Watch your eardrums.

Good afternoon.

Today's meeting of the San Francisco Public Utilities Commission will now come to order.

Ms.

Lanier, can you please call roll?

President Arce.

Here.

Vice President LeBroni.

Here.

Commissioner Jamdar?

Here.

Commissioner Stacey is excused.

Commissioner Thurlow.

Here, you have a quorum.

Thank you, Ms.

Lanier.

Before calling the first item, I'd like to announce that the San Francisco Public Utilities Commission acknowledges that it owns and are stewards of the unceded lands located within the ethnohistoric territory of the Moekma Alone tribe and other familial descendants of the historic federally recognized Mission San Jose Verona Band of Alameda County.

The SFPC also recognizes that every citizen residing within the Greater Bay Area has and continues to benefit from the use and occupation of the Moekmaalone tribe's aboriginal lands since before and after the San Francisco Public Utilities Commission's founding in 1932.

It is vitally important that we not only recognize the history of the tribal lands on which we reside, but also we acknowledge and honor the fact that the Moekma Loney people have established a working partnership with the SFPUC and our productive and flourishing members within the many greater San Francisco Bay Area communities today.

Item three, approval of the minutes.

The Commission will consider the minutes of April 14, 2026 at the next Commission meeting.

Item four is general public comment.

Members of the public may address the Commission on matters that are within the Commission's jurisdiction and are not on today's agenda.

Members present who wish to speak are encouraged to complete and submit to the Director of Commission Affairs a speaker's card located on the table to the left of the public gallery seating area.

Please note that members are called to the podium to speak in the same order that cards are received.

I'd like to remind the public as we begin public comment that the Commission values civic education, engagement, and encourage respectful communication at the public meeting.

We ask that all public comment be made in a civil and courteous manner, and that you please refrain from the use of profanity.

Thank you.

Remote callers, please raise your hand if you wish to provide general public comment.

Are there any members of the public present who wish to comment?

First up, I have Mr.

Massood, summary.

No, no, no.

Mr.

Francisco de Costa.

Commissioners.

You've heard me talk about the three employees.

Innocent employees that were fired.

So we have reached a point where we brought this to the Inspector General and to Osho.

And we have empirical data.

And I want to speak about it.

The reservoirs in our city are filthy.

You can go to the one at sunset.

You can go to the one at University Mount.

Are filthy.

Filthy, I said.

I don't want to describe it because if I describe it, the people at home will come to know exactly what's going in there.

So I'm bringing to your attention that we are going to go to the media.

Because you are not returning our calls.

You have no empathy, and as I said, no standards and have no etiquette.

Thank you very much.

Thank you.

Next I have Reverend Ronnie Chisholm.

Good afternoon, Commissioners and public at large.

I'm here to talk about a system that is broken that is designed to serve the people.

A water system that is not providing, and we're paying premium dollars for drinking water.

We are paying premium dollars for waste water.

And we are promised a system that would convert wastewater to usable water in other areas, and that's not happening.

And I'm really concerned about that, that our quality of drinking water is very poor.

I'm a Bayview resident.

Just two weeks ago, one of my neighbors pulled me over and said, Hey, I turned on my faucets this morning, and dark water came out that you experienced the same thing.

I would like to know what's happening with the hundreds of millions of dollars that are spent that we're promised to get quality water and a quality of life from the service that the SFPUC is doing.

What's happening with our gatekeepers?

Who's holding who responsible?

It's a health crisis that maybe we should really take it seriously, because we have a city that's in crisis and that really doesn't know it.

And I don't think we should be marching in the dark.

So please let's bring some attention to that and start holding people accountable.

If we can't, let's get someone in there who will and who can.

Thank you.

Next we have Johnny Chanon.

Okay.

I am here today.

First, let me thank you guys for having this.

You know, I don't get too many opportunities to put the government's feet to the fire.

So thank you for this opportunity.

And I'm and with that in mind, I'm here to speak truth to power.

Uh the first thing that's not on the agenda that I like to discuss with you has been a pain in my for a long time.

This is the typical bill that is sent to people, demand for payment.

And on this thing, it it talks about a bond that is 24 years old.

Okay?

I want to know to what percentage have we accomplished the objective associated with the original bond, and when is this bond going to expire?

Are they going to play this saw in perpetuity?

Um also related, I don't mean to jump ahead, but on here it says a bond.

You guys are proposing a rate increase.

You want a more money, float a bond.

Okay?

That's where this belongs, not adjudicated by some appointed political people.

And then lastly, this convoluted conniving canard committed on the people on the rate holders on this storm water component where they charge you because you have a roof on your house and a driveway.

The the the ludicrousness of this is they charge you 365 days of the year, even when it's not raining.

They're charging you for this storm water component.

So uh I'll I'll say my other for the agenda, but I I really like to get some uh response concerning the bond from two thousand.

Thank you.

Next we have Eileen Boken.

Thank you.

Right?

Now I sit down.

Please.

Thank you.

Eileen Bulkin, Coalition for San Francisco Neighborhoods, speaking on my own behalf.

Repeating comments made at the Capitol Planning Committee on April 20th.

April 18th was the 120th anniversary of the 1906 earthquake.

On April 14th, the fire department held a live emergency firefighting water system demonstration, including hydrants, fire trucks, and a fire boat.

The fire chief led the event with the mayor and the PUC general manager participating.

The Bay City News article on this event also referred to potential future funding, and I quote a dedicated high pressure water system, separate from the regular supply, would receive 130 million dollars.

End quote.

On April 15th, the mayor posted a video on his official Instagram account, and he made statements regarding continuing to expand our dedicated emergency firefighting system.

However, the April 14th PUC Commission meeting included agenda item number twelve to approve an amendment to contract number PRO.0163 parenthesis R for engineering services for the potable emergency firefighting water system, not the dedicated emergency firefighting water system.

So which is it?

Dedicated or potable?

And finally, is this Bait and switch?

Thank you.

Thank you.

Moderator, are there any calls who have their hand raised for public comment?

Isn't there we have another member of the public here in the gallery?

This is for general public comment?

Okay.

And your name, please?

So I have you for number eight.

Do you want to speak for general public comment as well?

Okay.

Please go ahead.

Denise Lewis speaking as a San Francisco homeowner and member of the California Native Plant Society, which supports my advocacy.

I'm speaking as an individual.

I have a few questions about the emergency firefighting water system that I hope to have answers for.

I suggest you hold a hearing to uncover the reason why staff chose not to adopt the full build out recommended by their consultant AECOM.

And exactly who made this decision.

Further, exactly who decides when and where the system should be expanded?

And what is their timetable?

Will they complete full build out by 2034 in accordance with the Board of Supervisors' state of urgency?

The next major earthquake could be today, tomorrow, or any time soon.

Time is of the essence to expand the system to all unprotected neighborhoods.

And just for the general public, the 2026 ballot measure for earthquake safety and emergency response includes only 130 million dollars to expand the emergency firefighter, firefighting water system when a full build-out would exceed three billion dollars.

Thank you.

Thank you.

Moderator.

Are there any calls who have their hand raised for general public comment?

Ms.

Lanier, there's one caller that wishes to be recognized.

Thank you.

Caller of a mute at your line.

You have two minutes.

Thank you.

Good afternoon.

This is Peter Dreckmeyer, Policy Director for Yosemite Rivers Alliance.

At your meeting on January 29th, General Manager Herrera mentioned that staff is looking into water supply planning and demand management.

Sounds good.

But they won't present their analysis until after the urban water management plan is finalized and submitted to the state.

This is exactly what happened five years ago.

A workshop on water demand projections and demand management took place two weeks after the 2020 urban water management plan was filed.

The Commission isn't able to make the best decisions because you're not presented with information in a timely fashion.

And so Moran's comment continues to resurface.

He said, I can't agree with any comment that the city's operation rule is overly conservative.

That comment was made in 1994, more than three decades ago.

Here's a quote from Palo Alto's 1990 Urban Water Management Plan.

It is anticipated that in the coming decade, peak summer system demands will exceed the hydraulic capacity.

325 million gallons per day of the three existing pipelines.

325 million gallons per day.

That was the understanding at the time Anson Moran made this statement.

In the 1980s, studies projected demand would be twice what it is today.

It's been under 225 million gallons per 200 million gallons per day for the past 11 years.

What else has changed?

Adoption of the water first pulse has made a huge difference.

On July 13, 2021, Steve Ritchie presented to the Commission.

He had a slide showing the precipitation in 2020-21.

It was almost exactly the same as 1976.

However, on July 10th, 2021, the SFPC has 350,000 acre feet more in storage than on the same date in 1977.

I have more examples, but I'm running out of the caller for comments.

Your time has expired.

Ms.

Lanier, there are no more callers that wish to be recognized.

Thank you.

Item five, report of the General Manager.

Ms.

Lanier, nothing to report.

Thank you.

Item six, Bay Area Water Supply and Conservation Agency report.

Good afternoon.

Could I have the slides up, please?

Greet.

Uh good afternoon, President R.

Say and Commissioners.

Today I am presenting the results of Bosca's annual report and survey of its member agencies.

We gather agency data as well as information from SFPUC staff to pull together this report the spring of each year.

So I'm just going to go through about six slides and I'm just going to hit the highlights of them.

I do want to mention that the report itself is in great detail and is available on the Bosca's website at BAWSCA.org.

So our first slide shows our demand over time as compared to population overtime.

And while we continue to see a drought rebound starting in 2023 and up through 2025, the overall demand remains low, and we are using as a Bosca region, 26% less water than in 1986-87 with a 35% population increase.

You have seen that kind of slide before, and that is very typical.

The next slide is the pie chart of where Bosca agencies get their water.

As we talk uh often uh Bosca agencies get about two-thirds of their water from the regional water system.

Um but they do have many other water sources, including groundwater, recycled water, and and uh for some of the agencies in the South Bay, uh some other other water sources.

Um but I this is a new chart for this year, uh, which shows the results uh in comparison uh for our uh the for 2050 in the demand study that we just completed.

Um actually that that's interesting because it shows a lower uh relative reliance on the San Francisco regional water system.

While the number goes up, the demand is higher from San Francisco.

We're actually, as our Bosca region, developing more sources of supply.

And so you see that 67 percent number is down to about 61 percent in 2050, according to the projections that were made in the demand study that that we just completed.

Uh I did want to highlight some um drastic differences here on this slide.

This shows our average residential use for the Bosca region, uh 79.3 gallons per capita per day in 2012-2013, dropping to that 58.9 that I talked about.

And interestingly, um, in 2012-2013, we had 15 agencies who had uh residential gallons per capita per day over 70, uh, which is uh quite a lot of water.

Um we're now proud to say that we're down to four agencies that are in that situation.

And more importantly, we have eight agencies that are now uh in uh uh gallons per capita per day for residential of less than 45, which is extremely comparable to this the numbers for San Francisco itself.

Um so you know, we're really proud of the achievement of conservation that's uh water use efficiency that's been going on throughout the Bosca region for that period of time.

And the last slide that I'll leave you with is a relative chart.

This has shown the the uh X-axis here is the percent of population.

And so you can see while there are three agencies that have a lot of water use per capita, um, they don't make up a lot of our of our population.

And um so while the the 42 percent of the service area is using less than less for its total residential use than what the state considers to be uh ideal indoor water use.

Um so these are very efficient customers.

Uh again, some of them are even more efficient than that.

