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HomeMy WebLinkAbout2023-11-15 RMLD Citizens Advisory Board MinutesV`l Town of Reading Meeting Minutes �tl L4 '•,,Mase^' - 39 Board - Committee - Commission - Council: RMLD Citizens Advisory Board Date: 2023-11-15 Building: Reading Municipal Light Building Address: 230 Ash Street Purpose: General Business Attendees: Members - Present: Time: 5:30 PM Location: Winfred Spurr Audio Visual Room Session: Open Session Version: Final Vivek Soni, Chair (Reading); Ken Welter, Vice Chair (Lynnfield); Jason Small, Secretary (North Reading); Dennis Kelley (Wilmington). Members - Not Present: Others Present: RMLD Staff: Gregory Phipps, General Manager; Erica Morse, Executive Assistant, Bill Bullock, Director of Integraded Resources; Benjamin Bloomenthal, Director of Finance & Accounting. Board of Commissioners Representative: David Talbot Minutes Respectfully Submitted By: Vivek Soni, Chair ,,,,o,,,,,,, Eos Topics of Discussion: Call Meeting to Order Chair Soni called the RMLD Citizens' Advisory Board (CAB) meeting to order at 5:30 PM and announced that the meeting would be held in person, remotely on Zoom, and recorded. Commissioner Talbot arrived at 5:33 PM. Approval of Citizens' Advisory Board Meetina Minutes Materials: Draft Meeting Minutes (CAB Packet, attachment 1) The June 15, 2023, minutes were tabled to a future meeting. The March 23,2023, and April 13, 2023, meeting minutes were approved as presented. Vice Chair Welter made a motion, seconded by Mr. Kelley, that the RMLD Citizens' Advisory Board approve the March 23,2023, and April 13, 2023, open session meeting minutes, as presented, on the recommendation of the General Manager and the Board Secretary. Motion Carried: 4:0:0 (4 in favor) Roll Call Vote: Chair Soni, Aye; Vice Chair Welter, Aye; Mr. Kelley, Aye; Mr. Small, Aye.) 2024 Operating Budget Presentation Materials: Operating Budget Presentation (CAB Packet, attachment 2) Mr. Bloomenthal discussed the 2024 operating budget tree crew proposal. Budget Presentation Recap Page 1 1 Mr. Bloomenthal noted that the 2024 operating budget proposed at the October 25, 2023, meeting included plans for an internal tree crew. The BOC requested additional scenarios to compare the operational and financial Implications between Internal, external, and hybrid tree maintenance approaches. Vice Chair Welter clarified that the initial budget proposal was for an internal tree crew. Chair Soni provided context, noting that the entire operating budget had been presented and discussed, but the focus now is solely on the tree maintenance aspect due to the request for further analysis. The intent is to clarify the tree maintenance strategy and proceed with overall budget approval. Current Status of Tree Maintenance (slide 2) Mr. Bloomenthal discussed the status of tree maintenance. Vegetation Management Challenges Mr. Bloomenthal provided a background on the current state of vegetation management, highlighting a significant backlog of over 100 trees requiring maintenance, with Reading presenting the largest challenge due to its approval process for tree trimming. Backlog and Maintenance Delays Mr. Bloomenthal emphasized that the backlog continues to grow, particularly in Reading, due to the town's stringent approval processes. Vice Chair Welter noted that the backlog has been consistent over the years. Mr. Phipps noted that that while there has been good progress in other towns like North Reading and Wilmington, Reading is about five years behind in required tree trimming, not tree cutting, just regular limb maintenance. Tree Trimming Reauests Vice Chair Welter inquired about the source of tree trimming requests. The conversation noted that tree trimming requests come from various sources, including homeowners, the town, and RMLD's own line crews. Mr. Phipps emphasized that the primary goal is to prevent outages by managing tree growth around power lines. Town Approval Process and Impact on Backloa Mr. Small asked if the backlog is due to the Town not allowing tree trimming or a lack of resources. Mr. Phipps confirmed that the Issue is more the Town not allowing tree trimming and a slow approval process rather than a lack of resources. Safety and Proactive Measures Mr. Phipps highlighted the safety hazards posed by delayed tree maintenance and mentioned proactive measures being taken to address these concerns. RMLD is also learning from experiences in other regions like Hawaii and California. Escalatino the Issue Chair Soni asked if RMLD has tried escalating the issue within the town or with the BoC to address the backlog more effectively. Page 1 2 Mr. Phipps indicated that efforts to escalate the matter are already underway