Recording in progress. Hey everyone. Uh what time? >> Next mark on the dot. Uh I called this RMLD board of the commissioners and board of uh um cap joint meeting into order.
>> Yeah, I call the cabinet. So >> excellent. All right. Normal D board of commissions recognizes the important hearing public com comment at the discretion of the chair and items on the official agenda. Once recognized by the chair, all persons addressing the board shall state their name and address prior to
speaking. Is the role of the chair to maintain order and all public comment ensuing discussion. Um just one comment I am sitting in for uh chairasquez as she is traveling at the moment. Looks like maybe on southwest with the red background. I don't know. Kind of guess.
>> Not quite yet. Not quite at the airport yet, but I'll be there soon. Thank you for that. I appreciate it, Bob. >> So, uh, could if I could please ask other than Pam, are there any other members participating remotely? Does not appear. Okay, we'll hand it over.
You're in. You don't have anything any Okay. All right. Uh seeing no one in the lobby, we will have no public comment unless there's somebody in the room would like to speak. There is none. Any reports from the leison to the uh boards?
Seeing none. There is none. Um committee updates. There are no committees. There is none. Wow. Fast. Pam watch. >> Watch your track. I got myself. >> All right. >> You're now in charge all the time.
>> All right. All right. And uh All right. So then we'll move on to uh item number six. And update Dave Kavanagh. Thank you very much for attending and taking the time to come see us. >> Great. Thank you for having me here. And I'll get the presentation up and we'll
go through ENT transmission. Excellent. Again, thanks for having me here to talk about the EN transmission. Um Dave Kavanagh. I'm the senior VP of regulatory market affairs at Energy New England. I also serve as the ex executive director for EN transmission.
basically the only employee in the ent um is ENT was formed as a limited liability company in Massachusetts uh under Massachusetts General Law 16447C as as a co-op. It was formed to provide a structure for member Munite plans to
participate and pursue joint ownership in regional transmission projects. As you may know, um, in this region, it's it's the incumbent transmission developers that have access to transmission projects. There's been one RFP. There's two. There's one that's
underway. There's one previously for the Boston Upgrades and that was awarded to, I believe, Eversource like $49 million. Public Power has always looked to try to get a foothold into regional transmission projects. Um, some entities have them. Um we have a number of uh
folks that work with ENT that are transmission owners including RMLD and they're smaller segments. They're not bigger transmission pieces. Uh CTE uh end up with some transmission based on the negotiation of NU Northeast Utilities and NSTAR forming. It was part
of the deal there that some transmission ran through their area and they ended up at a piece. Uh and of course if you look at the original structure of how the Vermont utilities were formed in Velco by definition that the utilities in Vermont have ownership through Velco because Velco is jointly owned. But
other than that, there's really limited opportunities for public power to have access to owning transmission. It's been a a policy level at the APA level and as well as uh NEPA has been looking for that as well. Uh so ENT was uh is is managed by ENE LLC through myself and
John. Um it has a service agreement basically describes what we do in terms of running the organization. Um it has a chair that is appointed by E&E. Uh and is governed by its board of directors. Uh the board of directors composed of class A members. Those are members that
can contribute to the the startup capital to get ENT up and running and uh and they also can participate in transmission projects and please do stop me at any time. So if you think about why would you have
ENT why would you form this entity? Well the municipal life plants are facing known and escalating transmission costs and that are projected significant additional costs related to state policy objectives. Right now, we have uh underway within
New England, the longer term transmission planning RFP, and that is an RFP that was closed on uh the last day of September at 11 p.m. And parties had to submit their desired participation proposals. Uh there'll be a year of evaluation, but that's really
to unlock the northern regions of Maine and bring uh clean energy down into the load center. So, that's uh underway right now. So, um, there's been a couple RFPs. We're we're structured to help try to get a participate in those. Uh, again, when you look at what's going on
here, the municipal light plants are are charged regional network service, uh, the cost of the using the transmission system. You all see that on your regional RNS bill. And many municipal light systems, including running, have made behind the meter investments to help peak shade to avoid some of those
costs. uh as the revenue stacking for those resources is very beneficial. uh costs are paid to the transition uh owners such as Eversource, National Grid and on a very small percentage basis to some MLPS and co-ops as I mentioned
running Brainree Norwood uh Middleboro um um CTMAC uh some of Belvel folks um Mwick to an extent has some as well small percentage they have a little piece of Seabbrook uh substation but very small percentage on basis they do
get some revenues from that but let's talk about really what we're facing in here. If you look at the history of RNS rates and we go back to let's say 2012 when it was $7525 a KW a year and you can see it steadily rising and you can see right now uh in
2024 it was uh 18528 a KW year and it dropped down a little bit because there was a bit of a true up from the previous year to 184 but the forward projection as you can see it's going to go it's projected
to go to 186 than 197 217 and 220 out in the forward years. Um that's a pretty good rate of change. Uh when you look at the um overall cost and you're up you're up to if you follow it uh right right
now to 26 you're at $15.30 a KW month. Relate that to the capacity market that's trading at around $3.85 a month. So it's multiples of the capacity market. So you know when you look at the the region uh the transmission build is is in support of reliability
requirements you know when they run what's called a needs analysis study as they're required as the regional transmission planner they identify thermal overloads generally on system go into solution study and then the uh they're generally less than three years within the date of need so they go back
to the IUS and they build them and that becomes a cost for the region but what we are seeing is um what's happening over the last couple years and projecting forward is going to be the main driver for cost in the region is going to be what's called asset condition upgrades. The system has a lot
of older infrastructure um laminated wood poles um systems that are over 100 years old and what we're seeing is about a little over a billion dollars a year is just from asset condition upgrades. It is 70% of the annual bill right now and that doesn't change going forward.
The current projections I've looked out five years, it's still like $1.3 billion a year as they replace wooden poles, uh, lattice structures, uh, spalling cement areas. They have to refurbish those conditions and those are what are
feeding our current rates. So again, the rates are, uh, good utility practice. these uh facilities are being upgraded to have a uh revol reliable transmission system, but nonetheless, every year you're adding another billion dollars a year onto that.