Um that is the end of my report today.

So happy to take any questions.

Um leave that with you.

Thank you, Mr.

Smagel.

Any questions on the Bosca report, colleagues?

No, seeing none.

Well, thank you very much.

Once again, we'll take public comment on your report.

Thank you for your partnership and your leadership at Bosca.

Remote callers, please raise your hand if you wish to provide comment on item six.

Are there any members of the public present who wish to comment on this item?

Seeing none, moderate uh one one member, Ms.

Lanier.

Oh, thank you.

Commissioners.

If you really want to address the water situation, we have to go to nineteen oh six to the earthquake.

And then we need to go to nineteen thirteen to read the RECO Act.

And somewhere along the line.

The Commissioners and the city, and some of the mayors, most starting with nineteen ninety six, have chosen to dole out our water in a manner which is not in keeping with the RECA Act.

And if you don't do something about it, then you will be failing miserably.

That water was primarily meant for San Francisco.

For the municipal and the army.

And I worked at the presidio, so I know the details.

So stop hoodwinking us in broad daylight.

Follow the RECA Act.

And stop doling out our water which belongs to the indigenous people that was stolen.

Moderator, are there any calls who have their hand raised?

Ms.

Lanier, there's one caller that wish to be recognized.

Thank you.

Caller, I have a muted your line.

You have two minutes.

Thank you.

Peter Dreckmeyer, the Senate River Collier.

I appreciated Mr.

Smeagel's presentation and all the great progress Bosca has made.

And this reinforces my point about how much has changed since the design drought was conceived.

For a while, the big unknown climate change, but then the long-term vulnerability assessment found no clear direction of change in mean annual precipitation over the planning horizon.

It provided evidence that the return period for the design drought is at least 8,000 years.

And using 100 years of observed data, 1,100 years of treating data, and 25,000 stimulated model runs.

The long-term vulnerability assessment could not produce a single drought as severe as the design drought.

You have a month and a half before your schedule to approve your urban water management plan.

Please use this time wisely.

Thank you.

Thank you, caller, for your comments.

Ms.

Lanier, there are no more callers that wish to be recognized.

Thank you.

Item seven is the consent calendar.

All right.

So colleagues, we have three items.

Is there any questions or comments about any of these three items 7A, 7B, 7C?

All right.

Seeing none, let's go ahead and take public comment on the consent calendar, Ms.

Lanier.

Remote callers, please raise your hand if you wish to provide comment on the consent calendar.

Are there any members of the present public present who wish to comment?

Seeing none, moderator, are there any callers who have their hand raised?

Ms.

Lanier, there are no callers that wish to be recognized.

Thank you.

Okay, colleagues, then with that in mind, can we get a motion to approve the consent calendar?

Motion to approve.

Motion from Vice President Leveroni.

Second.

Second in by Commissioner Thurlow.

President Arce?

Aye.

Vice President Leveroni.

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacey is excused.

Commissioner Thurlow?

Aye.

The item passes.

Okay, Ms.

Lanier, can you please call agenda items number eight and number nine together?

Yes.

The Commission will now consider agenda item eight and nine.

Eight is the public hearing to consider whether to proceed with the proposed adoption of fiscal year 2026-27 and fiscal year 2027-28 water rates in light of written objections and the San Francisco Public Utilities Commission's responses.

And two, to consider and adopt a new schedule of rates for retail water service in San Francisco and suburban areas to be effective with meter readings on or after July 1st, 2026.

Item 9 hearing to consider whether to proceed with the proposed adoption of the fiscal year 2026-27 and fiscal year 2027-28 sewer rates in light of written objections and the San Francisco Public Utility Commission's responses.

And two, to consider and adopt a new annual schedule of rates for sewer service in San Francisco to be effective with meter readings on or after July 1st, 2026.

Good afternoon, Mr.

Freiberg.

And uh let's go ahead and start the hearings.

All right.

Please.

May I have the slides, please?

Hello, Commissioners.

Good afternoon.

My name is Matthew Freiburg.

I'm the rates manager with SFPUC.

Here this afternoon to speak to you about the proposed retail water and sewer rates for fiscal years 27 and 28.

The resolution you see in front of you today is a little bit different than what you have seen in previous water and sewer uh proposals.

Um you'll see that each item actually has two resolutions.

The first one is to reject the objections that SFPUC has received to the proposed rates, and a second one to adopt the proposed rates.

My presentation will explain why the water and sewer proposals are structured this way.

At the close of the presentation, the Commission may take action on each item uh for vote in individually in the order you see here on the slide.

So this is a brief agenda of the contents I plan to speak about today.

I'm going to start with a high-level overview of the rate setting process.

Um talk about the proposal for updated water and sewer rates.

Uh I have a few slides on customer bill impacts just so that you can see the the general uh impact of these rates and what that means for customers.

Uh I also will then hand it over briefly to uh John Cote, who is our director of communications, who will speak to you briefly about resources that we have for customers and some of our public outreach efforts we've made.

And lastly, we'll close with some discussion.

So starting with the rate setting overview, uh the San Francisco City Charter requires that an independent rate consultant be hired at least every five years to provide uh a cost of service rate study uh for each of our enterprises.

Uh the last water and sewer rate study was completed in 2023, and it was used to enact rates for fiscal years 24 through 26, uh, which leaves us two years left on that rate study, and that's why our proposal today is for two years of water and wastewater rates.

The charter also requires that we uh work with the rate fairness board to review our proposed rates.

And we've been working with the rate fairness board and presenting to them uh as we progress in with the tenure plan and the budget and the development of the final proposal.

I even see members of the rate fairness board in this room today.

And you'll see in your packet that we have a letter from the rate fairness board uh speaking in support of the action in front of you.

Uh lastly, the rates have been developed uh with recognition of Proposition 218, which sets uh the constitutional requirements of establishing water and wastewater rates in California.

There are a number of requirements in here, but uh the most material ones are the proportionality requirement, which states that one ratepayer group cannot subsidize another ratepayer group.

The the rates that we charge must be in alignment with the cost of providing service.

And that's what we do when we develop our rate studies.

Uh there are also uh noticing requirements uh with uh within Proposition 218 that we identify when and where we're gonna have a rate hearing as well as as well as some additional information I'll talk about uh in a later slide.

And lastly, there is a new exhaustion of remedies requirement uh that was enabled through government code uh section 53759.1, which I talk about a little bit more in this next slide.

So in 2024, the state passed AB 2257, which creates an exhaustion of remedies requirement.

The local agencies may implement.

In January of this year, uh this commission adopted this new procedure to be part of SFPUC's rate setting process for our water and sewer rates.

With this new uh process, uh it requires that any person or entity that seeks to bring uh legal action against the SFPUC with regard to the proposed rates, must first submit written objection to the rates and clearly articulate the specific grounds for their written objection or for their objections with regard to the requirements of proposition 218.

Uh all objections would have been received by the SFPUC no later than April 2nd, which is 45 days after the Prop 218 notices were delivered to our customers.

Well, customers and property owners.

This slide here, which is an extreme eye test, and I don't intend on anyone to be able to read this, but we do have the proposition 218 notice itself uh shown on the right.

This notice is printed in more legible format in your packet.

Um this notice provides information about all the rates, the exact every element of the water and wastewater rates that we are proposing, the rationale behind it, how we're going to be using that uh using these revenues, and most importantly states when and where the rate hearing is going to be held, and we have a huge section on the back about the protest procedure and objection procedures, which I've zoomed in here showing where we have the protest procedure identified, and then again where the objection procedures are identified on the 218 notice.

So with that, I'll jump into the discussion of the water rates.

This chart here is probably familiar to you, and you'll see many different versions of this later today.

But this shows the 10-year expense forecast for the water enterprise, including water share of HECI water.

Uh the water forecast here show fairly modest expense growth over our 10 year planning horizon, about 4.3% annual growth and expenditures.

Uh these are driven primarily by continued capital investments.

Um it should be noted as well that the operating and capital costs for the regional water system are shared between retail and wholesale customers, while the in-city uh expenditures are paid for by retail customers alone.

Zooming into the years that we're concerned with, uh, we have fiscal year 27 and 28 here.

Uh this is the process that we use for identifying what our rate increases need to be at a top line for our financial planning process.

Uh we start with the overall revenue requirement, which is comprised of our operating expenses and capital expenses being the revenue funded capital and annual debt service.

So you can see that uh first bold line is our annual revenue requirement.

We then deduct the total non rate revenue and wholesale revenues.

Uh also I'm gonna pause for a second and highlight that wholesale revenues are substantial for the water enterprise.

They make up about half of our annual revenues.

Um then we deduct out our planned use of fund balance.

When we back those out, that leaves us with our rate revenue requirement, which we then compare to our projected revenues that are under our current rates.

Any percent difference between that two indicates the amount that we need to increase our rate revenue that we generate.

So you can see here from this table that uh we need to increase our rate revenues by 7% in fiscal year 27 and again in fiscal year 28 for the water enterprise.

Um this slide here provides an overview of the water rate structure.

Uh the rate structure itself is comprised of a fixed monthly charge and a volumetric charge.

Uh the fixed charge is a charge that's based on the meter size.

It grow it's a fixed monthly amount that graduates upwards uh based on meter size.

So our 5/8 inch meter has the lowest possible charge, our 16-inch meter uh has the highest possible charge.

Uh for customers that have uh indoor private fire sprinklers, there's an additional meter charge attached to those customers.

Uh the volume the volumetric portion um has two different structures here.

For residential customers, there's a two-tiered rate uh where single family residential customers, the first tier has four CCF or four units of water allotted to the first tier.

And for multifamily residential customers, there's uh three units of water uh per dwelling unit.

So if you have a four-unit multifamily building, then your your first tier has 12 units allotted in tier one.

Everything else is built at tier two rate.

For non-residential customers, we have a single uniform volumetric rate that is a charge to everybody.

Uh the proposed rates that we're bringing for you today uh were developed using the customer class allocations and the rate structure that were developed under the 2023 rate study.

Um we're not proposing any changes in cost allocations or rate structure.

So the rate recommendation is a flat seven percent increase for each element of our rates.

So you see that here.

So if anyone's doing quick back of the envelope math, um, these are our fixed charges that uh that we're proposed.

We have our current and proposed rates.

And the increases from the current year to fiscal year 27 and to 28 reflect the 7% change.

Again, we have our volumetric charges.

Again, you see all the different elements of our volumetric rates.

Again, the current uh fiscal year 27 is 7% greater than the current year, and again for fiscal year 28, another 7% increase.

So that brings us to our sewer rates.

So this chart here shows the expense projections for the wastewater enterprise.

And as you'll recall from our discussion from the 10-year plan in January, the expenses for the wastewater enterprise are growing quite a bit more rapidly.

In fact, they're growing about on average 8.4% per year.

Again, these expenses are driven largely by capital.

Uh, while our operating expenses are increasing by about 3% a year, capital spending is a chief driver of the growth in uh in expenses for the wastewater enterprise.

And while these projects are necessary to respond to climate change, aging infrastructure, regulatory requirements, they do provide some significant upward pressure on rates that are needed.

And unlike the water enterprise, uh almost the entire cost of the wastewater enterprise is funded by retail ratepayers.

We do have some wholesale customers, but it's very limited.

So again, if we're zooming into the two years that we're interested in this year, uh we develop the revenue requirements the same way by adding up the operating expenses, the revenue funded capital, and the debt service.

