WEBVTT METADATA Video-Count: 1 Video-1: youtube.com/watch?v=ep72o5c3WxM NOTE MEETING SECTIONS: Part 1 (Video ID: ep72o5c3WxM): - 00:00:00: Select Board Meeting Begins: Dunstable Community Power Program - 00:01:44: Electric Supply Contract Expiration and Market Volatility - 00:05:48: Locking In Rates and National Grid Timing Discussion - 00:09:41: Board Discussion: Rate Competitiveness vs. Market Volatility - 00:11:55: Motion to Authorize Electricity Supply Contract Signing - 00:12:49: Bids Coming In, National Grid Question and Meeting Close Part: 1 1 00:00:00.800 --> 00:00:19.920 Okay, >> there he is. >> All right, phone. So, um >> Oh, there. There you are. >> Yeah. Yeah, I'm on. So, I'll hang up. >> All right. Okay. Bye. >> Hey, Karen. >> All right, we're all here. So, let's 2 00:00:19.920 --> 00:00:37.120 >> Karen's got short time, so we'll call order for the select board. >> And here we go. All right. What do we got? >> Okay. Um, so we have our consultant, our municipal aggregation consultants here. 3 00:00:37.120 --> 00:00:55.360 Um, based on a meeting we had, I think last week or two weeks ago maybe, I don't know, time flies. But um given the conditions of the energy market right now um and after talking to them, I thought it was a good idea to bring them to the board to consider our options for 4 00:00:55.360 --> 00:01:12.080 the Dunville Community Power Program to make sure that um I guess you're you understand the market conditions. Um you understand what options exist for us. um with the keeping in mind that the goal 5 00:01:12.080 --> 00:01:28.720 of the program is to um provide stable rates for um our users and uh so you know ideally we're saving money but in the long run if we're able to provide some stability without these 6 00:01:28.720 --> 00:01:44.320 massive spikes along the way that's um that's that's the goal. So um with that Paul are you gonna take it away or Kim? I'll I'll take it away. I've got some um >> Okay. >> I've got some slides we can we can walk 7 00:01:44.320 --> 00:02:01.119 through quickly. And what I'll do um can you guys see the slides there? Okay. >> I'll um since time is limited, I'll I'll just we did some background slides or what the status of the program, we can go back and look at these later, but since Kieran is tight for time. So 8 00:02:01.119 --> 00:02:17.200 >> the big issue for us today is that the program's electric supply contract is coming towards its end. It ends in December. you have a little more time to enter into a new contract, but given the conditions um with the increase in electricity prices due to the war, um it 9 00:02:17.200 --> 00:02:33.519 may be prudent to try to lock in prices now. And so those would be the questions when to when to lock in and then what term of a contract. So this graph here shows electricity prices over time. These are forward prices in the market. We're over here on the right with prices 10 00:02:33.519 --> 00:02:49.440 coming up quite rapidly as a result of the war. In the middle there is the spike we had as a result of the war in Ukraine. We don't know that this we'll see a spike like this, but some of the conditions are similar. This was caused by a shortage in natural gas. Um we seem 11 00:02:49.440 --> 00:03:05.519 to be headed in that direction, although no one can guarantee for certain. Um these are the prices we've been seeing in recent bids for electricity supply contracts for aggregation programs. Um we we have prices for two three 12 00:03:05.519 --> 00:03:21.519 different terms here. 12 24 36. If we just focus on 12 for the moment, we can see that before the war started, prices were coming in around 15 cents a kilowatt hour. The early days of the war, it ticked up a little. The last two weeks, it's gone up significantly each 13 00:03:21.519 --> 00:03:38.000 week. And it's our understanding prices might even be a little higher today than they were a few days ago because of events yesterday. Um we can't know for certain what will happen um because we don't know what's going to happen uh in the Middle East. Um but we can draw some 14 00:03:38.000 --> 00:03:53.920 reasonable con things that might happen given likely outcomes. So outcomes there I think the likely ones are either um it gets better soon, it stays the same for a long time or it gets worse. Um, if it gets better soon, ultimately that would 15 00:03:53.920 --> 00:04:10.400 bring prices down, but not right away because it will take several months for the electricity and energy markets to get back where they were. So, we might see a slight decrease, but likely not a big one fast and not a big one in your