Energy Resources Customer Services Committee Apr 15 2026

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SPEAKER_09: I think everybody's here that's going to be here now

Unknown: we're good

Unknown: five seconds please, five seconds

Unknown: okay good evening and welcome to the energy resources and customer service committee meeting and special board meeting

SPEAKER_09: meeting.

SPEAKER_09: We have a meeting on June 15th.

SPEAKER_09: This meeting is being recorded and can be accessed on some of its website.

SPEAKER_09: Please remember to unmute your microphone when speaking in order that our virtual attendees may hear.

SPEAKER_09: The microphone will display a green indicator light when the mic is on.

SPEAKER_09: For members of the public attending in person that wish to speak at this meeting, please follow the speaker's request form located at the table outside this room and hand it to security.

Unknown: Members of the public attending this meeting virtually that wish to provide verbal comments during the committee meeting may do so by using the rated hand feature in Zoom.

SPEAKER_09: The time public comment is called.

SPEAKER_09: Technical support staff will enable the audio for you when your name is announced during the public comment period.

SPEAKER_09: You may also submit written comments by emailing them to public comment org.

SPEAKER_09: Written comments will not be read into the record but will be provided to the board electronically and placed into the record of the meeting of receive within two hours after the meeting ends.

Unknown: Chief legal officer, please conduct the roll call.

Unknown: Director Sanborn.

SPEAKER_10: Here.

SPEAKER_10: Director Fishman.

SPEAKER_10: Here.

Unknown: Chair Buie-Thompson.

SPEAKER_10: Present.

SPEAKER_10: All committee members are present.

SPEAKER_10: Also present are directors Herber, Kurth and present Tamayo.

Unknown: Item number one on tonight's agenda is to provide the board the 2030 zero carbon plan to send my annual update to include utility scale project progress.

SPEAKER_09: Progress towards 2030 goals.

SPEAKER_09: Reliability and affordability considerations.

SPEAKER_09: And an IRP update.

Unknown: Our first presenter is Josh Landon.

SPEAKER_09: He is the director of power generation and also Brian Swan, director of resource planning and settlements.

SPEAKER_09: All right.

SPEAKER_05: Well, good evening and thank you for that kind introduction, chair Buie-Thompson.

SPEAKER_05: Again, my name is Josh Landon, director of power generation.

SPEAKER_05: And tonight I really get the honor to present the utility scale update for zero carbon plan.

SPEAKER_05: And this year I'm actually joined with a co-presenter, Brian Swan, our director of resource planning and market settlements.

SPEAKER_05: And we have a lot of material and a lot of ground to cover tonight.

SPEAKER_05: So I'll actually just jump right into the agenda.

SPEAKER_05: Kind of lay out really the plan for this evening's update.

SPEAKER_05: So really I want to take a moment in level set on the zero carbon journey.

SPEAKER_05: Really talk about some of the key tenants of the zero carbon plan.

SPEAKER_05: Those will be critical as we walk through the update tonight to level set on some of those key components of the plan.

SPEAKER_05: And then I'll actually jump right into the utility scale update.

SPEAKER_05: So talk more tactically about projects.

SPEAKER_05: We have commissioned here recently projects in the pipeline that we're currently developing and also other projects that aren't yet public.

SPEAKER_05: But we're flagging the resource and just communicating the amount of capacity associated with some of those projects under development.

SPEAKER_05: Then I'll kind of switch gears.

SPEAKER_05: I'll have an opportunity to talk about the reliability update.

SPEAKER_05: So every year we perform a zero carbon plan reliability study.

SPEAKER_05: So I'll highlight some of the key takeaways, some of the key items of that reliability study.

SPEAKER_05: And maybe what's a little unique this year, I'll have the opportunity to talk about a case study that we recently saw.

SPEAKER_05: And really how that aligns with reliability and really our strategy going forward as we continue to plan, execute, measure and correct our zero carbon plan.

SPEAKER_05: Part of my update, I also have the opportunity to talk about new technology and advancements we're seeing there.

SPEAKER_05: And then after my update, I'll actually get an opportunity to pass the baton to Brian.

SPEAKER_05: Brian will really talk and he'll kind of zoom up and look at the progress overall for our zero carbon plan.

SPEAKER_05: And really show progress to date, but also the next four to five years and really that path to the end of 2030.

SPEAKER_05: In addition to that, Brian will also have an opportunity to talk about the integrated resource plan.

SPEAKER_05: And then we'll have time for questions, but I would just encourage the committee and the board as you have questions, please interrupt me and Brian.

SPEAKER_05: Let's go and address those in real time.

SPEAKER_05: So, you know, we're actually earmarked here tonight on the five year anniversary of our zero carbon plan.

SPEAKER_05: And as I think back to the inception of that plan, you actually go back to 2020.

SPEAKER_05: As I did last year, I just want to take the opportunity to really commend this board in 2020, right?

SPEAKER_05: We all remember the declaration of the climate emergency that really challenged the organization, stretch the organization to really focus on really the art of the possible.

SPEAKER_05: Right? The belief of really trending towards zero carbon in our plan.

SPEAKER_05: So really commend the board for really that foresight and thought.

SPEAKER_05: And as you think back to 2020, this was a time where today a lot of utilities have zero carbon plans.

SPEAKER_05: Back then it was not common. It was unique. We really set the most aggressive plan at that time.

SPEAKER_05: So again, this is really a legacy item and really want to commend the board for really, again, stretching the organization,

SPEAKER_05: really focusing on collaboration and innovation to really get us to the point we're at tonight.

SPEAKER_05: So, you know, as I think about the zero carbon plan, I'll also highlight and kind of direct the focus to the screen here.

SPEAKER_05: And as you see this diagram, this was actually part of the original zero carbon plan.

SPEAKER_05: And this really was that flexible path towards zero carbon.

SPEAKER_05: And it really outlined our starting point, which was about two million metric tons of greenhouse gas.

SPEAKER_05: Right. So in 2020, and then as we looked at various renewable and clean energy resources, it's that glide path to zero in 2030.

SPEAKER_05: So when we looked at the original plan and the various resource planning and engineering teams, as they looked at the resource mix,

SPEAKER_05: what they identified is approximately 90 percent of the plan could be accomplished with available technology.

SPEAKER_05: So, you know, our hydro units are foundational to our zero carbon plan.

SPEAKER_05: But it was other technologies such as traditional solar, wind and battery.

SPEAKER_05: As you look at the resource plan and resource mix and looked at 2030 and that load forecast, really, we could get 90 percent there with proven clean technology.

SPEAKER_05: So the plan really identified as you look at the X axis close to 2030, that first 90 percent challenging enough.

SPEAKER_05: But as it notes there, achieving the last 10 percent is a major challenge.

SPEAKER_05: So really the plan identified new technology development would have to be identified.

SPEAKER_05: It had to be cultivated, have to be scaled and proven at a utility scale really to get that last 10 percent.

SPEAKER_05: So this was critical component as we think about the zero carbon plan because our teams continue to work with industry stakeholders and really push pilot programs and projects

SPEAKER_05: and really try to advance that clean new technology that would get us the final 10 percent.

SPEAKER_05: So that's critical to the plan.

SPEAKER_05: And of course, holistically, it didn't stop at the utility scale.

SPEAKER_05: I see Rachel Wong there.

SPEAKER_05: She'll provide the update in terms of our customer and distributed energy.

SPEAKER_05: Of course, that's a critical part of our zero carbon plan tonight, but we're just focused on utility scale there.

SPEAKER_05: So the last component I'll kind of touch on as you look at the bottom, you'll see three tranches or three boxes there.

SPEAKER_05: And we're really in that center box.

SPEAKER_05: And, you know, last year we talked about a number of headwinds and challenges and we continue to see that.

SPEAKER_05: And we've continued to see that through the duration of the zero carbon plan, quite frankly, right in the middle of covid.

SPEAKER_05: We started the zero carbon plan and we've advanced quite far in that time.

SPEAKER_05: So we continue to look at these challenges and mitigate them.

SPEAKER_05: But as we're in the middle of the plan and we have approximately four to five years to go,

SPEAKER_05: it really makes sense to continue forward progress on our zero carbon plan, but also sharpen our pencils

SPEAKER_05: and holistically look at our integrated resource plan and really look at timelines of projects, the cost of projects,

SPEAKER_05: and really push us forward towards the finish line there.

Unknown: So the last kind of key tenet of the original zero carbon plan I'll talk about is, you know, represented by the picture on the left, right?

SPEAKER_05: This is a good pictorial analogy of really the framework of the zero carbon plan, which had built in controls.

SPEAKER_05: As we think about the zero carbon plan and we think about reliability, right, those are just table stakes.

SPEAKER_05: As a utility, we provide an essential service, life safety.

SPEAKER_05: So really, as we think about that, right, no compromise there.

SPEAKER_05: So as we think about reliability, right, we're not going to compromise that as we continue forward progress on our zero carbon plan.

SPEAKER_05: But furthermore, affordability is a key component, right?

SPEAKER_05: As we identified in this original zero carbon plan, what affordability means is we would maintain our rate increases at inflation or below.

SPEAKER_05: And we've continued to do that.

SPEAKER_05: And these are natural guardrails.

SPEAKER_05: And as I look at these two diagrams, and I'll kind of shift to the Venn diagram on the right,

SPEAKER_05: it creates this natural trilemma that we're constantly balancing system reliability, customer affordability,

SPEAKER_05: and of course the clean energy transition.

SPEAKER_05: But as I highlighted with the guardrails, system reliability and customer affordability are inelastic, right?

SPEAKER_05: There's not a lot of room we could do there in terms of the plan.

SPEAKER_05: Of course, we do have mechanisms to review projects and review those with the board and make decisions.

SPEAKER_05: But again, this is really why it makes sense to take a step back, again, as I mentioned,

SPEAKER_05: sharpen our pencils and go through the integrated resource plan.

SPEAKER_05: There's two, maybe, examples I could provide as we think about this Venn diagram, right?

SPEAKER_05: We're trying to thread the needle on the intersection of these three interdependencies

SPEAKER_05: and really find projects that advance all three of these.

SPEAKER_05: As I think about some of those and the exciting work we're doing at SMUD,

SPEAKER_05: one of the big one is extended next day market.

SPEAKER_05: Really, that has the opportunity to expand not only system reliability and customer affordability,

SPEAKER_05: but our ability to really optimize the broader western interconnection

SPEAKER_05: and the western grid to really advance clean energy,

SPEAKER_05: not only within our service territory, but more globally across the west.

SPEAKER_05: So that's an excellent example.

SPEAKER_05: The other one I would point to is we think about some of our thermals and how we're retooling them,

SPEAKER_05: how we're using them today.

Unknown: We do have thermals today that provide reliability support, but they actually don't run very often,

SPEAKER_05: so they provide tremendous capacity value in terms of managing contingencies.

SPEAKER_05: And those have real dollar impacts and cost savings.

SPEAKER_05: So as I think about a project like our thermals where we're not running them,

SPEAKER_05: but they're available in case of emergency,

SPEAKER_05: really as you think about this Venn diagram, they're really supporting all three,

SPEAKER_05: system reliability again, customer affordability,

SPEAKER_05: and allowing more clean energy resources to integrate into our system.

Unknown: So as I transition to the utility scale project update, I'll do this in two tranches.

SPEAKER_05: First, I'll kind of start locally.

SPEAKER_05: So these would be projects within our service territory or just adjacent.

SPEAKER_05: They have transmission pass into our service territory.

SPEAKER_05: So the upper left project, a lot of the board member a year ago was at this ribbon cutting.

SPEAKER_05: This is Agri-Voltaic site, SLU house.

SPEAKER_05: Just shortly after that, this project actually went commercial operation in July.

SPEAKER_05: So this project for approximately the last year has been online serving customer loads.

SPEAKER_05: So a huge success there, and that's an update year over year.

SPEAKER_05: That project completed construction last year is now online.

SPEAKER_05: The next project there, Country Acres, that's really a huge step forward

SPEAKER_05: in terms of our zero carbon plan because of the scale of that project.

SPEAKER_05: As you look at the capacity, it's 344 megawatts traditional solar PV,

SPEAKER_05: but it also has a very large component battery supply, 172 megawatts.

