San Francisco Public Utilities Commission Meeting Summary

Date: May 9, 2023, 9:30 AM (Pacific)

The San Francisco Public Utilities Commission (SFPUC) held a regular meeting on May 9, 2023. The meeting included approval of minutes, recognition of a retiring employee, reports from the General Manager, adoption of wholesale water and CleanPowerSF rates, amendments to contracts for the Balboa Reservoir and Transbay Joint Powers Authority projects, and general public comment.

Consent Calendar

• The commission unanimously approved the consent calendar (4-0), which included several routine contracts and agreements for sewer, water, and power infrastructure projects. Specific items included awards for sewer rehabilitation (Items 6F and 6G) and other minor contracts.

Public Comments & Testimony

• Item 7 (Wholesale Water Rates): Nicole Sancula (representing Boska CEO) spoke in support of the proposed staff action.
• Item 7: Peter Dreckmark (Policy Director, Tuolumne River Trust) commented that water demand projections are lower than the Urban Water Management Plan and urged the commission to adjust demand projections and the design drought length to avoid unnecessary investments and impacts on the Tuolumne River.
• General Public Comment: Teresa Wallace (creator/founder of I Am That I Am Bereavement Trauma and Crisis Center) advocated for a trauma center in San Francisco, noting the lack of mental health resources and requesting SFPUC sponsorship of a space in Bayview Hunters Point. She also inquired about any SFPUC connection to a property at 4101 3rd Street.
• No other members of the public spoke during the meeting.

Discussion Items

• Item 4: Employee Retirement Recognition – The commission recognized Constance “Connie” Smith for 32 years and 9 months of service. Ms. Smith worked in the Business Services Division, processed invoices, and served as a union representative (SEIU Local 1021). Commissioners and staff praised her dedication and customer service.
• Item 5a: Quarterly Audit and Performance Review Report – Irella Blackwood (Audit Director) reported that as of March 31, 2023, 15 audits (52% of the planned portfolio) were complete, 8 (27%) were in progress, and 6 (21%) had commenced in the third quarter. Key completions included an Enterprise Risk Management Cyber Risk Assessment and clean financial statement audits for all three enterprises. The audit bureau is monitoring recommendations from eight public integrity reports. Five audits are anticipated in the fourth quarter, and six more audits are planned to launch. Commissioner Rivera asked about “Super Green and Super Green Saver” programs; staff agreed to provide follow-up information.
• Item 5b: Community Contractor Update – Ben Poole and Steve Robinson presented data on LBE (Local Business Enterprise) participation, focusing on micro-LBEs. On the Biosolids Digester Facilities Project (worth $1.78 billion), 77 micro-LBEs have been awarded 186 contracts worth $194 million. From District 10 (Bayview Hunters Point), 55 micro-LBEs have been awarded 120 contracts worth $112 million. The project exceeds the 12% LBE goal, currently at 17%. Staff acknowledged concerns from community contractors and are working to strengthen the liaison role and develop a plan for future projects. Commissioners commended the progress and stressed continued improvement.
• Item 5c: Report on Recent SFPUC Activities – General Manager Herrera celebrated the 100th anniversary of the O’Shaughnessy Dam/Hetch Hetchy system, describing it as a testament to San Francisco’s ingenuity and stewardship. Commissioners expressed appreciation.
• Item 7: Wholesale Water Rates FY 2023-2024 – Aaron Kurbanova (Financial Planning Director) presented a proposed 9.7% rate increase for wholesale customers, bringing the rate to $5.21 per CCF (100 cubic feet, equivalent to 748 gallons). Drivers include low water sales volumes and the depletion of the balancing account. The increase is lower than the earlier estimate due to expected recovery in water usage. The commission voted 4-0 to adopt the rates.
• Item 8: Balboa Reservoir Purchase Price Amendments – Ron Flynn (Deputy General Manager) explained amendments to loan documents for the sale of Balboa Reservoir. The original payment schedule is revised due to changed market conditions; the next payment is due by December 31, 2026, but the purchase price, interest (3%), and ultimate maturity (December 2028) remain unchanged. This allows for development of 290 affordable housing units in Phase 1. The commission approved the resolution 4-0, recommending Board of Supervisors approval.
• Item 9: Interagency Cooperation Agreement with Transbay Joint Powers Authority (TJPA) – The commission authorized the General Manager to consent to an agreement for coordination of utility relocations for the downtown rail extension (Phase 2 of the Salesforce Transit Center project). The agreement ensures reimbursement for SFPUC work. Commissioner Rivera asked about lessons learned from the Van Ness project regarding asset management and digital mapping; Mr. Flynn agreed to follow up. Approved 4-0.
• Item 10: Public Hearing on CleanPowerSF Rates FY 2023-2024 – Mayi Yap (Principal Revenue and Rates Analyst) proposed a 15% increase in CleanPowerSF generation rates, driven by a 60% increase in power supply costs. The total bill increases for residential customers will be 4-7%, but CleanPowerSF rates remain 0.5-3% lower than comparable PG&E rates. The commission also approved a mechanism to set temporary rates for new rate schedules using a formulaic approach, allowing the General Manager to implement companion rates when PG&E introduces new schedules. Commissioner Maxwell inquired about the default rate schedule and competitive dynamics; staff explained the default is the most common schedule and that the temporary rate formula ensures competitiveness. The proposal passed 4-0.
• Item 11: Contract Amendments with Western Area Power Administration – The commission approved amendments to two contracts (Full Load Service and Scheduling Coordinator) for power service to Treasure and Yerba Buena Islands. The contracts are extended by five years (to December 31, 2029) with an increased not-to-exceed amount of $41.5 million. The action requires Board of Supervisors approval. Passed 4-0.
• Item 12: Communications – Informational items only, including an annual CleanPowerSF SuperGreen update and water supply conditions.

Key Outcomes

• Approved minutes of April 25, 2023 (4-0).
• Retired employee Connie Smith recognized with a resolution.
• Noted quarterly audit status and community contractor progress.
• Adopted wholesale water rates for FY 2023-2024 with a 9.7% increase (4-0).
• Approved amendments to Balboa Reservoir loan documents (4-0).
• Authorized interagency cooperation agreement with TJPA (4-0).
• Adopted CleanPowerSF rates for FY 2023-2024 (15% generation increase) and approved temporary rate-setting mechanism (4-0).
• Approved contract amendments with Western Area Power Administration (4-0).
• Heard general public comment from Teresa Wallace regarding a trauma center; no action taken.
• Meeting adjourned.