facilities that are roof-top solar facilities. for example, on moscone, on the chinatown public health center. all of those facilitis that on davies symphony hall, all of those facilitis with solar on the roof we have registered through the system and we're able to account for the renewable attributes of the electricity generated from those systems. we register them and we utilize those renewable energy credits to cover the system purchases that we make when our hetchy generation is not available to us. so that allows us to -- if you will, green-up purchases that are not otherwise specified as renewable. we also have made some purchases of renewable energy credits in the market to make sure that we have sufficient renewable energy credits available to us to cover any

system purchases that we might need to make. we purchased biomass and wind from various facilities in california and in the west. and at the time of this reporting we totaled between 2011 and 2012 a balance of renewable energy credits of 53,544 megawatt hours. we utilized for our own rps compliance 80,185 and that is drawn from that mix of renewable energy credits that we generated and owned and those that we purchased. >> this is certainly not asking you to speculate on this hypothesis.

>> yes. >> so does the commission have any qualms against using public utilities commission purchasing electricity on the market because they did express those qualms when they came to cleanpowersf. what is the difference, you think? >> i think the fact that our underlying resource is 100% greenhouse gas-free. through our own hetchy system and because we have more of that power than what we consume, our ability to be a net contributor to the greenness, i think, is an influencing factor on their comfort of using renewable energy credits to cover those intermittent purchases that we make, when the supply is below the demand in a particular moment in our supply-demand balance. >> it seems like for

cleanpowersf ultimately our buying power comes from the fact that we actually generate our own renewable energy. you see that as a stark difference? >> i think part of it is it's tough -- it's tough to educate folks about these differences. and i think some of the commissioners expressed concern about renewable energy credits because it's difficult to explain to call a product 100% renewable and then to have the renewable energy credit component to it, i think is difficult for lay people to get their head around. and in a program. >> i guess you could say the same thing about a lot of ways that electricity is generated layperson can't explain that either. >> i find myself have difficulties at times explaining it and it's a complicated commodity. the fourth question was how much revenue is projected to

come from new customers within our financial plan? and you will see in our response we have provided a table that delineates the customers and when we would expect the new load to come on and what the revenue associated with that new load is. suffice it to say that when you look at the annual totals, not specific to customer by customer, but just to summarize the annual totals start are a little over $3 million. they stay at about that level until fiscal year end 2017, when they climb to almost $4 million in fiscal year-end 2019, a little over $5 million and the balance of the 10-year plan you see a total of $48 million in additional projected revenue from new customers

served by san francisco public utilities commission. the next question had to do with what the rationale was for the split of 55/45 overall? and how does it apply to the mountain tunnel asset in particular? we were also asked to provide a copy of the wholesale water agreement, which you will see that we have included a link to. the 55/45 split just to refresh your memory is associated with how we account for the costs of operating a joint system, a system that produces both water services and power services. it's one system, many times one in the same asset is serving two purposes. other times, assets are strictly dedicated to providing water service and districtly

dedicated to providing power service, but those providing both components we split those costs between water and power rate-payers. 55 to power and 45 to water. that is an historic -- that is an historic method that has been applied to the hetch hetchy system for all upcountry facilities. we arrived at that method -- it's referred to as the separable cost methods where you look at what it would have cost to provide the water service separate from the power service or the power service separate from the water service and see how the costs would have broken out? when we performed that analysis some years ago, utilizing consultants, we arrived at a figure -- a split, went into

negotiations with our wholesale water customers, who also had views on how these asset costs should be shared and arrived at the 55/45 split. this is a method -- the separable cost method is used by the federal energy regulatory commission and other municipal utilities with joint asset as components of their service. it's a recognized method. >> it's not a required method though? >> no, and it's not the only method. it's one of the methods that is used, but it is a commonly used method across the nation for allocating costs. >> why wouldn't you -- in a simplified world the layperson would probably say well, what is the revenue or the volume, measuring the volume that we generate from electricity and