We then deduct the non-rate revenues and the wholesale revenues.

You can see it's a far lower number here for uh wastewater.

And then we deduct our uh our planned use of fund balance reserves.

And you do see that we're using a higher amount of fund balance reserves here for the wastewater enterprise.

We're trying to use as much as possible to try to bring down near term rates, but do so manage our fund balance in a responsible way.

Um we then have our rate revenue requirement and do the same calculation of our revenues under our current rates, and that results in a 15% rate increase that's needed for wastewater uh in 27, and then 14 and a half in fiscal year 28.

So then moving forward to our sewer rate structure.

The sewer rate structure is composed of three components.

Uh we have a fixed monthly charge.

This is a flat charge that's charged per account.

There's no graduation with meter sizes here.

We have our wastewater component uh which captures the cost of the sanitary sewer contributions from our customers.

Um this is for residential customers, we have a single rate that's charged per CCF of sanitary sewage discharge to our system.

For non-residential customers, we have a bit more diversity in the contributions of their flows.

So we have a more discrete rate structure there.

We have a charge for flow, and then we have three different loading elements.

One for chemical oxygen demand, one for toll suspended solids, and one for oil and grease.

Those are the three main constituents that we charge for in our rate structure.

The stormwater component is a fixed monthly charge that is assessed to customers for the stormwater runoff potential from their property to cover the cost of operating and maintaining the stormwater portion of our combined sewer system.

Uh for single-family residential customers, um, they're assessed a simplified rate that's based on the size of their property with properties grouped into three tiers of property sizes.

So the rate that underlies their charges are the same, but we have a small property, medium property, and larger property charge.

For non-residential customers or um large residential properties, they're assessed based on the measured area of their property, and we measure their permeable and impermeable area using uh LIDAR surveys, and we do that um every one to two years.

Um you may recall as part of the 2023 rate study that staff conducted a survey of other agencies that had implemented stormwater charges uh on their sewer bills.

The number one recommendation that we heard from those agencies was they wish they had phased in their rates over a longer period of time to give customers a chance to react to the change in the rate structure.

So taking some of their advice, we uh uh we progress with a seven-year phase in of the stormwater component of our sewer charges.

What that does mean is that even though we are not reallocating, we're not doing a cost of service study, it does mean that different components of our rate structure uh update uh on a percentage basis at different rates.

So where water had a flat amount, the wastewater rates are have have more variable changes.

So you can see here on this table that the monthly sewer service charges, those are increasing at the top line, 15 and 14 and a half percent.

The stormwater component, as we phase it in, is always going to be higher than our top line amount.

So for fiscal year 27, it's a 53.3% increase.

That's inclusive of the 15% uh rate revenue adjustment.

And 20 and fiscal year 28, it's 43.1%.

Offsetting that is a lower wastewater component.

So you can see on average the the wastewater rates are going up by 10.8 and 10.1%.

You see that on the residential line.

The non-residential line is a little bit more varied because we have different components, but if you were averaged it out for the typical customer on the non-residential rate, it would come up somewhere around the uh residential rate.

This table here shows the current and projected or proposed sewer rates.

Uh these rates are reflective of the percent changes that you just saw on that very last table.

And here is where the rubber hits the road for a lot of customers.

Uh again, the table on the left is a reiteration of the actual rate increases that we are proposing on a percentage basis.

Uh on the far right is showing the average combined bill increase for this particular scenario for a customer.

So what we're seeing here is the average single family residential combined bill on the right, where the blue bars represent the water portion, the green bars represent the sewer portion.

Uh this particular example is assuming a customer with a 58 inch meter that uses uh 4.5 CCF of water each and every year uh in this scenario.

They have a property size that assessed a two at tier two simplified residential stormwater charge.

Uh, and they we also assume a 90% flow factor for that customer.

You see that customer currently uh pays about 165 dollars a month.

Uh their bill will increase to 186 dollars a month, and then again to 209 dollars a month in fiscal years 27 and 28 respectively.

This is a similar chart, but showing for a small business.

You can see on the left that the rates are the same, but the average bill increase is slightly different.

That's because this is a different customer, has a different property size, different usage characteristics.

But you see a same general trend in uh bill increases going from 230 a month to 259 and 291 and fiscal years 27 and 28 respectively.

Uh this is my last comparison uh slide before I hand it over to Mr.

Cote.

Uh but with any rate study uh or any rate action, we always want to check in and see how we can how we compare to our peer agencies.

The slightly darker bar off to the right shows the San Francisco bill.

You see that 186 dollars, which corresponds to the single family residential bill we saw two slides ago.

And this is showing our proposed bills compared to other peer agencies across the state and within the region.

You can see that we're slightly more expensive than a similar house in uh that's served by East Bay Mud in Oakland.

Um, but we're generally in alignment with other peer agencies.

And it's because other agencies are also experiencing similar challenges that we are with increasing cost of capital, lower federal support for uh for these investments.

We're seeing rates go up like this across the country.

So with that, I'm gonna pause, I'm gonna hand over to Mr.

Cote.

Uh thank you, Matt, and good afternoon, commissioners.

John Cote, I'm the communications director here at the SFPUC.

Now, we understand that higher bills are a challenge for our customers.

And we're trying to do everything we can to balance affordability and the services that our customers rely on every day.

So as part of that, uh we offer free resources to our customers so they can save money.

Uh these include rebates, grants, and incentives, uh things like water-wise checkups to uh fix leaks, uh free efficient uh fixtures uh like shower heads or uh grants for on-site water reuse or green infrastructure projects.

Uh we're also mindful of our community members with low incomes.

And that is why we offer a customer assistance program that provides eligible customers with discounts of 25% or 40% off their water and sewer bills, uh, depending on income.

Now uh low-income customers can uh check their eligibility for that and they can apply online.

And all of the information that I just relayed to you uh is consolidated in a single uh one-stop shop uh web page that we put together uh as part of this rate proposal.

Um customers can get information on all of those programs, and that information is available in eight languages.

Now, I think it's important to note that before uh we even proposed these new rates, uh we made a committed effort uh to reach as many low income customers as we could and to help them apply for the discount programs that we offer.

So we partnered with community groups to hold seven in-person application drives in 2025.

Uh these events included real-time assistance in five languages.

Uh we partnered with organizations in Chinatown, in Bayview Hunters Point, uh, in Potrero Hill, and in the mission.

And we did that to connect with vulnerable customers in their own neighborhoods.

Um attended were seniors, and many many were members of immigrant communities.

The events were a success.

Uh we had more than 850 customers attend.

Uh that's an average of more than 120 people per event.

And we have additional in-person application drives uh that we plan to conduct this summer and this fall.

Now, only once we had done that uh did we conduct a robust, inclusive and multilingual, multilingual excuse me, public outreach campaign.

Um the focus of that was really to um connect with our customers, explain the need for this rate increase, uh, explain how their dollars would be spent, and uh uh uh educate them on how they could participate in the rate setting process.

Uh as part of that, uh Matt showed you earlier the uh the detailed Prop 218 notice that was mailed to all of our retail customers.

Uh we also offered to provide uh direct presentations uh to 40 different groups across the city.

About 20 of those groups took us up on that offer, uh, and that includes uh groups ranging from the Calle Vente Quattro uh Cultural District to uh the San Francisco Chinese Chamber of Commerce uh to the Bayview Merchants Association, just to name a few.

Uh we also conducted webinars.

These are bases basically virtual town halls, and we did that to make it easier for people to attend.

Um we held them at different times of day to uh to fit with customers' different schedules, and we had real-time interpretation at those in Cantonese, Spanish, and Filipino.

Uh combined, we had more than 600 people attend those various uh presentations.

Now here you see uh some some more numbers from that outreach campaign.

Um our outreach was really focused on reaching people where they are uh and in the language that they prefer.

So here you can get a scope of that uh of that work.

You also see some examples of the different content that we use.

So uh we have a social media post in Chinese, a digital ad in Spanish, and an infographic in Filipino as examples.

So these and other tools that we used drove about 14,000 individual individual visits uh to that rates webpage that I mentioned earlier.

And that made it the sixth most uh visited page uh on our website so far this year.

Uh we had a robust multilingual social media presence, and that created uh about 300,000 unique views.

And then finally, we use print, digital, and video ads uh with a particular emphasis on reaching monolingual and low-income communities, and those ads produced 1.4 million impressions.

And an impression is is simply uh the number of times that an ad is displayed to a user.

And with that, I will hand it back to Matt.

All right, thanks, John.

Um I know we're over on time, but this is my last slide here that just summarizes staff's recommendation.

Uh I know that we're going to review the count of official protests uh in accordance with the uh the requirements of the Prop 218 hearing.

Uh but we have the four resolutions associated with agendas eight and nine uh adopting the resolution to reject the objections to the proposed water and sewer rates and the corresponding resolutions to uh approve the proposed water and sewer rates.

With that?

Will you take any questions?

Thank you very much for the presentation, Mr.

Freiberg and Mr.

Côte.

I'll turn to commissioners first.

Commissioner Thurlow.

Um I have a few questions.

One for you, Mr.

Feibrook.

Thank you for the presentation.

You talked about how we're using the fund balance to buffer the experience of these obviously pretty significant increases to customers.

And I'm wondering how durable that is into the future relative to the minimum fund balances required, especially for things like maintaining our credit.

Yeah.

Um really great question.

Yeah, so right now we have ample uh fund balance uh in the wastewater enterprise.

Uh we look at with each year we when we're doing developing our financial plans, we look at our ability to meet our key performance indicators uh being our annual liquidity, our day's cash on hand, our debt service coverage.

Um we look at it not only in the individual year, but we look at how the decisions that we make when we're setting rates set us up for future years 10, 20 years down the road.

So we always have that in mind where we're trying to like find that right balance of providing near-term rate relief with managing uh spending down fund balance without putting ratepayers behind the eight ball in the future years.

Okay, that's really helpful.

And then I have a kind of related question.

I'm not sure if it's for you or Mr.

Côte.

Um but it sounds like I mean, one of the things that we saw in the protests that we received from community members is that a lot of people are worried about how affordable the rate increases will ultimately be.

And it strikes me that everyone, even people currently on the customer assistance program are going to be experiencing the same relative rate increases.

But it seems really important that you've done so much outreach to people who are eligible for the customer assistance program.

And I'm just wondering where are we at in terms of the fraction of people who are eligible actually being signed up?

And how has that changed through the efforts of the last months to get people more engaged and aware of their eligibility?

Really good questions.

Um I think that's gonna be a mix of us.

Um with affordability uh in general, proposition 218 really creates a lot of challenges for uh agencies in California because of that proportionality requirement.

Right.

It means that we can't take advantage of some of the other rate-making tools that agencies in other states uh utilize where they can really send a lot of rate revenue to fund um the customer assistance program.

We are fortunate that we have as robust of a customer assistance program uh as we do.

Um I haven't seen every agency, but uh in my previous work before joining the PUC, I worked with a lot of other agencies, and I can say from the agencies I've worked with in the past, our customer assistance program has the highest level of enrollment and the highest uh level of discounts offered compared to other agencies I've worked with.

So I'm really proud of that.

Um enrollment is around 7,000 accounts right now, but as far as the percentage of customers that are eligible, I don't have that number at my fingertips, but we can certainly get that to you, unless there's somebody here.

Oh, Aaron's got it.

