>> the meeting will come to order. this is the february 22 special meeting of the san francisco local agency formation commission. i am vice chair of the commission and i will be chairing today's meeting. i'm joined by commissioner hilary ronan to my left, commission singh is on her way and commissioner gordon march to the left. i would like to thank the staff at sfgov tv for recording today's meeting. madam clerk, think announcements? >> make sure to silence all cell

phones and documents should be submitted to the clerk. >> thank you. >> madam chair, first order of business if you would like to excuse chair furer for the meeting? >> yes, as she is away this week. >> first and second, please. >> so moved by hilary ronan and seconded by -- gordon marr, with no objections. so first of all, i would just like to take a moment to welcome commissioners marr and hainey. we are thrilled to have them on this body. we look at the two major pieces of work that they were doing with clean power sf and also with our emerge be mobility's labour study. these are two areas i see your expertise and knowledge being a great asset to this body.

so thank you for stepping up and joining lafco. i would like to take a moment to see if any new commissioners may say a few words? none here, ok. madam clerk, could you please call item number two. >> approval of the lafco minutes from the january 24 special meeting. >> do any commissioners have any changes from the january 18t january 18th mee meeting? can i call both january 4 and january 18 together? any changes to the minutes? seeing no changes, i'll open this up for public comment. any members of the public who wish to comment on item number two? seeing none, public comment is now closed. is there a motion to approve the

minutes. >> so moved. >> moved by commissioner ronan and seconded by commissioner marr. without objections, these minutes are approved. madam clerk, could you please call item number 3. >> community choice aggregation activity's report, current enrollment and service status, communication's plan for april enrollment, state regulatory activities and state legislative activities. it. >> we have a presentation frommn francisco public utility's commission. we'll talk about state regulatory and state activities. >> that's right. good morning. director of queen power sf and welcome commissioners haine and marr. we, they summarized what we'll e

talking about. we give a standard update on our enrollment which i'm going to provide. we have a bit of a group presentation today from various puc staff that support our work. so i'll be joined up here to go over the community engagement plan for our upcoming enrollment, as well as state legislative activities. if i could get the slides, thank you. queen power sf service and the university enrollment effort continue to move along successfully. they are now actively serving 111,000 accounts, city-wide. the program continues to maintain a cumulative opt out rate of 3.25% since the program launched in may of 2016. our super green upgrade rate continues to exceed the opt-out

rate at 3.8% of the active customers enrolled. that means that queen powers has more than 4,000 businesses and house holds in san francisco that have elected to receive 100% renewable electricity from queen power and, of course, our staff is very busy preparing for next major auto enrollment. we're preparing to welcome over 250,000 additional customer accounts in april. when the enrollment is complete, we anticipate we'll be serving 360,000 customer accounts city-wide. this month, we began mailing the first of our four queen power enrollment notices as required under state law. we'll be sending these notices in batches each month of about 60 to 70,000 notices a week.

that's about one million notices sent out through the enrollment period. we've brought some copies of these notices that customers will be receiving, and i'll distribute them through the executive officer in a moment so you can take a look. and we have some extra copies as well for the public and attendance if they would like to take a look. i'll pause and any questions on this introductory update? so with that, then, i'll turn the presentation over to tyler gamble, our puu director for the upcoming enrollment. >> good morning. good to see you guys.

i'll talk you through what we've done previously, what we're looking at right now and happy to answer any questions along the way that you may have about the work that we're doing. as mike mentioned this month kicks off the last planned and largest enrollment of our sf customers in the history of the program. over the past three years, i think we've learned a lot about our customers, their behaviours, preferences, a new thing for us at the puc. of course we have water and sewer customers but this type of product and program we've partnered with clean energy advocates, our city family on two previous enrollments and ongoing marketing and outreach on the power programs. we have the knowledge across the state. as mike mentioned with a 97% retention rate in our service and 4% upgrade rate, i'd say we've done a good job. moving forward, there's a

comprehensive plan to welcome our newest customers. starting with community presentations and events, weave built a speaker's bureau of team members to deliver sport presentations about the program to residential audiences across the city. we plan to call nearly 140 organizations across the city to provide them with information they can share with their members or to have us come and do face to face presentations, as well. you are all looking at the enrollment notices. those are going out in the mail today. in it, we explain who we are, what we're offering, how to upgrade, how to opt out if you're not interest and where to find terms and conditions in your preferred language. in all, we will send out one million notices to customers. so they'll be well aware of the program and what's happening and actually, i think in a pretty informative and educational way here for these notices. on advertising, we're placing

