Seward Electric Community Town Hall Meeting 9/28/26

Today a little bit about sort of how we got to where we are. We'll go over the financials and the economics. I do, as I— now that I'm here, the color background isn't— it looks a lot better on your HD, high-definition display than it does up here. But we will post these on the website. And there are a lot of numbers on a couple slides.

I'm going to kind of walk through what they are. I really— You know, it's going to be hard for everybody to grasp it and kind of internalize it here, but this will be on the website and then, you know, you're welcome to call anything you need for me to walk through what they actually mean. But I won't jump too far ahead, but we do have an update on our survey and one of the primary requests of the survey is to walk through the economics And so that's what I'm going to walk through today, but it is a pretty heavy going. So if you're, you know, take in what you can take in tonight and then feel free to call me, ask questions, come by, whatever works for you. So next slide.

So roadmap, um, this is just kind of a roadmap of what we've done so far going back, you know, starting in 2023 when the original two utility votes failed. And I'm not going to read it, but you can see we've kind of moved through a process that kind of cul— I think it culminated in two financial deep dives on August 10th and 11th where we had 10 or 12 people over in the conference room of the library and we kind of went into great depth on the economics. I'm— what I'm going to present to you today is a summary of that. I've made some modifications to the inputs based on comments I got from those meetings. And we've had 4 town hall meetings.

You know, we talked about— we had the small electric cooperatives from the Seaboard, Cordova, Kodiak, and Copper Valley come in and explain their kind of vision of the world and how life is for them. Then we had the bigger co-ops, Chugach MEA, Golden Valley, and Homer. And then we had Senator— former Senator Begich come down and talk about his experience in Anchorage working with the Municipal Utility Authority. And then on May 28th, we did sort of a preliminary look at the economic analysis, kind of pointing us to where we are today. And so this is, I think, kind of at the end of our process, and this is sort of talking about sewage energy future.

Next slide. Economics. So we have— just to understand as we move through the economics, we broke this into 3 alternatives. And one is that the titles aren't as— I couldn't really find good titles for what they are, but they're not as descriptive as I'd like them to be, but they are what they are. The as-is assumes a restructured utility with everything as it is today economically.

That means You're still paying PIL, you're still paying G&A to the city. So your cost structure is just generally higher than in the other one, which is the local control, build Godwin, Fourth of July. So let me back up and say when I started, I had like 5 alternatives. But when you do 5 alternatives, you get so many permutations, it's almost meaningless. So I squished them down until we got to 3.

The first one is as-is, but you're in a cooperative or municipal authority government— governance structure. The second is you're in a municipal authority or governance structure and you build Godwin and you don't pay PILT and G&A. And then the last is you sell the utility to one of the— to what I've assumed is the lowest cost utility in the rail belt. And I used Matanuska's numbers. They're very close to Chugach, and their financials are just simpler and easier to use because they don't own the gas field.

And the gas field makes Chugach's financials a lot more complex. So those are the 3 alternatives. And then what I do is I take— in each of those alternatives, I run 4 scenarios. One is called the kind of the exceptional, the very good case. There's a base case, which is what we really think it's going to turn out to be.

And then there's something that's worse than that and something that's almost impractical, it's so bad. But it does sort of, from an analyst perspective, it puts the parens around the possibilities, you know. So, so that's what you're going to see if you go to the next slide.

Um, the scenario analysis, we have the worst case, which you'll see the data on that. You know, I'd say it has everything going against you. That means interest rates go high, there's not as much water in the in the— there's not very much water in the reservoir. The— is that me or somebody's phone? There we go.

There's not much water in the reservoir, interest rates are high, the cost of construction almost doubles, so everything that could go wrong goes wrong in that case. In the mid-case, it's not quite as bad, but it's considerably worse than the base case. The base case is sort of where we think things will end up, and then there's The best case, which is not impossible, but it's not likely either, it's where everything goes your way. Construction costs come in under, interest rates are super low, you know, it's all good in that case. So we're going to walk through the actual outputs of those.

So if you go to the next slide.

So the key variables that we vary, the model has, oh, I think 60, 60, 65 variables in it, but the key ones that we vary are how much— that drive the outcomes. The ones that drive the outcome are under— one is if you're building Godwin, how much energy do you get out of Godwin? That's one. If you're— now that doesn't have any effect on the case where you don't build it, but if you do, how much energy do you get out of it is a huge— drives the financials. The load— sewage load also drives them.

And in the studies we did for the deep dives, I had various loads in there, and it just kind of skews the— it skews the outcome. You know, 56,000 kilowatt hours is what we're generating today. And if we were to assume that you all of a sudden load left, like Jag left or OBI or something, that has obviously costs go up because you're spreading your kilowatts over your costs over less— fewer kilowatts. But in this analysis, I set the first 3 the same, and then I put the one on the right as kind of a— it's about 50% of the possible average load of the shore power. I have no shore power in any of these other than that extreme case where our load grows considerably.

And then we take our construction and permitting costs, You know, in the base case, we think it's going to be about $190 to $200 million, but we upped that to $285 in the worst case, and we drop it to $140 in the best case. When you look at the— to get a kind of a grasp of the practicality of these evaluations, Bradley Lake in its day, if you move the cost of Bradley Lake forward in time, it cost about $6,900 per kW installed capacity. That's a real number.

I think this is a much simpler project. It's smaller. It's closer to the road system. And so we use in the base case 80— I think it's 80 or 85% of Bradley at $5,572 per kW installed. And then we vary that.

Then there's the— under the Investment tax credit direct pay, which is really what— it's a huge driver on this. And if we break ground on a hydro project before 2033, it— you get either 30%, 40%, or 50% depending on whether you meet certain criteria. And those criteria are you in an energy— energy endangered community or energy I can't think of the term. There's a term for it, but we are one of those. It's an energy something community where you have a deficit in energy.

If you use Davis-Bacon wages, you get another 10%. And if you use Build America Buy America products, BABA compliant products, you get the whole 50%. So in the base case, we think it could be done. That way and you'd get the 50%. But the important thing about that is it takes that $192 million and the federal government writes you a check for half of that about 18 to 24 months after you turn the project on.

And that's through what's called the Elective Direct Pay mechanism that NRECA and those guys pushed through in D.C. So that's a real big driver. I mean, when you can cut the cost of a hydroelectric project in half. Long-term interest rates, We're at 4.5% in the model. You know, I think that's probably achievable today.

The Department of Energy's Energy Dominance Financing Department actually has 3.375, so those aren't crazy numbers. And then surplus energy for sale, that's important because that's how much we can sell into the grid and use it to offset the cost cost of the project. So those are the 4, the key variables out of the, I can't remember, there's I think almost 60 variables in the model, but those are the key ones that actually, you move them and it drives the cost. So next slide. How are we doing on time here?

