She's looking to get>> I'll have to find him first to give you one.>> We're going to get started uh with our study session July 27th. We've got uhtwo topics. RPU first water system master plan and then we've got the RPUpower supply plan. So it's RPU all the time. So Mr. Tim Makulla, I will take itoff and uh thank you for coming to the RPU show this afternoon. Um, I wouldargue that these two study session topics that you'll hear this afternoonare probably two of the larger pieces of planning and resource work that'shappening across the city right now related to power and water supply. And II don't mean that lightly. These are significant pieces of work that arehappening. Uh, this will be your first introduction as the council to the workthat's happening in our water system master plan. And I would like tointroduce again to you Todd Bloomstrom, our assistant uh general manager ofmaintenance for RPU. And Todd has been with us almost two years now. And Toddand his team as well as some consulting groups are well underway into thiseffort and they have brought considerable uh work together here forthis introduction. This is a long road. Today is only the introduction and we'reI'll kind of jump to the end here at the uh beginning is uh we have about a yearahead of us of further planning work. So you will probably be left with a fewmore questions than answers this afternoon at least on the water systemmaster plan. So with that uh introduction I will turn it over to Toddand allow him to take it from here. >> Thank you Tim. Uh good afternoon and andthank you for making time on the work session agenda today. We're here to giveyou an update on the water system master plan as Tim uh described and theinformation we have to share with you today uh is primarily focused in threeareas. >> One of them is the challenges that we'reencountering with the water system uh today. They are not unique to Rochesteruh and not uncommon for other cities that have strong economic developmentand growth in their communities. Uh the second thing is we wanted to give ageneral overview of the technical process underway and I don't want to getdown in too much into the weeds with the technical piece but it's important toillustrate that there is a process for identifying and evaluating alternativesand finding uh the path forward that's best for the city. Um and so the otherthing is we wanted to talk about that this is not just a growth issue. Umwater systems are highly regulated. Uh we'll talk more about that and uh justremaining compliant with both water uh distribution requirements and waterquality requirements is becoming uh more challenging for all utilities across thecountry. >> So um with that I'm sure everyone on thecouncil understands that uh RPU is part of the overall city. We serve uh 42,000customer accounts and about uh 61,000 electrical accounts and that numbergrows each year. Um we've seen steady growth over the last 40 years. Um it hasbeen manageable in a very even and strong pace and so uh with that we havesome core responsibilities when we manage the particularly the watersystem. First and foremost is uh water quality. We have to ensure that thewater we're producing and delivering to customers is safe uh and that it is uhcompliant with all state and federal regulations. And water systems, as Imentioned, are very regulated and for good reason. Um making wholesale changesor large scale changes to a water system takes time. It takes usually years. Andso we're constantly trying to forecast what our future water demand is and howthe system is expanding. Uh and then making sure that we're securing enoughsource water so that we have enough water to provide to customers.Um with that though, it's not just uh securely uh purely securing water. Wehave to make sure that we're doing it in an environmentally responsible way. uhwe're talking about five billion gallons a year uh that is being uh withdrawn andand served to customers and we need to also be very cognizant of of theenvironmental protections that we need to comply with and then lastly all ofthe infrastructure. Um and from a technical standpoint uh we maintain twocomputational models. So one model is um to evaluate the overall distributionsystem and then over the last five years um we have developed a groundwater modeluh so that we can understand as we're extracting water uh from the aquifersthat we're doing it in the best way possible.So with that uh there is a graph on the right and this shows a 20-year historyof our water demand and then a 40-year projection out through 2065.Uh, and so it is a rather unusual shape. A bit hard to see, but there is a littledash trend line there. And typically in a city like Rochester that has had verylong sustained steady growth, uh that water demand continually increases overthe years, it es and flows because there it's mainly uh dependent onprecipitation for a given year. So we'll have high pumping years and lowerpumping years. Um but invariably there is a trend. What is unusual forRochester is one um we have put a lot of effort into conservation and that's animportant element and I think that has certainly helped us over the years. Uhbut we have seen changes in industrial land use here in the city um over thelast 20 years and it has um it has lowered the overall water demand for thecity. That's good because it created margin for us to sustain that growth umwith some manageable water demand. But I think we've essentially consumed thatmargin and now the population growth is really going to drive us on more of whatwould typically be expected for a growth in in water demand.I show here uh the projections. I want to emphasize and not lose track thatthese projections are for dryear seasons. When we plan water systems,when we design water systems, we do not do that on an average year. We have toplan for dry dry years and drought conditions. And so these estimates arebased on that. And today uh we're just slightly under uh 5 billion gallons ayear. 2023 was a kind of a classic drought year here in Rochester and wereached approximately 5 billion gallons that year. Um, and the projections outthrough 2065 uh increase that up to a little over eight billion gallons ayear. So, a fair uh increase. >> Can you hold a minute, Council MemberMiller? >> Yeah. So, I just want to ask thisquestion up front and I think it applies to both power and water. And I sent thisemail earlier and had a chance to talk with general manager McCulla, but in thecharter um in the the board powers enumeration, subdivision 4 of thechapter says the board is authorized and required to restrain and prevent so faras possible any and all waste of water, electricity, heat power, and any otherpublic utility service provided by the board. So, I guess that I I'm curiousabout how conservation is driving this projection and whatassumptions really go into it. When paired with what we know about ourchanging climate for this region, we would also expect um more infrequent buthigher water precipitation >> into the region. And so I'm I'm curiousabout the assumption for only focusing on drought years and also how thisrelatively flat eb and flow over the last 20 years begins to climb quitedramatically almost doubling in that projection.>> Sure. Um I appreciate the question is an important question. Um, one just lookingat the trend lines. If we were to extrapolate 2023 as a a drought year, itwould pretty well align with how the projections are starting to build. Yousee that jump upward and that is us transitioning from historical pumping toprojected droughtyear pumping. So that that explains that. But um, in terms ofthe question uh there is a whole portion of this study that is dedicated not justto conservation and but reuse. And as we navigate through this process, and wewill have to do that through the Department of Natural Resources, thestate agency, they are going to require that we implement more aggressiveconservation measures. Um there is already assumptions built into thesenumbers that we are going to achieve greater conservation than we are today.That is already built in. When we come back hopefully in October, um we'regoing to have a whole section to address water conservation and reuse. there willbe a matrix and options and how much conservation those those strategies canachieve and the cost of implementing those strategies. So um there is moreassump or more work to be built into the process. Um but we're already assumingthat we are going to increase the conservation levels that we have todayand >> and so a follow-up question would bewhen is the last time that this water demand forecast would have beenprovided? Would it have covered the period of 2005 to 2025?And how would we compare? I mean, and I just bring this up because I I thinkabout traffic models. >> Sure.>> They're always wrong. >> Any model is always wrong,>> but we often assume more demand than ever shows up.>> Yes. >> And over supply. And and I I guess I'mjust curious how we're really testing that assumption and and the underlyingassumptions showing quite this much demand growth.>> Yeah. >> Uh so it while this graph looks simple,there was probably a two months of work that that went into this and and thatinvolved us closely coordinating with community development. So theassumptions that are built into the comprehensive plan were the assumptionsthat we we brought into these projections. We also were looking atpast studies from public works with the wastewater master planning process andthe assumptions that were built into that as well as the county and rollogand their transportation models. And it feels maybe odd on the surface thatwe're looking at those studies to build a water plan, but it's important thatall of these studies are starting to coalesceto a common set of assumptions in terms of land use and growth and populationprojections. Um we validated that with uh the state demographic office and whatthey were assuming for Mstead County and Rochester. Um and then we also theseestimates were based on two methodologies. There's two differentmethods for estimating water demand and we we went back and forth those methods.So they calibrated. So um but to answer your question, what was the projectionsbefore? I wish I had them. I'm not sure that Rochester has done this moreextensive approach to planning in the past than we are doing today. So, well, good. Um, so this this is wherewe're at today. Uh, these numbers might refine somewhat and again as we'reworking on further conservation reuse measures. Um, but it's set the baselinefor planning in the future. Um, but water demand is not uh our onlychallenge. As I mentioned before, uh water quality uh requirements andregulations are becoming far more stringent and um all utilities arestruggling to comply with them. Um looking at our source water, uh and ourlong-term infrastructure needs uh also builds into this study process.um and really looking at not just um what infrastructure needs to be built.This study will also estimate the costs and how that's phased in and how uh wecan finance uh the future uh cost demands on the system.So I wanted to get into specifics of of sort of the challenge that we're facingtoday. Uh, and