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. that's mostly focused on trying

to avoid shifting costs to nonparticipants which would make it difficult for a program like cleanpowersf to compete against it. so, trying to preserve those options. as i say, that's all activity ongoing at the california puc. and then of course there is some legislative activity picking up. we have new legislate ~. we have a bill introduced by assembly member bradford ab [speaker not understood] that we're keeping an aye on and a bill introduced by assembly member ammiano, ab [speaker not understood]. we don't think they're meaningful so i'm not going to get into that. they are on our watch list so we encourage you to keep an eye on them as well. thank you. >> if you could give us an example of what 20 megawatt

would be serving the community. >> so, for example, there are some large warehouses in the -- sorry, in the bayview hunters point area. we thought solar there would be less than 20 megawatts greater than 1 megawatt. those would be system that would be considered distributed under the rules. they'd be local. they could be located and what qualifies as a disadvantaged community here in san francisco. so, that's an example. >> great, thank you. and then what's the current status of our shell contracts? >> so, the shell contract, you know, i think i told you last time i met with you, we are not engaged in discussionses with shell. we have told them that we understand that we aren't moving forward at this time given the lack of movement at our commission, and have had it, sort of an amicable conversation about the ability

to reengage if the opportunity presents itself, but we're not obligating them to hold to the dialogues that had occurred with us since we could not get authorization to sign that contract. >> so, it hasn't been really approved -- it was approved finally. >> the contract terms -- as i understand it, the contract terms were approved through the board process and certain criteria were laid out that needed to be met before anyone could sign the contract. those criteria included setting a rate and having the hetchy enterprise be financially stable. since we were not successful in setting a rate and we are not in a stable situation financially, we had that conversation with shell and let them know that we don't anticipate hitting those

targets. those conditions. >> okay. and if you were -- the contract is there to be signed at some point? >> we could reengage with shell, yes. >> okay. other question i have is relative to the california public utilities commission and they have 800 million for statewide fund -- statewide fund for energy efficiency work. >> yes. >> and that was one of the areas that we feel would be really important to -- i think lafco would be able to go forward to, to be able to do some work in san francisco. heretofore, i don't believe there's been an effort to actually access some of that 800 million. certainly cleanpowersf, it's possible wondering what the [speaker not understood] in the public utilities commission. >> i'm happy to share with you a memo that we prepared for our commission that addresses the options here. from memory, i can report that,

you know, san francisco does take advantage of some of the funding that's available through our department of environment. the department of environment has a contract with pg&e to spend some of those energy efficiency dollars. they are part of the every three-year reassessment and reengagement with pg&e on those programs in doing research on the balance of the fund available, we are aware once you are cca, you can access those funds. you don't have to be -- you don't have to have cca customer to access though funds. but it did you the california administratored at the sfpuc do expect you to operate a community aretion ~ aggregate [speaker not understood]. i'd be happy to provide for you a copy of the memo that goes into more detail about these

options because we did explore them, but we don't believe that we can pursue them at this time given the status of our cleanpowersf program. >> and wonder if there is a counter opinion to that, whether we can actually pursue them. we don't have customers, but we do have a framework for, you know, program. mr. freed? >> jason freed, lafco staff. i will not disagree with what ms. hale said. the one difference between the purchase, if i were moving this forward is actually go and talk with the cpuc if this was a good program, could we get money for the program if not addressing customers. one thing cpuc isn't able to do at this point, lafco could draft that letter on behalf of the board. as far as the cpuc is concerned, they have oversight over this program.

[speaker not understood] could send a letter of inquiry to find out what the status is and how we could go about cashing in to that kind of money that might be available for us. >> thanks for teeing that letter up for us. is that something you can [speaker not understood]? >> [speaker not understood]. i'd be more than happy to draft that. it would be something that could come from the board of supervisors, not lafco itself. i could dylan ratiganv it since we have an advise i level to the board. i'm sure there are a few of them that might be interested in having it go through the board process. >> great, thank you. any other updates to provide on the cleanpowersf program? any questions from colleagues, no? we can go to public comment. good afternoon again, commissioners. eric brooks, san francisco

