and chris roy general manager from the light bill from the light all right so we actually have a relatively busy agenda here we're starting a couple minutes late will hopefully be joined by mark a little shortly but our st matter we so the department of energy resources released the m l p version of the solar incentive program if you may recall the state is the state released a program that was budget and in that two week window we responded with a reservation of one hundred thousand from us that would allow one hundred thousand from the air we are so there's two hundred thousand dollars available funding to  continue incentivizing solar development and how much can you explain again what does the homeowner who implements solar receive as a as a rebate so it's that's the way this program is structured essentially they just apply for their twenty a one dollar twenty cents per watt and so are our budgeting figures basically we took what we forecast as an average of thirty new solar installations in the year app applicant puts in for the one dollar twenty cents and that's what they receive and what's nice about this actually the of a big big point is with this program is then the revenue will enter credits the wrecks are then turned over to belmont light to become part timeframes so we should be notified hopefully this week by dio we are that we were selected to be part of the program or optimistic that we will be in then on in december the new program only once we hear that it's official and we can engage and marketing and an outage excellent i think it's great that we're continuing to sponsor programs that help encourage you know greater deployment  or greater right and the wrecks are a big part of our power supply program moving forward and then just a couple other noteworthy items we felt finished the s and p credit rating process it's on the board the results of that this week that should become public this week as well so that reports out and you'll see all the details there i just want to confirm that everything is fully public before mentioning it here but that report is available and the other one you and i think you'll see it is part of the board of selectmen meeting we've been working on the green communities  essentially kind of in the same theme with the other program in content or we're hoping to bring that to the board of selectmen for signature tonight because that one if if we miss the deadline in december for tallahassee he sent us a couple of nice letters just appreciate expressing his gratitude for helping the city of tallahassee through a tough time so i just wanted to recognize that they're back and and there was a great amount of thanks the request that was made in july as you may recall the starting this year some of our contracts has expired and so we were complying with our goal of eighty percent price hedge to secure in that price in july we had another sixteen percent hedged for next year and so in july we asked for ten percent more that brought us to seventy and so then this request is to then bring us to the eighty percent hedged for tw nineteen and then there's also a request again to bring us a little bit more forward on two thousand and twenty for that price hedge the big difference between the two is all they ask is i'm just asking for authorization to enter into the short term margaret power contracts to get that price certainty to the seasonal gas fluctuations this request is for a slightly higher rate than july request so you'll see that in the suggestion language there it asked for fifty eight dollars and that's purely due to the gas markets we expect that we can do better than that but that's kind of the as before is there any effect on the amount of green energy in the portfolio by doing this there is not so that grid power is predominantly gas so to offset this as we mark move forward likely the short offset with rex but for the for the immediate need here it does not have an impact are we still remained at seventeen percent in the long range goal would then be to continue the grid power with something like  noble projects that are in play to replace it with solar or wind or hydro or something like that so that's why we're just looking to make a two year commitment here and will replace it with a longer term renewal project this just predominantly is just for price certainty so we provide and thank you for that's helpful you know the average in january across seven years or sixty five years anyone dollars and you can see that there that it's eighty nine  that mean that those are peak months is that why it's the one in the correct but i don't understand is if we have current power supply contract so how does this work i mean if we have and we have power supply contracts that are at a certain make it work price i mean certain contract price so why does the so we did that we don't have contracts for the peak periods is that what this means yes so it means that we didn't have our we had contracts expire that were replaced with other contracts as it were time place and so that means there were contracts that expired at the beginning of this year that were back built so our two options were either to get a grid short term grid contract like this leaves us room to seize opportunities for better contracts so you will probably come to us late in later this year asking to start to hedge that up to eighty percent exactly for instance we have granite wind at the table that's a small contract so if we had for next year for eighty percent granted wind at eighty one percent somewhere in that eighty to eighty five percent bracket moving out to two thousand and twenty eight we could hedge to eighty percent but being just a little more conservative that leaves twenty percent room to capitalize on say wind projects off i see so sometimes when you're hedging you're paying a higher price just to hedge against the market going to the market price going up exactly right they have some flexibility there yes we never want to be one hundred percent under contract exactly i mean abs point which i agree with is that you know some point we want to have all of our contract based on renewable energy rights act right yes that we're moving had too much you have to sell it back when you have a surplus and the market price when you're have a surplus is always on track require you to buy a certain amount yes exactly and just to clarify the data that you provided  here this is not necessarily what