DEPARTMENT
Power Enterprise
AGENDA NO.
8e
MEETING DATE
October 22, 2024
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Calendar: Consent Calendar
Contract/Project Manager: Julia Olguin, Origination and Power Supply Manager
Approve a Greenhouse Gas-Free Energy Contract for CleanPowerSF that is Subject to Binding Arbitration with the Pacific Gas and Electric Company and Authorize the General Manager to Seek Board of Supervisors Approval
Summary of
Proposed
Commission Action:
Approve a Greenhouse Gas-Free Energy Contract for CleanPowerSF that is subject to binding arbitration with Pacific Gas and Electric Company , in an amount not -to-exceed $8,955,000 and with a duration of one year , and authorize the General Manager to seek Board of Supervisors approval of the contract.
Background: Public Utilities Code Section 366.2 allows public agencies to aggregate the electrical load of interested electricity consumers within their jurisdictional boundaries. Pursuant to this law, the City and County of San Francisco (City) established a community choice aggregat ion
(CCA) program known as
CleanPowerSF to provide electric power to the residents and businesses located within its jurisdiction. The San Francisco Board of Supervisors established the City’s CCA program in May 2004 (Ordinance 86 -04). The Ordinance found that CCA would allow the City to increase the scale and cost- effectiveness of renewable energy, conservation and energy efficiency in San Francisco, and to increase local control over electricity prices and resources.
Today, CleanPowerSF is providing clean energy to more than 380,000 active customer accounts within San Francisco with an annual energy requirement of approximately 3,000 gigawatt-hours. The program has maintained an opt - out rate of about
4.5% and has attracted more than 8,200 upgrades to
SuperGreen, CleanPowerSF’s 100% Renew able Portfolio Standard eligible electricity product. CleanPowerSF also offers SuperGreen Saver, which features 100% Renewable Portfolio Standard eligible electricity at a 20% discount to qualifying customers.
Chapter 9, Section 902 of the City’s Environmental Code outlines emissions reduction targets for San Francisco, along with the sustainability goals needed to meet them. Among the sustainability goals is a target to supply 100% renewable electricity by 2025 and 100% renewable energy by 2040.
To acquire the renewable electricity supplies needed to meet and maintain the City’s clean energy targets , San Francisco Public Utilities Commission (SFPUC) staff submitted a bid on July 31, 2024 into Pacific Gas and Electric Agenda Title: Approve a Greenhouse Gas-Free Energy Contract for CleanPowerSF that is Subject to Binding Arbitration with the Pacific Gas and Electric Company
Commission Meeting Date: October 22, 2024
Company’s Greenhouse Gas -Free (“GHG-Free”) Energy Sale – Solicitation to purchase GHG-Free Energy from hydroelectric resources. Pacific Gas and Electric Company (“PG&E”) notified the SFPUC that its bid to purchase CY 2025 GHG-Free Energy was selected for a contract on August 6, 2024 and staff responded accepting the awarded bid, as required by PG&E to continue in the process.
SFPUC staff recommend that the Greenhouse Gas-Free Energy Contract for CleanPowerSF with the Pacific Gas and Electric Company be approved.
Scope of Contract: PG&E issued the GHG-Free Energy Sale Solicitation to solicit bids from market participants to purchase GHG -Free Energy generated in 2024- 2025.
The GHG-Free Energy offered in the Solicitation will be energy generated from large hydroelectric resources operated by PG&E.
The p roposed contract with PG&E will provide GHG- Free Energy to CleanPowerSF from hydroelectric resources from January 1, 2025 through December 31, 2025.
The proposed contract with PG&E requires that certain City contract -related requirements be waived, and t he General Manager has waived such requirements pursuant to the waiver authority of the San Francisco Administrative Code 21.43. San Francisco Administrative Code 21.43 delegates authority to the General Manager to enter into agreements with binding arbitration provisions with Investor-owned Utilities (IOUs), including PG&E, but not for contracts of this specific product type.
The proposed contract requires binding arbitration, and therefore will require approval from the Board of Supervisors.
PG&E’s solicitation required CleanPowerSF to sign the contract before receiving approval from the Board of Supervisors. As a result, the General Manager signed the GHG -Free contract on September 11, 2024, subject to Commission and Board of Supervisors ’ approval. The agreement includes a condition precedent that requires it will not be effective until it is approved by the Board of Supervisors. If it is not approved by the Board of Supervisors, there is no liability to the City or to CleanPowerSF ratepayers.
