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 able to shave some time if we are given the latitude to do that. >>supervisor john avalos: when it comes to assessing the competing rate, the pg & e rate that we are trying to come under or come at for the light green option, that's very predictable, right, we have the right information to the california public utilities commission where the rates are. it's not like it's a moving target that it's going to delay anything. >> it is a moving target that we follow. we know where it is and we participate in the

proceedings when it's set. >> what kind of anticipation do we see, we have generally in terms of anticipating any rates that pg & e might try to have for the california public utilities commission. >> they raise their rates about four times a year. the generation of the component of the rates is what are we are talking about and we are follow that closely. we'll talk in a future item, we'll see pg & e this summer financing options -- proposing the rates for green tariff option and that will help us gauge the competitiveness of the program to propose and design an offer. >> >>supervisor john avalos: thank you. we have a question from supervisor campos. >>supervisor david campos: thank you. do you have a target date for when rates would be set?

>> what i'm suggesting is that we would bring the program design and the rates to the commission prior to the end of this year consistent with what mayor lee had directed. we can try to do that quicker. it's going to be dependent on a number of activities falling into place easily. we are going to need to staff up as i mentioned so we have some hiring activities that have to occur and modifications to our contracting authority for power so we can act at a commercial pace and bring supply into the portfolio for cleanpowersf and knowing we'll be able to operate at a pace and using the tools for the marketplace. >> can we add one thing. i think the first offering maybe the

easier of the two. it's the second one, where the dark green is something that we really have to pay attention to because that is something that we'll be competing with pg & e on because that's their green tariff option. i think and you are going to talk more about it. so the first offering, the one that we are opting everyone in we can figure out what the price is and based off the price we can see the mix and the build-out. but when you look at the second option, the darker green option, that is one that will take some time because to see what the exception -- competition is doing and work that out. >>supervisor david campos: if i may, thank you to the general manager. i was hoping we would have something more concrete in terms of a time line. i think that the goal of

setting rates by the end of the year to me is not a very aggressive goal and it's also very intangible goal because it can mean a lot of different options. and it does, you know, i will say this i think for the record, it does worry me that we are having to staff up, if you will, at this point because this program has been on going for a very long time and it's sort of disappointing in a way that there isn't the person designated at puc to be exclusively working on this project. you know, it's almost

february of 2015. so i would simply ask the commission if there is a way of presenting something more concrete and if that means needing to hire someone. i know you have an amazing director and they can expedite hiring if needed. if you have the board of supervisors and the mayor with all hands-on deck, if there is a need to expedite anything, i think the people are committed to doing that. i hope we approach it from a perspective is how do we launch a program as soon as we possibly can and do everything possible to expedite that day. that's what i hope happens. thank

you. >>supervisor john avalos: great. commissioner vietor? >> yes, i think there is a lot of interest in moving this more quickly than what's being put forth. what i would like to propose is that by february the latest there is a time line to be brought back. this is january 30th. that's soon. that we see a time line that takes all of these factors that you laid out in the last round and really unpack them internally and come back and say this is the earliest we can do the rates. i would like to see the rate setting process before our commission in 3 months if possible. maybe that's a bench mark. three 3 months at the latest and see if we can work with that. we can review that once we see the timeline. i think that's a critical piece for us to get through. this contracting authority piece seems like a major hurdle and there

is an invitation from this board, this body. let's tackle that. i don't know why i couldn't start with some of the education and outreach from the community members. it seems that has been a long period of time to take place. seems like there is a momentum here to be able to reach out, cleanpowersf san francisco, hello, and what that really takes. i would like to see a time line brought back particularly before this body in february for us to really look at and tight and short as humanly possible to get this program launched. and i would like to direct our general manager to take care of that, please. >> i'm back in the principals office, right? [ laughter ] yes, i think the plan is to layout a plan and i think at the next commission meeting we'll look at everything and it's great to have the

will of all the board of supervisors behind you and the mayor. maybe i will ask for more things when i come before you, but, i just, you know, there is certain things we just wanted to highlight to let you know that tomorrow we just can't do it. i think the biggest obstacle is we are relying on shell to do a lot of the things that we couldn't do as a city, you know, contracting and campos, you are very aware of a lot of the obstacles, processes that we have to go through. we've already kind of recognized and we are going through all the things that we think that we need to have to be successful. and so for my standpoint, just to put it out there that when i produce something and we go out, i want it to be successful. i don't want to go out there as fast as possible and it's not something that we are proud of. so, yes, we are going to do it quick fast as

possible but we want to make sure it's a quality launch. so i have to balance all that and i will work to present a schedule, but i do feel proper notification of informing people that your provider will be changed. i do feel strongly about that because they will not have a choice when we opt them in. so i do feel that that notification, even though it's lower which i like a lot because there is no financial burden that we are imposed on anyone but i still feel that a notification if you are changing your provider should be warranted. >> yes. thank you and i couldn't agree more. if i might have one clarifying question on the report. the financing piece. i just wanted to ask because on the marin launch they were