I would start by the figure in the upper right. That is adiagram of the surficial geology, bedrock geology of of Mstead County. Andif there was a cross-section cut across the county directly from west to eastand that cross-section passed through Rochester and it was turned on its end,that would give you the diagram on the bottom of the screen. And that is across-section of the geological formations that exist below the groundsurface. And those different layers have different properties. Some of them arevery dense uh non-porous. There are not a lot of water in those formations. Nordoes a a significant amount of water pass through either horizontally orvertically. Other layers are very porous. Um they're either unconsolidatedor fractured bedrock. They contain large volumes of water. Those water bearingformations are what we call aquifers. And so in the past for Rochester, everytime we hit a point where we needed more water supply, we would go ahead anddrill a new well. And we would drill uh the well into that upper yellow layer,the bright yellow layer, and that is the Jordan aquifer. That is where most ofour wells are drilled into is the Jordan aquifer. Water quality is generallygood. Uh water yield is very good. uh and it has been a very um stable watersource for Rochester for a hundred years. Um and and like I say, most ofour wells are drilled in there. In 2024 was the last time we constructed a newwell here in Rochester and that was also drilled into the Jordan. Um and to dothat, we need to get permits through the state. Uh and the Department of NaturalResources is the agency that administers those rules for the state.The DNR did eventually give us a permit for well 24, but it came with somefairly strict requirements. Um, and while the wording is a little awkward, Itook this almost verbatim from the notification that uh we are prohibitedfrom constructing new water supply wells in the Jordan until we've reviewedalternative sources. And those sources need to be other aquifersor uh looking at potential surface water sources. And I don't fault the DNR. Theyare responsible for managing the resources of the state. It is their joband and they have concerns that uh the growth and and even the past growth ofRochester could be reaching the yield limit of the Jordan aquifer. And as autility, we also have a responsibility to make sure that we have a long-termsustainable source. And so we share some of those concerns. Um they went on uh toindicate that we need to demonstrate uh that additional groundwater withdrawalsif we're going to stay with just a purely groundwater system uh would notresult in any unacceptable environmental impacts uh and that would be consistentwith sustainable yield capacity. That's a lot. And you may ask well what exactlydoes that mean? And it seems very broad. Um, but thankfully there's some goodguidance already in place and it really comes from three sections of theMinnesota statute. The first section that I have listed there is the safeyield requirements under 103G. And so that talks about looking at the amountof water that's being extracted from a specific aquifer and is that depletingthe volume of water in that aquifer and drawing down the static levels of thoseum that given aquifer. The second one really focuses on surfacewaters and in that cross-section that I showed as there's a substantial amountof pumping out of a lower aquifer that can actually lower the water levels inupper layers of the strata including up to the surface and start to impact baseflows in streams. And so there is also a section on 103G that describes how thathas we have to avoid and minimize that. And then the last uh criteria that we'reworking with is the statutory protections on what's called calccariousfens. So if you're not familiar with that, it's a special type of wetlandthat is highly dependent on groundwater. Um the ecology of the wetland issensitive to changes in in groundwater levels. And so there are very clear andand rather strict uh requirements on calccarius fens.So that's great foundation that is the basis. Those three criteria is whatdrove us into the master planning process and for which we need to find asolution that complies with those three requirements. So uh the baseline is setin terms of that second paragraph on the previous slide. It talks aboutalternative water sources for groundwater. We are primarily in theJordan. We're going to analyze what it looks like in terms of complying withthese three requirements if we continue to add additional wells and additionalpumping in the Jordan and that would be our baseline conditions is continuingthe process as we're doing it today and evaluate what impacts that might be. Butthere are alternatives to remaining a groundwater system and advantages ofremaining a groundwater system. There's the Mount Simon aquifer that is thelowest aquifer that was shown on that cross-section.Uh the Jordan is typically 4 to 500 feet below the ground surface. The MountSimon is about 1,100 feet below the ground surface. Um advantages of beingin that it's highly protected. It's deep. It has a lot of protective layerson top of it and it is for the most part reserved only for municipal domesticuse. And so um that is certainly a good option for us. There are intermediatelayers though also the Wanowok uh tunnel city um are two intermediate aquifersand we're going to look at those aquifers too in terms of the analysisthat we do. The challenge is that not all aquifers are the same. Um in generalsense to produce the same amount of water in the tunnel city or Wanowokwould take twice as many wells as in the Jordan or probably the Mount Simon. Sothese aren't just pick your depth and you get the same results. The otherchallenge is that the water quality in each one of these are different. Doesn'tmean they're contaminated, but when water is in these water bearingformations for decades or centuries, it it adopts the material that which it'sin contact with. So minerals and properties of of the soil in bedrock uhbecome uh some of the constituents that are in the water that you withdraw. Soand we are also required to evaluate surface waters sources from the DNR. Umthat is not uh that is a typical uh progression for cities that are growing.If you look at Minneapolis becoming a surface water system wholly St. Paulnearly wholly a surface water system St. Cloud Duth those are all cities thatconverted from being a groundwater system to a surface water system manymany years ago. The advantage they have is they're all next to a very large anddependable surface water source. It's a bit more scarce here uh in MsteadCounty. Um we're we are looking at the south fork of the Zumbro River. A lot ofpeople say the Silver Lake not necessarily has to draw from the serverlake, but we're looking at upstream of 37th Avenue and that is just the SouthFork of the Zumbro. Water flow is intermittent. We can't dryup the river just for the sake of having a source water. So the limited yieldfrom that um is is not great to be um blunt. Um we're moving downstream. Sowe're getting downstream of the confluence the South Fork and MiddleFork um really at Lake Zumbro much larger watershed more base flow moreopportunity to yield from that source uh but still somewhat limited and andvariable in dry years. Um it's important that we have a dependable source. Andlastly, um we have to evaluate the Mississippi River. I know that's a longdistance from Rochester. There are cities that have gone long distances tosecure source water. And so that option would be looking at pumping raw waterfrom the Mississippi uh into Homestead County um as a source for our potabledrinking. Uh I wanted to just touch on the modelthat we're using. Uh so the diagram you see on the right um it looks likeshading but it's actually a grid. Uh and so the groundwater model that's beingdeveloped is a three-dimensional model and each one of those little squares isa data point. And so it's looking at all of those aquifer formations verticallyand then horizontally all of the demand that's being put on here. Not justRochester's municipal demand. all of the cities and all of the private wells arebeing loaded into the model and so that we can simulate what the outcomes arefor the increased demand over the next 40 years. Um looks like darker shadingaround Rochester in these streams but it is the grid getting very dense and fineso that we have um very dependable and accurate uh analysis on the areas thatare part of those three criteria that I described before. Study area is large.It goes from Dodge Center all the way out past St. Charles and from Mazeppaand Zimroda to the north all the way down to Fountain in the south. So about1500 square miles. Um and we feel that to get dependable results we need tohave a very good model and this is a very good model.Um just a little bit more detail uh on that second criteria about impactingstream base flows. uh the model and you can see this correlates with those verydense mesh uh in the in the previous slide. These are all the tributaries andreaches of the streams um that would be part of the analysis. The red are thosestreams that are designated as trout streams are even more sensitive thanothers and the blue are the non- trout stream. If you look closely, there'ssome purple squares and those purple squares are the stream monitoringstations that have been maintained for decades by the DNR and the USGS. And sothat is the data for which we will determine what stream base flows are andwhat impacts there could be. And then if you also look closely there are yellowtriangles and those are calccarious fence. Fairly rare. We are blessed tohave almost 15 of them in Olmstead County. Uh which is nice from anecological standpoint. It it is another layer of complexity in protecting thoseas part of our future water supply planning.>> Could you >> Sure.