revenue that we generate from water? is this method that you just described comparable or some other based on volume and cost would yield a completely different outcome in terms of the split? >> so the method that you just described is recognized in the industry as the "propositional benefits method." it also is of reasonable approach to allocating the costs. would it result in exactly the same outcome? no. is it a better or worse outcome? we would have to look at that again. it was one of the methods that has been considered -- had been considered historically when the puc settled upon using the separable costs method. >> i would imagine that the great volume of resource that we yield from the tunnel would be more on the water side than

the energy side. i mean water and electricity are very different things, but as resource, there is probably many more people in the bay area who get benefit from the water then get benefit from electricity. so you could look at it that way. >> sure, you could. >> with the bulk of the percentage or proportion on water versus energy. >> and just so i'm being clear in describing to you the method that we are using, while each asset is categorized as either a water, a power or a joint water and power asset, the sharing of the costs is applied uniformly. so we didn't look for example at mountain tunnel and say, what is the split for that particular asset? the whole system was assessed and the 55/45 was the resulting allocation. and with respect to mountain

tunnel, it is a joint asset. it does provide both water and power service to the hetchy system. it conveys water that is held behind -- drinking water that is held behind oshaughnessey dam and throughs through the dam through canyon power tunnel to kirkwood powerhouse. from kirkwood powerhouse, it flows into mountain tunnel. from mountain tunnel, the tunnel ends at a regulating reservoir called priest reservoir and down into moccasin and generates electricity. so that drinking water from the dam is providing both the drinking water service and a power-generation service. mountain tunnel is part of the system that allows us to do both of those things and so it has been categorized historically as a "joint asset."

your final question to describe the opportunities for getting energy-efficiency funds and we provided that to our own commission by way of providing a comprehensive response to you as well. i think we have summarized this to you before, but just briefly, in looking at the issue, we believe that while we could go to the california public utilities commission and request authority to administer energy-efficiency funds separated from implementing our community choice aggregation program, we believe the cpuc expects you to ultimately operate your community choice aggregation program and to

utilize those funds in tandem with it. so we see those as linked in the regulator's minds, the decision to allow you to administer funds is linked to operating the community choice aggregation program. as we have had discussed before, marin energy authority before they implemented -- after they registered as a community choice aggregator, but before they implemented their first transactions under that program, also went to the cpuc and took advantage of the opportunity to access those funds. but they've launched their cca program and been operating since 2010. so we see those two activities as linked in the mind of the cpuc. >> great, thank you. i think the only other question i had if there has been any communication with shell energy since august of last year? and communication between the

public utilities commission, energy enterprise and shell? >> we have communicated both formally and informally through theirs letters and i believe i alluded to that at the joint meeting that we had. if you would like me to provide a copy of that i can provide a copy of the formal correspondence. >> what was the upshod of the correspondence? >> so let them know it didn't appear we were launching our program. >> did that severe the contract or put on hold or the nature of the relationship as codified by the contract or nullified by the letter of the contract? >> i think it would be fair to say that we weren't holding them to their offer to provide service under the terms that we had negotiated. >> okay. >> thank you. >> thank you, i appreciate

your responses. thank you. >> you bet. >> any other parts to the presentation, miss miller? >> my staff report links the next three items together, 3, 4 and 5 and we could call those and do the presentation as well. >> let's keep this item open and we'll add the next three item 4, 5 and 6. >> thank you. >> before we do that, let's have public comment. we'll have public comment on 3, and then we'll call the next item. >> good afternoon,

commissioners, eric brooks representing cleanpowersf and the local grassroots organization our city. first i want to reiterate real quickly regardless of the sfpuc's financial problems, which are clearly very serious, cleanpowersf is a stand-alone program meant to fund itself as commissioner campos pointed out in that hearing where this was discussed. none of the advocates would want cleanpowersf to be anything otherwise than a program which funds itself. nor i believe would any of the supervisors and also the staff, the lead staff at the sfpuc for cca is already hired and is already getting paid and is available to be dedicated to cca. so the upshod is that none of the financial woes of the sfpuc has nothing to do with whether they spend time on

