the san walking valley power authority board of directors took action to suspend our efforts for a number of reasons. to roll back to the beginning, the kings river conservation district start of this effort in the central valley in 2001. we were exploring the potential of municipalization. we reached out to communities. we talked about issues relative to energy supply and service. we felt that because of our footprint and our experience, we were positioned well to create and lead a municipalization effort. we own and operate 165 megawatts of hydro. we own and operate 97 [inaudible] that serves the greater fresno area. based in large part on the

representations of pg&e, and southern california edison, they would support our efforts to about with the feasibility of community choice. the board decided, rather than start the fight of municipalization, let's pursue community choice. we began a second round of communication with the local city councils and the regional board of supervisors. we ultimately form the the san what keene valley power authority in 2006. -- formed the san joaquin valley power authority in 2006. we brought two counties to the table. fresno county never made the final step. we worked closely with that board of supervisors as we

developed our implementation plan. we have the somewhat dubious honor of saying we were the first entity to file an implementation plan and have it certified by the public utility commission for commencement of a community choice program for our member agencies. that initial certification was achieved in april of 2007. we worked through the processes as a result of a request for proposal process. we identified a potential full- service energy supplier. we also identified a number of potential renewable projects we pursued, potential development. our long term this and is somewhat different from visions here. it was for krcd to construct and operate a large generation

facility that to this day we would argue the greater fresno area needs to maintain reliability and hedge its exposure to transmission infrastructure deficiencies and an extreme dependence upon hydro to serve our region. our contract negotiations took about 18 months with citigroup energy. they were very much different credit conditions than today. we were seeking to develop a full-service energy supply contract that would give us six -- fixed price certainty for all the components of the energy piece of this trend selection -- transaction. with the corporate credit and price certainty for seven years, those were objectives established by our power authority board to address what we believed were the important

requirements of our program, that we have price discounts, stability in the price, and certainty for a least seven years. during that timeframe, we spent a great deal of time in front of the public utility commission dealing with the development of the implementation roles and also seeking clarification in response to challenges brought up by pg&e. let me sidebar. although we overlie persons of both edison and pg&e, the latter brought the problems to our efforts. edison was lower-key and far more supportive in assisting us with our assessment of cca feasibility. we had to withstand and beat down an effort to undermine the structure of our joint powers

authority as pg&e sought to enforce upon us a requirement that each member would be jointly and federally liable for all of the liabilities of all of the communities as part of that organization. we negotiated the initial bond requirement of $100,000. there were existing regulations for direct access energy service provider. we ultimately worked for resettlement of the bond methodology that is now a high topic of discussion. both san francisco and marin have expressed concerns about that methodology. we championed the exposure of a process and worked with the commission staff and the other parties you have heard from today to try to gain some

clarity as to when and how pg&e can market for opt-out. i think we, through a complaint filed in front of the public community commission in june of 2007 in response to aggressive marketing going on in our region that led to the departure of two of our biggest potential customers, we went to the commission and said there has got to be better guidance on how pg&e can be waived. they say they are neutral and support in, but they are working aggressively to undermine our efforts. through that complaint, there was ultimately a cpuc-assisted settlement in july of 2008. probably the most important piece of that settlement is a public admission by pg&e that they really changed their minds

on not cooperating but simply intending to market against cca effort. that change in their senior management policy occurred in january of 2007. we kind of flushed them out, if you will, and started to better understand the playing field, as ever tilted as it is, that we were going to have to deal with going forward. i mentioned earlier that we were forced to suspend our efforts in june of 2009. the erosion of the credit market that occurred in the fall of 2008 had serious impact on our efforts. it had serious impact on what citigroup energy, the supplier we renegotiating with, were capable to offer us. we had a substantial amount of risk position. citigroup was willing to take it relative to credit. we had secured a $40 million

line of working capital credit to support our program. we have price certainty provisions worked into the contract. we all know the erosion of the credit markets and the impact that had on citigroup, the parent company, really caused our program to come apart. we immediately began negotiations with a second supplier, but by thatrañ point,e credit terms and the challenges you have heard don explain -- dawn explain could not be achieved. put on top of that the financial condition that our communities found themselves in. we have essentially spent a tremendous amount of our local reserves fending off the fight from a so-called neutral or cooperative incumbent utility.

