SPEAKER_15

Good morning.

The August 2nd meeting of the Sustainability City Light Arts and Culture Committee will come to order.

It is now 9.33 a.m.

I'm Tanya Wu, chair of the committee.

Will the committee clerk please call the roll?

SPEAKER_17

Vice Chair Moore.

Present.

Council Member Morales.

SPEAKER_10

Here.

SPEAKER_17

Council Member Saka.

Council Member Strauss.

Present.

Chair Wu.

SPEAKER_15

Present.

SPEAKER_17

Therefore, members present.

SPEAKER_15

Thank you.

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

Hearing no objection, the agenda is adopted.

So we will now open the hybrid public comment period.

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

So just for clarification purposes, we are having a public hearing as well today.

So if you wanted to speak during the public comment period, please do not speak on matters that you would address during the public hearing.

We will...

come back to you for the public hearing.

So please address comments in the public hearing and public comments for public comments.

Thank you.

Clerk, how many speakers are signed up for today?

SPEAKER_17

We have one in person and three remote.

SPEAKER_15

Thank you.

So each speaker will have two minutes.

We will start with the in-person speakers first.

Public comment will be moderated in the following manner.

The period will be up to 20 minutes.

Speakers will be called in the order in which they registered.

We will of course start with in-person and then go to online speakers.

And you will hear a chime within 10 seconds left of your time.

So at that two minute mark, your mics will be muted.

If you do not end your comments within the time, we will then move on to the next speaker.

So the public comment period is now open.

We will begin with the first speaker on the list.

SPEAKER_17

Parker Dawson.

SPEAKER_02

to help better position our builders to provide for the high and increasing demand of power in our city.

Paramount to this work is ensuring, of course, that City Light has the personnel and the resources to be building out the infrastructure necessary to provide clear and predictable service hookup costs or service connection costs for new housing.

Reaching this goal is complex, and it's made all the more difficult due to our rapid rate of decarbonizing and SEL's firm commitment to remaining carbon neutral.

And in fact, the nation's, as I just learned this week, the nation's first utility to become carbon neutral.

The load burden on our aged and worn infrastructure shows.

It shows in routine outages for customers in our most underserved communities, as well as in increased service connection costs for buyers hoping to call Seattle home.

The rate path put forward by SEL represents one of the best strategies we can be leveraging to help create a reliable funding stream that helps the nation's leader in green power maintain that 24-7 access to safe, reliable, and renewable energy.

So we at the Master Builders Association strongly encourage you all to ask great questions and to pass their strategic plan moving forward.

Thank you all for your time.

SPEAKER_15

Thank you.

SPEAKER_17

Our first remote speaker is Sabrina Bayou.

Sabrina, press star six.

SPEAKER_14

Good morning.

Good morning, everyone.

My name is Sabrina Boullieu and I am the Regional Government Affairs Manager for Seattle.

Thank you, City Chair Wu and committee members for this opportunity to enthusiastically testify in support of Seattle City Life's 2025-2030 strategic plan update.

Like the last six year strategic plan update, this plan builds on City Life's commitment to meet the city and region's aggressive carbon emission reduction goals.

These goals are shared by the Port of Seattle as we move forward to decarbonize our operations, including rain cargo and cruise ship operations.

In partnership with Seattle City Light and our tenants, we are jointly embarking on a strategy to eliminate emissions from Seattle's working waterfront.

The goal is to put in place clean, reliable energy needs to enable the maritime industry's transition away from fossil fuels.

Infrastructure improvements such as Pier 66 cruise ship terminal electrification and implementation of strategies for clean, cost-effective, resilient, and reliable energy for the Port of Seattle and the Northwest Seaport Alliance facilities, tenants, and maritime industries in the Seattle Harbor.

This strategic and six-year plan reflects Seattle City Light's commitment to deliver on their partnership with us, support, and our shared interest for zero-emission maritime for Seattle.

We urge your support.

Thank you so much for this great work you're doing.

Thank you.

SPEAKER_17

Thank you.

Stephen Kovach, please press star six.

SPEAKER_07

Hi, this is Stephen Kovach.

I'm with the International Brotherhood of Electrical Workers, Local 77. I'm a business representative and represent the high-voltage workers at Seattle City Light.

And I want to speak in favor of City Light's strategic plan and encourage the committee to pass this out to the full council with the recommendation to pass.

This plan includes the rate structure City Light needs to continue its investments to rebuild aging infrastructure and invest in new infrastructure needed to ensure grid reliability and decarbonization.

This plan also gives City Light the ability to recruit and retain the most qualified high voltage electrical workers and to rebuild the current staff to levels needed to ensure the infrastructure work can be completed.

By being able to rebuild, it will allow City Light to expand its apprenticeship programs for high voltage workers, thus ensuring City Light has the workers needed in the future.

City Light took a huge step forward with its current contract with the IBW, which once implemented will allow them to advertise new wage rates and bring workers back who have left for better opportunities.

The best opportunity now is to work for Seattle City Light.

The IBW will partner with City Light to seek out and encourage these workers to apply.

There's several opportunities for us to do this.

Some of the biggest are at the annual line worker rodeos that happen throughout the Northwest and the National Rodeo in Kansas City.

We would love to be able to have banners advertising City Light's wages and benefits and encourage the people that are attending these rodeos to apply.

Almost all attendees at rodeos are high voltage workers.

I want to thank you for your time.

And again, please pass this audit committee and to the full council.

Thank you.

SPEAKER_17

Thank you.

Nancy Hirsch, please press star six.

SPEAKER_06

Good morning.

Thank you, Chair Wu, members of the committee.

My name is Nancy Hirsch with the Northwest Energy Coalition, a nonprofit advocacy organization for clean, affordable, and equitable energy.

We support the priorities in the integrated resource plan, the strategic plan update, and the new rate plan.

We also note that the impact on residential customers is less than the average across all customer classes.

This is very important.

and City Lights rate discount and energy efficiency programs targeted to low income are critical to maintaining affordability.

Utilities across the state and the region and the country are facing similar rate pressures as they make important new investments to modernize the grid, decarbonize the energy system, and bring on new renewable energy, energy efficiency resources to meet significant growing power demands.

City Light is investing in the system of the future, which includes more community-based energy projects and technologies, new wind and solar resources, and a strong strategy to restore salmon impacted by the city's hydroelectric projects as part of their licensing.

A key strategy for City Light will be to manage electricity demand to reduce peak energy use by customers during extreme weather events.

This takes investment in distributed solar, battery storage, and demand management technologies.

But they will be lower cost than buying power to meet peak demands when prices are spiking.

This is key to building community resilience.

We are in the midst of a challenging time and we're excited by the stress going forward and urge adoption.

Thank you.

SPEAKER_17

Thank you.

And that concludes our list of public commenters.

SPEAKER_15

Thank you.

So as a reminder, members of the public are encouraged to either submit written public comment on the signup cards available on the podium or email the council at council at seattle.gov.

There are no additional registered speakers and we'll now proceed to our items of business.

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

SPEAKER_17

Agenda item one appointment of Eric Chan as member of the International Special Review District Board for term to November 30 2025 for briefing discussion and possible vote.

SPEAKER_15

Thank you with the presenters, please come to the community table and once ready, please introduce yourselves.

SPEAKER_09

Okay.

SPEAKER_99

This isn't for me, right?

Okay.

Honestly.

Cool?

Go ahead, Rebecca.

You go first.

SPEAKER_16

Good morning.

My name is Min Chow Lee from the Historic Preservation Program.

I am here filling in for my colleague, Rebecca Freestead, who would normally be staffing this proceeding.

And Eric, would you like, excuse me, would you like to introduce yourself?

SPEAKER_05

Hey, hello.

Thank you, council members, and thank you for having me here, too, also.

A little bit of background about me is my family owns J Garden Restaurant.

We have been located in the International District for over 21 years.

So I've been there since I was 10 years old.

I'm pretty much always there every day.

So I've been in the community for pretty much 21 years as well.

I've seen it grow.

I like to see it, you know, be preserved, you know, the historical context of their legacy, you know, especially in the International District, lots of, you know, diversity and lots of historical landmark buildings too.

I think those are really important.

My building, my restaurant's located in the historical landmark also.

So we've also had customers for over 21 years in the community.

So I feel like we have a voice for some of the folks that don't speak up, you know, because they come to our restaurant pretty much every day.

And like I said, we've been a community for 21 years.

And hopefully what I bring to the table is preserving the historical context and the legacy of the international district.

Thank you.

SPEAKER_16

Chairperson, would it be helpful for me at this time from a staff role to provide a little bit of background about the district?

That'd be amazing, thank you.

Okay, thank you.

And again, Rebecca Freestead, who would normally be staffing, sends her gratitude and greetings to Chairperson Wu and the entire committee.

