have as far as having the reviews. we asked for those to update their bids and perfect them, and provide that for this meeting. we were hoping to have that on december 6. we got a request. one of the firms needed more time. we acted to accommodate that. they ask for december 10. bids are due later today. we already have time on the calendars to give the orientation to the scoring panel. these are folks with energy expertise. we have a member from lafco. we have a finance person from the puc. we have folks from our sister municipal agency down in palo

alto, as well as a member from marin. we appreciate their efforts. they are doing this without compensation. they are doing this to further renewable energy. that date we set for orientation is on the 15th. next week. the next bit of the timeline, we're looking to have the final provide written scores the first week of january, conduct oral interviews the week after that, have final scores on january 19, then go to the sfpuc to get the formal guidance to be able to have the sfpuc instruct the general manager and staff begin

negotiations. lafco has regularly scheduled meeting set for 2010. we would be able to provide an update on what transpires in the rfp process at that meeting at the end of january. that is what we have on there. another item i wanted to give you a status update briefly, some of the members of lafco are on the budget and finance committee. we sought release of reserves. commissioner mirkarimi as on that board and asked questions about what we were seeking and how it has been. for my own commission, the sfpuc, real briefly, putting up the history of the reserve request. we start with $5 million. $3.2 million were placed on reserve.

we had $1.3 million of reserve. the meeting on wednesday, the budget and finance committee authorized $430,000 to conduct negotiations. following that, i wanted to note that in response to your requests, we have been looking into the budget details and have started the process of working with lafco staff. we want to make sure the budgets are all in sync. we will be doing some of that digging in the next weeks. we will report that the next availability. as part of that meeting, i know

there was a question from commissioner campos. they were asking similar questions of the general manager and the staff. let me talk about it briefly here. the first item, performing the service through a third-party using the rfp approach. it is clear that the city has the core competencies necessary to take on cca. in so doing, part of that would be they are taking on some financial risk. you have heard about that from ms. weiss and how marin has had to proceed. we would have a third party, working capital, and the like.

we would have to get the funding for that, as well as, in terms of entering into the marketplace, counterparty is that you would be entering into long-term. energy contracts often require posting of collateral. should market prices change, you will still be there to purchase the power at the specified price. there are some things we have to work with their. -- there. one is to have the program where you hedge your portfolio. you by the energy for a long period of time. the benefit of that, the prices would not fluctuate with the market. the flip side is the longer the term, the more energy you buy, the more collateral you have to post to get into those

contracts. you have to be making bigger promises. the flip side of that, in terms of not providing the collateral, is having the hedge program. the downside is that, should there be changes in market prices, the customers would not have the insulation of having long term grain to -- arrangements with suppliers. these are the things we would need to be considering. another area of risk management that we would look into relates to phasing in an targeting of customers. what is tied into that is how we structure the program. how renewable do we make it? the prices might be different than what has been specified in policy, but has an ambitious and strong renewable component.

those kinds of things could be discussed. just to talk about the phasing, one of the challenges of starting up front, the challenges of the opt-out risk. that is there, no matter what. you have the opportunity of being able to use the pool of customers you have not offered the program to initially, and customers you can start to bring in at the opt-out rate is different than what you expected. you can seek additional customers and make sure the volume of energy you have expected to be providing over the course of the year is within targets. you can adjust the number of customers you're bringing in or adding the opt-out to to make sure the volume of energy is the same, which helps in terms of being able to buy blocks of energy through long-term contracts. the city, we have the core

competencies here at sfpuc. we have a call center and customer billing that we handle. that would require some additional staffing and computer systems to handle cca. we may want to consider if and how to use a third party vendor to handle the ball popped up in -- handle the bump up in calls. we would need an update to handle usage and data transfers. it would ensure accurate billing and accurate tracking of customers use it. we have an in-house trading desk. that would need to be augmented. these are all things that we are interested in investigating and can invest a further. i am ready to answer questions, should you have any. commissioner mirkarimi: i want to step back a second and talk

about a little bit of the motivation as to why a number of people have mentioned the interest in seeing the sfpuc step up and possibly be an actor and a player in the schematic of what it would mean to provide aggregation. a couple of things. 2010 has been a very with regard to a false start, for lack of a better phrase, on the first rfp process, pre-june and us being able to corral a fair amount of interest and that process be expedited in a way that we had hoped, only for us to stave off any kind of external threat because of proposition 16, giving us the

ability to retrench and redeclare our intentions of moving toward a thorough rfp process, to see what kind of interest we could garner from interested bidders and from implementing a cca. part of the process is more than setting up trial balloons and hoping that there will be an audience, a business audience, out there potentially attracted to doing business with san francisco. it is about the level of desire they are detecting from the city in getting this done. that level of desire is first will come, or not, by the san francisco public utility commission, and it is that community itself, when they see communications from sfpuc, is able to determine how serious

