supervisor mirkarimi: good afternoon, welcome to lafco. i'm ross mirkarimi, chair. madam clerks and mr. clerk, hi. would you please read the roll call. >> mirkarimi present. campos absent. dufty present. avalos present. schmeltzer present. mar present. bornstein absent. we have a quorum. supervisor mirkarimi: very good. i understand commissioner campos will join us shortly. would you please read item number two. aeye approval of the minutes of the 2009 special joint meeting with sfpuc. supervisor mirkarimi: is there

any public comment on this particular item? seeing none, public comment is closed. colleagues, entertain a motion by commissioner avalos, seconded by commissioner dufty. so moved without objection. would you please read item number three. >> item number three. report on the status of choice aggregation activities. supervisor mirkarimi: ok. mr. kimball, welcome. >> thank you. good afternoon, commissioners. my name is mike campbell. i'm the director of the sfpuc's clean power s.f. program, often referred to as c.c.a. so today i'm just going to go over what progress we've made in crafting the r.f.p. you should have a new revised r.f.p. draft for your pacts, as well as a summary sheet which describes many of the changes,

the notable changes, from what was made public prior to the july 9 meeting. i want to go over a few things in general at a high level here regarding a lot of the additional clarifications that we added based on feedback that was heard at the last joint meeting of the p.u.c. and lafco, again, on july 9. one big area that was changed is clarification in the scoring, specifically in making it very explicit that the oral scoring -- the oral interview, those scores will be associated with the same elements that are being scored for the written portion. and just as a reminder in terms of the process for the r.f.p., the first step is evaluating that the firms have -- that proposals meet the minimum qualifications in order to be scored. should they not meet any of

those minimum qualifications, they would be rejected as not sufficient. the second stage is the written evaluation, where the points are allocated based upon their responses, ability to achieve the goals as stated in the r.f.p. and the highest-scoring firms would then be invited for oral interviews. and there are points allocated for the oral interview process. those oral interviewpoints would be associated with the same key elements described in the written proposal section, and there are also some points for l.b.e. outreach efforts. another bit of feedback that we heard was concern over allowing rex without sort of limit. what we've done is to try to balance, as was discussed in

the previous meetings, the ability of having the portfolio be greener and getting the benefit of recs, which is they often can be a lower-cost means of achieving a green portfolio, splitting the difference so that the recs are limited between the difference to what is r.f.p.-compliant, which the procurement standards do not allow the use of recs and the 51% goal. as you're going beyond that amount, only half of that percentage, to the 51%, could be made from recs. another clarification and addition based on feedback from this body and the pumplet u.c. at the last meeting is -- the p.u.c. at the last meeting is asking the proposer to provide details in terms of what they see as key metrics for evaluating the success of a

program as well as what the proposer identifies as a target for opt-out rates, and if there's any issues associated to opt-out rates. and the last is pulling out of other areas and making its own sections abundantly clear that energy efficiency and response are fundamentally important to the portfolio. if you're going to try to do a side by side comparison of this document with the last one, there have been a lot of structral changes that are not substantive, but i'm quite proud of it, because this draft compared to the last draft, the team's worked really hard along with lafco, the city attorney and our own san francisco team to make sure that when we're talking about various aspects and what's required, we're being very consistent throughout the document. there's a lot of goals, and we really want to make sure that

we're extremely clear and the responses received that the evaluators, when they're going through that written proposal process, have a very clear idea of how well the respondents are both faring against one another and also how they're lining up directly with the goals. there also was some sort of a high-level discussion of what was changed between the obvious ninth version and this one. in the cover page to the r.f.p. there's a longer list. i'll be happy to go into those if this body would like. but in the interest of time, i'm thinking maybe i would just move on to some other areas. i'll seek your guidance. supervisor mirkarimi: first, i want to ask lafco staff to, ms. miller, also weigh in, since this has been a bit of a collaborative effort. and then either one of you, if you could, talk about timelines, just to remind everybody of the timeline on

