OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
525 Golden Gate A venue
San Francisco, CA 94102
T 415.551.4720
TTY 415.554.3488
[email protected]
DATE: November 1, 2023
TO: Clerk of
the Board of Supervisors
Office of the Controller
THROUGH: D
ennis Herrera, General Manager
Barbara Hale, Assistant General Manager, Power
FROM: Mi
chael Clark, Finance and Administration Manager, Power
SUBJECT: A
nnual Report on the Low Carbon Fuel Standard Credit Sales Fund Pursuant to Administrative Code Section 10.100-92
The following annual
report has been prepared for the Board of Supervisors
(Board) in accordance with Section 10.100-92 of the Administrative Code.
In Ordinanc
e No. 199-19, the Board established the Low Carbon Fuel Standard Credits Sales Fund (Fund #25455) and authorized the General Manager of the San Francisco Public Utilities Commission (SFPUC) to enter into one or more agreements to sell Low Carbon Fuel Standard credits. The Board also required the
SFPUC to “submit an annual written report to the Board of Supervisors and the Controller: (1) specifying the number of Low Carbon Fuel Standard credits sold during the previous fiscal year, the price received for each credit, and the total amount of the sales; and (2) describing the expenditures made from the Low Carbon Fuel Standard Credits Sales Fund during the previous fiscal year.” This report
meets the reporting requirements established by Section 10.100-92 of the Administrative Code for Fiscal Year 2023.
The City
’s Low Carbon Fuel Standard Credits
In Asse
mbly Bill 32, 1 entitled the Global Warming Solutions Act of 2006, the Legislature required California to reduce its greenhouse gas emissions to 1990 levels by 2020.
To achieve
this goal, the California Air Resources Board (CARB) adopted measures and programs to reduce greenhouse gas emissions from all sectors of the California economy. In 2009, at the direction of then Governor Schwarzenegger, CARB adopted Low Carbon Fuel Standard regulations to 1 Statutes 2006, Ch. 488.
reduce the greenhouse gas intensity 2 of transportation fuels by 20% by 2030.
The regulations set benchmarks for greenhouse gas emissions for each type of transportation fuel that are increasingly reduced over time. Transportation providers that use fuels with a carbon intensity (or greenhouse gas emissions) lower than the benchmark established by CARB generate Low Carbon Fuel Standard credits that can then be sold.
The San Fr
ancisco Municipal Transportation Agency (SFMTA) uses
greenhouse gas -free electric energy provided by SFPUC’s Hetch Hetchy Power to operate its electric public transit fleet (electric trolley buses, cable cars, historic streetcars, and light rail vehicles). Because this fleet operates with a carbon intensity significantly below the Low Carbon Fuel Standard target, the SFMTA accumulates credits that can be sold.
In O
ctober 2017, the SFPUC and SFMTA entered into a Memorandum of Understanding approved by the SFPUC in Resolution 17- 0199 that specifies the SFPUC execute the sale of SFMTA’s Low Carbon Fuel Standard credits.
The Memorandum of Understanding also states that SFPUC and SFMTA share equally the net revenues from these sales, and their use of the revenues support general operations that reduce San Francisco’s carbon footprint and/or advance the City’s sustainability goals.
St
arting January 2022, the Port of San Francisco (Port) signed up for the Hetch Hetchy Power Premium – Low Carbon Fuel Standard Partnership Program and began earning Low Carbon Fuel Standard cre dits for its provision of shoreside power to docked ships. As part of the initial terms of this partnership, the SFPUC executes the sale of the Port’s Low Carbon Fuel Standard credits, on behalf of the Port, retaining 20% of the revenues from these sales , returning the remaining 80% to the Port. Starting July 2022, the terms of the partnership changed, and the Port now receives 100% of the revenues from LCFS credit sales, and instead pays a service fee to SFPUC for performing the credit sale.
FY23
Low Carbon Fuel Standard Credit Sales
For
Fiscal Year 2023 , the number of Low Carbon Fuel Standard credits sold, price received for each credit, and total amount of the sales are set forth in the table below. There was a total of one transaction in the fiscal year with revenue of $1,364,767.60.
Quantity
(Calendar Year)
Credits
Sold
Average Price
Received Amount Date
Quantity 1 (2023) 19,061 $71.60 $1,364,767.60 3/9/2023
Total 19,061 $1,364,767.60
Per
the respective agreements with each agency, SFPUC transferred $561,379.80 to SFMTA and $210, 160.32 to Port. The remaining $593,227.48 was retained by the SFPUC for the Hetch Hetchy Power program. 2 The Low Carbon Fuel Standard regulations use the term “carbon intensity” instead of greenhouse gas intensity.