We gotta hurry up. So this is a table that lays out the 3 alternatives. So across the top row in the left column, you have as-is local control without Godwin. So that's a restructured organization where things pretty much go on as usual in that we're still paying PILT, we're still contributing some sort of a fee to the city, and we don't build Godwin, we don't build the hydro project. And then we have the worst, mid, and best— oops, I got best case up there twice.

It should be— oh no, it says base. Base case and best case. And I highlighted the base case because that's kind of where all of our estimating numbers are right now. We multiplied them by, you know, we either increased or decreased them by either 25 or 12.5% to go in the other direction, to the other direction. So if you take the, the rates in, um, in 2030, so we're picking the year 2030 because that's the year before the hydroelectric project would come online, you can see that— and let me back up.

I think I said this, but the sale case, I've used MEA's financial data for 2024 and calculated an average cost per kilowatt-hour. And it's very close to Chugach's. So these are essentially— they're an average cost. They blend all the classes of customers together. But you can see that in the worst case, In 2030, the price spread is 24.8 cents per kilowatt hour for selling to the lowest cost rail— railboat utility, 25.9 if you were to build the hydro project, and 29.2 if you were to restructure the governance but leave everything else the same.

And so as you move across to the right, you can see Chugach is 2438, 2547, 29 in 2030. And then the base case, or MEA, is 2439, 2499, and 2939 with the two alternatives. And then in the best case, MEA is 2344, 1935 is is the local control with the hydro, and 2307 is the local control without hydro and still paying the payments to the city. If you move to 2035, so now we've passed over the time and Godwin is in service and we've received the money back from— and you're going to look at a graph of this in a minute and you'll see that You have to move— we put it in service and then we wait 2 years before we get the ITC from the federal government. And during that time, rates go way down because you're not paying the debt.

You have it in a bond anticipation note that's going to get rolled over into the long-term financing. And so you see rates go down until we actually do the long-term financing, and then they, then they pop back up again. And you'll see that on a graph here. But once again, you can see worst case, 2633, 28. You know, and I'll skip over mid case.

At the base case, 25, 23, 2501, 2902. And then in the extremely, you know, the best case, you know, the rail belt MEA is 2330. Once you get GODWIN in place, the energy, you know, in this best-case scenario, the energy drops to like 10 cents a kilowatt hour, which is pretty, pretty crazy. And then 2237 is the case for without, with local control without GODWIN. And I'll explain to you what goes on, why those numbers change on the next slide, or 2 slides beyond.

And so I won't read these numbers on the other one, but you can see under the under the— in 2045, generally under the Build the Hydro, the prices go down. The rail belt's going up because fuel costs are going up, and the without kind of tracks the rail belt. It's just got an incremental adder on it for the other costs that the utility is— that the local utility has. So next slide. This is the same graph And I've taken those numbers and I've converted them to the monthly bill of a residential consumer who uses 750 kilowatt hours a month, which is close to what our average consumer uses.

So now you're looking at those same numbers in dollars per month, and it kind of gives you a little more of a sense, you know, in the worst case, the spread between— in the worst case, 2030, the spread is $186 versus $219 a month. You know, and in the best case, on the lower right corner, it's $169, $69, or $157. You know, and in our kind of— in what we think is our— in the final analysis of our base case, you know, you can see that the rail belt, is costing you $195. Local control with hydro is $174. Local control without hydro is $212.

So that just kind of gives you, and we'll post these on the website. You can puzzle over 'em, and I'll kind of walk through, and I can answer any questions as you have time to think about 'em. But let's go to the next slide. I got no time left. This is the model where we plot those prices.

In cents per kilowatt hour over the life of the project. So a hydroelectric project is a 50-year project. And you see some kind of weird stuff. You know, the upper left corner is the best case. The one to the right of it is the base case.

The lower left is the mid case. And the lower right is the worst case scenario. The blue line is, you know, reform governance with the hydroelectric project. The orange line is as-is under reform governance, and the green line is the sale to a utility. And so, if you start at the left side, what you see coming right out of the chute, let's use our base case, rates drop.

That's because the PILT and the G&A aren't there, and we get a 30%— and we assumed in the model that 30% of transmission costs are uplifted into the RTO. If that turns out to be 100, that number would be considerably bigger. If it turns out to be 10, it would be less. But that's what gives you that immediate rate drop. And then you can see that in that case, the orange line is our current cost structure and the green line is— is the rail belt.

And I think the reason those are coming together like that is because we have projected load growth in Seward that you aren't going to see regionally. Like, you know, once we get shore power on, you know, it could bring in— it could increase our load 15-20%. If you bring on an icebreaker, if the icebreaker and the Coast Guard come in, those are huge increases for Seward, whereas when when spread over the whole rail belt, they're almost not noticeable. But they really change the dynamic on rates here because now you're selling a lot more kilowatt hours. You don't really have— you have virtually no more costs.

And so your payments to Chugach go up, but your fixed costs go way down on a per-kilowatt-hour basis because you're spreading those same costs over a much larger number. And you can see, like, if you take the worst-case scenario, what's going on there, you see that same rate decrease, the little jog in the bottom. That's where you're getting, getting the hydro for the 18 months or 24 months, but you haven't refinanced the band anticipation note yet. So you're, you're not paying those rates. They're being accumulated and then added into the long-term financing.

That's what the little jog in the blue line is. But you can see the effect In the worst-case scenario, we've got the reservoir of the hydroelectric project at about 60% of what we think it'll be, and the costs have— are twice as high. And so it just spikes up to the top and goes off. What you see out there where the drop in prices is out, that's at year 50, where you would raise the dams and get more put more water behind the reservoir, and we've included the $50 million in today's dollars to accomplish that in the model. So that's sort of the flow of numbers.

You know, the one— like I said, I think what you can really see is the base case is where— is the most likely with the information we have today. You know, you could get to the mid-case if a lot of things went against you. But I also think, you know, if we start moving into those cases to the left, you make different decisions. You know, and those are the things you have to keep your mind on. You know, we have to be watching this, you know, regularly.

So next slide. So the major assumptions, just sort of a timeline of what we think the major assumptions are. And I'm going to run through this really quick. Essentially, we've set the customer rates at the distribution cost of service floor. For our 2026 draft rate study.

We're increasing fuel by 37.5% in 2035, so we backspread that over time. That's what we assume is— it's kind of a lowball, but low middle-of-the-road estimate of what's going to happen to Cook Inlet natural gas as we move into LNG. You know, in the as-is rates, we assume that Godwin has been dropped either because it's not constructible or perhaps people don't want to do it. And then— but the governance is still restructured. And again, we use MEA's cost of power as a comparative sale rate.

