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525 Golden Gate Avenue
San Francisco, CA 94102
T 415.551.4720
TTY 415.554.3488
[email protected]
DATE: November 22, 2024
TO: Clerk of the Board of Supervisors
Office of the Controller
THROUGH: Dennis Herrera, General Manager
Barbara Hale, Assistant General Manager, Power
FROM: Michael Clark, Finance and Administration Manager, Power
SUBJECT: Annual 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 Ordinance 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 2024 . Should you have any questions, please contact Barbara Hale, SFPUC Assistant General Manager , Power, at [email protected] and 415-613-6341
I. The City’s Low Carbon Fuel Standard Credits
In Assembly 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 adopted measures and programs to reduce greenhouse gas emissions from all sectors of the California economy. In 2009, at the direction of then Governor
1 Statutes 2006, Ch. 488.
2 Schwarzenegger, the California Air Resources Board adopted Low Carbon Fuel Standard regulations to 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 th an the benchmark established by the California Air Resources Board generate Low Carbon Fuel Standard credits that can then be sold.
The San Francisco 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 October 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.
Starting January 2022, the Port of San Francisco enrolled in the Hetch Hetchy Power Premium p rogram, which provides 100% renewable energy that meets California’s Renewable Portfolio Standard requirements. Through this program, the Port began earning Low Carbon Fuel Standard cre dits for its provision of shoreside power to docked ships . According to the terms of the program , the port receives 100% of the revenues from Low Carbon Fuel Standard credit sales and pays a service fee to SFPUC for performing the credit sale.
Similarly, starting June 2023, San Francisco International Airport enrolled in the Hetch Hetchy Power Premium p rogram and began earning Low Carbon Fuel Standard credits for its provision of e lectric vehicle chargers and AirTrain (a people mover for transport within the airport campus) . The airport receives 100% of the revenues from Low Carbon Fuel Standard credit sales and pays a service fee to SFPUC for performing the credit sale.
II. FY24 Low Carbon Fuel Standard Credit Sales
For Fiscal Year 2024 , 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 $1,838,185.50.
2 The Low Carbon Fuel Standard regulations use the term “carbon intensity” instead of greenhouse gas intensity.
3 Quantity
(Calendar Year)
Credits
Sold
Average Price
Received Amount Date
Quantity 1 (2024) 28,499 $64.50 $1,838,185.50 4/24/2024 Total 28,499 $1,838,185.50
Per the respective agreements with each agency, SFPUC transferred $684,345.00 to SFMTA , $371,649.00 to the Port of San Francisco , and $97,846.50 to San Francisco International Airport. The remaining $684,345.00 was retained by the SFPUC for Hetch Hetchy Power.
III. FY24 Low Carbon Fuel Standard Expenditures
San Francisco Public Utilities Commission (SFPUC)
SFPUC spent $1,745,079 from Low Carbon Fuel Standard Sales fund in FY24, 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.
Program/Project FY24
Expenditures
Retail Customer Programs
Promotes emission reductions and decarbonization through electrification, energy efficiency, and improved utilization of SFPUC’s Hetch Hetchy electricity within customer facilities and buildings.
$826,050
Electric Vehicles in New Construction Program
Provides incentives for installing electric vehicle charging infrastructure in new buildings for Hetch Hetchy customers. $326,404
E-Mobility Program
Provides point-of-sale incentives to help eligible low-income customers purchase electric bicycles.
$176,033
Multifamily Electrification Program
Provides affordable housing developments with
electrification audits and roadmaps to assist with the
replacement of existing gas-fired equipment with all electric alternatives.
$147,672
Northpoint Solar Refurbishment Project
Includes the replacement of existing solar modules and
inverters at the end of their life cycle.
$124,988
4 Program/Project FY24
Expenditures
GoSolarSF Program
Supports 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.
$47,730
Small Renewables Projects
Funds municipal distributed energy resource projects, such as solar installations.
$47,211
Moscone West Solar Electric Project
Supports an 800-kilowatt rooftop mounted photovoltaic
generation system owned and operated by the SFPUC
Power Enterprise.
$19,099
Utility Field Services Project Support
Funds the maintenance and repair of existing solar electric assets in SFPUC Power Enterprise’s portfolio.
$13,114
Moscone Solar Refurbishment Project
Replaces solar array wiring that is at the end of its life cycle to improve system performance.
$9,135
Distributed Energy Resources Project Development
Funds initial project scoping and development of potential new advanced energy assets.
$6,421
Police Academy Solar Carport Project
Supports a 150-kilowatt solar carport and battery storage system at the San Francisco Police Academy.
$1,222
Total $1,745,079
Transportation Providers
Each year, the transportation providers that generate Low Carbon Fuel Standard credits are required to report to the California Air Resources Board on their use of revenue from the sale of credits . The 2023 reporting year is the most current year for which there exists submitted information.
5 1. SFMTA
SFMTA reported the following information to the California Air Resources Board for the 2023 reporting year:
SFMTA 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 Low Carbon Fuel Standard proceeds go towards supporting Low Carbon Fuel Standard 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 greenhouse gas 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.
2. Port of San Francisco
The Port of San Francisco reported the following information to the California Air Resources Board for the 2023 reporting year:
There were no projects funded by electricity credits proceeds in 2022 or 2023. The funding has not been spent and remains available.
3. San Francisco International Airport
San Francisco International Airport has not yet been required to report to the California Air Resources Board on expenditures because they sold Low Carbon Fuel Standard credits for the first time in the most recent calendar year. The airport will report their use of the proceeds to the Cali fornia Air Resources Board for the 2024 reporting year. SFPUC will include this information in next year’s annual report on the Low Carbon Fuel Standard Credit Sales Fund.