2026-09-28 - City Council Electric Strategy Workshop

08:29Yes.

09:56Good evening and welcome to the electric

09:58strategy workshop. As a reminder, no

10:00final actions are being taken at this

10:02meeting since it is a workshop. Also,

10:04the rules of city council still apply.

10:07Speakers are asked to present their

10:09comments in a respectful and courteous

10:10manner. Speakers should stay stay on

10:13topic and be cognizant of their words.

10:14Speakers are given three minutes to

10:16address the city council. And to help

10:18speakers stay within the three-minut

10:19time frame. Speakers should be aware of

10:21the timer located on the side dis.

10:25This timer will buzz when it hits zero

10:27and we will alert the speaker that their

10:29time is up. Also, when speakers names

10:32are called, they'll be called at least

10:34in groups of four. and we ask that you

10:36move to the front row right behind the

10:38podium so we can keep things moving.

10:43Miss Galahghue, are you ready?

10:45>> Yes, Mr. Mayor. There are eight speakers

10:47tonight. The first four speakers are

10:49Richard Stark, James Far, Joe Hus, and

10:53Tim Fero.

11:05Hi, Richard Stark, eight years with

11:07Neapville and also a member of the

11:10strategy team supporting Doug Kger. I'm

11:13here tonight to give you an update of

11:15the due diligence we used to check for

11:18errors in AI generated research reports

11:21and analysis.

11:25The overall process is pretty simple. We

11:28first started by uh selecting two AIS

11:31each to run the same uh answer to a

11:34prompt and we get uh two research

11:37reports. From that we pick the uh the

11:40one we like the best and then ask the

11:43other one or a different AI to conduct

11:45due diligence on that. And then

11:48following that we got some human

11:50intervention by shopping some of the

11:52major concepts with others within the

11:54community who are knowledgeable about

11:56this topic.

11:59I'm now going to uh play a response from

12:02Gemini Pro who was uh asked to do

12:05diligence on a very detailed chat GPT

12:08electricity strategy external analysis.

12:12It was a 28 page report which contained

12:1450 59 citations.

12:18>> I'm Gemini Pro. To perform AI due

12:21diligence, how do I audit a competitor's

12:24complex analysis? Because Just another

12:27AI strategic plan. Every single

12:29underlying claim and calculation needs

12:31verifying. Take my recent assignment

12:34GPT's electricity strategy report for

12:37Neapville's Richard Stark. Layer one is

12:40citation verification. My dashboard

12:42scanned the ent

12:47GPT citations accurately supported the

12:49referenced source material. Layer two is

12:52mathematical integrity. I don't just

12:55read the final numbers. I audited every

13:01data. But then my system flagged a

13:04potential anomaly, a totally fabricated

13:07fact, an AI hallucinaber

13:17to expose the error, but the joke was on

13:20me. Chat GPT was right. That's just the

13:22new National Renewable Energy

13:24Laboratory. I finalized my assessment.

13:28This reports a massive level of

13:30analytical rigor. It provides

13:32Neighborville City Council with a highly

13:34reliable foundation for their

13:35electricity strategy. So, what's the

13:38final verdict on that GPT strategy

13:40report for Neville? It passed my 59

13:44citation audit with perfect accuracy.

13:46I'll just have to find another way to

13:48criticize my competitor.

13:54Um I hope you are now confident that we

13:56are thoroughly have thoroughly vetted

13:58our sources and uh hope you have a very

14:00successful workshop. Thank you.

14:03>> Thank you. Next speaker.

14:05>> The next speaker is James Farar followed

14:08by Joe Hus.

14:16>> Good evening. In government people's

14:18feelings carry weight. There is some

14:20fraction of Neapville residents who

14:22don't want their utility payments

14:23flowing to a coal plant. I understand

14:25that and respect their opinion. There is

14:27probably a better way to say it, but

14:29their feelings will be hurt if we stay

14:30with IMEA. Unfortunately, no one really

14:33knows how many residents are in this

14:35category. It's never been measured, but

14:37here are some facts. Despite heavy

14:39marketing, only 6% of utility customers

14:42subscribe to the city's energy

14:43efficiency program. Not all of them are

14:46altruistic. Most take more money out of

14:48the program than they are paid in. That

14:50sounds like a business decision, not a

14:52statement on reducing carbon. Rexs are

14:55used to help build more solar and wind

14:57facilities in Illinois. Yet only one,

14:59yes, one resident has purchased Rex

15:02through the city's green energy

15:03certificate program. Maybe these low

15:06numbers are a statement of how our

15:08residents feel about paying for carbon

15:10reduction programs out of their own

15:12pocket.

15:13It's likely you have heard from hundreds

15:15of constituents on this matter. It would

15:17be a stretch for you to claim you've

15:19personally heard from a thousand, but

15:21let's go with that number. That means

15:24you haven't heard from 62,000 utility

15:26account holders in Neapville. They have

15:29feelings, too. Think about rateayers

15:31hurt feelings when they open their

15:32utility bill in 2035 and see it has

15:35increased by hundreds of dollars.

15:38They'll perk up and ask, "Why is this?"

15:40Those future residents will be reminded

15:42the two coal plants at the heart of this

15:44issue are still running at full capacity

15:47and producing the lowest cost power in

15:49Illinois, but no longer for them and

15:52with no carbon reductions whatsoever.

15:55Those future residents will be reminded

15:56they collectively paid $700 million over

16:00the last 24 years with the promise their

16:02power supplier would drop the price of

16:04electricity by 25%.

16:07Instead, their $700 million investment

16:09vanished into thin air and their rates

16:12actually went up. Debris reminded their

16:15city no longer has an influential seat

16:17on the board of their supplier to guide

16:19its policies, but rather it is now some

16:21faceless, profit-driven Texas-based

16:24corporation. It seems like there will be

16:26plenty of hurt feelings to go around in

16:282035.

16:29This includes retired couples on fixed

16:31income already close to being driven out

16:33of their home by property taxes.

16:36uh families working two jobs but still

16:38relying on a food pantry to make ends

16:40meet or low-wage earners hoping to stay

16:43in Neighborville to give their children

16:44a better chance in life than they had.

16:47There'll be 62,000 of them opening their

16:49bills in 2035 all with hurt feelings

16:53asking what did I get in return? Thank

16:56you.

16:58>> Thank you. Next speaker.

16:59>> Next speaker is Joe Hus followed by Tim

17:01Fero, Robert Geese, and John Doyle.

17:06And if you've heard your name call,

17:07please move to the front row.

17:17>> Um, I'm Joe Hus and I'm a volunteer with

17:19Nest and I have some concerns with

17:20tonight's presentation. Um, in options

17:23two and three it says quote requires new

17:27personnel to staff an energy management

17:29office and today we pay IMEA to provide

17:32those energy management services. if we

17:34leave IMA, we can hire uh many different

17:37experienced power marketers to provide

17:39those same services. We don't need to

17:42hire staff. Um and so I didn't

17:44understand why the slide said that. Um

17:48then on option two, it also said

17:50requires immediate action. Again, we

17:53we've shared information at past council

17:55meetings that projects are built much

17:56faster than the nine years that we have.

17:59And more importantly that most it's most

18:01common to buy assets that are already

18:03under development. Uh for comparison

18:06here in Will County, Earthwise Energy uh

18:09started construction in this year for a

18:12600 megawatt solar farm and plans to

18:14start delivering electricity in 2028. So

18:17three years. In fact, the typical energy

18:20contracts are signed three to five years

18:22before the energy is needed. And for

18:25reference, you can look at slide three

18:26of the presentation that shows that we

18:29signed the IMEA deal just four years

18:31before receiving energy. Acting nine

18:34years before we need it would limit

18:36Neapville's options and flexibility.

18:42Um, also on option two, it said market

18:44participation with assets would have

18:47frequent rate fluctuations for

18:49customers. So assets serve as a physical

18:52hedge against pricing volatility. And

18:54today the coal plant serves as that

18:56physical hedge. Uh we can replace the

18:58coal plant by purchasing assets that are

19:01allowed under SEA or by signing a power

19:04purchase agreement. And both provide the

19:06same rate stabilizing effect. Rate

19:09volatility will depend on how much

19:11energy we hedge and how much cash buffer

19:13we maintain. And that's just the same as

19:15it happens today. So we don't understand

19:18why the slide says that the opposite.

19:21Those are just some examples of issues

19:24with the presentation, but they point to

19:26the importance of hiring outside

19:28independent expertise. In a couple of

19:31years, we'll need energy experts to

19:34provide the council with facts so that

19:36we'll turn so that we can turn our

19:38vision statement into action. Nest

19:41advocates for a diverse, flexible

19:44solution like on the one on the screen

19:46that wouldn't require hiring staff,

19:49wouldn't have price volatility, and

19:51would give customers options to lower

19:53their bills. Thank you.

19:56>> Thank you. Next speaker.

19:58>> The next speaker is Tim Fero, followed

20:00by Robert Geese, John Doyle, and Lewis

20:02Halus.

20:11Thank you.

20:13Tim Fero, affordable Neighborville

20:15director and resident of Neapville. This

20:19table here is a black energy comparison

20:20[clears throat] between IMEA Prairie

20:22State Power Plant or Power versus a PGM

20:26solar PPA. For sake of time, I'd like to

20:29skip to line to second line, which

20:31provides a glimpse into 2035 when

20:33Prairie State bond cost is retired. The

20:36base cost for Prairie State is $31 a

20:38megawatt hour. This was determined from

20:41actual 2025 invoices and generation

20:45reports.

20:47You then add a capacity cost of and for

20:51for Praate it's $4 for a total of 35.

20:55Now for solar PPA in PJM the base cost

20:58is around 80. The PGM capacity cost for

21:02such a solar PPA is $25. And this is $25

21:07per megawatt hour. And this cost is

21:08going to go up for a total of 105.

21:12So in so when you look at the totals,

21:14solar is three times the cost of IMEA

21:17Prairie State post the bond.

21:22Now I would like to cover some cover

21:25vision and strategy factors to consider.

21:27The state of Illinois already has a

21:29clean power plan. So why does Neapville

21:31need to get ahead of the state's plan?

21:33In doing so, there is a risk of

21:35isolation leading to reduced access to

21:38lower cost power and higher energy cost.

21:41The state has far gre greater

21:43flexibility to adjust CJ time timelines

21:46if economic risk warranted.

