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SF LAFCO, SFPUC staff recommend direct negotiations to get Clean Power SF moving
Summary
SFPUC and LAFCO staff told the Local Agency Formation Commission that no bidder met the city’s prior RFP terms for high-renewable, lower-cost supply, and recommended authorizing SFPUC to begin direct negotiations with suppliers while preserving a phased, risk-shared approach and targets to exceed state renewable standards.
Mike Campbell, director of the Community Choice Aggregation program (Clean Power SF), told the San Francisco Local Agency Formation Commission that the city received responses from major firms but none could deliver the high-renewable portfolio the city sought at a lower price than Pacific Gas & Electric without the city taking some financial risk. Campbell said staff’s planned recommendation to the SFPUC on Feb. 8 is to authorize direct negotiations with potential suppliers and a negotiation team that would include SFPUC staff, LAFCO staff, the city attorney and external consultants as needed.
The recommendation reflects two trade-offs, Campbell said: pursue a full-requirements supplier through bilateral negotiations — which shifts some operational risk to a single supplier and simplifies contracting — or build the program largely in-house at SFPUC, which would require the city to absorb more of the financial and operational risk. "We need to be flexible on program requirements," Campbell said, emphasizing the need for fixed prices with clear performance guarantees and a portfolio whose renewable content "meets or exceeds the state requirements for RPS." He also warned that suppliers said they could not assume all financial risks, and that "San Francisco will be required to put up some collateral" to start the program.
Public commenters, including Al Weinreb of the Local Clean Energy Alliance and Eric Brooks of the San Francisco Green Party/Our City, urged the commission to lock procurement and local build-out together, to include specific renewable and local hiring mandates in contracts and to use revenue-bond authority so contractors can count on renewable-generation revenue streams. Josh Varsay and others pressed for explicit milestones and a local-hiring commitment tied to build-out. Aaron Israel of the Sierra Club and a member of the SFPUC Citizens Advisory Committee urged clear, early outreach explaining any proposed changes to the 2007 ordinance that originally set LAFCO’s CCA implementation path.
Commissioners and staff agreed to a joint LAFCO–SFPUC meeting in February to review the contract timeline, discuss any ordinance changes and refine the marketing and budget assumptions. Ms. Miller (executive officer/staff) said the next formal steps are SFPUC authorization for negotiations, contract development and then implementation; she estimated a 3–6 month timetable for contract preparation and submission to the Board of Supervisors. No binding policy change was adopted at LAFCO; the commission treated the item as a discussion and directed staff to continue outreach to stakeholders.
The update highlighted contract design elements LAFCO will watch closely: (1) fixed-price structures and dead bands for specified annual volumes (Marin’s model was cited as an example), (2) clauses allowing resource substitution over time as local renewables come online, (3) risk-allocation between city and supplier and the potential need for city collateral or loan guarantees, and (4) phased rollout options to reduce near-term city exposure. The commission asked staff to ensure broad community outreach and participation in the coming months, especially with environmental and job-creation stakeholders. The SFPUC meeting to request negotiation authority was scheduled for Feb. 8; LAFCO will hold a joint meeting with SFPUC in February to review the timeline and associated budget assumptions.
