environmental reviews, and we've had a couple of very significant ones lately, that that part of it is in very good shape, and the risk is inherent to the test and is made a little bit more dicey just because things have slipped to the end of the schedule. we want to get things done by 2015 so that this stuff happens, that that will have some impact that we would just as soon avoid. i thought that generally, it was very positive. and in your part of the ordinance, the parts that you are responsible for, i thought it was helpful in saying that there are no big red flags, but you also laid out a lot of things that were items that we should pay attention to, and i think that is really value- adding, and i appreciate your taking that approach to it. i did have a question about -- i think this was a very useful exercise. when should we do it again? for the issue of compression,

there is probably not a need to repeat that. i think i heard somewhere during the presentation that this is in fact going to be repeated two more times with additional projects. >> the plan is to do this today we will more times at a nine- month interval. my guess -- sometime late this fall would be number two, and then sometime in 2012. during a very intense year for construction, unless the commission would like us to proceed with the other plan at this point. >> i think that is in -- that is fine. if you do them too often, you just reporting on the same thing. so i'm very pleased with that, and i appreciate the work you did, and certainly, staff has once again validated as to the quality of the work you are doing. i am most impressed with the ability to manage the shutdown schedule the way that we have. just from an operating

standpoint, it is incredibly important, and it sounds as though we have resources making that happen. so kudos to all. >> just one last comment. as director of engineering, i've taken a lot back myself from this program and looking at our own program. we had a $7,000,000,000.10-year capital program as well. we're building a plant -- we have a $7 billion 10-year program as well. we are building a plant, and we have taken a lot of cues from your construction as well. thank you very much. >> thank you very much. any other questions or comments? >> next item is the consent calendar. all items listed here are

considered to be retained by the sentence is the public utilities commission and will be acted upon by a single vote of the commission. approve an award job order contract to the lowest, qualified, responsible and responsive bidders. approve an award jobs or contracts a license to san francisco peninsula east bay not to exceed an amount of $5 billion to the lowest, qualified, responsible, and responsive bidders. accept work performed by cal state constructors for water enterprise water system improvement program funded contract station upgrade, approve modification 6 to reconcile them and items to reflect actual quantities of labor, materials, and equipment required to complete the project, decreasing the contract and authorize final

payment, and -- pardon me. sorry, i lost my page. and accept work performed by j. flores construction for waste water enterprise, renewal -- renewal and replacement program, approved modification to reconcile him and items to reflect actual quantities years, increasing the contract and authorize final payment. >> thank you very much. commissioners, does any commissioner wish to remove these items from the consent calendar? is there a motion to adopt the consent calendar? >> so move. >> second. >> any public comment? hearing none, all those in favor? suppose? thank you very much. consent calendar passes. regular calendar.

>> madame president, item 14, discussion and possible action to authorize the general manager of the san francisco public utilities commission to negotiate a service agreement with riverbank local redevelopment authority for transmission and electricity services. >> commissioners, do you have any questions or comments for ms. hale? >> i have a question that may lead to a comment or vice versa. in the resolution, it makes reference to creating the ability to recover costs, and it cites a resolution this commission passed back in 1989. i was able to take a look at that, and that resolution is actually kind of interesting. it says that for municipal accounts, that we will seek to recover costs, and it sets -- it

does not set with the cost was, but my guess is something less of the full cost, but it said that as an objective, and it says for commercial accounts, that we would charge rates approved by the cpuc and as they increase those rates, we would watch them lockstep. the item in front of us confuses that, at least as i read it. it talks more about cost recovery than it does about matching approve rates. >> barbara hale, assistant general manager for power. it is not our intention to divert from the direction we

were given historic plea. however, having said that, in practice, what we do in order to track the approval rates for commercial and enterprise department accounts is we charge some of the otherwise applicable pg&e rates, and in this circumstance, the service provided at transmission levels so the other was the applicable rate is not a cpuc-approve rate. there is a little bit of variation because of that. and then, what we are looking to do is maximize our revenue stream, not just recover our costs. what might be helpful is to look at another data point. i think the resolution language if you are referring to does talk about recovering costs and thus also, in the body of the agenda item, described the fact

that we are looking to charge comparable rates charged by pg&e. what i have by way of a slide to illustrate, if the secretary could show the slide please, are the rates that are charged by pg&e and the rates that are charged by the other electric service provider in the area of river bank, and you can see, on the top chart, what the rates are from 2007 through 2009. what we have been charging is what appears in a column titled sfpuc. the other was applicable rate is a transmission rate. that is what you see next. and then the mib ratwe. -- the mib rate. to show you what the revenues are associated with those rates, given the mere usage in 2007,