21:50Most Neighborville residents prioritize

21:52reliable and lowcost energy.

21:56Neighborville's economic development

21:57goals like I88 corridor depend on

21:59ensuring incremental reliable cost of

22:02damage power.

22:04Neapville businesses consume 50% of

22:07Neapville's power. We need to ensure

22:09their access to lowcost power remains.

22:12Higher utility costs to businesses will

22:14pass through to customers.

22:18Demand response and VPP initiatives

22:20should be should demonstrate a clear

22:22monetary benefit with transparent

22:24measurement.

22:26These programs should be evaluated on

22:28cost and reliability outcomes rather

22:30than carbon-driven objectives.

22:33Ration demand is now a long-term

22:36solution. Time-of-use structures often

22:38evolve into rationing mechanisms.

22:42After years of alternative choices, 80%

22:46of Comet customers still use the

22:48standard bundle service. There is no

22:50large pent-up demand for alternate

22:52choices by residents. Thank you.

22:56>> Thank you. Next speaker. Next speaker is

22:59Robert Geese, followed by John Doyle,

23:01Lewis Halus, and Roger Bloomquist.

23:11My name is Robert Gezy. I am with

23:13Affordable Neighborville. I moved here

23:15in 1972 after earning my PhD in physics

23:18from Stanford University and I spent 26

23:21years at Argon National Laboratory much

23:24of that time studying electric utilities

23:26and energy storage. We are told that

23:29there is quote unquote a climate crisis

23:33is there. I remember Rahm Emanuel saying

23:36you never want a serious crisis to go to

23:38waste. His full point was that a crisis

23:41can create an opportunity to do things

23:44that might otherwise be difficult. I

23:46believe we should be careful that

23:48climate policy does not become driven by

23:50the label crisis rather than by careful

23:53analysis. The climate system is

23:56extraordinarily complex. It involves the

23:59atmosphere, oceans, land, cloud, and

24:02many feedback mechanisms. Climate models

24:05are useful tools, but they are not

24:07perfect representations of reality.

24:10Earth's climate has climate has always

24:12changed. During the age of dinosaurs,

24:14temperatures were substantially warmer

24:16than today. 10,000 years ago, massive

24:19glaciers covered much of North America.

24:22Natural climate processes are real, and

24:24scientists cons continue to study them.

24:27The question is how much of today's

24:29warming is caused by human activities

24:32and what policies are justified by that

24:34warming. Greenhouse gases clearly affect

24:37Earth's temperature. Without the natural

24:39greenhouse effect, Earth would be far

24:41colder. Water vapor is the most abundant

24:44greenhouse gas.

24:46But its concentration largely responds

24:49to temperature. It is claimed that CO2

24:52persists in the atmosphere.

24:54This could be wrong. There is a

24:56mechanism to bring it out of the

24:58atmosphere. CO2 and water vapor combine

25:01to form carbonic acid. Carbonic acid

25:04combines with limestone and similar

25:06stone to form carbonate precipitates

25:08which eventually wash down to into the

25:10ocean where the plate tectonics remove

25:13the CO2 to the Earth's core. In

25:16addition, the relationship between CO2

25:18and temperature is not simply simply

25:20linear.

25:22The additional warming from increased

25:24CO2 is approximately logarithmic. My

25:27concern is that legitimate scientific

25:29questions are sometimes turned into

25:31political claims that leave little room

25:34for uncertainty or debate before we make

25:37expensive long-term changes to our

25:39energy system. We should carefully

25:41examine the evidence, the costs, the

25:44benefits, and the alternatives. So, I

25:46urge you, don't simply accept the phrase

25:48climate crisis. Examine the science and

25:51the policy choices for yourself. Thank

25:54you.

25:55>> Thank you. Next speaker.

25:56>> The final three speakers are John Doyle,

25:58Lewis Halchus, and Roger Bloomquist.

26:11>> John Doyle, Neville resident. Thank you.

26:13Um, tonight's presentation is going to

26:15start with a brief procurement history

26:16of the utility. And I noticed that

26:18pricing information wasn't included,

26:19which I thought seemed relevant. Going

26:22back to 2004, there were only three

26:23years that KMED was cheaper than

26:25Neapville. All three years during the

26:27IMEA era. The biggest average difference

26:29between us and Kameed happened during

26:30the J Aaron era. 17% cheaper with J

26:33Aaron compared to 8% cheaper with IMEA.

26:36In fact, IMEA's average difference is is

26:38marginally worse than we were buying

26:40power wholesale from KMED directly.

26:43Outside of the 2022 spike, the

26:44divergence that happened after 2021 has

26:47been driven by Comeded's delivery costs

26:49increasing, not their energy costs. We

26:52do not need a joint action agency to be

26:54cheaper than COMED. We have already

26:55shown that we can do a better job of

26:57that without one.

27:00And then it looks like tonight we're

27:01going to be setting a vision statement

27:02as a key outcome. Uh regardless of what

27:05was chosen or what is chosen, I think

27:06Mr. Wilson was very much correct a

27:08couple months ago when he said we're

27:09going to need definitions for all the

27:10key words in use. And take affordability

27:13for example. Uh it's not defined by SEA

27:16but it's worked out between the ICC and

27:17the IUS in our state. And in Neapville's

27:20case, you are the legislator, the

27:21regulator, and the utility all all in

27:23one. So it's entirely up to you as a

27:25body to define these key words in our

27:27mission statement and in our vision

27:28statement.

27:33When it comes to reliability, um I'm not

27:35sure how our SAT scores are relevant to

27:37the energy procurement side of the

27:38discussion and why it would be part of

27:40the decision framework. So when we get

27:41to that section of the presentation, if

27:43someone could please explain how

27:44reliability would be different under

27:46IMEA versus PJM market participation,

27:49that would be appreciated. I'd also like

27:51to suggest two additional metrics,

27:52autonomy and flexibility. You know, one

27:54of the city's guiding principles is to

27:55protect and preserve municipal

27:56authority. Why wouldn't that apply to

27:58this decision as well in regarding

28:00flexibility? No one could have uh

28:02predicted the current state of the

28:03battery and solar market 15 years ago.

28:05Even now, they are regularly

28:06underestimating growth in both sectors

28:08year-over-year. No one knows what it's

28:10going to be like in 20440 either. So we

28:12need a plan that lets us adapt to the

28:14changing markets.

28:16And lastly, I believe the plan is to

28:18eliminate options four and options two

28:19tonight. As well as the idea of forming

28:21our own joint action agency. I'd like to

28:23suggest instead of removing option two

28:25to merge options two and three together

28:26into a single market participation

28:28option. Uh we do not need to necessarily

28:30have owned assets ready to go in 2035.

28:33Uh but we shouldn't necessarily keep

28:35them out of the uh the conversation for

28:37long-term plans either. Thank you.

28:42>> Thank you. Next speaker.

28:43>> The next speaker is Lewis Halus followed

28:45by Roger Bloomquist.

28:53>> Next speaker.

28:55>> Final speaker is Roger Bloomquist.

29:00>> Good evening. My name is Roger

29:01Blumquist. I'm speaking for myself. I'm

29:04a lifelong engineer uh with experience

29:07running the electric micro grid on a

29:10nuclear submarine. So I've had a long

29:12interest in electricity. I also served

29:15briefly on the Nest energy committee.

29:18Traditionally our electricity priorities

29:20have been number one reliability, number

29:23two affordability, and number three

29:26environmental. That doesn't mean that

29:28two and three were ignored. It's just

29:31that number one was number one. This

29:34order of priorities fueled the post-war

29:37economic boom in the United States and

29:40around the world. These priorities have

29:42now been reversed.

29:44Nest and their allies have claimed that

29:46this will make electricity cheaper and

29:49more reliable. In fact, it has already

29:52made electricity more expensive, far

29:55less reliable, and only a little

29:56cleaner. And one of the slides from the

29:59previous speaker showed this.

30:02And unreliable electricity is not

30:05affordable electricity. Aware of this,

30:08lots of households and businesses in

30:10Neapville are installing fossil energy

30:13uh fossil emergency generators. That

30:16cost acts like a tax to protect us from

30:20electricity shortages. For consumers of

30:23goods, that tax appears as price

30:26increases and it makes reliability

30:28unaffordable for most people.

30:32Nest and ACS partner with Rocky Mountain

30:35Institute Pressure Group. RMI is funded

30:38by the government as it has advocated

30:40burning coal for home heating.

30:45I assume they still advocate underground

30:48homes. Or maybe they don't. They seem

30:51convinced that they alone are right

30:53about both markets and engineering,

30:57at least this time. How can we possibly

30:59take their recommendations seriously?

31:02Does anyone has anyone here ever seen a

31:06news story about falling electricity

31:08rates? I urge the city council to apply

31:11the laws of physics and economics and

31:14its electricity strategy.

31:17Aspirations are good, but not good

31:19enough.

31:20In the war between physics and

31:22platitudes, physics will win every time.

31:26Its laws cannot be repealed or amended

31:29by political systems. Thank you very

31:32much.

31:33>> Thank you. Any more speakers?

31:35>> No, mayor.

31:36>> All right. I'm going to turn the

31:37workshop over to our city manager, Mr.

31:39Kger, for the beginning of his

31:41presentation.

31:43>> All right. Uh, thanks, Mayor.

32:05All right, there we go. Uh, well, good

32:07evening. Uh, this April, we began a

32:09series of presentations to review our

32:12options for procuring energy in the

32:14future. We provided an overview of where

32:16we're at in the process, key

32:18terminology, some of the important

32:20considerations associated with energy

32:22and the key dates coming up that impact

32:24our decision-making.

32:26For tonight's agenda, we'll start with a

32:28recap of what has led us to this point.

32:31We'll review a timeline of key dates in

32:33our power purchase history. Um, we'll

32:35look at vision statements and hopefully

32:37align on a statement to guide our

32:39long-term strategy.

32:41We'll also review the decision framework

32:43that is guiding this process.

32:45Over the course of the last several

32:47months, we've reviewed all of the

32:49options from staying with a joint action

32:50agency to selling the utility. And

32:52tonight, we'll provide a highle summary

32:54of those options discussed.

32:57And then we'll have some discussions to

32:59confirm direction for staff and end next

33:01steps.

33:03Let's first take a look back at the

33:05decisions that have been made that have

33:07led us to our current situation.

