recording in progress. All right. All right. Look at us. We're so precise. 6 o'clock on uh Wednesday, November 12th. We will call this meeting to order. >> Um first, thank you to the North Reading Town Hall for hosting us tonight. We
really appreciate the opportunity to meet outside of our usual space and um engage with folks in uh all of our different rateayer areas. Um we'll do uh public comment. Uh the medium is being audio recorded remotely on Zoom and live
streamed on RCTV. Um the RMLD Board of Commissioners recognizes the importance of hearing public comment at the discretion of the chair on items on the official agenda. Once recognized by the chair, all persons addressing the board shall state their name and address prior to speaking. It is the role of the chair to maintain order in all public comment
or ensuing discussion. Do we have any public comment? >> We don't, but I will say Karen Herrick is looking to attend this in some form tonight, so she might hop on at some. >> Okay. All right. >> And Rebecca Lieberman sent an email.
>> We are. Yes. >> Is are we formulating response or is it >> Yes. um not for this evening but we are formulating a response to reply and the topic of um >> well the topic is timely in a sense she's talking about
>> right >> how we how we define resources and I think the answer should include that's exactly what we're working on so >> and it's what we work on every year when we go through the budget process yeah so >> all right as long as there's a response to a public comment
>> any other Okay. Uh, any liaison? Erin is going to try to join. >> Erin, I I don't um not sure I have anything new since last meeting except that the uh charter
committee did meet and we will present at the town meeting and I'm covering sections three and four which includes our definition as as commissioners. Um, but no, I haven't prepped or anything.
There's no no script. There may not be a script until I start talking and then it'll be recorded sometime in December. >> Yeah. So, >> we're not quite through one and two yet the first night. So, >> so yeah.
>> Um, okay. So, that's you're preparing for that for tomorrow, right? >> Okay. >> That's the next >> Yeah. >> Next session. There was no change to it. So it won't even be discussed. >> No, there were changes to the
>> Hey Ray, >> your portion. >> So it won't it won't be brought up because it was we didn't change anything. So there >> it's not going to be able to be coming up in town discussion. >> It may not there may not be enough changes to bring it up in the town
discussion and word changes, but that's technically we changed a few words. We changed those few words everywhere. So may not >> Dave, did you have a comment? >> Oh, I was just asking Ray, are you gonna are you going to present something or like like Bob said, there's no change?
>> Um, we were going to go through the charter by each person on the committee talking about a couple of things. I haven't talked to anyone else on the committee and I shouldn't do that. >> Okay. Uh I was supposed to talk about the no changes that were happening to three and
four but um I that won't occur. That won't occur. All right. So um >> so just curious >> yeah the only the only things that are open for discussion are substantive
changes to any one of the specific articles and the the uh gender neutral language does not constitute that. Right. So it has all streams power portion. >> Okay,
>> I get a night off. >> You may want to commit committee members. That's what the general consensus >> ideally short presentation presentation.
Um okay. Okay. Well, thank you again for being on that committee and representing RMLD for that. Um, okay. We're going to move to VC and the CAB for a secretary appointment. >> Okay. So, uh, we will need to appoint a
new secretary for our cab and um, do we have >> Yeah, I'll nominate Charlie second. >> Second. >> Okay. All in favor? I
>> Okay. So, we have a motion actually be appointed after >> there. Second motion. >> Yeah. >> All right. >> We nominated. >> Okay. Charlie, thank you for taking on that role.
>> No problem. >> Um, okay. So, we'll move to the operating budget presentation. >> Hi, I'm Paul Hu. I'm the interim general manager and uh my good friend Patty is going to present. Take it away.
>> Thanks. So, this cover sheet is for operating in the capital budget. So, we can move on to the next slide. And I just want to double check that we are sure that we can hear Patty where she's sitting on the recording. >> Yeah, you could hear me from here. Great. There. Thank you.
>> Okay. So, this um this slide shows the the process and the timeline and the collaboration over several months starting in June and July. Um I'm not going to read every thing under each month. Um it's it's pretty
standard. But um I just want to mention in October we sent two drafts. One on October 1st and the other one on October 23rd. And since then we finally reviewing and we actually have a few
more changes that we will make to the final. We haven't sent you the final because there might be other changes that we will send um after the meeting. So the next slide please. Okay. So this is the beginning of the
operating budget. Okay. So these are the revisions that we made since after draft two. Okay. So we eliminated or paused four more positions. Draft two had six paused
and the new net change is 10. And then um one of my slides coming up will look at the staff and levels the tables um on slide five which will show the different tables from three years. Uh the other
change that we made was we there were three expenses on budget that um we dug a little bit deeper and realized that we had a a bad um rollover carryover formula and when we took the more
current information that was available we were able to get more concise budget numbers. So those of the um appreciation, the payments to the four towns and the payment to the town. And then there was a small change to the
projected rent which we we realized the rent went up. It practically doubled and uh we realized that when we did the budget figure, but my projection for 25 because 25 is not over yet was a little low. So we moved that up to 300,275
which is more realistic. All slides in this presentation are updated with the about. This is the table that I mentioned and it just shows as of the fall of the prior year which was when we were doing the budget for the following year. These
were the staffing levels that we had on the budget opening total. So there you can see that since last year's budget, we've eliminated a net of 10 positions.
We eliminated in 14 and we added two of them swaps in departments. They eliminated one and added a different and that's the dollar associated with that. Is there more information in this
on any of those decisions or questions? >> You mean where did they come from? >> Well, more like um you know looks like we've pulled several out of building facilities engineering and added several in accounting purchasing if I'm looking
at this correctly. >> Oh maybe I'm not looking at I'm looking at open position >> correct. So the column on the left is open. >> Okay. So I should look at total. >> And the biggest change is two
in GMHR, two in grid, three in IRD. >> So there's one less for IRD, one less protected for IRD. >> Uh I sorry I see 13 total positions. >> Sorry, three less. Sorry, three less.
Yeah. >> So, >> so the coming so the 2025 budget IRD has seven open positions that get you to that 13. >> Right.
>> 26 is has two open positions. Eight are filled. >> Right. I'm just looking at totals. So, you believed last year that you needed 13. Now you're confident that you only need 10. >> Yeah, I last year was um there was a lot
of transition right during the budget >> uh season. We were still hiring people and all that. >> And uh now the team has stabilized and we just have two that we want to one one is actually back field. uh the other
one uh we will make some adjustment to the position and then post for that. So the team is pretty filled out. >> Okay. Any other questions on that slide? Next slide please.
So the budget compared to last year went down a little more than four and a half%. And these are some of the the reasons and this is budget to budget. So this shows significant changes to the
budget and some of it is the change in the headcount but there are also uh instances where we have more labor going to capital in two of these categories than we did last year. And that's
because of the two projects that we have going on the AMI and substation. um administrator and general salaries is down 20% and that's from the decrease in the headcount maintenance of general plant that's um
the IT category of that's that's for the whole whole place and that went up only because we were classifying software as a capital and really software subscriptions is operating so we put it where we want
and that rent expense went up because the rent practically doubled. Um, legal expenses are up, but it's lower than the actual this past year. And, uh, we also don't have the in-house council anymore.
And the interest in count was just a a bad number that was rolled over year after year. We actually probably earned over a million dollars when 25 is over. Um, and it was projected to be 300,000
and I'm projecting for 26 775,000. So that looks like a a big number, but it's materialistically not helpful. So anyway, the the the decrease in the budget was 4.57 and the dollars are
what the budget was in last year versus this year. >> I was just going to ask the dollars. It's not in this version. So >> Oh. Oh, right. Right. That's because I updated the same. Sorry. >> So down about five four. Sorry, you said 4.8.