our city is in wanting to pursue an rfp. i am hoping we are still on that page. in the past, i think we may have addressed this, so these concerns are of yesteryear, and i hope that is still the case, that there is some sluggishness, lack of enthusiasm within the sfpuc on moving forward with cca. that is translated into situations like, when the second rfp was executed, and we had a number of joint meetings about it, we did not expect on november 3, 2010 that you would have to send another letter out to the potential bidders asking them for information like prime

proposal financial documents, rps, references, business documentation, audited financial statements, demonstrated energy industry experience, certified energy scheduling, customer care and billing experience. the reason i am bringing this up is, and that, i would assume, is part of the primary package of what an rfp is, but when it is reported to us that after the clock has been eaten away, after five months, that we have some interest, but the interest is literally a one-sentence e-mail from the bidder who said they are interested. and that is the qualification of someone answering our rfp? that sound like something was not shepherded along the way to qualify interest. then for us to have to extend it

again the rfp process to get documentation that we are getting right now, i would have hoped that we would have got this documentation in the first place. so what it is doing unintentionally is feeding concerns that we are drawing down the clock, drawing down this process, and dollars, since you mentioned the budget, of city attorney time, law attorney staff time, of everybody, so that we get to a place that there is a determination that there may not be a company out there, that there may not be information that suits our standards out there. so i think some people are coming full circle and understanding, if this is in tune with what the sfpuc is doing, why not step up to the plate and the the aggregate themselves, or a hybrid-type of relationship? so if there are concerns about a

third party actor in this case providing that, well, sfpuc has the history, infrastructure, and assets that might be able to take some of the chore out of trying to ascertain information that seems to be difficult to ascertain. we are at a critical juncture now. at the end of this year, we have had some lucky breaks, in my opinion, in the duration of 2010. i do not think this is anything that people here can take for granted. unless we get a significant company that is willing to say, we hear you, san francisco, we are willing to negotiate with you, it is not going to be a repeat of what came up six months ago, than the natural fall back question should not be a report six months from now, or

as the time line suggested, we are sorry, p u c, lafco, board of supervisors, we came up with nothing. there has to be a default in some case. as you delineated, one of them should be a plan held by sfpuc that explains what their role will be potentially as a way to administer cca. if i hear correctly, that it is the ordinance that is giving writer's block, then that is easy, we can fix that. but do not let that intuitively or extensively -- instinctively block anybody from the process in a question that you will be confronted on. that is why a number of us have been anxious. after proposition 16, i would

have thought that the city family would have regrouped in an incredible way to say we will never let this happen again. yet, i am feeling that we may not be able to traversed the next go around if we come up then on a bitter response. part of that is we cannot afford to eat up the clock, we cannot afford to draw down on lafco's reserves, sfpuc's reserves on city attorney time, staff time, or resources that do not get us to where we need to go. i very much appreciate your leadership and your technical leadership on this question, but i have two reports -- i have to report, there is something amiss if we treat this with the next

round of bidders -- and we do have some heft in terms of companies that have signaled their interest in us. we cannot blow this. if we somehow do not find some business synergy with these companies, that does not end the discussion. i am not going to wait three months to say, sfpuc, it is your turn. i would rather say it now so that it is in your mind frame of potentially being one of these administrators of our cca. i guarantee, next november -- not guarantee -- but i would not be surprised if there was an attempt to obstruct us locally by some external threat from oz pursuing cca. so 2011 will be monumental. i would rather we do not exhaust

the year to make that happen. we have been following the trail of documentation between puc and the bidders themselves, and when i look at the chronology of the information, i am surprised that that information had not been on the front end, but based on the back end, which is raising questions for us why that is the case. i apologize for any level of their not being support in my comments and questions, but we are all feeling a little bit edgy at the fact that we are at the end of the year now and we are expecting things to be more packaged and processed that does not take time for granted. if you would like to speak to that. >> i may begin the response. barbara hale.