Yeah.

Hi, Eric Korvanova, I'm the financial planning director.

So it's hard to estimate the exact number of people eligible for the program.

Part of the key issue is that this program is only for individually metered customers because they have to be our customer.

A lot of low-income customers in San Francisco live in multifamily buildings, which are master metered, and so we don't have a direct payment relationship.

Um we have done in the past, we've done uh analyses using census data that tries to cross-reference the low-income population of San Francisco who's under our eligibility guidelines, as well as who actually lives in homes that are direct SFPUC bill payers.

Um I think at the time we estimated that there was roughly around 35,000 households in San Francisco eligible for our programs.

So 7,000 is not obviously 35,000.

And I think one of the points that we like to make is that it's very important that we try to do everything we can to keep rates low for everybody, because we know a lot of customers will not seek to apply for government programs.

There are sometimes barriers, some people don't trust government.

And so although we have this program and we're really trying to push people into it, we know that not everyone will be reached.

And this is truly actually one of the highest percentages for a lot of utilities across the country.

It's very challenging to people get people signed up.

Um the other thing I'll speak to is we talked about the uh outreach we have been doing.

I don't have the exact numbers offhand, but we do have did have a big uptick in applications from those programs, and we have been increasing our enrollment throughout the last year.

Okay, that's very helpful.

I'm really glad to hear and heartened to hear that we're putting so much effort into it.

Thank you, Commissioner.

Commissioner Jamdar.

Thank you, President Tarce.

I also have a series of questions.

Uh maybe I'll start with the last one because it's related to Commissioner Trulo's question.

So if those $35,000 35,000 households did sign up, just for the sake of argument, would that still be viable for the agency to have all of those customers enrolled in the Trevor Burrus?

If 35,000 accounts signed up for it, we might have to think about the uh availability of funding right now.

Uh the program has sufficient funding to keep up with the uh the account of accounts that we have enrolled.

If all 35,000 enrolled, then we would have to fit it we'd have to rethink how the program is run and how we could allocate resources to it and still meet the requirements of Prop 218.

Understood.

Thank you.

And then I'm curious, what was the response of this public outreach to the 850 customers?

Were there any sort of major objections or was it just I understand the education, but what was the feedback?

I'll let John come up here and uh add some of his detail.

But I attended some of the public outreach events.

I'd say with any public outreach, it's always a bit of a mixed bag.

There's some places they're just generally appreciative that you're there.

There's some people who are struggling to understand like the basis of the rate structure that we have.

Some people are on a fixed income, and any rate increase is going to be met with a lot of skepticism, and I appreciate that.

But Proposition 218 prohibits us from being able to create elderly and low-income discount uh rates the way we we would like to.

Um we try to go there and be a listening ear and then align them with whatever resources we can.

I'll let John, do you have anything you'd like to add?

You pretty much.

Okay.

Okay.

Um other questions are one is a quite clarifying question.

Is the fixed charge and the volumetric charge like stacked charges, or are there two separate ways of charging for the water?

There are two elements of the bill.

So every customer uh will receive their fixed monthly charge, and then there's a volumetric component.

So we we break up the rates uh in those two different elements to align generally with uh recovering costs uh from customers in a way that aligns with uh our general expenditures.

Um but we also like fixed charges also provide revenue stability and help us mitigate rate fluctuations year over year.

Uh but a high volumetric rate also creates uh provides customers with a lot of control over their bills.

So when we're doing our rate setting process, you'll see if you look at the underlying data in our rate surveys, you'll see that every agency has a wildly different rate structure.

I mean, they all have like a fixed or variable component.

Um we have preserved a very high volumetric revenue recovery.

It does create some uh revenue uh reliability challenges for us.

But what it does provide is customers the maximum ability to control their bills.

Um if you look at other agencies across the state, they used to be like this, and they've been moving more and more towards higher fixed cost recovery due to the fixed nature of a lot of our costs.

But also, especially in Southern California, agencies we've getting absolutely hammered by the drought.

Um they really move to a fixed cost recovery to provide that kind of uh rate reliability.

Thank you.

That is uh that really helps me understand.

Um I think second to last question, perhaps.

Uh you mentioned that the federal sort of capital costs or whatever, the help that we used to get from the Feds has sort of disappeared.

So rates everywhere are going up.

Are they expected to go down again when we get that back in place, perhaps somewhere down the line?

Or is this like a projected upward trend?

Um I never know what I'm gonna see in the news on a given day.

Um I have no idea what the federal government is going to offer.

Um a lot of our assets were built around the uh following the passage of the Clean Water Act, where there came a lot of strong Federal support to build some of the initial aspects of our system.

That's been a gradual thing.

It's not even necessarily just like the political times right now, but it's a little bit more uh punctuated right now.

Uh when we do set our rates, we always set our rates, assuming that ratepayers are going to have to fund those projects.

That said, we have a whole team that is dedicated towards getting low and no interest loans and grants.

Um that is their job.

They're very good at getting SRF and WIFIO loans.

There's also new loans coming from the Army Corps of Engineers that offer lower rates than what we get on going out and uh getting a revenue bond.

So we always set conservative assumptions when we're developing our ten-year financial plans, and if we happen to get a low-cost loan, then we'll factor that into our financial models once it's in hand, and then we can look at ways to bring down our future rate estimates.

Thank you.

And last question is the stormwater charge a new component of the wastewater bill, or is it just sort of being pulled out?

Uh so that was a new component that we added to the sewer bill in following the 2023 uh rate study.

Uh this is something that SFPUC has known that we needed to do all the way back to 2014.

Uh we operate a combined sewer system that that uh that carries and treats combined wastewater and stormwater.

Setting rates exclusively for the wastewater contribution inherently is going to create inequity in the way we generate rate uh generate bills for customers.

So you have a really large warehouse that has like one bathroom to serve uh a couple of uh workers, but that building has a huge footprint and contributes a tremendous amount of stormwater runoff when it does rain.

So that building is imparting a huge amount of cost uh on our system that we recognize needed to be captured in our rates.

However, when we first identified this, and again, this predates uh my tenure at the PUC, but we recognized that there was a significant amount of data that was needed to be able to fairly and accurately bill our customers.

We also had to stand up our billing system and make modifications of the billing system, which is a huge undertaking.

And I still to this day thank our IT team and our customer service team for all the extra hours they put in for getting that up and running.

Um in 2024 was the first year that we initiated the stormwater component as part of the part of our customers' sewer bills.

Um that's something that is going to remain in in perpetuity and helped us better reflect the cost of providing customers.

Thank you.

That's all my questions.

Thank you.

Commissioner John Darth, I think the short answer is it's not new.

And this was phased in after a a notice period to um to our customers.

Vice President Laborone.

Mr.

Freebert, thank you very much for your thorough report here.

I don't know if this number can be looked at.

Just curious, we have to do a lot of work on our system due to age, you know, maintenance, and that's in our uh budget expenses.

But there's also a component mentioned, and that is the regulatory requirements.

Yeah.

Is there when you look at the numbers that we have to uh put into effect to keep our system going, a percentage of what we need to do just even if our system was running properly, uh really good question.

It does run properly.

I mean, without you know the aging factors that we have.

Um the regulatory requirements that we have to look at every year.

It's a really good question.

It's not a number that I have at my fingertips.

I'm going to turn around a second and see if anybody from the budget team or if uh uh anyone else from our team happens to know that.

All right.

Okay.

No, all right.

I'm kind of relieved.

Um not because I don't want to share that number, but like it just makes me feel better personally.

Um but that's something that we can look into and we can provide that number to you if uh if that would be helpful.

Thank you.

And then last question would be a lot of numbers between 7,000 and 35,000.

Um I'm just wondering in your looking at that and seeing the rate increase and probably looking at an increase in uh not just with the 7,000, but with potentially newer ones that have come into the system.

Um is there a number?

And I don't need to know the number, but when you do the budget that you would be looking at to say if we go above a certain um participation, um I think obviously we know if we go to 35, you would already answer that question.

But if we did go to 8,000 or 9,000, is that a big number of of concern?

I think looking at the growth rate in our customer assistance program that we have seen over the last few years, uh I don't believe that we are on a trajectory currently to exceed the amount of funding that we have available for it.

Um that said, if there is an uptick, uh I'm not sure what that exact number is where we where we exceed that threshold.

Part of that also depends on the revenue that we get from the sources that we are using to fund that program and also what happens with with rates.

So if rates exceed um the growth in that revenue, then that would certainly uh make that a bit of a moving target.

Um but if we did start coming up against that threshold, uh we are tracking efforts at the state level uh to generate buckets of money to provide further support for customer assistance.

I don't know how far along they are.

I have to talk to our uh regulatory affairs team about that.

But that is something that we are tracking as uh support for further growth.

I just like to thank Mr.

Cote and the outreach that you have done in your team.

Um it sounds like it was very thorough and the word is out there, so uh even I've gotten phone calls.

So uh I appreciate uh all your education of uh the system.

So thank you.

Thank you, Vice President Laboroni.

And as we prepare to take public comment, I did want to just note that uh once again a uh a thank you to you and your team, Mr.

Fiber and Mr.

Cote.

I did want to note though, looking out in the audience, I see a number of San Francisco's small business leaders, and I wanted to particularly call out something that in Mr.

Cote's slide uh I think is important for both our our individual customers and small business customers to know that on the slide where Mr.

Côte was speaking and presenting rebates and incentives.

I would like to make sure that folks here or that may be watching or for the record that you can visit our website at SFPUC dot GOV slash conservation.

SFPUC.gov slash conservation.

And when you do, the first two links that you're gonna find are free evaluations and devices to make sure that your homes and your businesses are outfit with the most up-to-date efficiency and conservation measures.

And then second, there's a link that says sign up for savings.

And when you click sign up for savings, you will see an array of the different rebates incentives that were referenced by Mr.

Cote, and I want to make sure you know that these are again for residential and there is rebates here, commercial uh rebates and other incentives.

Let's just make sure we know that going into the decision we're gonna make today that the our customers out there, both residential and commercial know it's real when our team says there are incentives to help make this work and to help provide those those relief.

These are programs that in the past we've also helped to bolster.

So let's make sure we use them and get the word out, those are available.

So thanks again to the team.

Can we please take public comment, Ms.

Lanier?

Yes.

The Commission will now accept public comment regarding agenda item numbers eight and nine.

For the purpose of this hearing, each public commenter may provide up to three minutes of public comment.

There will not be a separate opportunity to provide public comment on either agenda item.

And the Commission may proceed to considering the resolutions for agenda items eight and nine after this public comment period has concluded.

Property owners and water or sewer customers who still wish to submit protests may continue to do so in accordance with the instructions provided in the Proposition 218 notice until the end of the public comment period for for those agenda items.

The opportunity to submit protests ends once the public comment period is closed for these agenda items.

Remote callers, please raise your hand if you wish to provide comment on item numbers eight and nine.

First up, I have Massood Summary.

Good afternoon, Commissioners.

Uh my name is Masoot Samari, and I have prepared a statement for item eight and nine.

But we are in um concerned about the scale and timing of the proposed rate increase.

For small businesses, especially restaurants, retail, and service providers, these costs are not optional.

With raising rent, labor and insurance already, squeezing margins, double-digit utility increases will force difficult choices, cutting hours, raising prices, or closing altogether.

We urge you to take more balanced approach, phase in increases gradually, set a lower annual gap cap, and um ensure small businesses relief is in place before implementation.

