Request for Proposal for Consultant(s) to undertake the Planning of the Local Build-out for the CCA Program

Request for Proposals

FOR

The Proposed Build-out of Local Energy Resources for the

Community Choice Aggregation (CCA) Program

______

CITY AND COUNTY OF SAN FRANCISCO

LOCAL AGENCY FORMATION COMMISSION

(SF LAFCo)

1 DR. CARLTON B. GOODLETT PLACE

ROOM 244

SAN FRANCISCO, CA 94102-4689

Date Posted: February 20, 2014

Closing Date: 5:00 p.m., March 27, 2014

I.INTRODUCTION

II.LOCAL CONTEXT AND RELEVANCE OF LAFCO AND SFPUC INVOLVEMENT...... 4

III.COMMUNITY CHOICE AGGREGATION IMPLEMENTATION PROGRAM OUTLINE

IV.SCOPE OF SERVICES AND REQUEST FOR PROPOSAL:

V.PREFERRED PROCESS FOR CONDUCT OF THE CCA PROGRAM AND PROJECT

VI.DATA

VII.BUDGET

VIII.SCHEDULE

IX.MINIMUM QUALIFICATIONS AND PROPOSAL REQUIREMENTS

X.OTHER INFORMATION REQUIRED IN RESPONSE

XI.SUBMITTAL REQUIREMENTS

XII.EVALUATION CRITERIA; PRE-PRPOSAL CONFERENCE

XIII.OTHER INFORMATION

XIV.ERRORS AND OMMISSIONS IN PROPOSAL; MODIFICATION OR WITHDRAWAL OF PROPOSAL

XV.FINANCIAL RESPONSIBILITY

XVI.SUNSHINE ORDINANCE

XVII.RESERVATION OF RIGHTS BY SF LAFCO

XVIII.STATEMENTS OF ECONOMIC INTERESTS

XIX.STANDARD CONTRACT PROVISIONS

XX.SAN FRANCISCO BUSINESS TAX REQUIREMENTS

XXI.HUMAN RIGHTS COMMISSION REQUIREMENTS

XXII.GLOSSARY OF ACRONYMS

The City and County of San Francisco Local Agency Formation Commission (“SF LAFCo”)invite consultants to submit proposalsto the SF LAFCo related to the Local Build-out of Energy Resources of the Community Choice Aggregation program (the “CCA Program”).

I.INTRODUCTION

Pursuant to California State Assembly Bill 117 (Migden, 2002), the City and County of San Francisco (the “City” or “San Francisco”) has elected to become a Community Choice Aggregator (“CCA”) to provide electric power and a broad range of related benefits to the citizens and businesses located within its jurisdiction. The City has adopted numerous documents in order to guide the implementation of aggregating the electric power loads of its citizens and businesses in accordance with state and municipal law, including the City’s voter-approved Solar Bond Program (Charter Section 9.107.8, Proposition H, 2001) and Community Choice Aggregation Ordinance 86-04 (2004, Ammiano) and Community Choice Aggregation Ordinance and Draft Implementation Plan 147-07 (2007, Ammiano, Mirkarimi). In June of 2007, the City approved a draft Implementation Plan and by 2009 the San Francisco Public Utilities Commission (“SFPUC”) and the City had approved a Request for Proposals (“RFP”) for the CCA program. The City approved a revised Implementation Plan and SFPUC issued a second RFP in 2010. In 2011 SFPUC began negotiations with Shell Energy to secure services for the CCA program, issued the first of three customer surveys, and approved a contract with Shell Energy.

In 2012, SFPUC conducted a second customer survey, the City approved a contract with, and appropriated funds to move forward with the Shell Energy contract, and SFPUC began presenting CCA rate structures to the Rate Fairness Board. Finally, in 2013, the Rate Fairness Board held various meetings and verified that the rates proposed are “fair and just,” SFPUC conducted a third customer survey.However, SFPUC did not approve not-to-exceed rates. In September of 2013, the City, in Board of Supervisors Resolution 331-13, publicly encouraged SFPUC to approve not-to-exceed rates and launch the CleanPowerSF program.

San Francisco’s CCA Program is an ambitious and innovative effort to provide the citizens and businesses of San Francisco with a number of significant improvements in their electric power service; not least of which are possibilities for reduced energy costs, development of significantly higher renewable energy sources, reduced exposure to future fuel cost volatility, increased reliability, and improved environmental quality.

