the rates of point 14 kilowatt hour. i'm wondering what that means in term of bonding capacity for build out. has that been a -- in terms of looking at a rate or imagine a rate based on what we want to consider for bonding capacities. >> as miss hale has mentioned it's based on a certain renewable rate and customer care participation.

if we change some of these choices made in the programs or changed in some of the assumption we can change the cost of the program and apply the cost savings to either lowering the rate or we can apply it to bonding capacity, but if we were to add up all of those cost savings that were summarized by miss hale, that comes you the to $9.4 million annually and that would give us roughly $90 million in bonding capacity. if we chose that otherwise it could go into savings for rate payers. >> yes. or we could reduce the rate the 2 cents for the renewables mix and half cent

for the payment. >> and the areas for commission action can you say what that provides in terms of what it means in terms of that $9.4 million. does that go directly toward rate payers or does that lead towards -- >> it leads to the program as it's been designed as with a 10 percent mix with the type 1 renewable, 85 percent for the type 2 renewable. it's been said at the program has been designed. if we make different choices on how we design this program we can bring the cost of the program down and shift those cost savings to bonding

capacity or to future build out. however this 1457 represents the cost of the program as we have redesigned it. >> okay. i think with -- if i may add, barbara hale, it also includes a rate stabilization fund which accumulates to 500,000 each year which is 2-and-a-half million over the program. what does that work on the in terms bond of is capacity? >> 2-and-a-half million is roughly $25 million. >> so the 14 cents rate has that capacity and we are talking about changes in the cost structure, the liever gives you more and we'll be looking for guidance from our

commission on what the right mix should be, how you wish to, if you wish to make those changes , how you want us to apply the lower cost in rate savings and capacity >> what would be providing with us the different scenarios that shows the bonding capacity and increase in bonding capacity because it gives us a sense of how we want to adjust the rates in terms of how we want to accomplish that plan. >> mr. torres? >> i want to make sure that we understand that this issue has to be extended until our april 23rd meeting to make sure we have the scenarios of the chairman referencing this. this is the first time we have seen this data. >> yes. commissioner, we understand this is your first exposure to the rate and to these choices that we are describing to you in such a more concrete way. and we

understand that there is work for us to do to respond to your questions about not only what that bonding capacity could be but what we could do with it under an outline of -- >> a third hearing at the puchlt p u c and more conversations we board as we move forward. >> i would like to move as quickly as possible and we are more information we need. i was hoping that we could have approved rates today. but i understand where people are at. >> that was my hope too but after all this information we need to take the time to do it right and make sure your

questions are answered as well as sflafco. >> thank you. i just want a point of clarification where you have -- that means that they are for example with the first phase of those who will be able to choose to opt out or just allow things to take it's course, they will be required to pay the exit fees on the way they are set or can you be clear about what that means for the actual customer? >> well, our own, you are talking about the departure charge? >> here on 5.4, there is a specific rate that is listed and says exit fee is charged by p g and e and maybe i'm not

reading that correctly. >> so there is the p g and e is sur charges. it's the power charge and different adjustment which accounts for the fact that p g and e has bought on the market and this is an additional charge that is added to the customer's bill. that charge and how that manifest in terms of dollars on the bill is shown on slide 6 and that comes up to roughly 85 cents for a customer. >> but that's not necessarily going to be included in the actual rate that we set? >> that is not part of our rate, no. >> but that will be a rate consistently on anyone who

chooses clean power? >> that's correct. that follows the customer's p g and e portfolio. when we describe what the premium is for the customer, it is included. we are making sure customers understand that that is a part of the cost that they will incur. >> okay. i had another question, i don't know if this was discussed but i know that earlier in the presentation there was a 60-day window to opt out without a fee, does that include the care

folks. >> there would be no charge for residential customers including care. if the care customer joins the program there would be no charge for leaving the program. >> if they opt out after the 60 day period? >> even after the 60 day there is a proposal to the zero. >> there is no fee for anyone anytime they choose to opt out of the program >> for residential customer yes, we are proposing a $25 fee for commercial customers after the first 60 days. >> okay. thanks. >> six months, sorry. >> i had a couple questions that might be for miss hale. this number is assuming as far as our bucket mix, because we