Continued engagement with impact uh will with impact that commission communities is essential.

San Francisco Small immigrant-owned uh and legacy businesses are vital to our uh local economy.

Respectfully ask you to do uh delay implementation and work with us on solutions that protect both our infrastructure and our business communities.

Thank you.

Next I have Denise Louie.

Um Denise Louis speaking.

A few days ago, I sent you an email requesting a workshop because details matter.

The staff's exaggerated water needs embedded in this rate plan can be used to justify building an unnecessary and expensive alternative water supply system, as well as continued obstruction of the 2018 Bay Delta plan.

I am glad to see ABC 7 News in the room because the public needs to know that the PUC's actions have led directly to the full collapse of the Bay Delta ecosystem.

Thank you.

Thank you.

Francisco de Costa.

Commissioners.

My take is totally different.

When we present the data.

And we look at what we need to focus on.

We need to find out.

First, the people or the citizens who use water if they conserve it.

And they do.

So they shouldn't be penalized.

Now you have this website you say, water slash whatever.

We need to have one, you know.

SF, water, slash, salaries.

And I want to know how many people make half a million dollars, how many make four hundred thousand dollars, how many make three hundred thousand dollars, you get the drift.

Always we forget the indigenous people.

You don't pay for the water, you get it for free.

And if you have the audacity to say that at one time, you know, you build the infrastructure, you've paid for it.

But in the stupidity of whoever was in charge, there was deferred maintenance.

And we have our attorneys, we have others.

Never once can they do a needs assessment.

You know this presentation, if it was given in the Army, and I served in the Army under three generals.

It wouldn't fly.

Because missing is we have to serve the people.

The people can serve the water.

Management gets overpaid.

They're not qualified, they're not engineers.

Even on the commission.

I doubt we have a we have a banker, thank God, so he can say something.

But we don't have engineers.

And each of our commissions have uh attorneys, and we pay the attorneys, and the time has come for us to stop this convoluted meetings and get rid of the commissions.

Thank you very much.

Ms.

Mary Butterwick.

Good afternoon.

My name is Mary Butterwick.

I'm a resident of San Francisco and a ratepayer.

I continue to be alarmed that the commission is facing a real fiscal crisis.

My water rates are going up and likely to triple in the next 15 years with 7% increases each year.

Within the next 10 years, debt service will account for more than half of the estimated cost of the water and sewer enterprises.

More recently, I learned that SFPUC identified the need for an additional $10 billion of capital improvement projects over the next 30 years.

And that doesn't account for the enormous costs associated with developing alternative water supplies, thought to require an additional 17 to 25 billion dollars.

How will these additional costs be factored into future rates?

I do not believe that ratepayers should have to invest in very expensive water supplies that will not be needed.

It is my understanding that by reducing the length of the design drought and applying realistic demand projections, one can substantially reduce the need for these costs.

My husband and I were here during the 1987, 1992 drought, and experienced rationing then.

We discovered several ways of cutting back on water use.

I would be more inclined to support rate hikes and even future rationing if I knew the funds and saved water would go to the protect the environment.

With the salmon count and the Tuolumne so critically low, we're running out of time to act.

Thank you.

Thank you.

Johnny Shannoni.

Let me preface this.

My hearing is not as good as it used to be, so if somebody said something and I contradict, pardon me, okay.

Now for the agenda item that I saved up for here.

Again, on this demand of payment that comes out every month.

It starts off here at the very top.

Very top item.

We are preparing.

First of all, and I know might be a little naive.

Who in the is we?

Okay.

The um the water department is a public property.

It's a public entity.

It's not a private enterprise.

So we doesn't count.

Again, on it's been there for a hundred years, or not actually I exaggerate, twenty-two.

It's been there or twenty-four, whatever it is.

Been there a long time.

They talk about that they they had a bond, they floated a bond, and were given it to you every month as a result of the voters voting for that.

All of these rate increases, and I recognize you know, the price of rice and everything else has gone up.

I understand that, but any rate increase belongs on the ballot.

It should not be something conjured up by some self-serving bureaucratic, unelected administrative commissions operating the revenue spigots.

And ubiquitous in government.

They use the words accountability and transparency, which is a crock.

It's become a a paradox, an oxymoron, a contradiction.

Everyone talks about global warming, but they don't do jack about it.

You know, you guys talk about accountability, not you guys, but bureaucrats and politicians talk about accountability and transparency, and it doesn't exist anywhere.

You know, they're just uh government window dressing.

They're words, they're meaningless.

So again, and I recognize, you know, you probably have to move on these contracts and the world keeps rolling, right?

But there is time, I think, to get on the November ballot and this kind of thing.

Again, bond 2002.

Think it was, yeah, 2002.

Twenty-four years.

You should give the the electorate, the stakeholders, the people that actually own the Sun Valley Water Company the right to decide what they want to do.

Thank you very much.

Thank you.

Eileen Boken.

Eileen Bocan, Coalition for San Francisco Neighborhoods, speaking on my own behalf.

Opposing these rate increases on the water side, 7% plus 7% equals 14% increase per year.

On the wastewater side, 14% increase per year.

14% plus 14% equals 28% increase per year plus stormwater increases.

However, per presentations at the Capital Planning Committee, currently, 30% of the PUC's operating revenue goes to debt service.

In less than five years, 50%, that's 5-0 of the PUC's operating revenue will go to debt service.

This is the main driver of rate increases.

At its April 21st meeting, the Coalition for San Francisco neighborhoods passed the following resolution and excerpts are as follows.

Whereas the SFPUC is currently proposing significant increases to water and wastewater rates over the next five years, whereas these rate increases are based on outdated population growth protect projections as the State Department of Finance Demographic Research Unit, DRU, most recent population growth projections show San Francisco's population growth being flat for the foreseeable future.

Most recent population growth projections show San Francisco's population growth being flat for the foreseeable future.

Whereas the SFUC is also using drought modeling called the design drought that is 30 years old and that plans for an 8.5-year drought scenario.

Therefore, be it resolved that the Coalition for San Francisco neighborhoods strongly urges the SFPUC to formulate two additional rate increase scenarios.

Therefore, be it further resolved that both scenarios use flat population growth projections, with the first recalculation using a 6.0 year drought scenario, and the second uh recalculation using a 7.5-year drought scenario to determine how each of these would result in reduced rate increases.

Thank you.

Thank you.

Albert Chow?

Good afternoon.

My name is Albert Chow.

I'm running for District 4 supervisor, but today I just come to express my concerns about the rate increases.

Twelve and a half percent this coming year, another 12 and a half percent next year, 25 percent.

Right after we've just had double rate increases from PG ⁇ E and also rate increases from ecology.

We are all struggling to live and afford in this city.

That is the time that is the paramount thing I hear from my constituents or people that want to vote for me, and other people that in the city is throughout.

This is a huge concern.

And I think that I was looking at the charts earlier that you had.

You have almost three to one, you know, $200 and something million dollars in debt service, another operating expense of 90 something million.

Sorry, I don't have the exact number in my head, but I would think that if we can stretch out those operating expenses, debt service is unavoidable, but stretching out those operating expenses over more years, maybe putting them off so that we can find some way to find some sort of rate relief for our constituents.

You say there are discounts and uh assistance for people that have fixed incomes.

Well, when you have a fixed income and you have a rate increase, even though you're getting a discount, it's a rate increase.

And it is a burden as a burden that we're feeling so much here in the city.

We're dying by a thousand cuts.

And I asked for that relief for all the citizens of San Francisco that we think more thoroughly how we can save the money, better spend it, proportional projects, take care of the debt service, and move forward in a compassionate way.

Thank you.

Thank you.

I have a card from it looks like Ted, is it Loenberg?

Good afternoon, Commissioners.

My name is Ted Lowenberg.

And like everybody else here, I've looked at these rate increases and said, what you're proposing is that these at this rate hearing is a massive increase in the water and sewer rate for San Franciscans.

At the last hike, you already doubled my monthly bill, even though I use only about the same water.

This is exactly why only a handful of people have actually showed up today.

You're going to get it anyway, so why should they bother to come here and waste their breath?

These rates are really way in excess of the current inflation rate now, about 3 percent and going up.

People are already freaking out over the rising prices of gasoline, food, health care.

Wages can't keep up with inflation.

Property taxes and fees have been popping on onto our tax bills.

And uh now the PUC wants to hike up the water rate for you know 7 percent for here and 7 percent, 10 percent there, and uh shocking 15 percent for the um rain runoff charge.

All of this for the next three years each year.

By the way, to me, the um the rain charge is really a uh way you get money for free.

Um but because when it doesn't rain, you don't give me money back.

We've had two dry months, January and March.

Am I going to get some of that money back because it didn't run off my roof?

I don't think that you have that in that plan.

So you're taking 50 percent for some events that don't happen.

That is some kind of HUTSPA.

You, my Commissioners are really now the worst enemies we that we have in our struggle to keep our heads above the rising tide of inflation.

Oil companies make uh uh look like amateurs going at uh gouging compared to what you're doing.

You are the prime source of the city, making becoming even more unaffordable.

As Eldridge Cleaver famously said, if you're not part of the solution, you're a part of the problem.

Secondly, you accomplished this outrageous increase with uh a totally rigged vote process.

That the fact is that the Byzantine process to qualify as an official dissent of these inflationary rates will never be uh uh never amount to the required 51 percent of the ratepayers.

Even our words today here don't count as a no vote against the proposal, even though we came on our own time and on our own dollar to do this.

So thank you for your comments.

Thank you for your comments.

Mr.

Donald Driscoll.

Good afternoon.

My name is Don Driscoll.

I'm from Driscoll and Owens.

I'm appearing on behalf of Mark Rowe and Ted Loenberg, who you just heard from.

Um they submitted timely objections under government code section 53759.1.

And we're appearing here, but we reserve all rights, including the right to challenge any rate adoption on procedural and substantive grounds using any appropriate procedure.

I'm going to begin with procedure.

This hearing is being conducted pursuant to government code 53759.1, which tax on administrative hearing procedures to what's a rate adoption procedure.

This is a mischaracterization.

In Planteer versus Ramona Municipal Water District, which the Supreme Court decided in 2019, the California Supreme Court described the characteristics that make us this section of six hearing an inadequate inadequate administrative remedy.

It lacks the clearly defined procedures for the submission evaluation and resolution of disputes that an adequate remedy requires.

What is permitted today is brief comment.

There is no testimony under oath, there are no rules of evidence, and no rules for decision making, no allocation of burden of proof.

There is no opportunity for cross-examination.

There is no impartial fact finder.

I'd like to point out that the SFPUC talked at length today, and we're allocated three minutes apiece.

The SFPUC seemed to suggest that the 2023 race rate study had recommended rates for this fiscal year, this coming fiscal year, and the next fiscal year.

If you read the report, that's not what it says.

It has projections for this year and next year, but it refrains from making recommendations.

If this were an administrative hearing, one of my first questions would be if you're relying on this, why are you relying on something that wasn't recommended?

Why wasn't it recommended?

But without any witnesses, we have no way of knowing.

I also like to point out that the Director of Commission Affairs has been kind enough to tell me that materials I submitted April 26th and April 27th won't reach you immediately.

They'll reach you over the next couple days.

Those are important factors in the decisions that could be made.

