the board. we've done a lot of work this last year to set a solid foundation for the power enterprise. i do believe the time is now that we develop a new line of business and that business is cleanpowersf. i look forward to continuing to partner with all of you to achieve the goals giving san francisco residents an affordable program to offer options for a greener product and local build-out for those who can afford it. thank you. >>supervisor john avalos: very good. thank you general manager kelly. seeing no other commenters. we have one member of the public who still wants to come forward. please come forward. >> hello, my name is linda weiner. i represent the sierra club. i did speak at the news conference this morning. we have worked for 11 years

with many of you on trying to get this program passed. i would reiterate what everyone has said that looking forward to a no later than that november launch date and for a utility rate. something dawned on me. i worked on ab 32 in sacramento the global warming bill. even though it's set up the implementation of the state level, what cities do will feed into that. the more we can get clean power set up it will make the program in cal more effective and other states are looking to that and i hope that by doing what you are doing it will set an example that will go beyond just this city. thank you very much.

>>supervisor john avalos: is there any additional public comment? seeing none, public comment is closed. we'll move on to our next item. we'll reopen public comment. there will be another time to open public comment. >> is it possible to make a public comment now. >> public comment is open right now for our opening remarks. we'll have public comment for each item before us that we'll discuss for public comment as well. if you have to leave now, this is a time to speak for public comment. >> i do have to leave. >> you have two 2 minutes. >> okay. thank you. my name is joe merably. i want to thank san francisco and mayor lee and joining with the

board of supervisors. the great weather we are having and there is nothing wrong with enjoying it. it comes at a cost. climate change is doing great harm to california. as we go into possibly our fourth year of drought, the lack of water for farms and wildfire is likely in the near future. we need san francisco and california to head take the lead on climate change and we need cleanpowersf. as a former customer of green mountain energy i really look forward to being once again a customer of such a program. so i urge sf puc to take action on cleanpowersf as early as possible in 2015 and give the citizens of this city and great opportunity to contribute in addressing climate change. thank you.

>>supervisor john avalos: thank you very much and thank you for mentioning green mountain. we'll close public comment. is there any additional public comment? seeing none, public comment is closed. next item. >> city clerk: enernex reporten titled quote local build-out of energy resources of the community choice aggregation program ". >> jason fried from lafco. you will see in your packet is a report of the program being launched. one of the things we did after the work by puc staff moving forward on the program what lafco did is look at the studies of the issues that were brought over the years of issues and concerns why the program was not brought forward. we came up with a 12 task

report that would outline all of those items and you have all of those 12 in front of you. i won't go over each item individually but we wanted to 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 incentives 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