Hi all,
Sorry in advance for this being a little long, but it is very important
that you all clearly understand what is going on with San Francisco's
CleanPowerSF project, which is now close to a final contract, but is in
immediate jeopardy, and is one of the -top- reasons that PG&E placed
Prop 16 on the ballot.
The meeting last night with the San Francisco Public Utilities
Commission was, to put it bluntly, unreal.
The SFPUC once again showed itself to be utterly incapable of delivering
a valid workable contract and project plan for CleanPowerSF, at or below
PG&E prices, making it absolutely clear that CleanPowerSF will fail
unless the LAFCo (Local Agency Formation Commission - where we have
Supervisor allies) takes a much stronger role this Friday, and hires
Local Power to do the heavy lifting on the design of the contract and
final work plan.
Among the many outrageous points that the SFPUC presented to us last
night were:
1) The SFPUC does not intend to deliver a contract to the Board of
Supervisors until June 8th, which is of course far too late to get any
possible fast track approval of a signed contract, before the public
votes on Prop 16!
2) The SFPUC has not mandated local renewable and efficiency
installations in the contract at all, and instead intends to pursue
separate independent contract bids for any actual installation projects.
This will make it nearly impossible for CleanPowerSF to be well designed
enough to properly pay for itself, and deliver large scale renewables
and efficiency with the thousands of local green jobs that come with
these, all rapidly enough to combat the climate crisis. It is very
important to note, in the seven years that the SFPUC has spent pulling
every trick in the book to delay the 360 megawatt roll-out of the
CleanPowerSF program; that over the same time period, using weak
independent separate contract bids, the SFPUC has installed only 10
megawatts of electricity generation, and all of that was in overly
expensive stand alone solar projects, over half of these privately
owned, which have collectively failed to meet strong local hiring
standards for green jobs.
3) The SFPUC intends to roll out CleanPowerSF with an outrageous 8% rate
increase for each year in the first three years of the program! This is
absolutely absurd and would mean that no commercial customers would join
the program, causing it to completely fail. Very strangely, even though
we have now gotten the SFPUC to agree to pursue a -20- year
contract/payback period in order to greatly lower program start up
costs, the charts that the SFPUC staff showed us last night to justify a
whopping 8% rate increase were based on a -15- year, not 20 year, pay
back period...
4) The SFPUC once again stated the desire to phase in the customer base
of the program a little bit at a time; a suggestion which almost all
other independent contractors and grassroots organizations have told the
SFPUC over and over for the last 7 years straight is not an acceptable
strategy for CleanPowerSF, and will likely make it economically too weak
to survive. This poor strategy would also allow PG&E to much more easily
target specific groups of customers receiving opt out notices with
negative advertising, and if Prop 16 passes, would enable PG&E to force
all customers who are not included in the program at the beginning
(likely 80% of them) to face an impossible two thirds public vote to
join CleanPowerSF.
5) The SFPUC made clear that it has completely failed on multiple fronts
to use a strong project financing strategy which will allow CleanPowerSF
to roll out at the start with a full renewables and efficiency portfolio
which will deliver clean electricity at the same or lower rates than
PG&E (instead of rates that are 8% higher per year). The SFPUC revealed
last night:
a) It has still not designed the program to be built with the self
funding renewable energy revenue bonds that were passed by San Francisco
voters in 2001 (known as 'H' bonds) and which were specifically designed
to enable the rapid construction of projects like CleanPowerSF; this
even though contractors and organizers have repeated over and over again
for 7 years that these bonds are -fundamental- to the success of the
program.
b) In 2007 the law firm Nixon Peabody informed the the SFPUC and the
LAFCo that it had discovered a mechanism for delivering the -very- low
cost power which San Francisco generates at the Hetch Hetchy dam
-directly- to San Francisco electricity customers instead of having to
expensively wheel that power through PG&E's for-profit delivery
mechanism. This would save the entire CleanPowerSF project huge amounts
of money; savings that would make it much easier for the program to meet
or beat PG&E prices. And yet the SFPUC revealed last night that it has
not pursued this obvious winning strategy at all.
c) The SFPUC has still failed to do the diligent work necessary to get
the California PUC to transfer -from- PG&E -to- the City, local control
of key energy efficiency funds (millions already paid for by San
Francisco customers) so that they can be used to build large scale
energy efficiency projects in the CleanPowerSF program. This too would
make it -much- easier for CleanPowerSF to succeed and the SFPUC has
completely failed to secure these funds for the City.
It is very important to note that on all of the fronts noted above, the
group Local Power (which is headed by clean energy guru Paul Fenn and
which -created- the model for CleanPowerSF called Community Choice
Aggregation) has presented the solutions to these problems to the SFPUC
-repeatedly- throughout the entire 11 year history of pursuing
CleanPowerSF, and the SFPUC has both utterly failed to listen and
repeatedly failed to bring Local Power on board, to work out these and
other vital aspects of the program.
I and others at last night's meeting called out all of these
shortcomings in the SFPUC 's plan, and then indicated that we could no
longer trust SFPUC staff to get this right (especially with less than
three weeks to go before the election) and stated emphatically that the
SFPUC -must- therefore allow the LAFCo and Local Power to now step in
and take the lead on the contract process in order to get it back on
track. The SFPUC staff's only response to this demand was to make a
legal claim that the LAFCo cannot force them to include Local Power in
the contract negotiation process. They essentially said "You can't make
us..."
Those of you who haven't been following this process closely for the
last several years should know two key points; 1) the LAFCo can -indeed-
bring Local Power, as an advisor to its own staff, fully into the
contract negotiations, and 2) this has been done before at -crucial-
moments in the history of the fight to pass CleanPowerSF; most notably-
Five years ago, when the SFPUC staff (even after being expressly
directed to do so by the SF Board of Supervisors) was refusing to draft
a full implementation plan for CleanPowerSF, Local Power -for free-
drafted the massive visionary project plan and gave it to the LAFCo, and
this led to the official plan for CleanPowerSF which was unanimously
passed in 2007 by the San Francisco Board of Supervisors.
and-
Last year, when the SFPUC was about to release a call for CleanPowerSF
contract bids that would have completely left out the local renewable
energy and efficiency components of the program as -optional- Local
Power was hired to step in and re-write the call for bids so that it
gave mandatory favorable bid points for companies including large scale
renewables and efficiency in the program from the start.
Now, the new and even more profound crisis of the SFPUC's total failure
to design a strong contract, and one with mandated local renewables,
efficiency, and local green jobs, -demands- that we once again bring in
Local Power to take the lead in the contract negotiations.
It is absolutely crucial that we as organizers go to the SF LAFCo
meeting this Friday, 2pm, at San Francisco City Hall room 250 to insist
that the LAFCo put the SFPUC in its place, and again hire Local Power to
assume the -strongest- possible role in the contract negotiations from
this point on.
We should also insist that the LAFCo send an official communication to
the SFPUC that the LAFCo in the firmest possible terms expects the SFPUC
staff to follow the advice of the LAFCo and allow Local Power to lead
the contract negotiation process.
This is our best shot at getting the large scale local clean energy and
green jobs which have been fought so hard for since 1999 in San Francisco.
I'll send a hearing minder about LAFCo tomorrow morning so you have that
info in a short email.
peace and solidarity
Eric Brooks
415-756-8844