this program or it goes forward because it's self-funding and there is staff already paid to deal with it. i want to specifically speak to ab 2145 and ab 25159. 2159. these are both urgent, it's especially urgent to stop ab 2145 because if it passes cca will essentially die in california and it will be as if prop 16 passed. the leaders on both ever these issues are definitely calling on individual supervisors to make the trip to sacramento next week on monday for ab 2145 and on wednesday for ab 2159. to make the case, we really want you to go the extra mile on this and i will email you later today letters that you can sign onto and the people to

contact about those sign-on letters to get them to the assembly members. thanks >> thank you. there are no other members of the public here and we'll close public comment on item 3 and go on to items 4 5 and 6. >> item 4 is approval of the contract with the enernex for tasks under a not-to-exceed budget and item 5 approval of the contract with san francisco community power on an as-needed basis subject to the prior approval by the commission for tasks not-to-exceed amounts and item 6 approval of the contract with the mrw and associateds an as-needed basis subject to prior approval by the commission for tasks and not-to-exceed amounts. >> good afternoon staff, i have a report and powerpoint that i will show you, but

initially the rfp was issued february 20, it this was rfp to obtain a consultant to provide a build-out plan for our cca program. one of the main issues was criticism that we had heard when the program was brought before the puc with shell and the uncertainties whether or not the program after the shell contract was completed were adequately planned? so the idea here is to have a build-out plan, so that we answer some of those questions that had been raised by the sfpuc. and alisa, thank you. so we received four proposals on our rfp. rfp just once again was vetted with our stakeholder community. we did not receive comments from the sfpuc at that

particular point in time and we had not yet had our joint meeting with the sfpuc. so they were not comfortable providing comments. however, once we had our joint meeting, the sfpuc did participate in our scoring panel. and have been helpful and i look forward to working with them to work with the selective consultant and provide information as needed and that was a pledge that was made by sfpuc commissioners at our joint meeting. so the four proposals were received by edf group, san francisco power, mrw associates llc and enernex llc. our panel consisted of not only sfpuc, but a member of the department of the environment and lafco staff member, as well as an outside member from the sonoma energy authority. as a result of the scoring, we had pretty much unanimously

recommended enernex to do most of the tasks. they were -- they are an international group. they are based in many cities and overseas. they are an electric power and engineering consulting firm that has staff both locally and of course as i said overseas. as part of our rfp, i just want to just rereiterate what we are looking for, universal access and equitable treatment and providing 100% renewable and energy-efficiency and installations. so on our enernex proposal, they have been engaged in multi-year solar and wind generation program for many of the investor-owned utilities, san

diego gas and electric, including los angeles department of water and they have been consultants for the california energy commission and awarded the 2013 project management distincted project of the year for smart grid. these are primarily engineers, but they work a lot in interface with government on new high technology renewable energy programs. we were impressed with the breadth of their knowledge, as well as the fact that they did have a credibility in that they are a company that is not only independent, not having provided any work for pg&e, but also just their very background in terms of the basic resources that we are looking at both wind, hydroand lynwood behind

the meter. the issue that was brought up earlier during miss hale's presentation which is the shell contract was critcized by public utilities commission and members of labor and one of the tasks was to make an assessment of whether or not sfpuc's staff was capable of running the program? and in addition, they were also looking at the alternative, another service provider, could be shell or anyone. the other more generic tasks, but the first task that we would have our consultant go forward is that initial task of making an assessment about how should the project go forward in terms of do we contract with another energy service

provider? or can the sfpuc provide those servicesin the second part of that critical question is also whether or not there is any economies of scale with that? meaning that we understand and we were told at the joint meeting that there is obvious a budget problem with the sfpuc and whether or not by implementing a program like this, you could gain any economies of scale? is there a source of revenue here that would in terms of administrative piece actually assist you in dealing with a potential budgetary shortfall? so those are the two critical questions. part of enernex's team was a company called willdan financial and i have seen willdan providing economic services and they are a well-known company that would work with the sfpuc, both