>> Yeah. questions on that. >> The uh I have a quick question just the rent part is that remind me of what we rent the warehouse pack. So that's exclusively the rent number, >> right? Well, it also goes in also within
there goes the utilities for the rent >> place. So it's you know gas and electricity and all of this stuff you know taxes. Okay, >> next slide please. So, this is a slide that maybe is
obvious for some of you or all of you. Um, you might be wondering why capitalized expenses are on the operating budget, but I thought it was important for you to know or realize that anything that's capitalized is not going to hit the bottom line in
that year or the operating budget, but it will be realized over uh the start of the following year at 3% depreciation and any construction in progress like the Wellington substation, the
depreciation is delayed until it's placed in service. So, you're spending the money and it's not in the bottom line and it's not part of the operating budget. >> Question, is there any change in kind of how we
thought about any of these expenses versus prior years? Well, like I mentioned in the last slide, some of the labor is more of the labor is categorized as capital than in previous years, >> but the rationale for recognizing that
as capital, the rest of the operating has not changed, >> right? The the team is going to be working more on capital. >> The um on the transformers that were purchased, >> right? >> Those are capitalized. >> It's right there. Yeah, transformers and
leaders get capitalized as soon as they arrive. So that Yeah, that's right. Even though it's part of the Lington substation, they are depreciable right away. Good question. Okay, so this is the condensed version of um
what you see in the budget book on page 87. I've consolidated the O andM and the GNA just for um purposes of displaying it more concisely. Um
it's the numbers might be a little bit different because of the changes that we made. So we're projecting a our budget will be lower um but our net income will also be lower as as well for next year. That's your
>> the net income versus the budget or the net income versus >> well for uh county at 25 we're projecting almost $13 million, >> right? >> And then 26 we're projecting >> right >> 10 million. And that's mainly because of
the difference in the GNA expenses. And Erin, can you um pull up um slide 19, please? So the GNA went up is going up um 2.8
>> and the components below make up most of that 2.8. And one of the one the biggest one is the 1.8. a in um efficiency and electrification. And part of that is we were short staffed for a lot of the year and the
rebates weren't getting processed um as fast and now we're catching up. So we will probably be processing some of those rebates in 2026 and then we have a new ones that will be processed more
timely. So that that those two numbers the difference between those two numbers make up the majority of the uh 2.8 >> that's that's the decrease in revenue of for the projected year because we're we're putting it back into rebates and into
>> right >> integrated resources. Okay. And then just three more items that had some variances in the reason why. We move on to slide nine. So this should look familiar to some of
you. Um this is the um top part of the statement on page 87 in the 85 in the budget book. And what this does is it shows that power supply is a good majority of our budget and it's 165.37
um and other fixed expenses which in definition is up there um make up another 10%. So 75% of our expenses, our budgeted expenses um are fixed.
>> Um so the I think I just answered my own question, but the payment to reading is based on kilowatt hours regardless of of right and it's fixed. It's all it's
decided to be the same. But for the remaining four town for for the four towns above the line payment is based on net flat. >> Correct. >> For the four towns. Yes. Yes. >> Next slide.
So this is the other half of the other part of the um statement from page 85. And this shows the semivariable cost and the definition is there. Some variable cost is provides a fixed um and also variable components that
fluctuate on output. So again the uh top now this is an order of impact on the budget and the top is labor and then we see the capital labor coming out the overtime and the capital overtime coming
out and then the pension and the um the benefits and the capital portion coming out. And then everything else is, you know, small in comparison. So it just shows so much of our
budget is um fixed or labor and not too much wiggle room on the other things. >> Yeah. >> Spend a fair amount of time trying to understand the expenses. >> Where do you want to know where that is? >> Yes, ma'am. Well, most of them go into
the energy efficiency expense, which is eight down >> except for the >> No, no, I'm not energy. I'm sorry. I'm sorry. It's um that's not that would probably be an other power supply.
>> Well, no, only the um 35,000, right? But that's the majority. That's the majority. >> Yeah. >> Okay. So it'll be it'll be going it go into the fuel and energy cost. So it's you going to the it's
>> yeah it's going to the power supply >> power supply in the previous slide right >> that will be actually the service fee I think we group it into the capacity cost right right now that's the the 30,000 yeah
>> so so it be sure as a fixed cost of the power supply >> it's not consulting >> excuse me >> it's not considered consulting >> not for the power supply but They we also pay them for uh so they have a
energy efficiency and conservation group. So as an owner we pay them 2400 each month. So that's about 30,000 a year. That's part of the IRD, you know, general um expense.
>> Uh and then we also pay them fees, different types of fees for the solar array program. they that they help to process application for. And then there are a couple of other services that we have. There's a EV RM RMLD drives
electric website that they set up for us. Um and then there's a peak analysis peak alert analysis service that's you know there was a contract there before
my time. So we are actually looking at all these services will Jason become the GM uh he'll help us make that there at town meeting um running noted a significant increase in health care
costs that was a budget guideline budget item change um have you seen that that impact on the wedding rights they they projected that for um
the and the warrant. So, I didn't know if if there's been any communication about that on the rates to our own. >> We was asking if we heard from the town how much the health insurance is going up. Is that what you're >> correct?
>> Yeah, correct. I have not, but >> it might end up being that we could be under budget for 26 if that's the case. >> They have a hard or a good number now, but I think they was like $340,000
that they came to town meeting for >> I don't think all of that was raised. like specific benefits with things that they had to pay. Um but but I think that increases so there is a rate >> there was a rate increase for sure that
was that maybe that's a good followup for next week is just to find out why let's just make sure our number >> that could change that number >> what is the uh large increase in training
from 249 to 424 is training in May planned training for 26 from the departments. >> You want to tell them how you got that number? >> I you just tell me that you talked to
all the department. Yeah, talked to all the department heads and got them under what the plans are. >> There's there's actually quite a bit less actual usage in training this year versus the original budget. That due to vacancies,
>> vacancies and also the vacancies indirectly because you can't have people out in training if you don't have people to cover while they're in training. >> So, as we get closer to being fully staffed, people can be trained. Some of the training is, you know, obviously the
safety stuff and everything. We have to do that. We got >> there's a lot of new equipment coming in. You have to learn how to use all the software all the systems. on that. So, um if well before we go to the next
slide, there's a number on there for other um operating and maintenance expense. It's 3.2 million. Um in the past, some of the board members wanted to see a breakout of that number and the
next slide is that really hard to see. >> Did you get that? Okay. >> Take up more of the screen. No, >> no, >> no. >> It might really Oh, that's better.
>> You can zoom in on the iPad here, but hope the folks at home. So to answer your question about the EM some of those other things that uh Megan was talking about not the power supply portion of the that would be in the
integrated resources the 916 per out of that 36,000. Um, can I move on to the next slide? >> Just I'm sorry. What's the the two columns on this? >> Oh, it's the FIRK. >> I I understand the FK numbers and then
you've got the budget and then I go over to the next to the left or to the right hand column. And I've got 58930. Uh what's the 50 grand? >> That's for that. There's two columns.
See engineering and operating supplies and expense. >> Okay. >> Yes. There's two columns in numbers here to reach the 3.2 million. >> Okay. Ser overhead and underground maven. So that's divided up into
>> I don't know divided up. >> It's three different FK numbers and then so it's just the title at the top. So it's FK and then budget. >> Oh, those aren't millions of dollars. Those are FK account numbers. >> No, no, I understand the FK account numbers. Yeah. And
>> so there's two columns. Got it. Budget. Fine. You'll have to keep it on one page. Okay. Got it. Yeah. Okay, the next the next slide in previous previous years there were questions regarding the detail of legal expenses and this is a breakout of our
legal expenses by cost center and the things that we use the um council So I know we no longer have inhouse where have we made adjustment. >> Most of those adjustments are under GM
and human resources. >> So the budget this year was 676. How you making it 760? Um, what's I think we changed that number. 760. Are you talking about last year? >> Yeah. >> Oh, yeah. Right. So, it's it's up
because it's more realistic to the actual, but also because we don't have in-house counsel and um the budget. >> Any other questions on that one? 13. Okay. So this is a calculation of
rate of return. Um I did actual with three years and also um actual through August the 25 and then the budget. Now, as you can see, um, MLPs are allowed up
to 8%. But the amounts that we have gone over and will go over are justified by MLDD's kind of capital infrastructure plan. So, if we were at 8% it would be 2.7
less. So, that excess will go into capital projects that we have going on. One general comment on plan numbers. >> Excuse me.
>> One comment about net plant. We got a lot of different numbers. Let me talk about net plant. There's a net plant in service. There's a net plant number here. And there was a typo for a
net plant in the profile of the talking. Well, the the number the numbers up here the 25 have some projections because the years >> No, no, no, I understand. No, no, but like
you this number, this is the kind of number I think we've typically seen in the past >> and I think this has formed the basis for the 2% payment for the towns, right? I think that the
2% payment is off of this. >> It is >> right. But if you look at the profile in the document, there's a typo. It's like that plant is more than gross. >> Yeah, that was a mistake and we realize that. Yeah. >> And then there's another page in the
book that we got, page 15, it lists net plant and service at 140 million for this year. And here you're saying it will be 123 million or 23.
So why why do we have >> that table has some errors on it and we were going to have to short we're going to have to tighten up this the six year. >> Yeah. No no no. So so so this is this is like a budgeting issue and it's also
I think it's a little bit of a process issue. So why does this happen? I mean we should not have these kind of I mean these should be spitting out from our system and we should not have uh Jason I think you know this kind of
like you also pointed out about net plan right so I I think I I've seen this even in the prior your book the net planted service number was higher than the net plant that's reported for the basis for town payments I'm mentioning this
because this is an issue that all towns can look to to say I'm getting paid on the basis of net land. >> Not anymore than usage. >> Yeah. >> But not net plan. >> No, but he's talking about the four not to the town hall. >> Okay.