>> Could you say what that is again? >> Calcarious fins. So those are a specialtype of wetland that are really dependent on groundwater as maintainingthe ecology of the wetland versus maybe more common wetlands that are reallyrunoff supported. And so any variation in groundwater can really highly impacthealthcare events. Yep. So I'm not going to go through thedetails of this table but I just wanted to put it up for illustration purposesthat each one of those purple squares we have through a lot of data crunching anddata of analysis we have determined what is called the August median base flow ateach one of those points that is what will likely determine the most on whatalternatives we're we evaluate will be the ones that are are most acceptable toavoid environmental impacts. So we have a water demand projection. Wehave criteria for which to judge it. We have a model built today and theanalysis is starting. So the the results are going to become available here overthe next two months and we hope to be back in October with those results. Butthere is an added layer to this as I mentioned at the beginning and that iswater quality. Not just in the future but some of the challenges we're facedtoday. So in regulatory compliance, we have to comply with primary drinkingwater standards in the federal safe drinking water act. In that standard,there are about 90 compounds that are regulated and they are tested in allwater systems, including our water system. And they have what is typicallyreferred to as a maximum contaminant level. So if any of those 90 compoundsthat are tested exceed that MCL, we are required to issue a public noticeto all our customers. It's good because customers can feel confident that ifthere's an issue that utilities are required to be open and transparentabout about the results. Um there are also 15 additional compounds that areunder the secondary drinking water stacks drinking water standards underthe safe drinking water act. Um and those aren't uh necessarily a violationif you exceed them, but they're highly encouraged to comply with thosesecondary standards. I did not want to make give you a list of 90 compounds ona slide. It would be hard to follow. But I did pick six to just highlight. Fourof them are primary drinking water standards. Two of them are secondary. Uhfor example, combined radium and gross alpha. So those are looking atradionuclides and in the levels that are in our surface water or source watertoday in the Jordan aquifer. We are generally low. uh but we did get areading of 4.9 and the units are pico curies per liter that was onetenth offof the maximum contaminant level which would have triggered a publicnotification. Many would argue those MCL's are set very low to make sure thewater is safe but hitting that MCL triggers a public notice and that was asclose as we've come in years. Gross alpha um is another component of thatand and we were within one picoy of hitting the 15 pico per liter MCL. So wehave some challenges here with our current source on the bottom um are POScompounds. Those are the newest addition to the primary drinking water standards.Uh there are several a couple of them have been sort of parked for a littlebit for further analysis but these two PFOS and PFOA are active. Um and you dosee an exceedence there. I should have put a footnote. We did sample well 20which we taken offline a couple years ago. That well has not pumped into thesystem but the results that we collected from that actually exceed the MCL.So in that case that well is now essentially decommissioned.um well 12 with the high combined radium. We are curtailing the use ofthat because we want to make sure we understand that and avoid any primarydrinking water violations. So in the last few years we have spent$2.5 million to build well 42 and have lost two wells. We have actually gonebackwards a bit. Um the other thing I wanted to highlight here uh and then Ican wrap up the water quality piece is iron and manganesees. Um iron uh atlevels that you find in groundwater in Minnesota aren't necessarily asignificant health hazard. They are very much a nuisance though. That is whereyou get orange water, red water complaints. People complain aboutstaining plumbing fixtures, staining clothes, um unsightliness, manganesees.You if you've ever seen little black specks at the bottom of a water glass,that's usually um oxidized manganesees in the water.We uh as a utility feed uh chlorine for microbial disinfection to ensure wedon't have microbial infections in the water system and we've we've maintainedgreat compliance. We provide a little bit of fluoride just to meet the staterequirements. We're required to have a certain level of fluoride and we haveorthophosphate that we feed and that is a sequestering product and it's tryingto keep iron and manganesees in that soluble state. So when you pour glasswater, it's clear. When it hits insoluble, it gets oxidized. That's whenit turns red. You get black specks. It stains plumbing. There's only so muchorthoposphate that can be fed to try and sequester it. Our complaint rate uh forwater quality is is twice the national average and it is because of the higheriron and manganesees levels. My point about the treatment process is we do nothave conventional treatment here in Rochester where we do filtration andthat frankly is quite unusual for a city of 100,000. Um but that is not to saythat the water that we deliver to customers meets all the primary drinkingwater standards. It has some aesthetic challenges for sure. Sowater treatment is certainly a big part of this study. Um when we look at waterquality in the Mount Simon and those intermediate aquifers, uh they probablyhave more significant issues than the Jordan, all of those issues can beaddressed with conventional treatment processes, but the idea that we couldpump directly from those aquifers is unlikely. I would just say that. Sonext step, uh coming to the home stretch here, um we are actively modeling, uhand looking through all the alternatives. We're going to go throughconservation measures and how we can drive down those future demandprojections. Um, we should have results in late late October and that willreally start to illustrate the path that we need to go down if we're going tohave a sustainable uh water supply for the city in the future. Um it will alsothen uh rolling into Q1 of 2027 as I mentioned they're going to estimate allthe infrastructure costs and we'll have the financial piece of that uh in thefirst three months of 27. So with that I just wanted to add oneother slide so there's not confusion. This information will be coming latethis year and early next year. Um but there are some items that you'll see onyour agenda coming up in the near future. While we do this study, growthdoes not pause. It's continuing to happen. Um, and we've encountered someuh fairly significant expansions of the water system that have been a capitaldemand on the water utility. Um, water utility throughout history has minimizeddebt. We've tried to operate on cash and not uh issue a lot of debt uhparticularly for capital. Um, but we do have some large projects that are comingup and we are going to need some short-term debt to weather through thatspike in growth. One of them is trunk water mane upsizing.We pay developers when we direct them to build water manes larger than they wouldotherwise need to build. We need that for transmission capacity to move wateraround the the city. Um, they do that and we reimburse that incremental costfor upsizing the water man. Typically that's about 150 to 200,000 a year. Lastyear it was over 800,000. Um, so we saw a lot of water man go in last year. Um,we have an advanced metering project um that will be a a a great benefit tocustomers and water meters need to be replaced every 20 years because thebattery dies. So we're we're just getting into the early stages of ofimplementation on that. It's a large project. um Southwest Rochester uhextension of water and sewer working closely with public works uh to get ajoint project out to bid to extend water and sewer out of uh along Country ClubRoad. And lastly, um doesn't happen very often, but once in a while we create anew pressure zone, and that is actually occurring with the Pebble Creek project.It would probably be one of our last major pressure zones to be created, butin order to create that, we need a booster station. Uh, and the Calmarbooster station is getting ready to be bid. Also, all that being said, we needsome short-term financing somewhere in the order of 2 million a year up toabout 10 million um to bridge us to the point where we have this master plandone and we have different financial models in place uh to to carry that. Sowith that, hopefully not too long-winded, but available for anyquestions that you might have. >> I'll start off. So you mentioned thatRochester does not have a traditional filtration system. Can you talk aboutwhat kind of system we do have? And then if we don't have a filtration system,how do we treat the water? >> Sure. So today at each of the individual32 wells, we feed chlorine uh for disinfection. Um, we feed a low amountof fluoride based on state requirements and we feed orthoposphate to try andcontrol the iron and manganesees precipitation. That is it. It goes outof the distribution system and goes to customers. There there is no centralizedplants or treatment process in the system today beyond the chemical feedsthat we do. Um, typically for a groundwater system um they are gravityfiltration plants. water comes in, there's some uh products that are addedto make the iron and magnes precipitate out and then it goes through filter bedsuh and then it goes through finishing basins and it's pumped out into thesystem. The advantage of having centralized treatment is you have afacility in place and everything sort of plumbed back to a common location. So ifnew contaminants are detected and new treatment processes are needed, it issomething that can be added on to the existing treatment plan. So, if if wewere to go with a a um something other than the Jordan aquiferor surface water, would we have to have those plants in order to co-mingle thewater supply? Is that a a necessity? >> We we likely will for the Mount Simon orthose other aquifers. They just would not coming out of the ground would we'recollecting a lot of water quality data as part of this study but the data thatI've seen so far it's unlikely that they could be pumped directly like we arefrom the Jordan surface water uh requires a very light high level oftreatment um that is that is a different type of treatment plant um that isneeded um and and you can treat just about any surface water. It's just amatter of the processes that need to be put in place. But a treat a surfacewater plant is is even more extent extensive than a groundwater treatmentplant. >> So would we have to if we would we havetwo supplies of water or would we have to then have a treatment plant for thewater that we pull from the the Jordan. >> There are cities that blend surfacewater and groundwater. Um, I am still optimistic that we we will find agroundwater solution because blending different sources of groundwater is amore manageable process than trying to blend surface water and groundwater. Itcan be done and is done even in Minnesota. Um, but it is a little bitmore tricky and and um I'm hopeful that we will remain a groundwater system.Yeah. >> Thank you, Council Member Wall. This is uh absolute hearsay which is uhnever good. Uh I understand that perhaps uh a data center uh nearby was proposingto drill two uh wells into the Jordan. Uh is is that correct? And how how wouldthat be possible given the uh state's restriction on use by a city? I'm not avoiding the question. I don'tknow the the gritty details or what I've heard I don't know as fact and so I Iwant to be cautious with that. I I will say that this study is bringing in allof the cities within that large study area. So they are very cooperative.We've been having quarterly meetings with all of the cities representingprimarily all the high-capacity wells in in the study area. They have given ustheir water demand history and they have helped us develop water demandprojections for each one of those communities. So this is not justRochester. This is the Jordan aquifer which nearly all the cities are tappinginto. The results that we find are not justgoing to apply to Rochester. They will likely apply to all cities accessing theJordan. So we're very much dedicated working together with them. There arethe one-offs of a data center or something that comes in. Until we knowspecifically what they are and they're willing to sit down at the table withus, we can really only speculate. >> Council member Council Member Keane.Yeah, I appreciate you guys being here, but I I guess I want to kind ofhighlight this is a major change for Rochester when you say we've been doinguh groundwater for a hundred years that this would be a a big change not just tothe way we source our water and the technology behind it, but also probablyin the cost of the water. Um, and I just I know you're saying this is a regionalstudy, but I do want to understand when you say we're not allowed to drill wellsright now, is that a Jordan Aquafer rule or a Rochester rule? That's a great question and I've askedthe DNR. The DNR has stated uh and it fairly so. They they said if someonecomes to us, we intend to give them the same responses they gave Rochester.They're not in the business of reaching out and telling people they're in amoratorum. But if if a city, whatever city that might be in this area, cameand applied for a new well, um the DNR has said that they are going to treateveryone equally and they would probably get the same notification. They may getaway with one more well, but then they would be in the same channel as we are.The reason my line of questioning really has to do with is this a tax beinglevied on to Rochester to figure out for a for a natural resource that doesn'tboundary our city or even our county. Um or is it something that is a regionallysignificant both problem and need for a solution?