SPEAKER_11
Good morning.
The August 16 meeting of the Sustainability City Light Arts and Culture Committee will come to order.
It's 9.33 a.m.
I'm Tanya Wu, chair of the committee.
Will the committee clerk please call the roll?
SPEAKER_10
Vice Chair Moore?
SPEAKER_02
Present.
SPEAKER_10
Council Member Morales?
Council Member Saka?
Council Member Strauss?
SPEAKER_05
Present.
Here, sorry.
SPEAKER_10
Thank you, Council Member Strauss?
Present.
Chair Wu?
Present.
Chair, there are five members present.
Great, thank you.
SPEAKER_11
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 comment should relate to items on today's agenda and within the purview of this committee.
Clerk, how many speakers are signed up today?
SPEAKER_10
We have no in-person speakers signed up and no remote speakers.
SPEAKER_11
Great.
As a reminder, 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 council at seattle.gov.
Okay, there are, we will now move on to our first item of business.
SPEAKER_10
Will the clerk please read the first item into the record?
Agenda item one, resolution 32139, a resolution related to the City Light Department adopting the 2025-2030 strategic plan update for the City Light Department and endorsing the associated six-year rate path for briefing, discussion, and possible vote.
Thank you.
SPEAKER_11
Before we can consider the resolution and amendments, we will need to place the resolution before us.
I move to recommend the adoption of resolution 32139. Is there a second?
Second.
It is moved and seconded to recommend the adoption of resolution 32139. So thank you.
Looks like department coordinators and presenters are ready.
But I want to remind us that the committee has heard and discussed the utility strategic plan, including the endorsement of the six year rate path in about three committee meetings.
We also had a memo.
We dove into the key drivers impacting the proposed rate increases for 2025 through 2026, which includes power costs, wage increases, increased cost of supplies or equipment, and unpredictable changes in climate.
I appreciate hearing the utility's effort to address affordability for our most vulnerable residential customers.
including a lower impact on our residential customers than the system-wide 5.4 average.
Residential rate increases is more accurately at 4.3% in 2025 and 4.9% in 2026. Council Member Moore, I understand that you have two proposed amendments.
We will hear and discuss and vote on Amendment 1 first.
After that, we will do the same for Amendment 2. Council Member Moore, please proceed with Amendment 1. Thank you very much, Chair.
SPEAKER_02
So I'm...
Excuse me.
Just a moment here.
So I move to amend Resolution 32139 as presented in Amendment 1 on the agenda.
SPEAKER_11
Is there a second?
SPEAKER_04
Second.
SPEAKER_11
It is moved and seconded to amend Resolution 32139 as presented on the Amendment 1.
SPEAKER_02
Thank you.
So I'm bringing forward this amendment for the sake of transparency with our Seattle constituents and transparency for all of Seattle City Light customers.
In my briefings on the rate path, staff noted the rates for the first two years, 2025 and 2026, were achieved from significant and time-intensive analysis and I very much appreciate that.
The out years, however, are closer to a best guess and we'll have deeper analysis as we get closer to those out years.
I've also heard staff be frank in acknowledging that the 5.5% for the out years is likely low and they anticipate needing to raise the rates after further analysis.
I think that that's pretty much a given when we look at the data on on the sort of exponential increase in energy demand that we see in the years to come.
And it's possible the rates could very well go up to 5.9%.
So given that the staff think that this is a likely outcome, I think it is not really fair to pass something today that tells our constituents and other City Light customers that the path will be decreasing in the out years.
And therefore, I'm bringing this amendment that depicts the out years as 5.4%.
We're just keeping it consistent across the board.
The department can still do their analysis and be in a position to do either a small increase or hopefully a lower rate.
Again, that seems highly unlikely based on the evidence before us and the comments made already.
But either way, I really think it's better to support a proposed rate path that is closer to what we are going to wind up with in the out years.
So I would be asking for a yes vote on that.
SPEAKER_11
Thank you.
I have a question, actually two questions for Seattle City Light.
For those people who are just tuning in who may not be familiar with what goes on behind the rate changes, could we talk about the numbers behind the rate, especially talk about the increased drivers and the percentages and what all goes into the different buckets of capital recovery, power cost increases, I was hoping we could just go through every single line item and talk about how it affects the percentage increase.
SPEAKER_09
Sure.
Eric, can you bring up slide 26?
SPEAKER_01
How do I get it up there?
SPEAKER_11
Thank you for driving the slide deck, Eric.
So for those of you who are just watching, we're going to take a look at the 2025-2030 strategic plan update financial forecast.
It's a document that's attached to the agenda and really goes into detail about all the numbers.
And so I'm hoping we could just do a brief overview just in case people are not familiar.
SPEAKER_09
Sure, thank you.
I'm Kirstie Granger, City Lights Chief Financial Officer.
So this is a table that we put together that demonstrates the drivers between the rate increase that we showed in our last strategic plan projecting the 3% with the 5.4% that's proposed in this strategic plan update.
So the first and largest of the uh increased drivers is power costs um and these are the costs associated with the contracts that city light has for purchasing power um a big one is the the one with the bonneville power administration we get about a third of our electricity from bonneville and we are anticipating that the price from the bot for the bonneville contract will increase this also include includes uh costs for new power resources so city lights we've discussed about how We are anticipating that demand for electricity is going to increase in Seattle and that we will need to contract new resources so that we can reliably meet that new demand.
The next is what we're calling the net wholesale revenue reduction.
This also has to do with power costs and the costs associated with increased market risk.
This has to do with replenishing the rate stabilization account, which has become depleted owing to two years of drought conditions and high wholesale market prices.
This represents a conservative approach to budgeting for revenues from surplus electricity sales, and this is contributing an additional 1.9% to the rate pressure.
Next is O&M, and this is the impact of inflation of labor and materials.
