WEBVTT 00:00:00.000 --> 00:00:14.919 Unknown: Music 00:05:30.000 --> 00:05:54.319 Unknown: Hello 00:05:54.319 --> 00:05:58.319 SPEAKER_02: Hello, Chaddy Cathy's down there. 00:05:58.319 --> 00:06:01.920 Unknown: Are we ready? 00:06:01.920 --> 00:06:02.920 Unknown: Okay. 00:06:02.920 --> 00:06:03.920 SPEAKER_02: Thank you. 00:06:03.920 --> 00:06:08.319 SPEAKER_02: Good evening and welcome to the Energy Resources and Customer Services Committee and Special 00:06:08.319 --> 00:06:10.399 SPEAKER_02: Board Meeting, June 17. 00:06:10.399 --> 00:06:13.579 SPEAKER_02: This meeting is being recorded and can be accessed on SMUD's website. 00:06:13.579 --> 00:06:16.839 SPEAKER_02: Please remember to unmute your microphone when speaking in order that our virtual attendees 00:06:16.839 --> 00:06:17.839 SPEAKER_02: may hear. 00:06:17.839 --> 00:06:20.879 SPEAKER_02: The microphone will display a green light indicator when the mic is on. 00:06:21.120 --> 00:06:24.560 SPEAKER_02: For members of the public attending in person that wish to speak at this meeting, please 00:06:24.560 --> 00:06:30.199 SPEAKER_02: fill out a speaker's request form located outside of this room and hand it to our SMUD 00:06:30.199 --> 00:06:31.639 SPEAKER_02: security team. 00:06:31.639 --> 00:06:34.959 SPEAKER_02: Members of the public attending this meeting virtually that wish to provide verbal comments 00:06:34.959 --> 00:06:39.719 SPEAKER_02: during the committee may do so by using the raised hand feature in Zoomer pressing star 00:06:39.719 --> 00:06:40.719 SPEAKER_02: 9. 00:06:40.719 --> 00:06:43.040 Unknown: The time public comment is called. 00:06:43.040 --> 00:06:47.240 SPEAKER_02: Technical support staff will enable the audio for you when your name is announced during 00:06:47.240 --> 00:06:48.600 SPEAKER_02: the public comment period. 00:06:48.600 --> 00:06:52.800 SPEAKER_02: You may also submit written comments by emailing them to public comment at SMUD.org. 00:06:52.800 --> 00:06:56.760 SPEAKER_02: Written comments will be read into the record but will be provided to the board electronically 00:06:56.760 --> 00:07:01.640 SPEAKER_02: and placed into the record of the meeting if received within two hours after this meeting 00:07:01.640 --> 00:07:02.920 SPEAKER_02: ends. 00:07:02.920 --> 00:07:05.000 SPEAKER_02: Chief legal officer, please conduct the roll call. 00:07:05.000 --> 00:07:06.000 Unknown: Director Sanborn. 00:07:06.000 --> 00:07:07.000 SPEAKER_04: Here. 00:07:07.000 --> 00:07:08.000 Unknown: Director Fishman. 00:07:08.000 --> 00:07:09.000 Unknown: Here. 00:07:09.000 --> 00:07:10.000 SPEAKER_04: Chair Buie-Thompson. 00:07:10.000 --> 00:07:11.000 SPEAKER_04: Present. 00:07:11.000 --> 00:07:12.000 SPEAKER_04: All committee members are present. 00:07:12.000 --> 00:07:15.320 SPEAKER_04: Also present are directors Rose, Herber, Kurth and President Tamayo. 00:07:15.320 --> 00:07:16.400 Unknown: Great. 00:07:16.400 --> 00:07:17.400 SPEAKER_02: Thank you. 00:07:17.399 --> 00:07:23.439 SPEAKER_02: One on tonight's agenda is to discuss adopting the 2026 update to our SMUD utility security 00:07:23.439 --> 00:07:24.939 SPEAKER_02: plan. 00:07:24.939 --> 00:07:28.519 SPEAKER_02: Our presenter today is Kirsten DePersis. 00:07:28.519 --> 00:07:35.859 SPEAKER_02: She's the director of facility security and emergency operations. 00:07:35.859 --> 00:07:36.859 SPEAKER_00: Good evening. 00:07:36.859 --> 00:07:38.560 SPEAKER_00: Thank you for having me here tonight. 00:07:38.560 --> 00:07:44.599 SPEAKER_00: I'm here to present to you SMUD's updated physical security plan and ask the board to adopt the 00:07:44.600 --> 00:07:49.520 SPEAKER_00: plan to meet the requirements of the California public utilities commission or CPUC. 00:07:49.520 --> 00:07:54.320 SPEAKER_00: This is an update to the plan that was approved in 2021 by the board and it's required to 00:07:54.320 --> 00:07:59.240 SPEAKER_00: be updated every five years and reapproved. 00:07:59.240 --> 00:08:04.480 SPEAKER_00: So the purpose of the security plan is to address covered distribution facilities that 00:08:04.480 --> 00:08:09.360 SPEAKER_00: serve critical customer loads and confirm whether the existing resiliency measures are 00:08:09.360 --> 00:08:10.760 SPEAKER_00: sufficient. 00:08:10.839 --> 00:08:16.279 SPEAKER_00: The types of critical customer loads that we're talking about are things like law enforcement 00:08:16.279 --> 00:08:20.959 SPEAKER_00: facilities, airports, wastewater treatment facilities, regional safety centers, trauma 00:08:20.959 --> 00:08:23.420 SPEAKER_00: center hospitals. 00:08:23.420 --> 00:08:29.519 SPEAKER_00: It's important to note that the CPUC regulation only covers assets that don't already fall 00:08:29.519 --> 00:08:31.480 SPEAKER_00: under NERC SIP 14. 00:08:31.480 --> 00:08:36.120 SPEAKER_00: SIP 14 covers the physical security of low impact distribution assets of which SMUD has 00:08:36.120 --> 00:08:38.240 SPEAKER_00: none at this time. 00:08:38.240 --> 00:08:43.240 SPEAKER_00: So the intent here is to ensure that utilities evaluate potential physical security risks 00:08:43.240 --> 00:08:46.600 SPEAKER_00: and address them through an approved utility security plan. 00:08:46.600 --> 00:08:51.919 SPEAKER_00: The CPUC adopted this decision for physical security plan requirements in 2013 after the 00:08:51.919 --> 00:08:56.000 SPEAKER_00: Metcalf incident which was an attack on a large distribution substation that was owned 00:08:56.000 --> 00:08:57.639 SPEAKER_00: by PG&E. 00:08:57.639 --> 00:09:03.080 SPEAKER_00: After the attack, the regulatory bodies throughout the U.S. felt that it was necessary to put 00:09:03.080 --> 00:09:10.040 SPEAKER_00: minimum basic security standards in place to protect electrical infrastructure. 00:09:10.040 --> 00:09:15.920 SPEAKER_00: So the CPUC has a very precise process, six step process that we go through every five 00:09:15.920 --> 00:09:16.920 SPEAKER_00: years. 00:09:16.920 --> 00:09:21.680 SPEAKER_00: The first step is to just simply identify these covered distribution facilities. 00:09:21.680 --> 00:09:27.360 SPEAKER_00: The second step is to assess the risk of a successful physical attack on these facilities 00:09:27.360 --> 00:09:32.000 SPEAKER_00: and determine whether the mitigation measures we currently have in place are sufficient. 00:09:32.000 --> 00:09:36.320 SPEAKER_00: In step three, we develop our security plan and we include individual mitigation plans 00:09:36.320 --> 00:09:41.279 SPEAKER_00: for each of those facilities where the existing measures don't adequately address the identified 00:09:41.279 --> 00:09:42.279 SPEAKER_00: risks. 00:09:42.279 --> 00:09:46.639 SPEAKER_00: In step four, we obtain an independent review along with recommendations and then we address 00:09:46.639 --> 00:09:48.639 SPEAKER_00: those recommendations. 00:09:48.639 --> 00:09:53.480 SPEAKER_00: In step five, we obtain a final review of the plan by a qualified authority as designated 00:09:53.480 --> 00:09:55.120 SPEAKER_00: by the CPUC. 00:09:55.120 --> 00:09:59.179 SPEAKER_00: And in step six, which is what we're here for tonight, is to have present the validated 00:09:59.179 --> 00:10:04.339 SPEAKER_00: final plan and have the board adopt the plan and submit that to the CPUC. 00:10:04.339 --> 00:10:09.819 SPEAKER_00: So you should all have a copy of that plan in your board packet. 00:10:09.819 --> 00:10:11.419 SPEAKER_00: So let's talk about our findings. 00:10:11.419 --> 00:10:16.979 SPEAKER_00: So when we first came in 2021, there were 314 total distribution substations. 00:10:16.979 --> 00:10:21.199 SPEAKER_00: Of those, 17 of them were covered under the CPUC directive. 00:10:21.199 --> 00:10:26.419 SPEAKER_00: At the time, we found that all 17 substations had either built in redundancy or backup generation, 00:10:26.419 --> 00:10:29.740 SPEAKER_00: meaning that no additional mitigation measures were required. 00:10:29.740 --> 00:10:34.500 SPEAKER_00: Now it's important to note that in 2025, the CPUC changed the scope of review from just 00:10:34.500 --> 00:10:40.379 SPEAKER_00: distribution substations to include all distribution assets, which includes transformers in addition 00:10:40.379 --> 00:10:41.959 SPEAKER_00: to substations. 00:10:41.959 --> 00:10:47.339 SPEAKER_00: So you'll see that this year in our 2026 plan, we now have 483 total distribution assets. 00:10:47.339 --> 00:10:50.699 SPEAKER_00: And again, that's those substations and transformers. 00:10:50.699 --> 00:10:55.419 SPEAKER_00: Of those, we have determined that 49 of them are covered under the CPUC directive. 00:10:55.419 --> 00:11:00.740 SPEAKER_00: That's the 17 original substations from 2021 and an additional 32 transformers that are 00:11:00.740 --> 00:11:05.500 SPEAKER_00: now included under the additional scope that was changed in 2025. 00:11:05.500 --> 00:11:09.579 SPEAKER_00: We've reviewed all of those and all 49 assets have either built in redundancy or backup 00:11:09.579 --> 00:11:15.779 SPEAKER_00: generation, again, meaning that no additional mitigation measures are necessary. 00:11:15.779 --> 00:11:20.839 SPEAKER_00: So as we've talked about, step 4 of this process was a third-party review and the recommendations 00:11:20.839 --> 00:11:22.259 SPEAKER_00: with that review. 00:11:22.259 --> 00:11:26.779 SPEAKER_00: So we commissioned Archer to review our plan and provide their recommendations. 00:11:26.779 --> 00:11:32.179 SPEAKER_00: The major recommendation that Archer had for us was to do an onsite review of each of those 00:11:32.179 --> 00:11:34.539 SPEAKER_00: 49 identified assets. 00:11:34.539 --> 00:11:38.860 SPEAKER_00: Now I want to make clear that this recommendation was simply a best practice and not an indication 00:11:38.860 --> 00:11:43.139 SPEAKER_00: of any challenges or noncompliance with the CPUC directive. 00:11:43.139 --> 00:11:46.799 SPEAKER_00: So once we do that review, the results of that review will allow SMUD to make informed 00:11:46.799 --> 00:11:51.019 SPEAKER_00: decisions about how to further reduce risk by leveraging the existing mitigation measures 00:11:51.019 --> 00:11:55.539 SPEAKER_00: that we have in place or implementing new mitigation measures should that be required 00:11:55.539 --> 00:11:57.039 SPEAKER_00: or determined. 00:11:57.039 --> 00:12:03.679 SPEAKER_00: So the work to do this review of the 49 assets is going to be completed in 2027. 00:12:03.679 --> 00:12:08.319 SPEAKER_00: So in addition to that onsite review, Archer did have a few minor incidental recommendations. 00:12:08.319 --> 00:12:11.919 SPEAKER_00: Those have all been incorporated into your final plan as well. 00:12:11.919 --> 00:12:17.179 SPEAKER_00: And I think the key takeaway here is really that SMUD's existing design and operational 00:12:17.179 --> 00:12:21.959 SPEAKER_00: redundancy continues to satisfy the CPUC requirements without requiring any additional 00:12:21.959 --> 00:12:26.279 SPEAKER_00: mitigation measures or projects. 00:12:26.279 --> 00:12:27.939 SPEAKER_00: So the fifth step was validation. 00:12:27.939 --> 00:12:32.239 SPEAKER_00: We utilized the Sacramento County Sheriff's Department Security Services Division to review 00:12:32.239 --> 00:12:34.859 SPEAKER_00: and validate our physical security plan. 00:12:34.859 --> 00:12:39.120 SPEAKER_00: They have confirmed that it does adequately address the identified requirements as outlined 00:12:39.120 --> 00:12:43.039 SPEAKER_00: by the CPUC. 00:12:43.039 --> 00:12:46.439 SPEAKER_00: And then finally we're here at the final step, which is adoption by the board. 00:12:46.440 --> 00:12:49.640 SPEAKER_00: So tonight we are seeking approval and adoption from the board. 00:12:49.640 --> 00:12:53.540 SPEAKER_00: And should the board approve the adoption of the plan, we are also seeking approval 00:12:53.540 --> 00:12:58.400 SPEAKER_00: to submit a copy of the board resolution to the CPUC. 00:12:58.400 --> 00:13:00.700 SPEAKER_00: And with that, I will ask if there's any questions. 00:13:00.700 --> 00:13:03.940 Unknown: Does there have any questions? 00:13:03.940 --> 00:13:04.940 SPEAKER_00: Great. 00:13:04.940 --> 00:13:05.940 Unknown: All right. 00:13:05.940 --> 00:13:07.900 Unknown: Thank you very much. 00:13:07.900 --> 00:13:08.900 SPEAKER_00: Thank you. 00:13:08.900 --> 00:13:14.500 Unknown: And I think all of the comment cards were for item number 2, correct? 00:13:14.500 --> 00:13:15.500 SPEAKER_04: Correct. 00:13:15.500 --> 00:13:18.000 SPEAKER_04: I don't see any hands for this item. 00:13:18.000 --> 00:13:19.000 SPEAKER_04: Okay. 00:13:19.000 --> 00:13:20.000 SPEAKER_02: Great. 00:13:20.000 --> 00:13:25.000 SPEAKER_02: Item number 2 is to discuss large load policies and considerations for cost recovery. 00:13:25.000 --> 00:13:29.279 SPEAKER_02: We have Scott Martin, our CFO, here to speak on this item. 00:13:29.279 --> 00:13:31.720 Unknown: Do I tell? 00:13:31.720 --> 00:13:32.720 SPEAKER_12: Yep. 00:13:32.720 --> 00:13:34.720 SPEAKER_12: I can't tell between the red and green. 00:13:34.720 --> 00:13:35.720 SPEAKER_12: It is good. 00:13:35.720 --> 00:13:36.720 SPEAKER_12: You are good. 00:13:36.720 --> 00:13:39.519 SPEAKER_12: So yeah, now it's on. 00:13:39.519 --> 00:13:40.519 SPEAKER_12: Good evening, everybody. 00:13:40.519 --> 00:13:41.519 SPEAKER_12: Nice to be here with you. 00:13:41.539 --> 00:13:45.379 SPEAKER_12: I have to say, I'm kind of the sixth man tonight. 00:13:45.379 --> 00:13:48.860 SPEAKER_12: The starting five weren't here, so I got to step in and do this. 00:13:48.860 --> 00:13:50.620 SPEAKER_12: I hope I don't miss my shot. 00:13:50.620 --> 00:13:53.379 SPEAKER_12: You know, it doesn't rim out on me or something. 00:13:53.379 --> 00:13:55.500 SPEAKER_12: But anyway, glad to be here. 00:13:55.500 --> 00:13:57.939 SPEAKER_12: Thanks to the public for being here as well. 00:13:57.939 --> 00:14:03.100 SPEAKER_12: Appreciate all of you attending and look forward to your comments later. 00:14:03.100 --> 00:14:05.500 SPEAKER_12: Let's go to the next slide. 00:14:05.519 --> 00:14:12.000 SPEAKER_12: So one thing that, you know, this presentation definitely is the beginning of the conversation 00:14:12.000 --> 00:14:15.100 SPEAKER_12: on large loads for us. 00:14:15.100 --> 00:14:21.480 SPEAKER_12: Something that it is definitely not is a proposal on the draft language for how we deal with 00:14:21.480 --> 00:14:22.820 SPEAKER_12: large loads. 00:14:22.820 --> 00:14:25.960 SPEAKER_12: So this is not we are not proposing a tariff tonight. 00:14:25.960 --> 00:14:30.399 SPEAKER_12: We're not proposing a draft board policy tonight. 00:14:30.399 --> 00:14:36.860 SPEAKER_12: This is really kind of the beginning of what would be the process to develop either a board 00:14:36.860 --> 00:14:43.019 SPEAKER_12: policy or potentially at some point a tariff that would address large loads. 00:14:43.019 --> 00:14:47.860 SPEAKER_12: So tonight really what we're going to be doing is as it says here on this agenda, we'll be 00:14:47.860 --> 00:14:52.579 SPEAKER_12: looking at some backgrounds so we can kind of level set on where we are with large loads 00:14:52.579 --> 00:14:57.500 SPEAKER_12: in terms of those loads that are already in our service territory and kind of how they 00:14:57.500 --> 00:15:01.799 SPEAKER_12: compare against other larger loads that are also in our service territory. 00:15:01.799 --> 00:15:06.639 SPEAKER_12: We'll overview some of the processes, both the local jurisdiction processes as well as 00:15:06.639 --> 00:15:13.799 SPEAKER_12: SMUD's processes for sort of approving or moving forward with new loads, large loads. 00:15:13.799 --> 00:15:16.720 SPEAKER_12: We'll talk about some of the risks and benefits. 00:15:16.720 --> 00:15:19.720 SPEAKER_12: We also did a pretty extensive research effort. 00:15:19.720 --> 00:15:24.659 SPEAKER_12: We looked at a lot of utilities in cities and jurisdictions across the country to try 00:15:24.659 --> 00:15:29.759 SPEAKER_12: and get a feel for what are all the different policy issues that the board and the public 00:15:29.759 --> 00:15:35.039 SPEAKER_12: in Sacramento should consider as we look at the large load issue. 00:15:35.039 --> 00:15:39.919 SPEAKER_12: And we also engaged with LPPC and consultants to also help us with that research. 00:15:39.919 --> 00:15:44.279 SPEAKER_12: So we'll be showing you some of the results of that. 00:15:44.279 --> 00:15:48.959 SPEAKER_12: And then we're going to talk a little bit about what we do from here, how we move forward, 00:15:48.959 --> 00:15:54.039 SPEAKER_12: what the next steps might be and what the schedule for those next steps would be. 00:15:54.179 --> 00:15:55.679 SPEAKER_12: So that's what we're doing tonight. 00:15:56.939 --> 00:15:57.639 SPEAKER_12: Next slide, please. 00:15:57.639 --> 00:15:58.139 SPEAKER_12: Yeah. 00:15:58.139 --> 00:15:58.980 SPEAKER_12: Thank you. 00:15:58.980 --> 00:16:03.099 SPEAKER_12: So in terms of background and, again, just sort of level settings so that everybody's 00:16:03.099 --> 00:16:09.219 SPEAKER_12: kind of on the same page as to kind of where we stand right now with large loads. 00:16:09.219 --> 00:16:13.179 SPEAKER_12: First off, you know, large loads are definitely an evolving issue in the United States. 00:16:13.179 --> 00:16:18.579 SPEAKER_12: You can see, I mean, you can't hardly read the utility press without reading, you know, 00:16:18.579 --> 00:16:20.779 SPEAKER_12: a story about large loads. 00:16:20.779 --> 00:16:23.579 SPEAKER_12: And it really covers the full gamut, right? 00:16:23.600 --> 00:16:29.560 SPEAKER_12: You have everything from cities like Reno or Seattle saying there's a moratorium until 00:16:29.560 --> 00:16:35.720 SPEAKER_12: next year on any new large loads until we can figure out the appropriate approach. 00:16:35.720 --> 00:16:42.520 SPEAKER_12: To Utah, which is looking at a very significant new large load called Stratis. 00:16:42.520 --> 00:16:50.920 SPEAKER_12: And it is, you know, going to be built on a 40,000-acre, 62-square-mile site, which 00:16:50.939 --> 00:16:57.259 SPEAKER_12: would be up to 9,000 megawatts of new load for Utah, which is about double their current 00:16:57.259 --> 00:16:59.500 SPEAKER_12: full state load. 00:16:59.500 --> 00:17:04.000 SPEAKER_12: So it is a very substantial, very significant new large load. 00:17:04.000 --> 00:17:06.980 SPEAKER_12: And it runs the gamut between those two extremes, right? 00:17:06.980 --> 00:17:11.180 SPEAKER_12: You have pretty much everything in between. 00:17:11.180 --> 00:17:13.220 SPEAKER_12: So there's a lot of variety out there. 00:17:13.220 --> 00:17:19.339 SPEAKER_12: There's a lot of different situations, different utilities, different approaches, different 00:17:19.339 --> 00:17:21.759 SPEAKER_12: cities, different approaches. 00:17:21.759 --> 00:17:26.519 SPEAKER_12: So we're hoping, again, to, as we talk about some of the policy issues later on to kind 00:17:26.519 --> 00:17:32.039 SPEAKER_12: of cover, you know, where we see the main issues falling. 00:17:32.039 --> 00:17:36.000 SPEAKER_12: We do have in Sacramento and SMUD an obligation to serve. 00:17:36.000 --> 00:17:38.559 SPEAKER_12: I do want to remind everybody that that is the case. 00:17:38.559 --> 00:17:44.519 SPEAKER_12: So as the local jurisdictions act on new load and zone properties and people move in 00:17:44.519 --> 00:17:49.240 SPEAKER_12: and build and construct and operate new businesses, we have the obligation to provide them a 00:17:49.240 --> 00:17:51.680 SPEAKER_12: lot of electricity within our service area. 00:17:51.680 --> 00:17:53.759 SPEAKER_12: That's part of our mandate. 00:17:53.759 --> 00:17:57.420 SPEAKER_12: Now within that obligation to serve, we can establish tariffs. 00:17:57.420 --> 00:18:02.319 SPEAKER_12: And those tariffs define how we provide that service and at what cost. 00:18:02.319 --> 00:18:07.799 SPEAKER_12: They define the relationships that we have with the customer in terms of power quality 00:18:07.799 --> 00:18:09.440 SPEAKER_12: and power provision. 00:18:09.440 --> 00:18:14.759 SPEAKER_12: And they also define what the customer is going to pay, say, in upfront costs versus 00:18:14.759 --> 00:18:16.839 SPEAKER_12: pay over time in rates. 00:18:16.839 --> 00:18:19.439 SPEAKER_12: They define what those rate structures look like. 00:18:19.439 --> 00:18:20.599 SPEAKER_12: Are they just usage charges? 00:18:20.599 --> 00:18:21.599 SPEAKER_12: Are they demand charges? 00:18:21.599 --> 00:18:23.039 SPEAKER_12: Are they a mix of them? 00:18:23.039 --> 00:18:24.439 SPEAKER_12: Are they infrastructure charges? 00:18:24.439 --> 00:18:25.919 SPEAKER_12: Et cetera and et cetera, right? 