Strategic Development Oct 06 2026

Unknown: MO

Unknown: Thank you.

SPEAKER_08: Welcome to the strategic development committee and special board meeting of October 6, 2026.

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SPEAKER_08: after the meeting ends. Chief legal officer, please conduct a roll call.

SPEAKER_08: Here.

Unknown: Herber. Chair Sanborn. So since we only have one committee member present,

SPEAKER_04: we'll need to appoint have the president appoint another member to board member to the committee.

Unknown: Thanks Laura. I'll go ahead and appoint the vice president.

Unknown: And also present our directors, Rose, Bowie Thompson and present to my.

Unknown: Thank you, director. For accepting that responsibility.

SPEAKER_08: Item number one on tonight's agenda is to brief the board on SMUD's recently completed integrated

SPEAKER_08: distribution resources plan and our presenters include Rachel Huang, our director of distributed

SPEAKER_08: energy solutions, Michaela Levine, senior managing consultant at energy, environmental and economics

SPEAKER_08: E3 and Amandeep Singh, director of distribution planning and operations. Rachel.

Unknown: Great. Good evening, board. And thank you. As director Fishman said, my name is Rachel

SPEAKER_03: Wong. I'm the director of distributed energy solutions and happy to be talking today about

SPEAKER_03: our integrated distribution resources plan. So just for some agenda and some place setting,

SPEAKER_03: tonight I'm going to actually start by giving you a little bit of background and context before we

SPEAKER_03: dive into the analysis. Michaela from E3 is actually going to go through the integrated

SPEAKER_03: distribution resource planning analysis with all of you and go through the results. And then

SPEAKER_03: Amandeep Singh, our director of distribution planning and operations is going to talk about

Unknown: the considerations as we look at the results as well as some of the efforts that are underway in

SPEAKER_03: terms of how we're utilizing this information. So before we dive into the analysis, I wanted to

SPEAKER_03: share some background with regards to integrated distribution resources planning. And E3 is actually

SPEAKER_03: going to touch upon this as well. In fact, this slide that I put up here I stole from their deck

SPEAKER_03: so you will actually see it. It's going to be pretty familiar for you. But I just wanted to

SPEAKER_03: give some SMUD context before we dove in. So first, you know, why do we do an integrated

SPEAKER_03: distribution resources plan? So we do a lot of planning and analysis, right? Because we want to

SPEAKER_03: make sure that we're prepared and informed as we think about the investments that we make. And

SPEAKER_03: while we don't have a crystal ball, the analysis of the potential future DER growth scenarios,

SPEAKER_03: it actually allows us to proactively prepare for various distribution grid pathways.

SPEAKER_03: You can see in this graph that the diversity of how each DER impacts our net load profile,

SPEAKER_03: and where you can see that DERs are not only adding load, but they're also reducing our load

SPEAKER_03: as well. So as we see that we're getting to scale, the insights from this analysis is really going to

SPEAKER_03: be important to inform both our programs as well as what we need to think about in terms of

SPEAKER_03: electrification, infrastructure to support our electrification and grid modernization efforts.

Unknown: So, you know, we are on the ball. As we think about load growth, as we think about electrification,

SPEAKER_03: we are doing some of this analysis to help inform our thinking for what investments we need to be

SPEAKER_03: able to make for the future, and looking at what we can do to optimize those investments to ensure

SPEAKER_03: that the investments that we make can able to keep our rates affordable. So a caveat, you know,

SPEAKER_03: this analysis isn't definitive. It's not like, okay, we've got one number and it magically pops up.

SPEAKER_03: You'll see that we're actually using scenarios in this analysis to provide direction, given we know

SPEAKER_03: that the state space is dynamic and evolving. And by doing so, it actually helps us address some of

SPEAKER_03: the uncertainty associated with it because it gives us a range to consider. From a history

SPEAKER_03: standpoint, this is actually the third time that we've done an IDRP. The last time we did an IDRP

SPEAKER_03: is actually in 2020, and it was before we actually established the zero carbon plan. You know, a lot

SPEAKER_03: of things have changed since. However, that work that we did back in 2020 did inform because we

SPEAKER_03: did some analysis relative to EV load growth. It actually informed and led to our managed EV

SPEAKER_03: charging pilot program, which we're now in the process of operationalizing to launch next year.

SPEAKER_03: It also helped to guide some key investments that we made to bring visibility and control to our

SPEAKER_03: distribution system, including things like our distributed energy resources management system,

SPEAKER_03: also known as DERMS, to support that increasingly dynamic future distribution system. The other

SPEAKER_03: thing is that we deliberately timed this IDRP analysis to be conducted ahead of our integrated

SPEAKER_03: resources planning analysis, which Brian Swan is going to be kicking off with you next week,

SPEAKER_03: so that this analysis can actually help inform that one. And so for this IDRP, we expect this

SPEAKER_03: analysis is going to help chart the appropriate course and the level of investment so that we can

SPEAKER_03: support as well as capitalize upon the benefits from electrification while maintaining reliability

SPEAKER_03: and resilience. And then finally, before we dive into the analysis, just wanted to give you some

SPEAKER_03: perspective with regards to implications to our distributed energy resources programs and how they

SPEAKER_03: can help alleviate some of the investments needed to support electrification. So I don't know if you

SPEAKER_03: remember several years ago, this was probably as part of our ZCP, but also in some of the presentations

SPEAKER_03: we've done on our distributed energy resources strategy, I've talked about this concept of the

SPEAKER_03: value stack, right? That DERs can provide different streams of value and that we can actually

SPEAKER_03: benefit from multiple streams of value coming from the DERs. But that being said, our DER programs,

SPEAKER_03: as we've designed them, and as you look at the business case analysis for those programs,

SPEAKER_03: to date they've been fundamentally leveraging that value derived from the bulk system,

SPEAKER_03: looking at needs like capacity and energy arbitrage. So that's really been the foundation

SPEAKER_03: of the financial models for our programs. But looking ahead, we know that as we are evolving

SPEAKER_03: our energy mix, and that can actually reduce some of our traditional value streams. So in the future,

SPEAKER_03: we actually need to add additional value for the financials to work. And that's going to come from

SPEAKER_03: localized distribution level deployments that target specific grid benefits right in our communities.

Unknown: This evolving resource mix is something that I actually talked about about a month ago when I

SPEAKER_03: came to you with regards to updates for our zero carbon plan customer programs. I talked about how

SPEAKER_03: increases in wind and solar within our 2026 power mix actually helped reduce the value of the load

SPEAKER_03: shift from our commercial power direct program where customers originally were in that three to

SPEAKER_03: seven window. And we actually saw the value really drop from that. And that really caused us to need

SPEAKER_03: to extend that window to 9pm in order to really increase the value from that load flexibility.

SPEAKER_03: So getting that local value right is going to be critical to scale our DER programs in order for

SPEAKER_03: them to be cost competitive and in order for them to really help us keep our rates affordable.

Unknown: This also means, though, that there's areas on our distribution grid where it's more valuable to

SPEAKER_03: invest than others. So that's another consideration we're going to have to have as we think about

SPEAKER_03: designing our DER programs. So we are working on a number of programs that can help us enable local

SPEAKER_03: distribution value. As I mentioned, we're operationalizing our managed TV charging program.

SPEAKER_03: I also talked about in our ZCP customer programs update that we are getting close to launching

SPEAKER_03: our commercial virtual power plant pilot where we're going to be installing battery storage on

SPEAKER_03: certain commercial customers' sites behind specific substations to generate that operational data to

SPEAKER_03: give us more confidence on things like non-RARs alternatives. So the combination of multiple

SPEAKER_03: benefits to achieve greater value is going to help us drive affordability. But it's also going to

SPEAKER_03: come with some additional complexity to planning and operations. So it's really going to be

SPEAKER_03: critical that we take integrated approaches both to our planning as well as thinking about our IT

SPEAKER_03: systems to support the operation of those resources. So with that, I will hand it over to Michaela from E3.

Unknown: All right. Hi, I'm Michaela Levine. I'm here from E3 with my colleague, Mike Sontag. Before I begin,

SPEAKER_00: I just really want to thank all of the SMUD staff that contributed to the development of this

SPEAKER_00: integrated distribution resources plan. I really want to appreciate all their time, effort, and

SPEAKER_00: thoughtfulness they put into shaping the outcomes of this study. I'm going to start by just kind of

SPEAKER_00: building on some of that motivation that Rachel laid out. So a key motivation for doing this

SPEAKER_00: integrated distribution resource plan, this IDRP, was to advance integrated planning at SMUD.

