have that conversation. >> yes. >> as part of our commission meeting we talked about decoupling the actual cca program in the local build out. so what we talked about is that we really have to work with lpi to look at see about a local build out and so at the last commission meeting which you are probably going to talk more about is what were some of the issues that the commission had on the lpi model and the major was a billion dollars of bonding for a bunch of projects behind the meter and what had to come online to fit the model. i think that was the concern. so we are really planning on trying to see what appetite we have as far as

building a local build out because once you start planning on local build out, you are going to have to sequel. so the question is what do we have an appetite to really fund. meanwhile we know that everyone enjoys going solar and it a job creation so that was the money that was identified by the board of supervisors and the mayor asked me to increase solar for the go solar. to answer your question, we at the puc feel we have to do more and how much more do we have an appetite? >> i see the program as a tiny aspect we need to do for the build out. i'm not sure that many envisioned that to be.

>> thank you, i appreciate the comments of the general manager. i would respectfully sort of provide a different perspective and just going back to what the board of supervisors approved. when the board of supervisors approved the contract with cell -- shell. it was an understanding that there would be a robust as possible. i don't know that i would put it as the p u c trying to four -- figure out the appetite. in approving the contract with shell is that a robust build out is an important part we do in terms of purchasing energy. i don't believe that legally there is

an authority to decouple the build out from the purchases agreement with shell and in fact i think if that is the approach, i don't believe that there is legal authority for the puc or anyone to do that because the expectation and the intent when the board approved the purchase agreement was there would be a robust build out concurrent with the purchase agreement. i know that sflafco has never approved, the board of supervisors has never approved decoupling of the two. i don't know what decouple means, but as we go forward with the shell contract agreement, we'll be continuing to do a build out as robust a build out as we possibly can.

the word decoupling does not, i think, describe what the board of supervisors and what this commission have approved. >> thank you commissioner campos. i would concur. >> commissioner veet or? >> i would also concur. i believe the commissions and i'm not sure the general manager we have decoupling word has been put out there at a couple of our public meetings as well and i don't believe that is the intent or where we need to go with the clean power sf program. i think the great promise of this program is to build a robust program to create jobs and minimize gas house contribution, combat

climate change and to which we have been demanded by the board of supervisors and mayor to bring that out online. one piece i have still not received and would like to go on record once again is we have not received a plan to be able to build, conduct the local build out in san francisco in order to respond either as a commission, as the public utilities commission or sflafco. so i would ask that the p u c put together in short order a plan for what this build out will look like, it should include the financing, jobs creates, the gas reduction numbers and everything we talked about what our program should look like. i'm okay with the go solar program and the $4 million being at the very beginning of

the program as the very very first piece to get our toe in the water. but it's not the program that we need to bring online as quickly as possible. [ applause ] >> thank you. we'll continue. >> that brings us to the question of what are the key that will help the asset set of rates that are go forward, that will provide the assurance to the financial community that we can fund through bonds the local build out that is so desired the as a component of this program such an important component of this program. that brings me to slide no. 28 where you can see these primary

lievers. how the start up reserve is repaid through rates and what level we assume of care customer participation occurs in the program. what we've done to try to make this a digestible element is to show you what the approximate and i emphasize approximate cents per kilowatt hour reduction would occur under different scenarios. we have priced this program in our conversations with you assuming that 10 percent of the supply is bundled kilowatt hours. 85 percent of the supply is firmd and shamed and 5 percent is

renewable credit. shaped. under the law those are the characterization of the process for a hundred percent renewal portfolio. what you see under no. 1 under the renewable mix, the annual impact if we shifted from 5 percent renewable energy credits which are the least expensive product to 85 percent renewable energy credits in our resource portfolio, if we were to leave rate, how much funds would that free up in just that choice free up each year? that would free up about $7.2 million to make that policy shift staying a hundred percent renewable but changing the product to make that

renewable supply. on the second row we funded from our revenues $14 million from our start up funds for our clean power sf program and under the not to exceed rate we have proposed we would be recovered that $13.5 million in 4-and-a-half years. what if we change that recovery period to 12 years? we would see on annual bases it would free up $1.5 million. we would lower the rate that we charge customers or make the choices that affect our cost. lowering our cost, perhaps applying some of the savings to rates may