The renewable power generation proposed to be installed through the San Francisco CCA Program will result in the implementation of one of the highest percentage renewable power mixes for any retail seller of electricity nationwide. The proposed CCA Program will also result in the construction of the world’s largest municipal green power public works project— to provide much of the renewable power in the CCA portfolio. For these reasons, the implementation of San Francisco’s CCA Program will become a significant and historic development in the implementation of renewable energy technologies.

The City’s stated mission is for San Francisco residents and businesses to enjoy the option of a cleaner, local, and economically more secure powergeneration at competitive or lower cost than rates charged for generation by San Francisco’s current investor-owned utility service provider, Pacific Gas and Electric (PG&E). Long-term reduction of San Francisco ratepayers’ power bills is a program objective, as long as environmental objectives of the program continue to be met or exceeded as rates are lowered.The SFPUC and the San Francisco Department of the Environment (“SFE”) have prepared several reports pertaining to the build-out of local and regional renewable energy and energy efficiency installations. These documents include the SENA contract, theSFPUC proposed program as presented to the SFPUC Commission, the final CCA Implementation Plan presented to and approved by the CPUC, extensive local build-out plans prepared for the SFPUC by contractor Local Power, Inc. (LPI), and other reports. These studies have been included in Attachment A and are available online at None of these documents should be assumed as final, and the exploration of alternative plans that might better achieve program objectives is welcome.

II.LOCAL CONTEXT AND RELEVANCE OF SF LAFCO AND SFPUC INVOLVEMENT

A.Foundation of SFPUC and SF LAFCo Authority based in concept of Home Rule

In 1879, the California Constitution was amended to grant local jurisdiction the five basic aspects of “home rule.” They are:

  1. Cities may enact any local police, sanitary and other ordinances and regulations that are not in conflict with general law of the state.
  2. The state may not enact special laws which affect specific cities.
  3. The state shall not impose local taxes, but instead keep its taxing authority restricted to state purposes on an across-the-board basis.
  4. Cities may establish, purchase and operate municipal utilities to provide their residents with light, water, power, heat, transportation, means of communications and other types of services.
  5. Charter cities may exercise exclusive jurisdiction over “municipal affairs”.

Cities are granted many express powers in statute. They also have the implied power to do everything necessary to implement an express power. Over the years, limitations have been imposed by statute and case law upon these “home rule” powers. San Francisco is a Chartered, consolidated City and County and its Board of Supervisors, elected by district, also acts as its city council.

Important considerations:

Under the San Francisco Charter, the SFPUC isa department of the City and County of San Francisco that provides water, wastewater, and municipal power services to San Francisco. Under contractual agreement with 28 wholesale water agencies, the SFPUC also supplies water to 1.6 million additional customers within three Bay Area counties. The SFPUC system provides four distinct services: Regional Water, Local Water, Wastewater (collection, treatment and disposal), and Power.

B.LAFCo Establishment under State Law

In 1963, the State Legislature created Local Agency Formation Commissions (LAFCos) to help direct and coordinate California’s growth in a logical, efficient, and orderly manner. Each county within California is required to have a LAFCO. LAFCOs are charged with the responsibility of making difficult decisions on proposals for new cities and special districts, spheres of influence, consolidations, and annexations.

LAFCOs are required by the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (“CKH Act,” Government Code §56000 et seq.) to prepare service reviews of local agencies. LAFCos are required to conduct these reviews prior to, or in conjunction with, updating spheres of influence (“SOIs”).

SF LAFCo is responsible for reviewing and approving proposed jurisdictional boundary changes, including annexations and detachments of territory to and/or from cities and special districts, incorporations of new cities, formations of new special districts, and consolidations, mergers and dissolutions of existing districts. The full text of the CKH Act can be found in Government Code Section 56000, et seq.

The jurisdiction of the City and County of San Francisco is both a city and county. Therefore SF LAFCo reviews special projects and municipal services. SF LAFCo has been actively investigating the risks, benefits, and feasibility of various municipal and other public agency options for providing electric and, perhaps, other utility services.