Part of what we're seeking is that the City of San Francisco pay for the full costs of fire protection and not impose those costs on water ratepayers.

But this Commission can't possibly decide that the city is going to pay.

It's a thank you for your comments.

Thank you for your comments.

Is Ms.

Heather Wilson wish to speak under item numbers eight?

Thank you for your comments.

Every member of the public has three minutes to provide comment.

Thank you.

Thank you for your comments.

Only because you've already provided three minutes and we have to provide everyone, we have to provide everyone under the law.

We have to provide everyone in the public the exact same amount of time, so we can't yet not about get back in line, but if you like to comment on another item, you can do that, but you've already provided the comment under yours.

I I know, but you you have already provided three minutes, so every every member of the public gets the equal time three minutes under the Brown Act of California.

No, no, no, it's a we're we're uh we're trying to make it work here.

Next speaker is a very important thing.

Thank you.

Hi, I'm Heather Wilson.

I own wishy-washy laundry mat in the Lower Haight.

So I'm representing laundry mats today.

Obviously, I'm in the business of utilities.

That's pretty much what I do is I sell water and I deal with wastewater.

I'm crunching the numbers at this new increase and what I'm going to have to do to pricing.

And it's going to be a really tough move this year, as well as even a harder move next year to kind of balance out these increases.

In general, the YouTube likes to say this is passive income and cash cows, and it's completely not that.

So my utilities is 21 percent on average of my revenue.

And then, of course, rent is somewhere around 25 to 30 percent.

So obviously there's only 100 percent of revenue, right?

So these numbers are coming down really quick.

Utilities are going to come back up.

But in regards to the you mentioned the rebates, the water rebate program you guys had last year is the whole reason I was able to come in and fix the lower hate.

I'm considered a local celebrity, and I just own a laundromat.

That's how bad this place was.

Um I used that rebate.

I put $65,000 worth of new energy efficient machines in.

I went from 24 percent efficient down to about 2021 is my average, and the city gave me $38,000 to do it.

That's the only way I was able to do that to cover all the other costs of owning this brick and mortar business.

That rebate went away on June 1st, end of fiscal year last year.

That went from five grand per machine up to down to $1,000.

The two machines I just put in cost me $34,000.

So instead of getting 10 grand from the city, I would have received two.

And it would have made it impossible for me to get more efficient because these machines are old.

We are now down to about 85.

The reason we're down is because it's getting dilapidated, you get behind the eight ball, and to replace the machines, a boutique little place, 700 square feet, that's about what I'm at, 16 washers.

You're talking $300,000 worth of dryers and machines.

So to pay that equipment loan plus 21 percent worth of utilities plus rent a cleaner, yada yada, you're over a hundred percent of revenue.

That's why they keep closing down.

I'm trying to buy another one to renovate another area that is in a lot of need.

It's an essential service.

It's also a health service.

Um, and I just can't help this owner of a building get out from under the eight ball hit part of his rent is offering on-unit laundry, and that laundry closed down in October because he was at 105 percent revenue was his expenses, so he closed and walked out.

I'm trying to help him.

I just can't make the numbers work because of that rebate went from five grand to one grand.

If so, thank you for your comments.

Thank you for your comment, and and we appreciate you sharing your experience and feedback.

I'll have a comment later.

Are there any members of the public present who have not already spoken on item numbers eight and nine who would like to speak?

Again, Commissioners.

Um, Reverend Ronnie Chisholm.

Uh some one commissioner said a few minutes ago, system running properly.

System running properly.

That's a joke.

When the SFPUC hasn't met basic uh requirements in terms of serving us the public that pays for filthy disgusting contaminated water coming out of our reservoirs.

Wonderful drinking water running down the streets for months unchecked.

That's a perfect uh system running properly.

That's a joke.

When you act very insensitively without in the uh sensitivity to the public as you raise the rates to exorbitant levels that your basic Your basic citizen is going to struggle is a major problem.

I think you need to wake up, look in the mirror and decide who you really serving.

Are you serving the people that you are supposed to be sitting to serve?

Are you serving outside of that?

So I would encourage you to grow up and do your job.

Be responsible be moral.

Because the public is is bare and paying their tax dollars and doing what they need to do and should do.

You should do the same thank you.

Are there any other members who wish to comment who have not already spoken for item numbers eight and nine moderator are there any calls who have their hand raised there are three callers that we should be recognized.

Thank you.

Caller I'm unmute your line you have three minutes.

Thank you.

I'm Dave Warner thank you for your service.

Hopefully you have seen my letter from yesterday the letter offered a solution similar to the one the San Diego mayor negotiated with the San Diego County Water Authority in June of 2024.

In short, it leverages your reserves in the short term and requires a very modest budget reduction in fiscal 2027.

It works like this the water and wastewater divisions combined are projected to have more than 250 million dollars of reserves set aside at the end of fiscal year 2027, well above the SFPC's policy minimums as Mr.

Freeberg stated earlier by using slightly less than 10 percent of those reserves or just 24 million dollars, you can reduce the combined water and sewer rate increases from 12.5 percent down to 10 percent a modest step out of respect of all those struggling with the increases then to recover the 24 million instruct staff to reduce its fiscal 2027 budget by the same amount which is a minuscule 2.6 percent against an almost 1 billion dollar budget and then that 1 billion dollars excludes the amounts funded by wholesale customers.

It's amazing that just 24 million can make such a big change to the proposed rate increases.

It is such a modest amount in the context of an almost billion dollar budget.

You might ask well what about fiscal twenty twenty-eight when the increase is to be repeated well let's cross that bridge when we get there a lot can change between now and then your next step would be to defer approving rate increases until staff can validate the figures I mentioned.

Surely 24 million can be found in a budget of almost a billion thank you caller for your comments caller I'm unmute your line you have three minutes our commissioners I am the CEO of the Hispanic chambers of Commerce of San Francisco and I'm speaking on behalf of the Latino and the minority owned small businesses that will be impacted by these proposed rate increases.

And with the additional increases in water and power this will disproportionately these entrepreneurs and many of them who operate within margins without relief these increases will force difficult choices cutting a staff as a rate with suffering for that lack of employees raising prices or closing all together.

We have lost more than 20% small businesses in the emission district area.

We urge you to adopt a faith approach provide a support strongly support to protect the diverse small business community that's really sustain and at the backbone of the San Francisco economy.

Thank you much for your comments caller I've unmuted your line you have three minutes my name is Alex I am a resident of the Bayview and I would just like to speak regarding a formal objection that I submitted on April 1st talking specifically about Prop 218 proportionality and what I've seen based on our current rate schedule here in the city plus our new adopted rates is that we do not regard or consider the massive difference in pumping costs between parcel elevations as a part of our city rate structure.

And basically, because of that, lower elevation households and lower elevation parcels end up subsidizing the enormous pumping costs of higher elevation and predominantly higher income parcels in this city.

In my view, this is clearly an unfair subsidy, and I urge the board and the commission to attempt to remedy remedy this situation by offering either a gravity credit or lower elevation parcels or an elevation surcharge, similar to what peer agencies like the East Cave Municipal Utilities District do, where they have a clear-tiered elevation surcharge that appropriately accounts for the differential and pumping costs for water and water delivery between within their service area.

Thank you.

That's all I have to say.

Thank you, calling for your comments.

Ms.

Lanier, there are no more callers that we should be recognized.

Thank you.

All right.

Ms.

Lanier and one last call to members of the public.

Is there anyone else in the room here that would like to provide public comment today on these items?

Anyone who has not already spoken on item numbers eight and nine.

Not yet.

All right.

Thank you, Ms.

Lanier.

Public comment for agenda items eight and nine is now closed, and no further protests may be submitted.

Are there any other further comments or discussion from the Commission before the Commission considers the resolutions attached to agenda item numbers eight and nine?

Sir, we have taken public comment and public comment is closed.

The decision is before the Commission at this time.

No problem.

The only comment I wanted to offer up was I took note of the testimony with respect to our small business owner experience that she shared with respect to her laundromat.

And I think I know that we have set our budget earlier this year, but to the extent to the general manager to the extent that we have fully funded those individual residential and commercial rebate programs that we heard were so effective and important during a prior challenges around making ends meet as a small business owner to the extent that we've fully funded those programs and have the maximum rebates and incentives that are available.

While of course we navigate at other financial responsibilities, but to the extent that we can ensure that those programs are fully funded and at the levels that we know and have heard today worked, I think we would all appreciate knowing that that's going to happen come July 1st when uh bills start coming in July 1st of this year and going forward.

Any other thoughts.

You know, I think one thing I'll just say we we appreciate everyone coming out today to provide feedback, written comments have been made.

Uh you heard it, those of you who participated or reviewed the conversations around our operating and capital budget conversations.

The really the number one driver of rates and the decision before us is the capital investments, and there's four factors that are really impacting us here today.

I think that I want to first, and just so you know where I'm going with this, I think on behalf of all of us, thank the general manager and the staff for working on Mr.

Freiberg and Mr.

Cote and everybody who put time and energy into this.

Um of course uh Aaron and the and the team.

Um you have heard us loud and clear for a year and a half.

This is a moment we need to build for.

We need to do the best we can to provide the most affordable rates we can and certainly guarantee the high quality of services, the safety, the reliability, and the quality and integrity of our system.

You see that with respect to the rates, um, we all wish we could continue and can continue and continue the progress we've made to get to this place.

We can always do that, um, and we will continue to do everything we can for the for the long term.

But I personally am convinced that our staff working with the stakeholders who we've heard from, many of whom are here today, that we've done the best we can in light of some serious challenges on the wastewater side.

It's not news, we've talked about it.

You see uh a somewhat more modest increase on the water side, but uh a higher increase on the sewer side blended is what's in front of us.

Um there's four things involved when it comes to our wastewater system.

There's four things driving the capital uh costs.

It's one, we have the construction costs that are second highest on the planet.

It's two, we have increasing regulatory requirements on our system.

Three, we have increasing costs associated with debt servicing.

And we have a federal environment that is more hostile than ever in supporting cities and counties and systems like San Francisco and the Public Utilities Commission to help us make these investments, and thus it comes back to us to figure this out together.

We're always going to keep doing everything we can for our ratepayers.

I know that we have done the best we can here today, and I am ready to support the rates proposed in front of us, Mr.

General Manager, colleagues from Commissioners comments rather from Commissioners any other comments.

So at this time, I would like to seek a motion and a second to find that the Commission has considered all written objections to the water rates and SFPUC's responses, that nothing in the written objection warrants revising the proposed water rates or rate study better stated that nothing in the written objections warrant revising the proposed water rates or rate study, and that the Commission therefore has determined to proceed with its consideration of the proposed water rates.

In short, I am asking for a motion and the second to approve the rates and rate study.

I move to approve.

Motion by Commissioner Thurlow.

Seconded.

Second from Commissioner Jamdar.

President Arsey.

Aye.

Vice President LeBroni.

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacey is excused.

Commissioner Thurlow.

Aye.

The item passes.

Thank you, Ms.

Lanier.

And I would like to ask that you please proceed to the protest counting portion for agenda item number eight.

The time to submit a protest against the proposed water rates close with the end of the public comment period for agenda items eight and nine.

As a close of public comment, SFPUC received 27 letters and three comments of protest against the water rates.

Mr.

President, the majority protest threshold was not met, and the Commission may proceed to consider the water rate adoption resolution.

Thank you, Ms.

Lanier.