>> Yeah. Um I'll start out by saying it's not unique. It's happened in other partsof the state. out in southwest Minnesota, they had similar challenges.Um, many years ago, Burnsville Savage went through this. The east metro isreally struggling with this issue. Uh, in fact, to the point of of there's beenlitigation and that's common knowledge. >> Um, this is the DNR uh trying to beresponsible managers of the system and and intercept issues before they becomeeither crises or lawsuits. But you know to put it clearly and and they have beenvery supportive of this study. Um in terms of the cost being burden at thispoint Rochester is 95% of the volume of the water beingdrawn out of the Jordan right now. I mean there are other cities and thereare other systems but all of those systems combined is is less than 10% ofthe overall volume which we are 90 plus% of. And so we have taken the lead onthis. I think there are other opportunities as we we we find what pathis is is right for everyone and and those could include some consolidationof wholesale water supply uh of treatment processes uh to adjacentcommunities um in other options and cost participation in those efforts.>> Okay. All right. >> Can I also add to that as well? Um ToddI think understated the regional nature of the planning effort that's happeninghere as well. Although we are leading the study, we have invited and manysurrounding communities have sent their engineering teams, their data andthere's been joint planning efforts together. So, a lot of our surroundingcommunities are actively working with us in providing data even though they'renot financially contributing yet, but we've seen great partnership from themand studying this as a regional issue. And I don't want that to be misstated orunderstated there. We've seen good participation from our from our peersaround. >> Okay. I I appreciate that because I doworry sometimes, but your numbers surprise me with the 90% when we'reabout 80% of the population of Homestead County and and the Jordan aquiferdoesn't, you know, know our boundaries and and listen to, you know, to our ourpolitical boundaries there. The Jordan aquifer is much bigger than this. AndI'm trying to get my head around this other sort of concept that thepopulation density is is what's really stressing the groundwater supply. Butbut is there sort of I know there's how much the five billion that we're allowedto take out per year, but how much how how much active return is there to a toa um aquifer every year? Is it you know it's healthy to be at 90% returnedwater? I I I have no idea how to uh get my head around that.>> That that is a great question. You're really cutting to the core of what thegroundwater model does. Um it is to some degree a a water balance, right? And andthat model will not just run out to 2065. it runs out an additional 20 yearsto make sure that whatever aquifers we choose have reached a steady state andmean they're not on a downward trend and that the recharge is balancing thewithdrawal that is that is at the core of what the model does is the questionyou're asking. So >> okay>> it's a very good question. >> No I appreciate this going on and partpartially is you know I don't think people appreciate the significance ofwater until you start getting shortages. I know I do some trips with some friendsthat live in the Southwest and this is a major political uh issue all times thatwe we've been above, but it's it appears we're on the cusp of getting more intoit as a um as a regional issue that has both quality of life uh but also and youknow quality of drinking water but also cost sharing which can be can bedifficult. So appreciate the update today.>> Thank you council member Doring. Yeah, I also very much appreciate the update andjust have a a few questions about infrastructure pricing. Right. So, Iheard you in the earlier in the pres presentation talk about u maybe tappingthe Mount Simon aquifer and that that aquifer sits basically double thedistance below the surface than um the Jordan aquifer. So, does that mean adouble uh to to to um drill a well into that aquifer? Is that double the cost ofa of a well that goes into the Jordan at this point or am I thinking about thatthe wrong way? >> Yeah, more or less. Um, there'sincreased cost. I would probably not classified as double. There'smobilization and getting there to begin drilling. Um, the cost is greater tobuild the well. The cost to pump on an annual basis is greater.>> Yep. >> From the Mount Simons. So, there is a acostbenefit balance that we're going to have to consider in the equations of allthese alternatives. not just where can we get the source and how does how do weensure it doesn't have environmental impacts but what is the most reliablelowest cost option to choose from and and those those play into that equation>> right and increased treatment is also I heard uh from from the Mount Simonaquifer and then in terms of of uh pumping uh surface level water uh isthat a more expensive option than drilling uh a well to the mount Simonaquifer because of of treatment. Um>> yeah, I mean if if it were if we're securing a source water from theMississippi and pumping raw water 40 miles, there's a substantial cost tothat. >> Yep. uh a water treatment facility for asurface water system would be substantially more than groundwater tothe point where the differential cost for drilling another 500 ft is probablynot a really in the order of magnitude of of what we're dealing with. Um citiesbuild surface water treatment plants. It's not impossible and it it's not Iwouldn't classify as financially devastating, but it is a big investmentand they last a hundred years and um so the costs would be substantially morefor a surface water system. >> Yeah, I'm I'm anxious to see the data ina couple months to see uh both the conservation numbers and how well we'redoing there, but also to to really look at options. You know, I I agree with uhCouncil Member Keane that this is uh this is disturbing to hear. Um um but Ireally appreciate the work that has been done to get ahead of of of an issuebefore we get into a a a scary situation. I guessif I could just add one closing comment to that and I appreciate that statement.Um there is a solution. We will find the solution. Um and and we will make surethat it protects the environment. Um we will get to that place. It's a matter oftime and and we are not in crisis mode today. Five years seems like a shortrunway, but we're already a year into this. We we will get we will get throughthis without being into a crisis situation.>> Council member Miller, >> thank you. I I really appreciate theanalysis. Um I I wanted to bring up another related plan that we've heardabout recently which was the urban 3 analysis which included water pipe asone of the utility or infrastructure types. Wasn't the worst one as behindwhere current spending versus needed spending is it's well behind roads butit's still showing 17.5 million annually.>> Yeah. >> As a gap between where current spendingis and what projected spending would be. So thinking about this and ask forinvestment. Could you talk about how you're um utilizing that analysis andyour planning, how it's informing water system planning and how you're advisingus as well on how we think about growth in the comp plan, annexations, newdevelopments, etc. >> Sure. Um so in reality, this is a atwo-part study. There are actually two consulting firms working together onthis. A lot of what we talked about is groundwater analysis and water sourcewater. And that is one of the consultants. The other consultant isdeveloped the water demand projections, has to step back to solve the sourcewater issue and then they will come in in in Q4 and Q1 of next year and andthey will be the group that will be determining what is the infrastructurejust to get the system modernized and functioning correctly and if treatmentplants are needed, how much do they cost? But they will also look at um thevery information that urban 3 was identifying and that is are we investingenough in the water system so that it is being maintained properly for futuregenerations. So that all plays into >> okay>> the study. Yes, >> I'm glad to hear that. My secondquestion is about that uh funding requestand I I'm just looking for clarification. It says request councilauthorization to issue up to $2 million annually. Yeah.>> Would those be annual requests or one request over five plus years?>> It's a bit of a typo on there. Okay. We're estimating about $2 million. So, Ilook at those projects and it depends on how much trunk water main oversizing wehave and so forth. Um, it could be two uh or maybe slightly more, but we do notbelieve that it will exceed $10 million over the next three years. So, I know itseems a little vague, um, but the Southwest transmission extension isgoing out to bid here hopefully in a matter of a couple weeks.