>> Above the land above the land. >> So, so, so I think that that number is we just need to be very careful about >> I understand. So I actually showed you just you know the um one on actual that the report that you're talking about on page 15
we have a revisement for actual that we could share and then we're going to we'll figure out the the six-year plan going forward for that portion. >> Okay. So, so, so I I I just wanted to point out that this this this has been
an issue in the past also in prior I brought that's why I brought last year's book also and last year's book also there was the same kind of inconsistency. >> Right. Okay. I >> think your point is around the systems that we use process that we use to create these reports.
>> Yes. because like because that that's the danger of using Excel versus >> planning tool a better planning tool >> right now maybe is that is this an Excel issue please just help me understand >> no um I think that
one of one of that the reports are done with the capital budget and this report is done with the operating budget and I think we need to synchronize the numbers should be one set. >> You're right. You're right. >> Because you know like I I'm just looking
from an accounting kind of perspective. I'm saying if I find errors like this it it it creates I I can question all the numbers. >> Do the accounting sorry the capital numbers and the operating budget numbers they come from different systems or the same system?
They're not coming from the system. They're coming from taking numbers from different places >> and manipulating them into the challenge is you don't have >> Yeah. So, so it gets to the process, right? >> I think Bob's been also pointing,
>> you know, the good thing is our audits are always very good, right? Well, the guys are right. So, um I think what you to your point when you get the data I Karen came in and picked up on a number one during one meeting and she's like,
well, why is this number low? It should be this one's higher and it to your point instantly looked at a number >> and begs all sorts of questions. It it it does. But >> so so I >> I think I think that the process of of the um the p the page 15 was assuming
that all the capital objective to be spent was spent. So that's why it was carrying over a number that was too big. >> Okay. And and the numbers really on here like based on what's really. So that's why we need to sh up the way
that we do the one. >> No. and one was called net plant, one was called net plant and service and I I I don't know what the difference is. >> Okay. No. Okay. So, thank you. Uh then I had one more question and I had shared
this with you guys earlier also. I I look at the projections for this year. I look at the six-year projections looking at there's a certain assumption as to what the expenses are going to be because you you you have to have expenses and based on those expenses you cover it with
revenues and you you set your rates accordingly right. So the expenses for through 2030. So I I looked at the expenses for 2030 based on what we showing in this book versus what
was shown in the book last year. And in terms of expenses like you know there's a substantial difference of about $11 million. Last year the projections were showing 29,000 and this year it's like 118,000
or something. So there was a substantial difference out to 2030. in terms of expenses. So my question is what was the difference in those assumptions? And the the reason I'm asking is because
we know that everything we hear talks about fuel capacity and transmission charges going up substantially. And so I I just want to make sure we're not kidding ourselves. I'm I'm just
saying that because we are now projecting ahead. I'm I'm not looking at next year's numbers. I'm I'm looking further than that because as we plan for additional projects or whatever we do, we need to have some sense of what our
revenues are going to be. And so I just want to make sure that we are not killing ourselves. So could you please because it's that's a substantial difference, right? because you're saying the expenses are not going to be that high. Help me understand.
>> So in other words, because I don't have last year's, but you are you're saying from last year's budget or from these line items >> in in the book that was shared with us. >> Yeah. What page >> on page
>> 15? >> No, it's 81. >> Page 81. So if you look at page 81 and the equivalent of page 81 for last year, you know, so I brought that.
Yeah, I have here. And so the the total operating expenses for calendar year 2013 are listed as 129.589 and here in this year it's 1181.
So I I I I just want to say that you know this is something one normally doesn't see this kind of difference and especially I I just want us to be careful because if you had said that the rates were going to be higher than what we had projected last year I
wouldn't have been surprised when you say it's going to be less I'm surprised at all. Well, the the uh six-year plan last year had assumptions that expenses were going to increase by at least 6%
every year and then increase by 6.7. That is not realistic. This year we did it 3%. Which made more sense with the revenue. >> So >> 3% year on year
>> for all. Okay. as opposed to six year. >> So just think about your 401k and how it compounds the interest. Same idea. 6% and then another 6% and then another 6%. >> So So do you use the same 3% on every line item?
>> Well, it's a a general No, I think it comes out to be a average of 3% increase, but we didn't we didn't do it from the top to bottom. We did it from round up. So we look at the low forecast. We look at our you know
pricing of of energy capacity transmission. Uh we did rely um on the forecast current forecast of the pricing to use their pricing. Um and then before when when this budget this uh six-year
budget was done I believe actually when I look at the old formula it was literally applying a 3% to to a rate and then applying 3% to to the to the load. So so when you add it together then on
on average it's 6%. It was not as clear as what what are the thoughts going into okay we're going to have two 3% which is 6%. So right now how we did it is we are projecting for the next six years the load growth we're projecting between
0.9% to 1.2% and as a reference ISO's long-term projection for the whole region is about8 0.8%. or pretty close to that. And then in terms of the capacity transmission and
and fuel cost projections in ease cost projection for the next uh six years was actually five years they only do five years it's actually pretty flat because >> transmission >> yes >> yeah it's incremental uh increases but
there's no dramatic changes but I can tell you transmission cost that uh in 2026 it's going to be stay around the same as this year but in 2027 to cond I think it it jumps by like 10
$10 per kilowatt year. So the costs are going up but we do also have to consider whether the load is actually going to grow at the same rate as we think it would and also we do want to reduce peak that will reduce our transmission cost.
So, you know, when you consider all these factors, it's not just a straight, oh, it's going to be 6% every year. It's it's just not reasonable. So, we decided we're not using the old method that was used before. So, we started using a new new method. >> Okay. No, no, I just wanted because
because this has significant impact because it's really, you know, you're building a lot of how you plan for this really is important in terms of all the projects. >> Yes. And also this six-year budget is updated every year. Right. >> Yeah.
>> So I I don't and all these the the fuel the transmission and and capacity costs are all pass through cost. >> Right. >> What our mod needs to manage is just so that we're not uh short when the price spikes. As long as we can manage that, I
don't think we have to but you know put so much cushion in ter in terms of the cost on energy. We want our collection of revenue to be as close as the actual cost. So that's that's how we're budgeting right now. And but before the
methodology logic is like, oh my god, the price is going to go up so so much. We're just going to build in that increase of rates all the time. But it's not always. >> Yeah. So yeah, I I wasn't looking at the revenue side. I was just focused only on the expense side. >> Oh, it's the same for the power supply
cost. The revenue and the expense should be close to each other. >> They should not we should not We have some reserve. We already do. And sorry I keep referring to Jason. Um um we have a a few million dollars
reserved. We want to formalize those reserves so that when prices does you know do spike we don't have to charge customer. We don't have to you know turn around right away. um we have to charge you more but we can use the reserve. So that's that's how we look at the power
supply cost. When you look at the long term you should not be >> okay no so so thank you. So so so thank you. So you're saying this year you've tried to do a more realistic estimate >> more precise than just a mathematical formula. >> Okay. No thank you. But it's significantly different. That's why I
wanted >> Yes. Yeah. >> Thank you Megan. But but each year that you do a six-year planned, the end year is going to change >> because you're basing it on >> Yeah. Yeah. No, no. So that's 30 this
year and 30 last year. It's not going to be the same. >> Yeah. No, but still it was significant figuring, right? because the infinite growth >> and expense right that everybody was
projecting and when we set our rates previously um we had that in mind and it did not materialize and then I think we were looking at the same process again for setting our rates and it did not materialize so I it's a good way to
>> yeah it's a lot more rigorous and precise is the way that they're doing it this year >> thank you So last slide. So this is um our recommendation that we're not going to adjust the rates but
we do need to do a cost of service study before we doing any changes with rates and that has been done in here. Can >> you say more about that? Can I say more about >> what about the cost of service study
with the help? Yeah. Um so there was the goal of doing the study this year but um for the first half of this year it hadn't been the priority of the GM and
after the GM left I'm not not sorry you both uh IGMs I think there are so many other priorities it hasn't been a priority the key of the cost service study is to really coordinate every single department at the company to actually look into you know what our
cost because as we just said our supply cost everything is a pass through. we just need to manage that balance. But for the real cost of services for the distribution charges that we charge uh the customers that's really depending on all these capital projects and
maintenance and repairs that we do and then look at the labor cost and you know projection of that and sometime it depend on you know the contract negotiation wasn't done you know all these are kind of affecting you know how the study should be done
but I think the key is the new GM. If if we can um uh kind of put this as a priority, you really need to work with the engineering and operations departments, the you know facilities department, all the all the different departments are actually contributing to the distributed energy
um charges. And one key part is we build we you know we're going to spend what $41 million on infrastructure uh in the next few years and we build like the substation we build that for peak demand that happens one hour a
year. So all all that cost like $35 million to to build station six I think. How I'm going to allocate that? That's the key of like you know what is actually the cost like who is contributed to that cost and you know
all these we have to look at all these details um before we actually change the rate that's my thought on it um it can never be science but I just feel the way we adjusted rate before I would say in the end if we had like a 4% increase of
rate maybe the end result is not that far off but there wasn't a thoughtful process to arrive at that It was just done the way that okay we're not really like outrageously over collecting but but there's got to be a way to look at okay of the 41 million at
least $41 million how are we going to collect that revenue going to collect in 10 years or 15 years so what does that mean for each year the rate like how much extra we have we have to collect to get that revenue so all these exercises
were not done as far as I know so that's why I'm really advocating for a rigorous cost of service. >> Two questions. >> What is the norm for a good uni in terms of how frequently should a cost of
service was the last one that had >> I was say I remember one or two. >> Yeah. Four four years ago. >> Four years ago. Yeah. So again should be in the consider. >> Okay. And then how much what are the
anticipated cost of this >> of the study? >> Yeah. >> I think it depends on whether we do it in house or we hire a consultant and I think last time a consultant was hired and I think Erica can speak to this. We had a hard time finding what they
>> So So I are you suggesting you will do it in house? >> I'm not suggesting that way. I would not suggest we do a house. >> Did you budget for something? >> Yeah. No, so that's why is there a budget? That's what I'm question
AMI program is going to be coming online 2026, 2027. I think that data that we're going to be getting from that, integrating that with a greater return, we might be a little bit early at this point because I really
do think that data coming in will be tremendous and because you you're going to start to see on the residential and commercial sides. I I just I'm I'm hoping that will be a significant impact here. I understand all the other
components that you're speaking to and we might be a little bit early on the cost um study at at this point knowing that we we're going to have another data pool coming to us that >> but the the cost of service more
advertises cost discovers your capital allocates the the RAB all that kind of stuff right does the does the AMI data capital cost, >> you know, we we're talking about rates about the chart. >> Yeah.
