touch on all the issues coming up and we want to see how to come up with a plan before you. we have bids on this task. you can bid on entire project or portions. some bid just on individual portions of it. of that we have the winning bidder of enernex and we have some qualified bidders with some subtasks if we needed them. enernex did such a great job that we never went to the other subcontractors to do the work, but we can use them if we need those. i will give the presentation to enernex and you can ask them questions from that

report. >> hi. i'm with enernex and i want to thank lafco and puc for working with this. my understanding that questions were raised for cleanpowersf. my task is to answer questions that have been raised. i'm going to go over the highlights of this task that we are going to address. an

introduction. enernex is a power source engineering firm for large wind generation and we've done that throughout the country and we e take modern technology and help utilities implement those illusions to run more efficiently. we have partnered with will dan to help those cities implement programs and helps with economic aspect for those municipalities. we have collaborated with will down to come up with their facilitation plan on their

cca initiative. what we did for this report is review a lot of the existing documentation. over 55 reports we reviewed and within the report you see some variability of some of the numbers stated because different reports had different amount of generation capacity for different generators, the solar capacity mice change on a specific location. the expected cost would change. one of the next steps would be to go back to say if you are proceeding with this specific project, how big is it goes tools -- going to be and cost. given the prior reports we did what we could to address the questions at hand. we collaborated with both sf lafco and sf puc since last spring to address these questions with multiple

iterations on this report and feedback to present the work we are finding today." the first question was whether sfpuc could find the procurement role. this was sped expedited. really the answer is yes indeed sf puc does have the capability to do the power procurement on behalf of cleanpowersf. one caveat of that is the realtime management of electric power. electricity is different than other commodities in that the supply of electricity must exactly match the consumption of electricity in realtime. at this point the sf puc works with other vendors that engage with the

california independent system operator in order to ensure that that matches in realtime and at least in the near term in part because you have to have 24/7 operations to support that as the report states in the near term we hope to partner to make that work and sf puc in subsequent development may look at eventually look at that internally. one of the big next things to look at is the timeframe and cost parameters for these various build-out opportunities and cost and competitive rates. one of the introduced opportunities for dark green and light green, renewable power and

heavily renewable power for customers. the exact mix and cost for those options need to be finalized with the goal being competitive with pg & e rates. so working with sf puc on the commission it should be possible for the sf puc to fulfill that role that was initially envisioned to be supplied by shell energy. the next question was the timing and economic benefits of local build-out and some of these tasks really were related to each other. so this also relates to one of the later tasks. you have the potential to realize the benefits, the economic benefit of the local build-out and this translates to how much, how many dollars per cost of mega watt. on the chart here is down to dollars per watt so what will reflect what customers will see. you also have the build-out

construction pay jobs. i understand the jobs were one of the questions raised for what kind of economic development and using the nrel. the development impact tool that we use to refine and estimate the construction phase jobs in terms of dollars or jobs per million dollars spent per construction as well as the assumed operational jobs after the generation station is up and running. and we'll go into more depth into some of these on a later task. so this is a high level summary assuming that all the projects that were listed are computed executed for total

cost and jobs per million and operational phase jobs in total. so, if all of the initiatives that were listed were actually built you have the opportunity to achieve this much economic impact. so, using the google maps we were able to, sorry the audience can't see the full slides here. thank you very much. there are various pins for the actual locations on each of these projects. you see that we are in the san francisco area and some are in the surrounding region. the report points out which are the regional jobs and which are the out of regional jobs and we use that 70-mile perimeter as the line of

demarkation. that was not refined enough and i don't know if they are which can say how many of these jobs are because you don't know who is commuting. >>supervisor john avalos: what was no. 1 in terms of the different projects. the project no. 2? >> project no. 1 is not on the map. it was regional. we did focus on these regional ones. >> the next aspect is the energy efficiency strategy. it was referred to the inside management and with the inside management you talk about energy efficiency. so helping customers get the most out of their

electricity use. demand response. we are asking customers to respond to pricing and other initiatives as well as solar because you have the large solar construction outlined on the prior projects and customer solar ntives for solar sf program to encourage customers to adopt solar. so energy efficiency funds can be collected from customers currently pg & e and california investment utilities collect a charge for energy efficiency initiatives and using the prior cpa's have a precedent. there has been a transfer of some of those energy efficiency funds over to the cca to utilize locally. it's envision that cleanpowersf can talk to

the california public utilities commission to collect some of those pg & e funding for your own energy program and initiatives. the funding level if you see the line chart here there is a 25 percent of 50 percent or 100 percent. that has to do with the incentive level. it's to do with the energy efficiency programs that the program would contribute some funds and the customer themselves would also contribute some funds and the question is when you come up with an interview program like that, what percentage of funding is supplied by the program, what percentage of funding is supplied by the customer. of course the more the customer contributes, the more overall is invested. so, each individual ee program can take a look at what type of incentive level is appropriate for that.