So the ISRD board was established in the early 1970s, and at 50 plus years, it is still going very strong.

The core responsibility of this board is to evaluate and make decisions about proposed changes in the ISRD.

Because the ISRD is recognized officially, at the federal and the city levels as being an exceptional place.

And because the ISRD holds an immeasurable amount of value in the hearts of community members, the board's work and its decisions are very important and very impactful.

The board consists of seven members in total, two of whom are appointed by the mayor and confirmed by council, and the remaining five are elected in a community election process that is held annually.

It is one of very few boards and commissions throughout the city of Seattle where the public has such a direct role in deciding who its board members are going to be.

They nominate and vote for five of seven board members.

The composition of the board is varied and includes people with architectural backgrounds, property owners, business owners, such as Mr. Chen today, residents, district employees, advocates, and more.

So in other words, it's a group of people with a great deal of collective wisdom that is very well poised to be making these important decisions.

on behalf of the city for their community.

The last thing I'd like to say about the board is you may have noticed a slight irregularity in your packets today.

Mr. Chand is being considered for position number one.

And normally that would be a community elected position.

However, this year, that position unexpectedly became vacant due to a resignation.

And therefore, per the ISRD bylaws, it is being filled in a different manner through mayoral appointment and confirmation in accordance with the bylaws.

SPEAKER_15

Thank you.

Colleagues, any questions or comments?

SPEAKER_03

Sure.

SPEAKER_15

Mr. Strauss?

SPEAKER_03

Mr. Chen, thank you for your volunteer service.

I'll have three questions for you, and I'll start with my statement that as a repeat customer of your restaurant, I am a happy customer, except for when I can't get a seat because you're too popular.

Keep up the good work.

Thank you for your commitment to our community.

When joining the ISRD, what is, from your perspective, what do you see that's going well, what might need to improve, and what are you looking to achieve or assist with on the ISRD?

It seems like you've probably had some interaction with the review board before.

SPEAKER_05

Yeah, thank you so much, Councilmember Strauss.

So I had my first meeting last week.

I sat in and I saw and observed how it went.

Obviously, my main goal is preservation.

Maintain Chinatown International District, maintain what it looks like on the outside.

I know there are lots of new buildings being built around us, but we're not gonna falter.

I'd like to preserve the culture there.

There's a lot of elders that still live in the community.

With new things being built up, we were talking about new businesses and how it would affect the community.

I think public safety is also a big issue for us in the international district.

I think that's something that's being looked at right now, of course, and I really appreciate everybody on the council member boards for looking into that as well.

And I think preservations of the culture there is important.

And I'm hoping to keep other businesses around, making them feel safe and welcome, because, like I said, we've been around for 21 years, hopefully for another 21 more years, and hopefully my colleagues around us stay for as long, too.

SPEAKER_03

Thank you.

I share your hope that you're around for at least 21 more years.

And if the only problem that you have is that you're too popular, that's a good problem to have.

So thank you for your volunteer service.

And Min Chau, I seem to see you everywhere.

Thank you for everything you do for all of the different boards.

I know you work on the Ballard Landmark Board as well.

And so it's always nice to see you up in District 6. Thank you.

SPEAKER_15

Thank you.

So thank you for your service and your willingness to contribute.

As we all know, Chinatown International District is on the list of the nation's most endangered neighborhoods.

And it's definitely a duty and a lift to have you on the board.

You're continuing the legacy of your family business in the Chinatown International District and also the preservation and the cultural heritage aspects of the district's legacy as well and so very excited to see you in this role and I've known you for a long time and so excited in all that you have done and will continue to do.

So with that, I move that the committee recommend confirmation of appointments 2022. Do I have a second?

Second.

Will the clerk please call the roll on the confirmation of the appointments?

Oh, I'd like to acknowledge that Council Member Saka has joined us.

SPEAKER_13

Thank you, Madam Chair.

SPEAKER_17

Council Vice Chair Moore.

Aye.

Council Member Saka.

Aye.

Council Member Morales.

Yes.

Council Member Strauss.

Yes.

Chair Wu.

Yes.

Five in favor, none opposed.

SPEAKER_15

to be confirmed will be sent to the city council.

Thank you for being here today and sharing your story.

So we will now move on to our next item of business.

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

SPEAKER_17

Agenda item two, resolution 32138, a resolution related to the City Light Department acknowledging and approving the 2024 integrated resource plan progress report as conforming with the public policy objectives of the City of Seattle and the requirements of the State of Washington and approving the progress report for the biennium September 2024 through August 2026.

SPEAKER_15

So as presiding officer, I am now opening the public hearing on resolution 32138. Clerk, do we have any speakers signed up for the public hearing?

SPEAKER_17

There was one, but they spoke during general public comment and are not present.

SPEAKER_15

Being there is not a member of the public registered or present for this public hearing on resolution 32138. This public hearing is now closed.

This was the second public hearing on this.

Thank you for the public who reached out to our office with your feedback and for speaking earlier in the public comment period.

So I see the department coordinators and presenters are at the community table.

Please introduce yourselves and begin.

SPEAKER_12

You're good.

SPEAKER_10

Thank you.

Good morning, Chair Wu and council members.

We are very happy to be before you today to bring forward the 2024, or to be here to answer questions, I guess, about the 2024 Integrated Resources Plan.

My name is Dawn Lindell, and I'm the general manager and CEO for Seattle City Light.

SPEAKER_12

I'm Paul Dockery.

I use he, him pronouns, and I'm the senior manager of energy resource strategy and planning for Seattle City Light.

SPEAKER_01

Good morning.

I'm Siobhan Doherty.

I'm the power supply officer for Seattle City Light.

SPEAKER_12

And I believe we're here to answer questions.

And if there are any questions, we're happy to address and answer.

SPEAKER_15

Well, thank you for being here again today.

Thank you for the time you spent answering all of our questions and briefing all of us separately.

And also thank you for spending the time answering all of my questions.

The public can see the memos from Seattle City Light on our agenda.

And so I have a couple of questions, but wanted to quickly ask you, can you explain the methodology used to forecast future electricity demand and how it accounts for various economic scenarios?

Like walk us through some of the considerations.

SPEAKER_12

Yeah, absolutely.

So thank you for the questions, and we responded in the memo.

I'll give a high-level summary of our use, our methodology for end-use load forecasting, and then can answer any follow-up questions.

So as I mentioned, we use a modern load forecasting technique called end-use load forecasting, and that...

evaluates our consumption based on different sectors like residential, commercial, and industrial, as well as segments like single-family homes, multi-family homes, or industrial spaces, and then end uses like heating and cooling loads and the different equipment.

We use that to then incorporate different projections for both economic indications as well as incorporating modern climate science into our expectation of temperature changes over the course of the study period.

We use 30 years of weather scenarios that have been adjusted for climate change to then model how our load can change over the next 20 years of the study period.

In this 2024 progress report, the largest impact to our load forecast since the 2022 integrated resource plan was the incorporation of additional building electrification and transportation electrification based on the adoption of new policies by the city and by the federal government's incentives for additional building electrification and transportation electrification.

So in that, we did see an increase, significant peak load increase between now and the end of the study period in 2040, and as well as additional energy increases.

And that's largely driven, like I mentioned, by building electrification, transportation electrification, as well as population trends for the city.

Do you have any additional follow-up questions that I can...

SPEAKER_15

Well, thank you for that.

And so just for clarification, this is a progress report of current acquisitions.

This does not include future acquisition, the acquisition plan, or funding to meet the demand that was forecasted.

SPEAKER_12

Yeah, that's correct, and a good additional framing on what our 2024 IRP Progress Report is.

It's a study of the resources necessary to meet the expected load growth of the utility.

It is not appropriation.

It's not a list of things we will go acquire or an appropriation of funds.

It really is meant to be a study of the types of resources that we expect to need over the period.

Any acquisitions or contracts for resources would be through a separate and related utility function and would come back in front of the council at that time.

SPEAKER_15

Thank you.

So what metrics and benchmarks will be used to measure the success and cost effectiveness of the proposed resource plan over time?

SPEAKER_12

Yeah, so one of the important components of the 2024 progress report is an update on the 2022 integrated resource plan.

And when we develop these plans, we are looking at metrics around how reliable our power supply is to meet the load growth of the utility.

And as I mentioned before, since this is not an acquisition plan or a budget or these resources, acquired through a separate process.

Those metrics for how effective we are at acquiring the resources would be through a separate utility function.

Any additions you'd?

SPEAKER_01

Let me just add that the IRP is updated every four years with the progress report every two years in that interim period.

So we will immediately start our next IRP.

And as we acquire resources, it'll go into those integrated resource plan updates.

