[2:21] >> I'll hereby convene our

[2:24] meeting. It's 2:31 for

[2:26] Pioneer Community Energies.

[2:27] This is a special meeting and

[2:29] we do not have a quorum. So

[2:31] we're going to recess until

[2:32] further notice.

[2:35] >>[RECESS]

[12:52] >> I'm going to reconvene from

[12:54] recess and we now have

[12:55] established a quorum. Our clerk

[12:57] is away from. Here she comes.

[13:00] She was doing something

[13:03] for me. Thank you very much.

[13:04] Theresa, if you'd please call

[13:05] the roll.

[13:07] >>[CALLING ROLL]

[13:28] >> Let the record show that

[13:29] Director Jones is present.

[13:30] She's

[13:31] in closed session currently.

[13:32] So with that said,

[13:33] we do have a quorum,

[13:35] barely and we're going

[13:36] to go ahead

[13:37] without objection and recess

[13:39] to closed session. Hearing

[13:40] none,

[13:41] that shall be the order.

[13:46] >>[CLOSED SESSION]

[30:05] >> Thank you very much and

[30:06] we're going to reconvene

[30:07] from closed session. The board

[30:09] took two actions

[30:10] in closed session. The first

[30:11] item that we took was

[30:13] to adopt the recommendations

[30:14] from the employee welfare and

[30:16] benefits ad hoc committee.

[30:18] Those recommendations will be

[30:19] placed on the July board

[30:22] meeting agenda. We also took

[30:24] action to recommend that this

[30:25] board approve an extension,

[30:27] the contract

[30:28] for our executive officer

[30:30] for three years, and

[30:31] to make a change to his health

[30:32] and vision dental package that

[30:34] is actually on the consent

[30:36] agenda a little bit later

[30:38] today. So we did take those two

[30:39] actions in closed session. Let

[30:40] the record show that we do have

[30:42] a couple of additional members

[30:44] who have come in since we

[30:47] originally called the meeting

[30:49] to order, Directors Holmes and

[30:51] Director Ring. So thank you

[30:54] very much. And we do again have

[30:55] a quorum for the purposes

[30:56] of today's meeting. So

[30:58] with that said, next item on

[30:59] the agenda would be the agenda

[31:00] review and just

[31:02] to make a couple of changes,

[31:03] actually, we need

[31:05] to do public comment,

[31:06] too.

[31:10] >> We have.

[31:14] >> Do we have public comment

[31:15] on the agenda, Madam Clerk? I'm

[31:16] not seeing it.

[31:17] >> It's below the agenda

[31:18] review.

[31:20] >> It's presentation stamp.

[31:21] Thank you very much. Sorry

[31:23] about that. Okay, a couple

[31:24] of quick changes

[31:25] on the agenda. What I'd like

[31:26] to do for the purposes of

[31:27] ensuring that we have a quorum

[31:28] to take action today,

[31:29] because I know that Director

[31:31] Holmes needs to leave

[31:32] by 04:00 is

[31:33] to move items three and four

[31:34] after the consent agenda. And

[31:37] I'd also like

[31:39] to continue item 1F

[31:41] to our next meeting. 1F is

[31:42] the approval of the Pioneer

[31:44] Community Energy's 2024-27

[31:46] strategic plan. So that will be

[31:47] moved to our July meeting. We

[31:52] are missing several

[31:53] jurisdictions here today, and

[31:55] we thought that it would be

[31:57] prudent to have them here

[31:59] for that discussion.

[32:00] Discussion.

[32:03] Since it's setting our agenda

[32:04] for the next three years. So

[32:05] are there any other changes

[32:06] to the agenda as presented at

[32:08] this time?

[32:09] >> I have none.

[32:10] >> All right, seeing none

[32:11] without objection, then we'll

[32:12] consider the agenda approved as

[32:13] amended.

[32:14] >> Thank you for the

[32:15] accommodation.

[32:16] >> You're welcome. And

[32:17] with that said,

[32:18] there is no objection. The

[32:19] agenda is hereby approved as

[32:21] amended. Next item on the

[32:22] agenda is public comment. This

[32:23] is an opportunity

[32:24] for any member of the public

[32:25] to address the board

[32:26] on items that are not scheduled

[32:27] on today's agenda. We cannot

[32:28] take action on said items,

[32:29] but we can refer them to staff

[32:30] for subsequent research and

[32:31] potential coming back

[32:33] to the commission

[32:34] at a later time. The board,

[32:35] not the commission. Got

[32:36] to remember which entity I'm

[32:37] on today. Madam clerk, is there

[32:38] any public comment?

[32:41] >> There are no comments

[32:42] at this time.

[32:43] >> All right, no public

[32:44] comment. So we'll close public

[32:45] comment and move right along

[32:46] to the consent agenda.

[32:47] Boardmembers, we have items 1A

[32:48] through E on consent. Is there

[32:49] any request to remove any

[32:50] of those items

[32:52] from consent?

[32:56] >> I'd like to pull 1E,

[32:57] please.

[32:58] >> Any other changes

[32:59] to the consent agenda?

[33:04] >> Hearing none. I'd like

[33:07] to entertain a motion to adopt

[33:08] the consent agenda as amended.

[33:10] >> I shall move.

[33:12] >> Second.

[33:13] >> Been moved and seconded.

[33:14] Any further discussion?

[33:15] Hearing none. Madam Clerk,

[33:17] please call the roll.

[33:18] >>[CALLING ROLL]

[33:36] >> Let the record show that the

[33:37] motion has been adopted

[33:38] unanimously. Thank you very

[33:39] much. All right, we'll move on

[33:40] to item number one e, finance

[33:41] administration, this is the

[33:43] adopting a resolution

[33:44] establishing a board member

[33:45] reimbursement policy. Director

[33:46] Ring, did you have questions

[33:47] on that?

[33:52] >> I feel like this is me

[33:54] voting

[33:55] to give myself a raise, and I

[33:56] don't think that that is fair.

[33:57] It's what I don't like in

[33:58] government. I'm giving myself

[33:59] more money, and so I would be

[34:02] more comfortable if,

[34:05] and I don't remember if it was

[34:07] in there, but I would be more

[34:08] comfortable if it went

[34:09] into effect, say, in January or

[34:11] after we were each reappointed

[34:12] to the meeting, because then

[34:13] it's not really giving myself a

[34:15] raise,

[34:16] it's giving the board a raise.

[34:17] I may or may not be

[34:18] on the board next year.

[34:19] >> Just

[34:21] for clarification purposes.

[34:22] Thank you very much, Director

[34:23] Ring. I appreciate what you're

[34:24] saying in this instance, this

[34:25] is just a policy that will

[34:26] allow us to be reimbursed

[34:27] should we attend a conference

[34:28] or training or something

[34:30] of that extent. So it's your

[34:31] mileage if you are attending?

[34:36] I think, I've been the only

[34:39] one that has attended. As you

[34:40] know, the board sent me on cap

[34:42] to cap, and so I had my mileage

[34:43] reimbursed. And it's just

[34:44] allowing that. It's actually

[34:51] just establishing a policy

[34:52] because they've been doing it,

[34:53] but we just have been. It's

[34:54] been without a policy.

[34:55] >> So this has already been

[34:56] in existence the whole time,

[34:58] and we're just.

[34:59] >> We just need

[35:00] to have a policy

[35:01] to codify it.

[35:03] >> What triggered it was the

[35:04] annual conference

[35:05] of the CCA back in April, when

[35:06] we realized we didn't really

[35:07] have a policy,

[35:09] but we've been doing it all

[35:10] along and we're gonna give them

[35:11] births in April.

[35:12] >> There's no per diem.

[35:14] For example,

[35:15] some entities that you sit on,

[35:16] you get $100. You know,

[35:17] this is not that. This is

[35:19] simply no compensation.

[35:20] There's no compensation or

[35:22] raise.

[35:24] >> It's simply still a benefit,

[35:25] though, right?

[35:27] >> Yes, there's a benefit

[35:28] to the extent.

[35:29] >> That you are,

[35:30] but if it's already been

[35:31] in existence.

[35:32] >> Yes. It's just codifying

[35:33] into an actual policy because

[35:35] we didn't have,

[35:36] we had an informal policy,

[35:37] and so we just need

[35:38] to put that in policy so that

[35:39] it's consistent. You know, the

[35:40] implementation is consistent.

[35:41] It says that you'll seek

[35:42] economic means by which

[35:44] to travel and things

[35:45] of that nature. So, you know.

[35:47] But anyway. So does that answer

[35:48] any. Address your concerns?

[35:49] Great. Okay, thank you so much.

[35:53] Are there any other questions

[35:54] on this item?

[36:06] >> Chair, I'll move the item.

[36:07] >> All right, let me just ask

[36:08] for public comment,

[36:09] and I'm sure I know the answer,

[36:10] but we have to do it anyway.

[36:11] Madam Clerk, any public comment

[36:12] on this item?

[36:13] >> There are no comments

[36:14] at this time.

[36:15] >> Thank you. Director

[36:16] Holmes?

[36:17] >> Yes, I moved the item.

[36:18] >> Thank you. It's been moved.

[36:19] Is there a second?

[36:20] >> Second.

[36:21] >> Any further discussion?

[36:22] Hearing none. Madam Clerk,

[36:23] please call the roll.

[36:24] >>[CALLING ROLL]

[36:34] >> Let the record show that the

[36:35] resolution has been adopted

[36:36] unanimously. Thank you very

[36:37] much and thank you

[36:38] for your questions, Director

[36:39] Ring. Appreciate them. All

[36:40] right, so the next item

[36:41] on the agenda,

[36:42] since we move the agenda

[36:43] around a little bit, is our

[36:44] fiscal year 24-25 budget.

[36:47] >> Thank you, Madam Chair. I

[36:49] think to discuss this item will

[36:50] be our director

[36:52] of finance and administration,

[36:54] Brad Kane.

[36:55] >> Good afternoon,

[36:57] Boardmembers. Theresa, if you

[36:59] could bring up the

[37:00] presentation. Our little street

[37:01] map that we show you

[37:03] of where we are

[37:08] in the budget process. So the

[37:09] board adopted a strategic plan

[37:11] back in the years 21

[37:13] to 24, and then is currently is

[37:16] finalizing the strategic plan

[37:19] for 24 27. Both of those

[37:22] documents were instrumental

[37:23] in setting the stage for

[37:25] Pioneer's budget. But back in

[37:26] April, the executive team got

[37:27] together,

[37:30] keeping the strategic plans

[37:32] in mind to what do we want

[37:35] to propose? What do we need

[37:37] to propose to fulfill the

[37:39] board's strategic priorities

[37:42] and goals? And so that's what

[37:43] happened in April. Then in May

[37:46] and June, the employee benefit,

[37:48] welfare and benefit committee

[37:50] met to discuss employee issues

[37:51] and pay and benefits. And the

[37:54] audit committee also met in

[37:56] May

[37:59] to heard the proposed budget,

[38:02] provided feedback,

[38:05] and then this board at the may

[38:07] meeting,

[38:09] also heard the presentation on

[38:10] the proposed budget and taking

[38:13] in all that feedback. We bring

[38:14] back to you today the

[38:16] recommended budget. And there

[38:18] are a few changes

[38:20] from what you sought,

[38:22] the proposed budget,

[38:24] and we will go

[38:26] over those few changes. So

[38:27] right now we're at the June 20

[38:29] meeting, hopefully for your

[38:30] consideration and approval

[38:32] of the recommended budget. And

[38:33] then the fiscal year begins

[38:35] on July 1. Next slide,

[38:36] please. So the highlights,

[38:38] the budget is balanced. There

[38:39] have been increased power

[38:41] supply costs compared

[38:42] to the prior fiscal year. That

[38:43] primarily is coming from

[38:44] resource adequacy and renewable

[38:46] energy. Also, a full year

[38:47] of service to Grass Valley and

[38:49] Nevada City are incorporated in

[38:50] this next year's budget rather

[38:51] than the six months in the

[38:53] current fiscal year that

[38:55] impacts both the revenues and

[38:56] expenses and then some expense

[38:58] changes for the CRR. We have

[39:00] broker fees related to that and

[39:01] the battery optimization. And

[39:03] the battery optimization is a

[39:05] new effort that is connected to

[39:07] the solar farm known as yellow

[39:10] pine. But the thing about both

[39:12] of these expenses is they

[39:14] actually generate revenue. So

[39:17] the CRR brokerage fees actually

[39:19] monetizes the CRRs and the

[39:21] battery optimization takes into

[39:24] account prices and cost related

[39:26] to Caiso, when

[39:29] to charge the battery and when

[39:30] to discharge the battery. And

[39:32] so both of those expenses are

[39:34] anticipated to generate about

[39:36] $10 million in revenue

[39:39] for pioneer and then the growth

[39:44] of programs. So last year, 1%

[39:46] of the energy sale revenue was

[39:50] earmarked for programs and

[39:53] in this upcoming budget year,

[39:55] 2% has been earmarked

[39:58] for that. And then the forecast

[40:02] has also been lowered to more

[40:04] accurately reflect the activity

[40:06] for the NIM accounts. And so

[40:09] that doesn't have a, you know,

[40:11] neither a good or bad impact

[40:13] on the budget. It's just a

[40:17] change that happened

[40:19] from the prior fiscal year.

[40:22] Next slide, please. So from a

[40:24] way broad highlighted summary,

[40:27] we're looking at about $260

[40:29] million in revenue, power

[40:31] expenses, about 210. That

[40:34] leaves a contribution margin

[40:36] of almost 49 or 50 million,

[40:38] which then the operating

[40:40] expense and debt service comes

[40:42] out of that,

[40:44] which is anticipated to be

[40:46] around 24 million,

[40:48] which then leaves about 24

[40:51] million that could be

[40:53] transferred

[40:54] into the net position for

[40:57] Pioneer. Next slide, please.

[41:00] So inflow and outflow,

[41:02] we have our almost $260 million

[41:03] of revenue. No surprise.

[41:05] Energy sales is the bulk

[41:07] of that, representing 95%. And

[41:09] then the CRR and battery

[41:12] optimization at 4%, that's $10

[41:14] million. And even though it's

[41:16] 1%, it's our interest earnings

[41:18] that still is getting pretty

[41:20] close to $3 million. So 1% is

[41:22] still a significant number.

[41:24] And that is really driven

[41:26] by two things. One is,

[41:28] as pioneer has moved forward

[41:32] in meeting its reserve targets,

[41:36] that's meant that there's more

[41:38] money that can earn interest

[41:40] earnings,

[41:41] but also just the change

[41:44] in the last three years of how

[41:46] interest rates have increased.

[41:49] And so although 1%, I thought

[41:51] $3 million was still pretty

[41:54] notable and still should be

[41:55] mentioned. And then

[41:57] on our expense side, you have,

[41:59] as it has been year

[42:01] in and year out,

[42:03] power supply costs represent

[42:04] 90% of our expenditures.

[42:07] Programs this year is a 2%

[42:09] allocation. Debt service is

[42:10] also 2%. Consulting service is

[42:13] 3%. Employee compensation,

[42:16] which includes salaries and

[42:18] benefits, is 2%. And then

[42:21] operating expenses,

[42:23] which is all other types

[42:26] of things, whether it's rent,

[42:29] leases, software, variety

[42:31] of things, rounds that up

[42:34] to be 1%. Next slide, please.

[42:36] So the things that have been

[42:38] changed from the recommended

[42:39] budget that was discussed

[42:41] at the May meeting and the

[42:43] proposed budget, energy sales,

[42:44] that revenue estimate has been

[42:46] increased

[42:48] by a million dollars. The power

[42:49] supply costs have been

[42:51] increased by $1.74 million.

[42:52] The admin division increased

[42:54] by 200,000. And that's

[42:56] primarily so that pioneer can

[42:57] be conjoined a JPA called the

[42:59] California community Power.

[43:01] And the benefit

[43:03] of that is that's a JPA form

[43:04] from a group

[43:06] of ccas that allows Pioneer to,

[43:08] in a cost effective way

[43:09] with other ccas, purchase clean

[43:11] energy and reliability

[43:13] resources. So we see that as a

[43:15] good tool to have

[43:17] in our toolbox to help us

[43:19] contain energy costs. And then

[43:21] the finance division,

[43:23] there's an increase of

[43:27] 174,000. And that's related

[43:29] to asking the board to consider

[43:31] a 20th pioneer position. And

[43:33] that's for an information

[43:35] technology analyst. Next slide,

[43:37] please. So

[43:39] in the current year 23-24, we

[43:42] had 18 funded full time

[43:44] positions. We're asking for 20

[43:46] funded full time positions in

[43:48] 24-25, the 19th position we

[43:49] discussed in more detail

[43:50] at the last meeting.

