taken to date in terms of a policy change but there have been indications of willingness to have a policy change. one of the key ones is this is an issue that direct access entities of for-profit firm that's sell energy directly to large industrial customers predominantly have been clamoring to get revisited for years and the commission hasn't even had a workshop. we've been very interested in doing much about that through various procedural mechanisms, we've been requesting along with our allies, that the commission relook at that and start developing more of a record and see if the rules for setting the -- the mathematic method for calculating what the exit fee should be, if that should be revisited. and the commission has been interested in that enough so it's held workshops with all parties, utilities, ourselves and our allies and there's been discussion about the way that

the exit fee has been calculated, what goes into that, is it appropriate and is it unbiased unfairly in favor of utilities, and from participating in those myself along with our regulatory staff and others, there definitely seems to be i would say a broader consensus certainly on staff at the cpuc and just the higher level cpuc by, you know, having staff be looking at this question that there's interest in moving forward on that. >> and would any changes require any statewide legislation that could be done in the cpuc? >> this is within the pevey of the cpuc and regular setting of rules. it's not the type of thing you generally would see in state legislation, i believe, because it's fairly wonky. it's the type of things we're arguing about is what type of factor should be included in

reaching the benchmark portfolio price for the cost of renewable energy and how do you figure out what is a fair benchmark renewable energy and how do you subtract that out of the overall price benchmark that then is utilized to set the exit fee structure. >> is there basing some of that on the number of customers they have and you eliminate customers, they're losing what their estimate revenue income stream would be? >> it has less to do with that, commissioner, has much to do with using a estimate of what their average -- what they think they can procure energy in the market would be and having that be a price that is unfairly biased too low. so -- i'm sorry, i'm messing that all up. that's probably why they don't want to do it to legislature. the -- one --

>> it's something we can come back to another time. >> i can take one more crack at it and if i just whiff there, we can just move on. sweating too much in my suit. one of the big elements we're arcing about are discussing politely amongst friends there when we talked about here terms of right now the -- the utilities are required to have a certain amount of their portfolio met through renewables so they are going out in the market and they are procuring renewables that -- prices, prices that are above their general average price. and one of the odd quirks is as customers would sign up for c.c.a., that would reduce their overall load and therefore increase their compliance percentage but the way the mechanism works currently, those prices for thirt portfolio include the price of these renewables as being, quote, uneconomic. so that would be factored into making the exit fee amount for a

c.c.a. customer. so in effect a c.c.a. customer is having to pay a little bit of a fee on their bill to help pg&e's portfolio be a little greener. and those type of arguments just on their face, they're unintended, negative consequence that has no real policy value for california. and that type of leverage we're finding there. i hope i didn't whiff too bad on that one. >> no, that was good. >> thanks for your patience. >> thank you plrks campbell. why don't we open it up to public comment. if there is any member of the public who would like to speak, please come up. >> good afternoon. i think most of you don't know me. my name is al winerub. i'm representing here the local clean energy appliance, which is an organization of about 70 organizations in the bay area that has been pushing for community choice energy for

many, many years. and largely out of a conference that we held last february i believe it was, grew very spirited, active movement to pose prop 16 because of the except to which it threatened community choice. so i just wanted to thank you for the opportunity to speak here. we've been following what's been happening in san francisco fairly closely and we're somewhat dismayed a number of months ago when san francisco sort of took the move of separating out the procurement part from the build-out part of community choice. and from the perspective of most of the advocates of community choice and the activists who have been involved, the real meaning of community choice is what it means in terms of community development and jobs and local buildout part, those of energy efficiency as well as new renewables.

so the judgment that the marin model has been successful is somewhat questionable in our minds. certainly marin has managed to exist under pg&e brutal attack. it's been able to refinance its loans and it's been able to secure a certain amount of energy at competitive base for the 10% to 20% of the rate base that they already have in there. but to call marin clean energy successful and the amount to follow is somewhat questionable, if that we don't feel the verdict is in on that. there are still a number of hurdles. there's very little of the marin clean energy that's actually local buildout energy right now. it's all procurement on the market, largely competitive because of some very special kinds of circumstances. so we're a little bit wary given that there's all the conversation about trying to make the procurement part work.