33:10Back in 2007, the city approved the

33:12contract with IMEA and that current

33:14contract expires September 30th of 2035.

33:19All the options explored take

33:21considerable time and planning to

33:22implement.

33:24From ' 07 to 2011, we received power

33:27from Jiren Goldman Sachs and IMEA began

33:30handling our administrative or ancillary

33:32duties.

33:34Then on June 1st of 2011, the city began

33:37receiving power from IMEA.

33:42In late 2023, discussions began on what

33:45the city's energy future could look like

33:46beyond 2035.

33:49IMEA presented its members with a

33:52contract extension and provided a

33:54deadline to accept the offer by April

33:5630th of 2025.

33:58Uh beginning in the spring of 2024,

34:01uh the electric utility held a series of

34:03educational presentations to city

34:05council.

34:07These presentations coincided with the

34:09rate study to determine financial needs

34:11through 2027.

34:13Uh and finally, staff hired a consultant

34:15to help forecast energy prices and

34:17outline our options.

34:21Moving to 2025,

34:24uh, council chose not to accept the IMEA

34:26contract extension, uh, and it was

34:29extended to August. Further educational

34:32presentations were given at council,

34:33PUAB, and from the hired consultants, as

34:36well as an energy workshop held in July

34:39of 2025.

34:41Council chose in August not to accept

34:43the contract extension. However, council

34:46did plan to continue negotiations and

34:48discussions with 10 specific areas and

34:51an added power sales contract.

34:55In February of 2026, council votes voted

34:58to formally pause the contract extension

35:00negotiations with IMEA.

35:03Uh in the spring of 26, the be utility

35:05began a new educational presentation to

35:08review current energy industry status

35:10and to present options for procuring

35:12energy in the future.

35:14Tonight's workshop uh leads off those

35:18April through August presentations.

35:21It's worth noting that there have been

35:22shifts in market trends and important

35:24implications as we look at our long-term

35:26planning.

35:28Some of the more major shifts include a

35:31shift uh from energy concerns to

35:33capacity concerns. Uh renewable sources

35:36continue to experience price reductions.

35:38Uh there's a significant decrease in the

35:40cost of battery energy storage systems.

35:43Um, in December uh of 2025, the Illinois

35:47Power Agency indicated for the first

35:49time potential reliability and capacity

35:51shortfalls in the PJM grid. PGM has a

35:54capacity shortfall predicted um uh

35:58predicting their shortfall begins in

36:002030. Uh also PGM has been very slow to

36:04add new new uh sources of energy. Uh and

36:08there's a potential for exponential

36:10growth in demand uh due to data center

36:12proliferation

36:14uh and current volatility creates

36:16challenges for longerterm contracts.

36:20Mr. Mayor, are there any questions

36:21before we move forward?

36:24>> Councilwoman Gibson.

36:26>> Thank you, Mayor. Uh two questions. Uh

36:29Mr. Kger, on slide three, it caught my

36:31eye in

36:33that middle one. IMEA begins handling

36:36administrative duties, but we weren't

36:38getting our power, our energy through

36:41them, right?

36:42>> That that that's correct. Um uh Jer and

36:45Goldman Sachs uh was basically our

36:47billing agent. Um but for uh like FK,

36:52NERK, uh PJM reporting requirements,

36:55IMEA was uh taking care of those for us.

36:58So we were a uh non um power you uh we

37:04were a member of IMEA but not a power

37:06purchasing member.

37:08>> Okay. So when we're talking about our

37:09options later in the presentation and

37:11the options we've been talking about

37:13before and we're talking about the need

37:14for staff or administrative.

37:17>> This is essentially what IMEA did for us

37:19for several years.

37:20>> It it is um it it is a function. Uh it

37:23could be done by staff. It absolutely

37:25does not have to be done by staff. Um uh

37:28so just to kind of put that out there.

37:30>> So as a city we have a history though of

37:31splitting up the energy procurement with

37:33the administrative if necessary.

37:37>> Uh yes uh from ' 07 to 2011 we did that.

37:41Prior to that um as a KMED customer took

37:44care of all our ancillary requirements.

37:46Um and then post IME took care of it.

37:50>> Okay. And so just to clarify the commed

37:51part so this timeline starts in 2007.

37:54Prior to that, we're commed customers

37:56just so we're on the same page.

37:57>> That's correct.

37:58>> And then um my other followup was you're

38:00talking about the PJM capacity concerns

38:03for 2030 2035.

38:06>> Um would where we get our energy from

38:10impact whether or not PJM

38:15I don't know if brown out's the right

38:16term affected our power supply. Okay.

38:18So, the reliability of the energy

38:20Neighborville gets from PJM and the

38:22grid, is that dependent on whether we're

38:25with a a joint action agency, um any of

38:28these other options?

38:30>> It it really should not. Um it's

38:32probably larger effect would be on, you

38:34know, pricing at that time.

38:37>> Okay. So, IMEA wouldn't necessarily cut

38:40Neighborville's power

38:43in 2030 if there were outages to the

38:44grid based on where we're sending our

38:48money for the power.

38:48>> That's correct.

38:49>> Okay. Thanks. That's helpful.

38:55>> I don't see any other questions.

38:57>> All right. Uh let's quickly review the

39:01difference between vision and mission.

39:03Uh at high level, a mission statement

39:05defines what we do today and answers the

39:08question, why do we exist? A vision

39:10statement is aspirational and describes

39:12what we want to be in the future. And

39:15that aspiration is one of the items

39:17we're here to discuss tonight.

39:21Whoops. How about that way? To develop a

39:24vision statement, we need to focus on

39:26our utility's future. The central

39:28question to answer is what will

39:30Neighborville's electric utility look

39:31like when we have successfully achieved

39:33our goals? In response, any vision

39:37statement we draft must satisfy four key

39:40criteria.

39:42First, it must be future focused and

39:44projected over a long term, such as a

39:4620-year horizon. Second, it should be

39:49inspirational and directional. That sets

39:51a clear trajectory for utility planning.

39:55Third, it must define our final

39:57destination. It does not focus on the

40:00granular day-to-day steps required to

40:02get there. Uh and finally, it must be

40:04explicitly anchored in the values we use

40:06to make decisions.

40:08With these guard rails in mind and to

40:11get the discussion going, let's consider

40:13a few samples of vision statements.

40:18Staff has drafted five vision statements

40:20which are shown over the next two

40:22slides. uh one statement uh that would

40:24be statement number two is also repeated

40:26as statement six just to make sure

40:28people were paying attention. Um but

40:30let's review each. Uh number one,

40:33delivering affordable, reliable power

40:35today while fostering the flexibility

40:37and sustainability Neapville needs for

40:39tomorrow. Two, providing reliable and

40:43affordable electricity while preserving

40:45long-term flexibility in demonstrating a

40:47commitment to the environment.

40:50Three, leading Neapville into an

40:53affordable, reliable, resilient, and

40:55carbon-f free electricity future through

40:57a flexible portfolio of supply, storage,

41:00and demand resources that can adapt to

41:02changing markets, technology, and

41:04community needs.

41:08Four,

41:09uh, envisioning an energy future built

41:12on affordable, reliable, and fortified

41:14power delivery. We will maintain a

41:16diverse supply oriented mix of clean

41:19Illinois compliant energy resources

41:21including m modern thermal generation.

41:25And finally, five, provide affordable,

41:27reliable electricity while preserving

41:29future flexibility and advancing

41:31Neapville sustainability goals.

41:34Neapville will continue to be a model

41:36community by keeping emissions from

41:37rising, bringing them below the Illinois

41:40average within 10 years and achieving

41:42carbon-f free electricity by 20 uh 2045.

41:47In addition, some of you have offered up

41:49additional options for a vision

41:51statement that are believe that I

41:52believe are worthy of further

41:54discussion.

41:57This is the current mission statement of

41:59the electric utility. Once a vision

42:01statement has been created and selected,

42:04uh would then advise the city undertake

42:06revising the mission statement later as

42:09needed, but not at this time.

42:13Now that you heard each vision

42:14statement, Mr. Mayor, I recommend

42:16opening the floor for discussion with

42:17the goal of reaching consensus on one or

42:20a version of one value statement.

42:25>> All right, council. I've asked Director

42:27Llloch to run the computer for us. She's

42:30going to um live type any versions that

42:34might come out of the council discussion

42:36here and we will have our

42:41ideas put down on the computer screen in

42:43front of you. We will call first on

42:46Councilwoman Jane.

42:48>> Thank you, Mayor. Thank you, Mr. Kger,

42:51for your presentation thus far over the

42:53summer and for offering these examples

42:57for vision statements. Um I agree with

43:01uh the key points delineated on slide

43:04nine which talked about it being um

43:08long-term focused, aspirational.

43:12Um but I will also add to that that I

43:15think it needs to be a statement that's

43:17succinct

43:18um easy to understand and hopefully

43:21measurable

43:23uh through our decision framework and

43:26our ultimate mission statement. So, um,

43:30for those reasons, uh, Councilwoman

43:32Gibson and I kind of been thinking a lot

43:35about that and looking at the options,

43:38um, here we'd like to offer, uh, another

43:42possible statement um that I would love

43:44to hear my the opinions and thoughts

43:47from my my colleagues up here. And that

43:49is as follows.

43:51to secure an energy future

43:55that prioritizes.

44:02Reliability,

44:05sustainability,

44:08affordability,

44:12flexibility,

44:15and local control.

44:18This statement we believe reflects Oh,

44:22I'm sorry. No, that's it. Period. We're

44:24good. Yeah. Uh just just explain the the

44:29thought process behind this statement.

44:31Um it it doesn't have concrete terms in

44:35here to operationalize what we mean by

44:37each of these values, but that these

44:39five values we believe have been brought

44:42up in multiple discussions over the last

44:44few months, if not years. um where the

44:48terms are easily identifiable

44:52not sequenced in particular order. In

44:54fact, we would argue that the values

44:58five of them are interconnected. If we

45:00take the example of let's say

45:02flexibility as a value um and we were to

45:06practice that and measure that let's say

45:08by the purchase of storage batteries

45:11that in turn should help or may help

45:14sustainability and affordability right

45:16so we see that interconnectedness of

45:19these five values um again not to be

45:22operationalized in this statement but to

45:24be perhaps in um our discussion of the

45:28decision framework um but mo most

45:31importantly aspirational and reflective

45:34of our core values as a community um and

45:37what we've been discussing so thoroughly

45:39over the last months um and so with that

45:43I'd like to present that as an

45:44alternative statement.

