REU Director Nick Zettel

REU Director Nick Zettel: Audio automatically transcribed by Sonix

REU Director Nick Zettel: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Steve:
Today, we connect with newly appointed Redding Electric utility director Nick Zettle to discuss his goals for RCU. Moving forward, Nick started with REU 19 years ago and has worked his way up to the director's seat. He brings a wealth of industry knowledge and as already native, is proud to work for Redding's publicly owned power utility.

Katie:
We'll learn how are You is making plans for the increased demand on the power grid from electric vehicles, as well as how they're planning for the decrease in other energy sources that's occurring worldwide. We'll also learn how are you buys and sells power. Seven days a week, 365 days a year. And how that process is especially important for our community in the ever changing energy.

Steve:
Market with the uncertainty around the current economy. Having a locally owned municipal power utility with multiple energy sources, including the city's own power plant, are you customers are sitting in a more secure spot and that's something to feel good about.

REU Director Nick Zettel:
My name is Nick Zettle. I'm the electric utility director for City of Redding. I worked for RCU or the Electric Department for 19 years. It will be my 20th year in March. My career path actually started as a technical intern in 2003 when I was going to college. I was working. Before that, I was working as a student assistant at Caltrans and Project Management. The state ran out of funding and let all the student assistants go. So lucky me. I saw a job posting walking out of my macroeconomics class and it said Technical Intern City Redding. I thought, That's me, I'm in, I'm an intern, I can be an intern. So I applied and they hired me and it's the best thing that's ever happened. I went from intern, graduated with a degree in financial management, worked into a long term resource planning slot, did that for about five or six years. And then I moved down to the energy trading and scheduling group at the power plant off Road, and I supervised that trading desk for about six years. It's a very exciting buying and selling power in gas and commodities. It's a 24 seven environment. There's always something going on.

REU Director Nick Zettel:
You have weather, you have geopolitical events, you have things that are always happening that are always threatening the portfolio. And you have to manage the risk and manage the funds. From there. I promoted to a manager of the long term resources group that looks out over 20 years overseeing all the things that we need to look at to ensure that our load is served efficiently and cost effectively and meeting all the rules and regulations as they change every year. From there, I promoted to an assistant director that oversaw the long term resources group that I just mentioned, the short term energy trading and scheduling group that I had supervised previously before that, and also our compliance unit. Every business has compliance. We have a tremendous amount of compliance in the electric business simply due to the fact that we have a life essential commodity that has to be available 24/7. And so I was kind of on the ground floor when the compliance unit really took off from the Energy Policy Act of 2005. I helped build a lot of it. And so I think it was natural to be an assistant director over the unit and to see it grow.

Katie:
Oh, that is that is quite a history with REU. I don't think I had realized that you'd been with the department that long. 20 years. So you've seen a lot of growth and change and you've kind of started at the bottom and now you're at the top as the director. Maybe you can just break down from your experience with are you now sitting in the director's chair? What are your goals for? Are you and where do you see the near future for you?

REU Director Nick Zettel:
Absolutely. My goals are actually the council's goals, right? So we have a strategic plan that was adopted last year by the City Council and it really lays out our vision and our mission in our strategic priorities. And it's very simple actually. You know, what we're trying to do from a visionary standpoint is we want to make Redding a better place for our customers, which is also our citizens. And we want to be trusted and we want to be their reliable utility. That's the mission. We want to be providing safe, reliable and cost effective service. Simplest point is that's what an electric utility should be doing, is ensuring that the power is on, that the power is always safe, and that we're only charging our customers what it cost for us to provide the service. That's it. From a strategic standpoint, long term goals, we called it the three RS. I'm going to add a fourth R to it. The three R's that are in the strategic priorities are that we want to mitigate risk, which is both financial and operational. We want to maximize our reliability, which is always been a top priority. But there's even more pressure coming with the transportation sector moving from fossil fuels onto the grid. Right? And then we want to meet regulations. And in California, meeting regulations is probably one of the largest hurdles you can jump over. California is by far the most progressive state in America with energy policy, right? I mean, we we just heard a few weeks back that the Air Resource Board mandated by 2035, if you're going to buy a vehicle, it has to be all electric. There's a bill sitting on the governor's desk right now, Senate Bill 1020. It may have been signed.