>> Kelmar's going out to bid in a matter of a couple weeks. We're going to have tostart we will start getting hard numbers on what those actual costs are and willbe more. >> And and from a timing perspective, thestudy results from the groundwater study should be wrapped up and available comeOctober. How will these funding requests be aligned with the timeline of thestudy results? >> Can I take that one to>> Yeah, sure. >> So, I I would ask that you think aboutthese two things in two separate buckets. The water system master plan,the groundwater model is really results that we will think about next year andincorporate into the 28 and 29 budget. I don't want to get ahead of the cityadministrator's recommended budget, but this short-term debt issuance is part ofour strategy on navigating the next couple years before those new systemassumptions are put in place. This is based off of growth that has alreadyhappened and it is based off of anticipated uh system expansion that weneed in this next year to two years to meet the rate of housing developmentthat that's happening. That's an overall good news item. I would argue that we'reseeing housing growth. The development related fees for the water utility havefunded historically tower storage, but not trunk main oversizing, not new welldevelopment, and not new pressures on development. Those have historicallybeen rate funded. So, we're in this period of a couple years where we wechose intentionally two years ago not to try and change development fees to getahead of this um knowing that we would be in this situation because we didn'thave the planning work done for the basis of the new fees. So, debt fundingis a strategy. It allows future rateayers to pay for infrastructurethat's needed today. And so, we're we're doing so in a recommendation that fitsin with our budget recommendations. We would anticipate coming back to theboard with the recommendation to come to council in the next 30 to 60 days forapproving this up to 10 million of debt issuance one time. That fits in with theproforma that the council will see very shortly here with the cityadministrator's recommended budget and the board recommended budget as well.>> Okay. >> Thank you.>> Thank you gentlemen. And as council member Doring said, thank you forgetting this in front of us now and keeping us updated as it progresses. Moving on to uh RPU power supply planupdate. >> Well, this is a plan uh that I will stayhere for and invite Bill Bullock who I think you all know and has been presenthere and been carrying a big portion of this work for us. I do have a bit of uhsadder news for us. Bill will be moving on to another organization and movingback east here shortly. So, this will be uh last time you get to hear Billpresent on this behalf. But I do want to give him significant credit for theprogress he and the team that have been working on this. Um sitting here a yearago, there was a bit of uncertainty as to what where we were going in relationto changing tax code and tariffs. And we've made a significant amount ofprogress towards our power supply plan. And so I'd like to give Bill theopportunity to report out here on where we have come in the last year and thenset the stage for the remaining work that's still ahead of us as well. Sowith that, I'd like Bill to take over and give you an update.>> Okay. Thank you, Tim. It's good to be here. I'll give you anupdate on the power plan. I think you've seen this before. Our plan always hasbeen a balance between the reliable capacity that we need to meet a peak daylike today when the wind isn't blowing and it's very hot out um and therenewable energy that we need in order to achieve the uh 100% net renewablegoal by 2030. Um the chart below shows the um the progress we've made. As youcan see seasonally, uh summer is when we need the most power. um uh winter iswhen we need the least amount. Um and today I think we're close to the peak ofabout 294 megawws. Um so um and as you can see the the hashtag items are thingsthat are are not firmed up yet. They're still uh uh uh being firmed up, but wedo have a line of sight on them and we have contracts in place. Um the samething on the renewable energy side. We're about twothirds of the way there.um uh if everything that we assume uh go goes rightum so I've kind of compared this process as things um eb and flow to be sort oflike playing snakes and ladders um is the best uh analogy I could come up withum because the goal is to get to 100% um it's to get to 100% at a reasonable costum and the path is less straight forward than uh it would be otherwise. Um inthis uh scenario the the latters are the strategic decisions we've made like inthe uh signing up for power purchase agreements um implementing batterystorage and uh building our own firm capacity. Um, we've also by actingquickly and with with the help of of the council and our board, um, have beenable to enter into contracts that have safe harbored the tax credits that were,uh, cancelled last year. Um, and we've been able to use supply diversity. So,we have a number of projects. Um, and I think we'll need more in order to meetthe 100% goal. Now the snakes are the same things we talked about as hurdlesto our program and those are tariffs uh and inflation, the expiration of the taxcredits, um some permitting issues and then market accreditation for um forsome of the assets. Um first on the capacity side, uh MountSimon Station uh is continues to be a good news story. Um we just executed ourum interconnection agreement with the uh system operator last week. Um that camein uh at about 25% of the cost we estimated. So we saved about $15 millionon the interconnection because we went to a accelerated process with MYSO. Wedid have to pay a little more um but all of that extra went toward uh the costsof of the interconnect. Um, and you know, Mount Simon is important. Um,maybe the only thing here is we should have built a bigger ladder. Um, andmaybe made it a little larger. Um, but it it is moving along well and we're uhwe're prepared to go for the air permit um in the coming weeks.Um, we also uh implemented battery storage um and that was we're doing 20megawatts 10 megawatts each at different uh RPU sites. Um, it's a tollingagreement, meaning we operate the asset, but the uh the developer will uh willcharge a toll for us using it. Um, and they'll be responsible for maintainingit. Um, the only this is mostly the latter. The only snake possible is umfuture accreditation in MSO is uncertain. So um because batteries havea limited storage capacity you after four hours you run out of the ability tooperate it at full load. So the the accreditation you get from MYSO forthose um is at risk in the future particularly when there there are moreof those batteries in place. Um, you know, a lot of this plan was puttogether because we are um exiting Simpa and the uh the Shero Coal plant where weget most of our capacity from is set to retire at the end of 2030. Um, so uh thethe blue teal uh items uh chart shows where we still need to fill some of thatcapacity need u to meet our needs into the future. Um,so the the black line is our cap capacity obligation, which is basicallyany >> Mr. Bulock, can you hold a minute? Uh,council member Doring, >> I'm going to let you finish explainingthis slide, but I have a question about it first afterwards.>> Okay. Just the the black line is our capacity obligation in MSO, meaning it'swhatever our load is plus any capacity that we've sold to the market.>> My question is about the GTI replacement component of this. Is that going to bereliance on fossil fuels there? Is it going to be renewable?>> Yes. >> And energy?>> We um you know, as you know, last year um GT1 at Cascade Creek had a fire.>> Um uh we looked at options uh and repairing it and returning it to servicewas the lowest cost option that is mostly covered by the insurance policyon that asset. So we are our plan is to replace it um extend the life foranother uh 6 to 10 years and then have a planned uh uh retirement of that andhopefully in that time frame the battery technology will have been advanced sothat longer term duration storage is available. I think that might be enoughtime to um for that to be replaced by something more renewable.>> Thank you for that clarification. Council member Miller,>> I have a question about the U black line for the capacity obligation. Obviously,today is a hot day. You said the wind isn't blowing too much. It's really hotoutside. A lot of cooling. So, that's a top hour of use. How many of the, youknow, let's say like the top 100 hours per year, how much of that capacityobligation would our top 100 hours per year of demand represent?>> So, it's very close. Um but our we are charged capacity based on um MYSO's peakday and our peak day is not always coincident with their peak day but it'sclose because it's basically based on the hottest day of the year.>> There's a this chart here represents only the summer season peak hour. So itis one hour that we align with MYSO's peak and we have to have enoughaccredited capacity to meet that peak hour obligation. There's really four ofthese charts that we plan around. This is the driving season here. And so thisis like earlier we have to plan for droughts. We also have to plan for ourpeak hours to have sufficient generation to meet our loads that we use in themarket. And so related to that demand response was one of the earlier uhreliable capacity categories. Can you talk about its role in in planning forthese peaks, planning for the capacity obligation?>> Sure. Um it does help. We have um uh we do have an existing program which ismostly thermostats. Um so we do control thermostats on days like today. It'smore useful in the summer obviously. >> How many what percentage of customersparticipate? have about 2500 uh devices enrolled.>> It's roughly 3% of customers are enrolled in our thermostat programtoday. >> And so we've looked at modeling on thewater system. Have you modeled what an increase to 10% of customerswould represent or increasing that program? I also justcurious about like the time of use rate around electric vehicles shifting thosecustomers to overnight usage. Mhm. >> Have there been conversations modelingof what time of use rates around the peak hours could look like?>> Yeah, we do provide an incentive for customers to go onto the time of userate. Um so if in order to get the incentive when they register their EVwith us, they will get a sure >> um get automatically enrolled in thetime of use rate. But time of use rate is also behavioral because it's likesome some participants like watch their energy usage and their energy bill andthen adjust their behavior accordingly. Some do not. They just pay their theirutility bill. So there is a certain amount of um slippage in that in thatpeople don't necessarily respond to the time of use rate.