lampre, steel head being federally protected. >> when is the best time to go fishing? probably if we do things right, probably 20 50 maybe. [laughter] when we have a sustainable run back in the creek, then maybe we can talk about some catch and release. >> i gotcha. thank you very much, mr. miller. thank you. ~ >> i'm going to put that in my calendar. [laughter] >> any other public comments? arthur? you heard the call for you to rescind your resignation, i'm sure. yeah, right. so i can come back and -- no, [laughter] >> don't go there. thank you, mr. president. >> you have until 20 50 to go fishing in your retirement. i'll meet you there. >> there you go. we'll come back for that. now that i helped save them by removing my earlier remark. a couple of things i wanted to start with. first of all, the program should and must go forward. calaveras dam is too important. you were good to highlight that

in your questions to ms. labonte. it is the flagship reservoir. it's the largest one you have in the bay area. it's absolutely vital for earthquake protection and drought protection. more on that in a moment. so, we support all the recommendations and the supervisors' appropriation, all of those things if you need us to come and say that to them, we would be glad to do so. we did have concerns about the budget. you are now six years away and counting from completing the entire program. more things could happen. it was impressive to see the risk curve that julie presented to you, and that's very helpful. i'm going to study that more and we'll probably have some more questions for her, your staff. that is in effect your decision making here today. with respect to our recommendations in the letter, the level of service goals was a question. commissioner moran spoke to that. i think the squab quantification, the timing is important to us.

that information is going to be coming back to you, as ms. labonte said. ~ with respect to the budget impacts, we did suggest that alternatives might be considered. commissioner moran said the unthinkable. or you can increase rates, too. which is a possibility, and i appreciate the comment because it suggests the spectrum of things that are at your disposal in case you do go above the 88% risk threshold. there will be other things you need to consider. and whereas the economy appears to be out of the great recession, now in capital letters in the media, i know that all of our cities and agencies are holding tight. they don't want to get anywhere near that financial cliff again. and, so, your work controlling this budget is very important to them. i think one of the things that we have collectively fallen into a deli yum about is the fact there are so many zeroes on these numbers. ~ so, $50 million seems like

[snap]. that's how much we save by financing, $350 million. so, it adds up, as they say. so, your continued attention to that will be important. speeding down the celeste -- one of our recommendation is any remaining contingencies be put under the command control of the program manager so that that can be reported to you and be visible and it doesn't really change the nature of your contingency management plan, but we think at this stage of the project it would be an appropriate idea. and then lastly, the impact of these projects and the importance of them. one of the points highlighted was the significance to drought. put thattion in perspective, there is another memo in your packet today that talks about the financial economic impact of drought. 10% reduction being measured in almost $2 billion a 20%

reduction system wide, almost $4 billion, that would more -- per year of drought. obviously more than pays for the $19 million increase due to this project. so we support you moving forward. thank you. >> any questions? mr. bilbow. >> thank you. from what i understand about the program and the specific project level changes, i am satisfied that impacts on rate payers, all of the associated issues here, i'm good with. i'm only stuck on two things. and once again, my theme is c-e-q-a. on page 3, the two resolve clauseses at the top there, i'm not actually sure if this commission makes the finding that there have been no substantial project changes. i thought that was the environmental review officer of the city under chapter 31 since the planning department is designated as their responsible

party for the city as the lead agency. and with respect to the second resolved, i guess i'm not entirely clear on why you would need to re-adopt past findings if there are no changes to the program, including the ssc and mmrp and if in fact you are readopting them, again in the future, i would request that there be a link or some ~ way to access that information because it is pretty material and it is suggested that that's incorporated in the resolution as they are fully set forth. so, i'm just stuck on the c-e-q-a minutiae. otherwise, i'm good with the changes. and thank you. >> city attorney's office. it is the practice for the commission to make the finding that there's no new information if there is -- that is

something that your environmental review staff confirmed with the planning department, that that finding is required to be in there. and i will work with you, david, to make sure that the recitals and the links -- i hear what you're saying about making sure the dates and the reference back to the planning department are available to folks. i will include you to improve our consistency on that point. >> the chair is ready for a motion to approve. >> i'll move. >> moved. >> and seconded. >> seconded. all those in favor signify by saying aye on item number 11. >> aye. >> opposed? seeing none, the motion carries. item number 12, presentation and discussion of the proposed wholesale revenue requirement and rate schedule for fiscal year 2013-14, as applied to meter readings. mr. reid strong. >> good afternoon. mr. reid strom, general manager [speaker not understood].

