>> good afternoon today is july 24th, 2015. welcome to the local agency formation commission. my name is john avalos, the chair of the lafco, and joined to my right by vice-chair cynethia crews and commissioner eric mar, madame clerk, could you share with us your announcement. >> please make sure to complete all electronic devices and speaker cards should be submitted to the clerk. >> that is our clerk, alisa somera and our meeting is broadcast by sfgovtv staff. bill and jesse. i would like to ask for a motion to excuse commissioners breed and campos. >> so moved. >> and that is seconded by

commissioner crews and we'll take that without objection. and madame clerk, if you -- i'm not sure if we need to call roll call or go to what makes more sense, 1 or 2. >> all right 2 is approval of the lafco minutes from the may 15, 2015 regular meeting. >> okay, colleagues, any changes or comments on the minutes? okay. nothing forthcoming. we can open up the item for public comment. any member of the public who would like to comment, and seeing none come forward, we'll close public comment and also announce the arrival of commissioner lindo. welcome. >> thank you. >> and if we have a motion on the minutes. >> so moved. >> a motion from commissioner crews, seconded by commissioner mar, and we'll take that without objection. okay. item no. 3, please. >> item 3 is community choice aggregation activities report, a, the status update on

cleanpowersf program and timeline for program launch, b, status update on the proceedings at the california public utilities commission and c, status update on state legislation and d, the civil grand jury report entitled "cleanpowersf at long last." >> thank you, we don't have barbara hale, but we have michael here to present on our cca activities are going in san francisco and i know they are going forward in a way that we'll be very happy about. look forward to the report. >> thank you, good afternoon, commissioners. happy friday. michael heims, san francisco. so i think what i'm going to do, last time we met, there were a number of questions

about the renewable energy market. and we made a commitment to address those today. so i'm going to do that and i do have some slides but before i go to that, that portion of my presentation, i'm going to kind of go through the agendized update. so with respect to the cca program status update, and timeline, we've been making steady progress with the implementation of the community choice aggregation program. since we last met, on july 14th, the sfpuc adopted an update to our community choice aggregation implementation plan. this is a plan that is required under state statute for filing to the california public

utilities commission. the city already has a plan that is on file and has been certified by the cpuc, but because of some of the program design changes, and slightly new direction that we have taken with the program, we have made some updates to that plan. and that has been submitted to the cpuc submitted this week. and we'll be concurrently submitting that to the board for review as well. also, earlier this week, we announced the results of our request for proposals for c cca back office and customer care services and we'll bring the results, the rfp and recommendation for an award, enter into an agreement to our commission at its august 11th meeting. and we will be recommending the

highest-scoring proposal, noble america. >> what is the name of that. >> noble americus. >> are they from rome? >> they are from san diego. and they are also the provider of similar services to the other community choice aggregation programs in california and sonoma and lancaster. >> that is for the back office administrative function? >> yes, for meter-data management, billing services, and to support our initial customer care activities, call center support. with the launch of a program like this, we're going tospect expect a large volume of calls and they will help us bridge to the point that the city can take on that service and run the customer care service on their own. >> will they be working on our

web interface? >> they have been doing that with the other ccas, yes. we do have a web page already up. so the next major milestone in our schedule is the release of the request for offers for power supplies. we're -- i can say that we're on-track to release rfo in early august and targeting august 3rd, so that is very soon. i would also like to note some communications, website-type activities. on june 30th we hosted community aggregates engagement meeting at the puc, to talk about our communications and outreach strategy and commission crews attended and provided some great feedback. we have also hosted a follow-up meeting with advocates at the puc, to discuss sort of

targeted community organizing activities. we, the puc attended its first sunday streets a week ago or so in the tenderloin, including information about the cleanpowersf program and we're also on-schedule for next sunday in the excelsior district. related to that, we are setting up a number of internal meetings with broader puc staff, to help educate puc staff around the cleanpowersf program. so that folks attending public events like the sunday streets, are as informed as they can be and can engage in citizens to help educate them about the program. >> so next sunday is that jerry day? sunday streets in excelsior is

later in august, but next sunday august 2nd is jerry day. >> jerry day. >> where we enjoy the music of the grateful dead and jerry garcia from the excelsior, could be a place for outreach. >> yes, could be very nice:a couple other things that we're working on in this area. we're planning on issuing our first e-newsletter to volunteer list that we have developed over time for the program. so we're really trying to get the message out that we're going to be ramping up cleanpowersf. we're very close to finalizing a new brochure. we are making website upgrades. and we're going to have some swag pretty cool t-shirt to

distribute. so with that, i'm going to shift gears, unless there are any sort of follow-up questions about the schedule. >> commissioner crews? >> thank you so much. every time -- every time -- [laughter ]are you also doing some meetings where the department of the environment as well? >> we are. we have met with the department of environment recently, principally focused on energy-efficiency programming and we're the department of environment is developing a proposal for us for a number of different potential efficiency programs. we do -- i think as we mentioned at the june 30th stakeholder meeting we do intend to engage with department of the environment on the outreach strategy, once we finalize on our end our enrollment approach.