[43:52] But that is for a project

[43:54] of development manager,

[43:57] which would focus initially

[43:59] on biomass,

[44:01] but wouldn't be limited

[44:02] to just that effort. And then

[44:04] the information technology

[44:06] analysis would be dedicated to

[44:07] pioneers increasing it demands

[44:09] and needs,

[44:11] and also provide more resources

[44:13] to respond and improve our

[44:15] cybersecurity. And the results

[44:17] that we saw from our it audit

[44:20] that recently concluded. Next

[44:22] slide, please. So,

[44:24] from an organizational chart,

[44:26] this is what Pioneer would look

[44:28] like, starting

[44:31] with the green boxes. The green

[44:33] boxes are what we would all

[44:35] consider our critical

[44:37] consultant contracts that we

[44:38] have that really make it

[44:40] possible for Pioneer

[44:43] to service our customers

[44:45] with the staff that we have.

[44:47] The blue boxes represents our

[44:50] existing approved positions

[44:52] of staff, and then the brown

[44:53] boxes are the two requested new

[44:55] positions, the project

[44:57] development manager and the

[44:59] information technology analyst.

[45:01] Next slide, please. So, trying

[45:03] to keep this short. Moving

[45:05] to the recommendation,

[45:07] we are asking for the board

[45:10] to approve the fiscal year 24

[45:11] budget,

[45:14] approving the job descriptions

[45:16] for the information technology

[45:17] analyst, the information

[45:19] technology administrator and

[45:21] project development manager.

[45:22] Let me pause there and say,

[45:24] although we're not asking

[45:25] for funding for the information

[45:27] technology administrator,

[45:28] we wanted

[45:30] to establish a career path

[45:31] early on so that there is,

[45:33] well, career paths just make it

[45:34] sometimes easier

[45:36] for getting interest

[45:38] in recruitment efforts too.

[45:40] And so, although we don't see

[45:44] that being something that would

[45:46] happen really

[45:48] in the next few years,

[45:50] we did want

[45:52] to establish that career path.

[45:53] And then also approving the

[45:55] title change of the director

[45:57] of public affairs,

[45:59] marketing and programs

[46:00] to director

[46:02] of communications,

[46:04] which there is no change

[46:06] to the job description,

[46:08] no change

[46:10] to the salary range. It's just

[46:13] truly a change in title. And

[46:16] then approving the salary

[46:19] schedule that for,

[46:22] that reflects the two new

[46:24] positions, two new funded

[46:27] positions,

[46:29] the information technology

[46:31] analyst,

[46:33] the project development

[46:35] manager, but also establishes a

[46:38] salary range

[46:40] for the administrator

[46:42] for information technology.

[46:44] And you should have received a

[46:46] revised salary schedule

[46:48] for that. And the reason for

[46:50] that is the communication

[46:52] coordinator,

[46:54] which was approved. Job

[46:55] descriptions and salary ranges

[46:56] were approved a few months ago.

[46:58] We actually have two people

[46:59] that are now on staff

[47:00] with that position.

[47:01] Unfortunately, that line wasn't

[47:02] included

[47:03] in the original agenda packet,

[47:04] and so that's been added and

[47:05] revised, but there's no change

[47:06] with any of those numbers. And

[47:07] with that, I'd be happy

[47:08] to answer any questions.

[47:09] >> Thank you very much. As I'm

[47:10] trying to choke on my water.

[47:11] Appreciate the presentation,

[47:12] Brad. And this, let's open up

[47:13] for any questions. Are there

[47:14] questions? Directors? No

[47:15] questions. Suzanne? No

[47:16] questions.

[47:17] >> Quick question.

[47:18] >> Yes.

[47:19] >> With the hiring of the new

[47:20] two positions, or we're

[47:21] expecting consultant costs

[47:22] to go down.

[47:23] >> On the project development

[47:24] side, I see longer term,

[47:26] there could be less reliance on

[47:27] consultants. I don't see that

[47:29] happening in the next twelve

[47:30] to 18 months.

[47:32] >> So these are things that we

[47:34] need to have done that we just

[47:35] haven't had done previously.

[47:36] Essentially then.

[47:37] >> Well, I think on the project

[47:39] development side, I think it's

[47:40] just, it frees up, Sam has

[47:41] to spend a lot of time.

[47:42] For instance,

[47:44] there's a project in Grass

[47:45] Valley we're looking

[47:47] at right now where he's having

[47:49] to spend a good chunk

[47:50] of his week on that. This

[47:52] person could free him up

[47:53] to focus on other areas. So,

[47:55] and then on the it side,

[47:56] I think it's more of a,

[47:58] rather than less reliance on

[47:59] our consultant. I think the

[48:01] consultant does become still

[48:03] part of our business. And now

[48:04] we've got that

[48:06] in house expertise, especially

[48:08] on the cybersecurity side,

[48:09] that protects our. So I think

[48:11] it's in the better.

[48:13] >> Interest

[48:14] of our great payers

[48:16] on the project development.

[48:17] Also, just as a reminder,

[48:19] director Ring, as I know you

[48:20] are new on the board, we've

[48:22] really just ramped up our

[48:23] programs

[48:24] in the last two years. And so

[48:26] even though we're going

[48:27] into our 6th year, we really

[48:28] haven't, you know,

[48:29] we've slowly rolled them out,

[48:30] and now it's just getting to

[48:32] the point where one person

[48:33] can't manage them anymore

[48:34] because we have increased our

[48:35] programs.

[48:36] >> You actually reminded me

[48:37] of another question. I have.

[48:38] Do we have a. So right now,

[48:39] we're in this budget. We are

[48:41] suggesting from go to go

[48:42] from 1% of our budget to 2%

[48:44] of our budget for programs. Do

[48:45] we have a goal percentage that

[48:47] we hit? We're looking

[48:48] to meet, like,

[48:50] are we expecting to get to 5%

[48:51] at some point in the future or

[48:53] there's just whatever we need

[48:54] to do. Whatever.

[48:55] >> Well, I think.

[48:57] >> Sounds right.

[48:58] >> Well, we look to see where

[49:00] the programs are going, how

[49:01] effective they are. I don't see

[49:03] it going past 2%, though.

[49:04] >> And it was 2 million last

[49:05] year. Initially, they had

[49:07] recommended. The first time we

[49:08] had our program roll out,

[49:10] there was a recommendation

[49:11] for 4 million, and the board

[49:13] felt that that that was too

[49:14] aggressive going out

[49:15] of the box, so we brought it

[49:17] down to 2 million. Actually,

[49:18] didn't we do the first year was

[49:20] like 1 million? Yeah. So we've

[49:22] just slowly, you know, got

[49:23] to the 4 million,

[49:25] which is where they,

[49:26] the citizens Advisory committee

[49:28] initially recommended us

[49:29] to be three years ago. We're

[49:31] just taking our time trying

[49:32] to be fiscally, you know,

[49:34] conservative and ensuring that

[49:35] we are investing

[49:36] in the right programs.

[49:38] >> Thanks.

[49:39] >> Any other questions or

[49:41] comments? With that said,

[49:43] any public comment, Madam

[49:45] Clerk?

[49:47] >> There are no comments at

[49:48] this time.

[49:50] >> I'll entertain a motion. Is

[49:51] there a motion to adopt the

[49:52] recommendations that staff have

[49:54] made that were on the. You had

[49:55] the presentation up. Could you

[49:57] please bring those that slide

[49:59] back up? Brad or Teresa?

[50:00] >> One moment,

[50:02] just so that we're clear.

[50:04] >> There were 6

[50:05] recommendations?

[50:07] >> Yes, 4 recommendations.

[50:09] >> All right,

[50:10] is there a motion approved?

[50:12] >> Staff recommendation.

[50:13] >> All right, it's been moved

[50:15] by Director Holmes. Is there a

[50:17] second?

[50:18] >> A second.

[50:20] >> Second by Director

[50:21] Peterson. Thank you very much.

[50:22] Any further discussion?

[50:23] Hearing none. Madam Clerk,

[50:24] please call a roll.

[50:25] >>[CALLING ROLL]

[50:39] >> Thank you. Let the record

[50:40] show the motion has been

[50:41] adopted unanimously. I just

[50:42] want to say that I'm very proud

[50:44] that we've been able

[50:45] to adopt a budget with 24.6

[50:46] million going into reserves. I

[50:48] think that's very prudent, you

[50:49] know, and that's also something

[50:51] that we've been growing

[50:52] over the years to make sure

[50:54] that we have that fiscal

[50:55] solvency, especially

[50:56] in times of, you know, when we

[50:58] have critical temperature

[50:59] changes where we're having

[51:00] to go out on the open market

[51:01] and purchase that power

[51:02] at such a high rate. So very,

[51:04] very glad to see that. And I

[51:05] want to continue to ensure that

[51:06] we put sufficient money. We do

[51:07] have a policy

[51:09] on our reserves,

[51:10] but very happy to see that

[51:12] 24.6 million in the reserves,

[51:13] as opposed to enhancing

[51:14] programs even more, got

[51:16] to be fiscally prudent. So

[51:17] thank you very much. All right,

[51:19] next item

[51:21] on the agenda is the revised,

[51:22] second amended and restated

[51:23] JPA.

[51:25] >> Thank you, Madam Chair. We

[51:27] do have a short presentation

[51:28] on this. We have just a few

[51:30] updates and some action items

[51:31] out of this as well. So our

[51:33] general counsel, Patrick, will

[51:34] cover this.

[51:36] >> Good afternoon. So this is a

[51:37] matter that came to us. Skip

[51:39] to the next slide. This is a

[51:41] matter that we originally

[51:43] started, I believe, actually

[51:44] in October, but November, you

[51:47] adopted the amendment

[51:49] to start the amendment process

[51:50] to amend the JPA. And we did

[51:52] that basically

[51:54] for several reasons. One was

[51:55] to clean up the JPA, because

[51:57] over the years we've had new

[51:59] members, and it's kind of,

[52:01] with five amendments,

[52:02] it got kind of confusing,

[52:04] clunky to know exactly what's

[52:06] in the JPA. So we did a

[52:08] restated one

[52:10] with restating all the sections

[52:13] of the JPA. And the second

[52:15] thing was to deal

[52:17] with the issue

[52:19] of the future amendments

[52:22] to the JPA. Right now,

[52:24] the JPA requires that

[52:26] for any amendment,

[52:28] no matter how small,

[52:29] it requires a vote of each

[52:31] of the member agencies

[52:32] by resolution. So you need

[52:34] to take it back to your

[52:36] governing body and get a vote

[52:38] of your governing body,

[52:39] and we need to get, right now,

[52:41] ten. We have ten members. So

[52:43] the idea was to streamline it

[52:44] and just have the most

[52:46] important items actually have

[52:48] to go back to a vote

[52:50] of the member agencies,

[52:52] and then the rest

[52:53] of the items could be amended

[52:55] by the board

[52:56] by a two thirds vote. So that

[52:58] was what we were trying to do

[53:00] in the agreement. It would

[53:02] still require that our powers,

[53:04] our section four powers,

[53:09] would have to go back

[53:13] to the member agencies. We

[53:15] cannot change what we actually

[53:16] do or how we do it

[53:19] in that respect. It also

[53:21] required that anytime we

[53:23] expanded, added a new member,

[53:24] that it would still have

[53:26] to be approved by all ten

[53:27] members or however many there

[53:29] are at the time. So we did that

[53:30] in November, pursuant

[53:32] to our JPA, it requires a 30

[53:33] day notice going out

[53:34] to all the member agencies. We

[53:36] did that then in January and go

[53:37] to the next slide. We did

[53:39] approve the amended and

[53:40] restated second amendment

[53:42] to the JPA, and

[53:44] from there we sent it to each

[53:46] of the member agencies

[53:48] for approval via resolution.

[53:50] Eight approved it,

[53:52] but two member entities,

[53:53] the town of Loomis and the city

[53:55] of Rockland, had some issues

[53:57] with it. So that is why we are

[54:00] back here at this time,

[54:01] because we are not able

[54:03] to get all ten signatures. Go

[54:05] to the next slide. The city

[54:07] of Rockland was okay

[54:09] with all the changes,

[54:10] except they wanted

[54:12] to amend basically section 19

[54:14] to include,

[54:16] which is the amendment process

[54:18] to include that. Also, section

[54:20] 14 would be the same in terms

[54:21] of if section 14 deals

[54:25] with the withdrawal

[54:27] of members, it allows a member

[54:29] to withdraw with notice, and

[54:31] they also must do an accounting

[54:33] and pay up

[54:35] on anything that they may be

[54:38] owed by the. By maybe owed

[54:40] to pioneer. They are concerned

[54:43] that section 14 language could

[54:47] be changed by the board that

[54:50] somehow would change that

[54:55] process and would not give them

[54:57] the power, I think,

[55:00] in the future to unilaterally

[55:03] withdraw if they wanted to,

[55:05] and that they did not want

[55:07] to see that. So we have added

[55:09] section 14A and B to the

[55:12] proposed restated JPA that's

[55:14] been before you today to

[55:17] address the issue that the city

[55:19] of Rockland had. So section 14A

[55:21] and B, if we wanted

[55:22] to change that language

[55:23] about the withdrawal process,

[55:25] would have to go back to each

[55:27] of the member agencies

[55:28] at that time.

[55:31] >> I just want to clarify, too,

[55:33] because this was when we

[55:35] initially were having this

[55:37] discussion,

[55:38] and we did have the opportunity

[55:40] to meet with member director

[55:41] Janda on this issue.

[55:42] Initially, there was some

[55:44] concern, and they said that,

[55:46] well, maybe if someone wanted

[55:47] to withdraw from the JPA,

[55:49] then we should all have

[55:50] to vote on that.

[55:52] But then when we brought it to

[55:53] their attention that that's not

[55:55] in anyone's best interest,

[55:57] to require all of us to have to

[55:58] approve whether or not someone

[56:00] withdraw that they quickly

[56:01] understood and simply said,

[56:03] okay, well, we're fine

[56:04] with that.

[56:06] But if this board wants

[56:07] to make a change

[56:08] to that section that deals

[56:10] with it, then any change

[56:11] to that section

[56:12] of the JPA would go back

[56:13] to all of us to ratify it. So

[56:14] if we wanted

[56:16] to change the process by which

[56:17] someone would withdraw, then

[56:18] that would require a full vote

[56:20] by the body. So it's just a

[56:21] clarifying change. And Don and

[56:22] I have been able to talk

[56:24] about it and are fine

[56:26] with that request.

[56:28] >> Although we don't have

[56:29] Rockland here today,

[56:30] they have seen this change

[56:32] in our agreement with it.

[56:33] >> Just wanted to clarify that

[56:35] because it is a little

[56:37] complicated and just to kind

[56:38] of did do that.

[56:40] >> There's history and how they

[56:41] handle it. The city of

[56:43] Rockland did meet and have a

[56:45] council meeting,

[56:46] and so they did discuss it

[56:48] in open session. All right.

[56:50] The other one was the town of

[56:51] Loomis, who have not taken it

[56:53] back to the. Back

[56:55] to their town council

[56:58] at this point.

[56:59] But I've had discussions with

[57:01] their. I guess he's called a

[57:03] town attorney, city attorney,

[57:05] essentially, Jeff Mitchell.

[57:08] And I know that Don and the

[57:10] chair has also had

[57:12] conversations with the city

[57:13] of Loomis about what they were

[57:16] looking for. Mister Mitchell

[57:18] provided a list of three

[57:20] different options that he would

[57:22] like to have seen. The first

[57:25] option was to. To basically

[57:27] include a significant number,

[57:29] like ten or twelve of the

[57:32] sections that would require a

[57:34] vote

[57:37] of all the member agencies. We

[57:39] were, at least I was

[57:41] of the opinion if we did that,

[57:44] we might as well not even do it

[57:46] because basically any change

[57:48] would have to go back

[57:50] to the.

[57:52] >> I'm going to just interrupt.

