SFPUC adopts budget fixes, reprograms CCA funds and approves Hetch Hetchy 10‑year plans

The San Francisco Public Utilities Commission on May 13 adopted revised 10‑year financial and capital plans for Hetch Hetchy and approved a set of budget changes the mayor proposed to close a previously projected 10‑year shortfall.

Commissioners voted to accept a package of measures that includes increasing the general‑fund power rate revenue assumption (from a 0.5¢ to a 1¢ annual increase over two years in the near‑term scenario), reprogramming $19,500,000 set aside for a Clean Power Authority (CCA), and adding mayoral funding for the GoSolar SF program and an emergency Lower Cherry Aqueduct rehabilitation. The package also contains roughly $155 million in 10‑year capital cuts and deferrals staff identified as least risky in the near term.

Staff said the mayor’s changes and program cuts move the commission from a roughly $500 million projected shortfall over 10 years to balanced scenarios in the planning horizon, provided additional savings or revenue assumptions are realized. Todd Rechtstrom, Assistant General Manager and CFO, told the commission the package combines revenues (including the mayor’s proposed rate adjustments), capital cuts and deferrals, and $19.5M reserve reprogramming to produce three balanced scenarios that keep the enterprise above zero in the 10‑year outlook.

Why it matters: Hetch Hetchy generates a substantial share of the City’s greenhouse‑gas‑free power portfolio and underpins savings to the general fund. The commission’s decisions determine near‑term borrowing needs and how much capital work is deferred or funded, which affects long‑term reliability and rate pressure.

What the commission approved and why: The commission adopted the Hetch Hetchy 10‑year financial plan and 10‑year capital plan and voted to request the two‑year capital supplemental appropriation outlined in the packet. Staff said the mayor’s adjustments reduce the amount the PUC needs to borrow in the fall from a previously projected $72 million to about $45 million, and that the package preserves a path to meet a 15% reserve policy under certain scenarios.

Key specifics staff identified include: - Reprogramming CCA reserves: $19,500,000 moved to address immediate fiscal needs and to fund priority programs. - GoSolar SF: Mayor’s proposed funding increased to $5,000,000 per year for each of the next two years (staff said the change reflects a policy choice to prioritize local solar incentives and workforce development). - Drought and emergency work: Proposed appropriation of ~$18.1M for the Lower Cherry Aqueduct emergency rehabilitation to improve drought reliability. - Capital adjustments: Staff enumerated roughly $155M in cuts/deferrals across the 10‑year plan, concentrated in power projects in the near term; many projects retain later‑year funding lines rather than being eliminated outright.

Questions and follow‑up: Commissioners repeatedly asked staff to produce concise justifications and one‑ to two‑page summaries of contingency and risk rationales (staff committed to a short memorandum on the WSUP contingency approach). They also asked for verified metrics on GoSolar SF—how many installations, workforce outcomes and GHG reductions the program has produced—before finalizing longer‑term program commitments. Staff committed to return with those figures at the May 27 joint meeting with the Environment Commission.

Votes and next steps: The commission moved, seconded and adopted the Hetch Hetchy plans and related budget measures by voice vote. Staff will present a short memorandum explaining the contingency and risk rationale and deliver more detailed workforce and program metrics on GoSolar SF at the May 27 joint meeting. The commission also scheduled quarterly budget reviews to revisit assumptions and monitor progress.

Context and background: Earlier this year staff presented a financial outlook that included a multi‑hundred‑million dollar shortfall driven by capital needs, contract expirations and uncertain energy market revenues. The mayor’s proposals and staff’s prioritized adjustments reduced that gap; commissioners emphasized that the out‑years remain sensitive to contract renegotiations, market conditions and future rate decisions.

Ending: The commission voted to adopt the plans and directed staff to return with follow‑up memos on contingency rationale and GoSolar performance ahead of further budget adoption steps with the Board of Supervisors.