REU Director Nick Zettel:
I even checked this morning. That mandates faster and deeper carbon reductions in the power sector. So by 2040. We are to be serving electricity with no carbon emissions. So that means no more gas fired power plants. That means energy storage, more renewables and moving the entire resource mix. The forth are that I'm adding here is maintaining affordable rates. I think it was implicit in the strategic plan that we were going to do all of this as affordable as possible. It's in our mission, but affordable is important when it comes to what is my power bill cost me every month relative to the amount of money I have to pay for it. And we track that metric of the average family in reading what their annual income is out of that annual income, how much they have to pay for electricity is their electric bill eating into more of their annual income or less of it? Right. And we really watch that affordability index. It's really important. We want our families in reading to be able to spend money on things that aren't just their power bills. Gasoline costs are increasing, rent is increasing, food has increased. Things are going up across the board. We are we are always mindful and we're always watching every which way we can to make sure that we're not piling on to an affordability. That's the long term goals to mitigate the risk, maximize reliability, meet the regulations and maintain affordable rate and overall the safe, reliable, cost effective service. We've been doing that for 100 years. 101 actually is where we're at now, and we're going to keep doing that. That's what works in this town. It's what our customers expect and that's where we need to be.

Steve:
As far as the regulation standpoint, you talked about how California is mandating by 2035 all new vehicles be electric. How can you ensure that the local power grid here in Redding can sustain such a huge jump in electric usage if people do switch to all electric? Even with the recent heat wave we saw throughout the state, there were some issues with power grid and shut offs and electric vehicles maybe not being able to be charged things. How can we best prepare ourselves for those changes?

REU Director Nick Zettel:
That's a great question. What's fascinating about Redding is this utility has had leaders in the past that have always been forward thinking and always been preparing for future load growth. So I kind of joke around that you've been waiting for electric cars to arrive. So what I mean by that is back in the early 2000s, we were forecasting a tremendous amount of load growth from a tremendous amount of population growth. So if you would have looked back in 2003, 2000, four, 2005 at our sales or load forecasts, you would have seen Redding's populations should be 130 to 140000 residents. That's what we were forecasting for today. Well, obviously we're not there. We're more around 89000 to 90000, maybe a little bit more, depending on the census numbers are coming. But because we were planning for such population growth based on how population was growing in the past, we built the system to handle that load well. Since the population hasn't grown, we have the transmission assets, we have the substation assets, we have the ability to import power from the bulk electric system to serve a much higher load than we have today, which for us for Redding is fantastic because what that means is a lot of the investment needed to serve the transportation sector.

REU Director Nick Zettel:
Charging has already been made, so now we can start using it. That's not to say that we don't have an infrastructure plan. We need to replace a lot of underground cable in the next five years. It's aging that's in the strategic plan. It's our aging infrastructure program. We we are all changing poles that are aging out and we are running a series of models to look and say, when do we think electric vehicles will start to really arrive and ready and proliferate? What will that do to our system at the local level, at your neighborhood, with your transformer, with your neighbors next door? And what do we need to do to be ahead of that? What we want to ensure is by the time you get your electric car and they give you your charger and you drive home from the dealership and you call your electrician and they come out to the house and they put the charger on the wall, either out front or in the garage, or if you're living in your apartment, they've got them in the parking lot that you just plug in the car and you're not worried about what's going on underground or the transformer or overhead a substation.

REU Director Nick Zettel:
So that's why we did the strategic plan is we recognize that this load is coming and we've been looking at it at the at the bulk level all the way down to the neighborhood level and developing the plans for it. And and we're going to have to invest in our system to do that. What I'm trying to say is we're going to spend a lot of money on capital upgrades. But I think the thing to keep in mind is if electric vehicles move on to the grid, the funding from the additional car charging instead of us buying gasoline or diesel for our cars, it'll go on to the power bill and then that will help fund for these upgrades. I think maybe for relativity. Right now, our electric rates are equivalent to about $1 seven per gallon. That's kind of the going rate. So we're going to track that dollar per gallon equivalent as we move through time when we make these investments. But I think if we're at a dollar a gallon now, even with the investments we have to make, we'll still be very affordable in the future.

