the best way to get to communities in san francisco is through community based organization. we'll work through them to get to low income residents to make sure no one gets inadvertently caught in this and paid media will work hand in hand with volunteer door to door types of events and social media. there's been questions of liability. with any program there is some amount of risk. this is a risk that we believe is a reasonable risk for the city to take. what we're saying is that if the program is not working, and we decide to collapse it, and the price of renewable power goes down, so that shell would lose money by backing out -- if we backed out of this our liability is capped at 15 million. given market conditions it seems highly unlikely the price of

renewable power will be decreasing when everybody is mandated to buy more but there is a cap should something go wrong. if the program is successful and we decide as to kill it and once again shell loses money there is no cap on that but that is our choice to do and that would be to kill a successful program for no reason and lose money. the ratepayer aspects and financial aspects, most of the money as you can see is going to buy the power itself. that's the point of this but there are funds to make sure that we are paying pg&e for their work on this, and for marketing outreach education effort. and this shows you that about 43% of people in san francisco are what we call tier one, the lowest users of power in san francisco. they would pay about $9.50 to be in this program. if you use more than that, tier 2, you're about $20 a month.

so altogether, average-wise in the entire city the average people would be doing would be about $18 a month but again that's including a lot of high end people, along with the ones that are in that lower classification. and this schedule, again, pretty busy but what it shows is no matter what class you're in this would mean a rate increase on your total pg&e bill that typically would be in the neighborhood of 23%. and so if that's too much, don't choose this. if it works for you and the best way to be green, then choose it. that's the way it works. i would be happy to answer any questions you might have. >> president chiu: supervisor campos. >> supervisor campos: thank you, mr. president. mr. harrington, thank you very much for your presentation. one of the things that has been floating around in the last day or so is this idea that, even

though we've spent so many years working on this that somehow we should hold off and continue this, maybe we can get a better deal, maybe there are ways in which we can make this program better. my understanding, having deferred to the great work of the puc, is that this is as good a program as we're going to get, and that in terms of the -- the terms of this agreement that i don't necessarily see how a continuance makes this any better i'm wondering if you have any thoughts about that. >> sure, supervisor. obviously a continuance is a policy call. i understand that. the issues people have, like this is an opt out program, that is state law. a continuance will not change state law. if you're looking for us to try to find another vendor, been there, done that, several times. the only group that's available is shell. the only group that was available to marine that made it work is shell. some day, some time, this may be different. but that is not in any near

future. i am not telling you it is the perfect program, but i am tell you it's the only one that we believe is possible in any kind of near-term future. and i don't see how it changes. >> supervisor campos: thank you. >> president chiu: supervisor avalos. >> supervisor avalos: thank you, president chiu. i just want to voice my strong support for the clean power sf program and i want to thank general manager ed harrington and his staff, barbara hale, and others, for their great work. also, for the staff, for lafco, nancy miller, and jason freid for all the great work together, the sponsor of this work today, supervisor campos, who has picked up the baton from ross mirkarimi, who picked it up from tom ammiano, for many, many years, this resolution, this appropriation, ordinance, have been in the making. and i'm very excited that we are

here today to really put teeth to our goals on climate change. san francisco, as the general manager said, has ambitious goals around greenhouse gas emissions and reducing greenhouse gas emissions by the year 2012. we're actually supposed to be at 25% reduction in greenhouse gas emissions. actually that's by the year 2017 we're supposed to be at 25% reduction in greenhouse gas emissions. by 2025 we're supposed to be at 40% reduction and by 2050, 80%. as the general manager says there is no other program we have that's actually going to do the work to get there. and we are actually a city whose population vastly understands that global warming is a reality, that climate change is a reality. and of that vast majority