>> They do sign up for it. Correct. >> They do. They sign up for it. Yes, theydo. and get in. >> And how many people have signed up forthe time of use rate? >> Do you know how many>> or how many customers, I should say. >> I will have to get back to you on thatnumber. I looked at it earlier in this year, but I know we've had more. So, letme take that as a followup on the number of time electric vehicles. We've hadmore whole house time of use signups as well. I'd have to look back at somenumbers. We're talking in the less than 100, I believe, total for time of use.And so a 100 customers roughly are participating in this time of use ratearound electric vehicles. Are there other time of use rates currentlyavailable? >> We have the the electric vehicle onlytime of use rate and we have the whole house time of use rate as the twooptions that are voluntary programs. You would have to have an electric vehicleto do the electric vehicle version of that. But whole house time of use isavailable to all customers. And we're hoping to continue in to expand thatprogram because it's a passive rate structure and in a sense the rightbehavior. It actually saves customers can can save them considerable money andit saves the utility future demand costs as well. Our ability to expand thoseprograms will grow as we finish our advanced metering project as well. Themetering technology is a core part of that program's ability to have data umto provide to the customers to show what they might save as well. We'll finishour advanced metering project on the electric side by mid28 and be able tocontinue to advance those rate structures um beyond that time frame aswell. Then are there assumptions built into these future years of into the2030s of increasing utilization, increasing subscribershipto those rates? >> You can't see it. It's encompassed inthat black line and it it is assuming continued and steady growth in ourprograms. If you looked at our resource plan from a couple years ago and earlyprojections of electric vehicle adoption showed significant demand potential fornew electric vehicles, the rate of electric vehicle growth has been fairlymoderate compared to some of those projections a couple years ago. And thedemand growth has been fairly moderate as well because of programs like time ofuse. It is the the best program out there for an electric vehicle driver. Itwill almost immediately save customers money and avoid infrastructure costs togo on to time of use because it's a very simple thing for most to just set it tocharge overnight. It doesn't add new demand. It saves on energy costs and itsaves not only the utility but all rate payers the cost of that extrainfrastructure. Demand response and conservation are baked into theseassumptions as well. What we're really here focusing on is the need on thesupply side of our equation because we have such a structural change comingwith our wholesale supplier in the next few years. And that's really what theprimary focus is. It's not that we're ignoring demand response. It's bakedinto these assumptions and uh maybe to get to the park the next question forthe end. What does it mean for the next step? Um we can talk about that when weget to the end of the presentation. Um any anything else?>> Oh, continue. >> Umone of the contracts that we signed last year, there were two um renewable energywith a local developer for existing wind projects. Um these were um one was notoperational, one was. Um uh they they both are operating now. Um, so the uhthe the risk mitigation of these were that they were already operating, sothey didn't need any permitting. They didn't they would weren't waiting fortax credits. Um, the only uh issue we came up with with Adams Wind iscurrently uh operating at 50%. Um, so about half the turbines are operationalnow. Um and the Dodge Center wind project um is currently behind the meterfor Excel and Derryland Power Cooperative. We're working with thosewith the developer and those uh offtakers on a solution where we can uhwhere they're actually use it as a load modifying resource. So in order toparticipate in the market, we would uh we we need a a change to theinterconnection of the of the contract. Um there is potential for that project.It is a very good price. Um so it is potential that we could upgrade thoseunits, give us the dispatchable capability that would allow it to be infront of the meter and uh we'd still have a good um affordableuh source of wind energy. Um the the big project we have is a 180megawatt wind project in Iowa. Um again they safe harbored those tax credits. Umthe expected start date was late 2027. Now it's late 2028. Um and the big snakethat we've hit on this is uh the permitting is being held up at thefederal level. Um so there is a a permit called the determination determinationof no hazard um which is issued by the FAA and the department of defense orwar. Um uh there are currently 165 wind projects waiting for that uh clearance.Um so they're they are stalled at this point but there are uh the thedevelopers of the project as well as uh many industry groups are working onlegislative solutions as well as judicial solutions and you know thecommunities that these are in want these wind projects. They um they not onlyprovide jobs but they also provide a tax base. Um uh so there are you know andand there are farmers for the most part. So uh in in the current environmentwhere the farming community is um suffering economically it would reallyhelp if so I think there are a lot of stakeholders that are trying to getthese uh permits cleared. Um and then uh a good news story of cityand uh their utility cooperation is um we do have 20 solar projects on citybuildings. Um the state was providing an offer that we couldn't refuse. It wasbasically a 70% of the invested cost would be covered by a state grant. Umand uh we'd still be um uh we'd have access accessibility to the investmenttax credits which are 30% of the cost. So basically it's a free solarinstallations across 20 buildings. Um they're not huge, but they do help. Umso it's uh uh it's about uh 1% of our uh of our annual load um uh with a $2.9million total investment. Um and uh this contributes to our renewable energy goalas a city. Um and these um these have been easy to implement. So these are areuh being installed. Uh I get invoices every week from uh from the developerthat is uh really working hard to get these installed quickly.So on the game board, this is where we are now. We're about twothirds of theway to the goal. Um, of course, we could hit more snakes. Um, you know, if thethe permit for um for the 180 megawatt wind project never comes, um that's abig hole to fill. Um you know, if the accreditation on the batteries goesdown, we'll need more um capacity uh in the future. Um so what we need to do isum make more rolls of the dice so that we have more chances to at uh securingthat 100% goal. Um and with that we are undertaking a uh an RFP. Um we we did anRFI a year and a half ago. Um we got some answers then the tariff inflationcame in and you know big policy changes to change everything during the courseof that. So now this RFP will be uh more solid. It's going out to even more uhdevelopers and um trying to expand the realm of possibilities. Um I think wecall it casting a super wide net. Um so this will refresh the work we did in2024. Um so we should have recommendations by the end of the year.um and we'll be able to model that um portfolio and come forward with moreopportunities to meet that 100% net renewable goal at a um a reasonable umprice within our current rate structure hopefully.So with that I know there can I ask a question about the last slide? So isthat in response to the delay with the north northeastern Iowaproject is that >> it is partially but it is also fillingthat third the third that we don't have yet. So we're hoping that that wind probecause wind um is the lowest cost in the Midwest and it is um uh it's a goodcontract. Um so we want it to survive. Um but you know it's it's out ofanyone's control at this point. Well it's it's in someone's control.>> So so a follow-up question to that and using your analogy there. So I saw thesnake that was coming. That snake. Do you have more ladders that you'reyou're looking at just in case? >> Yes. And that's the idea>> forward from 66 to 100. >> Yeah, that's the the idea of this RFP isit will create more options, find more ladders, and we know that we'll, youknow, we will uh order rank the responses because there is a lot ofcompetition for these resources. if someone can build something renewableright now, if a another utility will get it or um or a data center will try togobble it up. So there is a lot of uh competition for resources right now. Sowe want to create as many and what we found with those other projects thatwe've already executed is that moving quickly um from this process knowingwhat we're looking for really helps um you to nail that down. and it really isabout contracting efficiency. Um, so I think we've got a good um, you know,Michael's been very supportive of our efforts there. So we are able to um, tonegotiate very quickly with the developers and that speed is our friendon that. To add maybe to your first question of if is this RFP in responseto the wind delays, I would say it's another backup plan in case that doesn'tcome through to find additional renewable supply. But as we left it lastyear, we had secured about 2/3 of our capacity needs for 2030. We still needabout 100 plus megawatts of capacity that has not yet been identified. Theoptions in front of us are a largecale battery storage system or a contractwith another uh firm utility that may have supply out there to sell. We dobelieve there is some some of the projects that we had been watching inthe market that we had contemplated joining in the last year havedisappeared. um they're not going to come across the finish line. And so eventhe landscape has changed a little bit and part of the RFP response is to seewhat else is out there um to look at our to to further bring the analogy forward.More ladders is what we're looking for here. Also on the renewable energy side,not just because of the delays on the north uh the northeast Iowa project, butwe left about a third of our renewable energy supply unsecured. So we stillhave to meet our 100% by 2030 goal and sustain it. We need about another 100megawatts of wind energy beyond as well. The pricing has been not very favorablein the last year because of the tax code changes. And so we have time until about2031 or 2032 to make that decision. This isanother test of the market to see what's out there. We do believe if theNortheast Iowa project comes through, we will have secured our goal in 2030 for acouple years, but we need more to sustain that goal well into the nextdecade beyond. >> Thank you, Council Member Wall. Myquestion has to do with the Howard County wind project as well. The lasttime we talked about this, I thought perhaps there was actually some concernthat it would come on so early that we would have excess power that we wouldneed to try to offload. So, I always try to see the positives. Is it is it okaythat it's delayed? >> That is that is a positive though. Whatwe were counting on was banking those wrecks>> so that we could use them in 2030 and comply with the>> with the uh with the law. So, um, depending on when it comes on, we'llhave fewer wrecks in 2030. >> Thank you,>> Council Member Keane. >> Yeah, I appreciate seeing this and ofcourse I see it in my other role with but I want to go back to the reliablecapacity chart. Um, and just the and I again I just think just to maybe spend aminute on this to make sure what we're talking about here is like our thecapacity that we need to show my so that we can come and buy. But these are notreflective of like our real usage. Our usage is dramatically lower than this.>> Well, well the um our usage this is only uh the peak power on the peak day thatwe need and the black that's what that black line is.>> Yeah. And and I I want to support that. I I I really understand their goals andwhy we have to do it. I I I don't know if um as someone watching this wouldunderstand that we run that maybe a couple of times a year and not and andthe on and the when you look at the wind they're running you're getting 40megawws of capacity from it even though it's 220 megawatts that would cover ourcapacity most days of the early summer and fall.