that. and interested anyone interested in being a vice-chair you can speak about that sex with. commissioner campos? >>supervisor david campos: thank you mr. chair, i don't know if there could be a combined nomination. my nomination is to nominate you as chair and breed as vice-chair. >> i will second that. >>supervisor john avalos: okay. any discussion? commissioner breed, you are in accord with the motion? very good. okay. let's go to public comment. eric brooks, representing san francisco green party and local grass roots. just to comment commissioner breed has shown

some really outstanding leadership on this issue and it's extremely appropriate for her to move to vice-chair on this lafco. thanks. >> wolf neighborhood council in acclimation. >>supervisor john avalos: is there any additional public comment? seeing none, public comment is closed. this is motioned by campos and second by mr. mar. can we take that without objection. first i would like to say this you for the support and i'm really excited about serving with commissioner breed who will be the vice-chair of lafco and i really appreciate your pushover the past several

months on cleanpowersf. next item. >> approval of lafco minutes from december 13, 2013, meeting. >>supervisor john avalos: any comments on our minutes? is there any additional public comment? seeing none, public comment is closed. can we have a motion to approve the minutes? motion from vice-chair breed and seconded by commissioner campos and we'll take that without objection. >> okay. neck -- next item. the clerk: item no. 4. community choice aggregation activity record. a status update on cleanpowersf program, status update on

proceeding at the public utilities commission. we have miller to speak on these items. >> yes. barbara hale at the puc. speaking on item b and c first. as i believe you have been following, we've been having our public presentations about our budget and in private conversations as well with our general manager wefrment facing difficult times with the financial circumstances within power enterprise and with the power operations of hetch hetchy. we have some capital needs. we have higher than anticipated increases and cost for distribution services from pg & e and we are projected to

be out of balance by fiscal year 16-17. in light of that, our direction from the general manager and commissioners are to really focus our efforts at the puc on solving that problem. so we are really refocusing in a way that helps us achieve our highest value revenue which points us more toward increasing the customers we serve on our publically owned utility side of the house if you will and not on our cca side. we are also looking of course at ways to reduce our cost. so that's where our focus is at puc and with respect to item a, we did make a presentation to our commission on january 14th. we did include, the general manager did include the memo

that describes these issues in greater detail that i would be happy to provide to you. i provided copies to the executive director already and perhaps we can talk about that further at a subsequent meeting if you would like. >>supervisor john avalos: i think there has been some discussion about having a joint sfpuc lafco meeting. given how there has been a huge neglect or real effort to not move cca forward that i felt has been going on and a lot of rationals that have come out even when the mayor came and spoke about why he didn't support cleanpowersf. i felt there was a lot of information that didn't come out. trust is really low right now. i really want to see

some real verification on how there is some proposed or per expected shortfalls within the power program and i want that presented at the lafco meeting. i also think we should have more conversations too about how to make clean power happen and in the meantime between this meeting and the next if we do a joint meeting, have some real conversations about what possibilities there might be. i don't think it's a matter of just asking for money. i think it's a matter of ideas that can be shared that could create an opening for the passage of clean powersf in other form. >> okay. in talk wth general manager very interested in going fort with the general meeting and i will bring that

back to the commission and we'll look for ways to help restore that trust that as you have expressed has been lost. and so perhaps engaging some of the other city departments in an overview of the materials that we've been presenting to our commission. >> thank you, commissioner breed? >>supervisor london breed: yes, if we can have that information and made available to the public as well. i keep hearing there are some challenges and we have to redirect our efforts. from my perspective, i'm not certain if this is another tactic to move away from trying to move away from clean power. i would like to see some documentation of this and not see a situation being created just to derail clean power. just some evidence of that would be really helpful.

>> absolutely. happy to provide it and we'll be able to exile -- compile some prior information. you may recall 2 years ago we came to the board, the mayor and commission and expressed concern about having an out of balance financial picture. as a result of that, we made some major cuts in our infrastructure program. we committed to going forward with an acquiring a rating to help issue debt to help fund some of our longer term investment needs. we have taken those steps and we are back out of balance with these unanticipated capital and operating cost. the materials that we presented to our commission are public materials, but we would be happy to put into a greater picture at the meeting about

the capital needs and how we are spending the revenues we do have. >> sorry, one thing about the conversation with kelly was we would have an independent analysis of what you present and controller involved and analyst to weigh in as well to help understand what you are sharing right now. >> right. and to restore trust. right. >>supervisor london breed: i think my comments were along the same line as chairman avalos because there is a lot of information out there about when where the $19 million seems to have gone or where is it or how this whole thing works. i'm trying to understand what's happening with revenues and i'm not specifically saying this was all completely earmarked for this purpose, but i'm trying to understand exactly where

money has been shifted and what that means for not just our efforts, but the efforts that puc claims to be making towards trying to provide a real clean power program for san francisco. >> yes, let me assure you the $19 million is on reserve and unspendable by the sfpuc. it's waiting in a bank account waiting for direction. >>supervisor london breed: but there has been communication to me that those revenues are going to be used for another purpose. i want to make sure that if there are talks that we are not aware of, that we are made an aware of any relations to that or any other plan that might be to lafco. >> it seems this is the perfect venue to bring all of