there's a portion, i believe, who are willing to pay a slightly higher rate for making sure that we are generating our electricity here for consumers in a clean way, in 100% renewable way. this is a huge investment for our future, for the city, but also a great example for other cities around california, and around the country and around the world about how we can really be proactive around preventing climate change. so i am really excited about supporting this work before us today. in 2010, pg&e spent $50 million to defeat -- to try and pass prop 16, and they were defeated by voters. voters who were clearly outspent, believed that prop 16 was trying to take away the possibilities of creating programs like green power sf, trying to take away programs like community choice

aggregation and we were able to actually support the passage of the doorway opening for clean power sf by 68% of san franciscans who voted against prop 16. i think that's strong testament to where the feelings are of people in san francisco about clean power sf but we will be able to see truly what that is when we move forward with our phasing in of the program. it's not perfect, how it works, but we're constrained by state law. we have an opt out program. we also have opportunity for people to opt in. and that is something that i will proudly be doing with my family when it comes to it. you know, in future years, we're going to see, as we are able to phase in the program, moving away from the contract with shell. but we'll have revenue to be able to finance on, to actually build our own renewable power system, little by little, in san francisco. as we do that, we will be creating jobs in this city.

and i'm really proud to say that a lot of those jobs will be for local san francisco residents. i think this is a really remarkable vote we have here today. we are actually creating a new system for energy generation in san francisco, one that will not be controlled entirely by pg&e, but we will have the ability to create it ourselves. and the fact that we are making a choice in that happening means that every day san franciscans have the ability to really be part of that solution, to doing away with a monopoly here in the city. so i want to thank, again, my -- the people who work through the years to make this happen. and also want to put out strong words for support for the work of assemblyman tom ammiano who's brought this vision to the city 14 years ago -- it probably probably 1998.

thank you, tom. i want to say thank you to mr. harrington as well. when the person who was the controller for 17 years of san francisco tells us that a program is financially sound and has spent many years since being the controller being the general manager of the puc, telling us that a program is financially sound, i think it's worth noting and supporting. so, colleagues, i hope you can do the same. >> president chiu: supervisor kim. >> supervisor kim: thank you. i do want to thank both supervisors avalos and campos for your advocacy on this item. because of numerous issues mentioned there were questions that came up on budget committee. one is the most obvious that we are finally providing 100% renewable energy but with a company called shell. i know that makes people feel uncomfortable and i certainly understand that discomfort. what i want to say is that years and years of work went into this, and i do really want to appreciate the efforts of the staff that brought this to us.

there are a number of kind of outstanding issues that i think colleagues and i had a number of questions, particularly our most vulnerable customers and ratepayers. our low income commerce as well. we want to ensure that they are not caught in a program that they did not realize that they could opt out of. so i worked with a number of colleagues, who were very concerned about this issue, president chiu, supervisor cohen, supervisor mar, to come up with a series of amendments which we worked with the puc and the city attorney on, to add some additional protection for our most low income customers. i have a number of them. we have copies to share with all of our colleagues. but just to summarize through some of them, one is to make sure that we are able to provide discounts for our low income consumers that commence rate with discounts typically provided with pg&e customers for their care customers.

we also wanted to find ways of developing a funding mechanism, whether it's voluntary donations from other clean power sf customers or perhaps even the $5 fee for those that opt out later in the program that could be used to actually augment or subsidize the cost of the bills for our care customers. we also want to target the energy efficiency services and go solar incentive to our low income customers as well as reducing their bills because they will be first in line to take advantage of these programs that the puc would be going after. and then, second, we want to ensure that puc will exclude low income customers in the initial phase of the clean power sf program allowing additional time for outreach and also for people to hear more about the program as they learn from customers that are already in the first phase. as i mentioned before we are

