>> instructor: we don't neat need elaboration. i hate elaboration. so we are open now? there was no action taken during closed section is there any action to discuss the tups discussed during closed section. >> most not toculosis. to disclose. okay the motion carries the hour of 23 having arrived ... we are ready for our cleanpowersf. who's presenting?

here we go. item 14 members. >> barbara hale assistant general manage for power thank you members for did he go 98ing this time for local power i think and they are here to present to you their business case and financial deliverless at this point and their principal will be making the presentation. we have ten minutes allot it had for this presentation. >> thank you plaintiffs perhaps miscommunication and we prepared a 30-minute powerpoint. >> i think the first 17 slides are more than enough information for us. >> this is samuel golding our project manager. >> we will have to skip

through some of the slides in order to meet your time requirement. >> yes, my name is paul from local power incorporated, we have been working here in the city since 197, i know, as i really, commissioner moran, you have upthe general manager when i started working here on c c a and the city is also involved in the proposition h bond authority in 2,000 one and the 2004 c c a ordinance followed by the c c a complement plan of 2,007 and the work that we are doing now four for which we are grateful is the culmination of that workers. very much consists with the original ordinance that called for the use of the proposition h bond authority voter mandate from 2001 to build out a local renewable resore source from wind power and other

technologies as far as recommendation in his our reports to you, what we are recommending to you is essentially a modification of the curt program not any kind of a profound change would evolve from that program primary lie the hetch hetchy power in the motion denied destoe contract currently being sold on the market we are recommending an acceleration of local build out which we will get into in some detail and then we are recommending a change in strategies in terms of renewable credits and cost rex that you are currently using otherwise the changes that we are recommending do not change the program it would involve internal modification within the program in terms of agency in terms of how you allocate

resource and planning budgeting and staffing. we have leek looking at 78 that you saw customer enrollment target and the 20 megawatt target that is the lower ranges of the current range that you have currently and it involves 1800 watts of hetch hetchy problem and it would dilute the price premiums for phase one and set in place a program that is consistent with the build out goals of the program. as far as the more specific recommenddationings we are clear that the leading question box in the she'll agreement is in consistent with the bonds with the subsequent to phases that profession makes it difficult if not impossible to issue bonds in that agreement

and so subsequent agreement should takes place without that leading question block in place and then under the proposed approach we would commence the build out immediately in 2015. that is it. so surface the can you repeat clean hour s f program design that you have, from our point of view it's not competitive, it's seasonally very similar to the f g and e program which, is now pending approval in which you would essentially be under prized by that utility for your practical and have a significant risk of high opt-out rates. >> the proposed business case is essentially is a case of supply side model where you are buying power at a higher premium green power mix and none of the components are a alcohol for the industries that would involved it civilly would be a local

scaled acceleration of affordable tax and co generation of energy efficiency and other local renewable demand site resource as far as the conceptual approach and the product definition this is seasonally what was referred to in the industry as energy as a service and that means that you get out of the old kilowatt hour paradigm that goes back to the 1930's where you are selling hours of power into a service approach where you are standard dyeing on site affordable tax and building retrofits as standard components of that service we focus on a no money down approach to energy efficiency and renewables this would not only require any kind

of a late premium to the customers but a rate discount for those customers and is so energy efficiency with a discount and no money down and that is product differentiation that p g and e does not offer and utilities do not offer but we are uniquely poised to offer. this would apply to both the business community as well as residential customers. and so, as far as the approach to development we are really recommending an integrated and targeted approach to the resource rather than the market based additive approach which you have often see with conventional utility. the draft financial model that we preached was submitted a few months ago to the commission the power comprise is a baseline a proved concept at the

mathematical willful which we are going to make more complex over the next few months the first model consistses of photowind and a regional wind farm and as provide by the two house four ordinance and the final will demand response and solar thermal and power storage to give greater depth to the model but we are confidant that the surpluses which we will tell you about shortly will improve very likely in that final model. on that point. at what point are you making sure is there a model that you are going to weren't to us regarding the financial exposure to the rate pairs? payers. >> the he exposure to rate payers, i'm not sure exactly what you mean. you want to epitomize the

exposure to rate payers where is the exposure. >> well that exactly -- if you want to tackle this, i'm not sure how to answer that. that mic is not working iggs. >> the final risk parameters with wholesale power flakbations projected with the cost of power. >> is that available now. not available right now, no. it will be in about three months. in terms of how risk is treated within the model. >> colorado you want to talk model. >> do you want to talk about the financial build out. >> yeah the wholesale price of power fluctuates considerably in the last decade and in many situation that is has defined the marketplace in this case,

