>>> THE SUSTAINABILITY , CITY
LIGHTS, ARTS AND CULTURE MEETING
WILL COME TO ORDER. IT IS 9:32
A.M., AUGUST 1st, 2025 POINT
I'M COUNCILMEMBER ALEXIS
MERCEDES, CHAIR OF THE
COMMITTEE. GLOBAL CLERK PLEASE
CALL THE ROLE AND NOTE FOR THE
RECORD THAT COUNCILMEMBER
SOLOMON STILL EXCUSED?
>> VICE CHAIR WAREZ?
>> HERE. I APOLOGIZE FOR MY
MUSIC. I'M HERE.
>> I'M HERE, MADAME PRESIDENT
-- I MEAN MADAM CHAIR.
>> COUNCILMEMBER SAKA.
>> A LITTLE CYPRESS HILL NEVER
HURT ANYONE IN THE MORNING.
>> GREAT MUSIC. I WAS ROCKING
OUT MYSELF. THANK YOU.
>> COUNCILMEMBER STRAUSS?
>> PRESENT.
>> CHAIR RANK.
>> PRESENT.
>> CHAIR, THERE ARE FOUR MEMBERS
PRESENT HE'LL
>> WONDERFUL, IF THERE IS NO
ACTION WILL THE AGENDA BE
ADOPTED? HEARING NO OBJECTION
THE AGENDA IS ADOPTED. WELCOME
TO THE AUGUST 2025
SUSTAINABILITY, CITY LIGHT,
ALTERING CULTURE MEETING. WE
ALREADY HAD A LITTLE BIT OF AN
INTRO WITH SOME MUSIC THIS
MORNING SO THANK YOU VICE CHAIR
JUAREZ AND WELCOME BACK. WE ARE
LOOKING FORWARD TO HAVING YOUR
EXPERTISE ON THIS COMMITTEE OVER
THE NEXT SEVERAL MONTHS.
>> THANK YOU. THANK YOU FOR SUCH
A KIND WELCOME.
>> OF COURSE. AND WE HAVE A
STRAIGHTFORWARD AGENDA FOR
TODAY. WE WILL BE HEARING
EVERYTHING AND DISCUSSION ON A
RESOLUTION ON SEATTLE CITY
LIGHT'S 2020 6-1 27 ENERGY
CONSERVATION TARGETS AS WELL AS
EVERYTHING AND DISCUSSION ON THE
BIG UTILITY AUDIT. AND WITH
THAT, WE WILL NOW OPEN THE
HYBRID PUBLIC COMMENT PERIOD.
PUBLIC COMMENTS SHOULD RELATE TO
ITEMS ON TODAY'S AGENDA OR
WITHIN THE PURVIEW OF THIS
COMMITTEE. HOW MANY SPEAKERS ARE
SIGNED UP TODAY HE'LL
>> CURRENTLY WE HAVE ZERO
IN-PERSON SPEAKERS SIGNED UP AND
THERE ARE TWO REMOTE SPEAKERS.
>> GREAT. OUR TWO REMOTE
SPEAKERS WILL HAVE TWO MINUTES.
CLERK, COULD YOU PLEASE READ THE
PUBLIC COMMENT INSTRUCTIONS?
>> THE PUBLIC COMMENT PERIOD
WILL BE MODERATED IN THE
FOLLOWING MANNER -- THE PUBLIC
COMMENT PERIOD IS UP TO 30
MINUTES. SPEAKERS WILL BE CALLED
THE ORDER THEY ARE REGISTERED.
SPEAKERS WILL HEAR A TIME WHEN
10 SECONDS ARE LEFT ON THEIR
TIME. SPEAKERS MICS WILL BE
MUTED IF THEY DO NOT END THEIR
COMMENTS WITHIN THE ALLOTTED
TIME, TO ALLOW US TO CALL ON THE
NEXT SPEAKER. THE PUBLIC COMMENT
PERIOD IS NOW OPEN AND WE WILL
BEGIN WITH THE FIRST SPEAKER ON
THE LIST. KRISTIN MALLERY
FOLLOWED BY DAVID HAYNES. AND
PLEASE PRESS STAR SIX WHEN YOU
HEAR THE PROMPT IF YOU HAVE BEEN
UNMUTED.
>> HELLO EVERYONE. I HAVE A
COMMENT FOR TODAY FOR MR. ROB
SAKA SPECIFICALLY BECAUSE YOU
SAID NO ONE WORKED HARDER THAN
YOU AND THEN YOU DON'T SHOW UP
IN THE COMMITTEE. YOU ARE A
MEMBER OF. WHEN A CRUCIAL VOTE
NEEDS TO OCCUR, AND IT IS
UTTERLY DISGUSTING THAT YOU ARE
PURPOSELY FINE WITH YOUR MOST
VULNERABLE CONSTITUENTS DYING
DUE TO YOUR NEGLECT TO PERFORM
THE BASIC TASK OF YOUR JOB . IT
IS SOULLESS AND YOU HAVE BLOOD
ON YOUR HANDS.
>> KEEP ITEMS PERTAINING TO
TODAY'S AGENDA.
>> WELL IT'S NOT POSSIBLE
BECAUSE ROB SAKA ISN'T SHOWING
UP WHEN HE NEEDS TO, WHEN I CAN
MAKE THE APPROPRIATE, RELEVANT
COMMENTS. HE DIDN'T SHOW SO I
HAVE TO BE HERE TO DO THIS. IT
IS ONLY FAIR TO ALL OF US WHO
ARE STRUGGLING TO SURVIVE,
BECAUSE HE PRIORITIZES ONE CURB
OVER AN ENTIRE CITY OF PEOPLE
THAT DESPERATELY NEEDS HIS HELP.
IT'S DISGUSTING.
>> KRISTIN --
>> HOW DARE YOU 2
>> WARNING TO PLEASE KEEP ITEMS
FOR PUBLIC COMMENTS PERTAINING
TO TODAY'S AGENDA.
>> OKAY. WELL YOU'RE ALL GOING
TO HELL. THANK YOU. THANK YOU
FOR YOUR TIME.
>> MOVING ON TO OUR NEXT PUBLIC
COMMENT OR.
>> DAVID HAYNES. THERE ARE NO
ADDITIONAL REGISTERED SPEAKERS
AND WE'LL NOW PROCEED OUR ITEMS
OF BUSINESS.
>> THANK YOU FOR THAT. MOVING ON
TO OUR FIRST ITEM OF BUSINESS,
WILL THE COURT READ ITEM ONE
INTO THE RECORD HE'LL
>> RESOLUTION 32176, A
RESOLUTION RELATING TO THE CITY
LIGHT DEPARTMENT ACKNOWLEDGING
AND APPROVING CITY LIGHT
DEPARTMENT'S ADOPTION OF A
BIENNIAL ENERGY CONSERVATION
TARGET FOR 2026 TO 2027 AND 10
YEAR CONSERVATION POTENTIAL.
PUBLIC HEARING, BREATHING AND
DISCUSSION, AND POSSIBLE.
>> WONDERFUL. AND WE HAVE OUR
PRESENTERS FROM CITY LIGHT
COMING TO THE TABLE ALONG WITH
CENTRAL STAFF. WHEN YOU ALL GET
SETTLED IN, I INVITE YOU TO
INTRODUCE YOURSELF FOR THE
RECORD. THANK YOU ALL FOR BEING
HERE THIS MORNING.
>> GOOD MORNING CHAIR RINCK AND
COMMITTEE MEMBERS. MY NAME IS
DON LINDELL, I'M GENERAL
MANAGER AND CHIEF EXECUTIVE
OFFICER FOR SEATTLE CITY LIGHT,
AND TO MY RIGHT I LET EVERYONE
INTRODUCE THEMSELVES.
>> GOOD MORNING, MY NAME IS
BRIDGET MOLINA AND THAT
>> GOOD MORNING, MY NAME IS
JENNIFER FINNEGAN. I AND ENERGY
SOLUTIONS AT SEATTLE CITY LIGHT.
>> GOOD MORNING, I'M CRAIG
SMITH AND I'M THE CHIEF
CUSTOMER OFFICER AT SEATTLE CITY
LIGHT.
>> GOOD MORNING, JOE FERNANDEZ,
DIRECTOR OF CUSTOMER ENERGY
SOLUTIONS, SEATTLE CITY LIGHT.
>> MY NAME IS [ INAUDIBLE ] AND
I'M ON THE COUNCIL CENTRAL
STAFF.
>> THANK YOU FOR THE OPPORTUNITY
TO PRESENT CITY LIGHT'S
PROPOSED ENERGY CONSERVATION
TARGETS FOR 2020 6-1 27. TODAY
WE ARE SHARING OUR BIENNIAL
ENERGY CONSERVATION TARGET FOR
THE NEXT TWO YEARS ALONG WITH
THE 10 YEAR CONSERVATION
POTENTIAL. THESE TARGETS ARE
CONSISTENT WITH STATE
REQUIREMENTS UNDER THE
WASHINGTON ENERGY INDEPENDENT
FACT, INITIATIVE 937, AS WELL AS
THE CLEAN ENERGY TRANSFORMATION
ACT, CDA, BOTH OF WHICH REQUIRE
UTILITIES LIKE CITY LIGHT TO
PURSUE ALL AVAILABLE
CONSERVATION THAT IS COST
EFFECTIVE, RELIABLE, AND
FEASIBLE. THESE TARGETS ARE
BASED ON A DEMAND-SIDE MANAGER
POTENTIAL ASSESSMENT THAT
EVALUATES THE CONSERVATION
POTENTIAL WITHIN CITY LIGHT
SERVICE TERRITORY USING
METHODOLOGY PRESCRIBED BY THE
NORTHWEST POWER AND CONSERVATION
COUNCIL. THIS IS A RIGOROUS,
DATA-DRIVEN PROCESS THAT ENSURES
OUR INVESTMENTS IN CONSERVATION
DELIVER VALUE TO OUR CUSTOMERS
AND OUR SYSTEM. ENERGY
CONSERVATION REMAINS ONE OF OUR
TOP RESOURCE CHOICES. IT IS LOW
COST, LOW RISK, AND HAS MINIMAL
ENVIRONMENTAL IMPACT, MINIMAL
NEGATIVE ENVIRONMENTAL IMPACT.
IT HAS ENVIRONMENTAL IMPACT IN A
GOOD WAY. IT REDUCES DEMAND ON
OUR SYSTEM AND HELPS US AVOID
COSTLY INFRASTRUCTURE
INVESTMENTS WHILE SUPPORTING
SEATTLE'S CLIMATE AND
AFFORDABILITY GOALS. WE ARE
PROUD OF OUR LONG LEGACY IN
CONSERVATION. WE ARE CONFIDENT
THAT WE CAN MEET OR EXCEED THIS
TARGET AND LOOK FORWARD TO YOUR
SUPPORT AS WE CONTINUE INVESTING
IN A CLEAN, EFFICIENT ENERGY
FUTURE FOR SEATTLE. I AM NOW
GOING TO HAND IT OFF TO OUR
CUSTOMER ENERGY SOLUTIONS STAFF,
JENNIFER, TO PRESENT THE SLIDE
DECK AND ANSWER ANY QUESTIONS .
>> SO GOOD MORNING
COUNCILMEMBERS. WE ARE SO GLAD
TO BE BEFORE YOU TODAY. BEFORE I
JUMP INTO THE PRESENTATION
ITSELF, I WANTED TO TELL YOU
THAT YOU WILL SEE AN AMENDMENT
BY THE NEXT COMMITTEE MEETING ON
SEPTEMBER 6th. WHAT HAPPENED IS
THAT WE ATTACHED THE WRONG
VERSION OF THE REPORT AND WE
REALIZED THAT AS SOON AS THE
AGENDA CAME OUT ON TUESDAY, AND
WE NOTIFIED COUNCIL STAFF AND
INTERNAL STAFF, AND WE'VE BEEN
WANTING TO MAKE THAT RIGHT. SO
WHAT HAPPENED WAS THAT OUR
ANALYSIS WAS COMPLETED AT THE
END OF MAY BUT OUR NARRATIVE WAS
NOT. WE SHARED A LIVE LINK
INTERNALLY TO BEGIN THE INTERNAL
PROCESS, AND WHILE FINALIZING
THAT NARRATIVE. AND IN THE
BEGINNING OF JULY WE SHARED THAT
LIVELINK IN THE LEGISTAR
TRANSMISSION BUT THE WRITING
TEAM HAD MOVED ON TO A DIFFERENT
VERSION AND WE JUST REALIZED OUR
MISTAKE ON TUESDAY. SO WHAT
CHANGED BETWEEN THE LEGISTAR
VERSION AND THE FINAL? THE
CONTENT IS THE SAME. THERE ARE
NONMATERIAL CHANGES. BUT THE
NARRATIVE DID CHANGE IN THAT THE
NEWER VERSION PROVIDED BETTER
EXPLANATIONS. IT IMPROVE
READABILITY AND IT FIXED BROKEN
LINKS. OKAY. SO I AM GOING TO
START WITH THE PRESENTATION. SO
GOOD MORNING. WE ARE HERE TODAY
TO SEEK YOUR APPROVAL OF CITY
LIGHT'S CONSERVATION TARGETS.
THIS IS TO FILL A STATE
LEGISLATIVE REQUIREMENT. WE ARE
HERE BECAUSE WASHINGTON
INITIATIVE 937, THE WASHINGTON
ENERGY INDEPENDENCE ACT,
REQUIRES US TO PRESENT OUR TWO
YEAR AND 10 YEAR CONSERVATION
TARGETS TO YOU AT CITY COUNCIL
EVERY TWO YEARS. MY COLLEAGUES
WILL BE BACK IN A MONTH'S TIME
TO TALK ABOUT THE CLEAN ENERGY
IMPLEMENTATION PLAN AND THE
CLEAN ENERGY TRANSPORTATION ACT.
NOTE THAT THE CONSERVATION
TARGETS THAT WE ARE TALKING
ABOUT TODAY ARE AN IN THE CLEAN
ENERGY IMPLEMENTATION PLAN AND
YOU WILL BE DISCUSSING THIS IN A
MONTH'S TIME. NEXT SLIDE. OKAY,
SO WE'RE TALKING ABOUT ENERGY
CONSERVATION. LET'S DEFINE IT.
ENERGY CONSERVATION IS A
REDUCTION OF THE TOTAL AMOUNT OF
ENERGY CONSUMED OVER A YEAR. IN
EVERYDAY TERMS, THAT MEANS THAT
WE ARE DOING MORE WITH FEWER
RESOURCES FOR THE SAME AMOUNT OF
ENERGY. THE OFFICIAL DEFINITION
OF ENERGY CONSERVATION EXCLUDES
THINGS LIKE CUTTING BACK ON
PRODUCTION OR ON PLANT CLOSURE
AND IT EXCLUDES THINGS LIKE LOSS
OF AMENITY. SO IF YOU'RE
SHIVERING IN THE DARK BECAUSE
YOU DON'T WANT TO TURN OUT YOUR
THERMOSTAT, THAT DOESN'T COUNT
AS CONSERVATION, BECAUSE WE WANT
YOU TO BE COMFORTABLE.