had conversations around diluting the mix, i wasn't comfortable with that unless there was a plan to get back to the purist mix possible but in order to try to create a powerful rate, we talked about that as a possible option. does this include the greenist mix of rec's at this point? >> yes. i'm sorry about the microphone. yes, it assumes that we have the richest if you will, mix of california certified renewable products. it assumes 5 percent renewable credits. if you choose to have more energy renewable credits the cost would go down. >> we don't see that here? >> no. in the newer slide, if

you go from the 5 percent to 85 percent credit mix, you free up $72 million ear year. if you didn't lower the rate. >> you still call these liever in it's decision whether it would be accelerated research recovery, late reduction, local build out or bonding capacity as a combination thereof? >> did i miss anything? >> no. you got it. >> thank you. are you done? >> yes. done. >> i'm done. up for questions.

>> we are ready to move on to our fairness board presentation. >> the chair on the fairness board. we are and advisory board. our position is to uphold meetings and rate recommendation. the board has met 9 times this year to discuss these rates. we have

had considerable public testimony, testimony from the p u c to come up with some of our recommendation. the back part of our board is made up from customers and various members from departments within city government such as the controller administrator and office of public finances. the biggest challenge around evaluating these rates for the board is to balance a number of complex and often conflict issues and value sets large around balancing the rates to customer segments, the ease of understanding the rates for the rate payer. when we come to

that lens we've come to several observations that both sflafco and puc can benefit from. the rates are fair. when the rate fair boards look at the cost of the rates whether the certain rate payer is not paying another fee. the rates are technically fair and they pass that test. when we look at the cost of service, when we look at the program assumptions that go into where the rate need to be in order to recover proper funding for the cost that are anticipated for the program, the board recognizes the rates are probable set. in

particular, the phase 1 program contract rates are designed to mitigate a number of risk for 1/2 year period of execution and those objectives are centered around the hundred percent renewable mix and the care customers. if you were to change those requirements and guide the staff, the program rates can change as well. the second component where the staff is designed to rate to see financially around a targeted customer base. it is both in size and also in type of customer designed to be conservative. size in the sense of about 120 for the total 5.6 mega watt load and they are

charging non-care customers. they are not charging low income customers and will not be impacted in phase 1. they are not the ones being included in the program in the offset. >> just a question you have the first bullet, you talk about the phase 1 program meeting objective, a hundred percent renewable and financial support for low income customers, are we assuming the build out is in those numbers as well? >> yes. as planned. >> the decision to proceed with the program is a policy choice. it's not an economic necessity. it is purely a policy choice for this body. and what the

rate board has after a number of sessions has come to a conclusion as well as that we have high confidence in p u c staff in how they are dealing with the analysis and the input from stake holders and a balance between affording the rates anden insuring the program is financially feasible. our concern, our concern is that the rates currently set is a premium rate. it's more expensive at the end of the day. we can concern around the fees ability of the markets in premium product given that when be look at the results, across the city, there is pricing

elasticity around customers and definitely commercial customers whom are not possibly willing to buy this product at the premium rate set. that's hour -- our primary concern and when we get passed phase 1 is there enough customers and be able to set this product in long-term. >> i know that we have a moving target right now because those rates have not been set. they can be higher than what's being proposed an they could have inflation where i believe our rates could perhaps be more static and so we don't really have the necessarily the perfect analysis yet on how we can compare to p g and e green tariff rate.

>> right. as far as looking at apples to apples rate in terms of what p g and e customers are paying, there will be a pricing difference. compared to a potential p g and e product that this body knows there is a potential customer, there may be a higher or lower cost but there will definitely be a competitor. that was evaluate the fees ability of this program, the rate of body has done it within a monopoly like setting for water and waste water. this is a different product. >> as we see a difference in rates, we'll see a difference in that premium, though?