So, you know, the ISO has been doing a lot of studies and uh particularly at the request of the state and some scenario analysis and they produced 2050 transmission study which identifies potential future transmission requirements. The new transition projects are the results of multiple
scenario analysis, different loads, different supply mix, um, and different different, you know, areas of the system. Um, and it also looks at economywide electrification, the increased loads, locations, and the type and future generation that drive
transmission requirements. If you look at this with the zero fonts, uh, you know, you can see 2035, um, you know, we start to become a winter peaking system with a 35k gigawatt load. And if you stack the projected what's called uh uh
high likelihood concerned areas, the areas on the system that really have a high probability to be required to be upgraded or built out, you come up with about 6 to9 billion at a 35 gawatt winter load. Fast forward to 2040,
you're at 43 gawatt and you have a price of 11 to 13 billion. move up to 2050. If you have a 51 gawatt uh buildout, you're between 16 and 17 additional dollars, billions of dollars added transmission
rate. We're at about 13 billion right now rate base, you're going to double it in that time frame. worst case scenario and I think the curves would have come off uh for electrification on a economywide basis you could get to you know a winter 57 gawatt and you're at 23
to 26 billion dollars of additional cost in the transmission base yes >> so you've shown information here for I think these are different distribution lines >> these are different regions of the system yes
>> so is This do our transmission costs get determined by ISO New England or do they get determined by the transmission line ISO New England as a whole or by the particular distribution line that is used?
>> Great great question. I should not assume people understand how the transmission costs are derived. So it's a it's a regional transmission cost right. So at the end of each well over the course of a year uh the all the transmission owners put their revenue requirements together what they need to
recover through the rate of return. It's one big pile. They stack it up and then then they divide it by the expected future load and that becomes your rate. So whatever these projects would be there would be let's say they're all going to be what you know um RNS projects they're pool transmission
facilities. It is these areas that are aggregated into the total annual revenue requirement of all transmission providers and that is spread out over all uh network load in the region. >> So the network is all of ISO New England or is it for our region?
>> It is it is all of ISO noise for the RNS. Then there's LNS local network service and you'll have you know your PTF connection. might have some local network service and that's for the things that aren't recovered through RNS and that are more on the uh um if a community decided they wanted to bury
the transmission as an alternative to overhead it could be ruled that that's a local cost because otherwise could have been suspended as an overhead but that is LNS that's paid for that local region but as a as a practical matter all the issues here are recovered for a
systemwide cost uh for all regions of the of the system >> so the stability ility of ISO New England as a whole is considered like a common good. >> That is correct. >> So, so you're trying to keep that common good being >> that is correct. as a regional system planner, they have to, you know, meet
all the requirements for the balancing authority and reliability authority. And so it's it is it is that very reason as you said, it's the common good that the total cost of all the transmission is a is summed and then allocated not an elegant term like peanut butter over
everybody that's paying the bill across all six states. That is correct. Yep. So here we have these are these are 20 2050 transmission study. We can argue that these curves have come off of it. The the adoption rates are off. So we wouldn't expect to see some of these
numbers. But nonetheless, the cost of transmission continues to march forward. So ENT provides an opportunity. It provides uh the EN participants an ability to hedge those costs, those unavoidable transmission costs. You can't avoid them unless you put in
behind me resources and you're effective at clipping your peaks. then you can remove some of those cost exposures. But here we have a an ability to participate in projects ret receive the annual rate
of return on equity. Uh and um that comes back to you as a project owner and then that can be used as you as a owner and ENT that flows back to you and then you do with it as you wish in terms of how you fit that into your revenue structure and affect
your rates. So really ENT is providing opportunity for mark uh MA municipal light plant participation and regional transmission projects which receive the federal approved rate of return. And it's really a hedge much like you supply
hedge your supply your energy supply. It's the same thing. This is another hedge to help uh avoid or lessen the impact of some of those costs. Are these cars borne by the federal government at all or just by the beach house?
>> The federal under what what happens is um there's a there's an open access transmission tariff. There's a tariff and that tariff >> setting aside the other other meanings that can be derived from that. Uh there there there is there's a number of
tariffs in New England for the markets, but there's the open access transmission tariff uh which stipulates how you can build projects, what is recoverable and also determines the rate and that is approved by the federal energy regulatory commission. So the rate is
like 10.51 and it has an adder of 5.5 something. It comes out to 11.07 is the federally approved rate of return for regional transmission projects. Yep. And so that's that's for every
every year. And then January of this year, your new rate picks up. And it would have been this last summer, we would have I would have circulated what those rates look like. And then there's there is a full um sunshine process, if you will, that this is all the materials
presented. It can be challenged at the commission. The financials are available on the ISO website. Each transmission owner must present their information and then it's then it's basically a math formula. It says okay all these numbers in here comes down to here's the total revenue requirement here's expected load
of that year divide those and here comes your rate 184 kW years expected uh will be the rate now you go through the year the loads might be a little different you might have a trueup requirement because you had less load or you might more load and it's an adjustment that's
made on a continual basis but it's relatively minor relative to the rate itself Okay. >> Yes. >> So you're talking, you know, if you're saying $20 billion over the next 20 years, 11% of that is open for profit.
>> No, it's a great question because um not the RO return on equity, right? So there's like maybe a 6040 debt equity ratio. So the debt is recovered plus your debt service. It's not it does not get the 11% rate of return. It's the equity piece that gets the rate of
return. So you have $12 billion in the ground right now of transmission. Projections are depending on what we see for loads and requirements. Well, we know at least a billion a year is coming. >> Um it is depend how those projects are financed. If it's a again 5050 6040 8010
only the equity piece gets that return. >> Okay. >> Yes. And could you just give us a sense because I'm looking at this and I also discussed this with with you earlier like help us understand what's the economics for us right so so
>> just broadly I know you you can't go into specifics but >> no it's a great question >> right so just help us imagine so we have funded the startup right we funded the creation of >> that's correct >> and then help us imagine
What cash flow do you need from us going forward and when would we likely get returns? >> Which is why I asked them to come tonight. >> Great questions. Um probably want to talk with capsules and and executives. >> Yeah. So no,
>> but as a as a high level. >> Exactly. >> A high level. Let's let's >> whatever equity you put into the project, right? you would get back that equity on a rate of return of 1107%. That's the current rate. So every once
the project's commercial, your equity is returned with 11.07% rate of return. It does have a depreciation formula over time. Each each year it's depreciating, but and so the the equity piece starts to drop a little bit, but over time you get your rate of return. It's 11.07%.