green party, local grassroots organization in our city and san francisco clean energy advocates. so, first, just touch quickly on the shell or the horse shoe of the shell contract. it has been clearly stated by ken malcolm, the cca director in more than one hearing, that it's a fairly easy matter for the sfpuc to do that sort of brokering of energy in-house. it's not clear that could be done, especially now that the sfpuc has a bond rating for doing energy purchasing and so on. that would obviate the need for the $19 million bond that we're holding to make shell hold. that didn't work out. i wanted to point that out real quick. i want to get to the competition with pg&e. this is crucial. that's what cleanpowersf is for, to compete with pg&e. in july we're going to be doing that new interconnected

agreement with pg&e. if we started our cca and we're up in their face competing with them for electricity generation, we're going to be in a better leveraged condition to get a better deal so we don't have to pay the 3 whatever cents extra it is. and along those lines, what lafco needs from the sfpuc is for the sfpuc staff, especially cca director malcolm who for some reason is not here and was not at the last lafco, we need the staff that was hired to work on cca at the sfpuc to get engaged in this rfp process we're going to talk about in the next item and engage in helping design the build out and how that will impact the power enterprise, working out all these things jointly together and work together both staff so that we can get the best possible program. once again, that will be an asset for the power enterprise and an asset for the city. >> thank you.

any other member of the public? hi, jed holtz man, 350 sf which is in case you didn't know, grassroots claimant advocacy organization. i wanted to kind of finish my last comment. i hate speaking after the microphone, but it relates to this item as well. so, our own policy agencies are letting us know that we are facing between, according to the s.f. bacon certification and development commission, 62 billion of the area shoreline development at risk. u.c. berkeley estimate is for transportation facilities, 500 billion statewide, most of that in the bay area. i have a lot of figures here, ~ but the idea is we're talking about budgetary problems for an enterprise agency. part of those budgetary problems have come about because that enterprise agency is essentially subsidizing a lot of our other public

programs. that is a social good and we think the enterprise agency for doing that, notwithstanding we're here now because of that systemic imbalance. ~ thank as time goes on, what i'm getting at is these costs are only going to ip crease and it's looking, accord to our best scientists, they're going to increase at dollar levels ~ we simply will not be able to fund. so, we're looking at essentially a bankrupt public sector as our infrastructure faces the brunt of all of our planetary physical forces he. i think it's very important that we think not just in one or five-year range, but that we think about the fact that this is inevitable even if we stop emitting today. and we need to start thinking about how we are going to get through that. i think it's very clear that with all of this damage coming

resiliency is very important. and if we have our own local electrical infrastructure generating and delivering to customers, that would keep us [inaudible]. >> thank you. any other member of the public who would like to comment? and seeing none, we'll close public comment. [gavel] >> and we can go on to our next item. >> item number 6 is an update on request for proposals to provide build out strategy and plan for cleanpowersf program (energy efficiency, facilities, and local jobs policy). ~ >> thank you. we have our nancy miller [speaker not understood]. >> yes, good afternoon, commissioners. what do i have to do to bring it up? here we go.

with a lot of help, i should get this momentarily. so, since we last met jointly which was in july 9th, that's when the rate issue was brought before you and was -- [speaker not understood]. the commission has met and determined that based upon that meeting there were some concerns that were raised by commissioners and the public. and our commission determined that it would be a good idea in order to proceed to try to answer some of those questions. and the three main issues were the issues of jobs and local economy.

the issue of the shell contract itself, and whether or not that was a good contract, and then most importantly what was the build out. so, the rfp that ha been issued by lafco, tried to answer those three questions along with some other issues that came up. so, the rfp was prepared by lafco staff, but it relies heavily on documents that had either been approved by the board of supervisors or the draft cleanpowersf build out road map and strategies that was dated june 2013 and other reports that had been presented to the s.f.p.u.c. and to the lafco commission. the tasks that are asked for in the rfp follow almost directly

those that the sfpuc staff had identified approximately one year ago. so, the goal of the buildout obviously was to answer the questions and to provide a plan to improve electric power to the citizens and businesses he within san francisco. obviously the project objectives have not changed with cleanpowersf, that is to reduce energy costs, create higher renewable energy sources for the citizens of this city, to reduce exposure to fuel cost volatility. you will recall cca started because of the bankruptcy of pg&e and the unreliability of certain transmission issues. we're at the end of the transmission of the power grid, was to increase reliability and improve environmental quality. so, what we're looking at asking and what we're asking for is a consultant or