THROUGHOUT TODAY'S
PRESENTATION, I WILL BE USING
THE TERMS ENERGY CONSERVATION
AND ENERGY EFFICIENCY
INTERCHANGEABLY. THEY MEAN THE
SAME THING. LET ME DROWN YOU IN
SOME EXAMPLES OF WHAT WE MEAN BY
ENERGY CONSERVATION. ON THE LEFT
SIDE ARE RESIDENTIAL EXAMPLES,
AND ON THE RIGHT SIDE ARE
COMMERCIAL EXAMPLES. STARTING AT
THE TOP WE HAVE ENERGY STAR
WASHERS AND DRYERS. THESE ARE
APPLIANCES THAT MEET SPECIFIC
ENERGY EFFICIENCY STANDARDS SET
BY THE UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY.
THE APPLIANCES ARE DESIGNED TO
USE LESS WATER AND ENERGY THAN
STANDARD MODELS AND THEY SAVE
MONEY ON UTILITY BILLS AND
REDUCE ENVIRONMENTAL IMPACT.
WHILE INSULATION IS CRUCIAL FOR
ENERGY EFFICIENCY, BECAUSE IT
MINIMIZES HEAT TRANSFER, IT
HELPS TO MAINTAIN CONSISTENT
INDOOR TEMPERATURE AND REDUCE
RELIANCE ON HEATING AND COOLING
SYSTEMS. THIS LEADS TO LOWER
ENERGY CONSUMPTION WHILE
MAINTAINING COMFORT. HEAT PUMPS
AND HEAT PUMP WATER HEATERS MAY
OR MAY NOT BE IN YOUR HOMES
RIGHT NOW BUT IF YOUR
NEIGHBORHOOD IS ANYTHING LIKE MY
NEIGHBORHOOD, MORE AND MORE OF
YOUR NEIGHBORS ARE INSTALLING
HEAT PUMPS AND HE PUMP WATER
HEATERS BECAUSE THEY WORK GREAT
AND THEY TRANSFER RATHER THAN
GENERATE HEAT, AND THAT MEANS
THEY COST LESS TO OPERATE. ON
THE RIGHT SIDE ARE COMMERCIAL
EXAMPLES OF CONSERVATION. AT THE
TOP ARE TRIPLE GLAZED WINDOWS.
TRIPLE GLAZED WINDOWS HAVE THREE
LAYERS OF GLASS WITH INSULATING
GAS LIKE ARGON AND KRYPTON
FILLING SPACES BETWEEN THE
CONSTRUCTION AND ENHANCES ENERGY
EFFICIENCY BY PROVIDING SUPERIOR
THERMAL AND SOUND INSULATION
COMPARED TO WINDOWS THAT ONLY
HAVE ONE OR TWO PAINS. BUILDING
AUTOMATION SYSTEMS ARE
COMPUTER-BASED SYSTEMS THAT
AUTOMATE AND CONTROL VARIOUS
BUILDING FUNCTIONS INCLUDING
HEATING, COOLING, AND LIGHTING.
AND WHEN THEY WORK WELL THEY
IMPROVE EFFICIENCY, REDUCE
WASTE, AND ENHANCE OCCUPANT
COMFORT. THE LAST EXAMPLE IS
HEATING, VENTILATION AND AIR
CONDITIONING RETRO COMMISSIONING
OR HEATING AND COOLING RETRO
COMMISSIONING. THIS IS A PROCESS
OF OPTIMIZING THE PERFORMANCE OF
EXISTING SYSTEMS. IT INVOLVES
EVALUATING AND ADJUSTING THE
SYSTEM CONTROLS AND COMPONENTS
TO ENSURE THEY OPERATE AS
INTENDED AND THEY SAVE ENERGY.
THEY REDUCE COSTS AND ENHANCE
OCCUPANT COMFORT. WE AT SEATTLE
CITY LIGHT OFFER CONSERVATION
INCENTIVES ACROSS A PORTFOLIO OF
PROGRAMS THAT INCLUDE MEASURES
AND EXAMPLES LIKE THE ONES THAT
ARE ON THE SCREEN. WE DO THIS
FOR ALL CUSTOMER CLASSES. WE DO
THIS FOR RESIDENTIAL CUSTOMERS,
COMMERCIAL CUSTOMERS, AND
INDUSTRIAL CUSTOMERS, ALL ACROSS
OUR SERVICE TERRITORY. THEY
INVOLVE DIFFERENT TYPES OF
MARKET INTERVENTIONS, REBATES,
INCENTIVES, AND DIRECT INSTALL,
WHICH IS A WAY OF SAYING THAT WE
OFFER THESE MEASURES FOR FREE IN
SOME CIRCUMSTANCES AND INSTALL
THEM, TOO. WE ALSO PROVIDE
MIDSTREAM INTERVENTIONS, WHICH
MEANS THAT WE PROVIDE NUDGES TO
RETAILERS AND DISTRIBUTORS TO BE
STOCKING MORE EFFICIENT
EQUIPMENT. CITY LIGHT VALUES
CONSERVATION FOR MANY REASONS,
INCLUDING IT'S A LOWER-COST
RESOURCE. WHEN WE ADD TOGETHER
ALL OF THE INCENTIVES, REBATES,
AND MARKET INTERVENTIONS
TOGETHER, CONSERVATION IS A
LOWER-COST RESOURCE THAN OTHER
SUPPLY-SIDE RESOURCES LIKE
HYDROPOWER, WIND POWER AND
UTILITY SCALE SOLAR. IT IS LOWER
RISK. WITH CONSERVATION WE
DON'T NEED TO WORRY ABOUT
WILDFIRES BETWEEN THE PLACE WE
GENERATE ENERGY AND WHERE WE
CONSUME IT. IT HAS LOWER
ENVIRONMENTAL IMPACTS, INCLUDING
NO GREENHOUSE GASES. IT KEEPS
OUR ENERGY INVESTMENTS LOCAL. IS
A FORM OF ECONOMIC DEVELOPMENT
AND A SOURCE OF JOBS ACROSS OUR
LOCAL ECONOMY. AND LAST, BY
PRIORITIZING CONSERVATION, WE
HAVE SUCCESSFULLY DEFERRED THE
ACQUISITION OF NEW RESOURCES AND
TRANSMISSION RESTRAINTS. SEATTLE
CITY LIGHT HAS A LONG-STANDING
COMMITMENT TO CONSERVATION.
IT'S A FOUNDATION OF HOW WE RUN
THE UTILITY. WE STARTED RUNNING
PROGRAMS IN THE 1970S AND THIS
MAKES US ONE OF THE
LONGEST-RUNNING PROGRAMS IN THE
COUNTRY. LET ME EXPLAIN THE
CHART. ON THE X AXIS IS TIME AND
THE EARLIEST DATE IS 1979. AND
THE MOST RECENT DATE IS 2024,
WHICH IS NOT APPEARING ON THAT
SCREEN, BUT IT IS ONLINE. ON THE
VERTICAL AXIS IS AVERAGE
MEGAWATTS .1 AVERAGE MEGAWATTS
IS THE EQUIVALENT ELECTRICITY
CONSUMED BY 1200 AVERAGE SEATTLE
RESIDENTIAL HOMES IN ONE YEAR.
UNLIKE OTHER ENERGY RESOURCES
LIKE HYDROPOWER, WIND POWER, AND
UTILITY SCALE SOLAR, INVESTING
IN CONSERVATION NETS SAVINGS
THAT COME BACK YEAR AFTER . FOR
EXAMPLE, WHEN WE INSPIRE A
CUSTOMER TO INVEST IN BETTER
INSULATION THEN THE MINIMUM THAT
IS REQUIRED BY ENERGY CODE, THE
CUSTOMER, THIS UTILITY, AND THE
FUTURE RESIDENTS OF THE BUILDING
REALIZE ENERGY SAVINGS FOR THE
LIFETIME OF THE INSULATION,
WHICH IS AT LEAST 20 YEARS. PUT
ANOTHER WAY, I'M SAYING THAT
INVESTMENTS IN CONSERVATION MAY
MADE TODAY WILL PAY DIVIDENDS
FOR YEARS, IF NOT DECADES TO
COME. AND CITY LIGHT CUSTOMERS
HAVE SOME OF THE LOWEST ENERGY
RATES IN THE COUNTRY THANKS IN
PART TO PAST INVESTMENTS IN
CONSERVATION. SO WE ARE HERE
TODAY TO SEEK YOUR APPROVAL OF
CITY LIGHT'S CONSERVATION
TARGETS. THIS IS TO FULFILL A
STATE LEGISLATIVE REQUIREMENT.
WE ARE HERE BECAUSE THE
WASHINGTON ENERGY INDEPENDENCE
ACT, ALSO KNOWN AS INITIATIVE
937, REQUIRES UTILITIES TO
PURSUE ALL AVAILABLE
CONSERVATION THAT IS COST
EFFECTIVE, RELIABLE AND
FEASIBLE. IT TELLS US TO SET
TWO-YEAR CONSERVATION TARGETS,
TEN-YEAR CONSERVATION TARGETS,
AND THAT WE NEED TO DO THIS
EVERY TWO YEARS. IT ALSO TELLS
US THAT UTILITIES MUST COLLECT
ENOUGH CONSERVATION TO MEET THE
TO YOUR TARGET AND IF WE DON'T
MEET THAT TWO-YEAR TARGET WE
HAVE A PENALTY ON THE ORDER OF
ABOUT $85 PER MEGAWATT HOUR,
WHICH IS DOUBLE WHAT IT COSTS
FOR US TO ACQUIRE HYDROPOWER.
YOU WILL ALSO NOTE THAT I LIST
THE CLEAN ENERGY TRANSFORMATION
ACT. THAT LAW REQUIRES US TO SET
FOR YOUR CONSERVATION TARGETS
AND THESE WILL FORMALLY COME
BEFORE YOU NEXT MONTH IN A
PRESENTATION FROM CITY LIGHT. SO
HOW DO WE DETERMINE THE AMOUNT
OF CONSERVATION THAT IS COST
EFFECTIVE, RELIABLE, AND
FEASIBLE? WE FOLLOW
METHODOLOGIES SET BY STATE LAW
AND WE DO POTENTIAL ASSESSMENT
STUDY. NEXT SLIDE. THANK YOU. A
POTENTIAL ASSESSMENT STUDY IS A
BIG QUANTITATIVE MODEL THAT
IDENTIFIES THE AMOUNT, TIMING,
AND COST OF CONSERVATION. IT
DOES THIS FOR ALL ENERGY-SAVING
WIDGETS AND SYSTEMS, FOR ALL
TYPES OF BUILDINGS AND SECTORS,
AND IS BASED UPON THOUSANDS OF
INPUTS SPECIFIC TO CITY LIGHT
SERVICE TERRITORY AND OUR
CLIMATE ZONE. WHAT IT DOES IS IT
TAKES TOGETHER ALL OF THE WAYS
THAT WE CAN BE SAVING ENERGY IN
OUR SERVICE TERRITORY AND IT
COMPARES THEM AGAINST
SUPPLY-SIDE RESOURCES AS IN
HYDROPOWER, WIND POWER, THE
UTILITY SCALE SOLAR, AND IT
SELECTS THE AMOUNT THAT IS LEAST
COST. WE THEN TAKE THE AMOUNT
THAT IS LEAST COST AND SAY,
OKAY, WHAT CAN WE DO IN TWO
YEARS AND 10 YEARS TIME, AND IS
BECOME OUR TARGETS. AND THAT IS
WHAT IS BEFORE YOU TODAY. THE
METHODOLOGY IS SET BY STATE LAW
AND IT IS COMMONLY FOLLOWED BY
ALL OF THE UTILITIES IN THE
STATE. SO THE REASON WHY WE DO
POTENTIAL ASSESSMENTS IS PARTLY
BECAUSE WE ARE REQUIRED TO BY
STATE LAW, BUT WE'VE BEEN DOING
POTENTIAL ASSESSMENTS FOR LONGER
THAN WE HAVE BEEN REQUIRED TO,
BECAUSE THEY'RE REALLY HELP
INPUTS INTO THE WAY THAT WE RUN
THE UTILITY. THEY -- THE INPUTS
FROM POTENTIAL ASSESSMENTS ARE
YOU IN THE INTEGRATED RESOURCE
PLAN, WHICH WILL COME BEFORE THE
COMMITTEE IN EARLY 2026 . THE
POTENTIAL ASSESSMENTS ARE A KEY
INPUT INTO THE LOW FORECAST,
WHICH IS ALSO SOMETHING THAT
WILL COME BEFORE YOU. AND
POTENTIAL ASSESSMENTS HELP US TO
IDENTIFY WHERE THE MOST BANG FOR
THE BUCK IS FOR PROGRAMS. IN
OTHER WORDS, IT HAS TOLD US, IN
THIS VERSION, THAT WE SHOULD BE
INVESTING MORE IN COMMERCIAL
ENERGY EFFICIENCY THAN
RESIDENTIAL ENERGY EFFICIENCY.
EARLIER I TOLD YOU THAT
UTILITIES MUST PURSUE AVAILABLE
CONSERVATION THAT IS COST
EFFECTIVE, RELIABLE, AND
FEASIBLE, AND I ALSO TOLD YOU
THAT WE HAD TO DO THIS EVERY TWO
YEARS BECAUSE THINGS CHANGE AND
THAT'S WHY WE ARE BEFORE YOU.
THERE ARE THREE MAIN DRIVERS OF
CHANGE. THE FIRST IS MARKET
TRANSFORMATION, AND I HAVE TWO
POINTS UNDER THAT. THE FIRST IS
THAT THE MORE CONSERVATION THAT
UTILITIES HAVE COLLECTED IN THE
PAST, THE MORE THE LOCAL MARKET
HAS BEEN TRANSFORMED. AS A
UTILITY WITH LONG-STANDING
CONSERVATION PROGRAMS, WE HAD
LESS POTENTIAL CONSERVATION
AVAILABLE IN OUR SERVICE
TERRITORY THAN A UTILITY THAT
HAS ONLY BEEN DOING IT FOR TWO
YEARS OR 10 YEARS. IN OTHER
WORDS, WE'VE HELPED CUSTOMERS
TO CHANGE OUT THE INEFFICIENT
APPLIANCES AND HEATING SYSTEMS,
AND INSULATION. THE OTHER SUB
BULLET UNDER MARKET
TRANSFORMATION HAS TO DO WITH
THE BASKET OF WIDGETS AND
SYSTEMS THAT SAVE ENERGY.
TECHNOLOGIES HAVE CHANGED AND
THEY CONTINUE TO CHANGE. SO IF
WE THINK BACK TO 20 YEARS AGO,
OUR INDUSTRY WAS VERY EXCITED
ABOUT CONTACT FLUORESCENT LIGHT
BULBS, CFLS. THOSE ARE THE
SWIRLY LIGHTBULBS THAT USE 50%
LESS ENERGY AGAINST INCANDESCENT
BULBS. ALREADY CFLS HAVE BEEN
REPLACED BY L.E.D.S, LIGHT
EMITTING DIODES, AND IT'S NO
LONGER. POSSIBLE TO PURCHASE
CFL'S ON THE MARKET. THAT'S AN
EXAMPLE OF HOW THE BASKET
WIDGETS THAT SAVE ENERGY HAS
CHANGED, AND OVER TIME THERE IS
LESS CONSERVATION TO COLLECT AT
LOW COST. A SECOND BULLET UP
THERE IS ABOUT LOCAL MARKET
CONDITIONS. THE GOOD NEWS IS
THAT THE LOCAL ECONOMY IS IN A
VERY DIFFERENT PLACE THAN IT WAS
THE LAST TIME WE DID THE STUDY,
WE ARE STILL FACING SOME
HEADWINDS. THERE IS A 34%
VACANCY FOR OFFICE SPACE AND
OFFICE SPACE IS A SIGNIFICANT
BUILDING USE INSIDE OUR SERVICE
TERRITORY, SOMETHING LIKE
PERCENT OF ALL THE ENERGY SAVING
AGENTS AND SYSTEMS THAT CAN SAVE
ENERGY IN THE COMMERCIAL SECTOR
ARE IN OFFICE SPACE AND WE CAN
SEE THAT IN THE BUILDINGS AROUND
US. I SAVED THE MOST SIGNIFICANT
DRIVER OF CHANGE FOR LAST, AND
THAT IS GOVERNMENT POLICIES.