that every month once you get commercial annual revenue requirement is captured in the annual revenue requirement that is submitted to the FIRK every month you would receive money that flows back to RMLD for their share of participation in the project and then you would do what
you wish with that now if if the project had a certain percentage of debt and equity then there'd be a piece that would be debt service right then the rest would be equity a rate of return. So it it's a it at the end it's
a hedge against the cost you're going to be charged anyways. So let's presume you took a five let's go with 5% 5% debt position and you're getting 11% rate of return. You're 6% to the good on your cash flows uh on
your on your equity piece. That does that help? >> Related followup question to Vivbec. So this requires us issuing a bond which what the town the town means going to town meeting >> and asking for approval to issue a bond
and explaining all this to town meeting. >> It's a great great question may not so um you're you're a participant in a you are now currently a participant in a hydrovac phase one phase 2 project. You've been for 20 years you're on for
another 20 years. You're actually it's a public document. you're actually an equity sponsor and you had a cash call last year. Depending on the cash flow requirements of a project we're in, you could put cash. You say, "Hey, it's
>> free cash like Yeah. >> Yeah. >> Uh if you don't then ENT would bond as an entity and then we would charge you we would charge you that fee for the bonding as we go forward." that that's we're we're talking to bond council now
how we would structure that we get into a project but at the end of the day your experiences what you have right now is your phase one phase two participation you had a cash call last September you'll have more coming for the projects that are going on there and it might
might fully fit within your cash available such that it's all equity to you or we could have a discussion at the ent board level depending on the size of the project who wants to to how much bonding do you want us to do and what
your bonding you know debt equity structure how much you want to put in cash if you look at your cash flows over a seven-year period say hey you know we we think we can do x% cash let's just do that and we'll want you as a total bondist and our part is this piece >> so can can anybody do I mean do MLPS
have an ability to do this u kind of financial transaction or can any entity do this could a private equity firm do what you're describing Eligibility I think is who is eligible to bid is I'm sure it's exclusive up to
a certain point or am I incorrect? >> So for an RFP a qualified transmission project sponsor effectively known as a Q-tip is the only entity that is qualified to participate in an RFP
uh for bid submission. It doesn't mean that they can't partner with other entities underneath that to provide cash or whatever and still get that same rate of return. But there's only one entity, a Q-tip, that can participate directly
bid on the RFP. Um and uh we have four entities within EN that are qualified transfer project sponsors, but ENT collectively even though we have six others that are not could come in as a partner, strategic partner in an RFP and
still put cash into the project and get that same rate of return to the through probably a special purpose entity that is a qualified transition project sponsor that if they win the award, we can flow that through them. So is is or ne the Q-tip?
>> EN Good question. EN is the entity, >> right? >> EN is not a qualified trans trans project sponsor. We have members that are, but we are not qualified at this point as a trans transmission project sponsor. It doesn't prohibit us from uh
partnering with other entities to participate in an RFP. >> So >> they would submit under their >> we're not qualified. RMLD is not a qualified. >> You are not sponsor. >> You are not. Yeah. >> So ENE is the vehicle to participate.
>> ENT is a vehicle to take the collective weight of right now 10 entities to have uh to participate in a project. That's correct. >> But you still have to partner with the qualified transmission. >> We do. We could have one of our members do it and we can participate underneath
them or we can participate with other qualified transfers and project sponsors as as a >> part all this is good but if we get into real numbers right >> what realistically what would MLPS have
to be able to put up and because we always have other uses for that cash right so the question is is this best use of our cash and how much would be really required because
>> yeah what's the what's the >> so so at least at least for us you know I I know we >> you know what I that might be a question we don't want to discuss at this point um I again that might be something that we're getting a framework let's talk
about framework if we're going to talk about numbers let's let's take numbers no I I I understand the sensitivity on numbers but I'm just getting a sense of magnitude of numbers, right? >> Let's not talk any numbers, right? Because I I I don't think that's
appropriate at this point. Let's just get let's understand I'd love to see that number but I think that's something we can discuss. I Dave I I know your comfort level but um with with discussing numbers but I
>> it's here slides. Well, that's that's the how much is being spent in the region. >> Oh, but so so my my question is what is what would >> Yeah. So see like we talking budgets today, right? So my so at some time you know it would be helpful for RMLD to
understand what is the what is going to be the ask right and it's just and it's just good for us to be aware of it. >> Are we talking 100% >> six obviously it's six seven figures right? Is it multiples? Is it is it much
greater than that? And and then that that's can that can get scared. So I I >> So what'll help is I go further into the structure of N and we can see how that how you come to those conclusions. Uh how the board how I bring a project to the board and then the board decides whether to move forward with the project
or not. But scale, right? I mean, you know, there's a limitation on how much 10 municipal systems are going to put into a project. Um, you could think about the Watsons. They were $90 million or $110 million.
>> You're a participant in that, right? >> What is, what was that again? >> The Watson generation units, right? That was like, >> okay, >> there was a like $110 million. You're a participant in that. I think there's only like four or five participants in that. >> Um, so there's these are there's projects out there. >> So, so I think just the fact that you
have 10 entities Yeah. that are your sponsors. I guess there's some common sense there that you know if needed these people can produce the cash, right? I mean >> that's correct. >> Right. So >> there would you would imagine this that
you have this discussion about a project and the board everybody sitting around the room that hears about the projects going to have to decide what is the appropriate level of participation for the group or for themselves. somebody could participate on a greater level
than somebody else. It's it doesn't have to be an equal distribution. It is the decision by the board to participate and then who at what level wishes to participate and that would be we're all MLPS by by nature are riskaverse. So
this is about a fiscal hedge against the costs that are coming to you anyways and is the value proposition there to be participating. >> Yeah. So, so I agree with Bob that, you know, this is this is not the right forum to get that information, but I think it's it's helpful for us to have
>> happy to come back and have a or an executive session have a discussion about >> and I think we've had a lot of updates. So, I'm not in a hurry for more right now. >> Oh, come on. >> I just said anymore
like we can go to the first year, but yeah. So I mean happy to come back you know and talk about that for sure. Okay, next slide. Sure. >> Yeah.