fun upbeat paid advertisement with inside and outside buses and west portal and forest hill stations, in neighborhood newspapers city-wide and in-language publications such as world journal. print ads will run primarily in march and outdoor ads through may and planning an upgrade to the digital ad campaign that will go out likely later this spring. on social media, we're excited about it and we've seen engagement on clean power sf twitter and we leverage the twitter page which has the most following of all of the puc platforms to talk about the program, as well. i'm happy to report we've merged with the see year ya club san francisco page which was created several years ago where there was likely a void of communication on clean energy. but we've been able to merge pages together and we'll actively use the work they've

done and doing to communicate during this enrollment to reach all of our customers and community organizations. a lot of the neighborhood organizations that we work with in san francisco communicate via facebook group so that's really important there. of course we'll partner with our city family. we've created a digital press kit we'll share with our city family, including your offices. next week you should be receiving those and you can cut, copy and paste those into the newsletters. we have examples of posts, photos and things like that, as well. another really cool pieces around our super green customers and so we're trying to develop this community. they've been some of our best ambassadors and we've had great partnerships with large companies like linked-in and rainbow grocery and heath ceramics. we'll partner to offer challenges and incentives to get their own customers and employee to opt to super green.

businesses like the new wheel, business gear have confirmed this for residential customer. 15% off of a new item at last-minute gear and super green cocktails drink at true laurel. so really excited about that. a great opportunity to get out there where residents are and engage with them where they're at. we're expanding outreach to limited-english communities, doing everything we can to target residents whose first language is not english. philippino, mandarin and spanish websites are live on our website. as i mentioned already we're doing specific ads in publications that reach those audiences, doing editorial board meetings. this week we sat down to talk about our initiatives across the puc including clean power sf to try to get a better understandings of what readers are hearing from the program.

our ivr, the system you call to speak with customer service is available in philippino, spanish and mandarin on the way soon and a journal working group looking at equity in our program and language outreach is a part of that. finally, looking at a strong media strategy will leverage media outlets to tell our story is ongoing and i was excited about the bay area last friday that had a shinning about clean power triple, households in san francisco. couldn't have asked for a better headline there. the biggest goal we have right now is awareness. we're going to continue do everything to tell our clean energy story, educate residences and businesses that there is another option and that it comes from their city. we're generating cleaner, greener electricity. the secondary goal is to

increase the upgrades and we'll do that well beyond the spring enrollment. if i can answer my questions, always happy to take suggestions from you guys of things you might hear from your constituents, as well, to help us amplify our reach. >> i'm just wondering if you're using all of the attention to pg & e and bankruptcy and the bad acts as a way of sort of highlighting that there is at least a partial alternative here in san francisco? just out of curiosity. >> yes, i think we're doing that in a way that is tasteful, if that makes sense. but definitely making sure that folks understand that there is that other option and there are

definitely a lot of positives to the programming that we offer and that there is certainly a difference in the way that we operate. >> thank you so much. >> thank you, tyler. so shifting gears here, we are going to dive into our state regulatory update. so we're highlighting some select activities. there's a lot going on. a lot of details. so we're going to try to cover this as thoroughly as we can. of course, if you have any questions, please let us know and we're happy to get back to you through the executive officer with more information on any of these things. so to start with, on the pg & e

bankruptcy, i think it's been covered quite widely in the press, almost on a daily basis that since january 29 or on january 29, pg & e filed for bankruptcy due to pending liabilities from state wildfires in 2017 and '18. prior to its actual bankruptcy filing, pg & e filed with the pupublic utility commission to enter to $6 billion of debt, to provide with cash needed to support operations. further under state law a regulated utility must seek approval to issue debt and the commission can find the regulated utility exempt from certain provisions of the law on exemption, specifically for

debtor financing. on that same day, pg & e filed ford an expedited procedural schedule requesting that the california commission issue a ruling by january 28th. debtor and possession financing essentially means the company is offering assets as collateral to lenders who may possess assets if pg &est defaults o & e defauf the loans. they argued that the debt financing would provide the cash that the company needs to operate through the expected bankruptcy process. so this is prior to actually filing for bankruptcy. the california puc ended up calling an emergency meeting on the 28th and didn't approve the request. in that decision, the california puc found that it had to ensure that the pg & e and state were