45:48>> Okay, Councilwoman Gibson and note that

45:50we're identifying that as number six at

45:53this point.

45:55>> Thank you, Mayor, and thank you,

45:56Councilwoman Jane. Um, as she mentioned,

45:58we uh talked about this a lot. Um, and

46:02particularly I appreciated Councilwoman

46:04Jane's background coming from District

46:05204.

46:07As some of you may know, I um was on the

46:09park board previously. And at both of

46:12those um levels of government, I'd say

46:14we really

46:16uh worked a lot on strategic planning

46:18and vision and mission. Um, and one of

46:20the things I took away from my time at

46:22the park district is that a good vision

46:23mission statement is short. you want

46:26everybody in the organization to be able

46:27to say it at the drop of a, you know,

46:30drop of a hat. Um, at the park district,

46:32it was in the email signature. And I, at

46:35least I used it kind of as my guiding,

46:38my guiding light when I was making

46:39decisions at the park district. And what

46:41I particularly like about this last

46:43option six is that uh they are five

46:47pillars that are inter intertwined, but

46:50also they apply to both our electric

46:52utility and the energy procurement

46:54decision. that's before us. Um,

46:57especially flexibility and local

46:59control. Those are something that we

47:00care about at a resident and commercial

47:03level here in Neapville, but also as a

47:05city when we're looking about procuring

47:07our energy um because they really are

47:10intertwined. you know, what our

47:11residents pay and being able to

47:18have control and drive those prices is

47:21directly tied to the prices we pay at a

47:23procurement level. Um, so I I'm going to

47:27be in favor of option six. I appreciate

47:29Councilwoman Jane's work on it and I'm

47:32anxious to hear from the rest of my

47:33colleagues.

47:34>> Councilman McBroom.

47:36>> Thank you, Mayor. Um, [clears throat]

47:40so you know, my my and I do have a

47:43suggestion um to add to the list, but uh

47:47you know, my my concerns are always

47:50slippery slope. Um, what are these words

47:54going to be used for in the future? uh

47:57are we boxing some future council, some

48:00future city manager

48:02into financial commitments that

48:05may be reckless at the time? Um and and

48:08so

48:11if if the statement is is largely

48:14symbolic,

48:16um

48:18I don't know how we could have any

48:20assurances. Uh, Director Pier, you just

48:22mentioned that

48:24uh that whatever adoption of a vision

48:26statement,

48:28the next step would be it would it would

48:30cause a change in our mission statement.

48:33>> Yeah. In in terms of order, um, we would

48:35use the vision statement to establish uh

48:39a decision framework to make sure that

48:41we are capturing all of the components

48:44um for future strategic uh electric

48:48utility decisions. Um but uh the mission

48:52statement should definitely follow

48:53behind the vision statement that we're

48:55looking to establish tonight.

48:58>> Um as far as words, uh sustainability is

49:01a word that has come up all the time. Uh

49:04we we don't really get a definition of

49:06what that is. Um if if the vision

49:08statement is meant to be vague, um you

49:13know, I just I just it causes some

49:15concerns. Um so my my suggestion um

49:22would be to

49:24simply

49:26I got two that are very similar here but

49:29I'll go ahead and start. So to to

49:32maintain

49:35a financially strong

49:40technologically

49:45adaptable

49:51electric utility

49:55capable of meeting Neapville's future

49:58energy

50:06needs while preserving flexibility

50:13for generations to come.

50:19That's it. Thank you.

50:25Okay. Anything else? Council members.

50:30>> All right. Our goal here, Councilwoman

50:32Wilson.

50:33>> Sorry, Mayor. Um I I don't have an

50:36additional statement to add. I guess uh

50:39I don't know. You know, both uh seem the

50:42two new ones here seem um

50:45pretty succinct. Both add flexibility.

50:50Uh which to me makes sense. you know,

50:52with uh you know, IPA, for example, I

50:55think Director Kger talked about this,

50:57it's been talked about before with IPA

51:00projecting uh capacity concerns in 2030.

51:05Um but as I've talked about before, the

51:09sustainability bit does and and again if

51:11it does change um future statements and

51:15um things that we might be locked into,

51:18I do have concerns just because as I've

51:20talked about sustainability means

51:22different things to different people. Um

51:24and and especially when we think about

51:25metrics as well. Um to me I don't know

51:28what metrics we we'd be defining there.

51:31Um, then there's also um could be

51:35competing trade-offs when we're thinking

51:36about sustainability. Um, so I don't

51:39know. I um I do like obviously

51:42reliability and affordability. I think

51:44most people know what those mean. We we

51:46we look at different things when we're

51:49we have presentations from our our water

51:53um you know how many outited how many uh

51:56water main breaks there are. You know,

51:57that's part of the liability. um similar

52:01here here with energy. Um

52:05but

52:06uh I again I do have concern with that

52:08and whether it would similarly wash us

52:11lock us into something um without having

52:15some sort of metrics or uh scope etc in

52:20mind. Thank you

52:23>> Councilwoman Jane second round.

52:25>> Yeah, thank you. Um I I agree metrics

52:29are very important but to my

52:31understanding Mr. Kger that that metric

52:34and rubric by which we'll assess our

52:36future decision making and actions will

52:39be based on the decision framework and

52:42the mission statement perhaps right that

52:44that will help us define which what each

52:48of these values mean is is my

52:50understanding between what a vision

52:53statement is for versus the decision m

52:55framework and mission statement.

52:57>> Yeah. Um that is correct. um uh in about

53:01three slides uh we kind of kick into

53:03decision framework. Um we're not looking

53:06to kind of lock in on either those

53:08definitions or metrics, but really to

53:10just start that conversation um in light

53:14of a hopefully, you know, newly selected

53:16vision statement.

53:18>> Yeah. And the thinking behind the number

53:21six was um first of all it captures many

53:24of the words we've been talking about

53:26and using as part of the presentations

53:29as the framework or the lens through

53:31which we were analyzing all four

53:33options. Um, a good vision statement

53:36won't just be symbolic, but that it's

53:39really those next steps that are

53:42critical that where we delineate and

53:44operationalize, make these terms more

53:46concrete and then we live up to that,

53:50right? Like we um it's our job up here

53:53and in our community to to make sure

53:56that those words mean something and not

53:58to give just lip service. Um, I think

54:01that is totally possible. I think we're

54:03in a very unique time. We're in uniquely

54:06positioned at this moment to really

54:09think about the future um in a way that

54:13um is flexible, hence some of the some

54:16hence the term flexibility in there. Um

54:19but so I just wanted to add that to the

54:22conversation.

54:26>> Councilman White.

54:28>> Yeah, thank you. I um yeah I I guess

54:32we're looking at something that's more

54:33aspirational. I I'm

54:36a little concerned for some reason we're

54:39a couple of my colleagues are concerned

54:41about specifically the word

54:43sustainability and what it means and if

54:45it's locking us into something. I I mean

54:47I could take a look at almost any one of

54:49these and and say something similar. I

54:52mean what is techn techn techn

54:55technologically adaptable? I mean, okay,

54:57it sounds great, too, but and that can

55:00mean a lot of different things as well.

55:02So, I think it's going to uh it's

55:04important at this stage to not feel like

55:07we're we're locking something in. We

55:09haven't put any metrics around any of

55:10these things. Um, we've also have um

55:14taken a look at our uh our survey that

55:17recently came out that talked about

55:20sustainability and environmental uh

55:22concerns are important to the community.

55:24So I think it's important um at this

55:28stage that we include sustainability as

55:31well as some of the the other words that

55:33I I see that are in there. I think we

55:36have all seen uh up here on the dis as

55:40well as listening to members of our

55:42community that these are things that I I

55:45seem to be important to everyone. So um

55:48I guess I would caution us to keep it

55:52high level so that we can narrow it down

55:55into

55:57the things that we want to measure this

55:59on and then let's get to our mission

56:02statement and and let that drive let

56:04this vision drive all the decisions that

56:07we make once we come up with a uh

56:12something that we all can agree upon.

56:15Thank [clears throat] you, Councilman

56:17Hzar.

56:17>> Thank you, Mayor. I just wanted to give

56:19a shout out to Mr. Stark who probably

56:23for the last two years has been talking

56:25about the importance of uh having a

56:27vision statement. Um I appreciate

56:31Councilwoman Jane's comments. I I will

56:32be supporting number six is the the

56:34version of this. I in particular like

56:37that there's um five pillars that makes

56:39it very easy I think to build a mission

56:41statement later on and and

56:43operationalize.

56:44Um, but just as a general comment, I

56:47think beyond just the energy discussion

56:50as we think about strategic planning for

56:52our city in the next couple of years, it

56:54would be it's been a long time since

56:56we've had this discussion more broadly

56:57about what the city's vision is and and

57:00um I I just appreciate that we're

57:03talking about this more broadly and um

57:05and I hope that it becomes a habit for

57:07council. Thank you, mayor.

57:10>> Thank you.

57:12One thing I I'm looking at here

57:14throughout all of these different vision

57:15statements is the use of the word

57:17affordable. I I kind of interchange that

57:19with competitiveness as well. Um let's

57:22face it, there's a lot of communities

57:24around us that we are hearing hearings

57:27on um their water supply and how the

57:31privatization of their water supply has

57:34driven the costs up

57:36to to make it almost um unaffordable to

57:40live in their communities based upon

57:43what that private water supply costs.

57:46Right? So I I I do think we have to

57:49understand that in the business of

57:51selling electricity, we have to be

57:53competitive against what those

57:55communities next to us are selling

57:57electricity for, whether it be Kameed as

57:59their supplier or another

58:02municipallyowned electric utility. So

58:05going back to our our national community

58:07survey results, I mean, there was

58:08indication in there that affordability

58:11on power is something in the heads of

58:15the respondents. And I I think the

58:16positioning of that word near the

58:19beginning of any of these different

58:22terms really needs important placement.

58:24So whether it's competitiveness or uh

58:27affordable,

58:29you know, I I don't know how we don't

58:32prioritize that word in the vision

58:34statement.

58:36So Councilwoman Jane, I I I know number

58:38six is your suggestion. And would you be

58:41willing to uh offer some movement of

58:46affordability

58:48in front of the reliability?