And so two things that we discussed is that we are anticipating wage increases for our employees, and we support this.
We need to keep pace with markets so that we can continue to deliver our critical services.
So that is going to have impacts.
as well as the cost of materials.
A lot of the work we do is maintaining infrastructure, and the cost of poles, wires, and other materials are increasing.
This is contributing together 1.6% of the rate increase, and this does not include the cost associated with emergent work, which we are proposing to fund through savings and reallocations.
Other is primarily taxes.
City Light pays just about 10% in revenue taxes.
So anytime that we increase rates, our tax cost will increase.
And then finally, capital recovery for 2025 is not a rate driver.
Our capital program isn't growing in the near term, but we do predict that it will grow in the out years as we address aging infrastructure and increase capacity to accommodate families.
higher electricity demand.
So these costs altogether contribute 7.1% to an increase in rates, but we do have a revenue offset because we are anticipating higher electricity consumption, which translates to higher retail sales.
So this reduces that impact by 4.7%, and that brings us to the 5.4% that is in our strategic plan proposal.
SPEAKER_11
We always talk about finding new power sources.
SPEAKER_09
Where is that on this graph?
Yeah, that is in the power cost increases.
SPEAKER_11
And we also talk about our aging infrastructure.
A lot of people are concerned about replacing underground vaults.
Where would that fall in this projection?
SPEAKER_09
Sure.
So some of it would be capital, and some of it would be O&M.
SPEAKER_11
And then there is a line item for renewable energy credits, and that's under O&M.
Can we talk more about that?
SPEAKER_09
Sure.
As part of our, it's accounting-wise, we categorize it as O&M, but this has to do with the cost of meeting state requirements around renewable energy.
And so part of our budget goes towards purchasing renewable energy credits, or RECs, which is part of us maintaining our green power portfolio and meeting the state requirements around that.
SPEAKER_11
Colleagues, any questions regarding rate increased drivers?
SPEAKER_03
No, but I do have a question about the amendment.
SPEAKER_11
Oh, okay, great.
Yeah.
But anyone have any questions regarding the drivers?
SPEAKER_04
Not at this time, Chair.
It's similar to Council Member Morales on the underlying amendment.
SPEAKER_11
Well, I actually have a really quick question.
What are your thoughts regarding Council Member Moore's amendment Any concerns this brings and what would it take for CLI to make these changes?
SPEAKER_09
Sure.
So we appreciate the conversation that we've had around this, and we acknowledge that there's a lot of uncertainty in the rate path looking forward.
The rate path that we've brought forward is the result of a lot of outreach work and collaboration with our review panel.
And so we would not be comfortable supporting a change to a rate path that was not approved by our review panel, and so we are recommending staying with the rate path as proposed, because that's the one that was supported by the review panel.
SPEAKER_03
Council Member Morales?
Thank you.
I did want to clarify, I will admit being a little unsure about the effect of the amendment.
So the legislation The underlying legislation is a biennial change in the proposed rate.
And the out years are projections.
They don't actually set the rates in the out years.
In order to do that, you would have to come back.
You do come back.
And so this is perhaps an acknowledgement that it might be an increase later, but not actually setting the rates for the out years.
SPEAKER_09
That's correct.
SPEAKER_01
Go ahead, Eric.
Eric McConaghy on the Council Central staff.
Just a little clarification.
So the resolution that's before you now that Council Member Moore's amendment would change sets the rate path.
Those are the average annual changes year over year through that six-year period.
Subsequent to that would be the actual rate ordinance that the executive would send to Council that would set the rates and put those actual rates for each customer class into the Seattle Municipal Code.
And then once they're in the code, that's what City Light can use for billing.
So that 5.4 for the first two years, the Council Member Moore's amendment would extend throughout the next years.
City Light will take those for 2025 and 2026 and translate them into the actual rate changes for different customer classes.
And as Council Member Chair Wu mentioned, those may be different for different customer classes.
They're not all going to be 5.4.
They vary because...
it's more expensive and less expensive to provide power to different kinds of customers.
So hopefully that's helpful.
Didn't mean to belabor that too much, but just a little bit of clarity, yeah.
Okay, thank you.
SPEAKER_11
Council Member Strauss?
SPEAKER_04
Thank you, Chair Wu.
And thank you, Council Member Moore, for bringing this amendment, especially for the discussion, because everything that you and Chair Wu were just asking about I think are real.
I think that there are some concerns in the out years that the projections might be higher than what we have in the plan, but there's enough uncertainty that I can tell you as an elected official, I don't know.
And I do know that you, through all of the questions that I've asked you both, hearing committee, before and after committee, and then the multiple presentations that you've done with me in my office, where we've gotten to dig into these details, it's very clear that you've arrived at this through a lot of analysis and through a lot of outreach with the community, especially with the Ratepayer Review Board.
Council Member Moore, I think that you might be right, but I don't know.
And where I would need to see the process go from here is if we were to adopt this amendment, I would want to see it go back to the rate payer review board and then have City Light do some of that analysis and then bring it back to us just so that we go through the same process for these changes as the process which provided us the numbers that are before us today.
I think that's a little cumbersome at this point because, as Eric mentioned, we have the ability to come back to this strategic plan in the future before we set rates again.
So today I'm not going to be supporting this amendment.
because I do think that we need to continue moving the strategic plan forward for now.
But just also to echo Council Member Moore's awareness that we need to be pretty keen-eyed and sharp penciled about this.
Thank you.
SPEAKER_11
So I also have a question regarding Council Member Moore's amendment.
We talked about the 2025 rate increase drivers.
How did we come to the 5% increase?
SPEAKER_01
Just to clarify a little bit, do you mean the 5% of the years starting in 2027?
Yes.
Further out?
Okay.
I won't answer that, but that's the clarification.