And I'm not going to go through the next two slides. If you can go to the next one. I'm not going to go through these in detail, but this is the same set of assumptions and a timeline for for the restructured and you build the hydro project. And then the next slide, if you go to the next one, is the same set of assumptions for sell the utility and what assumptions we've made in the model for that. And then if you go to the next slide.

Okay, now, it's not really that, it's gonna be wrong.

I'll set my timer so I won't use up—. I went over 5 minutes, so I've got about 10 minutes.

I think she's putting up the slides.

Well, I'm going to talk briefly. Let me introduce—. Oh, yeah. Go ahead. I'm sorry, I didn't introduce Rob.

I had his—. I had it somewhere here. I don't know where he is. Anyway, Rob Carr. It's right there.

Oh, there it is. Rob Carr. Sorry. He's with the Cooperative Finance Corporation. And they're a cooperative organization formed by cooperatives.

They are a cooperative. And they lend money to cooperatives. Kind of large-scale lending. They financed, as he'll talk about, the conversion of Kauai Electric. It was an investor-owned utility.

Utility and it converted to a cooperative. And they've done a number of smaller projects. You know, Chugach Bar— I think everybody in the rail belt borrows from you guys, except maybe Homer. I don't know. Oh, yeah.

I want to ask CFC. I can't remember. I think MEA is the largest— one of the largest CFC borrowers. MEA is on the distribution side, yeah. MEA is the largest distribution borrower we have in the country.

Out of 900 co-ops. So anyway, Rob is a vice president Regional Vice President for CFC. He's a former Chief Financial Officer of Tanner Electric Cooperative in Washington State, and he has extensive experience in electric cooperative finance and management, and he now works with cooperative systems throughout the Northwest on financing and financial planning. And I brought him here today to talk to you about if you choose to move forward with something other than the sale, that he can kind of talk to you tell you the reality that this is doable and it's been done and they know how to do it and there are people out here who do this kind of thing. So.

Yeah. Great. Thanks, Brian. Yeah, I'll be brief on this. I'm— I cover all of the 17 co-ops for Cooperative Finance Corporation in Alaska.

There's 14 electric co-ops in Washington State. I'm from Washington State. I live just outside of Seattle. I cover the 17 in Oregon as well, and there's one in Hawaii, Kauai Electric. So unfortunately, I have to go out to Kauai once a year to make sure they're— yeah, it's a tough— yeah, January or December, twice a year.

So anyway, yeah, let's go to the next slide. I wanted to— the first two slides I have are just a little bit about electric co-ops in general, just some facts about them, and then I'll get in a little bit in into what our company does. But electric co-ops— and I'm not going to go through all of this, but they serve 42 million people. Basically, the last bullet point, employ over 73,000 workers. And it's not up there, but, you know, there's only really 3 major electric utilities in the country, right?

I mean, you've got investor-owned utilities, the Florida Power and Lights, the Puget Sound Energies. They serve the majority of the population in the country. And then you've got the electric co-ops. You've got what you guys are, a municipal. And then you've got what I consider public power entities in Washington and Oregon.

They're called public utility districts, PUDs. So those are the kind of the 4 major formats of the way electric distribution utilities are structured in the country. But let's go to the next slide. The next slide better graphically represents— so this is all 900 of the electric co-ops across the country.

You could see— well, I'll just say the average size of these 900 is about 15,000 meters. The largest one down in Texas is Perdenales with about 500,000 electric meters. And the smallest one coincidentally is right here in Alaska. You can't see it. The next slide shows it a little bit better, but it's INN, Iliamna, Newhall, and Nondalton in kind of the Lake Clark area.

Go to the next slide, please. Yeah, I just highlighted some of the— just the 17 electric co-ops in Alaska. We loan—. My company loans to just about all of them. The only one we don't loan to, I'd like to look at this map, is Metlakatla down there in Southeast.

They're pretty small. INN is the smallest one. They only have 275 electric meters. They became a co-op years ago when they went— they have a hydro facility on the Tazanima River. Only 2 employees.

So electric co-ops, I mean, we've got Chugach with 115,000 meters and some of the other rail belt electric co-ops are large, but then you've got also the really small systems, INN, Inside Passage, Naknek, Nushagak, those are really small. But, you know, I go out to their annual meetings a lot and I talk to their board of directors and, you know, sometimes they say, "Boy, we're INN, we're the smallest co-op in in the country at 275 meters. But, you know, I tell them that you might be small, but you're part of this electric co-op network. You're part of this 900 co-ops across the country. And even though you're a member in Newhallen, Alaska, you own part of our company.

We have $40 billion in loans outstanding. You own part of a $40 billion company. That's kind of the way this cooperative network works. And same thing with the trade associations, the National Rural Electric Cooperative Association, my company, CFC, the insurance— there's a network of insurance coverage for the co-ops. They don't cover Alaska, but the rest of the country it's Federated Insurance.

From the safety programs to the technology, to the software, there's this huge network within within the cooperative community in the electric co-op world. Next slide. So what is CFC? So CFC, the full name of my company is National Rural Utilities Cooperative Finance Corporation. And we were created by the co-ops, all those co-ops you saw on that map.

In 1969, they got together and said, look, prior to 1969, the only real viable source for the co-ops to finance their infrastructure was to go to the government through the USDA and the Rural Utility Service. And so in 1969, the co-ops got together and said, "Look, we want to find an alternative source to just getting money from the government." It was not very efficient, it was a little slow. So they created my company, Cooperative Finance Corp. Not a bank or credit union, we're an asset-based lender governed by a 23-member board. From the co-op network, not-for-profit. We're organized as a co-op.

Whatever margins or net income we make, we turn around and send it back, right back to the members, to the co-ops.

And we're headquartered in Dulles, Virginia. We have about 250 employees. And again, we have about $40 billion in loans outstanding to almost all 900 of the co-ops across the country. Next slide. Yeah, just, I mean, our vision is that we don't go out and sell loans.

Like, I don't go to an electric co-op and say, "Look, you need to borrow more money." It's— we just were a reaction to the co-ops coming to us and saying, "Look, we need money to build our infrastructure, our network." So we go out, we find the financing, we turn it around, we finance the co-ops, and whatever money we have left over, again, we give back to the co-ops. Co-ops through patronage return. Yeah, I mentioned this, we're established in 1969.

Next slide.

So, I get a question, "Well, where do we get our funds from?" So really, it comes from 3 sources. So, of those 900 co-ops that I showed you, a lot of those co-ops generate a lot of excess cash, so they invest with our company, and then we turn around and relend that money out. We offer commercial paper, money market accounts, short-term investments, and so we take that money and relend that out to the members. That's about a third of where we get our money from. The other third comes from the USDA and the Farmer Mac program.