Unknown: There are a lot of different flavors of integrated planning out there, and an IDRP is just one of

SPEAKER_00: them. Integrated planning is a really hot topic in the industry right now. It's a way for utilities

SPEAKER_00: to really engage in a transparent planning process. Integrated planning is all about breaking

SPEAKER_00: down the domains of the power system from generation, transmission, distribution, and customer and DR,

Unknown: and really bridging those silos in planning to think about how investments in one aspect of the

SPEAKER_00: power system affect others, and how we can do coordinated planning to drive towards lower total

SPEAKER_00: system cost plans that support other goals of the utility, affordability, reliability, and

SPEAKER_00: sustainability. So today we're talking about the IDRP, which primarily focus on the intersection

SPEAKER_00: of customers and distribution, DR and distribution. But the IDRP also acknowledges that DRs have bulk

SPEAKER_00: system impacts. Bulk system here, I find that I need generation and transmission. So as we go

SPEAKER_00: through the results, you'll also see how we consider those impacts as well. And as Rachel

SPEAKER_00: teed up, coming up, the big focus for SMUD is going to be your IRP, and so that's kind of

SPEAKER_00: focused mostly on the generation side of the planning process. A little bit more of the

SPEAKER_00: motivation. Coming back to that graph that Rachel showed you all before, a big motivation for this

SPEAKER_00: study was just the amount of low growth that SMUD's anticipating over the next 15 years.

SPEAKER_00: The study of being a distribution resources plan really focused on distribution-sided load,

SPEAKER_00: thinking about all types of DRs that SMUD anticipate getting adopted over the next 15 years.

SPEAKER_00: A lot of these DRs, including building electrification and transportation electrification,

SPEAKER_00: are critical to support the state's and SMUD's decarbonization goals. All of that investment

SPEAKER_00: and load growth is expected to trigger and accelerate the rate at which SMUD needs to invest

SPEAKER_00: in infrastructure investments. But it's also an opportunity for SMUD to realize some downward

SPEAKER_00: rate pressure, using all that load growth to increase the utilization of their system assets.

SPEAKER_00: But this study was really about how to maximize that opportunity, how to create the most downward

SPEAKER_00: rate pressure possible through electrification, and to do that, SMUD really needs to consider

SPEAKER_00: how DRs affect both the distribution system and the bulk system.

SPEAKER_00: A few objectives for the IDRP. The first one was to inform SMUD's capital and staffing strategies.

SPEAKER_00: With all this electrification, we're expecting the rate at which distribution upgrades

SPEAKER_00: are needed to support that load growth to increase over the future. And this study was

SPEAKER_00: to help SMUD inform how they might need to evolve their capital and staffing plans to be able to

SPEAKER_00: keep up with that pace of upgrade needs. Another key objective of the study was to inform how

SPEAKER_00: distribution planning practices at SMUD need to evolve to meet this high electrification future

SPEAKER_00: and the unique demands it's going to bring. A third objective here, and Rachel kind of touched

SPEAKER_00: on this already, was to inform how DR strategy will evolve at SMUD to think about how to leverage DRs

SPEAKER_00: as both a bulk and a distribution system asset. And fourth, another key objective of this study

SPEAKER_00: was to think about how to advance coordinated planning at SMUD across planning groups to yield

SPEAKER_00: lower total system cost solutions and bring affordability at kind of the forefront of planning.

SPEAKER_00: I'm going to summarize some key takeaways, and then we have a bunch more detail to kind of

SPEAKER_00: illustrate all of these key findings in the next few slides. The first key finding of this study

SPEAKER_00: is that significant load growth is coming to the SMUD system, but we estimate that that is going

SPEAKER_00: to create downward rate pressure for SMUD. Enabling all that load growth is going to require some

SPEAKER_00: upfront investment, both in staffing and capital projects. And electrification is expected to

SPEAKER_00: increase the volume at which SMUD will need to do distribution substation projects by 30 to 60%,

SPEAKER_00: and that kind of can vary based on the level of load management that SMUD is able to leverage.

SPEAKER_00: Managed charging, as well as nonwire solutions, can help SMUD really reduce that incremental

SPEAKER_00: distribution substation upgrade need. It could help SMUD significantly reduce that by up to 40%,

SPEAKER_00: and the distribution system cost impacts by 50%, which is another opportunity to yield

SPEAKER_00: more downward rate pressure with electrification if this load is well managed.

SPEAKER_00: The fourth key finding is that enabling load management and nonwire solutions will require

SPEAKER_00: SMUD to develop new coordination pathways between planning units. This will look like

SPEAKER_00: having good coordination between planning units on book process, programs, and infrastructure

SPEAKER_00: investments. Before we get into the analysis, I just wanted to outline our scope of work for

SPEAKER_00: this study. The first phase of the study was to develop inputs and our scenario assumptions.

SPEAKER_00: We built the study on a lot of work that SMUD had already done, building upon a lot of load

SPEAKER_00: forecasting and DR adoption forecasting that SMUD had already produced through past studies.

SPEAKER_00: But in this study, we took a detailed look at how EV charging management could look like across a

SPEAKER_00: bunch of different types of managed charging behavior, as well as different vehicle segments.

SPEAKER_00: So that was a big part of our input and scenario development, doing some EV charging load shaping,

SPEAKER_00: thinking about different kind of scenarios we wanted to test. After we developed all of our

SPEAKER_00: input scenarios for DR adoption, DR load shapes, managed charging, we went into the next phase of

SPEAKER_00: work, which was to develop a long-term distribution load forecast. So this load forecast looked out

SPEAKER_00: through 2040, you know, longer than a typical distribution planning cycle. And with those load

SPEAKER_00: forecasts, we produced for each scenario, we also assessed what generally the upgrade need would

SPEAKER_00: look like to support that level of load growth. The map here on the right side is just to illustrate

SPEAKER_00: the level of analytical rigor and detail that went to this study. For the long-term distribution load

SPEAKER_00: forecasts, the study leveraged load seer, which is a software platform that SMUD invested in,

SPEAKER_00: that is a distribution load forecasting and planning tool. Every one of those kind of little

SPEAKER_00: dots you see on the map is a location in which we forecasted that public DCFC charging would be

SPEAKER_00: adopted under a high public DCFC scenario. So you can see the level of spatial detail we went to,

SPEAKER_00: to really map all the places where DR adoption could occur and the likelihood that it would occur

SPEAKER_00: there as we developed these load forecasts. So after developing all these distribution load forecasts

SPEAKER_00: and assessing what the infrastructure upgrade needs, we went into a next phase of analysis.

SPEAKER_00: The first step of the analysis was to do our cost impact. We looked at for all these upgrades that

SPEAKER_00: SMUD would need, what would be the incremental distribution revenue requirement that SMUD would

SPEAKER_00: need to be able to build all those out over the course of the next 15 years? The next phase of

SPEAKER_00: our analysis was to take a targeted look at the opportunity to use non-wire solutions. And in the

SPEAKER_00: study we considered both managed EV as well as distributed battery as a non-wire solution

SPEAKER_00: technology that could be deployed to help avoid some of those distribution upgrades we identified

SPEAKER_00: in the second step of the study. And then the final phase of the study was to work with SMUD

SPEAKER_00: staff thinking about how programs and processes of SMUD need to evolve to be able to leverage DR

SPEAKER_00: as both a bulk system asset as well as a distribution system asset.