>> You know, I think when we start to think about usage more, I I think we we've been we've been on the high side every year to make a point. We kind of threw the dice out there. We have the discussion, you know, with the 8%. We saw 12%. Um we would look at our rate of
return, right? We're over our 8% each year, right? we'll put them we'll put the money back into the into the company, but some might say give it back to the rateayers, >> right? That it's $2 million. We should be putting it right back into the rateayers um rather than spending the
money. Things cost a lot of money. So, I I really do like the there's no requirement for a rate adjustment, but I I think the cost we're on track. We're as a company, we
got a good team. for stay in the forest. Um, so when you say no rate adjustments, I think just more data coming in might be a might mean better for us to to wait. >> It almost feels to me like it's two
sides to the right. there's the the cost conserve study which is what are the kind of internal costs and their capital budget and all of those pieces to deliver and then there's the AMI data that could be coming in that will tell us more about when and who and what
levels of uh you know delivery we need to support those two coming together really good two really good sets of data to be more accurate in how we do time of use costing and you know what incentives we give to people and how we think about
rates across those tiers. It almost feels like you need to be doing both at the same time. >> Absolutely. Because the cost of service study is the basis for the rating that I think what Bob you were talking about is really using the AI data to help us
>> to help us figure out the top how much should it be? What's that going to do for you? >> Right. So that assessment in parallel. >> Yeah. How much does the cost of service say? Is that it's like >> it shouldn't be
>> 150 grand. Oh, exactly. >> Yeah, I thought it would be higher than 10 or 15. >> I agree. If it's higher, then I I think we need to wonder if it's worth it. >> Yeah, >> it shouldn't be that. Yeah. >> Well, you also have to get value out of
it. It sounds like we maybe were questioning whether we got value out of it last time. So what I would suggest is like just let's just make sure that we have some money in the budget for next year to do that study and then we can make a determination if it's ins
I'll try to find how much we paid um in 2021 >> I can so confirming that another edit to this budget will be to add some um money for the cost of service >> cost of service >> or confirm if it's already there.
No, you I just think it's be something for the new GM to understand. I mean, by doing it and being part of that or you process should be a chance to see the budget where fences and things are happening, it' be good for the new GM to
understand and be a part of. >> Agree. Are are you saying we shouldn't put in? >> No. No. I said we should. Okay. We do it perfect. I think it makes sense for the new GM to see those I um
>> I think our new GM is awesome. It probably hasn't been through that kind of review of of the budget in the past. I'm just projecting. I don't know for sure. >> I've been part of a cause of service, so I do have some idea what involved, but >> what was the last time you did? You know,
>> uh it was three years ago. >> Okay. >> I supply all my capital information for it to our private. Could you find out how many questions >> I could sign any non-disclosures yet? I'll be
>> so so so my question was like the budget the revenue projections you have made right now are based on the current rate >> correct? Right. >> Yes. And what Megan is saying, you know, if we do this cost of service study, if you do it
early, then you can because you have to decide on rates early. >> Yeah. >> So, so the question is to Bob's point, would you do the when would you do the cost of service? If you're going to wait for AMI information, that's too late, right? So, you need to do I mean, we
need to have a rate recommendation, right? I mean if you want to especially reduce rates I mean you want to reduce rates it's it's important to do some some analysis on rates >> and I think this this data would be really important for us to have to
properly determine the rates for next year >> um or would we make adjustments mid year? >> I think that's a that's a that's a decision to be made because generally we change the rates in the spring. So I think before this year it was always
changed on March 1st and then this year we changed on April 1 actually worked really well because it was the shorter season the 12 hours were lower so customer didn't feel as much impact. Um and then we check like there was there's no regulation when we change rate. So we
could just carry the current rate over not change it. Uh or we make whatever adjustment we need which I I can just quickly go over what I'd like to to change which all I hope you agree that all makes sense. Um but then just wait till we finish the council services and
then in 2027 we have a new we have a new set of distribution rates. That's that's the part that we we would we would look to change because we have like five pages of of of different tariffs different rates rate items and a lot of
them have been going on for 25 years and haven't been looked at like all these 1% 1.8% 8% of discounts on on you know customerowned equipment and whatnot and but you know you know if you keep paying into it and after 20 years that whole
piece is already written off why are we still paying a customer for that thing that is already written off the books. So just just that's just one example of of how stagnant our rates have been. So it needs to be overhauled. So that's why
generally we we we we don't want to we don't want to change just for the sake of changing it or reducing for the change for the sake of reducing the thinking oh our budget is going down for next year then we should change rate next year too but rather I think we should do the cost server study first
and then figure out okay how are we going to actually allocate all this to different rate classes and and whether it makes sense to have like 13 different rate classes I personally I don't think it's helpful or necessary. Um the
changes I do want to make which is which we have have been wanting to do it for a long time is our peak periods which may we may not be able to do because of the metering um uh constraints is to change the peak time from 12 to 7 to 4 to 8
because 4 to 8 is currently the most common peak hours. um shorter period then we charge higher for the on peak period that will encourage the customer better to change their behavior because when we look at the hourly uh usage of
our customers who opt in to be on to rates their low shape is really not changing just bec because of our pricing ratio is not big enough for them to do anything and Belmont recently just did a a tou study their ratio is more
reasonable Um you can clearly see in the graph how people who are on those rates they shift their peak to the off peak period. >> I call 48 punishment peak time. I absolutely do. You have families you
come home you don't have a choice and the time of use is very very difficult because that's when people need power. If you're able to afford solar and batteries and options good for you. That's not everybody. So that's why I I
time of use rates in in those hours. Yes, of course that's what you smoke, but that's when you're home. That's what people are turning on the stove. They're cooking dinner. They're doing everything they need to do. And and and I think we have to be very very careful of that because it's very important for those
rates for everybody to be fair, right? Fair is is what it's great. If I can afford a battery and turn it on and time of use, great. Good for me. I paid less. the family doesn't have the money paying more. Right? So that that that's a factor that you really have to put in
there that that whenever we adjust the rate and have every, you know, opt in versus opt out, it's a very difficult decision, you know, for for people to make. And we we just have to keep that in our minds. That's a that's a punishment zone. It's not just a a high
use zone. it if you're a family, you can really get hit there because that's that's the time when you you're home, right? And it's it's it's it's great and we all sit in the dark and eat it at 9:00 because I can turn the oven on. I don't I don't I don't want to do that, right? So, but it's a it's the economic
signal, right, that you're after is is to try to, you know, try to try try to get people who can shift, you know, to lower peak demand during those hours and sort of sending a signal. I mean, I I feel like there are other ways to sort
of meet those. >> Yeah, Bob, I think a good thing like, you know, I think you make a really good point, but this is something that if you're doing a customer study. >> Oh, yeah. That's something that shows you data. >> So, so I think if you do a customer study, this would be something you do really explore
>> because then you you really have the voice of the customer on this. >> And Belmont just did that. They just published it. They did it with APA or the help of APA and and yeah it's >> across the board or if you opt in for the
>> uh for their study it's opt in >> right >> so if you can do it great you know you're not punished >> anyway but it sounds like well >> study they implement >> no they didn't do that they just did a
study >> oh just outside of their So they they did the study, the study comes back, they get the results. Have they adjusted their rates to reflect the results of the time? >> They're planning to because it's just
like it's solely affected. That's my understanding, but I don't know exactly what I'm doing. >> So it feels like helpful to understand kind of what a vision could be for it. We're not at that point yet where we're making that decision right now. What we're talking about is our current rate structure. What are we doing? get a
handle on that. >> Yeah. And what can we do to help increase the level of information that we have on our so that we can as we get access to these additional data sources on the AMI side, we can make smarter decisions. >> Yeah. So what what I would we can discuss definitely next spring but I