>> And I I don't think we're communicating that very well with these charts. Iwonder if it would be helpful to show some normal days.>> I appreciate your question and I think I understand the point that you're makingthere and it's a very valid and point that not many people I think understandabout how power generation works. This chart is more like saying I have a Idon't have a pickup truck but if I had a pickup truck it would probably have 500horsepower. It's like saying, "I have a 500 horsepower pickup truck," but itdoesn't say anything as to how many miles you actually drive it. Yeah. Andthis is about the name plate capacity of our resources on peak days. Our actualgenerators run 10 to 20% of the time during routine operations during theyear. So, this is just to meet that peak day of the of the summer type year. Ithink that's the point that you're trying to make. Yeah, I guess I'm as autility professional, this is what you have to worry about to make sure that wecan participate in the thing. So, I appreciate that that's there, but as aperson trying to understand this and our 2030 goals and our cost that we'redriving, I think it's important to understand what the average business daylooks like and not the fact that you guys and myso really really need toworry about today because this is the day that drives the 290 and there'sprobably other parts there. So, I appreciate it, but I don't think we'recommunicating what we want to communicate all the time. That that's mypoint. And I I don't know if if if you'd tell me like no, you don't understandbecause because I've seen days where we show here at the bottom. I mightunderstand that we're always running that dispatchable because it's at thebottom. It's what we build on. We don't run that unless the demand goes uphigher numbers. And I wouldn't get that from this chart. I would get it fromtrying to throw myself into this over the last couple years and understand itbetter. I have been accused of bringing too manycharts and graphs to a session and so I've opted to back away from those.You're making a a great point and most days if you would come to our controlcenter and look at the screen we're operating almost none of our generationin town. It's reserved for peaking days for very expensive times because we haveto meet that largely we're leaning on grid resources. We'll be leaning on ourwind contracts largely into the future. And really what's changing is a coalplant going away. And that is the fundamental problem that we're trying tosolve here by the end of this decade, by end of 2030. Right. And what it's whathas also driven this council and the city to come up with this goal towards2030 and that renewable. And I appreciate we're still 30% away fromsolving that. And I want to make sure we all understand that. And that's thatthis ties back to the we thought we'd solve some of that with the credits wewere running through the wind we were running in 27 28 29 and we're not doingthat now. So that that's part of it. So I also want to kind of go back to thestate buildings and make sure I understand this. This is um you you didthis thing about this is a really helpful thing that 70% of the costs ofthese are being paid, but I don't I don't see where they help our capacitynumbers. I see where they're offsetting uh or basically solving our demand, butthey almost look from my perspective they're behind the meter and they're notpart of RPU. They're almost part of the city generating its own energy and thenselling back to is do I understand that right or is it I>> I would say these are more on the energy side of our resource plan. They'resolving part of the renewable energy appetite that we have. Solar in ourregion on a peak summer day has about 20 20% contribution to the peak. So if thiswas a one mega or 100 megawatts, we would get 20 megawatts of capacity outof it. So it's a much smaller contribution on capacity, but we'rebringing both an update on energy and capacity here. And this is not only goodfrom its value it's providing to our renewable energy plan. This is one thatwill reduce the cost of government in the future as well. And that's one ofthe reasons we wanted to include it here with the ability to site this on allpublic buildings and take advantage of the grant. It'll reduce future operatingcosts once the capital's recovered upfront. And these this cuts across uhall city operations, fire stations, civic center, uh utility center, uh uhmany of our buildings. And so we brought this forward. it it's actually 0.1% ofour overall energy. So it's it's literally>> that's what I was trying to get. It's very it's>> it's a drop in the bucket but it's I think moreit's a cost of government and it's a good news item and this will reducefuture tax levy pressure that exists as well because utilities are somethingthat tax levy goes towards on funding government operations.>> So I appreciate it on the cost of government. I'd also I also appreciateit on the idea that we're providing renewable energy through another sourceeven though it's not RPU, but it's very similar to what a lot of our residentsare doing by bringing solar to the community. Uh and again, we're nothighlighting their thing that helps us offset like almost like a demandmanagement side there either. So, we're doing it on this government thing. Iappreciate there, but I did want to put it in perspective is like a percent of1%. >> You're very very correct.>> Okay. Uh, and then, um, as far as the, um,the, uh, RFP for the 2030 renewables, I'm expecting to see, I'm hopefully thatwe're going to see some proposals for renewables. I'm expecting to see someproposals for non-renewables. Um, and I think the fact is we need toconsider both because we need to get to that 2030 numberwhether it is making it with our renewables or whether it going out andbuying capacity because we are holding to the thing that our our power purchasething from Shero is going away in March of 2030. Do you want to talk about isthere other things that are going to be bid in potentially? Yeah, I think therange of options that we're exploring here will cover what we have alreadyseen with renewable energy contracts like wind power purchase agreements.We'll be considering probably new bids that look like those for us. And on theother end of the spectrum, we'll look a lot like what the SPA contract is today.So, we will likely get bids from other utility suppliers, maybe even Simpathemselves on what a extension of a power supply contract that includescapacity, energy, and renewables all bundled together might look like. Ibelieve we're not in the realm of possibilities of trying to build a newlarger power station here in Rochester. So everything we will see is going to bea supply contract of a various kind from another counterparty whether that be arenewable energy developer, a private merchant plant, another traditional likeutility demand response aggregator. And so we'll be bringing back a portfolio ofoptions that is solved for lowest cost and also meeting our goals to sustain100% net renewable electricity, but it'll probably bring some traditionallooking power supply contracts in that mix as well. Yeah, thank you. I I wantedto bring that into our discussion today. I also I guess I should preface it andsay I don't find that to be a terrible thing. I think that actually gives ourutility some potential to wait for some of this battery technology or otherthings to to mature to the point that it would be a better solution that we couldlook at in 30 2031 2032 depending on what kind of contracts we sign prior tothat. We don't want to make a 30-year commitment to something that we can'tget out of, but it is something that we do need to get to that capacity number.So, thanks for your work. >> Council member Miller,>> could you go back to the reliable capacity uh graph as well? So, I want toask again the question I asked about the water planning. um and going to thecharter and the utility board's charge to be authorized and required torestrain and prevent so far as possible any and all waste of electricity. Howdoes how do you interpret that directive in this kind of planning?>> Uh that's a big and broad question that uh I I think about a lot. I I wouldstart by maybe going back to some of the original that charter provision hasexisted since the original charter of presenting uh preventing and restrainingwaste. And so I think if you look back I would argue that it was probably arounduh unreovered revenue and people who are not paying for electricity as a part ofit as well. So part of that is the utility's obligation to recover revenuethere. I think a modern interpretation is exactly in line with what ourprograms are today. We have significant annual investment in conservationprogram to help find more efficient and using less electricity. We have demandresponse programs that will likely shave our peak today by up to six megawatts ofwhat it otherwise would be with our thermostat program. So I think what theboard's responsibility is on preventing waste of electricity and water isexactly in line with what we're trying to target here as well. Provide theenergy necessary and to the degree possible restrain the uncontrolledgrowth of that the efficient use of the infrastructure but we have a corecommitment as utilities to deliver the infrastructure and provide electricitywhen it's needed and provide water when it's needed as well. And theconservation programs are pretty robust here. So we are investing along with ourcustomers in their own buildings in order to make them more efficient. Andthat overall that is the lowest usually the lowest cost of of supply,>> right? Which is why I bring it up. It's it's cheaper to reduce demand ratherthan build something new to serve those same megawws.>> Yeah. And and so I guess I'm curious when you talk about the thermostatprogram, for example, having 2500 of 60,000 customers, I would assume themajority of those 60,000 have air conditioning.>> I would I would assume that as well. Most have air conditioning.>> So I I guess my my question is when we think about this and think about theopportunity by by that gap, like how do we get there? How do we getto 50% of customers participating? So, we move from sixmegawatts shaved to a significantly higher rate.>> Well, I mean, first you need um everyone to buy the same thermostat for theirhouse um that can be supported by the platform that we have, which isdifficult, right? There are a lot of different options. I mean, the themarket leaders are, you know, Nest and and Honeywell. Um, so you can get a lotof those, but but then when you get into like the the lowest cost like uhthermostats you can buy on Amazon are not going to be compatible with uh atypical platform. So you know it is a difficult to wrangle 60,000 customers toall do the same thing. >> Does the advanced meteringinfrastructure give an alternative? I think as far as I think for um foridentifying waste um the AMI is definitely a good tool because you cansee people that are using more than they expect. Um that's where you can get inand really um figure out what their issue.