Structurally governance it entires in our transition operating agreement. There's one director from each class A member and those class A members right now are parties that contributed to the startup. chairman of board may may vote as a director in accordance with the
rules or their ex officiado. Right now the chairman of the board does vote as a director. Uh the executive director as me I may vote as a director as well but I do not I I am I am an exopicionado. I don't vote. I'm there to provide content
for the discussion uh make sure we you know make notices bring proposals forward update on what we're doing. >> Who's the chair >> right now? Kevin Shaughnessy from Norwood is the chairman. >> Okay. >> Yeah. Uh the chairman is appointed by ENT
under our operate by ENE under our operating agreement. We have a management agreement with ENT. EN is a standalone entity. Well, we have a management agreement that is the employee right here, the only one right now. It is uh when I for me it's been the last couple years setting it up uh
putting the structures in place and then going out and having conversations on participation in projects. >> Yes. >> So as a class A member are board members allowed to participate personally in the projects or does that just come through
their shares? >> It's a great question. We're going to cover that but it's a great question. So each each a class A member can sit on the board. It's a general manager equivalent of of an LLP. When we get to deciding on I I bring a project, let's go there. Uh I bring a potential project
to the board for consideration. Um you know, we've had a few conversations with different entities. We talk about what it is, the shape of it, what's it look like, what's is it a good project for the region, is it something we have interest in? Um and we decided let's move forward, have that conversation.
Let's imagine you get further on down the road with the counterparty and they're saying, "Well, let's get into term sheets. Let's talk about your level participation." Then the board would say, "Okay, we're willing to participate at X level." Not everybody has to participate. It is purely a voluntary
participation. If nine of the 10 want in, nine of 10 want and if nine of the 10 are in, there could be a different distribution of costs that they decide to take on in that project. So this is strictly an opportunity. Here's the projects. The
board says yes, it's a good project. Even when the board says it's a good project and everybody may not want to take a piece of that. They may be in another project. They may be just not ready to go at this point in time. It's purely a decision they make at that point in time in and to what level they wish to particip participate.
>> So they can participate personally if they so choose. >> That is correct. through the partnership that >> they they can participate in a project uh of their choosing. Yes. Yeah. It's purely uh we don't want to set up a thing where like hey we just got into a
project and you're in. No, we want everybody to have a say in the matter as we move forward projects >> and we've done that as reading light and other projects with previous c >> certainly um with a lot of the power
supply projects. Um absolutely uh you know we're we're part of some pretty big solar projects in the region uh that we are fully ENT customers fully subscribe it long term. So there's been you know if you think about it some of the projects you're in are probably
contribution levels of what you would do in this framework same thing but 40-year versus a 20-year uh uh payback. Uh there's 10 class A members right now that is grown. Um we started with seven right out of the box. Uh Brainree,
Reading, Taton, Middbor, Westfield, Norwood. Um Littleton came on, Middleton came on, Hangingham was on as the class B, moved to a class A, and then Holden came on. So we're at 10 right now, uh as class A members. Hangingham came in as a
class B initially. Uh what was the class B? Class B is they didn't pay any startup. they could attend the meetings, couldn't vote, just following along to see if they wanted to participate. Eventually, Hang said, "Yeah, we're class A." They jumped in uh because we had some conversations going on that were of interest.
And again, uh only the class A members can vote. That's again o the overarching con construct con construct is to bring enough weight of enough systems to be able to participate in regional
transmission projects. The current long-term transmission uh project uh RFPs out there will see um an RFP on the uh storage as a transmission asset only. Those are 10 30 megawatt grids scale
storage projects that could come in in 26 or 27. Um, and then there's what's called system efficiency network studies. Used to be called market efficiency studies. We never had one, but this uh system efficiency network is looking at uh boundary conditions on
interfaces and where they identify significant losses 4.3 million or greater. They test that against a a solution. If the solution provides a benefit cost ratio of one or better where we should be indifferent to the spend that can go into an RFP space another opportunity to participate I
like that it's a little smaller uh it gives us a shot at different solutions just >> so just a question of the whole logic of doing this is to effectively reduce the cost of transmission in the rate payers bill right
>> so the rate payers are being charged at a certain time frame yes >> when they're using that service >> and will the dividends also come out in the same in the same time frame because to to to give a benefit you need to be
getting the savings. So let's say RMLD is in a project. Uh there's a there of course there's the project starts up goes into construction phase. Then we have a COOD. Project comes online. As you lead into the project development, you're putting capital in. And then when
the project goes live for the next 40 years, you're getting a rate of return on any equity you put in 11.07%. If you took debt, it's your debt plus debt service you get back. But that that revenue on your investment flows back to
RMLD for its share of contribution and that flows into your coffers to to to manage you as you wish. >> But whenever you get energy on that line, you get revenues on that line also. You get a return on that line at the same time. It's >> you're not getting any ev any energy.
This is strictly you're paying for the infrastructure that keeps the region reliable. >> Got it. Right. You're not getting energy. But this but that that line is in play. That line is >> that line is part of the regional system. It is part of it is part of what
keeps us reliable. You you do that right now and the benefit you get today uh for your monthly RNS bill is you get a reduction in the capacity that the region buys.
tie benefits. RNS customers support the regional transmission system. ISO when it determines how much capacity each year the system must buy. Then the net stall capacity requirement to get to that number by using TAI benefits. How
much we can lean on control areas and emergency assistant because you all pay for that through RNS. It's a natural benefit to us that they reduce the capacity requirement by the amount of neighbor support we can get during um
emergency conditions. Here you would be getting that same benefit, but you would also be getting your rate of return on your equity and any cost of debt plus debt service. >> What's the depreciation schedule for
transmission lines? >> Uh it well generally a 40-year asset. Um I don't remember the formula off the top of my head. Uh but it's a 40-year asset that um >> could be I mean straight line depreciation would be over 40 years. >> Yeah. Exactly. Yes. And so >> exactly
>> something to consider is and this is important to consider is much like your involvement at Hydro Quebec phase one phase two as an equity sponsor. So you have your initial development and implementation and then the lines and great for 30 years and then you have to
start replacing components and the asset condition upgrades I just mentioned. You would inject capital again and that would start that cycle all over with those investments. That's exactly what's going on with you with the phase one phase two. you're paying for um currently the insulator replacement
project on that line and contemplation of a a future builds on that facility to take into the next 20 years because you're in a 20-year agreement right with them right now. But it's the same idea. >> And and one more question on the capital
stack with equity and debt and the rate of return. Can you go over that again? H how the the rate of return is is equity. It's it's assets under ownership. >> That's correct. >> The debt component is not capitalized.