would suggest to change the time period um and then but not change the ratio so that it's not punitive but actually we shorten the numbers about it now we're not we're not making recommendations understand we're going
to get into it with more data >> and and just for clarity about the cost of service study that would include an allocation study right in terms of how allocate those costs across the entire rateayer base. >> Yeah, I I would >> that that's another lever to pull in
that in that whole system. >> Yeah, because like you know we can throw a $35 million number to the section six that that's it. That's your cost or or you know no matter how much you look into what are the components of the $35
million doesn't really change anything. It's rather how do we allocate that? >> You really pick on substation for a while. I know. She's sitting right next to me and saying all that stuff. So question. So if I read this statement, you're saying you're you're
not making a prelim preliminary recommendation. But if you're not going to do the cost of study, cost of service study till maybe late in 26, >> you're going to go in with no rate increase. >> I don't know. I would recommend waiting
till the end of 26. I don't know why you hear >> what's magical about the end of 26. >> Start the cost of service study. >> Yeah. But but when do you start the cost of you start the cost of service study now or late? >> Yeah. depend on people's resources and
capability to provide all the all the documentation on all of the the plan service and the capital spend and the back loan and they got the rates and the charges and they got to figure out how much each rate class is contributing to the backlo of the system and what the replacement cost
is. There's a lot of >> there's a lot of internal work. So, you bring in somebody to do it with you. all the information they're getting comes from here. >> So, it's it it it does put a strain on resources, but it's not going to change. I mean, unless you're planning on bringing in a bunch of people later in
26 that are all of a sudden going to be around to do this. Basically, your workforce is your workforce in terms of supporting the cost of service study. You know what I mean? >> So, it feels like what we do is say, "Yes, we want to do this in 26. We want to do it as soon as we can in 26, but
let's let Army GM get settled and figure out what are the other initiatives that need to happen as well and figure out the right timing. >> So, we go into 26 with black >> same rates,
>> not necessarily black, same >> and those rights support this budget. Thank you. All right. So, we asked a lot of questions. If you have any more
as a reminder, we have capital. >> Great. Anything else? >> Um, so we will just get a followup next week on the those changes that we reflected. Okay, perfect. Um, okay. Capital budget. You want to start this?
I didn't know if you wanted this one here. >> This is just what was on that first email that I sent out with it. These are the major differences, major changes between the 25 budget and the 26 budget. This was all in that first email that got sent out October 1st.
>> So yeah, I mean you want >> go back. >> Okay. >> I don't know if you want to talk. >> Yeah. So the the major reductions you know for some years we were going great guns on in territory generation projects
but we couldn't we haven't been able to secure land and if you don't have the land it's really not a heck of a lot that you can do. Uh same with in territory battery storage. You know we had great grand
plans for $12 million worth of it. It's not happening. we just we can't support it, you know, with our workforce. And again, we can't find spots to place it. And we've spent a lot of time the last few years looking for
it. And you know, no news here to anybody. There's not a lot of developable there is not a lot of land available, these kinds of things. So the new and or continued capital projects
Megan's been talking about Peter's substation six says the grid autom automate automation automation and modernization EV charging structure IT products and continued investment in
cyber security and infrastructure. So the solar projects that are ongoing are behind the meter. I mean the the Wilmington school north ready kum and maybe retail are all we're looking at those as behind the
meter. So they're capital expense on the respective town's part and not in our capital budget as >> expenses that we're we're carrying. >> There may be some infrastructure to connect it to the grid, but that would
not be different substantially than connecting any other building to the grid. Correct. Maybe a >> substantially. Correct. >> Yeah. Yeah. Um is there is there any net is there net
metering with those projects >> we uh return the fuel rate based on fate not just the rate >> okay which I think is my personal opinion is that's pretty cheap but
should do better that's just me so we have these discussions and I know quite a And you know there you have to maintain those poles and wires. We're letting them on to our system. We pay for that system. You know if you give them a free
ride on the distribution stuff that means everybody else is paying for it. >> So we what for whatever it's worth in Hingham we figured out the costs you know the fuel the transmission and we would base the net metering rate
annually on that. We did not give them as the IUS do. You know, they get the whole >> No, I I I agree. It's not a one-on-one. I mean, yeah, there's the two extremes of watt for watt or or some fuel charge basis.
>> Is this best practice for the MLPs? >> They do char some iteration off. I don't know of any MLPS that are paying the full n
Yeah, I think those that are wasn't two one to one and they're backing off. >> I don't know. I mean, you know, Paul had to take down the two or at least one of the two interprets. So, I don't know what they're doing. >> I thought they had a a good deal on they
go like we can't afford that >> possibly don't know. >> Um I I get the extreme ends of the argument. And I just think there's a middle spot somewhere that >> covers our costs um is incentive for
doing solar because on the other side of the on the side of not doing more to reimburse solar is that then people don't invest in solar because it doesn't pay. So there's is there's a benefit to
the other rent payers if they're not paying for peak demand charges because homes that could have solar don't have solar. >> Solar really doesn't hit the peak too much, >> right? >> Well, too much. >> It's like 30% of what they put in. >> It's not 100%. It's a fraction. I I get
it. But if if if that's it goes into the math of of what the benefit would be. And actually the some of the seating solar projects the best benefit for them is not so much net metering it's the saved energy cost because they don't use
the energy but they but then the save cost because our rates are low. >> It's almost ironic that you have to increase rates for the for the solar projects to work >> to financially make sense. >> They don't work in rent for a lot of people. I know I mean you got to make a
choice right some people say it's not worth a 30-year rate of return. our rates are so low at this point. I don't want to do it. >> Yeah, it's a better investment if your rates are high >> because you're saving that much more money, >> you know. Yeah, I there's more to it than like many of the things on on the
budget we're >> yes >> there ways we can look at incentivizing that and and I think either in the capital cost offset or the the return rate we we ought to find more incentives
to make it less of a disincentive for power to come into this they're in network further discussion for next slide. >> Moving on. >> Sorry, I did have another question on
the main slide. Um, just in terms of the IT projects and the investment in cyber security infrastructure and we don't we don't have to talk about the details of that because I know that some of that is um for executive sessions, but are we confident that we have enough
investment here to really get us where we need to be from a cyber security standpoint. >> So the person who would be intimately able to say that isn't here. He's on vacation this week, but I have not heard him say he has not said to me yet, I
don't have enough money to do what I need to do. >> Okay. >> I think this is just something >> was ning. I would echo that sentiment. I mean, we >> we have the tools we have to do what we need to do and keep it as secure as
possible. Um, obviously there's always new and emerging threats and new and emerging technology. So um kind of that cyber security initiative is to just kind of give us that um safety net to when those things come up be able to take advantage of those and yeah keep
>> So is this funding primarily for cyber security or is it also for the whole upgrading a system? >> So there's kind of two separate pieces. So there is um we have that one for the CIS system and that was strictly for
upgrading that and then we have a bucket allocated for cyber security or something. >> Yes. So the cyber security initiatives for whether it be the IT side or the OT side or email security kind of anything that may come up. So the cyber is like
that's only 50k, right? The cyber security fees is 50k and then the the CIS is 400 >> and then on top of that we have the operational budget that covers the rest of our either existing cyber security
things or things that help the plan run. >> No, we don't. So this is the uh facilities budget. Uh there's the this is the fleet for the fleet what they're adding to the fleet. Uh as you can see they have the u each
PTO material handlers the that was added to the fleet in CY uh this year. So the port truck and 2 and a half ton gas pickup trucks. Uh we have a bunch of uh the fleet backorded as long lead times for all that equipment. And on the bottom, the
26, we have planned orders for a heavy duty vehicle, which is probably going to be u two bucket trucks. Haven't decided on what type, a couple of sport utility vehicles, uh a three rail trailer, and a uh another uh rail trailer on the bottom
there. >> Looking lately on new orders? >> What's that? >> How are lead times looking lately on new orders? >> Uh pretty much the same. They're they're still out there. you know, budget this year and get it a ordered and hopefully get it to fall. >> I know last year we added money to the