Internal vs. External Tree Crews In response to an inquiry by Chair Soni, Mr. Phipps confirmed that the town's approval process has similar effects on both employing internal vs. external tree crews. Three Scenarios (slide 3) Mr. Bloomenthal provided an overview of three tree maintenance scenarios that were considered in response to the BoC's request for additional options regarding the operating budget's tree maintenance component. Internal Tree Crew Mr. Bloomenthal discussed the first scenario, initially presented on October 25th, which Involves hiring an internal tree crew to handle all tree maintenance tasks. Hybrid Tree Crew Structure Mr. Bloomenthal discussed the second scenario, a hybrid approach, where one tree crew is internal, and another crew would be sourced from an external contractor. This model aims to leverage the strengths of both internal and external resources. Restructurino External Contracts Mr. Bloomenthal discussed the third scenario, which explores the possibility of restructuring the contract for external tree maintenance services, as the current contract expires at the end of lune 2024. The focus would be on optimizing terms and conditions to better meet RMLD's needs. Scenario 1 — Transition to Internal Tree Crew (slide 4) Mr. Bloomenthal discussed the internal tree crew proposal, which includes hiring a certified arborist and four staff members, resulting in significant annual savings and long-term cost reductions. Proposal Mr. Bloomenthal explained that RMLD would introduce an internal tree crew including a certified arborist as the manager and four staff members and organized into two 2 -person crews. This setup also includes acquiring necessary equipment over several years. Financial Impact Mr. Bloomenthal highlighted an anticipated savings of — $Sm annually for the 2025 and 2026 budgets, due to salary positions over prevailing wage costs, and the provision of additional capital equipment like a bucket truck. Context Mr. Bloomenthal noted that prevailing wage costs increased by 124% from 2018 to 2021, primarily due to regulatory changes. Scenario 2 — Hybrid (Mixed Outsourced & Internal) Crew (slide 5) Mr. Bloomenthal discussed the Hybrid proposal, which includes a new tree contract for July 2024 with a mix of internal and external crews, aiming for Flexibility and cost savings. Proposal Mr. Bloomenthal explained that a new tree contract starting July 2024 would introduce a hybrid model with one internal 2 -person tree crew managed by a certified arborist and an external tree crew. Financial Impact Mr. Bloomenthal highlighted an expected savings of about $5001K annually for 2024 and 2025, by reducing exposure to prevailing wage costs and offering Flexibility to bring on extra external crews during emergencies. Page 13 Operational Benefits Mr. Bloomenthal noted that this scenario provides additional equipment for staff and flexibility in managing workloads during states of emergency. Scenario 3 — Outsourced Tree Crew (slide 6) Mr. Bloomenthal discussed the outsourced tree crew proposal, which includes restructuring the contract to a daily rate basis for better cost management and operational efficiency in addressing tree maintenance backlogs. Proposal Mr. Bloomenthal explained that RMLD would continue with a fully outsourced model but restructure the contract from a span basis to a daily rate basis to improve cost efficiency and operational Flexibility. Operational Chances Mr. Bloomenthal noted that change would prevent charges based on the removal of small branches (span basis), enable crews to work on specific high-voltage jobs and address backlogs in both three-phase and single-phase distribution lines in residential areas. Discussion on Span Basis Chair Soni sought clarification on the span basis. Mr. Bloomenthal explained that this relates to charging per entire tree or per branch cut and was intended to incentivize contractors but is now considered less effective than a daily rate basis. Total Budget Impact — CY 24 (slide 7) Mr. Bloomenthal presented the proposed budgets for three scenarios regarding the tree maintenance strategy for RMLD and highlighted the financial outcomes for each scenario, focusing on the overall net income implication. Scenario One - Internal Tree Crew Mr. Bloomenthal emphasized that the proposed budget for creating an internal tree crew shows a projected net income of $8.5m. This scenario is aimed at reducing overall operational costs by managing prevailing wage costs more effectively. Scenario Three - Outsourced Tree Crew Mr. Bloomenthal emphasized that continuing with an outsourced tree crew leads to a projected net income of $8.2m. The slight decrease in net income is attributed to increased