So we're also a preferred lender from the USDA, so we get preferred rates from them, so we'll get— We'll get money from them through some of these Farmer Mac programs, we'll relend that out to the co-ops. But a big portion of our money now is coming from the capital markets. So as we grow more and we put on a billion dollars a year, we've got to go out to the capital markets. We'll issue bonds. We're credit rated.

We'll go to Wall Street. And what we do is we use the collective strength of the co-ops. Co-ops are— financially strong. Their equity numbers are really good. They're well run.

So we use that collective strength of the electric co-ops to get lower rates for our members when we go out and issue bonds on Wall Street. Next slide. Yeah, so, you know, this is one of the ones that I wanted to talk about a little bit is Kauai Electric. You know, this was formed in 2002. Since then, there's been a few few additional co-ops that have been formed.

They've mostly been smaller ones. I know in Washington and Oregon, I've worked with ones that primarily tribal utilities that have broken away from an investor-owned utility and they've started their own co-ops. But this one was— this one was back in 2002. This was a big success for Hawaii. Kauai broke apart.

Hawaii was— Hawaii was It still is. Outside of Kauai, it's all an investor-owned utility, Hawaiian Electric. Back then, it was owned by Citizens Utility Company, which was an investor-owned, and they wanted to divest some of their electric utility business. And so, the membership of Kauai, it was just a group, a grassroots group of individuals said, "We want to start our own co-op." They're about 35,000 meters, so it was a relatively large system. And so one of the first things they did when they organized and they decided to become a co-op is they came to CFC and they said, look, we need a commitment letter to make this acquisition.

And so within a matter of weeks— and there's a lot of articles, you can Google Kauai Electric and the, you know, the start of the co-op and there's a lot of articles and videos out there. But they came to CFC, we issued them a commitment letter for $225 million.

Within 2 months from there, they accepted an offer from the investor-owned to settle $215 million. It was approved in September of '22, and then with— this all happened within 1 year, they became their own co-op. So it was a real successful model. It's something I know at CFC— it was before my time. I didn't start at CFC only until 7 years ago, but back in 2002, this was a big success for for the co-op on Kauai Island and for CFC as well.

But yeah, next slide, I think. Yeah, this is— it's just very successful now. They've got a goal of being 100% renewable energy by 2033. Again, they're governed by a, I believe, a 9-member board. I just want to mention that too, you talk about when you start a co-op, it's governed by the membership, right?

So there's a board of directors. You know, I looked at that map of 900 co-ops. I'd say 600 of the 900 co-ops across the country are governed by 7-member boards. There's probably the other 200 are 9-member boards, and then there's a small— less than 100 co-ops have 5-member boards. Now, there's no real set reason why some co-ops have 9, 7, or 5, other than the odd number, because you don't want to, you know, vote that's not even, so they usually use an odd number.

But the majority of co-ops have 7-member boards across the country. Kauai has 9. Some of my co-ops in Washington and Oregon tend to have 9-member boards as well, but 7 seems to be the majority of the co-ops across the country. There's a couple that have 13-member member boards, but that gets a little bit too large.

As opposed to some of the other utilities, the public— I mentioned public utility districts in Washington. They have 3-member commissioners, they call them, and that doesn't work as well when you only have 3 commissioners governing your utility. But that's it. That's really all I had to— I just wanted to talk a little bit about the cooperative network. Cooperative Finance Corp. Again, this is something we do.

Whatever route you guys go, there's— other than CFC, there's the Rural Utility Service that you would— you could apply to get funds from. We would do, you know, there's no guarantee we would finance anything. We do our due diligence, but if you got to the point where you wanted to go that route, you'd come to us. We would look at your business plan. Plan, look at the model, do our due diligence, do a credit analysis, and then, you know, hopefully we'd be able to provide a commitment letter for you guys for whatever amount you needed.

So happy to answer any questions at the end, and appreciate the time. Thank you. I think you were up next on the agenda. I know. You want to do it?

I can do it. Maybe we'll try that. Shawna, let's do NRACA now because it kind of follows on this, and then we'll we'll do the survey results at the end. Is that okay? So we're changing up the agenda.

So Rob talked a little bit about the National Rural Electric Cooperative Association, and I think it's worthwhile— there's a bunch of slides here, I'm going to go quickly through them, I'm not going to spend a lot of time going through them, but I think it's good to get a feeling for what the ecosystem is of co-ops and this concept that Rob talked about where you have 900 co-ops and how many million people, I can't remember, all come together and act as one. And that's why co-ops are successful is because they have kind of this power of community. And so these are the programs, sort of the ecosystem that falls around the co-ops. And this, you know, this is applicable whether you sell to one of the bigger co-ops or whether you form your own co-op. This is sort of the ecosystem that they have and they're operating from, or that you would have if you were to do something like this here.

So, you know, they're— the important thing, it's at cost of service electric. You know, we collect rates, we have a margin or an adder to that that covers our debt service and some operating capital. And then after, on a rotation, we give that back to you. You know, most co-ops have, you know, 9, 12, 14-year rotations. So we're collecting the money from you and 14 years later you get a— or 9 years later you get a capital credits check for it.

So the co-op doesn't have any money of its own. It's bringing money in rates, using it to fund the organization and then handing it back. Locally governed, return excess revenue and, you know, one of the 7 cooperative principles is concern for community and cooperation among cooperatives. And so I think those two principles kind of govern the way a co-op operates in its environment. Next.

I'll skip over this, 900 co-ops. Keep going. We're going to go through these kind of quickly. How they support each other, you know, there's outreach and advocacy on a national and on a statewide basis through the Alaska Power Association. There's a lot of training you can go through as far as operational and business strategies.

Hit the next one there. Comprehensive and— I don't know what that means, but— and workforce development. There's a number of training opportunities through NRECA, both from the board level to the senior management level to the frontline managers and to the the technical folks, the linemen, the operators. I'm not going to go through this, but this is just sort of a splash of the numbers, the number of people, how many co-ops are growing, how much revenue, how many assets. So next slide.

I think an important part of the co-op ecosystem is the federal outreach. Literally, they were able to push through direct pay under the Inflation Reduction Act. We all went to D.C. and lobbied, I mean, co-ops from all over the country. And the importance of that is it's what gives you this ability to get the federal government to pay 50% of a hydro project across the bay here. And that, I can't emphasize enough how much of a game changer that is.

