>> it depends. we look for our good price on the counter party side, folks who are in the market and ready to sell. we are members of the western systems power pool. all of the members are posted online. you can see the various different types of entities that sell and buy in that power pool. >> is there a record of who we purchase from? >> absolutely. >> and can i get a copy of who we purchase from? >> sure, sure. it's listed in our annual financial report, our c-a-f-r we publish every year. >> okay, it would be great to get a copy of that as soon as possible. and the other question i have is we're facing a routed year so we are going to meet our customers' demands? are we purchasing power currently because we're not going to be putting as much water through -- >> yes, we are, today we are purchasing a little bit because we're doing some maintenance on the system. it's pretty typical at this time of year before the snow

melts, we do some tuning up and make sure we're in good stead on all the up country generating units. it's pretty typical in every year we do some purchasing, some selling. >> are we not taking any additional purchases because of the drought? >> we probably will have some additional purchases in the spring. >> the spring. >> yeah, towards the end of this fiscal year, early summer we -- at the rate of storm right now, what we're looking at, we are expecting to purchase a little bit more than we typically would. but all still within budget. we don't expect to have any needs that were unanticipated given how we budget for power. >> and have you made any contracts for the spring already? >> new york city we haven't done any forward purchasing for the spring. we can, we can -- some time we find the published prices for power are pretty low and if you strike a forward deal, they just charge you more for it. so, when we're in that

situation, we stick with purchasing on the spot market and not making a forward commitment for the power. so, it's all based on the he economics at the moment. >> and could you share with us, you know, via paper like who you've actually purchased from heretofore this year and also the ongoing basis who you will purchase from? that will be important for us. >> certainly. for who we have purchased from because those are consummated deals that were recorded. as i said, i don't think we have a forward purchase plan. if i'm wrong, we can provide the answer to you. i think the answer is going to be there are none. >> and are those purchases that are made, are they approved by the public utilities commission or -- >> we have an energy trading policy that's been approved by the general manager that gives staff at certain levels authority to go forward without having to have additional authority. long-term purchases are subject to the same rules that other

contracting obligations are for the city's procurement. so, deals that hit the 10-year threshold, is it $10 million threshold, come all the way through the board's process. >> thank you. >> and, so, the only thing i would just highlight, of course, is definitely cheaper to sell or we actually get more margin when we sell hetchy. but when we go into -- and buy and sell, we don't make as much. so, that's why, you know, when we look at the he drought, we would like to have more reserve for those occasions. and, so, that's why drawing down on the reserves, get kind of nervous. >> and, so, if we are successful in pulling through acting on these various options

for balancing our capital and operating budgets, we'll have a budget scenario that looks more like this where werbach in alignment with what we had projected prior to facing these new challenges. back on that black line that you see going out through fiscal year-end 20 24 ~. >> and, so, we made a commitment to our commission that we're going to come back quarterly and give them an update on where we are as far as each one of the challenges and how we move forward and come up with a plan to bring it back in alignment. >> thank you. commissioner breed? >> thank you. i just wanted to go back to the last slide and ask a question about issuing debt. would this impact our ability to issue debt for a local build

out for clean power? >> so, when you issue debt, you have a certain capacity, a you are familiar. >> yes. >> so, any debt issuance and commitments we make take up that capacity and represent opportunities that can't be pursued for other program areas. so, if we were to, for example, issue debt for street light services improvements on that capital part of our program, then we wouldn't be able to spend as much money on -- we wouldn't have capacity to spend on up country generation improvements or rooftop solar here or other local build -- >> yeah, i understand that. but based on the possibility of issuing debt, we would potentially go to our potential capacity in 16-17, right? so, for example, we'll be able to issue debt based on what the capacity would be at that time

after issuing the previous bond. but in 16-17, depending on the number of projects and the amount of money for those projects, we'd be issuing debt which will maybe reach capacity or come under capacity? that's what i'm trying to understand. >> and when i'm saying capacity -- yes he. when i'm saying capacity i'm talking about the stream of dollars coming in, the revenue that we're making. >> yes. so, the potential for reaching capacity when we potentially -- a bond for 16 to 17, would probably be at our capacity. so, it will impact our ability to issue debt for local build out, for clean power programs. >> you're saying it will. i'm not certain and i apologize. our cfo is not here today, and he could be more certain for you our revenue stream has

