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tv   [untitled]    October 14, 2011 10:00am-10:30am PDT

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over 3000 members in the city and county of san francisco, on the apprentice, i do not think we have any problem. we have more than 99% of the new emperor this is coming through. there san francisco residents. thank you to maria for working it out to do this pla. i think it is going to agree to a lot of work for all the san franciscans. thank you. supervisor kim: thank you. >> at this time, public comment is now closed. >> we will move into your next item, approving the minutes of the september 8 meeting. >> so moved. >> we have a first. is there is second? >> i will second. supervisor kim: thank you.
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we will do a roll-call vote. >> with that, first and second. director harper. dr. lloyd had another engagement and left. director metcalf. the next one. and madam chair. with that, the minutes are approved. that does conclude your agenda for today. supervisor kim: thank you. are there any announcements? the meeting is adjourned.
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>> good morning, and welcome to the october 11, 2011 special
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joint meeting of the san francisco local agency formation commission and the san francisco public utilities commission. my name is david campos, and i am the chair of the lafco. madam clerk, if you could please call the roll. before we do that, let me simply think the following members of sfgtv staff for covering this meeting. charles, nona, and i want to begin by thanking not only the members of the lafco but also of the san francisco public utilities commission for being here today. madam clerk. >> on the call of the world. commissioner campos. present. commissioner mirkarimi, absent. commissioner of a less. present. commissioner hope schmeltzer. present. we do have a quorum. >> african turn it over to the vice president of the public utilities commission. mr. vice president moran.
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>> thank you, mr. chairman. >> vice-president moran. commissioner torres. commissioner courtney. president vietor will be here shortly. commissioner caen is enforced in delayed and will not be able to attend. >> commissioner, i think it is significant to note that this is really the first meeting where we have an opportunity not just to talk about what we want to do but also what we can do. and that may feel a little constrained. on the other hand, i think it represents a tremendous progress. i think it is appropriate to acknowledge the work that got us here. of lafco staff and puc staff and the members themselves. i think it is a very good place that we're at. i look forward to today's discussion. supervisor campos: thank you.
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with that in mind, let's call item number 3. >> opening remarks and discussion of expectations for the joint meeting. supervisor campos: to that end, let me build on what was said by vice president moran. there has been a lot of work that has gone into making it possible for us to be here today. once again, i want to thank the members of the san francisco puc for making themselves available and to have this joint meeting. it is very difficult and challenging, given the busy schedules that everyone has to find a time where both commissions can have this meeting. but i do think it is a very critical what we have this meeting and that we tried to move this project of community choice aggregation forward. let me say, from my perspective, you know, why i believe that is important for us to take action today. it has been a number of years since the passage, in 2004, of
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the original community choice aggregation ordinance, which was modified and amended by the board of supervisors in 2007. since that time, the puc and the lafco have been charged with the responsibility of trying to implement this program. and i believe that it is important for us, not only because of the obligation we have legally and the charge that has been given to us by the board of supervisors and the may year, but also to the rate- appears to make sure we move this program forward. today is really about both agencies sending forward a recommendation to the board that includes a proposed a term sheet, so that the final decision makers within the city and county of san francisco had the opportunity to make a decision about whether or not we are going to move forward. the action that will be taken
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hopefully in the next item -- actually, the second item, item number five, is an action where we, as the two commissions, make a recommendation for a proposed term sheet with the understanding that any action that is taken today is not a final action, that it simply moves the item forward to the board of supervisors said that the board and the mayor can then look at the issue and decide whether or not to move forward. i believe that both the puc and the lafco have fulfilled their mandate in terms of trying to figure out what is possible. and today is really about completing that work so that once the board knows what is possible, once the mayor knows what is possible, they can make a decision on whether or not to move forward. so i want to thank the staff at the san francisco puc.
