of nowhere. where people can see it. so we are suggesting a third item, which is the last page of the report, and it would be a media wall in the lobby that will allow us to do educational and artistic kind of expressions and you can see the entire system, and as someone walked up the handicap ramp, as they got closer to certain icons, it would get larger. there'd be a weather pattern, the entire system showing up on time. it would be artistic expression, too. it also allows thousands and thousands to take photographs and have those running across the panels, and as you stood in front of one, this would open up and tell you something about the system, and it would show you a larger view of it.

the third piece they're looking at is statistics about the building for the entire system that you can bring up on the wall about what is happening at the hetch-hetchy or the water system or someplace else. as a media wall, it would be an artistic expression that would actually be an educational experience, so those are the three things we're looking at doing in that building the art commission is typically not allowed to be spent in private areas of the building. it is typically only allow for the lobby or the outside. president vietor: sounds good. i know a little bit about these digital art walls. it is a way that people are going to get a lot of information, so that is cutting edge in the area of being able

to share information. >> at protero hill, -- no one has commissioned to do anything in san francisco, so it is a fun project. this is one that we're taking the lead on. the art commission. president vietor: trying to make sure that it is all accurate and -- >> right. president vietor: great. any questions or comments on 525 golden gate? we have a stamp of approval. the general manager report is finished. next item, please. secretary housh: the next item would be item number eight, the bay area water supply and conservation agency general managers' report. mr. jensen.

>> we were pleased to attend a ceremony at the opening debate of the tunnel, and it was throwing -- to a sheltermoran was there -- commissioner moran was there. people doing hard work on that, it is very impressive. i encourage you. president vietor: great. thank you. i was sorry to miss the event. glad you could attend. next item, please. secretary housh: the next item with the consent calendar. all matters listed under the consent calendar are considered to be routine by the san francisco but utilities commission and will be acted upon by a single vote of the commission. there are energy efficiency services for a, b is contract lighting efficiency and upgraded

services for the bay area's, $2 million to the third lowest bidder, torres construction corporation to perform lighting efficiency and lighting retrofit work in the city. item c, approving plans and specifications for the water enterprise system for a still pump station. ntk construction to demolish the existing. d, approved the plans and specifications and award wastewater and apprise the renewal and replacement program for various locations sioux were replacements for replacing existing stores -- location se wer replacement for replacing

existing sewers, bidder j. flores. e, approve the plans and specifications, contract -- contract ww-433, buchanan/ pierce/filbert/sacramento street and marina boulevard sewer replacement. any items to be removed from the consent calendar? >> -- president vietor: hearing none, is there a motion to adopt the consent calendar? second. all of those in favor? aye? opposed?

thank you. the consent item passes. next item, please. secretary housh: the next item is -- [audience member] president vietor: we called for public comment. did you of a public comment on one of those items? -- did you have a public comment? is there one in particular that you would like to hear an update on? [audience member] >> it is actually a one-page, a two-sided report. you have heard so much about that in the last several meetings, and we thought we would do a high-level update, letting you know that we have moved along the contract for the board of supervisors and some other small items, but it is not major. president vietor: and these

written reports are available to the public, correct? " >> yes, and they are on the website. president vietor: they are on the website. [audience member] president vietor: are there copies here? >> they are always in the public folder. there are extra copies on the web. president vietor: i am not sure a truck load, but maybe a couple of copies would begin to puff. -- would be good to have. next item. secretary housh: item number 10, a public hearing and possible action to amend the nomination and election of officers. the first day of october each year. notice of this change was posted according to the requirements

on july 8. commissioners, the main purpose of the change in the rules is to recognize that the city charter has a provision which allows commissioners to hold over appointments for a period of 60 days after their term in office expires. as you well know, proposition h changed all of the terms from january to august 1. this would take cognizance of the fact that they could have holdover commissioners at election time. and this would mean that the commissioners would be in office, hopefully, that were going to be in office for the next series of terms, so this is just to allow an adjustment so the commissioners do not hold an election with people whose term is possibly winding down and allow an additional 60 days for additional people to be

appointed so the commission and the charter are all in sync. president vietor: so is there a motion to adopt this? commissioner: this does not prolong our term, does it? [laugh] secretary housh: no, all commissioners in the charter have a 60-day holdover period where the mayor can consider -- commissioner: for the state, it is one year. secretary housh: all this does is take into consideration. commissioner: thank you, thank you, thank you. president vietor: any other comments or questions? public comment? in favor? thank you. mr. housh? secretary housh: next item, to continue working on a community

aggregation program and to negotiate contract with the parameters set forth in the term sheet parameters for contract negotiations, the documents included with the item. the attached resolution authorizes the general manager to continue negotiations for the power supply with terms and described in the attached, and submit the attached term sheet to the board of supervisors for their consideration. general manager harrington: good afternoon, commissioners. ed harrington. since we are towards this, we thought we should come back so that we would not be bringing a contract to you.