But there are people here who are better at that.
SPEAKER_09
So there is in the appendix one of the strategic plan documents the assumptions behind the 5%.
So it's a similar process where we have cost assumptions, capital plan, and then use that to develop a revenue requirement, which translates into the rate path.
And like I said, those are all documented in the appendix one for those who would like to take a look.
But I will say that a lot in those out years, the cost assumptions are, a lot of them are inflated.
So like, you know, we're making an assumption about inflation.
So we take the cost in the previous year and we apply a percentage.
And so as Council Member Strauss pointed out, like there is a lot of uncertainty.
We're taking costs and just, you know, inflating them along.
And so the farther out we get each year, the more uncertain that cost projection becomes.
SPEAKER_11
The rate is lower than previous years.
What is that cost savings?
Is that just more rate payers jumping the system?
How did we get that number lower?
SPEAKER_09
Um, you know, I think that part of it is probably that there aren't any, um, there's, there's not, there's no placeholders for new things.
Um, like we don't, we don't have a place where we just have, um, added budget for a thing that we don't know about yet.
And so that's always a challenge when you're creating a draft budget for multiple years out is that you don't know what new things the utility will be taking on at that point.
And so that's, that's one reason why we struggle a little bit.
And maybe that's why there's a bias in the out years where things are lower because we're We don't like to include costs in our projections for nothing, but invariably things do come up that the utility needs to address.
SPEAKER_11
Thank you.
Council Member Moore, I really appreciate the intent of this amendment.
So given from what we heard from City Light on this amendment, I'm uncomfortable changing the numbers that the City Light review panel has endorsed.
Not to mention they've heard from so many communities and key stakeholders on that, we need more investments, more energy efficient options and more outreach and all of those are costly.
While I will be voting, I will not be supporting this amendment today.
Your amendment does make me think about the out years and how we must improve our forecasting for the out years.
I think it's important to continuously hear from City Light on improvements for forecasting and have ongoing discussion of rates.
So I work with my committee members to develop topics for City Light to come to committee with updates.
And whether that's through a statement of legislation intent during budget or if it's a quarterly check-in, I will communicate with City Light after discussion with the committee.
So thank you, Council Member Moore, for bringing this concern to the forefront.
Are there any other comments or questions?
SPEAKER_02
Chair, if I may make just a few closing comments.
So I appreciate this is going to go down in flames.
But I really do want to both provide you the permission to actually give us a rate that's really closer to what you really, that truly reflects the costs to us.
And I know that that's a politically difficult position to be in.
And everybody wants rates to be lower.
Again, this is really about transparency, so I'm trying to give you the cover.
I think CEO Lindell has made it very clear that these rates are vastly understated.
And I guess I would ask that the Rate Review Board also take it on board that it's important to give us a more realistic sense of what the rates are going to be going forward, because I just don't like being in a position of coming back.
promising something and then really not being able to deliver on that.
So that's really the intent behind this.
I appreciate all the work that's been done, but just trying to lay that groundwork for future.
Thank you, Chair.
SPEAKER_11
Thank you.
Will the clerk please call the roll on the adoption of Amendment 1?
SPEAKER_10
Vice Chair Moore?
Aye.
Council Member Morales?
No.
Council Member Saka?
SPEAKER_05
No.
SPEAKER_10
Council Member Strauss?
SPEAKER_05
No.
SPEAKER_10
Chair Wu?
No.
Chair, there's one in favor and four opposed.
SPEAKER_11
Amendment 1 fails.
Council Member Moore, please proceed with Amendment 2, Version 2.
SPEAKER_02
All right, thank you, Chair.
So I move to amend Resolution 32139 as presented on Amendment 2, Version 2 that was circulated to the committee yesterday via email, and everyone should have a copy of that.
The difference between version two and version one are just a few language tweaks that were requested by the department.
The intent of the amendment remains the same, and I might ask Eric after I've done my presentation, it'd be okay for him to walk us through it.
We have a wonderful, amazing utility discount program.
I've been really pleased that we have it, really pleased to see that it is expanding and the intent is to expand it.
But unfortunately, for a variety of reasons, it's vastly undersubscribed.
This amendment requests a plan to achieve full enrollment by all income eligible customers who wish to participate.
Not everybody does, and I recognize that it's not possible to perhaps identify every single income eligible customer, but the goal and the intent is to identify as many as possible to have maximum enrollment.
I do applaud CEO Lindell's direction to open the program to serve households up to 80% AMI.
And I, again, with the rates going up now and I think in the future, it's going to be even more important that we bring as much financial relief to as many eligible households as possible.
So if I may, Chair, ask Eric to just describe the amendment.
Is that okay?
Okay.
SPEAKER_01
Happy to do so, yeah.
So yeah, if I say UDP, Utility Discount Program, forgive me, that might be an abbreviation that sort of comes out.
So UDP is really the most significant sort of assistance that both Seattle City Light and SBU can offer to customers.
The customer remorse amendment would encourage increased enrollment.
Just to sort of cover how it works, to be eligible for the UDP, a total household income must not exceed 70% of the current state median income for the folks that meet that standard, that threshold.
they can get a 60% discount on their City Light bills and a 50% discount on their SPU bills.
So that really matters, as you might understand, of course.
This amendment would do a few things.
Essentially, it's an amendment to ask for analysis and reporting.
The first report would be due by the end of this year, sort of an initial report.
The second report by April 1st of next year.
That's the...
The meat of the reporting would be to say, let's hear from City Light about the track record of enrollment for the past five years.
And then we'd like to hear modifications to that program to increase eligibility.
It would also say, we understand the...
It would communicate to the utility that there may be staffing changes and budgetary impacts, and the report would ask for those.