The purpose and scope of any contract(s) resulting from this RFPwill be to assist SF LAFCo and other San Francisco agencies, commissions, or divisions, in providing (or empowering them to provide) the services and programs contemplated by the CCA Program. The selected consulting firm(s) will perform services under the direction of the SF LAFCo Executive Officer and the SF LAFCo Commission.

  1. Overview of SFPUC Role in Development of the CCA Program

The SFPUC is the City department responsible for implementing the CCA Program.

D.Overview of SF LAFCO Role in Development of the CCA Program

Assembly Bill 117, passed in 2002, provided an enabling basis for Community Choice Aggregation in California. Through S.F. Ordinance 86-04, passed in 2004, San Francisco elected to pursue Community Choice Aggregation, and to include 360 megawatts (MW) of clean energy generation and efficiency measures as part of the CCA Program. In 2001, San Francisco voters passed Proposition H, which allows the use of revenue bonds to finance renewable energy generation and energy efficiency equipment and facilities that can be used to support the CCA Program.

SF LAFCo has prepared studies regarding the CleanPowerSF Program (“CPSF”) which may be found at: (

E.SF LAFCo Authorization to conduct Advisory/Monitoring Project

S.F. Ordinance 146-07, passed on June 6, 2007, in section (b), provides that “The Board of Supervisors intends to ask the Local Agency Formation Commission to monitor the implementation process and advise the SFPUC and the Board of Supervisors regarding the progress of CCA development and implementation. To the extent the LAFCo agrees, the LAFCo will assist with the startup of the CCA Program and advise the Board of Supervisors, SFPUC and other agencies regarding all aspects of development, implementation, operation and management of the CCA Program, as established by Ordinance 86-04, this Ordinance and any other subsequent ordinances.”

SF LAFCo accepted that role through its Resolution dated September 28, 2007.

F.Organization of the SF LAFCo

The SF LAFCo is comprised of the following:

CommissionersRepresents

John AvalosCity Officer

David CamposCity Officer

London BreedBoard of Supervisors

VacantBoard of Supervisors

Eric MarBoard of Supervisors - Alternate

Hope SchmeltzerPublic Member

Leah PimentelPublic Member - Alternate

The SF LAFCo meets at the call of the chair, usually the 4thFriday of the month at 2:00 p.m.

III.COMMUNITY CHOICE AGGREGATION IMPLEMENTATION PROGRAM OUTLINE

The CCA program adopted by the Board of Supervisors authorized the SFPUC to modify the program as additional information became available for the best optimal program.

A.For a full description of the CCA Program implementation, Respondents are advised to fully review the Implementation Plan(see Attachment B for the final program design).

  1. The CCA Program is committed to universal access; therefore, all the electric customers within the City of San Francisco will have an opportunity to become CCA customers. It is anticipated, however, that the CCA Program will enroll customers in phases. The first phase would be between 20-30MW and would initially be served with market-purchased (and possibly some municipally-generated) clean electricity delivered to residential and/or commercial customers, with the expectation that some of the build-out of local generation and efficiency installations would begin during this first phase. Under the current program designs, 90,000 residential customers are included in the first phase. The timing of future phases will be influenced by both the success of Phase 1 and speed of build-out of new energy resources.
  2. The CCA Program is committed to equitable treatment of all classes of CCA customers. There will be no undue discrimination among customer classes in setting CCA rates. The CCA Program and its supplier will seek opportunities in siting renewable generation facilities at customer sites and offering particular customers customized CCA rates for those facilities— where these opportunities are of benefit to the entire CCA Program and, therefore, all CCA customers.
  3. The CCA Program is committed to providing the option of 100% renewable power, which will exceed requirements established by the CPUC for Load Serving Entities (“LSEs”) for Renewable Portfolio Standards (“RPS”), Resource Adequacy Requirements (“RAR”), and Greenhouse Gas Emissions. Part of the 100% renewable power may be made up with Category 3 renewable energy certificates (RECs), with the goal of the underlying energy coming from non-nuclear carbon-neutral sources.
  4. The CCA Program is intended to incorporate integrated in-city clean energy generation and energy efficiency installations, to the greatest extent possible with the understanding that some build-out will occur outside of the City. The Scope of Services requests a complete Energy Program Build-out targeting local build-out opportunities, identification of revenues, timing and specific project detail.One of the initial goals of the CCA Program was to provide 50% or more of program supply through local and regional sources within the first 10 years.