contract costs while attempting to maintain a smaller workforce size. Cost Drivers and Financial Analysis Mr. Bloomenthal emphasized that prevailing wage costs have been a significant factor In increasing contract expenses over the years. The analysis indicates that an Internal tree crew could offer a more cost-effective solution by addressing these wage cost issues. Projected Financial Impact (slide B) Mr. Bloomenthal outlined the costs and savings across scenarios for Internal, hybrid, and outsourced tree maintenance crews for the coming years. Scenario 1 (Internal Tree Crew) Mr. Bloomenthal noted a projected total cost of $1.86m for Calendar Year 24, with an increase in expenses by $155K due to capital outlays voted on previously. Expected reductions in total costs to $730K in the subsequent years, with significant savings. Scenario 2 (Hybrid Internal and External Tree Crew) Mr. Bloomenthal noted a total cost is $1.9m, with an increase of $217K in expenses for the initial year. Costs are anticipated to decrease to $1.3m, showing substantial savings. Page 14 Scenario 3 (Outsourced Tree Crew) Mr. Bloomenthal discussed the operational strategy and contract restructuring of the outsourced model. Clarification on Financials Chair Soni pointed out a perceived discrepancy between increased expenses and net income growth. Mr. Bloomenthal clarified the financial projections and the inclusion of capital outlays in the analysis. Mr. Bloomenthal discussed the implications of each scenario on operational efficiency, with considerations for emergency and storm -related work, scheduled maintenance, and the potential for adopting a hybrid model. Adoption of Scenario 3 for CY 24 The CAB agreed to proceed with an outsourced tree maintenance strategy for the next calendar year, acknowledging the need for a thorough bid process and further analysis. Mr. Bloomenthal committed to a detailed review of operational and financial data in 2024 to inform future strategy on tree maintenance. Chair Soni made a motion, seconded by Mr. Small, that the Citizens' Advisory Board, on the recommendation of the General Manager, recommend to the RMLD Board of Commissioners the Calendar Year 2024 Operating Budget as presented, which is the proposed scenario 3, outsourced tree crew for CY 2024. Motion Carried: 4:0:0 (4 in favor) Roll Call Vote: Chair Soni, Aye; Vice Chair Welter, Aye; Mr. Kelley, Aye; Mr. Small, Aye.) Integrated Resources Department Report Materials: IRD Report (CAB Packet, attachment 3) Mr. Bullock presented the IRD report to the CAB. Outline (slide 2) Mr. Bullock introduced the IRD report, covering power supply outlook, load forecast, power supply costs, handling of certificates, and future rate breakdowns. Load Forecast (slide 3) Mr. Bullock outlined the expected load forecast through 2044, emphasizing an anticipated increase due to the adoption of electric vehicles and heat pumps. Power Supply Portfolio Mr. Bullock highlighted the current energy mix and noted sufficient hedging with non -carbon power sources In the earlier years. Mr. Bullock discussed future power supply portfolio adjustments to maintain supply and comply with net -zero targets. Mr. Bullock emphasized the need for continuous sourcing through 2044 and noted that some contracts may expire, necessitating renewal or finding new resources. Solar Mr. Bullock highlighted the addition of solar power expected in 2025 from the Gravel Pit project, which will significantly boost solar energy supply. Compliance and Certificates Mr. Bullock referenced the black compliance line on the graph, demonstrating a smooth curve towards gradually achieving net -zero targets. Page 1 5 Mr. Bullock highlighted RMLD's strategy to gradually increase the certificate retirement rate by 3% per year to minimize rate impacts and noted plans to incorporate in -territory generation to close existing supply gaps. Forward Price Curve — Monthly Through 2028 (slide 4) Forward Price Curve Analysis (2020-2028) Mr. Bullock presented the forward price curve, highlighting volatility, especially in winter, due to natural gas scarcity. Mr. Bullock emphasized the success in hedging against market volatility, noting that about 90% of the power supply is hedged. This offers significant protection against price spikes. Discussion on Natural Gas impact Chair Soni raised a question about the impact of natural gas pricing and the expectation around the Mystic LNG terminal's role in pricing. Mr. Phipps acknowledged the uncertainty in the market, emphasizing the importance of hedging and long-term contracts. Power Supply (slide 5) Portfolio Performance and Strateov Mr. Bullock detailed the Power Supply portfolio's performance, with a historical track