agencies and be able to discuss current policies, issues that they're dealing with, and their plans for addressing these issues. the grand jury is charged with conducting independent, confidential investigation of city departments of the grand jury's choice to ensure the agencies are operating effectively. so if you are interested in our local city government and would like to work with 18 other enthusiastic citizens, committed to improving its operation, i encourage you to consider applying for service on the civil grand jury. thank you for your time. for more information contact the grand jury office or visit the grand jury website.

>> welcome to a special joint meeting with the san francisco public utilities commission and the local agency. i am joined the to my right by a president. we're joined by carolyn and

john. a lot of them for their service. madame clerk, can you get the role. [roll call] we do have a quorum. >> we now turn over to the puc secretary for carolco -- their roll call. thank you, mr. secretary. i want to welcome everyone to this joint special meeting. i want to thank the commissioners for making their very busy schedules available to

be here today. if i may, unless there is any objection, hollywood like to quickly go forward and get that out of the way as we are waiting for staff to make their presentation. >> approval of the minutes for the april 18, 2011 meeting. >> these are the minutes. is there any member of the audience that wishes to speak? we have a motion by commissioner schmeltzer: -- supervisor mirkarimi. >> approval of the budget for fiscal year 2011-2012. >> this is the second and final

vote on the budget. there are no changes to the draft budget. we are asking for the full amount that we are obligated to ask for under state statute which is $334,000. that is back at the general fund, but be allowed to use it. we have enough in the reserve fund to operate for another year. >> any commissioners have questions on item 9? any member of the public that would like to speak on item nine? public comment is closed. this is the second vote if we could have a motion by supervisor mirkarimi, seconded by commissioner pimentel. without objection.

we now have the joint regular business for these advances go public utilities commission. o item #3. >> opening remarks in discussion for the joint meeting. >> and i don't know if you would like to say a few words at this point. president vietor: i particularly want to welcome and thank supervisor campos for assuming the chair of the lafco. we really look forward to moving the process forward as quickly as possible. i think it is quite interesting that there is a new climate change study that has really put us all, giving us a wake-up

call saying that we can do whatever we can to combat sea level rise. and we can really reduce our contribution and greenhouse gas emissions. >> let me thank everyone for being here today. not only the members of both commissions, but members of the public and the advocates that have been working on community choice aggregation for quite some time. one of the things that i have said is that we are at a very unique position to finally implement this program. i know there is a commitment on everyone involved. not only the members, but the public utilities commission. it is an exciting opportunity. our job is to get this done and

to do so as expeditiously as possible and make sure is done in a way the remains as faithful to not only the letter, but the spirit of the law that was passed that got us to where we are. that is what this is about today, getting an update for where we are so we can move forward quickly. and like any kind of presentation, we also want to hear from members of the public. there are things that we can be to learn from each other. the one thing that cannot be questioned is the commitment to make this happen and get this done. and with that, i don't know if there is any member of the public that like to speak on the item number three. public comment is closed. why don't we go to item four. >> of data on program design. >> we will hear from the staff.

thank you for being here. >> assistant general manager for power. i want to take a little bit of time to key on three issues that i would like us to discuss today. in formed by the customer attitude survey that we have performed, i will have him present that information's. as you hear from him, i would like ask you to think about three key areas of our program design. those are the products that we are offering. the phasing. who we are offering the product to. and the timing and rates issues

associated with the the program. in those three areas, as you hear about the results of the customer survey, i would like to have to think about those areas. i will come back to you at the end of the presentation and tell you what i think our recommendations are and what we would like feedback from you on those three areas of program design. product, facing, rates, and timing. with that, i like to have them make a presentation to you of the findings from our survey. >> think you, members of the commission. i am a partner at the community research firm. i will walk through a series of

highlights from a customer survey that we recently completed and talk about some of their implications. i would be happy to answer any questions you have on it. of like to start with a brief methodology of the survey. we began with three interviews with randomly selected customers. and we stratified the sample based on the rates that each of the individual customers somewhat in. so we over sampled customers in four and five, the highest amount of electricity usage and the highest electricity bills. he's make a relatively small share of the customer base. the impact on the rate is potentially higher, he wanted to make sure that we would be able to speak definitively about some of their opinions. the overall margin of era -- a