00:18:25.919 --> 00:18:32.539 SPEAKER_12: So we have the obligation to serve, but we also provide tariffs that make our service 00:18:32.539 --> 00:18:40.439 SPEAKER_12: fair and reasonable and equitable and follow our rule to board established criteria when 00:18:40.439 --> 00:18:45.519 SPEAKER_12: we serve our customers across the different kinds of customer classes that we have. 00:18:46.519 --> 00:18:48.519 Unknown: Can I ask a question? 00:18:48.519 --> 00:18:49.519 SPEAKER_05: Yes, Director. 00:18:49.519 --> 00:18:53.839 SPEAKER_05: I appreciate you framing this and what we're doing tonight. 00:18:53.839 --> 00:18:54.839 SPEAKER_05: Sure. 00:18:54.839 --> 00:19:02.720 Unknown: What's the chance that there's a large data center out there that's going to come and 00:19:02.720 --> 00:19:08.079 SPEAKER_05: want to be served before we get done putting together the tariff? 00:19:08.079 --> 00:19:11.720 Unknown: I'd say customers are contacting us all the time. 00:19:11.720 --> 00:19:18.160 SPEAKER_12: We do have some applications right now, but I think on the next slide I'll go over kind 00:19:18.160 --> 00:19:22.799 SPEAKER_12: of how we are segmenting the service. 00:19:22.799 --> 00:19:27.559 SPEAKER_12: And I think maybe I can get to your question a little bit better than right now. 00:19:27.559 --> 00:19:34.920 SPEAKER_12: In addition to the tariffs that kind of define that obligation to serve, we also have a couple 00:19:34.920 --> 00:19:42.200 SPEAKER_12: of other means that we utilize to encourage local economic development, and that would 00:19:42.200 --> 00:19:45.180 SPEAKER_12: be the economic development rates that we have within our tariff. 00:19:45.180 --> 00:19:46.180 SPEAKER_12: Those are predefined. 00:19:46.180 --> 00:19:56.640 SPEAKER_12: They offer a very small discount to commercial customers' bills as a result of local economic 00:19:56.640 --> 00:19:57.800 SPEAKER_12: benefits they provide. 00:19:57.800 --> 00:19:59.360 SPEAKER_12: Maybe that's job growth. 00:19:59.360 --> 00:20:03.480 SPEAKER_12: Maybe that's a new load in revenue within our service territory and utilization of existing 00:20:03.480 --> 00:20:08.920 SPEAKER_12: facilities or other potential local benefits. 00:20:08.920 --> 00:20:11.200 SPEAKER_12: So we provide these economic development rates. 00:20:11.200 --> 00:20:16.460 SPEAKER_12: It's not necessarily that these economic development rates would apply to, say, new large loads, 00:20:16.460 --> 00:20:19.000 SPEAKER_12: but we do have these within the current tariff today. 00:20:19.000 --> 00:20:21.460 SPEAKER_12: Six customers are taking it. 00:20:21.460 --> 00:20:24.839 SPEAKER_12: Three customers within the last 10 years also took it. 00:20:24.839 --> 00:20:26.559 SPEAKER_12: They've ended their agreements. 00:20:26.559 --> 00:20:29.000 SPEAKER_12: These agreements are typically 10 years long. 00:20:29.000 --> 00:20:34.599 SPEAKER_12: The agreements are really structured through the local economic development agencies in 00:20:34.599 --> 00:20:40.480 SPEAKER_12: partnership with them and require the local businesses to provide significant commitments 00:20:40.480 --> 00:20:46.279 SPEAKER_12: and information on the new jobs or new loads or new facilities or expanded facilities that 00:20:46.279 --> 00:20:50.400 SPEAKER_12: they would be providing in Sacramento as part of getting these rates. 00:20:50.400 --> 00:20:52.359 SPEAKER_12: And then we have one other tool. 00:20:52.359 --> 00:20:55.599 SPEAKER_12: It's called the customer tailored agreements. 00:20:55.639 --> 00:21:03.119 SPEAKER_12: Those agreements are really in place to tackle any of the issues that are really outside 00:21:03.119 --> 00:21:09.319 SPEAKER_12: of the tariff language or outside of what our current tariff offerings may provide. 00:21:09.319 --> 00:21:12.199 SPEAKER_12: So they would cover anything else that you might think of. 00:21:12.199 --> 00:21:18.519 SPEAKER_12: And we have currently one customer that is on a customer tailored rate and agreement. 00:21:18.519 --> 00:21:21.679 SPEAKER_12: And that customer signed their agreement back in 2025. 00:21:21.680 --> 00:21:27.799 SPEAKER_12: That board may remember us coming to you for approval for that agreement in 2025. 00:21:27.799 --> 00:21:33.799 SPEAKER_12: It actually phases that customer out off of the customer tailored agreement and onto their 00:21:33.799 --> 00:21:36.960 SPEAKER_12: standard rate by 2028. 00:21:36.960 --> 00:21:44.279 SPEAKER_12: So every year they have a migration, a one-step migration, until they get until 2028 when 00:21:44.279 --> 00:21:49.000 SPEAKER_12: they will be back on a standard service and the standard service rate for a customer of 00:21:49.000 --> 00:21:50.799 SPEAKER_12: their size. 00:21:50.799 --> 00:21:53.559 SPEAKER_12: So at that point we won't have any customer tailored agreements. 00:21:53.559 --> 00:21:57.919 SPEAKER_12: But again, customer tailored agreements kind of give us that unique flexibility within 00:21:57.919 --> 00:22:05.319 SPEAKER_12: certain bounds to provide rates and services that are more tailored to a unique customer 00:22:05.319 --> 00:22:10.919 SPEAKER_12: situation that doesn't quite fit perfectly within the tariff structure. 00:22:10.919 --> 00:22:16.599 SPEAKER_12: As I mentioned already, we do have one active data center application for a service greater 00:22:16.599 --> 00:22:20.240 SPEAKER_12: than 50 megawatts in its extremely early stages. 00:22:20.319 --> 00:22:24.799 SPEAKER_12: I'll talk more about kind of what the stage is of progression of a local jurisdiction 00:22:24.799 --> 00:22:30.120 SPEAKER_12: approving a project and then SMUD approving a project or serving a project later on in 00:22:30.120 --> 00:22:33.519 SPEAKER_12: the presentation and kind of see where maybe these customers are. 00:22:33.519 --> 00:22:38.839 SPEAKER_12: We also have four other applications, one of which is a large load greater than 50 megawatts 00:22:38.839 --> 00:22:44.880 SPEAKER_12: that is not under the data center kind of genre. 00:22:44.880 --> 00:22:49.319 SPEAKER_12: And we have a few others that are under kind of the data center genre, but again, less 00:22:49.439 --> 00:22:51.439 SPEAKER_12: than 50 megawatts. 00:22:51.439 --> 00:22:52.839 SPEAKER_12: In terms of, yeah, sorry. 00:22:52.839 --> 00:22:53.839 SPEAKER_12: Thanks. 00:22:53.839 --> 00:23:03.839 SPEAKER_09: I'm trying to put this in perspective if, say, a typical load for us is about 2800 megawatts 00:23:03.839 --> 00:23:06.759 Unknown: and the data centers that we currently have are 68. 00:23:06.759 --> 00:23:11.359 Unknown: Is that kind of in round numbers? 00:23:11.359 --> 00:23:13.480 SPEAKER_12: You're referring to the charts on the right there? 00:23:13.480 --> 00:23:14.480 SPEAKER_12: Yeah. 00:23:14.480 --> 00:23:17.079 SPEAKER_12: Yeah, so let me get to those now and I think I can break that down a little better for 00:23:17.079 --> 00:23:18.079 SPEAKER_12: you. 00:23:18.079 --> 00:23:19.079 SPEAKER_12: Yeah. 00:23:19.839 --> 00:23:26.919 SPEAKER_12: The top pie chart on the right, that shows the number of accounts that we have. 00:23:26.919 --> 00:23:29.359 SPEAKER_12: And that little, I think that's a yellow slice. 00:23:29.359 --> 00:23:30.839 SPEAKER_12: I'm going to say yellow. 00:23:30.839 --> 00:23:36.879 SPEAKER_12: That's a yellow slice of the pie at the top there with the 20 at the top. 00:23:36.879 --> 00:23:43.319 SPEAKER_12: That shows the number of data center accounts that we have. 00:23:43.319 --> 00:23:47.439 SPEAKER_12: And then the rest of the pie, I'm not even going to attempt what color that is. 00:23:47.439 --> 00:23:48.439 SPEAKER_12: Is that blue? 00:23:48.799 --> 00:23:49.799 SPEAKER_12: Okay, blue. 00:23:49.799 --> 00:23:57.799 SPEAKER_12: The 904, that's all the other customers' accounts that are greater than 300 KW. 00:23:57.799 --> 00:24:00.840 SPEAKER_12: So we have 20 total accounts that are data centers. 00:24:00.840 --> 00:24:06.820 SPEAKER_12: We have 904 total accounts that are greater than 300 KW that are not data centers. 00:24:06.820 --> 00:24:14.320 SPEAKER_12: So data centers really represent 2% about of the total accounts that are greater than 00:24:14.320 --> 00:24:15.320 SPEAKER_12: 300 KW. 00:24:15.320 --> 00:24:17.799 SPEAKER_12: Relatively small number of accounts. 00:24:17.819 --> 00:24:22.680 SPEAKER_12: The top five data centers that we have are listed there on the right. 00:24:22.680 --> 00:24:28.440 SPEAKER_12: You can see the names of those top five data centers within our service territory. 00:24:28.440 --> 00:24:33.059 SPEAKER_12: Now the lower pie chart, what that shows is the load. 00:24:33.059 --> 00:24:35.000 SPEAKER_12: So the peak demand. 00:24:35.000 --> 00:24:41.599 SPEAKER_12: Again the yellow pie slice shows the data center demand, 68 total megawatts for those 00:24:41.599 --> 00:24:44.359 SPEAKER_12: 20 accounts. 00:24:44.359 --> 00:24:51.459 SPEAKER_12: And then 547 megawatts is the total demand for the 904 accounts that again are greater 00:24:51.459 --> 00:24:52.759 SPEAKER_12: than 300 KW. 00:24:52.759 --> 00:24:55.959 SPEAKER_12: So this is the commercial group. 00:24:55.959 --> 00:24:58.639 SPEAKER_12: So that represents about 11% of the load. 00:24:58.639 --> 00:25:05.839 SPEAKER_12: Now you might ask, well, 22% of the number of customers and 11% of the load, data centers 00:25:05.839 --> 00:25:08.879 SPEAKER_12: are typically larger and more energy. 00:25:08.879 --> 00:25:11.879 SPEAKER_09: It's 11% of the large loads. 00:25:11.879 --> 00:25:12.879 SPEAKER_09: Yes. 00:25:12.879 --> 00:25:13.879 SPEAKER_09: Exactly. 00:25:13.900 --> 00:25:18.040 SPEAKER_09: So 2.5% of our total load. 00:25:18.040 --> 00:25:21.880 SPEAKER_09: All the data centers together are 2.5% of our load. 00:25:21.880 --> 00:25:22.880 SPEAKER_12: About that. 00:25:22.880 --> 00:25:23.880 SPEAKER_12: Okay. 00:25:23.880 --> 00:25:24.880 SPEAKER_12: Thanks. 00:25:24.880 --> 00:25:25.880 SPEAKER_12: Total system load. 00:25:25.880 --> 00:25:26.880 Unknown: Yes. 00:25:26.880 --> 00:25:27.880 SPEAKER_12: Exactly. 00:25:27.880 --> 00:25:31.840 Unknown: And if you look at the very far right, the top five customers that we have in terms of 00:25:31.840 --> 00:25:38.640 SPEAKER_12: demand, state of California, county and city of Sacramento, NTT, which is a data center, 00:25:38.640 --> 00:25:43.520 SPEAKER_12: Intel, which is a research campus chip manufacturing, right? 00:25:43.520 --> 00:25:47.600 SPEAKER_12: Not necessarily a data center per se. 00:25:47.600 --> 00:25:51.960 SPEAKER_12: But those are the top five customers that we've got, commercial customers, in terms 00:25:51.960 --> 00:25:53.960 SPEAKER_12: of total demand. 00:25:53.960 --> 00:25:55.800 Unknown: Okay. 00:25:55.800 --> 00:25:58.320 SPEAKER_12: So let's go to the next slide, please. 00:25:58.320 --> 00:25:59.320 Unknown: All right. 00:25:59.320 --> 00:26:02.080 SPEAKER_12: Let's talk a little bit about maybe the definition. 00:26:02.080 --> 00:26:07.280 SPEAKER_12: I know I've been using the words large loads and those kinds of things. 00:26:07.839 --> 00:26:12.639 SPEAKER_12: This really maybe helps to define better what we're trying to talk about when we say large 00:26:12.639 --> 00:26:15.559 SPEAKER_12: loads versus say standard loads. 00:26:15.559 --> 00:26:19.119 SPEAKER_12: Really when we're talking about standard loads, we're talking about loads that are less than 00:26:19.119 --> 00:26:22.759 SPEAKER_12: 50 megawatts total. 00:26:22.759 --> 00:26:31.279 SPEAKER_12: That means that they would typically be interconnected on the 69 kV system or on a lower distribution 00:26:31.279 --> 00:26:32.279 SPEAKER_12: voltage. 00:26:32.279 --> 00:26:33.279 SPEAKER_12: Okay. 00:26:33.279 --> 00:26:39.359 SPEAKER_12: Large loads, however, we are defining as greater than that 50 megawatt threshold. 00:26:39.359 --> 00:26:45.799 SPEAKER_12: The reason is that those loads would then typically be interconnected to the 115 or 00:26:45.799 --> 00:26:49.480 SPEAKER_12: 230 kV transmission system. 00:26:49.480 --> 00:26:50.480 SPEAKER_12: Okay. 00:26:50.480 --> 00:26:56.000 SPEAKER_12: Today we have nobody, no customer that is in that large load category based on this 00:26:56.000 --> 00:26:57.000 SPEAKER_12: definition. 00:26:57.000 --> 00:27:03.519 SPEAKER_12: There's nobody that is directly connected to our 115 or 230 kV transmission system. 00:27:03.519 --> 00:27:09.319 SPEAKER_12: We only have customers that are, as we're calling on this slide, standard loads, 50 00:27:09.319 --> 00:27:15.559 SPEAKER_12: megawatts or less, and connected to our 69 kV or below systems. 00:27:15.559 --> 00:27:25.000 SPEAKER_12: In terms of those standard loads, we have rates, rules, rule two, rule 16, which address 00:27:25.000 --> 00:27:32.960 SPEAKER_12: upfront infrastructure costs and who pays, customer or SMUD, as well as the nonstandard 00:27:32.960 --> 00:27:33.960 SPEAKER_12: rule two. 00:27:33.960 --> 00:27:39.559 SPEAKER_12: When we say nonstandard, we mean let's say a customer came in and said, you know what, 00:27:39.559 --> 00:27:45.720 SPEAKER_12: I know your standard service is a single feed, but I have a need for higher reliability, 00:27:45.720 --> 00:27:51.259 SPEAKER_12: so I want another feed from a separate substation as an example. 00:27:51.259 --> 00:27:55.779 SPEAKER_12: So I can be served from this substation with one feed and another substation from a totally 00:27:55.779 --> 00:27:56.779 SPEAKER_12: separate feed. 00:27:56.779 --> 00:28:00.259 SPEAKER_12: Now I've got two services to my single site. 00:28:00.259 --> 00:28:04.740 SPEAKER_12: That helps me with my reliability because if one goes down, I can immediately cut over 00:28:04.740 --> 00:28:06.000 SPEAKER_12: to the other. 00:28:06.000 --> 00:28:08.879 SPEAKER_12: But I don't need both at the same time. 00:28:08.879 --> 00:28:11.420 SPEAKER_12: One is just totally redundant to the other one. 00:28:11.420 --> 00:28:14.500 Unknown: I'm only going to use one service at a time. 00:28:14.500 --> 00:28:18.019 SPEAKER_12: If somebody were to come in and ask for something like that, it's nonstandard. 00:28:18.019 --> 00:28:21.500 SPEAKER_12: That would not be our normal standard service. 00:28:21.500 --> 00:28:23.500 SPEAKER_12: That would be covered under rule two. 00:28:23.500 --> 00:28:29.180 SPEAKER_12: And the costs of that second feed would be covered and paid for through our rule two 00:28:29.180 --> 00:28:30.180 SPEAKER_12: tariff language. 00:28:30.180 --> 00:28:31.180 SPEAKER_12: Okay. 00:28:31.180 --> 00:28:34.819 SPEAKER_12: Yes, sorry, Director Sambur. 00:28:34.819 --> 00:28:36.059 SPEAKER_03: Whose rules are these? 00:28:36.059 --> 00:28:37.059 SPEAKER_03: These are ours. 00:28:37.059 --> 00:28:38.059 SPEAKER_03: So these are our rules? 00:28:38.059 --> 00:28:42.019 SPEAKER_12: They are existing today in our current SMUD tariffs, yes. 00:28:42.019 --> 00:28:43.019 SPEAKER_03: Okay. 00:28:43.019 --> 00:28:45.139 SPEAKER_03: And where would the public be able to see what these rules are? 00:28:45.139 --> 00:28:46.660 SPEAKER_12: They're all online on SMUD. 00:28:46.660 --> 00:28:47.660 SPEAKER_12: Okay. 00:28:48.300 --> 00:28:49.620 SPEAKER_12: I'm ready to know if they can get them. 00:28:49.620 --> 00:28:53.500 SPEAKER_12: Read them through when you're really wanting to relax at night. 00:28:53.500 --> 00:28:57.500 SPEAKER_12: You can just go out to SMUD.org, read rule two. 00:28:57.500 --> 00:28:58.500 SPEAKER_12: Okay. 00:28:58.500 --> 00:29:01.100 Unknown: I personally think it's really exciting. 00:29:01.100 --> 00:29:07.060 SPEAKER_12: But I mean, not everybody gets as excited as me about it. 00:29:07.060 --> 00:29:10.940 SPEAKER_12: So rule two covers those nonstandard situations. 00:29:10.940 --> 00:29:17.060 SPEAKER_12: Rule 16 covers all the standard situations, standard installations within our standard 00:29:17.059 --> 00:29:18.059 SPEAKER_12: service. 00:29:18.059 --> 00:29:22.539 SPEAKER_12: And that covers what does the customer pay for that standard service versus what does 00:29:22.539 --> 00:29:28.539 SPEAKER_12: SMUD pay through or cover through our rates for the service. 00:29:28.539 --> 00:29:29.539 SPEAKER_12: Okay. 00:29:29.539 --> 00:29:34.059 SPEAKER_12: Because there's really a balance between do you cover all of the infrastructure costs 00:29:34.059 --> 00:29:40.419 SPEAKER_12: of server customer through upfront payments or do you cover it through ongoing payments 00:29:40.419 --> 00:29:41.619 SPEAKER_12: through the rates, right? 00:29:41.619 --> 00:29:44.419 SPEAKER_12: There's a balance between those two things. 00:29:44.420 --> 00:29:48.539 SPEAKER_12: And that's what our current rules do is balance between those two things. 00:29:48.539 --> 00:29:50.240 SPEAKER_12: Some is covered through our rates. 00:29:50.240 --> 00:29:54.820 SPEAKER_12: Some is covered upfront under standard service today. 00:29:54.820 --> 00:29:58.900 SPEAKER_12: And then again, as I mentioned, in those unique needs, sometimes we have those customer tailored 00:29:58.900 --> 00:29:59.900 SPEAKER_12: agreements. 00:29:59.900 --> 00:30:00.900 SPEAKER_12: We only have one. 00:30:00.900 --> 00:30:01.900 SPEAKER_12: It's being phased out. 00:30:01.900 --> 00:30:03.300 SPEAKER_12: We haven't had many in our history. 00:30:03.300 --> 00:30:06.900 SPEAKER_12: I think I've done maybe two in the time that I've been here in 25 years. 00:30:06.900 --> 00:30:09.900 SPEAKER_12: So not many. 00:30:09.900 --> 00:30:15.780 SPEAKER_12: And then large loads, easy there, oh, sorry, Director. 00:30:15.780 --> 00:30:17.259 SPEAKER_12: Don't age me. 00:30:17.259 --> 00:30:18.259 SPEAKER_12: All right. 00:30:18.259 --> 00:30:21.340 SPEAKER_12: So large loads is a different category. 00:30:21.340 --> 00:30:24.019 SPEAKER_12: Again, as I mentioned, we don't have any customers in this category. 00:30:24.019 --> 00:30:27.900 SPEAKER_12: We don't have anyone directly connected to our transmission system. 00:30:27.900 --> 00:30:35.300 SPEAKER_12: So as far as rates, infrastructure costs, nonstandard needs, all those need to be determined. 00:30:35.300 --> 00:30:39.380 SPEAKER_12: Often customers that are going to connect to our transmission system are very unique. 00:30:39.380 --> 00:30:48.620 SPEAKER_12: They require upgrades that are not standard upgrades given standard loads. 00:30:48.620 --> 00:30:54.500 SPEAKER_12: So because of their uniqueness and their nonstandard nature, and the fact that we've never had 00:30:54.500 --> 00:31:01.020 SPEAKER_12: a load that large requesting service from SMUD, we had not ever established really what 00:31:01.020 --> 00:31:04.740 SPEAKER_12: the terms would be for customers in that category. 00:31:04.740 --> 00:31:07.140 SPEAKER_12: What we have had is customer tailored agreements. 00:31:07.140 --> 00:31:13.980 SPEAKER_12: So if we did have a customer that were to come on and wanted service at that greater 00:31:13.980 --> 00:31:19.340 SPEAKER_12: than 50 megawatt large load category, then we would utilize today, right now, the customer 00:31:19.340 --> 00:31:25.100 SPEAKER_12: tailored agreement to define those service terms, to define what they would pay up front, 00:31:25.100 --> 00:31:29.660 SPEAKER_12: to define what their rates would look like, to define how we would protect all of our 00:31:29.660 --> 00:31:34.340 SPEAKER_12: other customers, to define what the environmental impacts might be and what we might ask of 00:31:34.340 --> 00:31:35.340 SPEAKER_12: the customer. 00:31:35.339 --> 00:31:42.139 SPEAKER_12: So all of that within the customer tailored agreement scope. 00:31:42.139 --> 00:31:45.699 SPEAKER_12: So let's go to the next slide. 00:31:45.699 --> 00:31:50.139 SPEAKER_12: Let's talk a little bit about the different processes that go on to have a customer. 00:31:50.139 --> 00:31:56.619 SPEAKER_12: Just the 50 megawatts, why not 25 or 20? 00:31:56.619 --> 00:32:03.099 SPEAKER_11: 50 is a big number, although it's not big in terms of what's talked about with AI development. 00:32:03.179 --> 00:32:10.819 SPEAKER_12: I think the reason is because less than the 50 megawatt typically gets onto our 69 kV 00:32:10.819 --> 00:32:18.219 SPEAKER_12: system for interconnection or lower, like a distribution level or sub-transmission level 00:32:18.219 --> 00:32:19.659 SPEAKER_12: type voltage. 00:32:19.659 --> 00:32:26.019 SPEAKER_12: And all of those facilities and assets are currently addressed through our current rules, 00:32:26.019 --> 00:32:30.859 SPEAKER_12: Rule 2, Rule 16 and rate designs that we currently have in place. 00:32:30.859 --> 00:32:36.419 SPEAKER_12: When you start to get above that level, that's where you're starting to interconnect directly 00:32:36.419 --> 00:32:40.019 SPEAKER_12: to the 115 or the 230 system. 00:32:40.019 --> 00:32:45.439 SPEAKER_12: And at that point, you're on a transmission level service and our current rules and rate 00:32:45.439 --> 00:32:52.179 SPEAKER_12: designs don't necessarily address those very large direct transmission level interconnections. 