And then it would also ask for a forecast of enrollment increases that could result from some near-term changes by the middle of next summer and then the summer after, June 1 of 25 and 26. The amendment language also acknowledges that there's ongoing work to both in program evaluation and improvement to the EDP.
And so with that first report at the end of the year, that would either be in tandem with or sort of a part of the reporting that is expected on the ongoing work that's happening right now because that has been initiated and we expect some results from that by the end of the year, regardless of this amendment.
I think that hits the high points.
I can answer any questions about it as drafted, but I think that covers it.
SPEAKER_11
Thank you.
So does it move?
Do we have a second?
SPEAKER_05
Second.
SPEAKER_11
It's moved and seconded.
Colleagues, any questions or comments?
Council Member Strauss.
SPEAKER_04
Thank you, Chair.
Council Member Moore, great amendment.
This mirrors some of the work that I was trying to do a couple years ago to improve the UDP program.
Council Member Moore, I might circle back with you to see if we can't merge some of these efforts because the cliff instead of the step down for eligible individuals, and then I know that the recertification can be cumbersome for all and is necessary for some.
Just as an example, if A person is on a retired fixed income.
We know that their income is not going to change.
Having them recertify pretty regularly can actually unintentionally boot people off of UDP.
Whereas somebody who is still in, won't have a fixed income for the rest of their life, it's important to recertify.
That's just one example of many.
I won't use our common time together to talk more.
Just thank you for the amendment.
SPEAKER_11
I actually have a question.
Are there any plans to incorporate different languages on the UDP website as we look at expanding the UDP program?
SPEAKER_07
Yes, we do.
I think we have some resources available now, and our goal is to communicate in all the Tier 1 languages going forward, both with our digital applications and then as we work through our online THROUGH OUR COMMUNITY PARTNER CHANNELS TO BE ABLE TO ENGAGE FOLKS IN MULTIPLE LANGUAGES.
SPEAKER_11
GREAT, THANK YOU.
SO I ALSO WANT TO THANK HELP CENTER MORE FOR BRINGING FORWARD THIS AMENDMENT.
SO IF THERE ARE NO FURTHER QUESTIONS OR COMMENTS, WILL THE CLERK PLEASE CALL THE ROLL ON THE ADOPTION OF AMENDMENT TWO?
SPEAKER_10
Vice Chair Moore?
Aye.
Council Member Morales?
Yes.
Council Member Saka?
SPEAKER_04
Aye.
SPEAKER_10
Council Member Strauss?
SPEAKER_04
Yes.
SPEAKER_10
Chair Wu?
Yes.
Chair, there are five in favor, none opposed.
SPEAKER_11
Amendment 2 passes.
Now that all the amendments have been heard, are there any further comments on Resolution 32139 as amended?
No.
SPEAKER_04
Chair, is this regarding the underlying bill?
SPEAKER_10
Yes.
SPEAKER_04
Yes, thank you.
I made some of my comments in response to Council Member Moore's First Amendment, but just want to thank you for the time being here, your thoughtful analysis, your deep community outreach, engagement with the rate.
Ratepayer Review Board and coming to committee three times and then meeting with me, I believe it was twice, could have been three times.
We've met a lot over the last few weeks on all of the items on the agenda today.
Just wanna thank you for your attention to it and Eric for your work on central staff.
I'm prepared to vote yes.
I look forward to continuing the conversation.
SPEAKER_11
Council Member Osaka.
SPEAKER_05
Thank you, Madam Chair.
And I just wanna thank Council Member Moore, Thank you.
Thank you, City Light team, CEO Lindell.
This was a really thought-provoking discussion as we considered this over many meetings, had multiple briefings offline.
And so if it's not clear by the course of this discussion and where we landed today, you have, you all from City Light, you have plenty of green space and flexibility in your forecasting to be realistic and transparent on a going forward basis.
And I do understand and appreciate that, you know, this time around, you know, we learned during that last meeting, I think, during an exchange with Council Member Moore and CEO Lindell that, you know, there are certain relevant material information that sort of evaded the because of deadlines and and you know getting this keeping this moving forward uh may or may not have impacted uh the the final proposed rates but regardless i just want to say you have plenty of space and greenway greenway uh i think from this council certainly from minimum to to council to be very transparent and clear uh and realistic about the rate path that are going to meet the needs of allowing us to address our aging infrastructure to make sure we keep power on and reliable and keep rates as low as possible, with the understanding that the strain and the demand is high.
So in any event, thank you all.
Appreciate the collaboration in all this.
And thank you, Madam Chair, for your leadership on this as well.
SPEAKER_11
I want to echo that thank you for multiple meetings, coming into committee meetings, as well as answering the memo and being available for any questions.
I do have concerns about the rate increases, but I feel like this is justified.
I mean, we want to be able to keep the power on.
We don't want to have to worry about brownouts or rolling power outages and Our age infrastructure does need attention and we do want to make space for future generations by investing in clean energy resources and diversifying our portfolio.
And so I want to thank you for this very meaningful and comprehensive and taking a look at these increased drivers and being available for answering questions and having the patients explain all this to us and for coming back at multiple times.
Thank you to Eric, central staff, EXPLAINING THIS AND FOR ALL YOUR WORK.
AND SO I'M EXCITED ABOUT THESE INVESTMENTS AND AS WELL AS, YOU KNOW, BEING ABLE TO HELP AND INVEST IN INFRASTRUCTURE GOING FORWARD AND THAT WE DID NOT TAKE THESE INCREASES LIGHTLY, ESPECIALLY HERE ON COUNCIL, WITH ALL THE OTHER INCREASES THAT ARE LOOKING AT IN OTHER COMMITTEES AND OTHER LEVEES.
IT WAS A HARD DECISION AND WE HAD A LOT OF QUESTIONS AND SO I'M HAPPY WITH WHERE WE LANDED AND THANK YOU FOR YOUR TIME AND COMMITMENT AND EFFORTS.
