diller playground in dolores park, go to sfrecpark.org. >> good afternoon and wg welcome to the localation formation commission. across from me is david campos and other commissioners as they arrive. clerk of the board is elisa miller and we are brought together by sfgtv staff whose name i don't have but i want to thank them for their service.

>> madam clerk please call the next item >> item no. 2, march 25th, meeting with the san francisco commission. >> thank you. any comments or questions or changes? let's go to public complent -- comment on the last minutes on the march 25th meeting. seeing none for this item. can we have a motion to approve these minutes? motion by breed and campos. next item. >> item no. 3. activities report on power program, status update on the proceedings on california public commission. >> great. thank you. we have

this update coming up right now to plug in before barbara miller, hale start. i stood before the public commission on tuesday and we'll get a date for the approval meeting. there is not that action at the puc. i know as we are missing those dates we are pushing back possibly on the start of clean power set program. i'm concerned we are not moving in the direction we need to move. i want to go forward and expedited the process. yesterday i met with the staff and my staff of lafco welcome to be part of that to figure

out ways how we can move forward on that program. i hope we can touch upon that today and during this report. lastly, i have noticed that the shell shocked effort is coming up again. i'm getting e-mails on that i know we have a communications plan and we have to put forward our message on that and it seems like there is a countervailing message out there because we don't have our voices out there to e-mail and other means to connect with people. with did do an editorial meeting with breed and myself and puc staff was there as well. questioning on how to get this program running and i think those events will be more helpful. miss hale?

thank you. >> thank you, commissioner avalos. barbara hale for power. i do want to acknowledge your participation at the public utilities commission meeting. it's great to keep that dialogue open with commissions opens and we do have a calendar in response to your specific request. i think that will help. i think the direction, the guidance and request we were given to our commission in how to get this moving is to provide further information on the local build out framework and plan that we had placed before the commission and we will spend time going over that same presentation with you today. we will also provide some updates on how things are going on the regulatory activities front at the

california puc and both presentations i'm very please today tell you will be made by our new director kim malcolm. kim comes from a long career working on energy issues both at the california public utilities commission where among other things and relevant to this program she was the administrative law judge who developed rules for this state and also from the non-profit sector she worked on the east bay implementing energy efficiency programs targeting low income customers and disadvantaged residents there as well as the general population and those effort included work force component and these are the kinds of

skills that we really need for this next phase. we are implementing and building out. >> hello. i have met with a lot of people and i'm very optimistic . i have a presentation for you today. it's a presentation that i gave the commission on tuesday and i encourage you to interrupt me at any time with questions or

comments. i would like to ask how much time are you expecting me to spend? >> i would go ahead and give that presentation to the commission. the purpose of this presentation was to respond to two types of concerns that are related. the first is that we need some kind of a build out road map and ultimately a more detailed plan for moving ahead. the staff and commission is committed to a build out as part of the -- >> do you have a handout for it as well or just the powerpoint? >> i think the handouts are on their way. >> they are in the packets for the agenda. >> thank you. >> so, we want to give the

commission now to you an idea of thinking on a build out and also to give you some new analysis of how we can set rates and how we can structure the resources mix from the shell contract. this is a two part presentation. i want to tell you a little bit about the resources we can use for the build out, some of the tools we can use. challenges and opportunities. we've created a very summary timeline and then i will talk to you about some rate making options. this list here in slide 3 is a reminder of things you have already visited in past presentations, i'm sure. just a reminder that we, the staff use the shell contract as a transition to a more diverse portfolio of

energy purchases and demand reduction strategies. we are mindful that we need to have plenty of flexibility in our planning to take advantage of all the technology and innovations and market conditions. we plan to leverage existing programs especially in the early years as we try to plan new once and we plan the build out i am pablths in the improvement. we hope to come pose the program with the rules of our interest in the community and finally there is a commitment that this program will be self sustaining and won't impose unnecessary risk on the city. >> we are joined by commissioner lee and mar. please continue.