SPEAKER_05: So as we think about this project, it's very exciting

SPEAKER_05: because it's a very active construction right now,

SPEAKER_05: and we're planning potentially to be able to energize this project later, early this summer

SPEAKER_05: and really start commissioning testing.

SPEAKER_05: From a planning perspective, we anticipate this project being fully commissioned

SPEAKER_05: and online serving load by the summer of next year.

SPEAKER_05: But really, as we look at the milestones and the project progress,

SPEAKER_05: really there's a clear path to meet that.

SPEAKER_05: So great progress with Country Acres, so a lot of work going on there.

SPEAKER_05: And then the next project, Dry Creek.

SPEAKER_05: So this is what I would consider a companion project.

SPEAKER_05: If you think back to 2021 when we commissioned Rancho Seco 2 solar,

SPEAKER_05: 160 megawatts traditional PV solar plant,

SPEAKER_05: this project is a companion because it adds that battery storage

SPEAKER_05: and battery supply to that asset.

SPEAKER_05: So out there in Rancho Seco, we're working with our Dry Creek project

SPEAKER_05: to really commission that.

SPEAKER_05: And the timeline here is quite quick.

SPEAKER_05: If you look at the commissioning timeline,

SPEAKER_05: we anticipate that that project will be online in late 2027,

SPEAKER_05: really supplying that additional storage we could leverage in our service territory.

SPEAKER_05: As the sun goes down and we could continue to serve load through energy supply,

SPEAKER_05: through energy storage throughout the night in the evening.

SPEAKER_05: The next two projects on the right, these are a little bit different color.

SPEAKER_05: The reason is these projects are under evaluation.

SPEAKER_05: So these two projects are actually SMUD developed projects.

SPEAKER_05: We're a lead agency.

SPEAKER_05: So our internal project development team,

SPEAKER_05: they're leading the charge on these two projects.

SPEAKER_05: The first one in the upper right I'll mention is Oveja Ranch.

SPEAKER_05: This is a 75 megawatt project with a 37 megawatt battery project.

SPEAKER_05: And actually this project in terms of the development timeline is advanced.

SPEAKER_05: It has the permit incomplete.

SPEAKER_05: So as we're looking at the next steps of this project,

SPEAKER_05: we're really focused on completing the engineering, the design,

SPEAKER_05: and really the plan to construct and operate this project long term.

SPEAKER_05: The next project there is another large project,

SPEAKER_05: another potential huge milestone in terms of our zero carbon plan.

SPEAKER_05: This is Curry Creek.

SPEAKER_05: I would also say this is a companion project to Country Acres.

SPEAKER_05: It's literally just adjacent to that project site.

SPEAKER_05: It actually interconnects into the same switching station.

SPEAKER_05: And this is another big project for us in terms of not only battery stores

SPEAKER_05: at 156 megawatts but also in terms of additional solar PV.

SPEAKER_05: So as I kind of summarized these projects,

SPEAKER_05: you see in kind of the yellow or green,

SPEAKER_05: if you add up all these projects,

SPEAKER_05: it's about a little over half a million metric tons of greenhouse gas reduction.

SPEAKER_05: So as we look back at the original zero carbon plan,

SPEAKER_05: if you remember, we started at 2 million, right?

SPEAKER_05: So this is approximately a quarter of the way there.

SPEAKER_05: As we look at other renewable projects within our service territory,

SPEAKER_05: in the light blue at the bottom,

SPEAKER_05: you'll see an additional 275 megawatts of solar and 275 megawatts of storage.

SPEAKER_05: So this is another project we're evaluating.

SPEAKER_05: It's not been publicly released,

SPEAKER_05: so we're not really providing too much detail here,

SPEAKER_05: but we're really working towards a potential notice of preparation

SPEAKER_05: and a public process starting later this year on this project.

SPEAKER_05: So another project in our pipeline that we continue to evaluate.

SPEAKER_05: Director Fishman.

SPEAKER_05: Just last night, the board gave initial approval to a plan to increase

SPEAKER_03: the net energy metering rate.

SPEAKER_03: Are we getting credit for the new solar that goes on behind the meter

SPEAKER_03: in terms of the greenhouse gas reductions?

SPEAKER_03: Does that count towards our zero carbon goal?

SPEAKER_03: We don't.

SPEAKER_05: I don't believe we count that contribution to reduction.

SPEAKER_05: And these are equivalent kind of projections

SPEAKER_05: just based on the operating profile of these assets.

SPEAKER_05: Okay, but it ends up, to us, it looks like reduced loads.

SPEAKER_03: That's correct.

SPEAKER_03: You sort of count it.

SPEAKER_03: That's right, yeah.

Unknown: All right.

Unknown: The next utility scale project update's really focused

SPEAKER_05: on the regional footprint in the west

SPEAKER_05: is we look at the top left project.

SPEAKER_05: This is actually a wind project, Hatchet Ridge in Shasta County.

SPEAKER_05: This is roughly a 100 megawatt wind project.

SPEAKER_05: It was an existing wind project that the existing power purchase agreement

SPEAKER_05: actually came to the end of the term.

SPEAKER_05: And our energy trading and contracts team did a good job to negotiate

SPEAKER_05: that we would be the offtaker there.

SPEAKER_05: So this one actually started December of last year.

SPEAKER_05: So this one is in service, and this is an update since last year.

SPEAKER_05: The next project down, you'll see there, it mentions New Mexico,

SPEAKER_05: Sunzia Wind, another wind project.

SPEAKER_05: This is a very exciting project.

SPEAKER_05: As you look at the capacity, our share of this project's 150 megawatts.

SPEAKER_05: But as you look at this project in totality,

SPEAKER_05: it is the largest clean energy project in the U.S.

SPEAKER_05: It's approximately 3,500 megawatts,

SPEAKER_05: almost 1,000 wind turbines in this project.

SPEAKER_05: And it also includes over a 500 mile, 500 kV,

SPEAKER_05: a 525 kV high voltage DC line.

SPEAKER_05: And really as we look at this project and our share of it,

SPEAKER_05: this does have deliverability into Kaiso.

SPEAKER_05: So as you look at that transmission line and we look at this agreement,

SPEAKER_05: this power does actually make it back into the Kaiso footprint.

SPEAKER_05: The next couple projects, Terra Gen, this is in Kern County.

SPEAKER_05: This is just a traditional PV site, just under 50 megawatts.

SPEAKER_05: And so this project, as we look at the milestone there,

SPEAKER_05: you can see January of next year.

SPEAKER_05: So very close to this project going in service

SPEAKER_05: and providing clean, renewable energy for our system.

SPEAKER_05: The next project on the upper right, GRACE, very similar,

SPEAKER_05: just a traditional solar project.

SPEAKER_05: This is 70 megawatts.

SPEAKER_05: This project is also nearing the finish line.

SPEAKER_05: We anticipate December of next year that this project would be online.

SPEAKER_05: The next two projects, I want to talk about Solano.

SPEAKER_05: I know in this report last year we talked about how that Solano IV went into service the prior year.

SPEAKER_05: So we had approximately half a year of service in Solano.

SPEAKER_05: And so in 2025, we actually saw a full year for Solano.

SPEAKER_05: And a couple of stats I just want to read out,

SPEAKER_05: because in terms of energy production out of our Solano wind facility,

SPEAKER_05: if I go back to 2023, in terms of annual production,

SPEAKER_05: we are about 500 gigawatt hours of energy.

SPEAKER_05: In 2024, about halfway through, we commissioned Solano IV.

Unknown: We went from 500 to about 650.

SPEAKER_05: So last year, full year production of Solano IV,

Unknown: we eclipsed 750 gigawatt hours, so almost a terawatt hour,

SPEAKER_05: three quarters of a terawatt hour.

SPEAKER_05: So as we look at Solano IV, and that's been a successful project for us,

SPEAKER_05: and as we fast forward to Solano V and the potential there,

SPEAKER_05: that project actually is a capacity increase in terms of production on an annual basis.

SPEAKER_05: The total capacity in terms of peak stays the same,

SPEAKER_05: but potentially as we look at that project in the design,

SPEAKER_05: we're actually installing more efficient wind turbines that have lower wind speeds to produce energy.

SPEAKER_05: So we could see 80% production as we transition our Solano II asset to Solano V

SPEAKER_05: and do a repower there.

SPEAKER_05: And right at once that project's complete,

SPEAKER_05: we'll be over a terawatt of energy on an annual basis from our Solano asset.

SPEAKER_05: So a lot of kudos and success there.

SPEAKER_05: It's been a huge benefit to our system and our zero carbon plan.

Unknown: The last project I'll mention there, another big success, in my opinion,

SPEAKER_05: in terms of our zero carbon plan and having dispatchable base load energy resources,

SPEAKER_05: a geothermal asset, this is our geysers plant.

SPEAKER_05: We had, this is a calpine plant,

SPEAKER_05: and we had an existing power purchase agreement with geysers for 100 megawatts.

SPEAKER_05: And again, our energy trading and contracts team did an excellent job in negotiating.

SPEAKER_05: Two additional tranches, 28 and 29, that increases from 100 megawatts to 125 megawatts.

SPEAKER_05: And then when we get to 2030, that actually increases to 150 total.

SPEAKER_05: And that project has a total term of 20 years,

SPEAKER_05: so that extends well beyond our 2030 plan into the future.

SPEAKER_05: And again, providing that base load resource to serve load 24-7 when the sun's not shining

SPEAKER_05: and the wind's not blowing.

Unknown: So as we look at the total GHG reduction for our regional projects,

SPEAKER_05: right in the lower right, you'll see about a million metric tons of greenhouse gas reduction from this plan.

Unknown: Also under evaluation, our energy trading contracts team is looking at an additional 425 megawatts of solar,

SPEAKER_05: 331 megawatts of battery storage, and an additional 40 megawatts of geothermal.

SPEAKER_05: So right as we evaluate all those projects, I'm not intending to communicate that.

SPEAKER_05: All those would be moving forward, but it's certainly projects that are viable that we're evaluating.

SPEAKER_05: And if you add up the greenhouse gas reduction from the prior two slides, the total,

SPEAKER_05: it's in excess of two million metric tons of greenhouse gas reduction.

SPEAKER_05: So really from a planning perspective, our teams have done a very excellent job developing projects

SPEAKER_05: and identifying clean energy resource projects really to offset over our original expectation or plan.

SPEAKER_05: So right, we're now in the phase where execution is key and we continue to manage these projects and continue to develop them.

Unknown: So in terms of new technology, as I talked about that last 10%, really that's the biggest challenge of our zero carbon plan,

SPEAKER_05: when you think about serving load when the sun's not up and the battery storage we have is depleted,

SPEAKER_05: and you're really trying to serve load in those challenging times, I'll call it say midnight until the next morning when the sun comes up

SPEAKER_05: and our renewable assets are producing electricity.

SPEAKER_05: Really, we identified the need for new clean technology.

SPEAKER_05: As we looked at the inception of the zero carbon plan, right, we looked at many alternative fuels,

SPEAKER_05: hydrogen, renewable natural gas, biofuels.

SPEAKER_05: We looked at other potential new technology that could help serve this gap.

SPEAKER_05: Really, optimistically, we haven't seen the advancement in the utility scale progress that we hoped.

SPEAKER_05: The one exception is there's been tremendous forward progress on carbon capture.

SPEAKER_05: So for a number of years now, we've been providing an update that we've been working with CalPine and the Sutter Project to convert that to carbon capture.

Unknown: So really the update here is that we continue those discussions.

SPEAKER_05: Sutter continues to work on their front end engineering design.

SPEAKER_05: They continue to refine that, and that will really inform potential options that we would consider and potential power purchase agreement costs.

SPEAKER_05: One of the updates that were made since last year, Director Herber, I remember you asked about the DOE grant, that $270 million that's flagged there.

SPEAKER_05: At that time, there was no change there.

SPEAKER_05: Unfortunately, shortly after the update last year, that DOE grant was repealed.

SPEAKER_05: But the good news in terms of project viability, the Q45 tax credit still remains.

SPEAKER_05: So as we think about the project viability here, that's a very extensive tax credit.