GOVERNMENT POLICIES CAN REALLY
CHANGE THE AMOUNT OF
CONSERVATION THAT IS AVAILABLE.
LOOK TO THE HEADLINES OF 2025,
WE THINK OF TARIFFS, WE THINK OF
THE DEPARTMENT OF GOVERNMENT
EFFICIENCY, WE THINK OF VOLUME
IN MAJOR COUNTRIES, AND THAT'S
LEADS TO GREATER ECONOMIC
CONCERN, HIGHER INTEREST RATES
AND LONGER DECISION-MAKING
WINDOWS. THIS LEADS TO FEWER
COMPLETED ENERGY PRODUCTS FOR
HOUSEHOLDS AND LARGE EMPLOYERS
ALIKE. THE PUNCH LINE IS THAT
CONSERVATION TAKES INVESTMENT
AND PARTNERSHIP BETWEEN
CUSTOMERS, ALL LEVELS OF
GOVERNMENT, AND CITY LIGHT. AT
CITY LIGHT WE ARE STRONGLY
COMMITTED TO CONSERVATION AND WE
ARE FACING SOME STRONG
HEADWINDS. SO THIS GRAPH SHOWS
OUR HISTORY. IT SHOWS OUR PAST
TWO-YEAR TARGETS IN BLACK, FOR
THE PAST EIGHT TIMES WE HAVE
COME BEFORE CITY COUNCIL TO
APPROVE A CONSERVATION TARGET.
THIS GRAPH ALSO SHOWS OUR
PROPOSED TWO-YEAR TARGET IN
GRAY. LET ME EXPLAIN THE AXIS.
ON THE HORIZONTAL AXIS IS TIME,
BROKEN UP INTO TWO-YEAR
INCREMENTS CALLED BIENNIUM. ON
THE LEFT IS THE 2010 THROUGH
2011 BIENNIUM AND ON THE RIGHT
IS OUR PROPOSED TARGET FOR 2026
THROUGH 27. ON THE VERTICAL AXIS
IS ENERGY SAVINGS AND THOSE ARE
IN AVERAGE MEGAWATTS .1 AVERAGE
MEGAWATT IS THE EQUIVALENT
ENERGY USED BY 1200 AVERAGE
SEATTLE HOMES IN ONE YEAR. THE
GRAY BLOCK SHOWS THAT THE
PROPOSED CONSERVATION TARGET FOR
2026 THROUGH 27 IS 16 AVERAGE
MEGAWATTS, WHICH IS LOWER THAN
THE CURRENT BIENNIUM OF 18
AVERAGE MEGAWATTS, BUT I WANT TO
ESPECIALLY POINT OUT THAT THE 16
AVERAGE MEGAWATT IS THE FLOOR
FOR WHAT WE WILL DO, AND WE WILL
DO ALL THAT WE CAN TO EXCEED IT.
WE ARE FULLY COMMITTED TO
CONSERVATION. I WANT TO POINT
OUT THAT THE BLACK BOX, THE
BIENNIAL CONSERVATION TARGETS
VARY IN HEIGHT OVER TIME. THESE
BLACK BLOCKS REPRESENT THE
AMOUNT OF CONSERVATION IN OUR
SERVICE TERRITORY AT THAT TIME.
THESE VARIES FOR THE REASONS
THAT I DETAILED ON THE PREVIOUS
SLIDE -- MARKET TRANSFORMATION,
GOVERNMENT POLICIES, AND MARKET
CONDITIONS. BUT THE TARGETS ARE
JUST HALF THE STORY. WE WANT TO
TALK ABOUT HOW MUCH CONSERVATION
WE HAVE ACHIEVED COMPARED TO
THESE TARGETS. THIS GRAPH IS THE
SAME GRAPH AS WHAT YOU JUST SAW
BUT IT ADDS A NEW LAYER --
ACHIEVEMENT, OR HOW MUCH
CONSERVATION CITY LIGHT HAS
COLLECTED A BREACH OF THE
BIENNIAL. THIS IS THE SAME GRAPH
AS THE PREVIOUS SLIDE, THE
HORIZONTAL ACCESS IS TIME, THE
VERTICAL AXIS IS ENERGY SAVING
AND THE BLACK BLOCKS ARE THE
SAME, AND GRAY BLOCK IS THE
SAME. WHAT IS DIFFERENT ARE THE
GREEN BARS, AND THIS IS THE
AMOUNT OF CONSERVATION THAT WE
HAVE COLLECT DID MOST OFTEN IN
THE FORM OF INCENTIVES. ON THE
LEFT SIDE OF THE CHART I SHOW
THAT WE EXCEEDED THE TARGETS AND
MORE RECENTLY WE CAN STILL
ACHIEVE THE BIENNIAL TARGETS BUT
BY SMALLER MARGIN. LET ME DRAW
YOUR ATTENTION TO THE LIGHT
GREEN BAR IN THE 2022 THROUGH
2023 BIENNIUM. THIS REPRESENTS
EXCESS CONSERVATION FROM
PREVIOUS BIENNIAL. THE LAW
ALLOWS UTILITIES TO CLAIM EXCESS
CONSERVATION SAVINGS FROM
PREVIOUS BIENNIAL . WE DID THIS
IN 2022 THROUGH 2023 BECAUSE OF
HIGH OFFICE VACANCIES AND SUPPLY
CHAIN SNARLS THAT LED TO LESS
CONSERVATION BEING COLLECTED
THAN EXPECTED. REGARDING THE
CURRENT BIENNA, THEY DON'T HAVE
A GREEN BAR THERE BECAUSE WE ARE
STILL COLLECTING ENERGY BUT
GIVEN THE HIGH VACANCY IN
COMMERCIAL REAL ESTATE AND
RISING PRICES DUE TO TARIFFS, WE
WILL STRETCH TO ACHIEVE THIS
TARGET AND WE MAY VERY WELL NEED
TO READ THAT BANK OF EXCESS
CONSERVATION FROM PREVIOUS
BIENNA. ANY QUESTIONS?
>> JENNIFER, MAY I PAUSE JUST
THERE BECAUSE I NOTICED OUR VICE
CHAIR JUAREZ HAS A QUESTION
>> THANK YOU, MADAM CHAIR. IT
JUST WAS A BRIEF ONE. JENNIFER,
THANK YOU, I KNOW THIS IS A LOT
OF WORK. JUST QUICKLY ON PAGE
10, I'M HOPING THERE'S ROOM
FOR DUMB QUESTIONS BUT ON PAGE
10, THAT ONE, COULD YOU JUST
TELL ME WHY -- WHY DID WE --
WHAT HAPPENED IN '16 AND '17
AS OPPOSED TO --
>> SO A COUPLE THINGS WERE GOING
ON IN THE PERIOD LEADING UP TO
THAT. WE HAD A LOT OF FEDERAL
INVESTMENT IN THE AMERICAN
RECOVERY AND REINVESTMENT ACT
AND WE HAD A LOT OF INEXPENSIVE
LIGHTING SAVINGS. AND THE GREAT
THING IS THAT THE MARKET HAS
TRANSFORMED, AND NOW ALL OF
THOSE WAYS THAT WE WERE ABLE TO
OFFER INCENTIVES FOR LIGHTING
HAS NOW BECOME CODE. AND SO WE
ADD CITY LIGHT CAN ONLY OFFER
INCENTIVES AND CLAIM SAVINGS ON
THIS SLIDE FOR ENERGY
CONSERVATION THAT IS ABOVE CODE
.
>> OKAY. AND MY SECOND QUESTION,
THIS IS JUST BECAUSE I KNEW THAT
ABOUT THE INITIATIVE, SO YOU
KEEP SAYING THAT THE STATE
DRIVEN FOR INITIATIVE 537 IN THE
CEDA. SO WHEN YOU SAY STATE
DRIVEN, WHAT STATE AGENCIES? IS
THAT DOE, DEPARTMENT OF ECOLOGY,
OR WHO IS RUNNING THAT, WAS
HELPING?
>> WE REPORT TO THE DEPARTMENT
OF COMMERCE. THE INVESTOR-OWNED
UTILITIES ALSO REPORT TO THE
UTC.
>> RIGHT, BECAUSE WASHINGTON
STATE DOES NOT OFFICIALLY HAVE A
DEPARTMENT OF -- WE HAVE
DEPARTMENT OF ECOLOGY BUT -- I
THINK THIS IS THE SAME GROUP AT
MEANS THAT THE STUFF ON WIND
ENERGY.
>> YEAH, THEY DO A LOT OF WORK.
I THINK CEDA -- SO CEDA ALSO,
IT'S A WIDE-RANGING LAW AND IT
ALSO HAS REQUIREMENTS FOR THE
DEPARTMENT OF ECOLOGY AND
DEPARTMENT OF HEALTH IN ADDITION
TO THE OTHER STATE AGENCIES THAT
WE LISTED.
>> THANK YOU. THANK YOU, MADAM
CHAIR.
>> THANK YOU FOR THAT QUESTION.
>> SO WE ARE HERE BEFORE YOU
TODAY TO SEE YOUR APPROVAL OF
THE TWO-YEAR AND TEN-YEAR
TARGETS FOR CONSERVATION. WE
COMPLETED A POTENTIAL ASSESSMENT
THAT IDENTIFIED THE AMOUNT OF
COST EFFECTIVE CONSERVATION IN
OUR SERVICE TERRITORY AND IT
IDENTIFIED 10 YEARS OF COST
EFFECTIVE CONSERVATION OF 78
AVERAGE MEGAWATTS. IT ALSO
IDENTIFIED A TWO-YEAR
CONSERVATION TARGET OF 16
AVERAGE MEGAWATTS AND THIS IS
11% LOWER THAN THE PREVIOUS
TWO-YEAR TARGET. THIS LOWER
TARGET IS THE RESULTS OF
MARKETING CONDITIONS,
PARTICULARLY IN VACANT OFFICE
SPACE IN THE NEAR-TERM AND HIGH
POLICY UNCERTAINTY AT THE
FEDERAL LEVEL AND PAST PROGRAM
PERFORMANCE. PLEASE ADOPT THESE
TARGETS.
>> THANK YOU. COLLEAGUES, WHILE
WE WILL NOT BE VOTING ON THIS
ITEM TODAY, I WILL NOTE WE WILL
STILL NEED TO VOTE ON THE
AMENDMENT. CITY LIGHT JUST SPOKE
ABOUT AT THE BEGINNING OF THE
PRESENTATION AROUND THE
ATTACHMENTS. I JUST WANT TO FLAG
THAT WE DO HAVE SOME ACTION TO
TAKE TODAY BUT NOT ON THIS
OVERALL PACKAGE RELATED TO
APPROVING THE TARGETS. BUT WITH
THAT I WILL OPEN IT UP FOR
QUESTIONS THE COMMITTEE HAS OUR
PRESENTATION TODAY.
COUNCILMEMBER STRAUSS?
>> COUNCILMEMBER JUAREZ IN
STILL?
>> VICE CHAIR JUAREZ, IS THAT A
STALE HAND?
>> COUNCILMEMBER JUAREZ, YOU'RE
ALSO STILL ON .
>> SORRY ABOUT THAT POINT I SAID
YES THAT IS A STALE HAND. IT IS
NOT A BROWN HAND AND I DON'T
KNOW HOW TO DO THAT SO YES, I'LL
TAKE IT DOWN. DID I TAKE IT
DOWN? YEAH, OKAY.
>> THANK YOU.
>> COUNCILMEMBER STRAUSS, THEN
COUNCILMEMBER SAKA OR
COUNCILMEMBER SAKA, PLEASE
PROCEED.
>> THANK YOU CHAIR AND THANK YOU
CITY LIGHT FOR BEING HERE TODAY.
REALLY APPRECIATE THE
PRESENTATION AND THE INSIGHTS
SHARED ABOUT THIS PROCESS AND
THE CONSERVATION TARGETS. CAN WE
GO BACK TO SLIDE 10 FOR JUST A
MOMENT PLEASE? ALL RIGHT. WHILE
WE ARE DOING THAT, LET ME JUST
ASK ON THAT -- ON THAT LOOK BACK
PERIOD OVER THE LAST YEARS, AS
VICE CHAIR JUAREZ NOTED, THERE
IS A HIGH WATERMARK IS IN 2016
AND '17 AND THEN FROM THERE THE
TARGETS GO DOWN OVER TIME AND
YOU TALKED ABOUT SOME OF THE
DRIVERS OF THAT AND CONTRIBUTING
FACTORS. AND ALSO LIKE AT SOME
POINT THAT LEVEL OF DECLINE IS
NOT SUSTAINABLE WHICH LEADS TO
MY QUESTION. AT WHAT POINT IS
THERE LIKE ON A GOING FORWARD
BASIS, WHAT POINT IS THERE THE
POINT OF THE MINISTRY TURN,
WHERE NOT NECESSARILY EXPECTANCY
AS NOTABLE [ INAUDIBLE ] WHEN
WE'RE [ INAUDIBLE ] ON A
BIENNIUM BASIS? WHEN IS THE
POINT OF DIMINISHED RETURN
EXPECTED?
>> IF I COULD JUST JUMP IN,
EXCUSE ME, I THINK -- EXCUSE ME
AGAIN -- THE DECLINE IS A LITTLE
DECEPTIVE, AND WHAT'S DECEPTIVE
IS ALL OF THAT CONSERVATION IS
CONTINUING. SO THE CONSERVATION
WE HAVE IN 2016-2017, WE ARE
STILL SAVING ALL THAT ENERGY,
AND WE'VE ADDED TO IT IN THE
ENSUING YEARS. THE GRAPH
DOESN'T SHOW THAT BECAUSE ONCE
THE SAVINGS BECOMES PART OF
CODE, SO EACH TIME CITY COUNCIL
STRENGTHENS THE CODE TO REQUIRE
ADDITIONAL CONSERVATION, WE
DON'T GET TO PUT IT IN OUR
CHART ANYMORE, BUT IT'S STILL
HAPPENING. IT IS STILL THERE. WE
ARE STILL CONSERVING. SO I
THINK, YOU KNOW I THINK THAT'S
REALLY IMPORTANT TO UNDERSTAND.