a lot of risk involvement and so on without any clear expression of what the phase two i think that was referred to or local buildout part is without any clear commitments of what that might be and how exactly that's related to the procurement part. now, it's not a surprise that the procurement part is very risky and questionable at this point. even the update of the san francisco electricity resource plan states very clearly that procurement on the open market is very questionable and difficult. i can refer you to page 63 where the rocky mountain institute basically -- >> thank you. >> oh, am i out of time? >> thank you very much. >> i didn't realize there was a three-minute time. i apologize. >> next speaker. >> good afternoon. commissioners, eric brooks

representing san francisco green party and the local grass roots organization, our city. i kind of want to give a more wonky version of what you just heard laid out from another organizer, and i sent you all an e-mail. please do take a look at that. it is more detailed on what i'm about to say. and both the green party in our city, first of all, would take very strong issue with the direction that the sfpuc staff wants you to go. very strong objection to any profound amendments to the 2007 ordinance. besides perhaps the -- what supervisor come pass raised last meeting of exploring at least the start-up and some of the procurement at the beginning being rolled out by the agency itself. but with that said, both local power and the contractors that

know most about c.c.a. and a lot of us as advocates for years have been hammering on some key points for the r.f.p.'s that have gone out. those points have not been included in the r.f.p.'s and it is our opinion that the reason the r.f.p.'s are not succeeding is not because of a problem with the 2007 ordinance, it's because of problems with the r.f.p.'s. zwroust quickly go over those, reweapedly asked for the extensive preparatory work that needs to be done to locate the assets, locations and any regulatory hurdles that contractors need to be secure about before they know what they're bidding on in r.f.p. that work was not done before any of these r.f.p.'s. the need for actual mandates in the r.f.p.'s for renewables of specific amounts and efficiencies of specific amounts once again so the contractor

that -- contracts that are bidding will see there's going to be a revenue stream coming from renewable efficiencies that they can count on. otherwise it's not economic for them to respond in a good way. locking in the h bond authority that we passed in 2001 for revenue bonds so that once again, contractors can see that the city is seriously dedicating that rev few bonds are going to be a fact and if they don't see that revenue stream coming in, how are they do bid on an r.f.p. not knowing that security will be for them? and then the last one, which others will repeat, i'm sure, is that having procurement and a buildout locked in with the roll out together because we're not going to get a revenue stream that will support this again without actually building things and having specific amounts. contractors need to be able to count on that as well.

>> thank you, mr. brooks. next speaker, please. >> good afternoon, commissioners. josh with brianline. how are you doing? i wanted to speak to the same issue which is just the commitment to the buildout of the local renewable generation and efficiency of community choice. i think it's a lot of what attracted many of us to this program to support it all of these years and i know we want to move forward with the program. i think we all do. but we also want to get to the buildout. we want to get to the local and it's something that marin has finally realized there talking about now getting to the local and i think as an advocate for the local renewable generation efficiency, job components that that brings, the ability of further environmental justice through this program, i think that's something we have to hear as a clear milestone in this program and i think it's not enough just to say let's go on the market and procure. i think we need to hear that commitment that we're going to commit to the 2007 ordinance

that we all still support. i want to also mention with respect you heard from al winerub of the local clean energy alliance. he and the alliance just published a report that i think is essential to making the case why we need to commit to the buildout component of community choice. it's called community power decentralized renewable energy in california. we may even if we're lucky have a couple copies for some of the members because it shows why it's so important to commit to that buildout. so as it goes forward, i'm deferring i think to some of the process and commitment we're hearing commitment to not only move forward with the program but i hope there's some openness to really committing in a very certain way with dates and actual commitments to that buildout. because i think that's where you really have a program people have been behind for som years and where we want to see this go. particularly we're eager to apply the new avalos local hiring law to that buildout because i think that's the

genesis of a lot of local hiring movement is out of environmental justice, guaranteeing opportunities for folks that grew up in disadvantaged communities with decades of power plant pollution from them dirty power plants in the southeast working on the renewables, lowering our demand for dirty power and that's something that i think we're real excited about doing as long as we do the buildout. thanks. >> thank you. next speaker, please. >> good morning. aaron israel, sierra club and member of the citizens advisory committee at the p.u.c.. this is a big deal what's being proposed, and wish new members of this commission were seated today. this is a big deal to change a key aspects of the ordinance, and i really hope that our staff at p.u.c. and lafco really do, do a good job in reaching out and explaining to the community