record of keeping contracted prices below open market prices, except for a brief period during the COVID-19 pandemic. Mr. Bullock discussed the portfolio's composition, including nuclear, wind, solar, and hydro, and plans for incorporating more non -carbon resources, with a focus on the potential impact of offshore wind on costs. nuciear energy and tuture contracts Mr. Bullock disused the low cost and significant role of nuclear energy in the portfolio. Mr. Bullock noted that contracts for nuclear energy extend through 2050, and highlighted the potential for future energy source developments, such as a nuclear fusion reactor. Certificate Management (slide 6) Ol 2023 Update Mr. Bullock provided an update on the latest quarter (Ql 2023) renewable energy certificates (RECs). Mr. Bullock highlighted the acquisition of —92K certificates, retirement of —50%, sale of 80% of the remaining balance, and reservation of 20% for future compliance needs. Mr. Bullock outlined RMLD's certificate management strategy. The current retirement rate stands at 29% of the total energy portfolio, reflecting RMLD's commitment to non -carbon energy, with plans to increase this rate by 3% annually to reach 50% compliance by 2030. Greenhouse Gas Reporting Chair Soni Inquired about the monitoring of RMLD's carbon footprint. Mr. Phipps discussed the ongoing evaluation of the carbon footprint, highlighting the recent submission of the AQ 31 report. Policv 30 Review Mr. Phipps noted that Policy 30, which guides reporting and REC management strategy, will be reviewed with the BOC and CAB at the December meeting. This review will include a discussion on potential adjustments to certificate retirement strategies. 2024 Rates — Residential A example (slide 7) Residential C example (slide 8) Page 16 2024 Rate Chanae Overview Mr. Phipps discussed the 2024 rate changes, providing clarity and breaking down the components of the rate increase approved in the last meeting. Mr. Phipps confirmed that the 2024 rates are set to take effect in March 2024. Mr. Phipps referenced two examples to illustrate the components of the rate increase. An average monthly bill was analyzed, showing a base rate Increase and the power supply cost as a pass-through cost. Mr. Phipps highlighted the difference between the base rate Increase and the pass-through costs related to power supply. Billing Components and Strateov Mr. Phipps discussed the current structure of the RMLD unbundled bill and the potential future simplification tied to metering system upgrades. Mr. Phipps emphasized that the approved rate changes, effective in March 2024, are part of a broader strategy to manage costs and customer bills amidst market volatility. Mr. Phipps detailed the fixed components of the monthly bills and the variable power supply cost, reiterating the goal to minimize customer impact from market volatility. Rate By Class Mr. Phipps explained the varying percentage increases across different rate classes. Mr. Phipps highlighted key components of individual rate classes, including customer charge, distribution energy, and distribution demand. Public Messaging and Communication Chair Soni emphasized the importance of clear public messaging about the overall impact on customer bills. Mr. Phipps acknowledged past discrepancies between projections and actual increases, primarily due to dynamic power supply costs. Mr. Phipps noted that a detailed public presentation will be made in ]anuary, followed by the official rate filing. Context — Within Territory Generation (slide 9) Mr. Phipps discussed the continued pursuit of in -territory generation as a strategic move for RMLD and emphasized its alignment with economic benefits, increased reliability, and compliance with climate legislation (2021 climate bill). Carbon Capture Fuel Cell — output (slide 10) Mr. Phipps highlighted a potential 20 MW carbon capture fuel cell project with Bloom Energy, as a pathway to meet RMLD's objectives. Operational Impacts and Environmental Benefits Mr. Phipps discussed the operational and environmental Impacts of adopting carbon capture fuel cell technology, including the generation of electricity, water, and CO2 emissions. Mr. Phipps explained the fuel cell system's output, including electricity, water (H2O), and CO2 emissions. Mr. Phipps emphasized that the carbon capture system is expected to sequester about 92% of CO2 emissions and highlighted the potential of converting CO2 into a revenue stream. Page 1 7 Carbon Capture Fuel Cell — CO2 (side 11) Mr. Phipps reviewed the operating and life cycle emissions data and highlighted significant reductions in net carbon emissions compared to traditional power sources. Mr. Phipps explained the proposed system's