Katie:
And even if you successfully plans for the future and our local power grid here is looking pretty good, we did have some flex alerts that went out during the heat wave, and I know we in Redding have R-u, which is our locally owned power utility, but that feeds into kind of the larger California scheme. How do the flex alerts actually affect us here in our power grid? Are we mandated by the state to also do flex alerts if the state mandates a flex alert? Or can we operate autonomously?

REU Director Nick Zettel:
So there's two kind of distinct events that happen with flex alerts. We call them conservation requests from our customers. So you're right. So we serve 62 square miles, everything inside the city limits, right? With few exceptions, there are some pockets inside the city that are still county, and PGA will serve those, but the rest of it is city ready. So when the state is having a shortage and they put out a flex alert or an energy emergency alert and there's a lot of stages that they have, they request that we participate in that. And if our customers save energy, then that allows us as a utility to then offer that energy to the market for other utilities that are that have a shortage. So that's kind of step one is if somebody else is in trouble, let's say PGE or Southern California Edison or Sacramento and our customers save energy, we are tied into the same market everybody else is in. And we can then sell that power to the market, provide them the energy we get, the funding from the wholesale energy sales, and it goes to our reserves for our customers. The second level is if Redding gets in trouble. So if we were an extreme heat event and we lost a few of our generators or we lost a major import transmission line, we would put out a specific request to our customers. It says in Redding we are experiencing a shortage or we're forecasting experiencing a shortage. We need you to conserve power. At that point, we would be trying to avoid any rolling blackouts in our system. So what happened in this last heat wave was the state of California was experiencing a shortage in multiple areas. And also Sacramento, the utility district was experiencing a shortage in our customers savings from the flex alerts that we sent out, both in press releases and social media, we were able to offer that to the market and help them ride through without blackouts.

Steve:
In instances of state emergency like you just mentioned, are there good faith standards and ethical things in place to when we're selling power to a Sacramento in a case of emergency, are agencies not able to jack up rates in instances like that? I mean, how does that piece.

REU Director Nick Zettel:
Of it work? Right? So, yeah, there's just like in all commodities, there's there's a real time there's a market for this, right? So there's a real time market. We participate it. I don't get too weedy with it, but it's called the the Western Energy Imbalance Market. Basically what it is, is the real time power market. So we're all connected to it. We all get the same price signal and then energy that we don't need. For Redding, the algorithm, the software system will recognize that and it will it will automatically sell it to whoever needs it, and then we will automatically get paid whatever the market clearing price is, right? So it kind of takes away a lot of that ability to gouge or pick a price or do something like that. And the other the other reality is in the electric market under federal regulations, you do not want to do that to another utility. You could be find yourself in a price gouging investigation and you'll have to forego any of those revenues, plus all the legal fees. So there's a there's an ethical purpose behind it. There's a legal purpose behind it. And there's also just the reality of being tied into a real time market where the prices are set across the West.

Katie:
So then does that take the place of some of the energy trader positions that you were talking about, that you were in the energy trading? Does it take place for some of those employees at are you or is it just kind of supplementing that?

REU Director Nick Zettel:
So it actually it actually made their jobs more difficult. So picture, ten years ago, you used to get in your Cessna and you would grab the yoke and then check the pedals and you would throttle and you would fly Like that. Right now is an energy trader. What you have to be doing is constantly looking out forward in the real time environment. What is the generator availability? What is a timeline availability? Do I have to rate a unit, a generating unit, because of emissions or having a mechanical issue? Did I put my forecasting correctly? Did I tell the energy trading system, Hey, this is how much we think we're going to use for power is how much I need? Did I do that right? Is that wrong? So instead of flying the Cessna, we'd say the yoke and pedals. Now you're you're in a 767 programming the autopilot, making sure that all parameters are correct.

Steve:
Nick, our staff member is working 24 seven in the buying and selling of power.