prepared for contingencies in the case of a bankruptcy filing to ensure that the company was able to continue operating during the bankruptcy proceedings. we indicated, i believe, at the last meeting that a possible impact to clean power of a bankruptcy was a delay in the remittance from pg & e of customer payments. a delay of remittance did, in fact, occur, starting wit occure day of the filing. as indicated to us prior to the bankruptcy filing, they asked to remit payments and other third party providers to customers as part of the ongoing normal business. ijust a couple of days later on january 31, the court issued an order to continue the payment remittance. in terms of when money started

flowing again, that occurred on february 4, so as i said, it has stopped on february 4, the city started again receiving normal payments from pg & e including the remittance of payments that had not been submitted to the city for the four or five days after the filing. to date, clean power sf has not experienced any other impacts related to the bankruptcy. pg & e continues to do all of the meters, billing, credit collection to accounts in the ordinary course of business consistent to the city as a cca. of course, we're going to continue to monitor very closely payments and the performance of pg & e in meeting places to clean power sf and provide reliable service to customers going forward and we'll continue to provide the body with updates, as billion.

as well the next item i wanted to discuss is generation rates for 2019, which we've spoken about in previous meetings. normally pg & e electricity rates are set every year on january 1. before this occurs, they typically issue a decision in december in a proceeding called the energy resource recovery account. we call that era. that decision was delayed this year and as a result that has delayed pg & e's implementation of the electricity rates. the delay is affecting the implementation of pg & e's generation rates and exit fee, the power charge and difference adjustment that cca participating customers must pay

pay. they issued a decision yesterday. so as a result, we're now anticipating that the new pg & e exit fees and generation rates will take effect on either apri. pg & e is expected to file rates with the california puc towards the end of march. they have 30 days from the day of the decision, indicating the specific effective date of the rates and we've heard april or may and that's what we're looking at. at that time, the sf puc will finalize clean power rates per the rate action taken on december 11 and approved by the board of supervisors following the rate hearing of february 15. until the rates are implemented, clean power existing rates will remain in effect and will continue to be below pg & e's generation rates. clean power assessed rates are currently to provide customers

with a 2% savings against pg & e's generation costs after accounting for the exit fee. and more on the pcia. the california puc also has a proceeding open to address reforms to the exit fee methodology. there was a decision issued for phase one of that proceeding in october. and phase two was just initiated earlier this month. so the california puc issued a scoping memo laying out its agenda for this next phase. key issues in this upcoming phase include implementation of an annual true-up in the exit

fee and that's a new mechanism in place by the last decision. previously this was based on forecasts, almost exclusively and now they're looking back at actual costs and revenues associated with pg & e's portfolio and making a fee to the following year and that in theory can go either direction. it can cause it to go up or down depending on market conditions. another item is, they'll be considering prepayment of the pcia. so the idea is that a community could pay sort of in a lump sum advance the community's pcia's obligations as a way to fix and create certainty going forward for customers and for program planning. the california commission will

also be examining the pg & e and other investor-owned utility's management practices to see if there are opportunities to reduce costs and to manage that portfolio in a more efficient manner for all rate repairs. not just to affect the pcie and exit fee but any customers in the territory. and then finally, the commission will be examining potential allocation of pg & e contracts and resources to ccas and new sales mechanisms, like an auction, to sell off any excess offers that they may have to third-party purchasers like ccas. so i think the key thing is that pg & e is a result of ccas forming in california are long. they have excess power resources

and in this next phase the california puc will address new ways to address liquidating those excess resources. resources. >> i have a quick question and i don't see a good place to ask this question except here. i saw last week they submitted saying the pg & e should get out of the retail electricity business and become a wire's only utility. is there a reason why clean power sf didn't sign on to this letter with the other seven ccas? >> hi, i'm the assistant general manager for power and i just wanted to help out on the answer on that one. cal cca, as an association did not make a filing, so just to be clear, there was a filing that was made by a collection of ccas

and then there were filings separately made by ccas. san francisco submitted its own filing. >> separate from those? >> correct. so san jose filed its on, san francisco filed its on and then there were, i think, five or seven ccas that jointly work together with an attorney that they had hired to prepare their filings. and that was this the commission safety oii. >> can you suc summarize what sanfrancisco's position was. >> mr. heims was about to do that. >> thank you so much. >> thanks, barbara. so good segway because this final slide here, which includes a number of proceedings that werwe're active in --