[57:53] I'm sorry. I think

[57:55] since we did have that meeting

[57:56] with Director Ring, the city

[57:57] manager, maybe just to. If you

[57:59] could just present the

[58:00] recommendation that came out of

[58:02] that meeting versus rehashing,

[58:03] because that's not

[58:05] before us today. Director Ring

[58:06] is now proposing this amendment

[58:08] that's up here. Because

[58:09] otherwise it might make things

[58:11] confusing and that's not

[58:13] on the table. I just want

[58:14] to cut out that their second

[58:16] suggestion was to get 60 days

[58:18] notice instead of the 30 days

[58:20] notice and we did meet

[58:22] with them. They're agreeable

[58:23] to 45 days notice. And that is

[58:25] what we've got

[58:28] in the proposal today. So those

[58:30] are the two main changes

[58:31] in the proposal pursuant

[58:33] to the discussions with

[58:35] Rockland and the town of

[58:37] Loomis. Next slide. And then

[58:38] the last change we are making

[58:40] on our own is as part of the

[58:42] performance evaluation and the

[58:44] employment with Mister

[58:46] Eckerd, we changed his title

[58:47] from executive director to

[58:49] chief executive director

[58:51] officer officer. I'm sorry.

[58:53] And so we just needed

[58:55] to clarify the JPA

[58:57] to be his title. His duties are

[59:01] exactly the same. It's just a

[59:05] change in title, but his title

[59:07] will now be officially chief

[59:09] executive officer

[59:12] in the future instead

[59:14] of executive chairman director.

[59:16] Next slide. So the

[59:19] recommendation is to adopt the

[59:21] resolution amending the

[59:23] revised, second,

[59:25] amended and restated JPA

[59:26] with those changes I just laid

[59:28] out by each

[59:29] of the member agencies,

[59:31] as well as the change

[59:33] in title. We already gave the

[59:35] 30 day notice. This is still

[59:37] part of the whole process that

[59:38] we've gone through,

[59:40] so there's not a need

[59:41] to resubmit it for another 30

[59:42] days notice to each

[59:44] of the member agencies. Once we

[59:45] adopt it, we will send it out

[59:47] to each of the member agencies

[59:49] for ratification via resolution

[59:50] of the revised, second,

[59:52] amended and restated JPA.

[59:55] Once, hopefully we get all ten

[59:57] to be in agreement,

[59:59] then it can be executed

[1:00:01] by the chair,

[1:00:02] and then we will be

[1:00:04] under the new revised, second,

[1:00:06] amended and restated JPA. The

[1:00:08] last JPA, essentially,

[1:00:09] that we sent out is null and

[1:00:11] void because we cannot get the

[1:00:13] required signatures. I think

[1:00:15] that's it. Is that one more

[1:00:17] slide? Thank you. So does

[1:00:19] anybody have any questions?

[1:00:24] >> Thank you very much.

[1:00:28] To summarize very quickly,

[1:00:31] we've all seen the amendments

[1:00:33] except for these two, and most

[1:00:35] of our jurisdictions have

[1:00:38] already voted

[1:00:40] on the initial amendments.

[1:00:42] We're going to have

[1:00:44] to go back and ask

[1:00:45] for their vote again, because

[1:00:47] we now have two additional

[1:00:48] amendments,

[1:00:50] should this board vote

[1:00:51] to include those in the round

[1:00:53] of amendments. So, again, the

[1:00:54] first one is just stating that

[1:00:56] if the board were

[1:00:57] to make a change

[1:00:59] to the section that deals

[1:01:01] with the process

[1:01:03] of withdrawing,

[1:01:06] that that would have to go

[1:01:07] before all of us. And the

[1:01:08] second would be changing the

[1:01:10] number of days notice

[1:01:12] for change from 30 days to 45

[1:01:13] days. And again, Don and I had

[1:01:15] the opportunity to meet with

[1:01:17] Director Ring and his city

[1:01:18] manager to talk

[1:01:20] about that and felt that 45

[1:01:22] days was reasonable. Anything

[1:01:24] longer makes it difficult

[1:01:26] for us

[1:01:27] in the immediate future,

[1:01:29] given that we're expanding,

[1:01:31] and so we don't want

[1:01:33] to push that off because we

[1:01:35] only meet once a month. I am

[1:01:38] in support

[1:01:40] of those two recommendations,

[1:01:42] and I'd like to open this up.

[1:01:44] If there are any questions or

[1:01:45] comments.

[1:01:46] >> I just want to point out,

[1:01:47] I think it's reasonable for

[1:01:48] Loomis, too. Loomis only meets

[1:01:49] once a month, too,

[1:01:50] and that was part

[1:01:51] of their issue with the 30

[1:01:52] days.

[1:01:53] >> I have a clarification

[1:01:54] question. I don't know if it's

[1:01:55] my brain or not. Back

[1:01:56] on the first slide. Way back.

[1:01:57] I'm just trying to understand

[1:01:58] something that wasn't making

[1:01:59] sense to me right there. So

[1:02:00] administrative.

[1:02:02] Let's see. Okay, so section

[1:02:03] 19, advance notice

[1:02:05] to each member agency

[1:02:07] before board votes. Two thirds

[1:02:08] vote by the pioneer board

[1:02:09] to amend the JPA.

[1:02:11] >> Correct.

[1:02:13] >> But then it says

[1:02:15] underneath must be approved

[1:02:17] by resolution, by every member

[1:02:22] so does that mean that it takes

[1:02:23] two thirds of this board

[1:02:26] to then send it

[1:02:27] to every member

[1:02:29] to approve it?

[1:02:30] >> Yeah. And then we need all

[1:02:31] ten.

[1:02:33] >> So it still goes back

[1:02:35] to every member

[1:02:37] for every amendment.

[1:02:39] >> Well, that's why we wanted

[1:02:40] to streamline it. Yeah, that's

[1:02:42] why we're streaming. Yes. So

[1:02:44] we're streamlining that process

[1:02:46] because every single.

[1:02:47] >> Yeah, that's the current

[1:02:49] process. The new process will

[1:02:51] give the 45 days I was stuck

[1:02:53] on.

[1:02:54] >> No wonder we're changing.

[1:02:56] >> That's exactly right because

[1:02:58] it's a lot of work.

[1:03:00] >> Expand the notice. And the

[1:03:02] board can enact except

[1:03:03] for those few exceptions.

[1:03:05] >> Yes.

[1:03:07] >> In section 414 and add a new

[1:03:09] member.

[1:03:11] >> Thank you for that.

[1:03:13] >> Can I make one comment?

[1:03:17] >> Sure.

[1:03:19] >> When this first all came

[1:03:22] to my attention, mostly it was

[1:03:24] our legal counsel who looked

[1:03:25] at it, and so he was the one

[1:03:28] who brought his concerns to me

[1:03:30] with it, which is then I became

[1:03:31] concerned. And so,

[1:03:33] so I would just like to advise

[1:03:35] that you all send it back

[1:03:37] to your legal counsel to look

[1:03:39] at before you consider a new

[1:03:41] adoption but there's something

[1:03:43] else I can say.

[1:03:45] >> On that point,

[1:03:47] one thing I've learned,

[1:03:57] of course, I'm not going to be

[1:03:58] your general counsel here

[1:04:00] shortly, but one thing I've

[1:04:01] learned is I would contact,

[1:04:03] because I know most

[1:04:04] of the city attorneys, so I

[1:04:06] would contact and make sure

[1:04:07] they're on board too,

[1:04:09] at the beginning

[1:04:11] of the process.

[1:04:12] >> And the other comment I want

[1:04:13] to make is that we are, this is

[1:04:15] greatly expanding the powers

[1:04:16] and the role of this board.

[1:04:18] This does. And I think that as

[1:04:19] we grow,

[1:04:21] that is when we have a giant

[1:04:23] board, it kind

[1:04:25] of reduces the risk

[1:04:27] of just a couple of bad actors

[1:04:28] in the board acting. So I think

[1:04:30] as we get bigger,

[1:04:31] this is not a terrible idea,

[1:04:33] which.

[1:04:35] >> We're actually planning

[1:04:37] to do. We've got several

[1:04:38] expansions that are.

[1:04:40] >> I just want us all

[1:04:43] to be aware of what we're

[1:04:45] actually doing here. And so I'm

[1:04:47] sure you are sort

[1:04:48] of state it. Yeah. But, yeah,

[1:04:50] as we get bigger, I think it's

[1:04:52] very difficult because we'll

[1:04:56] have to go back to 1520

[1:04:57] different organizations.

[1:05:01] >> And get those and then they

[1:05:04] don't get on the agenda. You

[1:05:06] missed an agenda and then

[1:05:10] you're 6 months

[1:05:11] down the road trying to get all

[1:05:13] those signatures done. Little

[1:05:14] experience with that one.

[1:05:15] >> Any other questions or

[1:05:16] comments on this?

[1:05:17] >> I would just make one more

[1:05:18] comment would be upon approval.

[1:05:19] Then staff will work

[1:05:20] with your city managers

[1:05:21] over the summer, and I would

[1:05:22] hope then we could maybe wrap

[1:05:23] this up by September.

[1:05:25] >> Can I have a motion? Can we

[1:05:27] put those back up, please,

[1:05:28] Madam Clerk?

[1:05:30] I'd like to just keep you

[1:05:32] on your toes, Teresa.

[1:05:34] >> There we go. All right,

[1:05:36] so do I have a recommendation?

[1:05:39] I mean, do I have a motion?

[1:05:44] >> I'll move that we support

[1:05:47] staff's recommendations.

[1:05:50] >> I'll second.

[1:05:51] >> It's been moved and

[1:05:53] seconded. Any further

[1:05:56] discussion? Any public comment,

[1:05:57] Madam clerk?

[1:06:00] >> There are no comments

[1:06:02] at this time.

[1:06:04] >> Thank you very much.

[1:06:07] Appreciate that. Okay, no

[1:06:10] further discussion. Madam

[1:06:12] Clerk, please call a roll on

[1:06:13] the motion.

[1:06:14] >>[CALLING ROLL]

[1:06:38] >> Let the record show the

[1:06:39] motion has been adopted

[1:06:40] unanimously. Thank you very

[1:06:41] much. And look for for the JPA

[1:06:42] on your next upcoming agenda

[1:06:44] for each of you then. So thank

[1:06:45] you so much. All right,

[1:06:47] so moving right along,

[1:06:48] we have a presentation.

[1:06:50] >> Thank you, Chair. Good

[1:06:51] afternoon, fellow directors.

[1:06:53] So you're done

[1:06:54] with the action items? You can

[1:06:55] relax. I thought we maybe.

[1:06:57] Thought we'd do something a

[1:06:58] little different. We've been

[1:07:00] making a lot of decisions over

[1:07:02] the last six months and maybe

[1:07:03] take a break and hear

[1:07:05] from a guest speaker

[1:07:06] with a lot of knowledge on

[1:07:08] issues that we all care about.

[1:07:09] So I had the pleasure of

[1:07:11] meeting our guest speaker last

[1:07:13] month at California municipal

[1:07:14] rates Symposium that was hosted

[1:07:16] by Smud. And after 8 hours

[1:07:18] of death by PowerPoint, our

[1:07:20] guest speaker then presented.

[1:07:22] And his candor was both

[1:07:24] informative and really

[1:07:26] entertaining. And I was hoping

[1:07:28] that he could share that

[1:07:30] with us today. And he has. I've

[1:07:31] included his bio

[1:07:34] in the staff report. But just

[1:07:36] to cover a few highlights,

[1:07:37] Doctor Ahmad Fareki has 45

[1:07:39] years of consulting, teaching

[1:07:41] and research experience and

[1:07:43] rate design, load flexibility,

[1:07:45] energy efficiency, demand

[1:07:46] response, distributed energy

[1:07:48] resources, demand forecasting,

[1:07:50] decarbonization and

[1:07:52] electrification. He has worked

[1:07:54] for over 150 clients on five

[1:07:56] continents and has testified or

[1:07:58] appeared nearly 100 times

[1:07:59] before regulatory bodies,

[1:08:01] governments,

[1:08:04] and legislative councils

[1:08:06] on six continents. Doctor

[1:08:09] Farooqi has taught economics

[1:08:15] at San Jose State, UC Davis and

[1:08:18] the University of Karachi, and

[1:08:21] delivered guest lectures at

[1:08:24] Carnegie Mellon, Harvard,

[1:08:26] Idaho, MIT, New York,

[1:08:29] northwestern, Rutgers, San

[1:08:31] Francisco, Stanford, and UC

[1:08:33] Berkeley. Really pleased to

[1:08:36] have our guest speaker today.

[1:08:38] And Doctor Frutkin, the floor

[1:08:39] is yours.

[1:08:57] >> Good to see you, all of you.

[1:08:59] I hope I can be somewhat

[1:09:01] interesting. I know it's just

[1:09:03] post lunch. Some of the stupor

[1:09:05] is probably beginning to set

[1:09:08] in. I'm pretty certain this

[1:09:10] topic is going to wake us all

[1:09:13] up because it is a disturbing

[1:09:16] reality of today,

[1:09:18] the high cost of electricity.

[1:09:20] And we hear a lot

[1:09:23] about electrification is the

[1:09:25] way to go. We hear

[1:09:28] about climate change, we hear

[1:09:30] about affordability, and

[1:09:32] of course, we are in on here

[1:09:34] in California. So the golden

[1:09:36] state, right? We always lead

[1:09:38] the country, it is said. And so

[1:09:41] what I want

[1:09:43] to do is explore some of those

[1:09:46] assumptions that are widely

[1:09:48] held and perhaps provide some

[1:09:51] thoughts for you

[1:09:54] to comment upon. What I will do

[1:09:56] is. So I should plan

[1:09:59] on talking for what, about 40

[1:10:01] minutes or so, something

[1:10:04] like that,

[1:10:07] not seeing a clock. So I will

[1:10:09] occasionally, one

[1:10:12] of us will wait. We'll bring

[1:10:15] the cane out. I

[1:10:17] will need a hint or two because

[1:10:20] I've been known to speak

[1:10:21] for longer than needed. And

[1:10:23] it's not just my wife who has

[1:10:24] that view. All right,

[1:10:26] so I think you're going

[1:10:28] to put up the first slide.

[1:10:30] There we go. And if you could

[1:10:32] put that in full screen mode.

[1:10:33] And there it is. Thank you so

[1:10:36] much. Okay, so I was thinking

[1:10:39] of what title to give it. So

[1:10:40] the title I came up

[1:10:42] with was how the Golden State

[1:10:45] lost its way on the road

[1:10:47] to electrification,

[1:10:48] and happy you invited me

[1:10:50] to present

[1:10:52] on the summer solstice, which

[1:10:54] makes it exceptionally unique

[1:10:57] and memorable. We planned it

[1:10:59] that way. I was thinking hard,

[1:11:02] how did it come about

[1:11:04] to be the 20 June? All right,

[1:11:06] so as I mentioned,

[1:11:10] electrification is a high

[1:11:13] priority for the state. Two

[1:11:16] technologies we are told hold

[1:11:18] the keys

[1:11:20] to electrifying homes,

[1:11:22] heat pumps for maintaining a

[1:11:23] comfortable temperature

[1:11:26] at home both in the summer and

[1:11:30] in the winter. What a

[1:11:32] remarkable device. I first

[1:11:34] heard of it when I was early

[1:11:39] in my career in 1979. I said a

[1:11:40] heat pump that provides cooling

[1:11:42] I was working at the Electric

[1:11:43] Power Research Institute, and

[1:11:44] they said, yeah,

[1:11:45] it takes the heat

[1:11:46] from the outside and puts it

[1:11:48] into your house. I said, in the

[1:11:49] winter there is heat outside. I

[1:11:50] said, yes, there is. And

[1:11:51] in the summer, it does it

[1:11:52] in reverse. It takes the heat

[1:11:53] from inside. So that was 1979.

[1:11:55] This is 2000. What, 24. Still a

[1:11:57] novelty for most people. And

[1:11:58] the average customer has no

[1:12:00] clue what a heat pump is.

[1:12:02] Everyone knows what an air

[1:12:03] conditioner is.

[1:12:05] But the state says,

[1:12:07] if you're going to save

[1:12:08] ourselves both here and abroad,

[1:12:10] by which I mean

[1:12:11] in the afterlife,

[1:12:13] we need a heat pump. Do any of

[1:12:14] you currently have a heat pump?

[1:12:16] You do? Okay, well, the rest

[1:12:18] of us don't know. That is so

[1:12:20] true. That is so true. Some

[1:12:23] of us might. So you pretty much

[1:12:25] summed it up. I mean,

[1:12:28] the reality is very, very few

[1:12:31] people have a heat pump today.

[1:12:34] But the state, as part

[1:12:36] of the policy that Governor

[1:12:38] Newsom has laid out,

[1:12:40] going back to Jerry Brown and

[1:12:42] others, is

[1:12:44] to manage climate change. And

[1:12:46] that's a key technology. It's

[1:12:49] very expensive to buy,

[1:12:51] very expensive to install.

