Transportation & Utilities Committee 11520

Good morning, everybody.

I'm Councilmember Alex Peterson.

This is the January 15th, 2020 meeting of the Transportation and Utilities Committee.

It will now come to order.

It is 9.31 a.m., and I'm joined by Councilmembers Morales and Strauss.

Thank you for being here.

Before we begin, let's approve our agenda for this committee meeting.

If there's no objection, the agenda today will be adopted.

Hearing no objection, it's adopted.

At this time, we'll take any public comment.

We're going to collect the names of anybody who's signed up to speak.

I look forward to hearing from you.

We will, as usual, keep the public comment two minutes per person.

And if you exceed the two minutes, I will signal to you that.

But let's keep it strict to two minutes.

Appreciate that.

Right now, we just have one person sign up to speak.

That's Ryan Packer.

Good morning.

Can you hear me?

Yes.

Cool.

Thank you.

Pardon me.

Thanks, council members.

Welcome to the first Transportation and Utilities Committee meeting of 2020. I just wanted to come here to thank you for serving on the committee and also to express my thanks to the Seattle Department of Transportation for all of the great work that they've been doing, particularly around the rapid implementation of the Center City Bike Network in the past year.

It's been really great, huge improvements.

But I have some context I want to deliver to you.

Seattle currently has a commitment to lower vehicle emissions by 82% from 2008 levels by 2030. Between 2008 and 2016, we lowered them by only 1.8%.

And the data that was just released by the Seattle Department of Transportation for 2018, which is the most recent, showed an increase of 36,000, over 36,000 vehicles per day on our streets compared to 2017. And so we're not making progress on that goal, and we only have less than 10 years now to make it.

But more immediately, though just as urgent, is the fact that 2019 was the deadliest year on our streets in over a decade.

with the vast majority of those fatalities falling on people who are using zero emission vehicles, their own bodies to move around the street, pedestrians.

The pedestrian safety crisis is immediate and has been escalating for several years.

And it's time to really dig in and try and solve that problem.

That's all I came here to say.

Thanks so much for serving on the committee.

Thank you.

Thank you.

Is there anybody else who would like to speak from the audience?

Thank you, Mr. Packer.

That's the end of our speakers, so we will move on to the next item on the agenda.

We're going to talk about the items of business here.

I'll just do a little introduction before our committee clerk reads the items into the record here.

So this is our first meeting of the Transportation Utilities Committee.

It also has the Department of Technology that we will be overseeing.

And we're going to hear today from the three, those three largest committees.

So Seattle Department of Transportation, Seattle City Light, Seattle Public Utilities.

and talk about what they see as coming through our legislative agenda this year.

One of the key issues that we'll hear about is the renewal of the Seattle Transportation Benefit District, which expires this year.

As many of you know, the Seattle Transportation Benefit District is something that funds nearly all of our pothole filling budget.

It also is most well known for expanding transit, which we need to preserve We have a lot of work to do to continue to expand, and this is complicated by what I believe to be the harmful initiative 976, which is tied up in court right now.

We will be talking about the transportation benefit district with Seattle city light and Seattle public utilities.

The previous city council did approve strategic plans where there are some scheduled rate increases, but we just want to stay on top of that and be mindful that the lower the rates, the better.

So why don't we go ahead and read the first item into the record here.

Seattle Department of Transportation overview and discussion of items of business anticipated to be heard in the Transportation and Utilities Committee in 2020.

So we'll just introduce, have you all introduce yourselves.

We always, we traditionally start with our esteemed central staff member.

So, and then we'll go around to the department.

Calvin Chow with Council Central staff.

Sam Zimbabwe, Director at SDOT.

Candia Lorenzana, SDOT Transit Mobility.

Rachel Laborte, SDOT.

Thank you for being here and thank you for bringing a presentation for us.

All these items today are just briefing and discussion.

We're now joined by Council Member and Pro Tem Lisa Herbold.

Thank you for being here.

Okay, so we're gonna walk us through the presentation.

Calvin, did you have any introductory remarks for this one?

Okay, all right.

All right.

Good morning, folks.

Thanks for having us.

Great to be here.

We just wanted to spend a little bit of time, quick overview of SDOT, but spend most of the time talking about the Seattle Transportation Benefit District.

This is very similar to a presentation that we gave before the previous committee back in December, but wanted to reprise that and update it a little bit and just use that as a context setting for where we see a lot of need over the course of this year.

Thank you.

I'm going to give a very brief overview.

I'm going to turn it over to Candida and Rachel to walk through the STBD portion of the discussion.

You'll see and you'll get used to us starting our presentations before you with our mission, vision, and values.

And we spent a lot of time last year updating this, working throughout the department to have sort of refresh this, come to consensus on what our key functions are and how this informs our work.

So we start every presentation with this information because it grounds what we do.

So our vision, as we say, is that we envision Seattle as a thriving equitable community powered by dependable transportation.

And today's conversation is particularly relevant to our core values of equity and mobility, and certainly supports the others as well.

Just a brief overview, we've got three overview slides of SDOT as a whole.

We have close to 1,000 men and women who come to work every day to serve the city of Seattle and the residents.

We deliver capital projects from the large things like the new Lander Street over crossing, but also small vital improvements like curb ramps and our programs like Safe Routes to School.

We have a vast inventory of assets.

We're staffed 24 hours a day, seven days a week.

You've seen us over the last week working on winter weather response 24-7.

We've had crews deployed since Sunday afternoon.

Thank you, Governor.

And thank you.

Just to highlight that point, in my opinion, the response from the city has been excellent during these snowstorms, and I know that You know, the mayor's assembled several departments to help keep the streets clear and keep people safe and also let people know to shovel their sidewalks and work with their neighbors.

And just, I've been really impressed with SDOT and the other, some of the other departments who are here, public utilities, City Light, et cetera.

So thank you for all your efforts and for the people in the field who are doing the work.

Calvin getting me some water just shows how critical central staff is, not just for supporting Council, but in supporting the agencies as well.

And I just want to sort of reinforce that we're staffed 24-7 to our Transportation Operations Center, some of our maintenance staff, regardless of good weather or bad.

We just ramp that up when there's an emergency response to deal with.

The phone number on this slide, 684-ROAD, along with Find It, Fix It, is a great way for us to get informed about anything that needs to be fixed.

And that goes directly to our dispatch and customer service groups that can respond to those things on a regular basis.

We also have a regulatory function where we issue permits for work in the right-of-way, and we partner with agencies such as Sound Transit, WSDOT, King County Metro, and we have dedicated staff working daily on coordination of construction activities, and particularly around all the big changes that are happening through the Seattle Squeeze.

It's a major emphasis of what we do as a department, and will continue to be for the foreseeable future.

And finally, we have planning and policy development work to shape the needs of our transportation network now and into the future and address emerging mobility needs.

This includes our work to deliver on the transportation benefit district to plan for the future needs of the city and where we need to go from a transportation perspective.

So with that, I'll hand it over to Candida and Rachel.

Thanks, Sam.

I'm going to kick us off and provide a bit of an overview of the Seattle Transportation Benefit District.

State law allows cities, towns, and counties to establish a transportation benefit district to respond to local transportation needs.

In 2010, the Seattle City Council created the Seattle Transportation Benefit District, and the following year enacted a $20 vehicle license fee to fund transportation improvements.

And in 2014, Seattle added STPD Prop 1 to the November 2014 ballot, asking for voter approval of a $60 vehicle license fee and a 0.1% sales tax, all of which goes to funding transit service and low-income access.

So a little bit of history here.

Seattle voters passed Proposition 1 by 62% in 2014, allowing the city to collect $50 million annually for transit service.

This also created our Transit Advisory Board, which is an advisory body that includes 12 Seattle residents.

most of which are, half of which are appointed more or less by the mayor and council, and then one member that is youth to get folks more engaged in boards and commissions at the city.

So as council member Peterson pointed out at the beginning of his presentation, what's not captured here is this does sunset at the end of 2020. So it was a six year time period in which we had these, we were collecting these revenues for these purposes.

Another point to highlight here is the $20 portion of the VLF.

That is something we continue to collect.

So in total, the city collects $80 in vehicle license fees and 0.1% sales tax.