consultants to create a city-wide integrated clean energy and efficiency installation network. now, there's a number of components. the rfp has been attached to your packet. i wasn't going to go into all of those, but basically to tell you that the rfp -- runs parallel with the current program as devised with the shell, but it also asks for alternatives to the shell contract such as as you heard previously, what alternatives be they other power purchasers or sfpu staff itself. and it identifies financing and asks for an overall plan for implementation, both short term and long term. the critical issue, we've talked a lot today about revenue and revenue issues that the sfpuc is having. you will recall that cleanpowersf was a self-contained program. while it did rely on advance funding from the sfpuc and it

did rely on a reserve, the funding was to be repaid and the reserve was to be identified in reserves that are already currently occurring within the city. now, given what we have -- what has happened between our last meeting and today, we will obviously take that into consideration with our consultant and i'll pull up a slide that ms. hale went through in just a minute because we do want to make sure that our financing projections and plan is the most up to date possible. so, we will take into consideration the newer information that we have received from the sfpuc. the draft timelines [speaker not understood] is also a task that we've asked for consultants to provide to us. just so you also know that within the last year there have been a number of communities that have moved forward with cca steps, both the northern and southern california. so, there are more consultants

available than there is more data available for us to take a look at. so, with the financing task comes the comprehensive financing options for the program. and once again, these are to look at not just the program as designed, but a program that probably does not include the shell contract. an integral part of the r efficienttion p is to identify the local jobs and identify benefit of such a program. ~ i know in the program ms. hale had up about hetch hetchy power, showed basically a net zero gain to san francisco. there are potentially other gains to the city and county of san francisco and that's one of the issues of the rfp is to look at both in terms of jobs and impacts to the economy. and i will also say that even within our own cleanpowersf

program right now, some of those costs are discretionary in terms of local buildout. so, what we were looking for if our consultant is to talk to us a little about given the new financing projections from sfpuc, what kinds of rate structure could we look at in terms of dealing with hetch hetchy purchases that might provide zero or potentially some positive numbers. so, the important dates of the rfp was posted on february 20th. we will have a pre-proposal conference on march 12th. and the due date is march 27th. on term of the tasks, we don't yet have dates about when tasks are due because that will be a result of the proposals that we received from the consultants. some of our tasks are more timely than others and we will have a schedule of completion dates at a later time.

then i just wanted to go back to one slide that was put before you. so, if i could have the i-t folks move to the projections. thank you. so, here on the cleanpowersf that ms. hale -- you've got a wonderful staff at the sfpuc and we have worked well with them in the past. and this number here for cleanpowersf that shows the net margin at zero, the number just above which is local build and repayment is a discretionary number. i mean, that could be -- repayment could be extended. local buildout also be spended ~ extended if you so chose. those are policy issues that come before you. you could have a program that actually did provide some value to sfpuc in terms of the sale of hetch hetchy power.

the rfp and all attachment to the public are back to the powerpoint in san francisco's lafco website and the website is still available. i would say that one request that i have of staff is to work with the sfpuc if that's at all possible, to be on our interview panel with consultants, and also to be available to provide information when a consultant is selected in terms of questions because the number of the data and the information that they need has to come would be best coming from the sfpuc. >> that would be great if public utilities commissioners could make that request of pu c

staff. commissioner vietor, i know [speaker not understood] wants to get on. i think his stack is not working. commissioner vietor. >> [inaudible]. emerged in the last go around had to do with recs. does that come up, is that going to be part of the rfp, the rec balances? >> yes, it is there and one of the tasks which is what is the energy mix and what is the best energy mix because i know that recs were a question. and as you recall, the reason why the recs increase is because there was a question from the sfpuc commission to reduce the rate down. so, we am a balancing act there. that still continues to be the issue. >> okay, great. and the role of the puc for requesting an interview, is that something that would continue to be a rate setting

responsibility or what would happen? who would select? i imagine lafco would be the one to choose -- >> lafco would select the consultant, but that's what i'm requesting, that a member of the sfpuc staff be assigned to sit on the panel to assist in that selection. >> what about this rate setting function of the puc? >> that is a charter function. >> but would that still need to happen if we need into a new contract? if we went down the same road we did with shell -- >> yes. >> okay. >> okay. >> thank you. >> commissioner moran. >> thank you. a couple questions. the rfp, do you have an estimate as to what the cost is going to be for that? >> i'm sorry? >> do you have an estimate of the cost of the rfp? >> to prepare it? >> no, for the actual -- if you enter into contract. >> no, i don't have an actual -- our budget was limited but i