[1:12:53] Sometimes it needs a panel

[1:12:55] upgrade,

[1:12:57] and it's even more expensive to

[1:12:59] operate unless you have solar

[1:13:02] or unless you have a really low

[1:13:06] rate

[1:13:08] from some other utility than

[1:13:10] Pacific Gas and electric

[1:13:12] company, which I will focus

[1:13:13] on because it serves 5 million

[1:13:15] customers in the northern part

[1:13:17] of the state, and those 5

[1:13:18] million represent roughly,

[1:13:20] what, 18 million people. So

[1:13:22] besides heat pumps, the other

[1:13:25] technology that is often

[1:13:28] mentioned is EV's. And I saw a

[1:13:31] lot of superchargers in this

[1:13:33] area. I have one myself. You

[1:13:35] have two, you told us so.

[1:13:37] Certainly EV's are catching on

[1:13:39] in California, but not in much

[1:13:41] of the country.

[1:13:44] But those two need

[1:13:47] to be pushed hard

[1:13:50] for electrification. Other

[1:13:51] technologies include heat pumps

[1:13:55] of water heating, induction

[1:13:58] stoves, clothes dryers,

[1:14:00] and electric spas

[1:14:03] for those who indulge

[1:14:05] in that luxury. Okay.

[1:14:06] To accelerate electrification,

[1:14:08] the state needs

[1:14:10] to make electricity competitive

[1:14:11] with natural gas,

[1:14:14] which is the primary

[1:14:16] alternative fuel, and

[1:14:18] with gasoline

[1:14:20] for transportation, that means

[1:14:22] lowering the capital cost

[1:14:24] of electric equipment,

[1:14:27] for example, buying an electric

[1:14:29] car or installing a heat pump.

[1:14:31] Lower that cost, and

[1:14:33] of course, lower the cost

[1:14:36] of electricity for the

[1:14:39] customers because it is not

[1:14:40] just a capital cost decision.

[1:14:42] These things last

[1:14:44] for a while, and so it has to,

[1:14:45] it has to save you money.

[1:14:48] Otherwise, why would you do it?

[1:14:49] Now there are some who will do

[1:14:52] it because they want

[1:14:55] to be green or because they

[1:14:58] want to experiment or because

[1:15:00] they are

[1:15:02] in the energy sphere,

[1:15:05] or they are physicists

[1:15:07] by training with a lot

[1:15:10] in the bank balance. So we have

[1:15:11] a challenge because this state

[1:15:13] is very expensive, labor

[1:15:14] expensive,

[1:15:15] the equipment is expensive. So

[1:15:17] what is the state trying

[1:15:18] to do? And you probably know

[1:15:20] this. I'm just summarizing it.

[1:15:21] The state, along

[1:15:23] with the federal government, is

[1:15:24] providing various financial

[1:15:25] incentives in the form

[1:15:27] of rebates, tax rebates that

[1:15:28] lower the purchase and

[1:15:29] installation cost of electric

[1:15:31] technologies and eues. That's

[1:15:33] great. I support it. However,

[1:15:34] it is also doing something that

[1:15:35] makes electrification

[1:15:36] unaffordable, repeatedly

[1:15:38] raising rates and pushing up

[1:15:39] electric bills

[1:15:40] to the breaking point. So how

[1:15:41] do those two things coexist?

[1:15:43] That's what we would. That's

[1:15:45] correct. And it's a mystery

[1:15:46] to me as a citizen

[1:15:48] of the state, how a state so

[1:15:51] smart and so big and so well

[1:15:54] known to possibly be the

[1:15:56] world's fifth largest economy

[1:15:58] for a separate country,

[1:16:00] how a state of this size

[1:16:01] of nearly 40 million people can

[1:16:03] be so down. I don't have any

[1:16:06] easy answers. I will just raise

[1:16:11] the questions and you will

[1:16:14] provide perhaps some

[1:16:16] of the answers because I'm

[1:16:18] at a loss. I should mention,

[1:16:20] I have lived in this state

[1:16:22] since 1974. I came as a grad

[1:16:25] student at UC Davis, liked it

[1:16:26] so much I have stayed.

[1:16:28] Unfortunately for us, for all

[1:16:30] of us, both

[1:16:32] in the room and not

[1:16:36] in the room. California took

[1:16:40] two wrong turns on the road

[1:16:43] to electrification. Wrong turn

[1:16:46] number one. It failed to rein

[1:16:48] in rising electric rates,

[1:16:51] which rose at a much faster

[1:16:55] rate than charges electric

[1:16:59] charges in the rest of the

[1:17:04] country and way faster than the

[1:17:07] rate of inflation,

[1:17:10] unchecked rises in electric

[1:17:11] rates that the legislature did

[1:17:12] nothing to rein in,

[1:17:13] that the governor did nothing

[1:17:14] to rein in, that the public

[1:17:16] Utilities Commission did

[1:17:18] everything to approve and push

[1:17:20] on to customers. It's a story

[1:17:22] of corruption and greed. But I

[1:17:24] don't have a movie yet. I think

[1:17:26] there's a script here. Okay.

[1:17:27] So it put a large share. Now,

[1:17:29] whenever some disaster happens,

[1:17:31] you have to blame somebody.

[1:17:32] You have to point your finger

[1:17:34] at somebody other than

[1:17:36] yourself. So they put a large

[1:17:38] share of the blame

[1:17:39] on customers with solar panels

[1:17:41] and replace net energy metering

[1:17:42] with a net billing tariff. And

[1:17:43] I will dive

[1:17:45] into that shortly. And I should

[1:17:46] tell you in full disclosure,

[1:17:47] I am one of those people who

[1:17:48] has solar panels. I live

[1:17:49] in the East Bay, and my bills

[1:17:50] were just rising and rising.

[1:17:51] So after five years

[1:17:52] of hesitation, I put solar.

[1:17:53] And as I look back, I think

[1:17:55] that's the best thing I've ever

[1:17:56] done probably

[1:17:57] in my entire life, to rein

[1:17:59] in my energy bills. In 2016, I

[1:18:00] did a massive whole house

[1:18:01] energy upgrade short

[1:18:03] of heat pumps. But I did

[1:18:05] everything else the bills only

[1:18:08] went down 25%. Then I put

[1:18:10] in solar. And over the last,

[1:18:11] since 2019, my bills finally

[1:18:13] have gone down 85%. And

[1:18:14] of course, then they're saying,

[1:18:16] I am the reason why everyone's

[1:18:19] rates are higher. I and 1.7

[1:18:21] million other customers

[1:18:23] in the state,

[1:18:25] representing nearly 5 million

[1:18:28] customers, are the reason why

[1:18:30] rates are really high. Is not

[1:18:32] the utilities, it is not the

[1:18:33] PoC, it is not the governor,

[1:18:35] it is not the legislature, it

[1:18:37] is those beasts who have put

[1:18:39] solar panels, ugly as they are,

[1:18:41] on their roofs. Okay, so wrong

[1:18:43] turn number two. This is more

[1:18:45] recent. So the solar panel

[1:18:46] debacle took place on April 15

[1:18:49] of last year,

[1:18:51] called net billing tariff. And

[1:18:52] then they said, oh,

[1:18:55] but that's only

[1:18:57] for new customers. That's

[1:18:59] for new solar customers. What

[1:19:02] do we do to get at the existing

[1:19:03] solar customers? And everyone

[1:19:05] else was thrown

[1:19:07] into the mix as well. We do the

[1:19:09] shell game between fixed and

[1:19:11] variable charges. Now, who ever

[1:19:12] thought a shell game could be

[1:19:14] so exciting

[1:19:16] to be front page news in story

[1:19:18] after story in the LA Times,

[1:19:21] in the Sacramento Bee, in the

[1:19:23] San Francisco Chronicle, even

[1:19:24] in the Wall Street Journal, et

[1:19:27] cetera, et cetera. Well, it

[1:19:29] turned out to be that the state

[1:19:31] didn't know,

[1:19:33] but it touched a nerve. And the

[1:19:34] idea was called income

[1:19:36] graduated fixed charge, IGFC.

[1:19:37] Now, you can easily change the

[1:19:40] c to a u at the end,

[1:19:42] and that's what it's all about.

[1:19:44] Now, to make the change sound

[1:19:46] equitable, it decided to make

[1:19:48] the fixed charges a function

[1:19:49] of income. So that was very

[1:19:51] clever. It was politically

[1:19:53] motivated because the professor

[1:19:55] who first put it out, he didn't

[1:19:58] have income graduation built

[1:20:00] into it. And of course,

[1:20:01] consumer advocates would have

[1:20:04] opposed it. Like, there is a

[1:20:06] group called turn, some

[1:20:08] of you may have heard of it.

[1:20:09] Turn has opposed fixed charges

[1:20:11] of $3 a month, of $10 a month.

[1:20:13] Legislature approved dollar ten

[1:20:15] a month. The PUC still couldn't

[1:20:17] even put in a three dollar

[1:20:18] fixed charge because turn was

[1:20:20] the voice that was always

[1:20:22] negative. So when this idea was

[1:20:24] floated

[1:20:26] with the fixed charges, I

[1:20:28] thought, this will die

[1:20:29] immediately because turn would

[1:20:31] opposed it. Well, what I forgot

[1:20:33] was that the idea,

[1:20:35] as originally proposed,

[1:20:36] was going to be modified

[1:20:38] to make it palatable to turn.

[1:20:40] And we'll get into that

[1:20:43] in our discussion. So this is a

[1:20:45] story of complex political

[1:20:46] maneuvers and intrigues,

[1:20:48] and I really think Matt Damon

[1:20:50] would be well adopted to, I

[1:20:52] don't know what role he would

[1:20:53] play. Okay.

[1:20:55] In the late 1980s,

[1:20:56] California's rates began

[1:20:58] to rise above the US average.

[1:21:00] In 1979, they were

[1:21:01] about the same. That's the year

[1:21:03] my career began. They were

[1:21:05] about the same. And ever

[1:21:06] since then,

[1:21:08] they have diverged. And so I

[1:21:10] retired two years ago. And

[1:21:12] somebody said to me, so does it

[1:21:13] now mean they will start coming

[1:21:15] down? People, you know,

[1:21:17] you have

[1:21:18] to admire their bluntness. So

[1:21:20] the US is the blue line and

[1:21:22] California. And by the way,

[1:21:24] California here includes all

[1:21:26] of California, not just PG and

[1:21:28] e. So this is much lower than

[1:21:30] what you would see if it was

[1:21:32] just PG and E. And I'll show

[1:21:33] you shortly the details

[1:21:35] of PG and E, much of which you

[1:21:37] probably have seen. Okay, so

[1:21:39] now we enter into the halls

[1:21:41] of power. It used to be at 77

[1:21:42] Beale street. I'm sure some

[1:21:45] of you have seen that building.

[1:21:46] And the commission is located

[1:21:48] at 505 van Ness. So

[1:21:50] between those two, a lot

[1:21:52] of underground lines. And

[1:21:54] that's how decisions were made.

[1:21:56] It was known as the revolving

[1:21:58] door policy between

[1:22:00] commissioners and utility

[1:22:02] executives. So they serve 5.5

[1:22:03] million customers

[1:22:06] in the northern part

[1:22:07] of the state. With the consent

[1:22:09] of the commission, they have

[1:22:11] more than doubled their

[1:22:12] electric rates

[1:22:14] over the past decade,

[1:22:16] exceeding the increases

[1:22:18] of any other utility

[1:22:20] on the planet. And I did a lot

[1:22:22] of consulting around the globe.

[1:22:23] I've shared this news as it

[1:22:24] unfolds. And utilities

[1:22:25] everywhere are as shocked as

[1:22:27] are people living

[1:22:28] in this state. How can they get

[1:22:30] away with it,

[1:22:32] is what everyone says.

[1:22:33] Especially a utility that has

[1:22:34] had a series

[1:22:36] of well publicized disasters.

[1:22:38] The PUC keeps

[1:22:40] on approving them. So

[1:22:42] for those of us who drive an EV

[1:22:43] and who live

[1:22:45] in the pg and e service area,

[1:22:47] a rate that appeals

[1:22:48] to many is called EV2A.

[1:22:50] That's not a name that you

[1:22:52] would see

[1:22:54] for any other product. But

[1:22:56] for our industry, where jargon

[1:22:57] abounds, that is the name

[1:22:59] of the rate. EV2A. The

[1:23:01] off peak rate in this is thirty

[1:23:03] five cents a kilowatt hour

[1:23:05] today is double what it was

[1:23:07] just five years ago when I

[1:23:09] bought my car. It's doubled

[1:23:11] in five years. At $0.35, it

[1:23:14] exceeds the peak rate

[1:23:16] of most utilities

[1:23:18] around the country. This is the

[1:23:20] lowest and it exceeds their

[1:23:21] highest. So this is how the

[1:23:23] world was turned upside down.

[1:23:26] Nobody has taken them

[1:23:27] to task. Nobody has calibrated

[1:23:29] their numbers against others

[1:23:31] because they say,

[1:23:33] we are unique and different.

[1:23:35] You could say this is PG E's

[1:23:37] exceptionalism or the PUC's

[1:23:39] exceptionalism. California sets

[1:23:41] the rules for everyone else.

[1:23:43] And a few others are saying,

[1:23:45] hey, if California can charge

[1:23:47] that, maybe I should raise my

[1:23:49] rates too. They're giving the

[1:23:51] wrong incentives to utilities

[1:23:52] and commissions elsewhere. How

[1:23:54] much would you save if you

[1:23:56] bought a Tesla, if you're

[1:23:58] in the market for a Tesla

[1:23:59] today, or an EV that gets,

[1:24:01] let's say, 4 miles/kw hour,

[1:24:02] compare that to an internal

[1:24:04] combustion engine vehicle,

[1:24:06] otherwise known as a gasoline

[1:24:08] car.

[1:24:10] But that's the jargon they use,

[1:24:11] that gets 45 miles per gallon,

[1:24:13] you're not going

[1:24:14] to save a whole lot. Savings

[1:24:16] are disappearing very fast.

[1:24:17] Five years ago,

[1:24:19] I would have saved $1,000 a

[1:24:20] year on my driving cost. Now

[1:24:22] I'm only saving $500 because

[1:24:24] they have doubled the rates.

[1:24:25] Gasoline prices,

[1:24:27] as you probably know,

[1:24:29] have not doubled. They have not

[1:24:31] moved. They've actually come

[1:24:32] down. They have oscillated and

[1:24:34] moved around. I have another

[1:24:36] reading. Thank you. Pleasure.

[1:24:38] Pleasure. So if you compare

[1:24:39] them with smuds rates. Anyone

[1:24:41] here a smud customer? I am.

[1:24:43] Okay, so this is from Smud's

[1:24:46] website. A smud customer using

[1:24:48] 750 kilowatt hours a month

[1:24:52] would pay $135 for that much

[1:24:55] electricity. A pg and e

[1:24:58] customer just located a couple

[1:25:00] of miles away

[1:25:02] across the road,

[1:25:04] in some cases, would pay $352.

[1:25:06] Now, if that's not highway

[1:25:09] robbery, then what is? How can

[1:25:11] they get away with it? It's

[1:25:12] exactly the same electricity

[1:25:14] from a physics and engineering

[1:25:16] perspective. There's the same

[1:25:18] air conditioning,

[1:25:20] the same electric car charging,

[1:25:23] same light bulb,

[1:25:28] but it costs. So if you had a

[1:25:30] choice

[1:25:31] between two retail stores,

[1:25:33] let's say one was Safeway, the

[1:25:35] other was Costco, where would

[1:25:38] you go? Well, the problem is we

[1:25:40] can't switch suppliers. We're

[1:25:43] stuck. That's how they're able

[1:25:47] to get away with it. It's the

[1:25:50] monopoly. But it's supposed

[1:25:51] to be a regulated monopoly. It

[1:25:54] has turned into an unregulated

[1:25:57] monopoly because

[1:25:59] of the commission's largess.

[1:26:01] This is just showing over the

[1:26:03] five years how the peak, mid

[1:26:05] peak, and

[1:26:07] off peak prices have changed.

[1:26:09] And this is as of the end

[1:26:11] of last year, when

[1:26:12] on the right bar, which says

[1:26:13] 2024, the very right bar says

[1:26:14] $0.34. That's gone up to 35.