fleet budget to purchase more vehicles because of legislative changes which have been put on hold. Um would it be prudent to buy another digger, another line truck, you know, at this point? >> There's a couple of vehicles they still
have to go up to bid for this year. They're putting the uh the final touches on those bids. with what's planned for next year, I think we're going to be in pretty good shape. Okay? Because now it's going to become an issue of where we store the vehicles. Uh the garage can't fit everything and part of the facilities, but on the other slide, we're going to try to build something
outside as a a shelter for the trucks to keep them outside. Next slide. So, um as kind of discussed earlier, we are um looking to move forward with a new CIS solution. Our um current sales
solution is on a aging platform and while we're not right up against the gun on its useful life um we want to be proactive about either finding moving to the um new platform that our current one
offer our current vendor offers or maybe looking at a different vendor. So, we're going to um look at all opportunities for upgrading our CIS system. And then as cyber security, as I said before, it's kind of a moving target and new
threats emerge daily, weekly, and so does the new technology that is comes out to combat that. So, we want to have that budget to be able to be able to take advantage of those new technologies as they emerge and keep this place as safe as possible
from an IT security. standpoint. >> Are are there so so this is this is in the capital budget. Are there subscription services that sort of do the same thing that would be in operations or would that still be capitalized? Um I think the initial
expense like so we have current cyber security subscriptions that we utilize that fall under the operational budget now but I think this is kind of for any new um technologies that we would implement kind of capitalizing them first and then that yearly subscription
would then fall into prior years um to next year's operational budget. So, so in this case um like we don't have Mac doesn't have visibility on a lot of the financial stuff but you guys have right
my sense is that our books are not the simplest to manage right and will the CIS help address that because this something that's been discussed in the past >> yes sir so like and this is a question that you know Pat's also been dealing with pulling information from different
pieces and Thank you. >> A lot of things you do a lot of things offline. >> Yeah. So, we're hoping that the new system with ways to go is going to be all inclusive and be able to spit out data without doing so much offline,
you know, Excel spreadsheets and >> so so, so would the 400k cover everything that so so the so it's a truly integrated system? So almost all kind of CIS billing systems are tightly integrated with an ERP system. So this would include all of the financials and
all of that as well in in that 400 day as well as some a lot of the other technologies that support billing and the CIS system like MS, MDM kind of things of that nature. >> Okay. Okay.
Okay. And so that that was the question asked like is 4 enough for I know what you guys think. You did something. >> All right. >> All right. Here's an engineering slide. Substation six.
You're talking about it all night. Uh project's moving along well. We have State Electric up there now. starting the excavation uh for the uh foundations for to receive the switch gear. Uh they've set some manholes. They've hit a bunch of ledge, so they're working on get the ledge out
of the site as well. So for anticipated large payments for next year, we have some national brick payments, 6.2 million. Uh we'll be paying uh Distran who's the supplier of the 115 KB equipment breakers and structures. State
electric will be getting paid next year as they should be completing most of the substation next year. So those are some of the bigger payments for next year. Um work to be completed assembly of the 115 KV and 15 KB switch gear in the substation yard. So the switch gear
should be coming in in December. The rest of the substation yard equipment was awarded to Distrian. That equipment will start showing up in December to January of next year. in the contract will begin assembly of all the equipment
in the yard. Um, as far as some more work going to be doing is the installation of the new poles and overhead feeders on Bale Street. or when a PLM going to submit a plan to the town of Wils and the duck banks and
and the Peter getaways and that'll uh the duck bank and the Peter getaways will only be uh be pulling in million B. So we don't really have the equipment that can handle the weight of that that wire.
Next slide. Uh this is a slide on our transformer purchases. We're pretty well stocked on transformers. So you'll see some of the numbers have gone down on what we're going to purchase from uh previous years. Uh as I've said at some other meetings, we thought we weren't going to get some of these transformers till
2026. Uh production opened up and we got them ahead of schedule. So when you look in the yard, if you drive around the yard, you'll see the the warehouse is full, the yard is full, station 3 is pretty full. Uh so we've done analysis on what we need for next year and uh the numbers
have come down for uh next year. Uh as far as battery storage, uh we're still working with talking to citizens on the battery storage that's going to go up to station 3. Uh they're still waiting on the big beautiful bill
and how things are going to come out with their uh incentive tax credit, things like that. So those are going to be part of the incentive for them to to move forward with that. We left the Lynfield Center Water District solar and bees energy park up there. The I think
they voted for it, but I'm not sure if it's going to go any further. So, we left it on there in case they want to pursue that. Next slide. Great assets. So, so before we go there, can we just
so if if I read your slide on the substation that was 16 million shows like carryover 13.3 and 7 for this year like I mean is for for 26. So is that 16 million to be spent in 2026? Is that
>> No, not all of it will will be spent. >> Not all of it will be spent. >> So it's just the way the project's been delayed and how it's gone out. So like a lot of that carryover is for National Grid. We expected to pay National Thra. We expected other equipment to come in earlier, but since it was already
approved, we keep it as carryover and the 2.7 should bring us up to um >> because I mean that adds up to 16 million, right? So So would all of that be spent in 26 or you still carry over some to
>> It will carry over based on their billing, anything else that happens at the site. uh things like that. >> I have a quick question just on on transmission capacity and so I just noticed there's no other big
transmission project scheduled or anything like that here as I look over the six years. Can you just comment at a high level on how long this capacity lasts us under current load projections and sort of capacity projections?
This would probably unless something significant happen last 20 years. >> Okay. Without having to do another big investment in terms of >> substation capacity or the substation capacity rather. >> Okay. >> Unless something
data center >> data center >> then all bets are off. So we turn the high school into a data center or something like that. >> But this substation will give us plenty of flexibility to reconfigure the circuits the way we have them. uh add some more automation to the distribution
system. Uh give us flexibility to uh do more maintenance of other substation by switching the load around. It's just going to give us a lot of flexibility. >> Okay. Thank you. >> And how long has this been in the works for?
They've been looking for land since Pete Dion was here. So that was a long time ago. Really? Yeah. which is fine on the lands of this railways. >> Okay. Um the AMI project um so we have received um about 500 units for the
pilot phase of the project. Um we'll be receiving um more leaders starting in December uh this year so we can uh hopefully get around running next year. uh we've been spending a lot of our time recently on
integration between the uh metering system and MDM system and our system. Um so we have some meters um in our shop that we um are putting consumption on
it. We're doing some testing with the um billing system. We tested with MDM with our AMI vendor to make sure that everything would work before it goes up the field. So um we
are preparing for we talked time of use earlier. We ever did a since the line changed at the time of use that we would be able to handle that. A billing system would be able to handle it and if we decided to do it at
a drop of a dime a year from now um we could we could do that without huge disruption in state. So we are doing things a little more differently than we were doing in the past, but we want to make sure that our bills don't change.
Even though we're doing things in the background a different way, the bill looks exactly the same as what? So it's a different way of us doing things. Like today, if someone wants a time of use meter, we actually physically have to go and change their meter. We will not be
doing that in the future. So um so it it is progressing pretty good. Um Tanalyst, our AMI vendor was here last week to do some training with us, some title training um with some individuals to
show them what the system can do and then some more detailed training with some of us that be on their game. So it's it's going pretty well. You know what I mean? You know, the integration with different systems is is difficult. is challenging. So, um especially when
it's three to four different systems. But, um you know, I I'm hoping to in install um maybe a couple dozen meters in a couple weeks. Um get them out the field
on people's houses and things like that. See how everything looks. But we we are really trying to work out the bugs in office. We're having at least a couple of uh meetings weekly with the various vendors to push this integration thing because
it right in my mind it hasn't been happening fast enough. So really kind of holding people's feet to the fire. Like I say it's at least a couple of Friday afternoon at 1:00 till 4 o'clock. You want to know he's interim get it done by January 2nd.