IT'S REALLY IMPORTANT FOR OUR
PUBLIC TO UNDERSTAND. WE
ACTUALLY AREN'T SEEING A
DECLINE IN CONSERVATION. WE ARE
SEEING A DECLINE IN WHAT WE CAN
COUNT IN CONSERVATION, WHICH IS
A WHOLE DIFFERENT THING, AND
THAT'S OKAY. YOU KNOW WE ARE
EXCITED THAT THE CODE IS
STRENGTHENED AND THAT YOU KNOW
EVERYONE IS REQUIRED TO DO MORE
CONSERVING, AND THAT MAKES IT
HARDER AS WE HAVE TO CONTINUE TO
FIND NEW WAYS TO CONSERVE. SO
THE SECOND THING I WOULD POINT
OUT IS WE'RE IN A LITTLE BIT OF
A WEIRD LOW AND THE WEIRD LOW IS
CAUSED BY 30% VACANCY RATE IN
OUR COMMERCIAL BUILDINGS. AND SO
AS WE FILL THAT VACANCY RATE, AS
WE CONTINUE TO SEE BUSINESSES
RETURN TO THE OFFICE, AND AS WE
CONTINUE TO SEE NEW BUSINESSES,
IN, AND WE ARE SEEING THAT WE
ARE SEEING ADDITIONAL REQUESTS
FOR CONNECTION, I THINK THAT
GIVES US A BIGGER POOL TO PULL
FROM SO THEN WE CAN APPLY THE
CONSERVATION WE ARE STILL
ALLOWED TO COUNT TO NEW
ORGANIZATIONS COMING IN, AND THE
SAME THING FOR ABOUT 6%
POPULATION GROWTH. WE CAN AGAIN,
AS THE POPULATION GROWS, WE GOT
MORE OPPORTUNITY TO CONSERVE SO
THEN FINALLY WE'VE GOT NEW
PROGRAMS COMING IN. SO THE
REASON I SAY ALL OF THAT, WHICH
DOESN'T SOUND LIKE AN ANSWER TO
COUNCILMEMBER SAKA'S QUESTION
IS BECAUSE I THINK WE ARE NOT
CLOSE TO WHERE WE HIT
DIMINISHING RETURNS YET. I THINK
WE ARE IN A LITTLE BIT OF A LOW
AND I CAN'T REALLY PREDICT HOW
LONG THAT LULLED WILL BE BUT AS
WE HAVE IN SOME THINGS LIKE
DEMAND-SIDE MANAGEMENT AND TIME
OF USE, WE'VE GOT OPPORTUNITIES
FOR BEHAVIORAL CHANGES THAT MAY
REALLY DRIVE SOME SIGNIFICANT
CONSERVATION. SO I GUESS I'M
NOT READY TO ASSESS , WHAT'S
THE POINT OF DIMINISHING
RETURNS, BECAUSE I THINK OUR
RETURNS WILL EVENTUALLY TURN
AROUND POINT
>> THE OTHER THING I'D LIKE TO
POINT OUT, THOUGH, JENNIFER
MENTIONED SOME SORT OF
TECHNOLOGY CHANGES. IF YOU LOOK
AT THAT WAVE FROM 2010 TO 2020,
THAT WAS THE L.E.D. REVOLUTION
AND THEN CHANGES IN CONSUMER
ELECTRONICS. SO WE CAPTURED
THAT. BACK IN PROBABLY THE LATE
-- THE EARLY 2000'S, NO ONE SAW
L.E.D.S COMING AND NOW WE'VE
GOT USES COMING WITH SELECT
BATTERIES AND ELECT VEHICLES. SO
WE'LL SEE WHAT HAPPENS THERE.
NEW USES AND MORE EFFICIENT
TECHNOLOGY THAT WILL INVOLVE
OVER TIME AND THEN WE ARE ALL
KEEPING AN EYE ON DATA CENTERS.
SO THEY'RE TREMENDOUS ENGINES
OF GROWTH NOW AND WE'RE ALL
CONCERNED ABOUT THEIR IMPACTS ON
THE SUPPLY SYSTEM. BUT OVER TIME
I'M SURE THAT JUST AS WE'VE
SEEN IN THE PAST, WE'RE GOING
TO SEE SOME IMPROVEMENTS IN
EFFICIENCY THAT WILL DRIVE DOWN
AND CREATE MORE EFFICIENCY
OPPORTUNITIES IN THE DATA CENTER
CATEGORY. SO THOSE ARE THINGS
YOU CAN'T SEE. THAT'S WHY WE
DO THIS EVERY TWO YEARS, TO
CAPTURE THE CHANGES, NOT JUST
THE CHANGES IN MARKET
CONDITIONS, BUT CHANGES IN
TECHNOLOGY. WE CAN'T ALWAYS SEE
THEM COMING.
>> THANK YOU. [ INAUDIBLE ] THE
CLARITY THERE. MOVING ONTO MY
SECOND, FINAL QUESTION IS IF YOU
COULD MOVE TO THE NEXT SLIDE,
PLEASE, ON SLIDE 11, DID I HEAR
THIS CORRECTLY THAT -- SO
THERE'S THE BIENNIAL TARGET AND
THEN THERE'S WHAT WE ACHIEVED
LAID OUT AT LEAST ON A LOOK BACK
BASIS. DID I HEAR THIS CORRECTLY
IS TO AN EXTENT THERE'S A GAP
OR A DELTA BETWEEN THE TARGET,
THE INITIAL TARGET AND WHAT WE
REALIZED IN TERMS OF
ACHIEVEMENT? THAT WE CAN GO BACK
AND AT LEAST ON THE PREVIOUS
BIENNIAL AND KIND OF THINK THAT
IT CARRIES FORWARD? CAN YOU
EXPLAIN THAT CONCEPT? DID I HEAR
THAT CORRECTLY?
>> DO YOU WANT TO HIT THAT, JOE?
>> THAT'S CORRECT,
COUNCILMEMBER SAKA. ANYTIME WE
EXCEED OUR TARGET YOU CAN THINK
ABOUT IT AS IF WE ARE DEPOSITING
THOSE KILOWATT HOURS INTO ABANK
. IF WE WERE TO EVER FALL SHORT,
LIKE WE DID IN 22-23, WE CAN
WITHDRAW FROM THATBANK ACCESS
KILOWATT HOURS FROM THE PREVIOUS
TWO BIENNIALS, SO THAT MEANS
2018-2019 AND 2020 E- 2021. AS
JENNIFER NOTED, WE'RE GOING TO
LIKELY NEED TO LEAN ON THAT BE
BACK AGAIN IN 2024 TO 2025,
WHICH MEANS IN 26-27 WE WON'T
HAVE A BANK AND WE ARE GOING TO
BE EXCEPTIONALLY MOTIVATED TO
EXCEED THAT TARGET, TO DRAW UP
THAT BALANCE AND PROVIDE SOME
SAFETY FOR OURSELVES. AND AGAIN,
THIS IS REALLY JUST A COMPLIANCE
TARGET HERE THAT WE ARE SETTING
BEFORE YOU TODAY. WE ARE
INTERNALLY MOTIVATED TO EXCEED
THIS AND ACHIEVE ALL
COST-EFFECTIVE ENERGY EFFICIENCY
RESOURCES THAT WE CAN FIND UNDER
ANY ROCK THAT THEY MAY EXIST.
>> THANK YOU FOR THAT. THAT
MAKES SENSE SO I UNDERSTAND THAT
WE CAN LOOK BACK FOR THE
PREVIOUS TWO BIENNIA TO BANK
THOSE IF NEEDED AND THAT FORCES
MOTIVATION. YOU SAID YOU ALL
WITHIN THE CITY LIGHT WOULD BE
INTERNALLY MOTIVATED, WHICH I
COULDN'T AGREE MORE, TO DRIVE
FUTURE CHAIN. WHICH WE CAN'T
CONTINUE TO DO THAT POTENTIALLY
BASED ON A BROAD NUMBER OF FACT.
YOU WOULD BE INTERNALLY
MOTIVATED. WHAT DOES THAT
PORTEND? WHAT DOES THAT MEAN FOR
POLICYMAKERS, PARTICULARLY AT
THE CITY LEVEL? HOW CAN WE
POTENTIALLY W SURE YOU WOULD BE
INTERNALLY MOTIVATED. HOW CAN WE
BEST FROM A POLICY PERSPECTIVE
BEST SUPPORT THAT WORK AND
ENSURE THAT WE MEET OUR TARGETS
AND AVOID THIS KIND OF EXERCISE?
>> THANKS FOR THE QUESTION,
COUNCILMEMBER SAKA. I'LL START
WITH THE FIRST FEW THINGS WE ARE
DOING INTERNALLY TO ENSURE THAT
WE ARE NOT IN THE SAME POSITION
WHEN WE ARE BEFORE YOU HERE IN
TWO YEARS. I THINK ABOUT THIS IS
REALLY PLACING OUR FOCUS ON
THREE MAIN LETTERS. ONE OF THOSE
IS FILLING GAPS IN OUR
PORTFOLIO, DEVELOPING AND
LAUNCHING PROGRAMS THAT OUR
CUSTOMERS HAVE BEEN ASKING FOR,
THAT WILL HELP US GENERATE
ADDITIONAL SAVINGS. WE HAVE
SEVERAL EXAMPLES OF THAT. WE
PLANTED MANY SEEDS. NOT ALL OF
THOSE SEEDS ARE YET BEARING
FRUIT BECAUSE IT TAKES TIME TO
DEVELOP AND IMPLEMENT, AND BRING
PROJECTS FOR THEM, AND HAVE
THOSE PROJECTS COMPLETED. THE
SECOND THING WE'RE DOING IS
WE'RE OPTIMIZING OUR PORTFOLIO.
WE ARE CONSOLIDATING PROGRAMS.
WE ARE SIMPLIFYING THE CUSTOMER
EXPERIENCE AND STREAMLINING
OPERATIONS TO MAKE SURE THAT WE
ARE GETTING THE BEST PERFORMANCE
OUT OF EACH AND EVERY PROGRAM.
AND THE THIRD THING WE'RE DOING
IS REALLY INVESTING IN CUSTOMER
AND CONTRACTOR OUTREACH,
INVESTING IN OUTREACH AND
MARKETING, REALLY AN EFFORT TO
SELL OUR ENTIRE PORTFOLIO OF
PROGRAMS, BUILD CUSTOMER
AWARENESS, STRENGTHEN CUSTOMER
RELATIONSHIPS, DRIVE ENGAGEMENT
AND PARTICIPATION AND ULTIMATELY
SCALE CUSTOMER BENEFITS. I'LL
START ON THE POLICY PIECE AND
THEN I'LL LET CRAIG DO A MUCH
BETTER JOB THAN I WOULD BUT I
WOULD SAY THAT ONE THING THAT WE
ARE DOING HERE AT THE STATE AND
THE CITY, THAT'S REALLY
SUPPORTIVE OF OUR GOALS, IS WE
HAVE WHAT'S CALLED BUILDING
PERFORMANCE STANDARDS IN THE
STATE OF WASHINGTON THAT HELP
INCENTIVIZE OR DRIVE BUILDING
PERFORMANCE LOWER FOR THE
EXISTING BUILDING STOCK AND IN
THE CITY OF SEATTLE WE HAVE
BUILDING EMISSIONS PERFORMANCE
STANDARD, WHICH ALSO HELPS
BUILDING OWNERS THINK ON A
LONGER TIME HORIZON ABOUT WHERE
THE OPPORTUNITIES IN THEIR
BUILDING MIGHT LIKE, BOTH FROM
ENERGY PERFORMANCE AND
DECARBONIZATION. SO IT'S SORT
OF THE CARROT AND THE STICK,
RIGHT? IT HELPS US TALK TO OUR
CUSTOMERS ABOUT HELPING THEM TO
NAVIGATE THEIR COMPLIANCE
JOURNEY AND MAKING THEM AWARE OF
ALL THE DIFFERENT WAYS THAT WE
CAN SUPPORT THEM WITH
INCENTIVES, AND MAKE PROJECTS
HAPPEN THAT HELP THEM MAKE THOSE
BUILDINGS MORE EFFICIENT OVER
TIME.
>> ON THE FEDERAL LEVEL, IN A
PLACE WE'VE HEARD THE FEDERAL
GOVERNMENT HAS BEEN A STRONG
PARTNER FOR US IN LOTS OF OTHER
COMMUNITIES AND UTILITIES ACROSS
THE COUNTRY. WITH SUPPORT FOR
TAX CREDITS THAT YOU ARE
PROBABLY WELL AWARE OF, HAVE
GONE AWAY THIS YEAR. AND THEN
MANY OF THE PROGRAMS, AND ONE IN
PARTICULAR THAT'S BEEN SORT OF
A CORNERSTONE OF ALL EFFICIENCY
EFFORTS AND SORT OF CONSUMER
AWARENESS AND EDUCATION ACROSS
THE COUNTRY IS IN DANGER OF
BEING DEFUNDED, AND THAT'S THE
ENERGY STAR PROGRAM. SO WE ARE
WORKING ALONG WITH OTHERS. I'M
PART OF THE ALLIANCE TO SAVE
ENERGY, VICE CHAIR, AND WE ARE
WORKING WITH OTHER ACTORS IN THE
SPACE TO TRY TO INFLUENCE
CONGRESS TO CONTINUE THESE
PROGRAMS, BECAUSE THEY'RE VITAL
TO OUR EFFORTS HERE LOCALLY AS
WELL AS NATIONALLY.
>> ONE OTHER LEVER THAT WE HAVE
AT THE CITY, JENNIFER TALKED
ABOUT HOW AT LEAST ON THE NEW
CONSTRUCTION SIDE WE HAVE A VERY
AGGRESSIVE AND STRINGENT ENERGY
CODE HERE IN SEATTLE, AND
THAT'S A GOOD THING. IT HELPS
DRIVE BUILDING ENERGY
PERFORMANCE DOWN AND WE ACTUALLY
INVEST IN THAT AS CITY LIGHT AND
WE INVEST IN SEATTLE DEPARTMENT
OF CONSTRUCTION AND INSPECTIONS
TO ENHANCE AND ACCELERATE THE
ADOPTION OF SEATTLE ENERGY CODE
FOR OUR CUSTOMERS. THAT'S A
GOOD THING IT'S DRIVING
BUILDING PERFORMANCE BUT IT ALSO
DIMINISHES THAT POTENTIAL SO
IT'S ONE OF THOSE CONTRIBUTING
FACTORS TO I THOSE BARS ARE
GETTING LOWER OVER TIME BUT I
WOULDN'T NECESSARILY SAY
THAT'S GOING TO BE A CONTINUING
TREND, MESSERLI. CRAIG TALKED
ABOUT THIS, AS MARKET
TRANSFORMATION OCCURS,
TECHNOLOGY CONTINUES TO EVOLVE,
EQUIPMENT COST COMES DOWN,
MARKET BARRIERS CHANGE ,
DIFFERENT POLICY, DIFFERENT
ADMINISTRATIONS, SO POTENTIAL
COULD GO UP AND DOWN, SO I
WOULDN'T NECESSARILY THINK
ABOUT THAT. IT'S GOING TO
ALWAYS BE THIS DIMINISHING
RETURN, ENERGY EFFICIENCY
PROGRAMS ARE GOING TO BE HERE TO
STAY.
>> GOT IT. THANK YOU CITY LIGHT.
APPRECIATE THE PRESENTATION AND
ANSWERING MY QUESTIONS HERE.
VERY IMPORTANT WORK AND NO
FURTHER QUESTIONS HERE, THANK
YOU.
>> THANK YOU COUNCILMEMBER SAKA.
COUNCILMEMBER STRAUSS.
>> THANK YOU CHAIR AND
COUNCILMEMBER SAKA, I'M GOING
TO TAG ONTO THE QUESTIONS THAT
YOU ARE ASKING BECAUSE WE ARE
ALL IN THE SAME VEIN HERE SO CAN
THE PRESENTERS REMIND ME, WHEN
WERE THESE STANDARDS AND METRICS
ADOPTED? FROM THE STATE LEVEL?
>> 2006 -2009
>> YOU'RE GOING TO NEED TO GET
CLOSER TO THE MICROPHONE.