It allows you to build something, you're building a a 50-year asset with free fuel at the same capital cost as a gas turbine that lasts 25 years and you have to pay hundreds of millions of dollars for fuel. It really is a game changer, particularly for the State of Alaska where we have lots of undeveloped hydro. Most of the rest of the country doesn't have that. But at any rate, that came from national outreach and advocacy for many years. They worked on that and finally Got Joe Manchin to roll over and Lisa got it pulled through and away we go.

So next slide.

You know, you have policy resources. If you have wildfire liability litigation, you know, there are policy reasons where you can go to and say, hey, what's everybody else doing about this liability for wildfires? How are we going to make sure that we aren't, you know, buying something that's, you know, we have a fire and all of a sudden we're going to, We have a fire and all of a sudden, you know, the people are going to own the co-op because we go bankrupt. So how do— there's that national policy resources that are really helpful to figure out how everybody else is doing it. Next page.

I talked about this a little bit, but they have research and member engagement. There's the— what's the program for member engagement? I can't remember. Touchstone. Touchstone.

Thank you. Touchstone Energy, there's like a series of things you can do to engage your membership and how to work with them. And it's sort of a— something that a lot of the co-ops do. Global Impact, you know, there are cooperatives I think in like 80% of developing countries. You know, the U.S. has shipped that technology and model over.

I know Bill Stewart, who used to work at Chugach, retired from Chugach and was working for for that group in Africa setting up cooperatives. So it happens all over the globe. Employee benefits, they have, you know, there's a 401, a pension, a retirement security plan, and a group benefits plan. I think one of the most important things is the RSA. And I say that because most of the management people and the non-IBEW The DFW people that you're trying to recruit are in the RSA program no matter where they are in the country.

And it allows you to recruit those people and bring them here and they stay in the same retirement program, which is huge for folks who may spend, you know, 20 years or 30 years in the electric utilities. You don't want to be hopping from one retirement program to another. And that's one of the benefits. And anyway, I'll move on to the next one. The next one, the Compensate Program is what it— it's basically a benchmark.

So what do you pay a field engineer, you know, adjusted for your local region? What do you pay a senior manager? What do you pay a dispatcher? What do you pay an operator? It's a program that you can become involved with and it gives you sort of guidelines where you know where you stand so that you're competitive with within the market when you're acquiring human resources.

Next, workforce development, I talked a little bit about that, professional development. I'm a graduate of the management internship program, which is sort of a mini MBA that the Robert Cabal School of Management, I went to Nebraska, it was in Nebraska back when I went to it.

Director education, there's a director certification education for board members. There's a series of classes that directors can take and over time they receive a certificate as an NREC recognized direct board member, board director of a board. So I won't go through this. This is staff education employee. I talked a little bit about that.

Conferences and networking. There are a number of conferences throughout the year, both at the technical level, management, senior management level, and at the board level where you can come together with folks from these 900 cooperatives and learn how things— what people are doing and actually talk to people and make connections. I think we're getting close. Here it is. So that's sort of the NRECA, National Rural Electric Cooperative Association, ecosystem.

And, you know, I think that's what makes the co-ops like Chugach, MEA, Homer, and Golden Valley successful. And, you know, it could make a local cooperative successful. And if you decide to sell, then that's sort of the ecosystem that you're getting into away from this kind of fragmented municipal ecosystem that you've been in for so long. Taylor's going to give you a little update on the search. Survey, the second survey.

We haven't closed the survey yet. Where I think it— we were Friday, we were at 342 respondents and we're still trying to get 400, but he's got a little update on where the numbers coming in. All right, so I'm going to start by asking a couple questions. So first question, in the room, who's taken the survey?

Okay, so we missed a few. And then how many people in the room have been to our electric webpage with the Seward's electric feature on it?

Okay, not as many. So the entire results of this survey will be posted on the Seward's energy features page that has a link from our electric department page that is a link from the cityofseward.us page. So if you go to cityofseward.us, electric department, Sewers Energy Future, then you can find the link to the complete survey results. So we're gonna kind of go through them at a glance, but if you really want to just read the entire thing in its entirety, then it'll be on the website. All right, next slide please.

So when we put these results together, Hays Research put these results together, there was 347 completed surveys to date. Today there's a lot more than that, just they had to, you know, stop at some point and then bring some in so we had these results. But the survey will actually stay open, so if you haven't taken it yet, you can— you still have a chance. And then we'll refine the results as more come in. And so this is the window from August 25th to September 25th.

And then with the survey results, 47% lived were inside city limits and 52% were outside of city limits. Next slide, please.

So these are just some of the key findings at a glance. And like I said, the complete survey is probably about 20 pages long, has more information. But, um, 62% of the results ranked forming a local electric cooperative as their first choice. 88% Say it's very important that all ratepayers inside and outside city limits have a say. So that's the average from both.

But if you live outside of city limits, that it came back at 98%. I know that's— it's confusing. I don't know why they want to vote, but anyway. And then inside city limits, I think it was like 74% or something. So the people that live inside the city I still think that people outside of the city should have to say, but 88% support Seward pursuing additional hydropower, and out of the 88%, 62 strongly support it.

57% Took part in at least one city engagement activity in the last 12 months. So that's the town halls, the financial deep dive meetings, the focus groups, and I'll throw in the Mount Marathon Hydropower open house we had last December. 66% Want the utility information by email and 61% by mail or utility bill. So it's interesting that people really like the emails the most. So if you're not signed up for the, um, Clerk's e-notifications page, definitely sign up and then you'll be getting the emails.

42% Of Written comments ask for the cost or rate impact of each option. So that's— Brian was going over that tonight. We will also be posting kind of like a, uh, if you've seen on like the REI website when you're buying a pair of skis and you want to compare it with some other skis, you have all the side-by-sides. So we'll be posting the same thing on our Seward Energy Future site so you can kind of compare what the different options look like from with multiple factors. Next slide, please.

So this is the preferred future for the utility ranked choice. So in the purple is ranked first, and then the light blue is ranked second, and the gray is ranked third. And so it came back very strong with the local electric cooperative is more of the local electric cooperative franchise option. So the city would maintain ownership of the assets and the electric cooperative would operate and maintain those assets. And one of the reasons that's important is because if we bought all the assets on day one, then our rates wouldn't be able to be as low as they could if the city, you know, continued to own the assets.

And then the city, would continue with the pellet and stuff. But anyway, then the Municipal Utility Authority option, 22%, is the second strongest, and then the, the sell to an existing rail belt cooperative at 15%. Uh, next slide please.

And so this is just another slide showing the difference, but in purple this time is this year, and then in gray, it's last year when we did the survey in 2025. Next slide, please.