>> you mean having the department of the environment either staff or interns or someone doing part of the outreach and communications to potential -- >> yes, to support the program outreach and education. >> i would really support that. i think that is a great idea. their outreach efforts have matured a lot in the last years. so i think their ability to do that on behalf of cleanpowersf would be a great asset. >> yes, we know they have a lot to offer and we look forward to having that cooperative relationship with them on that. >> thank you. >> okay. >> okay. so i'm going to address regulatory proceedings at the cpuc and get into the slides that i have. so there are really two things that i wanted to note with respect to regulatory proceedings at the puc. the first is the green tariff proceeding. last time i was here we talked about that and the city filed a

protest to pg&e's advice letter, implementing the green tariff program. just a couple of things that i wanted to highlight from that. one area that we took issue with was pg&e's proposed bill presentment for the green tariff. they have collapsed a number of charges for the program into a single line, which we think sort of obscures the ability to make comparisons between green tariff and our cca program this. is an issue that we didn't raise alone. other ccas raised this issue as well. and the other is that pg&e had proposed some customer switching rules on their terms. such that if a customer

deenrolled in green tariff, they would not be able to re-enroll for a year. and the issue that we raised there is just that during the cca enrollment period, there is a chance that pg&e customers that have signed up for the green tariff will be pulled out of that program. they may want to stay in that program, and so the rules shouldn't inhibit them from reentering. so we didn't want a draconian policy that could hurt customers here that want to be in the green tariff program. those are the two principle things i wanted to flag for you. also in june, the cpuc issued a decision on residential rates, electric rates. and that decision implements assembly bill 327, which was put into law in 2013.

and the decision sets forth a number of changes that are going to be implemented over several years. but among those changes, what residential rate-payers will see is an increase in minimum bills. and what that is, if you -- if you haven't used a certain amount of energy you are subject to a sort of minimum bill. so they are raising that amount. it also compresses pg&e's current four-tier rate structure into two. and what that is going to do is increase the total cost of electricity for low-usage residential consumers. and decrease the cost of electricity or high-usage residential consumers. >> that makes no sense. >> well, it's been -- that problem has been raised by particularly the environmental community that likes this

increasing block-tiered structure. >> [ inaudible ]. >> that is right. the argument against that is that the current rates aren't consistent with costs. and essentially what is happening the high-tier users are subsidizing the lower-tier users and the reason for that really is that the state legislature in the early 2000s set a cap on the low-tiers, basically froze those rates during the energy crisis. that has been in place until 2013. so for about a decade. as a result, pg&e hasn't been able to increase their rates for that usage. so they've had to assign the cost to those higher-tiers in order to recover their costs. so now the design should be more in line with our costs. of course, there are going to be fewer tiers and it's going to res did reduce the

incentive for high userers are rooftop solar energy. that is a concern. the flipside is that the low-tier users will have a greater incentives more so than they had before. so it's going to be interesting to see how it plays out and it's going to be implemented over time. but it may -- in san francisco, because we have so many apartment dwellers on average we're lower than the average pg&e user and could provide incentive to do more efficiency in san francisco, but that is something that needs to be looked at closer. >> is there greater impact on energy-efficiency for the lower income users versus the upper income users? >> so i can't really speak to the correlation of usage and income. >> i misspoke.

i didn't mean "income." for the people who use less electricity, is there greater opportunity and greater impact for energy-efficiency versus people who use more electricity? i would imagine that people who use more electricity have greater opportunity for energy-efficiency and you get the bigger bang for your buck by creating some incentive for that tier to be more energy -efficient. >> yes, that is correct. the large users have larger spaces. they have more heating and cooling requirements. they may have more appliances. so there is just more opportunity. that is true. but the increase could provide -- could make certain investments in say led lighting or anything like that for the

low-usage customers, more cost-effective. one critical point, aside from the efficiency and solar issue, we don't expect this to have an issue on cleanpowersf because what they are doing it in rearranging or collapsing the tiers, they are reassigning the transmission and distribution costs. so the generation costs, which is the portion of the pg&e, the current pg&e bill that cleanpowersf would be providing in the future, is a flat charge today across all of the tiers. so it is indifferent to how much you use. >> thank you >> thank you. >> so with that unless there are any other questions, i'm going shift to addressing the renewable energy market. some of the questions that came up last meeting. could i get the -- thank you.

the way that i have structured this, we tracked all of the questions that came up at the last meeting, and so the content of these slides really just follows the questions that were asked. so the first one was what types of products are available from the market? and what i wanted to do was just sort of set the tone for my response by putting it into context with our upcoming requests for offers. so what we intend to be soliciting in that upcoming request for offers for cleanpowersf are energy supplies required to meet a demand that is at least 30 megawatt in size and that will include renewable energy

requivalent to 33-50% of our default or standard products and 100% of our premium product. and in all of the renewable energy to supplied to meet that portion of the portfolio and the premium product demand will be sourced from bucket 1 resources. so this is the energy that is delivered directly into california, and is principally resources located in california. and then finally we'll be asking for other electricity products that are required by regulation, and that -- by that, i principally mean something called resource adequacy capacity, is which a whole topic in and of itself, but requires load-serving entities provide a capacity reserve to the grid in case of demand and supply are out of whack, or there is greater demand than expected and for

some reason, there is less supply than expected available. that reserve is 15% above the peak forecasted load. and you do that contractual with generators. we expect that we'll get some of that capacity from our renewable contracts. some of that capacity may come from the hetch hetchy system. so we'll be looking at a mix that meets our cost criteria when we do that. i'm going to focus -- >> some of that will come from non-renewable sources? >> it could. the capacity could be with in-state natural gas facilities, and really what you are doing with a capacity contract is you are ensuring that generator is available to the grid operator. we're not transacting to buy