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PUC hears power cost‑of‑service study, Rate Fairness Board urges phased approach; Clean Power SF net‑metering adopted
Summary
CFO Eric Sandler presented a cost‑of‑service study for Hetch Hetchy Power; while staff recommended a two‑year rate plan, the consultant proposed larger increases in years 3–5 to reach cost‑of‑service by 2021. The Rate Fairness Board recommended the staff two‑year approach and asked for a detailed plan for years 3–5. Separately, the commission adopted Clean Power SF time‑of‑use schedules and a net energy metering program (Item 14) with amendments limiting GM blanket authority.
The San Francisco Public Utilities Commission received a detailed cost‑of‑service briefing for the Hetch Hetchy Power Enterprise on April 26 and voted to adopt Clean Power SF time‑of‑use schedules and net energy metering (NEM) rules after amendments.
Eric Sandler, CFO and Assistant General Manager for Business Services, summarized a multi‑part study that looked at the revenue requirement, cost allocation and rate design for the Power Enterprise. Sandler explained a staff recommendation consistent with the commission‑adopted 10‑year financial plan that would average a $0.05 increase in year one (a two‑year package is before the commission for adoption on May 10) and noted that a consultant base case offered larger increases in years three through five to align all customer classes with cost‑of‑service by 2021. He said implementing the consultant's full recommendations, including higher reserves aligned with industry best practice, could add roughly $60 million to the revenue requirement.
Kevin Chang of the Rate Fairness Board, speaking for the board after five meetings, said the study was thorough and recommended the staff two‑year approach for near‑term stability while urging staff and the commission to return with a concrete plan for years three through five, aimed at increasing goosey (general‑use) rates toward cost‑of‑service and reducing cross‑subsidies.
Commissioners asked about reserve policy, the pace of increases, and impacts on city departments that are PUC customers; several commissioners said a committed timeline and a staff plan to recover cost‑of‑service over a reasonable period should be added to any resolution.
Separately, the commission considered Items 14 and 15 on Clean Power SF. Barbara Hale (Assistant General Manager for Power) described the program as on schedule for a May 1 service launch for the initial cohort (roughly 7,800 services) and presented proposed Clean Power SF time‑of‑use rates that track PG&E generation schedules with a set Clean Power SF discount. For net energy metering the staff proposed monthly crediting and an annual April true‑up with net surplus compensation at a Clean Power SF average green or super‑green rate depending on whether renewable energy credits are assigned to the utility. Hetch Hetchy NEM surplus compensation was proposed at $0.04/kWh plus a small R.E.C. adder for assigned credits.
Commissioners amended the item to remove a broad delegation that would give the General Manager ongoing authority to periodically update Clean Power SF rate offerings without return to the commission and to add missing footnotes to attachments; after the amendment and public comment the commission adopted Item 14.
The Rate Fairness Board recommended the staff proposal for the next two years, with a commitment to return with a more detailed plan for years three through five to move goosey customers toward cost‑of‑service. Commissioners directed staff to develop a clear game plan and to incorporate a recovery timeline into the resolution that will be considered for action at the May meeting.