Okay, if there are no further questions, will the clerk please call the roll on the adoption of Resolution 32139 as amended?
Vice Chair Moore?
SPEAKER_10
Aye.
Council Member Morales?
Yes.
Council Member Saca?
Aye.
Council Member Strauss?
Yes.
Chair Wu?
Yes.
Chair, there are five in favor, none opposed.
SPEAKER_11
The motion carries, and the committee recommendation that the council adopt Resolution 32139 as amended will be sent to the September 3rd City Council meeting.
Thank you.
We will now move on to the next item of business.
Will the clerk please read the next item into the record?
SPEAKER_10
Agenda item two, resolution 32130, a resolution related to the City Light Department endorsing the city wholesale energy risk management policy or the worm policy.
establishing worm policy as the guiding policy for managing risks related to wholesale energy, ancillary services, renewable energy credits, and greenhouse gas offsets within the City Light Department, and superseding resolution 31616 for briefing, discussion, and possible vote.
SPEAKER_11
Thank you, I see the department coordinators and presenters are at the table.
I want to remind my colleagues that this item was presented to the council back in March and with the advice of council central staff and with the support of the Seattle City Lights, we determined we needed extra time to consider concerns.
So I want to thank council central staff and the utilities staff and leadership for dedicating significant time and attention to work together.
strengthening and clarifying the overall language of City Lights policies reporting and the overall collaborative engagement.
So today I'm sponsoring two amendments.
The first amendment would replace the worm policy as transmitted with a revised version.
If the first amendment passes, then the second amendment would be appropriate to update the recitals.
But before we can consider the resolution and amendments, we will need to place the resolution before us.
I move to recommend the adoption of resolution 32139. Is there a second?
Second.
It is moved and seconded to recommend adoption of resolution 32139. Zero.
Okay, sorry.
Of Resolution 32130, we will now consider the resolution, then amendments.
So please, presenters and Council Central staff, introduce yourselves and begin.
SPEAKER_01
Yeah, Eric McConaughey and the Council Central staff, and maybe we should just do a quick rundown of introductions just at the top of this topic.
SPEAKER_13
Go ahead.
SPEAKER_09
Christy Granger, City Light, Chief Financial Officer.
SPEAKER_13
Raman Vishwanathan, Director of Risk Oversight City Light at Toronto Magadan.
Raman Vishwanathan, Director of Risk Oversight City Light.
SPEAKER_12
Good morning, I'm Mike Gaines, Chief Operating Officer.
SPEAKER_01
So, yeah, just as the chair mentioned, this was in committee.
There was an in-depth presentation discussion about wholesale energy, how City Light participates in those markets.
From time to time, City Light needs to purchase power.
As you know, City Light has got its own powerful generators and is in the fortunate position of being able to generate power.
can't generate all the power necessary to supply to retail customers, so that's purchased in what we call the wholesale market.
Also, from time to time, City Light can sell power that is surplus to the needs of its retail customers and then ends up on the upside for City Light.
Any participation in a market like that has certain risks associated with it.
So this risk policy, which goes back a number of years and was first set up in 2008 through Resolution 31053, there's a little history for you on the slide, is sort of the beginning of having an established wholesale energy risk management.
We might say WORM from time to time, by the way, that acronym.
So today, Before You is a revised policy based on the policy that was transmitted earlier this year.
It is in that sequence of updates that have happened as City Light has grown more robust and very, very capable risk management facility.
Roman leads that effort and maybe I should just pause here and acknowledge him and maybe allow him to say anything he might like to say about that work.
SPEAKER_13
Yeah, I mean, thank you, Eric.
I mean, first I want to thank Eric McConaughey and Ben Noble for their collaborative efforts in this, two amendments, and we worked on that.
In terms of the policy that is governing the risk, wholesale risk trading activities, this one has matured over the years and right from the beginning when we did this in 2008 and in the last, I would say, 15 to 20 years, not only the markets have matured, the industry has matured, and the oversight within City Light and externally has also pretty much matured.
So we have to reflect that.
And then with all the changing environment in trading as well as marketing and so forth, and regulatory environment as well, we need to be flexible, so that's what these amendments address basically.
SPEAKER_01
So specifically, the highlights of this version two that are the subject of the First Amendment would make clear that council is the authority to adopt amendments to the worm policy.
It would call for regular financial risk status reports to the council and specify their frequency.
And I want to say that those are ongoing.
That has been happening, and this just makes clear that that is expected.
But this is not a new thing.
We do receive regular financial risk reports.
It would call for annual internal audits reported to council as well.
Again, there is an annual internal audit process that is ongoing and this would make it clear in the policy that that's something to be provided to council and to formalize that.
Every five years, there would be a need assessment and scoping for an independent audit, and that could lead then to whether or not there needs to be tune-ups to the policy itself.
And then finally, it makes clear there's an affirmative responsibility to report to the city council and the mayor any failures to implement the Warren policy by the general manager, the chief financial officer, the director of risk oversight, and the City Lights internal audit team.
There were some other sort of formatting and maybe style changes to the document for clarity.
I was really pleased to be able to work on this with Ramon.
and with Ben Noble.
It's good to have opportunities to actually work together with folks from City Light.
It's a big part of the work that I do, and it gives me a chance to understand more about what they're doing.
And I think it also opens up lines of questioning so that we stay ahead of any sort of concerns that might come up.
So that's just my selfish indulgence there of being thankful for having that opportunity.
SPEAKER_11
So, sorry.
Thank you.
I actually have a question.
Can we talk about the difference between the original policy and the revised policy?
SPEAKER_01
Yeah, so the five items that are on the slide here are the principal differences or the highlights.
SPEAKER_03
Eric, I'm sorry, your slideshow is not up if you intended to have it up.
I see it there.
Oh, you do?
