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SFPUC adopts Option 5 for 2018 interim wholesale supply allocations, adds transfer notification rule
Summary
After extensive public comment from wholesale customers and cities, the commission substituted Option 5 for interim supply allocations, capped allocations at individual supply guarantees, eliminated a reserve, and required parties to notify SFPUC when transferring ISG amounts; the amended resolution passed by voice vote.
The San Francisco Public Utilities Commission adopted an amended resolution on Item 10 (section 4.02 of the 2009 Water Supply Agreement) setting interim supply allocations (ISAs) through 2018.
Steve Ritchie, assistant general manager for water, described four allocation approaches staff had discussed with wholesale customers and recommended an approach that limits ISAs to individual supply guarantees (ISGs) while enabling transfers among wholesale agencies. Following public comment from multiple wholesale cities and agencies'including Palo Alto, Menlo Park, Mountain View, Daly City, San Jose, Santa Clara and East Palo Alto'commissioners considered a revised option (labeled Option 5).
Commissioner Moran moved to substitute Option 5 for the prior attachment, delete a reserve resolve clause inconsistent with the substitute, and add a requirement that any wholesale customer that transfers a portion of its ISG pursuant to the Water Supply Agreement must inform the SFPUC of the amount of the transfer that also constitutes an ISA transfer. The motion was seconded and adopted by voice vote.
Under the adopted approach, ISAs will generally be limited to customers' ISGs; San Jose and Santa Clara (which are interruptible customers without ISGs) were reduced consistent with the contract's section 4.05 mechanics rather than being left unchanged. The policy relies on the contract's transfer market for agencies that need allocations beyond their ISG, and staff will implement the notification and transfer procedures described in the resolution.
Commissioners acknowledged equity concerns raised by smaller agencies such as East Palo Alto and directed staff to be mindful of hardship implications when developing the environmental enhancement surcharge that will be part of future wholesale rates.