we're paying this is the market corrects to spot market rate correct and so with that in mind then if december january and february the highest spot market prices i soon as markets are probably pretty what this way the ideal time to hedge is when the prices are low but the risk is if we don't hedge now then we're at the mercy of the market price swings and so if we had to now for the short term for a modest price increase over say a july purchase it's just it's basically paying for insurance but in the future we may decide to hedge it a different time of year that might give us a slightly more advantageous price  go back to the end goal so we're headed with this is a temporary measure and so the the and goal is to have a portfolio where we can show contracts expiring and coming in so you'll see it's like a managed financial portfolio right so they certain contracts expire over time in the replays so we're never in a position where we lose a huge percentage of our hedge so we're working our way towards that this is a temporary step for part certainty so this one this one is a little little lengthy so what my hope here was to present you have in front of you three different scenarios and so also in the same packet you should see this this is a slide that we polled from that cost of service study presentation and so to kind of set the stage for what the intent was behind these three scenarios is kind of twofold one post cost of service study that said this it had established financial metrics and targets that we're looking to hit over time and so you see some of that in the upper part of the table where you have your debt coverage ratio fixed coverage ratio cash balances so those are the ultimate metrics that we're trying to hit and so what we're looking to do is kind of juggling in the past we've talked about strategic plan and where we're headed and so the original if you look at the top table part of that original discussion included one percent rate increases through tw three and so one of the things you'll see with the bottom table and in the scenarios presented is looking at it in a slightly different approach where it kind of takes the one percent adjustments and moves it into a into one of a one year thirteen percent rate increase all at once rather than a gradual increase and why i feel that's somewhat important is because a five year horizon in today's utility sector is an eternity and so the approach that i was trying to show here was i think it would be advantageous on our part to hit our financial metrics in year one that way we can engage in these strategic planning discussions knowing that the the financial stability of the organization is already set and so so that that was key point number one and as part of that those financial metrics so for an example fixed charges you'll see this removes fix charges because fixed charges could be and i would expect to be a lengthy discussion because a lot of perspectives on what should be done with fixed charges should they be higher or lower that's a big discussion when we have time of use rates revamping how we collect revenue you know holistically and so some of the i think concerns too strong of a word but one of the points of awareness i had was i didn't necessarily want to link our financial targets with discussions about how we approach the street strategy of progressive rate design so the idea here was to get the financial squared away through traditional rate increase  you'll see three percent there's more details that get into and then that leaves us for at least a year to two years where we're hitting our financial targets and we can engage in a very thorough and public process on how we want to change our rates for the future because over the next two years there's going to be a lot of you know a lot of change in how utilities are looking to collect their revenues and then also incentivize the strategies we're looking  for climate change and electrification and adoption of new power supply policies and things like that important context around that so chris and i discussed over the past couple weeks coming out of the casa service study the need to put together a strategic plan which i think we talked about at this table a couple weeks ago it was originally some thinking that perhaps we get through the strategic planning process and then we then we revisit them at the rate plan i think upon reflection we realize that to do the strategic planning process correctly it's probably three sick perhaps longer we want to get community input we want to be thoughtful about a lot of the longer range steps so to delay a just meant to the rate plan seemed like it would be  sort of detrimental and that we would perhaps want to take a small step now to address what we thought we needed to address to put a light in a good position financially and that would buy us a bit of time to revisit the broader strategic plan which they will come  later but that's something that you next week or in a couple weeks will come back to us with sometimes a plan for the planning process not going to get tonight better but we will cover that exactly exactly and so the three scenarios here invested in with in with the snares are also some sentiments i'm looking to glean from the conversation about how to approach a great rate increases in general so just to highlight the differences with and then answering questions along the way so scenario one is is that so you can see before the one of the big points actually i'd like to make two is one of the exciting things as well this increase embedded in the cost with this our i know it has been formally adopted but as part of our budgeting process because we had to establish costs that we're expecting to occur next year and looking at policies that could be implemented included in this is our contribution to the roadmap targets for the climate action plan and so also one of the big things for me is with this three percent rate increase it will allow us what we baked into the financial and twenty and so obviously that percentage varies depending on the markets because that has wrecks in that strategy but for argument's sake it's fifty percent and the forecasts we put together and so what was really exciting to me in a way is if you look at the three percent rate increase one of the tables in there is how it hits each consumption level in kilowatt hours and so you can see the average average bill and belmont i think is somewhere in the