>> It is it is part of the project but you get the return of your debt plus your debt service. It's not doesn't get the 11.07 RO. >> Right. But the equity all equity infusions get 11. That's correct. >> That was correct. >> It's not a weighted average that comes
back to it is all equity gets 11%. I could send you tariff sheets, but there I mean there it is the 1107's on the rate of return. In fact, ironically, you all have been fighting the rate of return for about eight years in federal proceeding to to drive it lower. Uh it's
it's been moved a few times, but it's now 11:07. That's the current rate of return. It's the same rate of return, frankly, that you're getting on your capital investments uh in the phase one phase two projects. Dave, how competitive are these Q-tip
projects? I I I got imagine with that type of return that is a very attractive market for anybody. >> Exactly. >> And and how is there any type of waiting for when you're participating as
a municipal? are we are we delivered a higher u ranking or is there anything like that because you could see that this I'm I'm shocked that we're even allowed to participate those rates of return wouldn't want to have a guaranteed 11%.
>> It's a it's a great question and and that's and >> I say this that's why we've been held out is because the the incumbent uh transmission developers didn't have to let us participate, right? They they if
it if today ISO runs a need analysis for let's say southwest Connecticut and it says oh we've got to upgrade these lines pull new conductor and that report comes out today and the need is within three years it never goes to bid it's automatically awarded to the to do it as
soon as per case um but now the states said look we want this as an RFP because it's out beyond three years it's actually the current longer term transmission uh planning RFP the COOD for that is must be CO commercial
operation date by 2035 so it's far enough out the states want a diversity of of uh participants and in fact when the window closed on the last day of September they got their submissions there was six projects came six projects
split between DC solutions and HVDC solutions and That project has to increase the interface limits for SE in Maine, SEOK South and New Hampshire Maine interface each by you know thousand or so megawws
has to build a 1200 megawatt um 345 KV switchyard in Pittsfield main to allow interconnection of 1200 megawatts of terrestrial wind. by the states want to feed that clean energy down the coast. So that l that RFP has got six parties
participating. Three projects of AC, three projects of DC. It had a diversity of um incumbent qualified transmission project sponsors, some new qualified transmission project sponsors and then a mix uh of joint proposals uh that are in
there. the range of those solutions, the proposals 0.96 billion to 4.04 billion with two in about the 2.25 billion range. Um, pretty big projects, but you're right, it it gra it grabbed a fair amount of attention and we're now
underway in the region, not us, the ISO is analyzing those projects to select the winner. And how do they determine a winner? It goes to your point of public power involved. Uh, they select the winner at the end of the day. They look at the project. Did it meet all the requirements of the of stipulating the
RFP? Did it provide additional benefits that were not in the RFP? It's great. It has to be measured against about eight different criteria. Production cost savings, um losses savings, uh the lower
cost of generation interconnections, um there's a whole list of them. And then there's a whole bunch of non-technical appendix A criteria that the New England states committee on electricity provided that ISO must evaluate against reduction of carbon who's involved who's the product are the
co-sponsored by other participants of interest that would be us public power. So there's a there's a diverse set of um technical financial review requirements and non-technical review requirements. At the end of the day, there'll be one project selected out of the six
proposals and it must for ISO to recommend it moves forward, it must achieve a benefit to cost ratio of one or greater. Those financial evaluations, it must played out that it's one or greater. If it's one or greater, the ISO says states, we think you should move
forward with this. And then NESCO would say, let's move forward. That is the solution. Let's move forward. Whoever that winner is, and then we're off and running. must be online by 2035. Alternatively, if no project has a BCR of one or
greater or the project that the states want is less than one, then they could say, "We still want to move forward because it it does something we want it to do for us besides, you know, um transmission upgrades." And we'll now they the states would say oh that
project was for simple math that project was a billion dollars. 600 million of that was stuff from a needs analysis regular regional system planning requirements and asset condition upgrades. That 600 million goes into the regular RNS monthly bill
that's got to be done anyways. The other 400 million we're going to we the states will file it Burke under section 205 of the power act saying look we want to divide this cost up this way state of Massachusetts will take the whole thing or five out of the six states will take
the whole thing or three out of the six states that's a separate matter but this is a very big evaluation pro process not only does it have to meet the actual capabilities functionally it must meet the RFP requirements then it must meet this BCR test and then it gets a second
set of evaluations that the states provide a little um they're not financial, they're more um substantive in terms of uh carbon reductions and other things. Hopefully that's responsive to your question. >> Yes. And so it is a component of the
collection process. You know, they could say >> there wasn't there wasn't >> Black Rock or Reading Light. >> Well, there was a um >> Well, you're looking I mean you're looking to enter into a consortium, right, of >> that's correct. these projects. You're you're not
>> public power in of itself is not big enough to build one of these. That is absolutely true. >> It's much like phase one work and and figure out that correct for >> MLPS in the greater consortium. That is correct. >> Which would include a developer I'm sure
and all the spons all the other sponsors etc etc. >> The consortium could be made up of a of different pe different entities. That is absolutely correct. and all with the same opportunity to inject capital and get the returns depending on you know
how they put them. That's correct. >> Any other question? >> I have one. >> I'm new to this as you know and I'm trying to pick up as everyone's going and I come from a completely different business. Is this something that I can read like a disclosure statement of what
this is really about or perspectus or something to give me more information besides a presentation? >> I can send I can send you the um the RFP. It's not very long. It's it's not very many pages. Um and then um I can
include some content as to what it is. So in this instance, this RFP we're speaking about is issued by the states, but ISO New England under Tiff has to administer it and it is now closed and that can describe what what they're
trying to achieve. Um, and as we heard here, our our discussion point is we're subject to those costs. We can't avoid those costs and those costs are going up and the cost of this project will be thrown into the hopper and recovered through that same mechanism. And the
purpose of the ENT vehicle is to allow the members to go out participate in that project and use the rate of return above their cost as a way of paying down the exposure they have much it's it's a hedge. Yeah. So I'm happy to provide
Paul some information to share with you all. Um >> it sounds like everyone is more of course more familiar than me, but I'd like to get up to speed >> and you should feel free to stop me at any time when I'm talking. uh now or in the future when you have me back. Uh really it's there's it's you know it's a
new space and um as we just highlighted though public power in and of itself would not put $2 billion$4 billion a billion dollars to build these projects. we are looking to join a consortium uh or in a future state if we decide to
move um EN to a QTIP a qualified transfer project sponsor we could get there but in the short run we wasn't we didn't need to as but um yes so thanks for the question happy to provide some material
>> I quit thank you tip because Megan kept laughing >> well we don't we we get us the whole the whole other set of acronyms. Squatspa and all this type of stuff. It's like a >> acronym. >> It is. I have to remember what they are. But anyways, yeah, they they live in the world of acronyms. But anyway, um
>> well, hopefully that's helpful. >> Yeah. No, I I found it very informative. I'm sure everybody else. >> Thank you very much, Dave. Great. >> Appreciate when I started seeing the numbers and then I asked our how much conversation, you know, has the board
had over this and it didn't appear to be that much. I fig this is a perfect opportunity to kind of open everybody's eyes up to just >> magnitude scope of what we're what what we are into. >> Excellent. Thank you. I appreciate it. >> Thank good to see everybody again. Look
forward to seeing you in the near future. >> Yes. >> All right. Yes. Thank you. >> All right. Moving on to the capital budget for 2026. Approval attachment two. you want to read the motion and then go over the data or you want to um go over
the data and read the motion. >> Let's go. >> Okay, we'll go over the data uh first. Uh the updates from the capital budget uh and then the cab will read the motion and then we'll we'll work to the board of commissioners.