This $20 element goes to...

takes in about $8 million annually and funds basic services like street maintenance and spot paving, so things like potholes or signs and markings on the streets, transit spot improvements, and some of our bike and pedestrian master plan initiatives.

May I?

Yes, please.

Thank you.

And maybe it's here, I'm just not seeing it.

How much of the benefit district revenue comes from the sales tax each year?

I'll let Rachel answer that.

Am I on?

Yes.

So of the total benefit district, roughly $30 million comes from sales tax.

And so that leaves how much from the VLF?

So the VLF 60 generates about $24 million a year, and the VLF 20 generates about $8 million per year.

Perfect.

Thank you so much.

Welcome.

And I'll hand this off to Rachel to talk more about the voter approved program.

Perfect.

So as kind of illustrated in my answer to Council Member Herbold, all of these are under the umbrella of the Seattle Transportation Benefit District, but we kind of think of them as two different items.

One that was council approved and doesn't have a sunset date, and another that was that six-year voter approved measure.

So as we talk about the voter approved measure, we often reference it as STBD Prop 1. And the bulk of the funding that we generate through this program goes towards buying additional trips on King County Metro routes that operate in the city of Seattle.

We also fund programs like Orca Opportunity, in which we provide fully funded Orca cards to Seattle public school students and SHA residents to improve access to transit across the city.

And then in 2018, City Council adopted and approved a scope change, which gave us additional flexibility to provide funding for additional capital projects to improve the travel time and reliability of some of those transit routes we're investing in.

So this next graphic walks through how we have spent our program funds to date.

And so this shows our actuals through 2018, our 2019 where it stands and our proposed.

And as you can see on this, about 80% of all of our funds go directly to adding those trips on routes across the city.

And then seven cents on every dollar goes to improving low income access and transportation equity.

Another question?

Yes, please.

I know there are some limitations on the King County side to how much transit we can buy from them.

So I know there are some limitations associated with the number of bases.

Are there other limitations that we should be considering helping King County plan for so that we can buy more service?

So we right now we're thinking about the current lifetime of the STBD which again expires next year and when we did face a little bit of that struggle in terms of base capacity and available buses and that was really in 2017 and 2018 and was the main driver for why we did the scope change to allow us the flexibility to continue to improve transit if we weren't able to spend all of our funds directly on additional bus trips.

So right now we're in close coordination with King County as it comes to their base expansion, how they plan to grow over the next 10, 20, and 30 years, so that we can better align our planning processes for these types of things.

So it's...

I'm not sure I'm following the answer.

Will we be able to continue to add more capacity?

And if not, what are the other limitations?

And I get that you're saying that we're aligning closely with King, but can you just give a little bit more texture to what that means and how that might affect our decision making?

So I think one of the things that Rachel tried to highlight here is like we have reached the point where we are now not making any additional service investments this year.

So like that capacity piece, while still an issue to be mindful of, I think not as immediate, but we are, I think the important thing to highlight here is we are working with the county to understand their base capacity, actually their expansion.

So more than likely we'll have opportunities.

to increase service because they are able to take on more buses and more drivers.

So for any renewal conversation, that is something we're keeping track of.

But for the immediate need, we have worked through those and have kind of reached the top level of what our investment will be for the life of the STBD.

Okay, gotcha.

Thank you.

If I may add, It will also affect just the term of which the renewal might be.

So, excuse me, we do expect capacity to increase, but, excuse me.

It is.

But if we do go for a longer term, that might mean a different conversation with Metro about what their capacity is over time.

If it's a smaller term, obviously, then we're probably more constrained by what we see today.

So I think it's a little bit early to talk about the renewal portion of it, but I think the capacity argument, capacity concerns have been raised and are continually being discussed, and we should bring that information forward as the options get developed.

Great.

So next I'm going to go into a little bit more of what our specific transit service investments have been to date.

And first to set some context, currently STBD funds about 8% of King County Metro's network.

And that's the relative portion of the 350,000 hours that STBD currently funds.

And what percentage of that is Seattle, of the Seattle network?

8% of the King County network, or what percentage of the Seattle network?

We, to the route, because routes transverse across the city and outside the county, it's a little difficult to define exactly where they break down.

But you could say, you know, you could break it down into thirds, for example, and say a third of the service was in King County if you wanted to.

So since STBD began making these service investments in 2018, we've used the STBD funds to really meet the ever-growing demand for transit in Seattle and help provide additional capacity and frequency across the city.

And when deciding where to spend those dollars, we focused along the following service investment goals.

So first and foremost, we want to implement the frequent transit network, which sets up a series of 10, 15, and 30-minute routes that serve all areas of the city.

Next, we want to improve access for those historically disadvantaged populations.

This includes addressing the findings of the racial equity analysis that this program did in 2017 and trying to implement and act upon those findings.

Third, we like to align our transportation and land use goals.

So one thing we'll do is we will add additional trips in areas that we know are growing across the city, but we also want to address if there are any overcrowded trips on those bus routes.

And then lastly, and kind of all-inclusive along this, is we want to improve connections across the city.

We know that for riders, east-west connections can be really difficult on transit, and where those routes exist, we want to increase frequencies on those services.

We've also used STP funds to improve our night owl network, making sure that we have 24-7 service across the city to make sure that people can travel whenever they need to, whether it's nights, weekends, middays, or the peak period.

So I want to highlight a little bit about the last year of the program, sorry, the last 12 months of the program.

And it's what we call, refer to as year four.

So first off, I have our year four performance report if anyone would like it.

Would you like me to pass around copies?

Thank you.

Thank you.

So in year four, STBD added about 95,000 new hours of service.

And because I know that not everybody thinks about things in terms of bus hours, that's equivalent to about 1,550 new weekly trips across the city of Seattle.

In September 2018, we added over 300 new weekly trips.

In March of 2019, another 316. And then most recently in September of 2019, we had 937 new weekly trips on 23 routes across the city.

And that's added, not cumulative?

Yes, these are all additive.

And these are additive to what we've done in the first three years of the program.

And did our earlier conversation about capacity and not adding more service mean we shouldn't expect more service added in March?

Correct.

We are not making any more ads through the lifetime of the program.

Thank you.

Yeah, I also just think, you know, the question about capacity is a very complex one and maybe deserves a longer discussion as well.

But we've also added a lot of these trips are in off-peak times when there might be more capacity for metro buses and operators.

Adding peak hour capacity, peak capacity trips may be harder.

So like we bump up against capacity challenges differently in different times of the day.

But we are able to, we have been able to add, trips where we see sort of aligned with what Rachel described as the service goals.

And so on that, why wouldn't we consider doing that for March?

Adding non-peak trips to areas that aren't, for instance, meeting the goal of having the areas outside of those 72% of households with a 10-minute walk to 10-minute service.

I can think of two in my district, both South Park and Admiral, that Admiral in particular lost service when service reductions were made.

So why would we not, considering the fact that the base capacity issue doesn't have, can be It's not an issue for those non-peak trips.

Why wouldn't we consider doing that in March?

So I think there's probably a couple reasons.

The first and foremost is knowing that the current voter approved initiative expires at the end of 2020. We've got to keep contingency plans in case we don't, we aren't successful in having a renewal of that.

And there are some limits in sort of how much we can add or subtract service with King County.

Based on that, so we've got to have a reasonable contingency and a little bit of the uncertainty around the future of the VLF portion of the Prop 1 funds.

We've got a, we've been successful in getting a preliminary injunction to continue to collect those funds, but that's, there's still some questions about whether we will continue through the course of the year.

So at this point, we're not going to be able to add again during 2020, but want to be able to have that discussion as we lead into a renewal and then be able to plan for what that looks like and what we can commit to voters.

Perfect.

So one thing I want to highlight in our progress over the program to date is the expansion of what we call our very frequent network.

These are our 10-minute routes.

And we define 10-minute service as 10 minutes between 6 AM and 7 PM on weekdays.

And then we scale service from that at other times of the day.

So, for our 10-minute network, we really strive on focusing on the highest density and highest ridership portions of the city, providing connections northeast, south, and west to serve both homes, jobs, and activities across the city.