directing puc to give priority to low income power sf customers for eent of energy frgs and undertake an aggressive outreach campaign to reach those customers. and we also wanted to actually extend the opt out period to at least six months. and that was some of the amendments that have come forward. i am certain that some of my other colleagues will want to speak to some of the amendments as well. thank you. >> president chiu: thank you. supervisor kim, i understand, has introduced a series of amendments that are supported by myself, supervisors cohen and mar. seconded by supervisor mar. why don't we hold that. i know there are other amendments that will also be offered. supervisor chu. >> supervisor chu: i want to thank colleagues for their thoughts and comments. this item came before the budget and finance committee. we voted to send it out but it

was a societ vote 3-1. i dissentd i -- dissented. two of the most important reasons were around the issue of opt out and around the issue of the reserves. in terms of the opt out, we know very much that this is a restriction that the state has put upon us with the enabling legislation and because of that we had to structure a program that has opt out provisions. however i thought there was ways potentially to strengthen the program and make sure we're not inadvertently capturing individuals who did not want to be in the program. the second has to do with the reserve. currently the way the program is structured the rates that are going to be charged to cca consumers does not necessarily cover the cost of reserves. there are a number of reserves in the program -- i think some people think that it's a modest amount of money, that it is money that the city can affront but i think there is a policy choice to have people who choose

to have a more expensive program, who choose to be greener, to also pay for the required reserves of the program. as you know, there is about $# million i$7million in the -- an5 million in a program that is currently in place and none is being carried by any of the cca customers. from my point of view i think there is nothing absolutely wrong about having a cca program but i think it could have been strengthened with stronger opt out provisions as well as ability to recover some of these reserve expenses through the program. so those are the reasons why i dissented in committee committee. i am offering amendments to the items before us to try to get closer to those components that i'm most concerned with. unfortunately i have to apologize to the sponsor and of course the department. we were not able to circulate the amendments early enough to really get a thorough conversation so i apologize for that. i know sometimes here happen on the fly. so just wanting to re -- the

conversation or some of the amendments and then to have i'm sure a very robust conversation about it. the amendment or the motion that i would be making is to add to page 5 the wording further resolve the initial phases of clean power sf will offer service only to those customers who have indicated desire to be included in the initial marketing of the program. i should mention that these are amendments that i'm making in conjunction with supervisor farrell here. the second would be another whereas clause, added to page 16, and these should be in front of you as well, whereas the sf puc have not commit to buy power from shell unless the commission determines that a quantity of customers sufficient to ensure the financial viability of the program has indicated desire to be included in the initial marketing of the program. finally, to the ordinance, section 3, and the resolution, page 9, the sf puc will include in the clean power sf rates a

component to begin recoveringy reserves required in the program in the contract period so customers of clean power sf will bear the cost of the program. again, in that phase in terms of the recovery of the reserves there is not an indication of the level but it is sending a message we would like the program to become sufficient over time. those are motions i'd like to make. i want to thank the puc staff and ed harrington. they've done a great job of shepherding a program through that they thought they could bring to the board and we simply have a few amendments and changes we'd like to suggest. thank you. >> clerk calvillo: to supervisor chu, the clerk's office does not have a copy of those amendments. hopefully your staff is bringing them to us. >> supervisor kim: we will do that. >> president chiu: is there a second in seconded by supervisor farrell. and i wanted to ask, mr. harrington, have you had a chance to see these amendments? i think many of our colleagues would like to get your sense of a feedback on the various

amendments, if you've had a chance. >> i received them a few minutes ago and had a chance to look quickly at them if you'd like a quick response. >> president chiu: yes. >> with regard to the one that says the clean power ratepayers will begin recovering the reserves required for the program since there is no specific requirement for how much that would be i think as we look at the raitsd w rates we ha chance to say let's see how far we can get in the four years. that makes sense so we can do it. the other one does cause quite a bit more heartburn. it sounds like what we're asking to do is start a program with opting in, hoping for the best, not knowing whether it's going to work. i don't know how i keep a contract with shell not knowing how much power they're going to provide. it has a lot of issues that i don't know how it actually works, is the concern there. but maybe as the discussion happens it might be clearer, but i don't get it right now. >> president chiu: thank you.