So we'll be able to see how we're tracking towards changes in load and meeting the load changes we've already seen.

SPEAKER_15

Thank you.

Colleagues, any questions or comments?

SPEAKER_03

Council Member Strauss?

Chair, may I?

Sorry, I'm hogging the mic over here.

But I'm going to speak to a couple of the slides here.

If you want to share, I've got them up just by pulling up Legistar.

SPEAKER_12

Yep, I've got it right in front of me.

If you tell me what slide you want me to go to, I can get to it.

SPEAKER_03

Let's start with slide five, if we could.

And this is partly because I held my questions at our last meeting because we were running short on time.

So here they are.

So looking at this, speaking to what Siobhan just said about every four years we have the full plan and every two years the update.

What I appreciate about this is it is – we have such a changing climate that – It's my understanding that we're using 30 years worth of weather data to inform our next 20 years.

Is that correct?

That's correct.

And how are you, I guess, addressing climate change?

How are you factoring that into the model?

Because I'm not going to pull off the stat, but I think it was like the warmest July that we've had or something to that degree.

I mean, every year it feels like there's the warmest, the most of something regarding the climate.

How is that factoring into your 20-year projection?

SPEAKER_12

Yeah, thank you for the question, Councilmember Strauss.

So we do incorporate modern climate science into our evaluation of future loads.

To do that, we use a multivariate adaptive constructive analogs based on some global climate models.

Importantly, our utilization of the end-use load forecast allows us to incorporate interaction effects of extreme heat events and extreme cold events and how they interact with the addition adoption of cooling air cooling and its impact on our peak loads.

So we are using, as we look at 30 years of weather data, we are adjusting over that 20 year period based on modern climate science to make sure we're addressing how those extreme temperatures will impact our loads.

Importantly, one of the things that we are continuing to work on, we have worked with the University of Washington's climate impacts group to improve the downscaling of data models for use in our hydro forecasting.

Right now, we do not incorporate the impact of climate change on stream flows because we have not gotten good data sets that are to the level necessary for hydro modeling, but we are working with the University of Washington to do that.

We do hope to have that in place in time for the next progress report.

And it's one of the benefits of continuing, as you mentioned, to address these reports every two years, because as we learn more about climate change and as we learn more about impacts to stream flows, we need to keep updating our understanding of them.

I would just also add that we have been incorporating climate change into our integrated resource plan since 2016.

SPEAKER_03

Thank you, because I know for our utility, it is both the generation and the usage.

And so I know if we could go to slide seven, Looking at our load forecast, can you just confirm for me the brown line was what you predicted in 2020 and the red line is what you're predicting today?

Is that an accurate understanding?

SPEAKER_12

That is correct.

That is the change in our load forecast.

Since the load forecast we used in the 2022 IRP was actually a 2020 load forecast, this time we're using a 2023 load forecast, which is our most recent load forecast, to do this 2024 progress report.

SPEAKER_03

And I know graphs can sometimes feel skewed because of the units that we're looking at, but this looks like a pretty large change in the last three years.

Is that being driven by our climate change?

Is it being driven by how our buildings are electrifying or our transportation?

Because I know just in the last three years, the push for EVs, we didn't have an electric Ford F-150 three years ago.

So how did these numbers change?

SPEAKER_12

Yeah, we go into more detail in the progress report, but the largest drivers to this load forecast increase are building electrification and transportation electrification.

And there we do incorporate the impact of climate change on these loads, but it is not as big a driver as those adoption of new technologies for end-use electric service.

Could I just...

Please.

SPEAKER_10

Building electrification tripled in this time frame, and the load for building electrification, I should specify that, the load for building electrification tripled, and the load for transportation electrification grew 70%.

Those are significant.

And as we continue to look at the last five years out of the 25, which, of course, in 22 was only two years of the last 25 or 30 years, we are seeing that impact that you have noted of significantly more weather events.

So as we look at our integrated resources plan going forward, as Paul mentioned, we will definitely be incorporating some sort of a weight on the more current years to account for that.

SPEAKER_03

Thank you.

And luckily we don't have to meet these annual peaks today.

We're looking out 14 years from now or 16 years from now.

This is what, and again, just noting that these are the peaks, these are not the constants.

But maybe if we could move on to slide eight.

Those are our needs.

How do we get there?

Something that I see here that has not been on here before, or maybe it was and I didn't notice, is the enhanced geothermal.

SPEAKER_00

Council Member Strauss, could you speak more into your microphone?

SPEAKER_03

Thank you, Council Member Moore.

It is one of my favorite things to say, so I appreciate you holding me to it as well.

So when I'm looking at the...

We just talked about our needs for the peak.

This is also very important, and I know that there's another slide that gets into the year by year.

How does geothermal enter into this conversation?

I know we've got volcanoes nearby, but I'm assuming it's pretty difficult to transfer that energy from Mount Rainier over here.

Can you talk about that?

SPEAKER_12

Absolutely.

It's one of the conclusions of this progress report is the need to look more and study more on clean, firm resources like this enhanced geothermal resource.

And we modeled this using some analysis from the National Renewable Energy Laboratories and their pricing scenarios for new geothermal technologies.

These are advanced and enhanced geothermal technologies.

which are new techniques for extracting these geothermal resources that aren't as dependent on the existence of all three components of geothermal, the heat, the steam, and the location.

So it's a fairly, frankly, naive modeling of this type of resource.

We do believe we need to spend more time not only evaluating this resource but additional types of resources like this that can reliably meet load service needs one of the values of this type of resource in the environment we're facing is that their high capacity factors means they utilize transmission resources more efficiently having a higher capacity factor you use that existing transmission network very efficiently and we see that another area of need in our evaluation is understanding how our resource choices impact our transmission utilization for the region.

Anything you'd like to add?

SPEAKER_10

the other kinds of clean, firm generation, and I think it's just worth noting, those are the sources that we can depend on every hour of every day, no matter what the weather.

And so hydropower, of course, is our best right here in beautiful Northwest.

We've got all this wonderful hydropower that has enabled us to have the advantage of a very good, strong, clean resource.

The other viable sources are geothermal, which is what we put into the model, and small modular reactors today.

People are working on fusion.

I believe there are at least four companies right here in Seattle that are working on the fusion question.

That holds potential.

People talk about hydrogen as an option.

to make clean hydrogen requires three megawatts of clean energy to make one megawatt worth of hydrogen.

However, that one megawatt is firm, meaning we can store it and we can use it when we need it, but it is four times the cost.

So it is hugely expensive as an option, but may well turn out to be something that we look at.

We will keep all of our options open for this.

The model gobbled up geothermal even at a considerably higher price than the other options as soon as it was available because it is firm and available all the time.

We do have room in our portfolio though for additional solar and additional wind to reliably provide energy with those resources.

And we will make the absolute most use of solar wind and batteries as we can along this journey.

SPEAKER_03

And maybe if we could move to slide 13 to help ground this part that I realized I got ahead of myself.

I will be moving back to ask about peaks and lows.

The question becomes, well, what if geothermal doesn't work?

And what I appreciate about the Department of Commerce's requirement to file this report every four years with an update every two is that we're looking at geothermal on our plan for eight years from now.

And that allows us, in the interim, if something doesn't work, for us to adjust.

The bigger problem would be if we weren't planning for it.

And what was really helpful to hear from your team in our meeting, every two years, we add two years to this plan, and things change.

And so...

I know I brought up a new technology that may or may not work, and I just wanted to make sure to ground us back to the reality that if it doesn't work, it's okay because we're setting ourselves up with enough time to plan.

If we could go back to slide 10. If you could just briefly describe this slide because it'll inform my questions on slide 11 and 12.

SPEAKER_12

Yeah, as part of this 2024 progress report, one of the things we're taking the time to do is incorporate some new presentation of information.

And this month hour graphic is one of the new graphs we're showing.

And it shows a typical day for each month of the year.

So in this key, we're showing one day's load.

This is shaped like a winter load with a ramp in the morning, a little lull in the middle of the day, and a ramp in the evening.

But in the next few slides, you'll see a typical day's load shape for each month of the year.

So we have 12 effective typical loads, representative days load, one for each month of the year.

And that helps articulate where we see stress and how our resources need to meet different loads throughout the year.

SPEAKER_03

So this slide right here is just showing one day.

The next two slides are using one day as an example for every month of the year, is that correct?

SPEAKER_12

Well said, well articulated.

SPEAKER_03

All right, well, let's roll on to slide 11. Maybe if you could just re-explain this slide.

SPEAKER_12

Yeah, so as I mentioned, so there are one day for each of the 12 months.

The black line is the median load for our study period.

And this, what we're showing here is for the year 2025. The orange dark lines are the actual loads from stressed events.