SPEAKER_05: When you think about the storage of carbon and you think about the per unit storage cost, this could be anywhere over a 12-year period,

SPEAKER_05: which the Q45 is eligible for, 12 years of operation.

SPEAKER_05: This could be in the neighborhood of $1.5 to $2 billion.

SPEAKER_05: So as you think about that potential offset and really grappling with affordability of our plan, really there's a good avenue there for this project to move forward.

SPEAKER_05: So we continue to support this project.

SPEAKER_05: SMUD actually supported a couple bills.

SPEAKER_05: There was a companion bill that was eventually passed SB 614.

SPEAKER_05: And really this established regulations that carbon dioxide could actually be transported.

SPEAKER_05: And that's a critical component to, of course, carbon capture.

SPEAKER_05: So that was a huge milestone that that passed and it really set the stage that there's forward progress and a path forward on carbon capture.

SPEAKER_05: Question about this and I thought I'm sorry if I didn't ask.

SPEAKER_09: I know so we don't get the $207 million.

SPEAKER_09: We also, we don't personally benefit from the tax, but they do, right?

SPEAKER_09: That is correct.

SPEAKER_09: So that's how the money shell game is done.

SPEAKER_09: If this actually goes forward, what would be our cost?

SPEAKER_09: If it's everything's positive without the award, what do you, and I know it's still fluctuating,

SPEAKER_09: but I've just looked online.

SPEAKER_09: There's varying costs when you just kind of Google what would be our, if Algo as well, give us a guesstimate.

SPEAKER_09: Yeah, we don't.

SPEAKER_09: It's very wide online.

SPEAKER_09: Like if you look, it was like 1.5 billion, you know, slow billion, you know.

SPEAKER_09: Yeah, we do not have the pricing.

SPEAKER_05: Really that front-end engineering design study is still in progress.

SPEAKER_05: That will really inform the total cost of the retrofit and upgrade.

SPEAKER_05: And then when you layer on the tax incentive, that's really kind of the key components that CalPine would need to really start a negotiation process on price.

SPEAKER_05: So we do not have that at this point.

SPEAKER_05: So we hope to have some of those indicative pricing numbers and options to present to the board later this year.

SPEAKER_09: But like, again, because I'm looking at old stuff, so it looked like the phase one cost had a price, right?

SPEAKER_09: So are we not having to pay for that?

SPEAKER_09: Is someone else paying for that?

Unknown: Oh, the phase one in terms of...

SPEAKER_05: Like all the engineers, like someone else.

SPEAKER_09: Oh, yeah. So we're not engaged in paying for any of that.

SPEAKER_05: This is a CalPine project.

SPEAKER_05: So we won't engage until when?

Unknown: That's correct.

SPEAKER_05: We have not spent any money in terms of any kind of engineering or design or any material acquisitions, nothing.

SPEAKER_05: We're really just partnering with them.

SPEAKER_05: And once all that's sorted and the project is at a point where they know the cost, that's when really our engagement really starts heavily.

Unknown: The next new technology update I'll quickly touch on is fuel cells.

SPEAKER_05: As we look at carbon capture and we really look at load growth we've seen across the U.S., really driven by data center,

SPEAKER_05: you've seen really a lot of fuel cells added to the electric system.

SPEAKER_05: And so as we think about fuel cells, there's a couple advantages that potentially they could provide in terms of carbon capture.

SPEAKER_05: Quite frankly, they're more efficient in terms of the exhaust that comes out of their fuel cells has a higher percentage of carbon.

SPEAKER_05: So it actually makes that process of storing, capturing and storing that carbon more efficient.

SPEAKER_05: As I talked about Sutter and carbon capture, really just highlighting this slide because we're continuing to look at many options.

SPEAKER_05: It's not just one option in terms of carbon capture.

SPEAKER_05: So I just highlight this in terms of just communicating that we continue to look at other new technology, other options that we have available,

SPEAKER_05: and really we're trying to identify the best option going forward.

SPEAKER_05: Actually in a couple months we'll have an opportunity to come back to the committee and provide an update not only on advanced geothermal,

SPEAKER_05: but also fuel cell and carbon capture.

SPEAKER_05: So later this year we'll have an opportunity to do a little bit deeper dive on some of the new technology we continue to look at.

SPEAKER_05: So really the next steps here are really to continue to look at this technology, continue to evaluate its viability in our system,

SPEAKER_05: and really to kind of keep our eye on the progression here with this opportunity.

Unknown: Okay, so as I kind of round out my presentation, I'll try to do the best I can to distill a very complex reliability study down into a few remarks.

SPEAKER_05: But as I think about the annual zero carbon reliability study we perform, really this is looking at a couple components.

SPEAKER_05: The first major component I would point to is our ability to serve load through our transmission system.

SPEAKER_05: So it's a load serving capability study of our transmission network.

SPEAKER_05: So really this is forecasting what load is anticipated to look like through 2030, actually looks out 10 years.

SPEAKER_05: It looks at that load profile, looks at our resource mix and the anticipated resources we would have at those various stages of the zero carbon plan.

SPEAKER_05: And it really balances can you get import energy, all the energy within our local system to match the load forecast every hour of the year.

SPEAKER_05: So this is really an exhaustive study just to ensure that our resources have enough energy supply to meet load every point of the year.

SPEAKER_05: The other component of the resource or the reliability study is operational adequacy study.

SPEAKER_05: So this is a really exhaustive study that looks at a couple components.

SPEAKER_05: It looks at ancillary services, right?

SPEAKER_05: We often talk about energy, but there are also critical reliability components in terms of managing system voltage, managing system frequency.

SPEAKER_05: So that study looks at that.

SPEAKER_05: In addition to that study, it really looks at an intra-hour study.

SPEAKER_05: So it identified 12 sensitivity cases.

SPEAKER_05: It looked at various outputs of resources we have in our system, how those look every hour of the year.

SPEAKER_05: Actually at a five minute basis.

SPEAKER_05: It looks at our load forecast through 2030.

SPEAKER_05: And really again it's doing that pairing.

SPEAKER_05: But it's really looking at different types of events, right?

SPEAKER_05: If we have a low hydro year, for example.

SPEAKER_05: As I talk about edge operating cases, last year I talked about a low hydro year.

SPEAKER_05: 2015, 2021, we saw a hydro year where it was less than 30% of what we would anticipate or hope for in a normal water year.

SPEAKER_05: So that would be an edge case that this sensitivity study would look at.

SPEAKER_05: It would also look at impacts to wildfire, right?

SPEAKER_05: Last year we talked about in 2024 there were two wildfires that impacted actually five 500 kV transmission lines.

SPEAKER_05: So really challenging operating environments when you lose large transmission lines and imports.

SPEAKER_05: But this study really looks at all of those and evaluates all those cases.

SPEAKER_05: And so as I look at this diagram, I'll touch on a couple items.

SPEAKER_05: As you look at the ribbon on the bottom, kind of the green color there.

SPEAKER_05: Unanticipated system peaks.

SPEAKER_05: So as we think about variability of load, what could impact that?

SPEAKER_05: Certainly that's an extreme heat wave.

SPEAKER_05: We've seen those in the past.

SPEAKER_05: But as you look at load forecasting, it's an extremely challenging endeavor today.

SPEAKER_05: As you look at large loads and large load potentials from data centers, as you look at electrification, there's just many more variables there with unanticipated peak loads.

SPEAKER_05: So we continue to look at all those scenarios, continue to look at those.

SPEAKER_05: But the major takeaway I want to leave in terms of the reliability study update is it identified a planning path forward.

SPEAKER_05: Meaning if we execute on all the resources we have in the plan, that includes carbon capture at Sutter, that includes renewable natural gas at our CPP, consumer power plant.

SPEAKER_05: And then we actually execute on all the projects, renewable clean energy projects in our plan, we can serve load in 2030 during normal operating conditions.

SPEAKER_05: So these aren't these edge cases I'm talking about where we have low water year, there's impacts to solar production.

SPEAKER_05: So that's really the next slide I want to talk about because it's a good case study.

SPEAKER_05: As we looked at just a number of months ago, late November into December, we did see an event with Thule fog.

SPEAKER_05: As you look at that NASA satellite photo there throughout the central valley of California, you see that big cloud of fog.

SPEAKER_05: And really when you think about what is that impact, of course it's the solar production.

SPEAKER_05: So as I kind of direct us to the top right of this slide, you'll see essentially 14 days in a row.

SPEAKER_05: And these are load profiles, the yellow is our utility scale solar production, and the blue is the production from our Solano wind assets.

SPEAKER_05: So as you look at that first day in December 3rd, that's indicative of what we would anticipate in the winter.

SPEAKER_05: So that's kind of what we plan for, that's what we would anticipate solar production in the winter.

SPEAKER_05: The third general rule of thumb is between 50 to 40 percent of what the peak would be in the summer.

SPEAKER_05: So we anticipate, we plan for that.

SPEAKER_05: We also plan for a lot of contingencies.

SPEAKER_05: But as you look at the next 13 days in a row where we saw that Thule fog and see the impact, you'll see days where that solar production is less than 10 percent.

SPEAKER_05: Indicative of this kind of weather pattern too, there's not a lot of air movement, right?

SPEAKER_05: That fog just hangs around.

SPEAKER_05: So as you look at the production from Solano, right, that's very low.

SPEAKER_05: In some cases, zero on certain days.

SPEAKER_05: So as we think about these grid operating conditions, really what I'm trying to highlight is we plan for these, and we really manage through these as we look at our resource planning.

SPEAKER_05: But a critical component to meeting some of these challenges is having our thermal units available that can start up quickly.

SPEAKER_05: Last year we talked about some of our peaking units.

SPEAKER_05: I could start up in 10 minutes.

SPEAKER_05: We actually could count that capacity towards meeting contingency reserves and reliability requirements, which is where we provide that economic value and that reliability value.

SPEAKER_05: So customer affordability and system reliability.

SPEAKER_05: And in fact, when I looked at 2025 data, McClellan actually ran for less than 0.2 percent of the year.

SPEAKER_05: So number of hours.

SPEAKER_05: So as you look at that asset and you look at the value it has to our system, one thing you'll point at is it's not emitting any emissions 99.8 percent of the year, but 100 percent of the year it's providing capacity value.

Unknown: So that capacity value in terms of resource adequacy, our O-Team looked at it and calculated between 6 to 7 million dollars of benefit just for having McClellan waiting there ready for a reliability event.

SPEAKER_05: So as we really think about this type of event, and every year we see kind of a different edge operating case, whether it's a low water year, whether it's even smoke from wildfires has impacted our solar production.

SPEAKER_05: You know, quite significantly, 60 to 70 percent.

SPEAKER_05: So as you look at all these events that we continue to be challenged with, really that transition in our plan to ensuring that our thermals are available for these edge operating cases.

SPEAKER_05: Again, as we think about retooling our thermal assets, we're looking at how can we use them more efficiently?

SPEAKER_05: How can we, as we add more renewable energy and clean energy supply, how can we reduce utilization and operating time on our thermal plants?

SPEAKER_05: So as we continue to look at this, one thing I'll point at on this slide, you'll see the statement aligns with SB100.

SPEAKER_05: So SB100, if you're not familiar, this is a clean energy requirement by 2045 that just purely states all energy that's going to serve California load has to be clean energy by 2045.

SPEAKER_05: So earlier this year that SB100 had a draft report that came out, and one of the key components that report highlighted is, and this is an obvious statement, but as you add more clean energy resources, your dependency on gas and thermal reduces.

SPEAKER_05: And that makes intuitive sense.

SPEAKER_05: But what it did identify was that thermal assets would be needed for reliability.

SPEAKER_05: So even at a state level, that was identified in SB100.

SPEAKER_05: But one step further, it identified that during winter conditions, specifically, thermals could be needed for reliability.

SPEAKER_05: And that's twofold, right?

SPEAKER_05: We looked at traditionally renewable output from solar is about 40% of what it would be in the summer.

SPEAKER_05: So you have reduced output from solar, and then you also have these cloud events that we're managing.

SPEAKER_05: But the other key factor is we continue to electrify not only buildings, but vehicles, right?

SPEAKER_05: Our load profile in the winter is actually growing at a faster pace than the summer.