seeded with private investment money. is there an at some point or potential because you didn't mention that and i know there is a lot of money these days in san francisco. would there be opportunity for private investment at a low rate of return or something that could be put into this equation and i don't know if that would affect the contract pieces or exploration or launch. >> there are many options on the financing aspect. one of the interesting one is the investment of tax credit at the local level. a lot of the municipalities that have tried to procure their own new resources have private investors to build-out and that private investor at the federal level can get federal tax credit. that tax credit ends 2017. the build-out would have to occur

before 2017. after 2017 is the question can you do your own financing through less over bonding or another arrangement with another private investor and there is a variety of options that the report gets detail on. >> that's another reason to expedite as quickly as possible and i would request the puc look into that option specifically to see if there is some opportunity to be able to launch in a more aggressively if it would benefit not only for the launch but the financing of the program. >>supervisor john avalos: commissioner crews? >>cynthia crews: thank you, i have a question for ms. hale. i'm looking at the picture i took from my phone. if we are looking at the schedule of events, i think it says days

to rate approval do i understand the not to exceed rate is before the build-out? >> the not to exceed rate for the basic light green offering that we are talking about would be set competitive with pg & e's rate and we would need to see if we can have resources whose cost profile totals an amount below that. right? and what the enernex report suggest and what i think is a good idea is it says have that rate

discipline and then just build the resources that, you know, stay within that cost ceiling and if you can get local resources in, get them in, if you can get regional resources in, get them in and if you don't have financial capacity and you have to go outside the region, go outside the region. so the focus is lead with the affordability factor and then develop the resource portfolio within that financial constraint. >> maybe i'm just being paranoid. but, do you think that it is possible that pg & e's proposed green tariff option will set rates that are

financed by their dirty money, like oil and natural gas facilities so siphoning off that they can actually finance taking a loss on renewable energy to compete with cleanpowersf? do you think it's possible? >> the next item we are going to give an update on it. i think we'll probably address that. >> i do thing that the reason why i brought that up is if we expect for green tariff to be an option for the summer do we want to set our rates prior to pg & e. maybe i'm just not getting it right. >> what we are talking about is setting the initial offering lower than the price that everyone

is on right now. the concern is that pg & e is doing their green tariff option and we are going in some of, they can use access green power and that's a big advantage because they have used it for their whole rate base. so we are going to be at a disadvantage offering something equivalent to that. that's why we need to know what the price is, what they are offering and what we can offer to entice people to go to our option versus their option. all of that factors, we need to know because of the great business sense to do that. >> you are saying then it's an advantage to wait until after the green tariff rates versus doing it before? >> because if our price is higher and it's not as green and they come in and they have a target they can have something greener and cheaper and it would be hard for us to

encourage people to opt into our other option. >> i definitely see your point i think obviously cleanpowersf has a great many things that are more beneficial for city san franciscans obviously local jobs and being outside of that monopoly. i guess i have concern about waiting certainly as others do. so i would just suggest that we also consider moving something simultaneously in the project planning phases to move forward at a swifter speed. thank you. >>supervisor john avalos: commissioner moran? >> thank you. i would express my appreciation for this report

and one of the things that impressed me about was the tone of the report. it reads like a business analysis. and i think that's been needed for some time. it's not an advocacy document. i think it takes a good straight look at what possibilities are, also some choices and some decisions we need to make here in implementation and i think it provides a good bases for that. i wanted to express my appreciation to lafco and the consultants that put it together. for taking that tone, i am hoping we can pick up on that tone as well. i also have to comment to supervisor campos that we have had many historic moments was very close to home and i made a note of that. we do recognize the sense of urgency and the desire to move very

quickly. we do have to recognize that city processes are designed to serve many interest. being nimble is not one of them. as we get to an overtly competitive arena, we can't just depend on program design. we have to be able to change program design as competitive circumstances that pay it. as we go forward, we need to take the time to get the operational and business flexibility that we need to make that happen. >>supervisor john avalos: thank you for your remarks. commissioner mar? >>supervisor eric mar: thank you, chair avalos. it's always great to be here with the puc commissioners. i wanted to thank jeremy and the enernex report. we already had some discussion at the lafco meeting, but i wanted to reiterate the point by commissioner

vietor that a clear timeline for the puc commission and lafco from the puc would be really helpful with concrete dates and hopefully more aggressive goals as people have said. i also wanted to say that i also support as a few other commissioners mentioned expediting this as soon as possible and i understand what was laid out and the environmental groups, there is strong support and the coalition for clean energy. supervisors breed and kelly and thank you for what you have done on moving our city forward. i want to say in education outreach, i don't think we have to wait to start raising awareness in communities and low income and community of

color as well. i know there is a backup of pieces hopefully in the timeline where we can think creatively about how we are building this as quickly as possible and as mr. kelly said of course we don't want to move more quickly than we should, but i think that the anxiousness from the environmental organizations and communities, i share that and want us to move forward. timelines by the february meeting makes a lot of sense for me. >>supervisor john avalos: thank you, commissioner campos? >>supervisor david campos: thank you, mr. chairman, just a quick suggestion and one thought. i agree with what commissioner vietor was saying and as the general manager was indicating a time line will be presented to the public utilities commission at their next meeting. i think it would be helpful for me to for lafco to also hear from lafco staff as to what they think, you know, in their minds what