role as a base load generator, not a peaking system, with substantial operational hours planned. Mr. Phipps emphasized that the technology is seen as a bridge in the transition to low-cost, reliable, non -carbon energy. Fuel Cell Technology Discussion Bloom Enemy and Fuel Cell Technology Vice Chair Welter noted previous discussions with Bloom Energy representatives regarding fuel cell technology. Mr. Phipps discussed the potential acquisition of fuel cell technology from Bloom Energy and emphasized the shift towards in -territory generation for economic, reliability, and environmental compliance reasons. Mr. Phipps described Bloom as a significant supplier in the fuel cell market and outlined the economic rationale behind considering a purchase agreement for the technology, which includes leveraging tax credits from recent IRA22 legislation. Operational Considerations Mr. Phipps discussed the responsibilities associated with owning the fuel cell technology, including CO2 management, natural gas contracts, and subcontracting maintenance. Environmental I mol ications Chair Soni raised concerns about the environmental implications of using natural gas, specifically the reporting and impact of Scope 3 emissions, which include emissions from natural gas extraction and transmission. Third -Party Assessment and Alternative Solutions Chair Soni mentioned a third -party evaluation of the generation technology including fuel cell technology. The need for exploring alternative in -territory generation options such as hydrogen and solar PV was emphasized. Commissioner Talbot inquired about issuing an RFP to identify the best options for in - territory generation, solutions for reducing peak demand, and meeting carbon metrics cost- effectively. Mr. Phipps agreed the importance of caution and thorough evaluation in pursuing new technologies for in -territory generation. Milton Cat Mobile Battery Presentation Materials: Milton Cat Battery Proposal (CAB Packet attachment 4) Mr. Bullock presented the Milton Cat Battery opportunity to the CAB Milton Cat Mobile Battery (side 1) rroposai uverview Mr. Bullock discussed Milton CAT's proposal to install a mobile lithium -ion battery and emphasized its potential for peak shaving and flexibility due to its mobility. Proiect Details Mr. Bullock highlighted that the proposed battery system is 500 kW with two hours of Page 16 duration is designed to be shared with RMLD to demonstrate its benefits, particularly for peak shaving. Mr. Bullock noted that the project is expected to be located at Station 2 but can be relocated as needed. Mr. Bullock emphasized that the mobile nature of the battery allows for flexibility in location, potentially supporting areas with insufficient power rapacity during peak times. economic and uoeranonai Lonsiaeranons Mr. Bullock explained that the project has an estimated net present value of $100K and promises $35K a year in benefits, with total net benefits of around $110K over three years. Mr. Bullock highlighted that mobility feature allows for deployment in areas requiring temporary support during peak demand. Context and RFP Backoround Mr. Bullock noted that despite not winning a prior RFP issued by RMLD, Milton CAT approached RMLD with this proposal, distinguishing it from responses to the original RFP, which focused on larger -scale projects. Mr. Bullock discussed this proposal in the context of RMLD's broader energy storage strategies and acknowledged its potential as a learning opportunity and a temporary support solution during peak demand periods. Evaluation and Discussion Mr. Bullock emphasized the importance of evaluating such innovative solutions within RMLD's ongoing efforts to integrate storage solutions and enhance grid reliability. The project's potential benefits, its role in learning about storage solutions, and the importance of flexibility in addressing temporary capacity issues was discussed. Chair Soni and Mr. Kelley raised concerns regarding the environmental and operational implications of using natural gas, along with the importance of third -party assessments, and the value of storage solutions. Chair Soni made a motion, seconded by Vice Chair Welter, that the Citizen's Advisory Board recommend that the Board of Commissioners vote to accept the General Manager's recommendation to contract with Milton Cat under an Energy Services Agreement for battery storage services. Motion Carried: 4:0:0 (4 in favor) Roll Call Vote: Chair Soni, Aye; Vice Chair Welter, Aye; Mr. Kelley, Aye; Mr. Small, Aye.) General Manaaer's Report Materials: GM Report Presentation (CAB Packet, attachment 4) People Operations (slide 2) Team Morale and Enaaaement Mr. Phipps provided an update on the team's