Unknown: Before we get into the results, I just wanted to introduce the scenarios. As Rachel teed up,

SPEAKER_00: we did a lot of scenario analysis in this study and I want to introduce these before we show some

SPEAKER_00: of the results associated with these. The graph on the left is an illustrative example of what EV

SPEAKER_00: charging looked like in all of these scenarios over the course of a day. All of the IDRP forecasts

SPEAKER_00: have all types of DRs embedded in them, building, electrification, energy efficiency, solar, and

SPEAKER_00: storage. The key differentiation between the scenarios is the type of load management and

SPEAKER_00: amount we assume. So our first scenario which is highlighted in gray is our reference or

SPEAKER_00: business as usual scenario. So this was meant to represent kind of the current trajectory of SMUD's

SPEAKER_00: programs as they are today. And so in this world, you know, some customers are not managing their

SPEAKER_00: charging. Some customers are going to passively manage charging on the time of use rates that

SPEAKER_00: SMUD already has in place. And another fraction of customers are going to be enrolled in more

SPEAKER_00: active managed charging programs. They look kind of like how SMUD's programs are today really

SPEAKER_00: designed around bulk system price signals. So that was our reference scenario meant to kind of

SPEAKER_00: represent business as usual. And then off of that, we developed two what we describe here as bookend

SPEAKER_00: scenarios. These are not necessarily achievable scenarios. They all assume very, you know,

SPEAKER_00: pretty much complete participation in some kind of active managed charging program. But they really

SPEAKER_00: were bookend scenarios to kind of test the full solution space and see what the range of impacts

SPEAKER_00: could be. These two bookend scenarios are quite different in terms of what kind of price signals

SPEAKER_00: and load management goes on in these kind of active managed scenarios. We have our manage for

SPEAKER_00: bulk system needs scenario which is that green shape there. And in that world, we still have

SPEAKER_00: quite a bit of customers passively managing their charging and time of use rates as well as half

SPEAKER_00: customers participating in an active managed charging program designed around bulk system

SPEAKER_00: price signals. So trying to avoid those SMUD system peak hours and increase charging in the middle of

SPEAKER_00: the day. The third scenario here is the manage to find peak scenario. In this scenario, we still

SPEAKER_00: incentivize customers to avoid those system peak hours. So try to minimize charging in hours that

SPEAKER_00: would put pressure on SMUD's need for new generation capacity. But outside of those hours, try to find

SPEAKER_00: their peak as much as possible, conduct charging in a coordinated fashion to avoid creating the

SPEAKER_00: rebound peak. So as you see in this graphic here, kind of the key differentiation between that green

Unknown: scenario and the reference scenario is we see that that more aggressive level of managing

SPEAKER_00: charging around bulk system price signals kind of creates a really concentrated charging profile.

SPEAKER_00: We see load really build up in the middle of the day. And then we see a strong rebound peak kind of

SPEAKER_00: after system peak hours or time of use rates hours. As we get into results, I just want to build that

SPEAKER_00: intuition that that could kind of create a new challenge with a localized new peak in a certain

SPEAKER_00: subset of hours.

SPEAKER_00: So now to get into some of our key findings in more detail. The first key finding is that

SPEAKER_00: electrification presents an opportunity to increase SMUD's utilization of its distribution

SPEAKER_00: system and create downward rate pressure. In this chart here, we're showing in the yellow bars

SPEAKER_00: the investment that SMUD will need to make in its distribution system for primary distribution

SPEAKER_00: system upgrades under our analysis here, as well as an estimate of what the secondary system costs

SPEAKER_00: would look like. So SMUD will need to make some upfront investments in that capital in those new

SPEAKER_00: projects to enable that load growth. But as it does, load continues to grow, that utilization

SPEAKER_00: of existing assets as well as new assets will grow over time. And as load grows, SMUD will take in

SPEAKER_00: more revenue as illustrated in those light blue bars. And the net balance here is expecting kind

SPEAKER_00: of a downward rate pressure as a result of all that load growth and increased utilization of those

SPEAKER_00: assets of up to about 25% by 2040. The next key finding is that electrification is expected to

SPEAKER_00: increase the annual volume of substation upgrades or additions by about 30 to 60%. So historically,

SPEAKER_00: in a typical year, SMUD has done about eight substation projects. That has been for typical

SPEAKER_00: levels of customer growth, asset health index issues, aging transformers, or other types of

SPEAKER_00: emergent failures. This study was really trying to identify what additional upgrades would be needed

SPEAKER_00: based off of this electrification driven load growth. And what we see is a significant increase

SPEAKER_00: depending on the scenario. In our manage for bulk system needs scenario, we see the highest rate of

SPEAKER_00: distribution upgrades is needed. So when we see that charging is managed purely around bulk system

SPEAKER_00: price signals, we can create new localized peaks in the distribution system that can trigger more

SPEAKER_00: upgrades than if we manage charging to help smooth out those rebound peaks and mitigate any kind of

SPEAKER_00: load secondary load impact on the distribution system as in that managed peak scenario.

Unknown: I'm just going to caveat this analysis that this is not a detailed distribution engineering study.

SPEAKER_00: So there are other opportunities for SMUD to potentially mitigate some of these upgrade needs

SPEAKER_00: through circuit switching. The other thing I want to call out is what our key finding of this study

SPEAKER_00: is that SMUD should really evolve their distribution planning processes to do more scenario analysis,

SPEAKER_00: do more long-term forecasting, and really take an active stance towards monitoring this load growth

SPEAKER_00: so they're ready and prepared for if and when it arrives.

SPEAKER_00: The next key finding I want to highlight is that in this scenario forecast,

SPEAKER_00: we really saw that SMUD's distribution upgrade needs will really accelerate in the next few years.

SPEAKER_00: So this gives SMUD a limited number of years to really develop programs and processes to

SPEAKER_00: engage in dynamic load management. This chart here is illustrating the distribution

SPEAKER_00: substation projects as well as bulk substation bank upgrades that we identified as needed in

SPEAKER_00: the study under our three scenarios. Our reference are managed for bulk system and managed to find

SPEAKER_00: peaks. So again, we see there's a lot more investments needed in that managed for bulk system

SPEAKER_00: needs scenario versus the managed to find peaks scenario. And we see that the upgrades really start

SPEAKER_00: to accelerate in the 2030, 2035 timeframe. So the kind of key finding and recommendation we made,

SPEAKER_00: which is based on this finding, is that SMUD really needs to take an active and

SPEAKER_00: stance towards really identifying the different requirements they need from their non-wires

SPEAKER_00: solutions projects and how they are going to define their data needs,

SPEAKER_00: begin to do some piloting and begin to incorporate that into their normal planning process.

SPEAKER_06: I'm going to ask you, John, and one of the things that is a blind and lost piece,

SPEAKER_06: blind, but you certainly haven't decided that managing the peaks is superior. But if you look

SPEAKER_06: at the marginal cost of energy as well as that marginal environmental cost, right, that you would

Unknown: prefer to manage for bulk system needs, right, you want people to charge from 10 to 2, even though

SPEAKER_06: it creates a peak. So is there ‑‑ are you trying to say that or are you just saying this is one of the

SPEAKER_06: scenarios, right, that we've analyzed? Is there a commentary to that base result?

Unknown: Yeah, I think one of the things you're pointing to is that there are a lot of locations on the

SPEAKER_00: distribution system where there is head room. And the level of load management, you can do this

SPEAKER_00: really aggressive load management around your bulk system peak. You can really try to maximize load

SPEAKER_00: in the middle of the day if you're not too worried about a rebound peak because you have a lot of

SPEAKER_00: head room. But there are locations where if you take that strategy, you'll create a new distribution

SPEAKER_00: challenge and that could, you know, make those cost savings a little bit of a wash.

SPEAKER_00: And did the ‑‑ there's a lot of slides ago. Did you try to look at that comparison and say, hey,

SPEAKER_06: the electricity is free, right, in the middle of the day, we should invest in these

SPEAKER_06: transformers that allows us to handle those peaks when the power is at its cheapest?

Unknown: Yeah, totally. Sorry, I was trying to see if we had our appendix slides here, but I don't think we do.

SPEAKER_00: Yeah, we did. So we did an analysis where we looked at, like, what is the bulk system benefit

SPEAKER_00: you get in all of these scenarios and what's the incremental distribution cost? And what we found

SPEAKER_00: is that with the managed bulk system need scenario, you have a big bulk system benefit,

SPEAKER_00: but you have a relatively incremental distribution cost, and it's kind of a wash in terms of the

SPEAKER_00: total benefit across the entire system. Whereas in this managed defined peak scenario, you get

SPEAKER_00: still a lot of that bulk system benefit that you do in the managed bulk system, almost, I would

SPEAKER_00: say, majority of it, because you're still shifting away from your, you know, peak hours. You're

SPEAKER_00: getting a little bit less value, you know, you're kind of having some higher loads and hours that

SPEAKER_00: are maybe a slightly more energy cost, but you have a lot of distribution benefits. That yielded

SPEAKER_00: the total ‑‑ the total system cost that was lower than other scenarios.

Unknown: Great. Thank you.

Unknown: Thanks for the question. That's a good one. All right. I'm going to keep going and talk about how

SPEAKER_00: SMUD's customer programs need to evolve to take advantage of the locational benefits.

