San Francisco Public Utilities Commission Meeting - June 27, 2023

The San Francisco Public Utilities Commission (SFPUC) met on June 27, 2023, at 9:45 AM to discuss a wide range of items including the Alternative Water Supply Plan, Hetch Hetchy Capital Improvement Program, wildfire mitigation, bond authorizations up to $450 million for the Water Enterprise, and a resolution on labor and environmental standards for the California Community Power Agency. The meeting included extensive public comment, particularly on water supply planning and the design drought.

Consent Calendar

• Approved items 5a–5e (contract awards and work acceptance) unanimously (4-0).

Public Comments & Testimony

• Item 4A (Alternative Water Supply Plan): Numerous callers and in-person speakers criticized the SFPUC's use of an 8.5-year design drought, calling it overly conservative and a "manufactured crisis." Speakers urged reducing the design drought by one year and using more realistic demand projections to avoid unnecessary rate hikes and environmental harm. Several speakers noted that the SFPUC has ample storage (e.g., four years' worth) and that demand projections are inflated. Peter Drekmeier (Tuolumne River Trust) and others called for a sensitivity analysis. Bosca (represented by Tom Francis) expressed support for the plan and commitment to collaboration.
• Item 4B & 4C (Hetch Hetchy CIP & Wastewater): No public comments.
• Item 4D (GM Report): No public comments.
• Item 10 (Transparency Resolution): Several speakers, including Moises Garcia (CAC Chair) and Alex Lantsberg (Restore Hetch Hetchy), praised the commission for adopting CAC recommendations and for its collaborative approach. Peter Drekmeier urged a similar resolution for the water enterprise.
• General Public Comment: Speakers raised concerns about public access at Hetch Hetchy, the civil grand jury report on the water system, and urged financial oversight improvements.

Discussion Items

• Alternative Water Supply Plan (Item 4A): Manisha Kothari presented the plan, noting an average gap of 92 million gallons per day (MGD) between supply and projected 2045 demands under a dry-year scenario, with a maximum obligation gap of 122 MGD. Six regional projects could fill 22–48 MGD. The plan recommends moving forward with Los Vaqueros Reservoir Expansion and Daly City Recycled Water Expansion (approx. 4.6 MGD combined) and adding staff. Commissioners Stacy, Paulson, and President Ajami questioned demand projections, on-site reuse potential, and affordability. President Ajami stressed the need to consider demand-side strategies and avoid overbuilding.
• Wildfire Mitigation Plan (Item 6): Staff presented the 2023 comprehensive revision and independent evaluator report. The plan includes a new Techno Silva wildfire analyst tool (first public utility to use it). The independent evaluator found the plan fully comprehensive and recommended approval. Commissioners Stacy and Ajami emphasized the need to adopt the independent evaluator's recommendations and to build in-house model capability. The item was approved 4-0 with an amendment to direct implementation of those recommendations.
• Bond Authorizations (Items 7, 8, 9): Staff presented three related items: approval of commercial paper dealer agreements, issuance of up to $450 million in Water Revenue Bonds (Series A & B), and issuance of refunding bonds (Series C & D) to take advantage of tax-exempt market conditions. The refunding will use a tender process to repurchase existing bonds at a discount, potentially saving 8% or more. The commission approved all three items (each 4-0).
• Resolution on Transparency and Labor Standards (Item 10): The commission adopted a resolution supporting transparency, environmental accountability, and labor standards for the California Community Power Agency (CC Power). The resolution builds on CAC recommendations and commits staff to advocate for comparable commitments in CC Power procurements. Approved 4-0.
• CleanPowerSF CC Power Cost Share (Item 11): Approved an annual payment of up to $100,000 (with 5% escalator) for 25 years to cover CleanPowerSF's share of CC Power's general and administrative costs. Commissioner Stacy was absent; approved 3-0.
• Redwood City & Cal Water Contract Amendment (Item 12): Approved minor map corrections and transfer of seven residences from Redwood City to Cal Water service area. Commissioner Stacy absent; approved 3-0.

Key Outcomes

• Consent calendar approved 4-0.
• Alternative Water Supply Plan received as information; final plan to be released publicly later that week, with a return to commission in fall for further action.
• Wildfire Mitigation Plan adopted 4-0 with amendment to implement independent evaluator recommendations.
• Commercial paper dealer agreements (Item 7) approved 4-0.
• Water Revenue Bond issuances (Items 8 & 9) approved 4-0 for up to $450 million in new money and refunding bonds; pricing expected in mid-July.
• Transparency/labor standards resolution (Item 10) adopted 4-0.
• CleanPowerSF CC Power fees (Item 11) approved 3-0 (Commissioner Stacy absent).
• Redwood City/Cal Water contract amendment (Item 12) approved 3-0.
• Commissioner-initiated items: none; next meetings (July 11 and 25) canceled, next meeting in August.