SPEAKER_05: So as you look at our balancing authority, you look at California balancing authority, really, there's an inflection point where in the future, the winter load will rival the summer peak.

SPEAKER_05: So you really have that challenge we're grappling with.

SPEAKER_05: A couple of thoughts, really.

SPEAKER_03: Yeah, we're going to have to change our messaging.

SPEAKER_03: I think the general public is really in tune now with the fact that hot summer days, that's when we need to reduce demand, five to eight.

SPEAKER_03: That's really been well received, and we've sort of pounded it into their heads.

SPEAKER_03: When we talk about a winter peaking event with corresponding lack of wind, lack of solar, if there's a – the fog belt comes in again.

SPEAKER_03: And that, you know, it's cold, people are turning on the heat, it's dark longer, more lighting load.

SPEAKER_03: We're going to have to change that messaging a little bit.

SPEAKER_03: And the other thing, when Paul and Laura and I were in Portugal and learning about the Iberian Peninsula outage from a couple of years ago now, or a year ago – two years ago.

SPEAKER_03: Two years ago.

SPEAKER_03: It was April.

SPEAKER_03: It's not – it's a semantic difference, right?

SPEAKER_03: It's not that they had too much wind and solar on the grid, it's that they had so much wind and solar on the grid, they didn't need all their spinning mass generation, and they didn't have it in the right locations.

SPEAKER_03: At least that's sort of what we heard.

SPEAKER_03: And so, just – we have to be careful.

SPEAKER_03: I mean, the more wind and solar we have, it's great, but we also have to have some of that spinning mass, whether it's hydro or geothermal or wherever it's coming from.

SPEAKER_03: I'm sorry, I'm preaching to the choir here right now.

SPEAKER_03: Yeah, Bill, I appreciate the remarks, because as usual, Director Fishman, you're spot on.

SPEAKER_05: And that's why I kind of highlighted when we talk about geothermal, such a critical component to our zero carbon plan as you think about potentially carbon capture, that is spinning mass.

SPEAKER_05: These are assets that can support to frequency response issues, voltage support issues, and really manage the variability of traditional renewable resources.

SPEAKER_05: So those are critical to our plan.

SPEAKER_05: And that's why that 10 percent was really the big challenge, that new technology.

SPEAKER_05: Because that scale, right, if there was an abundance of geothermal, we'd have it, right?

SPEAKER_05: So there's some challenges there with just the scalability.

SPEAKER_05: Thank you.

Unknown: Yeah, I have a question kind of along those lines.

SPEAKER_00: You know, we have been told that we need something for that last 10 percent.

SPEAKER_00: There has been talk of using some type of fuel at the Cosuminous Power Plant that is cleaner.

SPEAKER_00: Is that technology advancing? Is that a real possibility?

Unknown: Yeah, so there is a path towards renewable natural gas.

SPEAKER_05: That is something we do utilize at a smaller scale today.

SPEAKER_05: And there's biogas, right, Kiefer in our service territory is biogas, approximately 14 megawatts, so a small component, right, of our overall need.

SPEAKER_05: But that is a path.

SPEAKER_05: I think the one thing I would highlight with that path is the challenge in terms of affordability.

SPEAKER_05: The cost of renewable natural gas is quite expensive relative to traditional natural gas.

SPEAKER_05: So it really comes when we evaluate CPP, the volume of gas we would need to run that plant, cycle that plant in the future.

SPEAKER_05: It's quite expensive in terms of managing it with renewable natural gas.

SPEAKER_05: But it's still a component we continue to look at.

SPEAKER_05: I think one of the challenges we see part of our zero carbon plant, but everyone's challenge with it is scarcity, right?

SPEAKER_05: Everyone's after renewable natural gas, right?

SPEAKER_05: You start to see scarcity pricing, and of course the global conflicts don't help.

SPEAKER_05: So we're seeing prices increase for commodities.

SPEAKER_05: And so those are challenges we continue to grapple with and evaluate.

SPEAKER_05: But the original zero carbon plant did anticipate that there would be renewable natural gas for CPP.

Unknown: And you don't have a sense when that might be coming.

SPEAKER_00: Like you're not seeing it in five years, three years, ten years?

Unknown: Yes, so we do have today several renewable natural gas contracts that our resource optimization team manages.

SPEAKER_05: And really without getting too far into the weeds, those gas contracts do have deliverability to the transmission system in California, the gas transmission system.

SPEAKER_05: But actually it's quite advantageous from an affordability standpoint to arbitrage that gas.

SPEAKER_05: As I mentioned, the cost and the value of that gas is quite high.

SPEAKER_05: So we use it as a commodity offset today rather than earmarking it for CPP use.

SPEAKER_05: But that's not to be said in the future as we continue to evaluate the plan, as we continue to get closer to 2030.

SPEAKER_05: A lot of those contracts extend beyond 2030.

SPEAKER_05: So we do have contracts today for renewable natural gas.

SPEAKER_05: Thank you.

SPEAKER_02: So I get the desirability of having McClellan and Campbell available for reliability purposes.

SPEAKER_02: Especially if we're seeing these winter things going on, do we have any sort of range of greenhouse gas impacts of utilizing those resources to keep us reliable?

SPEAKER_02: And I realize that's crystal ballish.

SPEAKER_02: Yeah, that's something we can analyze and follow up with the board report.

SPEAKER_05: And the reason I say that is because a lot of times today when we run these assets, again, as I mentioned, McClellan doesn't run typically.

SPEAKER_05: Right, the startups we did see in 2025 was actually in the fourth quarter.

SPEAKER_05: So it was managing some of these winter challenges.

SPEAKER_05: But with that said, when I think about looking at Campbell's, that does run for economics today.

SPEAKER_05: It does run for supplying loads.

SPEAKER_05: So it's hard to differentiate how much of that is for peer reliability, system issues, lack of supply versus just an economic position that we would run that unit to serve loads.

SPEAKER_05: So we could follow up on that.

Unknown: And the distinction of running it for economic purposes, do we tag particular instances?

SPEAKER_02: Yeah.

SPEAKER_02: Like it's difficult. Is that something we were teaming to do?

SPEAKER_02: Yeah, we have that data where we know when we're running our thermals for market sales versus serving our loads.

SPEAKER_05: So we do have that.

SPEAKER_05: And I would just maybe take an opportunity to, you know, earlier I mentioned the extended next day market as we look at entering that market in 2027.

SPEAKER_05: I think that's a real critical key decision that we'll have to evaluate is how we leverage our thermal units in that market.

SPEAKER_05: And right as I mentioned, that market is a very global wide footprint across the West.

SPEAKER_05: So it really optimizes assets across the Western interconnect.

SPEAKER_05: And by that, I mean if our units are dispatched to run, if that's the decision and the direction we go, that means they're the most efficient unit.

SPEAKER_05: And they're actually offsetting less efficient units somewhere else in the Western interconnect.

SPEAKER_05: And as you look at also the affordability standpoint, you know, Director Fishman, you highlighted this last year, there's a very tight correlation to plant efficiency and actually the price of that plant in the market.

SPEAKER_05: So again, the market will dispatch the most efficient unit, really ideally optimizing across a wider footprint and reducing overall emissions across the West.

SPEAKER_05: So that's a key decision we'll have to evaluate.

SPEAKER_05: And that's a key component of the actually the integrated resource plan that we'll look at.

Unknown: I just wanted to chime in on Director Herbers-Kant.

SPEAKER_09: I think there in the past there's maybe been some confusion or horse trading in terms of actual things that go into the pipe to our various facilities.

SPEAKER_09: And I'll just echo what I've heard is, you know, if it's price competitive within a certain range,

SPEAKER_09: that's why I would like to continue to see us trying to actually get the real, you know, real biofuels into, you know, consummness in our other plants.

SPEAKER_09: I know it's hard and we are competing in a short, but I know we've had conversations in the past and I know there was a bit of horse trading because it's not always exactly the fuel in the pipe and how we do the math.

Unknown: I just, you know, if we could keep fighting the good fight on that because it just even makes it a better story, right, of us keeping these plants if we, you know, again, we're not going to pay, you know, 10 times or what have you, but, you know, as the market shifts and more people enter the market, I know, again, I'm just one person, but would like to continue to see pursuing that.

Unknown: Absolutely. Yep. Something we continue to evaluate. Yep.

SPEAKER_05: So the last statement I'll make on this slide is really as we look at parallel availability, again, is our reliability study. I highlighted this last year, our updated reliability study last year identified once Country Acres is in service.

SPEAKER_05: Really, that sets the pathway where utilization of even Campbell's would be reduced, but maintaining a parallel operation posture as we continue to ensure that Country Acres is reliable and it's meeting not only serving energy, but all the ancillary services we anticipate for voltage and frequency response as well.

SPEAKER_05: So we'll continue to look at opportunities to, again, retool, reduce utilization, but retain for reliability purposes.

SPEAKER_05: So here's an example. You know, late last year, Director Rose, you had the opportunity to come out to CPP as we were in active outage and we were doing the turn down project.

SPEAKER_05: This was actually a very, I'll say, intrusive and challenging project in terms of the gas turbine retrofit. It actually required us to do retrofits to the burner system, the burner management control system.

SPEAKER_05: But what effectively this allowed us to do is reduce the minimum operating set point for CPP while still maintaining a very tight, narrow window on our emissions compliance and maintaining flame stability.

SPEAKER_05: So as we looked at this project over a couple years ago, we anticipated it would see about a $10 million benefit on an annual basis.

SPEAKER_05: And we also looked at about 100,000 metric tons of greenhouse gas reduction. That's about equivalent to adding a 100 megawatt solar facility to our system.

SPEAKER_05: So a huge benefit in terms of not only reliability affordability, but also, again, that transition to a cleaner energy resource.

SPEAKER_05: And I won't walk through the diagram on the right in detail, but I do want to highlight a couple things. As you look at the stack of colors, those represent different resources we had online.

SPEAKER_05: Our resource optimization team as a case study just picked a particular day earlier in March, March 9th, where turn down was utilized.

SPEAKER_05: And typically, as we would anticipate, the turn down would be utilized any time, kind of on the shoulder months. So really the spring, winter, fall time frames, we would leverage and really use that additional downward capacity of CPP.

SPEAKER_05: And as you look at, I'll just point out two trends. One is that green dotted line. So this reflects the real-time energy price.

Unknown: And as you note that throughout this 24-hour period on this diagram, it spikes up quite high, really around hour-ending 8. So this is really 7 a.m. to 8 a.m., right?

SPEAKER_05: As you think about a lot of, perhaps, traditional thermal units shutting down as wind and solar starts to ramp up, potentially that pricing signal looks like there was a little bit of scarcity in the market, so the pricing responds.

SPEAKER_05: It goes high. But conversely, as you look at the middle of the day, where you see that yellow kind of band, that's indicative of the solar supply and our solar output.

SPEAKER_05: So as you would anticipate during the middle of the day, when solar is producing, there's an abundance of energy, kind of the classic economics in supply and demand. There's a lot of supply. Demand is a little lower.

SPEAKER_05: So the price goes down. You actually see that green line go below zero. So even today, that's not uncommon, that during the middle of the day, the price of market power when solar is available is just slightly below zero.

SPEAKER_05: So again, this is the opportunity in that green bar where we could lower CPP to that new minimum output, which is approximately 80 to 90 megawatts lower.

SPEAKER_05: And so for every hour where that market condition exists and we're running that plant lower but keeping it on for reliability purposes, that allows us to really leverage the market and acquire additional renewable energy at a very affordable cost.

SPEAKER_05: So this was a great project for us again. As we looked at this one-day case study, for this one day, we did see $24,000 in commodity savings just for this one day.

SPEAKER_05: And then we saw 440 metric tons of CO2 equivalent reductions.

SPEAKER_05: So as you extrapolate that out through the year, our forecast of 10 million and 100,000 metric tons of reduction is in line.

SPEAKER_05: If we utilize this turn down approximately 200 to 270 days out of the year, which is plausible, we would see those type of gains on an annual basis.

SPEAKER_05: So a great project for us. And the last two slides I'll quickly go through as we looked at turn down for CPP. Obviously CPP is running all the time.