that out. >>supervisor john avalos: just to apropos to on the lafco side of the meeting on a brief path way to make clean power go forward under the current situation that the power program is in and i'm hoping that mr. freed can touch on that. >> sure, jason freed, lafco staff. at the workshop they had about a week or two, this subject was brought and they did a full presentation. one thing i brought up at the comment period is that there are two ways that cca can actually help alleviate the budget short fall and that is if you were to rearrange the cc program so that all the things that were in the contract for shell to do to brought in house, perhaps there could be some savings

on the operational side because the power side is on cca. if you are adding 30 mega watts of power, i don't think it would be that much of a load and you can shift to the cca the money for the cost and reducing the cost to shell. and there is a fund that everyone pays into their bill that puc can apply for it. i'm not convinced that puc would give it because there is not an operational program but there is money to give to the program. >>supervisor john avalos: so if shell is no longer involved, who is creating the energy? >> sfpuc has the staff and able to do that and when the rim fire went on they were able to replace the energy

and this staff is able to do that as well for scheduling and there might be some part that shell would do but you rearrange the contract to cover that. >>supervisor john avalos: we can meet with puc staff to talk about this idea and then bring it to the joint meeting as well? okay. >> miss miller? >> i would like to add that i appreciate miss mchale's comments. we designed this program to be a self sufficient program that it was going to run itself that they were not going to take other resources and apply it. in the financials which i would like to make sure that we talk about at the joint meeting, i do believe that there were provisions for paying back all the money advanced at the program and the financials handled that over a period of time and we strecht that out

at one point but the plan itself, the cca program paid for itself. i don't really understand the idea if there is a budget cut because of increased capital cost on hetch hetchy side and power supply. i understand that is a real problem. but cca wouldn't contribute to that problem. that correlation which is how does capital cost would initiate. your sufficient program that we had designed. >> yes. so we had a couple of areas that we wanted to update you on. we arrest actively continuing to participate in pg & e's green tariff filing

and opportunities for customers to choose hundred percent renewable gas portfolios. we are participating there to make sure the pg & e is compliant with the legislation that was adopted last september by the legislature in sacramento. in particular we are asking the california public utilities commission to enhance a community renewal program. that's part of what's required in sb 43. pg & e has not included that in their proposal. we are asking the c puc provide a mechanism in it's green tariff proposal from a small distributed renewable project. a mega watt or smaller located in

disadvantaged communities. that is another aspect of 343 in making sure we are included. if the california puc required pg & e to put that in their proposal. and we are asking the california puc to require pg & e to ensure that all green tariff cost are born only by participating customers so that their green tariff proposal is not subsidized by non-participants. in the california puc's energy efficiency funding and we'll continue to stay involved protecting not only the city's interest but also the particular concerns of how to take advantage for the

community choice aggregators. thank you. >> okay. also we have presentation on the rfp. >> yes. staff was directed at the last meeting to address the local energy build out program. some of the issues that staff was directed also included a marketing approach. that's not in this particular rfp and we were under the impression that that did not need to be under this particular draft. but if that is not the direction of the commission just let us know. what this rfp deals with is a

build out program to find an independent consultant to issue criteria that the commission has developed which is obviously maintained energy efficiency and increase local control and maximize job creation and maintain affordable electric rates to support environmental justice and provide and describe the economic opportunities. this was a criticism that we heard both from the mayor's office and sfpuc commission when the sfpuc prepared the program, the cca program for the rate approval was that there was some confusion or not enough clarity on the local build out program and commissioner breed had requested at the last meeting that we spend some time, spend some resources to take a look at that and specify a plan and provide a more cohesive plan as to what the local energy build out

would be. the draft talks about, there has been a number of reports. we don't want to reinvent the wheel. so what the draft does is mention the reports that have been done and acknowledge there is a bit of a difference between some of the reports. we have a program that is throwing off approximately $6 million a year. and we have reports by a local power that is more like $100 million a year in terms of expenses. we are trying to craft a program that is manageable, affordable and reachable within the context of our goals. the a draft at this point because we needed some feedback. we want to make sure that we have the principals correct and that we are doing what you would like us to do. i would like sfpuc

staff to comment and assist with this. i know that they have been directed at this point not to do that because the budget issues and directions. i have always enjoyed my working relationship with the sfpuc and they bring a lot of issues to the table. they have a staff and i think it makes a lot of sense to have their input. i know that barb can't really address this, miss hale can. i'm going to keep working behind-the-scenes to make sure that happens. i think it's really important. we have the program all put together. one thing this rfp does not do is it does not, it acknowledges the shell contract. so that is one thing that we would want direction on. if you do not want a consultant to assume the shell contract exist and to think of other things. that is not in this rfp. it

