?

What is established for 250 years?

I have very simple point.

We need open better room in city hall.

This is down.

You know what this mean?

One day per week.

from nine to nine, so people can come and speak for three minutes without stopping controlling this chamber.

You know what this means?

Because chamber, what we have right now here, is a pure, identical, I repeat, identical to Nazi, Gestapo, fascist junta.

Have absolutely same principle in this, in city court.

So you, council, Tanya Wu, chair of this culture.

So it is your duty, you know what it means by definition, bring Seattle back to normal culture, what is all America have.

We need to stop this idiotic situation so we look like a Nazi, Gestapo, fascist junta.

Stand up, America.

Stand up, you, consul.

Thank you very much.

SPEAKER_10

Thank you, Mr. Zimmerman.

So members of the public are encouraged to either submit written public comments on the sign up cards available on the podium or email the council at councilatseattle.gov.

Are there any additional registered speakers?

No, Chair, there are not.

We will now proceed to our items of business.

Will the clerk please read the first item into the record?

SPEAKER_11

Agenda item one, resolution 32144, a resolution adopting the 2024 Food Action Plan and directing the Office of Sustainability and Environment to continue interdepartmental coordination, implementation, and monitoring of the Food Action Plan.

For briefing, discussion, and possible vote.

SPEAKER_10

Thank you.

Will the presenters please come to the community table, and once ready, please introduce yourselves and to get started.

SPEAKER_07

Good morning, members of the committee, Madam Chair.

My name is Jessen Farrell.

I'm the director of the Office of Sustainability and Environment.

And I am joined by Bridget Igoe with OSC and Sean Walsh with HSD.

We are here to present on the Food Action Plan.

And without further ado, I'm going to jump into our presentation.

OK, great.

So today's topic is to discuss the updated food action plan and the proposal for the city council to express its support of an updated plan by adopting a resolution.

And we are going to really be talking about the theme of how we create a healthy and robust local food system that contributes to a sustainable and livable city for everyone in our community.

And this is an area where Seattle has now decades of leadership, and I know members of this council, Council Member Morales, Council Member Strauss, you all have been wonderful leaders for a long time now, and we appreciate your leadership as well, Madam Chair.

So we will move on to the next slide.

So just as a reminder, you all have seen this slide before, but OSE works to advance the One Seattle Climate Justice Agenda, and our food work really nests under reducing climate pollution, there's a climate change and pollution element to our work as well as our healthy resilient communities.

And if you hit the animation, you'll see all of our policy areas.

So our food policy and programs really nests under this.

And OSC's role in partnership with HSD is to coordinate this work across city and to work with our community.

We'll move on to the next slide.

And so the food action plan that we'll be discussing today is really the city's shared vision for our community across our city departments.

And it's our roadmap for equitable, sustainable, and resilient local food system.

And it outlines our strategies and actions to increase food security, support urban agriculture, local food businesses and prevent food waste.

And Bridget and Sean are going to get into those strategies in depth.

And again, as I mentioned, this is an area where we've been a leader.

We have had a food action plan since 2012, although it has not been updated since then.

So this is the first update in quite some time.

And OSC and HSE led the process to make sure that our plan reflects our changed context around the post COVID food world, issues related to climate resilience, and then also equity.

Next slide.

And so for over 10, one more.

Oh, no, that's the right one.

Sorry, we'll go back.

Thank you.

So for over 10 years, this food action plan has really been the backbone for all of our work, and it has led to a highly coordinated, efficient, and collaborative system that has yielded impactful and innovative programs across the city.

And I'll just Name check a couple of them, but we'll get into more depth here.

But of course, the Fresh Bucks program, which provides vouchers for over 12,000 households for healthy fruits and vegetables.

Food rescue innovation in partnership with SPU in particular to prevent food waste.

Farm to preschool program, which creates access for healthy foods for 47 preschools around the city.

And then so much more that we'll be getting into in depth.

And so the updated 2024 plan then is a continuation of this really important work.

Now we can go to the next slide.

And so the action today is to go through the food action plan and then the adoption of a resolution that really helps the mayor, the council, community departments really be on the same page around this longstanding framework.

that guides our investments and guides our programming.

And so with that, I'm going to hand it over to Brigitte and Sean to give you an overview.

SPEAKER_12

Thank you, Jessen.

Actually, you can go to the next slide, Nina.

Thank you.

So I'm just going to start by sharing some information on the needs and opportunities that we're facing in our local food system related to food insecurity, inflation, and the impact that food has on the environment.

And this is a small snapshot of the data that we consulted as we updated the Food Action Plan.

So we know that right now in Seattle, 10% of adults experience food insecurity, but the rates are much higher for people of color.

And food insecurity means not having enough access to food or food of adequate quality to meet basic needs.

Meanwhile, today's high food prices are making it even harder for lower income and food insecure households.

Data from the Consumer Price Index shows us that food prices rose 25% between 2019 and 2023. And we are seeing the impact of this in real time in our communities.

Food banks and meal programs are experiencing extremely high demand.

Sean and I just consulted data from the SNAP program.

in King County and enrollment is up 18% since January 2022. Lastly, food and food waste have major impacts on the environment.

The food we consume in Seattle makes up 24% of Seattle's consumption-based greenhouse gas emissions.

Now, we recognize these are very complex issues and that the Food Action Plan cannot solve for all of these problems, which are symptomatic of social, economic, and environmental issues that we face nationally and even globally.

But we can and do need to address them in our city to minimize the impacts on residents.

Go to the next slide.

So for decades, as Director Farrell mentioned, the city has invested in programs to address these issues.

Our core food programs are focused on food security and access.

food waste prevention, and urban agriculture.

And they're managed by the five departments that you can see listed here.

And each really is bringing specialized and unique expertise to this work.

And so a key point that we want to have you take away from today's presentation is that the updated plan largely reflects this existing and ongoing work by these departments.

Next slide.

But in addition to these core food programs that I mentioned, we also have aligned food programs.

And aligned programming means that the food is not necessarily the primary focus, but the work impacts the local food system and the goals of the food action plan.

So we have aligned food programming in the offices of economic development, labor standards, and planning and community development.

And I've listed some of the issue areas here that they're leading related to small business support, zoning, and labor standards.

So before we get deeper into the plan's content, we're going to go through a very quick timeline of our process to update it.

We started in 2019 but had to pause during COVID.

And during this time, we pivoted to emergency response efforts.

So during COVID, HSD and OSC worked collaboratively together to manage over $31 million in new one-time investments in food security.

In late 2021, as the city transitioned into COVID recovery, we resumed the update process and started to refresh the framework for the updated plan.

This work included a literature review, interviews with subject matter experts, deep community engagement with over 250 community leaders, and two racial equity toolkits.

In 2022, we briefed department directors, the city budget office and mayor's office staff prior to offering public comment period on an earlier version of the plan.

During this time, we also worked with the Office of Intergovernmental Relations to engage with the Snoqualmie, Suquamish and Muckleshoot tribes and give a opportunity for feedback from them.

After we submitted the draft plan to reflect the public comment that we received, we did another round of review and this brings us to this year, 2024. And in fact, yesterday we had, thank you Council Member Wu for coming, a release event.

You saw the outpouring of community partners who are really at the heart of this work.

And today we present to you for your consideration, a resolution for adoption.

Okay, so now we're gonna get into the plan content.

Like the updated food action plan, excuse me, like the original food action plan, this update is a five-year continuation of that original plan.

And so we have the same four goals represented in this update that you see here, increasing community food security, supporting locally grown and traditional foods, preventing food waste and climate pollution, and advancing an equitable local economy.

To advance these goals you'll see on the next slide that we've identified eight strategic priorities and all of the actions in the updated plan are organized around these categories so Sean and I are now going to walk you through each of these at a very high level, just to give you a sense of what they address.

So the first strategic priority is community food security, and this focuses on access to nutritious, affordable, and culturally relevant food.

The actions in this category include all of our existing food programs that are offered in places where Seattle residents of all ages are already accessing services like preschools, schools, healthcare, and community organizations.

Strategic priority number two is land access and use.

This is about continuing existing work to enable community groups to grow food on our public green spaces.

Some existing examples of this include our pea patches, Mara Farm, Beacon Food Forest, and the Rainier Beach Urban Farm and Wetlands.

Strategic priority number three is just on food related education and training.

The actions in this category leverage our existing food programs to provide culturally relevant and experiential food and nutrition education.

And we often see many community led grant programs funded by the city that have a strong food and nutrition education component.

Strategic priority number four is focused on the local food economy.

And this category is leveraging the city's current efforts to support food projects that promote equitable economic development and technical assistance provided by Office of Economic Development to so many small food businesses, some of them who were at the event yesterday and serving up amazing small bites.

So this category is also does reference Seattle's existing labor laws and protections for low wage workers, which include food service workers.

There's approximately 23,000 food service workers in the city.

I'll turn it over to Sean.

Thanks, Bridget.

SPEAKER_16

Strategic priority number five is focused on local supply chains, and it's an especially important topic since COVID began.

Our city work in this area includes current efforts to support local food system infrastructure and to shift food purchasing to more locally grown, environmentally sustainable, and equitably purchased food.

Strategic priority number six focuses on preventing food waste.

