that is what 100 million plus. if we want to make that sustainable, we need to do some of that stuff anyway. do you have a sense of how much we have to do, even without cca, to make ourselves sustainable? >> it depends on how much we do have some. in the order of magnitude, a 2 cent or 3 cent increase would be on the order of magnitude to order, to satisfy the capital plan. whether or not we can issue our own bond, i am making the assumption we would be able to, which would help bonds. that would be assuming a cca, 3

cents assuming and 2 cents without. the big decision is how much transmission investment, how much of that would be over and above what you have in your capital plan. that is in your 11 and 12. that is not in the current plan. as good as it gets, it is 2 cents or 3 cents. if you look at the revenue side. >> we're looking at bonding. >> you're looking at both. increasing their rates to enable you to bond. >> that is without cca. with or without. >> you can do a 2 cent or 3 cent increase. you'd have to go higher than that to meet the demand.

>> can i ask a question on the cca piece? one of the things that comes out through the governor's conversations is private financing. if there is a city bank -- citibank approach where they are waiting for these grenoble's to drop. and maybe that is not relevant for other aspects of hetch hetchy because of our public status and maybe we keep that conversation to cca. is that an option, could there be something in there for other aspects of the hetch hetchy operation? >> we are exploring is financing options for transmission facilities in particular. the tax and manage as far as being a provider, transmission

provider. that is part of the $100 million plus deferred capital discussion. as far as having commodity futures for energy, i am not recommending that. we are not proposing that in any shape. what we're doing instead with the proposal is entering into a 4.5 yr predetermined fixed-price purchase. basically a call as opposed to put on the option. >> there was an entity that was assuming too -- that could assume the risk? >> it is possible. what we are all unhappy with is having their rates higher than pg&e. any time we look at something else that might have a hedge risk, and might be beneficial. we know it will be more costly.

we tend to shy away. even though three years from now that might be helpful. we can think about it some more but that has been our concern. everything you do ends up [unintelligible] commissioner torres: the two cent was to make the balance unfold. does that include -- it does not. ok. do we have an idea as to what that increment is? >> we do not yet at this time. we will be coming back to the general manager and the commissioner. it is a long-term thing that we

are spending a good deal of staff time on. and the deputy general manager already meeting with folks to study that. and not to be too quick on that. it depends. if you look on slide 11, we're saying that to point -- that would bring in $9 million a year. you're looking at a 10-year capital program, that was short $60 million and had 80 fund balance. if you had $5 million a year for 10 years you could pay for what is in the current capital program. you could get a fund balance back to $30 million. that would be a cash payment. if you are doing it in cash, you have money to start paying off that $100 million. it would stretch out when you could bond. i think many of view would be unpleasantly surprised even

though we keep pointing it out. when we have our discussion of the budget, we're putting in $2 million to go solar and we're putting in $10 million for all efficiency programs and that is, you would prefer to spend more money on that, too. commissioner moran: is that another 2 cents roughly to just do with that issue? >> if you wanted to collect $100 million in cash, yes, if you would not have to do it that way. >> probably 2 cents at some point. >> that is the order of magnitude. we need to perfect that assumption. that number will change depending on what year it is. >> thank you. >> the last slide is a repeat of

a timeline serving customers slide. this is the same as it was before. the big item would be three lines down, just to refresh finalizing contract language and finalizing rates from shell in quarter one. we would go through the financial update then. when we adopted rates for the redevelopment areas. the numbers would go up $7 a month for tier when customers. that is 40% of our residential customers here. in the city. >president vietor: how familiar is lafco and/or the board of

supervisors with this scenario that the puc is currently in and it relates to cca and the big picture? >> at the committee meetings we have talked about the need to recover more of our costs for hetchy. on the tenure plan looking out, we have to be cutting things substantially and still not breaking even. in fairness, in budget hearings, it is the first year anybody looks at. a conversation about what happens in years three to ten, -- i would say it is not on the top of anyone's list. the discussion of cca having to

charge customers more than pg&e, we have to discuss that with lafco. there are people that are unhappy with it. that is the proposal we have. they are not aware of the 19 million appropriation because we have negotiating that and this is the first time we're talking about that. that would be a new item to them at the joint meeting. >> president vietor: we need to have that conversation to really give them a bigger picture with cca as a piece of it. it could have a significant impact on the fund. at least on ratepayers. >> outside the range of the budget discussions, in a year to. president vietor: i would take