00:32:52.179 --> 00:32:57.339 Unknown: Then maybe you need to tweak the terminology, right? 00:32:57.699 --> 00:33:06.019 SPEAKER_11: My understanding is that anything over, say, 1,000 volts at 4,000 amps is exceptionally 00:33:06.019 --> 00:33:07.019 SPEAKER_11: large. 00:33:07.019 --> 00:33:11.899 SPEAKER_11: It's a one-off custom design project, but that's only four megawatts. 00:33:11.899 --> 00:33:17.419 SPEAKER_11: So is there something to be said about these are extra-large? 00:33:17.419 --> 00:33:19.299 SPEAKER_11: It's not really just large, right? 00:33:19.299 --> 00:33:25.980 SPEAKER_11: Because these are 10 times what we would consider a large jump-out project. 00:33:25.980 --> 00:33:31.620 SPEAKER_12: I think at the end of the day, our intent is to segment between, and maybe this is just 00:33:31.620 --> 00:33:36.819 SPEAKER_12: an example, the 50, greater than 50, less than 50, but to really segment between those 00:33:36.819 --> 00:33:43.059 SPEAKER_12: loads that are directly connected to our transmission system versus those loads that don't directly 00:33:43.059 --> 00:33:44.660 SPEAKER_12: connect to our transmission system. 00:33:44.660 --> 00:33:46.420 SPEAKER_12: That's kind of as a dividing line. 00:33:46.420 --> 00:33:51.059 SPEAKER_12: But again, I think we are we haven't established a policy. 00:33:51.059 --> 00:33:55.579 SPEAKER_12: We don't have tariff language yet, right, for anything of this nature. 00:33:55.740 --> 00:34:02.740 SPEAKER_12: So how we define is going to be the subject of additional discussion as we move forward. 00:34:05.539 --> 00:34:06.939 SPEAKER_12: The local jurisdiction process. 00:34:06.939 --> 00:34:07.939 SPEAKER_12: Sorry. 00:34:07.939 --> 00:34:08.940 SPEAKER_12: Sorry. 00:34:08.940 --> 00:34:12.179 SPEAKER_12: You just got to know this is like a really juicy topic. 00:34:12.179 --> 00:34:13.179 SPEAKER_05: I know. 00:34:13.179 --> 00:34:14.179 SPEAKER_05: There's lots of questions. 00:34:14.179 --> 00:34:15.179 SPEAKER_05: I know. 00:34:15.179 --> 00:34:16.179 Unknown: I know. 00:34:16.179 --> 00:34:23.179 SPEAKER_05: So what I'm wondering about is, if I understand correctly, what you're saying is if there 00:34:23.179 --> 00:34:32.940 SPEAKER_05: is a company who wants 50 plus megawatts, then that could be handled in a custom tailored 00:34:32.940 --> 00:34:38.259 SPEAKER_05: agreement if we don't have a tariff addressing it. 00:34:38.259 --> 00:34:45.119 SPEAKER_05: So we don't have to worry about someone sneaking under their nose under the tent and building 00:34:45.119 --> 00:34:46.500 SPEAKER_05: a big data center. 00:34:46.500 --> 00:34:48.619 SPEAKER_05: Is that correct? 00:34:48.619 --> 00:34:49.779 SPEAKER_12: Not immediately, no. 00:34:49.779 --> 00:34:50.779 SPEAKER_12: Yeah. 00:34:50.779 --> 00:34:52.500 SPEAKER_12: We have customer tailored agreements. 00:34:52.500 --> 00:34:54.699 SPEAKER_12: They are an option for us. 00:34:54.699 --> 00:35:00.820 SPEAKER_12: That is the option that we would use today if a customer were to want service today. 00:35:00.820 --> 00:35:01.820 SPEAKER_12: Yes. 00:35:01.820 --> 00:35:05.940 SPEAKER_12: We would utilize that pathway. 00:35:05.940 --> 00:35:13.019 SPEAKER_12: I think what we're saying in this presentation is that we would propose pathways, potential 00:35:13.019 --> 00:35:18.739 SPEAKER_12: pathways forward to help further define what service we and how that service would play 00:35:18.739 --> 00:35:22.659 SPEAKER_12: out and what it would cost and what customers would be responsible for versus what would 00:35:22.659 --> 00:35:25.699 SPEAKER_12: SMUD be responsible for, right? 00:35:25.699 --> 00:35:29.219 SPEAKER_12: And the host of different kinds of impacts that might occur if a large load were to show 00:35:29.219 --> 00:35:30.979 SPEAKER_12: up in our service territory. 00:35:30.979 --> 00:35:34.899 SPEAKER_12: So we're going to propose maybe different pathways to address this going forward. 00:35:34.899 --> 00:35:38.019 SPEAKER_12: But today, right now, it would be customer tailored agreements. 00:35:38.019 --> 00:35:39.019 SPEAKER_12: Yes. 00:35:39.019 --> 00:35:42.819 SPEAKER_05: Thank you. 00:35:42.820 --> 00:35:49.380 SPEAKER_03: So by the time they come to us, though, the locals have already... 00:35:49.380 --> 00:35:50.539 Unknown: Yes. 00:35:50.539 --> 00:35:53.260 SPEAKER_03: They've gone through a lot of work. 00:35:53.260 --> 00:35:55.700 SPEAKER_03: Permits may have already been given. 00:35:55.700 --> 00:36:01.460 SPEAKER_03: They're just asking us for energy and the rates and the deal. 00:36:01.460 --> 00:36:07.059 SPEAKER_03: So there's a whole lot of work that's been done, hopefully in a public process in the 00:36:07.059 --> 00:36:11.780 SPEAKER_03: local land, to get to that point before it ever gets to us. 00:36:11.780 --> 00:36:12.780 SPEAKER_03: Exactly. 00:36:12.780 --> 00:36:13.780 SPEAKER_03: I just wanted to get to... 00:36:13.780 --> 00:36:14.780 SPEAKER_03: Yes. 00:36:14.780 --> 00:36:15.780 SPEAKER_03: Right. 00:36:15.780 --> 00:36:19.019 SPEAKER_03: No, I'm trying to make sure everybody understands that who's listening because I think people 00:36:19.019 --> 00:36:23.700 SPEAKER_03: think that we bring in a lot of emails and people think that we somehow have the final, 00:36:23.700 --> 00:36:28.100 SPEAKER_03: you know, the say, but a lot of say has been had long before it gets to us. 00:36:28.100 --> 00:36:29.100 SPEAKER_12: Yes. 00:36:29.100 --> 00:36:30.100 SPEAKER_12: Absolutely. 00:36:30.100 --> 00:36:33.660 SPEAKER_12: The local jurisdiction process happens before our process. 00:36:33.660 --> 00:36:38.100 SPEAKER_12: We don't proceed with service or construction of facilities unless the local jurisdiction 00:36:38.099 --> 00:36:44.819 SPEAKER_12: has already approved and allowed that customer to utilize the land and do the building and 00:36:44.819 --> 00:36:52.460 SPEAKER_12: has addressed things, critical things like water, zoning, local environmental impacts, 00:36:52.460 --> 00:36:58.380 SPEAKER_12: air, you know, all these other traffic issues, you know, noise, all these things that the 00:36:58.380 --> 00:37:02.699 SPEAKER_12: local jurisdictions are focused on and concerned about when they're talking about land use 00:37:02.699 --> 00:37:08.579 SPEAKER_12: and zoning and appropriate, you know, use for a customer site. 00:37:08.579 --> 00:37:09.579 SPEAKER_12: Okay. 00:37:09.579 --> 00:37:14.899 SPEAKER_12: So all of that process and I laid out sort of an example of what that local jurisdiction 00:37:14.899 --> 00:37:19.899 SPEAKER_12: process looks like and it really goes from, you know, an application to a zoning and land 00:37:19.899 --> 00:37:25.899 SPEAKER_12: review to environmental and air quality to community engagement to ultimate approval 00:37:25.899 --> 00:37:30.339 SPEAKER_12: and then building permits and then development and then any other compliance requirements 00:37:30.340 --> 00:37:36.019 SPEAKER_12: that might be ongoing, post development, all of that process, again, it's going to 00:37:36.019 --> 00:37:39.019 SPEAKER_12: be unique to each different local jurisdiction. 00:37:39.019 --> 00:37:43.019 SPEAKER_12: So this doesn't spell out every individual local jurisdiction and how they do it. 00:37:43.019 --> 00:37:49.860 SPEAKER_12: But based on, you know, the local jurisdictions going through a process like this, that would 00:37:49.860 --> 00:37:54.420 SPEAKER_12: all occur, all the issues around water and land use, zoning, et cetera, et cetera are 00:37:54.420 --> 00:38:00.000 SPEAKER_12: going to be addressed by those local jurisdictions prior to it landing with SMUD. 00:38:00.000 --> 00:38:04.719 SPEAKER_12: When it lands with SMUD, then we address the electrical elements of this and the service 00:38:04.719 --> 00:38:09.179 SPEAKER_12: elements, electrical service elements of it. 00:38:09.179 --> 00:38:18.280 SPEAKER_12: But we also usually contribute to that local process by doing an impact study and design, 00:38:18.280 --> 00:38:23.739 SPEAKER_12: preliminary design, electrical design and impact study as part of that local jurisdiction 00:38:23.739 --> 00:38:24.780 SPEAKER_12: approval process. 00:38:24.780 --> 00:38:31.180 SPEAKER_12: So there's understanding of and information on what it would take to serve a customer 00:38:31.180 --> 00:38:38.840 SPEAKER_12: with generation and infrastructure once that customer would start electric service. 00:38:38.840 --> 00:38:46.260 SPEAKER_12: So that study is part of that, usually part of that local jurisdiction process and we 00:38:46.260 --> 00:38:47.980 SPEAKER_12: provide that information as part of that process. 00:38:47.980 --> 00:38:55.900 SPEAKER_12: And the customer pays for upfront the cost of that study work that we do in order to 00:38:55.900 --> 00:38:59.900 SPEAKER_12: look at what their impacts would be. 00:38:59.900 --> 00:39:04.719 SPEAKER_02: One of the goals of having a policy so these developers before they even start the process 00:39:04.719 --> 00:39:07.500 SPEAKER_02: is to understand what potentially could be their cost. 00:39:07.500 --> 00:39:08.500 SPEAKER_02: Exactly. 00:39:08.500 --> 00:39:10.699 SPEAKER_02: And they're going to Utah and Texas because they're like throwing money, but if we're 00:39:10.699 --> 00:39:17.500 SPEAKER_02: not saying whatever policy, we say it's cost recovery you're paying for, that could either 00:39:17.500 --> 00:39:23.059 SPEAKER_02: sway or detract people because if we're saying no, you're paying for everything, we're not 00:39:23.059 --> 00:39:26.219 SPEAKER_02: doing an economic development rate because we don't do a lot of them anymore. 00:39:26.219 --> 00:39:27.219 SPEAKER_02: Exactly. 00:39:27.219 --> 00:39:28.219 SPEAKER_02: Right. 00:39:28.219 --> 00:39:31.619 SPEAKER_02: Be jobs, they could take that all in consideration, be like I don't want to go through this lengthy 00:39:31.619 --> 00:39:36.380 SPEAKER_02: process if they're not going to hand us a bag of cash like these other states are. 00:39:36.380 --> 00:39:40.260 SPEAKER_02: So that's kind of where you're trying to get to so that people know before this very, it's 00:39:40.260 --> 00:39:41.260 SPEAKER_02: multi-year project. 00:39:41.260 --> 00:39:43.579 SPEAKER_02: I mean, even before it gets to us. 00:39:43.579 --> 00:39:50.099 SPEAKER_02: So the goal is that we give some general guideline of saying it's both rates or upfront 00:39:50.099 --> 00:39:52.779 SPEAKER_02: because I've seen different structures all over. 00:39:52.779 --> 00:39:56.860 SPEAKER_02: Some are doing a half half, some are making them pay for all of it. 00:39:56.860 --> 00:40:00.139 SPEAKER_02: And that's why we're going through this process. 00:40:00.139 --> 00:40:06.739 SPEAKER_02: So people have a heads up as to just so you know, this is if you decide to come here, 00:40:06.739 --> 00:40:10.019 SPEAKER_02: this is what you could be looking at because these are large, I mean three to five years 00:40:10.019 --> 00:40:11.019 SPEAKER_02: minimum. 00:40:11.019 --> 00:40:12.019 SPEAKER_02: Oh yeah. 00:40:12.019 --> 00:40:13.019 SPEAKER_12: And probably longer. 00:40:13.099 --> 00:40:15.099 SPEAKER_12: Longer even. 00:40:15.099 --> 00:40:19.820 SPEAKER_12: So yeah, once they work out their local jurisdiction process, then they get to the SMUD process. 00:40:19.820 --> 00:40:25.179 SPEAKER_12: And if we have to build substantial new facilities or assets or even generation, I mean, we've 00:40:25.179 --> 00:40:27.980 SPEAKER_12: experienced how long those things take. 00:40:27.980 --> 00:40:33.820 SPEAKER_12: They're very long in their time frames to be able to build infrastructure locally to 00:40:33.820 --> 00:40:39.579 SPEAKER_12: provide, get the land, do the right of ways, do the permitting, all that work and construction, 00:40:39.579 --> 00:40:42.699 SPEAKER_12: it takes many, many years. 00:40:42.699 --> 00:40:43.819 SPEAKER_12: And you're absolutely right. 00:40:43.819 --> 00:40:50.579 SPEAKER_12: The reason we're really wanting to develop more definition or policy around this or language 00:40:50.579 --> 00:40:56.939 SPEAKER_12: tariff, for instance, as an example around this is to provide that guidance to those 00:40:56.939 --> 00:40:59.699 SPEAKER_12: who might be interested in Sacramento. 00:40:59.699 --> 00:41:04.019 SPEAKER_12: Right now, what we have to give them as well, we have customer tailored agreements and those 00:41:04.019 --> 00:41:08.579 SPEAKER_12: are very wide open without a lot of parameters. 00:41:08.579 --> 00:41:13.940 SPEAKER_12: So you start negotiating from the top and it can take a very long and significant amount 00:41:13.940 --> 00:41:19.179 SPEAKER_12: of time to work through all the different elements because there's no guidelines on 00:41:19.179 --> 00:41:20.179 SPEAKER_12: those elements. 00:41:20.179 --> 00:41:23.579 SPEAKER_12: So policies would help provide some guidelines. 00:41:23.579 --> 00:41:29.179 SPEAKER_12: Tariff language could help provide guidelines so that people, customers, interest parties 00:41:29.179 --> 00:41:35.699 SPEAKER_12: could understand kind of where we stand as a foundation on some of these elements that 00:41:35.699 --> 00:41:41.779 SPEAKER_12: are at play when they come in and want to locate here. 00:41:41.779 --> 00:41:44.339 SPEAKER_12: So let's go to the next slide. 00:41:44.339 --> 00:41:49.460 SPEAKER_12: So the SMUD process, again, we do have that obligation to serve defined by our tariffs 00:41:49.460 --> 00:41:55.339 SPEAKER_12: and defined by, again, if we don't have a tariff that is applicable, then we use our 00:41:55.339 --> 00:41:56.339 SPEAKER_12: customer tailored agreements. 00:41:56.339 --> 00:42:02.059 SPEAKER_12: So it would be defined by those agreements and again approved by our board. 00:42:02.219 --> 00:42:06.099 SPEAKER_12: We only do our process post the local jurisdiction. 00:42:06.099 --> 00:42:11.099 SPEAKER_12: So local jurisdictions can act, make their decision on all the local issues and environmental 00:42:11.099 --> 00:42:15.900 SPEAKER_12: concerns, water, land use, any environmental impacts, et cetera. 00:42:15.900 --> 00:42:24.460 SPEAKER_12: And then we go through our process to allocate budgets, to approve large contracts, any kind 00:42:24.460 --> 00:42:28.099 SPEAKER_12: of customer tailored agreement or other large contracts that we might have to render into 00:42:28.099 --> 00:42:35.339 SPEAKER_12: to address the new load, any large land purchases, any significant new infrastructure that we 00:42:35.339 --> 00:42:36.339 SPEAKER_12: might have to do. 00:42:36.339 --> 00:42:43.619 SPEAKER_12: All that would be part of our assessment and our planning for any kind of new large load. 00:42:43.619 --> 00:42:49.619 SPEAKER_12: And we would be bringing those to the board as needed across and as required by the board's 00:42:49.619 --> 00:42:52.179 SPEAKER_12: policies throughout the process. 00:42:52.179 --> 00:42:56.880 SPEAKER_12: Typically, you know, again, just to kind of give an example of how things might play out, 00:42:56.880 --> 00:43:15.280 SPEAKER_12: we have kind of the flow at the bottom there where it talks about customer's 00:43:15.280 --> 00:43:16.280 SPEAKER_12: needs. 00:43:16.280 --> 00:43:23.760 SPEAKER_12: We go through the CEQA process and then we do all of the final design and right of way 00:43:23.760 --> 00:43:27.040 SPEAKER_12: acquisition and then we do construction and development. 00:43:27.040 --> 00:43:29.200 SPEAKER_12: That would be execution after that. 00:43:29.200 --> 00:43:36.200 SPEAKER_12: And of course, the board would have multiple spots along that process where we would be 00:43:36.200 --> 00:43:43.120 SPEAKER_12: bringing say agreements to the board, budgets to the board, CEQA approval to the board, those 00:43:43.120 --> 00:43:44.120 SPEAKER_12: kinds of things. 00:43:45.119 --> 00:43:50.119 Unknown: So the state requires us to serve. 00:43:50.119 --> 00:43:54.759 SPEAKER_03: If someone gets, you know, a business gets a permit from a local entity, we don't get 00:43:54.759 --> 00:43:59.559 SPEAKER_03: to pick and choose winners and losers and say we can't provide electricity. 00:43:59.559 --> 00:44:00.559 SPEAKER_03: We're not going to. 00:44:00.559 --> 00:44:08.079 SPEAKER_06: But we do have the authority to give some parameters on that and our rates. 00:44:08.079 --> 00:44:13.799 SPEAKER_03: And couldn't we also require some like support for us to aren't there opportunities for us 00:44:13.800 --> 00:44:21.960 SPEAKER_03: to say we really would benefit if you would provide some commercial battery storage that 00:44:21.960 --> 00:44:25.780 Unknown: is back up for you but it's also back up for us in the grid. 00:44:25.780 --> 00:44:30.640 SPEAKER_03: Or maybe they could use their roof to provide solar or what have you. 00:44:30.640 --> 00:44:34.000 SPEAKER_03: So those are all conversations that could be had, correct? 00:44:34.000 --> 00:44:35.000 SPEAKER_12: Yes. 00:44:35.000 --> 00:44:36.000 SPEAKER_12: Okay. 00:44:36.000 --> 00:44:39.280 SPEAKER_12: So let's go to the next slide, actually. 00:44:39.280 --> 00:44:40.280 Unknown: Oh, sorry. 00:44:40.280 --> 00:44:41.280 SPEAKER_12: Dr. Ritz. 00:44:42.000 --> 00:44:49.519 SPEAKER_11: You're saying that these two processes are separate between this side and the previous 00:44:49.519 --> 00:44:51.760 SPEAKER_11: side but they're really not. 00:44:51.760 --> 00:44:57.720 SPEAKER_11: Because we generally, right, in our utility permitting process, we're going to want to 00:44:57.720 --> 00:44:58.920 SPEAKER_11: see a building permit. 00:44:58.920 --> 00:45:02.560 SPEAKER_11: There's generally a point in our process where it's like okay, where is your building permits? 00:45:02.560 --> 00:45:03.560 SPEAKER_11: Right. 00:45:03.560 --> 00:45:04.560 SPEAKER_11: Right. 00:45:04.560 --> 00:45:05.560 SPEAKER_11: Especially before we might schedule. 00:45:05.560 --> 00:45:09.400 SPEAKER_11: We're not going to schedule a crew until you have a permit in hand. 00:45:09.519 --> 00:45:11.519 SPEAKER_11: So it's certainly overlap. 00:45:11.519 --> 00:45:14.320 SPEAKER_11: I think I have two questions. 00:45:14.320 --> 00:45:19.720 SPEAKER_11: But one of my questions is how much of these processes are going to operate in parallel 00:45:19.720 --> 00:45:23.680 SPEAKER_11: versus serial with each other and then how do we be? 00:45:23.680 --> 00:45:25.200 SPEAKER_11: I think we're pretty good at this already. 00:45:25.200 --> 00:45:29.039 SPEAKER_11: How flexible can we be? 00:45:29.039 --> 00:45:35.160 SPEAKER_11: And I know the PUC and the transportation electrification rulemaking with the investor 00:45:35.159 --> 00:45:40.440 SPEAKER_11: and utilities have spent a lot of time dealing with this in the previous five or ten years 00:45:40.440 --> 00:45:45.239 SPEAKER_11: about what are those parameters around how far does the project move forward and how 00:45:45.239 --> 00:45:49.440 SPEAKER_11: much will they cover without some guarantees so they don't put a bunch of money into this 00:45:49.440 --> 00:45:51.039 SPEAKER_11: and things don't move forward. 00:45:51.039 --> 00:45:56.079 SPEAKER_11: We've seen that with our black and beach electrification work on the heavy duty side as well. 00:45:56.079 --> 00:46:01.159 SPEAKER_11: So there's certainly lessons that have been learned that transmit over to this space. 00:46:01.159 --> 00:46:04.359 SPEAKER_11: So it's certainly not mysterious. 00:46:04.360 --> 00:46:10.079 SPEAKER_11: And I guess my question is at what point in a small process do you hit a dollar figure 00:46:10.079 --> 00:46:12.920 SPEAKER_11: where it's going to come to the board? 00:46:12.920 --> 00:46:20.680 SPEAKER_11: We don't see individuals coming because we're not talking about anything in a 20 to 50 megawatt 00:46:20.680 --> 00:46:26.519 SPEAKER_11: range where you're talking about building a substation just for a project. 00:46:26.519 --> 00:46:31.960 SPEAKER_12: And that's exactly the point here is that when you're talking about large loads, it 00:46:31.960 --> 00:46:39.840 SPEAKER_12: becomes a really distinct different level of risk, a different level of expenditure, 00:46:39.840 --> 00:46:46.039 SPEAKER_12: a different level potentially of benefits, a different level of permitting and resource 00:46:46.039 --> 00:46:47.679 SPEAKER_12: requirement, right? 00:46:47.679 --> 00:46:54.199 SPEAKER_12: And all those things we feel like should be at least at a high level addressed either 00:46:54.199 --> 00:47:00.559 SPEAKER_12: through a board policy so we have more guidance as to how we address them or through tariff 00:47:00.559 --> 00:47:05.000 SPEAKER_12: language and or through tariff language so we have more direction on how to address 00:47:05.000 --> 00:47:09.840 SPEAKER_12: them as we proceed forward with anybody that may be interested. 