currently are. we don't see that as a high probability. even if that is the case it is only the difference. not at total $15 million or amount. the difference between what we can sell it for and others can buy it for. the reason we have slide for incremental cost of renewal, people say why 100% green power. couldn't you do one with 40% or 50%? in our polling we found there are people that are price-sensitive. they don't have the money, don't want to buy in. if you ask them for $5, they will fall off. if you ask them for $9 you have almost the same group that says i'm in for $5, i'm in for $9. we found it was a much more straight forward to offer 100% renewable, get rid of confusion because the people that are price sensitive you have lost anyway. the difference in 40% and 100% renewable is small. they are with or with you,

the difference is not great enough to make them change their mind to. be able to get this program going, it is two steps. one is the master contract. second is confirmation agreement to set prices out. we have to execute the confirmation agreement. the first thing is rates. go to the rate fairness board and then to the commission. if this board of supervisors wishes to reject those you will have 30 days, the same with water or sewer rates in san francisco. we have to have resources to make this work. we have to have the appropriations in place, we have to have a financially stable organization. contract with noble america is pretty much finished, just not a high enough dollar amount to require board approval, that is why that is not before you. the termination provision do not take effect. nothing kicks in until the final confirmation is in place. we have months to go and many steps before we are financially committed. that shows you what we think is a decent time

line, approval by this committee, by the board, going through the rate process over the fall and hopefully to enroll customers and start to deliver power late next spring. financial rate payer aspects of it, we are trying to spend as much as possible on green energy. there is overhead. this shows 82% goes to green power. other goes to things like marketing. we want to make sure we don't capture people we don't want to capture. you will see here that the huge percentage of san franciscans are in tier one. i'm tier one. this will cost me about $7 more a month on my bill. that means i could do this, have green energy for the cost of dinner of two on valencia for a year. i can get green energy for a year for the cost of one dinner. i think it a good deal for people that want to do this.

the affordability, to be clear, we are talking about 9.5 dollars for people in tier one. as your bill goes up the premium goes up. in general on your bill the difference is about 18 to 25 percent. there's a higher number there for people who are all electric. most people in san francisco have a mix of gas and electric. this doesn't affect the gas side. but people all-electric would sigh higher increase because they are more dependent on electric than gas. this is to put it in perspective along with garbage collection. pg&e bill, water and power to show this is relatively small for the average homeowner in san francisco, should they choose to do this. i should note mr. rose had two recommendations. one is four and a half

versus five-year. i recommend you change that to up to five years. the difference is that it is a five-year contract but we won't be buying power all 60. up to five years works. they have suggested $6 million go on reserve, that makes perfect sense to us. i'm here to answer questions and again ms. hale, mr. campbell here, mr. wiener also. >> thank you for the presentation. colleagues, any questions at the moment? supervisor kim? >> i just wanted to go over some of the concerns and you had brought up on the program questions. i was hoping you could talk in more detail about some of the ideas around multilingual customer education. i know one of the concerns that comes up among colleagues was that seniors are not english-speaking

consumers. they need to be properly educated. if you would talk about the assurances around education. >> right. we could use help we can get. recommendations are warmly accepted. we have about a million dollars set aside for marketing. the discussion is we go out and heavily market in multilingual ways. probably tv spots, along with radio. clearly most would be mail, though. it would be in people's mailboxes. we would also engage community groups to work with us in different communities, especially multilingual to make sure word gets out to people. again it is no interest to catch anyone. any recommendations you might have for how we hit niche communities we might otherwise miss, happy to work with you. but we have money, staff and the promise to do that. >> will this primarily housed under puc or assistance from other departments like the department of environment? >> department of environment has been

helpful. they have people that work in the community. they believe in this program. >> the other question i have that has come up is the $5 opt-out. i know that is a nominal amount. i'm curious. >> marin tried this to pay for administrative costs and make people stop and say do i really want to opt out or not. we are not projecting any income from it. if it made more sense to have it be zero, that is not a big deal at all. >> my last question, so you are saying delivery of energy, metering and billing will be provided by pg&e. so do we have to share costs with them? is part of the budget we will be paying pg&e to do this work or how does that work? >> pg&e is doing the work they have always done. taking care of transmission and distribution so we are not paying them extra. in fact, we have customers

paying that through transmission and distribution lines. there is a charge we will see on the bill, included in numbers here. it is really designed to pay pg&e for investments they may have had in other kinds of generation that they may not get the full benefit of if they don't get the full customer base. o theser than that people are paying for the transmission distribution and people to serve their homes and continue to pay that. >> i apologize. i have one more question. how does this work for large buildings? i know in my district there are a number of sro. how did it work for those residents? >> where there are people who pay their pg&e bill, that is the target. we are going after people who pay their bill. other people who want to opt in, businesses who may want to opt in or large sros that have one meter in the building, they may choose to opt in. that is not part of the