SPEAKER_05: We looked at retooling options to perform turn down at our other facilities. So Campbell is one of them. Obviously Campbell doesn't run as much as CPP, so there's a little bit less of a value, but still a value nonetheless.

SPEAKER_05: So as we look at commodity reductions, we see about just shy of 200,000 in terms of fuel reduction with a turn down.

SPEAKER_05: This is reducing the minimum output of Campbell's from 100 megawatts to 90.

SPEAKER_05: But in addition to that, I really didn't highlight another component, which is the cap and invest cost.

SPEAKER_05: So right about $30 per metric ton. So as you add that in, now this estimate is kind of pushing 400,000 to 500,000 a year.

SPEAKER_05: So another great project, our PowerGen thermal team is executing this year.

SPEAKER_05: And then here's my last slide, and I'll turn it over to Brian as I look at continuing forward progress on reducing emissions and utilization of our assets.

SPEAKER_05: The last one I'll talk about is our Procter & Gamble site.

SPEAKER_05: So this is a very traditional Cogen plant, meaning that we still supply steam to Procter & Gamble as they manufacture and for their process needs.

SPEAKER_05: So it is a traditional true Cogen still, where we still have a steam host and we still have requirements and obligations to provide them reliable steam, 8760 every hour of the year.

SPEAKER_05: Traditionally, as you look at the history of Procter & Gamble, when that unit ran for really reliability and to serve load, right, that plant was always online.

SPEAKER_05: So providing that steam supply was just part of the operation.

SPEAKER_05: But as we continue our energy transition, we continue to integrate more renewable assets into our system, right, that old operating paradigm of that unit being on all the time is just not the case anymore.

SPEAKER_05: So as we looked at how we can continue to optimize our existing thermal fleet, we're actually looking at three existing boilers that are on site.

SPEAKER_05: These are just auxiliary boilers.

SPEAKER_05: Their entire intent is not to provide any energy, but it's just to meet the requirements of that steam host and meet that.

SPEAKER_05: The value here is when we don't need the combustion turbine or the energies to run.

Unknown: We still can meet the steam requirements of that steam host, but using auxiliary boilers and still maintain a reliable supply.

SPEAKER_05: The value, again, is that those auxiliary boilers use about 20% of the gas and have far less emissions in terms of comparing them to the gas turbine.

SPEAKER_05: So a huge benefit here is you look at the cost and you look at the GSU reduction, about half of what CPP was, 56,000 metric tons.

SPEAKER_05: In terms of cost, it's about 2.3 million in just fuel savings as we, again, layer on the cap and invest savings that effectively could be closer to 5 million.

SPEAKER_05: So another good augmentation, reducing utilization of our gas turbines, but allowing them to serve reliability needs.

SPEAKER_05: Yeah, President DeMaio?

SPEAKER_02: Yeah, so the greenhouse gas reduction that you have there, 56,000 metric tons, that's just the reduction of electricity.

SPEAKER_02: It's associated with not running the combustion turbine and the power plant.

SPEAKER_05: To meet the steam host, it's using the ox boilers when those units don't need to provide energy.

SPEAKER_02: And so the burning of natural gas to provide the energy to create the steam, is that something that is counted against us or is that just counted against Procter and Gamble?

SPEAKER_02: Yeah, it's a good question. I don't know how that's allocated. I could follow up on that one because to your point, it's not used in our energy supply.

SPEAKER_05: It's just really to meet the requirements of that contract and that agreement.

SPEAKER_05: Thank you.

SPEAKER_05: So that concludes my update. If there's no further questions, I'll kind of pass the baton to Brian and he'll, again, provide that more macro view of where we're at with the zero carbon plan.

SPEAKER_05: Thank you.

SPEAKER_05: Just sort of carry any news that you're asking?

Unknown: In terms of...

SPEAKER_05: Just changes or...

SPEAKER_07: No.

SPEAKER_07: The only one that's not mentioned, right?

SPEAKER_07: Yeah, no. Effectively, at this point, in terms of operations, we continue to look at opportunities to reduce utilization, but no material updates there or impacts to operation.

SPEAKER_05: Thank you.

Unknown: All right. Good evening, SMUD Board community. Thanks for joining us here tonight.

Unknown: We'll be stepping out of the trees and taking a look at the forest here as we go through my slides.

SPEAKER_04: So backing up, certainly a lot of good detail in Josh Langdon's presentation tonight.

SPEAKER_04: So really, this next area we'll be exploring is kind of a high-level look at the portfolio progress to date.

SPEAKER_04: And really what I like to do here first is take a look back over time.

SPEAKER_04: Between 2000 to about 2020, guided by SD9, our resource planning directive, we added about 1100 megawatts of resource, renewable resource, I should say, to our portfolio.

SPEAKER_04: Those are, along the way, meeting goals within SD9, whether it be on the renewable side, decarbonization, and the like.

SPEAKER_04: The most recent goal in 2020 was a 35% reduction in 1990 level emissions.

SPEAKER_04: We actually exceeded that goal and met the 33% standard.

SPEAKER_04: So 1100 megawatts over about two decades there.

SPEAKER_04: In 2020, of course, the board signed a climate emergency declaration asking staff to develop the zero carbon plan.

SPEAKER_04: And at that point, we really set out to do what no other utility had done before, which was to fully decarbonize our energy supply by 2030.

Unknown: At the time, very ambitious goal for the organization.

SPEAKER_04: I think it was even called a moonshot goal for the time.

SPEAKER_04: But we set out.

SPEAKER_04: Staff was very on board with trying to get as far as we could such that we maintain reliable service as well as affordable power.

Unknown: And to date, we brought online about 440 megawatts of clean, renewable, and storage resources with another 990 megawatts committed to come online by 2030.

SPEAKER_04: So a total of 1,430 megawatts of resource.

Unknown: And comparing that to what we did the previous two decades, it's about 130% in half the amount of time.

SPEAKER_04: So it speaks to really the tremendous growth of clean resources in our portfolio.

Unknown: Now, we did target, however, in the zero carbon plan to get about a 90% reduction, about 2,400 to 3,500 megawatts of resource.

SPEAKER_04: With current commitments, we get about 60% renewable when we add our large hydro.

SPEAKER_04: We're right at about 80% carbon free.

Unknown: So the question right now, as we shift from the green to the white and blue area on this diagram, about 2,100 megawatts of resource under evaluation.

SPEAKER_04: That includes the carbon capture and sequestration project, about 300 megawatts.

SPEAKER_04: So with those projects under evaluation, that gets us right into the range that we were targeting.

SPEAKER_04: The question at this time is really the affordability piece, right?

Unknown: The cost of resources really haven't been as high as they have been, say, for about 30 years.

SPEAKER_04: So we'll take a look at some of the cost pressures on renewables and storage resources on the next slide.

SPEAKER_04: But I do want to kind of applaud staff and SMUD organization, as well as the community, for supporting the growth to this point.

SPEAKER_04: That is really a tremendous amount of resource that's being added to the portfolio at this time.

SPEAKER_04: Before I move on, yes?

SPEAKER_09: Just because, you know, we're 2026.

SPEAKER_09: We never said, like, beginning of 2023.

SPEAKER_09: No, we said 2023.

SPEAKER_09: So if we were communication-wise, you know, some people up for a re-election this year, I'll be up for re-election 2020.

Unknown: So when we can confidently say we're guaranteed the 80%, correct?

SPEAKER_09: That is our, we can say we are for sure.

SPEAKER_09: Or close, like, 99, right?

SPEAKER_09: So if we were to communicate, it's this last 20% that will be challenging based largely on costs.

SPEAKER_09: I mean, I looked at some other carbon sequestration projects.

SPEAKER_09: I mean, the cheapest one that I saw was 600 million.

Unknown: So we can just guess what it's going to be, right?

Unknown: And 600 million, what translates to what, one and a half, two and a half rate increase, give or take?

SPEAKER_09: Just on a project. Just on one.

Unknown: Give or some change. It's around there.

SPEAKER_09: It's not a small amount is what I'm getting to.

Unknown: So we take that.

SPEAKER_09: So whatever left sounds fairly expensive to get us.

SPEAKER_09: So we would possibly be looking at a higher rate increase than our typical CPI for any one of these very expensive projects.

SPEAKER_09: Yeah, that's kind of what we're working on right now with Scott Martin's team on the finance side is looking at the list of projects we have here

SPEAKER_04: and really trying to decide what's achievable within our affordability guardrails.

SPEAKER_04: And so then we can say, okay, maybe we can get to 85% or 90%, right?

SPEAKER_04: So that's really the work that's going on across the teams right now.

Unknown: Because 80% is pretty amazing. Because if we had set 80%, I don't know how close we would have gotten to 80%, but I think 80% knowing pretty confidently, right, barring anything.

Unknown: Yeah, give you a sense, you know, to move the needle here, say 10%, you'd probably, you know, if you're talking about geothermal, that's a really dense 8760 type resource.

SPEAKER_04: If you did about 120 megawatts of additional geothermal, that would probably add about a 10% increase in your carbon free percentage.

SPEAKER_04: Just even better than you.

SPEAKER_04: So just kind of by scale.

SPEAKER_09: Okay, I just want to, because I think this is a great, I mean, you look at the leaf, it's pretty fantastic in the short amount of time.

SPEAKER_09: I know we're all hoping for the moonshot goal, but I don't think the public realizes like how difficult that that jump is.

SPEAKER_09: And I know we're all charging to 100%, but just as of today, it's pretty phenomenal, the 80%.

SPEAKER_09: I'm going to keep fighting for more.

SPEAKER_09: Right.

SPEAKER_09: But don't rest now.

SPEAKER_06: Let me comment on that. I think Chair Buut-Thompson, I think you're absolutely right.

SPEAKER_06: I think, you know, for sure we'll get to 80%. That's a guarantee that we'll get there.

SPEAKER_06: In fact, I think when you look at all the budget and all the projects that we have online, it's going to be north of 80%, for sure.

SPEAKER_06: Probably in the 90-92 range.

SPEAKER_06: I think the challenge is going to be the last 8%, the 10% that we talked about.

SPEAKER_06: I think you rightly pointed out carbon capture, because losing a 270 million grant is going to be a major challenge.

SPEAKER_06: But now what's really encouraging is there's new technology coming through.

SPEAKER_06: Like Bloom Energy, right, the new fuel cell that's actually coming through.

SPEAKER_06: You know, if we actually look at the... You always look at a company's stock price to see what advancement they're doing.

SPEAKER_06: If you actually take a look at the price in January 2025, it was $23.

SPEAKER_06: Today is $240 per share.

Unknown: So they're going gangbusters right now on... And what's driving this, the AI, I mean, the data centerpiece.

SPEAKER_06: And they're really pretty, like I'm going to say, optimistic in terms of looking at how do you actually capture carbon,

SPEAKER_06: because a lot of the companies, the AI companies whose data centers are coming out, are also very environmental conscious.

SPEAKER_06: So they are actually putting a lot of money in and bringing new technology on board, new carbon capture technology on board to try to actually bend the curve on it.

SPEAKER_06: So I think, you know, you know, we, Thompson, I think you're absolutely right, is that I think this significant challenge is going forward because of the change in national policy.

SPEAKER_06: But this... Because also with the technology advancements and what is being invested to drive the market is also giving us a lot of hope in terms of bringing a lot of the renewable costs on new technology down.

SPEAKER_06: And that's really, really one of the main purposes of doing the IRP next year, is that now you can actually look at each one of those in details.

SPEAKER_06: And hopefully by that time, some of the new numbers will come in, you know, hopefully by CalPine.

SPEAKER_06: And the board will be much more informed, the public will be much more informed about what's achievable by 2030.

SPEAKER_06: Thank you for the comment.

SPEAKER_02: So this graph is in megawatts, do we?

SPEAKER_02: But what we really need to be concerned about is our carbon emissions and how many of our gigawatt hours or megawatt hours are carbon free.

SPEAKER_02: And so do we have a graph that demonstrates that?

Unknown: We don't have that tonight. That's something we can certainly develop.

SPEAKER_04: You know, just thinking about the starting point, which was about two million metric tons, you know, so if we're 80% of that, right, we could kind of get a sense of how low our carbon emissions are.