assumes the program is designed and voted on and then it assumes the local build out and asks for a creative and imaginative praj -- program with specificity. i'm available for questions. >>supervisor john avalos: thank you, commissioner breed. >>supervisor london breed: thank you, miss miller for putting this together so quickly. i do of course want there to be a little bit more time for input and i'm sure you got feedback that there are some other organizations that want to take the time to review it and provide input. i would like to make sure that we have the time to do that before we finalize the rfp and i wanted to get a sense of how my colleagues as well as how members of the public feel about how we move forward with shell. because there have been

some challenges and i don't feel that they have been the best community partner in this community effort and there has been a challenge around communication and miscommunication. i'm not completely certain about how i feel about acknowledging that relationship or retaining that relationship. but i would like to hear from, especially from people who have been actively engaged in this process and whether or not we allow this particular project, whether we use it from a context of explaining the history of how we got to this point which of course makes censor -- or do we continue that relationship. it would be important for me to understand from my colleagues on lafco as well as others actively involved in this effort to understand what their perspective is on moving that forward in the rfp

process. >>supervisor john avalos: commissioner campos? >>supervisor david campos: thank you, mr. chair. my thinking with being open and flexible with the rfp is i want to get to as many options as possible. one approach would be to include information with shell in the picture but also to include information with shell out of the picture so we have some comparison point. what i have said about shell is that i don't think for anyone of us who voted for this that shell was always the ideal partner, was always the best response. so as presented at that particular time. if there are options out there that are better that we have a responsibility to explore

them. maybe one approach to have in the rfp to have flexibility to look at both to have as much information as we can. i don't know if you are open to that but that would be my thinking. >> okay. it's really up to your direction. i know when we had the meeting with the advocates there were some that wanted that flexibility. since it wasn't clear is why i brought it up. i just want to make sure how you want to approach that. i don't think -- i think it's possibility to do it. it may draw a cost because we talk about what would be the option if there were no shell, but that's certainly doable. >>supervisor john avalos: the option being flexible to have one that includes shell and one that doesn't?

>> right. along the line of what the commissioners have been saying. >>supervisor john avalos: okay. i think that's the right approach. and in the meantime, what was the timeframe for this rfp? >> well, the timeframe was to try to get enough comments and good robust comments to be able to feel that we heard everyone and we had incorporated or figured out why we were not incorporating what everyone was saying. in terms, that would include from my point of view the sfpuc. i don't know if we want to wait on a joint hearing or go forward. we have gone forward in the past with out sfpuc involved. it's up to your direction. i have not had a conversation with the general manager. i have with mchale, very professional but they are not in a position to assist.

we also wanted to meet with the advocates. we had a phone conversation, but we would like to have that, a couple more rounds of that. so i think we could, two options: i bring it back, maybe bring it to the joint meetings, bring it back to you and tell you of the conversation or go forward and tell you the vice-chair approved the rfp. it's a matter of timing and whether or not you feel like going quickly. >>supervisor john avalos: do you have any preferences on that? >>supervisor london breed: yeah, i think that given the fact that we do have a draft and there will be input and changes made in order to get us where we need to go, that we shouldn't have to wait until the next lafco meeting in order to move this rfp forward. i do think that as much as we want involvement

from puc at this point, we as lafco should take the leadership on putting out there to the public exactly what we are looking for because ultimately we want a comprehensive plan. i think we should maybe allow the chair to give the final say that this is good and we can put it out there once we get our feedback and make the appropriate changes to get it where we need it to go. >>supervisor john avalos: great. thank you. okay. item b within this item. is that miss miller? >> this item will be dropped from the agenda. our mou goes to the end of fiscal year 14-15. we have another year 1/2 on the mou. that was my fault. we don't need to hear that item. >>supervisor john avalos: great. if there are no other comments from the panel.

we'll go to public comment. >> good afternoon commissioners, eric brooks local green party for the city. first once again thank you for the lafco for taking out the bold steps. we have had a couple moments like this in history where things got caught up and glad to see it moving forward. some quick technical notes. i think one thing that will really and we discussed it a little bit, i completely concur with exploring all possible actions with shell and without shell and other contractors like shell or do it in house which i think the advocates are most supportive of that. one thing that i have noticed is that we have not heard from the sfpuc

or from any other source that i know of exactly what is going on right now with the shell contract. that was put on holdback in august and we have not heard. i think we should ask sfpuc to clarify what's going on with that. as far as the whole thing, i think the key here is that even if the sfpuc gets considerably more involved and starts doing it own work on build out and cleanpowersf and gets back in the game. i think back where we let them take the ball back. this is the moment where we need to lafco stay the drive of this. this is politics. the key with the sfpuc is that as an enterprise agency that is in charge of rate payers and keeping the system secure, they are

mandated to be secure about this. lafco can really push the envelope in developing an rfp that will face the compliment crisis and we need to you keep this in-house. >>supervisor john avalos: thank you. >> hello commissioners. chad hose skin. we didn't hear too much about the cleanpowersf program. i was at the january 14th puc hearing and i strongly urge you to checkout the power enterprise budget information presented. a memo was available which i believe was the 14-15 two year planning cycle and indicated i think in one sente