And in the levy to move Seattle, we put forth a goal of providing 72% of Seattle households with access to a 10-minute or better route by 2025. And as you can see on this graphic, we started 2015 at 25% of households, and we've been able to increase it by 2019 to 70% of households.

So we have surpassed our interim 2020 goal, and we are within 2% of our 2025 goal.

Sorry, I'll shut up after this one.

I just want to point out, there's lots of areas on the map that don't meet this, but there are only two urban villages.

And they are, again, South Park and Admiral.

I just want to make a note of that.

And I appreciate that.

We are aware.

Thank you.

So next, I'll talk a little bit briefly about how we improve transportation equity and transit access.

So first, to improve travel options for students, the City of Seattle launched the ORCA Opportunity Program in 2018. And this expanded our provision of free unlimited use 12-month cards to high school students at Seattle Public Schools.

income eligible middle school students, and then Seattle Promise Scholars.

And then this graphic highlights our performance through June of 2019. So it doesn't take into account this school year that we're currently in.

And this is a graphic from the report that I handed out earlier.

In addition to ORCA Opportunity, we also have various other transportation equity initiatives, and here's kind of a quick snapshot.

So I mentioned the ORCA Opportunity program as it pertains to students and youth.

In June of 2019, we launched a 12-month pilot to expand ORCA Opportunity and provide 1,500 unlimited use ORCA cards to income eligible SHA residents.

And today, over 1,600 SHA tenants have a fully funded ORCA card.

We also help with the Transportation Equity Work Group, which was launched in 2019, which will provide a set of community-guided recommendations to be considered as we as a department develop our transportation equity agenda.

The Youth Transportation Ambassador Program engages with youth community-based organizations to help teach them about accessible and affordable transportation options, but also allow them to be a resource within their respective communities to share that information about how people can affordably access transportation options across the city.

And then lastly, this past year, we launched a senior regional reduced fare permit pilot, which I know just rolls off the tongue.

But this really seeks to engage our elderly community.

There are a lot of folks that are unaware that the regional reduced fare permit program exists, which is a wonderful way for the 65 plus community to be able to get affordable transit options.

So with this pilot program, We not only enroll them in this program, but also teach them how to use transit.

Because some of these folks have never been taught how to use transit.

And when they do, they love it and consider taking it for a lot of their new trips.

Thank you.

Thank you for highlighting the benefits.

It's aptly named the Transportation Benefit District.

And I know we'll hear more later this year about options for renewal so that we can stay on top of that and communicate that to our constituents.

So any questions from my colleagues before we let them go?

Thank you.

Thank you.

Thank you.

And we'll have the clerk read the next item.

Seattle Public Utilities overview and discussion of items of business anticipated to be heard in the Transportation and Utilities Committee in 2020.

Great.

So now we have Seattle Public Utilities here.

Appreciate everybody being here.

And why don't we have you introduce yourselves.

We'll again start with our esteemed central staffer.

Thank you.

Brian Goodnight, Council Central Staff.

Andrew Lee, Seattle Public Utilities.

Green Tebow, Seattle Public Utilities.

And again, thank you for bringing a presentation.

This is our first Transportation Utilities Committee of the year.

We've got new members, including myself, so we're going to get an overview of public utilities and what you're thinking we might see in 2020.

Can we load the slides up from our presentation?

Thanks.

Thank you.

While that's happening, I just want to thank you for the opportunity to be here today.

As you can probably tell, I'm not Mommy Hara.

Mommy really wanted to be here today for this meeting with the committee, but unfortunately, she came down with an illness, so she regrets not being here.

My name is Andrew Lee.

I'm the Deputy Director for Drainage and Wastewater at Seattle Public Utilities, and I'm very excited to be here with you today to represent the work that our department does on behalf of our ratepayers.

SPU has over 1,400 employees, who every day make sure that the people in our city have access to safe drinking water, can flush their toilets and take showers, have roads and homes that do not get flooded, and are able to dispose of their trash or recycle our compost responsibly.

Our mission is to protect public health and the environment.

And the work that we perform oftentimes doesn't get a lot of public attention or press, but it's arguably the most essential work for life and the environment in our city.

During today's presentation, I'll provide an overview of utility, and the values that we bring to our work.

After that, we'll dive into our particular focus area for SPU, which is our work on keeping our services efficient and affordable for our customers.

Lastly, we have Karine Thibault, who will present on our utility discount program, which seeks to ensure that our utility rates are affordable for our most vulnerable customers.

So this slide.

SPU's budget is among the largest for our city, totaling $1.4 billion in 2020. We are one of the most capital intensive departments of the city.

And for a frame of reference, almost one third of our budget annually is for our capital improvement program.

Just to describe some of our services, we provide safe drinking water to over 1.4 million people in Seattle and the surrounding region, which includes wholesale water to a group of suburban water districts and cities.

We provide garbage, recycling, and compost collection in Seattle.

We build, operate, and maintain over 2,100 miles of pipes that capture and transport urban runoff and or wastewater.

We operate the call center for both SPU, as well as city-like customers.

We provide engineering and surveying for other city departments and related services.

And lastly, as you can see kind of on the left-hand picture, we provide clean city services, such as cleaning illegal dumping, managing the city-wide abandoned vehicle hotline, providing homelessness encampment trash services, at select locations, removing graffiti, needles, along with public litter and recycling cans across the city.

That's our next slide.

We strive to focus on what our customer and customers in our community value.

Engaging and listening to our customers is the foundation of everything we do.

Based on our research and outreach by the city and other city departments, the six priorities on this slide consistently rise to the top.

These are the customer values that we use to inform our planning and service delivery, and they really provide the framework for our strategic business plan.

So the next slide.

Our strategic business plan is the guiding plan that directs our investments and focus areas for a six-year timeframe.

The framework for our strategic business plan is built around three focus areas, and those focus areas reflect what we've heard from our customers.

They are equity and empowerment, risk and resiliency, and accountability and affordability.

Because of the limited time today, I'm going to focus on just one of those aspects, which is our affordability and accountability work.

Thank you.

Next slide.

So we share the Council and the Mayor's concern around the growing lack of affordability in Seattle.

SPU's average single-family monthly bill, which covers all of our services, is about $200 per month.

This is comparable to bills from other cities in our region.

However, we know that the rising utility bills tend to have a disproportionate impact on those who can least afford to pay.

Quick question.

Yes.

Does that average bill that you cite include the utility tax?

The drainage?

Yes, it does.

It does.

Okay.

Just to make note, because of an interest in increased transparency, utility taxes are going to The general fund, it's not revenue that has to be used for the utility.

We worked with SPU over the previous years to make sure that that utility tax is called out on our utility bills.

Again, something that is not going back to the utility is going into our general fund.

There is a lot of, I think, regressivity and it is also part of the affordability challenges associated with utility bills that it might be worth taking a look at.

Thank you.

Yeah, we're really fortunate.

Council Member Herbold, as you know, chaired the committee that oversaw Seattle Public Utilities previously, and so we're really fortunate to have this consistency and institutional knowledge, and for bringing that additional transparency to people's bills, and utility tax has been around for a long time, but it is challenging for people to pay those bills, and it's good for everybody to know that it is subsidizing the general fund, essentially.

Thank you.

Last year, we provided the council with our affordability and accountability plan.

That plan identified improvements that we could make in our business to promote greater accountability and affordability in the six areas that are shown on this slide.

In the next slides, the next six slides, actually, I'm going to walk through examples of how we're currently working on improving our practices in each of these areas.

And I'll tell a few stories that will hopefully bring this to light.

So the first area is capital project planning and delivery.

This is an area of considerable opportunity for us because again, as I mentioned, Seattle Public Utilities, our budget is about a third made up by capital projects.

And just for context as well, our 2018 to 2023 budget has approximately $2 billion in spending on capital.

Our accountability and affordability plan identified 16 actions to reduce cost and improve speed of delivery for our capital projects.

And in short, if we're able to improve the speed and reduce the cost of our program, then because it's such a large program, $2 billion, even a 1% savings translates to $20 million.

So it's huge.

As an example of this, just one small example, our contracting process for getting engineers and designers from external sources to help with our large capital projects, oftentimes averages around six months, and in some cases can go as long as a year.

And so during that period of time, we're in essence waiting.