timeline. Um, if things get worse, of 16 00:04:10.400 --> 00:04:27.199 course, prices will go up. And if they stay the same for an extended period, they're likely to go up too because the current conditions that are driving prices up will continue to be in place. Oil won't be flowing. Natural gas won't be flowing. And then in particular, once 17 00:04:27.199 --> 00:04:43.680 we get towards winter, there's more of a demand for natural gas. And that's what could cause um natural gas prices and then thus electricity prices to increase. Um, if you were to lock in a contract now, um, it would be higher than your current price, um, but we 18 00:04:43.680 --> 00:05:00.479 could have a pretty good confidence you'd be lower than basic utility basic service. Utility basic service is 15 cents. Now, that's a pre-war price. The war is already putting a couple of cents into these prices, so they'll likely be um they'll likely be higher the next 19 00:05:00.479 --> 00:05:17.759 time. Um and then this just for illustration this is how another town this was the to be the town of Foxboro their experience during the Ukraine war um before their program operated where they're in their their program is in the orange they were below basic service 20 00:05:17.759 --> 00:05:32.880 most of the time above basic service a few times sort of stable as compared to those uh basic service prices during the Ukraine war utility basic service prices more than doubled nearly tripled for one period period. The town locked in a 21 00:05:32.880 --> 00:05:48.639 contract there, avoided this high price spike, provided stability for the residents. They ended up being a little higher than basic service for a while when energy prices came down, but on the whole, they felt pretty comfortable having given customers this orange line 22 00:05:48.639 --> 00:06:04.960 rather than the blue one, which is the point Jason was making a minute ago. Um, so if the town were to lock in, we're scheduled to receive bids later today. You don't have to take one, but we'll have real bids. As of yesterday or the day before, the prices might have looked 23 00:06:04.960 --> 00:06:21.840 like this. Um, today, we'll see what we get. Um, you'll see there's a big difference between 12 months and 24. That's because the big impact of the war is in that prices for the next year and prices for the following year haven't gone up nearly as much. So if you lock 24 00:06:21.840 --> 00:06:36.479 in for two years for example, you kind of average out that current very high price against a longerterm lower price and provide um a lower price for the customers. And then if you were to go 36 months, you have even more of that 25 00:06:36.479 --> 00:06:58.560 effect. So that was a lot from me. I'll stop there. So can you Paul can you also talk about the timing of national grids when national grids go national grid goes for market so they understand the context we're making this decision in. 26 00:06:58.560 --> 00:07:14.319 >> Exactly. So national grid goes out to bid in mid June and we'll know in mid June what their price will be for the period starting in August. That's and it's from August to January. That's an important price of theirs because your new price will go into effect in 27 00:07:14.319 --> 00:07:30.080 December. So, we won't know until mid June what the national grid price is at the time your new price goes into effect and the the time it's announced. So, in an ideal world, we might wait until June when we know the national grid price 28 00:07:30.080 --> 00:07:46.319 before choosing a price for the program. The reason not to do that this time is it there's definitely a risk that prices will be a good bit higher if we wait until June than they are now. And while it's not impossible they'll be lower in 29 00:07:46.319 --> 00:08:01.360 June doesn't seem they'll be a whole lot. There's reason to think they could be a whole lot lower. So there's a risk they're a lot higher balanced against slight risk maybe they would be a little lower. 30 00:08:01.360 --> 00:08:18.479 So the I I think the question is Paul you correct me if I'm wrong or Kim you too. Um I don't think there's any question that when we bid next it won't be any later than when National Grid goes to market. 31 00:08:18.479 --> 00:08:34.320 So we will e we should either align our bid with national grid and if we do that we know that our rate will be in line essentially we think it will be in line 32 00:08:34.320 --> 00:08:51.200 maybe a little less than what national grid um rates are in this case we're talking about potentially doing that earlier because the volatility of the market right now because essentially driven by the war is 33 00:08:51.200 --> 00:09:07.279 such that we're concerned that the increase is going to be dramatic over the next few months. And so if we lock in early, which does also pose risk because who the heck knows what's going to happen. 