SPEAKER_04: And how high our carbon emissions may be in 2030 to meet retail sales.

SPEAKER_04: But that's certainly something we can follow up with.

SPEAKER_04: Yeah, it's just really kind of hard to evaluate because of all the previous slides where it's like, okay, we've got all these megawatts installed, but then they're not actually working and they don't work.

SPEAKER_02: None of them are working all the time.

SPEAKER_02: So it'd be really helpful to have this in.

Unknown: Yeah, we can actually get that, but I think what Josh did earlier on his presentation is he actually gave what is the local project was like half a million metric tons.

SPEAKER_06: And then you look at the regional piece that's coming in and then there's another half a million that they're actually looking at that's coming up.

SPEAKER_06: And then for the regional piece, there's 1.5 mil.

SPEAKER_06: Now, of course, we said all those will not probably come into fruition, but it's actually north of two million metric tons.

SPEAKER_06: But we can certainly actually, as the next presentation, give that as a tracking on it.

SPEAKER_06: Because right now, as I said, I mean, the potential greenhouse gas reduction is capturing those two slides for both regional and local.

SPEAKER_06: And then we'll probably have to put into the slide that was talked about what carbon capture would, how many metric tons of carbon capture that would be.

SPEAKER_06: So we can actually put that together.

Unknown: Thank you.

SPEAKER_02: Thank you.

Unknown: All right.

Unknown: This next slide highlights some of the key pressures on the cost of renewable and storage resources, but also on emerging technology.

SPEAKER_04: Just to give kind of a sense of where things were when we originally minted the zero carbon plan back in 2021.

SPEAKER_04: Solar prices had never been lower.

SPEAKER_04: They're right at about or just under about three cents a kilowatt hour.

Unknown: Amazing to think that's what they were back then.

SPEAKER_04: You know, wind was in the four and a half cent range.

SPEAKER_04: Geothermal, very valuable resource, so priced higher.

SPEAKER_04: There's less of it as well, about six to eight cents.

SPEAKER_04: But over the last five years, we've seen significant increases in this area.

SPEAKER_04: It could be double to three times what we were paying in 2020.

SPEAKER_04: If we had the foresight, of course, we could have done a lot more right back then.

SPEAKER_04: But so some of the key areas of pressure, really the supply chain slowing due to the pandemic in 2020,

SPEAKER_04: that reduced the supply of materials to develop clean renewable projects and storage,

SPEAKER_04: albeit at the same time ever increasing global demand for these resources.

SPEAKER_04: So nearly overnight we saw the prices for renewable and storage resources go up considerably due to that slowdown in supply chain.

SPEAKER_04: We also have tariffs to contend with now, also adding to the cost pressures.

Unknown: Federal investment and production tax credits going away, that's also a significant cost pressure.

SPEAKER_04: We haven't yet seen this fully in bid end projects from our counterparties just yet,

SPEAKER_04: but we do anticipate prices to maybe tick up even more due to the loss of federal investment production tax credits.

SPEAKER_04: Typically, these things would reduce a project cost by about 30%.

SPEAKER_04: So it could be a very substantial increase that we haven't seen yet to these resources.

Unknown: The last area of cost pressure I'll mention here is the loss of grants.

SPEAKER_04: There's been a lot of discussion about the CCS project and the loss of that $270 million grant from the DOE.

SPEAKER_04: Since then, clawed back as we talked about.

SPEAKER_04: But that also yet to be seen, but I'm sure that will have some impact on the cost of that resource.

SPEAKER_04: We did talk about the Q45 tax credits kind of holding up that project.

SPEAKER_04: That was probably the lion's share of the tax credits and the funding opportunity for that project.

SPEAKER_04: But again, $270 million loss on a project.

SPEAKER_04: Still yet to be seen how that may impact the pricing for that resource.

Unknown: I will note too, while this sounds somewhat dire, we've navigated challenging paradigms like this in the past.

SPEAKER_04: So we'll certainly get through this and that brings me to the next area of the presentation,

SPEAKER_04: which is really the update to the IRP.

Unknown: The integrated resource plan.

SPEAKER_04: Long hand there for folks who don't know.

SPEAKER_04: Our zero carbon plan for all intents and purposes is our latest IRP.

SPEAKER_04: And also just to explain a little bit more for folks that are new to integrated resource planning.

SPEAKER_04: IRPs are a forward-looking long-term study, say over 10 to 20 years typically.

SPEAKER_04: It's a utility study that's typically done looking at several future outcomes or pathways,

SPEAKER_04: demonstrating how a utility will meet customers' future energy needs reliably, affordably,

SPEAKER_04: and with what types of resources to meet certain policy goals.

SPEAKER_04: For us, it's environmental goals.

SPEAKER_04: That's what we're most focused on.

SPEAKER_04: But also maintaining affordable rates and reliable power.

Unknown: And 2026 marks the five-year anniversary of the zero carbon plan minting back in 2021.

SPEAKER_04: We've made significant progress to date on the utility scale side of things,

SPEAKER_04: as we kind of highlighted here tonight, but also in Rachel Wong's updates on the customer side,

SPEAKER_04: most recently last September.

SPEAKER_04: So a lot of progress made.

SPEAKER_04: A lot of GHG emissions reduced.

SPEAKER_04: A lot of criteria pollutants reduced here also locally.

SPEAKER_04: Many lessons learned over the last five years.

SPEAKER_04: At this point, significant changes are abound in the key assumptions of the IRP.

SPEAKER_04: And it's really time to kind of reset the assumptions in that plan and look at our path forward.

Unknown: Now, we also have a statutory requirement with the California Energy Commission

SPEAKER_04: to file a compliant board adopted IRP once every five years.

SPEAKER_04: Our last IRP filing was in September 22nd, which again was the zero carbon plan.

SPEAKER_04: And so we have that same requirement here looming here in September 2027.

SPEAKER_04: So the update IRP will also help with our strategy here in policy setting,

SPEAKER_04: but also help meet that regulatory requirement with the state.

Unknown: That's some key questions. There's many questions, but really these are kind of the top areas

SPEAKER_04: I think we need to answer as part of the IRP update.

Unknown: What does our decarbonization path look like considering all the challenges in industry today?

SPEAKER_04: And a follow up to that is really how do we maintain reliable service and affordable rates

SPEAKER_04: on our path to zero carbon?

SPEAKER_04: What levers do we have as we go towards zero under these circumstances?

Unknown: Also, what major generation and grid investments are needed in the coming years to support load growth in the region?

SPEAKER_04: We know electrification will continue to grow.

Unknown: There's a lot of reasons folks want to move to EVs at this time, as we know.

SPEAKER_04: Post 2030, we do anticipate electrification to continue taking off.

SPEAKER_04: There's also the discussion about large loads.

SPEAKER_04: And so what does that mean to investments in generation and grid investments?

Unknown: In the last area, I think we've heard a little bit about this in Josh's presentation tonight,

SPEAKER_04: but what does the transition to a fully decarbonized grid look like and how will regionalization help?

SPEAKER_04: We know we're moving to the extended day ahead market here very soon in 2027.

SPEAKER_04: And there's really a great push to optimize resources across the West with a single body,

SPEAKER_04: really providing a greater access to renewable resources, lower cost of power,

SPEAKER_04: but also a lower emissions standing regionally.

SPEAKER_04: So that's something we wish to explore as part of the IRP.

Unknown: And as we go through that IRP update, we'll be sharing with the board and the public some of the key areas we need to update.

SPEAKER_04: And these are many year forecasts of information, customer demand forecasts,

SPEAKER_04: how does energy efficiency grow, electrification, how does that increase our loads,

SPEAKER_04: how do our customers continue adding clean, distributed energy resources to their homes and businesses,

SPEAKER_04: and how can programs help us continue our path to zero carbon.

Unknown: We also want to know what proven clean technologies are available, at what cost, at what depth,

SPEAKER_04: as well as what can we consider for new clean emerging technologies going forward.

SPEAKER_04: When do we expect things like hydrogen fuel to be available to power power plants

SPEAKER_04: or fuel cells with carbon capture or long duration energy storage technologies.

Unknown: We'll also reflect all the latest regulatory and market developments,

SPEAKER_04: as well as all the thermal generation retooling options completed to date and expected,

SPEAKER_04: as well as any reliability findings that we know of and system limits on inbound transmission to SMUD.

SPEAKER_04: And the IRP will follow a public process with our board and our community.

SPEAKER_04: Looking at this timeline here, today, April of 2026, we have the Zero Carbon Plan utility scale update.

SPEAKER_04: Next week, we have a Zero Carbon Plan forum where we will share similar information with the community

SPEAKER_04: and have a dialogue about the path forward.

SPEAKER_04: But really, that first initial IRP update meeting will be scheduled for October 14th, 2026,

SPEAKER_04: followed up by an IRP community program, outreach program and engagement.

SPEAKER_04: We're currently working on the details of the board committee meetings through about March,

SPEAKER_04: as well as the IRP community outreach and engagement plan that we'll look to share in October 2026.

SPEAKER_04: The plan is to have a board adopted IRP by April 2027 with the filing of that IRP

SPEAKER_04: with the California Energy Commission in September of 2027.

SPEAKER_04: We will continue community outreach and updates as we have to this point,

Unknown: as we have to this point, like we have with the Zero Carbon Plan.

SPEAKER_04: So much more to share in October, a lot of details to figure out between now and then,

SPEAKER_04: and we certainly look forward to having the dialogue with the board and with our customers as well.

Unknown: So with that, I think that brings us to the last slide and happy to answer any remaining questions.

Unknown: Thank you.

SPEAKER_11: Well, I just first want to thank you for really good presentations.

SPEAKER_11: Very clear and understandable.

SPEAKER_11: I do like the idea of getting a graph on the Zero Carbon part because the carbon is the metric we have.

SPEAKER_11: A couple questions.

SPEAKER_11: First, we've said from the beginning that 90% we had figured out and 10% was going to be the question.

SPEAKER_11: So I just assume we can baseline safe for messaging.

SPEAKER_11: We're going to hit 90, but the rest of it is going to be the question.

Unknown: But if that changes, please let me know because we go out a lot, and that's what I have been saying,

Unknown: that we were going to get hit the 90% with existing technology.

SPEAKER_06: So let me rephrase it, right?

SPEAKER_06: So what it is is that I think the plan that we have right now,

SPEAKER_06: based on what you saw on what we actually had planned,

SPEAKER_06: is going to be probably between 90%, 92%, right?

SPEAKER_06: The last 8% was going to be if carbon capture comes to be affordable.

SPEAKER_06: Now, even with that said, what we have from between the 90%, 92%,

SPEAKER_06: that is hoping that some of the assumptions for the utility scale,

Unknown: solar, batteries, geothermal, those things are still within actually the price that we're actually looking at.

SPEAKER_06: So obviously we made a very long way right now to where it is.

SPEAKER_06: I think Heidi, I think the answer to your question is that we're still having this goal to get to 100,

SPEAKER_06: but I think what it is is that what we have on plans right now,

SPEAKER_06: we have a technical pathway to get to 100.

SPEAKER_06: But we have some significant challenges because of the fact that utility scale, solar,

SPEAKER_06: and carbon capture, a lot of things, it's actually gotten more expensive.

SPEAKER_06: So we won't know exactly what the number will be until we actually finish the IRP.

SPEAKER_06: But with the, okay, so after the IRP we should have a hard...

SPEAKER_11: Yes, you would have a much better idea after the IRP.

SPEAKER_06: So by next year we'll be able to know pretty much?

SPEAKER_11: Oh, yes.

SPEAKER_11: Okay. But we feel pretty confident in 85.

SPEAKER_11: Oh, 80, 85 is actually, by law we have to get to 80.

SPEAKER_06: Right. So all the stuff that we've been doing has been accelerated beyond what's actually required.

SPEAKER_06: So I think we're going to team right now.

SPEAKER_06: We are confident that we'll be over 80 for sure.

SPEAKER_06: But then I think right now if you ask me to put a number on it right now,

SPEAKER_06: probably I would guess we'll be like 90, 92.

SPEAKER_06: And then the hard part, 100% is really predicated on carbon capture.

SPEAKER_06: And affordability and reliability.