And so if we can improve the speed of this procurement process without compromising our commitment to having a fair and equitable process, this can lead to time savings, which can actually lead to dollar savings.

So this is just one example of something that we're looking at.

We're also looking at opportunities to improve coordination both within our business as well as outside of our business with external partners as a way to reduce costs on delivering our projects.

And one of the opportunities we have in this committee is it's essentially now an infrastructure committee, so there'll be opportunities to coordinate with SDOT, who we just heard from, and that'll save money and improve service.

Yeah, and I can highlight, on the drainage and wastewater line of business, we've been partnering with SDOT for years on our rehabilitation of sewers, and some of our lowest project delivery costs are when we partner with SDOT.

So it is absolutely advantageous for us in that respect.

One of the things that we did during the rate-setting process is to, of course, we always want 100% of projects to be delivered 100% on time, but that's not always realistic, and our rate path had been assuming 100% project delivery on time, and so instead what we did is we applied a more realistic 97% completion rate, and that had an impact on the rate path.

So, that might be another thing to take a look at, is how, what is our completion rate for these projects?

And while not sacrificing the goal of continuous improvement, you know, should the rate path be set at some different, measure based on the reality of our performance.

Yeah, that's absolutely true.

We tend to be fairly optimistic, I would say, in what we're going to deliver, which is both good, but also can mean more money from our rate payers that doesn't get spent.

So we're absolutely looking at that.

Yeah.

Moving on to efficiency and improvement, SPU is focused on developing a culture of constant improvement in our utility.

You've probably heard about lean process improvement before.

Lean came out of work in Japan, primarily out of the automotive industry with companies like Toyota.

It's a cultural transformation for an organization where the entire organization buys into a mentality of continuously looking for improvements in how they deliver their work.

The methodology is intensely focused on analytics and driving performance through continuous implementation and monitoring of change.

What I particularly love about Lean is that it emphasizes empowering employees to come to work every day with their best ideas, their best creative thinking, innovation on how to do their work better.

We've had some isolated lean projects over the last several years, but what we've now done is we've systematically established a cohort of about 20 to 30 individuals who are applying lean across our utility.

And just to highlight one small example of this, this is a story, we have a service level goal in our operations of responding to priority nine work orders, which are our most high priority, like sewer backups, or flooding in the streets, or a water main break.

90% of those work orders, we want to respond to them within one hour.

What we observed earlier last year was that we weren't hitting that mark.

In fact, we've been decreasing on our trend.

And so taking some principles from Lean, our staff actually created what we call a visual management or visual dashboard that showed all of the locations where those priority nine work orders are in the city.

And it had information that we could track like when the call came in, who responded to it, how fast it got there.

And our teams actually met weekly to review the data.

And that's called a process of doing huddles, actually.

And so the process is very simple.

And the employees came, and they looked at the data, and they said, well, looks like a lot of the problems are arising from this particular cause.

And just for an example, one of the causes that they identified was that we were missing the mark, especially when we had shift changes.

And so during those shift changes, the handoff from the previous crew, like the afternoon crew, wasn't going smoothly to the evening crew.

And then we were exceeding our mark.

And so we said, let's smooth that transition.

And by making those transitions like that, and then monitoring, is it improving it?

We were actually able, in four out of the six months at the end of 2019, we were able to hit our 90% mark.

and drainage and wastewater, just again, through these simple continuous improvements.

So this is an exciting organizational transformation initiative, and I believe we'll be sharing more success stories about this work in coming years.

Thank you.

So moving on to partnership opportunities, we're strongly committed to building partnerships because they're an important tool in improving accountability and affordability.

As a utility provider, you're probably familiar that we are legally required to spend rate payer money on utilities and not on efforts that do not have a utility nexus.

However, oftentimes this can limit us because utility investments can be oftentimes much more effective and beneficial for communities if they are done in partnership with non-utility interest.

Partnerships, I believe, therefore, are a key to unlocking that potential.

As an example, SPU will be spending more than $100 million in utility improvements in South Park in the coming years.

These are long overdue investments that improve drainage and water quality in the area.

However, every time that we've been in the South Park neighborhood, in addition to concerns about utility infrastructure, we hear about jobs, and we hear about housing, and concerns about potentially displacement, things that are not traditionally in the utilities arena.

So what we've done is we've actually partnered and now received a grant from the Center for Community Investment to work with other city departments, community organizations, and the philanthropic community.

Through that grant, we're working with those partners to identify ways that we can go beyond utilities in South Park to enhance climate resilience, We want to make sure that we have the capacity to do this, build economic opportunities for the community, and support any displacement for the people who live there.

Chair?

Yes.

I just want to thank the utility for the recognition that the very things that you do to make the utility related things that you do to make a help accelerate the displacement that is already happening there.

And so I think it's from that recognition that even investments like rain gardens make a neighborhood more attractive for people who want to move there.

Even those investments were intended for the people that live there and I really appreciate the recognition and that core value being responsible for the partnership that you've taken with that community on other things that can make them resilient outside of sort of the utilities traditional bailiwick.

I think that's going to be a theme of the City Council this year is probably dealing with

the committee that you're chairing, Council Member Morales, and Dan Strauss' committee, and this committee, and thanks also for talking about climate resiliency.

I know we're trying to, there's the Green New Deal resolution that was passed last year, and I am introducing this concept of, in the fiscal note that accompanies all legislation, it's gonna ask a couple of climate change questions.

One of those is about resiliency and adaptation, so we're, want to be more mindful of that.

So you're already ahead of the curve.

So thank you.

And thank you for your partnership in that work as well.

So moving on to regulatory alignment.

As you know, utilities is a highly regulated business.

We are required to comply with federal and state laws for safe drinking water, sewage overflow, stormwater pollution, sediment contamination, environmental impact.

I could go on and on and on.

Regulatory compliance is one of the most significant drivers for both our operating and our capital budgets.

The two pictures you can see here show two of our larger projects to reduce sewage overflows into our waters.

The left picture is actually our tunnel launch site in Ballard for our $570 million ship canal water quality project, which will be SPU's largest environmental project ever.

The right project shows construction of our Henderson combined sewage overflow facility, which we built in Seward Park and completed several years ago.

Both projects are in response to regulations and in particular our consent decree with EPA and the Washington Department of Ecology.

So we're absolutely committed to protecting public health and the environment through projects like these in response to regulations.

At the same time, we're continuously looking at opportunities to influence regulations so that we can maximize the environmental benefit of every dollar that we've spent, but also keep in mind affordability for our residents.

I just want to take a moment to say thank you and to share kudos.

I've met with your team on the 24th on the sewage overflow site in Ballard, and the plans are coming along very well.

I found your team to be very well-versed and able to engage with community in a very positive way.

So I just wanted to share those thanks and congratulations.

Yeah, and thank you for the partnership on that.

So moving on to budget and financial management, we are continuously working to bring down the rate of growth in our rates.

On the left-hand side of this graphic, you can see the six-year average rate increase for each of our individual funds.

The highest rates of growth, not surprisingly, are in drainage and wastewater, primarily as a result of our capital program to reduce sewage overflows that I just spoke about.

Those separate bills lead to an increase in the combined bill, which is what our customers generally see.

The six-year increase in the combined build is what is shown on the right-hand side in the white boxes below the green box.

As you can see in the upper white box, which says planned and SPP, our most recent strategic business plan projected a combined average annual rate increase of 5.2% over the six-year period from 2018 to 2023. However, since it was adopted just two years ago, we've been able to shave off 0.2%, which may not sound like a lot, but it is a positive impact for our customers.

And we believe we're not done.

By integrating sound budget and financial planning at every level of the organization and implementing some of these A and A, the accountability affordability recommendations that I described earlier, our aim is to continue lowering the rate path even more.

That's great news.

I know Councilmember Herbold worked really hard on that with the committee with Mamihara last year, the year before, so anything this committee can do to help bring rates down, do please let us know and we'll encourage you along the way, for sure.

I appreciate that.

So lastly, this is the last slide, and then I'll transfer it over to Corrine.

I come to a really important part of our business, which is customer assistance.

As you know, despite the booming economy here in Seattle and the fact that it's one of the wealthiest regions, one in nine Seattleites lives beneath the poverty line.