what we wanted to do for your sake but also for the public to have not had a chance to look at this is to do a brief recap of how we got here, and then we would have mike campbell do a discussion about where we are with these negotiations, what the goals are, where we now are, and then have another come and talk about the parts of it. the first part is, again, what we want to do is review the history. we want to talk about the program goals and put that up on the screen, as that would be great, and then the outstanding issues, and then the next step, the timeline to launch this, and in the financial overview. briefly, cta allows the services. they do not take over the p.g. in the delivery of the energy, metering, and billing. -- do not take over the pg&e delivery.

it provides a different electricity source. they still do the distribution. you would still call them if you need service, and all of those things continue, and state law provides that customers will be given an opportunity to opt out. it is a system that your enrolled and unless you opt out. it provides for two opt out options before we cut over, and two after at no cost, obviously. it provides the customers the ability to choose the supplier for their energy, and they have a choice based on the environmental impact and their own personal views on what they would like to have. this started back in 2002, when state law allowed for them to take effect. in may 2004, the board of

supervisors established our first cca program. in 2005, the mayor declared the official part of the program so that we could work with pg&e, and then the budget was changed to put $5 million into the budget " to have seed money for the community abrogation discussion, and i realize that was possibly the last large discussion. four of you were not on the commission that then. in 2007, the board approved a plan for the program rules, and i should tell you, but in those days, the normal thing that occurred is that lafco, et -- lafco would work with it. the program would be discussed. the puc staff to begin up and say, "that is not possible to

do." they got up and did a report at the time saying it was not possible, so you had the puc staff and the city comptroller's office singing you cannot buy more expensive power and deliver it cheaper. they would say, "yes, you can." so every month, there was this, which did not make much sense to me, so the market would prove which way it would go, so in 2009, we petitioned a supplier, and we did go to the market and said we wanted to meet the goals that have been established. we did select a provider. they were not able to meet those goals even though they said they could when they responded, so those negotiations were ultimately unsuccessful. we went back to the board with the revised plan in march 2010.

that changed those goals to talk about the rates, and green power and things that were important to us in that program, and then the puc issued an additional rfp last year, and no better actually met the reduced qualifications. we still have a program that the market wanted to be involved in, so we came back to the commission in february, and you authorized us to negotiate with a creditworthy partner, which was show energy, which was the most successful even though it did not meet some of the specifications. we had $1 million, knowing that should this program be successful, there would be money for an educational campaign and marketing and that, so there was another million dollars, so there was now $6 million. there -- reports we have done over the years. in may of this year, we had a joint meeting with lafco, and at

that meeting, we talked about market research, and we talked about the kind of program we wanted to offer. we really did not ask for a vote, so what we really thought would be important is for you to officially tell us to -- if we are on the right track or not. we have gotten a lot of advice. they were asking for approval or not. there have been intended joint campisi/lafco meetings over the years, so we really are coming down -- there have been attend joint -- ten joing uc/lafco meetings. we want to make sure this is something you're comfortable with, so this is why we wanted to come to you. and with that, i will turn it over to mr. campbell to be able to discuss this, unless you have

any questions on the part that i have discussed. mr. campbell? >> good afternoon, commissioners. mike campbell. i am a director here at power enterprise. continuing from where general manager harrington left off, there is a long history. general manager harrington talked about this, and i will tie it back. there is in discussion about the rates, having raids be stable over time, having a target of 51% renewable, as the ordinance said by 2017, but it was

probably considered to be 10 years after the launch. the program would develop 360 megawatts of various resources to include both generation and the customer site resources, demand response, energy efficiency and. all customers would be enrolled all at the same time. the contract would be 15 years or more. there would be a single entity that would be able to provide all of the supplies and services needed, and that supplier would take on all financial risks. the city would have no financial liability whatsoever. again, ed harrington touched on this earlier, but we have gone two rfp's and have not seen a robust response. we have looked at ways to adjust the program. the first, one key change that