>> can i ask a question. is there a certain percentage or maximum that the cca is eligible for? >> the application would take a look at how many customers cleanpowersf has and take the total number of customers collected and that will determine the correct number per transfer. >> i see, thank you. >>supervisor john avalos: i'm hearing it's difficult to hear in the back. can you speak closer to the microphone. >> is that better? i will try to speak louder. during some of

the earlier studies, the question was how to approach commercial and industrial customers. one of the interesting aspects there were commercial and industrial customers that approached sf lafco and sf puc and they were interested in joining the program. the actual cca law legislation requires that the cca offer service to residential customers, but it does not require that you offer service to the commercial and industrial customers. so for a variety of reasons we highly recommend that cleanpowersf does work with industrial customers and giving them every opportunity to join the program, in part because per end point the commercial industrial customer uses more electricity than an individual residential. so there is economies of scale there from a

business standpoint of working with industrial customers especially those that are motivated to have a higher renewal supplying their electricity. there are companies in san francisco that have that idea. here we are combining a couple of tasks. task six we talk about renewable and task 7 hydroelectronic. what we need to do are the recommended next steps to go out and refine what the overall cost are. leveraging the prior studies and determining how large the various projects would be and get up dated bids for what they would cost. part of what's happened in the last few years, the cost of solar has gone down. it's not actually the cost driver

for those types of projects, it becomes more of the labor and aluminum framing that becomes the cost driver. so the task themselves are commodity. so getting estimates for what the various projects would cost and determining whether the construction and supply of generation can be supported by the competitive rates that are envisioned. that's along with that second bullet point where there are a variety of estimates for how much this will cost for the build-out plan and the required estimates is required. with the addition of hetch hetchy system there is the opportunity to add more efficiency to projects. that seems to be some of the most cost-effective way to get a

more generational from existing facilities. here again i'm bringing up the demand side management or behind the meter programs. so within customers themselves can be more engaged in responding to the price of electricity and being more energy efficient, adopting more solar, having rates a tariffs that encourage distributed energy resources such a solar through net energy metering tariffs and feed in tariffs and engaging with the industrial customers. they maybe interested in something like a feed in tariff. you have the strategy

to encourage efficiency, demand response. i encourage you do it in a holistic fashion so you are not only encouraging more use of efficient electricity but demanding electricity with demand response to either rates and tariffs. so that if the cost is high, the customer is incentivized to useless and more during off peak periods and as well as the modern technology as i mentioned to be more integrated with the electrical grid you have the capability to respond with air-conditioning, with heating and setback temperatures on thermostats and that type of thing in response to electricity. that helps minimize customer bills as well as manage the overall system as to demand

on electricity. of course not all of this comes free. the approach for the business plan of how do we introduce electricity and clean power san francisco electricity rates are incentives to stay and while building out these programs so while you have the clean generation resource providing the power for the customers. there is the financing aspect. there is the potential for bonding, the potential for income from electricity consumption to pay as you build-out. so the phased implementation tarts -- starts small and start getting income for the build-out and the approach the sf puc will find to help see

the timing of the build-out strategy will be to be sure to be on good financial footing to launch this program. we recommend integrated resource plan, what are the resources through resources that are procured, that are owned and resources procured by customers and where clean power sff has renewables. overall we highly recommend having a program management total life cycle cost approach to this. taking a look at a 20-year plus timeframe. here is an investment in a renewable resource. it's going to take 20 years for that resource to provide it's full value of investment. so, how do you

pay the upfront cost for that. what does that translate to for rates for customers that are going to be receiving power from that investment and taking a look at that full life cycle cost from construction to utilization and retirement of the asset, upgrade and maintenance of the asset. what are the cost and make sure the rates can support that type of plan going forward. again, the updated cost need to be taken into account. things like solar. it has come down in price recently. updated estimates for cost and build-out should be done to make sure the latest greatest information is used to build that recommendation which generation resources are most cost-effective for initial launch. the next step is rate

analysis. what are the rates that can be sustained and can we be competitive with pg & e rates doing so. all of this would feed into an updated implementation plan that would need to be filed with the california public utilities commission. there was a quick overview, but i know there is a lot to talk about. with that, i will take questions. >>supervisor john avalos: thank you, we can have questions now or we can hear from the public utilities commission staff. i think harlin kelly was up next. if you have questions that you want to ask. >> thank you. >> you are here, okay. >> ms. hale.