So, I don't know. Um, everybody saw the email. I don't know, uh, Patty, how you want to handle it. You want to just go over the updates that that you provided. You want to >> Yeah. Well, I I think Erin sent the
email out. I'm listen. >> I don't have my phone on me. I don't Did anybody recall who sent email? >> Maybe Erica. >> Did I Erica? Erica sent it. Okay. Erica and Erin.
>> Okay. Last week, uh, it was, uh, we recommended that we put additional money in the budget for the cost of service study, and which we did. We put another 50,000 into the GM outside U budget.
Um, if I may, so I told the the various municipal like plan general managers, say, "Hey, who's done a cost of service study lately?" And what did it cost you? That was the deal that >> Yeah.
>> Okay. Um, so, so this affected the budget book pages 81 through 87. Uh, there was a >> It went up by 44.9. 44.9. Okay. Not >> that line jump.
>> Oh crap. >> Notices everything. So um anyway, there was also discussion about the the discrepancy between the net plant figures on one statement to the other and we realized there was a number that
was put in the wrong column on one of the statements and that was actually the co the number that was projected for calendar year 25 total and not the cal the budget calendar year 26. So this correction uh and the update of the
other years changed the RO figures on page 81 in the budget book and then going forward >> and it brought it down from 10 point something to 82 >> to 8.84 I believe. Yeah. Um going forward we'll ensure to sync
the two statements before the budget is completed. Uh there was also a question regarding the increase in uh health premiums and it was there is going to be an increase of 13 and a half%. And we had already covered that in the budget with an
assumed increase of about 14%. And then there was questions regarding the OM decreases from projected to the budget and they were explained by a greater amount of operating labor going to capital projects.
I think that was it. >> Are there any questions from anybody? >> We did talk about the CIS system. You asked her >> that's in the capital budget. >> Oh, okay. >> That's in the capital. >> Okay. No further questions. Okay. You
guys want to make a motion? >> Okay. So, um Do you guys have any questions? Jason, you have you comfortable with the vice? You want it?
>> Moved that the RMLD citizens advisory board recommend to the RMLD board of commissioners the calendar year 2026 operating budget as presented on the recommendation of the interim general manager. >> Second. Second.
All in all in favor I I >> Okay, David. >> Uh move that the RMLD board of commissioners on the recommendations of uh recommendation of the RMLD citizens
advisory board approve the calendar year 2026 operating budget as presented on the recommendation of the interimm general manager. >> I'll second that. A roll call vote because being remote >> and escalas I >> Swanson I
>> I >> Quilter I passes 4 Z. Okay, moving over to the capital budget. All right, are there any um questions on the capital budget? I know. Uh
>> yes. >> Okay. >> Um we had asked a question about the capital the CIS project and could you want to just
clarify what what is being done about that project because uh I I I think there is a need to improve the the whole system and uh yeah so could could you just comment on that? Yes, it was just a
>> Paul, could you just recap? But it was like $400,000 request, right? I think that was the basis of >> were you saying if that is enough money or is >> it was just a line saying this will be a a new improved system. So I just want to
understand because I think there is a need to improve the system and so I just want to understand what all is going to be done about it. So so I just want to understand more about You need the question. You have the
question. >> I I I'll let Paul answer. >> So, VC had uh a series of questions about what what were we hoping the new system was going to do for us, you know, all that kind of stuff. Not specifically
about, you know, how much is 400 enough or is it not? >> And and like we were not asking, you know, what software are you buying and, you know, why are you buying from this vendor? It was more a question of Yeah. So, actually, why don't you read the questions? Sorry. >> Yeah.
>> Okay. Um, this we've seen some issues in reporting the budget in consistency. How do you plan to determine communication? This is a challenge for many all organizations. You'll be able to understand how information is going to go into CIS and
what is planned for training for folks using the new system. How long is it likely going to take for the new CIS system to be implemented and used effectively by our RMLD?