34 00:09:07.279 --> 00:09:23.279 But if we lock in early, there's a potential that we avoid the increased spike that it looks like the market is trending toward. And again, we provide more stability for 35 00:09:23.279 --> 00:09:41.040 residents in the program. That's the that's the question to me in a nutshell is do we want to try to beat this to the extent we can or do we want to just say you know what we're okay with following national grid schedule we're 36 00:09:41.040 --> 00:09:56.800 okay with being essentially competitive with their rate and go from there. Um, to me, if you're asking my opinion, I I don't think this is going to get any better anytime soon, 37 00:09:56.800 --> 00:10:11.839 especially within the schedule we're talking about national grid bidding. And um, and for me, if we can if we get rates that are, 38 00:10:11.839 --> 00:10:29.440 you know, competitive with the current basic ser basic service over a three-year period. To me, that's not a bad deal. Um, but it's it's really up to the board on how they want to want to move forward. 39 00:10:29.440 --> 00:10:49.440 Does that Paul, does that all make sense to you or do you want to correct anything I said? >> No, that's absolutely correct, Jason. Um if I may speak um I think providing stability for the the residents is one of the most important things and we may lock in a little bit higher rate but I 40 00:10:49.440 --> 00:11:04.320 this world's a disaster right now and I don't think it's the war is certainly a tremendous um factor in this but it's also this administration's just unpredictability in general and other policies that 41 00:11:04.320 --> 00:11:21.200 they're adopting that is just going to put us in this unpredictability state for a long time. Um, this this war is going to go on a heck of a lot longer than we think. There's not a true word that comes out of this president's mouth. So, we have no idea 42 00:11:21.200 --> 00:11:38.079 where this is going to go. And it also doesn't mean that if this gets resolved that he's not going to jump into the next one. So, I think stability at even a, you know, a couple cents more is is worth it for us to to jump on now. 43 00:11:38.079 --> 00:11:55.240 >> And folks can always opt out. So, >> that is true. >> Correct. >> Yeah. If they think they can get a better deal elsewhere, have at it. >> Go for it. Yep. >> Go for it. >> So, I appreciate the work here and I'm happy to read a motion if you like. 44 00:11:55.839 --> 00:12:11.040 >> I have one. Yeah. Yeah. You good? >> Yeah, I think we're all set here, Leah. Um Okay. Well said. Um yeah, well said. So, I move to authorize the town administrator to sign an electricity 45 00:12:11.040 --> 00:12:29.360 supply contract for the Dunstable Community Power Program of no longer than 3 years to go into effect at the expiration of our current contract with Dinery Energy Services in December of 46 00:12:29.360 --> 00:12:49.200 2026. >> Second. >> Second. Sorry. >> All those in favor? >> I >> I >> I >> All right, you're free to go. Karen, >> sorry guys. I got a jet. >> Okay, >> see you Karen. Thanks, guys. 47 00:12:49.200 --> 00:13:04.160 >> All right, good. Um, anything else that we needed to review with this? >> No, I think that's it. Um, as >> Oh, yeah, I do think that's it. >> Yeah, Paul said, as Paul said, we're getting bids. Um, when are they coming in? I don't know. Later this afternoon. 48 00:13:04.160 --> 00:13:21.120 uh later this morning and I think we're scheduled to meet. What time, Kim? Is it 12:30? >> 12 o'clock. Yep. >> Okay. So, I'll I'll let you know what the result of that is um later today and we'll go from there. >> I have a question. It's 13. Yep. 49 00:13:21.120 --> 00:13:36.240 >> I know. >> It's just kind of a side question. Is National Grid generating >> No, they're not. Right. >> Correct. >> They're out of the power plant business. >> Exactly. Right. They're they're buyers just like the town. Yeah, they buy them. 50 00:13:36.240 --> 00:13:54.160 >> Okay, I get it. >> All right. >> Okay. >> Okay. >> Good. >> Thanks everybody. >> All right. Bye now. >> Appreciate it. Thank you. >> Motion to close the meeting. >> Uh I motion to close the select board 51 00:13:54.160 --> 00:14:05.279 meeting. >> Second. All those in favor? >> I >> I All right. Good. >> Thanks all. >> Thanks everyone. Bye now. >> Okay.