>> excuse me. >> please go ahead. >> i just had a few questions about the pcia. since i'm new to this commission, maybe you've covered this in the past. so i just want to make sure i understand this because this has been -- this is really important and contentious. so the pcia or exit fee that was already -- from was already initial decision by the california puc about the amount that would be charged to clean power sf in phase one? >> yes. to be a little more specific, what the phase one decision did is adopted changes to a methodology that the california puc adopted to calculate the pcia on an annual basis and

assign what are intended to be the above-market costs of commitments that pg & e and other utilities made forming. so the decision itself doesn't set any values. it sets a methodology and framework and the utilities at the staff puc calculate that in a proceeding every year that then gets adopted. >> thank you. and then based on that new methodology, what was the amount that pg & e charged in the exit fees to clean power sf? >> are you looking for an aggregate dollar amount? >> yes, so this is added to the rate payer's bill. >> that's exactly right. the pcia is a charge that shows

up on the pg & e side of the electricity bill. so this is an pg & e fee shows up when a expert is participating in a program like this. it's a per kilowatt rate. so it in perspective, so the pcia is paid by all pg & e customers. it's embedded in the generation rate. so if you're a customer that doesn't live or do business in a community that has the program, you're paying the same costs but it's embedded in the pg & e generation rate. when a community forms a cca and you move to participate in that cca, a new charge shows up to recover a portion of pg & es costs, which have been deemed to be above market and that's where the pcia comes into play. to put into perspective for a

residential customer, the pcia in pg & e's service territory is on the order of 30 to 40% of the generation supply cost. >> that's the amount that customers continue to pay even as a cca. >> thank you. do you have an aggregate amount? i'm just wanting to understand what we're talking about here. >> i think probably what would be best would be for me to direct a number through the executive officer. it's on the order of $80 million, i would say, per year, somewhere in there. but we'll bring those numbers back. >> great. my final question is around the phase two process that's happening right now for these

rates. what is your expectation or do you have any expectation of what is going to happen? will that be additional costs added? or will it be a reduction, possibly? >> well, i'm hopeful that what we'll see are improvements that not just benefit the pcia but that can benefit all rate payers of pg & e. there are reforms considered in the next phase that can really be beneficial state-wide regardless of whether your community has elected to run a cca or not. and, for example, the portfolio management work that i was mentioning earlier has the potential to reduce costs for all rate payers and that would affect the pcia as well. i think the other thing that's

really important that i'm cautiously optimistic about is that the california puc will do more to recognize that we have a new landscape in california, a much more competitive market and because the investor and utilities like pg & e have been for the main buyer in the market, they now have more resources than they need and those resources should be made available to all rate payers. they were commitments entered into and they should be made available to the market in an efficient way. so i think reforms potentially like a new auction process that makes those access resources available on a regular basis could result in cost savings for all market participants. so i'm hopeful that those things will be considered. in terms of timing, we're

probably looking at something that's about a year out in terms of a decision. given these are fairly complex issues. >> thank you so much. >> so we were going to talk about the safety investigation. so the california puc opened this proceeding which is addressing pg & e's current corporate governance structure and operations to determine in the utility is positioned to provide safe and electrical gas service in california. as miss hail mentioned earlier, the city and county of san franciscole filed comments, the puc worked with the city attorney's office and those were filed last week on the 13th of february.