I am not seeing it on my screen.
Okay.
Am I the only one?
SPEAKER_11
Oh, wait, you might be in the wrong tab.
SPEAKER_01
I'm not sure.
SPEAKER_03
I apologize.
SPEAKER_01
Okay.
SPEAKER_03
Five years later, I'm still learning Zoom.
SPEAKER_01
It's okay.
I coordinated with Nita this morning, and I thought I was going to not have to ask her to help, and I asked for help as well.
So here we are together.
So, Council Member Wu, the...
The policy document that was sent over, much of it did not undergo changes in this revision.
These five items that I outlined were items that central staff identified and worked with City Light to make sure that they were clear.
Other than that, there were a lot of changes that were largely technical that we didn't And Ben and I looking at it and working with Ramon thought that we're just fine.
One thing that I will add that maybe is important that we haven't touched on today is that the policy itself as a document is not very lengthy.
There is a really very complete and detailed procedures document.
And that's the day-to-day work of all the folks in City Light that work in wholesale energy and managing the risk.
and they're separate pieces.
This policy would make that clear and allow for City Light in the, so to speak, in the weeds to be able to make adjustments to that.
All the folks that work in this area for City Light are beholden to both the procedures and the policies, and when they sort of, I'm putting words in Ramon's mouth, but my understanding is that when they sort of sign up and take the job, they sign and affirm that they know what they are and they're gonna abide by them.
as you might guess, they take it pretty seriously.
And there's a lot of technical documentation that they work with day in, day out that is not within the policy, but the policy does address as identifying it as the procedures document.
SPEAKER_11
Thank you, colleagues.
Any questions or comments?
Council Member Strauss?
SPEAKER_04
Chair, questions, comments on the underlying bill or the amendments?
SPEAKER_11
Of the amendments.
SPEAKER_04
Yes, thank you.
Just, I'm sorry I asked because I'm actually just going to talk about both and then I won't talk again on this policy.
Just thank you.
I know that this all stems out of the Enron fiasco many decades ago and the controls around our finances.
Since then, as well, City Light has absolutely gotten better about the internal controls.
There's still been outside pressure that hasn't done as well.
And so we have been leading the industry in that way.
What I really appreciate is, Eric, your work with Ben, who started off in the same role as you during that Enron crisis.
And so these amendments really tighten it up in a really nice way.
We trust you.
Things are way better than they were when this policy was initially adopted.
And I really appreciate the amendment and the underlying policy.
Overall, good work.
SPEAKER_11
Any other questions or comments?
SPEAKER_02
Thank you.
I just wanted to say to appreciate all of the work that was done to develop version 2. I want to thank Chair Wu and central staff for their work on this.
It definitely has resulted in a much better policy.
And while I appreciate the work of the Risk Oversight Council, I do think it's important that the Council continue to have a role.
So thank you for highlighting that issue, working collaboratively to address that issue and bringing this forth.
Thank you.
SPEAKER_11
I need a quick clarification.
Did I move the amendment?
Okay.
So do we go for a vote?
Okay.
If there are no other questions.
So I will first address the amendment before we go to a vote.
So I understand that the committee was seeking the right balance between the energy market conditions and insights and confidence in the process.
I'm so thankful that we had a chance to tour and see what the energy market looked like.
And to go to Seattle State Light's facilities, just to put it very plainly, I understand that energy market is very slimmer to the stock market, to just put it very overly simplified.
And so I'm really also pleased that we have highlighted the role of the internal audit at Seattle State Light to independently share their annual audit findings and recommendations directly with council central staff.
And City Light leadership and council staff agreed that presenting the worm policy to council every five years for review and approval is valuable in keeping the utilities governing board informed and engaged in this important function at City Light.
So thank you for all your work and your patience in taking the time to allow us to really understand this and to really delve deep and to come up with a good recommendation.
SPEAKER_12
Chair, if I might, I just wanted to acknowledge the engagement's been awesome from City Light.
We love talking about our business.
This has been a deep dive, I think a necessary deep dive, and we really do appreciate the engagement because it's important business, and I'm glad you're taking it super serious.
And as I sit here in Dawn's seat, I think she would echo that.
Thank you.
SPEAKER_11
Thank you.
Will the clerk please call the roll on adoption of Amendment 1?
SPEAKER_10
Vice Chair Moore?
Aye.
Council Member Morales?
Aye.
Council Member Saka?
SPEAKER_04
Aye.
SPEAKER_10
Council Member Strauss?
SPEAKER_04
Yes.
SPEAKER_10
Chair Wu?
Yes.
Chair, there are five in favor, none opposed.
SPEAKER_11
Amendment 1 passes.
You will now consider the next amendment.
I move to amend Resolution 32130 as presented on Amendment 2 on the agenda.
Is there a second?
SPEAKER_05
Second.
SPEAKER_11
It is move and seconded to amend resolution 32130 as presented on amendment two.
Before central staff provides an overview, I will address this amendment.
The revised language of recitals in resolution 32130 to accurately describe the effects of version two.
SPEAKER_01
Go ahead.
That's correct, yeah.
There's some recitals that describe what the policy does, and this is a good piece of housekeeping to have the recitals coincide with the amendment that just passed.
SPEAKER_11
Are there any comments or questions on Amendment 2?
SPEAKER_10
Will the clerk please call the roll on adoption of Amendment 2?
Vice Chair Moore?
Aye.
Council Member Morales?
Yes.
Council Member Saka?
SPEAKER_06
Aye.
SPEAKER_10
Council Member Strauss?
SPEAKER_04
Yes.
SPEAKER_10
Chair Wu?
Yes.
Chair, there are five in favor, none opposed.
SPEAKER_11
Amendment 2 passes.
Now that all the amendments have been heard, are there any further comments on Resolution 32130 as amended?