we present the water rates which are predicated on the 25 year contract that you already approved. while this is largely a ministerial act, there is some news in here which is rate payer good news. we want to make sure that gets reflected. we have a very short presentation for you, about four minutes. and i'd like to turn it over to deputy cfo charles pearl to walk you through the rate payer savings. >> good afternoon. as mr. reid strom mentioned, ~ we do have an opportunity to share with you the proposed rates for the wholesale water customers for next fiscal year in advance of your action which is scheduled for may 14th. and, so, if we could go to the slides, i just have a few to share with you. >> um-hm. >> as mr. reid strom mentioned, we have some good news. the rates will be going down for the biggest wholesale customers. the biggest reason you are aware of, we received $356 million payment in february from the wholesale customers.

as mr. jensen mentioned, that is done primarily for savings. what that means is we've been able to take out that rate component from our rate setting and i'll show you what that means in terms of numbers in a moment. another reason why the rates are going down for the wholesale customers is that they're buying more water. so, as compared to the current budget year, we had budgeted about 137 million, 137 mgd in terms of volume. and what we're seeing in the current year is that's going to be closer to 143. and, so, what you'll see in the chart here is we're projecting a little better news in the current fiscal year '13 and we're projecting that forward into the budget year for next year. so, again, better news in terms of water delivery, more sales means lower rate. >> is that not increase of the knit customer base or is that an increase of utilization by the current customer base or both? >> it's probably both. i couldn't speak to what's going on on the retail side in terms of the wholesale

customers, but i can tell you they're buying more water. so, in terms of the numbers, this is a grid that just shows the revenue requirement which is what we in finance use to determine rates. and you'll see in that pre-2009 assets row, the $28 million amount is going away. and, so, in fiscal -- beginning in fiscal '14 moving forward, all the zeroes there represent the removal of that prepayment amount from the annual rate setting. so, that's the primary reason the rates are going down for the wholesale customers. you'll also see down in the fiscal '14 column that negative 13 or almost $14 million number, that represents the additional water that they're buying from us in the current year that we're then giving them some rate relief in the budget year fiscal '14. so, those two thingsed to thetion have resulted in the rate reduction. ~ which is here. you'll see this shows some historical perspective. i can appreciate the numbers

are a little small if you're looking at the screen. but the negative bar that you see there for fiscal 14 shows a 16, 16.4% reduction. ~ for the proposed rates for next year. i do want to, though, show you that in the subsequent year fiscal '15, we do have some rate increase that is coming online and that is primarily due to debt service. so, again, a rate reduction proposed for next year, but it will -- we will have a bounce back in the subsequent year fiscal '15. >> where is the debt service reflected? >> debt service is related to the bond issued for wsip. >> where is the reflected in the thaterth? >> sorry, it's the bar chart you see on slide number 5. ~ chart >> got it. thank you. >> sure. >> thanks. >> the good news again, as mr. reid strom mentioned, ~ compared to what we showed you a year ago, the overall rates for the wholesale customers are going down from an sfpuc perspective. however, the wholesale customers will then need to pay for the bonds that bawsca has

issued so that we the puc will serve as a collection and paying agent so that with will then bill the wholesale customers for their portion of those bonds so that overall net-net the customers will have a little bit of savings which is represented by the interest rate savings on the outstanding bonds. so, overall you see a five rate comment, a 10% reduction overtime. the rates that the wholesale customers are being charged. however, what we'll then be doing is taking the information from bawsca and adding back what we'll need to collect from them to pay the bawsca bonds. this is a pennies per gallon slide and, again, it's just showing the costs going from about a third of a penny up to about two-thirds of a penny over time. the drop that you'll see in the fiscal '14 bar is just the rate savings that i just described. but the increases that you'll see over the next few years is primarily due to the debt service coming online.

and then our costs will flatten out once all the wsip bonds have been issued and once all of those costs have been incorporated into the rates. so, we do have a number the next few years a little bit more rate increases before things flatten out. this is just an idea of how the rates are set, but this is how we get to the rate which is $2.45 per unit. and, again, that translates into a little over a 16% rate decrease as compared to the current year. as mentioned, the -- oh, industry water rate discount, this is a discount we give to one of our wholesale customers because they actually take untreated water from our regional system. so, we give them a slight discount for that. >> who is that? >> core side county. ~. i mentioned the rate decrease. the only other change that's

going to be coming forward to you on the 14th of may is that we will be applying late payment charges to wholesale customers. we don't currently assign a late payment penalty to payments that are received after 30 days as we do for our retail customers. so, they're going to be doing that to bring them in line with the rest of our customer base. >> where is core side county? >> core side county is -- >> that's not a county, is it? >> that's the name of the water district. >> core side water district. >> they pull water from -- >> and it's located in monterey county or san mateo county? >> san mateo. >> all right. i thought we added a new county to california. >> no. [laughter] >> we'll come back on the 14th to present this in greater detail. >> [speaker not understood] me 4 minutes. you're beyond that. >> all right, i'm done. >> all right. any other questions? commissioner? >> i have a question.