>> I'll do ahead. >> Hey all, sorry for the noise. I I have to drop in a minute though. I just wanted to say thank you for the great presentations. >> Thanks. Yeah. >> And the only thing I I meant to ask
earlier is why why was it 900 and change for lawyers? But if if that's what it is, that's what it is. >> Uh on the opex. >> Um okay. Can we hold on that question? We we'll see if we can get an answer a
follow up on that. Uh >> um >> Okay. Thanks all. >> Thanks, Dave. >> All right. Byebye. >> I just I just had a I think the question is a review, but for your industrial customers and sort of larger commercial customers, are they
already on some sort of AMI meter and are you have sort of real time data already in that level of load profile? Yes. So we have um we went AMR almost 15 years ago and
um we had one fraction of um customers left which were our biggest customers um left to change out and the decision was made to do a an AMI pilot. Um so we secured a vendor and um some of our
biggest customers have been on AMI Loops. um we try to expand it a little bit to get end of line voltage because the meters that we have is AMR we didn't have um voltages off those meters so we tried to get what they call endline voltage at the end of our circuits so we
can uh feed that information into systems so we've deployed 1500 AMI meters out of um 30,000 and mostly on the large mostly in the
large customer size. So this so this is is primarily I mean the remainder is primarily or residential small commercial. >> Yeah it's it's a little more than small commercial uh you know we classify we they call the 500 club bigger customers
anybody over 500 KB per month. Um so it's pretty small you know that was 100 not even 100 customers. So um so but we do have a lot of minimally aware customers we have you know we have um
you know 75 3500 that's that's size that's the size of the company so um those people were not change to AMI unless there was a reason to so to support the existing PDR program
response um we have to change the need particular. So we we changed some but in in the grand scheme of things is only about 1,500 AMI resid.
>> So so sorry. So thank you. We have 31,000 meters. You've got 500 new ones now, right? >> Yeah. And next year, how many are you? because I
see the budget goes to 26 and 27. So you have like 1 point 1.5 million in 27 3.5 and 26. >> Y >> and some carry over 3.2. So like bulk of this is going to be carried over into 26.
>> Yeah. A good portion of it we you know we hope to start um early 2026 to um to mass deployment. Um we were going to do it with an outside vendor. The pricing
came back was very very expensive. Um it was almost double the cost that we thought was going to be. So we are going to do um obviously in the winter months depending on the weather um it might be slowgoing if we get a lot of snow. Um
but you know we um we plan to um do most of the change outs next year. Obviously some will carry over into >> Okay. So so like eight like this is about 8.3 million spread over 31,000
meters but not all meters are equal right because like some customers like you said aren't big customers. >> Yes. >> Some of the meters are a little more expensive than the others. >> Yeah. So, you should Are you hitting all the big customers early? >> Um, we'll probably do them maybe a
little later. We We might have the meters. We might have to pay for the meters, but they they won't be installed yet. >> Okay. >> We will take receipt of all the meters next year. >> 30,000 meters. Yes.
>> And you're deploying how many next year? >> I would say 75% of them. Is there another question? >> I was going to ask about the meters. His first statement was that he's going to start putting some out very quickly and I like is that a volunteer program or you just pick
>> AB which picking areas everybody's meter needs to be changed. So it's not really a volunteer. We've created a couple um we actually have some of the um reading devices already in the field. So our readers will be deployed around those um
pieces of equipment so we can read them. So um that's sort of what's the communications plan to those customers which meter upgrade. Yeah, and we speak we have a draft of the we're
going to do door hand seems to be the least cost way of informing the customers. Um, so when these technicians go out there and once they're they're done they give the customer the door. So we have the language do some internal review and then have
those Uh this a slide of operations just some pole replacements we've done. We uh annually we test thousand poles. Uh we've been doing the test based on age. The oldest poles and working our way up. Uh poles are replaced based on testing.
We don't do any bracing like Verizon does. We'll we'll get a report down and uh they'll give us they'll tell us how critical uh the need of the pole is to be replaced. We'll schedule those either immediately or a couple of days out and we'll put them onto the the master list
of poles to be replaced in the future. Uh the routine construction just covers all the unplanned routine activity that goes on in the distribution system. Uh capital construction projects that that develop during the year is included under the routine construction. So you see a number of privates in the
capital budget on there. >> I have one question on transform. You map your portfolio as under 25 and over 25, right? >> Yeah.
>> Is there you know but you actually know you actually know how old each transformer is. >> Yes. Um >> we just don't know how long it's been in service. Still recently we've been able to record that. You know when that when the transformer goes out and then comes back in and goes out uh sometimes you
you lost that data but we were able to track that data now. >> Okay. No. So, so, so I thought you're mapping, you're tracking the age and saying once it's over 25 years, it's on a list to be replaced. >> If it's a Yes, we do inspections and
it'll go on the list and we look at a bunch of things as part of the transformer to be replaced. We'll look at the load, the condition of the transformer, uh, figure how long it's been out in the field, those type of things to help with that decision. So, so, so like so is it possible or maybe you already have but is it possible to
communicate to us how critical our portfolio of transformers is because if all of them are on the edge of 25 years I mean if the remainder of you know because I I you have if you have a distribution if you could just represent that
as a distribution and saying I have so many and then and and also if they have some risk element associated with like you know oil problems or heat or something like I I think like you look at the temperature of the of the transformer. >> We look at the load and the TLM
transformer load management. We look at the loading on the transformer and that'll be an indication of what to do with that transformer. Now just because it's on that list doesn't mean it has to be replaced. We can split the crib and another transformer take half the load off of that. So there's there's different things factored into that. No. So, so just what I'm trying to
understand is from a criticality perspective is it possible to communicate through a better representation which shows age and criticality and this shows by distribution. So that so at
least we know from a from a budgeting point of view our portfolio so many of our transformers are at risk because right now the only thing we've historically always been communicated is age. Right. I mean, that's the only number we typically
hear about and and I'm sure you have other metrics that you use. >> Yeah. I mean, 25 is a good number, but if a transformer is out there and it's not loaded, you know, it's lightly loaded, it it'll go like more years than 25. I mean, we're replacing transformers
that are 40, 50 years old. Yeah. >> So, there's different factors that we use when we determine whether the transformer needs to be replaced. uh a lot of the uh transformers that are over 25 that are in the underground we do inspections on all those and we make determinations there.
>> No, no, it's just that because I think you know transformers are such a critical asset right in the whole system. So I'm just thinking is there like do other utilities like map it different? Heather, this is better.
I I the same thing. This just such a massive hump. You go out, you you put them in service, you get the date, you put them in service. You design them. They could have been sitting in stock for two years. But then you're taking something that you could be in stock if it's not used could sit for five years.
So it doesn't have any use on it. It's just been sitting for five years. >> Especially with pole mounts here. We have them inside. So you know 20 years old. It's all >> But we do keep a percentage. If we look at the styles of transformer we have between singlephase, three-phase, pad mount, pole mount, we try to keep a
certain percentage of the different types of transformers in stock as emergency replacements and to have a number of stock to replace units in the field. >> So, so they're asking is are you are you prioritizing them on an auto age?
>> Yeah, essentially. Yeah. My my question is is there a better way to represent how you are managing that portfolio so that it's it's not just digital you know as it's being represented to us as below and above 25 yeah I don't think it would
be worth the effort quite honestly I mean it's such a routine part of what you do you know you get an indication a lot of times I don't something's going wrong when you need replace it. Being proactive in investing
in a a highly detailed analysis for what you have I I don't know if the bang for the buck would be there, right? Other than age trans
is a good analysis and >> we had one on the street in Grove last night. Somebody had a pole and they had to replace it. And if you saw the outage map, the outage was on the outage map on the website. Okay. No. So my question is is there a better way representation in the second
convers then? >> I I I don't I'm sure there is an analysis you'd have to do to get to that level. I bet again my my opinion I mean I'm sure I'm sure there is other meth methodologies but >> are you looking at an inventory somewhere today or
>> Yeah. >> the pie chart. >> There's a pie chart. >> Oh right here. But I mean used to have uh used to have that many age
[Music] program >> 52 >> 52. Yeah. But but but it I mean I I understand the point where if you've got less than 25 and you know if if 60% if 60 of that 65%
is between 20 and 25 and we're just not seeing that. >> Yeah. It's just it's just a way of communicating that >> it'd be interesting to know that >> yeah that that that you know there's a great you have a big wave of transform
wave that it's not it's not like an even it's not an even distribution. It just shows you where the lumps are and and it just you know so that was my only point of you know showing it as you know either a chart like this like you could have you could have like a 2D diagram or
you could just have like one XY chart >> 10 years five years. >> Yeah. >> Yeah. just a way to see the more granular vintage of of each asset or something like that or the percentages >> that will be part of the cost. So
speed up quite nicely. >> Sorry budget perspective this might be okay. I think if you wanted to get more detailed time >> it's yeah it's it's less of a budget issue. It's more of a risk issue like you're just saying I'm trying to
understand what is the risk in our assets, right? So, so, so that shows it point out what the risk is. So, so I I I think you could you could almost use the same thought process with polls and you're always pole last say 30 years
13th of your pole inventory should always be in place. Yeah. 10,000 poles. Okay. 30th of that. Okay. That's how many bulbs I should be replacing per year. Transformers, they're they're different, but I think it's kind of the same. >> But lead time for transformers, like we
we through those, right? >> Yeah. But you're you're you're always replacing some on maintenance basises and and um yeah, there's million ways to look at it, but but I quite >> But I thought we were ahead on inventory for transformers. I mean I understand your question in terms of you're looking
at reliability and and >> yeah I'm looking from a risk point of view like do I have a hold coming when you know it's like they need to >> age the determining factor though you know I mean you're looking at 25 it's you know the older a transformer gets the more likely it it could fail but
it's it's all these other things that are based on the condition the loading u the environment how many years it's been been in service um so just because it's over 25 like we said if it 15 years on the shelf. It's only been in service 10 years. How was it loaded for those 10
years? So, there's a lot of things that uh we look at when we look at the transformers, but we we try to keep an inventory. We we try to keep I think it's either five or 10% of uh backup of transformers. So, >> and right now you're telling us there's no like fiveyear transformer or anything
like that that you're anticipating? >> No. that we haven't budgeted for before. >> And we and we do inspect all our underground transformers after 10 years of age and they include our most expensive transformers which are the
three base pads. So, so we're looking at those every year. So, we know there's not a cliff, you know what I mean? We we've got about four or five years of history of these transformers. Um, so we have a pretty good handle on the
condition of our most expensive transfus because I think the expense we can manage, but it's the delay, right? Getting this them we suddenly need a lot of them. It's it's a risk. So that that's that's part of the reason that >> you know the cliff we look at as a catastrophic event whether it be I mean
tornado or you know anything lightning storm anything like that u that could take out flood any of those events that could take out poles panic transformers any of those things are more likely than any kind of cliff we have as far as the ages transformers
over 25 years of are still gone. >> Put them on the shelf. >> Okay. Any other questions? >> Thank you. Next. >> Um, okay. So, can you just read back maybe some of the key followups you have?