and those comments included that voicing a concern that pg & e has not organized its business in a manner to provide safe service to its rate payers with observation that corporate culture promoting the company's image and financial performance over substantive focus on safety matters. the comments highlighted pg & e's increasingly poor record when it comes to providing safe and reliable service here in san francisco. but of course throughout the entire service area. the comments made clear the city's view that public ownership of some or all of pg & e's system is a viable alternative to the status quo. and the comments also encouraged the commission to recognize that public ownership and local control of utility service has traditionally offered safe and

reliable service with greater transparency, accountability and fiscal and social responsibility. oftentimes, typically, at lower costs than service from the investor and utilities and we see examples in california with other public utilities. >> will the puc's thoughts on this be included in the report that you provide to the mayor? >> on the general question of public service, yes, absolutely. i think that's at the heart of that study, definitely. so we're pretty early in the process of this proceeding. these comments filed were comments on the order instituting the rule-making so that's really the very first step. so this is something that's just

kicking off. the california puc laid out a large number of questions for parties to address and i think one thing that's positive is the sort of breadth issues they're considering, including public ownership. so we will be very involved in that and that's probably part of the reason, too, we filed our own comments in this case. i think we have significant interest in the issues being addressed here. >> does the puc see clean power sf as an entity that can request the bankruptcy proceedings be moved to another judge? has that been a part of the discussion at all? >> so i'm assistant general manager for power and the city's participation in the bankruptcy court is really directed through

the city attorney's office and so i don't believe we're in a position to respond to that question. >> ok, thank you. >> thank you. >> any other questions on that first item? so the next three items here can be grouped together because they address issues related to managing and mitigating the impacts of wildfires and dangerous conditions that may lead to wildfires in the future as required by senate bill 901. the first, the deenergyization of power lines addresses the issue of utilities pro actively deenergizing the powerlines to limit the potential impact of powerline related fire. of course, this has impacts on the community as being served. so this is focused on guidelines

for utilities to follow. the proceeding has impacts on our head chief facilities and, of course, to the county of san francisco to the extent that large pieces of the system are deinedeeng erb rized and they wl prepare and submit wildfire litigation plans that describe the plans to prevent combat and respond to wildfires affecting their service territories. that requirement is being taken up in the wildfire mitigation's plan proceeding. and the city afinally the califs opened up wildfire cost recovery to consider and adopt criteria for use by the puc in future applications from the utilities for cost recovery of wildfire costs. on this one, we've filed

comments in this proceeding and consistent with the board of supervisor's resolution, 4419, the city attorney's office argued that to the california puc that state legislators and regulators should not charge utility rate payers for the costs of wildfire damage caused by pg & e. and that successfully confronting this challenge will require a comprehensive policy and operational changes and engagement of all sectors including public entities, insurancers,ensurers and develo. we filed comments on the general scope of the proceeding. i think the issues here are complex and in our comments, we argue that this will require expert testimony hearing. so this will probably be a six

to eight-month type of timeline. the next two proceedings, disconnections and access to affordability, i also grouped together here. the first would set rules for disconnections of rate payers, including san francisco pg & e customers and provides a good forum for the sf puc in the city to participate and discuss dis-agency andisconnection and y issues that seek to balance equity, public health and safety and the need to operate a financially sound business. and to be clear, typically these disconnectses are for lacdisconf payment. the second proceeding here, the afford abilitability is focusinn

developing methods and processes to assess the impact of affor affordability on individual puc and decisions. the california puc is developing methods to assess and determine the impacts its decisions will have on the important goal of affordability for rate payers. and as i indicated we'll be very involved in these proceedings. the last one, building decarbonization, this was a proceeding that was initiated at the beginning of february, so again very new. and this is going to be focused on identifying any alternatives that could lead to the reduction of greenhouse gas emissions associated with under use and buildings. i'm personally excited about

this one. i think we absolutely plan to be involved. i think significantly reducing building use of fossil fuels like national gas is required if san francisco and california are to meet our climate change mitigation goals. and we think that this proceeding could be very informative in creating a forum with multiple stakeholders to discuss what those alternatives could be. so i'll pause here if there are any other questions. no, ok. i'm going to turn the remainder of the presentation to suzanne merkleson to our government affair's team and she'll provide an update on state legislative activities. >> hello, commissioners and thank you for having us today. my name is suzanne and i work for the policy and government

affair's team at the sf fuc and i focus on state policy for the power enterprise, including for clean power sf. as you can imagine, we have a pretty busy year ahead of us in the california legislature with ongoing fall-out from the pg & e bankruptcy, the need to deal with past and future wildfires and recurring issues that we seem to see every year, including procurement. and we're looking forward to ongoing work with lafco with this legislative session. so just to provide quick context, as you're probably aware, a new two-year session began in the legislature. democrats increased the super majorities in both the assembly and senate and we now have gavin newsome as our governor and we're still assessing petitions on energy and we'll continue monitoring that as the session progresses. one of the first major challenges will be the response to pg & e's bankruptcy and the devastating wildfires of the past several years.