Chair, just...
Council Member Strauss?
SPEAKER_04
Thank you for the extra parameters that you've put around this policy.
It's good work.
SPEAKER_11
Thank you.
Will the clerk please call the roll on the adoption of resolution 32130 as amended.
SPEAKER_10
Vice Chair Moore?
SPEAKER_02
Aye.
SPEAKER_10
Council Member Morales?
SPEAKER_02
Yes.
SPEAKER_10
Council Member Saca?
SPEAKER_02
Aye.
SPEAKER_10
Council Member Strauss?
SPEAKER_02
Yes.
SPEAKER_10
Chair Wu?
Yes.
Chair, there are five in favor, none opposed.
SPEAKER_11
The motion carries and the committee recommendation that council adopt resolution 32130 as amended will be sent to the September 3rd City Council meeting.
Thank you for all your work.
So moving on to the last item of business, will the clerk please read the third item into record?
SPEAKER_10
Agenda item three, Council Bill 120840, an ordinance relating to the City Light Department amending section 21.49.100 of the Seattle Municipal Code to authorize electric vehicle charging stations to sub-meter electricity.
For briefing, discussion, and possible vote.
SPEAKER_11
So as the department coordinators and presenters are coming to the community table, once you're ready, please introduce yourselves and begin.
SPEAKER_12
Go ahead, Jake.
Chair Wu, I'll kick this off.
Mike Haynes, Chief Operating Officer, sitting in for Don Lindell.
Thanks for having us this morning.
This is important, I think, for a lot of reasons for City Life, for our customers, for the future of our decarbonization effort.
On the heels of our transportation electric strategic investment plan, you're going to hear some more about that.
And this is like step one of several steps we'll be coming to you.
The Clean Fuel Standard legislation will be coming forward in a short period of time as well, which is another revenue source enabled by changes in state law and by virtue of our clean power supply and our desire to build out charging infrastructure.
Today we're seeking approval on this ordinance to support sub-metering.
I'm going to let the smart people talk about what that means and they can introduce themselves as they go.
So Jacob.
SPEAKER_06
Good morning, council members.
My name is Jacob Orenberg, and I'm part of the Seattle City Light Transportation Electrification Team.
Did we want to go forward with other introductions?
SPEAKER_00
Good morning.
David Logsdon, Director of Electrification and Strategic Technologies for Seattle City Light.
Craig Smith, Chief Customer Officer.
SPEAKER_08
All right.
Good morning, council members.
My name is Angela Song.
I'm the Transportation Electrification Portfolio Manager.
SPEAKER_06
Today, I'll be presenting to you a proposed ordinance that will provide an exemption to an existing prohibition on submetering specifically for EV charging.
Submetering is the practice of installing a customer-owned electric meter downstream from the utility meter, with the submeter being used to measure how much electricity is consumed by a tenant.
Seattle Municipal Code has a long-standing prohibition on the resale of electricity through submetering, and this is meant to protect tenants from being overcharged for electricity.
The code contains exemptions for houseboats and mobile homes that allow those property types to submeter electricity to the tenant, as well as protections for the tenants that the primary Seattle City Light electric service customer must comply with.
This prohibition on submetering results in two unanticipated barriers for electric vehicle charging that we are proposing to remedy today through this ordinance.
First, the prohibition can be interpreted to disallow EV charger billing based on the actual electricity dispensed to the vehicle.
And second, it prohibits certain types of lower-cost EV charger installations that can benefit multifamily housing.
The first use case that this ordinance will address is to allow EV chargers to bill customers by the kilowatt hour.
EV charging providers have several options for collecting payment from customers.
They can require customers pay a flat fee for the charging session.
They can make the customer pay based on the amount of time that the charger is used, or they can make the customer pay based on the actual electricity dispensed to the vehicle as measured in kilowatt hours.
Billing customers based on the actual electricity dispensed to the vehicle is the standard practice for the industry, And it is also the fairest way of billing customers.
However, current municipal code could be interpreted to disallow this practice because it requires the use of an electric meter integrated in the charger, which could be considered a sub-meter.
To eliminate any ambiguity, this proposed ordinance will change the municipal code to explicitly allow EV charging providers to bill customers on a per kilowatt hour basis.
The second use case we anticipate is that this proposed ordinance will allow submeter billing of electricity for EV chargers in common parking areas.
And this is a practice that is currently banned under municipal code.
These types of installations are beneficial because they can provide EV charging to multifamily housing residents at a lower cost.
And if approved, the proposed revisions to the code will provide the submeter chargers with the same protections for the end user that are already granted to sub-metered services at houseboats and mobile homes.
This use case provides a route for multifamily housing to install EV chargers that doesn't require integrated meters, internet connections, or payment processing systems, while still providing a means for the EV driver to pay only for the electricity provided to their charger.
This can result in cost savings for both the purchase of the charger and for the ongoing operations without burdening the property manager or the homeowners association with the cost of the electricity.
Residents will be billed by the property manager or homeowners association for the actual cost of electricity dispensed through the charger as measured by the sub-meter while avoiding the ongoing costs that would be incurred from installing chargers with integrated payment processing systems and the required internet connections.
Again, this is beneficial because it provides a route for lower-cost EV charging while still ensuring that the electricity is paid for by the end user.
To summarize, we request your approval of this ordinance to amend the municipal code to authorize the sub-meter billing of Seattle City Light electricity for EV charging.
This will allow EV charger operators to resell electricity dispensed through an EV charger on a per-kilowatt-hour basis and also allow property owners and homeowners associations to bill for submeter electricity provided to EV chargers in parking spaces dedicated to a specific tenant or other user.
And at this time, we can answer any questions you may have.
Thank you.
SPEAKER_11
Thank you.
Colleagues, any questions or comments?
Council Member Strauss.