All the actions in this category are led by Seattle Public Utilities and focus on their important efforts to prevent food waste in residences and businesses.

This section also includes actions focused on food rescue.

Food rescue is about increasing the quantity or quality of donated food going to people in need while at the same time reducing overall food waste that goes into garbage or compost.

Strategic priority number seven is about reducing climate pollution associated with the food system.

The actions in this category leverage the city's existing programs for climate action through efforts like shifting food spending in our programs to food that's better for the environment and for the climate.

OSC, HSD, and SPU have already teamed up to pursue federal funding opportunities to support future expansion of this work with external resources.

Strategic priority number eight, which is our final priority, is food action plan stewardship.

Actions in this category are internal facing and focused on city efforts like performance tracking, strong interdepartmental collaboration, continuous improvement, pursuing external funding, and continuing to monitor and act on federal and state policy.

And we are getting to the end of the presentation and just have a few slides left.

The following two slides show screenshots from an interactive food action plan map that OSCE and the food action plan interdepartmental team are developing.

The map will enable users to learn about site locations of city supported food work.

Users will be able to filter locations by strategic priority and apply different map layers such as council districts.

The map should be available for public use by 2025. Here's an example of food security services displayed over the racial and social equity index.

For example, purple dots on this map represent food banks and meal distribution sites.

You can see that sites are in all parts of Seattle but are concentrated in areas of highest equity priority, which are the maroon areas of the map.

All the site locations on this map are related to community food security, which is strategic priority number one.

This next slide shows community gardening and farming sites, which are related to strategic priority number two on land use and access.

For example, green dots on this map are pea patches.

You'll notice again that sites are in all parts of Seattle, but concentrated in areas of highest equity priority.

Again, we're aiming for these maps to be finished and ready for use by next year.

We wanna end with a few next steps for the near term.

We'll continue stewardship and delivery of the city's core food programs, And we'll also continue developing the maps we just looked at and work up an online dashboard so we can report progress on the plan.

And we'll continue our interdepartmental collaboration, which includes looking for new outside funding to support the plan's priorities.

A few of the projects we'll be focusing on even more include values-based food purchasing, food rescue innovation, and activating public space for community gardening.

That's the end of our presentation.

Thank you again for your time.

Even though the updated food action plan is a continuation of existing work, we think it's a great opportunity to highlight the city's commitment to these important issue areas and acknowledge our community partners who have been champions of this plan.

And if there's time, we're happy to take any questions or comments.

SPEAKER_10

Great, thank you so much.

Colleagues, any questions or comments?

Customer Strauss.

SPEAKER_06

Thank you, Chair Wu.

Thank you for this great presentation.

What I find really interesting is where you were leaving off, Sean, with the maps, the interactive information, because, and I really, food security is really important to me.

One of the first budget amendments I put forward as a new council member was about fresh bucks and expanding our access because it leverages our EBT system and it provides access to fresh food in the farmer's markets.

And In these last four years, I've talked to people about FreshBooks and how they can use them and how they can get signed up for them.

The biggest question is, well, where can I use them?

And it's not really easy to access information until now and with your new map.

And this is really exciting because as I'm looking at this, you can use it for recreational purposes.

in that sense, but then you can also use it for meeting your basic needs and everything in between.

And somebody really smart to me said, if you want somebody to do something or come to you or come to the activity, make sure that there's free food.

And this is beyond just food access.

This is about community building, about a lot of different people coming around the same table.

And there's a lot you can get done with good food on the table, because it brings these people together.

It brings good conversation.

And it sets up a really good atmosphere for taking on big new projects or having deeper relationships within the community.

That's what I was a bit stunned by when I was having the briefing with you earlier.

I don't have many questions because we spent, I don't know, half an hour or more talking through this plan.

I just wanted to highlight this because it allows somebody to quickly go to one place and have all of the information that they need rather than trying to navigate the city's website, which I know we have a new IT director.

I really liked the last IT director.

but it wasn't all in one place and now it is.

So a big congratulations to you.

It's an important step forward.

And then Brigid, I'd also just, when you were presenting, It's a small bit, but it's an important bit where when talking to the Snoqualmie tribe, you use the term engagement rather than consultation.

And my colleagues are probably tired of me talking about the difference between engagement and consultation and the fact that the city doesn't have a formal way to consult government to government with federal tribes.

federally recognized tribes.

And so it's a small bit, but I wanted to highlight it because it's an important distinction.

So just very impressed with all of your work.

And thank you for the half an hour briefing.

I won't take up any more of our communal time because I've already asked and had a very deep conversation.

So thank you, Chair.

SPEAKER_10

Thank you, Councilman Morales.

SPEAKER_18

budget in particular, we've been working on food security for 10, 15 years now.

And there was a time when city leaders were asking why the city needed a food action plan.

So I think it's a really significant step to demonstrate that we not only have one, but we're taking the time to update it and to make sure that we're really Addressing in every way possible as a municipality the fact that we have continued and growing food insecurity in the city.

And really using this action plan as an opportunity to see what each of our different departments can do to address those needs, whether it is food rescue or eliminating as much as possible food waste from our waste stream.

So I really want to thank all of you for this work.

It's important for many different reasons, not the least of which is that community food security really does take investment and the will from a municipality to make sure that our neediest neighbors are getting served.

It's not just about the emergency food system, which was never intended to be a regular weekly grocery trip for people.

It was really intended to be emergency.

And so all these other pieces that we're wrapping around this are important and making sure that we have access to pea patches and community gardens and all the other resources, supporting the farm to preschool program so that our littlest Seattleites get access to locally grown produce.

All these different components contribute to greater food security and The City of Seattle was not doing this work in this way 10 or 12 years ago.

So I'm really excited that we're in this space.

I'm proud to have been part of drafting the original Food Action Plan, and I look forward to working with all of our city departments to make sure that we continue doing this.

So thank you for what you're doing.

Appreciate it.

Thank you, Chair Wu, for having this presentation.

SPEAKER_10

Thank you.

So I love the energy in the community at the Food Action Plan press celebration yesterday.

It was so amazing to see so many organizations.

I think there's over 250 organizations, tribes, community members, restaurants, small businesses gathered and just so excited and so happy.

In many cultures, and especially in my culture, I'm Chinese, food is like a love language.

And with my work with Community Night Watch, food and meals are how we engage with our unhoused neighbors.

I go to pea patches, and I've met people who are unhoused, but they choose to live near them because they can come and cook and bring fresh foods from the gardens and be healthy and be connected.

to community.

So it's a powerful food is medicine.

And I have so much gratitude for your work.

Thank you for your leadership in putting together this plan, the interdepartmental collaboration especially, and just the well thought out community engagement.

It was just amazing yesterday to see so many people so excited.

I grew up in South Seattle, which is a big food desert.

I remember as a kid going to my local community center for brown bag lunches.

and going to Van Ness Elementary School to be able to get a meal for breakfast and for lunch.

And so, especially for young people, being hungry is the foundation of having food and being set for your day is really important.

So I move that the committee adopt resolution 32144. Is there a second?

Second.

It is moved and seconded to resolution 32144. Are there any further comments?

SPEAKER_11

Will the clerk please call the roll?

Vice Chair Moore?

Council Member Morales?

Yes.

Council Member Strauss?

Yes.

Council Member Saka?

Chair Wu?

Yes.

Chair, there are three in favor, none opposed.

SPEAKER_10

The motion carries and the recommendation to adopt the resolution will be sent to the city council.

Thank you.

And this will probably be heard and not the next council meeting the week after that meeting.

And so thank you for all your work.

And I look forward to seeing what happens next and to hear updates of the plan.

Thank you.

SPEAKER_16

Thank you.

Thank you so much.

Thank you very much.

SPEAKER_10

So we'll move on to our next item of business.

But first I want to acknowledge that we have a group of students here from the downtown school.

And you are juniors, so welcome.

Thank you for joining us today.

I hope you are learning a bunch.

We just talked about the food action plan.

If you want to read more about the plan, it is on our, you go to our calendar, our agendas are all there.

You can see the plan, and it's very comprehensive and covers a lot of ground.

So we will move on to the next order of business.

SPEAKER_11

Will the clerk please read our second item into the record?

Agenda item two, resolution 32146, a resolution relating to the city's participation in the State of Washington Clean Fuels Standard Program.

promulgated under revised code of Washington or RCW 78.535.005, acknowledging and approving the city's participation in the program and acknowledging the interdepartmental memorandum of agreement regarding city of Seattle administration and Washington state clean fuel standard program for briefing discussion and possible vote.

SPEAKER_10

So go ahead and introduce yourselves and begin when you're ready.

SPEAKER_02

All right, thank you so much.

I am Dawn Lindell, the General Manager and Chief Executive Officer for Seattle City Light.

SPEAKER_19

Good morning, I'm Michael Briche, he, him.

I'm the Partnership and Policy Advisor on TE Matters in Seattle City Light.

SPEAKER_01

Good morning, David Logsdon, Director of Electrification and Strategic Technologies for Seattle City Light.

Good morning, I'm Craig Smith, Chief Customer Officer at Seattle City Light.

SPEAKER_05

Good morning.

I'm Chris Wiley.

I'm the city's fleet director.

SPEAKER_08

Good morning.

My name is Allison Radenz.