it a step further. i do not know if the commissioners would agree. maybe that get calendar or addressed via the legislative affairs folks to figure out the appropriate time and if we need to take some prior action to that in order to maybe not make a recommendation but urged a conversation happens in the spirit of transparency and getting the policymakers on board. >> two things will happen. if you have that joint meeting there will be that kind of discussion. based on the retreat and conversations we have had, we are looking at how we bring the rate package to the rate fairness board and start their process. should you choose to, you could have that repackage go to the board of supervisors. we're starting that to make sure that is available for anybody if you want to use it and if the board wants to use it.

commissioner moran: none of this includes the performance bond. >> accept -- we posted a $100,000 bond. it is not faughclear what it -- it is not clear what might be happit might be. president vietor:commissioner >w this piece is out. >> i think whatever you choose to do as a commission, if you go forward with an authorization to

negotiate or a month or two with the contract, you would have certain triggers and if they do not happen, we would not be authorized to find a contract. that would be the bond is in the affordable range. there is not rates to cover the preparation. >> we do not know when that is going to happen. >> we assume it is going to happen. before we go into business next summer. and again, that may be one of the contingencies you may or may not want to put into de- authorization if you pass one. it has to happen and be affordable. maybe part of the contingency to sign anything. >> that is a big number. their initial asking was $80 million?

>> from shall? ? -- shell? this has been required by the enabling legislation. it is a perspective look, it is a bond amount. should you terminate a certain point in the future enough to cover the cost at the future time, it is a calculation being litigated. if it were by all proposals before the commission, if any of those were put into place, the bond amount would be limited to the administrative costs. the dollar per account return on the order of hundreds of thousands of dollars. if you take what the utilities have proposed now, there is a

decision pending on the direct access side. you look at how the mechanism if you look at past prices could affect what our bond amount could be for our size of program. it could approach annual revenues come in the $30 million range. half of that. $15 or more. if there is no bond -- a market out there, -- yioou are talking about gas. we may have the ability to self insured. or is this something we have required to be captured in rates? it could be more akin to the appropriation for the 15 minutes -- $50 million. where it earns interest and does

not get called upon. it may not be a direct cost in the same extent. president vietor: t>> the gove'd ask for a letter to them on this performance bond issue and how they could help. it strikes me that maybe we put this on as a resolution agenda item for our joint meeting. to say this is an area of concern. and we get those to move those -- move the resolution forward urging the governor to work with the cpuc to resolve this in a friendly manner. >> we can prepare them for you.

>> how are we doing? >> we are awaiting public comment or any direction or additional questions. >> could in advance to slide 11 again? >> absolutely. >> in effect, we are asking these entities for an increase and we are doing that so 75,000 people could enjoy having 100% clean power -- green power. i don't see h ow th how the impt benefits the ratepayers as a whole. it is going to benefit the 75,000. >>is that correct?

>> saying a rate increase could satisfy two things. it could make hetch hetchy sustainable just as it is without cca. with cca, we would have to do higher rate increases to provide a choice for folks to be able to choose a more expensive product. albeit 100% green. you are correct. it would be increasing rates on the general fund on the hospital, on the mta, on the school district, on the community college. that would be one way to fund the cca which would give 75,000 customers a choice to pay an extra $7 or $13 or $20 on average per month for 100% green option which they do not have for pg&e. that is a societal policy

choice. it is unfortunate that cca is coming as we are running out of money anyway. if we had not done go solar for four years, that would have been $20 million. there are other things we have chosen to do and this is in the folk history at a time that speeds up what is a problem for us anyway. >> thank you. commissioner moran: i was calculating if it was $7 for 75,000 people. and it does that the question, if you are taking $6.3 million a year from power ratepayers, what is the most effective expenditure of that money? that is a different way of looking at it. i would like to hear some public

comment. that would and help the dutc-- t would help my decision in the end. >> this is a very convoluted subject and i am requesting you to take public comment because we have something else going at the board of supervisors. i i think now said to have discussed it and you are also little bit confused in the sense that you want more information, could you take public comment, please? go ahead. we have been talking about cca. we also started talking from the year 2000 as stakeholders, looking at our energy consumption regionwide.