SPEAKER_04
Thank you, Chair.
Thank you for the time you spent with me in my office discussing this.
This is a pretty common sense revision to the changing electric vehicle environment that we have before us.
Even five years ago, we didn't have a Ford F-150 that was electric, and we do today.
We're seeing the electrification of vehicles outpace our ability to provide electric charging.
And one of the barriers in multifamily unit, multifamily buildings, or in our community is this, uh, third party charging because it's not free to set up the, this charging infrastructure.
And so maintenance and operation, as well as the ability, I really appreciated the ability that within multifamily buildings, you could tie it to your, your unit.
Um, And in that sense, if a building was to set that up, they wouldn't be incurring an additional charge.
But if the building doesn't have that capability, that there is a program that folks in their multifamily building would have infrastructure in their garage.
This is the way of the future.
This is a pretty common sense change, and I appreciate your time on it.
Thank you.
SPEAKER_11
Council Member Moore?
SPEAKER_02
Oh, okay.
Thank you.
My question is, so it looks like the bill limits resale of electricity to the cost of electricity, and I'm just wondering how installation and maintenance costs are accounted for in the path.
SPEAKER_06
The cost of the purchase and installation of the chargers is not addressed in the code, so that would be handled separately and by the tenants, the homeowners associations, and the property managers at their discretion.
SPEAKER_02
Okay.
So, I imagine that that could be relatively expensive to do that?
Yes.
Installation and maintenance, yeah.
SPEAKER_06
Yes, typically installations of EV chargers at multifamily housing, especially in parking garages, can be quite expensive.
SPEAKER_02
So how is that cost going to be distributed or accounted for?
SPEAKER_06
That's not addressed in the code.
That would be up to the tenants and the homeowners associations or property managers to determine who pays for what and how.
SPEAKER_02
Okay.
Do you see that as an obstacle to this being implemented or?
SPEAKER_06
The costs of installing EV chargers in multifamily housing is overall, yes, an obstacle.
It can be quite expensive, but that was not the intent of this revision of the code.
This revision of the code was just to allow these types of installations.
Seattle City Light also operates incentive programs to reduce the cost of these installations.
SPEAKER_02
Okay, and how do you access those incentive programs?
SPEAKER_08
Sorry, can you repeat the question one more time?
SPEAKER_02
How would someone or an entity access the incentive programs?
SPEAKER_08
So there's a few tactics that we have for promoting our incentive programs.
And so for multifamily in particular, one, a resident can reach out to our program team, and we'll follow up with the property manager in particular.
and work with them to identify the best solution for them at that particular property.
We also work with community-based organizations to go out into community events and talk about our programs.
Not only do we have multifamily, we also have a fleet program as well.
And so as we go out into community events, focus groups and things like that, we'll promote our programs as well.
SPEAKER_11
Okay, thank you very much.
Thank you, Chair.
Council Member Saka.
SPEAKER_05
Thank you, Madam Chair, and thank you all for this presentation here and putting this forward.
I think it is a very rational and realistic approach to help us implement our city's climate goals and comprehensive strategy with respect to transportation and electrification of transportation, various transportation elements and modes from the port to electrifying our transit system, and of course, personal vehicles, which is what this, the thrust of this is as well.
So all of which are very important, and, you know, as chair of the Transportation Committee, As colleagues, as you know, in the levy proposal, there was $32 million allocated specifically towards building and expanding our personal EV charging network across Seattle to make it more accessible for all.
You know, we have a goal of adding these EV charging networks the infrastructure in the top visited parks, libraries, et cetera.
Obviously, we need to implement and widely deploy these in various multifamily homes and buildings, facilities, et cetera.
But anyways, I think this is a great step to help us implement these broader goals and vision for electrification in our city.
And proud to support it today.
It's the climate-friendly thing to do.
It's the planet-positive thing to do.
It's the thing to do to support good-paying, living-wage union jobs in the trades to help build, maintain, and support this infrastructure.
So anyways, this...
This is a great proposal.
Thank you for bringing it forward.
Thank you, Madam Chair.
SPEAKER_11
I have a quick question.
You mentioned earlier that something was banned.
Could you talk more about that and why it was banned in the first place?
SPEAKER_06
Yes, the practice of submetering electricity was banned many decades back because landlords, not all of them, of course, but some landlords would end up overcharging their tenants for electricity and making profit on the electricity provided to their tenants.
SPEAKER_11
Thank you.
So I appreciate that this will allow property owners and landlords to submit EV charging stations operated by third-party companies or EV chargers in parking spaces dedicated to specific tenants while requiring the same protections already established for other existing submetering exceptions.
So thank you for bringing this forward and for what you do.
I think this is pretty straightforward.
I don't have any other questions or comments.
And if...
If no one else has any questions or comments.
Council Member Moore, did you still have a question or is your hand still up from previously?
No, my hand is not meant to be up.
Thank you.
So I move that the committee recommend passage of Council Bill 120840. Is there a second?
SPEAKER_05
Second.
SPEAKER_11
It is move and seconded to recommend passage of Council Bill 120840. Are there any further comments?
Will the clerk please call the roll?
SPEAKER_10
Vice Chair Moore?
Aye.
Council Member Morales?
Yes.
Council Member Saca?
SPEAKER_04
Aye.
SPEAKER_10
Council Member Strauss?
SPEAKER_04
Yes.
SPEAKER_10
Chair Wu?
Yes.
Chair, there are five in favor, none opposed.
SPEAKER_11
The motion carries.
The recommendation to pass the bill will be sent to the September 3rd City Council meeting.
So we have reached the end of today's meeting agenda.
Is there any further business to come before the committee before we adjourn?
Great.
Hearing no business to come before the committee, the time is now 1035, and we are adjourned.
Thank you.
SPEAKER_03
Thanks, everybody.
Thank you.