>> first there is two components of a build out. the first is energy efficiency. there are a number of existing programs that we can facilitate with our new cca customers and we are hoping to get some additional cpuc funding for energy efficiency. we understand marine county got some recently. we plan larger projects and larger buildings in the city. we have $2 million to allocate to the program for lower efficiency low income households. the secretary -- second build out is renewable arrangement. we can construct new projects on city project --

or private property and part of the component of this part of the program would be behind the meter on investment which would save can -- customers on distribution cost. >> in terms of opportunities for small scale combined combustion, did we have a sense of what we have in the city for that? any opportunities we have in san francisco with our city municipal services? >> yes. i'm not aware of a survey. barbara? >> barbara hale for power. the department did a research project to identify the potential for combined heat and power opportunity for san francisco. i think it's about three years old now. that's one of the basis of the information that the local power folks

relied on to put together their analysis. so that historic information as updated by local power is helpful in informing the opportunity and i think the challenge for us is how to design programs that provide behind the meter services that are, that can rely on resources and also we want to rely on renewable resources. the combined heat and power generation is not considered renewable. it's a more efficient use of natural gas than with otherwise occurring out of site so that's a great improvement and also the question of whether the the cca program is electro provider program on the services of the gas side of the bill. so that's a question that we are posing,

prepare to pose to our commission as we discuss the local build out opportunities. >> so, for the purposes of renewable energy we can't count anything from combined combustion? >> not from combined heat and power, no. >> of course, thanks. >> so there are a number of ways that we can effect this build out. you are probably all familiar with -- the meet erg terrace both of which will allow the power from local and regional power sources. we might be able to collect some customer revenues to help create programs investments and renewable efficiency energy. next page. we have some existing resources that we can use to create new programs. the

department of environment has some programs that we are starting to coordinate. we can issue bonds. we understand from our cfo that we need a couple of years of revenue streams or some other kind of collateral to issue those bonds and he'll be giving the presentation to the commissioners on may 14th about that. we are in the process of digging down to the next level and creating a buildup plan that will provide more detail and some discussions of the different kinds of policy decisions we are going to have to make as we develop buildup strategies. we know there will be challenges. we need customer interest in both purchasing power as well as participating in energy efficiency programs

and renewable installations. the success of the program will also depend on cost-effective resources and we expect to have some competition in that area from both the local utility and 3rd parties. there are challenges of system integration when you are building small projects behind the meter or otherwise especially with inner connection delays associated with inter connection and the way that smaller projects integrate with our demand profiles. we need to grow the program cost effectively. we are going to have to pay a lot of attention to ceqa for energy renewal projects and we are going to be constrained by revenue sources. the next slide shows a build

out timeline. we are pretty confident that we can be right out of the box with several measures besides just offering customers energy purchases. we can develop tariff, and develop rfp and start doing planning around build out. we will be working with other departments to make sure customers understand what is available to them and developing strategies for larger efficiency retro fits. you can tell by this timeline there are some things that could be delayed. we may not have the wherewithal to issue a piece for large

projects, although we can start the planning on that right away and there will be an over lay of ceqa for any major project. >> you say we might not be, so is there a possibility? >> for funding? yes. depends on the rate making. any questions on the timeline? >> just that we've had these delays over the past couple months in terms of coming to a decision whether or not to exceed rates and being able to schedule meetings. how long that is timeline roll out been changed in terms of those delays? >> i understand we need six months from the day of the commission on the not to exceed rate. a lot of that is for

customer notification process for rules and we need to finalize the terms of the shell contract and the city's own internal procedures. >> supervisor campos. >> thank you, mr. chairman. thank you very much for being here and welcome a board. i was wondering what is the expecting date by which we are able to start and able to bond and actually begin the building of an energy generation infrastructure? >> we can probably participate in small projects pretty quickly and we can take advantage of some powerful

meter and tariff whether existing solar installations in the city. for larger projects, if we need bonding we understood we need two years of revenue stream. so we might not be able to issue rfo for large projects for a couple years. we probably could issue an rfo into the second year but if we need any kind of projects to fund those projects for bonds that large it would take a couple years at least. >> thank you. >> moving into the rate making portion of the presentation. on this slide these are just reminders of the kind of moving parts that need to be considered and balanced when you are setting a rate and they