margin of error is about 5 1/7%. i would like to begin by talking about some general preferences that we heard the customers expressed when it comes to issues around their electricity service. the question was really designed to drive at the core of value proposition which was essentially, we offered the respondents a choice. would you like to pay more for electricity if you knew you would get more of it from clean, renewable sources? or would you like keeping the same rates even if it means you won't receive more of your energy from the clean and renewable sources. the customer base and basically split right down the middle. 45% said they would like to pay more, of 43% said they would prefer to maintain their current rates. we also have a question that

asked about a variety of other factors. we offered the respondents the list of factors that you see if we ask them to rate the importance of each of them individually. in this slide, the dark green bars, light green is very important. surface reliability, a 52% rating extremely important. 45% very important. almost all of them rating in the top two categories. we had second priorities include customer service, rate stability, at low rates that were priorities by roughly four and five customers. at the bottom of the list, we had renewable sources. this is a high priority for the

vast majority of customers in cities. all five of these items are very important to electricity customers, but there is the variation on the degree and intensity of their feelings with reliability at the top of the list. all of these factors come into play when we ask the customers about holding power. we started with the general question. we knew what kind of energy it would provide, and let them know that they would be automatically enrolled in we would have the ability to opt out if they chose. we asked them to indicate if they thought they would stay with clean power if the program was up and running or to switch back to pg&e. the customers split into thirds. 37 percent said they would

split, 31% said they would opt out, and the remaining 32% said they did not know. we did not tell them what the potential impact on their rates was. it is likely that undecided was waiting to hear more information about the cost. in a follow-up question, we gave them that information. for customers in each of the tears, we gave them estimates of the potential impact to try to understand their sensitivity. the scenario we describe for them was one in which they would provide energy that was 40% renewable had 100% greenhouse gas from. at that level, in the vast majority of customers in the city, we see that about three and five indicate that they would stay with clean our even if it that an increase between $3.60 dollars.

the customers are about evenly divided in tier 2. a little less than half said they would stay with the program at a comparable number say they would opt out. the numbers go up significantly in 3, 4, and five of the rate increases that we are testing were higher. in each of those groups, we still have had a core of respondents. they're telling us that they would stay with clean power sf. we know that those customers use the most electricity and we would have rate increases of $98 a month. we would still have 17% say they would stay with clean power sf. as a follow-up to this question, we asked about a different scenario. instead of providing power that would be 100% greenhouse gas

free, we asked them to consider a scenario that was 100% billable had 100% greenhouse gas free. we asked them if they would choose to participate in such a program given the rates you see on the slide. the rate impact is somewhat higher than the 40% renewable scenario. more than two in five customers indicate that they would opt in to the hundred% renewable scenario, and even when we get to talk about a potential rate increase, where 60 percent side that they would indicate they would choose the renewal option. it is interesting to compare the level of interest and participation than the respondents expressed in the 40% grenoble scenario, to the level they expressed.

all five roads indicate the five rates tiers. the first two columns after that indicate the response is what we ask about the 40 persons and renewal will add 100% greenhouse gas renewable. we expect participation rates at the income of the costs for 40% grenoble. the third and fourth columns moving to the right, which of the cost and participants for the 100% grenoble. while there is a drop-off in tier one. with the associated increased in cost, for the higher tiers, which is relatively slight. 4% in tier 2.

one in tier 5. what this suggests is that the level of great sensitivity that we see, we talk about the increases that would be involved, it almost gets us down to a core of people whose interest is that they would opt for 100%. even at a somewhat higher price. this gives us a sense of what the most solid base of support for the program is among each of the tears. even at 100% grenoble, it is not much lower than 40%. there are geographic differences in responses of the residents that we spoke with. and while we don't have a large enough sample of interviews to look at individuals the coats, we were able to divide the city into rough quadrants. northwest, southwest, northeast, southeast.