first roleout. we would hope to get programs and rates that would attract people that aren't in this opt-out but not go after major buildings first with a master meter because it doesn't work yet for that. >> so in the phase i program of potential for customers, your analysis is sensitive enough you can exclude those large buildings in the first phase? >> we are only going to people on pg&e rolls. in general you have one water meter but tend to have separate pg&e meeters. large apartments tend to be separately metered. we expect a lot will be people in large buildings that are renters but have separate meeters. >> large buildings, not sros, so for example condos and apartment buildings. >> right. they tend to be separately metered, we will go after

them as customers. they are ideal. they can't put things on their roof but this is the next best thing in terms of climate change. >> thank you. thank you, supervisor. >> thank you. thanks, mr. harrington and you and your staff. i see juliet and todd and barbara, spending a lot of time educating me. i appreciate your hard work on that. i will say at the time a resident hearing the initial goals of the clean power sf that cheaper, greener, all that stuff sounded -- local jobs sounded terrific. obviously i have questions about what we have going on. i know you are operating under the construct of state law and things given so thank you for the hard work but i want to press for having a dialogue. i know i have had questions over time. i continue to say one of my favorite people in city government i have met in the year and a half. sorry you will be leaving

us at some point. some of the things i continue to have questions about, the green aspects. in one bucket. the green aspects. we talk about 100% renewable. when i hear that, i think when the average consumer hears it, i think 100% green and 100% renewable. i think the definitions underlying them are different. they are bundled, shaped and racked and so forth. can you talk about that? i think it is important the public to understand exactly what it is. >> sure. >> i know it is a definition you haven't dictated but i think it is important for people to understand what that is. >> sure. if you put a solar roof on your house, unless you have large batteries in your basement, you say you are solar powered but you are not at night. you are putting power in the grid, using it in the day and taking out brown power at night. but over the 24-hour period

or seven-day week you are putting in hopefully just as much as you are taking out but doesn't work every hour of every day. wind doesn't blow the same, we don't release water from the dam the same. when you look at power you have a bit of a broader view. if i'm putting a unit of clean electricity into the bathtub and taking a unit out, i'm going to make the assumption that i'm adding as much as i'm taking out that. is the only way you can deal with discussion of green or brown power in california, unless you have extension cords to our power plants. renewable power is often not schedulable. it happens when it happens. the promise we make if you are going to use this many kilowatts of power in your home we will put that much that is renewable. can't guarantee it is the

same power, same day of the week but overall it is green power. >> right. in terms of renewable, the definitions, what can cons cute renewable? 85% this or certain -- different ones, can you talk about those again. for people to understand the difference between bundled, firmed and shaped. i think they are different components that would be helpful. >> sure. i will call up my staff if i start to fumble but the least green view is t rex, tradable renewable energy credits. we are proposing a small about, the trecs. just a bit, 5%. if there are problems in the dayton we can do it. they are the cheapest. * what happens is you have wind power in altamont that are there. those people own two assets. they can make money off the

power. because of the market in california they can make money buy-selling the renewable energy credit. so a small amount of our power is that kind of -- if we are buying the renewable energy credit portion, not the underlying power necessarily. the firmed and shaped that i was talking about, it is taking the power over a whole day, making sure we are delivering enough power to pg&e. that power may be a mix on any given minute of brown and green. over the whole period of time we are putting as much green as taking out. on any given minute that firm and shaped is shaping it to make sure we give pg&e the power we need for customers and take it from the best available place at that moment. those are the two i think are most confusing. the bundled really is this is the power coming straight through, we know it is there. >> right. in terms of green energy i think we talk a lot about -- supervisor campos mentioned it, the current program is called phase i. want to ask you about that.