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i want to especially single out general manager harrington for all the work that he has done and for awhile these to rigid and working not only with his staff but also with the lafco staff. i want to thank ms. miller of lafco, as well as mr. fried for all the hours that have gone into it. i especially want to identify the advocates who have been an integral part of this process. with bad, i want to thank everyone who is here, and i look forward to a robust discussion about where we are today, and my hope is that once the discussion is over, we will move forward so that this item can be sent to the board and to the mayor for action and decision. with that, mr. vice president, i do not know if you wanted to add anything. >> no, i guess i do not. thank you. >supervisor campos: are there
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any other remarks from the members? ok, let's move now to item number -- actually, is there any public comment on item number three? is there any member of the public who would like to speak? seeing none, public comment is closed. >> item number four, community choice aggregation a bigger park, including a presentation from shawn marshall of the local energy aggregation network. >> mr. campbell, good morning. is the microphone on? >> good morning. i am much more comfortable up here when i can hear an echo. thank you. i am mike campbell, director of community choice aggregation program for san francisco, part of the clean power sf program, power enterprise of the sfpuc. it is my pleasure to be here this morning. we have a big agenda for us.
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there'll be more in depth update in the subsequent items. but two things -- one thing i wanted to note is we did get passage and signature now from the governor of sb 790. this was the cca legislation that all of us that the sfpuc and lafco staff have been working very hard to get through. it will help level the playing field and only show you that there will be more cca's in the future. it has been such a battle going forward. i just wanted to highlight that and start the meeting on a very positive note. it is my pleasure to introduce to you all shawn marshall. she has started l a nonprofit hasean that is fine -- she has started a nonprofit called lean that is focused on cca's here
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and across the country. she is also on the board at the energy authority, so she brings a lot of expertise and experience for this body. >> good morning, commissioners. >> good morning, ms. marshall. >> as mike said, my partner and i started lean energy u.s. earlier this year with the express purpose of expanding the community choice aggregation model in california and throughout the united states. so i am very pleased to be here this morning on what appears to be a press this day for you all, to hopefully join a small but growing club of cca aggregations across the country. our mission is to accelerate the
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expansion of clean energy cca's into new communities and states and to foster energy innovation within cca programs. what we will be talking about in a moment is how innovative california, including san francisco's where it currently is with it -- with respect to clean energy cca's. but we have a lot to learn from our counterparts in massachusetts and illinois with the adoption rates and the energy efficient programs that they have going. a lot of what we're doing right now is gathering best practices and pushing the needle on how we can use cca as a test bed for a true energy transformation in the states where it is enabled. we did this in turn nonprofit fashion right now by building awareness and understanding. what you all have experienced over the last several years is a tremendous learning curve on what this whole business of cca
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is about, and we have much more to do across the country with the elected bodies, with planning commissions, other staff members from local governments, to help them explain the value of what we're doing here and how it can be done without burying staff and taking a tremendous resource. we're doing that. we're also providing policy support to the extent that we can within our nonprofit status. we were involved in 790, and i am delighted that that was signed by the governor on saturday. we're also actively engaged in some cca research. right now, we're looking hard at this issue of local billed out, which i know is a big topic here in san francisco, and how to refinance that? what is the balance here between distributed generation and central renewals and how you actually financed that a little bit sooner in the spectrum than later? right now, as you know, the
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investment tax credit appears to favor a direct to market ppa approach, an approach that is perfectly valid and typical. but we think, and i know many of the advocates in this room think, that there's an opportunity to get there sooner entered a diversified portfolio of diversifiedppa's, energy service providers, and local billed out, which is potentially regional bell about. and we are engaged in putting together a cca expansion fund to incentivize new cca's and local governments to get to the starting line in doing what you all are hopefully doing and have been doing for the last couple of years. so where are we in the u.s.? currently cca exists in six states. massachusetts was the first to come on line in 1970 -- in 1997 out in martha's vineyard and on the case. there's every approximately two hundred thousand customers. their rates are competitive with their utility.