morale, emphasizing that the staff remains positive, engaged, and energized. Mr. Phipps highlighted the team's dedication and motivation. Internal Moves and Promotions Mr. Phipps highlighted efforts in internal development, noting that over the past year, the organization facilitated four internal moves and awarded four internal promotions. Mr. Phipps noted that this demonstrates a commitment to team development and career progression within the company. Page 19 Internship Proaram Mr. Phipps highlighted RMLD's commitment to talent development, noting the success of the internship program which increased from three to seven summer interns compared to the previous year. Mr. Phipps noted that interns bring value to the organization through learning opportunities, spreading positive word-of-mouth about the utility sector on campuses, and contributing valuable analysis work. Open Positions and Recruitment Mr. Phipps mentioned there are currently six open positions, including critical director -level roles in operations, engineering, and the newly Introduced data analytics. Mr. Phipps noted that efforts to fill these positions are ongoing, with interviews for the Director of Engineering position scheduled. Mr. Phipps highlighted that RMLD is actively recruiting to strengthen its team. This approach underscores the foundational belief that the organization's success is built on its people, alongside a strategic focus on data management to meet future challenges. Director of Data Analytics Mr. Phipps noted that a new position, Director of Data Analytics, has been introduced to address the increasing need for data management and analytics within the organization. More Highlights (slide 3) Mr. Phipps provided an update on several key initiatives and strategic projects. Upcomina Presentations Mr. Phipps discussed RMLD's upcoming presentations to the Lynnfield and Reading Select Boards to address new battery and solar projects. Mr. Phipps noted that this reflects significant interactions with local governance to highlight strategic initiatives and project updates. Lynnfield Battery and Solar Proiec[ Mr. Phipps outlined a new battery project, in conjunction with a water treatment plant on Glenn St, and associated solar installations in Lynnfield. This initiative represents a strategic move towards owned assets and renewable energy Integration. Maple Meadows Mr. Phipps provided an update on the Maple Meadows Project and expressed optimism for progress, despite past delays. MLD ASH Street Campus (sli Asn brreer l ampua Mr. Phipps reiterated the need for a major refurbishment of the operations building at 218 Ash Street, continuing a longstanding discussion with the Town of Reading about campus improvements and potential relocations. Mr. Phipps discussed the likelihood of remaining on the current campus and highlighted future investment needs. Page 1 10 Mr. Phipps noted that initial discussions with neighboring property owners have shown openness to options for possible sales or campus reconfiguration. This marks a shift from previous disinterest and setting the stage for long-term planning Community Plannino Grant Mr. Phipps emphasized that the town of Reading's acquisition of a community planning grant will aid in reimagining the utility's campus. This marks a pivotal development in future planning efforts. Mr. Phipps highlighted RMLD's proactive approach to infrastructure development, community engagement, and strategic planning, emphasizing a commitment to sustainability and operational excellence over the coming years. Scheduling The next CAB meeting will be held on December 12, 2023. The CAB meeting was adjourned at 6:50 PM. Vice Chair Welter made a motion, seconded by Chair Soni, that the RMLD Citizens' Advisory Board adjourn regular session. Motion Carried: 4:0:0 (4 in favor) Roll Call Vote: Chair Soni, Aye; Vice Chair Welter, Aye; Mr. Kelley, Aye; Mr. Small, Aye.) As approved on March 21, 2024 Page 1 11 CAB Regular Session Minutes 2023-11-15 Final Audit Report 2024-04-11 Created: 2024-04-04 By: Erica Morse (emorse@rmld.com) Staus: Signed Tamsacdon 10: CBJCHBCAAB r mV8MQMDxt4 VSL4nceydXJl u_Ui "CAB Regular Session Minutes 2023-11-15" History f) Document created by Erica Morse (emorse@rmld.com) 2024-0404 - 3:07:25 PM GMT- IP address: 71.248.176.131 7. Document emalled to Vivek Soni (viveksoni781@gmail.com) for signature 2024-0404 - 3:07:29 PM GW in Email viewed by Vivek Soni (vnreksoni781@gmail.com) 2024-04-11- 6:36:50 PM GW- IP address: 73.38.54.35 by Document e -signed by Vivek Soni (viveksoni781 @gmail.com) Signature Date: 20240411- 6:37:04 PM GMr -Time Source: server- IP address: 73.38.54.35 Agreement completed. 2024-0411 -6:37:04 PM GW Q Adobe Acrobat Sign