58:51So it would read as to secure an energy

58:54future that prioritizes affordability,

58:56reliability, sustainability,

58:58flexibility, and local control.

59:02>> I I would be interested in hearing what

59:05my colleagues think of that move.

59:09I I have reason in the order that I

59:14placed it in. I I do think when you

59:16think about utility, reliability and

59:18affordability are often time the

59:20cornerstone values associated with it.

59:24Um,

59:27but I I do find the order to be

59:35perhaps reflect what I what I think um

59:40interconnectedly. I I do think though

59:42sometimes by putting sustainability

59:44towards the end, we think of that as an

59:46afterthought. Um that that could be a

59:49perception. Um although that's not

59:51necessarily the case here. Um so I I

59:55would love to hear from my from others

59:57on the dis on what they think about

59:59that.

59:59>> Yeah. My position is we have to have

1:00:02customers.

1:00:03>> Yeah.

1:00:04>> And and you can't sell a product without

1:00:05customers and you have to have an

1:00:07affordable product for those customers

1:00:09to buy.

1:00:10>> Councilman Hoszar.

1:00:11>> Thank you, Mayor. Um actually I think

1:00:13the mayor's point is exactly why I'm

1:00:15going to support number six. I mean, I

1:00:16think Councilwoman Jane was very clear

1:00:18that the intent is not for one of these

1:00:20to to stand out as a priority.

1:00:22Understand the mayor's argument, but I

1:00:24think the mayor's argument essentially

1:00:25is we are setting aside and agreeing to

1:00:27set aside affordability over the other

1:00:29four. And I I think that overlooks some

1:00:32of the interconnectedness part of this,

1:00:34right? So if we lack flexibility in

1:00:37local control as an example, we lack the

1:00:41ability even under our current contract,

1:00:43we lack the ability to purchase systems

1:00:46which would actually make our system

1:00:48cheaper. Um if we have reliability

1:00:52issues um that is that has second and

1:00:57third order effects. I mean look at the

1:00:58decision we made to underground our

1:01:00wires. That is unquestionably making and

1:01:03you know the energy price to neighbor

1:01:04consumers more expensive actually quite

1:01:06a bit more expensive over the next

1:01:09generation but we're we're doing that

1:01:11because we decided liability is

1:01:13important and it's a component of of all

1:01:16of this. I'm I'm not um I don't like the

1:01:19r the rationale of let's set one to the

1:01:22front because it's the highest priority.

1:01:26Um, I also

1:01:28would say to the credit of number six,

1:01:30it's not like sustainability was placed

1:01:32first to, you know, to make that one

1:01:35seem the most important. I think

1:01:36reliability, which is one we can all

1:01:38agree on, was the one that was put

1:01:39first, not to be prioritized over the

1:01:41other. Um, but I I like the framework

1:01:44then and yeah, I'm I'm going to support

1:01:46six. Thank you, Mayor.

1:01:49>> Councilwoman Gibson.

1:01:51>> Thank you, Mayor. Um, I I agree. I'm

1:01:53going to echo Councilman Holeshower's

1:01:56comments. Uh affordability obviously

1:01:58essential to bring in businesses. Also

1:02:00reliability. Um and I think maybe even

1:02:03the tension between those two. If we

1:02:05have really cheap energy but it's not

1:02:07reliable, that's just as likely to drive

1:02:09away businesses and residents and people

1:02:12that want to be in Neapville. Uh so

1:02:15personally, when I look at vision

1:02:17statements like this, I I see five

1:02:20pillars. I don't see any hierarchy

1:02:23in the way they're ordered. I think, you

1:02:26know, moving it around and explicitly

1:02:28saying or putting them in hierarchy,

1:02:32um

1:02:33I think they work together and putting

1:02:36them in an order will cause a tension

1:02:38between them where we have to prioritize

1:02:40one versus the other. Um and I don't

1:02:42think that's a strict rubric we want on

1:02:45our decision-m going forward. So, I like

1:02:48it as is with number six.

1:02:50Councilman McRo.

1:02:52>> Thank you, Mayor. Uh, Councilman Mike

1:02:54White makes a good point. Um, you can

1:02:56[clears throat] take all these words,

1:02:57technology, uh, you can extrapolate that

1:02:59into close to the microphone.

1:03:01>> What could that mean in the future?

1:03:02Thank you.

1:03:03>> Um,

1:03:05and and my concern is where where does

1:03:08the cost come in? Like what are we

1:03:09committing to? And so, [clears throat]

1:03:12it's pretty simple to me. Reliability

1:03:14and affordability. I mean, that's that's

1:03:16really what what's important to people.

1:03:18Um and uh and sustainability quite

1:03:22frankly it's a but it's it's a code word

1:03:24and I'm concerned that no one is able to

1:03:27define it for me and if we put it into a

1:03:29mission statement it's not something

1:03:31that

1:03:33are just words it's flexible it's

1:03:35something we aspire to we don't even

1:03:37know what it is um and and when I look

1:03:40at our mission statement

1:03:42frankly I think the mission statement

1:03:44could be stronger on on affordability

1:03:45but reliability quality responsive cost

1:03:48efficient services.

1:03:50I don't know what else we want. Uh I'm

1:03:52I'm fine with that mission statement.

1:03:53So, uh I'm I'm not sure I'm going to be

1:03:56supporting any of these vision

1:03:57statements.

1:04:01Okay. So, um

1:04:05it sounds like we've got

1:04:07three versions that were offered up from

1:04:09city council. Um, we've got to identify

1:04:14one from this group and we'll do a straw

1:04:18poll to determine what that looks like.

1:04:21So, um, we'll straw poll number six.

1:04:32>> Six, Mr. Mayor.

1:04:33>> Okay. And that's a simple majority.

1:04:39>> That's correct.

1:04:41We'll test number seven

1:04:47and number eight.

1:04:52Okay. Number six it is next item.

1:05:08>> All right. Uh thank you mayor. Great

1:05:10discussion there. Actually very helpful

1:05:11for us. Um because of the similarities

1:05:14between most of the options uh and also

1:05:16capturing the one that was selected uh

1:05:19we felt it was appropriate to discuss

1:05:20some of the key factors that would be

1:05:22used to help evaluate our direction and

1:05:25in other words begin discussion about

1:05:28our decision framework.

1:05:30So um [clears throat] under

1:05:32affordability

1:05:34certainly there's a practicality to

1:05:35consider for our customers. We want to

1:05:38continue to deliver value for our

1:05:40residents. Um, resilience and

1:05:42reliability. Uh, being a public power

1:05:44utility all these years has afforded us

1:05:46tremendous reliability compared to our

1:05:48neighboring communities. Uh, we can

1:05:50respond fast when there's an outage and

1:05:52we've been investing in our

1:05:54infrastructure and technologies over the

1:05:56years so that we can restore power

1:05:57quickly. Uh, sustainability. This topic

1:06:01has been heavily discussed in recent

1:06:02years. Uh we're all being more mindful

1:06:04of our carbon footprint and the city is

1:06:07taking this into consideration as we

1:06:08plan. Uh and finally, custom programs.

1:06:12Um in discussing the decision framework,

1:06:15I've met with um dozens of people uh

1:06:18about the categories and I have yet to

1:06:20meet anyone who likes uh the title

1:06:23custom programs. So um uh listening to

1:06:28the discussion uh at this time we would

1:06:30like to revise this topic to flexibility

1:06:33uh and that would be um flexibility to

1:06:36reflect the ability and make choices and

1:06:38changes at the customer customer and

1:06:40supplier levels.

1:06:45So um in terms of benchmarks or how we

1:06:48would measure affordability um we're

1:06:50looking at the actual total cost per

1:06:52kilowatt hour compared to KMED. It's

1:06:55also worth looking at the wholesale cost

1:06:57to gauge the efficiency of electric

1:07:00utility operations.

1:07:02Uh the measurement most commonly used in

1:07:04the industry for reliability or

1:07:06resilience is what's called SADI. This

1:07:08is a system average interruption

1:07:10duration index. And um what it is is a

1:07:13measure of the number of minutes or

1:07:15hours over a period of time that the

1:07:17average customer is out.

1:07:20Uh when measuring sustainability, we're

1:07:22looking at the metric tons of carbon

1:07:24produced by generation sources. Other

1:07:27metrics likely worthwhile tracking would

1:07:29include uh number of solar installations

1:07:32or number of EG EV chargers installed in

1:07:34our community or number of people

1:07:36participating

1:07:38um in uh some of our sustainability

1:07:41initiatives. Uh and then finally um

1:07:44custom programs again will make this

1:07:46flexibility uh measurement of success of

1:07:49providing our customers choices in

1:07:50retaining flexibility could be through

1:07:53evaluation uh evaluating participation

1:07:56in the range of offerings like our green

1:07:58energy certificate program uh or um

1:08:01uptake uh by offering demand response uh

1:08:04to our top co top customers for example.

1:08:08Uh and this would also flow through uh

1:08:10on the supplier side.

1:08:14Um we uh we're not uh really just kind

1:08:17of wanted to introduce those topics for

1:08:19tonight. Uh now that we've established

1:08:21the vision statement, we can kind of

1:08:23hone in on those a little further before

1:08:25we would bring them back to city

1:08:26council. Um but uh during this next

1:08:30section, I will recap at a high level

1:08:32the four options presented at the May

1:08:34through August city council meetings. uh

1:08:37creator joint joint action agency market

1:08:39participation with asset ownership

1:08:41market participation without asset

1:08:43ownership and selling the unit utility

1:08:47uh to another power provider such as

1:08:49Commonwealth Edison.

1:08:52So for the first option uh joining or

1:08:54creation of a joint action agency the

1:08:56primary benefits here um economies of

1:08:59scale shared resources uh governed for

1:09:02and by the members um concerns uh are

1:09:06that it requires other utilities to

1:09:08agree to the same agency requirements

1:09:10that Neapville has meaning in other

1:09:12words shared goals and significant

1:09:14negotiation required to join and have

1:09:17Neighborville specific priorities met.

1:09:20Um there would likely also be

1:09:21performance risk with size uh dependent

1:09:25mitigation and limitations on our

1:09:27ability to withdraw. Um so kind of

1:09:30working against the flexibility piece.