I'm the streetcar program manager for the Seattle Department of Transportation.

SPEAKER_00

Good morning.

I'm Francine Johnson.

I'm the manager of SPU's facilities and fleets.

SPEAKER_02

So good morning, Chair Wu and council members.

Today we are here to present an exciting new program for City Light in the city of Seattle, the Clean Fuel Program.

This is the result of state to reduce carbon emissions from the transportation sector.

Excuse me.

It is a complicated regulatory mechanism developed and administered, excuse me again, by the Washington Department of Ecology.

I am so proud of Michael Brees to my right under the leadership of David Logsdon and the team for working to thoroughly understand the processes needed for developing a path forward for City Light and our other city partners to make use of these funds and bringing this opportunity forward to you today.

I am confident that they've worked They've got this sorted, they've worked this through, and they have an effective plan.

What you need to know and will learn today is that we have worked collaboratively with our city partners, the Department of Transportation, Finance and Administrative Services, and Public Utilities, who are here today and thank you to develop a One Seattle approach, and most importantly, because of City Lights' clean energy portfolio, we are able to generate revenue to spend on important investments to do our part to reduce carbon emissions from the transportation sector in Seattle.

Today, you will learn how the program works, the other departments' participation, and City Lights' role and responsibilities.

The resolution that is planned for a vote in two weeks does not make any decision regarding specific investments with the revenue generated, but it sets the city up for successful participation in this impactful program.

I am now going to turn it over to our team leading this effort at City Light.

SPEAKER_19

Thank you, Dawn.

Let's see if I can get this in full screen mode.

Thanks again for having us, Chair Wu and committee.

As Don introduced, I'm Michael Breesch, and I just want to acknowledge, again, the support from our sibling departments in advancing this program, and thanks to City Light leadership for supporting me in this.

It is a big undertaking, but together we're making a lot of awesome progress on this.

So by the end of this journey, you all are going to be experts in the clean fuel standard.

And so bear with me.

We're going to walk through a pretty complicated program, but I feel confident by the end, you'll be able to tell your friends and family about this.

So very quickly, here is the agenda today.

And what I really want to emphasize is the key components of the resolution that you will ultimately be voting on, which is to approve and acknowledge the city's participation in the clean fuel standard, acknowledge City Light as the program administrator, which we'll talk about in a bit why that's the case, acknowledge our ability to transact credits on behalf of other departments, and finally, acknowledge the memorandum of agreement, which is why we have our peers at the table today.

So, distilling this program into a single slide is what you see here.

Essentially, the CFS is designed to address climate change and pollutants that come from our transportation sector.

The way it does this is by incentivizing cleaner fuels that can help displace dirty or fossil fuels.

And in doing so, it rewards those cleaner fuels through credits, and then the credit owners may monetize those credits.

I'm gonna walk through in the next few slides kind of the key components of the Clean Fuel Standard.

It's important to start with the why.

Right now, transportation is the largest source of greenhouse gas emissions in the state.

As you can see in this visualization from Department of Ecology, there's a bit of a lag in their data, hence the 2019 values.

As you know, also, transportation emissions are the single largest source of emissions in the city, running about 2 thirds.

Simply put, we cannot achieve our state and city climate change goals if we do not have specific means to address those transportation emissions.

In addition, as we know, it's not just greenhouse gas emissions that come from the burning of fossil fuels.

It's also various co-pollutants such as diesel, sooty diesel, particulate matter, NOx and SOx.

These have direct impacts on our communities in Seattle when we use these transportation fuels.

The Clean Fuel Standard, or CFS, is one of the tools in the state and now the city's portfolio that we can use to address the climate change impacts and pollution impacts of transportation fuels.

It does so by focusing on the lifecycle of a fuel used in transportation systems.

So to be clear, it doesn't focus on vehicles.

It doesn't focus on the trip not taken.

It is designed to focus on the fuels that we put into transportation end uses, such as cars, school buses, off-road equipment.

So think about luggage handling equipment at the airport.

Anything that uses a transportation fuel falls under the purview of this program.

It does so by focusing on the carbon intensity of the fuel's life cycle.

So you can see here on this image, cradle to grave.

So in this case, for gasoline, it's from the oil well until it's burned in the vehicle.

The way we, and you'll hear me say carbon-intensity CI quite a bit, and it's important to understand this concept because you have liquid fuels.

This also regulates natural gas.

As you can imagine, those look very different as a gas, as a liquid, and how they're used.

So it's looking at the carbon content per unit of energy of that fuel.

And what this program is going to do, it sets in law, is it says the CI, the carbon intensity of every fuel by 2038 must be reduced by 20% of 2017 levels.

And we have some numbers to help you kind of put that into concrete views.

So these were the CIs for gasoline and diesel, which are the big fuels we're going to talk about and that are important to Seattle in 2017. And then 2038, the CI, the carbon content of that fuel, must be reduced by that amount, hence the 20% reduction.

If your fuel is delivered in a specific year and it does not meet the CI that's designated in law, that's where the thrust of this program comes into being.

Another way to visualize this is this chart.

So you'll see on the x-axis is time, and on the y-axis is the percentage reduction in the carbon intensity of those fuels.

And so this is prescribed in law, and though you can see that 2038 is when the legislative mandate is to have that 20% reduction, ecology and rules push that up to 2034, which they're allowed to do.

So we're achieving this in-state even faster.

When you deliver a fuel, like I said, above that CI, so if you deliver gasoline and you're not meeting that CI, you generate what's called a deficit.

Deficits are bad.

When you deliver a fuel that is lower than that CI, you generate a credit.

Credits are good.

The main thrust is if you have a credit, you're in a good spot.

If you have a deficit, you're in a bad spot.

At the end of the calendar year, you can't have any deficits, largely speaking.

There are some exceptions.

So to internalize that, credits and deficits, that's my big ask of you because that's how the city of Seattle is going to really benefit from this program.

SPEAKER_06

Chair, may I ask a question or would you prefer to wait until the end?

SPEAKER_10

Can we please wait until the end?

SPEAKER_19

Fantastic.

SPEAKER_10

In case our questions get answered later on.

SPEAKER_19

So what do you do with these credits and deficits?

So as I said, you really want to avoid a deficit.

So fossil fuel producers and importers are going to be looking to the actions on the left to try to meet the carbon intensity of that given year.

If you cannot meet that CI, if Marathon or BP couldn't do what they needed to do, they have to turn to the market to buy credits.

City Light and users of City Light's electricity, like our sibling departments, will be generating these credits which means that these fossil fuel companies will be buying our credits and, in turn, providing us additional revenue to invest.

And so right now, I've talked so far about the CIs of fossil fuels, but what does it mean for City Lights Electricity?

And as Don mentioned, our clean energy portfolio lends us to having one of the lowest CIs in the state.

In fact, we're the second lowest.

The first is a straight zero, which only one other entity has.

And so you can see by two orders of magnitude, City Lights electricity is so clean that that means when we displace a unit of fossil fuel, we are generating significant credits because of our investments in our clean energy portfolio.

And in turn, those investments, we will pass on those benefits to our customers because of this program.

One final note on the overview of the program.

Equitable and just outcomes are crucial to this program.

They are, in fact, legislated into it.

And you can see here is a snapshot of Seattle from the cumulative impacts analysis tool that the Washington State Department of Health runs.

I just want to note that in addition to meeting those requirements, City Light intends to far exceed them in ensuring that the burdens borne by certain communities because of transportation system impacts, be it health, mobility, economic, City Light intends to exceeds those in meeting the letter of the law and also matching our obligations to our customers in delivering clean, reliable, affordable electricity.

Okay, so you have a main working of this program, and now we're gonna talk about actually how it starts impacting the city and some of the departments.

So in a distilled manner, if you as a department own or run a fueling dispensation, sorry, fuel supply equipment, so you dispense an eligible fuel, you are eligible to participate in this program.

99 out of 100 times, that is going to be an EV charging station of some sort.

I do want to emphasize that other fuels may be eligible that at some point, the city may get involved with, namely, potentially green hydrogen.

It's a story for another time, but I want to make sure we do acknowledge the different fuels that are eligible.

But for the most part, we will be talking about electricity.

So if you are owner-manager charging station, you'll likely participate in this program, and the outcomes of this program will be met through investments in decarbonizing the transportation sector.

I want to emphasize, and we'll turn to this in the next slide, that though all departments are eligible to participate, electric utilities like City Light face specific requirements in law and rules that necessitate a different approach for us.

Because we are a fuel provider, that is, we are generating and delivering electricity, the law places specific requirements on City Light, which on a later slide I will depict in a summary table.

In addition, because we are right now the primary investor in charging stations for the city, both owned and operated by the city, as well as incentivizing private ownership, the law places additional obligations on us.

And this list here summarizes some of those, including but not limited to additional reporting.

And some of that reporting is pretty comprehensive, namely around how we're going to use these funds.

On those funds, the law says electric utilities must spend them in certain ways.

Those requirements do not apply to our sibling departments.

They just apply to City Light.

And finally, because of the complexity of the program and the points that I just mentioned, It behooves us and it necessitates us that City Light administer this program on behalf of our sibling departments, but as we'll talk about in a little bit through the memorandum of agreement, that that will be done in a collaborative, transparent, and accountable manner.