we are proposing a substantial development of local renewable resource and those demands eliminate -- and so the very approach limits risk compared to what you would get if you follow the shaw north america contract approach which, is all based on a commodity electricity which, is direct exposure to market price. and so at the high altitude, that is the most general statement that i can make about risk. this is a considerably low risk approach for the rate payer because of the performance of solar and efficiency and wind are very predictable, have no market price fluctuation, are simply a matter of whether the equipment works and so it's a comparison of equipment to fuel. may be the best response would be to give us some bullets down the road and so we know how to respond to that issue and

because rate pairs are going to ask that we how are we minimizing the exposure to them. >> any other questions? yeah i have another question too in the risk -- but's a little bit different and so my understanding is that the assumptions in had model and i guess what i'm really -- c c's local build out component is critical and i want to go on record again saying thank you for your work and your long-term commitment to this because, i think that c c a without a local build out is not a c c a program and we need to be moving towards on site generation as quickly as possible but one of the assumptionings that i think you are using is this commercial enrollment i don't know what we want to call it but the commercial participation in the program and i feel there may be some other kinds of risks that are not direct to the rate payer but veeply if there is not enough commercial enrollment or businesses change and opt out at that point or something might

happen along the road? could you talk about that risky component assumption a little bit and what the risk is inherent in will. >> if i understand you, is that risk specific to commercial customers. yes. >> essentially it would be the same generic risk applied to residential you have large commercial customers downtown and high rises downtown consuming a big part of the energy and so they are more sensitive to fluctuation and is rates. really though, as it would apply to residential customers, fluctuation and is rates as they occur on the market, would be greater than they will be under a regime that is based upon local fixed capital cost and is that is what the build out will do you end up with over half of the power supply in a fair short period of time. being behind the meter and being essentially hardware

and performance based rather than market or fuel-based. so, from the point of view of the commercial customer, you know, there are now over a thousand municipallies in the united states over c c a service and there has not been to my knowledge been a proem with which the program commence with a rate increase now clearly if the program commences with a rate increase that will send a negative signal to the commercial customers the approach we are taking here does not require a rate increase which actually shows surplus and is potential discounts for customers that sign on for this product and so there is an opportunity here to not have to answer that universal premiums where you are testing the willingness of commercial customers to pay extra we view that as a result of market because the market has been problematic over the last ten

years but energy efficiency there are no such problems with wind farms. it's or solar its a superior environment for rate certainty and it would both offer residential customers and the city considerably less risk around the of service. >> that is once you have built out. yes, we have a farrell rapid build out schedule for that very reason we would start the program obviously with 100% bought power and then, quickly, roll out local resources to hedge that and so you would have within a couple of years a significant hedge on your wholesale price of power and by your four-year, five, year six, you are over 50% mitt gated and whatever happens in the market whether it goes up or down it is hit the c c a customer less than it would hit the p g and e kir

or the direct access customer who have a more direct exposurethat commodity price. >> and then the residents you bring along after the commercial customers are enrolled. >> well in general because year face one is currently focused on the residential class we are recommending that the residential customers be added quickly in phase two along with the commercial customers to balance the load between day time and night time load is highly advisable in terms of lowering the costs of service and improving the load shape of the aggregation and so yes, we believe that commercial customers should be added right way way, and then the site development that is another piece that i do not understand how it works. >> so you have to do a site analysis to identify where the best sites would be and then isn't there risk inherent in

that site analysis in getting these the development of these sites and that you are saying that can all happen by 2014 2014 as far as doing the analysis and build out piece. >> yes you have a great opportunity here and an satisfying vang that other supply ires don't have which, is the end use meter data of the city and that is the data that we are using to do this work and so every meter and is 365,000-meters for several years into the past to see where is the higher merge intensity in the city and where is the higher tier load and high value load and so this approach essentially would allow the city to go and pull those customers identified in our survey which, is ongoing now and will be complete in a few months and will identify the necessary number of sides to build out this model and show the economics would be favorable for those sites and then it's a

matter of pulling those customers and offering them just as a solar company would offer them but we are able to offer them in advance of pulling them is and so the mark cost would be tiny vs. if you had a feed-in marketing program where you would have to have them call and you then look at their utility bill and then earth the economics of the case. in this case, we are turning it on it's head so the targeting can takes place before money is spent. and then essentially offering a community solar shares program so that customers have the opportunity to participate in that equity even if they are not home own owners or building owns and that is the vas imagine of the customer and is so you get a progressive social impact they same time you have a high targeted complication and investment for an optimal performance and that is really the core concept here.

>> all right we are 15 minutes into the presentation any other question? mr. courtney? i'm going to take the liberty and go into the presentation if i may can i get into one of the documents. >> whatever you want. so i see here a document that is i believe fourth in a series of organizational charts. it's libel and i don't have my glasses but it's one 72 out of 442. it's the program that maximizes green jobs page and it has the three color coordinated references public over site and control, peck sector innovation and implementation and maximize local green -- would you speak belief on the maximized local green jobs as it relates to the