2008, 2009, we have the current billing chart, and you can see that for the puc, relative to the pg&e rates, we are showing about a $400,000 to $600,000 shortfall each year, revenue opportunity we are not taking advantage of. we also need to be cognizant as we approach riverbank with the fact that mid is also a potential service provider. we're looking for authority to begin this conversation, to renegotiate the rate. the floor would actually be to recover our full cost, but we sort of see as a ceiling the comparable rates that are provided by other service providers in the area. >> who else physically is in a position to deliver power? are there transmission ties to

other providers? >> today, the only direct interconnection to this load is us. there are certainly proximate lines owned by mid. >> i would like the language in the -- let's see. which whereas is back -- that? the third or fourth where talks about resolution 89. what i'm looking for is to capture what you just said, that we would at least recover costs and seek to obtain market rates. >> comparable? >> yes, comparable store are

kind of tough. that competitive? -- >> competitive? >> when there are differences in the physical capabilities of a disease that provide power, what we seek to do here is get as much revenue from this transaction as we can. >> perhaps then i and the resolve clause, when you're giving us clear direction, we can add language about negotiating a new contract that recovers our cost and maximizes our revenue opportunities or revenue recovery or revenue? maximizes revenue? >> that would be fine. given that understanding, i can leave this out to you. >> very good. >> i did not think this is an action item. just authorization as amended.

>> it is still an action item in terms of adopting. >> four commissioners to adopt the amendment proposed by the vice-president and approve the item with the understanding that those factors in the final resolve clause will reflect what was said in the meeting. >> the ultimate result is after we negotiate, we bring back to the commission. >> great. is there a motion to adopt the amended authorization? further comments on that, on the amendment? all those in favor? oppose? motion carries. i guess we should vote on the main authorization. any comments on the authorization? all those in favor? opposed? motion carries. thank you very much. next item please. >> item 15, discussion and possible action to authorize the general managers of san francisco public utilities

commission to enter negotiations for community choice aggregation services for clean power non responsiveness of all proposals received in response to the community choice abrogation solicitation. >> thank you. i think this is an exciting moment to be looking at this resolution before us. this has been rolling down the track for some time, and we are all, i think, very eager to take it to the next level, and we have a resolution before us, and i have a couple of amendments to it that i would like to introduce before we open up the floor for discussion. the commissioners should have a copy of the amended resolution, but there are a couple of additional amendments to that amended version that i would like to put on the floor. i think there is probably copies available for the public as

well. the first amendment is in red, and i would just like to add -- i will read it, i guess. commission secretary, maybe you could read it, and i will add the amendment. >> it stated that the city goal of developing 360 megawatts of new energy resources revise, and the city intends to conduct a process for development, construction operation of green energy resources, including a.g. efficiency and demand-type programs, located with the city -- within, i assume that means -- within the city as well as northern california. >> yes, within would be a correction. i would also like to add the word "immediately," because i think there is a time factor here that we are all very cognizant of, and we can but some time elements into further amendments as well because i know there is a lot of eagerness from the stakeholders to keep us

moving along. the second amendment that i would like to introduce that is not on the copy that you have has to do with the third whereas on the second page, and it would read -- whereas in light of the failure of two rfp processes to result in an acceptable contract for electricity supply and customer care in billing services, the general manager of the sfpuc has determined that the rfp could not be altered or revise in a manner likely to attract response of offers. the third amendment, which is also down in the red, which has also been slightly modified, so i will go ahead and read that as well, would read, "further resolved that the general manager of the sfpuc shall direct staff to direct a process

and scope of work with stakeholders and consultants to request bids for renewable generation and green resource commitments to further the adopted city calls for cca as described in ordinance 147-07, shall initiate timely action on the process and scope of work, and shall report on the status of these efforts to the commission by july." that would be the third amendment. i did just hear and learn that marin received 16 bids last friday on fridayrfp that date -- on their rfp that they issued on bringing renewable generation online, i think that it is a very exciting opportunity to look at model and try to craft the rfp that we will be issuing based on that model because it seems like it was successful, and if we could do it in that way, it would really set us up

for success. i also want to say that even with this modified resolution, that, you know, i feel that -- i just want to reiterate our commitment to the main goals of the ordinance, as outlined in 2007, around, you know, 51%, around the local generation, and that we would urge the puc and lafco staff to do whatever they can to achieve those goals as we move forward with the program, but this approach feels like a good way to get us started, and they are excited that we might be able to do that after all this time. i know we have a meeting that is scheduled on the 28, and i imagine that this resolution will come before that body as well, to look at that, and if there's any modifications at that time, then we could do that as well. so maybe we should put the

amendments on the table first. >> is there a motion to adopt the amendments? >> commissioners, are there comments on the amendments? >> no, in part because i would like to hear the presentation about what is going on generally. if we could just hold the vote. >> absolutely. holding public comment, too, before we vote. ms. hale, do you want to present where we are? >> yes, thank you very much. assistant general manager for power. we are at a milestone. we are excited to be able to bring to you this resolution that will let us begin our negotiations with the counter party, the credit-worthy counter party. the marin model is the only model functioning here. it has proven to be commercially

feasible, so we would like to, with your consent, move forward on that, on negotiating a contract, using the marin model and contract as a floor, if you will, for developing our program. we will -- with action on your part today, we will begin conversations shortly thereafter. on a parallel track, we will be pursuing a process and scope of work that will allow us to have the steps for building a local generation and making commitments in the market to develop local generation as that is feasible on a parallel track with negotiation of the contract. >> some questions. as i read it, we are basically changing the basic concept of how we manage this thing.