we very much share your concerns that the marketplace's response to our second request for proposal was not as complete as we have asked. all the issues you delineated in your comments, mr. chair, that we came back to the bettors and asked again was just that, our second request for that information. so the initial rfp cover that information and requested it from the bidders. we did not receive complete bids. rather than coming to you and saying, no complete bids, we are done with that round of rfp, we decided to sit down with each respondent and have a one-on-one with them where we could demonstrate our strong interest in having a perfected bid submitted to us. we were also cognizant of the fact that with the holidays, we might not have all bidders respond if we did not extend the

period. so we extended it from december 6 to december 10. we had it staged so that we would be able to bring you the results of the process in a more wholesome way today, but could not because of that need to extend. on the issue of the puc's motivation and interest in evaluating, self-providing the cca services, we have been about the wedding that at the staff level. we do have some information on the boundaries of risk, ideas on how we could shape a program. we are hearing your interest in being ready to talk about those issues soon after a january meeting, in the event of that

january time frame shows that we do not have a viable third party to provide the services to us. i guess i just wanted to stand and say, we hear you, we are about the winning those self- provide opportunities and can bring opportunities to our commission. >supervisor mirkarimi: the scenario is we are working with a limited pot of money, both what has been to the puc for cca purposes, and reserves that lafco coexist spy. so the scenario is real. this process, in essence, has cost us. if we come up to a place and nothing materializes before us, then what would we expect to do? i would rather not wait to

answer that question, knowing down the line that is a possibility. i would rather hear now. thank you for recognizing the concern that we have a potential contingency in place right now. obviously, what we would like is to find a great company that will help actualize what we would like to see through our aggregation objectives, and we are on the way to that path, but that is not the case. based on the first round of the rfp experience, and now this experience in process, i think we have no other toys. -- other choice. we havebased on communications i have seen exchanged between puc and those potential bidders, i was looking for something more robust by today.

it has not happened, fine. we will return in january. but if it does not happen then, then all focus will be on the obvious question, then what? i do not think most people here will be prepared to walk away based on the fact that 2010 did not arrive at a place that we wanted to go. i do not think that is going to happen so we should be able to anticipate what is going to happen next. puc is in the driver's seat commack and lafco and the board of supervisors is trying to figure out what kind of support we can provide so that we can figure out what we were all is directed to do. that is the nature of my points. mr. campbell? >> i am very encouraged in your remarks today, that you're

interested in revisiting city policy. there have been various times when that was looked at. there was a rfi that looked at policies and suggested some tweaks. even following that, there were a couple of things that i wanted to clarify and remind folks about. there was an awful lot of out reach that miss miller and i had done for the first rfp, and for the second, and at least in terms of expression measures, had done a lot. that is in large part of the cold call that i made to the origination from constellation, having conversations with potential suppliers, some who responded, some who did not to this rfp. in response to some of those,

one reason i am encouraged by your remarks, i had some frank discussion with those suppliers. some had more or less misgivings with the ability to reach all the goals we were seeking. so out of that, our staff, following the issuance of the rfp, were working on the items that ms. hale described. how would the city do it on their own? how would the sfpuc do it? we have done some analysis, looking at some past energy prices to see how we could differently shaped the program in advance of any changes in official policy. so i am glad that we are aligned there. supervisor mirkarimi: all i can do is paint one example that is contemporary, one that the puc will get. with a great amount of political will, forces were able to crowd

together a solar project for recurrent energy, and they were able to move with unbelievable pace, installing 5-megawatt solar panels on reservoir. by the time it came back to the board of supervisors questioning the contract's long-term rate of cost, still, the puc endeavored to implement what mayor newsom had asked for. you had demonstrated to us a level of wherewithal, ingenuity, and termination to get something done. absolutely impressive. it demonstrated to us, when you want something, you can actually do it, and it did not require legislation at the time in order to initiate the process in order

to get to where you wanted to go. that, to me, qualifies you as a potential contender for this particular role of being a cca aggregate her. but what has happened in this past year, i would like to see the same level of determination, and in essence, bravado, because of the way the contract was advanced despite concerns on cost. i do not mean to discount concerns of cost here. but for the puc to have that level of -- this is something that we what and we would do everything we can to put this behind. even come to us with an alternative that we are interested in joining with marin, having a real idea in

mind from the puc perspective. sit down and turn out the possibilities of joining the marin energy board. i am looking for a level of detail, political artistry, that can help us chart what i am anticipating -- because we have been down this road before -- the kind of road blocks that we are going to see. that is something that we should end the year on. good going for everyone here for navigating the insurmountable task of keeping the threat at bay, but now my concern is internal threats. the internal obstacles that, i think, need to be eliminated to make sure we are on -- illuminated to make sure we are on the same page.

i do not want to have a hearing in january and say, i am sorry, it did not answer our questions on the rfp. it did not happen. i believe we are at that point in our lives where we have dedicated a lot of our life to, resources have been expended for this process, and we cannot afford to waste another dime or minute until we know we are going to get exactly what we are paying for. i wanted to make sure that this city is indicted as there is transition in government, coming into a new year, new members of the collective family, we need to stay the course. i do not want to see any interruption to that. if at anytime the puc has questions or concerns because something is not in the ordinance, and you think by that interpretation it gives you the signal not to move on