Unknown: You know, with programs, conventional DER programs that are really designed around taking advantage

SPEAKER_00: of trying to avoid generation capacity investments, SMUD can dispatch all of the

SPEAKER_00: resources involved in that type of program on a single system‑wide signal. When you're using DERs

SPEAKER_00: for a locationally targeted program, diversity of dispatch signals is key. Different elements of the

SPEAKER_00: distribution system peak at different times. And as we saw in our scenario analysis, kind of

SPEAKER_00: coordinated to cascading charging of different types of resources is necessary to kind of avoid

SPEAKER_00: types of rebound peaks. Another key difference is that when you're using DERs for a generation

SPEAKER_00: capacity type program, the utility takes on a financial risk. But the utility could likely make

SPEAKER_00: up for any shortfall in performance or unexpected challenges with customer enrollment by getting a

SPEAKER_00: short‑term capacity contract in a liquid market in KISO. But when we're talking about using DERs

SPEAKER_00: for a locational capacity, the utility takes on both physical and financial risk. There are

SPEAKER_00: limited backup options if DER enrollment in a program targeted at locational capacity falls short

SPEAKER_00: of the system needs. There's also a difference here in terms of the risk when you're thinking

SPEAKER_00: about customer opt‑out. The impact of any one customer opting out of a program that is a system‑wide

SPEAKER_00: program target around generation capacity is rather minimal. It's still something to be thinking

SPEAKER_00: about monitoring. But when you're talking about locational capacity, if any one customer opts out

SPEAKER_00: when you're using a smaller pool of customers as a resource, the risk of anyone opting out is much

SPEAKER_00: more significant. Another key difference between programs designed around generation capacity needs

SPEAKER_00: versus locational capacity needs is that generation capacity is a value that's easy to forecast over

SPEAKER_00: the lifetime of a program and it's rather persistent. With locational capacity, the value of it is

SPEAKER_00: transient in time. The value of DER for the distribution system only exists where there's

SPEAKER_00: a distribution system constraint and it only exists until SMUD builds the upgrade to alleviate that

SPEAKER_00: type of bottleneck. So as SMUD goes forward and tries to build out programs that help them

SPEAKER_00: capture locational value of DER, there are a few key coordination challenges they need to

SPEAKER_00: think about. SMUD's customer programs teams need to really understand when and where there are

SPEAKER_00: distribution system constraints and when and where they might be able to help distribution

SPEAKER_00: planning leverage those DERs for distribution capacity deferral. Another key coordination

SPEAKER_00: challenge is between distribution planning and resource planning. If distribution planning is

SPEAKER_00: intending to leverage a collection of DERs for a non-wire solution alternative, resource planning

SPEAKER_00: needs to understand how distribution planning is going to need to dispatch that resource for their

SPEAKER_00: distribution peak needs and how that might diminish the ability of resource planning to use that as a

SPEAKER_00: generation capacity resource. This is basically, hey, we can target a specific substation of

SPEAKER_06: transformers as opposed to just the buckshot of our DER program going out to the region. Yes,

SPEAKER_00: exactly. Good clarification.

Unknown: So in addition to the scenario analysis we did in the study, we also took a look at the opportunity

SPEAKER_00: to deploy targeted DER in specific locations to defer distribution upgrade needs and non-wire

SPEAKER_00: solutions alternatives. So we did this analysis assessing what we were to describe as the economic

SPEAKER_00: potential. Where would it be cost effective to defer some of those 36 substation upgrades we

SPEAKER_00: identified in the reference scenario by deploying managed charging targeted in those specific

SPEAKER_00: locations or distributed storage. And what we identified is there's a lot of economic potential

SPEAKER_00: out there to defer distribution upgrades. There are a lot of challenges to realizing that potential,

SPEAKER_00: however. And Spud is kind of addressing those today by thinking about what makes a good economic

SPEAKER_00: investment in non-wire solutions and thinking about, you know, when is the risk appropriate to

SPEAKER_00: be able to invest in this solution, thinking about how technologies are going to be ready to

SPEAKER_00: be able to deploy in a non-wire solution, and getting proactive stance about thinking about

SPEAKER_00: how you're designing these programs. Another key finding I want to land on here,

SPEAKER_00: and this is really relevant to your upcoming discussion about your IRP, is that distributed

SPEAKER_00: storage or DERs really have this value stacking opportunity. They have value across the generation,

SPEAKER_00: transmission, and distribution system chain. And so when you're thinking about investment in bulk

SPEAKER_00: system storage, there's a key question to think about. Would it be more cost effective to cite

SPEAKER_00: some of that in the distribution system? Thinking about that DER in the distribution system can help

SPEAKER_00: you serve your generation capacity needs that storage would provide while also providing some

SPEAKER_00: distribution system value. So in this chart here, the purple box on the left is from Smud's zero

SPEAKER_00: carbon plan, I think 2021. That study back then identified a need for bulk system storage to hit

SPEAKER_00: the 2030 goal around the range of 700 to 1100 megawatts. On the right here, these red lines are

SPEAKER_00: illustrating how much storage on the distribution system has distribution value. So not everywhere

SPEAKER_00: in the distribution system has a constraint. So putting storage there does not give it distribution

SPEAKER_00: system value. But there are certain locations where if you deployed some storage, you could

SPEAKER_00: defer a substation for three or ten years. And so that's what's illustrated here in those red lines.

SPEAKER_00: Now, distributed storage usually comes at a cost premium compared to bulk system storage.

SPEAKER_00: Just the economy is a scale, procurement costs, other kinds of soft costs that come with procuring

SPEAKER_00: resources of a smaller size. So what the green lines here are illustrating is just kind of

SPEAKER_00: ether's estimate of what we think of as a typical cost premium for distributed storage. How much of

SPEAKER_00: that distributed storage might be cost effective when you factor in its locational value to be

SPEAKER_00: able to maybe display some of that bulk system asset that you might deploy instead.

SPEAKER_00: I'll just wrap up with kind of a brief summary of what we just went through today here.

SPEAKER_00: First key finding of the study was that significant load growth is coming.

SPEAKER_00: But we expect this to generate downward rate pressure for SMUD.

SPEAKER_00: Load management, nonwire solutions are key tools that SMUD can deploy to try to maximize that

SPEAKER_00: downward rate pressure. Another key finding is that enabling load growth, all this electrification

SPEAKER_00: load to meet economy-wide decarbonization goals is going to require some upfront investment in

SPEAKER_00: staffing and capital projects. We're expecting that SMUD's annual volume of distribution system

SPEAKER_00: upgrades can increase by a rate of 30 to 60 percent per year. We also found that there's

SPEAKER_00: significant potential to use managed charging and nonwire solutions to reduce the incremental

SPEAKER_00: distribution substation upgrade need. There's significant barriers to really realizing that

SPEAKER_00: and SMUD needs to take a proactive stance of defining what makes a good nonwire solution

SPEAKER_00: investment, what kind of risk management does SMUD want to deploy in those, getting ready to

SPEAKER_00: enable customers to participate in those types of programs and getting all their ADMS terms

SPEAKER_00: and technology ready to be able to leverage DRs for that use. The last key finding is just that

SPEAKER_00: load management enables SMUD to think about new coordination pathways between different planning

SPEAKER_00: groups at SMUD, thinking about how to leverage DRs as both a distribution system asset and a bulk

SPEAKER_00: system asset to kind of minimize total system costs. So with that, I'll wrap up there and

SPEAKER_00: then there's questions. Otherwise, I'll hand it over to Alex.

SPEAKER_00: Yeah. Two points I want to make. Actually, if you could jump back two slides to your part,

SPEAKER_06: that one. Could you just explain a little bit what these different cost numbers we're seeing

SPEAKER_06: on the bottom are actually, you actually mean? Yeah. So these are the costs of two-hour distributed

SPEAKER_00: storage, which is the resource we assumed in this particular chart. We did this in classes with other

SPEAKER_00: types of DRs, too, but in this particular chart is the resource that SMUD is deploying to defer

SPEAKER_00: distribution upgrade. We looked at this for a range of costs. SMUD is out there thinking,

SPEAKER_00: talking to vendors all the time, thinking about what resources they might be able to procure.