That concludes the protest hearing for the water rates.

I would now like to seek a motion and a second to adopt the revised schedule of retail water rates.

Let me once again distinguish the previous motion was to confirm that nothing in the written objections warranted revising.

And at this time, we are now going to proceed procedurally with the adoption of the revised schedule of retail water rates as further described in the attachment to the resolution to become effective July 1st, 2026.

Can we get a motion and a second to adopt the revised schedules of retail water rates?

Motion to adopt the rates.

Motion from Commissioner Jamdar.

Second.

Second from Commissioner Thurlow.

President Arce.

Aye.

Vice President LeBroni.

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacy is excused.

Commissioner Thurlow.

Aye.

The item passes.

Thank you, Ms.

Lanier.

So moving on to the Commission's consideration of the proposed sewer rates.

I would like to first seek a motion and a second to find that the Commission has considered all written objections to the sewer rates and SFPUC's responses that nothing in the written objections warrant revising the proposed sewer rates or rate study, and that the Commission therefore has determined to proceed with its consideration of the proposed sewer rates.

So moved.

Motion from Commissioner Jamdar.

Second.

Second from Commissioner Thurlow.

President Arcee?

Aye.

Vice President LeBroni?

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacy is excused.

Commissioner Thurlow?

Aye.

The item passes.

Thank you, Ms.

Lanier.

Can you please proceed to the protest counting portion for agenda item nine?

The time to submit a protest against the proposed water rates closed with the end of the public comment period for agenda items eight and nine.

As of the close of public comment, SFPUC received one protest against the sewer rates.

Mr.

President, the majority protest threshold was not met.

And the Commission may proceed to consider the sewer rate adoption resolution.

Thank you, Ms.

Lanier.

This concludes the protest hearing for the sewer rates.

I would now like to seek a motion and a second to adopt the revised schedules of wastewater rates as further described in the attachment to the resolution to become effective July 1st, 2026.

So moved.

Motion by Commissioner Thurlow.

Seconded.

Second from Commissioner Jamdar.

President Arse.

Aye.

Vice President LeBroni.

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacey is excused.

Commissioner Thurlow.

Aye.

The item passes.

Thank you, Ms.

Lanier.

This concludes agenda items eight and nine.

Ms.

Nair, please call the next agenda item.

The next item is item 10.

Public hearing to consider the adoption of rates of the San Francisco Public Utilities Commission Power Enterprise for Hedgeheadship Power service to be effective with meter readings belong beginning on or after July 1, 2026.

Mr.

Freiberg.

Hello again.

Good to see you again.

Matt Freiberg, rates manager for SFPUC.

This presentation before you today is on staff's proposal to adopt new power rates for Hedge HEC power for fiscal year 26-27.

Unlike water and sewer rates, where we typically adopt two or more years of rates, staff have been bringing uh one year proposals to the Commission for the past few years in recognition of higher volatility and key cost drivers around providing power service.

Yeah, the slides, please.

So this is our brief agenda for the HECI power rates.

Uh I'm going to start with an overview of the power enterprise, partially for the members of the public, but you will have seen this before.

I have a brief discussion on the HECI power rate structure.

I then want to speak briefly about the rate study for Hedge HECI Power that we have just completed along with a summary of power expenses and our proposed rate updates, followed by a brief discussion about the power the public outreach efforts that we have undertaken.

To serve as a reminder for members of the public, uh the power enterprise is comprised of two separate entities.

We have HECH HECI Power and Clean Power SF.

Uh Clean Power SF is a generation alternative to PG ⁇ E.

It procures power supply but does not have any of its own uh power generation facilities.

All transmission, distribution, and billing is managed by PG ⁇ E.

Uh Clean Power SF serves 80% of San Francisco's energy demand and is comprised predominantly of residential customers.

Uh you may also recall that in January, this Commission adopted a rate decrease for these customers.

And uh staff do not plan to propose any changes to clean power SF rates again until we bring forward a rate action for fiscal year 27-28.

Hedgeheigh power is SFPUC's publicly owned utility.

It uh both generates power and purchases supplemental power supply from the market when our facilities cannot meet the overall demand of our customers.

Hedgeheadie power has hydroelectric facilities in the Sierras and transmits power to the Bay Area.

HECI Power's customers are pr are principally other city departments, but there is some growth in retail customers uh in redevelopment areas in the city.

Today's presentation, I just want to highlight, is specifically about HedgeHedchy Power.

This table here highlights how unique HECI Power is as as an entity.

Uh you can see that we have residential and small commer uh small commercial customer classes make up the largest number of our count of accounts and make up uh around half the total accounts served.

But you can see that they only make up about 10 percent of the annual revenues or power purchased.

Um customers and medium commercial make up the vast majority of our revenues and and total sales.

Um your packet has this table in there.

I also have included a more detailed version of this table that shows the same breakdowns, but for every single rate tariff within every customer class, just to highlight exactly where we have customers located and where most of our revenue is generated.

Um within HECHI Power, there's two main classifications of rates.

Even though we have a lot of different tariffs, they fall into one of these two buckets.

Uh we have our general use customers.

Uh these general use rates are reserved for uh legacy municipal accounts uh that have been receiving subsidized power.

Since the early 2000s, HECHI Power began the work of gradually increasing their rates to bring uh these goosey rates in line with the retail customers, but this is a s as a long gradual process.

These rates have been increasing by about three cents per kilowatt hour each year.

Umce these customers reach uh parity with their retail customers, then we will retire that particular uh goosey rate tariff.

The remainder of our customers are on HECI retail rates.

So this includes all of our private customers, some city departments, predominantly uh enterprise departments, and a few customers outside of San Francisco.

Now given the fixed rate increases that we have for goosey customers at three cent per kilowatt hour.

When we start talking about any rate increases in our presentation, we're typically talking about the retail customer rate increases.

That's where we have control for change.

Uh next, I'd like to talk about the steps for our rate study.

Um similar to water and sewer, we conduct a rate study every five years uh for HECI power.

Uh the rate study itself is comprised of five key steps that I've outlined here.

The first step is our revenue sufficiency analysis, which is pretty much our tenure planning process, where we evaluate the long-term cash need of the enterprise based on our operating and capital expenditures.

We evaluate the projected revenues under existing rates and our ability to meet long-term financial performance metrics, and then determine what kind of rate adjustments are required to recover the revenue shortfall.

Next, we step into the cost of service analysis, which I like to think of as like a three-step process.

This three step process has a ton of work that goes into each step.

But the first step is taking a look at each individual budget line item.

So every capital project, every operating project.

And we assign a core function to these to these uh expenses.

Is it a power supply project?

Is it a transmission project?

Is it just as a distribution?

We then take each of those functionalized costs and we classify it with uh how that how that system serves customers.

Is that system designed to serve customer demand?

Is it designed to serve uh energy?

Is it designed to serve individual customers?

The last step, uh, we then look at our customer billing data and we see how much of each of those uh cost driving classifications are comprised of from each of our customer classes.

So, how much demand is in a customer class, how much energy is used by a customer class, how many calendar accounts do we have?

And that using that process, we're able to then take each individual expense and allocate it to a customer class.

And that is generally the purpose of cost of service to figure out how each customer class drives the cost of our system.

Lastly, we step into our rate design.

Um in that process, we figure out well, how do we recover those costs from our customer classes through the individual rate tariffs?

How do we size those rate tariffs?

How do those rate tariffs meet our long-term financial objectives?

Um, and then given the history of interclass subsidization, we make some adjustments to make sure that no one tariff is going up by too much in a given year and causing rate shock for our customers.

So here I'm talking about the power expense projections similar to what we saw with the water and wastewater.

Uh again, this is coming from our 10 year plan, and it shows the expense projections for HECI power.

You can see that the power supply and delivery costs as well as cap as well as the capital expenditures are what are really driving the expenses for HECI power.

What's unique about HECI power though is that a lot of times these capital projects and the additional power that we're purchasing is there to serve the connections to new customers or to provide power to new customers.

So, unlike water and wastewater, where we're developing capital projects to operate continue to operate and maintain a system, the HECI power system is continuing to grow.

Um, and the purchase power is meeting new customers.

So even though we see on average a 10.8% growth in annual expenditures, rates do not have to necessarily have to keep up with that because we have new load that we're serving with this growth.

So now we take this budget and we translate it into the fiscal year.

You've seen this table a couple times already.

Uh, but we look at the annual cash need or the revenue requirement, and that's comprised of uh our fiscal year 27 power supply and delivery costs, our other operating and maintenance costs, our revenue and debt funded capital.

We then take that uh revenue uh that cash need or the revenue requirement, and we deduct the non-rate revenues, our wholesale revenues, our planned use of fund balance, and in this case, we deduct also the goosey rate revenue.

That gives us our uh rate revenue for our retail customers.

We compare that to the revenue that is under uh current rates with consideration of account growth and growth and demand, and we see that we need a six percent increase in the retail rates.

Uh you may recall that our tenure plan called for a 7% increase, so this is a 1% lower increase uh than we had initially planned.

That was based on more detailed analysis of our customer billing data.

Um, and we determined that our current rates actually are producing more revenue than we had initially projected.

So next brings us to over through the cost of service analysis and the rate design, we're able to calculate our updated rates for our existing and new rate tariffs.

In our packet, we've included the full suite of rate tariffs, but when you look at the packet, there are too many tariffs for us to get through in this presentation.

So instead of provided uh two different tariffs to serve as an example that kind of serves bookends for the size and complexity of the rates that we have.

On the left is our R1E rate.

This is the default rate for all new residential customers with electric heating as opposed to somebody who has a gas who has gas heating.

Uh the tariff includes a fixed monthly charge of $10, and it has tier to energy charges based on the total monthly power usage of a customer.

So uh and our rates also change seasonally.

So while the cost that you see on each of these rate tiers is the same, you can see that the tier width or the amount of power allotted in each of these tiers between summer and winter are different.

It's because our in winter our customers turn the heater on, they use more energy.

This enables us to keep the bills relatively consistent uh throughout the year without showing having a winter bill being extremely high and summer bill being significantly lower.

The table on the right is the C3P rate or large commercial uh large commercial rate for customers receiving primary voltage.

You can see that these customers have a far more complex rate structure.

Um it's comprised of a fixed monthly charge as well as time of use-based energy charges and time of use-based demand charges.

Typically, the the rate tariffs increase in complexity for customers that pull larger load from the system.

Um additionally, larger customers see a higher fixed monthly charge and demand charge, while their energy charges tend to decrease.

This is so that we can allocate more of the fixed system costs they're required to serve these large load customers uh compared to our smaller customer classes.

And this slide here provides uh a summary of staff's proposed updates to rates.

Uh first, we're proposing to preserve that three cent per kilowatt hour increase uh for effective rates for goosey customers.

Um by doing so, we'll be solving for just under 25 cents per kilowatt hour and the effective rates for all goosey rate codes.

Say the effective rate because we have customers with simple rate tariffs, so we have a C1 uh goosey rates all the way up to industrial goosey rates, so the rate tariff takes multiple uh forms, but the effective rate is the same for all.

Uh the long-term goal again is to continue to increase these goosey rates until each tariff reaches parity with their retail rate, uh, and then we will eliminate that goosey rate.

Um our second proposal is a 6% average increase for all uh retail rates.

Uh you'll recall that when we do a cost of service analysis and do a rate design, uh, that there is reallocation of costs between customer classes.