REU Director Nick Zettel:
Yeah, we have 324 seven operations desk. The first desk, we call it the power desk. They work five hour shifts, 365 right through Christmas when we're all enjoying Christmas morning, right to Thanksgiving and a busy turkey. There is an operator sitting in the control center managing the power desk. There's also a trader we call the day ahead trader who is buying and selling power on a day. Had basis. Electricity can't be stored. So everything has to happen beforehand because when it happens in real time, it has to happen right at 6000, 60 cycles a second. If it doesn't, bad things happen right at blackout. So there's a day ahead traders. So today, the day trader came in this morning and traded for tomorrow. And then at midnight tonight, it will roll over into the real time environment for whoever's working the night shift desk. So the real time trader will take over whatever data did today for a month. And then the other desk is our transmission distribution operator desk. So that desk manages the transmission distribution grid all around Redding. If there's a car hits a pull, they are the ones that dispatch our crews out. If there is planned work to be done, they make sure that all the switching is ready so the line could be energized. The third desk is our power plant desk. So when you run a power plant, you have to have operators there.

Katie:
24 seven This is so fascinating to me. There's so many different parts and pieces that go into the buying and selling of power. And most people don't think about it because they just turn on their lights or they turn on their dryer or whatever, and it all works. What happens if the day ahead trader just blows it and really is off by a ton of energy.

REU Director Nick Zettel:
In order to avoid that, which every now and then your forecast is wrong because it's a forecast, right? Sometimes call it a guess. Cast forecasts are usually always wrong unless you're an expert and if you're that good at it, you're probably not working at a small public utility in Redding. You're probably somewhere Wall Street and you have a different type of lifestyle. But the reality is we use two different forecasting models that's looking at is it a school day or not a school day? Is it a Saturday versus a Sunday? Is it going to be cloudy and B, partly cloudy? Is it going to be sunny? Is it a holiday? Is there smoke in the air because there's a fire up north and the wind is going to blow it down here? What's the relative humidity? What's the overnight temperature going to be starting in the morning? There's so many factors that come into it on a fourth, the fourth day of 110 degrees. There's a lot more energy being used in the first day because the concrete top two buildings are hot. There's a lot of we call it heat. So so a lot of forecasting that goes in from the day ahead into the next day to guess as best as possible. But inevitably something goes wrong. The generator you thought you were going to use might have to be D rated because it has an issue, the transmission path that you were going to buy power and we call it we'll down or transmit down. It might be D rated because it has an equipment issue or a fire. Some people are not with it. So that's why there's the plan. One day ahead. When it goes into real time, something always changes, right? It was supposed to be partly cloudy. Now it's really sunny. So there's more load. So that's why in real time, what they can do is they can buy or sell power real time. They do it down to the last 5 minutes, actually down to the last two and a half minutes. If you get it as close as possible to what exactly what the city is going to use.

Steve:
It really is fascinating. I'm assuming that a power company could have the most state of the art equipment and infrastructure and buildings. But if you're not effectively trading energy and buying and selling and forecasting properly, that seems like it could really spell the success or the demise of your industry.

REU Director Nick Zettel:
We have a very strict energy risk management policy that we abide by. It outlines all the business rules of business practices, all the things that everybody should be doing, and before it even gets to day ahead or even the month ahead, it all starts with a long term plan with our long term group doing what we call an integrated resource plan. It's on our website. If anybody would like to look at it. We have an updated version that they're working on right now, and that plan looks out currently through 2045 because that's the new requirement to have zero emissions power. It factors in what are all the rules and regulations at the federal and state level. Where are we allowed to get power from? What type of power does it have to be? How much of it do you have to have? What are the percentages of it? What type is it? Solar power is generated when the sun's up. Wind power is typically generated mostly overnight when the sun goes down and the wind picks up. Hydropower is generated kind of year round until it runs out. So you look out in the future and then what's going to happen in Redding? Is it going to grow? Is it going to stay neutral? Will it decline? How fast will electric cars get here? What about medium and heavy duty vehicles? Those have to be on the streets a lot faster than than automobiles do by state law. And then in Redding, are we going to be a charging island for I-5 north and south and 44 and 99? Are we kind of that fueling hub? So what about folks that don't even live here? How much are they going to stop and charge? We use transportation and building electrification forecasts.