FY23
Low Carbon Fuel Standard Expenditures
SF
PUC spent $1,162,388 from Low Carbon Fuel Standard Sales fund in FY23, as detailed in the table below. This included expenditures of appropriations from prior fiscal years. SFPUC will continue to expend Low Carbon Fuel Standard proceeds for these and similar projects in future fiscal years.
Project Name FY23
Expenditures
Northpoint Solar Refurbishment $554,696
Electric Vehicles in New Construction $308,509
GoSolarSF $76,545
Retail Customer Programs $68,415
Moscone Solar Refurbishment $47,816
E-Mobility $38,299
Moscone West Solar Electric Project $32,742
Small Renewables $12,690
San Francisco Police Academy Solar Carport $9,230
Distributed Energy Resources Project Development $6,739 Utility Field Services Project Support $6,708
Total $1,162,388
• The Northpoint Solar Refurbishment project includes the replacement of existing solar modules and inverters, which were at the end of their life cycle.
• The Electric Vehicles in New Construction Program i s a newly launched program that provides incentives for installing electric vehicle charging infrastructure in new buildings for Hetch Hetchy customers. • GoSolarSF suppo rts the local solar industry and environmental goals with incentive offerings for customer adoption of rooftop solar throughout San Francisco, as well as addressing social and equity goals with a workforce program and low income and non-profit incentives.
• Retail Customer Programs pr
omote emission reductions and
decarbonization through electrification, energy efficiency, and improved utilization of SFPUC’s Hetch Hetchy electricity within customer facilities and buildings.
• The Moscone Solar Refurbishment Project will a llow for the replacement of solar array wiring that is at the end of its life cycle to improve system performance. The installation of the original project is approaching its twentieth anniversary.
• E-Mobility is a new program currently in development to provide incentives to help low-income customers purchase electric bicycles. • The Moscone West Solar Electric Project will a llow for the installation of an 800-kilowatt rooftop mounted photovoltaic generation system owned and operated by the SFPUC Power Enterprise.
• The Small Renewable Project f unds municipal distributed energy resource projects, such as solar installations.
• The San Francisco P olice Academy Solar Carport Project includes a 150-kilowatt solar carport and battery storage system at the San Francisco Police Academy. Additional analysis will be performed to determine the feasibility of expanding the functionality of this renewable system into an islanding microgrid with electric vehicle charging. • Distributed Energy Resource Project Development funds in itial project scoping and development of potential new advanced energy assets. • Utility Field Services Project Support funds t he support of existing solar electric assets in Power’s project portfolio.
Eac
h year, the transportation providers that generate LCFS credits are required to report back to CARB on their use of revenue from the sale of credits. The 2022 reporting year is the most current year that has been submitted. For the 2022 reporting year, SFMTA reported out the following to CARB:
SFM
TA operates the nation’s largest fleet of electrically-operated trolley buses as well as the nation’s 3rd busiest light-rail vehicle fleet. Together with the SFMTA’s hybrid electric bus fleet, SFMTA provides low/no emission public transportation options for approximately 700,000 daily riders. All LCFS proceeds go towards supporting LCFS program goals and advancing San Francisco’s ambitious climate action goals for the transportation sector: (1) shift 80 percent of all trips to sustainable modes by 2030 and (2) eliminate citywide GHG emissions by 2050. A number of initiatives across a suite of strategy areas help to progress these goals and SFMTA’s efforts to expand and/or improve access to electrified public transportation and alternative modes of travel like walking and biking. Examples include, supporting replacement of our hybrid bus fleet with all-electric vehicles and investments in our electric- operated right of way infrastructure like Central Subway. Central Subway entered revenue service January 7, 2023. Additionally, the SFMTA's Bus Rapid Transit corridor began revenue on April 1, 2022.
Since Port sold LCFS credits for the first time in the most recent fiscal year, they have not been required to report back to CARB yet on expenditures. Port will report out their use of the proceeds to CARB for the 2023 reporting year .
This will be included in next year’s LCFS Sales Memo.
Should y ou have any questions, please contact Barbara Hale, S
FPUC Assistant General Manager, Power, at [email protected] and 415-613-6341.