>> 2000 6-2 THOUSAND NINE.
>> THAT WASN'T THAT LONG AGO.
GO BUT IN THAT SHORT PERIOD OF
TIME, HOW HAS THE CONSERVATION
MARKET CHANGED? HOW HAS OUR
ENERGY CODE CHANGED BOTH HERE AT
THE CITY AND STATE LEVEL AND HOW
HAS TECHNOLOGY SHIFTED? YOU TALK
A LITTLE BIT ABOUT THE LIKE BOLD
IS A SQUARELY DETAIL, LIKE ELVES
TURNING INTO L.E.D.S. HOW HAVE
THOSE MARKETS CHANGED AND THEN
I'LL GET ONTO MY NEXT QUESTION?
>> SO MANY THINGS HAVE CHANGED.
I WILL START, I'D IMAGINE JOE
WILL JUMP IN. SO MANY THINGS
HAVE CHANGED. SO BACK IN 2000
NINE, ENERGY CONSERVATION, WHICH
MEANS THAT WE ARE SAVING AND
TRACKING ENERGY THAT IS SAVED AT
A YEARLY LEVEL WAS THE THING AND
THAT WAS WHERE WE INTERACTED
WITH CUSTOMERS AND WE INDUCED
THEM TO CHANGE THEIR ENERGIES IN
THAT WAY BUT THE WORLD HAS
CHANGED WITH ENERGY AND WE NOW
TALK WITH CUSTOMERS IN A
BIDIRECTIONAL WAY, IN OTHER
WORDS IT'S NOT ENOUGH TO JUST
TALK TO CUSTOMERS WANTS. WE HAVE
TO TALK TO CUSTOMERS REGULARLY
AND HELP THEM TO CHANGE THEIR
BEHAVIOR IN A DAILY WAY OR A
WEEKLY WAY SO THAT WAYS THAT
CUSTOMERS CAN CHANGE THEIR
ENERGY USE HAS CHANGED
DRAMATICALLY. I THINK THAT
RECENTLY THERE HAVE BEEN A LOT
OF MORE SENSORS INTRODUCED AND
THERE HAVE BEEN MORE SYSTEMS
INTRODUCED AND LIGHTING WAS
REALLY EASY. IT WAS SOMETHING
THAT WE ALL GO PURCHASE
LIGHTBULBS ONCE A YEAR, MULTIPLE
TIMES A YEAR, BUT HOW OFTEN DO
WE RATE OUR SYSTEMS? THAT'S A
LONGER DECISION TIME AND THAT'S
MORE EXPENSIVE AND IT TAKES MORE
INTEGRATION WITH OTHER PARTS OF
THE BUILDING. AND SO THAT MEANS
THAT IT TAKES MORE LEAD TIME AND
MORE CAPITAL INVESTMENT.
>> YEAH, I CAN TALK A LITTLE BIT
ABOUT BECAUSE THE MARKET HAS
CHANGED , OUR PORTFOLIO HAS
CHANGED IN RESPONSE AS WELL.
JENNIFER TALKED ABOUT THE
EROSION OF LOW HANGING FRUIT,
ALTHOUGH LIGHTING POTENTIAL IS
GONE SO WE'VE ADOPTED. WE'VE
INVESTED IN ENERGY EFFICIENCY
PROGRAMS THAT TRIED TO UNLOCK
DEEPER ENERGY SAVINGS IN
BUILDINGS. WE LOOKED UNDER
DIFFERENT ROCKS SO NOT JUST
EQUIPMENT UP GRADES BUT
BEHAVIORAL UPGRADES, SO WE ARE
INVESTING IN PROGRAMS THAT WE
AWARD BEHAVIOR CHANGES IN
OPERATIONS AND MAINTENANCE
OPPORTUNITIES. AND THEN WE ARE
ALSO WORKING WITH OUR PARTNERS
AND PEERS, CITY DEPARTMENTS LIKE
OFFICE OF SUSTAINABILITY
ENVIRONMENT, TEAMING UP WITH
THEM ON THE QUEEN BUILDINGS
EXCELERATOR. SO THERE'S THE
COMPLIANCE PIECE THAT'S
IMPACTING CUSTOMERS AND WE ARE
BUILDING PROGRAMS TO HELP THEM
NAVIGATE THAT COMPLIANCE JOURNEY
AND ACCELERATE THEIR PATH.
>> THE ONLY OTHER THING I MIGHT
ADD IS MIA, RIGHT? THAT'S
HAPPENED. SO NOW UTILITIES ARE
EVEN COMBINING FORCES AND
PARTNERING TO FIND NEW WAYS TO
CONSERVE, AND SHARING OUR
LEARNING ACROSS UTILITIES. SO --
>> WE INTERVENE IN DIFFERENT
PLACES TO ACHIEVE MARKET
TRANSFORMATION FROM THE BOTTOM
OF THE SUPPLY CHAIN ALL THE WAY
UP TO THE TOP. THE NORTHWEST
ENERGY EFFICIENCY ALLIANCE,
IT'S AN ALLIANCE OF A FOUR
STATE REGION WITH SEVERAL MEMBER
UTILITIES. I SERVE ON THE BOARD
AND NEAH IS A FANTASTIC
ORGANIZATION BECAUSE THEY
INTERVENE DIRECTLY WITH THE
MANUFACTURING COMMUNITY AND THEY
BRING ALL OF THE PURCHASING
POWER OF THE FOUR STATE REGION
TO MANUFACTURERS AND THAT GETS
THEIR ATTENTION, AND THEY HELP
THEM REALLY ACCELERATE THE
PERFORMANCE AND EFFICIENCY AND
REDUCE THE COST OF THAT
EQUIPMENT, WHICH BENEFITS THE
ENTIRE REGION. SO WHEN WE INVEST
IN THAT IT'S A REALLY EFFICIENT
FORM OF INVESTMENT. WE GET
SAVINGS DIRECTLY BACK FROM THAT
INVESTMENT AT A COST LESS THAN
SOME OF OUR DIRECT DOWNSTREAM
PROGRAMS BUT WE DON'T STOP
THERE. WE'VE GOT PROGRAMS WHERE
WE INTERVENE WITH DISTRIBUTORS.
WE PROVIDE INSTANT DISCOUNTS AT
POINT-OF-SALE TO HELP CUSTOMERS
AND CONTRACTORS WHO PURCHASE
THAT EQUIPMENT MAKE A GOOD
PURCHASING DECISION, AND THEN WE
INTERVENE ALL THE WAY DOWN AT
THE BOTTOM WITH CUSTOMERS AND
CONTRACTORS AND TRADE ALLIES.
>> THANKS, I'LL KIND OF DIG
INTO THAT A LITTLE BIT MORE, AND
THE VICE CHAIR HAD BROUGHT THIS
UP WITH WHAT WAS GOING ON IN I
THINK 16-17. I DON'T HAVE YOUR
BAR CHART IN FRONT OF ME. THAT
WAS BECAUSE OF ADDITIONAL
FEDERAL SUPPORT FOR ENERGY
TRANSFORMATION. I ALSO KNOW
WE'VE HAD A LOT OF LONG
CONVERSATIONS AND BEEN A LONG
CONVERSATION LAST YEAR AS WELL
ABOUT THE BAR CHARTS PRESENTING
INFORMATION THAT LOOKS LIKE WE
ARE REDUCING OUR CONSERVATION,
BECAUSE THE BAR CHART IS SHORTER
IN THE MOST RECENT YEARS. CAN
YOU HELP TALK ABOUT HOW WHEN
CODE CATCHES UP TO OUR ENERGY
CONSERVATION THAT REDUCES OUR
ABILITY TO PUT THOSE CREDITS IN
THESE CHARTS? IT'S NOT THAT WE
ARE NOT DOING THE CONSERVATION
ANYMORE, IT'S JUST CAN YOU
EXPLAIN A LITTLE BIT MORE THE
DEFINITION OF WHAT WE ARE
ALLOWED TO CALL OUT ON THESE BAR
CHARTS?
>> THANK YOU COUNCILMEMBER FOR
THAT QUESTION. I THINK ONE OF
THE THINGS THAT WE CAN -- THE
ONLY WAY WE CAN CLAIM ENERGY
SAVINGS IS IF SOMEONE TAKES AN
ACTION THAT SAVES MORE ENERGY
THAN IS REQUIRED BY FOOD CODE ?
SO WHEN CODE GOES UP MORE PEOPLE
SAVE ENERGY, WHICH IS GOOD, BUT
JUST FROM THE ACCOUNTING
STANDPOINT OF WHAT WE CAN CLAIM
IS THEN DIMINISHED AND I THINK
THAT WE HAVE TALKED A LOT TODAY
ABOUT MARKET TRANSFORMATION
WHERE WE TALK ABOUT HELPING TO
FUND AND HELP TO GET MORE WIDELY
ADOPTED, MORE EFFICIENT NEW
EQUIPMENT. LIKE I TALKED ABOUT
HEAT PUMPS AND HEAT PUMP WATER
HEATERS. THOSE ARE NEWER IN THE
ADOPTION CURVE. WE SEE THAT AT
OUR JOB AS SHEPHERDING ALONG AND
EXPANDING THE MARKET
TRANSFORMATION OF NEWER
TECHNOLOGIES TO THE POINT THAT
THEY BECOME WIDELY ADOPTED AND
EVERYBODY HAS THEM, AND THE WAY
THAT THAT IS NOTATED IS WITH
CODE.
>> THANKS, SO JUST TO KIND OF
REPEAT BACK, WE'RE GETTING MORE
PEOPLE TO CONSERVE ENERGY BUT
THE LEGAL DEFINITIONS OF WHAT WE
ARE ABLE TO CLAIM AS PART OF
THIS PRESENTATION ARE
DIMINISHED.
>> YEAH.
>> YOU KNOW I LOOK FORWARD TO
CONTINUING THE CONVERSATION
ABOUT WHAT DO WE GET TO COUNT IF
WE ARE CHARGING THE FAIRIES OR
WE ARE GETTING THE FERRIES TO
CHANGE THEIR LIGHT BULBS, ET
CETERA. AND JUST NOTING THAT IT
HASN'T BEEN THAT LONG SINCE
THESE METRICS WERE ADOPTED AND
IN THAT SHORT TIME THERE HAS
BEEN SUCH A TRANSFER MISSION
WITH OUR CODE THAT IT MAY BE
TIME TO LOOK AT, WORK WITH THE
STATE TO LOOK AT HOW THE LEGAL
DEFINITION OF WHAT WE ARE ABLE
TO CLAIM FOR CREDITS IS CHANGED
BUT JUST NOTING THAT I DON'T
WANT TO PROVIDE MISPERCEPTIONS
OUT THERE, OUR CONSERVATION IS
ACTUALLY GOING UP IN INCREDIBLE
WAYS BECAUSE OF THIS LAW AND
BECAUSE OF THE WAY THAT WE ARE
COMPLYING WITH IT.
>> THE LAW IS A POLICY DRIVER
BUT FOR CITY LIGHT YOU KNOW WE
ARE LOOKING FOR WAYS TO HAVE OUR
COMMUNITY HAVE THE LOWEST COST
OF ENERGY SO WE ARE GOING TO DO
THE RIGHT THING, DO WHAT WE CAN
TO SUPPORT A FLEXIBLE AND
AFFORDABLE PORTFOLIO, AND WE'LL
ALWAYS BE INCENTIVIZED TO PURSUE
THESE LOW-COST RESOURCES, AND
OUR INTEGRATED RESOURCE PLAN
DEFINITELY SHOWS THERE'S A
VALUE AND ACCELERATION AND WE'RE
GOING TO PURSUE ACCELERATION
REGARDLESS OF WHAT OUR
COMPLIANCE TARGET SAYS.
>> I'M GOING TO REQUEST THAT
THE NEXT TIME WE BRING THIS
FORWARD, WE ARE GOING TO TAKE A
STAB AT SHOWING YOU THE
CUMULATIVE CONSERVATION,
REGARDLESS OF CODE CHANGE, SO IN
SAYING IF THE CODE HADN'T
CHANGED, THIS IS WHAT WE'D
STILL BE COUNTING, SO YOU CAN
SEE THE IMPACT OF THAT. I THINK
THAT WOULD BE REALLY HELP AND
PLUS IT'S SO COOL TO THINK
ABOUT THE CONSERVATION DRIVEN BY
CODE AND THEN ALSO DRIVEN BY OUR
PROGRAMS, SO WE'LL TAKE A LOOK
AND SEE IF IN TWO YEARS WE
CAN'T COME UP WITH A WAY TO
DEMONSTRATE THAT, BECAUSE IT IS
DIFFICULT TO EXPLAIN. I'VE DONE
IT TWICE NOW AND WE HAVE TO FIND
A PATH THAT'S GOING TO MAKE IT
EASIER FOR EVERYONE TO
UNDERSTAND WHO MIGHT WATCH THIS
LEADER.
>> THANKS, KEEP UP THE GREAT
WORK. THANK YOU, CHAIR.
>> THANK YOU, COUNCILMEMBER
STRAUSS. COLLEAGUES, ANY
ADDITIONAL QUESTIONS?
>> MADAM CHAIR, I DON'T HAVE
ANY ADDITIONAL QUESTIONS BUT
I'D LIKE TO NOTE THAT
COUNCILMEMBER STRAUSS IS WEARING
HIS SOCCER SCARF. EVEN THOUGH
HE'S NOT A PLAYER. JUST POINT
THAT OUT.
>> WE'RE GOING TO THE NATIONAL
CHAMPIONS TOMORROW BUT NO, I'M
NOT GOING ANYWHERE.
>> WE ARE ON THE SAME PAGE, VICE
CHAIR. I ASKED COUNCILMEMBER
STRAUSS IF YOU NEED TIME TO TALK
ABOUT THE GAME TOMORROW .
>> I THINK I SHOULD BE WEARING
MY STORM JERSEY BUT MAYBE --
BECAUSE IT'S A GAME TONIGHT,
BUT I'LL DO IT NEXT TIME.
>> WE'LL BE COUNTING ON IT.
COLLEAGUES, I JUST HAVE A
COMMENTS, ONE QUESTION AND A
COMMENT TO MAYBE CLOSE THIS OUT
FOR THIS SESSION AND I'LL START
WITH THE QUESTION JUST AS A
FOLLOW-UP TO THE LAST
PRESENTATION WE HAD LAST MONTH
FROM CITY LIGHT PARTNERS TALKING
ABOUT LOAD FORECAST AND THE
INTEGRATED RESOURCE PLAN, AND I
HAD ASKED A QUESTION ABOUT DATA
CENTERS, AND YOU KNOW THIS
EMERGING TECHNOLOGY WITH A I AND
THE DEMANDS THAT COME WITH THAT
SO I WANTED TO RAISE THAT
QUESTION UP AGAIN BECAUSE LAST
MONTH YOU WILL MENTIONED THAT I
THINK IT WAS 11 REQUESTS HAVE
COME IN RELATED TO DATA CENTERS
AND THINKING ABOUT HOW THAT'S
GOING TO IMPACT DEMANDS ON OUR
ENERGY SYSTEM. SO WONDERING
ABOUT HOW WE ARE REGARDING THAT
AS IT RELATES TO HEAR AND WHAT
KIND OF CONVERSATIONS ARE
HAPPENING AROUND OPPORTUNITIES
FOR ENERGY CONSERVATION AND DATA
CENTERS.
>> SURE.'S IT IS 11 REQUESTS
WERE FOR LARGE LOADS OR CANNOT
ALL OF THEM WERE DATA CENTERS.