REU Director Nick Zettel:
We hired a company to strictly look at that forecast using a lot of data, a lot of data from around the country and trying to build trends. And how do we think it'll work in Redding? Then we use what's called econometric load forecasting, which is we use metrics of the economy to try to gauge how much power people are going to use, how many people are moving here, we're moving away. What is income growth? The more income typically, the more power gets used, you're more comfortable turning the air conditioner down. There's typically more appliances or purchasing. So there are so many things that we look into the future that we we kind of say the long term group goes to the grocery store and the short term group makes dinner and they have working groups. They meet constantly. They're always reviewing, Hey, what if this happens? What would you do? Or there's feedback from the short term group of, Hey, we purchase this product from the Pacific Northwest and it just isn't delivering, right? So we don't want to do that anymore. There's carbon content requirements. There's a lot into it. It is a fascinating business. It seems probably a little bit loose to folks, but at any point in time, if anybody wants to review our energy risk management, energy or energy risk trading guidelines, I'd be more than willing to share because it is a very buttoned up and a very tightly wrapped operation. It has to be. That is one of the reasons why our rates are so low, because we manage the business and we manage our rates.

Steve:
We talk a lot about how the goals of our are based off city council and obviously you have this integrated resource plan out to 2045 and doing a lot of forward thinking and forecasting. How challenging is it because you're also at the whim of the state and their regulations and obviously those don't happen overnight, but I'm sure there are instances where maybe some of those goals that you have ten years out, you might have to do a wanted pivot based on what the state comes down with. How do you balance that between the needs and the goals and the aspirations of our local community with that of the state, which may not always align?

REU Director Nick Zettel:
We have to compartmentalize it. We have to put it in the right buckets in and address it in the right areas. So let's talk about state goals. State of California, very progressive and energy policy at the state. It's no secret they want every vehicle to be electrified or at least zero emission, maybe through a hydrogen fuel cell process. And they want buildings to be electrified. They don't the state does not want to burn natural gas in buildings anymore. They want to decarbonize the California footprint. The way we manage that is through the integrated resource plan. We have our ear to the rail. We're paying attention in the legislative and regulatory processes, and we are incorporating constantly what the next social policy direction is from the state. Now, bringing it back to Redding. We don't get to decide in Redding if we want to do electric cars or not. We don't get to decide in Redding if we want to go to zero carbon energy or not. Those decisions are made by policymakers at the state level and possibly at the federal level for some of the bills and laws that are coming up. What we do is we put together a decision set for our council, which is our local policymakers, and there is there is freedom in there.

REU Director Nick Zettel:
There is discretion on what our council can do and not do. But there's also no freedom with certain laws. It has to be done. And in order to get our customers input. You may recall a few months back we put a survey out to our customers, both residential and commercial, asking a lot of questions about the future. What are you? Think about electric cars. Would you ever own one? What do you think about renewable energy? How important is it that your energy is zero carbon content or not? What's the most important to you? Reliability, Low rates, A safe power grid. We ask all these questions and they're different from a commercial customer to a residential. And we incorporate all of those responses into the plan. So we have the state and federal rules. We have what our customers desires are, and then we try to develop a portfolio of options that we can go forward with that fit in all the requirements, what our customers want, what is going to meet the laws. And then we have a series of workshops with our customers, council members that tend to have in the past. And ultimately we bring that plan to the city council.

REU Director Nick Zettel:
We'll walk through the different options of the future portfolio. Do you want more solar, more wind? You want to blend of both. You just want to meet all these requirements is with the least cost possible and the council decides if they like the plan or not and they want to make changes to the plan. So it's the beauty of running a utility in a in a city that's as big as Redding, but as small as red. So our customers have direct input into what this portfolio is going to look like. And we get to have the good old town hall workshops where people can show up and say, I really want this type of technology or I don't care about the technology, I just want to be as low cost as possible or I don't care how you get there, just stop having emissions in the portfolio or I don't want electric cars or I do want electric cars. Everybody gets to have a voice and we do our best to compile all that into a plan. And that's coming up soon. So in the next year, we look forward to having those workshops with our customers.