order of five hundred and fifty dollars kill what hours around there so you're looking at a one dollar fifty cents a month increase for the average residential bill to help support moving our powers piple for to fifty percent automating next year and so there are different ways to do that so scenario one is basically hitting all the different rate classes as part of the cost of service study scenario two  scenario two eliminates any increase on them plus municipal wise the municipal thrown in is for me and you know our costs here in the town exact just for discussion purposes that also included in this three percent do increase in that upfront you know one of the things i anticipate coming up in the next in discussions through two thousand and nineteen is the pilot discussion and so one of the things that i wanted to include in this was by having a rate increase a larger rate increase upfront provides more margin to have discussions about what a pilot should be the pilot's been the same for ever ever  decades so so i think it's more than a fair request to revisit that and and so part of that you know when there is the power supply goals we can hit that with the three percent we can look at the pilot goals in that mix and also included in there are some of my thoughts around other potential projects such as knowing what i've been involved with for expenditures for strategic reached excuse me strategic planning so that's in that  i would think that doesn't have much of a change in behavior does it mean that people consume less when they go up about fifty a month you know i think that it's the it's the yeah it's not about the eighteen dollars   typical communication with rate payers in this process is it just the bill just change or do we not message people in their statements or has it work sure so that was also to add into that i would consider this to be your traditional rate increase have done for you know generations and we're taking this approach at the very end with this three percent increase of three percent instead of waiting to go through a time or use fixed charge process where you're having a whole revamp of how we collect revenues so this would so using that timeline as an example there's it's a thirty day so it's a rate hearing so that the there's one public effect we're hearing separate meeting or do we do it during one of our like during and so actually you know they remind me of another important point and somewhat related to that so that's the public process that's really just yours your typical public hearing in a thirty day window right implementation the other important piece here actually almost forgot about was we use a three percent increase here we do is also kind of reset how we use rate stabilization and the p p t a you know based on the training i've received i think we can adjust how we use the p p t a will will rea corn that is a p c a to be more industry standard but really explain this terms of sort of the purchase power and transmission adjustment we would repurpose that to be the power cost adjustment was for me personally is easier to understand that way which is essentially the mechanism used to adapt to price wings seasonal price wings according to fuel markets and so what you should see is a rate increase in november and then that rate increase goes away in april that should of what a p c a or p p t a is used for and then when you have a longer term price impact that we forecast that's when you employ employment rate stabilization the way we do that today is essential part of our operating revenues we just transfer three hundred thousand dollars every year regardless of what's happening and so this would also reset those mechanisms to align ourselves with more of the traditional training that i've received that we'd implement that i mean this is what you have s are doing right but you could do scenario two of them assuming you some stabilization fund is absolutely not inclined to support you know increasing even though it's small dollars mean they have the low income six percent absolutely that's just to me doesn't feel like the thing to do but support a three percent increase but if we could use some stamps fine on scenario two let's say where we examine the low income in the midst of all and see what reduction that might have and get you to where you need to be as an indicator you know it's for they give you some breathing room to consider purchase power supply contracts think of that nature to get greener than i can see myself that john that is so nice hybrid idea the question of whether or  terms of its impact on this table zation fund it should be modest along those lines i don't want to burden you with fifteen scenarios but if we could also just call it two percent rate increase it asking for a  don't just ask exactly but you could do that probably the stabilization fund as i was saw that is like if like the like we had twenty two thousand and eight or something where the town fuel rates went crazy high yes and we were having trouble remember getting that you know heating up buildings because it went to the markets as well not to gas was four dollars and something a gallon and you know that that's what the stabilization funds for not to get greener i mean that's that's not an emergency although it's an emergency for climate change i get that but it's not like a market emergency it's something we're doing to meet a policy goal to do that and it's also the opportunity where we could just choose not to address that rate as well right you could give us a version of this that would be three percent or two percent across the board except for that that particular rate cuts do we have a policy on what are balanced in there you know different like we have we have somewhat of a free cash guideline if you will in the reserve policy town i mean muni's typically have a policy a relates to the amount of stabilization fund they should have that's so difficult to do is have some consider mean perhaps you know to address your point adam that is certainly don't want i mean it's used to smooth out the rates and in times in which as adam indicated there's a crisis or something that would impact our you know all of our rates but i don't know what our balance is today's that low is at high so you could set a policy for that we have about four million dollars total in stabilization some of that is subjective of what is an appropriate amount to keep i personally i think the four million