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SFPUC presents not‑to‑exceed rates for Clean Power SF; commissioners ask for scenario analyses tying rates to local buildout funding
Summary
PUC staff presented a not‑to‑exceed residential generation rate of $0.1457/kWh (cost of service $0.1409/kWh) that implies a premium over PG&E’s 2013 generation rate; commissioners asked staff for multiple scenarios showing how choices on renewable product mix, reserve repayment terms and care‑customer participation would alter rates, available funding and bonding capacity for local buildout.
The San Francisco Public Utilities Commission’s financial team presented proposed not‑to‑exceed rates for Phase 1 of Clean Power SF and described policy levers staff can use to balance affordability with funds for local investment.
"The cost of service is $0.1409 per kilowatt hour," Crispin Hollings, Director of Financial Planning, told the joint meeting. Hollings said the proposed not‑to‑exceed basic residential rate shown to commissioners is $0.1457 per kWh for 2013, producing a generation premium of roughly $0.0669 per kWh compared with a 2013 PG&E generation rate of $0.0788 per kWh.
Hollings translated the premium for an average Tier 1 residential customer into a monthly impact of about $10.24 and emphasized that procurement costs (including renewables) make up approximately 75% of total cost of service. He outlined two modification levers that could reduce unit costs: changing the renewables product mix (more RECs versus bundled firmed/shaped energy) and extending the reserve‑recovery term (from 4.5 years to 12 years). Staff estimated the levers could free roughly $9.4 million per year under the not‑to‑exceed assumptions.
"If you change some of these choices ... we can decrease the cost of the program, and then we can apply these cost savings either to lowering the rate or we could apply it to bonding capacity," Hollings explained. He estimated $9.4 million freed annually could support about $90 million of project financing; a rate stabilization accumulation of about $2.5 million over 4.5 years could support roughly $25 million in bonding.
Local‑build tradeoffs and commissioners’ requests
Barbara Hale, assistant general manager for Power, described program elements (net energy metering, feed‑in tariff, feed‑in offers for local projects, and use of city land) and said initial GoSolar funds can begin local rooftop installations that typically avoid CEQA delays. But commissioners repeatedly pressed for concrete scenarios: how different rate choices would affect customer premiums, opt‑out risk and the program’s ability to issue revenue bonds to seed a meaningful local buildout. Several commissioners asked staff to provide sensitivity analyses showing projected bonding capacity under alternative mixes and repayment schedules.
Rate Fairness Board and next steps
Kevin Chang, chair of the Rate Fairness Board, told commissioners the Phase 1 rates are technically fair under the board’s standards, but warned the market viability of a premium product is uncertain and recommended aggressive cost control, post‑startup rate review, and a clear, measurable local build plan. Commissioners asked staff to return with scenarios and requested the matter be revisited at a follow‑up hearing (targeted April 23) before any vote on final rates.
The commission did not adopt final rates at the meeting; members directed staff to provide multiple scenarios showing trade‑offs between rate affordability and local buildout funding and to clarify bonding capacity estimates before a subsequent decision.