present a better balance to you of affordability and environmental achievement for the program. we have heard staff has heard very clearly from sflafco and puc that we need to fund the local opponent and we are trying to find optimum approach for that. we need to demonstrate that we have a revenue stream from this new customer base. so we need to launch the program so that we can demonstrate that we have a customer base and the revenues are coming in and then we can use those fund to begin to fund our local investment and energy efficiency and renewables. these are some of the leaveers how you would to

the financials we have talked about. >> strike a balance between maximizing dollars for build out or what the rates are going to be in terms of customers? >> right. you can do a mix. you can take that just using this example on robust renewals mix. you can take that and refund some of it in setting the rate, assuming a lower cost resource portfolio, so the program over all cost are lower, set the rate a little bit lower reflective of that but don't set it at $2.7 million because you won't have funds to dedicate to local investment fuchlt set the rate at the reflective of the lower cost of the resource portfolio because

the mix is different. every month i'm taking more than i'm spending, therefore i can afford a bond that will fund a local investment into energy efficiency and local generation components. >> thank you, commissioner. >> thank you. i think this discussion gets us probably the more real choice we are going to have to make in the next several weeks and that is how to fund and how much to fund the robust program that everybody says they want. it has been suggested that we should add it to a billion dollars. that exceeds my willingness to fund. the actions of the board of supervisors took back in september not only provided $2

million for going solar but 2 million for energy efficiency and 30 million for local build out. by restructuring the program and it's use for reks as the biggest example you can add to that up to $9.4 million each year that the program is in place. i think that's a question that we have to answer for ourselves and i think one of the questions that the advocates have to answer for themselves is that if there was a program that had $6 million plus call it 7, 2, 9, 4 per year, is that good enough. because very frankly i do this i that's the choice. we make it as good as we can and we have to figure out if it's good enough. i think this is part as

good as we can make it and we'll quickly -- whether it's good or not. >> are you saying that's the margin we have for build out or was this anticipated before? >> so this is looking at the rates that the, the not to exceed rates. and what if we made different choices, that rate is build program that will -- is built into the original components. so, under that not to exceed rate that we have before you, assuming the toast -- the cost that that rate is built up from, you have $9

million. how do you allocate that, do you lower the rate, assuming more extended period of time for recovery of your reserve. those are the choices. >> do we have someone that can talk about what that means hypothetically bonding capacity? >> we have our financial director here and we also have our assistant cfo, charles, could you speak to that, mr. charles pearl. perhaps we can take that up during the rates conversation. >> thank you. >> very good. >> for staying on the local build topic, the next slide shows talks through some of the elements of that, staying within the city's overall policy adopted policy for how dollars should be invested in energy. first always in energy and efficiency demand response

and the program is where we would stop. clearly the city's policy going ghost goes on to address -- unless it was deemed to be so clean it would qualify as a renewable product under the states rules. or established funding $2 million in energy efficiency is targeted toward low income and available to customers at program launch and additional the million and go solar sf incentive also available at program launch then we have the $2 million for the local renewables. so that's the funding that is already built into the program. the additional funding will depend on the actual rates and the actual cost are after we signed our shell confirm and

gotten advice from you as to the right mix as just as we discussed on the slide before. and then of course additional phases will allow for the expansion of our local and regional city controlled resources beyond the mega watts including substituting resources in for the shell supply as our shell energy north america proposed contract allows us to do. we also anticipate including a number of other program elements and activities. and those show up on the slide 30. just to review them quickly, we will have net energy metering rates for top scale solar, p v installation, we'll be paying customers for generating on their roof tops but not

consuming. we'll be able to purchase from local producers of renewables any extra power they wish to spill, if you will onto the for our program. we anticipate regularly issuing requests for offer for development of larger scale energy efficiency programs and for local and renewable projects. we've talked before about the fact that we have control of quite a bit of land and assets as associated with our water facilities where we could develop larger scale projects that just aren't available to us here in san francisco because we just don't have the landmass, we don't have the the solar availability, the resources as we have in some other

properties. so we want to make sure we have those opportunities as well. we have the ability to revenue bond projects. we are looking forward to that. as soon as we have a proven tract record on our customer base and a revenue stream we'll be able to begin that conversation with bond holders and see what our capacity is for further investments. all of those activities will be launched with the program and be able to meet our obligations for projects that require sequel review and analysis. as i mentioned before, the seed dollars we have for energy efficiency and go solar sf will allow us to immediately begin investments here in san francisco that does require a sequel review so it's funded immediately. we need to develop