the table to the right shows the proportion that would be interested in the 100% renewable energy scenario in each of these areas of the city. the highest level of interest is what we have defined as the northeast quadrant that runs from everything north of market in the northeast corner of the city down to the valley. that support drops a little bit in the southeast quadrant in the northwest quadrant. slightly less than one-third indicate they would opt for 100% renewable package. finally, in order to understand the way that some of the customers might react to some of the arguments for and against the clean power program, we presented them with some of the major things that supporters and opponents might say. after giving then he to those statements, we asked them to indicate if they would stay with the program once it was up and

running. based on the consistency of their responses, who were able to seven a customer base for three groups. they told us consistently throughout the survey that they would stay with clean power. they indicated they would opt out. that gives me proportions. that leaves half of all residents is that this is going to fall into the category. the vending on the structure of the program, depending on the rate structure, their participants are most variable.

with that summary, i will be happy to answer any questions that you have. commissioner pimentel: i have a question. how often will a ratepayer both to a different -- move to a different tier. if someone is in tier 2, how many are they willing to go up before they would opt out? >> let me answer the question of the movement among tiers. i will return to end to the question to indicate if there is a willingness to stay. today, with nothing available, many customers and all customer

consumption his bill and their consumption and the number of kilowatt hours is what determines what tier they are in. come -- customers can move amongst the tiers month to month. they discovered that they have moved into a higher rate half a they have been killed. it is an after the fact awareness. handoff to the second part of your question, the degree to which customers might decide to opt out, and survey can't really speak to that because we asked people about their rate impact at their current level of usage. we did ask about a number of different grade levels that allows us to model some of the curve of the price sensitivity. we might be able to make

ruckuses him if they were to go to another teacher, who but the percentage might be deterred. it would be a projection and not a definitive answer. >> does that answer question. >> we have been joined by commissioner avalos. commissioner mirkarimi: think you, mr. chairman. the be yourself or she can reflect on this. the the just and pressing a bit when i am noticing when the county hall, in response to the efforts, who they are adjusting it. and you give me a little bit of contrast about what they are doing that looks like a response to our own strategies and how this seems to respond to their playing games.

>> we will get into design of what we recommend to be the program designed in light of the presentation you have just heard. but they have proposed changes to their redesigned, both collapsing the tears -- tiers and proposing to flatten in the generation component of rates. i will get more into that as we talk about program design. >> some of the tiered structure is that happening everywhere? >> it is happening territory- wide. we can only distinguish between customer classes and not

locationally. >> this slide shows you the pg&e generation rate for 2011 residential customers and our climate zone. it shows you on the blue line the rates that pg&e currently houas for the generation component of rates. you can see how it steps up based on the increase in consumption month-to-month. that is the tier, those steps are in reference to the tearier. it goes up with an increase in consumption. the red line is the proposed flat generation rate that pg&e has placed before the california public utilities commission.

if adopted as proposed, it will represent an increase for the lower tiered customers. the average residential customer in san francisco is there. there will be a decrease for the higher tiered customers. that is just on the generational component and not the overall bill. that is the component of service that the community choice aggregation service provides. >supervisor mirkarimi: does pg&e have a green tier? >> i am not aware they have a green service offering. they have a climate smart program. it is an offset type of program. they do not have a green portfolio program beyond the standard service.

supervisor mirkarimi: it speaks to what i think is a telling and positive outcome in the poll that has 45% of the respondents saying they would prefer to pay more to insure that their electricity is coming from clean, renewable sources like solar and wind. it is nice to capture more than the anecdote that this could beat the traffic that helps us insert towards unleashea niche t pg&e cannot provide. >> these are core customers that are consistently with us. >> i have a question for mr. metz on the data. i am trying to understand slide

two versus slide 5. it looks like there were split on the idea of paying more for renewable energy. half wanted to and half did not. and guess it is because you are drilling down now and going by teaier that there seems to be ls interest at the higher tiers. >> that is correct. the first side is a purely conceptual question asking if they would pay more in general principle. in five, we're giving them very specific information about what the rate increase would be. their reaction is to that specific context instead of the general. that is where you see this papee steeper creation.

>> as we talk about program design, there will be a strategy for the targeted group, which tier it is, which groups will be more inclined to pay more for renewable. i was struck by slide four. it shows that once they heard more about the program, they were more inclined to stay with the program. that is kind of a marketing question. is that right? if they are educated about it, they might stay with it. >> this slide is showing when they are given a description of the program, 37% are saying they would stay with it. 32% are uncertain. we surmise is because we have not given them the rate information yet. because these numbers are fairly co