>> I've got a couple. increase the RMLD's health insurance >> and how much for the cost of service study. >> Okay. And then we did have a follow-up question that Dave had around legal costs and what >> I don't think it was a question. >> Uh my note to myself was follow up with
Dave on a question on >> I think his question I think his question is why uh what makes up that amount and >> yeah good 760 you said 760. >> Yeah. So maybe we just need to confirm. So maybe if we're going to do follow-up
session, maybe just a little bit level of detail on like what are the assumptions and in like how much is >> labor attorney versus I think you've got some of that in there. >> I ask questions every time.
So you're over 25 a little more. my favorite meeting. Um, just on on page 87 on the the line item budgets, um, when you you go there, the first kind of the first thing you look at is what's increased a lot, what's
decreased a lot, you know, what are the what are the ones that pop out into, you know, just just on that paper. So, you know, are we getting the right mark? If you take um under operating and maintenance expenses line 580, you know,
if you look at our our projection of what we had for sensor change, we're 50% over for, you know, line item 580, but yet on the budget, we're only putting in 900,000.
We're we were at a much higher number. And the year before, you know, we budgeted a number, we were higher than that. and the number before the year before 24 right we budgeted we were you know we were similar so I think that that line item
>> that that 900,000 that's one of the things that we're now capitalizing more of the labor so that's why it went down because it's not an operating labor expense it's more of it's going to be in capital >> okay okay so you're just shifting
900,000 over to the capital Not that's what's left is the 900,000 >> operating which it's the difference. It's more percent of the total labor for that category is going into C capital
than previously because of the the projects that we have going on. >> So kind of the nature of what's going to happen in 26 is a lot more capital and this is the operations budget. So yeah a greater shift of those dollars. So it's a it's a it's a shift in the in the
>> and then would that again hold true. So I'm assuming that's the same thing in line 598 is that that you know again that line item where it's it's been 774 and then
764 and then it drops down to 270 551. Is that is that because of the same sh >> probably the same thing but because it's saying leave time. Um I think maybe the percentages were applied
to evenly in a ratio allocated. So we have to take a look at that one. >> Yeah, that's that's interesting that one because we're always last couple years anyways we've been significantly over the budget but then the budget gone
down. So >> but but if if the money's being redistributed then >> right but even so why are we consistently significantly different budget >> that we can do more >> right >> less
>> or yeah well we're and we know that coming from different source but that you know just just items you know when you look at anything that's above 50% or you know even below
50%. Those are the trick, you know, just a little bit of you look at those and say, "Hey, you know, some of them you can't control. Um, but others you you possibly can." But those are the ones I would I would take a look at.
Same page. Uh 916 efficiency and electrification. For the two previous years, we seem to be spending only about half of the budget that we put out there. Um, we're still projecting a 2026 budget of 3.2
million. um a good job at spending that or >> one thing that should be noted here is that the budget in the previous years and and what the way that we were reporting it we were taking a portion of
the the staff in the IRD department and applying it to the programs. So if you notice the middle column, the integrated resource is low at 916
and the energy efficiency expense is high at almost 4 million. But if you combine those two numbers, you compare them to the two numbers from this budget, it's it's pretty close. I think it's down 7%. So that's because a
lot of Megan's staff, the plan was to take the people working on the program and moving it into the energy electrification expense, but we decided not to do that. >> Yeah. When when that allocation was
done, again, it wasn't very thoughtful. sometime this one when I came in last year this one staff member her entire time was uh allocated to EC energy efficiency but she was only spending 10% of her time on it and in the end I
decided it was it didn't make sense to charge staff time to energy efficiency because that's the special specially dedicated collected revenue that should be going back to customers who participate in our program >> and then it's really splitting here to
try to figure out all you know each each member of the team how much time they're spending on a on the energy efficient program because they also work on you know general communications you know website update program design how do we allocate that it wasn't a very
thoughtful and reasonable way to do that. So we took all the labor cost out of the energy efficiency fund budget and then just leave it in our general salary labor labor budget. And then for the easy budgeting itself because it is a
dedicated fund. I cannot say we're going to collect $3 million but I only budget for $2 million. So the budget number is always going to stay around that $3 million based on the rates that we're charging customers to collect that fund. >> Right? So the actual spending I did
actually prepare a table just in case you answer the question. We do have a lot of >> predictable predictable reputation. >> You have to change it up a little bit, right? >> Um we have over a hundred cases that's
going to be carried over to early 2026. Okay. >> Because we have all these you know people when they install like farmer solar it's a long lead time. So we do track how many we're having. Um in the end we may now still spend all that but
I do need to prepare for it. For example for the commercial and industrial customers we only had like three last year and maybe four or five this year but we developed two three new programs for CNI customers. We're actually planning a workshop for our CNI
customers uh in January. So we really want to engage our customer to be honest. They actually contribute to the to the larger half of of this fund. So once they come in, if they actually do something, it can easily be $50,000
because our right now our cap for CNI is $50,000 just one case. So I did I do want to prepare for that growth uh in the CNI. >> Yeah. I Good. I just want to make sure we we we are
spending that money and because it is collected for that purpose. Yes. And >> and and and great. I mean, the allocation of the time spent servicing it should be correct. Um and you're accounting for that. >> Um I I don't like to see that money not spent
and then hear, oh well, you know, it doesn't pay for a person not to put solar on their house because, you know, it's not a good deal. Well, let's make it a good deal. We've got the money. So >> I think it's a policy decision if this board decides to support more staff are
more than happy to to work on those programs. But it's a policy decision to you know how >> and the policy decision would be supported. Are we are we not spending the the resources we've set aside and and if we aren't then let we should change the policy to make sure we do. Um
but but yeah that's that's thank you for anticipating this question. Other questions? Um so we do have a few followups and given that um maybe we don't vote this
this evening unless anybody feels the followups are minor not but that's it'll be nice to look at the updated numbers one complete set of updated numbers so that we are approving numbers that have been suggested.
>> We think we have time for next week. Uh already set aside for that. >> Yeah. And then we'll pick the numbers for the >> Yeah. They'll be in sync. >> Yeah. So, we'll provide a new version of
the budget before the next meeting. >> I think that'd be a good cooperative. Yeah. >> Yeah. And then if we just have maybe Paul or somebody, you can just present here the answers to like the three or four questions that we ask. >> That means when? >> Uh Wednesday the 19th
>> um at RMLD. >> She's looking to the first time. >> X couldn't have been better. >> You're welcome. Um, okay. I think that's it for the meeting. Um,
yes, we're not going to do the motion for them. Nothing else. Yeah. [Music] >> Move that the RMLD board commissioner to regular session. Have a second. >> Second. >> All those in favor? No.
>> Swanson. Yes. Yes. >> Thank you everyone. >> Thank you. >> Thank you. Good job. >> Thank you very much.