management staff, as well as their financial staff to answer those two kind of critical questions. >> i just have one question, and it goes back a little bit to the slide that you had where it says "community choice aggregation commitment outline." under the fourth bullet point "providing the option of 100% renewable power." i just wanted to get clarity that we are actually looking at various options that could include less than 100%? >> that is correct. >> okay. so i just wanted to make sure that was the case. >> that is a good question. i was trying to really get the slides to come back, but that was the option of 100% renewable. always before it has been 100% renewable program and they are looking at customers can, i mean we always looked at it as phasing, starting small. they will look at that as well. >> so we'll look at various percentages in order to? >> correct. so they are

looking at both program and customer rollout. >> okay. >> so i think i have already talked about this slide. this is just the -- once again the initial task which is important and we'll actually have a report on this prior to the completion of other tasks. as to the other consultants that bid, san francisco community power is a locally-based consultant. what we are recommending is that we provide them a letter basically saying that we will use them on as as-needed basis. the task that they bid on, they only bid on a few tasks in the rfp, but the ones that they bid on had to do with basically the

energy-efficiency and community outreach portion of the plan, which is a task that would come later in our consultant's timeline. and we would like to keep them on as-needed basis. the idea being that i would come back -- we would come back to you if we were to assign a task and then have an amount assigned to that task that. is also true of mrw and associated. they have worked on both marin and sonoma cca programs. they are involved in the power generation portfolio side and their team as well had the legal counsel for both the two programs. just dealing with regulatory issues, which some of our rfp had some regulatory tasks. once again, those aren't our initial tasks, but something that we may want to use them.

so once again i'm recommending that we authorize them to be available to us on an as-needed basis, once again subject to come back to you, if we do asin a task and then add a budget amount. just going back on enernex, their initial bid was $1.1 million, but that also included do something designs of a number of programs that we do not need for a plan. we would actually need it for implementation, things such as design of programs, preparation of rfps. so we were able to negotiate after our interview that the projects that we need from them would be not-to-exceed $210,000 and that is what is reflected in the contract that you have before us. the not-to-exceed amount overall for community power is $40,000 and not-to-exceed amount for mrw and associates

would be $50,000. we have the budget for the these amounts both this year and in our protective budget that jason will speak to on a item before you coming up next. so next steps would be obviously if you have any questions, i would answer them, but to award the contract to enernex and then we would receive the report back and we're looking at trying to get that back within six weeks and actually i'm trying to get it back at your next board meeting. a lot of that depends on cooperation with sfpuc staff of course. we would then authorize task -- remaining tasks at our next meeting. it's expected to be completed the entire report by september, 2014. and that concludes my presentation. >> thank you.

thank you for your work on this and your presentation. commissioner breed, do you have any questions? mr. fried? >> there is one task that we're going to get started immediately, looking at what level, if the puc took over all the aspects instead of having a third-party like shell providing services and what that would mean for budgetary reasons? because we know you have a budget hearing coming up in may around the puc budge shortfalls and some thought on my part and others that there could be ability for cca program to offset the shortfalls. so we're going to get that portion needing to go right away. i wanted to make sure that part was clear and that one section will need to be done immediately. >> okay. what is the overall not-to-exceed rate for enernex?

>> $210,000. >> thank you. i really appreciate all of the work that was done and the puc involvement as well, and reviewing the respondents. we can go ahead and open this item for public comment. any members of the public that would like to comment, please come forward? >> good afternoon again commissioners. eric brooks. san francisco clean energy advocates. very pleased to say that even though we didn't have much time to look it over, only about one day, we didn't see any red-flags come up in any of these contracts with one small exception, with the sf community power. if i ran out of time, i would appreciate it if you would ask me to elucidate that. the upshod is that we can support this. it looks like it's good enough for us to move forward and for the advocates to be supportive