a resources plan and i spoke with our public utilities commission indicating by january we'll have an implementable integrated resource plan once we know what our customer base and revenue stream is. i'm hearing and saw lots of nods when she said she want an actionable plan. we can certainly put together that framework for the plan over the next month or so. >> i think that's going to be very critical to many members here in this room that we have a plan. via tore talked about a plan. we have here a menu of options. i would like to ask that we can come back in a month's time with something

more concrete if that's where the commissioners here would like to go. commissioner has a question. >> i have a metering question . would they get an additional metering bill as well? >> yes. we would be paying for kilowatt hours that are not consumed behind the meter but spilled onto the grid and made available to their neighbors, yes. >> do you have a sample of what it might look like. i have seen some that are very confusing and wanted to be able to see if it's friendly to view. >> we expect it to be more friendly. that's part of the state law framework that allows

us to initiate the program. we are going to be in discussion with p g and e with respect to how that bill will look. >> it's much simpler to under in the current p g and e net meter. >> yes, i'm familiar with the challenges associated with the bill. as i say we are going to work with p g and e to see if we can make it more customer friendly and understandable. >> commissioner court knee >> thank you supervisor avalos. with respect to the $2 million, are we learning that the additional $2 million is earmarked for cca customers only? >> no. the reallocation is available to all go solarsf customers. there is a separate $2 million in the authorization of the program by the board of

supervisors, that $2 million you see on slide 27 showing up under the clean power sf row as $1 million in fiscal year 2014, 2015, the reallocation shows up as a separate $2 million and can go for any go solar sf customer. >> thank you, i would like to thank you for bring thg -- bringing this up and it's important that these funds are allocated to cca customers. that is an exclusive we offer and that ought to be retained

for people who put their faith in this center. >> so if there are no more questions on the part of the presentation we can move to the not to exceed rate portion of the presentation and kristin hollings will make that presentation to you. thank you. >> thus thank you for your presentation. >> good afternoon, my name is crisp in hollings, rates will require additional approval and maybe lower t the rates you have seen before today are what we have received -- reviewed

and the key layers by miss hale. the rates we are presenting here today are new and unique and the customer base has a choice of whether or not to participate. starting with my first slide. i want to start with this slide which shows something of a 10 thousand foot view in terms of the charges. i want to point out 2 row, starting with rates, for basic tariffs there is a flat rate. with the exception of sewer rates with basic residential customers the rate is like p g and e. the monthly program is set at 0 by state law. the charge is at s f

krchltc discretion and 0 for customers. customers have a choice to participate and customers may leave at any time. other customers are similar to p g and e. so this next slide is building up cost of service. it is based on a cost of service and this charge shows byline item and for each year of the program and then also within each year, the columns show both the total cost for a given line item and also the unit cost per kilowatt hour. it's this unit cost which we are use to go determine the rate and then also add that year one also shows the cost as a percentage of the total cost. so, moving to the rows

highlighted by the arrows, these make-up 75 percent of the total cost, the line item includes the cost of renewables and can reduce this cost by 2.6 cents by kilowatt hours and the reserve is based on a 4-and-a-half year repayment term extend to go 12 years could reduce the cost by roughly 1/2 cent per kilowatt hour. if we add up all of these cost, it would fund $90 million in projects. for the

last year we see 4.9 kilowatt hour but it's not the final rate. the care discount this judgement adjustment and the final rate is on my next slide. so as noted on the last slide, the cost per kilowatt hour adding to the care low income which is shown in column c. the result is a rate of 14.57 cents per kilowatt hour shown in column d and noted by the arrow is being proposed for the basic residential not to exceed rate for clean power s f. then moving to column h, this compares to 2013 p g and e generation rate which results

in a premium of 6.9 percent in kilowatt hour in column i and the premium is proposed s f rate and p g and e rate. so my next rate translates this race to a dollar amount. although the rate is flat, the dollar impact of this premium increases with higher tiers. as we move from the columns designated by the arrow we see the premium in dollars. i have circled for tier 1, this tier, the dollar i am mpact is $10.24

a month it represents about a 30 percent premium on the total p g and e electric and gas bill. while customers in higher tiers will see a higher premium, it makes up a smaller percentage of their total bill. this next slide translates the tier for the resident dental residential customer. it shows the $10.24 premium. the cost of the generation makes up the $10.24 premium. so, this