the timeline would be. i think it would be good to see if maybe there is an agreement, but maybe to the extent that one staff might think it can be done sooner than that's an opportunity for us to, for both staff to at least discuss that. i certainly as the puc hears from the puc staff, i would like to get a sta sense from our lafco staff as to what they are thinking in terms of an expedited timeline. that would be helpful for me. >>supervisor john avalos: thank you, i appreciate that as well. i think the lafco staff nancy and others looking at the other programs out there and have some ideas for how we can leverage some of the work that's already been done and so it's not just all on their shoulders and they can

assist with the effort. i think it's a great suggestion. okay, seeing no other members with comments or questions, we can continue with the next part of the presentation with the department of the environment. >> thank you, commissioners, this is a great day. i just wanted to make a couple of comments about activities that the department of the environment is doing and has been doing that are going to intersect with cca and talk about things that are on going right now at the public utilities commission and let you know about that. we have been running about a $7-8 million energy efficiency program over the last few years. a part of it is a partnership of administration with pg & e and we have a smaller contract with the bay area regional net who, that we helped form which is administered through a bag and a bag has a contract with the state

or with the c puc on that and we have some grant funding to do policy implementation and other research. i want to say that one of the things that we have discovered in our programming is that while using the life cycle costing analysis is a great thing to do and presenting the business case to a business or homeowner about the energy efficiency saving is usually not what sells. what sells is the improvement in the maintenance, lighting, comfort home health and having a lighted project on a shelf. it's a way to get the project sold. we have sold 15000 projects in san francisco to date with the small business program. another area that we are very active in now is we've been working with the puc on marketing, go solar sf and we've had a

number of grants from the federal government. we recently received one to start doing a planning of solar plus energy storage for the purpose of the disaster preparedness. we are working with the department of emergency management, puc and the power enterprise and with pg & e will be launching that next month. it's how we can get more solar into the marketplace, really back up our critical loads with energy storage technologies and then use that on a daily basis to provide grid support, demand response, peak load management and during times of disasters have those electrical loads for on going support. we've also been very active in the finance area. we have several finances areas in multifamily buildings and commercial pace program out of our office and as residential pace is just

launching now and we are working with water enterprise on the pay as you save program. we are hoping some time this year and next year that will be up and running. finally the regulatory area there are three proceedings with the california public utilities commission that we are following closely that will intersect with cleanpowersf that is the energy efficient portfolio where the rules are being set for efficiency programs can operate and that included community choice aggregators and marin has been fighting on this alone and i'm hoping we can join with them from the cleanpowersf perspective to fight about the proceedings that will benefit san francisco and the second is generating proceeding which is opening and we are just starting to follow that. i'm not going to report anything on that. a third one

which is integrated demand site proceeding and that is where puc is looking how to integrate, demand response, demand management with energy efficiency projects. right now those two things are in silos. if you are management an energy efficiency program you can't bundle it with a response. i think that's a real advantage that community choice aggregation is going to be able to provide integrated services to our customers that include water conservation, energy efficiency, demand response, electric vehicles and other renewable generation all in one package that we can build-out with them over time as they can manage those things. final ly in terms of program design sometimes we can structure these things to no

cost to the businesses and homeowner as things are paid off over time using savings and other benefits that are incurring to them. we are very much looking forward to working with the puc and contractors in designing programs and i appreciate wanting to get the program up and running on the purchasing side and stabilizing a cash flow and your customer base and there are also opportunities for us to get out in front right away with customers and provide them the kinds of services that are going to excite them about staying in the cleanpowersf and expanding the utilitization of the program. thank you and if you have any questions and i will be here to answer necessity -- any questions in the future. >>supervisor john avalos: thank you. we appreciate that. weem look forward to that effort. mr. fried?

>> thank you. jason fried. while this was going on, there was a period where we were getting questions from enernex and about something and they were always very good and requestic to respond back to those questions so the report can keep moving forward and we thank them for their efforts and thank the advocates for the comments when the drafts were put out there and getting those incorporated into the report as well. most of what i have been wanting to talk about are comments addressed already. the first one came up to me while we were standing here talking about setting of rates. there is two different products, there is the light green and deep green. for a lack of better calling. the light green everyone is in agreement, it's kind of pg & e's price and we figure out we can fit

into that program. it's not going to be 100 percent. we are going to do what's left over. once we create that product, we are going to use a build-out program. that's pg & e's price. we know what that is. we need to know what pg & e's rate is going to be. what we maybe doing on that portion is why don't we figure out when is the best time for us to launch. when can we get contracts to launch. when you look at marin and sonoma they launched in may, lancaster launched in may of this year. i don't think we can do it this year. but perhaps we look to spring of next year because of heche hech power maybe we'll get snowpack and perhaps we'll figure out when it's best to launch. set that rate. we already