supervisor mar. >> supervisor mar: thank you. and just looking at the -- to my colleague, supervisor chu and farrell, it looks like the amendments would be harmful to the success of the program, from what i could see. i just wanted to first thank supervisor campos for bringing this forward after years of work by assemblyman tom ammiano and many others. i also wanted to thank the sierra club, many leaders from the sierra club over many years, kind of pushing and advocating and advising on this, besides our great puc staff, and our lafco staff, nancy miller, and jason greed a freid as well. i've been listening to the senior organizations, low income people groups and community based organizations input, as well as the electrical workers. we've been communicated to by hunter stern and ibiew on a number of issues. as a father, i want to see a

clean air future, clean greener future for my daughter and the future generation. and melanie nutter, head of the department of the environment is here, that we have tremendously ambitious climate action plan goals. and as ed harrington said a moment ago, this will help us at least make a dent on kind of the huge challenge before us, to clean our air, and to make a clean energy future for all san franciscans. that's why i -- that's why, as a member of lafco over the years, since 2009, i've been strongly supportive of coming up with the best possible contract in plan. i wish we had more contractors that put in for this but as ed harrington said we're doing our best with what we have and it should be a good step forward for a cleaner future for san francisco. like supervisor kim and others, i want to make sure that our lowest income populations are protected and i strongly support the most aggressive education

and outreach program we can have towards especially our lowest income populations, especially language minority groups, so that it's not just the two notices before and two notices after, but everything from, as you said, social media to door-to-door, and even grassroots organizing by the community based organizations as much as we can do. i think mr. harrington mentioned it was 1.2 million through the puc's work but i think really targeted work with a lot of partnerships with community based groups is really critical. whether it's through lafco and puc and many of our community based organizations, i also appreciate kind of from president chiu and others leadership efforts to try to make sure that we are supporting the -- with $2 million, kind of the more low income populations to get energy efficiency improvements and go solar funding for their homes and housing and also making sure that this new hardship fund really is well done, and there's

strong outreach and awareness about it. i also wanted to say, too, that my intent -- i'm supportive of clean power sf but i also want to make sure we're looking at other efforts to meet our action goals. ibew raises other alternatives and i was going to ask mr. harrington to comment, something called california's community solar program and they also point to how public agencies in san mateo and other countries ar -- counties, we wat local jobs here and to build it up so we have more jobs that are green jobs that we're creating as well. this is a step forward divardz that. but if you could respond to what ibew is saying that would be helpful. >> supervisor, we would supportny program to create and generate green power wherever it might be. when we say local we are not just saying in san francisco. obviously we have watersheds in

san mateo and santa clara that are useful for solar panels and we will be happy to partner with whatever groups of people that want to create jobs in the local economy of the bay area and be able to build those kind of projects. >> supervisor mar: again, thank you for putting the best possible contract together. i know we were sitting down together over the past couple of years as this moved forward so i know a lot of thought with supervisor campos' leadership has gone forward but without your leadership i don't think we would be here today so thank you, mr. harrington. >> president chiu: supervisor olague. >> supervisor olague: i'm really happy to be supporting this legislation. i also will be supporting the amendments of supervisor kim, that relates to the needs of low income communities, although i believe that when a lot of these communities, seniors, and others, are informed about the benefits of this legislation, i think that many would be willing to pay that little extra because of the implications that are so

great. i first started -- was first introduced to this issue actually in the late 70's when i read a book by airy lefns called soft energy pass. it's amazing to think 30 years later we're barely making the first step in san francisco. so it's impossible again not to thank supervisors ammiano and mirkarimi for really leading the charge and remaining patient during these years, because it obviously -- many of the campaigns -- i don't know if many people were involved in them but i think most of us -- some of us here were. and they were really controversial and it was quite a fight to get to where we are now. so, again, i want to thank the leadership at the puc, mr. harrington, -- fox, and ms. ellis who came by and certainly informed me of this.