you know, i'm sort of perplexed by this conundrum of the more you use, the more you conserve more, put it that way, you get less revenue. and, so, while i'm pleased to see an increase in revenue, i just want to follow-up on our president torres' comment about why there is an increase in use. maybe you can answer that now, but it would be great to understand why the wholesale customers are now using more water. >> i can just briefly tell you that the three things that we looked at in terms of why water usage goes up or down has to do with primarily water activity, and conservation. so, i can tell you that general conservation is something you'll see across the country in terms of a general downward turn line of water demands. that is something that is fairly common across the country. what's more regional in nature, though, is what's happening with the economy, some areas of california, perhaps are stronger than the others.

and what we have seen here in the bay area is stronger economic activity. another thing that you can also rely on is how -- oh, whether or not unemployment and that sort of thing is actually having an impact on water demands. and, so, we go through our budgeting process, and budget sort of an average water year in terms of consumption. so, as things change, whether we have a dryer year or wetter year, [speaker not understood], we budget a water demand scenario, we are seeing that water demand has picked up and perhaps that is an indication of a little more demand because it has been a drier period whereas normally it's a wetter, rainy season still. >> thank you.

yeah, and drier and less rain. >> referring to law. item number 12, any public comment? blah, blah, blah c-e-q-a, blah, blah, blah, we'll talk. [laughter] i understand this is not for action today, this is for may 14th. i'm also wondering if this required any special notice under charter section 16.1 13 because of the change in rates. >> i have no idea. >> because it's wholesale it didn't require? >> it didn't require. >> interesting. >> we learn something every day. >> yes, we do. and i appreciate that. >> thank you for being here. we don't need a motion on item 12, right? no. >> [inaudible]. >> it's for consideration at the next meeting. >> make sure you put that in my script. [laughter] >> >> [speaker not understood]

call for the vote. mr. chair, members of the commission, one comment on the demands and though affecting those. we have just begun a water demand, regional water demand projection study which will look at such factors in the conservation and economy and so forth. we will have -- by this time next year we should have a much more elaborate answer to your question. >> thank you. >> be glad to provide that for you. >> all right. item number 13. >> item 13, authorize the general manager to execute on behalf of the city and county of san francisco a memorandum of understanding with united states department of commerce, national oceanic and atmospheric administration for an amount not to exceed $160,000 with a duration of two years. >> wow, this is the lowest amount we've ever approved here, right? >> good afternoon, commissioners. tom [speaker not understood], assistant manager for wastewater.

~ tom moala. i'm before you today, this is a tool that we use [speaker not understood]. as you know, we have a combined system. so, the better information that we actually get to feed into our system, the sooner we can come online. and also to get better treatment for our staff. so, this was developed into the future, the ssip with rent control being -- so we can do [speaker not understood] can help us with overflows. all of these are in play. this is a critical tool as we use technology on the wastewater side of our system to move forward. >> all right. commissioner. >> i hate to sound skeptical. [speaker not understood] seems like this is something on the market. doesn't seem like such a hot ticket. i don't know. i sort of read into it, looked at it. it's not a huge contract amount, but it's still 160,000

and just really sort of a cutting edge of our technology and something being used pretty widely throughout the industry. if you can speak a little to that. >> so, actually, it's three different -- i do have stephanie hair aston here who is the program manager. ~ hair ston. this is in partnership with noaa and we want to be with them. one of the cities put this in place, austin being one. i don't know what the other cities are. if you want more detail, stephanie can maybe talk a little more about the technology. >> do these things really work? i guess that's my question. >> so, we're going to be working with a research consortium. it's a research test bed within noaa. and right now the national -- we get our forecast information from the national weather service. and they provide information to us base ed on forecasting

models that use big, big grids. and, so, there's essentially one grid square over the city of san francisco that tells us how much rainfall is going to fall in san francisco in any given period. and we have radar to assist us to actually look at what's falling in the city in real time. what we're looking for noaa to help us do is understand on a much finer scale for our city, how much rainfall is going to fall, 6 to 8 hours from now, that kind of window so the operators can use that information to empty storage boxes and turn on pumps ahead of time. and the grid we would be using is much finer than the current grid. and we're just pulling up the slide. one more. so, the map on the left of san

francisco shows us the grid size that is currently used in our forecasting. and the map on the right shows what forecasting grid we're trying to go to to really understand where the water is going to fall, in which subbasin. and, so, these are cutting edge technologies. it's not a commercially available tool. it's one that would be developed for san francisco with very specific topography and weather patterns and other things in mind. >> will we be able to sell this information to the network television in san francisco? >> we're -- right now what we're asking for approval for is just some feasibility studies to really understand. and in parallel with that part of what puc staff would be doing is to really dig deep on the intellectual property. we've already started the conversation. we have assurances from noaa that we would be able to own the data, but it would be used in the model for life safety

and weather -- sort of storm watch type situations, but it would be integrated into the forecasting model. but if any other entity wanted to use our data other than the government for predicting life safety systems, that there would be a structure in place where there would have to be an m-o-u with san francisco before they would be able to use our data. >> is it possible to recruit the 160,000? >> it's possible. if other cities in the area -- which they would -- have an opportunity to benefit from the data, if they want to use noaa services in a capacity, they would share the cost. >> [speaker not understood]. we could charge the nbc affiliates. >> mr. cruz had a fantastic idea as well as developing sort of a local weather app that we could sell to the residents of san francisco for planning their picnics this weekend or whatnot.