And then, uh, this is back to the ratepayers having a say. So you can see that the blue is 2026, the gray is 2025. And so we've got all respondents at the 88% and 86% last year, so we grew by 2%. And inside city limits, there's some people that are changing their mind, thinking that the people outside of town, you know, shouldn't have to say this year. And then outside city limits, we have 8% more people that are thinking they should have a say in the future of the utility.

Next slide, please. And then this is on our hydropower. So, um, 74% already aware of the Godwin-Fourth of July Creek exploration. 88% Support pursuing additional hydropower. And then there are some holdouts at the bottom that oppose it.

And then there's 3% oppose and 9% don't know. But anyway, we're happy that a lot of the community that took the survey seemed to be aware of our endeavors across the bay.

And then this is how we're hearing about the options. So I was surprised that the largest amount was the updates with the utility bill. When we switched to the billing in your last month's bill, you got a handout in your bill that had directions on it on how to sign up for the new billing software. And we fielded over 250 calls with upset customers that they didn't know how to sign up for the new software. So that leads me to believe that a lot of people aren't reading their insert with the bill.

But according to the survey, those that take the survey, that's like the main way to get information. Word of mouth, and I was kind of bummed I didn't see the comments about word of mouth at Safeway. So on the first survey, it was like, where do you hear the most information? Information. And then it was Safeway.

But then Safeway also ranked as the lowest of the credibility for the information. And then social media, I think we're up to 850 followers on our electric department Facebook page. I'm trying to get that closer to a million so we can monetize it and then offset rates. But We got a ways to go. Um, our Seward's Energy Future page, watched from the town hall recordings, which are also available on the same web page.

And then some people attended a town hall, and then the local news with the Seward Folly at 17%. So, uh, definitely reaching out to the Seward Folly more for getting information out. And then first time hearing about it was survey at 9%.

And so this is how people want to hear from us. And so we're going to try to start up a stronger email campaign. So we're on the clerk's list for the e-notifications. So that's the best way to get emails from us when we have, you know, whether it's planned outages, you know, announcements for town halls like this. That's great.

If you add your email to your billing contact information, we'll start using that for unplanned outages. Just, it's really hard for me to send out e-notifications via email when we have an unplanned outage because I'm most likely in the field at the, the outage. So I can do the Facebook updates from my truck, but I can't race back to my computer cheater to send out the clerk's notification. So anyway, emails are number one, mail, newsletters, social media, community meetings, text, radio, and Seward Folly. Next slide.

What information do customers still need? And the cost and the rate impact of each option. So that's where, you know, Brian had some of the side-by-sides tonight. But we'll put more side-by-sides on the webpage and then probably also send out the e-notification if you're signed up for that. The pros and cons, communication channels and formats, more details about the hydropower project.

Also on our webpage on the Seward Electric future, we have the actual FERC preliminary permit application posted. So you can see everything that we sent to the FERC, and kind of project layouts and plans are all in there.

Ratepayers all should have a say, transparency, honesty, and trust, reliability, backup, and infrastructure, and examples from other communities.

And these are just some comments that came in. And on the actual survey results, we have comments obviously without your name. But that's probably my favorite part of the survey is just getting the constructive feedback. And, you know, sometimes, you know, there's some positive feedback too. But that's where we learn like where our gaps are at.

So if you, you know, fill out those open-ended questions, we read them all and we try to figure out ways to improve our communication in the future.

I think there might be one more.

Yep, so that brings us to our roadmap.

And then Q&A. Thanks.

Thanks, Taylor. He always does such a great job. He's quite a speaker. Born under the leadership star, that's what I always say.

Let's see, roadmap next steps. So where we're at is the second survey. We're going to close it once we get 400 respondents, which we may be there or close right now, 400 plus. We're going to try to have a work session with the council, ideally before the end of the year, but that's really a council matter. It might be early first quarter of next year.

And then the council needs to take whatever next steps they think are appropriate. And that will kind of close out what I think has been an open and transparent process. We've tried to be upfront, as upfront as we can be. So I would leave that there. I'm trying to think, there's a couple other things.

One thing, if you go to the website and you do look at the preliminary permit for FERC, some of our numbers have change since we put that permit in because we're gathering more information and learning more. Some of the numbers that we use in the model are different than what we had when we had applied for the permit, which was last April. It's a bit of a moving target. You know, something that's also going to have to be factored in is the ShorePower load. You know, I think we're at a point right now with the ShorePower project where we believe we have a path forward with the money we have from the $45 million from EPA and the $5 million from Seward Company.

I think we have a path forward that we're pretty confident we can complete it within that budget. So that'll be moving forward, and that will increase sewage load. It's an interesting— you know, it increases sewer load at no real cost, right? We're not adding more infrastructure that we are paying for. And so That decreases the component of rates that's non-fuel and purchase power, just what we call base rates.

So that's an interesting thing, and we've got to work that into the model. I also would just— an update, we did a week ago Friday apply for a $2 million grant from the state to do the preliminary evaluation on the Godwin Fourth of July project. What we're looking for there are showstoppers, you know, the constructability analysis. You know, the geotech will have to go over there and drill some holes and make sure that the reservoir will hold water and that you could build a dam there. We'll do some preliminary fish biology work in Fourth of July Creek.

And then there's a third thing we're doing, but it's slipping my mind right now. Sorry. Yeah, we'll start the road up, you know, a pioneer road to get up in there. So we do have— and that grant, if we were to be awarded it, I think AEA makes its recommendation at the end of the year and then it has to go back to the legislature to be— it's been appropriated but it hasn't been authorized. So it will have to go back to the legislature for authorization.

So that work would begin next summer. So that's really the— oh, and the other thing is to map out the actual reservoir volume. That's what we really have to know. You know, those 3 variables. It's got to be buildable.

We've got to have sufficient volume. And the reservoir has to be able to hold that. That would— those are kind of what I call— and the fish, the fish biology. The biology of the fish in Fourth of July Creek. Are they natural fish or are they terminal fish from the Trail Lakes?

Hatchery, and we need a fisheries biologist to look into that. So other than that, I'll ask if there's any questions, comments. You can come up to the mic, and that's probably the best way to do it.

And Shawna will wrest the mic from your hand if you take longer than 2 minutes.

And I thought all those people were coming up for questions. They were all walking out.

First off, outside city limits, uh, two questions. Good, simple one. First is, uh, I was really surprised to see people are getting their information from the sources other than the city council and administration. Could you address why you think that may happen? And second, are the dams— there would be 2 dams at the Godwin Creek—.

2 Dams. 3. 3? Yeah. Are those roller-compact gravel concrete gravity dams, or what will those be?

I really can't speak to how people get their information. I just don't know about that. But I can say that, you know, in our initial estimates, we're looking at rock and gravel concrete-faced dams. But, you know, that's— this is pre-feasibility level right now. We really need to, you know, do the geotech and understand what we're dealing with up there.