So the big topic, of course, is how are we going to use these revenues?

This is for electric utilities what is prescribed in law.

And the way I like to talk about it is that there's two buckets.

And just last month or so, Department of Ecology finally finalized these requirements.

And so the first bucket must just be spent on transportation electrification activities.

That's pretty broad.

It's really up to the electric utility to define that.

In our case, we have an awesome strategic document, T-CIP, that you will all be discussing at the end of the year in T-CIP 2.0.

Of that 50%, 30% must directly and meaningfully benefit highly impacted communities and vulnerable populations.

So circling back to the equity and just outcome slide that I had earlier.

The other 50%, the other bucket, must be spent on a prescribed list of investments co-developed by the State Department of Ecology and Washington State Department of Transportation.

As I mentioned in the previous slide, these requirements only apply to electric utilities like City Light.

Other city departments will not face these and so have much more flexibility in how they use the revenues from their respective credits.

What you see here is a summary of the four eligible investments that the two state agencies have provided electric utilities.

And these investments are related to our residential credits.

So think about single family homes or small condo buildings.

Non-residential credits are not subject to these, but our residential credits by far will be the bulk of our credit bank.

So really quickly, that includes the provision of new or used emission vehicles for community-based organizations or organizations that support those specific communities.

The second one is anything related to charging stations.

So if it has something to do with an electric vehicle charging station, the law is broadly permissive of us spending money on that.

The third, which I want to draw your attention to, is expanding grid capacity and investing in grid modernization to support the new electricity demand that comes from electrifying the transportation sector.

This is a significant undertaking, which my peers at the table know far more than me about it.

But we know that in order to meet this load, we'll have to continue investing in our system.

And thankfully, the CFS allows us to use revenues to do just that.

And then finally, we are allowed to partner with public and private fleet owners to help them convert their existing fleets and future fleets into zero emission alternatives.

This here is just a summary table that shows what I've described in previous slides about the additional regulatory burden and legal obligations that City Light faces in participating in this program versus compared to our sibling departments.

And in a nutshell, this really results in us wanting to take the lead in helping administer this program bearing those costs, bearing those obligations, and also allowing our sibling departments to maximally benefit from their respective investments in TE.

And I'm happy at a later time to walk through what some of these might be.

And here is where what I've just talked about is the pain, or not the pain, but really the work that we have to do to get to the benefit.

And this is the benefit.

And this is specifically for City Light.

And so this is just a depiction of what we're going to see by spending the revenues from selling the credits from this program.

And again, I want to draw your attention to the lower right, which is the opportunity to invest in grid investments that benefit our rate payers, that benefit our system, and then certainly allow us to continue making investments in decarbonizing various sectors and meeting our climate change obligations.

So what are we doing right now and in the past to be in compliance with this program?

This is what compliance looks like.

I'm not going to spend a lot of time on it, but it is thankfully a positive feedback loop where the more we comply with it, the more revenue we generate, which we then are in more compliance with.

So all departments are currently doing this.

City Light has been doing it.

We're bringing along our peers and so that they can be in compliance with it.

But this is just distilled how we meet the program.

And I'm happy to report that we have an A-plus in compliance.

We are doing everything that we've been asked to do.

And in fact, we're also helping Department of Ecology figure out some novel aspects of this program due to the nature of Seattle's innovative investments and how our peer departments are also participating in the program.

So very quickly, we've successfully registered all the chargers that we have so far and on an ongoing basis.

We are reporting the electricity that we are dispensing from those chargers.

Those include our City Light publicly owned chargers.

We've registered the SDOT streetcar, and this didn't make it onto the slide, but we've also begun registering SPU's chargers, and then we're in the process of getting FAS's the electric vehicles as part of the motor pool registered we have to use telematics so we'll be the first entity in the state that uses telematics for a fleet so we're leading the cause we're helping Ecology figure this out we submitted our annual report and we are successfully generating non-residential and residential credit so we're in good shape and I just jumped through So how are we doing this in a One Seattle manner?

How are we approaching knowing that there's multiple departments involved?

So this is a visual depiction of what we are initially approaching this as.

And so I won't go through it, but I just want to emphasize that we're doing it in a collaborative manner.

The peers at this table have been generous with their time and their patience and their collaboration.

And it's resulted in, I think, for the most part, a really well-coordinated effort.

And as this program evolves, we aim to bring in more of the executive as well as engaged city council as we navigate this program.

And so this is what we're thinking right now.

And specifically, as I mentioned before, one of the elements of the resolution is acknowledging the memorandum of agreement.

We spent, I would say, most of 2024 drafting this MOA so that now and into the future, departments that are listed here and at the table, City Light, SDOT, FAS, and SPU, and that asterisk also represents future departments that may join if they do get involved in owning or operating their own charging stations or whatever eligible fuel dispensation equipment, that this document is a living one that can bring in folks so that moving forward, we have a clear understanding of how to meet, not only successfully comply with this program, but support one another as this highly dynamic industry evolves.

And on that list, there is some of the activities that are captured in the MOA.

In summary, they're generally how we all will be Ensure that we successfully comply with this program.

So next steps.

So as I mentioned before, this is what is in the CFS resolution that we've put before you.

We ask council to approve and acknowledge the participation in the clean fuel standard.

And then we ask council to acknowledge City Light's role as the program administrator on behalf of the city, City Light's ability to transact those clean fuel credits on behalf of other departments and including ourselves.

And finally, the interdepartmental MOA.

And then this is just a list of the next steps related to this program for both City Light and Citywide.

And with that, I'm happy to answer any questions.

And also we're very lucky to have our peers here if you want to ask them any questions pertaining to their respective department.

Thank you.

SPEAKER_10

Thank you, colleagues.

Any questions or comments, Council Member Strauss?

SPEAKER_06

Did I have a tell?

SPEAKER_10

Maybe.

SPEAKER_06

Yeah, fair enough.

I spoke last time, so if somebody else wants to go first, happy to.

I'm not a panelist yet, so I can't see if anyone else has got anything.

Sorry.

SPEAKER_10

Oh, I think you're the only person who may have a question or comment currently.

SPEAKER_06

Fantastic.

Well, I mean, with that presentation, can I explain it to my family when I go home today?

No further questions.

Just taking you up on your offer, if anyone from any of the other departments want to talk about how your department has participated in benefits, drawbacks, challenges, or opportunities.

SPEAKER_05

Well, as the fleet manager for the city, yeah, I think this program will service really well, right?

I mean, I think when we talk about the need for the cost of EV infrastructure that we're trying to put in to support our fleet and the electrification of the fleet, we need that, right?

We need that kind of revenue.

Also on premium costs on electric vehicles.

similar, right?

We're always trying to figure out how to piece this together to advance our electrification efforts for the fleet.

So I think this is a real welcome opportunity.

I think, you know, the state's created this program, and we're developing a great relationship between our two departments, all these departments at the table, to make it happen.

Because, you know, the city has, in the fleet operation, we have over 500 charging stations We just put into service our 500th electric vehicle, which is significant milestones for our activities here.

So I'm happy about it.

SPEAKER_06

How many Ford Lightnings do we have?

SPEAKER_05

Oh, boy, you're going to put me on the spot.

Yeah, I didn't mean to put you on the spot.

SPEAKER_99

17.

SPEAKER_05

That's probably pretty, no, more than that.

Yeah, over 20. That's great.

SPEAKER_00

I mean, for SPU, I would just second the comments that Chris made.

We really appreciate SEL reaching out to us and collaborating.

We think this is a really great partnership.

And we have a smaller number of electric vehicle chargers, about 77 right now, but we continue to build out that infrastructure and looking forward to reporting that with you.

SPEAKER_09

Yes, and I'll echo my colleagues as well, but we're in kind of a unique position as being, SEL Streetcar is a, city-owned fully electric system.

We're a really core part of our low emissions transit network.

And so we're really excited to participate in this.

And we're always looking to diversify funding opportunities and reinvest in rider experience.

So thank you.

SPEAKER_06

Fantastic.

And if I might try to digest 27 slides in about 10 words, it's my understanding that with the state program that's running, a fuel producer, if they don't meet these standards, then they have to pay us money.

Or they have to pay money into the credits for the utilities that are already overachieving, then they receive money.

because they're overachieving.

You were saying you get dinged, it's bad.

You get a point, it's good.

From there, we then get to use this funding in very specific categories.

I'll just use transportation as one example.

From there, then we get to build infrastructure and make our transportation network cleaner.

Is that?

Yeah, you can have my job.

SPEAKER_19

I don't know about that.

I don't know about that.

That is distilled.

I will emphasize that it's not just City Light who's generating these credits.

If you are a producer of renewable gasoline, if you generate biodiesel, you are also eligible.

You're not generating nearly as many credits as, say, City Light with our clean fuel.

And then also electric vehicle supply providers, so the companies that run private networks, so think like Electrify America, the big green charging stations.

They, too, are eligible.

But by far, City Light, because of our clean electricity and the awesome efforts of our residents, of our businesses in electrifying, we will have one of the largest portfolios of credits to sell.

And yes, so fossil fuel importers or producers are going to look to us.

because they can make a pretty easy transaction to cover their deficits.

But yes, your summary is spot on.

SPEAKER_06

Thanks.

It was because you briefed me earlier.

