the staff members on the subject should state to the commissioners what is being done. you don't have to come here like the previous gentleman suggesting things but then, nothing is done about it. water is precious. and we just take it for granted in san francisco because we stole the water from different people we don't respect them at all. we don't even have them in some way even though we brought them here at one time and they promised to have them, nobody has reached out to them. they just take it for granted that okay that water comes so we use it for all her buildings,

skyscrapers and everything. and yet, in a very general where we will talk about climate change, conservation and the footprint on not taking any concrete action in an unimaginable way to address a waste of water including our hydrant and huge pipes break. we need to capture that data so that we may have a dialogue that's gonna be a hearing. thank you. >> thank you. any other public comments? thank you, and we will move on to communications, this is the commissioners? any comments or questions? we have no public comment to communications. all right.

next item is other commission business. >> the last time we spoke, i talked a little bit about some of our concerns related to the community workforce, development approaches in the private and public sector and we believed at the time that given the fact the larger-all the unions were going to be negotiating contracts. the good news is that those contracts have in fact all been tentatively agreed to and it looks like there's going to be a rollover, the bad news is that we won't be afforded an opportunity as an agency or organization to kind of flesh this thing out. i have been, a little bit focused on the workforce piece. it's both a bottom-up and down

approach. i'm kind of looking forward to having some dialogue and we are asking that once again look at that piece have those combo stations and lead the way on that. a lot of those departments that are not engaging this in this way, the fact of the matter is the workforce piece isn't always a critical piece and that does not intend to put anybody off and i have begun to believe and it's not a critical piece that we do. it requires a little bit more engagement in them looking forward to having some conversation with staff. just before a presentation and not a full hearing. just to look at some reasonable expectation. i hope that we can look at that in the next couple of months. bama sounds reasonable to me.

and we can work with staff to make that happen. any other commission business. okay, say none. report of the general manager. >> good afternoon first, i wanted to give an update that is not listed on this of the stores that we have receiving. it's good for water for business, but it's been quite challenging on the waterway system. i want tommy to come up and give you an update on what we are doing and the challenges that we been fell act-- the challenges that we been facing during the storms. >> please put up the screen. good afternoon commissioners.

>> good afternoon. >> thank you. i am tommy sisson a general manager for wastewater. i gave you a update two weeks ago, if you remember we've had quite a few bit of rain. this is a ring amount, basically every single day with few breaks in between. what we have done, we have increased our rain and these are just the facts, since the last time i was here were average around 10-15 every day and we hope that it continues to grow until we get up to the 25,000 that we need. we delivered more sent back to the people 132 banks went out, on the last storm. we have deployed twice this month the last one was on friday

the 20th in a just and it this morning with the removal this morning. i want to talk about the storm that really had us. our folks have come really adapted and just when we start to think that were good about predicting the weather, we got thrown a curveball last thursday night. our system is set up we have deployment thresholds that we do, we look at the updates by the hour for staffing purposes. our staffing purpose are deployed at. 753 quarters of an inch from the area we deployment. we put more staff out in the field. that is just not but other departments help i department of public works, crews clear and remove debris to ensure that everything is clear. approximately half hour on

thursday night david and wake you up, a lot of people were woken up it came in between 3:45 in the morning of the 20th, friday until around 4:00 p.m. friday. it was a five-minute. or certain part of the city got a 80 or 90 storm. i brought a little video just to show you what actually happens. this is taken from a security camera. if you guys want to start that, commissioners? >> i saw this earlier today and it's very spectacular. we will not be able to see it on our screen. but we do have a good angle on the tv screens and if you can't try to move to get a good angle

to see this. >> this is 15th st. we have a catch basin here and this is taken from a security camera of one of the residents. this is a 20 minute video and i'm going to speak through. you can see the stop sign here, the writing on the ground is very clearly and you can see the water, the catch basin still draining. coming down the road and it's rushing there was lightning right there. the waters coming. the catch basin still training, the staff put up these barriers on sandbags to keep vehicles off these catch bass so they continue to drain. moving up a little bit.

you can see the writing on the ground is gone now, it's flighted all the way across this intersection. in the water still coming. we three minutes in the video. at 5:12 this is what it looks like. look there comes a garbage can right here. there was a lot of residence out there and they said that it was literally happened in around five minutes. a wall of water came down and came across the street. you can see that the catch base is doing what it should do but it's overwhelming. you can see the flooding here continue to happen. again worth a ten minute mark, basically it stopped off and raining. now were at the 11 minute mark. look at the catch right here. it is still doing its job but it's overwhelming. it's like putting a jug of water through a straw.

moving forward, this is one of the neighbors here. you can see the catch base is so bright-- draining but it's overwhelming. we wanted to show you how quickly it happens and how quickly goes away. by the end of 20 minutes it's gone. i do not know if you stop these catch bases but it's clear in them just the same. love right now we can start seeing the writing on the ground. the sky is no longer bringing down rain and were into 60 minutes of the video. now, everything is clear. there's not much left. all the street is clear and the catch basin still doing its thing. we can see that it's totally clear.