SPEAKER_00: SMUD is trying to develop these in the US. They're going to get more bids and understand these costs

SPEAKER_00: more. So we really just wanted to characterize a range of potential by looking at a wide range

SPEAKER_00: of resource costs. So there's a very low cost estimate there and then some analysis that E3

SPEAKER_00: conducted that's aligned with some of the cost impact. So on that gray bar,

Unknown: it's got a slide. We never got the colors. So you have 36 potential substations and you're saying

SPEAKER_06: 32 of those can be deferred by at a cost of $95 per kilowatt year. You may interpret that right?

SPEAKER_06: Yeah. It could be deferred for seven years if you have storage available at that cost.

Unknown: Okay. Interesting. And then my comment, I thought what was interesting with this chart is it's very

SPEAKER_06: clear you see the difference between the public power business model and the IOU business model.

SPEAKER_06: Where we don't have an inherent incentive to spend on capital and to add to our bottom line.

SPEAKER_06: And so I think it's everywhere we're very interested in that flexibility and being

SPEAKER_06: creative. However we can save money, we're going to save money to help keep our rates low.

SPEAKER_06: And then the last point, I think back to that summary slide. The only other point I wanted to

SPEAKER_06: last bullet here, I wrote a note for it, it popped up, is how important it is for us to think

SPEAKER_06: creatively and cross cutting across the organization. I know I had some issues with one of the circuits

SPEAKER_06: in my ward where they're on a bluff. So there's only one way in and it always impacts their

SPEAKER_06: ability to have when there's a storm, they're often out and they're out for days at a time

SPEAKER_06: because there's only 40 homes served. So they get put on the low priority list automatically

SPEAKER_06: when somebody 30,000 homes are out. But I said, why don't we offer them our virtual power home

SPEAKER_06: battery program. But there's a lot of inertia inside the organization where there's a lot of

SPEAKER_06: business students that have to communicate and swap back and forth. But part of this analysis

SPEAKER_06: is really showing just the importance of trying to break down those barriers and think creatively

SPEAKER_06: about solutions and getting to yes versus just oh, no, we can't do it. So thank you for this. I

SPEAKER_06: think it was a great presentation. Okay. I think you're up.

Unknown: Good evening, everyone. I'm Andeep Singh. I'm the director of distribution planning and operations.

SPEAKER_02: And it's my team's responsibility to plan and operate our grid. On the distribution side,

SPEAKER_02: we plan on two-year cycles, we plan on five-year cycles, and on the transmission side, we plan in

SPEAKER_02: 10-year cycles or 20-year cycles. We plan for future load growth, just like what was presented

SPEAKER_02: to us. We plan for contingencies. We plan for regulatory compliance and we plan for weather

SPEAKER_02: events. And studies like such that was presented to us, they're extremely important to us because

SPEAKER_02: they help us plan better. For today, we're going to concentrate on distribution planning because

SPEAKER_02: that's where the EVs are going to be connected. So let's walk through our distribution planning

SPEAKER_02: process. What inputs inform our forecast? We look at our historical peak load for the last few years

SPEAKER_02: and then we look at our new customer demand that's coming. And that combination provides us

SPEAKER_02: the demand to create a five-year distribution forecast. And once that five-year forecast is

SPEAKER_02: achieved, then we identify the capacity needs. We compare the forecasted demand with available

SPEAKER_02: capacity to identify where and when the deficiencies are expected. And when those

SPEAKER_02: deficiencies are identified, then we look for the mitigation measures. And the mitigation measures

SPEAKER_02: could be seasonal load transfers, they could be switching loads, they could be substation upgrades,

SPEAKER_02: just like adding a new transformer to a substation or adding more capacity, or it could be a brand

SPEAKER_02: new substation build. And if there's a large load that comes outside of this planning process,

Unknown: we work closely with our commercial development and strategic count teams to support the large

SPEAKER_02: load projects. We have Rule 2 and Rule 16 that helps us guide that process for the large loads

SPEAKER_02: on the distribution side. And as you all know, for the transmission side, we are working to develop

SPEAKER_02: a large load policy on the transmission side. But today we're talking about distribution.

SPEAKER_02: So our distribution forecast, which is a five-year forecast, it informs our 10-year and 20-year

SPEAKER_02: forecast for transmission as well as the integrated or the resource planning forecast for the 20-year.

SPEAKER_02: Let's talk about the EV impacts that were identified in the study.

SPEAKER_02: EVs along with the DERs will change our grid. Our grid used to be a unidirectional grid where

SPEAKER_02: we have our generation all the way to distribution and the power used to flow one way. With the

SPEAKER_02: evolution of EVs as well as DERs, the grid has become bidirectional grid. And the bidirectional

SPEAKER_02: grid triggers the need for new and greater cross-functional efforts to manage unique loads

SPEAKER_02: with evolving load profiles. EVs are different. The forecasts for EV growth are uncertain.

SPEAKER_02: So we assume that the growth will be incremental and it will be evolving.

Unknown: They have unique load profiles. We saw in one of the graphs that was shown by E3 that

SPEAKER_02: they have different peaks. Our peaks might be shifting from our traditional peaks.

SPEAKER_02: So we account for those as well. The idea always is, and Mikaela touched on that,

SPEAKER_02: our aim is to always increase our existing system utilization through new technology and

SPEAKER_02: ongoing pilots. We're constantly looking at utilizing our grid very efficiently to

SPEAKER_02: prevent unnecessary infrastructure upgrades. It's always our goal to utilize our existing resources.

SPEAKER_02: And looking forward, we're looking at non-wire solutions. And non-wire solutions could be the

SPEAKER_02: DERs. They could be batteries. They could be working with our customers and look at load flex

SPEAKER_02: options and demand forecasts as well. Many options there. But we're constantly looking at that.

SPEAKER_02: So the key takeaway on this slide is that the EV growth will introduce new complexities,

SPEAKER_02: and we're aware of that. But it will also introduce new opportunities to innovate and plan for a

SPEAKER_02: smarter, flexible, and reliable grid in the future.

SPEAKER_02: What are we doing with this information? What are some of the ongoing efforts, as it was touched by

SPEAKER_02: E3? We anticipated this. We anticipated this was coming. So we are already ahead of the game.

SPEAKER_02: We have invested in our system in efforts like Advanced Distribution Management System, ADMS,

SPEAKER_02: Distribution or Distributed Energy Resource Management System, DERMs,

SPEAKER_02: as well as our Advanced Metering. These tools allow us to gain more visibility and control into

SPEAKER_02: our grid, which is, like I mentioned, it's evolving and it's becoming bi-directional grid.

Unknown: We have a new forecast tool now that allows us to do hourly forecasts that predict load growth

SPEAKER_02: while accounting for the impacts of DERs and EVs at a more granular level. Our traditional

SPEAKER_02: planning process used to work on peak-based planning. It was a static planning that we used

SPEAKER_02: to perform that would look at the peak loads and we would perform distribution planning based on

SPEAKER_02: that. This tool, LoadSear, as was mentioned in the previous slides, it allows us to look at

SPEAKER_02: the entire 8,760 hours during the year to look at the granular level to see how the loads are

SPEAKER_02: shifting and what can we do to efficiently utilize our grid. For our future mitigation measures,

SPEAKER_02: as I mentioned, we are looking at non-wire solutions that could include managed charging,

SPEAKER_02: load flexing, storage, renewables and demand response options.

SPEAKER_02: Our next steps, obviously, would be incorporating the learnings from this study as well as the IRP

SPEAKER_02: study that's upcoming into SMUD's planning processes while preparing for new mitigation

SPEAKER_02: measures that will support for greater transportation electrification in an affordable and reliable

SPEAKER_02: manner. What are some of the opportunities that we're preparing for the new integrated system

SPEAKER_02: planning process, which I'll talk about in the next slide, by developing a process to align

SPEAKER_02: infrastructure investments across SMUD, multiple departments, to identify the lowest cost,

SPEAKER_02: most reliable path forward for us. Our path forward is to leverage data, innovation and

SPEAKER_02: integrated planning to meet our evolving customer needs in a more cleaner, more resilient grid.

SPEAKER_02: Okay, what is integrated system planning? I know we talked about it, but I thought it would be

SPEAKER_02: good to touch on that. Integrated system planning would align our infrastructure investments,

SPEAKER_02: rates, managed charging, as well as DERs to identify the lowest cost, most reliable path forward to

SPEAKER_02: serve our future load. And some of the key outcomes there would be cross-functional alignment,

Unknown: shared understanding of the system needs. So instead of planning for distribution,

SPEAKER_02: generation and transmission, separately we would plan for the entire grid in one shot. And then

SPEAKER_02: more informed investment decisions, which are the obvious outcome for this. For the EVs and the DERs,

SPEAKER_02: we will leverage the integrated resource plan to align our EV demand growth with siding renewable

SPEAKER_02: generation, storage, flexible loads and managed charging to support our decarbonization goals.

