would be recovered that $13.5 million in 4-and-a-half years. what if we change that recovery period to 12 years? we would see on annual bases it would free up $1.5 million. we would lower the rate that we charge customers or make the choices that affect our cost. lowering our cost, perhaps applying some of the savings to rates may present a better balance to you of affordability and environmental achievement for the program. we have heard staff has heard very clearly from sflafco and puc that we

need to fund the local opponent and we are trying to find optimum approach for that. we need to demonstrate that we have a revenue stream from this new customer base. so we need to launch the program so that we can demonstrate that we have a customer base and the revenues are coming in and then we can use those fund to begin to fund our local investment and energy efficiency and renewables. these are some of the leaveers how you would to the financials we have talked about. >> strike a balance between maximizing dollars for build out or what the rates are going

to be in terms of customers? >> right. you can do a mix. you can take that just using this example on robust renewals mix. you can take that and refund some of it in setting the rate, assuming a lower cost resource portfolio, so the program over all cost are lower, set the rate a little bit lower reflective of that but don't set it at $2.7 million because you won't have funds to dedicate to local investment fuchlt set the rate at the reflective of the lower cost of the resource portfolio because the mix is different. every month i'm taking more than i'm spending, therefore i can afford a bond that will fund a local investment into energy efficiency and local generation

components. >> thank you, commissioner. >> thank you. i think this discussion gets us probably the more real choice we are going to have to make in the next several weeks and that is how to fund and how much to fund the robust program that everybody says they want. it has been suggested that we should add it to a billion dollars. that exceeds my willingness to fund. the actions of the board of supervisors took back in september not only provided $2 million for going solar but 2 million for energy efficiency and 30 million for local build out. by restructuring the program and it's use for reks

as the biggest example you can add to that up to $9.4 million each year that the program is in place. i think that's a question that we have to answer for ourselves and i think one of the questions that the advocates have to answer for themselves is that if there was a program that had $6 million plus call it 7, 2, 9, 4 per year, is that good enough. because very frankly i do this i that's the choice. we make it as good as we can and we have to figure out if it's good enough. i think this is part as good as we can make it and we'll quickly -- whether it's good or not. >> are you saying that's the

margin we have for build out or was this anticipated before? >> so this is looking at the rates that the, the not to exceed rates. and what if we made different choices, that rate is build program that will -- is built into the original components. so, under that not to exceed rate that we have before you, assuming the toast -- the cost that that rate is built up from, you have $9 million. how do you allocate that, do you lower the rate, assuming more extended period of time for recovery of your reserve. those are the choices. >> do we have someone that can

talk about what that means hypothetically bonding capacity? >> we have our financial director here and we also have our assistant cfo, charles, could you speak to that, mr. charles pearl. perhaps we can take that up during the rates conversation. >> thank you. >> very good. >> for staying on the local build topic, the next slide shows talks through some of the elements of that, staying within the city's overall policy adopted policy for how dollars should be invested in energy. first always in energy and efficiency demand response and the program is where we would stop. clearly the city's policy going ghost goes on to address -- unless it was deemed to be so clean it would qualify

as a renewable product under the states rules. or established funding $2 million in energy efficiency is targeted toward low income and available to customers at program launch and additional the million and go solar sf incentive also available at program launch then we have the $2 million for the local renewables. so that's the funding that is already built into the program. the additional funding will depend on the actual rates and the actual cost are after we signed our shell confirm and gotten advice from you as to the right mix as just as we discussed on the slide before. and then of course additional phases will allow for the expansion of our local and

regional city controlled resources beyond the mega watts including substituting resources in for the shell supply as our shell energy north america proposed contract allows us to do. we also anticipate including a number of other program elements and activities. and those show up on the slide 30. just to review them quickly, we will have net energy metering rates for top scale solar, p v installation, we'll be paying customers for generating on their roof tops but not consuming. we'll be able to purchase from local producers of renewables any extra power they wish to spill, if you will onto the for our program. we

anticipate regularly issuing requests for offer for development of larger scale energy efficiency programs and for local and renewable projects. we've talked before about the fact that we have control of quite a bit of land and assets as associated with our water facilities where we could develop larger scale projects that just aren't available to us here in san francisco because we just don't have the landmass, we don't have the the solar availability, the resources as we have in some other properties. so we want to make sure we have those opportunities as well. we have the ability to revenue bond projects. we are looking forward to that. as soon as we have a proven tract record on our customer base and a revenue stream we'll be able to begin

that conversation with bond holders and see what our capacity is for further investments. all of those activities will be launched with the program and be able to meet our obligations for projects that require sequel review and analysis. as i mentioned before, the seed dollars we have for energy efficiency and go solar sf will allow us to immediately begin investments here in san francisco that does require a sequel review so it's funded immediately. we need to develop a resources plan and i spoke with our public utilities commission indicating by january we'll have an implementable integrated

resource plan once we know what our customer base and revenue stream is. i'm hearing and saw lots of nods when she said she want an actionable plan. we can certainly put together that framework for the plan over the next month or so. >> i think that's going to be very critical to many members here in this room that we have a plan. via tore talked about a plan. we have here a menu of options. i would like to ask that we can come back in a month's time with something more concrete if that's where the commissioners here would like to go. commissioner has a question. >> i have a metering question .