And I'll just say that we are ahead of the curve because we've been on a pathway to carbon neutrality for a very long time.

So we were ahead of the curve previously, which puts us in a really good position right now.

And I think...

One thing that a lot of folks in general public, all 140,000 people watching Seattle Channel might not know is that we already have biofuel producers here in Washington, whether it's for aviation or for fishing fleets.

I have been trying to get more biofuel folks to come and serve our fishing fleet because we have the largest fishing fleet in the North Pacific, in the Bering Sea.

And so it's just a great opportunity.

So I don't have another question for you.

But just to bring that awareness that biofuels is not a future concept.

It's a now concept.

We have pipelines in the port running to the airport to use biofuels specifically.

This is an exciting moment and also compliments to Seattle City Light for being ahead of the curve so that we can get more credits.

Thank you.

SPEAKER_10

Thank you.

Council Member Morales?

SPEAKER_18

Thanks for the presentation.

I do want to congratulate all of you on the Department of Energy grants that will support some of this work as well.

I have a question about the investments in infrastructure.

So I know a lot of this is about electric vehicle charging for city fleets.

But we also know that there's public infrastructure needed, and I just want to clarify that this investment could also be used for that infrastructure investment.

And then, this may be a tangential question, but I am interested to know about particularly for the public infrastructure, how we are contemplating standardizing that, because as you mentioned, there are private companies that are installing equipment too, and I know we all know that part of the challenge for folks who are interested in purchasing electric vehicles is the charging capacity or lack thereof, but the standardization or lack thereof is also an issue.

So I'm wondering if we can just talk about that a little bit.

SPEAKER_19

Yes, excellent questions.

I'm happy to kick it off and we'll certainly turn to my colleagues if they want to add anything more.

To your first question, Council Member Morales, though we didn't talk about it today and happy to talk about it later to show what we're initially thinking for investment performance, portfolio from this program, it is going to align with our strategic investment plan.

So this council passed and approved what I call TCEP 1.0, I believe, in late 2019. We're working on our next one, which will be presented to you at the end of this year, TCEP 2.0.

And the main components of that plan, which will be reflected in our investments from the Clean Fuel Standard, are in public charging infrastructure.

So that can include but is not limited to our fast chargers, our awesome curbside level two program, which I believe we've presented to you on.

It also includes multifamily dwelling.

It includes potentially a future workplace charging program, single family charging for low income households or households in highly impacted community or neighborhoods.

And that's just kind of a high level.

So you're right that we have this opportunity to invest in our public fleets, but by large, we will be investing these revenues in infrastructure that serve the public.

SPEAKER_01

And I'll jump onto that.

Thank you, Councilmember.

So Councilmember Strauss earlier said we're ahead of the curve in some of these areas, and I'd emphasize what Michael just covered with being ahead of the curve because of the actions Council took four years ago when they approved City Light's Transportation Electrification Strategic Investment Plan.

So we've been making investments in this space for four years already thanks to that.

And in many of the areas Michael covered, we're actually going to be coming back to Council later this year with an update to that plan And we've been conducting significant community outreach to update the plan, bring community feedback and engagement right into the core of that.

So we have the framework, and we've been making these investments.

And this is an additional funding stream that we can channel through that to continue to expand.

And then to your second question on standards, which is a very good one, there's been some positive developments around standardization across North America, most recently with updates to the North American charging standard.

So there's some really nice streamlining impacts from that.

We've been collaborating with industry groups at the national level, Electric Power Research Institute, Pacific Northwest National Labs, and others.

And then at the regional level, we collaborate very closely with all of the charging providers.

So the third-party electric vehicle infrastructure providers, we collaborate with them so that customers have a seamless experience, whether they're going to a city-owned charger or whether they're going to a third-party charger.

And in many of the cases, we're incentivizing installation of those third-party chargers as well.

Because we want to bridge the gap that exists in the needed charging infrastructure for the levels of adoption we've got coming, ensure a seamless customer experience.

So that is very much front and center for our strategies and plans.

We're going to need to develop a lot of charging.

SPEAKER_04

Projecting, I think, what, 12,000 publicly available charging ports by 2030. And so this will be a operation.

And we'll also use this in conjunction with other investments that we'll make, other federal and state grant opportunities that we are actively pursuing.

And, of course, what's in the city's transportation levy will also help to support this.

SPEAKER_19

And just...

SPEAKER_18

Go ahead.

So I'm glad to know we've long been thinking about that and have a plan for supporting individual vehicles, but I'm also interested to know how we will use this to invest in broader public transit systems, because we know if really the goal here is to reduce emissions and to improve transportation in general, we're gonna have to also reduce the number of single vehicles that are on the road.

So can you talk a little bit about how this relates to our transit infrastructure?

SPEAKER_01

Sure, there's multiple levels to that.

So one at the broader collaboration level is the city's transportation electrification blueprint.

which addresses some of the aspects you're talking about and fits electric charging within the broader structure of how do we get more people out of personally owned vehicles in the first place and reduce vehicle miles traveled.

So there's a number of strategies across the city with that that we collaborate with Office of Sustainability and Environment and others on.

And then for our direct role and investments at City Light, We've also been building partnerships with those transit providers since the implementation of our investment plan four years ago.

So right at the beginning of that, we heard those concerns from community about transit is number one.

How do we electrify transit?

How do we continue to expand access?

So for our plan, we've been really centering electrifying transit.

That started with partnerships with King County Metro, Washington State Ferries.

Metro is currently operating 40 battery electric buses throughout the service territory and throughout Seattle from the first base that we electrified with them.

And we partnered with them on the development of that base, the energy adjacent of it, of course, but then also research and bringing technology innovation.

So we brought national labs and some funding to that.

and develop new technologies that actually support transit electrification.

Earlier this year, there was a groundbreaking on the next bus electrification hub there.

Interim Base, which is going to soon be operating an additional 100 battery electric buses.

Metro is committed to electrifying their entire bus fleet.

We're committed to supporting that.

That bus fleet operates out of Tukwila, which is in our service territory, so we've been working deeply with them.

Washington State Ferries is going to electrify the very first battery electric ferry in the region operating between Coleman Dock and Brain Beach Island.

And we've actually got some funding from the state for looking at innovative solutions to charge there.

We have a memorandum of understanding with the ferry system as well on supporting that electrification.

Sound transit so we're working with all of the different transit providers as we go on this and then work working more broadly across the city on the overall strategy for How do you reduce vehicles miles traveled as much as possible and then electrify what's left on the roads?

So you can address those transportation emissions Thank you very much, thank you chair

SPEAKER_10

So thank you.

This is all very technical and I'm grateful for your expertise.

Thank you so much for being here.

I tend to vote in favor of this resolution because joining the state's program aligned with our commitment to combat climate change and improve our air quality for our residents.

So I was hoping you could talk more about when it comes to local communities, community members, What will they see come out of this from our partnership with the state?

And you mentioned 30% on slide 15 on page 199 must be spent on equitable investments, and the other 50% will be projects with the state.

So what can our constituency come out of this?

SPEAKER_19

Thank you, Chair.

That's an excellent question.

The other half of my job, as I mentioned at the beginning, is the partnership side.

And so I see my role as meeting community where they're at and what investments City Light and the city can make regarding clean energy, clean transportation, and building on a lot of the things that my colleague David just said.

Right now, as part of TCIP 2.0 development, the plan is being built by communities.

So we are in community right now in partnership with either community-based organizations or members of the communities that we want to prioritize, be it highly impacted communities, vulnerable populations, BIPOC communities, low income, and that they are building the report for the investments that they'd like to see.

And so CFS is going to both support that and what, though my manager isn't here today, she and I have talked about what are ways in which that we can empower communities over some of the revenues that their utility is generating.

So to answer your question, there's a number of possibilities, but what our commitment is to our customers and our communities is that the investments that they want, we will fund through this program and that they'll see it.

And part of that is also working on greater accountability.

How do they want us to show up after each of these interactions to show that we're doing what they asked of us?

So that might be public charging.

It's going to be certainly much bigger investments in transit.

It might be in community vehicle shared programs.

these are some of the hints that what might be coming at the end of the year for T sub 2.0.

But yeah, we're leading with partnership and delivering projects that community wants.

SPEAKER_04

Thank you.

Engagement, not consultation.

SPEAKER_10

Thank you.

Okay.

Well, I move that the committee adopt resolution 32146. Do I have a second?

Second.

It is moved and seconded to adopt resolution 32146. Are there any further comments?

SPEAKER_11

Will the clerk please call the roll?

Vice Chair Moore?

Aye.

Council Member Saka?

Aye.

Council Member Strauss?

Yes.

Council Member Morales?

SPEAKER_99

Yes.

SPEAKER_11

Chair Wu?

Yes.

SPEAKER_10

Chair, there are four in.

will be sent to the full city council.

Thank you so much for being here today and for your very comprehensive explanation.

Thank you.

Thank you.

So we will now move on to the last item in business.

Will the clerk please read the item into the record?

SPEAKER_11

Agenda item Agenda item 3 in ordinance relating to the City Light Department amending rates terms and conditions for the use and sale of electricity supplied by the City Light Department for 2024 2025 and 2026 amending sections twenty one point forty nine point zero two zero point zero three zero point zero five two point zero five five point zero five seven 0.058, 0.060, 0.065, 0.083, 0.085, 0.086 of the Seattle Municipal Code for briefing and discussion.