it. >> there's also a few more things i could address as to what's been changed. ms. miller was going to address it, but there were some changes that we're in the process of working into the document that weren't included in what was sent around on wednesday, just because we hadn't had the opportunity to have some of those conversations. and i can go over those now briefly, if you'd like. >> that's fine. why don't you do that. and ms. miller, you can respond. >> ok. so, again, we've had some additional consultation with lafco as well as with some of the consultants, including local power and some additional changes from what is in your -- what is in the public draft. i just wanted to make sure that highlight based on some of the discussions. one is that the supplier would not have exclusive rights to be the energy efficiency in demand response, to provide energy response programs through the request for offer process that the city would manage. we are expecting that we'd be

seeking those types of services as a resource through the r.f.o. process as well. made some additional clarification regarding element of the program that in some instances, some types of programs may be ceqa exempt. so that wouldn't need to go through a full ceqa process. also associated with the resource substitution component of the request for offer process, clarifying that both the city and the supplier have an obligation to ensuring that the cost of doing any resource substitution, that there's an obligation and the costs associated would be minimal. the last and most notable one that we had the greatest amount of constructive discussion about was about the duration of

the contract term. given the r.f.o. process and the idea that we would be asking the supplier to be, for whatever term the contract is for, buying the full amount of energy that would be needed over that duration for a specified price, and the layering in of resources over different durations that we managed through the city process and working with the supplier to substitute those in and out. there is a tension between the desire of having a long-term fixed price, a price that's known or be able to market to customers and having a stable relationship with the supplier, versus also knowing what those resources are that the city has under contract or plans to build and what those costs would be. so in consultation, especially with local power, who is encouraging us to think more

flexible in terms of having the term be shorter, we're going to shorten the minimum duration term to be three years as opposed to the five years, as in the draft that you see there. but allowing for creative thinking from the respondent, so that the three years is a minimum, so we have some apples to apples comparisons, and also so we're not having to go through another r.f.p. process immediately and having a one-year contract, i don't think, would work either. supervisor mirkarimi: and local power had recommended a three-year minimum from a five-year? >> actually, their recommendation was a two or a three-year. supervisor mirkarimi: two or three years. >> as a minimum, again. supervisor mirkarimi: but on average, up to 20 years, correct? >> yeah, with the ability to extend up to 20. supervisor mirkarimi: exits would be when of that contract? >> again, the exit would be at whatever the first duration of the contract is. if you've got a three-year contract with an extension to extends, it would be for three years. in terms of -- so those are the changes i wanted to go through

that were not in your pact. i wanted to make sure to be very explicit about those. in terms of timelines, thinking , following this meeting, we just need to put together all the apen dissees, do our last check of dotted i's and crossed t's, and issue the r.f.p.'s next week, giving firms two months to respond, which brings that to, you know, early october, the first week of october. try to score in the month of october and begin the oral interview process so that we can be trying to do the negotiation process and have a contract by the conclusion of this calendar year. i don't know if ms. miller has more to add on the conversations that we've had. i just want to highlight, it's been, again, a real benefit to have additional resources in the form of lafco staff, and i

appreciate -- supervisor mirkarimi: lafco appreciates that, too. well, we're fortunate at two bites of the apple as well. >> that's what i was going to speak to is the two bites of the apple. this r.f.p. that we've developed now is a vast improvement, mainly because we had the time and we also had the input of the risk management folks from sfpuc. we learned a lot during the process. we have a navigant that's doing the marin county issue, weighed in more extensively on this r.f.p., as did local power. so we learned a lot. and there's still a lot of flexibility, but one thing that we did learn is that we don't know yet where the renewables, particularly the in-city renewables are coming from. so we need to put a timeline on the r.f.p. about how we're going to accomplish that and swap in-and-out resources with this bidder. so we'll still have a long-term contract potentially, but

definite option-out points as we layer in the renewables. so i think we've just had a really good iterative process between the consultants and the staff at sfpuc. certainly local power and navigant. so we're planning on issuing this and not bringing it back to you until actually we have bidders. so that's pretty exciting. we're looking forward to round two. supervisor mirkarimi: so let me get this straight. the document that -- the way that it's been illustrated both are consultants, local power and navigant, have both said it's ready? >> yes, we have a final. as mike said, there's a final wrap-up. there's a little bit on the scoring. we had some comments from one of our commissioners about scoring. i want to loop back with that commissioner and make sure that we're taking care of any of those issues. but i think we're pretty much