And then the orange band in the background are the full range of our simulated loads for that hour, for that month.

And one of the important things as analysts looking at this graph is seeing that the extreme events like from MLK weekend, the January 12th, 2024, which shows up in January, that that peak day which we saw historic peaks is aligned with the top of our simulated band and that shows that the weather forecasts and the Adaptation of our load forecast based on the simulated weather is a good representation of the types of load we we can't expect to see and in fact loads that we did see under peak conditions fell within that band was a good indication and

SPEAKER_03

So we're seeing this at the top of our predicted band.

Correct.

I know when I was growing up, the summers were cool enough that you could only depend on the first weekend of August to actually be hot.

That clearly is not the case right now.

As Seattle has become more air-conditioned, as we're moving into a hotter climate here...

Is it previous that the summer was the low and the winter was the high, and now we're looking at two highs for the year?

SPEAKER_12

So even in this load forecast, we still see our winter peaks being the driver, and that is largely because of building electrification and the adoption of electric heating.

When we get heat pumps, though, we get both the electric heat in the winter and some air conditioning in the summer.

And this load forecast does incorporate increased load in the summer.

But the increase of that air conditioning load doesn't impact our load as much as the heating in the winter.

So we still see winter as our peak.

But our summer peaks are still growing and growing faster than what we would have done without building electrification.

SPEAKER_03

All right.

new person question of why are there two peaks in the winter?

For each day, that is.

SPEAKER_12

Yeah, it's just kind of a behavioral thing.

So in the winter, you know, it's darker in the morning and gets early darker at night.

So we see a lot more of spiking of like lighting needs in the morning and the evening.

Whereas in the summer, You generally you have the same behavioral patterns, but you don't use as much lighting during those shoulder periods.

And ultimately, when you that lighting need in the winter, because you're already higher just because of process heat and heating needs.

Generally, you end up with those spiky shoulders during the day.

SPEAKER_03

And so if I was using this model to guess at what is going to happen today, our peak today is going to be about 435 o'clock.

Is that a good estimate?

Yeah, I think that's good.

All right.

Looking at the next slide, this is really where my questions are coming.

Thanks for walking me through that background just so that we're able to talk about this.

Can you share what the difference is here in the blue, the kind of more transparent colors, those bands, the blue and the orange?

What's going on here?

SPEAKER_12

So as we walked from the last slide to this slide, the orange line, which is the load for an extreme day, stayed the same.

And then what we're doing is the band, the orange band, which is the simulated loads for that day, is now representing 2035 loads.

So if we go 10 years into the future, what loads do we expect given that climate change adjusted load model and building electrification and transportation electrification how much higher do we could the extreme load events be and that would be the top of that orange band so specifically in january of 2024 you'll see our most recent mlk load was around 2026 megawatts and this simulation says that in 2035 peak load in january could be as much as 2300 megawatts for that peak.

And what this integrated resource plan is doing is trying to build a portfolio of resources that can reliably meet not just the peak we just saw, but reliably meet the peaks we're expecting to see in the future.

The other things on this graph, we included the blue line, which is how our generation actually performed during those extreme events.

So it's again, the same actual generation from our portfolio for that day.

And then the blue band are our generation band of how well our generation performs as we study it during this period.

And the blue bands and the blue line are without any new resources added to our portfolio.

SPEAKER_03

And so I'm seeing in the month of January, June, a little bit in October, but November and December, that our forecasted needs are higher than our forecasted generation.

Is that essentially what we're looking at with your forward-looking new loads?

Are you including all the geothermal, the solar, the battery?

Is that influencing this blue, or are you calling out that we need to do more to have the blue higher than the orange?

SPEAKER_12

The addition of wind and solar and geothermal is to get the blue reliably higher than the orange.

You correctly point what this is pointing out, which is when your orange band is higher than your blue band, it means that you need more resources to make sure those are met.

So the blue band does not include new resources, and the next slide is the new resources that we need in order to make sure the blue band's where we need it to be to reliably surf load.

SPEAKER_03

That was probably the most helpful part, understanding that the next slide is what gets our blue band above our orange.

Before you move on, I'll give you a plug for your rate path, which is if colleagues, thank you for listening to all of my questions.

The orange line and the blue line, when the blue is higher than the orange, we get to sell our power at a very high rate, which is what keeps our rate path lower than it would be otherwise.

And so I just wanted to note that.

But To summarize all of my questions and what you've presented here, to get the blue shaded area above the orange is your next slide.

Is that correct?

That's correct.

All right.

If you want to show that and ground us down, it will explain why I am supporting this IRP today.

SPEAKER_12

Yeah, so as you've walked us through, in order to reliably serve this increasing load, we need to add to our portfolio sufficient resources so that when we see extreme events like we saw in January, we have a portfolio of resources to meet that need.

And what this shows is the year-by-year breakdown of the resources that we showed as the table at the beginning.

In the early part of our study period, you see the addition of solar and wind resources and batteries.

We started offering the enhanced geothermal technology in 2032, and this study picked up all of that enhanced geothermal as soon as it was offered in chunks, and we didn't start picking up wind and solar again until after we had depleted the full utilization of that resource.

Don mentioned that was all of the resource we offered.

We offered 400 megawatts and picked up all of it, and as soon as we offered it, it was in 2032, and it started picking it up then.

But regardless, as you articulated, the near-term steps remain the same.

Solar, wind are commercially available resources, and we'll continue to pursue them to add to our portfolio.

Thank you.

Wonderful.

SPEAKER_03

That's my last question is I know we'll see you back in two years for the update to this for the full plan.

How between here and there, between here and 2026, what are the projections for attaining that solar and wind?

Are we on track?

SPEAKER_12

We will be back here.

That's part of the, you know, our other utility function is to go acquire resources and then the acquisition of those will be back in front of you to get approval for those resources.

And I'll let Siobhan add anything else.

SPEAKER_01

Yeah, no, that's great.

We'll do a competitive solicitation process.

We'll go out and see what's available in the market.

We'll find the resources that meet our needs at the lowest cost possible and look for how to fill in some of these gaps.

SPEAKER_03

Wonderful.

Thank you, Chair, for letting me take so much time.

SPEAKER_00

Thank you.

Council Member Moore?

Thank you very much, Chair.

Thank you for the presentation and for the additional materials provided or answers to questions that Chair Wu submitted.

I guess I just have a number of questions and concerns.

I note that in the...

in the answers to the questions that you note, really the main driver here is electrification, and it's electrification both for buildings, but more importantly for transportation.

That's where the real growth is going to be in electricity costs and needs.

But then I note that you also state in response to a question about the IRP that unfortunately the analysis for the 2024 IRP progress report was not completed in time to inform the 2025-2030 strategic plan rate path.

And the final results of the 2024 IRP indicate that the amount of new renewable resources required to reliably service load will likely be greater in the out years, 2027 to 2030, than identified in the strategic plan.

the exact amounts and impact will be better known as we get more information.

So I'm just a little concerned that we haven't actually been able to incorporate the progress report into calculating the rates.

And I'm just wondering if you can address that.

SPEAKER_01

Yeah, I can start us off.

The timing for the integrated resource plan, which is required by Commerce, and the timing for the strategic plan were a little bit off, so you're right.

The full IRP was not complete when we did the strategic plan modeling last year.

it is very similar to what's in the IRP.

The solar is very similar.

There's slightly less wind in the strategic plan than in the IRP, but for the first two years, it's incorporating, I think, the right amount of resources for that timeline.

in that rate path.

We did include new resources in that rate path, and we are looking for the next IRP to have that complete before we're ready to get to the next strategic plan.

So we've already started planning for that, and we are starting the modeling process so that will be complete next year before we start the process for the strategic plan.

So I think for the first two years of strategic plan, it's very on target with the IRP, and we'll have a better timeline next year.

SPEAKER_10

I want to add that part of the reason that Siobhan has been promoted to the officer level is because power marketing is such a critical component of our future.

And she has taken it upon herself to ensure that our time frames are going to match up.

And we've had that lesson learned and we will absolutely be in line to coordinate so that we're not duplicating efforts and so that we're not making the full use of the expenditure on the IRP process.

So thank you, Siobhan.

SPEAKER_00

Yeah, it just, in looking at the rate path that's been set out, I know that I had made previous comments that I was concerned that we were front-loading the costs, and I remain concerned about the front-loading of the costs, but I also remain concerned about the fact that I don't think that we are being fully transparent about how much costs are going to need to go up in the next, after 2026. I mean, in response to these questions, we talk about why we have higher rate costs for the next two years.

You note that wholesale prices for electricity have more than doubled compared to the previous decade.

Rising power costs are the single largest cost pressure on rates.

Peak load is going to grow 7% by 2030 and 16% by 2035. You have significant investments in electrical infrastructure.