are the customer's willingness to pay and the rate, the recent shell contract. what we call head room would provide reserves for the puc to engage in build out activities. the final shell procurement rate which we are still working on and program cost and actually we are working on that too. we think we might be able to squeeze the rate down a little bit more with some cost saving measures. right now our estimated price range or not to exceed rate is 11.14 per kilowatt hour and -- >> how does that compare with the pge rate? >> right now it's about 8

months. and which is proposed to the california puc. it's about 11.5 cents. >> i thought there was an estimate of what that was going and a rule of not to exceed on that? the 11.5 is the latest you found? >> that's the latest we've seen in the press. >> the puc is going to make that determination when? >> basically optimistically it would be about 5-8 months but could be longer than that depending on how they treat any protest and depending on how long it would take the process the final letter rate. >> commissioner mar? >> i just wanted to ask the

11.14 to 14.57 cents per kilowatt hour how much is a regular charge. how much would it cost per month for residential user. >> good question. that's shown in the next slide where we present four different rate making scenarios. the first one is the base case which is the one discussed i think prior to this week where you have the higher rate and no funds for build out but you have a very resource mix from the shell contract that purchases a lot of shaped and firm product which is called bucket 2. we've changed that resource mix for purposes of the next three scenarios to show the purchases

of a lot which are called recs. there is a showing of how they will be affected for the customers. the three scenarios on the right hand side, the first shows how much you will collect for a build out. if you stayed at the higher rate 14.57 cents and changed the resource mix to be rec's heavy and there is the collection for build out. the next scenario split the savings from purchasing recs between a build out receive which is about $18 million and a lower rate which is 12.86 cents. the final

scenario shows the effect on the rate if you use all the purchasing saving recs to lower the rate and you would have no additional funds for build out. >> so it looks like it increases about 5.5 and $20.25 per month depends on how we determine the recs? okay. >> there is another table that shows the same types of relationships if you had a resource mix of the bundle

product and 45 percent of the -- >> i'm sorry. the table she's actually looking was not in the packet. it's on your desk. this is the new version that she's referring to so you can look at it more closely. >> it's on your screen. >> the rates are a little bit higher and the reserves are a little bit lower in the various scenarios because of the cost of that second product called firmed in shape. the differences between those three products depending on who you talk to is very significant and not very significant. we can explain that more if you like. they are all green, they are all california certified.

>> who presents the best scenario in terms of the range of opinions of the cost were each of these? >> you mean the staff on best scenarios? >> you mentioned staff and other people? >> there were commissioners who were concerned about purchasing 85 percent recs which is something in the middle. we are not recommending the base case because the rate is just too high and there is nothing left for build out and we understand the city's commitment to the build out. we create the same tables for any resource mix if there are any different ratios

you would like to see. >> okay. thank you. >> the next table shows the different way of depicting of what's in that first table, the first one we talked about with the 10, 5, 85, mixture of resources. this shows the different component of rate relative to cost. the portion called energy for the different green products. we are hoping to present to the commission a not to exceed rate on may 14th and to get them a little more

information about the build out plan. are there any other questions? >> before we entertain questions i wanted to make one correction of what i said. barbara hale, general manager for association for power. on your question to me about combined heat and power and whether it can be renewable. it can we renewable, power with natural gas is not considered renewable. there are opportunities to power it with a biomethane product or other fossil fuel that are considered renewable fuels and those opportunities would make it qualify as a renewably heated source. combined under the meter doesn't count under california's p s rules under

the renewable requirements because it's behind the meter and not on the utility side. that doesn't mean the city wouldn't want to renew on the aspect but it's as well. >> it wouldn't qualify? >> if it were combined methane few it wouldn't qualify behind the meter towards our requirements. >> thank you. comments or questions? i want to announce we are joined by smeltser. >> i want to mention how we are going to be promoting this on a mass level and i know there is some anxiety that shell shock campaign was getting the word out more and i'm reviewing the

tweets from the twitter feeds and facebook social network messaging and it doesn't seem like we are way behind the curb and i noticed puc has noted two times since october and looking at the facebook feeds out of many different post there is only maybe 1, 2, or 3. do we have a strategy so we have a constant presence to promoting positive things and changes as we go forward because i feel unless we catch up, we are really going to be not getting our message out and not framing this correctly. >> in fairness to miss malcolm, she's been focused on the local bill. i will try to respond to your