Given these significant and growing disparities in our community, our customer assistance efforts, which focus on ensuring that our services are accessible and affordable to everyone is a major focus area for us.

With that, I'd like to pass it over to Coraine Thibault, who leads our policy efforts in this area, who will share some highlights of our utility discount program with you.

Thanks, Andrew.

And good morning, Chair Peterson, members of the committee.

I'd like to start by showing you this graphic that you may have seen in the Seattle Times pretty recently.

It shows that we have very large disparities in wealth in our community, most prominently between those who own a home versus those who do not, as well as along race lines.

You can see here that the median net worth of a white household in Seattle is almost 20 times as large as that of a black household in Seattle.

We also have large disparities by age and by educational level.

And because of these large disparities and because of the general diversity in the communities that we serve, it's really important that we have not just one approach but multiple tools to address affordability gaps and ensure that our really critical services are accessible to everyone.

So today I would like to introduce you to two of our most important affordability programs, as well as two related pilot programs.

The first program I'd like to talk with you about is the Utility Discount Program, or UDP for short.

This is by far our largest and most critical affordability program.

Households earning up to 70% of the state median income can qualify for this program, which for SPU cuts each and every one of their bills in half.

A 50% discount is applied to every one of their bills.

This is a joint program between the two utilities.

So enrolled households also receive a discount from Seattle City Light, and I believe they'll be talking with you more about that.

and our partners at the Human Services Department administer the program on our behalf.

The UDP is one of the most generous utility discount programs in the country, and today we have just over 34,000 households enrolled in the program.

The other program I'd like to highlight today is SPU's Emergency Assistance Program, or EAP.

This is an SPU-specific program, and households earning up to 80% of the state median can qualify.

So whereas the UDP provides a discount on every bill, the EAP basically forgives one bill a year for households that don't have children or two bills a year for households with children up to a maximum dollar limit of $448 per bill.

And that maximum dollar limit goes up every year proportional to our combined rate, our combined bill.

We have a question.

Yeah, so we were, received information, requests for information this morning from folks about the utility discount program.

You might be getting to it, but do you have information about the number, you said 34,000 are enrolled.

Is that new, unique enrollees every year versus the folks who are renewing their participation in the program?

Do you have that kind of desegregated data?

We do have that data.

The 34,000 is just the total number of households receiving the discount today.

But we certainly do have data from 2019 that shows new enrollees during 2019. And I can ask the Human Services Department to get that data.

And then do you have information about or what is the kind of information available to participants to understand the process for re-enrolling?

Because part of the question that we received was why is it so difficult for folks to re-enroll if they have already qualified and they continue to meet the qualification requirements, is there a way to reduce barriers so that folks can do that more quickly?

Yes, and we will be talking about reducing barriers to enrollment, certainly, and I can, we will be developing a more comprehensive response to that email.

I saw it just before I came into this hearing, so yes, thank you.

Great, yes.

Anything else, yeah?

Do we have an estimation of how many households in Seattle would be eligible for this program, and what's the delta between how many are enrolled?

Yes, we're working right now, as you know, demographics in Seattle can change pretty quickly, so we're working on updating that figure.

The last figure we had was 98,000 households could potentially be eligible for the program.

So we have roughly one-third, if that number has stayed relatively similar to what it was last year.

Thank you.

Yes.

I would like to just double check that 34,000 number.

The constituent that has reached out to us has referred to another document and it's an HSD document that reportedly states that this number is new enrollments and that HSD only reports new enrollments.

That may not be accurate, but I would love to double-check that.

And then also on the threshold to income qualify for both programs, I want to flag my interest in not using the state median income that for a city like Seattle, a high-cost city like Seattle, we should be using an area median income that is linked to the cost of living in our city.

I've raised this issue in the past and I just wanna flag it for, I know that in making utilities more affordable for low income folks, it has a offsetting cost on the utility bill for folks who don't qualify.

But I think those are things that we need to struggle with and that we need the information so that we can make those decisions.

Thank you.

So finally, I'd like to note that the EAP is in addition to the UDP.

So households earning up to 70% of the state median can qualify for both forms of assistance, which adds up to a substantial amount of relief.

So the first pilot program I'd like to talk about, we recently launched two pilot programs that are related to these core programs to basically see how we can optimize them.

And we've been working with the Office of Innovation and Performance to help design the pilots and carry them out.

So the first pilot I'd like to talk about is the UDP self-certification pilot.

In this pilot, we're allowing a limited number of randomly selected households in 13 lower income census tracts around the city to attest to or self-certify their own income rather than having to submit the laborious income documentation for each member of the household, which is the normal requirement for having to enroll in the program.

So self-certification is the model that's used in California by PG&E program-wide.

And it's been very successful there.

And so our purpose, I think, is pretty clear.

We're trying to reduce barriers to enrollment, make it easier, and try to get more eligible households enrolled out of that potentially 65,000 households that are eligible but not enrolled today.

So we are looking for better and easier ways to get people into the program.

Of course, that carries some risk, allowing people just to attest to their income rather than verifying it up front.

So we're also developing new auditing techniques, which are also used in California, to make auditing more efficient and more accurate and to minimize the risk of doing the self-certification.

And we'll also be looking at whether this is just generally a more cost-effective way of administering the program, whether we can save money by doing it that way.

And I also want to thank the utilities, City Light and SPU's UDP staff in working with constituents trying to use this fast track application process.

We ran into one constituent who tried to renew using the fast track and was told by HSD UDP staff that the fast track system was only for new enrollees.

And the utility UDP staff advocated on her behalf ably and resolved the issue.

HSD wanted to rewrite the rules before they would apply them to allow her to apply using them.

Again, these are examples of barriers that I think are in conflict with continuous improvement.

And I really appreciate your diligence.

in seeing that.

Good.

Thank you.

So the last, the second pilot that we recently launched that I'd like to tell you about is called the UDP Shutoff Prevention Pilot.

So in this pilot, our objective is to reduce the rate of households that are on the UDP that have their water shut off due to nonpayment.

Currently, the shutoff rate is almost exactly 1%.

Our goal in this pilot is to reduce that to as close to zero as possible.

So we have multiple different tools that we'll be using to achieve that objective.

The first tool is that we recently, with leadership from Councilmember Herbold, significantly expanded our emergency assistance program, the program that I just mentioned.

we actually doubled the amount of assistance that a household can receive and also allowed more households to qualify.

We're anticipating that this piece alone, the expansion of the Emergency Assistance Program will be a very effective tool in preventing water shutoffs for lower income households.

We'll also be doing better and more proactive communication with households facing a potential water shutoff and other households that we think might benefit to let them know that the Emergency Assistance Program exists.

We've started for any household who is potentially facing a water shutoff who's enrolled in UDP.

We've started actually placing door hangers at their house.

And on the day that they would have been shut off to say, are you aware of emergency assistance, please contact us and giving them an extra week to contact us.

We're also calling them.

And we found that many people just haven't been aware of the program and are now taking advantage of it.

So it seems like it's a very effective tool.

So, the benefits of this pilot are really twofold.

The first is the obvious, we're preventing shutoffs, shutoffs that might otherwise be taking place.

And I think, you know, the tools that we have, the expanded emergency assistance program, the proactive outreach, the UDP discount, these combined I think will be very effective at reducing that 1% rate down to a very small fraction of that.

But I also anticipate that there will still be a small number of households that, despite all the tools, all the policy tools we currently have and all the programs, will continue to have difficulty or an outright inability to pay their utility bill at least once a year.

So the other major value of this pilot is that it will provide us with really critical data to better understand that small number of households that will continue to fall into that gap, for whom the current tools just aren't enough.

For example, we'll be able to understand, we know that it's generally low-income households, but where is that threshold where The assistance that we offer today just isn't adequate.

We don't really know.

Is it 100% of the federal poverty line?

Is it 200%?

It's just guesswork at this time.

So this pilot will actually be looking at and talking with households and looking at the data that we have from like their UDP applications to see what income levels there tend to be falling into so that we can get a better sense of which households are falling into that gap, what income level are they at, and maybe other relevant circumstances that might be contributing to that, so that we can really design a targeted affordability tool to help fill that gap.