In addition, Seattle City Light is also behind in addressing aging existing assets like direct buried underground cable.

So I really, I know it's not intentional, but I just, I am very concerned either that we are front-loading costs and when we should be smoothing the costs, or we're not really being honest about the costs that are going to be, our rate payers are going to be facing in two years' time, and shouldn't we really be talking about that?

And if the costs need to be higher now and projected, then we should be honest about that, rather than creating a false expectation that in four years' rates are going to go down.

And I do appreciate the fact that, in answer, and again, I appreciate these, very much these questions that were submitted by Chair Wu, you know, that the actual residential cost is not going to be 5.4, that that's the average cost.

But nonetheless, we are looking at a significant rate increase for rate payers.

And I know that that was an issue that was identified.

So really what I'm I'm asking for here is just greater transparency and honesty about the fact that we really do have significant increase in costs that we are looking at and all of these graphs show a tremendous amount of increase in demand as we do the right thing, right?

SPEAKER_10

Yes, Council Member Moore, thank you so much for that question.

I really appreciate the question.

What we have, you are exactly right, what we have done in the outer years is put in place holders.

It has been a journey the last five months as we've begun to really dig into where we are in terms of reliability.

I know we've visited neighborhood meetings where we've heard from our customers about their struggles with our reliability.

We have come to terms with and worked on new looks, including the 24-year look is something that I brought in so that we could really see the difference in price.

And we're not the only utility at all that has really dealt well with the COVID 100-year pandemic and therefore did not take the rate increases during those years that really were needed in order to ensure that people could get through that difficult time.

And what we're trying to do is avoid rate shock and also make sure of what we need.

So we have seen the significant rise in infrastructure costs.

So while the CPI has gone up maybe 9%, the Handy-Whitman, which is CPI for electric components for a utility, has gone up nearly 30%.

It is part, I wouldn't call it lack of honesty.

I would say it's part hope that we are, we will see those prices come back down and we don't want to put in something that we may not hit.

We also are very much focused on finding efficiency improvements and cost savings and really going after every grant that is possible to help us offset the cost.

And prior to this, we were going after some larger grants, but we weren't necessarily going after medium size and small ones, but we need to because they add up.

We are also looking at partnerships with other utilities because, again, we're in the same boat, and we may be able to share costs on some resources and therefore reduce the costs.

I agree with you that the outer years where we've got the 5% placeholder are likely too low.

In this next two-year period, we are going to be doing a study on our assets.

We know we have a problem.

We can see the reliability, which has declined every single year since 2017, and I haven't looked back farther than that.

But we've got old assets.

We've got 330 lines that are direct buried, and we have to replace those.

They are all past their useful life.

We've been replacing five miles a year.

Not quite five miles, but we'll call it five.

That would take us 66 years to replace all of that line, and We cannot wait that long because we will continue to have the outages.

So what we've got to do is get a really good, clear picture for you all on what that looks like, and then we've got to create a 10-year plan on what we believe we can accomplish in that 10-year, and we've got to look at the rate impact, and then we've got to decide what we can live with.

And meanwhile, we will staff fully.

As our IBEW president referenced earlier, we will staff fully and we will be able to move a lot faster than we have been.

So all of those things will start to help.

And in two years, we will have a better view.

We don't have to wait two years to keep you posted, though.

I would suggest that as we complete these efforts, we meet with you all and we share with you what we're looking at.

And that way, again, we can decide together what the right path forward is for with its incredibly hardworking people and who've done an amazing job of maintaining the previous generation's investment in our infrastructure.

Now it's our turn.

It's our turn to invest in this infrastructure.

to carry us forward for the next generation.

And so we just have to figure out the right path for that.

So we have put in placeholders.

We know they're wrong.

And we just don't know how wrong.

And we have high hopes we can manage it to an acceptable level.

And I believe we're on track to do that.

I don't know what exactly acceptable is, but certainly less than a double-digit rate increase.

SPEAKER_00

Thank you, I really appreciate that answer.

I appreciate the honesty of the answer and I appreciate the explanation of the complexity and the impending costs.

I guess my position would be better to put in a number that overstates, and then you can come back and say, look how we're actually reducing rates, rather than, oh, we have to come back now and ask for a jump, no matter how much it is going to have an impact.

So I appreciate the balance.

It's a difficult line you're walking.

Anyway, that's my position.

Thank you.

SPEAKER_15

Thank you, Chair.

Thank you.

Any further questions?

I'm just curious, watching the Blue Angels yesterday on the rooftop and looking around, seeing all the solar panels in all of the buildings, has that any influence on, I know it's not part of your portfolio, but does that influence the consumption or how much electricity that is available?

SPEAKER_12

Absolutely.

And in this plan, we are incorporating customer solar resources as a resource that we need to encourage through programs to help meet our load locally.

So it is absolutely a part of our evaluation and part of meeting the city's needs going forward.

SPEAKER_15

Is it significant or is it really minor?

Do we have an idea if they're generating enough to actually be bought or sold versus keeping certain buildings sustainable?

SPEAKER_12

I'll go to the slide where it shows up and you can, it's the customer solar program line on this slide.

So in the first 10 years of the plan, we expect 12 megawatts of that type of resource, which would be local customer owned resources within the utility.

So that's, it is significant in meeting the needs.

And one of the benefits of that resource that we do try to incorporate into our modeling is the value of not having to use third-party transmission to get that here.

Transmission to our service territory, as we articulate in both the demand side management potential assessment, as well as this IRP, is an area of concern for us and an area of continued need to study and improve our modeling around.

But I hope that answers your question.

SPEAKER_15

Thank you.

So...

I was hoping we could look at some of the slides that are also included in the packet, page 23, which is the modeling analysis of other utilities, resources, additions, and comparison.

So, could you talk a little bit more about what this graph demonstrates?

SPEAKER_12

Yeah, so we just wanted to incorporate into the slides in case there were questions about how our portfolio and how our plan compares to other utilities around us.

So this is our portfolio mix and volume of resources compared to some other utilities in the Northwest.

And the next slide also compares, because one of the big drivers of portfolio addition is load.

So the next slide, 24, compares the load for those similar utilities.

And I think part of the comparison is that what we are encountering and what we need to address is very similar to what a lot of the other utilities in the Northwest are facing.

I think Dawn, you mentioned that earlier, that we're not alone in this challenge and the need to incorporate new resources.

And it does have an impact on the cost of those resources that we are trying to acquire for the city of Seattle.

SPEAKER_15

quite interesting Clark Public Utilities, their load appears to get lower for peak while others kind of move around or stay the same.

Seattle City Light at peak load, it seems like we excel others in terms of use.

SPEAKER_12

Yeah, I can just speak briefly to why that type of thing is.

We have a lot of residential, or sorry, we have a lot of commercial loads that are very susceptible to heating and cooling.

So it's a reflection of the building electrification and transportation electrification for the urban center.

SPEAKER_15

That's interesting.

Thank you.

Also, I have another question regarding...

how the IRP informs the strategic plan.

So it looks like, is it normal that the IRP is a little bit delayed to be able to be included in the current strategic plan?

Or is this year, was that just?

SPEAKER_01

I think historically they have not been aligned.

They've not been on the same timeline.

I think it hasn't been an issue historically because we haven't needed to procure new resources.

The resources that we already own were more than enough to meet our load, and our load has not been growing.

It's been steady or flat for the past 10 years.

So this is the first year.

In 2022, we started to see a little bit of new need, but there's a dramatic increase, which I think makes it more important, very important, that we align these processes in the future, and that's what we're going to do.

SPEAKER_10

And if I can add, I think the gap was hidden, as Siobhan has noticed.

In my experience in other utilities, though, we do the IRP, and that becomes the forecast, which then you just have to do it once for that, and then you expand and build on that.

So I think it's a place where we can find some efficiency, and I can assure you the team is all over that.

So we'll continue to do that.

I think the kinds of questions that you're asking are exactly what we need to be asking ourselves after each thing that we do, what went well and what could have gone better so that we can make the changes we need to make.

And this was not something I needed to bring to this team.

They had already identified that we had an opportunity here by the time I came in in February.

So I'm super proud of them for doing that work.

SPEAKER_15

Thank you.

And so usually how would the RRP, so it would forecast for the strategic plan, but it looks like perhaps the 2022 IRP was used for the current strategic plan, or was there any relations between the two?

SPEAKER_01

Yeah, so we, when we were planning for the strategic plan, it was mostly December and January of this year, we had recently completed the demand side management potential assessment that came to council earlier this year, and that was indicating a higher need for new resources, similar to what we're seeing in this IRP update.

And so we looked at that, and we looked at some of the early analysis coming out of this IRP update to inform the strategic plan.