what's more impressive to me is that it's hard to see it on the tv screen. the catch base, and you can see it. you know that there is capacity. you know that the catch base is working. as it was it was designed to work. you know it's not clogged up either. the system is working as it's designed but it's overwhelmed. what use on the street, basically rainwater. >> there was some damage, three garage is flooded in this area. we also had some flooding over at kai you got and we had

plating at 17 and fulsome. it did not meet the threshold for us to launch the barriers, we did get caught in the storm. we launch them on friday and we didn't take him down until this morning. >> what about this area here? >> yes, our response, we saw what happened. staff went out there first thing in the morning and by the way, before the storm came, our communications and emails out to these neighborhoods. these four primary areas. this low-lying area as well, they send out the emails in the morning. that there is a storm and it's

coming and to be aware. in the morning, the following morning, claims from the city attorney's office was out there and we began our clean up right away to make this right and restoration has artie begun this morning. >> where are we with this long-term solution? >> first of all, as we talk to you there is different areas performing different storms. i think were showing you today is that it's going to be very difficult to manage flash eve s events, but we are looking at increasing the capacity and the cost with that. we have already identified some projects and i think our plan is to come back to you in a couple of months where, we will identify some alternatives so

that people can kind of see the cost of some of these solutions. we have short-term solutions and long-term solutions. we been working on some short-term and we will give an update of where they are. but also with the long-term solutions and will give you an update of where they are. we have been working with those in the neighborhoods, i think the challenge that i'm seeing is that as we collect more data is that it's really hard to predict. with regards to what type of storm that's been a happen but also the types of storms we been seen. it's like ocean beach for example, we are trying to beat mother nature. this is really hard.

so, working a look at the same approach whatever we built up there the storm may be larger and we have to look a holistic way or a more permanent solution. this is what we hope to bring to the commission. >> this is about the flooding for the whole area? >> yes. were hoping that also pays for it all. >> thank you tommy. >> that was a quick update. since we're talking about flooding the next one is trout. we may have to rename this. >> yes or general manager for water department. this is a drought update. this is a bit of a misnomer. first, i always show the

reservoirs and as you can see were close to full, water bank is full, they all have a lot of water and the interest he won is this reservoir here. it's a 54,000 acre-feet our current level of restriction of the division and safety and am is about 33,000 acre-feet. we have more water than were supposed to because we have had water come in such a rage. the gauge on the arroyo hondo in the reservoir sunday before last was the highest we have ever read there. about 70 cubic for second that was a lot of water coming in. this is been filling up and we have been treating water out of this area to move it out.

in addition, we have been releasing this valve here which is a protector valve that we use to evacuate that reservoir. 250 cubic per second. we just reconfigured this valve and we did this in december and i'm glad we did because now we can use this valve. we headed up to 500 ft. per second, twice the flow we currently have it shut off because of the emergency work at alum maddie --alameda county is doing. there was account --car that when in that area and they still haven't found the driver. so once that is cleared up we will begin and bring it up to around 750 ft. per second. we need to get that elevation down. it has caused some problems for contractor and we want to avoid that. we also want to avoid another

start coming in and making that even worse. so were getting it out as fast as we can right now. just a quick slide on the reservoirs around the state. they are all well above average this time of year except for this one here. it's a little bit below. but other rise reservoirs are very weathered around the state. this is our our cumulative participation slight. the dotted line is 1983, the red line is this year. for the last three weeks we have been above the wettest year in our record. it's supposed to be dry about the next week but they --the risk at storms for neck wednesday. this is been a very wet year. i almost thought about making this a one slide presentation based on this slide here. the black line shows the peak of the hundred percent snowpack on

april 1st and you can see were above that already at the end of january. that is far more snow that we've seen in the last 4 or 5 years. not only do we have a lot of precipitation, but we have a lot of snow now as well. this is a barrier. water available to the city is already at 640 acre-feet. this is a kind of year where there's plenty of water to take, philip our bags are was of war and have a good year for water supply. this is the upcountry participation --purchased the precipitation for january. we are already up the average at this point. on the bay area side were about double precipitation in january and were not quite at having for

the year-to-date total so far. and last but not least, currently deliveries for customers are tracking last year so folks are continue to conserve. the fact that they're so much precipitation i kind of doubt that anyone is water anything right now. yes, this may be retitled flood update, i hope not. we are looking good. last time the state water board was having a workshop on drou t drought, they're going to continue their existing drought until the middle of may. whatever they do, i don't think it's can make a difference because we have plenty of water. currently were not wasting water so, i don't see them doing anything that will affect our

water management in the context of drought. i will take this opportunity to a goal what peter said, we have a meeting with the water stewards and environmental groups on february 10th. this is a friday. this, to go over in detail. so i look for to that discussion and i'll be happy to answer any question about the drought update. >> i have a question. the participant --precipitation side. the wettest day in record was --year was 83 and the driest? >> 1977. you see this brownish-maroon area. >> and 2016 was dry but more precipitation? >> 2016 is a yellow line it was

above average. when was the first year that this recording started? >> we go back around 90 year so it's around 1920 give or take. >> thank you. >> it makes one have more storage. thank you. >> on the next item we have the 2018 water and sewer-- >> i am sorry do we have any public comment on that. thank you. go ahead. >> the next item in 2018 water and sewer rates study update. >> i'm eric sandler. i have a presentation you've heard about flood and drought. so i have when i love this-- just a joke.

>> let me please have the slides. i have a brief presentation it's basic an update on her 2018 setting. we are going to be talking ab t about, to provide you some context and some updates on some key task. what our goals are, some of this you're familiar with because i printed out prior to this presentation. and share some of the discussion and consideration for the proposed action with regards to the charge. just remind everybody that city charter requires us to do an independent cost of service study for each unit. every five years.