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i should say that their utility is not an iou in the sense that we have them here. the utility handle the distribution side of the equation. so it is not as competitive as it is currently here in california. in ohio, there were next to follow suit in 1999. they have got a couple aggregations. the best known as the northeast ohio public energy council. they have got, i think, 129 communities now. but a large percentage of ohio has done what illinois is now doing, which is in essence privatizing cca of tradition or the committee acts is essentially as an agent for the third party supplier to come in. that has real pros and cons, and we're working hard to make sure that the local communities are not giving away the store and are demanding higher and higher percentages of green energy. that is our work right now in the midwest. so i will say, there are no
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gangbusters, because ohio has at its two million customers, and illinois recently to ballot with 20 committees and are looking to go to a ballot with 20 more in 2012. so we have something to learn about adoption rights out here in california. in rhode island, they are still sort of very stuck in this narrow view of we're only going to do municipal accounts only. it is not available to residential and industrial commercial customers. but they do have 36 cities to have aggregated in rhode island. new jersey, the advocates are still pushing hard there to give them up to the first program. i reported out on illinois. they enacted cca in 2009, and they are really going gangbusters. but again, it is this different paradigm where the city is asking -- acting as they pass through. they take on the wrist, but in my view, the yield very the long-term benefit. other promising states --
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yes, commissioner? >> tallon judy fine big investors? >> it is a technical term. it find it really against our experience here in california in terms of adoption rates. so when 20 cities go to ballot, it is mayor lee 25 cities. in 20 cities passed a referendum to move forward with their programs. that is an adoption rate that blows california out of the water. so you still not really have one, hopefully two soon. sonoma is coming up the pike. and they're getting ready to go to ballot with 20 more. >> they have been on since 2009. >> correct. >> what has been the experience? what has been the experience for the consumers? >> they have not yet launched their first cca. oak park is leading the charge
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there, and they're getting ready to ratify or select their supplier next monday. that will be the first 20,000 customers in the city of oak park. >> how many communities have these facilities online and operating as we speak? >> across the united states? >> just massachusetts? >> one in massachusetts, only two to come shortly with the city of boston. it is hundreds in the state of ohio. but in terms of jpa-driven cca's, only two in ohio. the rest are coming to the city as agent methodologies. >> so three nationwide? >> four. >> thank you. supervisor avalos: thank you for your presentation. it is still ongoing. i wonder if you're going to touch upon what types of projects we're talking about in massachusetts or ohio that are already online in terms of clean
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energy? >> yes, i will get there. in fact, i am going to get their right now. mike asked me to keep this short, so ask any detailed questions that you have. but in clean energy, there's no question that california is leading the way. first with mea. next toughly with the san francisco setting the bar perhaps even higher with a commitment to local build-out and distributed generation. right now, as you know, marin energy authority has a mix of 33% renewable. 27% of that is qualified, california qualified renewable in our portfolio mixed. our rates our competitive. sundays are higher. some desert lore with pg&e. next year, with the rate hike, it looks like we will be cutting in slightly lower than their rates on the generation side. you cannot play the iou's game
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the iou way in the long term. it is very tough on the rate competition issue. massachusetts is headed in the right direction with clean energy. they currently have a standard of 6%, so there's a fine portfolio is only 6%. they are really following what the state requirements are. one of our goals is, let's work on the rps levels in other states, but that is a different day. they do have a co-op which they formed with the municipal utility in order to go out direct to market. they just signed a 20-year contract for 18 megawatts of solar at competitive rates. so they're starting down the ppa to ownership and really interested in this idea of asset formation, but that is down the line for the. premium rates across the board in terms of 100% renewals are offered at a premium -- sorry.
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they're not embedded within what anyone would consider right now is cost competitive. i will say that his oak park as attendees and clean energy threshold that they have established. they also have a 100% clean energy premium that given where the rates are, that a deep green will come in slightly lower, but they do not expect that to last too long. again, if this really is a long view on the trade issue, you cannot -- i have said this to our counsel, you have got to look at it over time, because the market is volatile. the quicker you can get to a balanced portfolio of assets of ownership, the better of you're going to be long-term in terms of rate stability and cost effectiveness. and want to underscore balance. energy efficiency as for massachusetts has put all its eggs in the basket. because there were able to get the ee carve out, what we call
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the public goods charge that currently cca's are not getting. we will now through 790 as long as the public's goods charges extended. that is sending to work on. but massachusetts gets the carve out. they have done a lot with energy efficiency, but it is on the program side of the duty predates and weatherization. -- but they do the rebates and weatherization. how do we make cca a test bed for energy efficiency integrated into procurement on the supply side? as opposed to on the demand side, and how do possibly push the envelope on energy efficiency as a feed-in tariff? there are possibilities, and we hope to ride with san francisco and others. but we feel our innovations in the field. rates are the bottom line no matter where you are. i expect that even in san francisco, rates matter. right now in marin, we're
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looking at with the elastic is it -- what the rate elasticity of the customer base is in terms of when we are slightly higher than pg&e. and how far can you go and for how long with slightly higher rates before you start seeing any effect in your opt-out? that funding will need to watch, and i am sure you will on a regular modeling bases, to make sure you're not losing customers and thereby undermine your cca program. that is the balancing act we juggle every day. in the midwest, where they have not made a real commitment to clean energy other than oak park at 10%, it is all about the rights. they're going to realize a 20% rate savings over their incumbent utility. and they're only going in on a two-year contract. so it will be interesting to see what happens with that group in a couple of years. the cities do not benefit a lot right now. they took on no risk, but they also do not have a lot of the economic benefit that we see out here.