So we included more resources in the strategic plan than what we saw in the 2022 IRP because we were seeing indications that we were going to need more resources, but this IRP was not fully complete at that time, so we didn't include all of the resources because we didn't want to push rates up higher than they should be if we didn't have the analysis complete.

SPEAKER_15

Thank you.

Any additional questions or comments?

Okay, so I move that the committee suspend the rules and move to vote to adopt resolution 32138. Is there a second?

SPEAKER_03

Second.

SPEAKER_15

It is moved and seconded to adopt resolution 32138. Are there any further comments?

Will the clerk please call the roll?

SPEAKER_17

Vice Chair Moore?

SPEAKER_15

Aye.

SPEAKER_17

Council Member Morales?

SPEAKER_99

Yes.

SPEAKER_17

Was that a yes?

Yes.

Thank you.

Council Member Saka?

SPEAKER_13

Aye.

SPEAKER_17

Council Member Strauss?

SPEAKER_03

Yes.

SPEAKER_17

Chair Wu?

SPEAKER_03

Yes.

SPEAKER_17

Five in favor, none opposed.

SPEAKER_15

The motion carries and the recommendation will be sent to the Seattle City Council.

So thank you again for being here today.

We will now move on to the last item of business.

Will the clerk please read the item into the record.

SPEAKER_17

Agenda item three, a resolution in the City Light Department adopting a 2025 to 2030 strategic plan update for the City Light Department and endorsing the associated six year rate path.

SPEAKER_15

Thank you.

So again, we'd like to thank Seattle City Light.

Last committee ran out of time.

I'm so sorry about that.

We're looking forward to a great discussion today.

As council members, we all have to consider any proposed rate increases in the context of other proposed rate increases, such as the one recently announced by SPU, as well as other tax increases being requested by the city.

such as with the recent transportation levy.

I know there are a lot of concerns.

I want to thank Seattle City Light again for all their efforts in getting our questions answered and all of their due diligence.

And so when ready, go ahead and introduce yourselves and please proceed.

SPEAKER_10

Thank you.

I am General Manager and CEO Dawn Lindell.

SPEAKER_11

Lee Bareka, Manager, Strategic Planning and Performance.

Kirstie Granger, City Light Chief Financial Officer.

SPEAKER_07

Good morning, Andy Strong, EEP Officer.

SPEAKER_01

Siobhan Doherty, Power Supply Officer.

SPEAKER_08

Good morning, Mike Haynes, Chief Operating Officer.

SPEAKER_10

Good morning, Jenny Levesque, External Communications Manager.

All right, we are here and ready to answer any questions.

SPEAKER_15

Great, thank you.

Could you give us a breakdown of each customer category and how the 5.4% increase would impact each of their rates?

SPEAKER_10

Yes, we can.

SPEAKER_11

Yes, as we mentioned, so the strategic plan proposes a rate increase that averages 5.4% across the system.

Later this summer, City Light will be bringing forward a full rate ordinance that will set fees and charges for each customer class, and so we will dig more into the customer breakdown at that time.

But we do have analysis complete on that.

And so we've received approval to share that for residential customers, we are anticipating that their increases will be slightly lower than the 5.4% system average.

For residential customers, the increase will average 4.3% in 2025 and 4.9% in 2026. And that translates to about $4 a month for most residential customers.

So $4 per month in the monthly bill.

And then for customers who are enrolled in Seattle's utility discount program, it's a great program that we have for customers who qualify to get assistance on their bills.

This program has a 60% discount.

And so for customers in the UDP, this rate increase will be about $2 a month on their monthly bills.

Yeah, we can.

And we do have a table, I suppose.

We could bring that up.

Thank you.

Maybe we can bring it up.

Does it advance if you just do arrow down?

SPEAKER_00

What?

SPEAKER_11

Like arrow.

SPEAKER_00

Yeah.

Yeah.

It's slide 33, though.

It's not moving.

SPEAKER_10

Okay.

Page down.

SPEAKER_00

Oh, how did you move it?

SPEAKER_15

Maybe while we're bringing out that slide, could you help us understand the key assumptions driving each rate increase?

SPEAKER_11

Yeah.

I have it.

Oh.

Go ahead and talk.

SPEAKER_09

Okay, go right back.

SPEAKER_11

Which one do you want?

Why don't we bring up the slide on rate increases?

I mean, the cost increases farther up.

So, yeah, so City Light, we are a not-for-profit publicly owned electric utility.

We exist to serve the public.

And so we are requesting to increase electric rates because our costs to serve are increasing.

And there are three main cost drivers that are driving the need for us to request a rate increase.

And the first one, and the largest factor, is our power costs are increasing.

As we mentioned earlier when we were talking about the IRP, Wholesale electricity prices have more than doubled compared to the previous decade.

And at City Light, we're fortunate that we have low-cost power coming from our hydroelectric dams and from the Bonneville Power Administration.

But as our IRP has shown, we have the need for new electric resources to meet increasing demand.

And these resources will be more expensive than the resources that we have historically had.

And so a big part of our rate increase is capturing the cost of the electricity that we serve our customers.

both forward-looking and then also owing to drought conditions and high market prices and extreme weather events that the utility has been experiencing for the last couple of years, our rate stabilization account, which is a cash reserve that helps protect rate payers from market risks.

This this cash reserve is close to empty and so part of this power cost increase as well has to do with replenishing the RSA to 100 million so that we can lift so that the lift the surcharge that's currently on will be automatically lifted the second.

key cost driver is wages.

City Light's wages have fallen behind market, and part of our rate proposal is to increase wages so that City Light can pay a fair market wage compared to neighboring utilities like Snowpud and Tacoma.

As Mr. Kovach testified at the beginning of this committee meeting, we are losing staff to neighboring utilities because we do not pay a wage that's comparable.

And so to have the skilled electrical workers to do the work that we do, we need to pay a market wage.

As we've noticed that Utility work it's it is it is skilled It is it requires a lot of training and in some cases is dangerous And so you know paying having good staff that are skilled and experienced and paying that fair market wage is very important the cost of materials is also rising so Cost for wages as well as materials and and those are really the big cost drivers that are under our rate proposal for the next two years and

SPEAKER_15

Thank you.

Were you able to find that slide with the customer category and their percentage increases?

SPEAKER_11

Yeah, that's...

Hey, can you bring up the right table?

Thank you.

So this is a table that summarizes example bill impacts.

We understand that a percentage rate increase isn't what customers see in their bills.

They see a bill and a dollar.

And so in this table, we show some example residential customers.

Somebody's electric bill is going to vary depending on whether they live in a condo or a single-family home.

whether they heat their home with electricity or with some kind of fossil fuel.

So the top part of this table summarizes some example customers and what their monthly bill would look like in 2024 compared to the increase that they would expect to see in 2025 and 2026. And so for most residential customers, and this has to do with the rate design that we are proposing, they can expect to see their bills increase $4 a month.

And then for utility discount program, UDP participants, $2 a month.

The bottom part of this chart shows some examples of commercial and industrial customers.

There's a big variety in electric bills depending on if you're running a small shop like a car wash or whether you're running a hospital.

So these just show a range of commercial and industrial examples and then what the percentage increase would translate to for a bill for a company like that.

SPEAKER_15

Could you speak briefly about any alternative funding sources or cost saving measures that have been explored to minimize these rate increases?

SPEAKER_11

Yeah, so one strategy that City Light is actively pursuing is grant opportunities.

At the federal level right now, there's a lot of funding to support modernization of the grid and decarbonization and the utility work that we're doing.

So City Light is, we are actively pursuing any opportunity that we can to bring in dollars to help keep our rates low.

In the memo that we provided with City Council, we summarized 10 grants that City Light has recently been awarded.

One very exciting one that we recently received from the Department of Commerce that's going to help families get caught up on their electric bills is the Washington Families Clean Energy Credits.

And this is $19 million that we are working to apply to customers' bills to help customers who may be behind on their bills get caught up.

And so that's a...

one particular grant that we're very excited to have received and we're looking forward to getting that applied to customer bills as quickly as we can.

16 million already applied.

Wow.

SPEAKER_10

We are on the way.

SPEAKER_11

We are on our way.

We're also pursuing grants at the federal level to support doing work on our hydro projects.

We're pursuing one for what's called GRIP, Grid Resilience and Innovation Partnerships, and that one would be $50 million, which would be a big deal if we were able to get that.

We also anticipate that there will be funds coming from Washington state's carbon market and we're going to apply those and use those to help support cost of electrification and help working with customers who are looking to electrify like their fleets or their buildings.

And then finally, we're very excited to be pursuing partnerships with other city departments to help improve our services, hopefully without increasing costs.

And one of those is a pilot we're going to do with the Department of Neighborhoods.