00:47:09.840 --> 00:47:11.320 SPEAKER_12: I think you're absolutely right. 00:47:11.320 --> 00:47:12.320 SPEAKER_12: They're unique. 00:47:12.320 --> 00:47:13.320 SPEAKER_12: They're very unique. 00:47:13.320 --> 00:47:16.840 SPEAKER_12: And we need to address them in a different way than the standard service that we're doing 00:47:16.840 --> 00:47:17.840 SPEAKER_12: today. 00:47:17.840 --> 00:47:18.840 Unknown: Yeah. 00:47:18.840 --> 00:47:21.719 Unknown: Let's go to the next slide. 00:47:21.719 --> 00:47:22.719 Unknown: Okay. 00:47:22.719 --> 00:47:26.599 SPEAKER_12: So let's talk a little bit about the risks and the benefits that we see. 00:47:26.599 --> 00:47:30.480 SPEAKER_12: And I just kind of summarized some of the biggest, highest level ones. 00:47:30.719 --> 00:47:35.240 SPEAKER_12: Certainly there are more than this, but I think these are the main ones that are of 00:47:35.240 --> 00:47:40.519 SPEAKER_12: most concern that we've seen as most concern across the country. 00:47:40.519 --> 00:47:41.920 SPEAKER_12: First we've talked about infrastructure. 00:47:41.920 --> 00:47:48.039 SPEAKER_12: A lot of these large loads require significant new infrastructure, new lines, new transmission 00:47:48.039 --> 00:47:53.920 SPEAKER_12: lines that go miles and miles, maybe new transformers that are very large, expensive assets, maybe 00:47:53.920 --> 00:48:01.440 SPEAKER_12: new substations as Director Rose was talking about, either onsite or offsite, new generation 00:48:01.440 --> 00:48:06.400 SPEAKER_12: that could be required and that could be a host of different kinds of generation from 00:48:06.400 --> 00:48:11.039 SPEAKER_12: renewable to other kinds of generation that might be needed. 00:48:11.039 --> 00:48:17.039 SPEAKER_12: So there's a lot of infrastructure and planning that need to go into these very large loads. 00:48:17.039 --> 00:48:21.200 SPEAKER_12: And with that comes the risk of stranded assets. 00:48:21.199 --> 00:48:26.839 SPEAKER_12: You might build all of these assets to serve the new load. 00:48:26.839 --> 00:48:32.559 SPEAKER_12: And then that customer goes into bankruptcy and struggles with their business and is all 00:48:32.559 --> 00:48:34.359 SPEAKER_12: of a sudden gone. 00:48:34.359 --> 00:48:38.319 SPEAKER_12: That means that all those assets that you just put in place, that you just built, that 00:48:38.319 --> 00:48:43.279 SPEAKER_12: you just developed, while other customers may use them over a much longer period of 00:48:43.279 --> 00:48:48.519 SPEAKER_12: time, this customer is now gone and not supporting them with revenues. 00:48:48.519 --> 00:48:52.519 SPEAKER_12: So that's the risk of the stranded asset. 00:48:52.519 --> 00:48:56.900 SPEAKER_12: How do you address that risk within your policies or within your tariff? 00:48:56.900 --> 00:49:00.679 SPEAKER_12: In addition to that, we have the renewable portfolio standards that we must meet. 00:49:00.679 --> 00:49:07.480 SPEAKER_12: So any new sales that we have would have to meet the RPS regulation and requirements. 00:49:07.480 --> 00:49:13.239 SPEAKER_12: In addition to where do we find the additional energy beyond the RPS requirements and the 00:49:13.239 --> 00:49:19.639 SPEAKER_12: capacity to meet the customer's peak loads and needs, as well as how do we address any 00:49:19.639 --> 00:49:24.319 SPEAKER_12: carbon obligations that we might have as a result of this new load to the extent it can't 00:49:24.319 --> 00:49:28.439 SPEAKER_12: be served by renewables. 00:49:28.439 --> 00:49:36.000 SPEAKER_12: And then the benefits on the other side here, we do and would have significant new electricity 00:49:36.000 --> 00:49:39.159 SPEAKER_12: sales and revenue as a result of those sales. 00:49:39.159 --> 00:49:45.440 SPEAKER_12: And that revenue can obviously help, especially if you are able to find points and spots on 00:49:45.440 --> 00:49:51.920 SPEAKER_12: your system where you have capacity that customers are not utilizing 100% of the time. 00:49:51.920 --> 00:49:55.359 SPEAKER_12: A lot of our assets are built to serve peak loads. 00:49:55.359 --> 00:50:00.279 SPEAKER_12: So a lot of the time when that customer is not peaking, the assets are available for 00:50:00.279 --> 00:50:01.319 SPEAKER_12: use. 00:50:01.319 --> 00:50:07.599 SPEAKER_12: And so if a customer can come in and utilize those assets in times where they're not being 00:50:07.599 --> 00:50:12.799 SPEAKER_12: used, not during the peak, then we've got additional electricity sales without a lot 00:50:12.799 --> 00:50:14.319 SPEAKER_12: of new infrastructure costs. 00:50:14.319 --> 00:50:19.480 SPEAKER_12: And those sales can then help offset the cost for other customers and help keep our rates 00:50:19.480 --> 00:50:20.480 SPEAKER_12: much more affordable. 00:50:20.480 --> 00:50:24.239 SPEAKER_12: So there are definite potential benefits there. 00:50:24.239 --> 00:50:26.400 SPEAKER_12: That really has to do with optimizing our existing infrastructure. 00:50:26.400 --> 00:50:32.319 SPEAKER_12: If we have existing infrastructure that could be more fully utilized, then we could benefit 00:50:32.319 --> 00:50:36.119 SPEAKER_12: from additional sales with that infrastructure. 00:50:36.119 --> 00:50:38.400 SPEAKER_12: There's also potentially opportunity for new grid. 00:50:38.400 --> 00:50:39.719 SPEAKER_12: I'm sorry, Director Fisherman. 00:50:39.719 --> 00:50:46.920 Unknown: Scott, I want to talk about optimizing existing infrastructure, but in a more regional concept. 00:50:46.920 --> 00:50:53.079 SPEAKER_10: I think we're all pretty familiar with the idea of geographic diversity, especially when 00:50:53.079 --> 00:50:55.199 SPEAKER_10: it comes to generating resources like wind and solar. 00:50:55.199 --> 00:50:59.400 SPEAKER_10: If it's not windy or if the sun isn't shining in one location, chances are it is someplace 00:50:59.400 --> 00:51:00.400 SPEAKER_10: else. 00:51:00.400 --> 00:51:05.719 SPEAKER_10: And if we can optimize those resources, that provides benefit to everybody. 00:51:06.159 --> 00:51:10.599 SPEAKER_10: To what degree – I know people are talking about having a data center that can shift 00:51:10.599 --> 00:51:16.439 SPEAKER_10: load from one to another, maybe a cross-country for that matter, or somewhere else in the 00:51:16.439 --> 00:51:18.079 SPEAKER_10: world for that matter. 00:51:18.079 --> 00:51:22.079 SPEAKER_10: But what kind of coordination is happening regionally? 00:51:22.079 --> 00:51:26.439 SPEAKER_10: Is there any to say, gee, let's try to take advantage of that, right? 00:51:26.439 --> 00:51:35.439 SPEAKER_10: If we can really have load that helps us pay fixed costs, as long as it's running when 00:51:35.440 --> 00:51:41.559 SPEAKER_10: we have excess capacity on the grid and it shifts someplace else when we don't, is 00:51:41.559 --> 00:51:44.119 SPEAKER_10: there coordination happening like that? 00:51:44.119 --> 00:51:49.000 SPEAKER_12: I would say, yes, the regional markets may help support things like that, but there's 00:51:49.000 --> 00:51:53.079 SPEAKER_12: a point at which peaks become local, right? 00:51:53.079 --> 00:51:59.880 SPEAKER_12: There's a point at which it's your system, it's your peak that you need to address. 00:51:59.880 --> 00:52:03.940 SPEAKER_12: And that peak is physical equipment limitation, right? 00:52:03.940 --> 00:52:08.940 SPEAKER_12: What can you actually physically serve with the equipment and assets that you've got? 00:52:08.940 --> 00:52:14.420 SPEAKER_12: And so to the extent that it becomes that localized, regional markets aren't – even 00:52:14.420 --> 00:52:18.400 SPEAKER_12: if there's capacity available in the regional market, it's really a local limitation on 00:52:18.400 --> 00:52:23.059 SPEAKER_12: your asset's ability to serve the load that is the limit that you're talking about. 00:52:23.059 --> 00:52:30.260 SPEAKER_12: And so it's more localized, and the customer who is putting that load on your local system 00:52:30.260 --> 00:52:35.580 SPEAKER_12: is the one or others, other customers that would need to flex around that peak locally 00:52:35.580 --> 00:52:42.380 SPEAKER_12: to address those local system constraints that you might have. 00:52:42.380 --> 00:52:44.740 SPEAKER_12: So I think – oh, sorry, Director Tomayo. 00:52:44.740 --> 00:52:49.660 SPEAKER_07: So you listed several risks there. 00:52:49.660 --> 00:52:58.300 SPEAKER_07: Those are all things that we can address both in tariffs and in policy and in whatever tailored 00:52:58.300 --> 00:53:03.860 SPEAKER_07: agreement we have to de-risk those to a pretty good extent. 00:53:03.860 --> 00:53:04.860 SPEAKER_07: Is that correct? 00:53:04.860 --> 00:53:05.860 SPEAKER_07: Yes. 00:53:05.860 --> 00:53:06.860 SPEAKER_07: Absolutely. 00:53:06.860 --> 00:53:15.780 Unknown: I think that's just something that I think that we want to make sure that we always do, 00:53:15.780 --> 00:53:27.960 SPEAKER_07: that we're keeping our organization and our existing customers whole. 00:53:27.960 --> 00:53:35.000 SPEAKER_07: We don't want to accept the risk because some big corporation wants to come in here 00:53:35.000 --> 00:53:37.500 SPEAKER_07: and make us build a bunch of things. 00:53:37.500 --> 00:53:44.720 SPEAKER_07: We can put a lot of those things on their dime and have contractual and even financial 00:53:44.720 --> 00:53:49.400 SPEAKER_07: mechanisms to make sure that we reduce the risk as much as possible. 00:53:49.400 --> 00:53:50.400 SPEAKER_07: Correct? 00:53:50.400 --> 00:53:51.400 SPEAKER_12: Yeah, absolutely. 00:53:51.400 --> 00:53:55.519 SPEAKER_12: I think that's part of the reason we would propose to move forward with either a policy 00:53:55.519 --> 00:54:04.259 SPEAKER_12: and or tariff so that we can address these risks fairly and make sure that customers 00:54:04.259 --> 00:54:10.599 SPEAKER_12: who are interested in locating in Sacramento are aware of how we're addressing these risks, 00:54:10.599 --> 00:54:17.119 SPEAKER_12: how we intend to address these risks, so that they're fully aware before they show up and 00:54:17.119 --> 00:54:21.440 SPEAKER_12: ask for an application, for instance, but they understand how we're going to address 00:54:21.440 --> 00:54:22.440 SPEAKER_12: these risks. 00:54:22.440 --> 00:54:28.079 SPEAKER_12: They might as well understand, and our customers also understand, how we address these risks. 00:54:28.079 --> 00:54:29.079 SPEAKER_12: But absolutely. 00:54:29.079 --> 00:54:33.480 SPEAKER_12: Let's go to the next slide. 00:54:33.480 --> 00:54:39.760 SPEAKER_12: Here are all the different sampling of the entities that we've taken a look at across 00:54:39.760 --> 00:54:48.760 SPEAKER_12: the country in doing our research as well as working with LPPC and also our consultant 00:54:48.760 --> 00:54:55.960 SPEAKER_12: to look at what are all the different potential policies and tariffs and ideas around the 00:54:55.960 --> 00:54:58.840 SPEAKER_12: country as to how to address large loads. 00:54:58.840 --> 00:55:04.200 SPEAKER_12: And I'll just say there's a big variety, as we all really know. 00:55:04.200 --> 00:55:07.800 SPEAKER_12: But some of the issues that really rise to the top, and we've talked about a lot of them 00:55:07.800 --> 00:55:12.060 SPEAKER_12: in this presentation already, but having looked at all of these different entities, it's really 00:55:12.060 --> 00:55:16.000 SPEAKER_12: about interconnection queue and process and infrastructure. 00:55:16.000 --> 00:55:21.079 SPEAKER_12: It's about rate design, rate schedule language, cost collection, risk mitigation. 00:55:21.079 --> 00:55:26.559 SPEAKER_12: These are the things that really kind of rise to the top of the list of things, environmental 00:55:26.559 --> 00:55:32.639 SPEAKER_12: considerations and emissions, things like these all kind of rise to the top from the 00:55:32.639 --> 00:55:34.920 SPEAKER_12: surveys that we've done. 00:55:34.920 --> 00:55:38.320 SPEAKER_12: So let's go to the next slide. 00:55:39.320 --> 00:55:46.280 SPEAKER_12: So I just kind of give a really simplistic, and I stress simplistic because there's a 00:55:46.280 --> 00:55:52.200 SPEAKER_12: huge variety and a lot of detail in terms of tariff language and policy language and 00:55:52.200 --> 00:55:58.200 SPEAKER_12: contract language across a huge spectrum of different utilities and different locations 00:55:58.200 --> 00:55:59.760 SPEAKER_12: and different cities across the country. 00:55:59.760 --> 00:56:06.180 SPEAKER_12: So I don't mean to say that this is comprehensive necessarily, but it kind of gives a good high 00:56:06.179 --> 00:56:14.179 SPEAKER_12: level kind of summary of where different issues, what different subjects there are 00:56:14.179 --> 00:56:18.419 SPEAKER_12: that are going on in terms of policies and tariffs when you talk about large loads and 00:56:18.419 --> 00:56:23.219 SPEAKER_12: what those issues are and then maybe some examples of the common practices that people 00:56:23.219 --> 00:56:24.919 SPEAKER_12: are doing. 00:56:24.919 --> 00:56:29.980 SPEAKER_12: So in terms of pricing, I think we've talked about pricing itself, how do we price, what 00:56:29.980 --> 00:56:35.739 SPEAKER_12: charge do we do, do we do time of day, fixed charges, demand charges? 00:56:35.739 --> 00:56:36.739 SPEAKER_12: Is it a rate schedule? 00:56:36.739 --> 00:56:37.739 SPEAKER_12: Is it a customized contract? 00:56:37.739 --> 00:56:44.179 SPEAKER_12: And I think we've seen examples of those across the country in both directions. 00:56:44.179 --> 00:56:48.939 SPEAKER_12: In terms of commodities, and that would be the energy supply, I think there's a variety 00:56:48.939 --> 00:56:49.939 SPEAKER_12: again there. 00:56:49.939 --> 00:56:53.219 SPEAKER_12: Do we pass on the cost of that energy procurement to the customer? 00:56:53.219 --> 00:56:55.299 SPEAKER_12: Do they build their own generation? 00:56:55.299 --> 00:56:59.299 SPEAKER_12: Do we build the generation for them and take on that requirement? 00:56:59.299 --> 00:57:05.299 SPEAKER_12: Do we do a power purchase agreement with a third party and have them build generation 00:57:05.300 --> 00:57:07.780 SPEAKER_12: and support the new customer load? 00:57:07.780 --> 00:57:11.700 SPEAKER_12: There's a variety of approaches there. 00:57:11.700 --> 00:57:17.580 SPEAKER_12: I think we've seen people settle in on through the rate design in terms of recovering the 00:57:17.580 --> 00:57:18.580 SPEAKER_12: commodity costs. 00:57:18.580 --> 00:57:23.700 SPEAKER_12: That's what we do with all of our customers today is through our energy prices and our 00:57:23.700 --> 00:57:25.740 SPEAKER_12: demand charges and our tariff prices. 00:57:25.740 --> 00:57:31.740 SPEAKER_12: We collect the generation component or the energy component of our rates. 00:57:31.819 --> 00:57:36.379 SPEAKER_12: There's also a large interest in new energy sources from very large loads, things like 00:57:36.379 --> 00:57:42.379 SPEAKER_12: nuclear energy or small modular reactors or a combination of different energy sources 00:57:42.379 --> 00:57:49.379 SPEAKER_12: like solar, wind plus batteries plus natural gas combustion turbines or things like that 00:57:50.099 --> 00:57:54.939 SPEAKER_12: being developed across the country as well. 00:57:54.939 --> 00:57:59.539 SPEAKER_12: In terms of infrastructure, it really has been boiling down to who pays that infrastructure 00:57:59.539 --> 00:58:00.979 SPEAKER_12: cost? 00:58:01.059 --> 00:58:05.900 SPEAKER_12: Do you pay it upfront or do you pay it ongoing through the rate design? 00:58:05.900 --> 00:58:09.139 SPEAKER_12: I think a lot of jurisdictions have settled on, well, the customer is going to pay it 00:58:09.139 --> 00:58:15.740 SPEAKER_12: 100% upfront and then we'll provide a refund as customers come onto that facility or as 00:58:15.740 --> 00:58:21.579 SPEAKER_12: the customer that it was built for starts to utilize the facility and you generate some 00:58:21.579 --> 00:58:26.539 SPEAKER_12: revenues and then you start making, based on the reserve, you start making some refunds 00:58:26.539 --> 00:58:31.860 SPEAKER_12: to the customer for that 100% upfront payment. 00:58:31.860 --> 00:58:34.900 SPEAKER_12: Financial security, I think, Director Tamayo mentioned this. 00:58:34.900 --> 00:58:39.599 SPEAKER_12: This is really an important one in terms of the risk, the credit risk that might come 00:58:39.599 --> 00:58:42.539 SPEAKER_12: with a new customer. 00:58:42.539 --> 00:58:44.699 SPEAKER_12: Do you require a long-term contract? 00:58:44.699 --> 00:58:47.539 SPEAKER_12: Do you require a minimum notice of departure? 00:58:47.539 --> 00:58:49.039 SPEAKER_12: Maybe a minimum billing demand? 00:58:49.039 --> 00:58:55.380 SPEAKER_12: What that means is that, let's say, the customer is a 60 megawatt customer but they're only 00:58:55.380 --> 00:58:59.539 SPEAKER_12: utilizing 40 megawatts most of the time. 00:58:59.539 --> 00:59:02.900 SPEAKER_12: They don't ever hit that 60 megawatt that they asked you for. 00:59:02.900 --> 00:59:07.220 SPEAKER_12: Do you charge them at the 60 megawatts regardless or do you charge them at the 40 megawatts 00:59:07.220 --> 00:59:10.340 SPEAKER_12: that they're actually using? 00:59:10.340 --> 00:59:14.539 SPEAKER_12: If you establish a minimum billing demand, that would mean you charge them the 60 instead 00:59:14.539 --> 00:59:18.460 SPEAKER_12: of the actual 40, right? 00:59:18.460 --> 00:59:20.420 SPEAKER_12: So that's an option. 00:59:20.420 --> 00:59:26.220 SPEAKER_12: Transit fees and then risk premiums or collateral requirements or letters of credit. 00:59:26.220 --> 00:59:30.500 SPEAKER_12: Again, as customers might come in with very solid credit. 00:59:30.500 --> 00:59:33.460 Unknown: It might be a highly rated utility. 00:59:33.460 --> 00:59:37.539 SPEAKER_12: May be very high in terms of negative income but five years from now, circumstances may 00:59:37.539 --> 00:59:38.539 SPEAKER_12: have changed. 00:59:38.539 --> 00:59:39.619 SPEAKER_12: Markets may have changed. 00:59:39.619 --> 00:59:45.180 SPEAKER_12: Customers' value might have changed and all of a sudden that customer's credit is now 00:59:45.180 --> 00:59:46.579 SPEAKER_12: questionable. 00:59:47.420 --> 00:59:51.299 SPEAKER_12: Should we have a letter of credit and collateral requirements to ensure ourselves against that 00:59:51.299 --> 00:59:54.940 SPEAKER_12: changing credit landscape over time? 00:59:54.940 --> 00:59:58.819 SPEAKER_12: You can see some of the examples of things that are going on in the industry to try and 00:59:58.819 --> 01:00:00.980 SPEAKER_12: address this financial security issue. 01:00:00.980 --> 01:00:01.980 SPEAKER_12: Scott? 01:00:01.980 --> 01:00:02.980 SPEAKER_12: Yes. 01:00:02.980 --> 01:00:05.259 SPEAKER_12: I'll ask for questions. 01:00:05.259 --> 01:00:10.420 SPEAKER_11: In the research that we've done, we typically have four components of commercial rates. 01:00:10.420 --> 01:00:14.460 SPEAKER_11: The demand charge is often the key one. 01:00:14.460 --> 01:00:19.420 SPEAKER_11: Has that research shown that that's not been sufficient, that they're over-requesting and 01:00:19.420 --> 01:00:23.179 SPEAKER_11: then that demand charge is not recouping that over-capaciting bill? 01:00:23.179 --> 01:00:29.500 Unknown: I don't know that there's enough data to say that that's the trend. 01:00:29.500 --> 01:00:36.579 SPEAKER_12: But I think utilities are being conservative in making sure that that doesn't occur, right? 01:00:36.579 --> 01:00:43.460 SPEAKER_12: So implementation of a minimum billing demand has been a solution to that risk. 01:00:43.460 --> 01:00:48.099 SPEAKER_12: Even if the risk isn't necessarily proven out that that risk exists. 01:00:48.099 --> 01:00:50.699 Unknown: I think there's the potential for that to exist. 01:00:50.699 --> 01:00:54.940 SPEAKER_12: I think we've seen it in our own service territory as well at times. 01:00:54.940 --> 01:01:06.139 SPEAKER_05: Scott, I wonder if you could talk a little bit more about the customer may bring their 01:01:06.139 --> 01:01:09.820 SPEAKER_05: own generation. 01:01:09.820 --> 01:01:13.139 SPEAKER_05: Can you tell us what that might look like? 01:01:13.139 --> 01:01:17.739 SPEAKER_12: So for instance, the simplest would be put solar on your site, interconnected to your 01:01:17.739 --> 01:01:19.819 SPEAKER_12: facility and net meter it. 01:01:19.819 --> 01:01:22.420 SPEAKER_12: That would be probably the simplest approach. 01:01:22.420 --> 01:01:26.739 SPEAKER_12: Maybe a more complex approach might be try and install an SMR. 01:01:26.739 --> 01:01:31.659 SPEAKER_12: Get the law changed in California to allow for new nuclear to be built and install a 01:01:31.659 --> 01:01:34.619 SPEAKER_12: small modular reactor to meet a lot of your load. 01:01:34.619 --> 01:01:39.699 SPEAKER_12: That would be maybe the most aggressive or extreme example. 