SPEAKER_11: And affordability, yes.

Unknown: Okay.

SPEAKER_11: And when it comes to the carbon capture, that was to me never envisioned in my zero carbon brain when we originally started this.

SPEAKER_11: And the only reason I was cool with it is because it wasn't really ours.

SPEAKER_11: I mean, we were just helping them get the grant and then they lost the grant.

SPEAKER_11: Yes.

SPEAKER_11: And I mean, we never put money into it or anything like that.

SPEAKER_11: So, okay.

SPEAKER_11: Because they are extraordinarily expensive.

SPEAKER_11: Now, customer contributions.

Unknown: I've always said we have to keep the public with us.

SPEAKER_11: And a lot of the public wants to help us.

SPEAKER_11: And they do help us.

SPEAKER_11: And we keep increasing our incentives and the rebates, which is wonderful.

SPEAKER_11: And I guess because when they reduce their load or their generating, you know, that is just a reduced demand for us.

SPEAKER_11: But is there anything else that the customers can do?

SPEAKER_11: Is there anything else we can do to elevate their participation in our achieving this goal?

SPEAKER_11: Because I think honestly they want to help if they can.

Unknown: So, I think what it is is that let me go ahead and answer that.

SPEAKER_06: So, if you actually take a look at really what Rachel seems doing is engaging the customer with our different programs.

SPEAKER_06: So, a couple key things that has to happen, right, that we'll continue to do.

SPEAKER_06: We always look at the demand response, right?

SPEAKER_06: What kind of demand response program that when the peak is actually stressed, you know, how do we actually get them to do it?

SPEAKER_06: How do we reduce the load during peak?

SPEAKER_06: But then the other big piece is energy efficiency.

SPEAKER_06: So, any time we can actually help the customer to reduce their load all the time to save them money,

SPEAKER_06: also that actually save the amount of electricity that we've got to generate.

SPEAKER_06: So, that's also very helpful.

SPEAKER_06: And then the big piece is what we call virtual power plants.

SPEAKER_06: As you know that right now with all the utilities, with the rooftop solar and the batteries, right,

SPEAKER_06: hopefully one of the big things that's not talked about here is vehicle to grid.

Unknown: So, that's really what the big thing that we're looking at, you know, you heard, you know, on the presentation,

SPEAKER_06: vehicle to grid in California by 2035 would have almost like 15 gigawatts.

SPEAKER_06: And so, I think for smarts consciousness, that's a couple hundred megawatts.

SPEAKER_06: So, there's still a lot of wild card that's actually happening that we actually, that's what the team is going to look at.

SPEAKER_06: Really, what is the customer participation?

SPEAKER_06: What is the different programs that we have?

SPEAKER_06: And then really, specifically, when do we think vehicle to grid is going to be available?

SPEAKER_06: Or even if vehicle to home is available?

SPEAKER_11: And you know, I'd love to participate in that because I sit there, you know, I look at that Audi with that big battery in it all the time and think, wouldn't it be great if I could tap into that and I'm not, yeah, and then not buy a whole other battery wall, even with our rebates, they're still expensive.

SPEAKER_11: It's still a lot of money.

SPEAKER_11: Remember doing the heat wave just by asking our customers to shift load.

SPEAKER_06: We shed 10% of our load, 300 megawatts, just by saying everybody just reduce your use a little bit.

SPEAKER_06: And this is going to be the kind of challenges going forward to try to get to 100 or try to get to 90 and 95 because as cost gets more, as cost pressures increases, the more customers to participate, the more we can actually utilize with the customer and co-optimize those two systems is really what is going to be one of the key things I know Rachel's teams and the old team is going to look at.

SPEAKER_11: I'll also remind everybody that things happen very, very quickly.

SPEAKER_11: And just because of what's happening in the world today, they've already seen an absolutely huge increase in the purchase of EVs around the world.

Unknown: It's already started.

SPEAKER_11: So I mean, things can go like that.

SPEAKER_11: And if we can get them vehicle to grid or at least adaptable, that we could use them in a couple of years, wouldn't that be amazing?

SPEAKER_11: So anyway, I'm so excited.

SPEAKER_11: I'm so proud of the staff work that you've all put in.

SPEAKER_11: I mean, really, we cannot thank you enough.

SPEAKER_11: You are the A-Team.

SPEAKER_11: You are team awesome.

SPEAKER_11: And I'm super, super proud of all of you.

SPEAKER_11: Thank you very much for all your hard work.

Unknown: Thank you.

Unknown: Thank you.

SPEAKER_00: I kind of have a question along the same lines as Director Sanborn.

SPEAKER_00: You know, I talk to so many people who want to put solar on their roof to help us out, you know.

SPEAKER_00: And I see the costs for, you know, electricity going up and up and up and up from, you know, the various assets that we're looking at.

SPEAKER_00: Do you see us getting to a point where it would be cost comparable to try to engage our customers to have rooftop solar?

SPEAKER_00: Or is there such a price difference between, you know, the market and what we're paying at the new amount that it would never, that it wouldn't pencil out?

SPEAKER_00: Because I get that question a lot.

SPEAKER_00: And so I'm just wondering, is that one way for them to help?

Unknown: That's a good question, Director Herber.

SPEAKER_04: One of the problems is, you know, rooftop solar experiences the same price pressures that we are on the utility scale side of things.

SPEAKER_04: So that's one thing.

SPEAKER_04: So as utility scale prices are going up, rooftop distributed solar is also going up.

SPEAKER_04: And we have been working pretty closely with Rachel Long's team to look at maybe some options for more distributed type solar.

SPEAKER_04: But the challenge, again, is the starting point between utility scale and rooftop.

SPEAKER_04: There's always a delta of about two to three times the cost relative to utility scale.

SPEAKER_04: So there is a big cost difference to begin with.

SPEAKER_04: And now, again, rooftop solar is also experiencing the same run ups and costs that utility scale is.

SPEAKER_04: So that paradigm has not changed.

SPEAKER_04: That relationship and pricing has not changed.

Unknown: Thank you.

Unknown: Yeah, sure.

SPEAKER_02: Yeah, well, first of all, thank you very much for all the progress that we've made that, you know, 1.5 megatons per year.

SPEAKER_02: 1,500 megatons per year reduction.

Unknown: Metric tons.

SPEAKER_04: Megawatts or metric tons?

SPEAKER_04: Metric tons.

SPEAKER_04: Metric tons, yeah.

SPEAKER_02: So thank you very much for that.

SPEAKER_02: That's a significant advance.

SPEAKER_02: Regardless of what our future projections are, those are things that are going to help now.

SPEAKER_02: Or at least I know some of those are like in the works, but I guess most of that is actually already built or actually being built.

SPEAKER_02: So sort of related to Director Herbra's question, it seems to me that the battery incentives that we're providing really gets more value.

SPEAKER_02: I mean, that doesn't directly incentivize solar, but it sure does make it the value of the solar much higher for our customers.

SPEAKER_02: And then we're accessing that gives us better access to that resource when we really need it, too.

SPEAKER_02: And I suppose that's going to be accounted for in our IRP, plus all the other benefits that we get from it.

SPEAKER_02: And we didn't really talk about that today, but I think that's one way that helps people who are considering getting solar because then it's just more worthwhile for them.

SPEAKER_04: That's correct. Yeah, we'll be bringing that piece of information, that assumption on growth of programs.

SPEAKER_04: Paul mentioned VPPs, and so that will be part of the information share.

SPEAKER_04: What can we expect from the growth of programs that Rachel seems working on?

SPEAKER_04: And how do those contribute to the reduction in need for gas resources?

Unknown: Thank you.

Unknown: A couple of questions. I got them a little bit late. I apologize.

SPEAKER_07: But I don't think they were covered.

SPEAKER_07: I was a little bit curious about the role of EDAM participation and how that will potentially fit into the greater 2030 plan.

SPEAKER_07: Yeah, so that's something that we'll want to evaluate and share with the board and the public as part of the IRP process.

SPEAKER_04: EDAM, as we know, we're committed to going in 2027.

SPEAKER_04: That should open the availability to import more clean electrons from the ISO.

SPEAKER_04: It kind of removes the financial barrier to import more electrons from the ISO.

SPEAKER_04: Today, we have about 90 percent of our renewables in the ISO.

SPEAKER_04: And ahead of that, it's about a $15 to $20 a megawatt hour payment to import that energy.

SPEAKER_04: So it does decrease the cost to import those electrons, but also allows us more access to other lower costs, lower emitting resources across the West.

SPEAKER_07: I would echo what the other board members have said, thanking the staff for all their hard work.

SPEAKER_07: Progressing this forward, there's been a lot of work done. We've seen these various contracts come through.

Unknown: And so I think that's good. I know there's a lot of headwinds. The numbers you gave were accurate.

SPEAKER_07: And how much more solar? It was 2 to 4 cents. We were writing the climate emergency declaration.

SPEAKER_07: And things have, if anything, doubled in price as opposed to follow a trendline down.

SPEAKER_07: And that's just a reality, and there's lots of reasons for it.

SPEAKER_07: But it's certainly a challenge that we're going to have to deal with. The IRP is going to really take that head on.

Unknown: Because we were working on this plan, the idea was that these were at least going to stay at those prices, if not continued to trend downwards.

SPEAKER_07: And so it's much different marketed. 2 cents per kilowatt hour solar versus between 6 and 10.

SPEAKER_07: And that's just sort of in the back of my mind. It's frustrating to watch. And there's a whole bunch of various reasons.

SPEAKER_07: But that's just the reality I would correct here.

SPEAKER_07: I wanted to ask just a little bit about RPS compliance. I haven't seen any RPS compliance updates in a while.

SPEAKER_07: Come to the board. Where do we stand in general?

SPEAKER_04: We're in good standing right now through compliance period 5, which ends 2027 with a 52% mark. 52% renewable.

SPEAKER_04: We believe we've procured working with John Olson and Chad and team enough for knowables to comply with that three-year compliance window.

SPEAKER_04: 25, 26, 27. For 28 through 20, 30, compliance period 6, we're right at about 60%.

Unknown: And so right now we're kind of tracking contract performance schedules, that sort of thing, load growth.

SPEAKER_04: Could move the needle a little bit, but generally we're right at about 60% right now.

SPEAKER_04: So that's the last couple of minutes.

SPEAKER_07: Assume what's in the pipeline will show up.

SPEAKER_07: That's correct.

SPEAKER_04: Okay.

SPEAKER_04: Pipeline meaning what's committed. What's committed right now, what's actually signed will get us right at about 60% RPS.

SPEAKER_04: You may have mentioned this before I got here. Are we feeling pretty confident what's in the pipeline is going to materialize?

Unknown: There's quite a few options that we've been kind of going back and forth with counterparties. These are real offers.

SPEAKER_04: And so I do have quite a bit of confidence in the resources we're looking at.

SPEAKER_04: We have to work with the finance team to make sure what we're eventually going to maybe propose to the board aligns with our affordability metrics.

SPEAKER_04: Yeah.

SPEAKER_07: This is something I think that we have all these projects in progress and they're very geographically diverse, but like every project always has a level of risk with it, right?

SPEAKER_07: Is there going to be a lawsuit? Is something going to fall through?

SPEAKER_07: So it's sort of hard to know with a lot of these.

SPEAKER_07: So that's something in my mind.

SPEAKER_07: I've been thinking a little bit about like when we talk about like renewable, especially solar, are there any opportunities close to us but not necessarily in the county for solar?

SPEAKER_07: I guess there's something that the bank can access, but it leads to that deeper question.

SPEAKER_07: Does having a transmission line accessing into bank matter if you're going to have an EDAM market that changes the transaction and transmission costs?

SPEAKER_07: So it's a much bigger change coming through.

SPEAKER_07: Just a couple other things.

SPEAKER_07: On the edge cases, you had that great slide talking about the Tulee Fog we had in November.

SPEAKER_07: I remember well the 2018 IRP work and that was really where we saw this multiple billion dollar cost of an all renewable energy scenario was the edge case where you had fog for two or three weeks with no wind and no sun.

SPEAKER_07: So it was looking backwards into the 80s and 90s back then, but we just lived it.