don't have until we see the proposal. >> okay. the source of funding would be -- >> no memo from sfpuc, [speaker not understood] is the chair of that. >> thank you. i think you answered the one question i had, which is the rfp you said will be or any contract or revenues for that would be taken into account whether or not the 19 million is available. you talked about updating the financial projections [speaker not understood] was the issue there. >> yes. >> that is part of the consideration? >> yes. >> what about assumptions as to the availability of discount energy from hetchy? >> that we will ask them to take a look at. i don't think that we are discounting that. we would -- we are based on the slide that was shown today, i think what we're looking at is the 11.5 cents which is a net -- you don't lose any money selling hetch hetchy power to

cca customer, but you don't make any money was the point of that slide. so, you're looking at more lucrative customers to assist you, which is what i would understand, which we would ask the consultant to take a look at that issue. >> i think the cost would be an opportunity cost, if we can get more for it someplace else. >> that is true, but i also think cca had the potential of commerce customer hes ~ customers here in the city. granted you would be in competition with another provider. >> okay. i guess my only point, i think you've answered them satisfactorily. as i'm given the updated information we had since the commission last looked at the cca, i think you cannot assume that the 19 million will be there or that a discount energy from hetchy will be there. it may be there in part, but i

think you are correctly dealing with that, you can't assume that it will be there to the extent we have thought about it before. >> i think that's fair given what happened at that meeting. i think our assumptionses are along with what you're saying. >> okay, thank you. >> um-hm. >> thank you, commissioner vietor. >> yes, i have one more question. you know, i saw on the source for presentation you use some of these documents have already been improved or going through the city process. i remember when we set off on this journey many years ago and we moved forward with a program that is now showing quite a bit of success. and i'm wondering what the level of conversation was on really directly modeling the program or at least the rfp on what sonoma ha done. it's such a change to landscape from when the shell contract was negotiated. >> well, that's correct. and i think that's one of the opportunities of the rfp, is to have the consultant take a look

at that. in other words, don't assume the shell contract, what other types of program, programming element should he we be considering to take advantage of changes, budget issues, and that have just been new technology. >> and i do think it's important, i guess i didn't really quite understand. we are trying to be [speaker not understood] here on this journey. i do think it's important for the puc to participate in some way in this review process of these rfps that are coming in. so, you know, i'd like to direct our general manager to find somebody that can at least assist with the rfp review as per the request. >> so, i need to kind of understand exactly what the involvement is because i'm

having like kim, search for commercial customers because the way if you look at that chart, we need customer immediately so we can provide sometime, but we need to contain it. >> what is the time commitment? i appreciate that. >> it would be an interview panatumimabv. so, that would be half a day maybe half a day of energies. ~ panel in terms of brand information sharing, i'm assuming what they'll want to do is talk to somebody about how to get information and where it is. i mean, we talked today about providing some information. so, i don't see that as a big time thing, but maybe a day or two. >> yeah, that's fine. >> thank you. >> thank you. >> and if it's more, we'll work that out, talk about it. >> i appreciate that. commissioner breed. >> i just wanted clarity on the 19 million that's in reserve.

wouldn't the board of supervisors need to approve the release of that reserve? >> yes, i believe that i will defer to the money person here, but i believe that that is correct. >> thank you. >> you're welcome. >> so, i just wanted to point out, the only issue that i was bringing up is we were not planning on de-appropriating it. if we go into negative that it would be frozen. and, so, that's why i was just pointing out the severity of the financial challenge that we are facing. >> thank you, i appreciate that. it also said in your powerpoint that you won't go into the negative. [laughter] >> that's why i'm working on it. >> thank you. any other comments or questions from committee? okay, let's go on to public comment.

good afternoon again, commissioners. eric brooks, san francisco green party, our city and san francisco clean energy advocates. so, just wanted to first of all thank lafco and thank its staff for the incredible work to actually get this to happen. it's crucial. something that advocates -- this work has been -- advocates have been asking for for several years. it's finally going to be completed work. with regard to cca director malcolm's involvement with the rfp process, i don't want you all to push the envelope on that because we have to remember that ms. malcolm is being hired, was hired and being paid to work on cca. and that's her job. and we want her to come here and do her job and interact with the bidders for the rfp so that we're getting the best bang for the buck out of this