And that's a pretty— I think the estimate for the geotech is $1.2 million. That's a pretty good chunk of money to get somebody up there and drill holes, so— Yep.

I'm asking on behalf of a Seward resident who couldn't come tonight. They were wondering, this has already been brought to Seward voters, I believe twice. Is it twice that Seward voters got to vote on the sale of the utility? And both times voters said no, keep the utility. And so the question is, why is this happening if the voters of Seward said no?

No change. Um, the— my understanding is, and I— this was before my time, so it's what I hearsay, um, is that when the vote failed the second time, there was a, an agreement that this, this would not be addressed for 2 years, and that expired in October of 2025. I think the challenge is is, and I think both the council and the administration have understand that the current model that the utility has been operating under for many, many years hasn't worked. And so you need to do something different, particularly in this time of dynamic change in the rail belt. The existing model wasn't working during a kind of a quiescent period of the '80s, '90s, and 2000s, early 2000s.

You know, we had, you know, 80-foot trees, 3-foot in diameter growing up through energized conductors. You know, we're clearing right-of-way. We're not clearing right-of-way, we're logging. You know, utilities keep their right-of-ways clear down to the ground. You know, you should be able to drive a golf ball down the right-of-way.

That's the best kind of right-of-way you have. And so that kind of stuff wasn't being done, and I think it was structurally a function of how the utility was operated for a lot of reasons. No, I don't think there were any, anything, you know, I'm not casting aspersions on anyone. I think everybody tried to do their best, but they didn't have that ecosystem of knowledge and training and networking and policy and stuff that kind of move you forward in that direction. And so a change has to be made.

Um, the question is what that change is going to be, and that's why we're here.

I'd like to answer the question that the lady before me, um, presented. Perhaps it's so that the Bear Creek residents who are ratepayers could also weigh in on this conversation. How many ratepayers are in the and how many meters in the city and how many meters out? It's about half and half. I think there was a little more outside than inside, but I don't have the exact count.

But—. And I know allowing non-city residents to vote is a very, very complicated city charter issue.

That's not the question that brought me to the microphone, though. So I will go back to my original question, and that's about co-ops. There are some rumors running around town that we don't have the knowledgeable people to make a 5 or 7 member co-op board. I was very interested to see about the training. So does a new co-op take average citizens like me and we go through enough training that we are then a knowledgeable, responsible co-op board?

Yeah, you know, I think the structure, if that were the path that the community chose to go down, you know, you create what you call either an implementation committee or a forming board. So some interested people in the community would come together and then there's a process that's pretty well understood, Articles of Incorporation, bylaws, and then you stand up the organization on And then you hire a CEO and you hire contractors. And all that is— that labyrinth is pretty well known. And it does start for co-ops right from folks like you. You know, the community would have to— and usually that forming implementation committee or forming board becomes the first board of directors, usually with staggered terms.

And then those people maybe roll off and you kickstart started. But it's very doable. I mean, Kauai did it. A lot of places have done it. Yeah, it's— that labyrinth is well known and there are a lot of people who can help you get there.

Thanks. I stepped out of the room when you— [email protected].

This is open for any kind of question? I stepped out of the room right when you to start doing this, right? So it's good? Sure. So, and this probably already been— I had this in my first one, so I'm sure this has come up, but I'm just curious.

I used to work at the Marine Institute down there, uh, out and watching the tunnel, all that water shoot out. I used to think, what the heck, why aren't we getting some power out of there? I mean, it's already happening every day. I mean, the city knows because they dig the stuff out. So, you know, when they plan on moving it, why can't we— what's the deal?

I, being the kind of guy I am, that's the same thing I said. Why don't we have a hydro project on that? There is— we have this challenge of the amount of rock and stuff that's coming down through that would have to go through the turbine. And, you know, I think the The Corps of Engineers is well along on their design for the new tunnel, and they're out looking for funding for it. So getting the Corps to change their mind at this latest— late date is probably not practical.

I would hold hope that they're going to leave the old tunnel in place for maintenance. And so perhaps there's a way to integrate that old tunnel into a hydroelectric project. Now, I ran the numbers on it. It's not a very big Hydroelect. It's a 2.3-megawatt project.

And the break-even on it would be about $23 million in 2025. So it's not like a total game changer. It's bigger than Marathon and, you know, a tenth the size of Godwin Fourth of July. So while I think it would be an interesting project and there may be hope for it in the future, I would focus right now on Godwin Fourth of July. July and hopefully what we think is there is there as a resource and it's constructible because it's a game changer for the City of Sewers.

As you saw from the rates, I mean, you know, if you can get that project going, you know, you can sustain sewers load at incredibly low electricity rates out through 2061 and then you're going to have to sink some money into raising the dam. Anyway, I digress. Sorry about that. That leads me to my next question. Because I spent time, a lot of time up in the Godwin and Fourth of July Creek drainage.

And you think that place dumped gravel. The Fourth of July, the Godwin coming out probably 2 years ago changed the pattern. You still look at it on maps, it shows it coming straight out. It came out of the Godwin— that canyon there. Yeah.

And immediately turned—. Right. You know, south. So what we would be doing is building a dam up by the glacier on both of those. You know, there's a slightly higher outflow on the east side.

Yeah. We'd build two dams there that were between 40 and 60 feet tall. And so we would impound that and create a lake and then run a pipe. So that Godwin Creek would disappear, you know, until it got down to the Y with Fourth of July. So you'd bring a pipe—.

So what do you even go through that, the canyon? Well, the pipe would go down there, but the water wouldn't run free down there anymore because recently there was a landslide. Yep. In that canyon that—. Yep.

You know, I recognize we've looked at that one hillside. That's part of the geotech evaluation we've got to do, you know, is what, what really is practical, um, you know, and you got— it's got to be constructible. So there's no guarantee that it is that today, but I think we know the path to get from here to there and come to a conclusion that, you know, we have a high level of certainty in. Yeah. So, Joe, I told you— There's a lot of moving parts.

And there's a lot of challenges. You know, no project is easy, but the numbers on this one are so compelling. You know, the financial impact on the community that it's definitely worth, particularly if you can get the— if we can get a state grant to do it, to run this to ground. So you'd put a dam on the two outlets of the Godwin? And one on Fourth of July.

And then we'd run a pipe from Fourth of July down, and there'd be a powerhouse on city land right where the confluence of Fourth of July and Godwin are. Yeah. And then the creek would be reestablished from there down, and, you know, ideally we'd be able to enhance the fishery hatchery by putting some settling ponds between the power. So is there fish in Fourth of July? You know, it shows on the AF— Alaska Fish and— AF D&G— Alaska Department of Fish and Game map that there are fish there.