you may have seen that the governor specifically called out ccas in his state of the state address, which signals that ccas are playing an increasingly important role in state's energy use and creating an pg & e strike force including bankruptcy experts among others. the strike force is really an internal staff task force that the governor set up within his office and they've been tasked with developing a road ma roadmo address payer liability. the governor appointed genev geneveve sherona. she's served at the sac sacrameo utilitity district. i would like to talk about ca

cal ucca's and our team works closely with them on legislative efforts. ccca has been working on a state bill proposal intended t toameliorate some of the past. we're working with them to make sure they push the right bill forward art the right time, given that things will be changing quite quickly with pg & e's bankruptcy. cal cca and we're working out to sort details of the bill and strategizing on bill content. so we want to make sure we're addressing the right issues as the bankruptcy moves forward a and the legislature looks for potential solutions to the bankruptcy and to larger wildfire issues. the basic principles cal include

affordability, which costs can be levied on rate payers, so looking to lower electricity costs for all rate payers, via cost minimization and generally a proficient procurement which is a general concern. >> before we move on, could you tell us who is sponsoring the bill? >> it could be cal cca? >> it was -- should was the legislator putting the bill forward. >> we're still in conversation with several. we're still in conversation and we would be happy to update you on that as we get more information in the future. >> do you think it will be a one or two-year bill. >> i don't know at this time. >> ok, thank you. >> so then just larger issues of

bill analysis and advocacy, the pga team works closely with the power enterprise, with -- next slide, sorry. with trade associations and lobbying team in sac sacramentod it could impact clean power sf, including any updates to sb 901, regionalization, procurement mandates which seem to surface every year and grid access and transparency issues. we are happy to work with you and we would like -- we always appreciate lafco's involvement and look forward to keeping you updated as the session progresses, thank you. >> any other questions i could answer. >> before i open this up to the colleagues, in the past we've asked for a spreadsheet of your

watchlist. last june we got a word doc with eight bills on its and i just wanted to see if we could have a more thorough listing. you could highlight the ones that are specific to clean power sf, but we would like to know what's out there in terms of the landscape, not just that handful. >> sure. >> bills are still being introduced. so we don't have the full spectrum of what will be -- >> but you will be by february 22? >> yes, that's today. >> and this is the deadline. >> today is the deadline but you see gut and amends and spot bills and so on. so we should be able to get you that information and i'll work with my colleagues on that. >> great. if you could give it to our executive officer and he can submit it to all of the commissioners, thank you. >> ok. >> opening this up to any of my colleagues have any questions or comments for miss merkelson.

>> no, thank you so much. >> thank you. >> so that concludes our report and happy to take any other questions you might have. >> let's open this up for a public comment. are there any members of the public who would like to comment on item number three? >> good afternoon commissioners, california for energy choice which is a state-wide coalition operating since 2010 to promote and expand community choice programs like clean power sf. also with san francisco clean energy working for the last 15 years to get clean power sf and local clean energy and move that bill forward and i'm one of many people in a new coalition called no pg & e bail-out working to deal with all of this pg & e

stuff. i want to point out that chapter 11 is not bankruptcy. it's bankruptcy protection. it's protection from bankruptcy. and that -- what it means they're trying to avoid having to pay victims of the fires and having to avoid paying for things like clean energy costs, if it can and maybe the bankers that it just got a $6 billion capacity to do loans with. , the first ones that get their share of the money. it's important to understand that the so-called emergency hearing they called with five day's notice was not an emergency. pg & e has $20 billion positive in its bank account and so they have the capacity to pay for these things and pg & e would not have been able to file

chapter 11 bankruptcy protection without the cpuc doing that and literally on midnight, 12:01 after the day the cpc passed this, that's when pg & e declare chapter 11. what we need to do and need lafco to push for is for the current credit tere creditors te chapter 11 deal so that it's lickkliquidates. >> thank you. >> i listened to the report specifically on the outreach and i want to keep encouraging outreach to be done to the black community because often that's not the case and also, to go through some of the community-based organizations because facebook isn't always a

person's resources and different social media an e-mails and some people don't even have wi-fi. noso i want to keep that on the front on outreach and if some of the literature could be more in layman terms. sometimes it's very complicated and i'm trying to follow myself and it's kind of complicated sometimes to the public. thank you and have a nice day. >> thank you. >> public comment is now closed. no action needs to be taken for the commission on this matter, but madam clerk, could you call item number 4. >> presentation on steps of energy services and implications for lafco clean power and sf.