Funding and Costs: Funding Source: The cost of this contract will not exceed $8,955,000 for a duration of one year and will be funded entirely from CleanPowerSF customer revenues.
Not-to-Exceed Amount: $8,955,000
Schedule: Advertised (Pacific Gas and Electric GHG -Free Energy Sale – Solicitation): July 15, 2024
Estimated Contract Effective Date: December 2024
Delivery Start Date: January 1, 2025
Agenda Title: Approve a Greenhouse Gas-Free Energy Contract for CleanPowerSF that is Subject to Binding Arbitration with the Pacific Gas and Electric Company
Commission Meeting Date: October 22, 2024
Delivery End Date: December 31, 2025
Duration: one year
Environmental
Review:
This action does not constitute a “project” under the California Environmental Quality Act Guidelines section 15378(a) because it will not result in direct or indirect physical changes in the environment.
Recommendation: SFPUC staff recommend that the Commission adopt the attached resolution.
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, The San Francisco Board of Supervisors established a Community Choice Aggregation (CCA) program in 2004 (Ordinance 86-04) and has implemented the program called CleanPowerSF, through the work of the San Francisco Public Utilities Commission (SFPUC) in consultation with the San Francisco Local Agency Formation Commission (Ordinances 146-07, and 232-09); and
WHEREAS, In April 2019, CleanPowerSF completed citywide enrollment of residential accounts, with an annual energy requirement of approximately 3,000 gigawatt-hours; and
WHEREAS, On July 15, 2024, Pacific Gas and Electric Company (“PG&E”) issued a Greenhouse Gas-Free (“GHG-Free”) Energy Sale - Solicitation, to solicit bids from participants to purchase GHG-Free Energy generated in 2024-2025; and
WHEREAS, On July 31, 2024 SFPUC staff submitted a bid into the PG&E GHG-Free Energy Sale – Solicitation to purchase GHG-Free Energy from hydroelectric resources for CleanPowerSF for 2025 delivery; and
WHEREAS, On August 6, 2024 PG&E notified SFPUC that its bid to purchase 2025 GHG-Free Energy was accepted and on August 8, 2024, SFPUC staff responded to PG&E accepting the awarded bid, as required by PG&E to continue in the process; and
WHEREAS, The proposed GHG-Free Energy contract with PG&E represents one of the best available opportunities to secure 2025 GHG-Free Energy supplies in support of CleanPowerSF’s City electricity procurement requirement to achieve and maintain 100% clean and renewable electricity supplies starting in 2025; and
WHEREAS, The proposed 2025 GHG-Free Energy Contract with PG&E requires that certain City contract-related requirements be waived, and the General Manager has waived such requirements pursuant to the waiver authority of the San Francisco Administrative Code 21.43; and
WHEREAS, San Francisco Administrative Code 21.43 delegates authority to the General Manager to enter into agreements with binding arbitration provisions with Investor-Owned Utilities (IOUs), including PG&E, but not for contracts of this specific product type; and
WHEREAS, The proposed 2025 GHG-Free Energy Contract requires binding arbitration, and therefore will require approval from the Board of Supervisors; and
WHEREAS, PG&E’s solicitation required CleanPowerSF to execute the 2025 GHG-Free Energy Contract before receiving approval from the Board of Supervisors; and
WHEREAS, The General Manager signed the 2025 GHG-Free Energy Contract on September 11, 2024, subject to the condition precedent that the contract will not be effective until it is approved by the Board of Supervisors; and
WHEREAS, This approval does not constitute a “project” under the California Environmental Quality Act Guidelines section 15378(a) because it will not result in direct or indirect physical changes in the environment; now, therefore be it
RESOLVED, That this Commission hereby approves the CleanPowerSF 2025 GHG-Free Energy Contract with binding arbitration; and be it
FURTHER RESOLVED, That this Commission authorizes the General Manager to seek Board of Supervisors approval of the 2025 GHG-Free Energy Contract, subject to binding arbitration, in an amount not to exceed $8,955,000 and a contract duration of one year.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of October 22, 2024.
Director of Commission Affairs
San Francisco Public Utilities Commission