I also want to flag that there's also a number of private property owners of multifamily housing where low-income people live but do not pay their bills because their landlord does.

I've ran into two large multifamily unit buildings in the last three months where the landlord did not pay the bill and the tenants were facing a shutoff.

That was averted.

But I think those are, that's another population that we should look at creating tools to not get to that point.

Because, you know, again, the utility is forgiving as far as how behind in your bill you have to be before you're facing a shut off.

So these are landlords who are operating, some of them large management companies that operate thousands of units of housing in the city that are engaging these practices.

So I think we need to

We have a lot of established programs and policy tools, including recent work that we did to improve our communications with tenants and multifamily buildings about potential shutoffs.

as well as we have several new tools under development that we're excited about, so we'd be happy to come back and brief you or individually brief you on sort of the breadth of our customer assistance efforts.

Thank you.

Just really want to thank you for this program, and I look forward to working with you to enroll as many families and households as possible.

Thank you so much.

Thank you.

Thank you.

I think you heard a theme of affordability today, and it was impressive.

We got this email from one of our constituents, and we've all read it, and we brought it up today, and we're very in tune with our constituents and what their needs are, and as you are with the rate payers, so we'll lean into affordability, I'm sure.

Absolutely.

All right.

Thank you for being here.

Great.

Thank you very much.

We'll read the next item in to the agenda about City Light.

Seattle City Light overview and discussion of items of business anticipated to be heard in the Transportation and Utilities Committee in 2020.

Thank you.

Welcome, welcome.

Nice to meet you.

Great, so we'll start, as usual, with introductions, and we'll start with our central staff person.

Good morning, I'm Eric McConaghy, I'm the council's central staff.

Thank you.

Thank you.

Sorry.

A lot going on here.

No problem.

Good morning, council members.

I'm Deborah Smith, and I'm the general manager CEO of Seattle City Light.

And Maura Brugger.

I'm director of government and legislative affairs for Seattle City Light.

Thank you.

So we can just dive right into your presentation, an overview of City Light and what we expect to see in 2020.

Great.

Well, we've got a lot going on, so we're excited to share it with you, and I'm excited to work with our new council members and, of course, with you, Chair.

So we are in the process of updating our mission, vision, value.

So I appreciated that when Sam was talking for SDOT, that's where he started, and so We'll be bringing updated or incorporating updated mission vision values into the strategic plan that you'll be reviewing this summer.

But I will share that our vision, which is very different than the vision you would have seen if I put the poster up there, our vision going forward is to connect Seattle to our shared energy future by partnering with our customers.

and ensuring that their energy needs are met in whatever way they choose.

So we are really focusing on creating customer choice and meeting customers where they are.

And that's, you know, I would love to say that we're unique in that way, but we're not.

That's where the industry in general is going.

Customers have far more choices and the notion of your electric utility as a monopoly that can paternalistically decide what you get and how you pay for it.

That is a kind of a relic of the past, and so we are moving forward.

quickly in making that transition.

So, more if you could go to – this is – the future is Seattle City Light.

So, this was – Seattle City Light is one of the oldest public utilities in the country.

We're also the 10th largest public utility in the United States and the largest public utility in the Northwest.

So, that was the future.

This is the future that we talk about now.

So, this is a slide that is under, it's in process, but I love it.

It kind of talks about where we're headed and it captures a whole lot of what you're going to see next year and in future years all in one picture.

So, wherever you see the little radio, those are, that represents our AMI system.

where, as you know, many of you I'm sure are aware, we've been implementing an AMI system over the last number of years, and we are right now in 2020, one of our priorities is to complete the second phase of integration so that we can really start delivering value to our customer owners from the investment that they've made in that system.

You also see, if you look at that picture, you see distributed generation, which continues to be a high priority for customers.

They like energy independence.

And our job is, again, to support them in having their energy needs met in whatever way they choose.

So that can be rooftop solar.

It can be battery storage.

It can be microgrids.

There's all kinds of technologies that are emerging.

and, quite honestly, becoming very commercially viable.

I sometimes talk about technology as being both a driver for change, customers' expectations about how products and services will be delivered to them have changed, and I think that's probably nowhere truer than in Seattle, where we live in the midst of technology, and it is also the enabler of change.

So, the things our customers want are, you know, we compete, I talk about this, we compete not with PSE or Tacoma Power, we compete with Amazon and we compete with anyone who believes they have a space in the energy future, and many organizations, especially many tech places, spend a lot of time thinking about that, because that's what, again, our shared customers want.

So we can go to the next slide, Maura.

So some information about City Lights.

So this is our adopted budget, $1.432 billion for 2020. So of that, a little over a billion is and maintenance expense.

And then our capital improvement plan is $378 million.

So if you start at the pie with the green, purchase power provides budget authority for both short-term and long-term purchases.

Debt service provides funding for scheduled payments on outstanding debt.

And City Light is generally in the bond market on an annual basis that is part of how we manage our rate structure is by funding our CIP with long-term debt instruments.

Taxes provide funding for both state and city taxes.

Deferred O&M, you see that, that slice of the pie, that is used for conservation incentives and programs that provide a multi-year benefit to the utility, and we finance them similar to capital costs, that's why they're deferred.

A capital expense is the fully loaded cost of our capital program that includes investments in the transmission and distribution system, generation facilities, and buildings and vehicles.

City services is the cost of Seattle IT, the cost allocations we pay to various departments, and the call center that you heard is provided for us.

We have a shared call center with Seattle Public Utilities.

O&M and general expense is mostly labor and benefits for the 1,792 employees that currently maintain and administer the utility assets and programs.

And then lastly, You'll note we have called out controllable O&M of $306 million.

That represents the 21% of our budget that we can reduce.

You can't reduce all of it because you're operating all of these assets, but those are the expenses that in some way we have day-to-day control over.

Just a quick overview of Seattle City Light.

You see the map of our service territory.

We serve the city of Seattle as well as eight franchise communities and a total population of over 900,000.

So customer statistics, and these slides that you're seeing are coming out of our brand-new FAQ Finger Facts book, and Maura's going to provide those to you.

So they are 2018 data, and there is generally about a one-year lag on that.

You can each, you can, I'm giving you four each.

I currently have one of these on my desk.

Yeah, it's really helpful.

I carry one with me everywhere I go.

Yeah, so while we have a large number of residential customers, ironically they only use about 25% of our power.

Non-residential represents 50% of our power and then in turn 20% is available for wholesale purchases through long-term contracts or in the energy market.

The UW, University of Washington, is our largest customer right now.

And I guess I wanted to take a moment to explain some verbiage, some language, and some of you have heard this before, but we will often refer to Seattle City Light as being long.

So we are long in power.

And what that means is that we generally generate and have access to, either through generation or through our long-term contracts, more power than we need to serve our customers.

However, Prudent risk management policies, as well as the seasonality of when we generate more power, which is generally in the spring, versus us being a winter peaking utility, mean that at any day, on any day, we are generally in the market.

So that means we are buying and selling both to close our, to balance in the hour, but also to close our positions.

So that's a risk management terminology.

And it refers to essentially managing risk by closing out that long position when you know you have it.

So what that means is that when we look ahead, and this comes up in terms of our ability to serve transportation electrification, yes, right now we are, we have locked in sales for that long position.

But with proper planning, we have the ability to change our strategy based on increased load.

So that's why sometimes you get kind of a nuanced answer from us when you ask, do you have the capacity to serve transportation electrification?

That's why.

The other thing, go ahead.

And I believe that planning, based on conversations that we had towards the end of the year around Council Member O'Brien's proposed legislation, that you anticipate sufficient load as well should the council at a later date decide to require new development to not allow for natural gas heating, and that you have sufficient load for that over time as well.

Yeah, so it's a very, I mean, it's a, we could do a whole session, and I'd love to do it with you sometime about power supply, and in fact, I meant to introduce our newest member of our executive team who's in the office, Tom, or the audience, Tom, can you stand up for just a second?

So this is Tom DeBoer, and he just joined us, I think this is, is this week two?

Week two.

Yeah, yeah.

And Tom, yeah, exactly.

So Tom is going to be replacing, although no one can ever really replace Lynn Best.

Lynn is our environmental officer.

And we've hired Tom to fill in that role.