your logic about really going back and upending a lot of the key pieces of the 2007 ordinance. we all need to understand your logic and its -- it's ideal if we don't hear it after the fact. thank you. >> thank you very much. is from any other member of the public who would like to speak on this item? seeing none, public comment is closed. colleagues, any comment or questions? commissioner mirkarimi. >> thank you. i agree with the last public comment that i think for p.u.c. staff in particular and lafco staff, i would strongly encourage that you take this show on the road in explaining i think the -- in how the experiences of dealing with the

r.f.p., r.f.q. process has now taught the city government as to the parameters of what we're dealing with in why there may need to be some flexibility in dealing with what the c.c.a. program looks like in san francisco. it's been a sobering exercise in dealing with i think the universe of companies who have been responding both formally and informally to our different phased requests that is reflective of the ordinances of which i had been the author of. and c.c.a. and then before me then supervisor ammiano. and i think it's important that if there are networks of advocates who are unclear about the hiccups or the impediments or the challenges, then i think

the message is sound that both lafco and p.u.c. should be together in having the strategy discussions and members of lafco's commission maybe can participate in those as well too. but as far as i understand in talking very closely with our colleagues in other counties around the state of california, with their ongoing experiences about dealing with their interest in trying to pursue c.c.a. and then what ultimately were the half baked and products that came out of it and then ultimately torpedoed, whether in san jaquin valley or whether in the east bay, and to see only one municipality so far in the state of california really begin to flourish at best out of an incubation stage, that being marin, there are no other examples that are i think

striving in the state of california. so we are creating as we go along, and i think that that creativity and the mechanics of those economics have got to be well explained so that p.u.c. doesn't continue to come to lafco into p.u.y. commission meetings -- p.u.c. commission meetings, disappointing people because there might have been a different set of expectations, hopes and dreams to what it is we expect to see happen. and lafco's staff i think is obligated to do the exact same thing. that's why i think that this next six-month period is going to be an absolutely critical period about locking in what the plan is going to look like based on what the potential vendor, service provider, is going to be able to do to implement that plan. and the city government, especially p.u.c., going to be

able to feel that relaxation on the question of risk liability since it seems to be a high bar for the city government to be comfortable about this particular transaction and venture. so i'm hoping that, that happens soon enough. people from the environmental community, et cetera, need to be at the able and there needs to be i think that thoughtful discussion. and until we get that i think that support from sacramento in terms of strengthening our municipality's ability to stave off the predatory tactics of the private utilities industries to underminus and to constantly keep changing the rules of what it means to try to meet or beat or even try to i think subvert our ability of providing a real product to customers only to see the utility unregulated to go

ahead and just take the rug out from underneath c.c.a. efforts, then we are left to fend for ourselves. that conversation has got to take place. in my opinion it's immensely naive for anybody to think that until the rules are highly upgraded and strengthened from sacramento to have our back or any city's back in california, that we're going to just continue to see more prop 16's come down the pike even tailored locally to municipal ballots, not just state ballots, in order to literally decimate every effort of where there's a c.c.a. so hoping those conversations start soon. >> thank you, commissioner. colleagues, any other comments or questions? i do have a question for miss miller. in terms of the process going forward, some of the decisions that need to be taken, what is the time line?

what is the process? and what role is lafco going to play in terms of advising what happened what happens at the p.u.c., what happens at the board of supervisors? >> through the chair commissioner campos, chair campos, what we will be doing is setting up in february a joint meeting with the sfpuc to talk about the time line for the contract. and at that time we will also have a -- some more information about a couple of the agenda items that are before you today, one being legislation and the other being a budget. and that budget will include the assumption of a contract and then the potential marketing efforts that will go forward. so the idea is that the time line is between, i believe it's three and six months for a