SPEAKER_02: And again, the key outcome would be holistic planning across the grid. So we would plan the

SPEAKER_02: grid as a whole instead of planning separately for different sections. The strategy will support

SPEAKER_02: decarbonization and reliability, and it optimizes the use of our existing and new resources.

Unknown: And then we plan for uncertainty as well. We are going to use scenario analysis. We now have tools

SPEAKER_02: that would help us generate scenario analysis to account for changes in vehicle costs, charging

SPEAKER_02: availability, incentives, fleet adoption and customer behavior. So we would have different

SPEAKER_02: graphs showing these different scenarios, and then we could utilize that to plan better. And the key

SPEAKER_02: outcomes, obviously, range of potential futures. It informs flexible and adaptive strategies and a

SPEAKER_02: reliable and a cost-effective path forward. So all in all, by integrating EV and DER growth into our

SPEAKER_02: planning processes, we're prepared to meet our evolving customer needs while advancing a cleaner,

SPEAKER_02: more reliable and affordable energy future. That concludes our presentation. Thank you.

SPEAKER_02: Questions from the board? Rob?

Unknown: Appreciate it. Thank you very much for a great presentation. I actually have a

SPEAKER_07: question going back to the E3 presentation. In particular, there are several places where we

SPEAKER_07: talk about increased sales leading to downward rate pressure. And I'm curious what the

SPEAKER_07: costing model is for the energy that we use to actually sell to people.

Unknown: Maybe I can walk through. Page 9, maybe. Yeah, I'll walk through the chart a bit more.

SPEAKER_00: This one you're thinking about? This, yeah. Yeah. So what we have on the top here are the distribution

SPEAKER_00: investments we identified. So what are the cost of those? So just looking at the kind of capital

SPEAKER_00: cost, we had a simple revenue requirement model that we used to think about how those costs,

SPEAKER_00: offering costs, get spread over time. Worked with SMUD's financial planning folks to help us develop

SPEAKER_00: those assumptions. The blue bars are basically taking the load growth, we're expecting the

SPEAKER_00: incremental load growth, and multiplying it by 8 cents per KWH, which again came from SMUD's

SPEAKER_00: team, thinking about in your current rates, how much of the rate is really recovering the

SPEAKER_00: distribution component of costs? So we just used a flat rate of 8 cents per KWH. Yep, flat nominal terms.

Unknown: Thanks. That was my question. I appreciate it.

Unknown: Anybody else? Brandon?

Unknown: Yeah. One of the things I was thinking about, are there any potential barriers to this type of work?

SPEAKER_06: And so I understand, I have a decent understanding of IOU planning processes and ways like regulators

SPEAKER_06: can say no, but do we have any NERC requirements that we have to think about? Are there any

SPEAKER_06: potential barriers that we need to overcome to do this type of work other than our own internal

SPEAKER_06: ability to do it? On the distribution side, I would say no. NERC regulations would not apply

SPEAKER_02: on the distribution loads, especially on the low distribution, 12 KV or under. So that's that.

SPEAKER_02: Internally, as you all are aware, LoRa is rolling out our ISP strategy, so that would allow us to

SPEAKER_02: work together and plan for the grid in a holistic way. So we're really looking forward to that.

SPEAKER_02: I think that would eliminate any of the shortcomings that we had in the planning process.

SPEAKER_06: Remember we did some of the black and beech work, which is going to be racial work.

SPEAKER_06: But that really looked, that was a lot of preliminary work, looking at the edge of grid

SPEAKER_06: on a circuit by circuit basis. I guess one of my questions is given our high penetration of

SPEAKER_06: especially electric vehicles and to a lesser extent building electrification, what is that

SPEAKER_06: current status on our distribution system? Rachel, you were just here last month talking about

Unknown: the statuses of the programs. Yeah, and maybe what I'll speak to, because I smile that you bring up

SPEAKER_03: the black and beech analysis, because that was really the start, right? That was the groundbreaking,

SPEAKER_03: like how do we estimate what we think customer adoption of some of these DER technologies will

SPEAKER_03: be and where will they be? Like how do we think about the forecasting of what that adoption will

SPEAKER_03: look like, both based upon demographic and psychographic proclivity to adopt, coupled with

SPEAKER_03: putting it on a geospatial basis on our distribution system and trying to line that up relative to the

SPEAKER_03: grid implications with the customer adoption? And really we've just continued to evolve since

SPEAKER_03: then, right? So those projections back in 2015 are not what we are projecting today in terms of

SPEAKER_03: forecasts. In fact, as we were looking at forecasts with regards to electrification adoption and the

SPEAKER_03: different DER adoptions to feed into the integrated resources plan analysis, that's evolved too,

SPEAKER_03: right? Even this analysis was started, I guess it was last year, right? And so didn't necessarily

SPEAKER_03: have all of that federal policy pullback. So that kind of speaks to the uncertainty of the information

SPEAKER_03: again by looking at scenarios and bookends, it helps inform us of kind of the space in which we

SPEAKER_03: know something will come together. But it goes back to that, it doesn't give us a definitive

SPEAKER_03: analysis. So we just continue to refine based upon the knowledge that we have based upon analysis

SPEAKER_03: to be able to help best inform what we do. But it continually iterates because of the

SPEAKER_03: fact that there's multiple dynamics that factor into what that looks like.

Unknown: And then one last, my last sort of comment, as a might sort of take away from this is to say,

SPEAKER_06: yes, there's sort of the results of the study, yes, there's value to be had. And yes, we need to

SPEAKER_06: coordinate to unlock that value. I guess my question from policy governance perspective is,

SPEAKER_06: what do you, what can I monitor to ensure that we're progressing down that path?

Unknown: That's a wonderful question. You know, there's really, at the end of the day, and maybe this

SPEAKER_03: is nice that it's that slide, right, we want to see that downward pressure on rates. We want to

SPEAKER_03: see that the revenue, that as we think about the costs that we're managing that right, that we're

SPEAKER_03: we're utilizing our assets as much as possible. So I think that we'll be looking at, like,

SPEAKER_03: it really is looking at success criteria, right? So currently I come and tell you, like, hey,

SPEAKER_03: this is the EV adoption in SMUD's territory and this is the heat pumps and these are these things.

SPEAKER_03: It's really reframing and looking at what does success look like. Maybe it's that

SPEAKER_03: net revenue. Maybe it's that, like, what are we seeing in terms of costs versus what are we

Unknown: relative to the revenue as we look at what that EV adoption is. So I think it's really looking

SPEAKER_03: at what success is and then kind of redefining what those numbers are that we track.

Unknown: Yeah, so there's a couple places in the E3 presentation where we talked about

SPEAKER_09: locationally targeted programs and the benefits of that. Do we have, we had any, I realize that

SPEAKER_09: we're putting some of the hardware in place, but have we had any programs that are locationally

SPEAKER_09: targeted and even if we don't have those right now, how do we imagine those being rolled out

SPEAKER_09: and, you know, who would, are there, like, socioeconomic issues that come up with that?

SPEAKER_03: Yeah, a couple things. And I think I've talked to the board multiple times as this, you know,

SPEAKER_03: has evolved as we've done all this geospatial analysis with regards to where we see load growth

SPEAKER_03: being and what the implications are in the distribution grid. We do not have anything

SPEAKER_03: right now where we differentiate the incentives based upon locational value. So we don't say,

SPEAKER_03: okay, you customer over here, you get a higher incentive than you customer over there.