>> you know, i'd actually be quite interested in working with david beale i guess on the climate change work and modeling. because i think this could be a very cutting edge tool, to be able to do rainfall prediction. and, so, if there's a kind of way to add that to the scope or a piece of it, i think it would be a really great piece to change the modeling to what puc already does not. >> a should be like noah's ark. >> is there a second to that amendment? >> public comment? >> public comment, there be not two peep to accept that, there we go. is there a motion to approve? >> so moved. >> all right. second? >> second. >> all right. moved and second. public comments? mr. cruz did you want to talk about his picnic ideas? all those signify by saying aye.

>> aye. >> those opposed? motion carries. finally we come to item 14. >> item 14 is discussion of proposed power clean power sf community choice aggregation program strategies including associated timeline overall resource mix and the effects on the not to exceed rate. ~ conference with legal counsel pursuant to california government code section 54956.9 (a) and san francisco administrative code section 67.10(d). >> good afternoon, ms. heal. >> good afternoon. >> so, werbach, barbara hale he assistant manager. we're back to talk about the items you identified for us at the joint puc/lafco meeting, meeting before last for you. ~ and that was two primary tasks. first, to develop a robust outline of the build out of our clean power s.f. program, including the mix of resources, the investment and funding levels, the sources of those funds, the greenhouse gas

impacts, and the local jobs impacts. our new director that was introduced to you at our last meeting will make that presentation, kim malcolm. but before she launches into that, i want to advise you of two other issues. the second piece of -- to do from our prior meetings was a comparison of our proposed program with other programs operationally proposed in california and across the nation. we're still doing some more homework on the -- on that comparison and we'll provide it to you in written form so that we can discuss it at the next meeting at your [speaker not understood]. we're working with lafco staff to put that together. and we've had some late breaking additional information on the sonoma county efforts that we want to make sure we incorporate. we talked mostly to date about the marin energy authority program and the differences between that program and ours. just quickly for purposes of

review, it's mostly differences associated with the resource mix just like we're going to talk about today. the fixed costs for operating their program, their program design. their program does not include an additional low-income discount. our program does. so, we have additional subsidies and costs that we need to cover. and it does not repay any of their start-up costs. our program does. they have a very distinctly different customer base than our san francisco program opportunity. they have a greater number of large users than commercial customers. they are also serving their municipal, for example, their municipal government throughout the county. our program does not include our municipal services because we provide service to the municipal government through our hetch hetchy power program. and the market prices for the power that they've procured are

different in that they executed a contract with shell under different market conditions with the passage of time. so, that's a quick summary on the marin program and a preview that we'll be providing similar information provided with the other programs in written form. and then finally, i wanted to make note of two regulatory activities that you may have read about in the press. we have been participating at the california public utilities commission on two filings that pg&e has made. they made a filing in compliance with state requirement, state law and regulation on march 31st, and that is the filing to comply with ab 97 0, the community choice aggregation cold of conduct they needed to identify by march 31st whether they were going to establish an

independent marketing entity to oppose community choice aggregation efforts within their service territory. we did file a protest in response to the filing and are asking that the filing be rejected by the california public utilities commission and that pg&e should be prohibited from marketing against cca's unless and until they meet the requirements of the code of conduct. in our reading of what they filed, they were told that they must decide by march 31st whether they want to have the option to market against community choice aggregation programs and how they will train their staff and educate their staff and establish procedures to make sure that they perform that marketing consistent with the law. they didn't say yes they were and they didn't say no they weren't.

they gave an undecided, let's keep the options open filing at the public utilities commission, this california public utilities commission. we don't think there is an option under state law and under regulation for them to say. we're unsure, we want to keep the option open. they either have to say yes, we will, or no, we won't. so, it's on that basis that we're asking that their request be rejected. we also ask that if the california puc is inclined to consider their filing, that the matter should be set for hearing so that we can understand what their approach is going to be and so that we can make sure that we're comfortable and in compliance with state law and requirements. and then the second item -- yes. >> just to understand that, that is for them to be able to set up a separate marketing to work on cca issues, if you will, or to oppose? >> to oppose. >> oppose. >> yes. >> they don't want to take a position on whether they would do that or not?