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adoption rates, we have already discussed. when you have in front of you is a handout. not even going to try and go there. but hopefully some members of the public -- i do not know there are extras. i will not belabor this, but this is a slide of all the communities, at least that we know of, that are actively considering cca. you guys are lovely next up to bat. sonoma is right behind you. they are taking it to their board of supervisors for their feasibility analysis to get started down this road. they also have a couple scenarios with aggressive and local -- when i say local, it is really regional bell allowed -- build-out. it is back combination of build- out and directed service provider. monterey and santa cruz are looking for initial funding so they can get going on their
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spending -- study. davis is looking. richmond looks like it will join mea's program. we're starting to make inroads in california, but our focus has been northern california. here is the rest of the country in terms of what is happening. most of the action right now is in illinois. we're hoping that there will be an uptick in activity in massachusetts. we're not doing a lot rainout in ohio. with that, i will end my comments on the national picture, but i look forward to joining you do this a very cool glove -- " love of innovation and forward thinking. supervisor campos: thank you for your presentation. colleagues, any questions? commissioner torres: no questions. >> terrific. supervisor campos: is there any member of the public who would like to speak on this item, item four?
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seeing none, public comment is closed. please call item number 5. >> item 5, approved the updated term sheet parameters for program and contract negotiations and directed staff forward to the resolution to the board of supervisors for review and consideration. supervisor campos: great. i guess we will turn to ms. miller. but before we do that, i do want to make a point that i actually wanted to make in my earlier comments. i want to make sure that it is something that is sad. this item focuses on the proposed term sheet, which again is simply a proposed term shared with the understanding that there will be contracts down the road that would necessitate the board of supervisors approval and may year-old emperor glass wall. but it is important to note that there is also an expectation of proceeding on parallel tracks with the build- out.
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it is also about making sure there is movement on the build- out. i think it is important to understand that context. so where appropriate in the presentation, if there can be some report on where we are in terms of the progress that has been made on this effort to have a parallel tracks and make sure that the work of the build-out is moving forward. >> thank you. i will be very brief in my comments. under the original ordinance that asked the sfpuc to look at cca at program, there were a number of program goals. lafco was charged with the responsibility of monitoring the program and working with the sfpuc. just to remind you of the goals, what we started this program to beginning with was first to provide choice to consumers, to reduce their reliance on fossil
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fuel, to provide reliable and stable rates, to increase local control in energy independence, and to create community john opportunities. in the past five years since we have been working in this program with the sfpuc, there has been a number of studies done by outside consultants and a number of peer review analysis that have been done because of the presentation by the sfpuc today is really the culmination of a number of years, and in our presentation, we're not going to go through all the studies that have been done. but briefly, in 2008, we prepared an outside consultant to committee choice aggregation report, which basically went through the risks, the program design, and some of the issues that he would need to look at in the term sheet. in to detonate, a separate company did a report on a suggested implementation plan, which is one of the requirements of the " cca program.
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it does a 9, d sfpuc put on contract and energy -- independent energy and alison -- analysis to explore the potential for renewable energy both regionwide and in the city. in 2009, another independent company prepared a risk assessment report in order to mitigate risk and figure with the risks of would be. that was peer review in 2009 by local power inc.. in 2009, that a draft term sheet was prepared for the sfpuc usage. i just want to reiterate that this is an amazing opportunity for the city and county of san francisco. it is not a program without risks, as are all new programs, but i believe that your staff, the sfpuc, has mitigated that risk. and you will hear during the presentation how that is done.

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