first place would have been to have something like marin establish some legal barrier, a risk barrier, if you will. that is not possible. so we had hoped to get that same or similar level of isolation by contacting with somebody who could carry that risk instead of us. basically indemnify us against that risk. what we are now saying is that we need to really bring this thing -- in order for this to work, we need to make it look like teh mar -- like the marin deal as much as we can, but without the protection of a jpa, and the way we seek to manage risk is not by legal barriers, but by the sequencing of business activities so that at

any given time, we are not overextended. you are nodding, so i assume that i read it correctly. that, i think, makes a great deal of sense. i also think it makes sense, the way these amendments have been awarded to generate some options. you know, that as cca has implemented and implemented successfully, as we are ready to take on increments of is, that there are options that we can elect to do. i think it is important, as far as managing expectations, to say that's if those studies show that there are potentially feasible energy development projects, that does not mean that we will edition -- initially do all of them. the basic assumption here is that we will visit manage our expansion to meet our risk

objectives. i think that is an important thing for everybody to keep in mind. that this positions us to move quickly, but it says we will choose our pace of progress as part of how we manage risk. that is the primary thing. i think -- the other thing is a question for you. that is that as we bring this more in house, it starts to look more like what we are doing at hunters point and what we are doing at treasure island. is this -- does it make sense to rethink some of the functions that we do internally and those which we seek contract services for? >> yes. certainly, the -- part of the

challenge with the program is that it has specific rules of play, if you will, set by the california public utilities commission. at hunters point and treasure island and our other redevelopment opportunities, we are the bundled utility provider, so we are doing everything from metering the load back to, you know, billing it, and the distribution and generation, all those functions were cca. as we mature in that role, some of the resourced procurement, the generation component that is the key of cca -- there will be a growing ability on the part of our staff to take on more of those functions because we will be doing it even more as we serve in the bundled utility service provider role at hunters point.

right now, we do power purchasing and scheduling, but the amount of power purchasing and scheduling we do is quite small relative to our load. when you take on the cca functionality, depending on the enrollment, we will have a much larger purchasing and scheduling functionality that will be performed by our third party. over time, will we be able to take that in house? i think yes. under the cca model, though, we will never be billing customers. that is a function that pg&e continues to perform, and we do not have the right to perform that function. >> i guess where that leads me is there were some other things that were unclear in the prior division of labor, and one of those was rate setting and how does that take place. i think it is pretty clear now that rate setting will take

place here, and that is quite different. as we develop the negotiated package, part of what i will be looking to is not just the contracts that will be negotiated, but also what our internal structure and procedures are going to need to be in order to make this thing work with less involvement from the contractors. it puts more burden on city staff and less on the contractor, so i think we need to come back to the commission with that full package. >> the boundaries between us and the contractor -- we can work on that. the boundaries between us collectively with the contractor, as opposed to pg&e, e withcca, you are still only affecting one line of the bill. that is really a different model than hunters point. we are a full-service provider.

the public power model we have in those instances is dramatically different and much more involved -- evolved than affecting one purchase of power generation line. if we had a choice, obviously, the larger role. now part of what i was thinking was part of the power scheduling is something that is common to both activities. the fact is, we look at taking on all of that, there is an increasing amount we may get into, so that is something that as we negotiate a contract, we probably want to be thinking about how long that contract should last and how we use them to get us smarter so we can take it on ourselves. van at a key feature of the model we will be making here is

the ability to substitute resources in to serve the cca load as we negotiate them, as we commit to them. whether we are in an ownership role or a power purchasing role for that resource, so we will be able to back down what our third-party provider procures in order to make room for what we are separately procuring, and that is that purchasing function you are talking about. >> i do think that the puc you are bringing up, we're just doing the first phase right now, and that the second phase, it might be time to make a decision on whether they are a more appropriate customer. >> again, the only provide one line of the bill. it does not provide any of the directions to the customers. public for about -- public power makes us the complete power provider. much more complete role. >> but could we not supervise

the one line and we provide the rest? >> we do not add cca to ourselves. we would be in competition. we would be charging the provider a utility charged to do that. it provided the power in the first place. we do not need to provide it. >> even through our ppa that we purchase, that could be used to power redevelopment, right? >> sure, it could be used to do that, but it does not have to be done through the cca model. >> if we brought on additional generation that was not for some reason part of the negotiated package with whoever we negotiate with, and we decided that it makes sense, economic or otherwise, for the city to directly contract, like at

sunset reservoir, and that would go to serve -- that could be won. >> actually, we could have won generating facility use sunset as an example -- there are 5 megawatts of silver there -- so we're there. we could a sign that power to any or all of the three sets of customers we provide service to. municipal load being one. public power being another. and cca being the third. that would be a wholesale transaction that we could then assigned to the three different retail portfolios that we have. >> great. thank you. >> there's an interesting circumstance where we will be setting rates whereby people who live in different parts of the city will be impacted in different ways. so if you are a san francisco customer, you'll have one rate. if you are a redevelopment customer, you will have another, and we have a role in setting both of those, so at some point, we may feel