greater capacity for bonding than is shown on that slide, i think it was 43.7 million. and as i understand it in talking with our cfo, we do have more capacity for borrowing than that. >> okay. >> i'm not sure what the -- >> we're not certain, it just depends where we are when we have the ability to issue, issue bond capacity? >> right, depending on what our revenue stream is -- >> so, we just don't know right now? >> i don't. >> okay. >> if i might just add, if you -- nancy, your interim executive officer, if you had a cleanpowersf officer, you would have addressal revenue, additional customers. so, your bonding capacity increases as ms. hale said. typically revenues. you also have bonding revenue that is limited by only certain

kinds of revenue. i would assume that cleanpowersf would limit revenue from a certain program. so, more revenue, more bond that ~ bonding that is for particular projects. >> okay. >> the other thing i would like to highlight is that right now we are providing the $19 million set aside. and, so, the issue that we're struggling with is as our enterprise starts to struggle, if you look at a scenario where we're unsuccessful, really we'll start going negative. it doesn't matter because once we start going negative, they will freeze all our assets. and, so, the whole thing is that's why we're feeling so -- our major priority is so that we won't go negative. >> so, okay. so, i wanted to ask a question about -- we know the governor

just passed a bill for emergency funding for the drought, and tomorrow i'm introducing -- urging resolution that asks for funding for three significant projects at puc. so, in your slide you specifically say, of course, all bets are off if we have a drought. we may run into a scenario where there will be the need to spend more money in order to deal with the reserve. so, i wanted to know if puc is making arrangements to make those requests to the state. and if received, that could mean freed up revenue for, you know, other possibilities, correct? >> yes -- >> but would allow us to go into our planned action as listed here? >> well, i think they're looking for shovel ready projects. >> we have three shovel ready

projects? >> mount tunnel is not shovel ready. the one we identified is cherry aqueduct where we can tie that reservoir into our drinking supply. the other one was the direct install because a lot of -- we give rebates, but people can't afford to actually take out the old and replace it. then we have groundwater projects. we're ready to rock and roll. we're working with the rec and park to move forward with those projects. those are the projects that do qualify. unfortunately it just helps the water and not help the financial of our power enterprise. >> okay. thank you. >> commissioner vietor. >> [inaudible] on the procurement issue and i know that there was some -- during the [speaker not understood], there's was market protest and long term procurement questions. i've asked this before, but can you remind me, it's usually the criteria is cheapest, we don't

have additional criteria for how we purchase power. >> we have renewable energy credits from our system that we can apply to clean up the brown power we purchased when we are purchasing. >> so, [speaker not understood], it might be getting into the question of where to procure from. i think it would be interesting to actually see with that charter something that shows what those credits are, how much of that purchasing we're doing, even look at it in terms of drought. because it could potentially grow to be a larger number. it's important to kind of from the environmental policy perspective be tracking and look at that. >> sure, we track our purchases and use of renewable energy credit. i'd be happy to come back with presentation materials on that or do a memo to be responsive to -- >> understanding that we might not have the luxury today

because of the financial situation, but there is anything that we can do moving forward to even move beyond the equation with [speaker not understood] power, but actually purchasing stock market or long term procurement, it would be good to have an understanding of that, too. >> sure, happy to include that. >> we're only to replace the loss of power due to our drought or to increase power. we're only going to renewable sources. is that correct? >> no, that is not correct. we are purchasing on the system, making system power purchases which are not unit specific, are not technology specific. and then we have renewable energy credits from our own store of credits from our own generation that we apply to that power to maintain the 100% greenhouse gas free renewable

label. >> so, like regs? >> yes. regs from our system, we generate regs from our own system and we use the regs from our own system. we've also purchased regs. >> there was opposition to cleanpowersf because it was based on regs. seems like that's already practice within the public utilities commission to practice -- >> yes, it's the practice to in the energy market and sf. coming back to actions and options, i want to spend time on the new revenue source line there. and that gets us to looking at what are our opportunities. we've been talking through this presentation about commercial retail enterprise level paying customers. sort of how did we arrive at that. what this slide shows is four different types of sales.

wholesale, clean power sf, large commercial retail. so, the top column. and it shows -- it walks through the price it sold for at the top line, the transmission and distribution costs that occurred. so, those are deducted from the sale rate to arrive at a gross margin. and then we factor in other costs, costs of hetchy power, for example, local build and repayment stream, and we arrive at a net margin we look at these different types of sales opportunities. so, if you have a kilowatt hour hetch hetchy power, where did you make the most sense to deliver from that power? it you can deliver from the wholesale market. on average we'd clear about a penny. you could deliver it to the klaxon power s.f. program as it was envisioned when we presented it to our commission