JUST TO CLARIFY BECAUSE I THINK
WE CONFUSED FOLKS LAST TIME BUT
ABOUT HALF OF THEM WERE -- MAYBE
A LITTLE LESS THAN HALF WERE FOR
DATA CENTERS AND WE ARE
CONTINUING TO WORK WITH OUR
CUSTOMERS, AND I'LL ASK CRAIG
SMITH TO TALK MORE ABOUT THAT.
WE ARE CONTINUING TO WORK WITH
OUR CUSTOMERS AS WE ARE
DEVELOPING IN CONCERT WITH OUR
CUSTOMERS, A LARGE LOAD POLICY
SO THAT THOSE ORGANIZATIONS THAT
COME IN WITH A REQUEST FOR A
LARGE LOAD, BECAUSE IN PUBLIC
POWER, THE BENEFICIARY PAYS, WE
ARE WORKING WITH THE LARGE LOAD
REQUEST CUSTOMERS, THE CUSTOMERS
WHO ARE REQUESTING LARGE LOAD SO
THAT THEY WILL CARRY THE BURDEN
OF THE COST OF THAT LOAD AND
THAT'S FOR ALL NEW LARGE LOADS,
EVEN IF THOSE ADDITIONAL LOADS
COME FROM EXISTING CUSTOMERS. SO
CRAIG, WOULD YOU LIKE TO EXPAND
ON THAT AT ALL?
>> SO THE CITY LIGHT TEAM HAS
ACTUALLY BEEN FORMULATING A NEW
LARGE LOAD POLICY SO WE'VE GOT
SOMETHING IN DRAFT FORM THAT WE
BEEN DISCUSSING WITH MANY OF OUR
LARGE CUSTOMERS, EXISTING
CUSTOMERS, SO THAT WE CAN BETTER
UNDERSTAND HOW THIS PROPOSAL
WOULD ACTUALLY AFFECT THEM IN
PRACTICE, AND WE ARE HAVING --
I'LL JUST SAY THERE IS A LOT OF
GIVE AND TAKE GOING ON RIGHT
NOW. WE EXPECT TO COME BACK TO
COUNCIL PROBABLY THE DECEMBER
MEETING WITH A PROPOSAL. BUT
IT'S A CHALLENGING TOPIC. WE
ARE CERTAINLY CONCERNED ABOUT
THE IMPACTS OF NEW LARGE LOADS
LIKE DATA CENTERS, BUT WE HAVE
TO COME FORWARD TO COUNT. WE
HAVE TO BRING FORWARD A POLICY
THAT'S NONDISCRIMINATORY, THAT
DOESN'T TREAT DATA CENTERS
DIFFERENTLY THAN OTHER
CUSTOMERS, AND AS WE WORK
THROUGH THAT, PARTICULARLY WITH
CUSTOMERS WHO ARE IMPLEMENTING
MAJOR DECARBONIZATION PROGRAMS
THAT CAUSE THEM OR REQUIRE THEM
TO ELECTRIFY, THAT CREATES A LOT
OF TENSION AND SOME OF THE
THINGS THAT FOLKS ARE HAVING TO
RESPOND TO ARE DRIVEN BY CITY
POLICY. SO WE ARE WORKING
THROUGH ALL THAT.
>> I'LL JUST ADD ON, THAT'S
EXACTLY WHY WE DO THIS EXERCISE
EVERY TWO YEARS. SO IT'S ALL
REALLY A CYCLE. WE START WITH
OUR LOAD FORECAST. TRIES TO
PREDICT OUR LOAD GROWTH OVER
TIME, THINKING ABOUT
TRANSPORTATION ELECTRIFICATION,
BUILDING ELECTRIFICATION,
CHANGES IN CODES AND STANDARDS ,
ALL THE EFFICIENCY WORK THAT WE
DO, DATA CENTERS, ET CETERA.
BASED ON THAT LOAD FORECAST, WE
DO OUR INTEGRATED RESOURCE PLAN.
WE TRY TO STACK UP AN OPTIMAL
MIX OF SUPPLY AND DEMAND SIDE
RESOURCES TO MEET THAT LOAD IN
AN AFFORDABLE, RELIABLE, AND
ENVIRONMENTALLY RESPONSIBLE
MANNER, AND THE DOES AND SIDE
MANAGEMENT ASSESSMENTS WHICH WE
TALKED THROUGH TODAY IS JUST THE
DEMAND-SIDE PART OF THAT, AND
TODAY WE'RE TALKING ABOUT JUST
THE ENERGY CONSERVATION PIECE OF
THAT. WHEN WE COME BACK IN
SEPTEMBER WE'LL BE TALKING
ABOUT THE DEMAND RESPONSE
POTENTIAL THAT CAME OUT OF THE
SAME STUDY SO WE'LL BE BUILDING
UP A PORTFOLIO OF PROGRAMS TO
HELP OUR CUSTOMERS AND BRING
DEMAND RESPONSE KIND OF
INSTANTANEOUS DEMAND-SIDE
RESOURCES TO THE UTILITY.
>> WE COME BACK TO DATA CENTERS,
THOUGH. SO WE ARE NOT THE ONLY
ONES. IT'S A NATIONWIDE ISSUE.
WE ARE PART OF, MEMBERS OF THE
ELECTRIC POWER RESEARCH
INSTITUTE. I WAS AT A MEETING A
COUPLE OF WEEKS AGO. I KNOW
APRI, WHICH IS SHORT FOR
ELECTRIC POWER RESEARCH
INSTITUTE, IS LOOKING WITH
WORKING WITH A COUPLE OF THE
HYPERSCALERS. SO I KNOW THEY'RE
DOING A PILOT PROJECT RIGHT NOW
WITH GOOGLE AND ALSO ONE WITH
META ON SOME OF THE DATA CENTER
FACILITIES AND SO TESTING SOME
NEW ENERGY EFFICIENCY
APPROACHES, AND WE ARE SEEING
SOME PRETTY POSITIVE EARLY
RESULTS SO THAT SORT OF RELATES
BACK TO MY COMMENT EARLIER,
COUNCILMEMBER SAKA. YOU KNOW
WITH THAT GROWTH IN TECHNOLOGY
CHANGE THERE ALSO COMES
OPPORTUNITY SO WE ARE LOOKING TO
KIND OF MINE THOSE AND IDENTIFY
THOSE OPPORTUNITIES, AND MINE
THOSE AS AN INDUSTRY. SOME MORE
TO COME OVER THE NEXT FEW YEARS,
I THINK.
>> THANK YOU FOR THAT, AND I'LL
CLOSE ON JUSTICE COMMENT,
BECAUSE I WANT TO MAKE SURE WE
DIDN'T LET THIS SLIP BY TOO
MUCH WITHOUT REALLY HIGHLIGHTING
THE UPDATE THAT YOU SHARED,
CRAIG, AROUND ENERGY STAR AND
JUST HOW PERSONALLY SHOCKING I
FIND IT TO BE, AND I IMAGINE
FOLKS ACROSS THE ENERGY SECTOR
FIND IT SHOCKING TO FIND THAT
ENERGY STAR HAS A PROGRAM, AS
FOUNDATIONAL OF A PROGRAM AS IT
IS, IS POSSIBLY GOING TO BE
DEFUNDED, AND I DIDN'T KNOW IF
THERE'S ANYTHING YOU WANTED TO
EXPAND ON THAT. I WANTED TO
THANK CITY LIGHT FOR YOUR
SIGNING ONTO AN INDUSTRYWIDE
LETTER FOR SUPPORT OF ENERGY
STAR AS A PROGRAM BUT I WANTED
TO JUST HIGHLIGHT THAT TO THE
COMMITTEE AND MAKE SURE THAT WE
DIDN'T LET THAT SLIP BY. THIS
IS A MAJOR FEDERAL POLICY CHANGE
THAT COULD BE COMING OUR WAY, SO
I DON'T KNOW IF THERE'S
ANYTHING YOU WANT TO EXPAND UPON
ON THAT WORK. I KNOW YOU HAVE A
LEADERSHIP POSITION ON AN
INDUSTRY BOARD RELATED TO THIS.
>> WE ARE ALL TRYING HARD. IT'S
ALL SYSTEMS GO TRYING TO
INFLUENCE BOTH SIDES OF THE
AISLE. THIS IS TYPICALLY OVER
THE YEARS, IT'S BEEN A
BIPARTISAN PROGRAM, A STRONG
BIPARTISAN SUPPORT. BUT THERE
SEEMS TO BE SORT OF THIS NEW
IDEOLOGICAL BIT THAT'S MAKING
THINGS THAT HAVE TRADITIONALLY
BEEN BIPARTISAN DIFFICULT AND
UNCERTAIN TO PREDICT AROUND
CONTINUATION, SO WE ARE
CONTINUING TO DO THE CAMPAIGN OF
INFLUENCE AND ANYTHING THAT THE
CITY CAN DO, I KNOW OFFICE OF
SUSTAINABILITY AND ENVIRONMENT
HAS AN INTERESTING ENERGY STAR
AS WELL BECAUSE THERE'S A
PROGRAM CALLED ENERGY STAR
PORTFOLIO MANAGER THAT REALLY IS
THE FOUNDATION FOR OUR
BENCHMARKING PROGRAM. SO KEEP
THOSE CARDS AND LETTERS AND
COMMUNICATIONS TO OUR DELEGATION
AND TO MEMBERS OF CONGRESS
GOING.
>> IT SURVIVED THE
RECONCILIATION BILL, SO THAT'S
GOOD, AND STILL IS AT RISK, SO
WE WILL CONTINUE TO KEEP THAT
MESSAGE IN FRONT OF THE
LEGISLATIVE FOLKS AS WE MEET
WITH THEM, INCLUDING IN A COUPLE
OF WEEKS WHEN WE HAVE A TOUR AT
BOUNDARY. SO WE ARE LOOKING
FORWARD TO THAT.
>> THANK YOU FOR THOSE COMMENTS.
I GOT MY CAREER STARTED AT
ENERGY STAR AND IT FEELS REALLY
GOOD. THANK YOU.
>> THANK YOU ALL.
>> COLLEAGUES, IF THERE ARE NO
FINAL QUESTIONS OR COMMENTS ON
THIS PRESENTATION, I'M GOING TO
TAKE UP THAT SMALL ACTION THAT I
TALKED ABOUT BEFORE WE STARTED
OUR DISCUSSION FOR TODAY, JUST
TO MAKE SURE WE AMEND OUR
RESOLUTION, JUST TO BE CLEAR
WE'RE NOT PUTTING ON THE
UNDERLYING RESOLUTION BUT I'M
GOING TO IT SO WE CAN TAKE
ACTION TO AMEND AND THEN WE WILL
TAKE A FINAL ACTION IN
SEPTEMBER. PAUSING THERE, IF
THERE ARE ANY QUESTIONS ABOUT
WHAT WE ARE ABOUT TO DO, AGAIN,
JUST MOVING TO AMEND BUT I WILL
MOVE THE UNDERLYING RESOLUTION.
SO I MOVE THAT THE COMMITTEE
RECOMMENDS ADOPTION OF
RESOLUTION 32176. IS THERE A
SECOND?
>> SECOND.
>> THANK YOU. IT HAS BEEN MOVED
AND SECONDED. NOW I MOVED TO
AMEND RESOLUTION 32176,
ATTACHMENT ENTER A, BY
SUBSTITUTING VERSION 2 FOR
VERSION 1 POINT IS THERE A
SECOND?
>> SECOND.
>> THANK YOU, IT IS MOVED AND
SECONDED TO AMEND RESOLUTION BY
SUBSTITUTING VERSION 2 FOR
VERSION LETTER A ON ATTACHMENT
ENTER A. AND I DO HAVE AN
OPPORTUNITY, CENTRAL STAFF, IS
THERE ANYTHING, ERICA, IF
THERE'S ANYTHING YOU'D LIKE TO
ADD?
>> IT'S BEEN WELL DISCUSSED AND
WELL HANDLED AND THANKS FOR
ASKING BUT IT'S ALSO.
>> THANK YOU. ANY COMMENTS? ALL
RIGHT. WILL THE CLERK PLEASE
CALL THE ROLL ON THE ADOPTION OF
THE AMENDMENT TO ATTACHMENT
ENTER A?
>> VICE CHAIR WHERE IS.
>> AYE.
>> COUNCILMAN PROSECCO.
>> AYE.
>> COUNCILMEMBER STRAUSS.
>> AYE.
>> CHAIR RINCK.
>> YES. FOUR IN FAVOR, FOUR
OPPOSED COMES YOUR EXTENSIONS.
>> THE ATTACHMENT IS AMENDED.
ALL RIGHT. WE DID THAT
PAINLESSLY AND WE WILL CIRCLE
BACK ON THIS TO TAKE ACTION AT
THE SEPTEMBER 5th
SUSTAINABILITY, CITY LIGHT ARTS
AND CULTURE MEETING. AND I
BELIEVE IF THERE IS NO
OBJECTION, SO WE'LL BE VOTING
ON SEPTEMBER 5th, AND HEARING NO
OBJECTION, THE RESOLUTION WILL
BE POSTPONED TO SEPTEMBER 5th
WHERE THE COMMITTEE WILL ALSO BE
HOLDING A PUBLIC HEARING ON THIS
ITEM. WE DID SCHEDULE A PUBLIC
HEARING FOR THIS ITEM AND WE
INTEND TO ALLOW MEMBERS OF THE
PUBLIC TO SPEAK TO THIS ITEM IS
REGISTERED BUT DUE TO THE
CHANGES PRESENTED TO US TODAY,
WE WILL HOLD ANOTHER PUBLIC
HEARING ON THIS ITEM SEPTEMBER
5th TO ALLOW THE PUBLIC
ADDITIONAL TIME TO REVIEW AND
COMMENT ON THE UPDATED
RESOLUTION. AND WITH THAT,
HOPEFULLY WE WILL MOVE ON TO OUR
NEXT ITEM OF BUSINESS. THINK YOU
ALL FOR BEING HERE.
>> WILL THE CLERK PLEASE READ
ITEM 2 INTO THE RECORD?
>> BAKER TILLY AUDIT, BRIEFING
AND DISCUSSION.
>> AND WE WILL GIVE FOLKS A
MOMENT TO COME UP TO THE TABLE.
>> FABULOUS WELCOME. THANK YOU
FOR BEING HERE THIS MORNING AND
IF YOU COULD PLEASE INTRODUCE
YOURSELF FOR THE RECORD BEFORE
SPEAKING.
>> GOOD MORNING COUNCILMEMBERS.
MY NAME IS NATALIE HAYASHI, I'M
CITY LIGHT'S ACCOUNTING
CONTROLLER AND DIRECTOR. I'D
LIKE TO INTRODUCE ERIN WORKMAN.
AARON IS THE BAKER TILLY
PRINCIPAL IN CHARGE OF THE CITY
LIGHT FINANCIAL AUDIT. AARON HAS
SPENT HIS 27 YEAR CAREER SERVING
ENERGY AND UTILITY CLIENTS
EXCLUSIVELY. AARON ALSO
INSTRUCTS, PRESENTS UTILITY
EDUCATION COURSES FOR THE
AMERICAN PUBLIC POWER
ASSOCIATION OR THE A PPA, AND HE
HAS AUTHORED NATIONALLY AND
REGIONALLY PUBLISHED ARTICLES ON
UTILITY REGULATION AND
ACCOUNTING ISSUES. AARON WILL BE
PRESENTING BAKER TILLY'S REPORT
ON THE 2024 SEATTLEITE FINANCIAL
AUDIT.
