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SFPUC previews Clean Power SF term sheet; staff seeks authority to finalize Shell deal, cites financial and regulatory hurdles
Summary
Assistant General Manager Barbara Hale told commissioners the SFPUC will present a term sheet with Shell on July 26 and seek Board of Supervisors appropriations; staff projects an initial pool of roughly 230,000 formally‑notified accounts and expects about 75,000 accounts (roughly 30 MW) to remain enrolled. Key outstanding issues include reserves, performance bond requirements from the CPUC, and how to stage opt‑outs.
Assistant General Manager Barbara Hale updated the San Francisco Public Utilities Commission on Clean Power SF negotiations and a schedule that would send a term sheet and business terms with Shell to the commission on July 26 and then to the Board of Supervisors for approval.
Hale said staff expects to offer service to roughly 340,000 residential accounts in the city and to formally notify an initial cohort of about 230,000 accounts under the state’s opt‑out process. From that initial formal notice, staff’s survey-based projection is that about 75,000 account holders — representing roughly 30 megawatts of load — would remain enrolled. Under current state rules, customers who opt out are restricted from rejoining for three years.
Hale described the program as a premium 100% renewable product composed of about 85% “firmed and shaped” products (such as firmed wind), 10% bundled renewable generation, and 5% tradable renewable energy certificates sourced from California Energy Commission‑certified facilities. She said staff is negotiating commercial terms with Shell and separate ‘back‑office’ negotiations with Noble, and plans to return on July 26 with a term sheet and, later, contract documents.
Several financial items remain unresolved, Hale said. The city must identify startup funding, a reserve that would be accessible to Shell, contingency staffing and consultant funds, and how to allocate financial responsibilities if a counterparty defaults. Hale said the California Public Utilities Commission’s forthcoming decisions on performance‑bond or bond‑posting requirements are an unknown that may affect the size of the financial commitments the city must make.
Commissioners pressed staff for pro forma financials, a clear rate timetable and the outreach plan. Hale said the formal opt‑out process requires four notifications per account (two before service begins, two after) and staff will run a multimedia public outreach campaign in addition to the state notices. Low‑income customers will receive a subsidized rate under the plan, she said, and the exact rate structure will be addressed through the city’s rate‑making process.
Public commenters at the meeting urged caution and fuller scoping of an in‑city build‑out before the commission approves a term sheet, warning a premature deal could lock in limited opportunities for local procurement, workforce development and community benefits. Hale responded she intends to retain contract provisions that allow San Francisco‑proposed resources to be incorporated into the supply mix over time, and that staff is pursuing resource substitution language similar to Marin’s agreement with Shell.
Next steps: staff plans to present a term sheet to the commission on July 26, continue Noble negotiations on the back‑office services, return any required contract for commission and Board of Supervisors approval, and pursue the Board appropriations that will underwrite startup reserves and contingencies.