As you know, the Department of Neighborhoods is really great at outreach and really reaching communities that are maybe a little bit more challenging to make contact with.

And so we're looking forward to working with the Department of Neighborhoods to hopefully get out there and talk to customers who maybe don't know about our utility programs, discount program, the UDP, who maybe don't know about some of the opportunities that we have for customers who are behind on their bills.

And so those are just some examples of ways that we're pursuing additional sources of revenue to help keep rates low.

SPEAKER_15

So are there any steps that are being taken to improve operational efficiency and reducing rates?

And how can these improvements help our customers save on future rate increases?

SPEAKER_11

Absolutely.

Yeah, we understand that rate increases are a hard ask.

We never like to have to request rate increases, and we understand that part of the work that we do is that we need to do everything that we can to reduce waste and improve efficiency every step of the way.

Over the past two budget cycles, City Light, we've saved over $41 million by shifting budgeted spending to address risks and high priority needs like cybersecurity and physical security so that we can address those needs without an additional rate ask.

We've also, this table that we've got up right now shows examples of other savings that we've been able to pursue and achieve through refunds, grants, as well as process improvements.

And moving forward into 2025 and 2026, we're committed to continuing to look for new and innovative opportunities to make the most of every rate payer dollar that we collect.

One thing that Dawn has brought with us is that she's got experience with using Six Sigma to improve MISIS processes.

That's one space that we're looking to lean in on.

And, oh, I'm sorry, no pun intended.

And we're going to look for more opportunities to continue to get leaner and, I did it again, leaner and more efficient.

Thank you, colleagues.

SPEAKER_15

Any questions or comments?

SPEAKER_00

Yes, questions.

Council Member Moore?

Thank you.

Thank you again.

Again, I just keep harping on the rate path.

I think we had met and I had asked for, I had indicated an interest in having a plan put forth that would not front load the cost, that would spread the costs out.

I did receive answers to my questions about that.

which I know I didn't actually receive a proposal after my direct request, but moving on from that.

Noting that the reason that we can't smooth out the rate path over the next six years is because of market-based wage adjustments, but also because the city is governed by two financial policies that direct the utility to deliver debt service coverage.

at a minimum of 1.8 and a fund for 40% of its CIP with current year revenue.

So isn't that gonna be the case every year?

That those legal requirements are in place every year?

SPEAKER_11

Yes, those are the financial policies set by city council that govern how we balance our funding, work through revenue and then through selling bonds.

These are the policies that help the utility not become too leveraged and help us keep our good credit rating, which is really important for us to be able to sell bonds and get good interest rates because a lot of the work that we do is infrastructure.

being able to have a strong credit rating, being able to be financially sound is very, very important.

And so those financial policies are what govern us staying financially stable and maintaining that good credit rating.

SPEAKER_00

Yeah, so that's nothing different that is driving the particular inability to spread out the cost.

So then I'd like to go to slide 18, where we show cost pressures driving up rates.

And each year from 2025 through 2030, power costs are going up.

Each year from 2025 through 2030, market wages are going up.

Each year from 2025 to 2030, capital recovery is going up.

And yet, what you've presented to us is that rates are not going to go up in 2027 through 2030. We're going to keep them at 5.0%.

That just defies reality.

I appreciate the fact that you're being optimistic.

I appreciate the fact that you're looking for all sorts of additional funding sources.

But we know that rates are going to go up.

They are not going to be at 5%.

You will be back here in two years.

It will be an increase.

How much, we don't know.

Let us be honest and put some market...

Let's put a more accurate marker in place, please.

I think we want to under-promise and over-deliver, and we also need to be honest about what this is looking at.

I mean, we look at what we did in the prior strategic plan, and we had it listed as 3% for this year, 3% for next year.

That was the forecast, and now we're here with 2.4% increase.

And yet we still remain in a position of saying we're going to stay at 5% for the years they're out.

Truly, our own data belies that.

So all that I'm requesting is that you come back to me with a more accurate rate path so that we can be...

We can be preparing the public for that fact, and we are not looking like fools when we come back in two years and have to increase, make a significant increase.

And we can all be on the same page about how we can work to try to over-deliver.

Thank you.

SPEAKER_15

Council Member Strauss?

SPEAKER_03

Oh, thank you.

I just had a clarifying question there about what you were sharing with Chair Wu regarding the credits to the bills.

Is that money that we're getting from the state, is that tied up with the Climate Commitment Act set another way?

I'm not here lobbying on any initiatives out there, but just trying to understand if initiatives were successful, that Commitment Act was repealed, would we lose those credits?

SPEAKER_10

I don't believe we would lose the ones that we've applied now, but future benefits from that act we would not receive.

SPEAKER_08

Yeah, so this year's are in and those won't go away, but anything beyond December is at risk if it goes down, if that answers your question, yeah.

SPEAKER_03

Thank you.

Just trying to look for certainty.

I think what you're hearing generally is we want to be realistic what our infrastructure replacement is, what our wages are, et cetera.

I know, Andrew, we were just talking about some infrastructure that needs to be replaced because it's aging.

I oftentimes...

Compare our electrical infrastructure to my 72 Ford pickup that every year something has to get replaced.

This year is the first time that the engine's been pulled out in 52 years.

So it's currently sitting high and dry.

And sometimes you need to make those big infrastructure replacements along the way.

I'll note that when we see percentages like this, especially with the RSA on top, it does make us all pause because we do want to keep rates lowest possible for our customers.

And I believe it was slide 25. that shows 27, you know, comparing our rates to others.

We're not the lowest, we're definitely not the highest, seeing Portland General with an 18% rate this year, Vista 13% next year, Puget Sound Energy moving up to 6.9, 9.6 in the out years.

Question here, and Chair Wu, thank you for asking the question.

Understanding what the impact is to our residents, the full story is not being shown on slide 17. Sorry for bouncing around.

I've got the presentation of myself.

Slide 17, showing that rate path, it is going to be less of an impact for residents as you just described, but these numbers do jump out of the page at us.

And I appreciate what you shared about the Climate Commitment Act dollars, and also the utility discount program.

I'll note here, for the record, I still would like to see some changes to the utility discount program.

I would love to work with you on that, both to smooth the cliff.

If somebody makes a dollar too much, they're just out of luck, as well as...

how do we get a higher subscription rate to it?

I understand that we're at about 30% of eligible customers have subscribed to it.

I think there are probably some administrative barriers that could be smoothed out there.

All this to say, yes, Council Member Moore, we have to be realistic about what our needs are.

And yes, we need to make sure that we're supporting our customers in the best way possible.

Yes, I didn't have a question other than Climate Commitment Act.

Thank you for your time.

SPEAKER_15

Council Member Saka?

SPEAKER_13

Thank you, Madam Chair.

Lots of great discussion going on right here today.

So I want to thank my colleagues for asking some really thoughtful questions.

I want to thank our experts at City Light here for your transparency and candor in answering these very tough questions.

These are really important topics and it impacts people's everyday lives and experiences, not only today, but for the next decade plus to come.

I share the, you took the words out of my mouth, Council Member Moore.

I agree, I guess, I concur with my colleague, Council Member Moore, that we need to under-promise and over-deliver and always endeavor to do that, although I am very mindful of the sensitivity, like how delicate rate increases are and the impact they are on our customers, particularly residential customers and our most vulnerable customers.

As you know, it is definitely one of my priorities to keep our rates low.

And I know you all, through your various engagement with impacted communities, including customers, you learned that was a core priority as well, including predictability.

So, yeah, I don't love the fact that these...

Rate increases, placeholders aren't, like we know today, they're not accurate, although I do appreciate you, CEO Lindell, the hopeful, optimistic approach.

Generally, I also prefer to live in my hopes and not my fears.

At the same time, we do need to bias on the side of transparency and accountability.

And we have all these huge costs that we know that are impacting or factors that are impacting costs, including we need to lift and restore the RSA, the labor costs, the inflation, plus all the non-trivial investments that we need to make in our capital improvement projects, whether it's modernization of the grid, decarbonization efforts, just like...

nitty-gritty core underground replacement of the cables.

These important projects, we have all these huge commitments and goals that we need to absolutely live up to, but I don't want to be in a place where we can live up to them on paper, but performance is horrible, and reliability and predictability is horrible.

I don't want to turn Seattle City Light into...

What is it?

The Nigerian Electric Power Authority.

Being half Nigerian myself, if you've ever been in Nigeria, the power goes off regularly, consistently, and it's not tied to a weather event.

It's just because...

Bad planning, bad infrastructure, can't have that.

So I'm not personally in the business of kicking these tough decisions down the road, especially as it relates to capital improvement projects.