1:09:33Option two uh market participation with

1:09:35asset ownership. Main benefits of this

1:09:37option uh large amount of autonomy and

1:09:40the ability to consider multiple sources

1:09:42of energy generation. concerns with this

1:09:44option um uh will require options sooner

1:09:48than other choices uh to begin

1:09:50evaluating cost, funding, feasibility,

1:09:53return on investment as well as levels

1:09:55uh of market hedging. Um uh I would

1:09:59agree with Mr. Hus about uh frequent

1:10:01late rate fluctuations for customers. Um

1:10:04you know during the last couple of years

1:10:05there's been a lot of volatility in the

1:10:07market. Um and um the the higher uh that

1:10:13you hedge the more you would reduce that

1:10:16volatility. Um and then also um you know

1:10:20with respect to the energy management

1:10:22office again um those are functions that

1:10:26need to be performed. uh whether they're

1:10:28done in-house or outouse um would be

1:10:31determined I'm assuming kind of based on

1:10:33cost as well as quality. Um

1:10:37kind of uh from uh moving on to option

1:10:42three, market participation without

1:10:45asset ownership. Uh primary benefits

1:10:47here uh we won't be locked into a

1:10:49long-term energy mix. Uh we can pivot

1:10:51our power portfolio to new technologies.

1:10:54uh no long-term asset liabilities um

1:10:57meaning likely no debt would need to be

1:10:59issued. Um primary concern here um is

1:11:02really price volatility. Um uh secondary

1:11:06concern is really kind of establishing

1:11:08or hiring the uh knowledge base for an

1:11:12energy management office. Um price

1:11:15volatility um and adverse financial risk

1:11:19uh due to market fluctuations. And that

1:11:21would require um either upfront cash or

1:11:23credit to allow trading uh or uh

1:11:26entering into hedges um through uh in

1:11:29this instance purchase power agreements

1:11:32um and um we would be subject to market

1:11:35rate increases.

1:11:37Uh and then finally option four um sale

1:11:40of the electric utility. Primary benefit

1:11:43of this option

1:11:45uh is that post sale uh we no longer

1:11:48have financial risk. Uh however um we

1:11:51would expect cost to increase. Uh we

1:11:53would lose control over future rates and

1:11:56maintenance and service levels for our

1:11:57customers. Uh and we'd also lose control

1:12:00over the energy mix. Um and um we would

1:12:03anticipate a decrease in reliability.

1:12:08So, um, after the deep dive over these

1:12:11the last several months and tonight's

1:12:12overview of these options, we're hopeful

1:12:14now we can discuss which of these

1:12:16options the city council believes we

1:12:18should focus our efforts on. Um, based

1:12:22on discussions to date,

1:12:26uh, we recommend further focusing on

1:12:28option one, further focusing option one

1:12:31down to joining a joint action agency

1:12:34rather than creating a joint action

1:12:36agency. uh on option two, not focusing

1:12:39on option two due to the relatively

1:12:41small size of our demand. Um we can

1:12:44accomplish most of the pros of option

1:12:46two by utilizing purchase power

1:12:48agreements or PPAs. Um under option

1:12:51three. Uh for option three, focusing on

1:12:54option three as the city did this from

1:12:572007 to 2011 with Jiren Goldman Sachs.

1:13:00This would still allow us to dictate

1:13:02sources of generation, but instead of

1:13:05direct ownership, this would be

1:13:07accomplished through uh purchase power

1:13:09agreements for specific generation

1:13:10types. Option three does not present

1:13:14prevent us from pursuing or implementing

1:13:16battery energy storage systems as this

1:13:19is storage as opposed to generation. Uh

1:13:22and then uh finally um not focusing on

1:13:25option four due to the complete lack of

1:13:27future control over cost uh as well as

1:13:30maintenance efforts. Uh to reiterate uh

1:13:34just because an option is one in which

1:13:35we would suggest focusing on um or not

1:13:39focusing on uh as markets and

1:13:41technologies change we could easily

1:13:44revisit any of the options

1:13:50at this time. Uh based on the feedback

1:13:53we've received to date, we'd like to

1:13:56focus our options, our efforts on the

1:13:59options directed by city council. Um so

1:14:01this would be a point to discuss those

1:14:03options and which would be focus points

1:14:06and which ones um would we should uh

1:14:09devote fewer resources towards focusing.

1:14:14>> Okay, we have some questions starting

1:14:16with Councilman Hzar.

1:14:17>> Thank you, Mayor. Um, so make this easy.

1:14:20As far as the decision point, actually

1:14:23100% agree with um, Director Kger's

1:14:26recommendation of what the focus point

1:14:27should be. So if there's a call for

1:14:30hands in the air later, I will I will

1:14:31support that recommendation from staff

1:14:33as is. Um, I did have a couple of points

1:14:35I wanted to highlight. If uh, we could

1:14:37jump to slide 14.

1:14:43All right. Um, and Mr. Kger, you used

1:14:46the language verbally, which I really

1:14:48appreciated, but I just wanted to

1:14:49highlight um you know, the bottom point

1:14:53says custom programs that's going to be

1:14:55updated to something like flexibility.

1:14:58And um while it says on the screen that

1:15:01we're talking about program choices and

1:15:03programs for our customers, just as you

1:15:05said in your verbal comments, um I would

1:15:08hope in future iterations we're also

1:15:09talking about flexibility for the city

1:15:11to do things like batteries and all the

1:15:13other programs that we talked about. Um

1:15:15for slide 15

1:15:18um you also to your credit uh said this

1:15:22um verbally but I wanted to make sure

1:15:25that we highlight in all future analysis

1:15:29that we have two ways that we're

1:15:32tracking affordability. So one of course

1:15:33is the rate that our um end customers

1:15:37are paying but wholesale rate is also

1:15:40important and the reason I bring this up

1:15:42is um and you know, unless the present

1:15:46act the presentations have been pretty

1:15:48clear. So, I'll just say that um

1:15:52there have been a number of years where

1:15:54our wholesale rates have been higher um

1:15:56than they would have been through other

1:15:57sources. So, um that has a direct impact

1:16:01um downstream. We may have a year where

1:16:03we overpaid on the wholesale side. We

1:16:06were still able to deliver to our

1:16:08customers for a lower rate just because

1:16:10we're more efficient on the delivery

1:16:12end. Um, but I just want to make sure we

1:16:15always compare apples to apples, right?

1:16:17So, if we're making a decision on

1:16:19wholesale sourcing, let's compare

1:16:21compare our wholesale cost to like, you

1:16:25know, competitors that would provide at

1:16:26a wholesale price at a certain rate. Um,

1:16:29I think we get ourselves into a lot of

1:16:31trouble and have gotten ourselves into a

1:16:32lot of trouble comparing um the retail

1:16:35rate paid by consumers to different

1:16:37wholesale rates. So, those are my two

1:16:39comments, but ex excellent job of the

1:16:41presentation. and I'll support the

1:16:42recommendations of staff. Thank you,

1:16:43Mayor.

1:16:45>> Councilman McBroom.

1:16:47>> Thank you, Mayor. Um just so just to be

1:16:51clear, um your recommendation is we we

1:16:56don't focus on two and four. Is that

1:16:58right?

1:17:00>> Don't don't focus on which one?

1:17:01>> On the two two and four options. Uh

1:17:04>> uh yeah. Yeah. I think option two um all

1:17:07the everything uh that we can accomplish

1:17:09under option two I think we can do under

1:17:11option three. Um also would recommend uh

1:17:15not pursuing option four when we had the

1:17:18uh discussion at the council meeting. Um

1:17:20it did not seem like um there was a lot

1:17:23of support for that uh at the council

1:17:26level. Uh Neighborville has always been

1:17:28a community that values local control

1:17:31and option four is the only one where

1:17:34you you pretty much give up complete

1:17:36control. Uh and then on option one the

1:17:39only difference would be um instead of

1:17:41kind of reinventing the wheel with by

1:17:44creating a new joint action agency um if

1:17:47we decide to pursue that path uh select

1:17:50a joint action agency that's already in

1:17:52existence.

1:17:53>> Okay. So fi find an existing joint

1:17:55action agency. Um and and corre remind

1:18:00me when we talked about the timeline

1:18:03option one was a like a next year

1:18:06decision like a June or was that forming

1:18:09our own joint action agency?

1:18:11>> Uh you know next year would probably be

1:18:13a forming um because all of these are

1:18:15really kind of like new evolutions.

1:18:18um you know the kind of like the time

1:18:21commitments are are really estimates. Um

1:18:23our hope is that uh as uh next uh next

1:18:28spring and summer as we work through um

1:18:33our uh utility rate study um that we

1:18:36will discuss all of the different

1:18:37options and um the implications on rates

1:18:41that you know selecting uh any of these

1:18:44options might have on us.

1:18:45>> Okay. Thank you. And so, uh, my

1:18:48understanding is kind of pushing this

1:18:50decision off again, we're waiting for a

1:18:52rate study, uh, that'll come in June of

1:18:55next year. Um, and that'll give us some

1:18:57data and that

1:19:00option three or market participate

1:19:01option two, three together, whatever.

1:19:04Um, uh, that that's going to involve

1:19:07planning for upfront cash and a rate

1:19:09stabilization fund. And is that is that

1:19:12what we're waiting on? We're waiting to

1:19:13see what impact that investment would

1:19:17have when we would [clears throat] have

1:19:19to voluntarily raise our own.

1:19:21>> Yeah, you know that's correct. Um

1:19:23depending on which option um is uh

1:19:28selected um will impact the level of

1:19:31cash reserves or deposits

1:19:34um or shity um or in some cases um you

1:19:38know even debt that would need to be

1:19:40issued.

1:19:41>> Okay, just to be even more clear. So the

1:19:42rate study that we get back in June of

1:19:44next year is going to forecast what we

1:19:48may have to pay in 2028 in increased

1:19:51rates if we were to pursue uh market

1:19:54with or without asset generation.

1:19:56>> That that's correct.

1:19:57>> Okay.

1:19:59Um

1:20:01I la last question as far as market

1:20:04participation with asset ownership. This

1:20:06would be purchasing something. Do we

1:20:08have any idea like cost and would that

1:20:10be small, modular, nuclear? What would

1:20:12that

1:20:13>> you know it it wouldn't take anything

1:20:16off the table. Um you know personally I

1:20:18think um that in the future small

1:20:22modular reactors are going to play a a

1:20:24critical role. Um uh however I think um

1:20:28it's too early for us to really kind of

1:20:30like head down that path. Um but um my

1:20:34thought with uh if the council said hey

1:20:37yeah we would we do like uh small

1:20:39modular reactors um that instead of you

1:20:42know owning 2% of one uh we would simply

1:20:46buy um either a block or load following

1:20:49um you know megawatt hour of of power

1:20:53produced by that small module reactor

1:20:56and accomplish the same thing.