at the 11.5 cents a kilowatt hour. ~ you'd see no margin because any extra money was plowed back into local builds and refirethv. ~ requirement. you could sell to a large retail customer and have 7.9 -- 5 .5 to 7.9 to spend on local build, on up country improvements, to restore and reserve ~ for that drought that we've been talking about. so, just purely from that business perspective, it makes the most sense when you do the math to use that hetchy kilowatt hour for a large commercial customer retail sale here in san francisco. >> i appreciate that. and knowing the financial constraints that the public utilities commission is in, it makes sense that we have a mix,

what we won't be able to get and sell in terms of revenue from that. i think when it comes to cleanpowersf, it's not what we get above what we put in. in terms of pennies on the dollar, but also what we're able to achieve in terms of greenhouse gas reduction and really increasing the consciousness of people about our climate and what we're doing a about it. i think there were other benefits -- [speaker not understood], understand you give me a docks youthv that's purchasev financial, i have to push back a little bit. >> and, so, then, what does this overall picture, financial picture and business case mean for cleanpowersf? i think for us, you know, our first priority is to have a healthy and stable power enterprise so that we can continue to provide the benefits that we provide.

we will pursue transmission and distribution cost reduction. we will figure out how to fix mountain tunnel for the power benefits it brings. and we will work to secure a more retail enterprise commercial customers and the revenue that they bring. meanwhile, we understand that lafco will continue to work ~ on cleanpowersf. and hopefully with the information that cleanpowersf local -- sorry, lafco folks bring in, we'll be able to evaluate again in the future our opportunities to move forward with the program. and i'm happy to take any additional questions. it's been a good dialogue so far. maybe you've exhausted your questions. >> i appreciate your entertaining questions in the middle. i think it's very fresh in our minds while you're going through this. thank you for your presentation and your work together.

we'd like to get updates as we move forward as well. maybe the lafco meeting, we'll be joined -- puc-lafco, we can get updates, anything that's happening. commissioner breed. >> thank you. i just wanted to i guess -- i don't know if this is a question or comment, but it's my understanding that we were looking at putting the street lights in the next easter bond and not a bond for the puc. you mentioned that as an example. so, i just wanted to make sure that we are looking at the various opportunities there are to actually share in on the cost of some of these things. we do know that street lights continue to be a big challenge for our city. so, i'm hoping we can come up with a solution to address the capital issues as well as, you know, the energy costs associated with them. >> so, one of the frustrations that we have is the hetchy

provides opportunities to a lot of great program. and i believe street lights is definitely one of them. and, so, you know, in solving our problem with hetchy, we met with supervisors and kind of came up with some of the plans that we're working on. and, so, but we haven't had a chance to actually talk and negotiate what the deal was. and, so, with the mayor's office, we have been having conversations about raising general fund rates. we've been talking about putting street lights in the next bond. we've been working with pg&e and we've actually reduced the costs. we are looking at alternative projects for mountain tunnel. so, on all fronts we're on this. so, i would love to come back when we have more answers

because by me going out there and just saying here are all the thing we're talking about, prior to negotiating with the actual other entity is sort of premature. but i'm looking at every possible way, even cutting our operating costs, looking at our staff, just looking at ways we can reduce our costs or be more efficient. >> i'd like to think there is a way that if we're able to move forward on cleanpowersf that there could be some over lot how we can -- that can help reduce some costs for the power enterprise. i think it's worth looking at because we have support for cleanpowersf. not always necessity in the public utilities commission, but hopefully that can change moving forward. i have hope. >> i think one of the common themes is that we have hetchy

power, we have firmed up hetchy power that we can sell. so, i think by providing and selling power to customers, more customers, get us to that point and i think we're definitely going to pursue that because that's what we normally do anyway, so -- >> i'm saying there is a way we can green light cleanpowersf going forward. if you can increase your service for wholesale customers, but perhaps an overlap between cleanpowersf around staffing might help minimize costs you can minimally. they can work together. if there are no other comments or questions from colleagues, we can go on to public comment on this item. public comment is open on this item. any member of the public would like to come forward?

good afternoon again, commissioners. eric brooks representing san francisco green party and the local grassroots organization, our city, and san francisco clean energy advocates which is a coalition working to move forward cleanpowersf. so, it's really important after that presentation to focus on this issue of available money and bonding and how that relates to the s.f.p.u.c.'s quote-unquote financial crisis. first of all in 2002 when the law what passed in order to enable community choice aggregation, cleanpowersf, that was to be self-funding ~. so, the customer revenue stream that you bring in by bringing in hundreds of thousands of customers into this new program provides a brand-new revenue stream and also the revenue stream that you get from doing what lafco is about to do, which is design a local build out program which is going to