But he also has a really extensive power supply background.

And we have lots of really talented folks in the organization.

So yes, because not only is there our generation council member, but We have a long-term contract with the Bonneville Power Administration.

And there's another slide that I'll talk a little bit more about that.

But the way Bonneville allocates their system, what they call the federal system, is based on they look at load.

And when we talk about load, what we mean is it's the load on the system.

So at any point in time, the load is how much power is our customer, cumulatively, are our customers using at any point in time.

That's the system load.

And the way Bonneville allocates resources is they look at your projected load, and then they look at the resources that you own or have access to, and they take that back.

And then they put everybody's needs in the hopper, and they allocate their system on that basis.

Now, we currently, are in a contract with Bonneville that ends in 2028. But as we look ahead and as electrification, particularly of the transportation industry moves forward, Bonneville will have different, the various utilities that receive their power from Bonneville, those loads will change.

and we would have the ability to have access to additional power from Bonneville.

So that's a long version.

The other thing I wanted to just mention briefly before I moved off this slide, because it's not listed on our priority slide because we're so close to being done, but many of you probably heard about the energy imbalance market, the EIM.

I know these two council members here have, and so we have worked through our committee and through our council for a number of years in a very thoughtful, careful process that has received multiple, there have been multiple milestones along the way where we have brought legislation to the Council for action.

We did the last piece of legislation this last fall.

And so we are entering the energy imbalance market, which is a market that allows you to buy and sell power in very short intervals based on, you know, in the 15-minute kinds of hourly variations.

And what that will do for us is it will allow us to make better, to get more value for our long position, back to that term, by selling into California primarily.

So, California has a very interesting load curve because they have so much solar.

So, they have so much solar in the middle of the day, and then the sun goes down, and suddenly they have significantly less.

And their state standards, their renewable portfolio standards and other, just like Washington, are requiring utilities to get ever more green.

So their struggle is that when everybody comes home at the end of the day and wants to start the dryer, cook dinner, and put their kids in the bath, that's the time when the sun is going down and there is no power.

So our thought is we have this long position and we will be able to sell into those, we call them shoulder times, we will be able to sell into those shoulder times when our long position has the most value.

And so part of our strategy around that, that you will be very involved in as we work through our strategic planning process.

is to offer time of day rates that can, where we can incent our customers to conversely use less power during those times of day when that power has the most value in the market.

So kind of a, again, for first-timers, it's complex, but we, it is a very cool thing.

It's where the industry's heading.

We would have been the first public utility to enter the EIM, but actually, Sacramento beat us.

We deferred because we needed to put in a new energy trading and risk management system, which we did and it went super well.

And we are in the final stages of our EIM implementation.

And the CAISO folks, it's the California Independent System Operator, they come up here every other month and we are the poster child for an implementation that's going extremely well.

So it's almost, it's not an afterthought, we think about it all the time.

But frankly, it's not something that's requiring a lot of attention right now, because we're in parallel, and it's going very, very well.

Yes, it is April.

And KAISO, it's only on April 1. So you join a group going forward.

So there is a group of utilities that will now go April 1 of 2021. And so they're in an earlier stage.

And I believe Tacoma Power just announced their intention to join.

And I believe they are going in 2020. When is it, Tom?

2022.

And so for the ratepayer, what does that mean?

And does it mean something for April?

No, it just means that in April, we will begin to trade in the EIM into the energy and balance market.

And then the goal is to bring you new rate structures as, again, part of the work that we're on right now.

And then those new rate structures could go into effect January 1 of 2021. And that's where hopefully we would begin to really develop some strong financial value from the EIM.

But again, it is a financial play that over time should help improve our wholesale revenues, which helps our customers.

We offset wholesale revenues, offset our expenses, and so they provide a benefit to all of our customers.

Thank you.

Thank you for being innovative on that and looking down the Pacific Coast on how we can maximize that and it'll positively impact rates.

Well, I'd love to take credit for it, but it's people that came before me here at Seattle City Light, so thank you.

So I'm on the next slide now.

So this is our sources of power.

So we do generate a significant amount of resource and our capacity to generate, so the nameplate, Our rating on our facilities in total is about 2,100 – 2.1 – I'm saying this wrong.

It's 2,000.

Yeah, 2,000 megawatts.

In reality, especially in the summer, and especially you talked about climate impacts, it is hard to know, but we certainly have seen lower generation from some of our facilities.

This last summer, Skagit, which is one of our large facilities, we were never actually able to open the recreational facilities because the water levels were so low.

So that is something that we do think about all the time, and we are thinking about As we begin our relicensing process of Skagit, for instance, we are very mindful that the city's long-term position and City Light's position is that we fish first because we lead with environmental stewardship, but we also know that as we approach that relicensing process, we need to be very mindful of the economics of the negotiations, simply because the output or the generation of the facility is less certain.

So, we, as I said, we're blessed with significant hydropower resources of our own.

In 2018, it was 60% of our power.

We're also the second largest customer, again, of the Bonneville Power Administration.

I am currently the chair of the Public Power Council.

So, we call it PPC, and PPC is the major trade association that represents all of Bonneville's customers.

And there are actually about 100 plus Bonneville customers.

I believe there's 80 some that are members in PPC.

And what Bonneville is, Bonneville is called, it's a PMA.

So it's a power marketing agency.

So the Army Corps of Engineers and the Bureau of Reclamation own generation facilities.

And Bonneville, which reports into the Department of Energy in D.C., Bonneville is charged with really two things, marketing that power and protecting the species and the folks who are impacted by the presence of the dams.

So they work hard to balance their environmental stewardship, and they very much lead fish first with maximizing revenues.

on behalf of the public utilities who are considered or called preference power customers.

So Bonneville has 31 federal dams.

You hear about them most often.

They are the Lower Columbia and the Lower Snake River Dams.

And I think most of us are aware that there's a lot of controversy about the Lower Snake River Dams.

Again, we could have a really great conversation about that if you're ever interested, and it's something that I'm personally really involved in and doing a lot of work and spending a lot of time on.

There's one nuclear plant and then several non-federal power plant.

Bonneville's also operates and maintains three quarters of the high voltage transmission in the Northwest.

And we use Bonneville transmission to bring back, bring power to load from our boundary facility.

So that's that slide.

Top priorities.

So this is kind of a mix.

These are all priorities that were contained in our last strategic plan.

But since I inherited a plan, what I did was I pulled out a number of them.

to me, were the things that we're really focusing on.

And so this is kind of a compilation of those.

It's a heavy lift.

We've got a lot going on.

So creating a customer-centric culture, we've got a lot to do.

I already mentioned redesigning rates.

Pursuing transportation electrification, and that is probably one of the first big things you're going to see from us is our transportation...

What is it called?

We settled on a name.

transportation electrification strategic investment plan.

There we go.

So that's the plan that will and that you as our governing body are required to what we're required to present to you and obtain approval as part of a legislative bill that we were able to get through last year was a very high priority for us for three years and And it will allow us to provide incentives for transportation, electrification, infrastructure.

So not cars, not bikes or scooters, but the infrastructure, primarily the charging infrastructure.

And we can provide incentives for those to our customers similar to how we provide incentives for energy efficiency today.

And so we're developing a plan that will come to you for consideration and hopefully approval.

And that needs to happen.

That is the first step before we can move forward with the new authority that was granted under the legislation.

And just for clarification's sake, are you, as it relates to the authority granted by the state legislature to incentivize transportation, electrification, infrastructure, are you also considering the port transportation facilities as part of that initiative?

Yes, absolutely.

So as we look to transportation electrification opportunities for the city of Seattle and for City Light, we're very focused on mass transit, on public transportation, on ferries, buses.

et cetera, that is the opportunity.

I drive an electric vehicle.

I don't know if anybody else does, but I drive it very, very rarely in Seattle.

So we recognize that the bang for our buck, both environmentally and also from a, quite frankly, from a load perspective, and we'll talk about that, is around public transportation.

So, modernizing operational technology, and some of that is around getting things ready for electrification.

So, our grid, et cetera.

We've talked about that as well in terms of our ability to meet increasing loads related to transportation, et cetera.

We know that we have distribution system constraints along I-5 and other places.

They're solvable.