would they get an additional metering bill as well? >> yes. we would be paying for kilowatt hours that are not consumed behind the meter but spilled onto the grid and made available to their neighbors, yes. >> do you have a sample of what it might look like. i have seen some that are very confusing and wanted to be able to see if it's friendly to view. >> we expect it to be more friendly. that's part of the state law framework that allows us to initiate the program. we are going to be in discussion with p g and e with respect to how that bill will look. >> it's much simpler to under in the current p g and e net meter. >> yes, i'm familiar with the

challenges associated with the bill. as i say we are going to work with p g and e to see if we can make it more customer friendly and understandable. >> commissioner court knee >> thank you supervisor avalos. with respect to the $2 million, are we learning that the additional $2 million is earmarked for cca customers only? >> no. the reallocation is available to all go solarsf customers. there is a separate $2 million in the authorization of the program by the board of supervisors, that $2 million you see on slide 27 showing up under the clean power sf row as $1 million in fiscal year 2014,

2015, the reallocation shows up as a separate $2 million and can go for any go solar sf customer. >> thank you, i would like to thank you for bring thg -- bringing this up and it's important that these funds are allocated to cca customers. that is an exclusive we offer and that ought to be retained for people who put their faith in this center. >> so if there are no more questions on the part of the presentation we can move to the not to exceed rate portion of the presentation and kristin hollings will make that presentation to you. thank you.

>> thus thank you for your presentation. >> good afternoon, my name is crisp in hollings, rates will require additional approval and maybe lower t the rates you have seen before today are what we have received -- reviewed and the key layers by miss hale. the rates we are presenting here today are new and unique and the customer base has a choice of whether or

not to participate. starting with my first slide. i want to start with this slide which shows something of a 10 thousand foot view in terms of the charges. i want to point out 2 row, starting with rates, for basic tariffs there is a flat rate. with the exception of sewer rates with basic residential customers the rate is like p g and e. the monthly program is set at 0 by state law. the charge is at s f krchltc discretion and 0 for customers. customers have a choice to participate and customers may leave at any time. other customers are

similar to p g and e. so this next slide is building up cost of service. it is based on a cost of service and this charge shows byline item and for each year of the program and then also within each year, the columns show both the total cost for a given line item and also the unit cost per kilowatt hour. it's this unit cost which we are use to go determine the rate and then also add that year one also shows the cost as a percentage of the total cost. so, moving to the rows highlighted by the arrows, these make-up 75 percent of the total cost, the line item includes the cost of renewables

and can reduce this cost by 2.6 cents by kilowatt hours and the reserve is based on a 4-and-a-half year repayment term extend to go 12 years could reduce the cost by roughly 1/2 cent per kilowatt hour. if we add up all of these cost, it would fund $90 million in projects. for the last year we see 4.9 kilowatt hour but it's not the final rate. the care discount this judgement adjustment and the

final rate is on my next slide. so as noted on the last slide, the cost per kilowatt hour adding to the care low income which is shown in column c. the result is a rate of 14.57 cents per kilowatt hour shown in column d and noted by the arrow is being proposed for the basic residential not to exceed rate for clean power s f. then moving to column h, this compares to 2013 p g and e generation rate which results in a premium of 6.9 percent in kilowatt hour in column i and the premium is proposed s f rate and p g and e rate. so my

next rate translates this race to a dollar amount. although the rate is flat, the dollar impact of this premium increases with higher tiers. as we move from the columns designated by the arrow we see the premium in dollars. i have circled for tier 1, this tier, the dollar i am mpact is $10.24 a month it represents about a 30 percent premium on the total p g and e electric and gas bill. while customers in higher tiers will see a higher premium, it makes up a smaller

percentage of their total bill. this next slide translates the tier for the resident dental residential customer. it shows the $10.24 premium. the cost of the generation makes up the $10.24 premium. so, this is the final slide i will go through. the next six slides look like it. they show the rates and charges for all the tariffs that are included

in this proposal. we are proposing 27 tariffs and as has been mentioned earlier, we want to have these rates in place should such customers want to participate. we are targeting residential non-carr customers that is noted by the arrow the first two columns show the standard p g and e tariff and tariff title and the final 6 columns shows the proposed not to exceed rate for this program and you will note that rate in 2013. so at this point i'm happy to take any questions on the information i have presented. >> colleagues, any comments or questions? >> let me start off on slide 4 you have an arrow pointed to

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