1:20:57>> And then just one last comment mayor if

1:20:59I can. Um so uh

1:21:06all right so timeline June rate study um

1:21:10I'm losing my train of about here at a

1:21:12point uh oh so so we've gone through all

1:21:15these options and and some of them have

1:21:18attractive features they all have

1:21:21risk some of them kind of frightening

1:21:23risk to me and uncertainties

1:21:26um but I'm having an open mind and you

1:21:29you know, we're going to delay more and

1:21:30we're going to look, I guess, look for a

1:21:31recommendation from you guys after we

1:21:34narrow it down for you. But, you know,

1:21:36IMEA, I don't even know if they're

1:21:38interested in us being a partner. I I

1:21:40mean, I don't know. Um, and we we really

1:21:43we had we got a letter from the previous

1:21:45CEO that was very, hey, we've like

1:21:48working with you, and it was nice

1:21:49letter. Um, they have a new CEO now. I'm

1:21:53interested in what what they think and I

1:21:55I think it's kind of it's it's kind of

1:21:58interesting that we've gone through this

1:21:59whole process. It's gone on for two

1:22:01years and I has never sat at that podium

1:22:04and I'm curious if they even want us to

1:22:05be a partner and if they do make their

1:22:08case for it. Um because we have people

1:22:10come in here every single meeting and

1:22:12debate whether IMEA can do this or they

1:22:14can't do this or IMEA is bad or IMEA is

1:22:17good. We haven't heard from the people

1:22:19that have been delivering electricity to

1:22:21this for 15 years and and we're with for

1:22:22the next eight almost almost nine years.

1:22:25Um that's something that I would I would

1:22:28encourage council to consider and I may

1:22:30be bringing it up in um in our future uh

1:22:33regular meeting. Uh and I don't even

1:22:34know would they be willing to you

1:22:36probably don't know the answer to that

1:22:37but I think it's something that needs to

1:22:39be explored. Um, so

1:22:41>> yeah. Um, yeah, on that point, um, I I

1:22:44do not believe that their absence is due

1:22:47to lack of interest. I think they're

1:22:49simply kind of respecting the decision

1:22:51council made to say, "Hey, we're going

1:22:53to take a pause on negotiation." So, um,

1:22:57I I I think they're kind of honoring

1:22:59council's wishes. If council wanted to

1:23:01have them, you know, come and present

1:23:03and discuss, uh, my guess is that they

1:23:05would be happy to.

1:23:08>> Councilman Wilson. Thank you, mayor. Um,

1:23:10yeah, a couple things I guess to, you

1:23:12know, I guess this ties into the slide

1:23:1714. Um, when we looked at the vision

1:23:20statement and then, you know, looking at

1:23:22our decision framework where again like

1:23:26we just talked about sustainability and

1:23:27the first bullet point, obviously there

1:23:29could be more that fall into this would

1:23:31be reduction of greenhouse gases.

1:23:33Obviously, this is just one, but um to

1:23:38me, these things may end up the vision

1:23:41may end up conflicting where you look at

1:23:44this, and I'm sure there's some people

1:23:46here uh in the audience that might like

1:23:49this and might not, but

1:23:52when when I see this, I I I think, well,

1:23:54how much is this going to cost? Because

1:23:57I I think some people here would go,

1:23:59okay, let's

1:24:01have our own solar farm or whatever. And

1:24:03then, you know, if we hearken back to

1:24:05uh, you know, some of Nest's

1:24:07presentations when we're looking at

1:24:09Lazard's

1:24:10own PDFs that they're citing, and those

1:24:12were going to cost, I I can't remember

1:24:14the exact numbers, but somewhere

1:24:16around$167

1:24:18compared to 30 to $35 of uh cold

1:24:22generation.

1:24:23Um, I I just have concerns with that and

1:24:26the fact that they might conflict with

1:24:27it. So that's just my immediate thoughts

1:24:30of seeing some of these

1:24:33um things with regard to um

1:24:37the decision framework here. Um, and

1:24:40then I guess to go to slide 16. Um,

1:24:47for option one, uh, I guess you you

1:24:50already answered quite a few questions

1:24:53that I had, uh, that Councilman McBroom

1:24:55was asking, but, um, say after we take a

1:24:58look at this rate study and then, um,

1:25:01council, whoever that whoever that is at

1:25:04the time,

1:25:06um, goes, "Okay, well, given the rate

1:25:08study and what demands we might have,

1:25:11could option one potentially be going,

1:25:13oh, hey, We had a good deal with IMEA.

1:25:17Let's bring can we bring them back and

1:25:20restart negotiations if there's will

1:25:21from council. Could that I guess could

1:25:24that be an option here?

1:25:25>> Uh that could be one of the outcomes.

1:25:27Absolutely.

1:25:28>> Thank you, Councilwoman Jane.

1:25:31>> Yeah. Thank you, Mayor. Um just a few

1:25:34points um for clarification. First of

1:25:38all, I appreciate us moving from

1:25:41eliminate to focus on the options. I I I

1:25:45think that's reflective of where many of

1:25:48us are where we're what we're thinking.

1:25:50Um, so

1:25:55I have a little bit of confusion between

1:25:58option two and three and making a

1:26:00decision about focusing our efforts. I

1:26:03guess I want clarification on what we

1:26:05mean by focusing. So let's say we voted

1:26:08that let's say theoretically we voted

1:26:10for option three and one to be the

1:26:13focus. Um what does that mean for next

1:26:16steps for staff?

1:26:19Yeah. Um sure thanks for the question.

1:26:22Um you know uh what what I would take

1:26:27that to mean would be hey you know we

1:26:29look at market participation

1:26:31um we are going to want to hedge to some

1:26:34extent and that our priority in looking

1:26:37at hedges would be power purchase

1:26:39agreements as opposed to um percentage

1:26:43share ownership of actual assets. So um

1:26:46yeah two and three are actually very

1:26:48close. Um it really comes down to kind

1:26:51of like a lease or buy um scenario. Um

1:26:55you know where option two would really

1:26:57be the buy and option three would be

1:26:58kind of like the lease. um from uh you

1:27:01know from a flexibility standpoint uh I

1:27:04think option three has the that

1:27:06advantage over option two because um if

1:27:09we do uh have asset ownership um those

1:27:12are typically like 15 20 year deals and

1:27:16is going to you know reduce our

1:27:18flexibility moving forward whereas with

1:27:20purchase power agreements um you know

1:27:22that's going to be more in kind of like

1:27:24the three to five year time frame. So

1:27:26from a staff bandwidth perspective, do

1:27:29you think there's um a lot more involved

1:27:33with exploring option two with option

1:27:35three? Um and part two to that question

1:27:39is is that exploration or focus being

1:27:42done between now and the rate study or

1:27:45post rate study publication or

1:27:47reporting?

1:27:49>> You know, um right now I'm thinking that

1:27:51would be kind of like post rate study.

1:27:54um and um you know really just kind of

1:27:57focusing on the different options and

1:27:59the impact as it relates to rates for

1:28:01the next you know six nine months.

1:28:04>> Okay. And last question. So between now

1:28:07and June do you foresee us um working on

1:28:12the decision framework and the mission

1:28:14statement in preparation for that

1:28:17exercise when it comes time.

1:28:20>> Uh short answer yes. Um I don't know

1:28:23exactly what that looks like. I would

1:28:25like to hone in on decision framework

1:28:28and then once we have that I think we

1:28:30could move to mission statement. Um you

1:28:32know I haven't det I haven't figured out

1:28:34what uh the best process for that

1:28:37whether you know that would be a

1:28:38separate workshop or whether that would

1:28:40be um reports that would be a component

1:28:43of a city council meeting. Um but yes,

1:28:45we would be um you know providing doing

1:28:49research and providing that information

1:28:51for council so that um when the rate

1:28:53study comes, you know, everybody is up

1:28:56to speed and and ready to go on it.

1:28:58>> Okay. Thank you,

1:28:59>> Councilwoman Gibson.

1:29:01>> Uh thank you. I I think what I had to

1:29:03say largely mirrors what Councilwoman

1:29:05Jane just said. I'm just I'm concerned

1:29:07that the next step slide 22 says direct

1:29:10staff further research and um I feel

1:29:13like there's some really big steps in

1:29:14the middle of the decision framework.

1:29:16While I recognize that there's bullets

1:29:18in this presentation

1:29:20um I think the next step is that we need

1:29:23to talk about the decision framework as

1:29:26a council. Um because coming up with the

1:29:28five pillars tonight even highlighted

1:29:31that we all have different

1:29:32understandings of each of those pillars.

1:29:34So, I just want to make sure that we

1:29:36aren't just taking the decision

1:29:39framework from tonight's presentation

1:29:40that this is going to come back to

1:29:42council before we get um the summer

1:29:462027.

1:29:47>> Yeah, that's absolutely correct. Uh the

1:29:49decision framework was not, hey, we're

1:29:51locked in on this now. It was really to

1:29:53kind of introduce the concept and also

1:29:56have um some discussion on council's

1:29:58part. Um, you know, I I don't want

1:30:00people to think that this means that,

1:30:02oh, you know, you know, we're going to

1:30:04do do go pencils down and not do

1:30:06anything until the rate study because

1:30:08that's absolutely not the case. Um,

1:30:10decision framework um mission statement.

1:30:13Um, we are continuing our um costbenefit

1:30:16analysis for battery energy storage

1:30:18systems. So, there will be um touch

1:30:22points with city council and reports to

1:30:25city council as as time progresses.

1:30:28Okay, great. Thank you. And to that

1:30:29point,

1:30:31you know, for the four options, yes. Um,

1:30:36the only one I would be comfortable

1:30:37eliminating now is the sale of electric

1:30:39utility because that seems like

1:30:41no-brainer. It's the opposite of local

1:30:42control and flexibility. Um, for the

1:30:44other three, you know, I hear your

1:30:46points about asset ownership without

1:30:48asset ownership. Um but I I just I'm not

1:30:52comfortable eliminating any of those

1:30:53until we've uh as a council come to a

1:30:56consensus on the decision framework

1:30:58those decisions.