we ran out of money. i will be real honest. our reserves got to a level where we felt it was most prudent to stop, let the credit markets stabilize, and continue to support in the regulatory environment, and speaks the -- seeks stability out of the regulatory arena and legislative and financial arena. today, where we find ourselves, although suspended, we are spending a tremendous amount of time in the regulatory process supporting comments and providing input into the san francisco and marin efforts. we continue to be parties to various proceedings that were initiated prior to our suspension. we are working with our communities to explore the potential of a regional solar project. we went out for a request for

proposal to identify qualified solar developers with substantial experience to work with our communities to create a regional program and a combined series of small smaller projects -- small solar projects. some of the waste water treatment plant facilities they are looking to convert to solar. to do that, a tremendous amount of response. we had 18 qualified respondents to that request. we are in the process of going through those. we will make recommendations to the power authority board of directors at the january meeting. we have participated in -- and support of michael's effort to bring reason into the energy efficiency regulation. we continue to look at market conditions and assess where we go from here. the one thing i've learned this

-- learn through this is the credit markets this dynamic. the instability present remarkable challenges for all of us. it is important that we keep our eye on the end game. for our region, that is to expand the local generation capacity to improve the reliability of the greater fresno area delivery systems. as i work with my boards, we are going to necessarily have to begin to look at larger renewable footprints, larger components of renewable projects, and expand that resources in smaller ways than the 500-megawatt plants we were pursuing several years ago.

again, i appreciate the opportunity and the invitation to be here and speak with you. if there are questions, i would be happy to answer them. i will stop there. thank you. commissioner mirkarimi: we very much appreciate the time you have taken to join us here. we just want you to know that we have not had really the pleasure. it is rare to get into such discussion with representatives and leaders from san joaquin valley. i was pleased that when we were before the senate panel testifying, the many cities came together to share their experiences and perspectives. we have not done that before. we congregated in the same room. i think it was moon's three informative and instructive to

memorialize that record -- it was extremely informative and instructive to memorialize the record. it was -- it had a level of detail to it that this is something we have heard about, something we have read about, rumor has carried, the stories of trials and tribulations and torture that city governments have gone through, yet we have never had the opportunity to exchange notes as we had at that time. you are trailblazers. you really helped lead the path. i am sorry to see the efforts of pg&e have stalled you. i am hoping you will be able to resuscitate. one question i have for you is

that often come it is asserted that our pursuit of municipalization is a liberal fang, a progressive thing. we are often castigated or relegated by others to -- who try to slot us as being in a less-minded way of thinking about municipal is asian region municipalizat -- about m unicipalization. you were leading the pack. you should speak to that. people in san francisco hear it from others who want to mutate the debate as to what this means. when we hear it from other counties who are not necessarily like san francisco, i think it is important to share some insight. >> thank you. i will.

let me mention that i appreciated participating in the aforementioned senate hearing last month. mr. chairman, you represented this group of very well. it was the first time i had a chance to listen to you speak. you did announce standing job in speaking to the vision and the issues we have been challenged with. yes. the central san joaquin valley is not a liberal hotbed. it is not a political -- should not be a political issue. what drives our region, and i think everybody knows the greater fresno area tend to be fairly conservative in its political alignment, my board certainly is probably right of center across the board, but that is the beauty of community

choice. it allows local government to come together around its about abuse, it -- together around its values, its vision. i spent a lot of time in front of the commission and in front of elected officials throughout the state, making sure they understood that choice is not about san francisco. i started with that. the initial response i got when i came in, they said, that it's a san francisco thing. it isn't. it is a local government thing. we can all develop programs that meet our needs and play a big part in solving the california energy infrastructure issues, and meet objectives for renewable in greenhouse gas reduction, and do it in a non- partisan -- a non-political way. i think we have made some ground on that.

we help people understand that it is what the local government, what the local interest really want to achieve that drives this. commissioner mirkarimi: your cca could be very different from ours. you already referenced the composition of what you would like to see in terms of your -- had you pursue your portfolio, it would look very different than what we were pursuing. that is the beauty of the cca. the local government's in search and into the question that there has never been -- they have never been allowed to help answer the question of, what kind of energy do we want to be able to administer? i think this broad stroke that opponents or people who are not clear what cca is to try to

paint it as a san francisco or liberal thing. it really is not, which is why we have red and blue counties who are part of the mindset that it should be up to local control, or at least local governments should have an influence. >> yes. very well stated. commissioner mirkarimi: comments? questions? >> thank you for being here. how far south as your authority go? kern county? >> we do reach the northern border of kern county. the conservation district as a 1 million-acre area that encompasses 14 communities within the central valley. we go down as far south -- or southernmost community member was the city of corkran.