dollars as it is is a comfortable amount and so that's where say the two percent rate increase scenario then we wouldn't have to dip into stabilization we leave it i would also say we would continue the practice of transferring three hundred thousand over and so part of the other thought there is if you recall this year because we didn't implement a p p t a or rates tab for the capacity markets th scenario i certainly like and maybe have a chart like this but with the stabilization fund with all the scenarios and how it affects the balance in the meeting with like a line like what you say the minimum balance should be like we do with you know free cash policy that we have to  ideally would be i think to make a recommendation to chris perhaps that you can make the adjustment that he can then bring back to us that would be meeting on december with taking a position  this and then having with you on that i guess that's the question does does the public hearing have to follow the vote you could separate like if you could separate the meetings or if you think one of to clarify that so i was going to build off of scenario two with rate stabilization funds and i'd still like to see a chart of the rates on the chart with all four scenarios ok maybe with a line on there is and we can have a great hearing in early january and if it looks like we want to vote it will go into effect in march we put on the other gender you know picking dates for twenty s december th as well that sounds good ok changes here but you had a couple of additional changes that you wanted to put in front of the board for consideration back we so trying to tie all these things together this is round two of these power supply policy suggested  citizen it's confusing to go and do the choose your own adventure to find what does that actually mean and and how do i use you know provide meaningful feedback on that and so one of the thoughts i had was essentially simply went in there renewables each year and you can see that there i gotcha it's all the same but that one changes the other one doesn't the exact so call them two however i think is the more meaningful column and that's the one that adds in a says that's great that's what the state wants to do what is belmont want to do and so and so that's where column two comes into play to say should we adopt something like an energy committee roadmap or any other policy metric that says we want to to take this approach to what is the climate action plan already committed which we are committed to recall a time mean and maybe i'm mixing the two up here that the energy committee is going to put forth an article in the you know i mean next year in which they they committee so this seems like a good next step it's aligned with the climate action plan and we may choose to amend it yet again and the power policy is always intended to be a living document in fact this is our nd time coming back to it in less than a year but it's  and i just want to point out one other key component so in order to create a budget plan our supply budget we need to know what our costs are going to be for the next year and so this also if you'll see that on page three  the we replaced the existing paragraph with a new one that basically uses the table to to clarify how we treat renewable energy credit purchases so now we have a means to calculate cost for power supply or power supply budget updated power supply policy effective development two thousand and fifteen nd all in favor asses thank you very much thank you all right and then finally and we are in the remaining two or three minutes although i would say take the time you need on this because it's a it's an important topic you're going to do an update on the solar feasibility research that you have done right into the incinerator site yes so this one so we reached out as we  touched upon it the last meaning i reached out to solar design or so ships and through that process we were really looking at what are you know opportunities do we have to use me to leverage solar to support site and so really what all the feedback indicated was because that the capping process is a two to three year process and we're in such a turbulent time with renewable energy credits with import tariffs on solar panels with expiring investment tax credits that the the solar developers really would would not wade into providing a bi to to indicate what they were to show what it could cost them to develop solar on the site and so they really do so s t a came back to me and said we really you know there's no progress to be made here because there's so it's so one certain that the financing entities won't touch it and and so their recommendation that i tend to agree with is the look at a storage only option that's more flexible and can be placed you know more flexibly than a solar array and doesn't even actually necessarily have to be on the cap but really that twenty three year horizon is going to kind of referencing something you know what we said earlier in the meeting it's an eternity in today's utility and scent of world so the financing entities just kind of refuse to participate and so we're shifting gears to look out of storage or you know what revenue options are there for storage only in the immediate short term and you think that will be probably i mean repeating we can make an effort to get something at least  unfortunately kind of hoping for some sort of one of these five choices to sort of naturally rise to the top but unfortunately they're all kind of in the mushy middle and it's a little frustrating but it is what it is and the fact of the facts and if storage doesn't with storage may work out of storage works out that's an idea too if the solar array doesn't work out as a commercial all money making enterprise that doesn't work out it could always be a component to something else you could do an ice rink with solar on the roof but that's not a solar farm it's just a building w a digester study that we commission is a forty five day study or so the end of the year probably isn't going to happen just because we're not going to forty five dollars days the end of december we're not going to be till january but the more the more data we can get the sooner we can get it moment thank you very much chris so i think the last two things we have are just prove all of minutes they looked good you ever if you take those those are some of the particularly the september th one the joint meeting