that is what were doing for water and sewer. the last time you sit rate for water and sewer was july 1, 2014. effective july 1, 2014, and that ran through physical year 18. the rates of were talking addressing in the study that were currently undertaking this fiscal year 19. effective july 1, 2019. we got started early because were ambitious. just to arrive --remind you what the key task are. i look at it at three levels the first one has to do with how much revenue you want to collect from your charges. that determined by your operating expenses, expect pictures and everything that covered policies like reserves how much of a capital plan you

want to finance with cash and/or debt. that has to do with the revenue requirements. also how much you want to recover from rates and charges it's a cost study. this, looks at how your customers and their use the characteristic structure cost so you can allocate costs fairly to different customers. and finally, rate design. how do you structure the rate and charges to recover the cars --cost of services. you have a fixed charge, tears in your rates those are the kind of things that we talk when we talk about rate design. the next light is briefly talks about what we talk about with rates study and structure. the policy and consideration that we look at one of the things that we can wait and consider. here is a summary categorize, we look at customer equity, affordability, how is he it is

to understand the rate structure is, we look doesn't recover civic --cost for the enterprise. are those costs recouped in a good way are they variable, are they simple to implement do we achieve our objectives. these are the lenses to which we look and evaluate any rate discussion or consideration of rate. i'm in a talk a little bit about, we seen this line before but i thought i'd give an update on some of the work. not all of this is within the scope of the right and cost of service study, it all feeds into the work of setting rates and charges. the things that we made is a lot of progress and we engage with their financial advisor miss

road to send a very good study with regards to various financial policies. will become before the commission before the months and talk about the policies like reserves, debt service coverage, capital financing policy and dep management. you'll be hearing from us as a result of that survey and evaluations over existing policies and recommendations for changes. this, is how much money you need to collect. the next area wastewater structure. we've had a lot of time looking at the creation of storm water charge. this is where i'm going to spend the rest of the presentation talking about. we got the scope together with the consultant and the updates in our string charges. basically, we charge for storm water best on flow so this is a

water that you return to the way system but also based on the strength of your discharge. it doesn't have a lot of grease, organic matter so we are updating this and it's a big undertaking. this is very important for conducting cost of service study and making sure that were operably charging our customers. that work is kicking off on the affordability front, we have a good scope of work that one of our city hall fellows is working on and looking at how her rates and charges a picture low income customers. where they live, how can we design better programs for them. and finally, some other areas that we will be getting on a little further down the line in the rate study. which are fixed variable, do we

want to consider other rates so that we don't find ourselves in the situation that we have been in the several years. asking for reduction and affecting the financials because of that. i wanted to give you a little bit of background of all of the work that has been happening with respect to the stormwater chart. this is worth's kickoff with the consultants and you might want to consider thinking about a storm water charge. the staff has been plugging away over the last couple years throughout the country. we've done a gis analysis of san francisco to try to map partial data to storm water data. we've done a cleanup of our service data with model definitely.

developed implementation budget and plan for storm water charge which is not an insufficient get the effort. is probably more significant change that we've had in a very long time. in conclusion of this effort, we had one of the ways were governed this rate study little differently, we have a formal steering committee made up of executive staff. we had a meeting where we discuss all the stormwater related meetings --issues proposal and ideas. we looked at rebuilt and impact

strategies, we look at implementation costs and complexity and then, one of the policy goals and how well the charges go with it. this is what the staff and see committee is recommending and the path were to be moving forward with the commission. we wanted to tell you about that. were looking at a phase approach and the idea is that, because this is a dramatic change in how we will be charging, charging our customers it's a pretty significant change requires education. it will have some impact on some customers we want a lot of to be able to mitigate some of those charges ahead of time. the approach that were talking to is a ploy and develop and then develop and deploy which is a charge. were talking about in the next

rate package is to bring in new customers, there is a certain group of customers who currently don't recover any recross and their customers that currently receive water service. bacon lots, parking lots and we want to release a grant program for this and be fully impacted by a storm water charge. lots, want to release a grant program for this and be fully impacted by a storm water charge. lots, want to release a grant program for this and be fully impacted by a storm water charge. lots, want to release a grant program for this and be fully impacted by a storm water charge. lots, t to release a grant program for this and be fully impacted by a storm water charge. lots, parki to release a grant program for this and be fully impacted by a storm water charge.p lots, parkt to release a grant program for this and be fully impacted by a storm water charga lots, parkin want to release a grant program for this and be fully impacted by a storm water charge.r lots, want to release a grant program for this and be fully impacted by a storm water chargk lots, p want to release a grant program for this and be fully impacted by a storm water chargi lots, p

want to release a grant program for this and be fully impacted by a storm water charge.n lots,e want to release a grant program for this and be fully impacted by a storm water chargg lots, p we want to release a grant program for this and be fully impacted by a storm water charge. and then, we want identify for customers so they can understand them what part of the bill goes to manage these costs. after we have developed it is to actually implement a storm water charge for everyone. that would be a face in over a ten year. . this is recovering on a charge that we currently recover on a fixed charge in the surface area and we have shown you that before. we will develop and deploy this chart in the next multi-rate here package. that is the management-- the proposal for moving forward for the proposal water charge. here are some of the other items related, that were going to be conducting and bring for you over the next year and a half as well. i'm happy to answer any questions. >> thank you.

commissioners? >> thank you. looks like there's been a lot of work and i am eager to see it move quickly. i thought there was a lot lost opportunities with some of the lots that we see and specially with these rains that are coming. i appreciate that and just understand the idea that everyone's going to see in a pretty short print of time i don't know when. but storm water charge of their bill. >> they will be seeing a charge that they currently see on the bill. but there will be a breakdown of how much that relates to --two storm water. >> that's gonna be sober and average? >> one of the things that we

want to do is make sure that we introduce the concept in the next bill. a rate structure and really focus on the folks that are not receiving the bill and try to get them into the. have a bigger base. as we wrap up the stormwater, will make adjustments accordingly. how many people are they the portion of them? >> i think it's about 2000. >> why are they not getting bills? >> they don't get water service like parking lots. >> even though they don't receive water service to going to get a fee because the impervious surface that they have? >> yes. >> and then you go through them and see what the nature of the businesses?