>> thank you, barbara hale. sf puc. i want to thank you for the information. i want to say the collaboration and dialogue that we had with taf was constructive. the report reinforces the number of program design elements that the puc was already considering in the cleanpowersf program. there is five key points from the enernex report that i think from a business perspective are worth emphasis. first is the report recommends that we set the energy price and then figure out the mix of supply that we can afford. second, we need to recognize that local requirements and preferences are going to be more expensive. that a phased implementation of the program is smart with the 2-tiered

offering with the light green and clean start is what sonoma calls it. that basic light green offering be at pg & e rates and include build-out with the expansion of the program. once we have established that financial stability that jeremy just referred to. to remember that investment in generation may impact rates and affect customer retention. i mean that both in effect customer retention in a positive way as well as a negative way if we don't get the numbers right and pay attention to the cost profile. the study i think has been very helpful and while we've collaborated on this report we've also been working as general manager kelly referred to on a business plan effort. that effort

will outline our business opportunities including cleanpowersf and help us tart our effort to bring the hetch hetchy power system to san francisco in a financially stable manner. that business planning effort will be discussed with our commission over the next couple months and should result in a finished product in the spring. that's our target. with the completion of the enernex report it is our goal to complete the program design. the program should lead for affordablity and offer more associated jobs. consistent with the enernex recommendations puc staff propose we develop a new cleanpowersf program with a 2-tiered program offering. the new offering would be our version of

light green or clean start and that will include you the basic opt out required by state law and enhanced offering, the san francisco offering the dark green opt up option for san francisco. our next step at the puc for power staff is to advance the study work to the integrated program design. we need to staff up, we need to complete the business plan, we need to identify and obtain revised power purchase contracting authority so that we can mitigate risk and operate at the commercial pace that this program is going to require of us. by that, i mean we are going to put together our ideas and vet them with the general manager and our commission on how to modify our contracting authority so we can build a portfolio of resources that are cost-effective to make the commitments in the supply market of a duration to allow us to have

a stable program. that was part of the function that shell was providing for us. with shell out of the picture, we are talking about new ideas of changing the contract approach that we have authority for. then we need to complete and present our rate setting and program design. unlike our prior cleanpowersf program design and rate making process we had done that in tandem. what i'm proposing here is to take those steps in parallel. i think we can do that because now we are not talking about figuring out the cost and then setting a rate. we are talking about setting a rate at the pg & e rate and then building a cost profile, a supply that fits within that ceiling. so i think we can parallel track those staff efrs with the rate fairness board and with staff on the program design and

consultants on program design. >>supervisor john avalos: does that parallel process help to expedite? >> it should, commissioner. and depending on what sort of other changes we might be able to make to the prior program plan on the activities that happened after rate setting, i'm sorry to tell you that i think it's not doable to launch a program. i think the earliest i heard during this afternoon's conversation was this summer. it's just not, we are not physically able to do that given the requirements of notification, given the fact that we can't negotiate a contract for supply in that amount of time under the existing city contracting rules. it's just not physically possible . >> what would be great to see

given that. you do seem to have some constraints to develop the process. if you can give us different scenarios that way we can have some leeway to push at certain times. >> certainly. let me get around the desk. hopefully this will show if i can get sf govtv to put this on. this shows my version of the next to follow adoption of not to exceed rates by the commission. this is the same, i'm sorry. better? okay. thank you. this is the same set of activities that you saw in july of 2013

when we presented what the activities are that follow adoption of not to exceed rates. couple things have changed. we don't have shell in the picture. so, there is no activity around authorizing a shell contractor signing a shell contract. there will be other contracts, however, for us to bring the supply forward for us to have the back office functionality. there will be other contracts. a couple of the areas where we maybe able to shave some time, supervisors, avalos, to respond to your specific question is in our earlier program where we are envisioning rates higher than the pg & e rate, there was a lot of concern about having accidental customers or customers who weren't well informed being opted into this program, right, and response to that, we developed an earn -- early customer and

notification program. i would like to suggest that maybe since we are now talking about a program that is easy at or below the pg & e rate we can relax some of those requirements and reconsider that plan. as you see on this sheet, that activity is starting here and it takes some time to go through those steps. so we might be able to shave some time there. where i'm saying we won't be able to shave time is in the steps for example here where opt out notices are mailed. those opt out notices are required by state law and required timeframe of two 2 months out of launch. we can't shave time there. that's a fixed activity. but as we come through the program design phase and think more about how quickly we can act, those are some of the areas where i think we might be