[1:26:16] And

[1:26:17] by the time this year is over,

[1:26:18] I suspect the 35 will be 37 or

[1:26:19] 38. Because it's a treadmill.

[1:26:20] It's giving us palpitations

[1:26:21] because the treadmill is very

[1:26:22] fast. Now, this graph is truly

[1:26:23] amazing. How could they get

[1:26:24] away with this? No other

[1:26:26] utility anywhere else has had

[1:26:27] this rate

[1:26:28] of rapid acceleration

[1:26:30] of rates. And according

[1:26:32] to some analysts,

[1:26:35] pg and e bills

[1:26:37] on a monthly basis may rise

[1:26:38] by another. They already have

[1:26:40] risen by $56 by the end of

[1:26:42] April, but by the year end,

[1:26:44] they could be higher

[1:26:45] by another $100 per month,

[1:26:47] not per year. And currently,

[1:26:49] the average pg and e rate is

[1:26:51] forty six cents per kilowatt

[1:26:52] hour. It varies by rate,

[1:26:54] type and how much you use,

[1:26:56] etcetera, etcetera.

[1:26:58] But the average

[1:27:00] for all pg and e's 5 million

[1:27:01] customers is $0.46. There's

[1:27:03] three times higher than the us

[1:27:04] average. Isn't that shocking?

[1:27:06] What's funny

[1:27:08] for me is people are just used

[1:27:10] to it. Nobody says anything.

[1:27:12] They complain. They say plenty.

[1:27:13] They say plenty and you say

[1:27:16] plenty. It's almost like. It's

[1:27:17] almost

[1:27:19] like if you had said nothing,

[1:27:22] the same would have been true.

[1:27:25] Maybe it could have been a

[1:27:26] little higher. I think our big

[1:27:28] problem comes down the fact

[1:27:30] that CPUC is appointed

[1:27:33] by friends and appointed

[1:27:38] by the governor. Honestly, it's

[1:27:39] just his friends. Yeah. The

[1:27:41] CPUC is supposed to be the

[1:27:43] California Public Utilities

[1:27:44] Commission. But it has turned

[1:27:46] into something else. And I have

[1:27:47] a few other interpretations

[1:27:48] that I can share some other

[1:27:50] time. So what you have there,

[1:27:51] you know, they have. They have

[1:27:53] lost their anchor. And believe

[1:27:55] me,

[1:27:57] they couldn't be doing this

[1:27:59] without the governor approving

[1:28:01] it. And look

[1:28:03] at the connections between our

[1:28:05] current governor and pg and e,

[1:28:07] and the history that goes back

[1:28:08] there, too. They're much more

[1:28:11] than skin deep,

[1:28:12] one might say. I mean,

[1:28:14] and we were going

[1:28:16] to break up pg and e, right?

[1:28:17] That's what the governor

[1:28:19] himself was saying. We'd have

[1:28:20] to look

[1:28:21] at public ownership early on.

[1:28:23] And then all is forgotten,

[1:28:24] all is forgiven. God is most

[1:28:26] kind. So all of that noise

[1:28:27] in the media,

[1:28:30] they just ride it out. And I

[1:28:31] don't know how long this will

[1:28:33] continue, but it's a very,

[1:28:35] very disturbing connection that

[1:28:36] at every social gathering I go

[1:28:38] to, including weddings and

[1:28:41] Carmel, or parties

[1:28:43] near my house,

[1:28:45] people just start coming

[1:28:47] to me and complaining

[1:28:49] about PG and E. Even though I

[1:28:51] don't work for PG and E,

[1:28:53] I am not PG and E. Somehow,

[1:28:55] like a magnet, I draw those

[1:28:57] filings and all we do is we

[1:28:58] agree. And then they look

[1:29:00] at me and they say,

[1:29:01] so you're not doing anything?

[1:29:03] Well, I said,

[1:29:05] I'm doing whatever I can, but

[1:29:07] it is a very stiff competition.

[1:29:09] And then some come

[1:29:10] to me and says, you're retired,

[1:29:12] why are you not relaxing? I

[1:29:14] said, how can I relax? As a

[1:29:16] customer, as a public citizen,

[1:29:18] I have to speak up. So it's

[1:29:20] keeping me busy. Okay, so

[1:29:23] along with the two other

[1:29:25] investor owned utilities

[1:29:27] in the state,

[1:29:29] PG and E has blamed all

[1:29:31] of those high rates

[1:29:32] on the surge

[1:29:34] in rooftop solar installations.

[1:29:35] So why would anyone install

[1:29:37] solar? It's because the rates

[1:29:39] are high. And the bills are

[1:29:41] high, and they're saying, oh,

[1:29:43] now that you have installed

[1:29:44] solar. That's why the cause and

[1:29:46] effect have been very cleverly

[1:29:47] intertwined. It's very

[1:29:49] disingenuous. Right? Very

[1:29:51] disingenuous, since

[1:29:54] California's high rates predate

[1:29:56] the arrival of solar panels

[1:29:58] by more than two decades. And

[1:30:00] I'll show you some graphs.

[1:30:02] Californians installed solar

[1:30:04] to cope with the skyrocketing

[1:30:07] rates and not the other way

[1:30:10] around. And furthermore,

[1:30:12] if they want electrification,

[1:30:14] solar customers are more likely

[1:30:16] to go with heat pumps and

[1:30:18] electric vehicles because they

[1:30:19] can afford them. When I looked

[1:30:21] at heat pumps twice, once in

[1:30:23] 2016 for my space heating and

[1:30:25] air conditioning,

[1:30:26] and then two years ago

[1:30:28] for my water heating, but both

[1:30:30] times the contractors would say

[1:30:32] to me, unless you have solar,

[1:30:34] it won't make much sense. And

[1:30:36] then two years ago,

[1:30:38] I had solar in the heat pump.

[1:30:39] The water heater broke and I

[1:30:41] was at Lowe's asking which one

[1:30:43] should I pick? And he said,

[1:30:45] you should pick this one. I

[1:30:47] said, well, how

[1:30:50] about that heat pump,

[1:30:52] water heater? And he looked

[1:30:53] at me and he said, oh,

[1:30:55] go right ahead. If you want

[1:30:56] your bills to go

[1:30:58] through the roof,

[1:30:59] go right ahead. So the

[1:31:01] contractor community, and I'm

[1:31:03] in touch with several of them

[1:31:04] through professional channels

[1:31:06] as well. It's a very difficult

[1:31:07] sell. I'm sure you had

[1:31:08] to think it through quite a bit

[1:31:09] right before. And I have a

[1:31:10] couple of friends who have

[1:31:11] installed heat pumps. One spent

[1:31:13] $44,000. I'm still trying

[1:31:14] to figure out how it got

[1:31:16] to be that high. I mean,

[1:31:17] that sounds really high to me.

[1:31:19] But he has promised me he will

[1:31:20] give me an explanation. And

[1:31:22] avoiding seeing me

[1:31:23] for a few weeks now,

[1:31:25] who knows what happened there.

[1:31:27] Okay, so this is the growth of

[1:31:29] solar panels that didn't really

[1:31:30] start to grow until almost 20

[1:31:32] years after the energy crisis.

[1:31:34] I'm sorry,

[1:31:36] did you say his bill was

[1:31:39] 44,000? No, his. Not his

[1:31:41] electric bill. The cost

[1:31:43] of installing. I mean, he also

[1:31:44] did a home energy upgrade. I

[1:31:47] think he didn't have air

[1:31:48] conditioning to begin with,

[1:31:50] so duct work, etcetera,

[1:31:52] I think there was a lot

[1:31:54] of infrastructure work, but I

[1:31:56] think his bill is probably,

[1:31:57] I would guess, between 100 and

[1:31:59] $200. Okay. All right,

[1:32:01] so what did the utilities do?

[1:32:03] They decided to play

[1:32:05] off one group of customers

[1:32:07] against the other group

[1:32:09] of customers. They argued that

[1:32:11] there was a cost shift because

[1:32:13] solar customers used so much

[1:32:16] less power, power from the grid

[1:32:20] than the average customer, so

[1:32:24] they don't pay their fair share

[1:32:26] of cost, and therefore,

[1:32:29] the rest of the cost has

[1:32:30] to be recovered

[1:32:32] from everyone else. And then

[1:32:34] they said only the wealthy

[1:32:36] people installed. Solar is so

[1:32:37] expensive. And so really, this

[1:32:39] is a cost shift that is the

[1:32:41] opposite of what Robin Hood

[1:32:43] would be doing. This is reverse

[1:32:44] robinhood. That was the phrase

[1:32:45] that I ran into

[1:32:47] in other states. So

[1:32:48] like a rogue. A rogue, kind

[1:32:50] of a cost shift. They also

[1:32:52] argued that rooftop solar cost

[1:32:53] far more than large scale

[1:32:55] solar, and therefore,

[1:32:57] we should focus just

[1:32:58] on large scale solar farms way

[1:33:00] out there, and the transmission

[1:33:02] lines would bring the power.

[1:33:04] Now, why would they do that?

[1:33:06] Well, because they make money.

[1:33:09] They get a profit. It's very

[1:33:11] transparent, but it's amazing

[1:33:12] how gullible the general

[1:33:14] population is. Obviously, this

[1:33:16] is not their specialty. This is

[1:33:19] not what they think about. So

[1:33:21] they managed to convince

[1:33:22] at least a good chunk of the

[1:33:24] legislators that large scale

[1:33:26] solar is the way to go. People

[1:33:28] even tell me some, well, known

[1:33:29] academics who I will not name

[1:33:31] that. Oh, it only costs five or

[1:33:33] six cents per kilowatt hour

[1:33:34] to have large scale solar,

[1:33:36] whereas the solar you have put

[1:33:39] in is

[1:33:40] like fifteen cents. I said,

[1:33:42] okay, why don't you start

[1:33:43] selling me that power

[1:33:45] at four or five cents? And then

[1:33:47] there was no need for me

[1:33:48] to put in solar. So why does it

[1:33:50] cost four to five and I pay you

[1:33:51] 45? I mean, what's going

[1:33:53] on here? That's the part of the

[1:33:55] equation they delete and then

[1:33:56] they immediately leave the room

[1:33:58] or change the topic. They know

[1:33:59] it. They know it. I mean, it's

[1:34:01] not that they're that unable

[1:34:03] to grasp common sense. So what

[1:34:05] they have done now,

[1:34:07] there was a podcast by one of

[1:34:09] the professors just a few weeks

[1:34:11] ago that another professor

[1:34:13] friend of his from Princeton

[1:34:15] put up on twitter. I listened

[1:34:16] to it much as I didn't want to,

[1:34:18] just to see what was the new

[1:34:20] manufacturing of lies now. And

[1:34:21] basically they said, oh, it's

[1:34:23] inequitable because the poor

[1:34:24] are subsidizing the rich. And

[1:34:26] second, it is inefficient,

[1:34:28] it costs more. So it is both

[1:34:29] inefficient and inequitable.

[1:34:31] How bad can it possibly be?

[1:34:33] And you still want to do it?

[1:34:34] It's like a snake

[1:34:36] in the grass. Okay, so let's

[1:34:38] just briefly examine this cost

[1:34:40] shift. And I want to show

[1:34:42] something very basic that they

[1:34:44] have omitted in their math.

[1:34:46] So, look at the middle bar,

[1:34:49] is the average customer's usage

[1:34:51] from PG and E. As of today,

[1:34:54] 540 kilowatt hours per month.

[1:34:57] And then look

[1:34:59] at the left bar, 980. Solar

[1:35:02] customers,

[1:35:05] before they installed solar,

[1:35:07] used a lot more power than the

[1:35:09] average customer. They had high

[1:35:11] bills, that's why they put

[1:35:13] in solar. And that goes back

[1:35:15] years and years and decades. I

[1:35:17] have my data,

[1:35:18] I don't have data on other

[1:35:20] people's pre solar use. Every

[1:35:22] utility has it,

[1:35:24] but I can't get it. So I just

[1:35:26] use my own data. So my pre

[1:35:27] solar data,

[1:35:28] even though I have lived

[1:35:30] in the house since 1989 in

[1:35:32] Danville, I don't have that

[1:35:33] digital data,

[1:35:35] so I have it only from 2008

[1:35:37] onwards. But the house hasn't

[1:35:39] changed much. It's the same

[1:35:41] house. So 980 for the years

[1:35:43] from zero eight to 19 was my

[1:35:44] kilowatt hour usage, almost

[1:35:46] twice as much as the average

[1:35:48] person. So I was paying twice

[1:35:49] as much for the grid. And now,

[1:35:51] of course, I'm paying 108.

[1:35:53] That's the average

[1:35:55] over the last few years,

[1:35:56] a lot less. So what they do is

[1:35:58] they don't show this bar

[1:36:00] on the left,

[1:36:02] they just show this. And they

[1:36:04] say, you're robbing the poor

[1:36:06] to pay the rich kind

[1:36:08] of argument. Well, but for many

[1:36:10] years it was the other way. So

[1:36:13] if you're going

[1:36:16] to compute my cost shift, look

[1:36:18] at the whole history,

[1:36:20] the life cycle of me and my

[1:36:22] data is just one customer,

[1:36:24] there are many others. Just add

[1:36:26] it all up and this is what you

[1:36:28] get then. So I added up the

[1:36:30] life cycle cost shift and my

[1:36:32] lifetime overusage is that

[1:36:34] number, 37,397 kilowatt hours.

[1:36:35] I have paid more

[1:36:37] for the grid,

[1:36:39] as have most solar customers,

[1:36:41] when you look

[1:36:43] at the longer time horizon. So

[1:36:45] saying that we use less and

[1:36:47] therefore are creating a cost

[1:36:49] shift is only half

[1:36:52] of the story. It's very clever.

[1:36:54] And I've raised this and

[1:36:56] they're saying, we don't

[1:36:58] understand what you're saying.

[1:37:00] You're speaking Latin and

[1:37:01] Greek now, which is one way

[1:37:04] to just say, hey,

[1:37:07] just go away. Unfortunately,

[1:37:08] the utilities and their

[1:37:10] consultants convinced the CPUC

[1:37:13] that net energy metering should

[1:37:15] be killed because it was

[1:37:17] subsidizing the rich

[1:37:19] at the expense of the poor,

[1:37:20] and it should be replaced

[1:37:21] with net billing. So what they

[1:37:23] did was they said, we're going

[1:37:24] to cut your compensation

[1:37:25] for exports by 75%, which is

[1:37:26] huge, because export

[1:37:27] compensation accounts for half

[1:37:28] of the savings that a solar

[1:37:30] customer gets. So you cut half

[1:37:31] of that by 75%,

[1:37:33] you have really made it

[1:37:35] for new solar customers. It

[1:37:36] doesn't make much sense. It's

[1:37:38] so expensive now. Only the

[1:37:40] Veldi will now put in solar,

[1:37:41] and they are,

[1:37:42] they are putting it in. But

[1:37:44] solar installations have

[1:37:46] dropped by 80% in the six

[1:37:47] months following this

[1:37:49] development

[1:37:50] of the net billing tariff.

[1:37:52] They have doubled the payback

[1:37:54] period. So the solar industry

[1:37:56] is in a crisis. But it's not

[1:37:58] just the industry that is

[1:38:00] in a crisis, it is the

[1:38:01] customers who no longer have

[1:38:03] that option available

[1:38:04] to them,

[1:38:06] unless they're willing to put

[1:38:08] in batteries. And batteries are

[1:38:09] still expensive,

[1:38:11] and you would have to put

[1:38:12] in two or three batteries

[1:38:14] really

[1:38:15] to do what they're asking you

[1:38:17] to do. I have one battery, and

[1:38:18] actually, interestingly enough,

[1:38:20] I put it in just because I'm

[1:38:21] in this business that wanted

[1:38:23] to see what the battery does.

[1:38:25] And I have the time

[1:38:27] of use rate that I showed you,

[1:38:28] the three period rate I use the

[1:38:30] battery for arbitrage against

[1:38:32] during the high peak period

[1:38:34] price. I don't buy power

[1:38:36] from PG and e. Solar panels are

[1:38:37] not generating much because the

[1:38:39] sun's going down. It's

[1:38:40] from four to 09:00 p.m. the

[1:38:42] battery is fully charged and it

[1:38:43] begins to supply the house

[1:38:45] with power. That works till

[1:38:46] about 07:00 p.m.

[1:38:48] on hot summer days like this.