is that tighter grant program? this will be some criteria for who will be eligible for grant? >> yes. >> what is some of the criteria? >> we have not developed one yet. we've been working on the funding mechanism. we want to really target the program for the folks that probably are the most impacted so that they can have a chance to mitigate some of the impact before the charge. >> so the timing of all this, if i may school it just say no one apply for a grant because i've seen on my bill with the stormwater fee is, right? and i want to get some help with that, when would all this start to be able to happen? >> we propose-- the grant program as part of the next budget and repackage. they would have a four year.

to be able to assess potential impact pursue a grant program, do improvements on their site before being impacted by that storm water charge. >> which within happen? >> in the four year rate package. >> four years from now? >> more like five. >> the people wouldn't get charged for the fees? until five years? >> what were talking about-- what are the options that were talking about is part of this next rate fee is to identify a portion of your court bill and introduce the concept of storm water. we have been talking about how

do you start education dean folks about manning the storm water. so we been having conversations of how do we do it how do we do this transition of where we are and introduce a stormwater and start with all the customers. >> online bill in my house, i will see separate line item? based on my property? which are repaid, actually. but that would introduce the y pay? i'm to try to understand. >> there is some indication on your bill of what percentage of what you're paying xhosa storm water. >> currently? >> yes >> but i can have a choice say, that's a lot i'm going to tear my asphalt and put a--

>> we have not really talked about how were going to face it in. there is a lot of variables that we need to work through before we, that's why we want to come back and talk to you more of some of the options. >> will that be? next couple months? >> in term of which option? >> yeah, when-- >> let me talk with the general manager. >> yes. i would like to understand this a little bit better from a public perspective. what this will look like and what my options might be. >> it's a tricky one.

we get a little bit schizophrenic we want to roll it out as quick as we can and we want to do it quickly. on the other hand, sitting of change it can be a real surprise to some people that they have to pay for a service that they're not paying for. you have to somehow figure out how we can make it work. i look forward to hearing proposals. >> thank you for working on this. >> you're welcome. >> any other questions or comments? any public comments? been commissioners. this presentation should really take its impetus from the act. i say this again and again. so, i tell you commissioners do not know what the regular act

states he up to mediate. if you read it, some of the things like the charts that show is to show accountability. with the water, with the energy at one time public housing and electricity. now, nobody gets it for free. and nobody gets it for the subsidy, but we want to say something but there's nothing in place. we all kind like --you all have this kind of presentation just like happen that donald trump's press conference. alternative facts which means nonsense. having said that, people are

hurting in san francisco. this, over 100,000 families have left in the last eight years, we have a population of about 850,000. you have to factor this data to see like his left and why are we burdening them. in the past you've had propositions were we have stated to the taxpayers that they're going to address the clean water and we put the water side and address a clean water and no one has taken responsibility. that was sent by the commissioners.

you are just decided to stick with the clean item. so now we have close to a $9 billion program is going to go, deal with us, this sewer system and the project and were still going to tax the ratepayer. who do you think pays for those bonds? the ratepayer. but, are they looking at this incidence or they looking at them as bonds. this should stop. >> thank you. any other public comment? let's move on but before we do that i just want to announce that my intention is to have a close session item at 4 o'clock this afternoon.

as you recall the last meeting we ran out time and did not have the close session. i want to make sure that we don't do that again. are you going to close session at 4 o'clock and if there's any business that we have to that we will take care of that we come out of close session. thank you. i am assuming that that was the end of the general managers report? >> that is correct. >> good afternoon. at its meeting last week the board elected new leadership. l councilmember was elected as chair and barbara pierce was elected as a vice chair. we have initiated our budget planning and actually processing we always begin our budget process with workplan looking at long-term challenges.

i will plan to brief this commission on some highlighted issues that i think would be of interest to you. i think i'll be helpful. beyond that, i have nothing urgent to say i will not take up your time. with that any questions? >> we're always glad to hear from you. >> thank you. >> thank you. okay, fiscal the consent calendar. commissioner one of the things that we talk from time to time is instead of reading all the consent items because of their nature like her to have the material that we asked the secretary simply to read the initial part of it without going through item by item and reading that. i would propose to do that if it

ends up feeling that somehow we change yourself. we can always go back, so i made it give it a go. any objections? okay let's go. >> all of these are considered to be retained by the san francisco commission and will be acted upon by single vote of the commission. there will be no separate percussion unless a member request this in which event it will be removed from calendar and considered as a separate item. >> thank you. commissioners any items that you want removed? i would like to remove nine-a. any items from the public to be removed? none, may have a motion from items nine-b. although he up to jay.

>> i will second that. all those in favor. can you explain just what this policy is and what it is what the circumstances are please. >> i am michael general manager. what's before you is align the city to change the outline pipe on one of the reservoir tanks. currently, the la pipe is six feet higher than the bottom of the tank. that is because in 1971 we make them reconfigure their outlet

pipe. what this means is that basically they cannot fully join the tank so we leave about a day and a half of water that it takes a long time to maintain. we have been working with them over the past couple of years to reconfigure and siphon what comes in a tank. we thought the best way was to run in parallel to our 3-4 lines in our easement, this is what we have with the cigarette oak. will be working with engineering staff to better utilize all the water tanks, they come out of division iii. working through that solution we thought it was a good exception that we work with the staff there and that will solve everybody's needs. >> i am pretty jealous of her right away. they're hard to get to. but they're really easy to go away and that there --that's a

bad idea. the reason for the policy that we have, our policy states that we will approve areas. the reason the policy prohibits encroachments that are imperiled to the pipelined my understanding of that is at the were a couple of pounds of that one is that it's part of what a right away is therefore. not to interfere with that right away. in general. we don't do that. i understand the project they were trying to do what i don't understand is why we think that placing this in the right away is a good idea?