contract development and preparation and submission to the board and then we'll have a time line for marketing. there are also other proceedings before the cpuc that we will report on again having to do not only with the issue that mr. campbell was talking about but other issues that are before the cpuc right now. so in terms of our next steps, our next steps are really the contract. we really -- and then the implementation of the program. we've completed a implementatio. we completed the prior steps under the ordinance in terms of the implement -- implementation plan, our agreement with pg&e, filing it with the cpuc2ca the next steps are really contract and implementation. commissioner campos: the only thing i would ask is that as

we're moving forward to the extent we're talking about adjustment to the ordinance, that we have a proper vetting of some of the issues that have been raised. i think the joint meeting will be helpful in that endeavor. i think we need to make sure some of the concerns that have been highlighted are addressed. >> i agree. we will be doing that. i want to say that we will be in contact with you. i want to make sure that there is -- if there hasn't been before, that we make sure we have a lot of communication. our marketing efforts will be relying on the groups of the -- group's the speakers represent. commissioner campos: great. thank you. i imagine there's no need for any action at this point. >> that is correct. commissioner campos: thank you. if we could file that item? let's continue to the call of the chair. if we could call item number 5,

please. >> report on california community choice aggregation issues and the resolution on california public utilities commission policy on reentry fees bonding for community torahs aggregation programs. commissioner campos: ms. miller? >> this is an item that is a resolution and an action item. we were directed by the commission to look at some legislative options. through strength and cca's ability to implement the cca program. what has come up before the cca, the subject of the resolution before you, this cpu see -- the cpuc regulates the investor- owned utilities. they have said, we need some protection in case a cca fails and customers are coming back

into the investor-owned utility full the can. what they wanted was a charge called a reentry fee, which took the place of bond. the cca would have to post it in order to cover the damages of potential utility -- damage as a potential utility would face. there is controversy over this. sfpuc is handling this through the city attorney's office. before you is a resolution to support their activities before the cp you see -- cpuc. it is a resolution that has been -- that has been through the sfpuc and the attorney's

office. commissioner pimentel: do you happen to know how much the reentry fee would be? >> it depends on the size of the cca program. mr. campbell might have information. they were looking at quite high amounts in terms of the fees. fees really could not be justified in our opinion. it did depend on the size of the program. i don't know if mike has anything to add to that. >> sure. to clarify, like i was saying in my remarks, it is really the same item. there is a statutory requirement from ab117 that the cca post a bond, a performance bond, to cover the reentry fees. what was before the cpuc was

this draft settlement from between parties involved in this issue. the mechanism that was before the commission, and why we're so glad to applaud the commission's actions in not making this the row for california, our estimates for a san francisco program covering the majority of the customers here, we need a bond capable of covering more than $200 million. it would be a major portion of annual revenues and could be a significant impediment to getting a cca off the ground. we are involved in this because, depending on what the rules, one of the big challenges is the mechanism proposed was based on whatever the market conditions were at the time. even if you had contracts where appliances were locked in,

conditions changed, it could require a significant bond to be posted. it could be a challenge for a small program to come up with that kind of cash quickly. we are really glad that the commission decide to pull this. the resolution touches base on that. >> the cpuc is really mindful to what we say to them. lafco is another voice. irish that you approve the resolution before you. commissioner campos: thank you very much. colleagues, any questions for staff? commissioner mirkarimi? commissioner mirkarimi: i am just curious. is there a resolution on cpuc's mind that would stick it to the private utilities in case they themselves do something that they should not do that corrects or covers our backs in case

something on there and completely implodes? i mean, in some ways this is about making sure we are revel to stabilize our ability to transact in a volatile market. what about the volatility on the side of the private utility? does cpuc have the parallel discussion about that? anybody? >> i think the answer to that is no. commissioner mirkarimi: ok. i see the resolution as being necessary. i also think it is just the inequity. we are constantly having to build the assurances that we are not going to ruin them. commissioner campos: is there any way to get the cpuc to begin

those discussions? >> there are two commissioners who were recently appointed. there is going to be a new dynamic at the cpuc. commissioner mirkarimi: do you know who they are? >> mike florio is one. is it elizabeth sandoval? commissioner campos: commissioner schmeltzer? >> i apologize. commissioner schmeltzer: catherine sandoval. commissioner campos: if there is any member of the public would like to speak, please come forward. >> hello, commissioners. i represent the san francisco green party and our city.