[1:38:49] But on cool spring days or

[1:38:51] winter days,

[1:38:52] the battery powers the house

[1:38:54] until almost midnight. So the

[1:38:55] battery, for me,

[1:38:57] was an experiment. Most people

[1:38:58] didn't put in batteries

[1:38:59] until this rule change

[1:39:01] occurred. But what I didn't

[1:39:03] know what the battery can do,

[1:39:04] which proved

[1:39:06] to be the real benefit, was

[1:39:07] during outages. And I've had

[1:39:09] more than two dozen outages

[1:39:10] since June of 2021, even though

[1:39:12] I live in an area where

[1:39:13] underground wiring is the norm.

[1:39:15] And even though those days were

[1:39:17] mild weather days,

[1:39:19] they were not hot days

[1:39:21] like today,

[1:39:23] they were not psps days.

[1:39:24] Underground wiring is

[1:39:26] in terrible shape and keeps

[1:39:28] on having mechanical problems.

[1:39:29] After 50 years,

[1:39:31] if you don't maintain a car,

[1:39:32] your car probably would have

[1:39:34] died 30 years prior. Well, the

[1:39:35] wiring has survived,

[1:39:37] but now it's beginning

[1:39:38] to die. And so the battery

[1:39:39] kicks

[1:39:41] in and keeps the lights going.

[1:39:42] It keeps the refrigerators

[1:39:44] going. The food is safe,

[1:39:45] of course. The air conditioner

[1:39:47] cannot run,

[1:39:49] and I can't charge my car,

[1:39:50] but the basic necessities. So

[1:39:52] the batteries are definitely a

[1:39:53] good option,

[1:39:55] but they're still expensive,

[1:39:56] so that's what the PUC did.

[1:39:58] They had a very smug look

[1:39:59] on their face. They said,

[1:40:01] everyone's now going

[1:40:03] to buy solar and put batteries,

[1:40:04] and that'd be good

[1:40:06] for the grid. Well, 80% sales

[1:40:07] drop tells us that not everyone

[1:40:08] bought that story. So expensive

[1:40:10] to install it. So why would

[1:40:11] they do something like this

[1:40:13] in a state that's supposed to

[1:40:14] promote electrification and

[1:40:16] renewable energy? Actually,

[1:40:18] what was amazing

[1:40:20] to me is this was met

[1:40:21] with a lot of opposition

[1:40:22] by many well known people,

[1:40:24] including from Hollywood. The

[1:40:25] guy who played the incredible

[1:40:27] Hulk, I forget his name. He was

[1:40:28] active on Twitter

[1:40:30] on this issue. And

[1:40:32] Schwarzenegger wrote an op ed

[1:40:34] in the New York Times

[1:40:36] lambasting this proposal. The

[1:40:37] PUC modified certain elements

[1:40:39] of it, but still approved it

[1:40:41] unanimously. Now, when an

[1:40:43] agency takes decisions

[1:40:44] unanimously,

[1:40:47] and that was the first of many

[1:40:48] decisions they would make, all

[1:40:50] of their rate increases have

[1:40:52] been approved unanimously. So

[1:40:53] then you begin to suspect that

[1:40:55] there is something suspicious

[1:40:57] here,

[1:40:59] that they are following orders.

[1:41:01] It's

[1:41:02] like a totalitarian state.

[1:41:04] That's very unfortunate,

[1:41:05] because it used to not be this

[1:41:07] way four decades ago. Okay, so

[1:41:08] that was the first wrong turn.

[1:41:09] Now comes the second wrong

[1:41:11] turn. The shell game between

[1:41:13] fixed and variable charges. So

[1:41:15] we did not have a fixed charge

[1:41:17] for two

[1:41:19] of these three utilities. It

[1:41:20] was literally zero. And the

[1:41:22] third one, SCE, had a fixed

[1:41:24] charge

[1:41:26] of mean almost nominal, because

[1:41:27] tern kept opposing them. The

[1:41:29] POC listening

[1:41:31] to turn and others said, okay,

[1:41:33] no fixed charge. New law is

[1:41:35] passed, Ab 205, and we'll come

[1:41:37] more into that. And what it did

[1:41:38] was it said, you're going

[1:41:39] to lower the energy charge,

[1:41:41] the variable charge, so that

[1:41:42] electricity will become more

[1:41:44] affordable and you will tempt

[1:41:46] people. Oh, the price just

[1:41:47] dropped. So you can buy more

[1:41:48] food or more gasoline or more

[1:41:50] electricity. Now is a sale.

[1:41:51] But the sale had a catch. You

[1:41:53] had to pay for the sale. Have

[1:41:55] you ever heard of that? So you

[1:41:56] had to pay a fixed charge,

[1:41:58] the subscription fee,

[1:41:59] to be eligible

[1:42:01] to get the discount. And that's

[1:42:02] how it was sold and marketed.

[1:42:05] Why was the fixed charge

[1:42:07] introduced? Why was there a

[1:42:09] need to do that? Why was it not

[1:42:11] a genuine sale? Because the

[1:42:13] utilities would have lost

[1:42:15] revenue. But God forbid, how

[1:42:16] can you deny them the food that

[1:42:18] they subsist on,

[1:42:20] which is money

[1:42:22] from customers? And so they had

[1:42:23] to bring in the fixed charge.

[1:42:25] It was called revenue neutral,

[1:42:27] which is jargon for saying the

[1:42:28] utility will always get the

[1:42:30] money it needs, regardless

[1:42:32] of what the red design is. It

[1:42:35] is like the law

[1:42:36] of conservation of energy

[1:42:38] in physics, which is the law

[1:42:39] of conservation of revenue

[1:42:41] in regulation. We knew it was

[1:42:42] coming, and sure enough, it

[1:42:43] came,

[1:42:45] but turn would have opposed it.

[1:42:46] They decided to make the fixed

[1:42:48] charge a function of income.

[1:42:49] And that was an epiphany that I

[1:42:50] don't know

[1:42:52] at what point occurred, but

[1:42:53] when I first saw that paper

[1:42:55] come out

[1:42:57] from the academics pushing

[1:42:59] for this,

[1:43:00] I thought it was going to die.

[1:43:02] But let me do just some

[1:43:06] backdrop here. So I personally

[1:43:07] support fixed charges,

[1:43:10] but they should be based

[1:43:11] on some reasonable concept

[1:43:13] of metering cost, billing cost,

[1:43:15] and customer care. That's how

[1:43:16] it is done throughout the

[1:43:18] United States. And I actually

[1:43:19] was involved

[1:43:21] in supporting a fixed charge

[1:43:23] of $3 and $10 for these three

[1:43:25] investor owned utilities. I was

[1:43:26] their expert witness.

[1:43:28] But the PUC would think of

[1:43:30] approving it and then turn

[1:43:31] would push back so it wouldn't

[1:43:33] get approved. And finally

[1:43:35] thought,

[1:43:37] it'll approve just a dollar

[1:43:38] three, fixed charge. Well, the

[1:43:40] general counsel of the PUC said

[1:43:42] is unconstitutional. I said,

[1:43:43] what do you mean it's

[1:43:45] unconstitutional? The

[1:43:47] constitution gets

[1:43:48] into such details

[1:43:50] on electric rates. And

[1:43:52] apparently it did. I never

[1:43:53] checked it,

[1:43:55] but they were required to go

[1:44:02] to the legislature to get them

[1:44:04] to change it. So they went and

[1:44:05] they invited me. I went out

[1:44:07] to Fresno. I'm sitting there

[1:44:08] at a community college in

[1:44:10] Fresno, and right next

[1:44:11] to me is the head

[1:44:12] of the energy division

[1:44:14] of the PUC. At the time we had

[1:44:16] a long debate. 100 customers

[1:44:17] were there. They lined up.

[1:44:18] They had their views,

[1:44:19] they had their objectives,

[1:44:21] but it was a caucus

[1:44:23] of the state assembly,

[1:44:24] and they passed it. And then

[1:44:26] the full assembly approved it,

[1:44:28] $10 a month fixed charge.

[1:44:30] But as I said,

[1:44:32] the POC still wouldn't approve

[1:44:34] it,

[1:44:35] because ultimately the PUC has

[1:44:37] to approve it. Even if the law

[1:44:39] says you can do it, it doesn't

[1:44:40] become reality unless the PUC

[1:44:42] does it,

[1:44:43] because turn kept objecting.

[1:44:45] Fast forward to 2017. The PUC

[1:44:46] held a workshop on rate design.

[1:44:48] A suggestion was made

[1:44:50] to drop energy prices down

[1:44:52] to the marginal cost

[1:44:53] of energy,

[1:44:55] which would be ten or $0.11,

[1:44:57] economists say. And you've

[1:44:59] heard this, I'm sure, from 100

[1:45:00] other economists,

[1:45:02] that the most efficient way

[1:45:03] to allocate scarce resources

[1:45:05] to meet the infinite needs

[1:45:07] of human beings is

[1:45:08] to price everything

[1:45:10] at marginal cost. So the same

[1:45:11] proposal was made here. Well,

[1:45:13] but the price

[1:45:14] around that time was around

[1:45:16] thirty five cents a kilowatt

[1:45:17] hour. And if you drop it down

[1:45:19] to ten, there would be a

[1:45:20] massive revenue deficiency.

[1:45:22] They would go bankrupt. And so

[1:45:24] they said,

[1:45:25] what we need is a fixed charge.

[1:45:27] And I was on a panel where the

[1:45:29] fixed charge was debated,

[1:45:31] and I said, this fixed charge

[1:45:33] would be really high because

[1:45:35] you're looking

[1:45:38] at the difference between

[1:45:41] $0.30, let's say, and $0.10.

[1:45:43] So there's a 20 cent revenue

[1:45:45] deficiency. The fixed charge

[1:45:47] would be enormous. The workshop

[1:45:49] ended inconclusively. And then

[1:45:50] 2019. The POC invited me

[1:45:52] to come and talk about

[1:45:54] electrification and rate

[1:45:57] design. So I went,

[1:45:59] I thought we were going

[1:46:01] to talk

[1:46:03] about electric cars. I mean,

[1:46:05] that's what I thought was the

[1:46:07] issue, because there,

[1:46:09] that person who invited me,

[1:46:11] who was still at the PUC, was

[1:46:13] with a conference

[1:46:15] on electrification of cars

[1:46:17] with me in Los Angeles two

[1:46:19] months ago. So I go

[1:46:20] in and suddenly, lo and behold,

[1:46:22] it turns out they want me

[1:46:24] to chat about heat pumps. And I

[1:46:26] was not prepared for that. So I

[1:46:28] said, do you have anything I

[1:46:30] can react to? And they said,

[1:46:31] no, you're the expert. You tell

[1:46:33] us. I said, you know,

[1:46:35] I have done no thinking

[1:46:36] on this. Well, just start

[1:46:38] talking. Okay. So I said,

[1:46:40] lower electric rates. They're

[1:46:42] too expensive. They said,

[1:46:44] we can't do it. I said,

[1:46:46] raise gas rates,

[1:46:47] we can't do it. I said,

[1:46:49] provide rebates

[1:46:51] on heat pumps. Oh, that's not

[1:46:53] for us to do. Okay, put a tax

[1:46:54] on gas water heaters and gas

[1:46:56] furnaces. We can't do taxes.

[1:46:57] Ban the installation

[1:46:59] of gas equipment. Fine. And

[1:47:01] arrested contractors who

[1:47:03] installed gas equipment they

[1:47:04] started laughing. I said,

[1:47:06] you asked me to brainstorm, and

[1:47:08] that's all I'm coming up with.

[1:47:10] They said, we can't do most

[1:47:12] of what you're saying. Thank

[1:47:13] them. Left the room. I'd taken

[1:47:15] two junior people with me

[1:47:17] for the excitement, but it

[1:47:18] became more exciting than they

[1:47:20] had ever realized.

[1:47:22] Afterwards, one of them said,

[1:47:24] is this how they make their

[1:47:27] decisions? I said,

[1:47:29] you just got an inside view.

[1:47:31] Okay, then in 2021, this group

[1:47:32] called Next ten,

[1:47:34] they published a paper authored

[1:47:35] by three academics at Cal, and

[1:47:37] they decided to make the fixed

[1:47:38] charge a function of income.

[1:47:40] And this is what the fixed

[1:47:41] charge would have looked like.

[1:47:43] The green line fixed charge

[1:47:44] would have been close to $175 a

[1:47:46] month if you were above a

[1:47:48] certain income threshold. Can

[1:47:49] you imagine? I mean,

[1:47:51] these values defy imagination.

[1:47:52] And so ab 205 suddenly appears

[1:47:54] out of nowhere, and nobody

[1:47:55] today, and I'm curious if any

[1:47:57] of you know who authored that

[1:47:58] paragraph. Nobody is rising

[1:48:00] to the occasion. You would

[1:48:02] think they would be proud

[1:48:04] of what they did, right?

[1:48:05] But they have fingers

[1:48:07] on their lip like

[1:48:08] in a catholic school. Nobody

[1:48:10] will betray the name of that

[1:48:11] individual because that

[1:48:13] individual may have an issue

[1:48:15] starting their car, turning the

[1:48:16] key might become a challenge

[1:48:18] for them. You know what I mean?

[1:48:20] So it said, the commission.

[1:48:22] The commission may authorize

[1:48:23] fixed charges. Didn't say

[1:48:25] shell. It didn't say would. It

[1:48:27] didn't mandate. It just said

[1:48:29] May. But suddenly that May was

[1:48:31] taken to be shell. It always

[1:48:33] is. It always is. And it was

[1:48:35] like the height of duplicity.

[1:48:38] There's another world,

[1:48:39] but I can't find it. Okay, so

[1:48:41] the CPUC forced the IGFC,

[1:48:46] the income graduate,

[1:48:48] into an ongoing proceeding

[1:48:52] on demand flexibility. Now,

[1:48:56] demand flexibility is about

[1:48:58] having time varying rates.

[1:49:00] Fixed charge is the polar

[1:49:02] opposite

[1:49:04] of a time varying rate.

[1:49:06] But you can count upon the PUC

[1:49:08] to bend the rules so that even

[1:49:10] a beef looks

[1:49:12] like a vegetarian steak.

[1:49:14] Okay. Several parties submitted

[1:49:16] their proposals on April 7,

[1:49:18] which was good Friday

[1:49:21] of last year. Turn, which had

[1:49:23] always opposed a fixed charge,

[1:49:25] suddenly came out swinging

[1:49:26] in full support. Why? Because

[1:49:29] their customers would see lower

[1:49:32] bills. Because the fixed charge

[1:49:34] was going to be really low

[1:49:36] for them, and they would still

[1:49:38] get the same volumetric charge

[1:49:41] reduction. Teamed up

[1:49:43] with an environmental group,

[1:49:45] NRDC, which had also always

[1:49:47] opposed fixed charges. I was

[1:49:49] dumbfounded. I said, you know,

[1:49:51] this is beyond my abilities.

[1:49:54] This is where the Matt Damon

[1:49:56] angle comes in. Somebody has

[1:49:59] entered the room that has

[1:50:04] suddenly cast a shadow

[1:50:06] on everything I learned about

[1:50:08] raid design and how agencies

[1:50:10] work. To this day,

[1:50:12] I can't totally figure it out.

[1:50:14] Okay. The ious submitted a

[1:50:16] testimony. I'm going

[1:50:19] to speed up. There are details

[1:50:20] here. I think this deck can be

[1:50:22] shared

[1:50:24] with the others afterwards.

[1:50:25] Right. Okay, so this was,

[1:50:28] it went

[1:50:30] through some gyrations. This

[1:50:31] was their original proposal.

[1:50:33] Looking at PG and E. It would

[1:50:35] have been $92 if you were not a

[1:50:37] care customer or not a Fara

[1:50:38] customer, hardworking,

[1:50:40] middle income couple. All

[1:50:41] of those would fall

[1:50:42] in that fourth category, and

[1:50:43] suddenly they would be paying

[1:50:44] $92 a month extra. They said,

[1:50:46] this will promote

[1:50:47] electrification,

[1:50:48] but as I'm showing here,

[1:50:49] it won't. It's a shell game.

[1:50:50] So you think you're ahead

[1:50:51] because your energy price went

[1:50:52] down. Oh, but suddenly every

[1:50:53] month they're taking a fixed

[1:50:54] charge out

[1:50:55] of your same pocket. I mean,

[1:50:56] you'd have

[1:50:57] to be not paying attention,

[1:50:58] but after three months,

[1:50:59] everybody will figure it out.

[1:51:00] So they were hoping the

[1:51:01] swindling game somehow will not

[1:51:02] be picked up,

[1:51:03] and everybody would say, oh,

[1:51:04] yeah, the fixed charge is

[1:51:05] like a price

[1:51:06] for my citizenship of the

[1:51:07] United States, act

[1:51:08] of patriotic fervor.