So my response back to was that as you know we're in the mid well not the we're get ready to start installing the AMI meters. There are issues having the number of systems to talk to each other.
same folks that would be putting together the RFP for the new system are the same people who are working with various vendors to try and get the system to talk to each other. I didn't feel that we could do both of them well
and the fact that we have like 500 meters sitting here and we're kind of anxious to get started. I made a decision to hold off doing anything CIS system until we get this integration together because you know you can only do so much at any given time. So I made
a decision you know sit tight on this for a second as we get closer to getting these four systems integrated into AMI then we can kind of move to what do we want this new CIS system to do for us. We're talking more just CIS that's
customer information system FIS financial information system. >> Correct. >> It's more than just the CIS. The CIS is your customer. >> Everybody's using has been using CIS. >> Yeah. The line item just said CIS 400,000. >> So, but this is this is helpful. So,
what are the four systems? You said four. There's the financial integration system. There's customer. >> He's talking about CIS. I'm talking about AMI. There are four systems that need to talk to each other >> and those are >> the metering
data software meters and then we have the head system part of the AMI system and the meter data management system is from the same vendor for this. So actually to be accurate this new
investment of the department budget shouldn't be CIS it should be >> okay >> system so it's not just CIS >> so but so it but it includes CIS a customer information system to to do this is the financial piece of
our current ERP uh the support for that is expiring by 23rd So we would we would be looking for a new system anyway. >> So so I I think that exactly what Pard
said the problems we're running into is try to get these dispar systems to talk to each other is one of the biggest problems that we have every time we try to do something with we've got 16 or 17 different applications different vendors. Uh it's not a holistic system. It's incredibly inefficient. It's very
labor manual manual labor intensive that we spend a lot of time. It's prone to error when you have people, you know, hand jamming in numbers and trying to figure out things. Uh but like like Paul said, until we right now we have to get, you know, the ability to to to do the
billing to roll out the meters and then we get a little bit of breathing room that we certainly should as quickly as you know we can safely do so look at and evaluate finish evaluating and decide on a new system. >> What you want for 2026? Well, the thing
if I look the timeline after talking to to the vendors uh that we have talked to uh it's going to be a multi-year. It's not going to be done at 2026. So that that 400,000 is the 2026. It's going to go into 2027.
But um in the in the financial analysis at least of one of the solutions, it's a wash. it's not going to cost us any additional money, you know, over what we're spending because you're going to be eliminating all these other applications and support for them and then the infrastructure that we need to
have to support those as well. So, >> you talked to different vendors already. >> We we did uh we talked to three different vendors. We had demos um and that's where that's where we got some quotes back, but we haven't there's been no decision made on it. And um I don't
know if it's going to go to to RFP if that decision I guess will Jason will be involved in that when he comes on board. So that might be helpful if we saw an RFP so we know what systems are included in the the proposal. But right now just seeing a line item CIS 400,000 it's kind
of it opens up questions >> in the budget for >> right >> so we have to money doesn't get spent by6 you have to let funds available to bid to cover the cost of go fix it. So if they've got points back, I'm sure they're somewhere in that ballpark,
>> right? >> A little bit of an add for being a hero. And >> it it's a little different in the municipal >> world if you're not familiar yet. >> No, I'm I'm okay with him personally. Yeah. But I just in the meeting last
week or Yeah, last week we talked about the uh P accounting system that wasn't in it. But the somebody >> No, it's definitely there's definitely a full financial package there. >> I just want to know what's included in the CIS >> is the outage management. We can we can get you a list of without being like
vendor specific, but it's it's a it's it's purposebuilt for utilities just like us, you know. So it's it's a holistic solution. It's just about probably 95% of what we need and uh but we can get you with different items.
>> So, so, so what Paul said is that AMI goes first and once the AMI is well on its way, >> the integration, not necessarily the installation, >> right? Okay. Once the integration of the
the the the software piece is underway then you will undertake then Jason >> the next retrofitting new system back in after you've already done the integration.
>> No. So the the integration that I'm talking about is the various components. Megan. >> Yes. So, right now we have Sorry to interrupt you. We just need the mic. >> So, right now the there are 500 AM
meters on our property ready to be installed but we cannot install those unless we can actually build customers through th those new meters. So what we are we have been working on uh for a
while is to uh for the uh the tentless meters meter readies to be transferred to the meter data management system which we actually had. So for the MDM project, I think you've heard me talk about it in the last last uh past year
or so, uh we started that the the kind of the uh the the commissioning of that project last summer and by this past February. We finished the phase one uh SAT. SAT is the system acceptance
testing which means the meters data management system is working because it's receiving all the reads from our current it meters they work fine and then the second phase of the MDM project is to integrate with tensless meters and
titanless meters were just delivered uh I think at the end of August. So then uh Nick our metering department they they started to put in some meters on our property so that I can create some reads. So we started the second phase of
that integration uh sometime in September and um so the first part is for the meter reads to be transferred to MDM it's all correct up till now it's still not correct because the tend meters um the meter reads the
missing reads were not corrected so the MDM is not receiving all the meter read so the intent of using the MDM is to use the interval data to get to the total register reads. So the old way of uh getting the meter
reads is just to do a register read but you get two and then you subtract one from the other then you get your consumption and you build on top of that. So there are some a lot of nuanced issues that we're trying to deal with both pentless and MDM that's the first
step. The second step once MDM's receiving all the reads and can do all the calculation that matches the registries those data will become billing files that will go to the building system which is Cogdale. Currently we use Cogdale and that's
another piece of integration. We don't know at this point. Uh I'm pretty sure it's going to take a while for them to actually receive the files and actually can do the calculation because they have to manipulate the the rate templates to be
able to consume the these new billing files. So that's the two big pieces of integration we have to really get done before we install the very first sentence meter on our customers >> because we can't build. So you will systems but it's kind of the
only way that >> it would probably be just to CIS >> right >> the other stuff would stay we still have to do stay it would be red >> and and there the impetus for uh getting a new ERP is actually from the
operations side where we we heard I'm not from the operations side but the the operations team has been struggling with the current system where half of the work is done manually or because the different that you know we use sprite
point I think you know some of the information cannot be really uh be connected to the the what is it called payroll uh system so a lot of the data entry is done manually right now so that was the other impetus for for getting a
new ERP but I see John wanted to talk you need Rich, just to go back said about retrofitting and stuff that uh the newer at least solutions that we looked at, they're fully integrated, right? So, you're buying a it's a commodity product, right? You're not you're not
going to the vendor and saying, I want, you know, this to do exactly this, exactly that. They they have a product that's already been that's been rolled out to other customers all over the country. Here's the product. Here's their financials. Here's their meter data management. Here's their MS because
right now all of our stuff is just all over the place, right? So, the challenge of keeping everything running and then trying to add to it, you know, I mean, it's just it just draws out that timeline and that that's what I was referring to is, you know, it's labor intensive to try to try to operate like
that. But I I know what you're saying with retrofitting, but really to in my mind, what we would do is we'd stand up a parallel system. The the database is the database. That's what the data what's your data? It's it's the financial information. Sure. But primarily for billing, it's that the meter reads, right? So, it's sharing the
same data as the the the new system and the old the current system. Once everyone is trained up up to speed on the new system, you go over to it. That's got the other parallel. >> Yeah. >> Thank you. So, that's why at least this
kind of detail is like, you know, that was just one line. I just wanted to get some color on this. Okay. Uh, there any more questions on the capital budget? If not, I'll hand it over to you for that. >> Okay.