1:30:59>> Yeah. Um you aren't alone with that.

1:31:01That's why we uh we kind of pivoted um

1:31:04uh after it went out from kind of like a

1:31:07straight up elimination, you know, take

1:31:09it off the table to, you know, kind of

1:31:11more of a prioritization and more of a

1:31:13focus. Um that so that was that was one

1:31:15of the impacts of that. Um and just for

1:31:19my thinking going forward because these

1:31:22options

1:31:24we have more we would have more control

1:31:26and flexibility on it. The option we

1:31:28choose even initially in 2035 could be

1:31:32different from the option we choose in

1:31:342040 2045 2050. Correct.

1:31:36>> That that is absolutely correct.

1:31:38>> Okay. Thank you

1:31:40>> Councilman Hoszar second round.

1:31:42>> Thank you mayor. And just following up

1:31:44on um that point um I just wanted to

1:31:48give a shout out to Mr. Grath and you

1:31:51know and with his recovery hope he's

1:31:52doing well. He's done a a wonderful job

1:31:54leading his team and um also you know

1:31:58the fact that we are focusing on options

1:32:01one and three I think is a testament to

1:32:03the electric department and the faith we

1:32:04have in our employees um that that

1:32:06option isn't what we're focusing on. So,

1:32:09um, I just want to make sure that if

1:32:10they're out there listening, they know

1:32:12that we up here appreciate everything

1:32:14the department does every day and what

1:32:16an amazing community we have. So, thank

1:32:17you, Mayor Council White.

1:32:19>> Yeah. Thank you. Just a few points. Um,

1:32:23um, the IMEA and not having I mean, we

1:32:26haven't heard from them uh was was was

1:32:29stated up here, but I I was kind of

1:32:31wondering that myself. I mean there's we

1:32:34have an open meetings uh format a public

1:32:37u you know where they could come up and

1:32:39speak if they'd like. So uh for public

1:32:41comment as a minimum uh if not just a

1:32:44formal invitation. So um I never have

1:32:47taken that off the board. I'd like to

1:32:49hear what they'd have to say. Um anyway

1:32:52also affordability. Um I know I think

1:32:55the metric you're looking at is

1:32:56comparing it to KMED. Um and maybe

1:32:59that's just an example of who we can

1:33:00compare it to. probably be the main one

1:33:02I get, but um maybe other joint action

1:33:05agencies that are in our vicinity. Um I

1:33:08would like to see it expand a little bit

1:33:10above and beyond just the Cameed

1:33:12comparison.

1:33:13>> Yeah, we we could absolutely um uh

1:33:15include um other Illinois communities uh

1:33:19that are in different joint action

1:33:20agencies um and and include their rates

1:33:23as well.

1:33:24>> Okay, good. Um uh and I'll go back to

1:33:27sustainability being part of the

1:33:29mission. I mean, I I guess We I I guess

1:33:32we need to look at SEA. We we've been

1:33:34required to know get off of fossil

1:33:37fuels. I think sustainability

1:33:39um from that standpoint should

1:33:41definitely be in there. Um we need to

1:33:43maybe put some parameters around what

1:33:45and defining what we're looking at, but

1:33:47the greenhouse piece of this is not our

1:33:50really not even our call as we've been

1:33:51told that we have to do that. So unless

1:33:54something changes, but as of now that's

1:33:56that's what's uh what we're living with.

1:33:59Um the other thing I would ask about

1:34:01with option two and three

1:34:04um I see some advantages of option two

1:34:06but it it I mean owning an asset that's

1:34:09gets expensive. I get that piece but it

1:34:12also pro I would think provides a hedge

1:34:15for us if we own some portion of

1:34:18something. I I I don't know. I'd like to

1:34:20hear your thoughts there. Um and and

1:34:23with that in mind, do would it be

1:34:25important for us to have a hedge or

1:34:26would or would three somewhat provide

1:34:28that as well?

1:34:30>> Um uh sure. Um I I think it uh I I think

1:34:36it's very important that we would have

1:34:38some form of hedge whether that be

1:34:40actual asset ownership or PPA or um uh

1:34:44power sales contracts

1:34:46um just uh to really protect our

1:34:51customers from a lot of fluctuation.

1:34:54you know, um option two and three, the

1:34:57difference, you know, between kind of

1:34:59like the buyer rent, um uh can work both

1:35:03ways. Uh you know, if you if you

1:35:05purchase a highly performing asset, um

1:35:08and you're locked in for 20 years and

1:35:10rates go up, um you know, you're in

1:35:13great shape. Uh if you purchase a high

1:35:15performing asset and some new technology

1:35:18comes on that's much cheaper, you know,

1:35:20you're you're stuck for 15 or 20 years

1:35:22before you could get out of it. So, um

1:35:24it really can cut both ways. Um but, um

1:35:28I under either of those scenarios, I

1:35:30think that we should have either

1:35:32ownership um or contracts that would

1:35:35kind of hedge our demand.

1:35:39>> Councilman Kelly,

1:35:40>> thank you, mayor. Uh thank you to staff.

1:35:42Good presentation tonight and good

1:35:44discussion up here. I think it seems

1:35:45like we're in a in a positive direction,

1:35:47I think, uh moving forward. Um just one

1:35:50quick question on the four options. I

1:35:54appreciate the pivot. It sounds like

1:35:55we're talking more about focusing than

1:35:57eliminating, but I've heard a little bit

1:35:59mixed on on lack of focus or eliminate

1:36:03on option four. Um the sale of the

1:36:06electric utility, it it seems like I I

1:36:08don't think I've heard anybody say we

1:36:09want to leave that on the table and I

1:36:11just want clarity, I guess, from staff.

1:36:13Are we is that remaining in are all

1:36:16remaining or is option four potentially

1:36:18off the I'll tell you my preference

1:36:19would be to eliminate option four

1:36:21entirely. I I don't think that makes any

1:36:23sense for us. The other three I I think

1:36:26the discussion I've heard I'm happy

1:36:28with. But I'm just curious from staff's

1:36:29perspective, would you plan on spending

1:36:31any time any resources evaluating option

1:36:34four or not at all at this point?

1:36:36>> You know, ba based on council

1:36:38discussion, um I I don't feel it's

1:36:40strong enough to eliminate, but it is

1:36:41not our intention to pursue um

1:36:44discussions or do any additional

1:36:46analysis at this point on option four

1:36:49unless council directed us otherwise.

1:36:51All right, fair enough. Thank you,

1:36:54>> Mr. Kger. On option number two, the

1:36:56asset ownership piece, are you including

1:37:01the bez under asset ownership or would

1:37:04that be a potential option in three

1:37:07since the bez technically is not a

1:37:09generator

1:37:11per se of of electricity? Is that

1:37:14>> Yeah, I um I would I I think that uh a

1:37:18battery energy storage system, you know,

1:37:20could fit under option one, two, or

1:37:22three. Uh because um it's not uh it is

1:37:27ownership of an asset, but it is not

1:37:30ownership of a generating asset. The

1:37:32generating asset would still be out

1:37:34there if we had battery energy storage

1:37:36system. um you know, we could we could

1:37:38charge it up um and discharge it um and

1:37:41it wouldn't violate really any of the

1:37:43premises of the first three options.

1:37:45>> And when it comes to asset owner

1:37:47ownership, you either have to find a

1:37:49site for the asset that's going to be

1:37:51the generator of power in your city or

1:37:54find a place outside of your city. So

1:37:56Neighborville could potentially

1:37:59be investing in wind, solar,

1:38:04u nuclear,

1:38:07gas fired generation. I mean, there's

1:38:10only so many options out there. But if

1:38:12you can't host enough generation in your

1:38:14city, you have to buy it someplace else.

1:38:16Is that your

1:38:17>> Yeah, that is correct. And you know, the

1:38:20kind of the benefit of having Well, you

1:38:22know, having it on site kind of cuts

1:38:23both ways. um you know you can cut down

1:38:26on transmission costs. Uh however um

1:38:29most generating assets are not really um

1:38:32kind of sought after neighbors. Um uh so

1:38:37you know I think the from a practical

1:38:39standpoint uh it would really we would

1:38:42really be looking at a partial ownership

1:38:45of an asset that's located outside of

1:38:47our borders.

1:38:49>> Okay. All right. council. The goal here

1:38:52is to try to um

1:38:55give our professional staff some sort of

1:38:57guidance on what they should be focused

1:38:59on. Um I think the easiest way to run

1:39:02this is take the affirmative position

1:39:04and I'm going to be going option by

1:39:06option and we're looking for a simple

1:39:08show of hands in the air. Majority um

1:39:11simple majority will drive that

1:39:14particular option as a viable option

1:39:16that the city should continue to pursue.

1:39:19Um, and if there's not a simple majority

1:39:22on an option, then that will be guidance

1:39:24to not pursue. So, we'll start with

1:39:27option one.

1:39:30Hands in the air in support of option

1:39:32one.

1:39:37Option two.

1:39:43>> All right. Five hands. Mayor,

1:39:45>> option three.

1:39:50Eight hands also

1:39:52>> option four.

1:39:58So no hands.

1:39:59>> Okay,

1:40:03I believe that's all the questions we've

1:40:05been asked to answer tonight.

1:40:08>> The um uh you know kind kind of wanted

1:40:11to talk about uh next steps. Uh, mayor

1:40:14um really appreciate council's time,

1:40:16very thoughtful discussion. Um, uh, and,

1:40:20uh, think we've, um, really made some

1:40:23great strides in in figuring out our

1:40:26path forward. Um, I, you know,

1:40:29appreciate the, um, you know, the areas

1:40:31to focus on from an option standpoint

1:40:33and, uh, we will direct our staff

1:40:36accordingly. Um you know finally in uh

1:40:392027 um we will be doing a new rate

1:40:42study um uh and recommendations will be

1:40:45presented and um we will present those

1:40:48in conjunction with the evaluation of

1:40:51these remaining options. Um and with

1:40:53that would just like to thank everybody

1:40:55for their time tonight and we'd be happy

1:40:56to answer any additional questions.

1:41:00Thank you for all of your preparation to

1:41:02all the speakers who came forward

1:41:03tonight to the city council for all your

1:41:05participation tonight. I thought it was

1:41:07a very fruitful and uh productive

1:41:09discussion. With that our workshop has

1:41:11ended.

```*