>> it's the engineering solution to make it all work. basically, we reconfigure those tanks in 1971 and this tank or reservoir has been in place since the 1930s. the more resilient and having more storage available on being able to service this tank in the future, we feel that this is the best solution. >> let's hold us over for a meeting. what i would like to see for this purpose, not so much interested in the other problems but i'm more interested in the right away problems. what i would like to see is basically what the right-of-way looks like, what's in it and what potential other uses there are for it. and i like to see what were losing. we can do that off-line and come

back in a meeting or whatever. >> sure. i will also need a discussion. mok. so item nine a will be contention to a future meeting. and it's been crescent that we call items 10 and 11 together. mme. sec. ? >> item ten is public hearing possible action to improve change and to administrative procedures. this of water and water capacity resulting from the invitation from article 12.

>> good afternoon. i'm the general manager for water and i do have a presentation. again this is for item 10 and 11. the san francisco ordinance was added to the san francisco housecoat in 2012 aligned for on-site water. in july 2015 the board of supervisors amended that article 12 mandating on-site water system be installed and operating in projects over 250 ft. . this- for the fees and consider that acknowledge a reduced impact with on-site reduced systems. and just for air a reference.

item 5v on your agenda actually has a annual report on the program. so, with that document there is a summary of that of what they're doing. in fact, the one that was mentioned earlier put it as a particular project that is moving forward to reuse the building and drainage. basically the requirement was to have a regulation in ordinance and policies to make all this work. so the first is on the water and waste capacity charges. those charges are to recover the cost associated with the additional water capacity to new users that may require additional capacity. it's typically a one-time charge collected by the department of building inspection. the charges are based on water meters and codes.

current capacity charge calculation does not recognize water use. this would make sure that we excesses charges installing on-site water system. this, but basically charging you nurse for demands on the system. there is example there for doing and 525. but we're putting less into the system and taking less water out of the system so a reduced charge seems to be in order. for this action for item 1ten, e provide a process that the charges will be based on the size of the water meter record for those plumbing pictures. and pending the approval the

chargers would come effective you first of this year. that's part of the story, item 11 is the other part of the story and that is what happens if somebody want to stop using the system. or it breaks or malfunctions in some way, how do you come for that? overburden posing as a water use allocation and charge program. accounts complying with this ordinance will be assigned a monthly allocation typical water use that they would incur. we would also have each end of the water use in excess of that allocation to be billed with a rate of 300% which is applicable to the customer. that would be a punitive charge. you stop using the system, you'll have to pay a hefty rate to use the sewer and water system the way it's written up,

it provides for a 90 day. for this system or malfunctions. they do have time to repair. that is an appropriate approach. basically, if you prove this the program will be effective january 1st because it requires creation of an diagram in our system. again, the action on this is to adopt a water use allocation program for accounts that only need to comply with the non-ordinance. at x is a financial making the system so customers can comply with this ordinance. we want to avoid people who basically put something in, don't pay for use of the system and decide they don't like that idea and this is the way to say, you need to like idea or pay a hefty rate. there are two separate items here for your consideration. thank you >> i have a question.

isn't this related to the storm water see question in some way? you might decide to put an on-site water system to reuse this water, would that affect my rate? or a lesser rate? >> you will pay less of the rate because you're using less water. >> this is not tied in with rates this is just a capacity charge? >> yes. the chart is what you pay to make sure that there is room in our system to either provide water to you or to treat the wastewater. they were letting you off the hook on this this chart speaking you been required to put this type of system, we will not charge you for that capacity.

but if you renovate you have to do the capacity fee as well. >> you capacity charge? >> new developing with her doing the storm water will need to make sure that we figure that in at some way. that's to get the storm water out of their and that's probably good thing. but if they decide to change it later required to put that in, that's where we would call fallon say but even i required that's a different manner. >> i love when you come back with these options with the storm water and understand how the capacity charge fits in for that new development and redevelopment and existing as we move forward.

understanding this is generally first but one of the implications only and start unpacking the water for the question does that make sense? >> i would turn to mr. sanders? >> yes, the capacity charge for wastewater is really with respect to capacity not to storm water. it's about the train flow that you discharge to the system. >> it's not going --it's only wastewater reuse? >> while we get to the rate and talk about wastewater we will make the distinction from sanitary flow and storm water. we are talking about nonportable water. we all want to tie everything together.

>> we have always done century stewards and over that would think about storage water-ivan that is just a volume question. grandmother connected i understand. >> we will make that clear. thank you. on item 12 i noticed that those provisions would a pride --apply for the license how was at the fine. >> when the building is gone. it is not an assume life. >> okay. that is fine. commissioners any other questioners-other questions? >> i would like to move an item. >> any public comment seen that

all is in favor? this carries. item 12. item 12 of the workshop and discussion of the clean power plant. >> good afternoon commissioners. this is her second workshop on our growth plan the intent of this workshop is to educate you to make sure that you're aware of the various issues and components of the growth plan that staff is busy investigating. where trying commissioner to be responsible to request a not to shop industry bring with a final report but, to open the door and show the kind of work were doing. we're kind of research were doing and understandings were developing. this workshop will give you a broad survey of the components

of the growth plan. >> commissioners i would like to get the item to 13 before we going to close session. >> i will turn the presentation over to mike. >> welcome. >> thank you and good afternoon. i will do my best here to your schedule. let me see. slide please. with that we will get going. for our second plant workshop, today we have prepared a presentation focus on the research and analysis that were doing on each area.