The citizens advisory board recommend to the RMD board of commissioners the calendar year 2026 capital budget as presented on the recommendation of the interim general manager. >> Second.
>> Second. Thank you. All in favor? I >> would uh someone like to read the motion? >> You want me to do it? I'll do it. Uh move that the RMLD board of commissioners on the recommendation of the RMLD citizens advisory board approved the calendar year 2026 capital
budget as presented on the recommendation of the interim general manager. >> Second. All those in favor I thank you. I Mr. I Yes. 4 Z. All right. On to the next item. Uh Paul.
>> Yes. So, uh I don't have too much, but I I want to give the BOC a heads up. You're going to be getting uh via Adobe the IBW contract to sign. Once that happens, then that kind of sticks a fork
in that for the next three years and those folks can get their races because they haven't yet. So if you keep your eyes open the next couple of days for that, everybody in the IBW would be very much appreciated. >> Happy Christmas. >> Happy Christmas.
>> Oh, good. >> And basically that's the I mean we kind of I was going to talk about the AMI integration, but we kicked that horse pretty well dead. We ran it over backs up a couple of times. So >> you're welcome. >> Thank you for that.
I'll that's it for me. >> Okay. All right. Moving on to scheduling. Uh upcoming meetings. Uh Wednesday, uh December 17th is the next one on the schedule.
>> Probably need a couple of meetings between now and then. You think, Bob? >> No. 880 so far this year. >> No. Yes. Stop. That counts general manager in for 10 years. I don't
know if I had 80. That's got to include committees and >> meetings folks had to get paperwork out >> really >> because it seemed to be like >> I think we did
>> this year >> because we get paid by the >> we get paid >> one meeting. >> Yeah. There you go. One meeting right there. >> There you go. >> Two meetings right there. Yeah. Fabulous. >> But no, that's a lot of work by everybody here at uh
>> end result >> right in here and right there and and so and everybody in the room at at the support network here in the uh the team again can't say enough about how how seamless it is. So we get data, we come back, we have the information, we ask,
it shows up magically. So it's a it's a great >> well it for us magic. >> So all right. Um, so no no issues with the schedule coming up. Um, do we we I know we set up a couple other Did we set January? >> Nope.
>> Do we want to set January? >> Um, we can. I'm not available on Wednesday. >> That was going to be my big thing. So, we're gonna have ideally I'd love to have, you know, every month we do it on a Wednesday. That's just not like not
Wednesday, but any day. >> Yeah, >> exactly. It looks like one of you can't do Wednesdays and one can't do Thursdays. Monday Tuesdays Tuesday I'm more inclined for a Tuesday than a Monday. I know what Monday mean. >> Yeah, >> but okay. T
>> I don't know. Jason, if you have a >> Tuesday, >> Pam. >> Yeah, Tuesday would be fine. >> Okay. >> Third Tuesday, fourth Tuesday. It doesn't really matter to me >> any particular week in a month that are
>> I would >> only because we may have a new general manager at that time. >> Yeah. So I' I'd say at least the second week of January. Um not the not January 4th. I'm not up I'm not up for January 4th.
>> No, the 19th is >> all right. January 2nd or third week. >> The 20th or the 27th through January. >> That is someone said what what's the holiday? >> No. No. I mean that's the 19th. Oh, so
it would be that's the 19th. Okay. So we could either do the >> 20th or the >> 13th and the second. >> Sorry. >> You don't want to do the second week? >> Do the second week. I mean, the one thing we do have to do and then we'll get out of your way is goals, right? We
have to get That's the kind of big one for January. >> Yeah. >> So, that might be Or do you want us to give you three weeks rather than two weeks to settle in? >> Okay, fine. >> All right. Yeah. >> Um,
okay. If that one's okay on the 20th of January, 2026. >> And what time are we like? We like six. Do we want to go earlier? >> Six. Good. It's time to get people here
out of work into traffic. >> Six. >> Six to seven. >> Six is good. I I prefer six to seven. >> Yeah, me too. >> Okay. >> I heard to seven. So >> six to seven. 60-minute meeting. >> Six to seven. >> I'm going to have Bob run the meeting. That's up to the chair.
>> All right. So, next meeting will be January 20th uh joint meeting and we'll we'll pick the next one after that. We'll go. Okay. >> Because I think we might have to have a couple polls. We're we're way behind on housekeeping type uh stuff, but we've been very busy. So, we might have to do
two in February or pick up pick up an extra one. 84 85 >> way to 80 pretty quick. >> Yeah, exactly. Uh, okay. All right. So, that's good. And then the schedule will be uh Rich and
Pam AP and uh payroll in December. Uh myself AP and uh Ray will be payroll >> meaning. >> Okay. And Pat, if you did not see Patty's note, anybody did not see Patty's note about uh the timing of
>> Thanksgiving week. So that was No. Okay. Okay. So, just just be aware. Um, so if you need anything, I know uh I think uh Erica has our cell phone number. So, if you need something approved, I would say
shoot a text like yes, do it today by noon, please. And then that way it'll get done because and I I know we're all using our email, but some of us are more responsive than others. So, um, but that would be good. All right. Excellent.
>> Okay. Didn't get a motion. >> That the RMD citizens advisory board adjoin regular session. Roll call vote required. >> Second. >> Okay. Okay. All in favor? >> I. >> Thank you.
>> Okay. Uh move that the RMLB board of commissioners adjourn regular session. >> Second. Those in favor roll call. >> I guess I >> All right. Thank you everybody.
>> All right everybody. >> Thank you. >> Thanksgiving. >> Happy happy holidays. Happy >> happy Thanksgiving.