SPEAKER_10

So thank you for being here and when you're ready, please begin.

SPEAKER_02

Thank you.

I will have the team introduce themselves and then we will dive in.

SPEAKER_14

Good morning.

Karsten Croft, manager of financial planning and rates for City Light.

SPEAKER_08

Kirstie Granger, City Light chief financial officer.

SPEAKER_02

Thank you, team.

So the ordinance before you today implements the City Light rate path adopted in the 2025-2030 strategic plan.

Thank you for your support of the proposed rate increase recommended by the utility in our review panel.

As we shared with you during the deliberations on the 2025-2030 strategic plan, the new rates are built on a foundation of responsible financial planning, particularly as we face higher power costs, the impacts of providing competitive wages, and higher prices for wires, poles, transformers, and other materials.

We also continue our commitment to affordability for all customers, including a pledge to increase enrollment in our utility discount program.

Finally, we are committed to providing new pricing options to help customers manage their energy bills through efficient use of our products and service.

I'm now going to hand it off to our staff to walk you through how the specific rates for each customer class are calculated, some rate design changes, and finally, what the bill impacts are to the various customer classes for 2025 and 2026. Karsten?

SPEAKER_15

Thanks, Don.

And again, my name is Karsten Croft, Manager of Financial Planning and Rates.

I did not have my microphone on before.

So this legislation sets retail rates for City Light customers for 25 and 26. And as Don mentioned, our presentation today will include some rate setting background as well as the proposed rates.

In addition to retail rates, this legislation also updates the existing large customer solar program which is for customers with solar arrays over 100 kilowatts.

And this is what's larger than what's allowed to participate in the net metering program.

The update expands eligibility to include other types of renewable generation, and it also increases the maximum size from 2 megawatts to 5 megawatts.

In addition, we're changing the export rate, which is the rate that we pay to customers for any energy that's exported to the grid.

And it's being changed from a flat annual rate to a monthly rate that more fairly compensates customers for the value of energy that they deliver to the grid.

Lastly, this legislation sets the 25 and 2026 net wholesale revenue planning values, which are used in the rate stabilization account mechanism.

And these values are pulled directly from the financial from the strategic plan.

So the strategic plan that was just adopted endorses a six-year system average rate increase.

And just to tie it in to our budgeting and rate setting, the financial assumptions for the first two years of 25 and 26, well, they provide the spending targets for the development of the budget and also the revenue requirements for the development of retail rates, which we're talking about today.

And so even though we have a 5.4% increases set forth in the rate path, not all customers are going to see their rates increase by exactly 5.4% due to City Lights rate setting process.

City Lights rate setting process has three primary steps, which is shown in the table.

The first is determining the revenue requirement, which is the total amount of revenue City Light needs to collect from all of our customers.

through retail rates.

And this is in order to meet our financial targets.

As I mentioned before, that this is developed as part of the strategic plan process.

The second step is the cost of service, where City Light divides customers into different rate classes, which is illustrated in the donut chart in the middle.

The blue shades are commercial customers, which make up roughly 60% of our revenue requirement.

Commercial customers are composed of four general service rate classes, and these are shown in the chart, starting with small general service in the light blue, and then going clockwise, we have medium, large, and high demand general service.

The small green slice is for street lighting customers.

As part of the cost of service process, various costs that make up the revenue requirement are then assigned.

And we'll have a couple slides that come up and talk about that in more detail.

The third step is rate design, and this is where we create a schedule of rates for each customer for each customer class to recover their share of assigned costs.

So as a not-for-profit municipal utility, City Lights goals in collecting revenue are to cover all of our costs and collect it in such a way that each customer pays their fair share.

This graphic shows a high level summary of City Lights operations in our primary cost of service categories.

The chart groups our costs into three primary categories.

The first being energy costs, which is the cost of producing and purchasing energy and bringing it to our service territory.

The second category is our delivery costs, often referred to as distribution costs.

And these are the costs of reliably delivering power to our customers through our vast network of delivery infrastructure.

The third category is customer service which is the cost of metering billing and providing overall customer service so take away here is that there's different methods for assigning costs to different categories of service and the cost increases in different areas as well as changes in consumption profiles of the customer classes will result in different sizes of right increases for different customer classes.

And so this slide shows another view of the cost of service.

The chart on the left shows the total cost that make up the revenue requirements broken out into the primary categories.

Energy costs make up 52%, delivery costs make up 36%, and customer costs make up the remaining 12%.

Each of these costs will be assigned to a customer classes based on different criteria.

The second chart shows the assigned costs for each customer class, which is also the revenue requirement.

So our fees and charges are designed separately to collect revenue requirement for each customer class.

But for illustrative purposes, the chart on the right shows how the total revenue is recovered from fees and charges.

Energy charges are the most common fee, and they represent the cost per unit of energy provided.

We often refer to this in cents per kilowatt hour.

The vast majority, or 86%, of the cost recovery is currently through the energy charges.

Demand charges reflect the charge for a peak use during a billing cycle and provide an incentive for customers to flatten out their load profile.

City Light has demand charges for its medium, large, and high demand general service customers.

The green amount at the top is the revenue that we collect from the customer charge.

One of the takeaways from this chart is that rate design determines how the revenue is collected and not how much revenue is collected.

So the less revenue collected from the customer and demand charges, the more revenue that needs to be collected from the energy charges and vice versa.

Okay.

So this table shows our cost of service results in terms of average increases to each customer class and this can be interpreted as the average bill increases for each customer class.

There are many different factors that can impact why different classes have increases above or below that 5.4% system average.

AND I MENTIONED THE FACTORS SUCH AS THE PROPORTIONAL INCREASES IN ENERGY DELIVERY AND CUSTOMER COSTS AS WELL AS THE CHANGING IN THE CONSUMPTION PROFILES.

SO LOTS OF MOVING PIECES THAT GO INTO COST OF SERVICE.

AND IT MIGHT BE WORTH NOTING THAT CITY LIGHT HAS HAD INCREASES ABOVE AND BELOW THE SYSTEM AVERAGE WELL WITHIN THESE RANGES BEFORE.

FOR TODAY WE'RE JUST GOING TO GO OVER THE HIGH LEVEL DRIVERS FOR EACH CLASS AND WHY THEY'RE ABOVE OR BELOW THE SYSTEM AVERAGE.

AND BEFORE WE START THAT THERE'S ONE CHANGE IN THE COST OF SERVICE THAT'S SPECIFICALLY WORTH CALLING OUT SINCE IT IMPACTS MOST OF THE CUSTOMER CLASSES.

AND THAT'S A REVISED ALLOCATION OF OUR CUSTOMER SERVICE COSTS TO BETTER REFLECT THE ACTUAL TIME AND THE RESOURCES BEING SPENT TO SERVE EACH GRADE CLASS.

THIS CAUSE CUSTOMER CLASS COST PROPORTIONALLY INCREASE A LITTLE BIT MORE FOR NON RESIDENTIAL CUSTOMERS THAN IT DID FOR RESIDENTIAL CUSTOMERS AND THAT'LL BE A THEME AS WE WALK THROUGH THIS TABLE.

AND SO MOVING QUICKLY STARTING WITH RESIDENTIAL CUSTOMERS ON THE LEFT RESIDENTIAL CUSTOMERS HAD LOWER THAN AVERAGE INCREASES PRIMARILY BECAUSE OF LOWER INCREASES TO THE CUSTOMER COST FOR REASONS I JUST NOTED THEY ALSO HAD A SLIGHTLY LOWER AVERAGE INCREASE IN DISTRIBUTION COSTS.

BOTH SMALL AND MEDIUM CUSTOMERS HAD INCREASES SLIGHTLY ABOVE AVERAGE AND THAT WAS PRIMARILY FROM THOSE HIGHER ASSIGNED CUSTOMER COSTS.

THE BIGGER INCREASE IN LARGE GENERAL SERVICE IS ALSO BEING DRIVEN BY THOSE HIGHER ASSIGNED CUSTOMER COSTS, BUT THE LARGEST DRIVER ALSO COMES FROM ADJUSTING FOR AN UNDERCOLLECTION IN EXISTING RATES.

AND WHAT'S HAPPENING HERE IS THAT IN AGGREGATE, LARGE CUSTOMERS HAVE HAD A REDUCTION TO THEIR MONTHLY BILLING DEMAND, MEANING LESS REVENUE IS COMING IN FROM DEMAND CHARGES THAN ORIGINALLY ANTICIPATED IN THE LAST RATE CASE.

So if we think of these average rate increases as a step up, what's happening here with large customers is that their starting step has lowered, requiring a higher step up to recover their fair share of costs.

So again, if we aren't collecting revenue through our demand charges, we need to raise the energy rates.

High demand customers have an increase lower than the system average rate, and that's because of slightly below our average increases to both energy and distribution costs.

Street lighting has the highest change per kilowatt hour, but street lights are treated a little bit differently than other rate classes.

So in addition to all the costs for the energy and the distribution to get the power to the street lights, street lights are also directly assigned costs of the street light infrastructure and the maintenance of the street lights.

And these costs are only for street light service, and so they're only assigned to street light customers.