Katie:
And you kind of touched on it earlier, but I wanted to give you more space to kind of dive into and answer that more fully. How is it that RCU is working to keep rates low among all of these changing things? How is are you able to pick and choose what energy they want to buy or sell or trade or invest in in order to keep rates as low as possible?

REU Director Nick Zettel:
So that's a great question. So rates are comprised of a few things. They're the cents per kilowatt hour that we charge our customer inside. The inside, that rate is the cost of buying power or natural gas or renewable energy, the cost of running our system or transmission and distribution and substations, the cost of running a power plant, the cost of complying with software tools, things all the labor, the staff, overhead of buildings and things like that. And so in order to keep rates as affordable as possible, what we do is we segment out how to manage those cost centers. Any business would do that. So in its simplest level, what what we do as a utility is we either manufacture a commodity, which is electricity at our manufacturing plant, it's a power plant, or we buy the commodity that somebody else manufactured, right, either through a solar project or wind plant, hydro. And then we deliver the commodity to our customers and we meter it and we send them a bill. And so if we really segment out and say, what is our highest cost exposure area, it's typically power cost, right? So out of $150 million a year to say operate the electric utility, probably about 80 million is directly related to sourcing power. And in order to not get caught in a situation like today where there's a Russian-Ukrainian war, which is causing extreme natural gas price pressure, if you're wondering how that works, why would the price of natural gas go up in California if Russia is invading Ukraine is because gas can be liquefied and shipped overseas and sold to Europe.

REU Director Nick Zettel:
So if Russia is shutting off gas supplies in Ukraine, there's extreme demand for what we call LNG liquefied natural gas. So now we have to compete with Germany and in England, in these other countries for the gas they're going to buy. We have to compete with it here because the the gas and oil companies, they're going to seek the highest price. So in order to avoid that, we employ a pretty in-depth energy hedging program to ensure that we're not exposed to geopolitical issues and and major weather events as much as we can. And that helps keep rates down. So if you're forward planning and you're forward thinking and you're taking deliberate steps to manage costs, it helps keep rates down. Overall. However, in California, if you're going to, the job we have to do is serve electricity is zero carbon in the future. We have to expand our grid and modernize our grid for vehicle charging. Overall rates are probably going to go up. But I think everybody should keep in mind that as you everybody transition to electric cars, you don't have to buy gasoline or diesel anymore. So you're going to shift your funds from one source to electric. And we have to invest to make that happen. But if we do this correctly, the plan would be overall your costs go down.

Steve:
Given all of that and the increased cost of energy that you alluded to, what is the current financial status of our you?

REU Director Nick Zettel:
So we're doing quite well. So we had a city council approved a rate increase to two rate increases. Of 2% each. It was in January of 2022, which we had, and there's another rate increase 2% starting January 23, considering inflation was just shown at 8.3% year over year for August. If we're staying at 2%, we're at 25% of the inflationary rate, which I think is commendable given the exposures that we have. For example, a transformer, a pad, mount transformer we call the little green box, you'll see in neighborhoods, those were about $4,800 for the average size. Now there are over 20,000 for those. So we are seeing 400% price increases of inflation, if you can get them, there's that, too. So if you're lucky enough to get them, you get to pay 400% more. So there's there's been some you know, natural gas was trading at about $4 per decade term in February. Now it's trading over $10 per day. So tremendous increases, financially speaking, are reserves are strong. The plan was to burn down cash reserves to buffer rate shock and only have a 2% rate increase. And so we don't see a need to make any modifications. So for 2024 and 25, we're going to go through the budget process. We need to see how our loan forecast comes together. We need to see where the hydro the water situation lands right now or at the end of a very, very bad three year drought. But that could change in one winter. Right? I'm praying for the for the triple dip La Nina. I keep seeing that the water is coming to northern California. So we need that right. The more water we get, the less gas we have to burn, less power we have to buy and we give our our federal allotment of hydropower gets delivered. So but overall, considering the year we've had, we are in a very, very good position.