Let us be realistic, let us be transparent, because if rates are gonna increase, which we know, the exact degree is unknown at this time, Customers deserve answers, and they deserve clarity on what that looks like, and more importantly, why.

I think people wouldn't necessarily mind paying their fair share more.

We need to be able to clearly articulate why and what they're going to get in exchange for that.

So I will be supporting this proposal today, but I do share the concerns that have been raised and look forward to working collaboratively with you all to to address some of these concerns and be a little more realistic.

And as an aside, I'm not particularly optimistic or sanguine about geothermal and the prospects, although I think those are fair, realistic, and reasonable assumptions that you all baked in there.

But complex stuff, lot going on.

And anyways, look forward to continuing the partnership.

So thank you.

And also, Council Member Strauss, I'm really shocked and surprised that you only have to repair your 1972 Ford pickup truck once a year.

That's pretty amazing, but in any event.

SPEAKER_03

Thank you, Council Member Saka.

Luckily, I do have AAA, so I can get it towed as needed.

And I believe you're also Finnish?

Finnish and Nigerian, yep.

And so your Finnish side has very stable electrical utility.

Yep, that they do.

Been to both countries.

SPEAKER_10

Well, I'm there.

SPEAKER_15

Thank you.

So I have a question.

If you can go to slide 23, City Lights Cash Reserves.

So the graph only goes to March 24, and we are now in beginning of August 24. Is there a projection for our surcharges going forward?

And where are we at now?

SPEAKER_11

That's a great question.

Yeah, this forecast got stale as we were working through the strategic plan approval process.

It was fresh when we started working on this deck, and we have not updated it, and we should have.

Yeah, we are into the water year.

It has been dry, but Siobhan and her team have been doing a great job making the most out of the limited water that we have, and the RSA has not...

increased, but we are not quite, I think we're a little bit better right now than that dotted line.

So I don't know, Siobhan, do you want to add something to that about how the summer and the runoff is going?

SPEAKER_01

Yeah, we've had historically dry winter and spring.

Our load was a little bit lighter throughout the early part of the year.

We had a warmer winter, even though it was dry, and we had a cool spring, which meant we were able to hold onto water in the mountains for longer, which helps us because prices tend to be low in the spring and they get more expensive as we move into the summer.

So we've been able to manage the water that we had available really well.

But August tends to be our hardest month.

By August, any of the water reserves that were in the snowpack have melted and been used up.

And so August is really the hardest month for us.

We've done good planning.

We've hedged in order to meet that need.

It really depends on whether we see heat waves coming up.

But so far we've had a very good first half of the year.

And a little bit depend on the weather going forward.

SPEAKER_15

And when we do reach the emergency refill plan, what does that look like?

SPEAKER_11

I hope we will not reach the emergency.

The hope is that we will not reach that.

And as Siobhan just said, this month, August, is the one where City Light, we have the most financial uncertainty around the wholesale market.

No water, possible heat waves, high market prices.

So this month, Don just knocked on the table.

It's...

we're going to be watching and keeping fingers crossed that we stay above that $25 million.

If we do, we will be back here talking to you again about an emergency refill plan, which...

could mean incremental rate ask.

That would be a very dire situation because it would mean that our reserve is in danger of being empty.

And we need to be able to buy power to serve it to customers.

Otherwise, we're...

where do we risk being the Nigerian?

I mean, that is what happens when a utility can't get electricity is that you have rolling brownouts.

And in California and in the Southwest, they sometimes see that in the summer, and that is not a place that we want to be.

I think I read a statistic that the average person thinks about their electric utility seven minutes a year.

And I think we don't mind being taken for granted.

It's not a bad thing.

We want people to be able to not think about us and just go to charge their phone and turn on the electricity and know it's going to be there.

And so being able to source electricity to serve our customers for all of their needs is very important to us.

And that's why we take the RSA status very, very seriously.

SPEAKER_15

I'm also concerned too because of climate change and how warm our summers are.

or just year round how warm our city is.

And so hopefully we won't ever have to get to that point, but I'm glad to hear that we have a plan and hopefully we will never have to deal with that.

So I also have a question.

Could you talk about if there were any cost efficiency analysis done on the strategic plan or anything to that measure?

Like what, for instance, What would it look like if we were to remove a certain component?

I mean, it probably would look like brownouts and other issues.

Or if we were not to execute a certain project, what would that mean?

Has there been any studies done?

SPEAKER_10

We only put in to this rate increase, as Council Member Moore has shown or has discussed, we only put in the cost of the power, the cost of the labor increase, and a little bit for the increased taxes.

We are assuming we will find enough efficiency to do our new programs.

So that is built in.

We are dependent on doing things faster and at less cost.

And we believe there's opportunity there.

So faster and at less cost in order to do the new programs that we need to put in for folks.

We will also shift...

We're taking a hard look at program performance, and we will do less of the ones that are not delivering, and we will do more on new programs that will deliver for us.

we will be some key programs coming up in this next two-year period.

One of those is the time of use rate.

That will require a significant amount of outreach and communication, which we will depend on our external communications manager and her great skills in that arena, because we have to get that conservation.

In addition to the...

the 1800 megawatts that we need to buy in the next 10 years, we need an additional 118 megawatts in conservation.

So that is also built in.

So in terms of analysis of taking something out, we are at the place in the rate increase that if we took something out, we do risk not having the power that we need.

and we risk the continued decline in our reliability.

If we look at slide number 36, This shows our outage history.

So going up, as it shows, means an increase in outage.

So you can kind of look at the dotted line because, you know, the multi little dots, it goes up, it goes down, depends on the weather.

But the trend for our...

The...

duration of the outage, which is the lower line, and in terms of the system duration for the outage, and then the upper line is what the customer experiences in terms of minutes.

I believe minutes are what's on the Y axis.

And so we can see we are consistently declining in our reliability.

And then if we look at slide 37, Because sometimes we might say, OK, well, but everyone is.

The problem is that the industry average on this, in terms of average outed minutes on the y-axis and years across the bottom, the dotted line is the industry average, and the green line is us.

And so we are unfortunately considerably above the industry average in our outage minutes.

And that's the direct experience that our customers have, and we want to improve that.

And so we've got to have the staff to be able to address that.

We can have the same number of outages, but if we add back our six crews, that is six crews who can respond more quickly to the multiple outages that we have.

We can deploy them, and they can get there.

So...

adding that extra labor back in is just key and then getting a good handle on the underlying asset situation up there so we can tell what we need to do and what we need to replace that's not built into this budget yet that's what we need to do over this next couple of years and then we need to build out the right path to address this so i think the you know we we have we have stayed very low um probably lower than we're comfortable with, but because we're coming out of this historic pandemic and we don't want to have that enormous rate shock and we want to give a little more time for things to even out, but we are aggressively applying for funding.

No funding is too small.

for us to go after.

And I, you know, when we looked at the savings we had over the last year, what I want to point out is not only is staff finding efficiency, but they are, I mean, they are sale shopping.

We need to spend time with the industry.

They are doing the early bird discount.

I mean, we are counting that $200.

You know, we are looking for How can we do what we're doing in the least expensive way possible so that we find the dollars to do the programs we know we need to do?

And I'm pleased with how responsive this team has been with that.

SPEAKER_03

Chair?

Unfortunately, I need to leave 13 minutes early from committee, which is about right now.

I see that we have still some more questions regarding that and good questions and also really good answers because Something that we as this council are having to face is we delayed a lot of hard decisions during the pandemic because people were out of work, were down on their luck, and we kept them stabilized.

And now we're here having to confront that.

But I might ask, Chair, since I have to leave, can we vote on this at our next meeting?

SPEAKER_15

Yes, thank you.

Yeah, I think I like more time to wrap my head around this and to ask further questions.

And so, oh, yes, Council Member Moore.

SPEAKER_00

Yeah, thank you.

I would appreciate being able to not vote on this today.

And I just, heads up, we'll probably be bringing an amendment around the rate path because I think I very much appreciate the fact that we're trying to keep not sticker shot 5.4, but we could do 5.4 going forward, unless I hear from you why we can't do that.

So just a heads up, I've started those conversations with our central staff.

And also, I wanted to put a plug in and thank my colleagues for noting the utility discount program, that's incredibly important.

I appreciate all the work that you are doing to make that, to increase the AMI and I echo the comments of Council Member Strauss.

I'd love to be helpful with that and just thank you both, Council Member Strauss and Council Member Saka for your comments too.

Thank you, Chair.

SPEAKER_15

Thank you, so acknowledge that further discussion is needed before voting on the resolution today.

We will not vote on it today and we'll consider it for the August 16 committee meeting.

And so thank you so much.

Thank you, Council Member Strauss.

And we have, looks like we have reached the end of today's meeting agenda.

Are 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 1119 and we are adjourned.

Thank you.