01:01:39.699 --> 01:01:41.619 SPEAKER_12: It could be a balance of different things. 01:01:41.619 --> 01:01:47.539 SPEAKER_12: Batteries, solar, maybe even new natural gas engines or combustion turbines, right? 01:01:47.539 --> 01:01:55.859 SPEAKER_12: All of which the customer could pay for potentially put on their location and site, manage themselves, 01:01:55.859 --> 01:02:01.019 SPEAKER_12: run themselves, maintain themselves, permit themselves, et cetera. 01:02:01.019 --> 01:02:04.099 SPEAKER_05: That they would be totally off the grid, correct? 01:02:04.099 --> 01:02:06.579 SPEAKER_12: Potentially they may want backup service from us. 01:02:06.579 --> 01:02:10.980 SPEAKER_12: So in case their units are down but they still have to run whatever their loads are, they 01:02:10.980 --> 01:02:18.579 SPEAKER_12: may want SMUD to provide that service in case their small microgrid isn't working, 01:02:18.579 --> 01:02:20.300 Unknown: right? 01:02:20.300 --> 01:02:22.099 SPEAKER_12: Or maybe they do a balance. 01:02:22.099 --> 01:02:27.699 SPEAKER_12: They provide for some of their load and then SMUD provides for the balance of that load. 01:02:27.699 --> 01:02:31.219 SPEAKER_12: So there's a lot of different varieties, I think, here. 01:02:31.219 --> 01:02:37.619 SPEAKER_12: But the point is that some customers may want to do their own generation and permit it, 01:02:37.619 --> 01:02:42.420 SPEAKER_12: own it, maintain it, put it on their site, et cetera. 01:02:42.420 --> 01:02:55.339 SPEAKER_05: And just to refresh my memory, because I didn't think that customers could totally serve themselves. 01:02:55.339 --> 01:03:00.859 SPEAKER_05: I thought that the obligation to serve is part of us having a monopoly. 01:03:00.859 --> 01:03:05.859 SPEAKER_05: So how would there be a situation like that? 01:03:05.860 --> 01:03:09.980 SPEAKER_12: There may be a situation where it's mutually beneficial for the customer to serve a portion 01:03:09.980 --> 01:03:14.260 SPEAKER_12: of their load and for SMUD to serve another portion of their load, right? 01:03:14.260 --> 01:03:21.180 SPEAKER_12: So in those circumstances, we would negotiate that approach and how it would play out and 01:03:21.180 --> 01:03:24.579 SPEAKER_12: who pays what, right? 01:03:24.579 --> 01:03:26.180 Unknown: Okay. 01:03:26.180 --> 01:03:30.940 Unknown: I actually read two articles that I was kind of sci-fi. 01:03:30.940 --> 01:03:34.220 SPEAKER_03: But apparently some of these data centers are so frustrated with the lack of the grid 01:03:34.219 --> 01:03:38.539 SPEAKER_03: capacity that they're looking at doing their own geothermal and going straight down under 01:03:38.539 --> 01:03:44.859 SPEAKER_03: the plants to try and grab it and then also looking at infrared coming from space. 01:03:44.859 --> 01:03:47.459 SPEAKER_03: So I have never know. 01:03:47.459 --> 01:03:49.819 SPEAKER_03: They've got a lot of money to figure it out. 01:03:49.819 --> 01:03:51.819 Unknown: They do. 01:03:51.819 --> 01:03:57.019 SPEAKER_12: There's examples where they're restarting old nuclear power plants. 01:03:57.019 --> 01:03:59.139 SPEAKER_12: I think they're not going to retire very well. 01:03:59.139 --> 01:04:03.819 SPEAKER_12: So if you have enough money and you really want that power and you're a very large load. 01:04:03.820 --> 01:04:08.059 SPEAKER_02: And just to be clear, that all has to be permitted and gone through a process. 01:04:08.059 --> 01:04:11.260 SPEAKER_02: It's not like they can just say, I'm going to build something. 01:04:11.260 --> 01:04:15.900 SPEAKER_02: It still has to go through the local jurisdiction, which again, we don't have any impact. 01:04:15.900 --> 01:04:19.260 SPEAKER_02: We can comment like another public. 01:04:19.260 --> 01:04:26.600 SPEAKER_02: But if somebody wants to build a consensus on there, they would have to get cited, permitted, 01:04:26.600 --> 01:04:32.220 SPEAKER_02: go through that very lengthy process, secure the natural gas pipeline and all of that. 01:04:32.980 --> 01:04:38.019 SPEAKER_02: We would just support them in whatever balance they may need. 01:04:38.019 --> 01:04:39.019 Unknown: Yes. 01:04:39.019 --> 01:04:43.339 Unknown: I'm going to hold on to it, Scott. 01:04:43.339 --> 01:04:44.739 SPEAKER_10: I'll wait till you're done. 01:04:44.739 --> 01:04:45.739 SPEAKER_12: Okay. 01:04:45.739 --> 01:04:48.339 SPEAKER_12: So we talked about benefits to the system. 01:04:48.339 --> 01:04:52.899 SPEAKER_12: To the extent customers can do demand response or have interruptible service, there might 01:04:52.899 --> 01:04:57.259 SPEAKER_12: be situations where they can void the peak and benefit our system by utilizing facilities 01:04:57.259 --> 01:05:00.059 SPEAKER_12: that aren't utilized and contribute to system costs. 01:05:00.380 --> 01:05:04.059 SPEAKER_12: They can do that either through batteries, maybe backup generation, or maybe even potentially 01:05:04.059 --> 01:05:05.059 SPEAKER_12: other means. 01:05:05.059 --> 01:05:07.820 SPEAKER_12: Technology, new technology. 01:05:07.820 --> 01:05:12.059 SPEAKER_12: And then of course, all the environmental issues, how do we deal with carbon emissions, 01:05:12.059 --> 01:05:13.059 SPEAKER_12: land use. 01:05:13.059 --> 01:05:16.059 SPEAKER_12: Again, these are our issues. 01:05:16.059 --> 01:05:23.259 SPEAKER_12: A lot of times we deal with those through the rate design and others do as well. 01:05:23.259 --> 01:05:28.980 SPEAKER_12: But obviously, how we deal with carbon emissions and how we deal with land use policy would 01:05:28.980 --> 01:05:31.980 SPEAKER_12: be important as part of this issue. 01:05:33.980 --> 01:05:34.980 Unknown: Okay. 01:05:34.980 --> 01:05:35.980 SPEAKER_12: Next slide. 01:05:35.980 --> 01:05:42.099 Unknown: So let's talk about now maybe turn the page a little bit from policy issues and talk about 01:05:42.099 --> 01:05:46.099 SPEAKER_12: a little bit how could we address these things going forward. 01:05:46.099 --> 01:05:48.059 SPEAKER_12: There's really kind of two ways. 01:05:48.059 --> 01:05:52.659 SPEAKER_12: The first way would be a board policy. 01:05:52.659 --> 01:05:55.260 SPEAKER_12: And the second way would be a rate schedule. 01:05:55.260 --> 01:05:56.260 SPEAKER_12: Right? 01:05:56.260 --> 01:05:58.260 SPEAKER_12: Like rate language in a tariff. 01:05:58.260 --> 01:06:00.420 SPEAKER_12: Okay. 01:06:00.420 --> 01:06:05.380 SPEAKER_12: When I say terms, that would mean like terms of service that you might apply. 01:06:05.380 --> 01:06:09.540 SPEAKER_12: Maybe they're environmental terms, maybe they're pricing terms, maybe they're conditions of 01:06:09.540 --> 01:06:13.420 SPEAKER_12: service terms, maybe they're generation, how do you recover the generation, maybe it's 01:06:13.420 --> 01:06:14.820 SPEAKER_12: infrastructure, right. 01:06:14.820 --> 01:06:17.500 SPEAKER_12: So those would be the terms of an agreement. 01:06:17.500 --> 01:06:22.980 SPEAKER_12: Under a board policy, the board would have the flexibility to define under each of those 01:06:22.980 --> 01:06:29.179 SPEAKER_12: different elements what is the appropriate kind of high level goals and objectives for 01:06:29.179 --> 01:06:30.480 SPEAKER_12: the policy. 01:06:30.480 --> 01:06:35.900 SPEAKER_12: For example, under infrastructure, the board might say we need to have a fair allocation 01:06:35.900 --> 01:06:41.780 SPEAKER_12: of infrastructure cost to the customer and no impact on the rest of our customer base 01:06:41.780 --> 01:06:44.380 SPEAKER_12: as a policy consideration. 01:06:44.380 --> 01:06:45.380 SPEAKER_12: Right? 01:06:45.380 --> 01:06:51.519 SPEAKER_12: The board could decide what would be the best approach to addressing infrastructure as part 01:06:51.519 --> 01:06:53.719 SPEAKER_12: of the board policy. 01:06:53.719 --> 01:06:57.159 SPEAKER_12: In a rate schedule, however, we need to be very defined. 01:06:57.159 --> 01:06:59.719 SPEAKER_12: This is how infrastructure is going to be dealt with. 01:06:59.719 --> 01:07:06.239 SPEAKER_12: This is exactly how we will charge it, how it will get refunded, over what time period, 01:07:06.239 --> 01:07:07.880 SPEAKER_12: and under what terms. 01:07:07.880 --> 01:07:15.159 SPEAKER_12: And that would all be driven through the rate schedule and applied to every customer case. 01:07:15.159 --> 01:07:17.360 SPEAKER_12: With a board policy, you'd be more flexible. 01:07:17.360 --> 01:07:19.800 SPEAKER_12: Each customer might be a little bit different. 01:07:19.800 --> 01:07:24.000 SPEAKER_12: Have different circumstances and characteristics so you could address it more flexibly through 01:07:24.000 --> 01:07:30.760 SPEAKER_12: a board policy that's higher level that would give you more room to address all the different 01:07:30.760 --> 01:07:34.039 SPEAKER_12: potential customer situations. 01:07:34.039 --> 01:07:36.019 SPEAKER_12: Types of customers, similar thing. 01:07:36.019 --> 01:07:40.200 SPEAKER_12: You could have under a board policy pretty much any customer right over a certain level 01:07:40.200 --> 01:07:44.240 SPEAKER_12: or attaching to our transmission system as an example. 01:07:44.240 --> 01:07:46.960 SPEAKER_12: In a rate schedule, it would be very specific to that rate schedule. 01:07:46.960 --> 01:07:49.480 SPEAKER_12: You would define a rate schedule like we have today. 01:07:49.480 --> 01:07:53.760 SPEAKER_12: If you're between 300 and 500 KW, you're on this rate schedule. 01:07:53.760 --> 01:07:54.760 SPEAKER_12: That's what you get. 01:07:54.760 --> 01:07:55.760 SPEAKER_12: Here it is. 01:07:55.760 --> 01:07:58.119 SPEAKER_12: If you're over a megawatt, here's your rate schedule. 01:07:58.119 --> 01:07:59.360 SPEAKER_12: This is what it is. 01:07:59.360 --> 01:08:01.679 SPEAKER_12: If you're over 50, here's your rate schedule. 01:08:01.679 --> 01:08:03.119 SPEAKER_12: That's what it is. 01:08:03.119 --> 01:08:05.320 SPEAKER_12: That would be the rate schedule approach. 01:08:05.320 --> 01:08:10.400 SPEAKER_12: And that would be very defined in terms of the terms of service there. 01:08:10.400 --> 01:08:14.960 SPEAKER_12: In terms of the ability to change, in a rate schedule, it would be every two years in a 01:08:14.960 --> 01:08:20.480 SPEAKER_12: board policy, the board could take it up, address it, have conversation about it, engage 01:08:20.480 --> 01:08:26.520 SPEAKER_12: the public about it, and then change the policy if they saw fit. 01:08:26.520 --> 01:08:30.520 SPEAKER_12: The process to change it would be board meetings under a board policy and under the rate schedule 01:08:30.520 --> 01:08:34.319 SPEAKER_12: would be the GM report and public rate process. 01:08:34.319 --> 01:08:37.720 SPEAKER_12: And that occurs generally speaking every two years. 01:08:37.720 --> 01:08:41.760 SPEAKER_12: We could have an off cycle rate process to address something in the tariff language, 01:08:41.760 --> 01:08:46.880 SPEAKER_12: but that would be an exception, certainly not the rule. 01:08:46.880 --> 01:08:51.680 SPEAKER_12: And the result of these, one, the board policy would be the high level guiding document. 01:08:51.680 --> 01:08:58.119 SPEAKER_12: The result would be a contract with the customers that would fit all the board policy that has 01:08:58.119 --> 01:08:59.840 SPEAKER_12: been defined. 01:08:59.840 --> 01:09:06.440 SPEAKER_12: And the staff would come to the board to describe how the contract that's been negotiated fits 01:09:06.440 --> 01:09:09.920 SPEAKER_12: all the appropriate board policies that have been established. 01:09:09.920 --> 01:09:13.359 SPEAKER_12: Under the rate schedule, it would be the rate schedule language. 01:09:13.359 --> 01:09:16.800 SPEAKER_12: The customer would meet the rate schedule requirements and as long as they met the rate 01:09:16.800 --> 01:09:23.239 SPEAKER_12: schedule requirements, they would get on that service. 01:09:23.239 --> 01:09:28.119 SPEAKER_12: The timing for approval of board policy could be done by Q4, 2026. 01:09:28.119 --> 01:09:35.800 SPEAKER_12: A rate schedule would take until Q3, 2027 because our next rate process will not begin 01:09:35.800 --> 01:09:39.199 SPEAKER_12: until Q2, 2027. 01:09:39.279 --> 01:09:45.880 SPEAKER_12: So at that point, we would be able to introduce a new rate schedule, have it vetted in public 01:09:45.880 --> 01:09:50.880 SPEAKER_12: or with the public, and then come back to the board with a resolution that addresses 01:09:50.880 --> 01:09:54.519 SPEAKER_12: large loads through the rate schedules by Q3, 2027. 01:09:54.519 --> 01:10:00.079 Unknown: Again, if you wanted to do both, that's kind of the last column there, kind of maybe is 01:10:00.079 --> 01:10:01.960 SPEAKER_12: a blend of both worlds there. 01:10:01.960 --> 01:10:08.199 SPEAKER_12: You could establish the high level policy by Q4, 2026, and then potentially establish 01:10:08.559 --> 01:10:12.199 SPEAKER_12: more detailed rate schedule requirements by Q3, 2027. 01:10:12.199 --> 01:10:18.920 SPEAKER_12: I will mention to Director Booby-Thompson's comments earlier that we have a number, a 01:10:18.920 --> 01:10:24.760 SPEAKER_12: few customers, not dozens and dozens, but a few customers who have applied for service 01:10:24.760 --> 01:10:27.479 SPEAKER_12: that are larger. 01:10:27.479 --> 01:10:34.439 SPEAKER_12: And those customers, we are now treating through, or would treat if they get to the point where 01:10:34.759 --> 01:10:39.519 SPEAKER_12: they get to the SMUD process and through the local jurisdiction process, we would be treating 01:10:39.519 --> 01:10:43.359 SPEAKER_12: them as part of a customer tailored agreement. 01:10:43.359 --> 01:10:46.559 SPEAKER_12: That's how we would address them today. 01:10:46.559 --> 01:10:51.159 SPEAKER_12: But if the board were to establish a policy by Q4, 2026, that would give us a lot more 01:10:51.159 --> 01:10:58.319 SPEAKER_12: guiding principles to be able to share with customers and be clear with customers about 01:10:58.639 --> 01:11:05.079 SPEAKER_12: here are the principles that you will need to meet as we negotiate with you and develop 01:11:05.079 --> 01:11:10.479 SPEAKER_12: a contract with you for any potential service in the future, assuming you get through the 01:11:10.479 --> 01:11:13.000 SPEAKER_12: local jurisdiction process. 01:11:13.000 --> 01:11:17.479 Unknown: So, let's go to the last slide. 01:11:17.479 --> 01:11:21.199 SPEAKER_12: And so the path forward here, really this lays out maybe a schedule. 01:11:21.199 --> 01:11:26.920 SPEAKER_12: Tonight's the presentation on large loads, kind of addressing the whole landscape of 01:11:26.920 --> 01:11:28.960 SPEAKER_12: different issues with large loads. 01:11:28.960 --> 01:11:36.440 SPEAKER_12: Q3 of 2026, from this point, we would propose board engagement and a presentation of a schedule 01:11:36.440 --> 01:11:42.159 SPEAKER_12: to develop a board policy, a draft policy, and to engage the public in a public process 01:11:42.159 --> 01:11:50.680 SPEAKER_12: to help us and comment on a draft board policy. 01:11:50.680 --> 01:11:56.520 SPEAKER_12: And then in Q4, we would hope to be able to get through both the public process and conversation 01:11:56.520 --> 01:12:01.560 SPEAKER_12: with the board to get to a point where we have a draft policy for board review by Q4, 01:12:01.560 --> 01:12:06.360 SPEAKER_12: 2026, and ultimately adoption in Q4, 2026. 01:12:06.360 --> 01:12:11.840 SPEAKER_12: If we go the rate schedule route, then Q2, 2027 would be the rate process and the public 01:12:11.840 --> 01:12:15.720 SPEAKER_12: outreach process would occur as part of the rate process, just like we normally do. 01:12:15.720 --> 01:12:19.280 SPEAKER_12: But this large load tariff would be part of that. 01:12:19.280 --> 01:12:24.520 SPEAKER_12: And then in Q3, 2027, we would look for a rate process board vote and an adoption of 01:12:24.520 --> 01:12:26.880 SPEAKER_12: the tariff at that point. 01:12:26.880 --> 01:12:28.200 SPEAKER_12: So we're interested in your feedback. 01:12:28.200 --> 01:12:32.480 SPEAKER_12: We want to hear which kind of pathways the board would be interested in or is thinking 01:12:32.480 --> 01:12:34.840 SPEAKER_12: about. 01:12:34.840 --> 01:12:40.440 SPEAKER_12: And hopefully we can get to kind of a direction on working through a policy and or rate schedule 01:12:40.440 --> 01:12:44.720 SPEAKER_12: development and how we want to engage with our customers on this topic. 01:12:44.720 --> 01:12:50.560 Unknown: Got a lot of ground to cover here, Scott. 01:12:50.560 --> 01:12:54.520 SPEAKER_10: First of all, I think we need to do a policy as soon as possible. 01:12:54.520 --> 01:12:59.560 SPEAKER_10: By the end of this year, I think that's pretty clear to me. 01:12:59.560 --> 01:13:03.880 SPEAKER_10: If we do the policy, we don't necessarily need to follow it up with a tariff. 01:13:03.880 --> 01:13:09.120 SPEAKER_10: The policy could say these are the parameters under which we want these facilities to be 01:13:09.120 --> 01:13:15.520 SPEAKER_10: interconnected, and staff gets to work with each one to make sure that whatever deal they 01:13:15.520 --> 01:13:19.600 SPEAKER_10: get fits those parameters and then that would come back to the board. 01:13:19.680 --> 01:13:20.680 SPEAKER_12: Right. 01:13:20.680 --> 01:13:23.000 SPEAKER_12: So can you go to the previous slide, actually? 01:13:23.000 --> 01:13:24.520 SPEAKER_12: So that's exactly right. 01:13:24.520 --> 01:13:26.440 SPEAKER_12: You could establish a board policy on its own. 01:13:26.440 --> 01:13:29.640 SPEAKER_12: It doesn't have to have a tariff with it. 01:13:29.640 --> 01:13:35.079 SPEAKER_12: You could do that by Q4, 2026, and the result would be contracts that we would be bringing 01:13:35.079 --> 01:13:36.840 SPEAKER_12: back to the board. 01:13:36.840 --> 01:13:42.079 SPEAKER_12: And the showing would be how those contracts and the terms of the contracts fit the board 01:13:42.079 --> 01:13:43.079 SPEAKER_12: policy. 01:13:43.079 --> 01:13:54.000 SPEAKER_10: If we did that and then also decided to do a tariff as part of the rate process, would 01:13:54.000 --> 01:14:00.199 SPEAKER_10: that allow a given customer to say, could we allow a given customer to come in and say, 01:14:00.199 --> 01:14:05.960 SPEAKER_10: I'd rather do a one-off deal with you, let's negotiate outside of the tariff, or would 01:14:05.960 --> 01:14:07.479 SPEAKER_10: it have to be under the tariff? 01:14:07.479 --> 01:14:12.760 Unknown: I think the intent of the tariff would just like our tariffs today. 01:14:12.760 --> 01:14:14.480 SPEAKER_12: They're meant to be the catchall. 01:14:14.480 --> 01:14:18.079 SPEAKER_12: So that would be kind of the intent, right, is to be the catchall. 01:14:18.079 --> 01:14:22.440 SPEAKER_12: I think the board policy would establish how we write the language within the tariff to 01:14:22.440 --> 01:14:23.880 SPEAKER_12: be the catchall. 01:14:23.880 --> 01:14:27.920 SPEAKER_12: But you're always going to get those circumstances that don't quite fit. 01:14:27.920 --> 01:14:30.079 SPEAKER_12: And that's why we have that customer tailored agreement. 01:14:30.079 --> 01:14:33.680 SPEAKER_12: And I think that's where it would fall out with the tariff and board policy. 01:14:33.680 --> 01:14:39.000 SPEAKER_12: You'd have a potential for a customer tailored agreement that would meet tariff language 01:14:39.000 --> 01:14:43.520 SPEAKER_12: in some circumstances, meet all the board policy, and we'd have to have a showing as 01:14:43.520 --> 01:14:45.479 SPEAKER_12: to why it's beneficial. 01:14:45.479 --> 01:14:49.399 SPEAKER_10: The way I'm kind of framing this in my mind and telling me this is even a legitimate way 01:14:49.399 --> 01:14:55.960 SPEAKER_10: to do this, if I'm going to buy a new house, I go to a mortgage broker and I say I'd like 01:14:55.960 --> 01:15:01.560 SPEAKER_10: to make a big down payment so my payments are less, or I can extend the time frame by 01:15:01.560 --> 01:15:07.119 SPEAKER_10: – I can do a 30-year loan or a 15-year loan, or if I get that 30-year loan and I want to 01:15:07.119 --> 01:15:10.479 SPEAKER_10: make a minimal down payment but I'm willing to pay some points, I can buy down the cost 01:15:10.479 --> 01:15:13.079 SPEAKER_10: of the interest rate. 01:15:13.079 --> 01:15:19.399 SPEAKER_10: So any one of the developers of these locations is going to want that – may want that same 01:15:19.399 --> 01:15:21.380 SPEAKER_10: kind of flexibility. 01:15:21.380 --> 01:15:26.239 SPEAKER_10: Could that level of flexibility be built into a tariff that allows them to make some of 01:15:26.239 --> 01:15:27.239 SPEAKER_10: those choices? 01:15:27.239 --> 01:15:28.239 SPEAKER_12: Right. 01:15:28.239 --> 01:15:29.239 SPEAKER_12: Exactly. 01:15:29.239 --> 01:15:33.239 SPEAKER_12: And that's probably more of the challenge with the tariff, is that when you develop 01:15:33.239 --> 01:15:37.800 SPEAKER_12: the tariff it's going to be more specific about those kinds of elements, right? 