during the first workshop in november, customer rates and margins and supplies, finances regulatory affairs and compliance-operational readiness and pro forma financial analyst. today i will a provider initial takeaways. i'm not making recommendations, that will be forthcoming. i will conclude what steps and you can address any questions you have. the purpose of the plan is to determine the options with program goals. here is our familiar program slide affordability, cleaner energy, local investment and long-term rate and financial stability. this chart really illustrates

the task ahead of us. in short, going citywide is a big deal. you will see the current 60 mw program second bar to the right. the question is how does clean power grow its current size? how does it grow from 73,002 as many as 335 counts? this, without sacrificing quality or taking unnecessary risk. i presented the slide which has changed colors. this came out in november and it summarizes the clean powers of business practice policy that you adapted and september 2015. critical importance is the fees and policies. which is now in the red bracket.

which states the rates must recover costs, they miss meet or beat of each phase. sufficient supply should be available to serve the new phase. that sufficient finance must be available and must have the staff and support system to execute a larger programming. to address these policies when you have to understand our customers their demands, our costs what are inns influence by energy and supplies. and our ability to execute other plants. using the slide before june or november workshop today were laying the foundation by reviewing what we have found.

it's in the blue part and the orange part our recommendation and a report which will come out in the spring. fundamentals of understanding the program growth is understanding our customers. city demand, this part of the presentation focuses on what our customer base looks like. this, from a usage and rate perspectives and how it might affect our performance. what is clean power? this shows our total clean power is an opportunity which is run 413 mw. it represented by the green and whitish gray in the projection and you can see the errors right there.

the power and utility service which is representing the bright blue wedge on the top delivers power to around 19% of citywide demands. that final wedge the orange wedge on the top left is 10% represented by two direct axes group. we are not addressing that group today because of the unique environment but, however, the growth plan will address this group in further detail. direct axes is a competitive retail market emerged in the late 1990s and 2000's. really proceeded the cca market. and it was suspended during the energy crisis about customers that remained with her direct axes were allowed to stay. we, the city has around 10%. am an example of that?

>> an example would be a number of commercial large customers that are receiving service. this, to direct axes and they like the clean power model can enter into contracts with energy service providers for the generation portion and service. does that answer your question? safeway would be an example. >> thank you. here's more detail on usage by customer class. this for both enrolled and to be enrolled. here you see in the bright green from the last slide. what's in important the residential customers that are obligated to serve represent 91% of the accounts.

that is the deep green wedge on the left chart plus a yellow wedge. the big one. the addition of those two. but the only represent 30% of citywide usage. that is a yellow portion and the green portion. commercial represent 90% of accounts but about 60% of usage. how does our customer energies compared to other providers? >> i'm sorry. how many families that represent? >> we don't know but we know the 91% are residential 91%. that's over little bit over 300,000 of the 335,000 that i referred to to being citywide. offhand, 9% is around 30,000.

this chart right here compares the usage within our current enrollment group and citywide against other providers like pg&e and other ccs. in short what this chart stays is that san francisco has lower residential usage but a higher commercial and industrial commercial percentages than the others. since this program is obligated to serve residential account it's worth calling out fat are residential accounts use 35 to 55% less electricity on average then do the residential customers of the other for cca.

that is great news it's one of the reason why cities are sustainable but, it does increase the burden of financially of fixed per account costs. that makes nonresidential accounts important for the programs margins. and that's because we deliver more energy to these accounts. this is an important take away because nonessential enrollment is optional but it is desirable. and we have artie move forward with the first space --phase with a commercial mix into our group. we have acted on this take away with her current phase. i will note that a counter point here is that nonresidential customers carries with him and

it takes more sell away from us. this helps explain why it's desirable to have a mix of commercial and residential customers. in short, our takeaways are that customer makes is important. as we proceed with phasing with configuring groups of customers for expansion. our work and that rather than enrolling a single customer class a diverse enrollment that includes residential and commercial customers is important. any questions at this point?

no okay. now that we examine our customer demand i want to dive deeper into her biggest cost driver. that is power supply. a question for us is will there be sufficient renewable energy supply to meet our programs demand. the answer is yes. this california chart in front of you illustrates renewables are available and growing. in fact from 2015 to 2016 the capacity drew 24% in one year. the cc also reports another 50% growth is in a construction phase. not all renewable products are created equally. our business practice policy state oppresses, the renewal

resources for project looking california. our court be noble portfolio consists of these types of bundle resources. this chart which reflects spot energy process of short-term shows that these resource committee premium. this commitment to product category 1 could mean a slower growth in the share of our portfolio. then it we use other renewed renewable energy products like p cc to which is represented by the red line. this chart can show something out which is that timing is important. you can see the dotted line on the far right and indicates the end of the compliance. you can see the prices that they are coming up and that.

that concluded and it came out. there's a small window to generate the category 1 bundle resource at the end of that term. scarcity drove up prices. this is why portfolio management is critical. and that is what this light indicates. electricity portfolio management is critical tour program success. we need to strike the right balance with fixing our cost with long-term contracting or resource ownership. this, and an open position. this is under contract command. one benefit is reduce collateral. another is that the market is always evolving and we want to be able to respond to opportunities. these benefits will need to be balanced with a consideration of

market price exposure. the open position. in general were finding is that contract diversity from both technical article and supplier standpoint is going to be important. this is gonna be a critical portion. what are we seen with local development? first, the best path currently is through the use of power purchase agreements. the principal reason is that those of private developers w l will, this is a way other ccas are going.