>> possibly, yes. the recommendation we make while these are moving targets is the the rates board is making no recommendation regarding the phase one program rates at this time. i think the challenges is given a lot of these numbers that go into the analysis performance base is not making a recommendation. however if the rates be approved, we do have some procedural administration recommendations to make with sflafco that the program manages aggressively is cost. we talked about the three levers and the cost and whether or not that can be managed as

well. looking at these 3 levers, it maybe the ponlt possibility to at least bring a potential for a premium to be reduced. but the other recommendation is to refuse the cost at the initial start up. we anticipate the program to have a start up cost and be unpredictable in terms of those cost and a time to bring back the rates and cost back to the board for further review and further comment and to continue to reach out to the board for meetings and to plan and execute measurable and local build out program. if there are further questions or issues, please let me know. >> any comments or questions? commissioner veet ori?

>> i want one clarification, you are saying the rates seem sound even though it's a premium product? >> the board has a certain mandate to determine whether or not the rates are fair, and the technical analysis around to do that when we normally do for water and waste water we apply those same standards to these rates and hence our evaluation is that those rates are technically fair. the issue of whether or not they are expensive compared to another product, p g and e potential product, green product, that's not what comes in to it because when we evaluate water and waste water, there is no competing market. there is no other water to say this is fair or not. so hence we are a little bit like fish out of water, no pun intend but when we evaluate this, it is fair.

but our concerns are risen when we look at hour compared in the competitive standing would not that rate as set would make a viable and feasible program rate and that's our straulgs evaluation at this time. >> commissioner breed? >> just a question do you look at the fees involved in this process as well? >> yes i did. >> can you tell me about the exit fees that they are saying are proposed on each bill which would amount to 85 cents >> i think those are surcharge and not being changed or changeable. the other side of the lever where it's controlled

by the puc changes are being contemplated at a nominal sum. as there is no other program cost where there is an opt in opt out program where there is an exit fee. in this case there is not an exit fee. >> thank you. chairman, avalos, i just wanted to ask if regards to this exit fee, do you think that this would be somewhat of a disin incentive for people to participate in the clean power program? >> that whether we have an exit fee would buy behind --

be a dissent disincentive? >> yes. >> it's been contemplated for a long time and the city and p u c have worked to minimize that as many as possible. >> commissioner campos. >> thank you mr. chair for your presentation. i would wondering if you can explain to me a little bit about your sense of whether or not the rates that we are talking about would make the program successful because my understanding is that that is an intent here to make sure that we are setting it up to be successful. >> i think anytime there is a product especially for utility, the challenge is uncertain

whether that premium product will succeed. so biggest concern is whether or not if there is any pricing lever to make the product as competitive with the status quo, i think it will help not only for people to opt in but to stay with the program. if you look at different results, there are different changes as you go to the changes level that the person has. we identify the high utilization customer, the low income customer and commercial customers as the ones with the highest indifference curves towards opting out if the rate is higher than what they are currently paying. from that standpoint if all the levers that the program has in how it manages the cost as far as the

rate goes, i think the more prudent approach would be to bring that product line with the current status quo. people are saying, this is a program, i'm not paying more for it, why not be greener in essence. if they have to pay more for it, the obvious question is what am i gaining for it. some decisions that people make as further result, if this is a posse choice, i want to make it green and then the rest is uncertain. i think from where we go from here is really to give as much flexibility to the program such that we can have as large as robust customer base from which that revenue base would allow clean power

sf to get into. >> thank you. i appreciate the work to look at especially phase 1 to see the rates are fair and when it comes to the choices we have before us as to how the set the program and levers is going to be in the next couple months. the fact that we have that opinion from the rate and fairness board about fairness is significant for us to move forward on. thank you for your presentation. >> thank you. >> are there other aspects presentations before we go to public comment? are there any public comments from anyone? >> let's go public comments. we'll do up to 3 minutes. public comment is now open. i have a few cards that i can call folks to come up in the order they are called. al wine

rip, david l.a.cord, sue von. >> good afternoon, everybody. i would the wrap up. thanks for everybody about the concern about this program. i know there has been a huge amount of focus upon the launch of the program and so forth. i want to get back to it to what mr. change was talking about the program overall. according to barbara hale presented that launch is 5 percent of the potential customer base in terms of gig watt hours