Katie:
What are some common misconceptions about you that you wish the community knew? You hear this from people and you're like, No, that's not actually the case. Here's the real story. What are some of those items?

REU Director Nick Zettel:
Probably two that I've heard over all the years. One is what is our view? Is it like a stand alone for profit utility or is it not? And the other is I got my bill and it's really, really high. Right. And there's two reasons for both of those. And I do not blame any customer for being confused. This is very confusing. I'll explain why. So the getting back to the what is our are is simply the electric department. We're one of ten departments in the city. We branded ourselves renting electric utility in the early 2000s when the state deregulated the energy market. You can think Enron back then in an attempt to let anybody sell power to anybody. That was the plan, right? So, of course, that didn't work. It totally, completely imploded and they deregulated the energy market. But along the way, utilities, electric utilities of cities had to brand themselves because we were going to be competing to sell power to our own customers. So the electric department became our new city of Santa Clara's electric department became Silicon Valley power. Sp Roseville became re Roseville Electric, right? Everybody got logos, everybody got branding campaigns, all that right. Which worked at the time. But going forward, it's kind of confused, folks, because there's City Redding and then there's you. Well, no, we're just the electric department. That's what we are. We're not for profit, just like the city is. Any funds that we earn from selling in the wholesale energy market, they go right into the reserve account.

REU Director Nick Zettel:
The Enterprise Fund account for the electric department, and they're used to buy poles and wire in more power and bucket trucks. And hopefully if we have enough wholesale sales, it keeps us from having a future rate increase. We'll spend that like we are this year. We're spending about $6 million out of cash reserves instead of raising rates. That's the plan. So are you is simply the electric department of the city of Redding, much like public works or finance or personnel and other things? The other item is getting your bill in the mail. So if you come to pay your City of Reading bill, you will come to the 3611 Advtech Parkway Building, which has are you right up front because it's our headquarter building. Again, many, many years ago, for efficiency purposes, the city consolidated customer services under the electric department because we were already doing it. And so we service all utilities, water, wastewater, solid waste, and we put out one bill and it actually the bill says City of Reading on it. And then as you go down the line items, it'll say water and wastewater, electric and things. But over the years, the folks have picked up the bill. And why is my electric bill so expensive? So and I totally understand if you come to pay it, you're walking into a building that has some city of signage on it.

REU Director Nick Zettel:
So there's been talk over the years of, well, maybe everybody should do their own bill. Well, we're not going to do that because that costs a lot of money to send out individual mailers. And that's just that's not fair to our customers to spend their money to send them for different bills. So what I do think is is interesting is your city of writing bill, which includes water, wastewater, solid waste and electric. If we do this correctly, it still may be cheaper than living outside the city limits and getting an electric bill from investor owned utility. So what a lot of folks realize when they move into the city, they get one bill for everything and it's still cheaper and they're paying for for their bill that was just their electric outside of the city. So but that that is a common thing. And all I ask for any customers is to try to remember, oh yeah, why pay to use building, But it's all the utilities. And so when you look at your bill, look at the line items, you'll see electric and you'll see water and wastewater, which is really helpful when you're trying to figure out what you need to conserve weight. You might run on my sprinklers too much or do I need to turn my air conditioner up because I'm using too much power?

Steve:
Obviously, I use an active partner in the community. You'll see them putting on events like Public Power Week, partnering with school programs, sponsoring other great community events and things of that nature. Why does are you put funds towards those sponsorships or towards those programs versus putting those funds towards reducing energy rates?

REU Director Nick Zettel:
So, you know, I think the amount of funding is actually very, very small. And over the years we've tried both, right? We've tried to to not be in the community and not provide small amounts of funding for energy, education and outreach and not provide small sponsorships. We provide scholarship funding for STEM related things like that. And we had demand from our from our city, from our town that they wanted that. And I think we found a good balance. We provide a very small amount of sponsorship funding, consider our annual budget and it makes a big impact in the community. And we actually have a procedure in internal standard operating procedure on when a sponsorship request is made, how does it get reviewed and it works well. And again, as we go forward, if we need to tighten the belt and this is the City Council wants to change direction, then we can always stop offering any type of sponsorships or scholarships and focus strictly on rates.