bring in revenues over the long term. those are what build cleanpowersf. there is no connection whatsoever really, except for bond rating to the san francisco public utilities commission to bond for its own stand alone energy programs. that's totally different. so, the point is cleanpowersf is designed to be self-funding. it's designed not to cost rate payers, taxpayers, or agencies anything. and that makes cleanpowersf the biggest potential energy and clean energy asset that we've got in the city. hundreds of thousands of customers will enable us to do things like, as mr. freed has mentioned before, more easily get hold of energy efficiency funds. as the chair of lafco mentioned, more easily be able to staff all energy programs. the cleanpowersf system is going to be an asset, not a liability. and that's why we need to bring it online before we get into

the pg&e contract discussions. then we [inaudible]. >> thank you very much. okay, this item we can file, but we have asked -- very sorry. [speaker not understood]. thank you. my name is [speaker not understood], 350 san francisco. just wanted to briefly speak to commissioner avalos' point in looking at i guess it's the next to last slide, zero margin in selling power to cleanpowersf. but there is this side benefit of achieving environmental benefits. i just wanted to -- i mean, that is definitely true, but i wanted to point out even looking financially as mr. brookes was just pointing out, the zero margin out pouring all revenues into build. but the point of pouring those revenues into the local build, if you look at the basis of all

the discussionses that we're having, the basis of all these amazing benefits to the city, all this largess that we've been able to provide to the general fund, it's all coming from selling a very valuable city-owned renewable resource that just keeps oncoming and making us money. so, what we're talking about is pouring this funding, pouring these revenues into the local build which will increase the pool of renewable assets that just keep oncoming and provide the entire basis for the puc's future budget and all capital costs that we will need to pour that money into going forward. so, we're talking about hundreds of megawatts more of renewable resources that will be locally owned. and once that system is paid off, it will be just another revenue source for the budget. so, kind of talking about making an investment for our future, but not just environmentally. also financially. i know that this power that

we're selling at great loss to the general fund is providing a lot of benefits to our beleaguered social services fund. it's worth noting the bacon certification commission estimates projected sea level rise damage in the area at $62 billion. >> thank you very much. next speaker, please. good afternoon, commissioners. jeff dorian, 350 bay area. i agree with everything the previous two people said. i'm just kidding. i do agree with most of what they said. a lot of it i'm not familiar with. being new to these programs, but i can see, just looking at this ~, there is a lack of stuff written under lafco, just anticipating the future changes like the drought that california is going to be faced with that most of us are

probably worried about. and the big gaps in services that will occur from those droughts and where is the power going to come from? hopefully it will come from [speaker not understood], was questioning about that also. there needs to be secure retail enterprise customer and revenues underneath lafco also just as well as with the dam. thank you. >> thank you very much. any other member of the public who would like to comment? and seeing none, we'll close public comment. [gavel] >> again, this is a non-action item or possible action and would like to request that we get information about our power purchases that we made recently, proposed ones we could be making as well. i also asked for a sense of what our generation is through the years, especially looking at drought years so we can get that over the past, say, 20 years and will be great to see.

maybe going back to last route which i think was '89 through '92. so, it's over 20-year. that will be historically helpful. i know the conditions are different, but like to be able to see that and share with us as well. thank you. let' go on to our next item. >> item number 5, cleanpowersf update. >> for purposes of the regulatory update, i can report that we have continued to be very active at the california puc on pg&e's green tariff application. for context, the city supports the development of a green tariff. we've said that in various policy documents. the city supported sb 43 which

was a law passed in 2013. it requires [speaker not understood] with certain elements and we'll stay engaged to make sure the program is designed to succeed, but is also fair and equitable to customers. what pg&e has filed, they proposed a program at the california puc that would allow customers to voluntarily purchase up to 100% of their energy needs from small and medium sized solar projects located within their service territory and by small scale they're talking 20 megawatts or less. the program would initially rely on projects fitting this description that are already in pg&e's portfolio. so, not a new build opportunity, but existing resources. and pg&e has stated that they would eventually -- the program would eventually result in the development of new projects spurred by the number of customers that enroll and their green tariff program.

our objectives in the proceeding at the california puc are to develop an enhanced community enabled program element. so provide specific mechanisms in the green tariff's proposal for procuring energy from small distributed renewable projects one megawatt or smaller. so, trying to carve out a niche below that 20 megawatt level that pg&e included. and located in disadvantaged communities, this was an important part of sb 43 that we advocated for and really are trying to sort of give ourselves, our community a leg up in the process. if we are successful in getting a good program available to our residents through pg&e. we want to make sure that we have an opportunity to exercise that local build opportunity right here in san francisco. the green tariff costs, we want to make sure are borne by participating customers.