B.The SFPUC will be responsible for implementing and managing the CCA Program. However, AB117 requires the CCA Program to be authorized by the Board of Supervisors. Therefore, the Implementation Plan and relevant ordinances authorize the SF LAFCo to provide advice to and monitor the CCA Program on behalf of the Board of Supervisors.

C.SF LAFCo will monitor the SFPUC’s implementation of the CCA Program, provide advice and recommendations to the SFPUC, the Board of Supervisors or its Budget and Finance Committee, and propose measures and policies it deems reasonable and necessary to assure the successful implementation of the CCA Program.

IV.SCOPE OF SERVICESAND REQUEST FOR PROPOSAL

The following is a general statement of the types of services SF LAFCois requiring. Respondents to this RFP may set forth qualifications for any or all of the following services. The SF LAFCointend to contract with one or more consultants to render such services. Since SF LAFCo has a monitoring and advisory role in the CCA Program, it is probable that the consultant selected by the SFPUC to implement the CCA Program may not also be permitted to provide advisory/monitoring services to SF LAFCo. (Public Contract code Sections 10365.5 et seq.)

A.General Statement of Scope of Services Requested by the SF LAFCo.

1.The consultant(s) will provide professional assistance to SF LAFCo on an as-requested basis.

  1. SF LAFCo seeks consultant(s) to prepare a CPSF Local Build-out plan which includes details of a full citywide integrated clean energy and efficiency installation network, timing of expected revenues, comprehensive financing options for the program, anticipated local jobs, impacts to the local economy, and overall plans for implementation. Specific tasks are set forth below.

B. General Statement of Services Requestedby SF LAFCo.

1.The consultant(s) will provide professional assistance to SF LAFCo.

2.The CPSF build-out plan would support or exceed the general public policy goals of CCSF’s 2011 Updated Electricity Resource Plan (adopted by the SFPUC in March 2011 and endorsed by the Board of Supervisors in August 2011), as follows:

•Ensure Reliable Power

•Maximize Energy Efficiency

•Develop Renewable Power

•Increase Local Control

•Provide Affordable Electric Bills

•Improve Air Quality

•Maximize Local Job Creation

•Support Environmental Justice

•Promote Economic Opportunities

  1. CPSF’s strategic direction is also informed by the Mayor’s Climate Plan and the City’s Renewable Task Force Report.
  1. CPSF’s build-out strategies would contribute to the implementation of certain specific recommendations of the 2011 Electricity Resource Plan (ERP), which are to:

•Improve and expand energy efficiency programs in San Francisco.

•Promote the development of behind-the-meter resources to create jobs and encourage the optimal combination of energy efficiency, on-site generation (e.g. on-site wind or solar as well as efficient, low emitting cogeneration) and load-shifting and demand response capability through smart-grid technology and energy storage.

•Develop San Francisco as a “Green Test Bed” to promote and encourage the deployment of new energy technologies within the City and attract green energy firms to locate within the City, including finding alternate or new financing opportunities.

•Advance and support Community Scale Energy Systems, both privately-owned as part of new development and through increased use of City-provided infrastructure where possible.

•Promote storage deployment as an alternative to the existing use of diesel and natural gas-powered back-up generation.

•Incorporate locally-developed renewable and GHG-free resources (including energy efficiency) into CPSF’s supply portfolio where feasible and cost-effective.

  1. “Build-out” in the context of the existing CPSF program generally includes two components: energy efficiency and locally-owned or controlled electricity resources. Management of supplies and demand (e.g. with technologies that control load curves), storage, electric vehicle charging infrastructure and microgrids are included in these program components. The RFP requests that Bidders acknowledge this but to also explore opportunities to enlarge and accelerate the Build-out Program.

CPSF has a draft short term procurement strategy that relies primarily on market purchases from a procurement contractor, Shell Energy North America (SENA), for up to about 30 (MW). The City’s policy is for CPSF’s electricity supply portfolio to be 100% renewable at all times, whether CPSF relies exclusively on market purchases or as it develops a more diversified portfolio with local resources. Consultant(s) should review alternatives to the SENA contract that include direct purchasing by the SFPUC or other contract alternatives.