[1:51:10] >> The fixed charge would be

[1:51:12] applied to everyone regardless

[1:51:14] if you were

[1:51:15] in a CCA or not.

[1:51:17] >> Regardless

[1:51:18] of which territory you were in

[1:51:20] and regardless whether you were

[1:51:22] CAiR or Fara.

[1:51:23] But it would vary by income.

[1:51:25] So that's what they have done

[1:51:27] now. And I guess the new

[1:51:29] charge, you probably know. So

[1:51:31] the utilities started

[1:51:32] to lower their numbers, and

[1:51:34] what ultimately got approved

[1:51:37] was this proposal where they

[1:51:38] created three tiers. The first

[1:51:40] tier is care,

[1:51:42] really low income. Your fixed

[1:51:44] charge is only $6. And if

[1:51:47] you're sort of just

[1:51:50] above that, but still under,

[1:51:52] you know, under $50,000, let's

[1:51:54] say, to pick a number,

[1:51:56] it'll be $12, it's double the

[1:51:59] $6. And if you're everyone else

[1:52:01] making $60,000 a year or more,

[1:52:02] you're going to pay the $24.

[1:52:04] And where did they get the

[1:52:06] number? It's not based

[1:52:08] on cost, it's based

[1:52:10] on a cheat sheet of the Smud

[1:52:11] website. They just copied the

[1:52:14] smud number. And what I said

[1:52:15] to them was, if you're going

[1:52:17] to copy Smud's fixed charge,

[1:52:18] also copy their energy charge,

[1:52:20] which is, you know,

[1:52:22] don't just do cut and paste

[1:52:24] of half the text, you have

[1:52:26] to copy the entire text. You

[1:52:28] know,

[1:52:29] they should be embarrassed.

[1:52:32] Just copying smuts number was

[1:52:33] the most idiotic thing,

[1:52:35] honestly, in raid design,

[1:52:37] that I've ever seen. Three

[1:52:38] large utilities, copying a

[1:52:40] small utility's homework

[1:52:41] assignment and turning it in,

[1:52:43] and the commission saying, yes,

[1:52:44] you passed. That was the part

[1:52:46] that really hurt. I mean, how

[1:52:48] could the commission not see

[1:52:49] what was going on? I'm sure

[1:52:51] they did. And the larger

[1:52:52] utilities wanted to say,

[1:52:54] we're only going

[1:52:56] to charge what Smud does

[1:52:58] because everyone knows that

[1:53:00] Smud has great rates. So

[1:53:01] they're, like you said,

[1:53:03] they're only looking

[1:53:05] at half the equation,

[1:53:07] but they're trying to say, oh,

[1:53:08] well,

[1:53:10] we're not charging very much

[1:53:11] because, look,

[1:53:13] we're doing what smud does,

[1:53:14] and everyone loves smud. I must

[1:53:16] admit, Smud should have

[1:53:18] objected. I mean, but I don't

[1:53:19] think officially they have. Or

[1:53:20] maybe they were happy just

[1:53:21] to have something copied. They

[1:53:23] were going to charge two

[1:53:24] thousand five hundred dollars

[1:53:25] to two hundred dollars. It's

[1:53:27] like, oh, now we're only

[1:53:28] charging you this much. They

[1:53:30] said,

[1:53:31] we have made a huge compromise.

[1:53:33] We have dropped it down

[1:53:34] from ninety two dollars

[1:53:36] to twenty four dollars. And I

[1:53:37] was so vocal on this,

[1:53:39] they kept reaching to me

[1:53:40] through back channels. You

[1:53:41] should be happy now. It's just

[1:53:43] 24. It's not the 92. Yes, as we

[1:53:44] hear what you're saying. I

[1:53:46] said, where did you get the 24

[1:53:47] from? You just copied it

[1:53:48] from smudge. And I said,

[1:53:50] I'd be okay if it was $15 or

[1:53:52] something small. You can't go

[1:53:53] from zero to 24 suddenly

[1:53:55] in one fell swoop. So here is

[1:53:56] the part that's more worrisome.

[1:53:57] The 24 has the appearance

[1:53:59] of looking halfway decent,

[1:54:01] down from 92. But the PUC has

[1:54:03] left the door open

[1:54:05] to raising the fixed charge in

[1:54:06] subsequent rate design cases

[1:54:08] and also to introducing more

[1:54:09] income tiers. This is what they

[1:54:11] say. The camel has got his nose

[1:54:12] under the tent. And once the

[1:54:13] camel is in there

[1:54:15] through the nose. I've been

[1:54:16] to Saudi Arabia many times as a

[1:54:18] consultant. Okay, so

[1:54:19] unanimously approved, four

[1:54:21] to zero. One commissioner

[1:54:23] recusing himself because he was

[1:54:24] the head of the PAO,

[1:54:26] the public advocates office.

[1:54:28] And this unanimous vote came

[1:54:30] despite several cautionary

[1:54:31] editorials in the LA Times, the

[1:54:33] Chronicle and the Bee and many

[1:54:36] other national publications.

[1:54:37] And many cautionary letters

[1:54:39] were sent

[1:54:41] by state assembly members,

[1:54:43] state senators, and even

[1:54:45] federal congressional

[1:54:48] representatives to Alice

[1:54:50] Reynolds, the president

[1:54:52] of the PUC. It ignored, I mean,

[1:54:54] just defies the description

[1:54:56] of decency. This charge is

[1:54:58] going to be the second highest

[1:55:00] in the country. So we're going

[1:55:02] from zero, which is the lowest

[1:55:04] in the country,

[1:55:06] to suddenly the second highest

[1:55:09] after a utility in Mississippi

[1:55:11] that is not known

[1:55:13] for doing anything

[1:55:15] for energy efficiencies. So

[1:55:18] very, very strange,

[1:55:21] embarrassing,

[1:55:23] and they'd never show you this

[1:55:26] chart, but that's the day they

[1:55:30] never benchmarked anything that

[1:55:33] they were doing. So

[1:55:36] in closing, what I will do is

[1:55:39] I'll say if the intent was

[1:55:41] really

[1:55:43] to promote electrification,

[1:55:45] they took a wrong turn. They

[1:55:47] went down this way. And if

[1:55:49] somebody was to ask me,

[1:55:52] what should they have done?

[1:55:53] And maybe they will come

[1:55:55] to their senses and go

[1:55:57] in this direction,

[1:55:58] even though I doubt it. But

[1:56:01] at least I felt compelled

[1:56:02] to add a couple

[1:56:04] of slides here. The first thing

[1:56:05] the PUC should do is cap the

[1:56:07] growth of electric rates

[1:56:09] to the rate

[1:56:11] of inflation long overdue. We

[1:56:13] can't double it every eight

[1:56:15] years. Find ways

[1:56:16] to lower cost, and thus the

[1:56:18] rate level why are PG and E's

[1:56:20] rates three times the national

[1:56:22] average? Offer low income

[1:56:24] customers additional rebates if

[1:56:25] you want to really encourage

[1:56:27] electrification and focus

[1:56:29] on the low income segment.

[1:56:31] But the challenge that I have

[1:56:33] with the low income segment is

[1:56:34] their priorities are food,

[1:56:36] clothing, shelter,

[1:56:38] transportation,

[1:56:39] and education. Those are their

[1:56:41] five most important things.

[1:56:42] Energy is important and they

[1:56:44] certainly want affordability.

[1:56:46] But they're not going

[1:56:47] to buy a heat pump,

[1:56:49] which is so expensive. Many

[1:56:50] of them rent a house. They

[1:56:52] don't even own the house and

[1:56:54] they don't even own a car. So

[1:56:56] how are you going

[1:56:57] to help them?

[1:56:59] By subsidizing the price

[1:57:00] of an EV. So the best way

[1:57:02] to do it, in my opinion, is

[1:57:04] to have a modest fixed charge.

[1:57:06] Yes, we agree fixed charge is

[1:57:08] needed. Do it gradually, ten

[1:57:10] to $15 is reasonable. And then

[1:57:11] set the energy price equal

[1:57:13] to marginal cost. Let it vary

[1:57:15] by time of use, but only apply

[1:57:17] this marginal cost rate

[1:57:19] to new purchases, not

[1:57:21] to your existing. This is the

[1:57:23] second time I've done it today.

[1:57:26] I'm sorry. Spill the water.

[1:57:29] It's not big. Basically focus

[1:57:31] on the new decision making that

[1:57:33] customers have and they're

[1:57:35] in the market

[1:57:37] for a heat pump. Say, okay,

[1:57:40] we have AI technology today.

[1:57:43] We have smart meters. We will

[1:57:45] know how much energy the heat

[1:57:46] pump is using and this marginal

[1:57:48] cost rate of $0.10 will apply

[1:57:50] to your heat pump. That will

[1:57:53] suddenly boost the sales of

[1:57:55] heat pumps and do the same

[1:57:57] thing for the electric car. So

[1:57:59] apply it at the margin, and

[1:58:01] that way the utilities don't

[1:58:03] lose revenue. They're still

[1:58:05] getting their current revenue.

[1:58:07] You don't have

[1:58:09] to do the shell game. They are

[1:58:11] still made whole and

[1:58:13] at the margin yourself,

[1:58:14] lowering the price to reflect

[1:58:16] what you're saying is the true

[1:58:18] additional energy cost and

[1:58:20] everyone's happy. And

[1:58:22] by the way,

[1:58:24] I didn't just make this up.

[1:58:25] This is already being done

[1:58:27] somewhere. It's in the state

[1:58:28] of Georgia

[1:58:29] for C and I customers,

[1:58:31] commercial and industrial

[1:58:32] customers. Georgia Power has

[1:58:33] wanted

[1:58:35] to encourage electrification

[1:58:36] since the nineties and they

[1:58:38] have had a rate which applies

[1:58:40] at the margin, and it is the

[1:58:42] marginal cost and it's really

[1:58:44] low. And when I first saw that

[1:58:45] rate, the person who developed

[1:58:47] it had come from South

[1:58:50] Africa. He was well versed

[1:58:51] in all of these issues because

[1:58:53] they had done it for their gold

[1:58:56] mines and diamond mines and

[1:58:57] whatever other mines they have.

[1:58:59] They have a lot of big

[1:59:01] industrial load and they offer

[1:59:03] this rate so that they can

[1:59:04] electrify. And so I proposed

[1:59:06] this. I said to Georgia

[1:59:08] Power, I said,

[1:59:10] why don't you apply this rate

[1:59:12] to your residential and

[1:59:14] commercial customers. Why only

[1:59:16] for the big commercial

[1:59:17] industrial customers. And I

[1:59:19] said,

[1:59:21] that way you'll promote a lot

[1:59:22] of smart energy use. But of

[1:59:24] course they didn't want the

[1:59:25] residential and commercial

[1:59:27] customers to use electricity

[1:59:29] the way they wanted to. And I

[1:59:30] said, why is that? They said,

[1:59:32] you don't understand. You will

[1:59:34] never understand. We have

[1:59:35] something here called southern

[1:59:37] comfort. Okay. So I stopped

[1:59:39] pushing, but the idea stayed

[1:59:41] with me and I thought this

[1:59:43] might be the time

[1:59:44] to revisit it and introduce it.

[1:59:46] So I'm pushing this. I'm going

[1:59:47] to try to get it in the

[1:59:49] newspapers and other channels

[1:59:51] because this accomplishes the

[1:59:52] goal of electrification

[1:59:54] without creating the mess

[1:59:56] of a fixed charge that's based

[1:59:57] on income. I'm sure they will

[1:59:59] not do it, but if there's

[2:00:01] enough public pressure, maybe

[2:00:03] some legislators might get

[2:00:05] interested and maybe some bill

[2:00:06] might pass. So this is my

[2:00:08] closing slide, and I hope you

[2:00:10] found it interesting. Any

[2:00:16] surprises? Any comments?

[2:00:25] >> I appreciate the details

[2:00:26] of how badly were being treated

[2:00:28] by PG and E. We all know we're

[2:00:29] being treated badly, but now,

[2:00:31] we know the details.

[2:00:33] >> It's amazing how they get

[2:00:34] away with these kinds.

[2:00:37] >> I don't get it.

[2:00:39] >> I mean,

[2:00:41] at some point I did a post on

[2:00:43] LinkedIn, I said,

[2:00:45] there's a dirty Harry here. I

[2:00:46] don't know who it is,

[2:00:48] but the dirty Harry is killing

[2:00:49] legislation

[2:00:50] to stop the fixed charge. It's

[2:00:52] killing legislation

[2:00:53] to change the solar rules. And

[2:00:55] so I was told there is a person

[2:00:57] x whose name,

[2:00:58] thankfully I forget who,

[2:01:00] is walking the halls,

[2:01:01] and he is their broker. And the

[2:01:03] broker,

[2:01:06] I don't know what tactics he

[2:01:08] uses, but when one

[2:01:10] of the bills AB 1999 was set

[2:01:12] to be voted upon by the Energy

[2:01:14] and Utilities committee,

[2:01:17] and that would have put a cap

[2:01:19] of dollar 25

[2:01:20] on this and said, it'll be no

[2:01:22] higher and even this will be

[2:01:24] revisited after three years.

[2:01:26] The chair of that committee had

[2:01:28] been talked to and decided

[2:01:29] to not even put it

[2:01:31] on the agenda. So how can you

[2:01:34] vote on something that's not

[2:01:35] on the agenda? And so they

[2:01:37] couldn't take a vote. And it

[2:01:39] was so frustrating because so

[2:01:40] many

[2:01:42] of the legislators who are

[2:01:44] Democrats and also Republicans

[2:01:45] would have supported it. So how

[2:01:47] do you prevent an embarrassment

[2:01:48] from occurring where ultimately

[2:01:50] the governor will be forced

[2:01:52] to admit that in a democratic

[2:01:53] state the legislature

[2:01:55] overturned his wishes and then

[2:01:56] his chances for the White

[2:01:58] House would be reduced

[2:02:00] to negative, perhaps,

[2:02:02] if not zero. So just get it

[2:02:04] off the agenda. So they got it

[2:02:06] off the agenda, but the hue and

[2:02:08] cry was such that then it came

[2:02:09] back. It came back

[2:02:11] for a vote slightly modified,

[2:02:13] actually, quite a bit modified,

[2:02:15] and there was hope. But what

[2:02:16] they did was they didn't tell

[2:02:18] people that today the vote will

[2:02:20] be taken. And so only two

[2:02:22] people were there who voted

[2:02:24] for it, and they said,

[2:02:26] that's not enough. So it has

[2:02:28] died. I mean, these are

[2:02:30] shenanigans that I had no clue

[2:02:31] about. I mean,

[2:02:33] this is very clever

[2:02:35] manipulation

[2:02:38] of public opinion. So hard

[2:02:39] lesson here, right? I mean,

[2:02:42] it's sort of. We're dealing

[2:02:44] with a very tough. What should

[2:02:47] we call it? Environment. I

[2:02:49] mean,

[2:02:52] I don't know what else to.

[2:02:54] Political environment. I've

[2:02:55] never seen it this bad

[2:02:58] in any state of the union. So

[2:02:59] how could California be doing

[2:03:01] this?

[2:03:03] >> You mentioned earlier there

[2:03:05] hasn't been a movie

[2:03:07] about this, but there actually

[2:03:09] has been an investigative

[2:03:10] series about all this and the

[2:03:12] corruption and the tie

[2:03:13] to the governor,

[2:03:15] the broader issues.

[2:03:18] >> Well, the bailout. Remember

[2:03:20] the bailout?

[2:03:22] >> Yes.

[2:03:23] >> I mean, firepower, money,

[2:03:25] it's been out there. It's so

[2:03:27] ingrained. You know,

[2:03:29] when this series came out,

[2:03:31] I tried to share it and get

[2:03:33] people. I don't understand it.

[2:03:35] >> Would you share this

[2:03:36] with me? Would you be able

[2:03:38] to share that with me? The link

[2:03:40] that she has?

[2:03:42] >> I'm gonna check it out.

[2:03:43] When did it come out?

[2:03:45] >> The last most recent one

[2:03:47] because it was a series 2022.

[2:03:48] >> What's it called?

[2:03:50] >> Firepower, buddy.

[2:03:53] >> I can share the link

[2:03:55] to you.

[2:03:56] >> One where they looked.

[2:03:58] Recovery for your fires.

[2:04:00] >> Not used to your system.