we are not creating any new green energy but buying what is on the marg. >> we are not creating new. we are creating a demand but not creating any new. >> supply and demand says you are not creating more, buying up more. could have this unintended consequence or likely will of driving up green energy costs. >> that is the hope. by doing that we will create more people doing generation. that is, in fact, the state requirement to have everybody go toward more green energy is driving up that demand and hope is they will provide it. >> in terms of local buildout, that is important. i understand it is not part of the equation today but we talk about it. can you talk more about the plans around that? right now it is kind of the current structure seems at break-even to get this up and running. that is not going to create sources to bond against or

what have you. can you talk more about the plan? if that is part of the dialogue i want to make sure everybody has a firm understanding. >> sure. as i said i think the 30-year view is easy, when everybody owns this stuff, how you get from here to there. we want to create a revenue stream with customers. same time we are putting $2 million into starting to do actually design of more renewables and those kind of things we can build ourselves. we are under contract with local power. also helping us try to figure out what is the first step, what are the first places you can go and actually start to do this. the goal would be that once you have a revenue stream and once we have ideas more specifically about what kinds of programs we could do, we have enough money to start the environmental review, some of the engineering and take the revenue stream and bond against it. start to develop any

utility company with multilived and long-lived assets and do whatever you do to borrow against it. that is for the big thing, so to speak. we always say it is better not to use the energy in the first place than to build another power plant. the rest is raise enough money and get enough to raise energy efficiency. the point of the report is reducing the rate will reduce this. people do respond that. will reduce it somewhat. the trick is get out there the way we have done with the water system. we go out to people's homes with the water system and give you a fresh aerator for your faucet. we will give you the low-flow shower for your shower head, a rebate on your toilet. those are the kind of things we want to do. not just create more energy but save it and not use it. those kind of programs we will have to figure out. once we start the revenue stream, where do you fund

those or rearrange the money, how do you make those work? we cannot tell you it is a perfect model set out for the next ten years but that is the idea. >> i guess that is question for me. obviously there is cost for the rate payers. we will be voting on it as a full board. you know. a lot talking about production of local green energy that. is a valuable product. my question is more around the viability. can we really get there. if we really get there how much is it really going to cost? a million or 100 million? what is the impact on our rate payers in addition to baseline to get phase i going? >> sure. good questions. again, i think if you -- that longer view f you talk about silicon valley power where they own their own assets and have their own rates, their rates are lower than investor owned utilities in california.

long-term i can tell you if you look at the other ones they tend to have lower rates than investor-owned utilities. i can't tell you five years from now what that impact has to be to get enough money up to build that kind of thing out that. is why we are being very clear. we are asking a premium because we know will it cost more. >> are you anticipating the revenue itself or make a profit and have a margin to bond against? >> it a combination. >> okay. so if it is a combination whatever the rate increase now it will have to go high tore -- high tore make a profit. >> we are showing the rate stabilization fund *. not only are we taking -- most money will go to buy power, some will go into the rate stabilization fund. another way to look is that the begining of the bonding capability, those can be used to start the revenue

stream to start the bonding. >> thank you for the answer to those. a few questions around -- we talked about the issues generically. it is not your fault but the opt-in versus opt-out. it is state law, i understand it. i know you are characterizing it as a voluntary program. i would politely disagree with the terminologiment to me what does scare me is people are not going to pay attention. i think everyone knows there is potential out there. so can you run through again what you're -- there are a number of mandated notices. what you are doing. then whether it be marin or otherwise any o ther examples of the opt-out percentages to what we can correlate to what is happening in san francisco. >> the process would be if we are going and offering this to you at your home we would send you a post card saying here is the information. if you don't want this program, please let us know.

send a post card, internet, whatever in terms of making it as easy as possible. a month later, saying this will happen. just want to remind you. if you don't like this, let us know. we wait 30 more days, start providing power, send another notice saying you should now be getting your first bill. you are noticing a difference. do you want to stay in this program. a month later you have gotten within or two bills. do you want to stay? if you don't, please let us know. we should be -- for those who are able and willing to read those kind of notices i understand, that is the easy part. then the part is how do we make sure people get the message who aren't opening their mail and aren't reading that. is what we are saying. through community groups, radio and tv, we have talked about how much a media buy we can get for the million, plus the rest of it. we will be trying a variety of different ways. i'm not trying to be

facetious when i say in marin pg&e did a good job to make sure all the poe ten shalt customers were very aware of options. i would expect they would assist us in this campaign with more money than we have available. >> what was it in marin, do you know? >> opt out. it varied over time. the opt-out rate -- it is also a little misleading because marin, their big users were including government customers because we have green power for our government. they didn't. you had a built-in number of people that weren't going to opt out because their board of supervisors and city councils had done it. the original opt-out was neighborhood of 10%. it is a little higher in some places. about 20 when finished. about 80%. now again we believe that our program is a bit more robust. a bit more obviously green. they have the light green and dark green. we are going straight to the dark green. so there would have been