01:15:37.800 --> 01:15:40.239 SPEAKER_12: What specifically do we want for collateral? 01:15:40.239 --> 01:15:43.920 SPEAKER_12: What specifically do we want for a letter of credit? 01:15:43.920 --> 01:15:48.039 SPEAKER_12: What specifically – how would we address different credit ratings across different 01:15:48.039 --> 01:15:49.039 SPEAKER_12: – right? 01:15:49.039 --> 01:15:53.159 SPEAKER_12: How would we specifically address upfront infrastructure costs and refund that? 01:15:53.159 --> 01:15:57.559 SPEAKER_12: That would all be more spelled out in the tariff again to be more of the catch-all. 01:15:57.560 --> 01:16:04.160 SPEAKER_12: This is how we're going to do this specifically, right, versus a contract under a board policy 01:16:04.160 --> 01:16:08.960 SPEAKER_12: which would be the board setting a policy of customers are going to pay, say, 100% of 01:16:08.960 --> 01:16:11.960 SPEAKER_12: the upfront cost if you're a large load. 01:16:11.960 --> 01:16:12.960 SPEAKER_12: Right. 01:16:12.960 --> 01:16:13.960 SPEAKER_12: Right? 01:16:13.960 --> 01:16:14.960 SPEAKER_12: Okay. 01:16:14.960 --> 01:16:15.960 SPEAKER_12: That's clear. 01:16:15.960 --> 01:16:16.960 SPEAKER_12: Now, how does that work, right? 01:16:16.960 --> 01:16:21.520 SPEAKER_12: And that can be defined within the contract terms and would have a showing as to how that 01:16:21.520 --> 01:16:25.960 SPEAKER_12: meets the board policy as part of the board approval. 01:16:25.960 --> 01:16:31.159 SPEAKER_10: And I know we get inquiries about this all the time from prospective companies that 01:16:31.159 --> 01:16:34.199 SPEAKER_10: want to do this kind of facility. 01:16:34.199 --> 01:16:36.600 Unknown: I mean, are they really all over the place? 01:16:36.600 --> 01:16:39.920 SPEAKER_10: Some are willing to put big cash upfront and pay for everything upfront. 01:16:39.920 --> 01:16:42.840 SPEAKER_10: Some are willing – well, you know, I don't have the cash right now, but I'm willing 01:16:42.840 --> 01:16:46.600 SPEAKER_10: to sign a long-term rate agreement that's at a higher rate or whatever, and I'll pay 01:16:46.600 --> 01:16:47.600 SPEAKER_10: it off over time. 01:16:47.600 --> 01:16:49.079 SPEAKER_10: They're all over the place. 01:16:49.079 --> 01:16:50.079 SPEAKER_12: Yeah. 01:16:50.079 --> 01:16:56.159 SPEAKER_12: So, kind of, you look at – well, if you go back to the previous slide where we're 01:16:56.159 --> 01:16:59.239 SPEAKER_12: talking about all these different elements, right, you can think of a variety of things 01:16:59.239 --> 01:17:05.439 SPEAKER_12: under each of these subjects that customers may be differing on, right? 01:17:05.439 --> 01:17:07.239 SPEAKER_12: Some might want to provide their own renewables. 01:17:07.239 --> 01:17:10.199 SPEAKER_12: Some might want you to go get a PPA, right? 01:17:10.199 --> 01:17:15.039 SPEAKER_12: Some might want you to go build something for them in a partnership agreement, right? 01:17:15.039 --> 01:17:16.880 SPEAKER_12: Maybe they've got land locally. 01:17:16.880 --> 01:17:22.319 SPEAKER_12: So there's just a huge variety of different options that could occur for each different 01:17:22.319 --> 01:17:25.640 SPEAKER_12: customer potentially across these different elements. 01:17:25.640 --> 01:17:33.880 SPEAKER_12: So yeah, the flexibility of policy may help you fit those very unique customer circumstances 01:17:33.880 --> 01:17:38.159 SPEAKER_12: a little bit better than potentially a tariff. 01:17:38.159 --> 01:17:45.000 SPEAKER_10: And I think from previous discussions the board has had, there are certain data centers 01:17:45.000 --> 01:17:51.079 SPEAKER_10: that just suck up a ton of power and other resources, and we probably couldn't handle 01:17:51.079 --> 01:17:55.039 SPEAKER_10: those just based on the size of the loads that they're coming in. 01:17:55.039 --> 01:18:02.479 SPEAKER_10: There are smaller ones that we can handle, and my question is, how much flexibility do 01:18:02.479 --> 01:18:09.399 SPEAKER_10: we have to provide incentives for the type of loads that we can handle and that are beneficial 01:18:09.399 --> 01:18:12.000 SPEAKER_10: to us versus those that are not? 01:18:12.000 --> 01:18:17.359 Unknown: Yeah, I think at the end of the day that can be addressed within the policy, and we 01:18:17.359 --> 01:18:22.479 SPEAKER_12: would be able to help define that better, right, as to what might be beneficial versus 01:18:22.479 --> 01:18:24.000 SPEAKER_12: non-beneficial load. 01:18:24.000 --> 01:18:26.000 SPEAKER_12: Okay, thank you. 01:18:26.000 --> 01:18:28.000 Unknown: I have something. 01:18:28.000 --> 01:18:30.000 Unknown: Heidi? 01:18:30.000 --> 01:18:32.640 SPEAKER_03: Okay, thanks. 01:18:32.640 --> 01:18:38.239 SPEAKER_03: So I've been hearing that they're worried they're not setting enough for these fast enough, 01:18:38.239 --> 01:18:44.159 SPEAKER_03: which is shocking because they're all over the place already, but now they're offering 01:18:44.159 --> 01:18:53.399 SPEAKER_03: smaller options to homeowners to process data on site and pay them like $21,000. 01:18:53.399 --> 01:18:57.399 SPEAKER_03: I don't know if you've heard about this, but this is the kind of thing that worries me. 01:18:57.399 --> 01:18:59.159 SPEAKER_03: How fast is this moving? 01:18:59.159 --> 01:19:01.439 SPEAKER_03: How do we keep up with it? 01:19:01.439 --> 01:19:07.679 SPEAKER_03: But I'm now worried that our customers are going to start getting approached to do things 01:19:07.680 --> 01:19:09.440 SPEAKER_03: like that, and what are we going to do about that? 01:19:09.440 --> 01:19:13.640 SPEAKER_03: Like that to me is something that would need to be in a policy, and we're going to have 01:19:13.640 --> 01:19:18.360 SPEAKER_03: to, if you haven't heard of this, it's actually the latest thing. 01:19:18.360 --> 01:19:24.240 SPEAKER_03: So that really concerned me when I heard that because that could mean a whole bunch of things 01:19:24.240 --> 01:19:26.280 SPEAKER_03: that we don't understand about the grid. 01:19:26.280 --> 01:19:28.960 Unknown: Yeah, and that might be something where you might want to address it. 01:19:28.960 --> 01:19:34.600 SPEAKER_12: If it's really small customers, like residential customers as an example, that might overload 01:19:34.600 --> 01:19:37.039 SPEAKER_12: local circuits and local panels. 01:19:37.039 --> 01:19:41.920 SPEAKER_12: Yeah, I mean, that might be something you want to address through both a tariff language 01:19:41.920 --> 01:19:43.560 SPEAKER_12: and potentially the policy. 01:19:43.560 --> 01:19:47.800 SPEAKER_12: So I'm very much where Director Fisherman is. 01:19:47.800 --> 01:19:52.400 SPEAKER_03: I feel strongly we need to get a policy quickly. 01:19:52.400 --> 01:19:55.160 SPEAKER_03: So fall, fine. 01:19:55.160 --> 01:19:57.240 SPEAKER_03: But I do think we need to look at the rates. 01:19:57.240 --> 01:20:04.360 SPEAKER_03: If we're going to do it with our normal process, that's a ways off, and things are coming. 01:20:04.359 --> 01:20:11.559 SPEAKER_03: So I guess I'm sure the public and I want to know that we're being transparent about 01:20:11.559 --> 01:20:12.559 SPEAKER_03: this. 01:20:12.559 --> 01:20:15.880 SPEAKER_03: So they're not on the last to no list. 01:20:15.880 --> 01:20:21.559 SPEAKER_03: There's a lot of discussions that happen in the economic development world before the 01:20:21.559 --> 01:20:24.119 SPEAKER_03: public knows they're coming. 01:20:24.119 --> 01:20:31.359 SPEAKER_03: And I think this is an item that has become such of a hot topic around the country because 01:20:31.359 --> 01:20:34.039 SPEAKER_03: of all the problems that have happened. 01:20:34.039 --> 01:20:41.239 SPEAKER_03: There's a wide variety of problems that I think they're nervous and they just want to 01:20:41.239 --> 01:20:46.319 SPEAKER_03: know that we're going to be transparent in this community about what's being discussed 01:20:46.319 --> 01:20:47.880 SPEAKER_03: and they get a chance to weigh in. 01:20:47.880 --> 01:20:52.000 SPEAKER_03: And I'm saying this for our friends in local government land as well if they're listening 01:20:52.000 --> 01:20:57.239 SPEAKER_03: because I do feel like we all have to work together on this as partners in the community 01:20:57.239 --> 01:21:00.720 SPEAKER_03: for the customers and for our relationships. 01:21:00.720 --> 01:21:01.720 SPEAKER_03: So thanks. 01:21:01.720 --> 01:21:02.720 Unknown: Rosanna? 01:21:02.720 --> 01:21:03.720 Unknown: Thank you. 01:21:03.720 --> 01:21:16.000 Unknown: Well Scott, I want to say that I really appreciate the way that you have laid this out. 01:21:16.000 --> 01:21:18.360 SPEAKER_05: It's very clear. 01:21:18.360 --> 01:21:26.480 SPEAKER_05: And the good news is that it's pretty clear that all of us on this board feel that it's 01:21:26.479 --> 01:21:34.159 SPEAKER_05: important that our customers are not going to be paying for AI data centers that come 01:21:34.159 --> 01:21:37.399 SPEAKER_05: to town and want a free ride. 01:21:37.399 --> 01:21:45.399 SPEAKER_05: We have the opportunity to set a policy that will prevent that from happening. 01:21:45.399 --> 01:21:50.359 SPEAKER_05: So I think we absolutely need to do that first. 01:21:50.439 --> 01:22:03.199 SPEAKER_05: In regards to the tariff or the rate making, I'm a little bit more interested in the custom 01:22:03.199 --> 01:22:05.399 SPEAKER_05: tailored agreements. 01:22:05.399 --> 01:22:12.079 SPEAKER_05: Just because things are so different for so many different customers, it might be hard 01:22:12.079 --> 01:22:17.559 SPEAKER_05: to capture all of that in a new rate schedule. 01:22:17.560 --> 01:22:28.520 SPEAKER_05: But I for one feel like we need to definitely set a board policy and then take a look at 01:22:28.520 --> 01:22:37.240 SPEAKER_05: whether or not we want to establish a tariff or have more flexibility with a custom tailored 01:22:37.240 --> 01:22:38.240 SPEAKER_05: agreement. 01:22:44.240 --> 01:22:45.240 SPEAKER_09: Thank you. 01:22:45.240 --> 01:22:46.240 SPEAKER_09: Nice work, Scott. 01:22:46.239 --> 01:22:47.239 SPEAKER_09: Thank you very much. 01:22:47.239 --> 01:22:50.119 SPEAKER_09: A couple things. 01:22:50.119 --> 01:22:56.920 SPEAKER_09: First off, I believe that within the board's policies already there's guidance on this, 01:22:56.920 --> 01:23:00.079 SPEAKER_09: but I think it's a good idea to pull it all together in one place. 01:23:00.079 --> 01:23:04.960 Unknown: There will be some redundancy in there, but that's not the worst thing in the world. 01:23:04.960 --> 01:23:11.079 SPEAKER_09: It makes it easier for folks to understand and very clear to people. 01:23:11.079 --> 01:23:15.279 SPEAKER_09: Second thing, when you bring this back, I'll be very interested in talking about how we 01:23:15.279 --> 01:23:19.460 SPEAKER_09: procure the power for the data centers. 01:23:19.460 --> 01:23:24.039 SPEAKER_09: We have some very low cost power right now. 01:23:24.039 --> 01:23:28.039 SPEAKER_09: Some of our wind, some of our solar, some of the cheapest power ever been created, our 01:23:28.039 --> 01:23:29.039 SPEAKER_09: hydro. 01:23:29.039 --> 01:23:36.639 SPEAKER_09: Then when we have a newcomer, do we share that low cost power with them and then have 01:23:36.639 --> 01:23:40.920 SPEAKER_09: to buy additional expensive power to fill the gap? 01:23:40.920 --> 01:23:45.199 SPEAKER_09: That would tend to increase the average rate for folks. 01:23:45.279 --> 01:23:51.039 SPEAKER_09: I want to pay attention to that to make sure that our existing customer base isn't losing 01:23:51.039 --> 01:23:56.960 Unknown: access to all this great low cost power that they helped to create. 01:23:56.960 --> 01:24:06.000 SPEAKER_09: Next thing, on your list of benefits there, there's one benefit which doesn't matter to 01:24:06.000 --> 01:24:12.319 SPEAKER_09: us, I suppose, here at SMUD, being a nonprofit, you work efficiently on all the things that 01:24:12.319 --> 01:24:17.000 SPEAKER_09: we do, but it definitely will matter to the local governments. 01:24:17.000 --> 01:24:22.359 SPEAKER_09: That's the utility users tax and the property taxes that they're going to see from these 01:24:22.359 --> 01:24:23.359 SPEAKER_09: things. 01:24:23.359 --> 01:24:30.479 SPEAKER_09: My back to the envelope on a 300 megawatt data center, a small data center by the current 01:24:30.479 --> 01:24:38.159 SPEAKER_09: standards, the city of Sacramento could see north of $15, $20 million a year from the 01:24:38.159 --> 01:24:40.960 SPEAKER_09: creation of one of these things. 01:24:40.960 --> 01:24:47.920 SPEAKER_09: That's an awful lot of stake to a city that can't pay the bills right now and is trying 01:24:47.920 --> 01:24:50.720 SPEAKER_09: to find revenue wherever they can. 01:24:50.720 --> 01:24:58.680 SPEAKER_09: I guess the closing thought on that is these are high stakes things. 01:24:58.680 --> 01:25:01.760 SPEAKER_09: Let's make sure our existing customer base doesn't suffer. 01:25:01.760 --> 01:25:05.039 SPEAKER_09: But if we do this right, we can all be better off for it. 01:25:05.039 --> 01:25:11.479 SPEAKER_09: We can even see the average rates go down because we'll have higher sales to share the 01:25:11.479 --> 01:25:12.479 SPEAKER_09: overhead among. 01:25:12.479 --> 01:25:13.479 Unknown: With that, thanks. 01:25:13.479 --> 01:25:14.479 SPEAKER_09: I appreciate it very much. 01:25:14.479 --> 01:25:18.720 SPEAKER_09: Of course, we'll all be looking forward to when you come back. 01:25:18.720 --> 01:25:24.519 Unknown: Dave, did you have a comment? 01:25:24.519 --> 01:25:27.519 SPEAKER_02: I still have questions, but I think you guys have comments. 01:25:27.520 --> 01:25:35.400 SPEAKER_07: I'll just pile on with the notion that I do think we need to have a policy that is oriented 01:25:35.400 --> 01:25:43.920 SPEAKER_07: towards protecting our existing customers and community and all the different types 01:25:43.920 --> 01:25:47.520 SPEAKER_07: of risks. 01:25:47.520 --> 01:25:56.000 SPEAKER_07: Even if there is a ‑‑ I think that should also inform if there is a tariff, any sort 01:25:56.000 --> 01:26:03.239 SPEAKER_07: of tariff would have to be informed by a policy that says structure it so that our 01:26:03.239 --> 01:26:05.960 SPEAKER_07: existing customers are protected. 01:26:05.960 --> 01:26:12.960 SPEAKER_07: I actually ‑‑ I'm a little skeptical of the notion that we would even be ready to 01:26:12.960 --> 01:26:21.000 SPEAKER_07: do a tariff since there are so many different versions of how this could fold out. 01:26:22.000 --> 01:26:31.640 SPEAKER_07: Before we set up a tariff unless it was pretty limited in scope, it seems like we don't really 01:26:31.640 --> 01:26:39.399 SPEAKER_07: know enough about where all of this is headed or even what the opportunities are to benefit 01:26:39.399 --> 01:26:48.600 SPEAKER_07: our system or protect our system or protect our organization and our customers. 01:26:48.600 --> 01:26:55.880 SPEAKER_07: It's pretty clear to me that we need to do a policy whether we think we might do a tariff 01:26:55.880 --> 01:26:59.720 SPEAKER_07: subsequent to that or not. 01:26:59.720 --> 01:27:02.880 SPEAKER_07: Thank you. 01:27:02.880 --> 01:27:06.280 SPEAKER_02: Questions or comments? 01:27:06.280 --> 01:27:13.680 Unknown: I have a number of things that I wanted to address. 01:27:13.760 --> 01:27:21.600 SPEAKER_11: In terms of what would be a beneficial load and those fine lines when we are not at our 01:27:21.600 --> 01:27:30.360 SPEAKER_11: peak 40 hours, do we have ‑‑ what kind of a tool or resource do we have so we understand 01:27:30.360 --> 01:27:32.079 SPEAKER_11: where and when those hours are? 01:27:32.079 --> 01:27:35.960 SPEAKER_11: Is there a heat map of our distribution grid? 01:27:36.720 --> 01:27:37.720 Unknown: Yes. 01:27:37.720 --> 01:27:45.480 SPEAKER_12: We began looking at that and where we have that sort of available capacity options and 01:27:45.480 --> 01:27:53.319 SPEAKER_12: looking at how much we might have available in different locations to address that exact 01:27:53.319 --> 01:27:54.319 SPEAKER_12: question. 01:27:54.319 --> 01:27:55.319 Unknown: Okay. 01:27:55.319 --> 01:28:01.119 Unknown: One of my things that's always in the back of my mind is what is this ‑‑ what is 01:28:01.119 --> 01:28:08.119 SPEAKER_11: going to be the durability of this demand and what is the risk of that? 01:28:08.119 --> 01:28:13.920 SPEAKER_11: You have seen space X's IPO this week. 01:28:13.920 --> 01:28:22.199 SPEAKER_11: One of the pieces of the talking points is built into that valuation is doing AI in space. 01:28:22.199 --> 01:28:24.159 SPEAKER_11: Pie in the sky certainly sounds like it. 01:28:24.159 --> 01:28:30.519 SPEAKER_11: I never doubt the ability of the owner to do things that are unexpected. 01:28:30.640 --> 01:28:35.520 SPEAKER_11: But there are ‑‑ how do you juggle that risk? 01:28:35.520 --> 01:28:40.840 SPEAKER_11: From our perspective, right, it's basically how do you mitigate a risk of infrastructure 01:28:40.840 --> 01:28:42.760 SPEAKER_11: and stranded assets to our customers. 01:28:42.760 --> 01:28:46.960 SPEAKER_11: I think the industry can figure out how it wants to produce power, who wants to be more 01:28:46.960 --> 01:28:52.840 SPEAKER_11: efficient and the market and the visible hand will take its course as well. 01:28:52.840 --> 01:28:54.520 SPEAKER_11: But it says something in the back of my mind. 01:28:54.760 --> 01:28:57.400 SPEAKER_11: I wonder what that said. 01:28:57.400 --> 01:29:03.320 SPEAKER_11: I think that we're protected pretty well already by our existing rate structures. 01:29:03.320 --> 01:29:10.120 SPEAKER_11: We require our customers to build their own equipment and pay for their own equipment. 01:29:10.120 --> 01:29:13.720 SPEAKER_11: Not all utility rates are set up that way. 01:29:13.720 --> 01:29:16.320 SPEAKER_11: Is that generally true? 01:29:16.320 --> 01:29:17.800 Unknown: Well, yeah. 01:29:17.800 --> 01:29:20.000 SPEAKER_12: I mean, there's a lot of nuances to that. 01:29:20.000 --> 01:29:29.400 SPEAKER_12: But we do require a lot of the on‑site underground facilities would be paid by the customer. 01:29:29.400 --> 01:29:30.400 Unknown: Okay. 01:29:30.400 --> 01:29:31.400 SPEAKER_11: Yeah. 01:29:31.400 --> 01:29:33.400 Unknown: So, this thing is like that. 01:29:33.400 --> 01:29:40.119 SPEAKER_11: Also, one of my questions is, as you think about this, what's that marginal cost of power 01:29:40.119 --> 01:29:41.119 SPEAKER_11: around this? 01:29:41.119 --> 01:29:50.880 SPEAKER_11: The active discussion is the MCSS, a watt of gas or a watt of the new renewables, which 01:29:50.880 --> 01:29:55.319 SPEAKER_11: is all of our new generation. 01:29:55.319 --> 01:30:01.359 SPEAKER_11: You can just look at the prices of the contracts that we're signing up for and you can see 01:30:01.359 --> 01:30:07.800 SPEAKER_11: stuff is between, say, $70 and $110 a megawatt or a tiny bit more. 01:30:07.800 --> 01:30:11.079 SPEAKER_11: So I think that's a really interesting ‑‑ it's an interesting question. 01:30:11.079 --> 01:30:13.720 SPEAKER_11: When you start looking at the actual rate, I will say this, I do agree with the idea 01:30:13.720 --> 01:30:19.880 SPEAKER_11: of doing a board policy and then following up with a more detailed rate and knowing that 01:30:19.880 --> 01:30:21.039 SPEAKER_11: hope of that will work out. 01:30:21.039 --> 01:30:25.000 SPEAKER_11: But if you get into the details, you might need to do some adaptive management there 01:30:25.000 --> 01:30:28.079 SPEAKER_11: and pivot as well. 01:30:28.079 --> 01:30:34.519 SPEAKER_11: The only other things that we've given much thought to are alignment ‑‑ how are we 01:30:34.520 --> 01:30:41.600 SPEAKER_11: aligning with a lot of the economic development work and acquisitions, like what GSAP does 01:30:41.600 --> 01:30:46.280 SPEAKER_11: locally and I know Rancho Cordova is very eager. 01:30:46.280 --> 01:30:49.880 SPEAKER_11: These cities are all very eager to attract businesses. 01:30:49.880 --> 01:30:53.480 SPEAKER_11: So I'm sure they're putting together packages for business attraction. 01:30:53.480 --> 01:30:58.760 SPEAKER_11: I'm curious how that will align with our own existing rates. 01:30:58.760 --> 01:31:03.400 SPEAKER_11: Our economic development rate generally requires a significant number of jobs to be created. 01:31:04.079 --> 01:31:09.439 SPEAKER_11: My first thought about reading the details is they probably wouldn't qualify for that. 01:31:09.439 --> 01:31:11.479 SPEAKER_11: Very unlikely. 