What I've heard from people is they're terminal fish from the hatchery. What kind of fish? You know, I'm not a fisheries guy. I'm an electrical guy. Well, we're going to do—.

I am not. I'm not one either. I'm going to hire— we're going to— if we We get the grant and we all decide to move forward. We're going to move forward. We're going to hire a fisheries biologist to go over there and let's answer this question for once in a while.

Because I hear some people are like, oh yeah, there's fish there. And other people, no, there are no fish there. No, they're fish from the hatchery. And I'm like, we need to know what that answer is. So you answered my question.

Thank you. Thank you. He asked the question I was going to ask, which is I'm a retired river geologist. I studied rivers. —Oh, yeah, I studied rivers and dams a lot in the eastern U.S. And my biggest concern with that plan is the sediment load.

I was just curious if that was going to be integrated into your studies. Absolutely. I mean— Will you be able to get measurements of flow and sediment supply? What we did so far, I mean, we did stream gauging on Godwin, one day of stream gauging, and then we used a linear regression from the data that the Corps had. Well, the Corps has all— you know, they have moment-by-moment data on Lowell Creek, so we took that and used that to kind of extrapolate what Godwin was.

And then Joel Groves at Hatcher— what's his— Polar Council. Well, Polar Council, but he was Hatcher Pass— Fishhook Hydro had 3 years of stream gauging data on 4th of July. Oh, great. So we acquired that data from him. So— We probably do some modeling then to be able to figure out how much sediment might— because you had mentioned being able to maintain the capacity.

That's sort of the biggest threat is that sediment. Yeah. Totally, totally agree. I mean, I totally, you know, yeah, I'm with you on that. All right.

Looking forward to following it. Yeah. It'll be interesting. I mean, there's all those— you know, there are a whole myriad of issues that need to be studied. But, you know, building hydroelectric projects, you know, it's a whole— And how do we find the information on —current studies, or— is that on that— it's on that website you were referring to?

Yeah, so I'll tell you right now, because there's a competing claim— and I have my general counsel right there— because there's a competing claim, a competing application for FERC, we are keeping our study work proprietary until FERC chooses who's going to get the permit. Okay. The Federal Power Act under Section 7 requires that FERC give the permit to a municipality that applies for it within its region. So we believe that FERC is required to do that, but we have to walk through that process. And we expect to hear something from them towards the end of this year or first quarter of next year.

Ideally, we'll get what's called the preliminary permit, and that gives us the ability to study it and make a license application. And no one else can study it out from under us. So we're working on that. Thank you. Thank you.

Hi, good evening. I'd like to switch thoughts here for a minute and talk a little bit about shore power. One of the issues that's worried me is this battery, this best system. The numbers I picked up out of my head is like $10 million for the battery. 8, But yeah, it's going to the council tonight.

Yeah, let's use round numbers. Okay. And then, yeah, pick the numbers and, and do the math, people, please do the math. But $10 million battery, 20-year life cycle, that's half a million dollars a year in depreciation. How are 3,000 rate customers going cover that cost?

It's grant-funded from the EPA, so it's contribution— contribution and aid to construction. The first one is grant-funded. I'm talking about the next one down the road in 20 years. Where's that money coming from? Plus, have you thought about what's it cost to dispose of this 10 or 12 megawatt battery?

Those costs We talk about deferred maintenance and how far back we are currently with brush cutting, trees cut down and whatnot. Let's think about the future a little bit here. Mm-hmm. And how are we going to cover costs? Because the one thing I really don't want, the Seward residents, Seward residents to be subsidizing the cruise ship industry for shore power now or 20 or 30 years from now.

We shouldn't do that. We don't need to do it. No, I think you're absolutely right. I think the intent is that— and that we follow the same principles that the Regulatory Commission of Alaska does, and that is cost-causer, cost-payer. So if there are two things, one from a maintenance perspective on the batteries, we have alternatives in the proposal from the vendor we've selected to provide that maintenance.

Out to the end life of the battery, and then there's the question, you know, the batteries degrade over time, do you want to replace them as you go or have them put that into the cost up front? We're still— we will weigh that out in negotiations with these folks. And then as you move forward, there's a number of ways you can deal with an issue like that. It's similar to Godwin Fourth of July where you have a sinking fund. What we've done in the financial model is put in a sinking fund where we're recovering enough money each year to actually rebuild it at the end of its 50-year useful life.

You could do that, the same thing with the battery and charge that to the CruisePower. You know, they're not going to get the same rate that we all get here. And what hasn't been decided is what that rate is going to be and how it's going to be structured. And so that's really a— it's not a question of whether the investment is a good idea because it does provide significant reliability in the months when the cruise ships are not here that will improve the reliability of Seward itself at no cost to Seward. But you do have to recover the cost of the battery, and you're spot on.

But that's how we structure the rate, and that's really a rate-making issue, and it's been done many times in many places, and it's, it's, it's very doable. And it's a good point, but we are thinking that far ahead, and we will get, get it taken care of. Because my other concern there is whatever rate you come up with, there's no guarantee those ships are going to plug in. There's nothing out there that says they have to. Yeah, I believe the plan— and I think my boss is here somewhere.

She left me. I'm going to say it out loud, you know, there's going to be a requirement for them to plug in here, period. That's, that's going to be a statute that the city will have to pass. So that's how it's done in other places. It's not rocket science.

I mean, it's— It's going to be based on dollars. Well, you know, it's going to be—. We're looking at 6 months, not a full year of cruise ship activity. I understand. Yep, very clear.

Thank you.

Hey, so the way I'm seeing it, you said something has to change with the structure of the utility. What is the viability of doing a co-op or what would the reasons for doing a co-op be if we did not develop the ability to produce power? Well, I think two things, you know, and I'm not sure which is more important, but one, both people with inside the city and outside the city get— have a say in the utility, right? The governing board would represent the entire entire area, not just the people inside the city limits. Second, you kind of engage in that ecosystem I talked about where, you know, you have the ability to attract employees from other cooperatives and other places.

There's a big pool of employees that you don't have right now. And so you can actually create a more viable utility because you've bonded together with those other 900 co-ops. And now you're one big co-op. And that's really the reason is to move to a place where, you know, you operate in a more traditional utility sense than SEWERD has operated in the past.

Any other questions, thoughts, comments? Kevin, you haven't said anything tonight.

Well, if that is where we're at, 9 minutes early. Thank you so much. Oh, door prizes. So we're not early. You guys are going to make it here for the whole thing.

But anyway, thank you all so much for coming. And I think— I hope this is our last town hall, and I hope we can move on and put this issue to bed. Thank you.