Everyone has them, but that's part of what that's about.

implementing revised small cell permit processes.

This is actually work that we're doing very closely with SDOT and with Seattle IT, Department of IT.

So again, another opportunity area to brief you if you'd like.

It's really...

It's good government, quite honestly.

It's working together to create a more efficient process that is responsive to the carriers, but perhaps more importantly, is more efficient and effective for the departments within the city.

accelerated utility pole replacements.

I think probably everyone knows we had 26 poles that came down last spring and we've been working hard to develop a plan.

This is gonna be a priority for us.

And from a capital improvement plan perspective, it is probably the number one priority.

And we have been, our CIP looks very different and will look very different looking ahead as we create space for the investment required to bring our pull plant up to spec.

I mentioned Skagit hydropower relicensing, so you will hear about that quite a bit.

Our first action is to file a preliminary application with FERC that's about the licensing approach we intend to take.

That will happen Q1 here coming up soon, but as our new governing body You know, I don't want to be overly optimistic.

I doubt, you know, it's a long process.

But it is one that is extremely important to the city and has the stakeholders are largely three tribes that we have great relationships with.

And so our goal will be to continue those relationships as we move forward through this negotiation.

And then lastly, enhancing the employee experience.

And that is not last, because none of those things will happen without a workforce that feels safe and able to come to work and do their best every day.

We are mindful of that, and we're putting a lot of focus on that, particularly in terms of leadership and best practice management skills, and really holding our officers, me, officers, directors, managers, supervisors responsible for creating an environment where employees can do their best.

Just a question going back to the transportation electrification.

There's both the issue of investments that the utility makes in that infrastructure, but then there's also the question of investments that property owners wish to make to allow for electrification, namely EV charging stations.

I have a constituent, a number of constituents at Puget Sound.

co-housing, I'm sorry, Puget Ridge co-housing, who have been seeking a variance on a three-year-old policy that you only allow for a drop in a single...

One site, one service.

Yes, yes, yes.

Is that something that you're willing to take another look at?

Yes, absolutely.

We're actually in the process of developing a variance process for, we call it one site, one service, and then there's also a variance process that we're developing that has to do with clearance that talks about the distinction between city lights, rules, and the state.

So we are trying, that's part of, quite honestly, Council Member, that's a big part of being both a customer-centric utility and that notion of understanding that customers have choice.

All right.

Fantastic.

Thank you.

Yeah.

So, next slide.

And I'm going to talk a little bit.

I'm going to focus on our UDP program because I think the folks from SBU did a great job of talking about some of the process improvement efforts that we've been working through together.

Disconnect prevention program is not one that we're involved in, and we have our own pilot that we're working on, but many of the other areas that they discussed are actually efforts that Human Services, City Light, and SPU have been working on together.

You know, we have one of the most generous low-income rate assistance programs of any utility in the country.

And again, all of our customers support the program at 60% for electric bills.

In addition to the rate discount, we offer all of our residential customers access to payment plans if they're struggling with a larger-than-usual bill or an unexpected financial hardship.

And we have been reworking our department policies and procedures to clarify that there's a great deal of flexibility.

I think one of the challenges for us as an organization and as a city is to empower employees to help customers with, you know, that one-call resolution at the same time that you maintain adequate controls.

I'll just own that that's something that we're still trying to figure out, but we're making a lot of progress.

The other one, the pilot that we're doing, it's called the Energy Equity Rate Pilot, and it says fall 2020. It's really fall 2019, but then in all honesty, we are still in the process of signing customers up.

So basically what our program does is it looks at, it is designed to serve and provide benefit to the lowest income customers.

So typically a customer that makes in the $25,000 range per year.

So, in the if you look nationwide, the average energy burden is around 4 percent, because we have lower rates than most parts of the country.

We use a different number.

But the idea here is to say we want these lowest income customers to have a similar energy burden as you or I might have.

And so we're using 6% as that number.

And so what happens is if they sign up for the program, they will qualify for a fixed rate.

There's no fixed charge.

There's no tiered rates.

Our typical rate structure has tiers where you pay less for your first block of power and then more if you use more.

So it's a flat rate without a fixed charge.

It's quite low.

The result of the rate, and this was one of the things that took a little longer to design, was to make sure that because the UDP already offers a significant discount, we wanted to make certain that this program actually provided more.

to these lowest income customers than the existing UDP program did.

So that's what it does.

And then one of the really nice things about it is a lot of these customers are people who have passed due bills or are rearage.

And so the notion is that you enter a relationship with them.

We're going into their homes.

We'll be doing as much energy efficiency as we can so that we're really helping to not just solve a short-term problem but solve a long-term problem as well.

And then at the end of the day, using customer donated funds, if the customer is able to make their prospective payments, keep those current, then we would offer a rearage forgiveness at an agreed upon period of time.

So they have a lower rate, and then they have a fresh start.

So again, right now this program is electric only, but it's certainly scalable.

And so I think when we talk with SBU and City Light, and we're such close partners on the UDP, we think about learning from each other and trying different things at the different utilities that ultimately would be something that could be offered either place.

Thank you.

So, the rest of my presentation is going to touch on the strategic plan and the strategic planning process.

So, you know, the purpose of the strategic plan, it's a roadmap to meet customer needs as directed by our mission vision values.

I'm super excited because this is my first strategic plan.

So, like I said at the beginning, I inherited one.

It was a good plan.

And I'm excited going forward to develop a new roadmap for 2021 to 2026. Some background, 2012 was the first year that we did a strategic plan, and that was with our review panel.

And it created, it was a six-year business plan, sets the foundation for our biannual budget, and it endorses a rate path.

So on the review panel, they provide input on the strategic plan.

It's a nine-volunteer panel members represent various groups.

The mayor appoints some, the council appoints some.

This major update that we're doing right now is the first time that we've incorporated scenario planning into it.

So again, one of the things we did was we worked with someone who was very good at creating futures.

And for instance, one of the futures that we looked at was a future that was around Climate change.

And what if climate change is really that thing that happens much faster and is really impactful?

And the idea is you start out with these futures, and we looked at three of them.

And you come back and you say, what do I need to do today so that I can survive this potential future scenario?

So that's where we're at.

So if you could go to the next slide, Maura.

This is just a little more information about who's on the review panel.

You do have a vacant seat.

And I know that we've had some conversation already, so there is an opportunity there to identify, I think, a financial analyst position that the committee could bring forward.

And we would love to have that happen sooner rather than later, because, again, we are in the midst of this planning process, and we really welcome the diverse feedback from the various constituents of the review panel.

So where we're at right now, we're in the thick of things and we're on track to bring you a 2021 to 2026 strategic plan in early summer.

Immediately following adoption of the plan, we'll bring forward our 2021 to 2022, the first two year rate ordinance to implement the first two years of the strategic plan that would be adopted before the council undertakes the 2021 city budget deliberations.

So that's the process.

Any questions on that?

Okay, a little talk about, a little discussion about rates, because I understand, and it's super important to me, and we are doing a lot of work right now on our rate trajectory.

So, in 2017, we built a new retail sales forecast model that incorporated new codes and standards, other technologies like LEDs, solar panels and electric vehicles, and other relevant factors like climate change.

And you see that that new strategic plan shows loads decreasing.

In fact, our loads have been decreasing fairly consistently for a number of years, and our most recent load forecast that's been updated even since the one referenced in here shows that loads don't start to increase again, so that load forecast doesn't bend and start to move up until 2031, 2032. And that's really as a result of, it's the point at which electrification, our assumptions around transportation electrification become greater than the continuing load decreases associated with all the things we just talked about.

And it's really funny, I talk about this, you guys understand this, but when I talk to other, you talk to groups, you know, they see Seattle and we talk about all the growth in Seattle, Crane City, how can your loads be decreasing?

And I think it's because, well I know it's because, as we have rebuilt this city, the properties that we take down to make way for the new are substantially, used substantially more energy than the incredibly more dense replacements.

So we take down a much smaller, same footprint, not as high perhaps, We put up a new building that looks like it has substantially more residents or more businesses in it, but they are so efficient today that they use less energy.

So it is a very interesting place to be because employees are dealing with all of the growth and the impacts of growth, and it's huge.