01:31:11.479 --> 01:31:18.119 SPEAKER_12: But in terms of working with GSAP, that is absolutely ‑‑ it's a requirement of the 01:31:18.119 --> 01:31:20.279 SPEAKER_12: EDR rate, the economic development rate. 01:31:20.279 --> 01:31:26.399 SPEAKER_12: You can't get on the economic development rate without working with the local economic 01:31:26.399 --> 01:31:32.920 SPEAKER_12: development agency and getting a support from that agency in terms of what you're bringing 01:31:32.920 --> 01:31:35.680 SPEAKER_12: and the value you're bringing to the community. 01:31:35.680 --> 01:31:43.000 SPEAKER_12: So yeah, that's absolutely ‑‑ that coordination must occur under the current tariff. 01:31:43.000 --> 01:31:49.440 SPEAKER_11: My last question is just would you have a comment or two about our CO2 obligations and 01:31:49.440 --> 01:31:53.159 SPEAKER_11: how we're currently thinking ‑‑ how can we maintain ‑‑ reasonably maintain those 01:31:53.159 --> 01:31:57.159 SPEAKER_11: obligations and growing? 01:31:57.159 --> 01:32:03.559 SPEAKER_12: And that's the issue around who is ultimately going to be obligated to deal with that carbon 01:32:03.559 --> 01:32:04.559 SPEAKER_12: requirement. 01:32:04.559 --> 01:32:09.000 SPEAKER_12: It's possible that SMUD might not be. 01:32:09.000 --> 01:32:12.399 SPEAKER_12: It kind of depends on how you may set up the energy generation, right? 01:32:12.399 --> 01:32:14.199 SPEAKER_12: We may own the renewables. 01:32:14.199 --> 01:32:20.920 SPEAKER_12: They may own, say, the nonrenewals as an example, in which case the customer might be responsible 01:32:20.920 --> 01:32:25.119 SPEAKER_12: for their own carbon emissions and addressing the carbon emissions with the state and under 01:32:25.119 --> 01:32:27.079 SPEAKER_12: the cap and trade program. 01:32:27.079 --> 01:32:35.059 SPEAKER_12: So it really ‑‑ how we structure that energy supply is going to be critical in terms 01:32:35.059 --> 01:32:38.519 SPEAKER_12: of who has the carbon risk and obligation at the end of the day. 01:32:38.519 --> 01:32:42.840 SPEAKER_12: Or if there is a carbon obligation at the end of the day. 01:32:42.840 --> 01:32:43.840 Unknown: Yeah. 01:32:43.840 --> 01:32:47.159 Unknown: I'll be structured in policy also. 01:32:47.159 --> 01:32:48.159 SPEAKER_02: Exactly. 01:32:48.159 --> 01:32:50.600 SPEAKER_02: So we don't have to leave it up for discussion. 01:32:50.600 --> 01:32:57.560 SPEAKER_02: We can say anything above XYZ, low needs to be procured under these parameters that 01:32:57.560 --> 01:32:58.720 SPEAKER_02: are renewable and whatever. 01:32:58.720 --> 01:32:59.720 SPEAKER_02: Absolutely. 01:32:59.720 --> 01:33:00.720 SPEAKER_02: Part of the policy. 01:33:00.720 --> 01:33:01.720 Unknown: Absolutely. 01:33:01.720 --> 01:33:02.720 SPEAKER_12: Yes. 01:33:02.720 --> 01:33:05.320 Unknown: Dave, you had an initial comment? 01:33:05.320 --> 01:33:06.320 SPEAKER_02: Yeah. 01:33:06.320 --> 01:33:13.560 SPEAKER_07: One of the things ‑‑ you know, actually I wanted to support what Director Bowie Thompson 01:33:13.560 --> 01:33:19.079 SPEAKER_07: just said about, you know, where your ‑‑ you know, attributes of the power that you're 01:33:19.079 --> 01:33:20.079 SPEAKER_07: getting. 01:33:20.079 --> 01:33:25.519 SPEAKER_07: Another thing that I want to be really clear about is I want to make sure that, you know, 01:33:25.519 --> 01:33:29.840 SPEAKER_07: especially since there's so many ‑‑ or there's all this hype and we know there's 01:33:29.840 --> 01:33:35.359 SPEAKER_07: going to be strong companies that come in and meet their obligation ‑‑ you know, 01:33:35.359 --> 01:33:39.159 SPEAKER_07: meet their goals and some of them are going to blow it. 01:33:39.159 --> 01:33:42.119 SPEAKER_07: Or at least that seems like a significant risk to me. 01:33:42.119 --> 01:33:47.760 SPEAKER_07: And if a whole bunch of companies are building these centers, some are going to succeed and 01:33:47.760 --> 01:33:48.760 SPEAKER_07: some are going to fail. 01:33:48.760 --> 01:33:55.320 SPEAKER_07: I want to make sure that the risk is on them and that, you know, that you mentioned letters 01:33:55.320 --> 01:33:56.760 SPEAKER_07: of credit, things like that. 01:33:56.760 --> 01:34:03.520 SPEAKER_07: So if they're not paying for things up front, that we still have a way to, you know, if 01:34:03.520 --> 01:34:07.320 SPEAKER_07: they go belly up, that we're not left holding them back. 01:34:07.320 --> 01:34:12.039 SPEAKER_07: So I think that's a really important aspect of it because there's so many companies that 01:34:12.039 --> 01:34:13.239 SPEAKER_07: are getting into this. 01:34:13.239 --> 01:34:18.560 SPEAKER_07: And if it gets over built on a national scale, then even if they're strong companies, they 01:34:18.560 --> 01:34:20.080 SPEAKER_07: may fail at this. 01:34:20.080 --> 01:34:21.080 Unknown: Yeah. 01:34:21.080 --> 01:34:22.280 SPEAKER_12: Absolutely totally agree. 01:34:22.280 --> 01:34:25.440 SPEAKER_12: And I think there's a big variety in terms of security, right? 01:34:25.440 --> 01:34:30.480 SPEAKER_12: There's a plethora of different options in terms of security there. 01:34:30.480 --> 01:34:35.800 SPEAKER_12: But absolutely agree that security needs to be one of the things we address. 01:34:35.800 --> 01:34:43.880 Unknown: I had some logistical questions that I think the public may not quite understand. 01:34:43.880 --> 01:34:46.960 SPEAKER_02: In Sacramento County, besides the business parks ‑‑ because I understand the business 01:34:46.960 --> 01:34:49.680 SPEAKER_02: parks are probably the most primed, right? 01:34:49.680 --> 01:34:52.960 SPEAKER_02: Because of the infrastructure is there, but they are business parks. 01:34:52.960 --> 01:34:53.960 SPEAKER_02: Right. 01:34:53.960 --> 01:34:56.199 SPEAKER_02: That's what their purpose is for. 01:34:56.199 --> 01:35:03.520 SPEAKER_02: Outside of, you know, Metro and McClellan, where could we possibly even see land wise 01:35:03.520 --> 01:35:10.439 SPEAKER_02: that could even be close to anything shovel ready in the next five ‑‑ because that's 01:35:10.439 --> 01:35:12.199 SPEAKER_02: a limiting factor, right? 01:35:12.199 --> 01:35:13.279 SPEAKER_02: Just the land master. 01:35:13.279 --> 01:35:16.800 SPEAKER_02: Do we see ‑‑ I know in Harold and Galt there's some pockets. 01:35:16.800 --> 01:35:18.560 SPEAKER_02: There's not a lot of infrastructure out there. 01:35:18.560 --> 01:35:19.560 SPEAKER_12: Yeah. 01:35:19.560 --> 01:35:28.079 SPEAKER_12: I mean, if you were to look maybe east in the Wiltonish area, maybe south, like you 01:35:28.079 --> 01:35:31.840 SPEAKER_12: said, in the Galt Grove potentially, maybe Natomas. 01:35:31.840 --> 01:35:39.039 SPEAKER_12: But there's not ‑‑ we're not like these other states that have thousands of acres 01:35:39.039 --> 01:35:40.880 SPEAKER_02: ready to plop when it is ‑‑ We're not Texas. 01:35:40.880 --> 01:35:42.680 SPEAKER_02: We don't have lots and lots of land. 01:35:42.680 --> 01:35:44.480 SPEAKER_02: We're a little unique in that. 01:35:44.480 --> 01:35:45.480 SPEAKER_02: Very true. 01:35:45.839 --> 01:35:47.639 SPEAKER_02: You say you have one in the hopper. 01:35:47.639 --> 01:35:55.079 SPEAKER_02: Is that in an already established area or would that be someone in the longer term that 01:35:55.079 --> 01:35:56.599 SPEAKER_02: would have to be more fully developed? 01:35:56.599 --> 01:35:58.479 SPEAKER_02: Well, it's still a very long term. 01:35:58.479 --> 01:35:59.479 SPEAKER_12: Sure. 01:35:59.479 --> 01:36:00.479 SPEAKER_12: It's going to be a very long term regardless. 01:36:00.479 --> 01:36:01.479 SPEAKER_12: Yeah. 01:36:01.479 --> 01:36:04.199 SPEAKER_12: But yeah, it would be more in the Sacramento area. 01:36:04.199 --> 01:36:05.199 SPEAKER_12: Okay. 01:36:05.199 --> 01:36:06.199 Unknown: Yeah. 01:36:06.199 --> 01:36:07.199 SPEAKER_02: Okay. 01:36:07.199 --> 01:36:11.559 Unknown: You know, there's a lot of great policies and tariffs out there already. 01:36:11.560 --> 01:36:17.360 SPEAKER_02: I think you've seen Georgia in terms of what they're doing, in terms of making sure that 01:36:17.360 --> 01:36:22.800 SPEAKER_02: there is demand, making sure ‑‑ I think TVA actually has a higher rate for data centers. 01:36:22.800 --> 01:36:28.200 SPEAKER_02: I think, you know, I trust that, you know, the staff will go through the process and 01:36:28.200 --> 01:36:30.240 SPEAKER_02: see ‑‑ I mean, other people are doing this first. 01:36:30.240 --> 01:36:31.920 SPEAKER_02: A lot of them aren't doing them well. 01:36:31.920 --> 01:36:34.280 SPEAKER_02: But I think that's the great thing with AI now, right? 01:36:34.280 --> 01:36:38.440 SPEAKER_02: You can see what policies ‑‑ but I've seen ‑‑ you know, I don't see anybody 01:36:38.439 --> 01:36:43.719 SPEAKER_02: currently but I see little bits and pieces and I think you did a good job. 01:36:43.719 --> 01:36:51.519 SPEAKER_02: I would like to echo, you know, let's make sure that it's economically safe for our rate 01:36:51.519 --> 01:36:58.039 SPEAKER_02: payers to be able to, you know, have this opportunity also is something I don't want 01:36:58.039 --> 01:36:59.039 SPEAKER_02: to miss. 01:36:59.039 --> 01:37:03.019 SPEAKER_02: You know, you're already seeing some utilities actually lowering rates and proposing lowering 01:37:03.019 --> 01:37:05.960 SPEAKER_02: rates because they have such high generation. 01:37:05.960 --> 01:37:11.279 SPEAKER_02: So I trust that the staff will look at the models out there. 01:37:11.279 --> 01:37:16.920 SPEAKER_02: That's what's nice about having a policy board is you can come with some great ideas and 01:37:16.920 --> 01:37:18.840 SPEAKER_02: we can discuss in the public. 01:37:18.840 --> 01:37:27.000 SPEAKER_02: But, you know, the advent of the data centers I think has been a scary premise largely for 01:37:27.000 --> 01:37:31.480 SPEAKER_02: states that don't have policies and don't have boards and avenues. 01:37:31.500 --> 01:37:37.099 SPEAKER_02: So I hope that we can look at what failures, look at some lessons learned. 01:37:37.099 --> 01:37:39.819 SPEAKER_02: I think a lot of people rushed in. 01:37:39.819 --> 01:37:45.699 SPEAKER_02: They saw it as a great land race and gold rush for their communities but didn't look 01:37:45.699 --> 01:37:49.419 SPEAKER_02: at, you know, the overall policies. 01:37:49.419 --> 01:37:56.219 SPEAKER_02: I think we're also different here in California where we do have a very long and arduous CEQA 01:37:56.220 --> 01:38:00.880 SPEAKER_02: where our process where these other states do not have the same process. 01:38:00.880 --> 01:38:07.400 SPEAKER_02: So I know we will be leaning on our fellow jurisdictions, you know, to make sure that, 01:38:07.400 --> 01:38:10.560 SPEAKER_02: you know, these are all open and transparent policies. 01:38:10.560 --> 01:38:16.280 SPEAKER_02: But I agree with having a policy first to just get that. 01:38:16.280 --> 01:38:20.840 SPEAKER_02: What's also nice about policies, we review them on an annual basis. 01:38:21.460 --> 01:38:27.579 SPEAKER_02: We're rates are a bit more of a process and I think down the road once we get some examples, 01:38:27.579 --> 01:38:32.060 SPEAKER_02: I think it will help with the rate process but I don't want to hold up. 01:38:32.060 --> 01:38:38.460 SPEAKER_02: At least so that the business public can get an idea of where we're going also to help 01:38:38.460 --> 01:38:39.579 SPEAKER_02: with their planning. 01:38:39.579 --> 01:38:41.300 SPEAKER_02: I think that's the biggest thing. 01:38:41.300 --> 01:38:47.220 SPEAKER_02: If they know they have general guardrails, it may influence, you know, their financial 01:38:47.240 --> 01:38:53.360 SPEAKER_02: decision whether or not to locate here or someone that has less arduous process in 01:38:53.360 --> 01:38:55.720 SPEAKER_02: terms of financing. 01:38:55.720 --> 01:38:57.800 SPEAKER_02: Any other comments before we move on? 01:38:57.800 --> 01:39:00.079 SPEAKER_02: I know we have public comments. 01:39:00.079 --> 01:39:01.079 Unknown: Okay. 01:39:01.079 --> 01:39:05.720 Unknown: So we have Scott, do you have any closing comments or anything? 01:39:05.720 --> 01:39:07.159 SPEAKER_02: No, thank you very much. 01:39:07.159 --> 01:39:08.360 SPEAKER_12: I think we have what we need. 01:39:08.360 --> 01:39:09.360 SPEAKER_12: Great. 01:39:09.360 --> 01:39:10.360 SPEAKER_02: Thank you. 01:39:10.360 --> 01:39:11.360 SPEAKER_02: We have several comments. 01:39:11.380 --> 01:39:16.380 SPEAKER_02: So first is Rick from 350 Sacramento. 01:39:37.380 --> 01:39:38.380 SPEAKER_08: Okay. 01:39:38.380 --> 01:39:41.099 SPEAKER_08: Thank you, staff and board members. 01:39:41.120 --> 01:39:44.120 SPEAKER_08: It's also good to see my old boss here. 01:39:44.120 --> 01:39:50.000 SPEAKER_08: I did a great job presenting all of the issues. 01:39:50.000 --> 01:39:55.880 SPEAKER_08: I'm speaking today on behalf of a group of environmentalists, not just 350, and that group 01:39:55.880 --> 01:40:01.079 SPEAKER_08: is listed in our submitted comments where there's a lot more detail about our concerns 01:40:01.079 --> 01:40:04.160 SPEAKER_08: about large data centers in our region. 01:40:04.160 --> 01:40:11.079 SPEAKER_08: There's also some specific comments that should have come in from our energy advisor, Ed Smiloff. 01:40:11.079 --> 01:40:15.699 SPEAKER_08: On a host of issues and others like Peter Macon will be speaking as well. 01:40:15.699 --> 01:40:17.380 SPEAKER_08: I'm not here really to talk about rates. 01:40:17.380 --> 01:40:22.739 SPEAKER_08: A lot of people think of me as a rates person, but I'm not going to be addressing those specifically. 01:40:22.739 --> 01:40:28.739 SPEAKER_08: I guess what I'd be more talking about has to do with some policy provisions that we 01:40:28.739 --> 01:40:33.779 SPEAKER_08: would like to see in any future agreements on serving data centers. 01:40:33.779 --> 01:40:37.159 SPEAKER_08: The first one would be public transparency. 01:40:37.180 --> 01:40:43.340 SPEAKER_08: Many of us were blindsided by the 18-megawatt data center expansion of PRIME at Macon Business 01:40:43.340 --> 01:40:44.340 SPEAKER_08: Park. 01:40:44.340 --> 01:40:47.739 SPEAKER_08: It's now been approved and under construction. 01:40:47.739 --> 01:40:52.260 SPEAKER_08: I know that the EJ community was very upset about it for various reasons. 01:40:52.260 --> 01:40:57.300 SPEAKER_08: Tonight, we are learning from Scott's presentation that SMUD has at least one active possible 01:40:57.300 --> 01:41:01.059 SPEAKER_08: applicant in the greater than 50-megawatt range. 01:41:01.059 --> 01:41:06.420 SPEAKER_08: Again, these huge data centers can create a lot of potential huge impacts to the surrounding 01:41:06.420 --> 01:41:07.420 SPEAKER_08: community. 01:41:07.420 --> 01:41:13.199 SPEAKER_08: I think it's only fair that the public get fair warning about these giant projects. 01:41:13.199 --> 01:41:19.560 SPEAKER_08: SMUD really is the first point of contact since they have to do an electric design study 01:41:19.560 --> 01:41:22.640 SPEAKER_08: before they can really get started. 01:41:22.640 --> 01:41:27.399 SPEAKER_08: We feel that SMUD should make the project information that they receive publicly available 01:41:27.399 --> 01:41:28.399 SPEAKER_08: as early as possible. 01:41:28.399 --> 01:41:35.159 SPEAKER_08: We'd like to know who it is that 50-megawatt plus project is and where they will be locating 01:41:35.239 --> 01:41:40.119 SPEAKER_08: so people can prepare for that. 01:41:40.119 --> 01:41:46.800 SPEAKER_08: As far as preferred siting, because SMUD is first in line, it's in a unique position to 01:41:46.800 --> 01:41:50.319 SPEAKER_08: help decide where and how these data centers can be connected. 01:41:50.319 --> 01:41:58.439 SPEAKER_08: Of course, it's best if they're near existing substations and greater than 69 kV transmission 01:41:58.439 --> 01:42:03.159 SPEAKER_08: lines, particularly if they have two feeds available. 01:42:03.159 --> 01:42:11.880 SPEAKER_08: They should also be in disturbed or industrial areas that are far away from nearby communities. 01:42:11.880 --> 01:42:16.399 SPEAKER_08: And we think that SMUD should consider releasing a map of these preferred sites as a guide 01:42:16.399 --> 01:42:19.960 SPEAKER_08: both to applicants and to the concerned public. 01:42:19.960 --> 01:42:29.220 SPEAKER_08: We need to safeguard the zero carbon plan, make sure that even with all the valley filling 01:42:29.220 --> 01:42:36.300 SPEAKER_08: and extra revenue that we do have enough batteries and renewables to provide power 01:42:36.300 --> 01:42:40.820 SPEAKER_08: for them and not go over our carbon zero goal. 01:42:40.820 --> 01:42:43.820 SPEAKER_08: So thank you. 01:42:43.820 --> 01:42:45.820 Unknown: Okay. 01:42:45.820 --> 01:42:58.500 Unknown: Then we have John Mubber. 01:42:58.500 --> 01:43:01.180 SPEAKER_01: Good evening, Chair, Board and committee. 01:43:01.180 --> 01:43:02.739 SPEAKER_01: Thank you for the presentation. 01:43:02.739 --> 01:43:04.359 SPEAKER_01: Good work. 01:43:04.359 --> 01:43:11.579 SPEAKER_01: This is a very important topic and SMUD needs to make sure they get it right. 01:43:11.579 --> 01:43:18.500 SPEAKER_01: Regarding the slide that states as a benefit, quote, may help keep rates affordable. 01:43:18.500 --> 01:43:21.020 SPEAKER_01: Is there evidence this has ever happened? 01:43:21.020 --> 01:43:25.500 SPEAKER_01: I have found no evidence of a data center keeping rates affordable. 01:43:25.500 --> 01:43:29.420 SPEAKER_01: I have dealt with this firsthand moving here from Texas. 01:43:29.420 --> 01:43:37.899 SPEAKER_01: Data centers will promise jobs, no or low water use and interruptible electricity demand. 01:43:37.899 --> 01:43:43.100 SPEAKER_01: They will deliver a handful of jobs after construction, hundreds of thousands of gallons 01:43:43.100 --> 01:43:50.979 SPEAKER_01: of water use a day and 24 7 365 day constant electricity demand. 01:43:50.979 --> 01:43:57.819 SPEAKER_01: They have to run 24 7 to make it economical to pay for the very expensive CPUs and GPUs 01:43:57.819 --> 01:43:59.379 SPEAKER_01: on the server racks. 01:43:59.379 --> 01:44:03.419 SPEAKER_01: They can't be switched on and off. 01:44:03.419 --> 01:44:08.599 SPEAKER_01: Currently communities all over the country are organizing and protesting new data centers. 01:44:08.599 --> 01:44:11.659 SPEAKER_01: Nobody wants them anywhere close to them. 01:44:11.659 --> 01:44:19.139 SPEAKER_01: In a June 10th letter to the Texas PUC and ERCOT, Governor Abbott directs, quote, the 01:44:19.140 --> 01:44:26.420 SPEAKER_01: PUC to take action to ensure that data centers, interconnections will result in reduced residential 01:44:26.420 --> 01:44:29.060 SPEAKER_01: electrical bills. 01:44:29.060 --> 01:44:35.579 SPEAKER_01: And the PUC will take action to require data centers to pay for all of their electrical 01:44:35.579 --> 01:44:43.420 SPEAKER_01: infrastructure cost to ensure that no residential rate payer is burdened by those costs. 01:44:43.420 --> 01:44:49.140 SPEAKER_01: If the Governor of the most pro-business and anti-regulation state in the country 01:44:49.140 --> 01:44:54.659 SPEAKER_01: is directing these actions, the SMUD Board should consider these at its bare minimum 01:44:54.659 --> 01:44:56.539 SPEAKER_01: requirements. 01:44:56.539 --> 01:45:01.659 SPEAKER_01: New large loads for data centers should be offered no incentives. 01:45:01.659 --> 01:45:07.539 SPEAKER_01: They should be required to pay for all of their electrical infrastructure costs, including 01:45:07.539 --> 01:45:09.140 SPEAKER_01: new generation. 01:45:09.140 --> 01:45:11.699 SPEAKER_01: They should have their own tariff. 01:45:11.699 --> 01:45:16.619 SPEAKER_01: So other rate classes won't be affected by their electricity use. 01:45:16.619 --> 01:45:21.939 SPEAKER_01: I shared the whole letter in my written comments for you to read the whole thing. 01:45:21.939 --> 01:45:23.939 SPEAKER_01: Thank you for your consideration. 01:45:23.939 --> 01:45:40.819 Unknown: And then we have Peter Machen. 01:45:40.819 --> 01:45:44.579 SPEAKER_13: Thank you to Scott for the presentation. 01:45:44.579 --> 01:45:48.619 SPEAKER_13: Rick and I are tag teaming tonight because I'm going to address some of the other issues 01:45:48.619 --> 01:45:55.719 SPEAKER_13: that we wrote up in our comments, our letter from 350 Sacramento. 01:45:55.719 --> 01:45:58.380 SPEAKER_13: One of them is the rate impacts. 01:45:58.380 --> 01:46:03.000 SPEAKER_13: I think some of the other commenters have mentioned this too and board members too. 01:46:03.000 --> 01:46:11.439 SPEAKER_13: But we don't think that other customer classes should be impacted by data center power use 01:46:11.439 --> 01:46:17.279 SPEAKER_13: or infrastructure requirements, that those costs should be borne by the data centers 01:46:17.279 --> 01:46:19.039 SPEAKER_13: themselves. 