done, with some final tweaks in the next few days. supervisor mirkarimi: and then how are we soliciting? i know that there's a routine process. but to make sure that in october we're not disappointing that we've had few bites by the community, the development community. >> i can talk about that briefly. one, there's areas of standard processes of publishing and advertising. in addition, we're going to go through making sure that in the relevant trade publications, which everybody in the industry that would be the types of firms that would be responding to this, that will be buying a half-page ad in that publication, which gets a lot of eyeballs. the last times we've done that, we've received cold calls from that. so i know that that works for sure. and also in the last few weeks, i've been doing just individual outreach to firms that have expressed interest in the past and have been going one step

further and just networking and asking folks if there were other firms that they thought i might be worth talking to. i've asked both consultants and -- >> and that's my sense as well, is that we would have to cultivate. we would have to recruit interest, harvest interest, since we're sort of pioneering something new, and that the first r.f.p. attempts was clumsy. i mean, it came back clumsy, and that there are lessons learned. so with those lessons learned i want to make sure that with everybody's good work between lafco and p.u.c. that we hit it. >> i'd like to add to that, too. in doing outreach to various firms, firms that expressed interests and did not respond as well, one of the nice things is there was a public version out before the july 9 meeting. so there was an opportunity to get -- hear what respondents -- potential respondents thought,

especially those that had elected not to responsibility. and by and large the feedback hack that this r.f.p. is a step in the right direction. particularly that the process made a lot of sense. they thought it was pretty hard to put together the full package. and that's been echoed. additionally, there has been -- while i'm on the topic, there has been pretty widespread comment from the firms that i've spoken with that the regulatory unknowns regarding the a.p.f. standards in california, particularly around sb-722 is something front and center in everybody's minds. they're having a hard time managing that with their existing business, so it's something that they expressed as just a general concern. they also had -- there are a variety of issues we've talked about before of the intention of what we're seeking to do in terms of the renewables and trying to meet or beat out

prices. and some folks had questions about that, because that's a concern they have. supervisor mirkarimi: colleagues? anybody else have any questions for staff, p.u.c. or lafco? ok. why don't we go to public comment. three? i will read the cards as i have them here. eric brooks,es opinion knoll la jackson, eric smith, espinola jackson and espinola jackson. you have three cards. >> we need her to speak more than one. eric brooks, san francisco green party and community choice energy alliance in our city. i just spoke to local power an hour ago and maybe paul was being polite to work constructively with the other parties. but i definitely ascertained from him that he's not satisfied with where this r.f.p. is at.

and as all of you know, the lafco commissioners should know from the email that i sent yesterday, that the advocates are not satisfied at all. we do not want an r.f.o. process to be separated out of this r.f.p. and we want this whole thing to move forward as one package, not in separate piece that's can be undermined. the key issue -- the key thing that needs to happen that has not happened yet -- and the reason the last r.f.p. was not successful, is that before that r.f.p. went out, both local power and and a half gant specifically said in their assess -- navigant specifically said in their assessments that we need to do a long assessment for the renewables and their efficiency and a comprehensive outline about how our renewables and efficiency assets will roll out so that the r.f.p. can be sufficiently informed that bidders can be

excited about it and bidders can know that they are bidding on and give us a project that we can vote for. that will take a few months, but now that prop 16 is over, that's what we need to do. we need to gear down and do this right, not rush it forward. we need to do it properly, not rush it forward. so all the things that i said in the email i would also reiterate, but i'm not going to repeat them. the main thing is that study work needs to be done before this goes forward or we're not going to be -- the advocates, especially, are not going to be comfortable with it. we're not comfortable also with the sfpuc making individual r.f.o. decisions on various different projects when we knew this project, as we've said for the last seven years -- we need this project to be designed comprehensively with a careful mix of resources and pay-back time so that it all pencils out