so what is missing in this dialogue is, what is the consumption of the city? 960 megawatts, 980 megawatts, we need to find that out. sfpuc needs to have a viable business plan so that the constituents understand, you do know that we have this cable from pittsburgh coming to potrero, giving us an added 400 megawatts. we need to figure out practically when we embrace grenoble's, how we are going to embrace it. we have had very little leadership. we have had a lot of talk. we have not had true leadership

on grenoble's. on the issue of lafco, i am fed up. -- we have not had a troop leadership on rende true leadern renewables. if the body over here has to come up with the money, where at loggerheads. it is time we come up with a business plan where we ask lafco and the people they hire and sfpuc, there is a convoluted diatribe. we need it in simpler language. when it comes to the red hill,

are we going to get anything? or 13 cents? because we are living if you are alive in dire economic times. their economic times. 14 million people out of jobs. 420,000 people have joined the working poor. thank you. president vietor: thank you. >> good afternoon, commissioners. eric brooks. i have been listening in the audience and liking a lot of what i am hearing. this is exactly that -- the discussion we need to be having about what ratepayers will pay

and financing for this program. when cca was created, it was never intended to be rolled out at a higher rate than pg&e to ratepayers. it was intended to mitigate that and make that unnecessary by building hundreds of megawatts of local, city on assets that you could amortize the cost of overtime of paying the upfront costs and project over time that you will receive a lot of revenue in savings. that is the discussion. that we have been having with stafford of last decade. especially in our last meeting. it became clear that the discussion is starting to bear fruit. we're having conversations about how the local build out and

having a really comprehensive plan for hundreds of megawatts that would be built in the first three years of the program and start feeding into will help the program. off if you look at both the local power reports and the navigant reports, both make this a recommendation. to make sure your cost is the same or lower than pg&e. it is absolutely crucial to do the biggest and most rapid local build out possible because that is where you get a city owned nonprofit asset that is bringing in revenues that you can deliver to the customers. it is important to note. the best comments were brought up by commissioner torahtorres.

poor people will be shut out because they will have to pay $13 a month. that is similar to what their bill is. poor people will not be getting in on this one -- unless we get this local build out scope of work underway. that brings me to the timing of your joint lafco meeting. the november 11 date is too late. we need to get something -- we need to get something this month of weekend. we need to be able to show sfpuc how the local building program affects the deal with shell. if we do not get that six months not going to be able to show you how to fit the local build out into your rates and on security and our security for the

program. you will be in a position where you have to decide on a contract without that information. please make sure and get it underway as quickly as possible. >> thank you. >> good afternoon. i wanted to support the statements that have been made about compressing the time line to get this going, to get the discussion happening. i think that the idea of having a meeting to discuss all these things and move forward is the only program that we have. this is something we are talking about putting our renewable energy future, our local green jobs energy in. three months is too long. if we can go with those earlier dates to do the joint member --

meeting, if you approve the plan to develop a local bill out of work and opportunities and improvements for our local communities, it will create over 1000 jobs a year to do that. that is important. that is what i think what the program is all about and what is attractive about it. you have to have that discussion. move the discussion to compress time line because of the importance of doing that. and moving the discussion forward to get these questions answered, they are good questions, got to get the answers and we have to move forward. three months as triple the amount of time to move this forward. it is good progress but let's get it done to get this plan moving now and get this stuff worked out about the term sheet and move the discussion forward to the board. that would be great to see in the next couple of weeks, no

more than one month. thank you. >> just a question. it is clear to me that you think the rapid local bill now is an important piece of this. are you in favor of the program as currently reflected? >> the term sheet is tied to the local buildup. commissioner moran: the goal is twe are moving forward on the tracks and i do not see the term sheet and the idea of a build out and separated. thanks to general manager harrington, we're having discussions about how this is a twin track approach. i cannot separate the two in my mind.

>> thank you. >> i am paul lucas in district 10. there is a thing called doublespeak. i know that it is used a lot in meetings. this is what it seems to say. think of it as a way that language is the basis of all human communication. it may not be far-fetched to say that language forms the basis of all human interaction. we use language to express our thoughts and feelings on issues. we act as a result of processing information which we can do by using language. the language we here and use every day influences us and helps us to ship opinions to a greater degree than you realize. if the language we hear and read is corrupt and mislea,