>> so i'm going to provide a brief overview of the process of municipalizing energy given that i know that is the matter of great interest to lafco and to the city of san francisco right now. so under the california constitution, any city can municipalize utilities, including energy, water, et cetera.

and, in fact, san francisco already has a municipal utility which you're aware of. and when i say you have a municipal utility, not only do they procure the power, in this case through the hedge dam but distributes the power and owns infrastructure within the city of san francisco for that distribution. and i'm sure that i that cpuc fy be able to speak up if you have any questions about the facilities. so i want to run over some important terms that we hear frequently in this area and one is what is a municipal utility? a municipal electric utility is operated by the municipality and operated by the municipality. another term is municipal utility district and the reason the san francisco lafco was originally performed was because

of a proposal to create a district. a municipal utility district is a separate governmental agency that provides fe utilities beyod the boundaries of one municipality or county and the proposed municipality district that lead to the formation of san francisco lafco would include the county of san francisco and the city of brisbane and operate out of city boundaries. another term we use is community choice aggregator or cca program. that is a statutory program that is authorized to procure power which would then be distributed through the investor-owned utility infrastructure. so a cca under the statute doesn't exist in the absence of an investor-owned utility and would not order near overlap with a municipality or

municipality utility district and we use iou or investor owned utility to describe pg & e or edison or san diego gas and electric. so in order to form a municipal electric utility and again, we have in san francisco, any municipal corporation or city can distribute that under the california constitution. municipal are not regulated by the california puc. the san francisco charter includes express provisions allowing san francisco to procure and distribute power and also allows the city to expand its municipal utilities if it chooses. so it could be an oversight role

for the lafco. as distinguished from the municipal utility, a municipal utility district requires voter approval in california. it creates a whole separate governmental agency that usually has five board members who would then oversee the utility and again, that utility would provide power, not just to the city and county of san francisco, but outside of the boundaries, as well. and there, there's a very specific statutory role for lafco. lafco reviews the creation of districts within their boundaries and can approve or condition, modify or reject entirely a proposal to create a municipal utility district.

lafco would serve as a lead agency under cequa and after a number of public hearing, assuming the lafco supports that, they would ask the county to it on the ballot and the electors could finally decide to create the separate district. so that's a brief overview of the difference between a municipal utility district and municipal utility and any questions before i move on, please speak up. >> what does sacramento have? they have a municipal utility district. >> they do. do they have an oversight commission? you know how they're set up? >> i am not familiar with the structure of smud. i know they serve well outside of the municipal boundaries. do any of you know?

what examples are there of a municipal utility for a single city? >> city of alameda, has its own municipal utility. trying to think. >> reading, los angelos. >> thank you. >> quite a few. >> 25% of california's electric customers are served by municipal utilities in the state. they range in size from the largest municipal utility in the state is lawp down to very small cities that run their own electric departments and municipal departments like heelsburg. >> any comparable size to san francisco? >> so today, our current sizes

us about the 15th largest public owned utility in the state. were san francisco to expand the expanding service, we would be the third largest in the state. we would be behind lawp and smud. >> maybe you answered the question already, but what's the oversight to, like, l.a. >> so it varies across the state. we already talked a little bit about smud where they are a district and have an elected board. lawp is more akin to our type of structure in that their general manager reports to their city council. so it's a structure that's more like ours. we're a county structure in terms of our board of supervisors, but it's a similar

relationship. similarly it's their electric utility is a department of the city. same thing with santa clara, silicon valley power. so it varies. >> thank you. >> thank you very much, barbara. yes, with a municipal utility, it can be structured in a number of ways and depends on the size of the department, so some of them have their own commission that oversees them and others act more just like a city department. so one issue with a municipal object is how to acquire or construct the infrastructure that's needed to actually distribute power. and the options for that are fairly straightforward. you can construct your open. you could negotiate a sale or transfer with the owner of the infrastructure, in this case,