>> when you say local what you mean by that? >> we mean within the city and county of san francisco and within the greater bay area. >> thank you. slides please. thank you. in summary on power supply. what were finding so far is that one is available to we must be aware of our deadlines and impact for the federal tax incentives. three we must build a portfolio that is diverse and actively manage it. staffing is gonna be very important as well. finally, we may want to consider

revisions to search supply management business practice. this account for some of the learning that we have thus far with the growth plan. i'm in a posse. >> i have a question. it seems that this is where the opportunity to achieve a goal and investing local renewal and local jobs would take place? and, it seems all select the best way for us to get there. and that is to really drive towards facility built and owned model. but the recommendations that you're putting forth right now is based on this agreement? >> yes. as long as the tax policy supports private investments the way he does.

it will make ppa's more cost-effective way to purchase this energy. whether it's local or not. >> i am wondering what this plan is then. this, to get us to the local own build? >> yes. and the answer to that is through regular procurements. and that can be large scale power purchasing even to some port the growth of the program. we can ask for resources from existing projects and new projects and we can start to layer into our portfolio long-term contracts with new projects. it doesn't entirely preclude the option of a build. we just need to look at the cost of the project and how they fit into this portfolio.

and what costs were buried. >> i would love to see that piece called growth program. and how many jobs we are actually talking about and timing benchmarks on whether both are happening, what point. when can we start doing that? >> i think one of the things that we want to share with you is evaluating i think the main challenge here is that we want to make sure that it's affordable. that is one of the things that the commission wanted to some make as well. and so that is a challenge based on what's happening. we are definitely committed to local buildout it's just a

balance between affordability and opportunity to invest in renewable resources. were trying to balance at. >> and we don't know what's gonna happen with the federal level correct? i don't know it's can be 30% or what could happen but it's good to have some planning. >> that is absolutely right, one of the point i want to make is that the work that were doing with the worth plan is, we will be looking long term for this at our demand and supply and he will model a number of different supplies and scenarios including portfolio that has a more regional renewal than southern california. and it will also model and some amount of local resources into our our portfolio.

we can see without-have and what that does to her cost of power. >> i'm interested in the expiration of what flexibility do are in terms of organizational corporate structures. what i'm thinking of is either, simple version of it will be a for-profit corporation which is owned by a committee group. this can take advantage of the tax credits and can use as a revenue source as we go forward for that power. i think that might be worth exploring as a way of getting the policy and position when we look forward to this >> i hope that one piece of good news is that, we will not go out and buy all of our power forever

all at once. we don't want to lock in 100% of her energy next year for example. this, for 20 years. we can have a demand to meet and we will thwart resource planning process evaluate those options. this is to work with our fellow ccas, public utilities and other entities to pull our power and deliver larger projects and gain some economies of scale there.

the cost of the project is paid up front and typically debt-financed by a municipal entity. they have been working on projects under that model and those projects have to be a certain scale to make them cost-effective. >> i seem to remember that there was a thing called a municipal for-profit corporation? it goes back a long time but whatever variation of that things he can get both. >> yes. >> any of the questions? okay, go ahead. >> let's talk about financing

the supply. for the past months we've engaged in outreach and met with so many institutions power supply in the purchasing staff and other cca, these discussions suggest that credit is available potentially with limited or no recourse. this is a new finding that we were not aware of at the time of launch. of course the cost of this credit still remains a question that will need to be determined to a more formal engagement. through our conversations we have learned that the cost issue can be influenced by a number of factors including cash on hand. showing that we had the capability of paying her bills the transparency of our finances low alt.rates which indicate customer interest in what were doing.

and finally the lockbox which we discuss at our lack workshop. what are the findings and take the weeds so far? first, credit is available. but that will have to be determined by finance but there do so lockbox could help reduce collateral. were examining the pros and cons of a lockbox and whether we might achieve a similar benefit three self administer of payments. we really are looking at all options here and we want to be sure that the path with take gives us flexibility as well. finally, were taking stock on modifications of existing reason a reserves and rate policies.

>> is that a shorter pause? . >> i'm catching up with the schedule. and keep going great. >> diving for their into program costs us go to regulatory affairs and compliance. as i think you know now this is not optional and the pc ia is a greatest threat to cca programs. it's now 29% of total generation cost. as reported we are active participants in the pci workshop group to discuss reforming the pc ia. this group report back to the cp in the spring and i can say now that while there have been some very productive conversations i think the most important one is real learning not only from our

staff but from other cca staff on the technical details. this will help us in the future. it feels like the progress is slowed, we will be hearing proposals for the recommendations over the next six weeks. we will report back to you on that. i think this work is going to inform us of what the next steps will be and whether there needs to be action. i want to mention that there are other proceedings that can also affect these cost. these require resources and attentions at well and it's part of our growth plan. we do have a plan for this work.

they also have a compliance burden with up to 60 compliance reports to numerous agencies filed yearly. they must remain in compliance and there needed to monitor and understand and prepare a report on compliance. the takeaways. we need to be engaged in these proceedings and comply with our obligations. the large number proceedings that we could be involved in means that we need to engage thoughtfully and in close coordination from other people. that will only get better for a long time the difference were sort of actors with the formation.

that's a more unified force. finally, the growth plan is are addressing our opportunity to progress. our finer growth plan will include a recommendation about readiness and the staffing plan to support the growth. what i wanted to do today was provide some information on the operation like functional areas, house staff today how are operating budget compares to the

other cca and the takeaways thus far. i hope this can be seen here. what this does at the most fundamental at the core of our work is a bulk energy supply. it demands forecasting, the men and supply scheduling and power markets operators. settlements credits with the l isl, and there are two components to the supply demand management, this includes things like building our load by promoting electric vehicles for example. energy efficiency and demand response. supply management which includes purchasing, resource development city built own small-scale

renewables. and the potential to invest in to the project together. while the functions for clean powers have happened they have been supported throughout the pcp. power is not doing it alone. drilling deeper into the golden and orange elements of this chart.