01:46:19.039 --> 01:46:26.960 SPEAKER_13: I also agree with previous, I think some of the notes that Scott had, the developer should 01:46:26.960 --> 01:46:34.399 SPEAKER_13: be finding all of the required upgrades and pay for all of their power either through 01:46:34.399 --> 01:46:41.079 SPEAKER_13: pay for it up front or supply a bond or an LLC to protect the rate payers in case they 01:46:41.079 --> 01:46:45.920 SPEAKER_13: kind of go and disappear. 01:46:45.920 --> 01:46:50.840 SPEAKER_13: I think we could pay them back via rate reductions over time as long as that doesn't impact the 01:46:50.840 --> 01:46:53.000 SPEAKER_13: other rate classes. 01:46:53.000 --> 01:46:56.880 SPEAKER_13: I do think we should have a separate class for large loads. 01:46:56.880 --> 01:47:01.960 SPEAKER_13: My preference, I think I agree with Director Rose about 25 megawatts. 01:47:01.960 --> 01:47:09.800 SPEAKER_13: Because if I did the math right, you could serve 35 megawatts on a 21 kV dedicated feeder. 01:47:09.800 --> 01:47:11.239 SPEAKER_13: And that's a lot of power. 01:47:11.239 --> 01:47:14.520 SPEAKER_13: And that's not 115 kV. 01:47:14.520 --> 01:47:18.400 SPEAKER_13: So you can get a lot of energy use there. 01:47:18.400 --> 01:47:19.400 SPEAKER_13: Let's see. 01:47:19.400 --> 01:47:26.680 SPEAKER_13: I guess I better get moving or I'm going to run out of time. 01:47:26.680 --> 01:47:32.079 SPEAKER_13: And then also if you were to charge other rate classes for some of the upgrades provided, 01:47:32.079 --> 01:47:38.520 SPEAKER_13: only charge them if those upgrades actually provided a benefit to those rate classes. 01:47:38.520 --> 01:47:43.000 SPEAKER_13: And then for interconnection conditions, one of the things we'd like to see, even though 01:47:43.000 --> 01:47:51.880 SPEAKER_13: it's been mentioned that the county basically has the first approval process so that they 01:47:51.880 --> 01:47:55.920 SPEAKER_13: probably would become public before coming to SMUD. 01:47:55.940 --> 01:48:02.319 SPEAKER_13: We think it would be a good idea to create an interconnection queue for large loads where 01:48:02.319 --> 01:48:04.399 SPEAKER_13: it would be posted publicly. 01:48:04.399 --> 01:48:10.359 SPEAKER_13: Again, if they meet the definition of large load, whatever the board decides is a large 01:48:10.359 --> 01:48:12.039 SPEAKER_13: load. 01:48:12.039 --> 01:48:15.279 SPEAKER_13: And then it would be okay to redact their names. 01:48:15.279 --> 01:48:19.760 SPEAKER_13: But their point of interconnection should be defined. 01:48:19.760 --> 01:48:22.960 SPEAKER_13: Their voltage connection level should be defined. 01:48:22.960 --> 01:48:26.319 SPEAKER_13: The type of load that they are, it might not be just data centers. 01:48:26.319 --> 01:48:28.199 SPEAKER_13: It could be logistics, manufacturing, whatever. 01:48:28.199 --> 01:48:30.439 SPEAKER_13: That should be in the queue. 01:48:30.439 --> 01:48:35.720 SPEAKER_13: And then the request, the date the request came in and in service date and then the size 01:48:35.720 --> 01:48:37.600 SPEAKER_13: of the project. 01:48:37.600 --> 01:48:43.159 SPEAKER_13: And then that way the public is kept informed of what's going on with loads. 01:48:43.159 --> 01:48:44.159 SPEAKER_13: And I'm out of time. 01:48:44.159 --> 01:48:45.159 SPEAKER_13: So thank you. 01:48:45.159 --> 01:48:53.760 Unknown: Do we have any online people? 01:48:53.760 --> 01:48:58.599 SPEAKER_04: We do have one hand up from Muriel Strand. 01:48:58.599 --> 01:48:59.599 Unknown: Okay. 01:48:59.599 --> 01:49:03.439 Unknown: Can you hear me? 01:49:03.439 --> 01:49:05.439 Unknown: Yep. 01:49:05.439 --> 01:49:06.439 SPEAKER_14: Okay. 01:49:06.439 --> 01:49:14.479 Unknown: So I definitely think that big new customers should be charged the marginal rates of the 01:49:14.479 --> 01:49:22.839 SPEAKER_14: new power that they might require, however that sort of falls out. 01:49:22.839 --> 01:49:27.239 SPEAKER_14: So I'm a mechanical engineer, so I'll leave the comments about the loads and all of that 01:49:27.239 --> 01:49:31.639 SPEAKER_14: to other folks who clearly know more about than I do. 01:49:31.639 --> 01:49:35.959 SPEAKER_14: But so I'm looking at it more from an economics and a market perspective. 01:49:35.959 --> 01:49:38.319 SPEAKER_14: So I read The Economist. 01:49:38.319 --> 01:49:45.679 SPEAKER_14: And in recent weeks, maybe months, I've been reading stuff on there expressing skepticism 01:49:45.679 --> 01:49:50.399 SPEAKER_14: about what is the business case for these guys. 01:49:50.399 --> 01:49:55.439 SPEAKER_14: Personally I look at these big corporations and all in this giant race with each other 01:49:55.439 --> 01:49:58.159 SPEAKER_14: to get in there first. 01:49:58.159 --> 01:49:59.559 SPEAKER_14: Okay. 01:49:59.559 --> 01:50:01.239 SPEAKER_14: What about the customer? 01:50:01.239 --> 01:50:06.819 SPEAKER_14: What actually is the service that they're providing for the customer? 01:50:06.819 --> 01:50:14.939 SPEAKER_14: And so in the conversation about having one of these people in Sacramento, the economic 01:50:14.939 --> 01:50:20.819 SPEAKER_14: development department should be part of the conversation so they can talk about what is 01:50:20.819 --> 01:50:26.920 SPEAKER_14: the business case for this and what service are they providing for Sacramento's? 01:50:26.920 --> 01:50:33.539 SPEAKER_14: Because if this is for somebody thousand miles away, they can do it there. 01:50:33.539 --> 01:50:39.380 SPEAKER_14: So yeah, this is a great conversation and I think everybody's going to stay tuned. 01:50:39.380 --> 01:50:41.380 SPEAKER_14: So thanks for sharing. 01:50:41.380 --> 01:50:50.739 Unknown: I do not see any more hands. 01:50:50.739 --> 01:50:51.739 Unknown: Brandon. 01:50:51.739 --> 01:50:57.380 Unknown: I just want to have a follow-up question. 01:50:57.400 --> 01:51:06.760 SPEAKER_11: What are our requirements around business confidentiality and what could potentially be made public 01:51:06.760 --> 01:51:10.640 SPEAKER_11: while respecting these people's rights under our processes? 01:51:10.640 --> 01:51:15.520 Unknown: Laura Lewis, Chief of the UN Government Affairs Officer. 01:51:15.520 --> 01:51:18.720 SPEAKER_04: I think generic information I think we can post. 01:51:18.720 --> 01:51:25.579 SPEAKER_04: I know in some cases if we're looking at largely coming to the area in consultation with GSEC, 01:51:25.579 --> 01:51:29.220 SPEAKER_04: sometimes we're required to execute NDAs. 01:51:29.220 --> 01:51:32.819 SPEAKER_04: So in that case, we wouldn't be able to disclose the entity, but we could certainly, if someone 01:51:32.819 --> 01:51:41.559 SPEAKER_04: buys an application, more than just an inquiry, put the amount of the load, something generic 01:51:41.559 --> 01:51:43.559 SPEAKER_04: that wouldn't identify the entity. 01:51:43.559 --> 01:51:50.319 Unknown: Yeah, I just think it's something that we should think about. 01:51:50.319 --> 01:51:54.399 SPEAKER_11: I think there's certainly a balance there and can always put in a public records access 01:51:54.399 --> 01:51:55.399 SPEAKER_11: to. 01:51:55.399 --> 01:51:56.399 Unknown: Go ahead. 01:51:56.399 --> 01:51:57.399 SPEAKER_03: Yeah, I find that interesting. 01:51:57.399 --> 01:52:00.579 SPEAKER_03: I didn't know that we were required to sign NDAs with GSEC. 01:52:00.579 --> 01:52:02.379 SPEAKER_03: Because we're a public agency. 01:52:02.379 --> 01:52:04.460 SPEAKER_03: We're not required to sign them. 01:52:04.460 --> 01:52:11.339 SPEAKER_04: But sometimes we do as part of that conversation because sometimes these entities are looking 01:52:11.339 --> 01:52:19.819 SPEAKER_04: at multiple cities to locate and so we do enter into NDAs from time to time to keep 01:52:19.819 --> 01:52:24.059 SPEAKER_04: the project details and everything confidential. 01:52:24.060 --> 01:52:26.060 SPEAKER_04: We've done that. 01:52:26.060 --> 01:52:27.920 Unknown: Okay, thank you. 01:52:27.920 --> 01:52:32.820 SPEAKER_02: And there were comments about being blindsided by this 18 megawatt. 01:52:32.820 --> 01:52:34.080 SPEAKER_02: We have several. 01:52:34.080 --> 01:52:36.720 SPEAKER_02: And what is our process as to notice? 01:52:36.720 --> 01:52:39.280 SPEAKER_02: That to me does not seem, is that McClellan, right? 01:52:39.280 --> 01:52:40.440 SPEAKER_02: It's at a business park. 01:52:40.440 --> 01:52:41.400 SPEAKER_02: The whole point is that. 01:52:41.400 --> 01:52:43.200 SPEAKER_02: So what is our normal process? 01:52:43.200 --> 01:52:48.680 SPEAKER_02: Because we have other, I mean, NTT is like 35 megawatts, right? 01:52:48.700 --> 01:52:54.539 SPEAKER_02: What is our normal process for, I mean, I guess, because I'm not, again, I don't see 01:52:54.539 --> 01:52:55.539 SPEAKER_02: it as large. 01:52:55.539 --> 01:53:04.420 SPEAKER_02: But do we ever do anything that tells anybody that's any of these larger projects, I guess? 01:53:04.420 --> 01:53:06.700 SPEAKER_02: I mean, what is our normal, I haven't seen it. 01:53:06.700 --> 01:53:07.700 SPEAKER_02: I'm just saying. 01:53:07.700 --> 01:53:14.060 SPEAKER_02: I just haven't seen it in the past because to me we have a process and it's been through 01:53:14.060 --> 01:53:15.060 SPEAKER_02: county. 01:53:15.060 --> 01:53:18.060 SPEAKER_02: But do we have like a threshold where we say it's over five megawatts? 01:53:18.080 --> 01:53:19.080 SPEAKER_02: Can we tell? 01:53:19.080 --> 01:53:20.080 SPEAKER_02: We do a big fanfare. 01:53:20.080 --> 01:53:21.720 SPEAKER_04: What do we do typically? 01:53:21.720 --> 01:53:24.120 SPEAKER_04: We typically don't have a process for that. 01:53:24.120 --> 01:53:26.560 SPEAKER_04: We do have an obligation to serve. 01:53:26.560 --> 01:53:29.360 SPEAKER_04: So once it's approved by the local entities. 01:53:29.360 --> 01:53:34.720 SPEAKER_02: So really, if people want to know what's going on, they need to track projects going through 01:53:34.720 --> 01:53:36.520 SPEAKER_02: the county and the cities. 01:53:36.520 --> 01:53:37.520 SPEAKER_02: That's where the notification. 01:53:37.520 --> 01:53:42.640 SPEAKER_02: Because they're required, right, to notify within a certain area, right? 01:53:42.640 --> 01:53:44.320 SPEAKER_02: So it's their job to let people know. 01:53:44.579 --> 01:53:47.979 SPEAKER_02: It would be a public process to get the permits that they would need to construct and all 01:53:47.979 --> 01:53:48.979 SPEAKER_04: of that. 01:53:48.979 --> 01:53:49.979 SPEAKER_04: But we traditionally have not said. 01:53:49.979 --> 01:53:50.979 SPEAKER_04: We have not been involved in that. 01:53:50.979 --> 01:53:51.979 SPEAKER_04: Until usually like a ribbon cutting. 01:53:51.979 --> 01:53:52.979 Unknown: No. 01:53:52.979 --> 01:53:53.979 SPEAKER_04: Right. 01:53:53.979 --> 01:53:54.979 SPEAKER_02: Right. 01:53:54.979 --> 01:53:55.979 SPEAKER_02: Yeah. 01:53:55.979 --> 01:53:56.979 SPEAKER_02: No. 01:53:56.979 --> 01:53:57.979 SPEAKER_02: Right. 01:53:57.979 --> 01:53:58.979 SPEAKER_02: So okay. 01:53:58.979 --> 01:54:01.340 SPEAKER_02: I just want to be clear that it's not something we've done, we traditionally do, we plan on 01:54:01.340 --> 01:54:02.340 SPEAKER_02: doing. 01:54:02.340 --> 01:54:06.340 SPEAKER_02: That notification is required for the local jurisdictions. 01:54:06.340 --> 01:54:07.340 SPEAKER_02: Yes. 01:54:07.340 --> 01:54:08.340 SPEAKER_04: Yeah. 01:54:08.340 --> 01:54:10.059 SPEAKER_02: They have to go through a crazy community process. 01:54:10.059 --> 01:54:11.059 SPEAKER_02: A public process, yes. 01:54:11.320 --> 01:54:15.880 SPEAKER_04: And sometimes these loads will start at a certain threshold and they'll grow over time. 01:54:15.880 --> 01:54:18.400 SPEAKER_04: I think Prime was like that as well. 01:54:18.400 --> 01:54:22.240 SPEAKER_04: I discussed shaking this out over there. 01:54:22.240 --> 01:54:23.240 Unknown: Yeah. 01:54:23.240 --> 01:54:24.240 Unknown: Exactly. 01:54:24.240 --> 01:54:31.039 SPEAKER_12: They usually ask for a reserve capacity that is in excess of their starting capacity. 01:54:31.039 --> 01:54:36.280 SPEAKER_12: Again, that goes back to that minimum demand type debate that we were talking about earlier. 01:54:36.300 --> 01:54:41.059 SPEAKER_12: And then they grow into that capacity that we've installed to serve them over time. 01:54:41.059 --> 01:54:42.059 SPEAKER_12: Yeah. 01:54:42.059 --> 01:54:44.259 SPEAKER_12: Because they want to ask for more in case they grow. 01:54:44.259 --> 01:54:47.300 SPEAKER_02: But when they start, it's usually like a ramp up time. 01:54:47.300 --> 01:54:53.659 SPEAKER_02: Regardless, it's noticing of these things coming is a requirement of the local jurisdiction. 01:54:53.659 --> 01:54:59.380 SPEAKER_02: It's not something that we traditionally do except for a press release saying, yay, we 01:54:59.380 --> 01:55:01.380 SPEAKER_02: have this new customer. 01:55:01.380 --> 01:55:02.380 Unknown: Good. 01:55:02.380 --> 01:55:03.380 Unknown: Question. 01:55:03.380 --> 01:55:13.880 SPEAKER_07: So there's a statement here that, in what Rick provided us, states that it's the first 01:55:13.880 --> 01:55:17.480 SPEAKER_07: point of contact in the application process. 01:55:17.480 --> 01:55:23.500 SPEAKER_07: Are there cases where somebody would apply for, actually apply for service if they haven't 01:55:23.500 --> 01:55:30.520 SPEAKER_07: already applied with the county or the city or the land use authority to get approval 01:55:30.520 --> 01:55:32.520 SPEAKER_07: for the project? 01:55:33.520 --> 01:55:38.380 Unknown: I would say that that would not typically happen now. 01:55:38.380 --> 01:55:43.540 SPEAKER_12: I wouldn't expect that that would typically happen now. 01:55:43.540 --> 01:55:44.540 SPEAKER_12: Not to my knowledge. 01:55:44.540 --> 01:55:46.900 SPEAKER_07: I mean, that strikes me. 01:55:46.900 --> 01:55:51.760 SPEAKER_07: They're not going to ask us for service at a place that they don't even know whether 01:55:51.760 --> 01:55:52.760 SPEAKER_07: they're... 01:55:52.760 --> 01:55:54.580 SPEAKER_12: Well, okay. 01:55:54.580 --> 01:56:02.140 SPEAKER_12: So there's a difference between having a discussion about what SMUD could or could not do in general 01:56:02.840 --> 01:56:06.360 SPEAKER_12: versus I've selected this site. 01:56:06.360 --> 01:56:10.340 SPEAKER_12: I'm going to build my facility here. 01:56:10.340 --> 01:56:14.380 SPEAKER_12: Now I'm going to apply for service at this location. 01:56:14.380 --> 01:56:20.619 SPEAKER_12: What is SMUD's service requirements here? 01:56:20.619 --> 01:56:22.440 SPEAKER_12: Those are two different levels of conversation. 01:56:22.440 --> 01:56:27.380 SPEAKER_12: I would say the first conversation about just generic, don't know where I'm going to locate, 01:56:27.380 --> 01:56:31.800 SPEAKER_12: I like Sacramento, seems like it's a reasonable cost, good labor pool. 01:56:31.800 --> 01:56:34.100 SPEAKER_12: We'd like to locate here in general. 01:56:34.100 --> 01:56:38.579 SPEAKER_12: Those discussions will often happen without an application for service. 01:56:38.579 --> 01:56:43.739 SPEAKER_12: The application for service is more of an official, this is the location where I'm at. 01:56:43.739 --> 01:56:47.060 SPEAKER_12: I'm proceeding with the local jurisdiction to... 01:56:47.060 --> 01:56:48.220 SPEAKER_12: And I've secured this site. 01:56:48.220 --> 01:56:53.140 SPEAKER_12: I have site control and I'm proceeding with the local jurisdiction to move through their 01:56:53.140 --> 01:56:56.820 SPEAKER_12: process to construct my facility and build my business here. 01:56:56.820 --> 01:57:00.460 SPEAKER_12: I now need to understand what the service requirements are for SMUD. 01:57:01.359 --> 01:57:02.359 SPEAKER_07: Right. 01:57:02.359 --> 01:57:11.399 SPEAKER_07: But they've already contacted, they've already gotten a lot more knowledge about a specific 01:57:11.399 --> 01:57:20.079 SPEAKER_07: site where you can actually think about what are the actual impacts versus, oh, what are 01:57:20.079 --> 01:57:22.199 SPEAKER_07: your general... 01:57:22.199 --> 01:57:27.920 SPEAKER_07: Sounds like we've gotten a lot of inquiries of, hey, what are your general parameters? 01:57:27.920 --> 01:57:30.079 SPEAKER_07: What are you going to require from us? 01:57:30.100 --> 01:57:37.380 SPEAKER_07: And there might be dozens of those and those are all pretty speculative, right? 01:57:37.380 --> 01:57:38.380 Unknown: Yes. 01:57:38.380 --> 01:57:39.380 SPEAKER_07: So that wouldn't... 01:57:39.380 --> 01:57:44.100 SPEAKER_07: I mean, to me, it doesn't make any sense that we would inform the public, and especially 01:57:44.100 --> 01:57:48.539 SPEAKER_07: if somebody was asking about, well, could you serve this site because that's part of 01:57:48.539 --> 01:57:49.539 SPEAKER_07: their... 01:57:49.539 --> 01:57:51.180 SPEAKER_07: They haven't even bought anything, right? 01:57:51.180 --> 01:57:57.260 SPEAKER_07: And they're looking at maybe a piece of property and it doesn't make sense for us to say, oh, 01:57:57.280 --> 01:58:01.440 SPEAKER_07: somebody asked us about this particular site because they haven't... 01:58:01.440 --> 01:58:09.520 SPEAKER_07: They may already be thinking about, well, negotiating the price. 01:58:09.520 --> 01:58:18.239 SPEAKER_07: So anyway, it seems that this assertion that we're the first point in that when we get 01:58:18.239 --> 01:58:24.640 SPEAKER_07: those inquiries or applications that we're the first point, that's just... 01:58:24.660 --> 01:58:26.260 SPEAKER_07: That's not really... 01:58:26.260 --> 01:58:29.740 SPEAKER_07: Doesn't sound like it's generally correct. 01:58:29.740 --> 01:58:35.940 SPEAKER_12: Not the first official point, I would say, but we are often an initial point of contact 01:58:35.940 --> 01:58:38.140 SPEAKER_12: in just a discovery phase. 01:58:38.140 --> 01:58:39.140 Unknown: Right. 01:58:39.140 --> 01:58:40.140 SPEAKER_07: Yes. 01:58:40.140 --> 01:58:41.140 SPEAKER_07: Which would... 01:58:41.140 --> 01:58:47.539 SPEAKER_07: Seems strikes me as being too early in the process to let the public know that, oh, somebody 01:58:47.539 --> 01:58:48.539 SPEAKER_07: asked us about this. 01:58:48.539 --> 01:58:52.280 SPEAKER_12: In the discovery phase, there's so many different options of customers looking at, including 01:58:52.340 --> 01:58:59.019 SPEAKER_12: in and outside of California, in and outside of Sacramento, that we get many of those types 01:58:59.019 --> 01:59:00.019 SPEAKER_12: of inquiries frequently. 01:59:00.019 --> 01:59:01.019 SPEAKER_12: Yeah. 01:59:01.019 --> 01:59:02.019 SPEAKER_12: Okay. 01:59:02.019 --> 01:59:03.019 SPEAKER_10: Thank you. 01:59:03.019 --> 01:59:04.019 SPEAKER_02: Do you have a question? 01:59:04.019 --> 01:59:05.019 SPEAKER_02: Go ahead. 01:59:05.019 --> 01:59:08.619 SPEAKER_10: Just a comment, or I guess it's a question too. 01:59:08.619 --> 01:59:13.399 SPEAKER_10: In my illustrious previous career as a SMUD Public Information Officer, I remember getting 01:59:13.399 --> 01:59:17.340 SPEAKER_10: into a little bit of hot water because I divulged a little too much about a certain customer 01:59:17.340 --> 01:59:22.920 SPEAKER_10: and what rate class they were in and what programs they were part of. 01:59:22.920 --> 01:59:29.279 SPEAKER_10: I mean, even after they're a signed customer, we have to maintain their confidentiality. 01:59:29.279 --> 01:59:35.319 SPEAKER_10: So I mean, there's certain things we can talk about and certain things we can't talk about. 01:59:35.319 --> 01:59:39.440 SPEAKER_10: And I don't intend to reinsert myself into the hot water as a board member. 01:59:39.440 --> 01:59:42.440 Unknown: Any other comments? 01:59:42.440 --> 01:59:45.360 Unknown: Well, thank you. 01:59:45.380 --> 01:59:48.380 SPEAKER_02: I think you have some good public comments, right? 01:59:48.380 --> 01:59:49.500 SPEAKER_02: So thank you for the public. 01:59:49.500 --> 01:59:54.779 SPEAKER_02: I think there's always little bits and pieces, and there's lots of information out there 01:59:54.779 --> 01:59:56.699 SPEAKER_02: now with everybody else in front of us. 01:59:56.699 --> 02:00:00.979 SPEAKER_02: So you said the timeline would be this summer and fall. 02:00:00.979 --> 02:00:01.979 SPEAKER_02: Correct? 02:00:01.979 --> 02:00:02.979 SPEAKER_02: Okay. 02:00:02.979 --> 02:00:03.979 SPEAKER_02: Well, we look forward to it. 02:00:03.979 --> 02:00:05.619 SPEAKER_02: And there's the public here. 02:00:05.619 --> 02:00:08.819 SPEAKER_02: Welcome to email your ideas and incorporate. 02:00:08.840 --> 02:00:15.000 SPEAKER_02: I think the staff was really good at evaluating and saying why we didn't add XYZ. 02:00:15.000 --> 02:00:22.199 SPEAKER_02: But I think it's always good to get a good variety of people's backgrounds. 02:00:22.199 --> 02:00:26.920 SPEAKER_02: And hopefully we can do this a positive way that will be a template for everybody else. 02:00:26.920 --> 02:00:27.920 SPEAKER_02: So thank you. 02:00:38.819 --> 02:00:39.819 Unknown: Thank you. 02:01:08.819 --> 02:01:09.819 Unknown: Thank you. 02:01:38.819 --> 02:01:39.819 Unknown: Thank you.