>> GOOD MORNING. AGAIN MY NAME
IS AARON WORKMAN. ON THE LEAD
AUDIT AND PRINCIPAL ON SEATTLE
CITY LIGHT'S AUDIT AND I'M
PLEASED TO PRESENT A 2024
FINANCIAL AUDIT RESULTS. NEXT
SLIDE, THANK YOU. SO WHAT I WANT
TO DO FIRST IS JUST GO THROUGH
AN AUDIT OVERVIEW. WHAT EXACTLY
IS IT THAT WE DO AS PART OF OUR
AUDIT? I WANT TO TOUCH ON SOME
OF THE MAIN AUDIT AREAS OF
FOCUS, TALK A LITTLE BIT ABOUT
INTERNAL CONTROLS AND THEN
AROUND IT OUT WITH OUR AUDITORS
COMMUNICATION CHARGED WITH
GOVERNANCE. AND THEN OPEN UP TO
ANY QUESTIONS YOU HAVE, THANKS .
SO JUST TO GIVE YOU SOME
PERSPECTIVE ON THE AUDIT, OUR
FIRM SPENDS ABOUT 1200 HOURS ON
THE AUDIT AND IT'S KIND OF
FUNNY IF YOU TAKE A LOOK AT YOUR
FINANCIAL STATE IT. ALL OF THAT
WORK RESULTS IN 2 TO 3 PAGES OF
OUR AUDIT OPINION, WHICH I'LL
TALK ABOUT IN A BIT IF WE TAKE A
LOOK AT THIS YOUR'S AUDIT ON IT
WAS A VERY STRAIGHTFORWARD YEAR
FOR THOSE THAT WERE HERE LAST
YEAR OR YEARS PASSED. THERE WERE
A NUMBER OF ACCOUNTING CHANGES.
THERE WAS ACCOUNTING CHANGES
RELATIVE TO LEASES AND THEN
SUBSCRIPTION-BASED INFORMATION
TECHNOLOGY ARRANGEMENTS BUT THIS
YEAR WAS VERY STRAIGHTFORWARD.
NOT A LOT OF CHANGES. IN FACT,
REALLY NO SIGNIFICANT ACCOUNTING
CHANGES. SO AGAIN, VERY
STRAIGHTFORWARD AUDIT YEAR THAT
WENT VERY WELL. AS ALWAYS, WE
PUT IN 1200 HOURS WORTH OF WORK
BUT THE MANAGEMENT TEAM AT CITY
LIGHT, IT MAY NOT BE 1200 HOURS
BUT THEY SPENT A SIGNIFICANT
AMOUNT OF TIME PREPARING FOR AND
ASSISTING US WITH THE AUDIT
PROCESS. SO AGAIN, WE APPRECIATE
THEIR TIME. FOR YOUR BACKGROUND,
OUR FIRM SPENDS ABOUT FOUR WEEKS
OF, WE COLLECT FIELDWORK WHERE
WE CONDUCT THIS WORK ON-SITE AND
REMOTELY. WE CONDUCT ONE WEEK OF
PRELIMINARY FIELDWORK IN THE
FALL AND THEN IN THE MONTH OF
MARCH AND APRIL OR MONTHS OF
MARCH AND APRIL WE SPEND ABOUT
THREE WEEKS CONDUCTING OUR FINAL
FIELD WORK WITH OUR LAST DATE OF
FIELDWORK APRIL 4th OF 2025. ONE
OF THE BIG ITEMS TO NOTE IS AS
PART OF THIS YOUR'S AUDIT WE
DID NOT IDENTIFY ANY ERRORS OR
ADJUSTING JOURNAL ENTRIES, WHICH
IS GOOD. SO OUR AUDIT WAS
PERFORMED IN ACCORDANCE WITH
GENERALLY ACCEPTED AUDITING
STANDARDS. THOSE ARE THE
STANDARDS THAT WE REQUIRED TO
FOLLOW AS YOUR AUDIT FIRM. IN
ADDITION TO THAT WE ALSO AUDIT
YOU IN COMPLIANCE WITH
GOVERNMENT AUDITING STANDARDS.
THOSE ARE ADDITIONAL STANDARDS
RELATIVE TO OUR TEAM'S
CONTINUING PROFESSIONAL
EDUCATION, SUPERVISION OF OUR
AUDIT TEAM, THE QUALITY CONTROL
OF YOUR AUDIT, OUR INDEPENDENCE
AS YOUR AUDIT FIRM, AND DUE
CARE. SO OUR AUDIT ACTIVITIES TO
OBTAIN REASONABLE ASSURANCE THAT
YOUR FINANCIAL STATEMENTS ARE
FREE FROM ETHEREAL MISTAKE. AT
THE END OF THIS YEAR'S AUDIT
YOUR FINANCIAL STATEMENTS HAVE
RECEIVED A MODIFIED OPINION,
WHICH IS ALSO KNOWN AS A CLEAN
OPINION, WHICH IS THE HIGHEST
LEVEL OF ASSURANCE THAT WE CAN
PROVIDE AS YOUR AUDIT FIRM. SO
JUST TO GIVE YOU SOME
PERSPECTIVE INTO THE AUDIT
PROCESS, I'D SAY ABOUT 30% OF
WHAT WE DO IS SPECIFIC TO
INTERNAL CONTROLS, MOST OF WHICH
IS SPECIFIC TO INFORMATION-TECHN
OLOGY CONTROLS, SO MUCH SO IN
FACT THAT WE HAVE A CERTIFIED
INFORMATION SYSTEMS AUDITOR CAN
OPT THAT PORTION OF THE TESTING
AND THEY WORK AS PART OF OUR
AUDIT TEAM, THAT'S ABOUT 30%.
40% OF WHAT WE DO THEN IS CALLED
OUR SUBSTANTIVE TESTS. THAT
WOULD BE THE NUTS AND BOLTS OF
OUR AUDIT, IF YOU WILL. THAT
WOULD BE CONFIRMING YOUR CASH
AND INVESTMENT BALANCES, TAKING
A LOOK AT YOUR FIXED ASSET
ADDITIONS AND RETIREMENTS,
THINGS LIKE THAT. AGAIN, THAT'S
40%. THAN THE REMAINING 30% HAS
TO DO WITH OUR PLANNING ON IT
AND THEN FINANCIAL REPORTING.
BUT WHAT I'VE DONE ON THIS
SLIDE IS I'VE OUTLINED SOME OF
THE MAJOR AREAS OF EMPHASIS, BUT
I THINK IF YOU WERE TO YOUR
FINANCIAL STATEMENTS, NONE OF
THESE SHOULD COME AS A SURPRISE.
AGAIN, A BIG PORTION SPECIFIC TO
INFORMATION-TECHNOLOGY, INTERNAL
CONTROLS, CAPITAL ASSETS. YOU
KNOW IF YOU LOOK AT YOUR BALANCE
SHEET, MOST OF IT IS MADE UP OF
YOUR INVESTMENT AND YOUR CAPITAL
ASSETS, PLANT AND SERVICE,
THINGS LIKE THAT, SO WE SPENT A
SIGNIFICANT AMOUNT OF TIME
LOOKING AT THAT. REVENUES,
ACCOUNTS RECEIVABLE, YOUR
BILLING, YOUR REGULATORY
ACCOUNTING ITEMS . IF YOU LOOK
AT THE BALANCE SHEET ON THE
LIABILITY SIDE, THAT
ENVIRONMENTAL LIABILITIES, WE
SPEND A LOT OF TIME TAKING A
LOOK AT THAT, ACCOUNTS PAYABLE,
YOUR EXPENDITURES, PAYROLL. AND
THEN LASTLY YOUR FINANCIAL
REPORTING. SO I JUST MENTIONED
THAT WE PROVIDED AN OPINION IN
YOUR FINANCIAL STATEMENTS AND I
TALKED A LITTLE BIT ABOUT
INTERNAL CONTROLS. ONE THING I
DO WANT TO MENTION, THOUGH, IS
WE DO NOT PROVIDE AN OPINION ON
INTERNAL CONTROLS. HOWEVER, AS
WE IDENTIFY CONTROL
DEFICIENCIES, WE ARE REQUIRED BY
THE PROFESSION TO CATEGORIZE
THOSE IN AREA SEVERITY, MOST OF
WHICH WOULD BE WHAT WE CALL
MATERIAL WEAKNESS AND THAT'S A
DEFINITION THAT IT'S A LACK OF
CONTROLS OR A BREAK IN CONTROLS
THAT WOULD LEAD TO MORE THAN A
REASONABLE POSSIBILITY THAT YOUR
FINANCIAL STATEMENTS COULD BE
MATERIALLY MISSTATED. I'M
PLEASED TO REPORT WE DID NOT
IDENTIFY ANY MATERIAL
WEAKNESSES. THE NEXT
CATEGORIZATION DOWN THE WHAT WE
CALL SIGNIFICANT EFFICIENCY,
LESS SEVERE THAN A MATERIAL
WEAKNESS, BUT IT'S A LARGE
ENOUGH BREAKDOWN THAT IT WOULD
WARRANT YOUR ATTENTION AS
GOVERNANCE AND WE DID NOT
IDENTIFY ANY SIGNIFICANT
DEFICIENCIES. I WILL SAY IS A
PART OF ANY AUDIT WE WILL OFTEN
HAVE INDUSTRY BEST PRACTICE
RECOMMENDATIONS, FINANCIAL
STATEMENT CHANGES IN
RECOMMENDATIONS, MINOR CONTROL
DEFICIENCIES BUT JUST TO LET YOU
KNOW, NONE OF THOSE ROSE TO THE
LEVEL OF THE MATERIAL IS THICK
AND. ONE OF THE DOCUMENTS YOU
RECEIVED IS OUR AUDIT AND
INSIGHT RESULTS LETTER PER WHAT
I WANTED WAS TO TOUCH ON A
COUPLE HIGHLIGHTS HERE. IF YOU
WERE TO TAKE A LOOK AT YOUR
FINANCIAL STATEMENTS, IN THE ONE
IT OUTLINES YOUR SIGNIFICANT
ACCOUNTING POLICIES, WHEN OUR
JOB AS AUDITORS IS TO TAKE A
LOOK AT THOSE POLICIES, MAKE
SURE THEY COMPLY WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES
AND NOT ONLY THAT THEY COMPLY
BUT THAT YOU'RE FOLLOWING THOSE
POLICIES. ONE OF THE THINGS OF
NOTE , IF YOU LOOK IN YEARS
PAST, IF WE HAD ANY ACCOUNTING
CHANGES, WE WOULD HAVE TO
DISCLOSE THOSE POLICY CHANGES
PURPOSE OF IN PRIOR YEARS WE HAD
LEASES CHANGES AND AS I
MENTIONED BEFORE, THE
SUBSCRIPTION-BASED INFORMATION
TECHNOLOGY ARRANGEMENTS. BUT NOT
THIS YEAR. OFTENTIMES GOVERNING
BODIES WILL ASK ME WHEN YOU TAKE
A LOOK AT THESE FINANCIALS, WHAT
SHOULD YOU PAY PARTICULAR
ATTENTION TO OR WHAT AREAS OF
THE FINANCIAL STATEMENTS ARE
SENSITIVE? AND I WOULD SAY MY
ANSWER IS ALWAYS GOING TO BE
THOSE ITEMS THAT DEAL WITH
SIGNIFICANT ESTIMATES, SO MUCH
SO IN FACT WE ARE REQUIRED, AS
YOUR AUDITOR, TO POINT OUT WHAT
SENSITIVE ESTIMATES, MATERIAL
SENSITIVE ESTIMATES ARE WITHIN
YOUR FINANCIAL STATEMENTS. SO
THE BIGGEST ONES THAT YOUR
ORGANIZATION HAS, NO SURPRISE,
REALLY, IS YOUR NET PENSION
LIABILITY, YOUR PROPORTIONATE
SHARE OF SEATTLE'S RETIREMENT
LIABILITY. SELF-INSURANCE
CLAIMS, ALLOWANCE FOR DOUBTFUL
ACCOUNTS ON YOUR ACCOUNTS
RECEIVABLE, YOUR NET OTHER
POSTEMPLOYMENT BENEFIT LIABILITY
, YOUR UNBILLED REVENUES, AND
THEN YOUR ENVIRONMENTAL
REMEDIATION LIABILITIES. IF WE
HAD ANY SIGNIFICANT DIFFICULTIES
ENCOUNTERED IN PERFORMING YOUR
AUDIT, WE'D BE REQUIRED TO
DISCLOSE THOSE AND WE DID NOT
HAVE ANY DIFFICULTIES IN
PERFORMING THE AUDIT. IF WE HAD
ANY UNCORRECTED MISSTATEMENTS
WOULD BE REQUIRED TO DISCLOSE
THOSE AS PART OF OUR AUDIT.
OFTENTIMES AFTER YOUR ENTITY
WILL CLOSE THEIR BOOKS, THERE
MAY BE SOME INSIGNIFICANT ITEMS
THAT COME TO ATTENTION. NORMALLY
THESE WOULD BE ACCOUNTS PAYABLE
INVOICES THAT WOULD COME ACROSS.
AGAIN, THESE ARE NOT MATERIAL,
INSTEAD OF OPENING UP YOUR BOOKS
AND CHANGING YOUR FINANCIAL
STATEMENTS, MANAGEMENT HAS
WAIVED POSTING THOSE ENTRIES. WE
HAVE ADDED THAT TO YOUR LETTER
AS A SUMMARY, BUT AGAIN, IT'S
NOT MATERIAL . THESE ARE ALL
PROPOSED BY MANAGEMENT SO IT'S
NOT LIKE WE AS AUDITORS FOUND
ANYTHING INCORRECT. IT'S SIMPLY
JUST A CONVENIENCE FOR REPORTING
PURPOSES. IF WE HAD ANY
DISAGREEMENTS WITH MANAGEMENT OR
OBVIOUSLY ANY SIGNIFICANT
FINDINGS WERE ISSUED, WE'D BE
REQUIRED TO DISCLOSE THOSE AND
WE DID NOT. JUST KNOW IF WE DID
, THIS WOULD NOT BE THE FIRST
TIME WE WOULD BE COMMUNICATING
THOSE. I WOULD REACH OUT TO THE
GOVERNING BODY ON A TIMELY
BASIS. CERTAINLY THE LAST THING
I THINK WANT AND US AS WELL IS
TO COME TO THIS MEETING AND FIND
THAT YOU DO HAVE A BUNCH OF
FINDINGS WERE SIGNIFICANT
FINDINGS AND IT'S THE FIRST
TIME THAT YOU'RE HEARING ABOUT
IT. AS I MENTIONED EARLIER, WE
DID NOT HAVE ANY MATERIAL
ADJUSTING JOURNAL ENTRY'S. ONE
OF THE ITEMS IN THAT
COMMUNICATION LETTER THAT I
MENTIONED BEFORE IS WHAT WE CALL
OUR MANAGEMENT REPRESENTATION
LETTER. IT'S A LITTER OF ALL
THE REPRESENTATIONS THAT YOUR
MANAGEMENT TEAM MAKES AS PART OF
THE AUDIT PROCESS. IT TALKS
ABOUT THEIR THOUGHTS ON FRAUD,
LITIGATION, INTERNAL CONTROL,
ACCOUNTING POLICIES. BUT IF YOU
HAVEN'T, I'D URGE YOU TO TAKE
A LOOK AT THAT LETTER TO SEE
WHAT TYPES OF THINGS YOUR
MANAGEMENT TEAM IS ATTESTING TO
AS PART OF THE AUDIT PROCESS. IF
YOUR MANAGEMENT TEAM REACHED OUT
TO ANY OTHER ACCOUNTING FIRMS
AND HAD ANY DISCUSSIONS
REGARDING ACCOUNTING POLICIES OR
ACCOUNTING QUESTIONS, WE ARE
REQUIRED TO BE MADE AWARE OF
THOSE COMMUNICATIONS AND WE WERE
NOT MADE AWARE OF ANY
COMMUNICATIONS LIKE THAT. WITHIN
THE PROFESSION I'D SAY EVERY
YEAR THERE CONTINUES TO BE
ADDITIONAL SCRUTINY ON AUDITORS
RELATIVE TO AUDITOR
INDEPENDENCE. I'M PLEASED TO
REPORT THAT NOT ONLY OUR FIRM
BUT EVERY INDIVIDUAL ON YOUR
AUDIT ENGAGEMENT IS INDEPENDENT
IN FACT AND APPEARANCE IN REGARD
TO YOUR ORGANIZATION. IN FACT,
WE DO NOT PERFORM ANY MONETIZED
SERVICES TO SEATTLE CITY LIGHT.