the claim powered budget and staffing within the part and surprise shows the budgeted staffing. the largest number staff right now are working on program development and administration. this has resource planning and customer care caught contracts. the other golden boxes indicate program functions that are supported by the power groups. finally, the orange box represents our communication and outreach team.

so what can we expect. were looking at other organization there staffing on their budget given the program sales and this slide compares our budget and sonoma's budget and gives a sense of what our operating budget might look like as we grow. you can see the very bottom of the chart. as well as a line above it. generally our budgets are comparable with mce and sonoma budget. and sonoma appears to operate a

much leaner area than they do. are takeaways at this point in our effort are that our core function are staffed for today's scale. and they are scalable for growth. however, the application for additional resources what help and better take advantage of opportunities and to manage risk. with this in mind we have identified power contracting account managing and affairs in some areas or the medium term increasing step coverage to our serve our settlement teams will be important especially as we had demands in an larger number of supply contracts.

finally building out our customer service teams. this, so were prepared to take these functions over once existing contract is over. all this depends on our plan growth and when we attend to add new customers and revenues. i'm in a policy or >> do you have, at some point it would be useful i think we've had different versions but a timeline as to how we see this girl? my guess is that it's changing the deeper you get it? i think that would be useful. are you talking about the phasing arena go?

>> he will get to that next. any other comments or questions all the elements i've discussed are quantified in the form of projected program revenue and costs. the analysis were conducting right now of expansion. the results of this analysis will be presented at an upcoming workshop. this is we get a sense of the options that were looking at and the timing two. we are analyzing a number of growth in our areas as this chart describes our best case is the sex the --60 kw.

the first growth will be updating our 2015 in this approach. the second growth will look at max enrollment. growing and one additional phase and were looking at is that making it happen in 2018. this is the fastest scenario were looking at and all require the most sick and if vacant financial --financial resources. the work that were doing will help with the financing requirements. as we dig into this we will also share other risk associated with this and executing on this kind of a plan.

in the third growth a middle ground that brings on remaining customers in two phases. this will be faster but will allow more time for staffing, key functions like portfolio management. and this will give us more time toward dress our uncertainties. such as a solution to the efforts. it would put us in a situation were buying everything at once. but again, will be analyzing this case in presenting the results in a other workshop. we are almost there, any questions? i am on the phasing. part of that is our rollout schedule for having a do this

over time. the other part of it is the buildout program. are these merged? >> were taking of a two-step process. this will absolutely account for acquiring supplies. what we will be doing is using the best information that we have on current and future supply cost to model what the portfolio will look like and we can do sensitivities to consider different portfolios. but the real work on planning to meet a future demand will happen in that plan. which is a separate project that has commenced. were aiming to deliver that to you as well. >> okay.

i have completed the overview and the key growth excuse me the components. and the takeaways of our research today. what our next steps? we anticipate coming back to you with 1 or 2 more of these workshops and discussions. we intend to build off of the foundation that we have said in this workshop and more ultimate we will prepare and have for you the spring our growth report and a growth plan recommendations which include timelines. i will add that as part of those recommendations you may include proposals to modify our practice --business practice policies and the areas were looking at include reserves and rates. that concludes my remarks.

>> okay. >> with one exception. this is a different type of slide that was shown in the p t past, this is i gis map of the 1300 sign-ups that we've had so far. >> look like there's clustering there? >> we did have sign-ups that happen before that we did the audit enrollments. this is a cumulative today of our sign-ups. >> it would be nice to get an update by district of four we are. if we could.

>> my districts doing pretty well. and keep in mind that for two districts that have auto enrollment so, though should be heavier? >> yes, it would be a solid block. it's a lot of accounts the 70,000 accounts are in the 5 and 8 area. this is at --here it is you can see it now. >> thank you. >> i do not want to drill down to four but on the back of the house expansion the 2 or 3 year plan.

my concern is the framework o the local build and jobs. instead of starting out from the standpoint and the conception that because of the federal tax credits at all has to be these type of relationships and i realize that mitigate that by talking about ppa's can transfer.

this is an example we can take advantage of that and we still have the opportunity. the dilemma here is, yes these private relationships that help us get federal funding will help develop the researchers quickly but the committee does not own the resources down the line, it's a financial negative. it might not be a robust way to produce jobs. we have to balance how we do a quick buildout with how we create local jobs and opportunities. the vision that i don't think we have yet that i think we really need to get to is that it's not about whether it's private to get the funding or public because of the reasons i just stated. but this has to be a financing lodge of all types of purchase

and relationships. some will be like sunset reservoir where they privately get the funding and then we have an opportunity to buy it. some will be encouraging homeowners to put up solar panels and salas power through feed and incorporations. so i think that what we need from staff going forward on this and you all is to start out by focusing on the vision like the one that we have seen here. what do we want to build out and where to get san francisco to be hundred percent as much as possible local renewable energy and then why financing components do we need.

that's our creating that vision which is crucial to getting to move forward with the citywide buildout. bad thank you. mr. friede? you like to save your spot? >> thank you for the time. i would like to thank the commissioners and the staff after coming to many of these meetings. we heard some new stuff today and i want to thank you all for keeping an open mind and thinking outside the box. looking at some new information with regard to financing without putting the power enterprise in

jeopardy which is also something that we been hoping would be explored on the face i saw an article lowering their rates by 10% and that was somewhat depressed it was somewhat depressing because we were just hearing about this jeopardy situation that we can to be and where were hoping that their neck rets change put this us up above us. this may be think that we really need to reevaluate every policy and procedure and every everything we put ourselves to be conservative. we really need to investigate the balance