SPEAKER_03: That being said, we've talked, I've talked to you about our managed EV charging pilot,

SPEAKER_03: which we ran out of R&D and did analysis and we're in the process because we've got an RFP

SPEAKER_03: on the street and we're, you know, evaluating bids with regards to a new provider relative to

SPEAKER_03: operationalizing our managed EV charging program. And in order for the numbers to work, so this

SPEAKER_03: goes back to that financial model business case, in order for those numbers to work, we're going to

SPEAKER_03: have to try to encourage those customers that are behind specific transformers that we know either

SPEAKER_03: have a certain number of EV customers on there or that we forecast that additional EVs will come on

SPEAKER_03: there and potentially overload those transformers for the value proposition to work. So as such,

Unknown: for that managed EV charging program, when we do launch that operational model next year,

SPEAKER_03: we're not going to say, hey, you get this dollar and you get this lower dollar. We're going to say,

SPEAKER_03: we're going to target market to those customers behind those constrained transformers. Similarly,

SPEAKER_03: with the commercial VPP pilot, we are picking commercial customers behind specific substations

SPEAKER_03: that are at that sweet spot of, you know, not already on our capital plan, we're already

SPEAKER_03: working on upgrading that substation. Not so far out that we don't really know whether or not we're

SPEAKER_03: going to have to upgrade that substation or not. So we are doing the targeting is the approach that

SPEAKER_03: we're taking. But it is a conversation we're going to have to have with the board at some point of,

SPEAKER_03: like, do we ever get to that point where we differentiate? But currently our approach

SPEAKER_03: is really about targeting outreach to those customers and enrolling those customers

SPEAKER_03: where we know that they can have the best value for SMUD. Thank you.

SPEAKER_08: Sure. Thanks. I'm thinking just a little bit about, really, these are situational decisions

SPEAKER_07: depending on where the consumer falls within the region. At what point do we start to talk to the

SPEAKER_07: local land use authorities as to what fits where within the service area? Do we ever want to try

SPEAKER_07: and say, no, you should be putting these uses in a different place so that we can serve them more

SPEAKER_07: efficiently? I know we say that with the data centers, but when do we come down the size threshold?

Unknown: I'll speak to it from a customer standpoint and maybe Amadeep can speak to it from a good

SPEAKER_03: standpoint. One thing that we have tried to do in all of this, you know, customer adoption,

SPEAKER_03: geospatial analysis approach has been how do we triangulate multiple sources of data to see where

SPEAKER_03: you can potentially de-risk focusing in that area first? Does that make sense? So one example is

Unknown: for our medium and heavy duty vehicle electrification, we had that CEC funded roadmap

Unknown: where we interviewed the top 100 commercial fleets to understand what their electrification

SPEAKER_03: plans were for medium heavy duty vehicle electrification. Then we looked at it from

SPEAKER_03: a distribution grid standpoint and said, okay, where are multiple fleets planning to electrify

SPEAKER_03: on a certain timeframe and where are those spaces on our distribution grid and therefore what is the

SPEAKER_03: distribution grid's ability to handle that capacity? So then it gives you some better

SPEAKER_03: understanding of where to target because you're using both your customer information as well as

SPEAKER_03: your distribution grid information. Some utilities, some IOUs have started doing that like proactive

SPEAKER_03: grid investment. A lot of it was due to like EVs and now there's discussions about data centers.

SPEAKER_03: But it was really about EVs starting. So Con Edison in New York, for example, has

Unknown: CPUC approval to do some proactive investment. And it's those kinds of approaches that, you know,

SPEAKER_03: starting with, you know, because your question is do we direct them to be like you should put this

SPEAKER_03: here, you should put this here. I think our first step is, you know. I'm looking at it from the other

SPEAKER_07: end of the telescope. Yeah. I think. When do we start to say to people, you know, that's really,

SPEAKER_07: it's not going to work there very soon. That's probably, and I don't know if, you know, Laura

SPEAKER_03: has any perspective or either Laura is like also certain areas are wanting to attract certain

SPEAKER_03: businesses in that area and understanding what that is can be an opportunity as well.

Unknown: Yeah, I think from a, if you're purely speaking about, Laura, sorry, Chief Executive Officer,

SPEAKER_05: if you're purely speaking about electrification, I think most of the time that infrastructure is

SPEAKER_05: already there in terms of you've got buildings and homes and they're electrifying, whether it's

SPEAKER_05: their fleet or their homes or their businesses. And so I think in those cases, we really do want

SPEAKER_05: to help in terms of reducing the emissions from buildings and transportation. So I don't think

SPEAKER_05: we would be saying, no, you can't do this here. I think we're really just trying to figure out how

SPEAKER_05: do we do it in a way that's cost effective and manage really that'll manage the charging of

SPEAKER_05: electrification measures. So that way we're looking at making the most out of our existing system and

SPEAKER_05: where we need to doing those upgrades. Thanks. I've got a quick question. I hope it's a quick

SPEAKER_08: question. How much visibility do we have and how much, if any, control do we have over third-party

SPEAKER_08: charging systems? So whether it's Tesla that just put in six or eight new handles at the grocery

SPEAKER_08: store near my house or EVgo or Electrify America, do we have any visibility slash control over those

SPEAKER_08: systems? In terms of managing their charging and things like that? Yeah. And potentially, I mean,

SPEAKER_08: do we charge them more during peak hours? And then can we, I mean, if we're in some emergency

SPEAKER_08: situation, can we turn those off or turn them down or do something? So we have our commercial

SPEAKER_03: customer rate. So there's sort of price signals that are built in there. We are working on things

SPEAKER_03: like fleet managed charging programs and working with that from our customers as well. We also

SPEAKER_03: find that as the Teslas and the other public charging entities are going in, they're also

SPEAKER_03: looking at those strategies from a dynamic pricing standpoint as well relative to kind of managing

SPEAKER_03: what capacity they have access to as well as sending price signals to their customers as well.

Unknown: But we don't have the ability currently, technically, at least to, oh, gee, there's

SPEAKER_08: six cars plugged in over there at a location that's about to overload. We can't turn them off.

SPEAKER_03: We currently do not have a, we don't have a program offering that does that, but we are looking at those

SPEAKER_03: opportunities. Okay. Thank you. I think just to add to that too, we do get applications. So if it's a new

SPEAKER_05: connection for new chargers that are going in, like Tesla's putting in a new

SPEAKER_05: charging station, we would get an application for service there. So then the system studies that are

SPEAKER_05: done in distribution planning actually looks to make sure that we can serve those customers or

SPEAKER_05: those charging stations. So it protects our system from, we wouldn't have it connected if we weren't

SPEAKER_05: able to serve it. Right, exactly. And then we've also looked at flexible connection opportunities

SPEAKER_03: too if someone wants eventual capacity but are willing to provide some flexibility up front to

SPEAKER_03: get them from a speed standpoint. Thank you. Director Rose.

Unknown: One of the things as Director Kirth was having that discussion is

SPEAKER_06: what is the risk of AI, data center, large load interconnection, right? It's adding in

SPEAKER_06: transportation electrification, a couple of megawatts here, a few megawatts or even kilowatts.

SPEAKER_06: The grid has the capacity to handle that. It's not been a problem. But if you start dropping in

SPEAKER_06: 20 or 50 plus megawatts, how much is that going to suck up? And is there going to be

SPEAKER_06: delineation between our secondary and primary services that I should worry about? Or are we

SPEAKER_06: going to jump in a couple of data centers and all of a sudden the distribution grid is going to be

SPEAKER_06: completely congested and now the little stuff, the day-to-day little stuff is going to become

SPEAKER_06: problematic? So it's the same process. If we had a data center that was coming and asking for

SPEAKER_05: service, they would do an application for service. There are system studies that are done within

SPEAKER_05: distribution planning and transmission planning if it needs to go on the transmission side.

SPEAKER_05: That would inform us on what upgrades are needed in order to support that load. And they wouldn't

SPEAKER_05: get connected until we were able to support. I know in our process today, we do recoup those

SPEAKER_05: infrastructure costs in terms of from a commercial customer who's installing or who's

SPEAKER_05: signing up for new service. We also are working towards having the large load policy that the

SPEAKER_05: board's instructed us on. As we progress into the IRP and large load, if it's possible to find a

SPEAKER_06: balancing act there between making sure that we're not going to, I guess, sell a resource that's not

SPEAKER_06: available to someone smaller who wants a little piece of that to do their project. So I definitely

SPEAKER_06: think there will be a balance there. We'll try to figure that out. One person doesn't come in and

SPEAKER_06: take up all the bandwidth. So it'll be an ongoing discussion for the next six months.

SPEAKER_06: President DeMile.

Unknown: Yeah. Thank you. So, Amandeep, this one's for you. It's your last slide and the last box.

SPEAKER_09: Talking about uncertainty and that's certainly throughout this whole presentation. So

SPEAKER_09: clearly there's a range of potential futures, but what kinds of things would we be doing to

SPEAKER_09: maintain our flexibility and to have adaptive strategies and what kind of things,

Unknown: how would we be looking at the grid and how things are changing?