also, the advocates like eric brooks, green party folks, and others, for staying with this, for this period of time. so although the u.s. never ratified the -- protocol i think it's responsible for us to at least locally to start talking about reaching the goals of reducing greenhouse gas emissions. so i think it's a conversation that's long overdue. i hate to be corny but there's that bumper sticker, act locally, think globally. i might have it reversed. so anyway i'm really happy to be here today to support this. >> president chiu: supervisor farrell. >> supervisor farrell: thank you, president chiu. and, colleagues, and also want to echo support and thanks to ed harrington. i think he's done an amazing

job. i know we will talk about you later but done an amazing job at the puc. you know, when i first heard of cca a number of years ago before being on the board of supervisors, and the notion of creating greener, cheaper energy, that also creates local jobs, you know, who wouldn't support that idea. and i believe, as much as anyone in building our green economy here in san francisco, and doing what we can to make that a reality. and, you know, as i mentioned to mr. harrington, have expressed to him, i realize the constaint he's been under and puc has been under through state law and otherwise in what they can create. as was talked about in committee last week, the initial goals of the board of supervisors passed a number of years ago before cca were simply unattainable. i want to echo comments that i support the -- of cca but there are a number of issues that i have with the current form of the proposal.

i think first and foremost is what came out of and is mandated by state law being an opt out type of program. i think it is the wrong way to legislate, to cause it to be an opt out program. it smells of coercion. to me, if this was a voluntary program, or we could create a mechanism where we knew that the people that were being offered cca and that were being asked to increase their energy rates had at least indicated that they wanted to do so, that to me is a big deal. second of all, we talk about the economic impact, a loss of jobs here in san francisco, reduction of the hetch hetchy fund balance which would result in general fund implications. but as also as supervisor chu mentioned, having a reserves that are not borne by the cca ratepayers but instead are borne by the entire ratepayer base for

the puc, which is why i'm going to obviously supporting those amendments. for me, colleagues, i think at the end of the day it really comes down to the consumer. if we can make this a way, i don't think it is the right thing to do to hoist on consumers an increase of 20, 30% higher energy rates, and really an opt out program. we can have debate whether we think that's a decision people make but if we're excluding low income folks we talked about sros and seniors there will be people vulnerable who will be paying higher rates unbeknownst to them. this has come out in the spam e-mails we've gotten from different agencies, the notion of creating local green energy. this is something i absolutely support as well but the premise and the numbers just don't add up right now. we are increasing energy rates by between 20 and 30% right now, to create what is a break-even program here in san francisco.

and that's fine. but i sat down with -- who runs our public finance program yesterday to understand what is our capability in san francisco for puc to bond against in order to raise enough money in order to build out and create local green energy. and the answers were we're going to have to increase the rates substantially over the 20 to 30% that we do now in order to create that. i know there's been talk about it's a fait accompli if we approve this program and we will build local green energy but that is not the case. mr. harrington and i talked about it last week in the committee meetings. there are no numbers. it's an unknown right now but it is known you have to increase rates higher than what it is today and that's what we need to take into consideration. it's misleading at best to say this program today will create local green energy because that is not the cause. in any case for me the biggest issue has been this opt out

nature of this program. we've been talking with our city attorney over the last week. i do wish we had more time to iron this out but it is what it is. and i know there's momentum to make a decision here today. but to create a program where we know there is some voluntary nature of people subscribing to this where they will -- it is not an opt in program, we can't avoid the opt out nature of this but where we have a much better idea where folks want to participate in this program this is why i've added the resolution -- amendment to the resolution, that supervisor chu alluded to earlier, adding to page 5 a resolution that will make this motion, adding to page 5 the initial phases of clean power sf will -- to those customers with desire to be included in the initial marketing of the program and added to page 16 puc shall not commit to buy power from shell unless customers to ensure the