WE ONLY PROVIDE THE AUDIT
SERVICE. AND THEN LASTLY WE JUST
WANT TO THANK EVERYONE. NATALIE
AND HER ENTIRE TEAM, FOR ALL THE
WORK THAT THEY DO CARING FOR AND
ASSISTING DURING THE AUDIT AND
PREPARING FOR THESE FINANCIAL
STATEMENTS. YOU DON'T GET TO
ACCOUNTING RESULTS LIKE THIS
WITH NO SIGNIFICANT FINDINGS BY
CHANCE. IT'S DUE TO ALL THE
HARD WORK OF EVERYONE IN YOUR
ORGANIZATION AND AS YOUR
AUDITORS WE CERTAINLY APPRECIATE
ALL THE TIME AND EFFORT. BUT
WITH THAT I'LL OPEN UP TO ANY
QUESTIONS ANYONE MIGHT HAVE.
>> THANK YOU FOR THAT
PRESENTATION AND THANK YOU FOR
BEING HERE IN COMMITTEE THIS
MORNING. COLLEAGUES, AND HE
QUESTIONS ON THIS PRESENTATION?
I AM SEEING ON .
>> OKAY, SOUNDS GREAT. WELL JUST
CONCLUDE HERE, I DEFINITELY
APPRECIATE YOUR TIME TODAY AND
CERTAINLY WE VALUE AND
APPRECIATE THE OPPORTUNITY TO
WORK FOR YOUR ORGANIZATION.
>> THANK YOU.
>> COUNCILMEMBER SAKA, IS THAT A
QUESTION OR A COMMENT ON THE
AUDIT? FABULOUS, PLEASE PROCEED.
>> THANK YOU CHAIR AND THANK YOU
FOR HEARING THE RESULTS OF THE
AUDIT. I'M STILL POURING MY WAY
THROUGH THE UNDERLYING REPORT
BUT [ INAUDIBLE ] THE
PRESENTATION HERE. KUDOS TO THE
CITY LIGHT TEAM FOR GOING
THROUGH THIS AUDIT WITH NO
MATERIAL FINDINGS. IN ANY EVENT,
I WOULD JUST BE CURIOUS TO
UNDERSTAND FROM THE AUDITORS
PERSPECTIVE, WHAT ARE --
HIGHLIGHT TOPIC AREAS, THERE'S
NO MATERIAL FINDINGS BUT IN
TERMS OF KEY RISK AREAS [
INAUDIBLE ] SHOULD BE AWARE OF
OR STRATEGIC PLANNING, WHAT ARE
SOME OF THE TOP THINGS [
INAUDIBLE ] IN YOUR VIEW CAN DO
BETTER TO ADDRESS THOSE?
>> I THINK YOU SAID EVEN THOUGH
WE HAD NO MATERIAL ITEMS,
WHETHER IT'S A GOVERNING BODY
OR MANAGEMENT, WHAT AREAS OF
FOCUS OR WHAT THINGS MAYBE HAVE
WE IDENTIFIED ORBITING THE
INDUSTRY SHOULD PAY ATTENTION
TO, WAS THAT THE WESTERN?
>> THAT'S RIGHT.
>> SOUNDS GOOD. I WOULD SAY ONE
OF THE BIGGEST THINGS THAT'S
PROBABLY ON YOUR RADAR,
CERTAINLY, IS CYBERSECURITY. AS
MUCH AS ANY ORGANIZATION THINKS
THEY ARE PLANNED AND HAS GREAT
INTERNAL CONTROLS, AND THE
AUDITOR COMES IN AND SAYS
CONTROLS ARE GOOD, THINGS
HAPPEN, RIGHT? INFORMATION
TECHNOLOGY, IT'S A DYNAMIC
UNIVERSE, CYBERSECURITY IS
CONSTANTLY CHANGING SO ONE THING
WE OFTEN RECOMMEND OR CONTINUE
TO RECOMMEND IS CONTINUE TO STAY
DILIGENT IN THAT REGARD. I WILL
SAY WE CONTINUE TO SEE MORE AND
MORE INSTANCES, NOT SO MUCH OF
INTERNAL FRAUD BUT THERE'S A
LOT OF EXTERNAL FRAUD. THERE'S
CONTRACTING FRAUD THAT WE SEE A
LOT. THERE'S RANSOMWARE.
THERE'S CERTAIN THINGS LIKE
THAT, THAT WE CONTINUE TO SEE
MORE OFTEN. SO THAT WOULD BE
SOMETHING. AND AS PART OF THAT,
I'D MENTIONED BEFORE THAT WE DO
PROVIDE MINOR CONTROL
RECOMMENDATIONS. WE DO AND HAVE
AND CONTINUE TO PROVIDE CONTROL
RECOMMENDATIONS, AGAIN MOSTLY
SPECIFIC TO INFORMATION
TECHNOLOGY AND WE DISCUSSED
THOSE WITH MANAGEMENT ON AN
ANNUAL BASIS. I'D SAY THAT'S
PROBABLY SOME OF THE BIGGER
THINGS, FROM YOUR PERSPECTIVE IN
THE AUDIT, WHAT ARE THE BIGGEST
RISKS THAT WE OFTEN SEE? I'D
SAY THAT ONE OF THE BIGGEST
RISKS WE OFTEN SEE IS MANAGEMENT
OVERRIDING CONTROLS, AND TO THAT
POINT, WE SPENT A SIGNIFICANT
AMOUNT OF TIME LOOKING AT THAT
RISK AND ADDRESSING IT, SO WE
USE A LOT OF DATA ANALYTICS. WE
ACTUALLY TAKE A LOOK AT AND
INCORPORATE EVERY JOURNAL ENTRY
THAT WAS POSTED THROUGHOUT THE
YEAR. WE BRING THAT INTO OUR
AUDIT SOFTWARE. WE'LL USE
ANALYTICS AND WE'LL SEGREGATE
THOSE AREAS OF CONCERN AND
HIGHER RISK ITEMS AND DEVOTE
ATTENTION THERE. OFTENTIMES
WE'LL GET ASKED IF SOMETHING
CAN GO WRONG, WHERE MIGHT IT BE?
I'D SAY OFTENTIMES IS WITHIN
THE JOURNAL ENTRIES SO THAT'S
AN AREA WE SPEND TIME ON GOOD
QUESTION.
>> THANK YOU. VERY HELPFUL. WANT
TO AGAIN APPLAUD THE WORK OF
CITY LIGHT FOR SUCH A FINDING IN
THE LESS THAN SEXY SPACE OF
AUDIT, INDEPENDENT [ INAUDIBLE ]
PARTY AUDITS. I THINK THAT'S A
TERRIFIC RESULT FOR THOSE IN THE
DEPARTMENT FORGETTING THAT. NO
ONE IS PERFECT. NO INDIVIDUAL OR
ORGANIZATION IS PERFECT SO THANK
YOU FOR KIND OF HIGHLIGHT THE
OPPORTUNITIES. THE ISSUE OF
CYBERSECURITY AND CYBER
RESILIENCE, THAT IS A VERY, VERY
IMPORTANT TOPIC IN TERMS OF
ADDRESSING AND CLOSING SOME OF
THOSE FORMER ABILITIES. BY THE
WAY, IT'S NOT JUST SOMETHING
UNIQUE OR SPECIFIC TO CITY
LIGHT, IN THIS CASE. EVERY
ORGANIZATION IS FACING SIMILAR
CHALLENGES AND VULNERABLE FROM
CYBER THREATS FROM NATION-STATE
ACTORS, CYBER CRIMINALS AND THE
LIKE BUT HAS BEEN PARTICULARLY
IMPORTANT FOR OUR CITY LIGHT
TEAM AS A PROVIDER OF CRITICAL
INFRASTRUCTURE TO MAKE SURE THAT
ITS PROGRAM IS VERY BUTTONED UP
. IN ANY EVENT, THANK YOU FOR
THE PRESENTATION AND KUDOS AGAIN
TO CITY LIGHT. THANK YOU POINT
>> THANK YOU COUNCILMEMBER SAKA.
I THINK THE GOAL IS ALWAYS TO
HAVE A NOT SEXY AUDIT. THANK YOU
AND COUNCILMEMBER STRAUSS --
>> THANK YOU CHAIR. JUST WANTED
TO SAY THANK YOU, HAVING THESE
PRESENTATIONS ANNUALLY IS A GOOD
WAY TO KEEP TRACK OF WHAT'S
GOING ON AND TO ALWAYS REMAIN
DILIGENT ABOUT THE WORK THAT
WE'RE DOING. SO THANK YOU FOR
THIS AND EVERY YEAR FOR COMING
TO COMMITTEE AND TALKING TO US
ABOUT THE AUDIT.
>> THANK YOU COUNCILMEMBER
STRAUSS. THANK YOU CITY LIGHT
FOR YOUR HARD WORK. WONDERFUL.
WITH THAT, COLLEAGUES, IF THERE
WERE NO ADDITIONAL PISTONS, WE
HAVE REACHED THE END OF TODAY'S
MEETING AGENDA. IS THERE ANY
FURTHER BUSINESS TO COME BEFORE
THE COMMITTEE BEFORE WE ADJOURN?
I KNOW I HAVE ONE ACE BUT I'LL
INVITE OTHER MEMBERS, IF THERE
IS ANYTHING FOLKS WOULD LIKE TO
LIFT UP. ALL RIGHT. I'LL GIVE
FOLKS A MOMENT AND THANK YOU
AGAIN CITY LIGHT FOR BEING HERE.
WONDERFUL. COLLEAGUES, I WANTED
TO LIFT UP, I KNOW WE DIDN'T
HAVE THE OFFICE OF ARTS AND
CULTURE AS A PART OF TODAY'S
COMMITTEE MEETING, BUT I WANTED
TO LIFT UP ONE UPDATE FROM THE
OFFICE OF ARTS AND CULTURE THAT
I THOUGHT WAS PARTICULARLY WORTH
NOTING AND IT'S A LETTER THAT
DIRECTOR CUYAMA SENT IN SUPPORT
OF THEATER ARTIST NANDA ROCHA,
WHO WAS BEING HELD AT THE TACOMA
DETENTION CENTER BUT NOW HAS
BEEN RELEASED ON BOND, AND I
WANTED TO SHARE A PORTION OF THE
LETTER JUST FOR THE COMMITTEE
TODAY., QUOTE, MR. ROCHA WAS
SCHEDULED TO BEGIN REHEARSALS
FOR A PLAY THAT RECENTLY
RECEIVED FUNDING THROUGH OUR
OFFICE'S PRESTIGIOUS CITY
ARTIST GRANT. HIS UNEXPECTED
DETENTION HAS DISRUPTED NOT ONLY
THIS IMPORTANT ARTISTIC PROJECT
ALSO THE BROADER COMMUNITY THAT
RELIES ON HIS CREATIVE AND
EDUCATIONAL CONTRIBUTIONS. MR.
ROCHA IS A PUBLISHED AUTHOR AND
DEEPLY RESPECTED MEMBER OF
SEATTLE'S ARTISTIC AND
EDUCATIONAL COMMUNITIES. HE'S
LEGALLY PRESENT IN THE UNITED
STATES WITH A VALID WORK PERMIT
FOR 2030 AND AN ACTIVE CASE FOR
SILENT. AT NO POINT HAS HE
OVERSTAYED ANY BEZOAR VIOLATED
HIS IMMIGRATION STATUS, IN
ADDITION TO HIS PROFESSIONAL
ACCOMPLISHMENTS AS DIRECTED IS A
BELOVED TEACHER AT 18 THE HIGH
SCHOOL AND DEDICATED MENTOR TO
COUNTLESS YOUNG PEOPLE, END
QUOTE. SO I WANTED TO BRING THIS
UP IN COMMITTEE TODAY, NOT ONLY
TO THANK DIRECTOR CUYAMA FROM
OUR OFFICE OF ARTS AND CULTURE
FOR SENDING THIS LETTER BUT ALSO
TO CONNECT ADULTS CONNECT THE
DOTS ON THIS PARTICULAR CASE. I
KNOW WHEN I SAW THIS HEADLINE IN
THE NEWS IT WAS CENTERED AROUND
THE EAST SIDE COMMUNITY, GIVEN
THAT WANTED A HIGH SCHOOL IS
LOCATED IN KIRKLAND. BUT
UNDERSTANDING THAT THIS
INDIVIDUAL HAS CONNECTIONS TO
OUR SEATTLE COMMUNITY IN A VERY
MEANINGFUL WAY. WHILE MR. ROCHA
IS NOW RELEASED ON BAIL, ON BOND
EARLIER THIS WEEK, IT'S
IMPORTANT TO NOTE THAT HE STILL
IN PAYROLL FROM I.C.E. ACTION,
NOT JUST FROM LOCKUP IN TACOMA
DETENTION CENTER. SO THANK YOU,
COLLEAGUES, FOR ALLOWING ME THE
TIME TO SPEAK ON THIS. I FELT IT
WAS IMPORTANT TO BRING UP IN
COMMITTEE TODAY. AND WITH THAT I
OPENED IT UP. IF THERE'S ANY
FURTHER BUSINESS FOLKS WOULD
LIKE TO BRING UP WE CLOSE OUT
FOR TODAY.
>> JUST WANT TO THANK YOU, MADAM
CHAIR, FOR YOUR WORDS. I THINK
THAT'S IMPORTANT WE HAVE THIS
PLATFORM. WE ARE VERY PRIVILEGED
TO BE ABLE TO GET OUR WORDS OUT
THERE FOR PEOPLE. WE DON'T
ALWAYS HAVE AN OPPORTUNITY WHERE
THEY DON'T ALWAYS HAVE AN
OPPORTUNITY SO I WANT TO
THANK'S TODAY.
>> THING YOU GUYS, THANK YOU.
>> COUNCILMEMBER STRAUSS,
ANYTHING YOU'D LIKE TO SHARE
ABOUT THE GAME?
>> IT'S OKAY. THANK YOU,
THOUGH.
>> WONDERFUL. COLLEAGUES, I
THANK YOU FOR YOUR TIME THIS
MORNING. HEARING NO FURTHER
BUSINESS TO COME BEFORE THE
COMMITTEE, WE AR