just happened over time, and we have talked about this in the past, the pg&e rates in 2012, july 2012, are going to change to be a flat generation rate, said that is one where usage increases, the rate charged for generation does not change. that will be modified so that there will still be the same conservation incentives, but that actually ties into how we would design our rates, that we would not a flat rate. we also are considering working on maintaining a great benefit for low-income customers. they would be eligible for the same program. rate stability. we're looking at a 4.5 your

program, contract, rather, what show. and this is to assure that the rates stay stable over time. we're being prudent and doing a reserve. the cfo taught to -- talked about that a bit. this is for each year of the contract. i do not mean the same number over 4.5 years. but we do know what that is for each year of the contract. we know that at the outset. president vietor: how is the reserve account funded? >> the reserve account will be funded from customers, part of the rate. i will leave the rate and finance questions for mr. r ydstrom, if i may.

through our conversations with shell and doing market research, what we have brought back and spoken to you about in the past, we really could be offering renewable power on day one. in terms of the rate premium, it is not so significant for customer preferences. we are heading that direction. >> how does that work? -- president vietor: how does that work? does it involve the grid? how do we know that that is 100% renewable? >> at least for me, when i was a physics major, energy was the most difficult, and water was a lot easier. just like when you have multiple rivers flowing into a central river, you do not know

how much which glass of water or wherever it came from, but you know how much is coming in. but the same token, the amounts of energy coming from the system needs to be balanced, and there is a very strict accounting by an independent control operator that makes sure that people who say they are putting in energy are putting in the right amount of energy and have a way of tracking how much is getting pulled out, so that is a balance. that is part one of your question. and in guaranteeing the supplies are there. we will have a contract for the types of resources, and reporting will be provided by the supplier, and we will be mapping that. it is a relatively standard way of operating.

it is a clause a state agency -- a quasi-state agency. to make sure that that type of thing happens, the distribution network, the transmission network is open and with access for all suppliers and consumers. commissioner: i have a question. can we reach the same rate as pg&e? >> no, ma'am. : commissioner >> i do not have the number. it is not an enormous% increase.

i would have to double check. >> to make sure understand the question. you are saying -- >> i was at the last cummings. -- laskco meetings. that was part of the original discussion. what was the rationale to get away from that? >> it was never a realistic goal. inherently impossible to buy green power that is more expensive and deliver it cheaper. if you -- it's the green power

was cheaper, it would have purchased it. the problem is they would like green power cheaper. that was never the case. we love the seller on the rooftop but it costs 23.5 cents to produce it. we're able to sell power here at 11 cents. we cannot buy at unless you want to go ahead and subsidize that. that is not the way it will be long term. we will start to own our own infrastructure as the world changes. there will be a difference and the green power will be reduced in price. green power is more expensive. >> shell oil is coming to the

rescue? >> they will by wind. -- buy wind, the chepaeapest is wind. even with that, it is still more expensive than your basic what they call brown power which is the majority of what is produced and should be by pg&e. >> we have discussions with shell about the values and compliance. we would -- my concern is the results from conversations surrounding pg&e. i am not so sure at this point that shell oil has been sufficiently vetted but i do not

know. >> shell oil is internationally known. some of the similar questions were raised when iran energy selected shell oil. and it is a large corporation. the only one that would step forward. it is one of those things you might take into consideration as you look at the contract. it is the only company that has offered to do business. >> it is not show oil. -- shell oil. a subsidiary. i will move to slide 13. there are a bunch of different renewable as mr. harrington was

noting. there is a different variety that we can utilize under grenoble's which is the -- that we can utilize. you can -- electricity comes off those panels. there is firm renewal bills which is the bulk of the product we will be purchasing. -- renewable switches the bulk of the product we will be purchasing. there is the tradeable renewable energy credits. all the sources would qualify as renewable under the california energy commission's

guidelines. and all are the types of resources that count toward rps. in terms of developing the grenoble's over time, we are envisioning we would be operating on a parallel path. the process would develop city owned resources. the term sheet for the contract is similar. the opportunity is to substitute resources. we could replace an existing resource. we also in terms of talking about, we will get to customer enrollment later. we talked about phasing in customers, adding to the program over time. we can plan for having generation be