promising not as much of an increase in rate as we are doing. >> okay. then i will have other ones after the comments report. from the consumer point of view this is where i come from a lot. it is the opt-out nature and increase in the bill. my biggest part is around the consumer that doesn't pay attention, either mail or otherwise, he won't be during campaign season, that is a good thing, when people don't pay attention to their mail. >> we did think about that. >> okay. ted egan's report was talking about an $18 average increase to the bill. i know yours says now -- is it $27. >> we have had several refreshers, because the market does change. before we would go out and set rates and come back to you with rates we get

another refresher of what the market is so the number also change when you look at that. the other issue i think is happening is we look at averages and tier one and tier two. the majority of people. so you get different kinds of numbers. what we are saying is we believe a tier one customer, about 40% of the cities -- people in san francisco will be paying about 9.5 dollars more on average. tier 2 is closer to 20. when you add in the high-end users, the average in the city is something like 27. >> i understand all that. you have to play with numbers but you have to pick a point in time. i guess the question becomes with the opt-out nature and saying okay, let's say the person who doesn't pay attention is now going to be paying $27, close to $30 more a month. okay. but then also as of a month ago it was $18

>> we will step the rate before we start the opt-out. if you look at the schedule the process shows setting a rate, giving it to the board 30 days, establishing that rate the next four and a half years, knowing what it will be, all would be there before the first opt-out goes out. >> so the board of supervisors will vote on this, right? right now -- i understand you are not going to be able to have a final number, right? but in whatever. since august 3rd -- i know ted's been working on this a long time, it went up 50%, the average cost to the customer. so trying to get understanding of kind of where we are going to come out.

just wanted to make sure. again, mr. egan can say where he got his number, we can talk about that. the other thing people reminded me of is after discussing this with a number of supervisors and others, that 20% care subsidy wasn't in the numbers when mr. egan looked, now they are. people that are not in the program will pay slightly more. it is not just a change in the market. >> again, as we vote on things and look to approve or not, having the full picture as much as possible and how it rolls through your report is interesting. >> i guess the ultimate thing is if this is not affordable, people will not choose it. we will assess the rate and tell them. if that is not affordable, they will not choose that. >> i understand that. respectfully i come from a

different point of view where given opt-out it is not a choice. you are choosing to opt out, you have to choose. i respect what you say. i come from a different perspective. okay. thank you very much. those are my questions. >> thank you, supervisor. i did have a few questions as well. in terms of the opting out component, i'm not very confident wbl opt out. it is a construct of state rules that regulate how we form a cca. we are not able to structure an opt-in, by i think would be better. i know people who want to be in the program get in the program. i think our best intentions for outreach, we are still going to have people who don't know they are in this program. that is just the nature of having a program where you are automatically enrolled. how many times have we automatically enrolled in a magazine thing to realize later we are in it. i think that is a concern. i just want to know a bit

about the connection charges. for one, opting in, opting out, you are proposing a $5 fee. as you said that could be different. it could be zero or higher or lower. who and when do you determine that level? >> that is part of the process that goes to rate fairness and to the puc as the rate schedule and that comes to the board of supervisors. >> is the $5 meant to be a nominal amount to have people reflect or meant to cover some administrative charges? >> again, we are not counting on any money so that is what it will reflect. if for example it made more sense to have zero for low-income customers that would be fine. >> okay. one other question. this is on the city side or cca power side. on the other end, pg&e end, is there a reconnect fee. should a customer be automatically enrolled or into the cca program. say they realized they don't want to be in the

program, opt back out six months into the program. what happens on the other end, the pg&e end? >> if representatives are here from pg&e, i will let they answer when they get up. but my understanding is that if a single person rolls back into pg&e it makes no difference. if there were a lot, that would make them go out and buy new power at a different rate than their power mix might be they would have the ability to charge a higher amount for a period of time. my understanding that has not been done by pg&e and marin and i would expect pg&e would not make it more difficult for customers to go back to them. they do not need to, have not so far. >> going back a bit to the rate issue, so when item comes before the rate board and back for approval, at that point in time you lock in a power rate for clean energy for the five-year period or four and a half?

>> yes. >> during that four and a half year period, as people are enrolled, they should not expect energy to change. >> we would expect the lock-in on average 5% for year. you have a rate but know what the raises would be. up slightly, maybe 5% a year. >> during that time when someone enrolls, as we are talking about the numbers, we are talking about the average bill, people should likely expect there would be a cpi adjustment or 5% inflay toer. >> we would put that in and tell you. * so where we might get rate increases who knows how often, when it goes through the process, we set it out where this line of your bill would change once a year by that amount. >> then just going back to i think a conversation that spurred a question for me, the issue about generation. you talked a bit about how in the current or just starting off the program