the northernmost member was fresno. >> what was the response of the growers in the area? what has been the agriculture response? >> it is important -- the best way to answer is to "pull out that the board of the kings river conservation district as an elected board. they tend to be farmers or representatives of the agricultural community. this started with seven elected members with farming connections sitting around the board room and saying, we have a hydro plant, we have a gas-fired plant, we believe fresno needs more generation infrastructure, and we're not seeing pg&e make those investments. let's use our experience and

statutory authorities to pursue expansion of the investment. farmers were very interested in price stability and certainty of supply. if you look at the greater fresno area grid conditions in 2001, it was the center of rolling blackouts. even today, as we continue to watch the california energy commission's assessment of california infrastructure conditions, they are concerned about the greater fresno area meeting its demand in low hydro conditions. you add on top of that the lack of any significant transmission infrastructure expansion to serve an incredibly -- incredibly fastest-growing area. we are stressed. the farmers felt this would be important to allow them to

attain greater certainty and the ability to turn on the pump when they needed to. >> you have senator rubio. >> we have had one briefing with him. >> i wanted to point that out. this is a statewide issue, not a san francisco issue. the political dynamics of albert -- agriculture transcend their need for efficient, inexpensive energy. that has an impact on the price of the food we eat. there is a natural alliance that can occur between san francisco and the san walking valley -- san joaquin valley. commissioner mirkarimi: any more

comments? seeing on, the happiest holiday to you and the people who work with you. i look forward to san francisco county continuing to build its relationship with you in the valley. i think there are a lot of us thinking there are positive opportunities for us. >> thank you very much. commissioner mirkarimi: thank you very much. colleagues, we will move to public comment. those who would like to participate, one after the other. >> good morning, assembled commissioners. eric brooks, representing san francisco green party. i have worked a lot on this over the past seven years. the first thing i wanted to say is to set and what the commissioner said, which is that

we would not want to just focus on the three-year rule. let's see if we can focus on a comprehensive set of legislation. we have got to remember that pg&e is vulnerable. this is our shot to do an omnibus reorganization of that legislation. in 2002, we passed ca after the bankruptcy bailout. this is a similar opportunity. we should go for it. i wanted to speak to one issue raised, the phasing of the customer base. for san francisco, i would caution against that. we have a bigger market, which means pg&e will be more likely to pull every trick in the book to make sure this market does not come in. they might have a ballot measure that would effectively strain and the remaining customers. we have a lot of major

opportunities in that we have our revenue bond authority passed in 2001. that gives us a chance to come if we bring in all customers at once, show a bigger and stronger revenue stream for the project, and if you combine that by making sure we also do the full build-out of local renewable and efficiencies, you get stronger -- you will get much stronger economies of scale to make the thing strong and to have enough revenue to compete when pg&e start playing games with rates or ballot measures. [tone] commissioner mirkarimi: thank you. next speaker, please. >> ♪ strolling along a king county roads and the budget rain, it begins to fall

and i feel the warmth better now it is coming i see lafco in the rain walking hand in hand with the puc it is gone again just you wait and see after a while, we will run under a tree the farmers, it is going to be real green we are making it better under stormy budgets i see lafco in the rain walking hand in hand with the puc it is going to get better, just you wait and see ♪ commissioner mirkarimi: thank

you. next speaker, please. >> that is a hard act to follow. i am becky evans here on behalf of the sierra club. we were active in getting support for the cca. we will continue to support it in the future with staff and volunteer efforts. please count on us. thank you. commissioner mirkarimi: thank you. any other public comment? public comment is closed. i believe we already made a motion that has been advanced by commissioner schmeltzer for there to be a resolution drafted on behalf of lafco. when we come down to the item of agenda items for the next joint committee, we will be talking about that.

other than that, i don't know there is any other [inaudible] very good. we will continue this to the call of the chair. please read the next item. >> item 5, hearing on community choice aggregation status report. responses to the request for proposals for abrogation services. issues to consider should san francisco directly provide community choice segregation services. >> i will be giving a report on out on items 5a and 5b. first is a status update, where we are with the rfp process. as you know, we issue our initial rfp in the summer. we made a revision in september. responses were due november 3. i have a chart to talk about the

time line. following what we received on november 3, we found there were four responses. i believe everyone has been briefed on those. they were from consolation energy, shall energy of north america, and what was formerly sempra. all of those responses were lacking some of the key information we were looking for in the rfp. what we did was, along with staff, puc staff, we met with each one of the four respondents. we have that meeting on a monday. we'd describe what we really need it. we gave them a tailored message of what was needed to be able to 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