Katie:
And that's a good segue. When you're talking about scholarships or STEM related careers, if someone's looking for a job at are you or maybe they're in high school, maybe they're in college, maybe they're mid-career, where would somebody start with getting a job with Are you and how would you recommend they go about that?

REU Director Nick Zettel:
There's a few ways. So if you're in college, we actively seek internships so you can always reach out to us and you can learn more about what type of internships and what time of year. We typically do them over summer. And that gives we just had a round of interns this summer and it was fantastic that anywhere from Applied Economic. Thanks to electrical engineering. And they worked in the power plant, They worked in our Energy Trading Settlements group and they work in the engineering group. And that's a great time to come in and see how how does it really work? There's going to college and there's going into the business and see how it really works If you're graduating high school. We have a lot of jobs where you can look into from a meter reading utility worker, look at postings, and I'd always encourage you get on with the kid anywhere you can get your get your foot in the door, reach out, learn and apply If you're if you're mid-career. Typically what we'll do for our our higher leadership level positions is we might use recruiting firms to to really reach out and dial in the candidate that we're looking for. What do we need? Project management, experience, energy management, engineering, outside line or those type of items where it's specific. We use recruiters and we also do postings, and I'm looking forward to really pumping up our recruiting efforts both from a social media standpoint and changing it around a little bit and trying to be attractive and get out there and hustle a little bit harder and have folks see who are you is and what we do and what we're about and what our city is about and make it more attractive to want to be here and work here.

Katie:
Why should people care about having a community owned public utility? What's important about.

REU Director Nick Zettel:
That? I think we have something special in Redding that other cities don't have, where we have our own electric utility, which if you live in California, considering from your house to your car to basically your lawn mower to your bike and possibly your skateboard and everything else is going to be plugged in electrified. But it's really important you have a say and you have a sense of ownership over your electric utility. And that's a public power is I want our customers to know how important it is. If you go to city council and you talk or if you send me an email or you make a phone call or you stop by, we listen and it matters. It really does. Everybody who works here already, we live here. We live in this town. These are our schools, our businesses, our family, our friends. We're here. And this isn't a multinational corporation. We don't have stockholders. We have customers that live here. And I think public power is fantastic. When you can look at what our rates are, you can look at you get the same, if not more reliable service for a third of the price. I think it speaks for itself, and I think that's just the ability to say this is where I want my electric utility to go, this is what I think, and call up a council member or provide input and it really matters and you can really do that. And we listen. And if you feel like you want to say something that maybe that we don't want to hear, that's okay. I'm totally okay with that because we're trying to run this business and your feedback and thoughts is always helpful. And we will survey you and ask for your surveys and ask for your thoughts. And the more that you participate, the better we're going to make this.

Steve:
Nick is the new director for Redding Electric Utility. What are you most looking forward to?

REU Director Nick Zettel:
I had the benefit of being in acting or an interim director for about six months after the retirement of Director Beanz, which is great to test drive to grab the wheel and jump in. Of course, the mission there is basically number one, don't screw it up. Number two, don't rock the boat in number three. From a personal standpoint, do you think you can be effective? Do you think you can lead this? This is year 101. Could you take it forward in the future? And I really feel like this is a particular moment in time in the power business for Redding, where there's so much buzz around things getting electrified. The laws are coming down. First it was. Anything under 25 horsepower, I think from like lawnmowers and things like that and weed whackers that all electric then outcome's electric vehicle. Soon it'll be buildings and what a time to be in a leadership position where with such massive change in momentum, I'm honored to be a part of it. I'm honored to do it in my hometown. It's a big journey and I really feel this ingrained responsibility to make it happen, that we keep this good thing going that we have for the last 101 years, that we don't turn into something different, that we stick to our roots of safe, reliable and affordable power. And folks can make this transition and without disrupting their lives, I decided.

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