Unknown: And what kind of lead times do we anticipate to be able to make, oh, it's like, oh, well,

SPEAKER_09: we didn't plan this one quite right. What kind of lead time do we think we're going to be able to

SPEAKER_09: maintain? It's a combination of things, right? We plan, like I mentioned, we plan in two-year

SPEAKER_02: cycles and we plan in five-year cycles. And we plan annually as well. So when we look at our grid

SPEAKER_02: as a whole on the distribution side, we take a look at that annually to see where we stand. And

SPEAKER_02: then we also do the biannual or every two years as well. Based on that, we identify where

SPEAKER_02: the shortcomings are. And we're constantly also looking at some of these other non-wire solutions

SPEAKER_02: as well, right? We're looking at the pilots for various of these non-wire solutions. Non-wire

SPEAKER_02: solutions are your non-traditional, whether you could install a battery, whether you could install

SPEAKER_02: a DER, or you could work with our customers to participate in load management. So we're

SPEAKER_02: constantly looking at that. But as far as the lead time is concerned, I think our planning studies,

Unknown: they define what those lead times are. Because we're looking constantly five years ahead on the

SPEAKER_02: distribution side and 10 years plus ahead on the transmission side. So we're always ahead of the

SPEAKER_02: game. And with our new tools, we could run scenario analysis on different of these scenarios to see

SPEAKER_02: how our grid is going to be in the next five years, in the next 10 years. So that's what we do. So

SPEAKER_02: we're going to be doing the scenario analysis moving forward.

Unknown: Then that actually strikes me as one of the advantages of being able to target

SPEAKER_09: some of our customer programs. And those could be, especially if we know how successful they are in

SPEAKER_09: the areas that have received the targeting, if it's appropriate to target them to other places

SPEAKER_09: that are going to be, that are approaching problem status. Does that capture that?

SPEAKER_09: Yeah. And I think that's one of those opportunities, right? Like there's a lot that goes into it,

SPEAKER_03: as we've talked about you wanting to make sure they show up, the validation, the cost effectiveness,

SPEAKER_03: all of those pieces. But by able to tap into that fleet of customers, you've got flexibility,

SPEAKER_03: right? And if you can do that in targeted ways, you don't have to pay for, you know,

SPEAKER_03: dispatching all of it. You could pay for potentially because there's added value to dispatch

SPEAKER_03: in specific geographical locations. And we're starting to see that already. We had Orange

SPEAKER_03: Vale substation work going on. And so how do we dispatch the fleet for my energy optimizer,

SPEAKER_03: partner plus battery storage systems, for example? So, yeah.

SPEAKER_08: Well, thank you, Rachel, Nikayla, and Amandeep. I really appreciate the information. I've always

SPEAKER_08: said SMUD staff is so good at keeping the lights on on a day-to-day basis that we have the luxury

SPEAKER_08: of being able to look at these 4, 5, 6, 10-year, 20-year plans. And so this was a luxury. Thank

SPEAKER_08: you. We appreciate it. I have one card from somebody in our audience who wishes to speak on this item,

SPEAKER_08: Mr. Weber.

Unknown: Good evening, Chairman, Board, and committee. Thank you for the integrated distribution resource

SPEAKER_01: plan presentation. I found it interesting. I assume this will be part of the IRP. Speaking of IRP,

SPEAKER_01: I'm wondering how stakeholders in the public will play a role in its development. I'm used to a

SPEAKER_01: robust public involvement and transparency in the development of an IRP. I will read an example.

SPEAKER_01: September 8, 2026, Idaho Power employees and members of a public advisory council will meet

SPEAKER_01: Thursday, September 10 to discuss key elements that will drive the utility's 20-year energy plan.

SPEAKER_01: It will be the first monthly meeting of the company's 2027 integrative resource plan

SPEAKER_01: advisory council called IRPAC. The company produces an integrative resource plan, IRP,

SPEAKER_01: every two years and intends to submit its 2027 plan to regulators in June. The virtual IRPAC

Unknown: meetings are open to the public. Thursday's meeting will provide an overview of the process

SPEAKER_01: and a recap of the 2025 IRP updates about the company's resource acquisition process,

SPEAKER_01: the proposed sale of Idaho Power's Oregon service area, and a look at the past summer's energy use

SPEAKER_01: are also on the agenda. Background information and a link for attending via WebEx are available

SPEAKER_01: at idahoapower.com slash IRP. Meetings begin at 9 a.m. Mountain Time. The IRPAC is a volunteer

SPEAKER_01: panel that will meet with Idaho Power staff several times over a period of months to discuss

SPEAKER_01: the 2027 integrative resource plan, which will play out the company's preferred portfolio of

SPEAKER_01: energy resources to serve customers over the next 20 years. The IRPAC includes representatives from

SPEAKER_01: public interest groups, industry and agriculture as well as the state and local lawmakers,

SPEAKER_01: public utility commission staff and other interested parties. The advisory council provides

SPEAKER_01: public input and feedback that assists the company in the creation of the 2027 IRP. I

SPEAKER_01: participated in Idaho Power's IRPs from 2006 until 2013. What will be the format for SMUD's

SPEAKER_01: 2027 IRP? Thank you. Thank you. Laura, can we ask somebody from staff to get back to Mr. Webber and

SPEAKER_08: with some idea of what our communications and outreach strategy is going to be for the IRP.

SPEAKER_08: Thank you. Do we have anybody online who wishes to speak on our agenda item?

Unknown: Do not see any hands now. Okay. And the next item on the agenda is for public comment for items not

SPEAKER_08: on the agenda. And Mr. Webber, you wish to speak on that as well.

Unknown: Yes, thank you. Good evening, Chairman, board and committee. I've been a SMUD superfan for decades.

SPEAKER_01: I could have lived anywhere but chose here in part because of being in SMUD's service territory.

SPEAKER_01: The 2030 zero carbon commitment was a big draw. SMUD's website states the following promise,

SPEAKER_01: low rates, reliable service, carbon free energy by 2030. We're going all in to provide 100%

SPEAKER_01: carbon free power by 2030. Our 2030 zero carbon vision continues this commitment.

SPEAKER_01: Webster's defines commitment as an agreement or pledge to do something in the future.

SPEAKER_01: This is different than a goal which is defined as the end toward which an effort is directed.

SPEAKER_01: In last month's committee and board meetings, it sounded like there was a shift in the messaging

SPEAKER_01: from the 2030 zero carbon commitment to a goal. And it didn't sound like that goal would be achieved.

SPEAKER_01: I would suggest that the 2030 zero carbon commitment be replaced with a 2035 95% renewable

SPEAKER_01: generation goal. My reasoning is negative messaging often fails. Messaging needs to be

SPEAKER_01: for what you want, not what you don't want. When you commit to a partner, you don't say

SPEAKER_01: zero cheating. You say always faithful. You focus on what you want, not what you don't want.

Unknown: We want renewable generation. We need milestones to achieve the goal along the way. 90% by 2030

SPEAKER_01: and 1% more every year. Without milestones, goals are unlikely to be met. If you want to run a 100

SPEAKER_01: mile race in one year, you would want to set milestones along the way. 25 miles after three

SPEAKER_01: months, 50 miles after six months, 75 miles in nine months. Please consider my suggestion for a

SPEAKER_01: positive achievable goal with milestones along the way. We do have a big tailwind since the plug-in

SPEAKER_01: solar bill was signed. If we could get a couple hundred thousand owners and renters to install

SPEAKER_01: 500 watts of solar each, that adds up to 100 megawatts of solar on the system without any

SPEAKER_01: transmission upgrades or cost rate pairs. If we could encourage people to install west facing

SPEAKER_01: panels, we could save millions of dollars on storage. I have faith that SMUD employees can

SPEAKER_01: achieve the goals working with the board and the public. Thank you. Thank you, Mr. Weber.

SPEAKER_08: Chief legal officer, do we have anybody online who wishes to speak on items not on the agenda?

Unknown: No, we do not. And then our last item is to provide a summary of committee direction.

Unknown: The only thing I have is that we'll follow up with John Weber on information related to the public

SPEAKER_04: process that we'll use for the RIRP. Great. Thank you. Having reached the end of our agenda,

SPEAKER_08: seeing no more business, this meeting is adjourned.

Unknown: Thank you.