[2:04:02] Sorry.

[2:04:03] >> So that's something else.

[2:04:05] Did it generate some opinions?

[2:04:07] >> Yeah. I mean, in my mind,

[2:04:09] because this is. This was put

[2:04:10] out prior

[2:04:12] to the governor's reelection,

[2:04:13] and I had hoped it would get

[2:04:15] some traction,

[2:04:16] and it didn't.

[2:04:18] >> That is amazing.

[2:04:20] >> I mean, it's sort

[2:04:21] of disappointing to see all

[2:04:23] of this happening in this

[2:04:25] state. I would expect this

[2:04:26] to happen in Missouri, you

[2:04:28] know, not to pick

[2:04:30] on any other state, but I have

[2:04:32] to pick on one. And so I could

[2:04:34] see it happening

[2:04:35] in the deep south, but here,

[2:04:37] it's just, I don't know what is

[2:04:39] being achieved. Who's better

[2:04:41] off? Power and money, you know,

[2:04:42] they always go together,

[2:04:44] don't they?

[2:04:46] >> At one time,

[2:04:47] had quite a public conversation

[2:04:49] with some PG and e official,

[2:04:52] so putting profit above

[2:04:53] maintenance. I'm an old public

[2:04:55] works guy. You know,

[2:04:57] we're going

[2:05:00] to pay our stakeholders

[2:05:01] before we take care

[2:05:02] of our equipment,

[2:05:03] which led and right now, I'm

[2:05:05] out of Nevada county, which is,

[2:05:06] by the way, if you don't know,

[2:05:08] this is the home of PG and E.

[2:05:10] That's where PG and e came

[2:05:11] from.

[2:05:13] >> The original.

[2:05:14] >> Came out of Nevada county.

[2:05:16] Congratulations. And right now.

[2:05:18] Right, right now,

[2:05:21] we've got a failed dam,

[2:05:22] a failed hydroelectric dam

[2:05:23] by PG and E, who did not do

[2:05:25] proper maintenance on

[2:05:27] Spalding Lake. And you have an

[2:05:28] entire county looking at

[2:05:30] potential water restrictions

[2:05:31] throughout the entire summer.

[2:05:33] Two counties. Two counties,

[2:05:35] yeah, that's right.

[2:05:37] With the failure

[2:05:39] to do proper maintenance at a

[2:05:40] hydroelectric facility.

[2:05:42] >> That's a recurring theme

[2:05:43] through every analysis I have

[2:05:45] read. And if you've seen the

[2:05:46] book California burning, I

[2:05:48] mean, actually,

[2:05:50] she did a great job,

[2:05:51] but still left out a lot. So I

[2:05:52] sent her a lot

[2:05:53] of material afterwards. She's

[2:05:55] not from California, right? I

[2:05:56] mean, she came

[2:05:57] from another state, so.

[2:05:58] But even she uncovered a lot.

[2:06:00] And what does the CEO of PG and

[2:06:01] E do when that book comes out?

[2:06:03] Is obviously, you know,

[2:06:04] a thorn in the side. She says,

[2:06:06] oh, I have bought 100 copies

[2:06:07] and distributed them to our

[2:06:09] management so we can learn what

[2:06:10] not to do.

[2:06:12] >> I had a PG and E public

[2:06:14] representative stand up at my

[2:06:16] council meeting and say that

[2:06:18] the new CEO is teaching them

[2:06:19] all to lead from their heart.

[2:06:21] My attorney thought I was going

[2:06:23] to throw up on the dice.

[2:06:24] >> It's amazing.

[2:06:26] >> We just all accept it.

[2:06:28] >> We also sitting here going,

[2:06:31] well, what can we do

[2:06:33] about it? It's just. That's the

[2:06:35] way it is. It's too bad. And so

[2:06:37] I guess the question we have, I

[2:06:38] think the only solution is a

[2:06:40] bypass. The only solution is a

[2:06:42] bypass of the POC by going

[2:06:45] through the legislature.

[2:06:46] You've got to get the dirty

[2:06:48] Harry out of it.

[2:06:50] >> CPUC is unregulated.

[2:06:52] >> It's sort of

[2:06:54] like limitless rate increases,

[2:06:56] no questions asked.

[2:06:57] Apparently, there's some rule

[2:07:00] that somebody told me,

[2:07:02] they'll give you 85%

[2:07:03] of whatever you ask. So you ask

[2:07:06] 125% to get the 85%. It's sort

[2:07:08] of like back to the dark ages

[2:07:09] of man, so to speak, where you

[2:07:12] had special interests and they

[2:07:14] had a code,

[2:07:18] and you were not let

[2:07:21] in unless you were part

[2:07:23] of that group. And regardless

[2:07:25] of what the public opinion was,

[2:07:27] the king, or whoever it was,

[2:07:28] the queen did whatever they

[2:07:30] wanted to do.

[2:07:32] But it was legitimized

[2:07:34] by some stamp,

[2:07:35] like some agency, the Public

[2:07:37] Utilities Commission, back in

[2:07:38] 2015. It was the last time, I

[2:07:40] think,

[2:07:42] I testified there. I was

[2:07:43] at a party, the night before,

[2:07:45] and I said to my host, I have

[2:07:47] to leave a bit early because I

[2:07:48] am testifying tomorrow. Where

[2:07:50] are you testifying? I said

[2:07:52] before, the California Public

[2:07:54] Utilities Commission. That's a

[2:07:56] rogue agency. What are you

[2:07:58] doing there? You lose your

[2:07:59] reputation just by appearing

[2:08:01] before them. I didn't even tell

[2:08:03] them on whose behalf I was

[2:08:04] testifying. Had I mentioned

[2:08:06] that,

[2:08:07] they would have kicked me out,

[2:08:09] probably right away.

[2:08:11] But I mean, these are very

[2:08:12] unfortunate situations which

[2:08:14] none of us really should be

[2:08:15] discussing, except that we

[2:08:17] can't avoid discussing them

[2:08:19] because they define our

[2:08:20] reality. I mean, ccas, one

[2:08:22] of the reasons they came into

[2:08:23] being was this reputational

[2:08:25] damage that utilities,

[2:08:26] actually, a while back, one

[2:08:28] of them hired me to investigate

[2:08:30] why CC's were being created.

[2:08:31] And I said, okay, I need

[2:08:33] to talk

[2:08:35] to the decision makers,

[2:08:37] the city governments, the

[2:08:39] counties, municipalities. No,

[2:08:41] we are not allowed. You can't

[2:08:42] talk to them because they had

[2:08:44] that legislative limit put

[2:08:46] on them. So I said,

[2:08:47] how am I supposed

[2:08:49] to get the data? Then they

[2:08:51] wanted me

[2:08:53] to forecast the growth

[2:08:55] of ccas. And I said,

[2:08:58] how can I forecast

[2:09:00] without data? That's why we

[2:09:01] hired you. Oh, okay. So I found

[2:09:02] a lot of data by reading.

[2:09:04] Actually, somehow I should have

[2:09:06] taken it that way.

[2:09:07] But the dumb part of me said,

[2:09:09] no, I have to do analysis.

[2:09:11] Otherwise I could have just

[2:09:13] said,

[2:09:15] here's what the experts said.

[2:09:17] Well, it turned

[2:09:19] out there was a lot of data

[2:09:20] in the public domain,

[2:09:22] which was newspaper articles,

[2:09:23] do master's theses written

[2:09:25] on the topic. They had

[2:09:27] interviewed the decision

[2:09:28] makers. So I compiled a list of

[2:09:30] factors that were leading

[2:09:31] people to become ccas. The

[2:09:33] first one was the high price

[2:09:34] of electricity. Second one was

[2:09:36] local content for the power.

[2:09:38] The third was green content

[2:09:40] for the power. And the fourth

[2:09:42] one was, oh, a messiah came

[2:09:43] to sell us on this idea as

[2:09:46] being an intellectually

[2:09:48] compelling thing to do. And the

[2:09:50] fifth one was, the neighboring

[2:09:53] community just did it. So I

[2:09:54] listed these factors. That was

[2:09:56] the best I could do. I'm sure

[2:09:57] they knew all of this anyway,

[2:09:58] so then one of them looked

[2:10:00] at me and said, you left out

[2:10:01] the most important factor. I

[2:10:03] said, what is that,

[2:10:05] anti utility sentiment? I said,

[2:10:07] I wasn't going to mention it,

[2:10:09] but since you mentioned it,

[2:10:11] yes. I mean, they know it.

[2:10:13] They know it. And I think

[2:10:14] forecasts are indicating 80%

[2:10:16] of California

[2:10:18] at some point will be ccas.

[2:10:19] So, you know, they brought it

[2:10:21] upon themselves. They did.

[2:10:22] >> But you'll continue

[2:10:24] to see rate increases to cover

[2:10:25] their operating costs while

[2:10:28] their markets shrink.

[2:10:30] >> That is correct.

[2:10:32] >> That's what we've been

[2:10:34] seeing. That's what we've been

[2:10:36] seeing is their markets reduce,

[2:10:39] the rates go.

[2:10:41] >> I mean, we were talking

[2:10:43] about the San Francisco

[2:10:44] Chronicle. I had to buy a copy

[2:10:46] the other day because there was

[2:10:47] a particular nice editorial

[2:10:48] in it. And I thought, okay,

[2:10:49] I'll buy a hard copy. I paid

[2:10:51] $3. First of all,

[2:10:52] it took me many stores

[2:10:54] to find one that sold it. Even

[2:10:56] my library said,

[2:10:57] today's issue has not come in.

[2:10:59] I said, how could it be? They

[2:11:00] said, it's somewhat random.

[2:11:02] Some days it comes in. So, I

[2:11:03] mean, tanking $3. So, I mean,

[2:11:05] that tells you why people don't

[2:11:07] think it through. The more you

[2:11:09] raise your prices, the fewer

[2:11:11] they will come. And then you'll

[2:11:13] keep till you have one customer

[2:11:15] paying a million dollars for

[2:11:18] the Sunday Chronicle.

[2:11:20] >> Doctor Farooqi,

[2:11:23] thank you so much

[2:11:25] for being here.

[2:11:26] >> My pleasure.

[2:11:28] >> We look forward to having

[2:11:29] you back.

[2:11:31] >> I appreciate it. The slides

[2:11:32] will be shared,

[2:11:34] and if there are any further

[2:11:36] comments, reflections,

[2:11:38] etcetera, I'm happy

[2:11:39] to respond via email.

[2:11:40] >> Thank you so much.

[2:11:43] >> All right, I'll head out.

[2:11:45] Thank you.

[2:11:47] >> That was great. Thank you

[2:11:48] very much, Don,

[2:11:49] for having that scheduled.

[2:11:50] Really enjoyed hearing from

[2:11:51] Doctor Farooqi. Next item

[2:11:53] on the agenda really quickly,

[2:11:54] board member, communications. I

[2:11:55] don't think we have any report

[2:11:56] outs for committees, so. CEO

[2:11:59] communications.

[2:12:00] >> I'll keep this very brief,

[2:12:02] but I do want to welcome. So

[2:12:03] she actually started with us

[2:12:04] in May,

[2:12:06] but the meeting went long,

[2:12:07] so we didn't get a chance

[2:12:10] to introduce her. But Kelly

[2:12:11] Neuer joined us as our customer

[2:12:13] care coordinator,

[2:12:14] and this was kind

[2:12:15] of a stars lined up moment. So

[2:12:17] she is from this area. She

[2:12:21] worked at PCWA

[2:12:23] for ten years and then kind

[2:12:24] of took her career

[2:12:26] across country to North

[2:12:27] Carolina. And

[2:12:28] at the same time that Alexia

[2:12:30] retired, she was looking

[2:12:31] to come back. So the stars

[2:12:33] lined up and we were able

[2:12:34] to make this happen. So, really

[2:12:35] happy to have you here. And if

[2:12:36] you're ever making a cross

[2:12:38] country trip, she's done it

[2:12:39] about six times,

[2:12:40] so she knows where to stop. So

[2:12:41] maybe you want

[2:12:42] to make a quick introduction

[2:12:43] to the board. Thank you,

[2:12:45] Kelly.

[2:12:46] >> Yes, I'm Kelly. And my last

[2:12:47] job, I actually onboarded Sean

[2:12:50] Loman, which was fun. So we've

[2:12:52] had a lot

[2:12:55] of history together,

[2:12:57] but I'm really, really happy

[2:12:59] to be here. When I was looking

[2:13:00] to come back to California, I

[2:13:02] had a list

[2:13:03] of things that I wanted in the

[2:13:05] company that I worked for. I

[2:13:08] wanted it to be small enough

[2:13:09] that I mattered and could make

[2:13:10] an impact. I wanted it to be

[2:13:11] local because this is my

[2:13:12] community and I wanted it to be

[2:13:14] something that actually did

[2:13:15] something good for people. So

[2:13:16] if I was going to be part of

[2:13:19] writing copy or marketing or

[2:13:21] anything else, I wanted it to

[2:13:22] be that something that was

[2:13:24] actually good for the people

[2:13:26] and then I stumbled on Pioneer

[2:13:28] and told my whole family,

[2:13:31] I'm applying for this job. I

[2:13:33] was so excited. I'm very happy

[2:13:34] to be here. Thank you

[2:13:37] for having me.

[2:13:38] >> Thank you, Kelly. And second

[2:13:40] new hire I'd like

[2:13:41] to introduce is Jake

[2:13:42] Trumbull. He comes to us as our

[2:13:43] communications coordinator. He

[2:13:44] also spent

[2:13:46] over a year as an internship

[2:13:47] at intel working in the

[2:13:49] marketing and outreach areas.

[2:13:51] He also previously worked

[2:13:52] for a demolition company. If

[2:13:54] you need something blowing up,

[2:13:56] he'll help you with that.

[2:13:57] Anyway, please, Jake.

[2:13:59] >> Demolition for hire here.

[2:14:01] No, really excited to join

[2:14:04] everybody here. I graduated

[2:14:06] from Sac State

[2:14:08] about a year ago now

[2:14:10] with a degree

[2:14:12] in public relations. Excited

[2:14:14] to join the communications team

[2:14:16] with Kelly, Gina, Lisa, and so

[2:14:18] many more. Just ready to get

[2:14:19] to work for you guys.

[2:14:20] >> Thank you.

[2:14:22] >> Thank you, Jay. Just want to

[2:14:24] also announce that starting

[2:14:25] tonight,

[2:14:27] throughout the weekend last two

[2:14:28] years, we were present at the

[2:14:30] El Dorado Fair, and this year

[2:14:32] we're doing placer.

[2:14:33] But we did do a sponsorship

[2:14:35] at El Dorado Fair as well. And

[2:14:36] we saw you last week,

[2:14:38] staff did. So we'll be there

[2:14:39] at a booth. Please stop

[2:14:41] by if you're in the area. And

[2:14:42] one more announcement would be

[2:14:44] that this will be our last

[2:14:46] meeting with Patrick as our

[2:14:47] general counsel. I just want

[2:14:49] to say thank you so much

[2:14:51] for all the work that you and

[2:14:53] Richard Watson, Kishan and your

[2:14:54] other folks

[2:14:56] at the firm have done

[2:14:57] in supporting Pioneer. And we

[2:14:59] did go

[2:15:00] through an RFP process,

[2:15:02] and it was about that time

[2:15:04] to do it. And we're going

[2:15:06] with a more local firm in

[2:15:08] Grass Valley that we'll be

[2:15:10] introduced to next month.

[2:15:11] But again, I want

[2:15:12] to just thank Patrick

[2:15:13] for contributing

[2:15:14] to our success. And that's it

[2:15:15] for my report.

[2:15:17] >> I just want

[2:15:19] to say thank you. It's been a

[2:15:20] pleasure working with you the

[2:15:21] last five and a half,

[2:15:22] six months. Staff has been

[2:15:23] great. All of them. Teresa has

[2:15:25] been great, Brad and all

[2:15:27] of them have been great. So I

[2:15:29] really appreciated the

[2:15:30] opportunity and wish you all

[2:15:32] the best of luck.

[2:15:33] >> Thank you, Patrick.

[2:15:35] We really appreciate all

[2:15:36] your service to us. So thank

[2:15:38] you.

[2:15:39] >> And that's it for my report.

[2:15:41] >> All right, with that said,

[2:15:42] seeing nothing further

[2:15:43] on the agenda,

[2:15:44] we will hereby adjourn

[2:15:45] without objection. That's the

[2:15:47] order. Adjourn 4:44.

Board of Directors Special Meeting

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