>> And would it be possible to incentivize those customers once those meters are inplace with a a rebate rather than a a time of use or peak rebate? Yeah, I meaneven right now customers can go into the portal, see what their daily profilelooks like. >> Sure. Which is great information. And ifthey didn't spend that, they would spend less on electricity. But I guess to thisproblem of our capacity obligation being driven by our some of our heaviestutilization days, how do we reduce that 294 megawatts?>> Yeah, sure. You're making uh good points. In my experience, and this hasbeen a 20-y year frustrating challenge to try and uh get more and more activeparticipations from customers in this space. Noteveryone wants a Nest thermostat. Not everyone has the capital to invest in anew furnace that comes with a fancy new thermostat program. These are slowlychanging dimensions of our housing stock as well. So I think there are limitsthat we recognize of what is the available market and the availablecapacity. We part of our incentive programs and our rebate programs areexactly for this purpose to get more efficient appliances, heating systems,active control of those and that's built into these assumptions and there's Ithink an upper limit of scale and pace at which we can do that on acost-effective manner. It's not that we're ignoring those things. It's justthe scale of the larger problem here is far beyond what can be solved withdemand response alone. Okay, >> it is a very important part of theprogram, but for our 20 years of conservation, that black line would beoff the chart and you wouldn't even see it. We've reduced the need of our peakdemand by over 75 megawatts by 20 years of investing in capacity.>> And so absolutely worth celebrating. >> But that big block of blue there ofadditional capacity needs cannot be solved by demand response alone. It's akey part of that and we will uh openly look for options for aggregators andothers that could bring those things to the market as well beyond what we havetoday. >> So my last question is about how wemight think of other um areas of our local jurisdiction and in part of thisand I'm curious we often hear from renters that they wish that they couldparticipate in programs they would make investments to their housing unit butfor they don't own it. Would RPU consider working with us on programsthat would bring up efficiency standards for rentals, especially for electricityand and water usage? How might we think about those programs for customers whosay, "I wish I could do this, but I don't have control over my my housingunit." >> I would love to have more conversationabout that exact option about how we could work together across utilities andplanning and uh other parts of the city that could work together on these.That's been part of the work that I've been that's why I do this work isbecause getting efficiency into homes and uh lower utility costs is a key partof housing affordability as well. And that split incentive you describe of Ilive here but I don't own it and I can't invest in it is one of the corechallenges of this work. >> And when should we expect it? Should weexpect an update in November on this timeline or>> uh we have a meeting to kick off this RFP later this week. That timeline willadjust based off of the the RFP timeline. I would expect we're probablyin decision mode in Q1 of next year after we have time to look at theproposals that come in over the next six months.>> Great. Thank you and best of luck, Bill, in your next endeavors.>> Council member Dory. Yeah, just to follow up with Council uh Member Miller,I'd be very interested in in exploring the possibilities of of addressingefficiencies in our in our rental population here in in this community. Ihave I have two questions really. Can you talk a little bit about theutilization of the rebate programs? Are are they highly utilized in thiscommunity or or not? >> Um I'm going to make a qualitativejudgment here. I would say we have good participation but there is moreopportunity for participation as well and u it's difficult to capture themarket at the point where people replace air conditioners on a day like todaywhen it fails and so there's very quick decisions that are made I need it nowand not so many of the decisions are made in the spring when you're not usingyour air conditioner and so I think there's opportunities to look atprograms in that space um as well. But we've had a robust efficiency program.We've met our state goal 20 years running. Um so in that sense, we havegreat programs and we've met our goals, but there's many that struggle withutility bills here. Um and largely that's because there's a lot ofintensive use uh around older housing stock as well. So there's lots ofopportunity. Yeah. >> In that area.>> Thank you. Thank you for for that data. I I you know I think about the equitybuilt into rebate programs and and those who have the capital available toreplace older um older appliances or air conditioning units and how it almostsets up a classism in a rebate program. And that's by no means of that's by nofault of having a rebate program. It's just how do you figure out that? Um mymy secondary question is I'm really interested in renewable generation. Um,and I'm wondering if there's a public-f facing um, dashboard that talks abouthow much renewable generation is actually happening in this community andwhere I might access that. There is not a publicly availabledashboard yet that publishes like real time generation. What I would callpeople's attention to is the msoenergy.orgor which talks about regional power generation and that really is the coreof our supply. You go to msoenergy.org and pull up uh how much wind isproducing right now uh to meet the demand need and that's a great real-timeresource that's always there. >> Okay. Thank you so much,>> Mayor Norton. I wanted to just quick follow up basedon uh the last two speakers comments and because I think the only person that washere at the time was Patrick. Um the energy commission atthe time um actually did a project with our section 8 housing units and we wentin um with the uh permission of the section 8 housing manager. We went intoeach of the units. there were many of them and just did simple things likereplace LED bulbs, replace the water filters, etc. They were things we coulddo quickly while we were there and the manager evaluated some of the otherneeds in comm in some of the apartments as well. And I believe at the end ofthat study, Kevin Bright was here as our energy and person and I think he's stillwith Kudson. he might be able to provide a little bit more information um aboutthe outcomes, [snorts] but I think we saved they said probably was just forthat effort that we did that the energy commission did um it was something like$120 per unit of savings a year just fromthat change. Um, and at the time, and things have changed a little bit, butLED bulbs were more pretty much more expensive than regular incandescentbulbs. And so people would buy the cheap light bulbs when they went. Um, and youknow, LED bulbs last for like eight years. So that you may pay a little bitmore, but you're not spending as much over time, but if you don't have themoney at the time, that doesn't matter to you to the point that you guys aremaking. So, um, it was my understanding after that that the county was going todo some more of this work in some of that section 8 housing. And I knowyou're talking about even beyond section 8, but it was a good experience. It wasa good outcome. And I think looking at some sort of program maybe with thecounty if it's um some of the lower income or HUD homes or maybe just withyou know apartment manager to do some of that, it can significantly impact theindividual, but it's also good for the system. So I think looking at that inthe future would be really helpful. And if you ever want to talk to Kevin, he'sout there and he'd share Thank you for sharing, Mayor CouncilMember Miller. >> Yeah, just building on that. I mean, I Iagree that when somebody's furnace or air conditioner goes out and they call acontractor, it's a it's an urgent situation.And so I I wonder what some of like what volumes our major contractors in townare doing on heating and cooling equipment and what that gap that averagegap is between choosing something that's less energy efficient over time versussomething that's more in the initial cost. And I know I brought this upbefore Mr. McCullik, but um Fort Collins Utilities has a loan program for onbillill financing. Exactly. To address that gap and help people make the moreenergyefficient choice upfront. And I think the contractors are really thosesalespeople with the homeowner saying, "Here's your here's your cost. Here arethe programs available." And I've had this done, too. And they talk about therebates, but I I wonder if maybe our rebates aren't going far enough andhelping people choose. And how we might think about structuring financing,particularly to help somebody make um a more responsible choice, a moreproductive choice for the grid and our peak demand over time. But at that pointof urgency and needing to replace an appliance.>> Yeah. And we do do um programs to educate people about the options thatare available so that when >> but if somebody can't afford it, theycan't afford it. Right. >> Yeah.>> If if it's it's $1,000 cheaper to install a traditional air conditioningunit than a heat pump and that person says, "I don't have an extra thousand,I'll I'll choose the less energy efficient appliance." Is there somethingbeyond education that we could understand a benefit and andparticularly looking at onell financing which spreads the cost even withinterest to a more manageable monthly budgetable amount>> I think could be um quite consequential. I mean we it's how people think abouthousing. It's how people think about transportation. If this is a significantuse of energy, as we know it is in addition to transportation, buildingenergy use, it seems like it would be in line with our responsible environmentalstewardship goals and even in that waste reduction directive to the board. >> Thank you.Anything else? Thank you, gentlemen. Good luck, Mr.Bulock. >> Thank you.>> Just the shortest item of the meeting. >> [laughter]>> Uh so your upcoming study session schedule is on the screen. Um you haveuh four I guess they're sort of media but sort of not that media of items. Sofar what I've seen in in study session materials aren't super long. Maybesimilar um to what was here today but with less charts. Um so the much awaitedchateau operating model um federal public meetings update and then um thefive-year update from uh director Matella and then a alternate sideparking discussion that I don't know if you can do that in 30 minutes but um wedid leave 15 minutes available just in case. Um and then the transit serviceand financial update, economic mobility update and um some more wonderfuldiscussion of the budget forthcoming on the 24th of August. And the rest of thestudy session calendar is in your packet.>> Thank you. >> We are adjourned. Thank you.