Capital work for the streetlights has grown in recent years and the recovery of those infrastructure costs or what's the primary driver for those higher streetlight customer rates.

So that was a lot to pack for the cost service results lots of moving pieces and now we're ready to move on to rate design.

So the utility and the City Light review panel jointly produced a rate strategy report back in 2019, and a major delivery of that report was redefining our rate design goals and objectives, and these are shown on the chart on the right.

There are eight rate design goals that City Light should balance as best as possible when setting rates.

This rate proposal also advances three key strategies from that 2019 study, and that's including establishing and gradually increasing a fixed customer charge for all customers to cover the cost of metering, billing, and customer service.

And this strategy promotes revenue sufficiency, decarbonization, and rates that are more cost-based and stable and predictable.

The second is introducing optional time of use rates, which are rates that charge different amounts during different periods of the day.

Time of use rates support decarbonization, customer choice, and rates that are cost-based.

SPEAKER_17

We have a question, Council Member Moore.

Sorry, thank you, Chair.

In looking at the resolution, and you mentioned it here, and I'm sorry to interrupt now, but I need to get clarification.

that we're going to bill all usage at the same rate.

Is that correct?

Or all users at the same rate?

SPEAKER_15

Not all customer rate classes at the same rate.

SPEAKER_17

No, just...

So it says effective January 1st, 2025, all kilowatts will be billed at the same rate.

And you just mentioned something about changing to same rate billing.

Can you clarify?

I'm not understanding.

SPEAKER_15

Yes.

In fact, in a couple slides, when we get to the residential rate design, we'll cover that.

SPEAKER_17

What did you just say about all rates?

SPEAKER_15

That same rate for all kilowatt hours is only specific to residential customers.

SPEAKER_17

Okay.

And why is that?

SPEAKER_15

Because we design rates differently for the different customer classes.

Okay.

Small general service and medium general service also have the same rate for all kilowatt hours as well.

SPEAKER_17

Are you going to explain why you design it differently for residential customers?

SPEAKER_15

Yeah, we can get to that.

SPEAKER_17

Okay, thank you.

SPEAKER_15

Thank you for your question.

And let's see, I think so that the third strategy that we're implementing is phasing out our legacy two block residential rate structure, going to that flat energy rate for residential customers.

And that's going to support transparency, revenue sufficiency, decarbonization, and rates that are more stable and predictable.

This table summarizes the changes in retail rates.

The black check marks indicate the rate types that are currently being used, and the gold indicates the proposed changes in this rate case.

So the two structural changes are moving away from the block energy rates for residential customers and offering time of use rates to residential and small and medium general service customers.

So moving on to our residential rate design.

City Light residential customers are currently on a block structure where they pay a lower amount for the first block of consumption and a higher amount for all other consumption.

So that's the current rate structure that we've been working with.

The chart on the right shows that rates for the first block and the second block back since 2014. City Light has been intentionally gradually reducing the differential between the first and the second block to provide a smooth transition as we move towards this flat rate.

City Light's block structure is over 30 years old, and it was originally sized on engineering estimates based on basic household income at the time.

And the objectives there were to provide low-cost electricity to cover all basic household needs with the first block, while also providing a higher second block to provide a better price signal closer to the marginal cost and a better price signal for energy efficiency.

City Lights average rates 30 years ago were very low and they were significantly below that marginal cost of energy.

So they needed a stronger price signal to be able to promote that energy efficiency.

This is no longer the case as City Lights rates have grown as well as many other changes within our housing stock and energy efficiency over the last 30 years.

So our proposal to translate to a single energy charge and gradually increase the customer charge will better support many of those rate design goals that we've been making.

And we made these changes slowly over time to really help mitigate bill impacts for customers.

SPEAKER_17

So it seems to me that with a flat rate, you're still going to be disproportionately impacting lower income households.

Mm-hmm.

SPEAKER_15

That's an excellent question.

We do have a slide addressing that as well.

And I'll get to that.

Okay.

A couple slides here.

THE NEXT TWO SLIDES HELP ILLUSTRATE HOW OUR CHANGES IN RATE DESIGN OVER TIME ARE MORE FAIRLY RECOVERING OUR COSTS THIS SLIDE SHOWS BOTH THE ESTIMATED AVERAGE MONTHLY COST TO SERVE AND THE COST RECOVERY FOR THREE EXAMPLE CUSTOMERS WITH DIFFERENT SIZE CONSUMPTION AND THIS IS FOR THE YEAR 2019 FOR EACH EXAMPLE.

For each example customer, the cost to serve is broken out into customer costs in blue, energy costs in green, and distribution costs in gold.

The cost recovery for each customer is broken into revenue from the customer charge in blue and revenue from the energy charge in green.

SO FOR THE AVERAGE CUSTOMER IN THE MIDDLE THE COST TO SERVE IN THE COST RECOVERY TRACKING PRETTY CLOSE WE ONLY HAVE ABOUT A TWO DOLLAR DIFFERENCE HOWEVER IF YOU LOOK AT THE SMALL CUSTOMERS SHOWN ON THE LEFT WE'RE UNDER COLLECTING BY TWELVE DOLLARS A MONTH AND FOR THE LARGE CUSTOMER ON THE RIGHT WE'RE OVER COLLECTING BY TWENTY TWO DOLLARS A MONTH SO NOW IF WE GO TO THE NEXT SLIDE WE'LL SEE WHERE WE'RE AT IN TWENTY TWENTY SIX.

AND THIS CHART SHOWS OUR PROPOSED RATES FOR 2026. WELL, NOT PERFECT.

THEY DO A BETTER JOB OF LINING COSTS WITH RECOVERY.

FOR THE SMALL CUSTOMER, THE UNDER COLLECTION IN 2019 OF $12 HAS DROPPED TO $4.

AND FOR THE LARGE CUSTOMER, THE OVER COLLECTION OF $22 HAS DROPPED TO $12.

SO THIS SHOWS THAT WE'RE MOVING IN THE RIGHT DIRECTION IN TERMS OF COST RECOVERY.

Okay, so this slide shows the bill impacts of our proposed residential rates for five example customers.

with different amounts of consumption.

The y-axis shows the average monthly bill, and the gold bars represent their current 2024 bill, and the green area at the top is the increase from the 2025 rates, and the blue area is the increase from the 2026 rates.

So, for example, the customer on the left, which is listed as an apartment with gas heat, will have their monthly bills increased by $3 in 2025 and an additional $3 in 2026. SMALLER USE CUSTOMERS WILL HAVE A HIGHER PERCENTAGE INCREASE, BUT MOST ALL CUSTOMERS WILL HAVE A MONTHLY BILL INCREASE BETWEEN $3 AND $5 EACH YEAR.

AND IT'S IMPORTANT TO POINT OUT THAT CUSTOMERS PARTICIPATING IN THE UTILITY DISCOUNT PROGRAM, WHICH OFFERS THAT 60% DISCOUNT, WILL SEE THEIR BILLS GO UP BY LESS.

SO UDP CUSTOMERS WILL SEE INCREASES OF AROUND $1 TO $2 ON THEIR MONTHLY BILLS.

All right, moving on to time of use rates.

That's something that the utility is very excited to be offering.

And this slide shows the structure of the time of use energy rate that will be available to customers in 2025. Some of you may recall that the utility adopted time of use rates for 2024, but we have not put customers on them as we continue to work on getting that technology backbone in place for a successful deployment.

We kept the same structure of our time of use rates that was adopted in 2024, which is a three-period rate that is the same for all months of the year.

This is an example for residential customers, but small and medium customers will have the same overall structure.

The rates will just be shifted down a little bit.

The peak price in orange goes from 5 p.m.

to 9 p.m., and the off-peak price in blue, it goes from midnight to 6 a.m.

All other hours are mid-peak, which is shown in gold.

And the price differential is similar to what we had before, which is about two times the peak-off-peak ratio, and the peak-to-mid-peak ratio is only a small differential.

And this provides a strong price signal to shift as much energy as possible into those low-cost off-peak period hours with an extra incentive to be able to shift during peak hours.

And for added context, the black line in the chart is the daily load shape of city light load for January 12th, and that was the day that we've had our highest system peak in over 30 years.

It's only used to show the relative shape of load on the coldest winter days.

AND ALSO NOTE THAT SOMETIMES THOSE COLD WINTER PEAKS CAN BE DUAL PEAKING AS WELL.

WE ANTICIPATE CUSTOMERS WILL BE ELIGIBLE TO OPT IN AND BE ENROLLED ON TIME USE RATES IN MID-2025.

SO COUNCILMEMBER, THIS SHOULD HELP ADDRESS YOUR QUESTION.

On a affordability and rate design.

So some people may be under the impression that low income customers have a much lower consumption so that rate designs that have a higher fixed charges disproportionately impact low income customers.

And this is actually not the case at City Light.

And the chart on the right shows this, and it shows consumption by housing type and income.

So each vertical line on the x-axis is an income bracket ranging between 15,000 and 150,000, and the y-axis is the average daily consumption in kilowatt hours.

For each income bracket, we show the average daily use for both single-family homes and for apartments.

And what the data is showing is that there's actually a very slight negative correlation between income and use.

And the major, you know, the real major takeaway here is that there's a real wide range of consumption at all income levels.