SPEAKER_07: And so I think it's a really good experiment scenario to put it much closer to a sort of reality that this is what we're going to have to make sure the lights stay on.

SPEAKER_07: Whatever that resource looks like and just being realistic about it because it still does happen because it just happened.

SPEAKER_07: Great. So thank you for that.

SPEAKER_07: Other than that, I had some question about the CCS, carbon capture sequestration affordability.

SPEAKER_07: I mean, it was somewhere in the range of like 10 cents a kilowatt hour extra for carbon capture.

SPEAKER_07: You know, and you're seeing some of these prices in Tencent.

SPEAKER_07: So it's an interesting mix.

SPEAKER_07: And I'll be curious to see if there is not some technological innovation in that fuel cell.

SPEAKER_07: I just quickly googled a little bit.

SPEAKER_07: It wasn't maybe 20 or 25, 50 percent lower carbon capture using some kind of carbonate fuel cell.

SPEAKER_07: But I need to do far more research and then quit Google search.

SPEAKER_07: So I thought that was sort of interesting to hear tonight.

SPEAKER_07: It's some different technology as well.

SPEAKER_07: I know the other thing I wanted to catch here and then I think I'll cover everything is just the large loads.

SPEAKER_07: The talk is we're going to need to double the utility grid nationally over the next like five years, maybe 10.

SPEAKER_07: And so how much in this current planning are you including like really potential high level of loads growth?

SPEAKER_07: Growth will end up in the IRP.

SPEAKER_04: Yeah, we'll definitely consider large load.

SPEAKER_04: You know, the challenge is knowing what you should actually plan for.

SPEAKER_04: The idea is to maybe look at a sensitivity case to say, hey, over maybe 10 years, here's 400 megawatts.

SPEAKER_04: What does that look like?

SPEAKER_04: Right. What type of investments are needed?

SPEAKER_04: What does that do for our revenue requirement?

SPEAKER_04: You know, how does that maybe benefit us? Right.

SPEAKER_04: Those are some of the things we'd want to look at in that area of the plan.

SPEAKER_04: But yeah, certainly a big consideration.

SPEAKER_04: We know there's a lot of interest there.

SPEAKER_04: These types of customers are very thirsty for energy.

SPEAKER_04: You know, and that's definitely something we'll have to navigate in the IRP.

Unknown: Because as we look at our marginal cost of generation, which is not a natural gas cost that we talked about last night,

SPEAKER_07: you can see the contracts that we've signed and what those costs are potentially going to be.

Unknown: And I know if you look at that as our wholesale price, it's not matching our commercial rates.

SPEAKER_07: So if you see a large load coming on board, you're somehow going to reconcile those two differences.

SPEAKER_07: The last thing I just wanted to ponder and think about as we talk about the edge cases, right,

Unknown: is what does that accounting potentially look like?

SPEAKER_07: Do we have a separate accounting methodology for the 2030 goal?

Unknown: Aside from, hey, this is our bid, we're 100% business as usual.

SPEAKER_07: But if we're going to get these 100 weird scenarios, right,

SPEAKER_07: do we have, do we allow, do we account for that separately?

SPEAKER_07: The EPA, in call it's an exceptional event.

SPEAKER_07: And I think that may be something we should think about as we examine the goal as well.

SPEAKER_07: It's going to cover the middle 95%.

SPEAKER_07: And then we'll have some recognition that there may be additional emissions when the reality is that the reliability has to come first

SPEAKER_07: and the affordability as well.

SPEAKER_07: Those are my last thoughts. Thank you.

Unknown: Thank you.

Unknown: I'd like to add my thanks to staff for this.

SPEAKER_03: You know, back in 2020, we kind of said go do the impossible, and oh, by the way, keep the lights on and keep the rates low.

SPEAKER_03: And you know, you're really coming pretty darn close at this point.

SPEAKER_03: And the pathway is there.

SPEAKER_03: Obviously, there's some potential hurdles, but we know what they look like, and we know what we need to do to get around them.

SPEAKER_03: And we'll see what kind of support we get from the federal government eventually.

SPEAKER_03: And just thank you. It's really an impressive body of work.

Unknown: So I just want to take a moment to really thank the team.

SPEAKER_06: I still remember when Director Sanborn talked about, you know, our 2030 Zero Carbon Plan was a moonshot goal.

SPEAKER_06: And I can just tell you, for the past five years, this team, I mean, I know I see Chad over there a lot of times,

SPEAKER_06: a lot of the folks who actually is the workhorse, you know, trying to get all those folio done, other renewables done at a reasonable price

SPEAKER_06: or actually at a very good price.

SPEAKER_06: I think what's pretty amazing is that if you think, and then I see John over there, John Olsen is sitting over there, you know, running a powerful folio.

SPEAKER_06: There's so many people here, and then Josh and his whole generation team, right, doing the turn downs, right, doing everything we can to lower all the costs that we have, lower the carbon,

SPEAKER_06: but then also have economic benefits for us.

SPEAKER_06: And then Brian, obviously, thank you so much.

SPEAKER_06: I think when I look back the last five years, when we said it was a moonshot goal, I'm actually extremely, extremely pleased and very proud of what we have accomplished.

SPEAKER_06: If you think about, besides actually hitting our carbon goals for the five years, our rate is still one of the cheapest in California.

SPEAKER_06: In fact, while we're doing this, we actually make gains between – we actually got lower than some of the folks that are traditionally up, peer use, are lower than us.

SPEAKER_06: We actually have closed that gap or actually went below them.

SPEAKER_06: And then, of course, when you think about reliability, if you look at all the crazy storms that we have, the heat wave that we have last five years, how we've came through, we couldn't be more proud of what we accomplished.

SPEAKER_06: So I do want to say thank you to the team.

SPEAKER_06: I mean, I see all over there right now, Rachel, working with the customers.

SPEAKER_06: I just want to say thank you.

SPEAKER_06: I mean, it's really amazing how far we've come along.

SPEAKER_06: You know, in the past five years, I know it's challenging for the next five, but I think this team is – there's any team that can actually do it, this team will be able to deliver.

SPEAKER_06: Thank you.

SPEAKER_06: What do you care about the next five?

SPEAKER_06: I still care.

SPEAKER_06: I always care.

Unknown: But it's pretty amazing.

SPEAKER_06: We know, especially when you talk about the auto, it's going to the moon and back, right?

SPEAKER_06: I mean, it's going outside of the moon.

SPEAKER_06: This team is really pretty phenomenal.

SPEAKER_06: So I just want to say thank you.

Unknown: Anybody else?

SPEAKER_09: Yeah, I think I said it earlier.

SPEAKER_09: I mean, I hear a lot of numbers.

SPEAKER_09: I was a quantitative economics major.

SPEAKER_09: So I will err on the side of VA on 80%.

SPEAKER_09: I think if we can get to 90, 95, I always feel like, you know, overpromising.

SPEAKER_09: It can get us in a tough situation.

SPEAKER_09: But I do appreciate the goal because, like I mentioned earlier, like I'm an executive.

SPEAKER_09: If someone just said 80%, then, you know, we'd probably just hit that.

SPEAKER_09: So I think it's like a bonus material if we can get, you know, above 90%,

SPEAKER_09: because I think the amount of work to even just get to 80.

SPEAKER_09: And I know we feel pretty confident.

SPEAKER_09: It's fantastic.

SPEAKER_09: And so any little percentage up is great.

SPEAKER_09: And then we can, again, reevaluate, right?

SPEAKER_09: I think the world is seeing challenges that we didn't think were happening.

SPEAKER_09: We thought the price of everything would go down, right?

SPEAKER_09: And it's gone up.

SPEAKER_09: So it's a bit of an article of the onion every day, right?

SPEAKER_09: So congratulations.

SPEAKER_09: I'm very happy with the 80% because affordability, as you said, Paul said, everybody said.

SPEAKER_09: You know, our lovely 3% is just keeping our normal operations.

SPEAKER_09: And anything above that is a hard decision that we'll all have to make, right?

SPEAKER_09: If it's above our CPI and maybe prices will dramatically fall or new technologies will come online.

SPEAKER_09: I know we've been talking about Bloom for 20 years.

SPEAKER_09: Yay, finally for them now, right?

SPEAKER_09: But, you know, I remember them coming to the board 18 years ago and I joined it, right?

SPEAKER_09: So thank you again.

SPEAKER_09: And I'm excited.

SPEAKER_09: And I know we have some public comments and some people in the audience.

SPEAKER_09: So, Mr. It's time for public comment.

SPEAKER_09: Rick, are you ready to roll?

Unknown: Yeah, hi, I'm Rick Adina and I'm a 350 Sacramento.

SPEAKER_01: And most recently I've been with a group called the Save Coyote Creek Coalition.

SPEAKER_01: And I'm gratified to see that that project is no longer on the list of pending projects.

SPEAKER_01: And I'd like to thank you, Paul, for that.

SPEAKER_01: And also I'd like to remind you that even though you are retiring, you can come back and make comments if you're passionate enough.

Unknown: In this organization and meeting the climate goals, I've been gone 12 years and look at me, dang, and I'm still here.

SPEAKER_01: I would like to say that after Coyote Creek and some of the discussion with some of the board members,

SPEAKER_01: it was agreed that we would start a new process and that has begun.

SPEAKER_01: And I would like to say we had a very successful meeting yesterday.

SPEAKER_01: And I'd like to thank SMUD staff.

SPEAKER_01: That would be Amanda Beck, Sarah Cheney, Kathleen Anfay, and Andrew Kosen for meeting with us to review a project which Josh alluded to,

SPEAKER_01: a 275 megawatt project.

SPEAKER_01: It hasn't been released yet.

SPEAKER_01: We got a preview of it.

SPEAKER_01: And I have to say thanks for letting us look it over and have our comments in the record.

SPEAKER_01: The project looks great to us so far, as does another, which is a 300-plus megawatt in the wings near Wilton.

SPEAKER_01: But, you know, everything is taking its time.

SPEAKER_01: We saw that with Country Acres, Curry Creek.

SPEAKER_01: These two projects, we're not going to see them until 2031 or something.

SPEAKER_01: So that's actually beyond the 2030 goal.

SPEAKER_01: So it is a little bit worrisome.

SPEAKER_01: We only have four, five years maybe.

SPEAKER_01: And it looks like we're going to be leaning heavily on carbon sequestration from Sutter and from this new fuel cell technology, which I hope pans out.

SPEAKER_01: I think it's probably a good idea that the Campbell and Proctor plants are being repurposed for now.

SPEAKER_01: We expected that they would have been retired at this point.

SPEAKER_01: But it looks as though that they're going to be a lot more efficient and used a lot less in the future.

SPEAKER_01: But we now have the ominous rise of the data centers, which is extremely worrisome as well.

SPEAKER_01: It could be adding quite a bit of load.

SPEAKER_01: And so we're waiting to see how SMUD is going to be dealing with those.

SPEAKER_01: I would say that I'm looking forward, having once worked in that area, on the new IRP and how all of these questions are going to be addressed.

SPEAKER_01: So good luck to you guys on that. Thank you.

SPEAKER_09: I think I was the only one. Was there anybody? Okay.

Unknown: I'm encouraged to be reminded that we'll have an opportunity to listen to Paul when he comes back in his retirement to tell us what we could do better. So thanks.

Unknown: I'd like to suggest that in light of his long tenure here, when he does come back, maybe we give him three and a half minutes.

SPEAKER_09: I do not see any comments from the agenda.

SPEAKER_09: I don't see any virtual comments either.

SPEAKER_10: Okay, great.

SPEAKER_09: If we receive written comments, items on the agenda, also same with public comment, they will be included into our record if received within two hours.

SPEAKER_09: I believe we had one item on the summary committee direction that I recorded.

Unknown: I have a staff will provide information to the board regarding the range of GHD emissions for Campbell's and McClellan and include information about when we run the plants for reliability versus economics.

SPEAKER_10: We'll provide information to the board about who bears the carbon risk when we run proctors, auxiliary boilers to provide steam to proctor and gamble.

SPEAKER_10: And then in the next zero carbon update, we'll provide a graph showing GHD reductions over time.

Unknown: Yes.

SPEAKER_09: Okay. Thank you.