And so there's real limits to what rate design can do to accomplish affordability.

And that's why the most efficient methods to be able to provide affordability are robust assistance programs, such as our nation-leading utility discount program, which again offers a 60% discount to eligible customers.

Energy efficiency also helps all customers with affordability, but City Light is extra focused on finding new ways to deliver energy efficiency programs to low-income customers including weatherization programs like HomeWise.

Okay, moving on quickly to commercial rate design.

The changes in the commercial rate design, they're not quite as exciting as the residential changes.

We're keeping the same structure that's in place, And what we're doing is we're increasing the base service charge that we introduced in 2023 to all non-residential customers, as well as moving forward with those opt-in time use rates for small and medium customers.

For the sake of time, we're just going to show the commercial rates in the next two slides.

But we did provide a comprehensive list of bill impacts and tables in the appendix for additional reference.

Okay, so just a quick overview of medium general service and small general service rates.

This is a good time to introduce the topic of network service.

So City Light has network service for its downtown area, which consists of undergrounding service where each building is fed off of multiple feeders.

This redundancy provides high reliability for network customers, but also comes at a much higher cost.

Therefore, we split network customers into their own rate classes for medium, GENERAL SERVICE CUSTOMERS, WHICH YOU CAN SEE ON THIS CHART, AND ALSO FOR LARGE GENERAL SERVICE CUSTOMERS, WHICH YOU'LL SEE ON THE NEXT SLIDE.

THERE ARE ALSO RESIDENTIAL AND SMALL GENERAL SERVICE NETWORK CUSTOMERS, BUT THEIR LOAD AND THEIR ASSOCIATED COSTS MAKE UP A VERY SMALL AMOUNT OF THE NETWORK, AND SO THEY DON'T CURRENTLY HAVE SEPARATE NETWORK RATE CLASSES.

NETWORK CUSTOMERS HAVE BOTH HIGHER DEMAND CHARGES AND HIGHER ENERGY CHARGES.

AND OVERALL THEIR AVERAGE RATES ARE ROUGHLY 20% HIGHER THAN NON-NETWORK CUSTOMERS.

AS FOR THE 25 AND 2026 RATE CHANGES, FOR SMALL AND GENERAL MEDIUS CUSTOMERS, WE'RE INCREASING THAT CUSTOMER CHARGE AS WE DISCUSSED AND FOR MEDIUM CUSTOMERS, THE DEMAND CHARGE IS INCREASED BY JUST A SMALL AMOUNT AND THE REST OF THE REVENUE REQUIREMENT GETS COLLECTED THROUGH THAT HIGHER ENERGY CHARGE.

For high demand, the story is pretty similar to medium customers.

Recovering more of that customer service cost through the customer charge and making small changes to the demand charge and the rest of that revenue requirement is recovered through energy charges.

Large and high demand customers are already on default time of use rates.

And so one thing to note is that we made a small increase to the differential between their peak and off-peak pricing to provide a stronger price signal.

And this resulted in just a very small dip in the off-peak rate in 2025. And again, we've got example bill impacts for large and high demand customers in the appendix.

And we weren't gonna walk through all the bill impacts of the non-residential customers, but I'm just gonna slowly scroll through so that you can see for reference.

So that's all the content that we had to go over today.

In closing, these rates recover the revenue requirement that was outlined in the adopted 2025 through 2030 strategic plan.

In addition, the rate design changes we're making help the utility transition into more dynamic rate design options for the future.

The industry is changing rapidly, and rate design will be an increasingly important tool to help keep our energy costs down for our customers.

SPEAKER_10

Thank you, that was a lot.

And my colleagues want to let you know that we are not voting on this today.

I believe that CLC will provide further briefings and will be available for questions for the next two weeks, until the next committee meeting.

And so, does anyone have any questions?

Council Member Strauss?

SPEAKER_06

Sure, but again, if somebody else wants to go first.

Seeing none, though, I'll jump back in.

If we could go back to slide 14, just some observations, and then I'd love to meet with you and get into this a little bit deeper.

This is what we are taking a really large step backwards at a much higher level beyond just this policy.

but a trajectory that we've been on at City Light and with the city is getting to time of use rates.

Because we know that when the grid is at full capacity, when everyone's using electricity, then we have to go buy it, which is more expensive and actually costs our customers more in the long run as compared to, Well, using it when it's not on peak.

With the battery technology that's coming online and with more smart technology, whether it's water heaters or dishwashers or whatever type of electrical mechanism you can program to operate at a certain time of day, we're able to flatten that load demand, that load curve.

But to get to time of use rates, we have to sunset the policy from 30 years ago.

because the policy from 30 years ago sets up a two-tiered cost system within the same bracket.

And so if we are having both of those things at the same time, it's not gonna work.

And I know that we're still a year away from being able to use time of use rates to opt in, two years to opt out.

That's really the point that I was trying to make here is that this is an important step along the way and a process that we've been on for a long time.

If you want to go back to slide 10, I think it exemplifies this a little bit better, where if we were trying to use those time of use rates where we saw the three different buckets, if you will, and then we had the second block and first block on here, it would create a really uneven and cumbersome system that would be even less equitable, less forward-thinking.

I'm really excited about this.

I have a lot more geek level questions.

I won't take our communal time here to get into that, but really excited about this because time of use is gonna be really important for us to shift our load, save us money, and be more efficient with our energy consumption and use.

Thank you.

SPEAKER_15

That was a great summary.

SPEAKER_06

Yeah, if you wanna say a comment on that, please do.

SPEAKER_02

Go ahead.

Thank you.

I just wanted to go back to slide 14. And we've got an awesome audience in here today of people who are going to be leading our city at some point here in the not too far distant future.

And I wanted to take the opportunity to use this example maybe to help explain to our public where we're headed with time of use.

So if we look at this graph, it's really a full day.

It's a full 24 hours.

At the left, we start at 6 a.m.

And at the right, we end at 6 a.m.

So it's a 24-hour period.

And what the black line on this graph shows is how a normal household uses its energy, right?

So you're asleep from midnight to 6, unless you're texting in bed.

You are waking up at 6 AM, or maybe earlier, to get ready for school.

And you start taking showers, and blow drying your hair, and turning on your lights, and making toast, and all that uses electricity.

And that curve builds up.

Go to school and go to work.

Now those businesses or your schools are turning on their lights using their energy.

Then what happens is that around 5, Parents come home, after school activities end, everyone comes home, and you really start using a ton of energy.

And that black curve goes way up.

You're washing and drying clothes.

You're making dinner.

Probably your parents are doing that, but you're microwaving something.

And then as we all start going to bed, that usage goes down.

And what happens is when we get home from work or school, we either turn on our heat or we turn on our air conditioning if it's in the summer.

We don't have enough energy in our system to serve that.

And so we have to go buy it off the energy market.

And that costs a ton of money.

And that costs everyone.

So what we want to do with this time of use rate is drive people to use less energy in that peak time so that we don't have to spend the money to do that.

And it works across all income classes.

It was really a surprise to me when we ran the information for slide 15. And we found out that lower-income people tend to use more energy, probably because where they live, it's less efficient.

So we want to design and continue to utilize our programs to help increase household efficiency, and we also want to change behavior at every income level, save money, and help our customers save money.

So I hope that might help.

And then the only other thing I will do is put in a quick plug for how cool it is to work at the utility.

If you want to work outside, we've got a job for that.

If you love math, we've got a job for that.

If you like to make videos and do communications, we've got a job for that.

So I'm just pointing that out.

SPEAKER_06

Chair, may I continue that conversation?

I'll take that a step further just from our last presentation, CEO, which is when we are moving into the next decade with so many more electrical vehicles on our roads, if everyone's charging those vehicles during the daytime, it's going to blow this curve out of the water.

which is why we need to incentivize people if they want to have a cheaper drive to work to charge that vehicle at night, flatten that curve.

I'll also add that between that 5 and 9 p.m., we do have the second shift of almost every industry coming online.

So as folks are going home from school or going home from work, there's a second shift coming back in.

So the folks that clean...

the city hall, folks that are making sure operations are still occurring, which is what contributes to that second spike.

So much going on.

What's really critical about this is, in the last presentation, that forward-looking position of how much electricity we're gonna be using, we'll be in a lot of trouble if we don't have this time of use rate.

SPEAKER_02

That's correct.

Thank you.

SPEAKER_06

And I'll also put in a plug, the utility seems like a really cool place to work.

If you want to do, I mean, look at what Michael did in the last presentation.

He was able to distill very complicated information in a pretty simple, straightforward way.

But that takes a lot of intelligence to be able to do.

So, Chair, I'm done.

Thanks, I'll be quiet now.

SPEAKER_10

Thank you.

Colleagues, any other questions, comments?

So I have a lot of questions, but I will definitely reach out for additional briefings and emails.

But thank you so much for being here.

I look forward to seeing you next committee.

And thank you everyone for this discussion.

Thank you.

I would like to put in a plug for City Hall opportunities as well.

Please stick around.

We'd love to answer any questions you have regarding the inner workings here.

But we have reached the end of today's meeting agenda.

Is there any further business to come before the committee before we adjourn?

Hearing no further business to come before the committee, the time is now 1118 and we are adjourned.

Thank you.