So the rates do not go up by a flat amount.

Um but also to prevent rate shock for any customers, we are setting a cap of uh nine percent for any of our individual rate tariffs.

So customer classes that are under uh cost of service, uh meaning they're not at they have not met their current cost of service, they have a larger percent increase, that's averaging around 7.3% uh increase.

And the larger customer classes that are over cost of service right now, that's our large commercial and industrial customer classes, they have a lower than six percent increase.

But on average, in aggregate retail rates are going up by six percent.

Third, we're looking to create a new municipal airport rate.

This is to recognize that SFO's uh energy usage patterns are completely different from that of other industrial customers where they are currently bundled into a rate with.

Um this enables us to set rates that are more fair for the industrial customers and SFO.

The bill impact for SFO, we've set the rates so they're SFO is generally indifferent to which rate they're in, uh which uh rate tariff they're in.

Um, but it does have an impact for our industrial customers.

Um the other reasons for this is that our CIP, you may recall, has a number of projects that are set up to serve SFO exclusively.

By setting uh up a municipal airport account, we can direct assign those capital projects to SFO so we do not have to socialize those costs with the rest of the retail rates.

Uh our last recommendation is to update the green tariff.

Um Hedgehog G Power has a green premium tariff.

Um this is an opt-in rate for customers that want to purchase 100% renewable portfolio, renewable portfolio standard certified energy.

The current rate is eight cents per megawatt hour, uh, and it's below the marginal cost for Hedgehogi power running this program.

We're proposing to increase the surcharge to nine and a half cents per megawatt hour, and that'll further align the rate with the cost of the program.

Next, I have a couple slides on bill impacts.

Um so here you see the bill impact of our or you see our typical bill for our uh residential customer on the R1 rate to the left, it's about $95 a month with a proposed rate that increases marginally to 102 dollars a month.

If we compare that to PG ⁇ E, uh if a if if the same customer was on PG ⁇ E rates, their bill would be considerably more at 127 dollars a month.

So it's just demonstrating that Hatch H power, even though we're increasing rates, is still providing an incredible value for our customers.

Looking at C1, uh so this is a small commercial C1 rate.

Again, similar trend here.

We have uh our typical customer on a C1 rate is spending about $366 per month.

But again, it's less than if they were on PGE, where their bills would typically be around $422.

And lastly, we have a large commercial, the C3P rate.

This is the one that we talked about in one of those other examples.

We start to see that margin with PGE starting to creep up a little bit.

And we see the bills also going up for these larger customers, but we see under current rates, it's almost $34,000 a month.

Under the proposed rates, we're looking at around $36,000 a month.

But if these customers were on PGE, they would be paying just over 40,000 a month.

Lastly, our rates communication with every rate update.

S a PUC makes it a priority to inform all of our ratepayers and utilize multiple forums for rate pairs to learn more and ask questions about rates before they are finalized and presented to you, the Commission.

This table here provides a high-level summary of the multiple ways that we've conducted outreach starting all the way back in January, where we updated our rates landing page, began uh customer e new e newsletters and emails, and uh starting in March, we started with on-bill messaging and uh direct mail postcards and uh as well as key account outreach directly to some of our largest customers.

And that concludes my presentation.

I'm willing to take any questions from the commission.

Thank you, Mr.

Freiberg.

Questions from the Commission?

Commissioner Thurlow.

When you thanks for the presentation, by the way.

When you look at the general use rate increases over time, that three cents per kilowatt hour per year, is that right?

Yes.

Um what is the time scale for that converging with the other rate structures?

And presumably that depends on the rate increases.

Yep.

Uh really good question and very suit observation.

Uh the three cent per kilowatt hour does outpace our retail rates that we're proposing, so we are gaining ground on that.

Uh the time of convergence depends on the different uh rate tariff.

So the effective rate that is charged per kilowatt hour for our industrial customers and our larger customers, those customers tend to use power more efficiently, and their effective rates end up being lower.

So the industrial customers are very close.

I think we're like a year, maybe two years away from uh the industrial goosey rates intersecting with the retail rate.

But the smaller rates like commercial, um, there's a much longer lead time there.

The effective rates uh for those customers tend to be a bit higher on the retail side.

So I don't know the exact number, but I think it's at least 10 years before those align.

Again, if our retail rates remain lower, then we'll catch up faster.

But the industrial is by far the largest share of the revenue at this point, is that right?

So it it effectively you have a year until the largest revenue contributions are at parity.

Is that correct?

Correct.

Okay, perfect.

Thank you.

Any other questions?

Ms.

Anir, can we open up for public comment?

Thank you, Mr.

Freiberg.

Yeah.

Remote callers, please raise your hand if you wish to provide comment on item 10.

First up, I have Mr.

Massoud summary.

Did he step out?

Okay.

So next, Francisco DaCasta.

Is he still here?

Okay.

Mr.

Johnny Shannoni.

Did he step out also?

Alrighty.

Ms.

Eileen Vulcan.

Eileen Boken, Coalition for San Francisco neighborhoods speaking on my own behalf.

Opposing power enterprise rate increases, if any, based on fund balance offsets.

Again, the planning and budgeting is based on outdated population growth projections.

On January 23rd, during the Power Enterprise 10-year capital plan and two-year capital budget, the AGM stated that the to accommodate upgrades to the West Side treatment facility and to accommodate population growth on the West side.

A West Side substation would be needed at a cost of $200 million.

This preceded the wastewater enterprise presentation on February 5th, which stated that the growth on the West Side to be $10,000 to $20,000 new customer accounts.

This also preceded the January 29th water enterprise presentation, which did not refer to providing potable water for population growth on the West Side.

Based on the water enterprise presentation, it could be inferred that the additional capacity would be part of the potable emergency firefighting water system and be financed primarily with earthquake safety and emergency response bonds.

And what has the PUC already inflicted on the West side?

Blended water.

Since 2017, the PUC has blending uh hedge hechy water with groundwater from the West Side Basin Aquifer, which has affected the taste.

The West Side Basin aquifer is also at risk for salt water intrusion due to climate change and sea level rise, not to mention uh overdrafting.

And then there's recycled water, also known as toilet to tap.

Per the RBAC tour, the oceanside facility discharges 10 to million galleons, 10 to 11 million of gallons per day to the outfall pipe.

When recycled water comes online, there will initially be 5 million gallons daily for irrigation.

Thank you for your comment.

Thank you.

Thank you for your comment.

Moderator, are there any calls who have their hand raised for item 10?

Ms.

Lanyard, there are no callers that wish to be recognized.

Thank you.

All right, Commission colleagues.

Can we have a motion and a second to approve item 10?

Motion to approve.

Vice President LeBroni moves.

Second from Commissioner Jamdar.

President Arce?

Aye.

Vice President Leverone?

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacy is excused.

Commissioner Thurlow.

Aye.

Item 10 passes.

Item 11.

Consider and adopt the proposed wholesale water rates for fiscal year 2026-27, which will become effective for meter readings on or after July 1, 2026.

All right, one more time.

This presentation is to provide staff's recommendation for wholesale water rates for fiscal year 26-27.

Before you use the agenda for this presentation, I have a few slides talking about the wholesale rate setting process, some slides describing the drivers of wholesale rate increases, a recommendation for the wholesale water rate for fiscal year 26-27, and another slide just provide some context of the historic and projected wholesale rates for Bosca member agencies.

So wholesale water rates are prepared annually and done so in accordance with the water supply agreement between SFPUC and Bosca.

The rates are based on the wholesale customer share of expenses related to the operating and maintaining and main related to the operations and maintenance of the regional water system.

At the end of the fiscal year, SFPUC performs a true up of the actual revenues and expenses to confirm that the retail and wholesale customers are paying their proportionate share of the system.

If there is any under or over collection in a given fiscal year, then the differences are reflected in our balancing account that is then factored into future rate setting efforts.

This slide here provides a high-level overview of the rate setting formula that we use when we're setting uh wholesale rates.

The formula itself is a very straightforward calculation with two key parts.

We have the variable rate revenue requirements that you see in the numerator, and then the volumes uh that we have projected for wholesale customers in that given year and the denominator.

Uh the wholesale revenue requirement is by far the largest component and is based on our adopted budget.

It reflects the wholesale customers' proportionate share of operating debt service and cash funded capital expenses.

This amount is then reduced by the fixed fee revenues that we're projecting for that year.

And then lastly, we apply the balancing account.

And you can see that there's a plus-minus symbol here.

So in some years uh wholesale customers owe SFPUC for pass imbalances, and we'll add to the numerator.

In other years, it's reverse and SFPUC owes Bosco customers, and we'll reduce the rate revenue.

Uh and again, the denominator is then that that whole sum is then divided by the wholesale volumes.

My next couple slides really speak to the key components in there.

So this chart here shows a prior year actual expenses for fiscal year 25, uh, the projections for the remainder of fiscal year 26, and projections out to fiscal year 31 for the wholesale share uh of expenditures.

Um the upward trend here you see reflects the sustained growth in operating and capital related costs uh within the water enterprise over our planning horizon.

For fiscal years 207, uh the operating expenses are continuing to increase by around 3 percent per year.

And then we have continued growth in debt service uh from previously issued bonds are being layered on top of our annual expenditure uh projections.

This chart here shows the beginning fund balance or the beginning balancing account in each fiscal year.

Um you can see in recent years there was a large balance that was owed to Bosca uh as identified in the big negative values in the far left.

If we jump forward to this fiscal year, you can see for fiscal year 26, we began the year with about 13.4 million dollars that were owed, it was owed to wholesale customers based on projections this year, primarily driven by changes in uh wholesale customer water use.

We're seeing a bit of an inversion, a 16.8 million dollar uh change, and we're expected to see a $3.4 million balance owed to SFPUC by the end of this fiscal year.

And then next we have our water usage.

Um this chart's a little bit busy, but you see there's there's two lines here.

The top line reflects the wholesale customer usage, the bottom line is the retail customer usage.

The solid portions are the prior year actuals, and the the dash lines reflect the the projections that we have incorporated into our financial planning models.

You can see that the wholesale customers have recovered from the historic low in 2023 uh by over 10 uh million gallons per day.

You can see in the current fiscal year in 26, there's a bit of a dip.

Uh there's been a pretty pretty significant reduction in water use from what we had projected last year.

And we think that this is probably the new normal that they're gonna be vacillating between those between those amounts.

So you can see that our long-term projection we're we're projecting the wholesale customers will eventually make it back to the the total water usage that we saw last year, but it will probably be somewhere between those bounds.

There's a lot of uncertainty there, but that's generally where our projections are looking.

For retail customers, you can see there's also been some recovery since COVID and the drought, but hasn't been as dramatic.

We're also seeing sustained conservation and anticipating that the conservation is going to continue on in the future years.

So our financial plan actually has a modest decrease in projected volumes.

And this is something that uh Ms.

Corpinova spoke about in uh the tenure plan.

Um the water usage impacts rates for wholesale customers in a couple of ways.

Um, the differential between the wholesale and retail use impacts the proportional annual use calculation that we use to divide the regional system costs.

So the bigger the differential, so higher wholesale use, lower retail use means more costs allocated to wholesale customers.

But that's something that we evaluate year over year.

Um additionally, if wholesale customer usage is low, it means that there are fewer units of water to spread those costs over, which means it's gonna provide some upward pressure on rates.

Alternatively, if water use increases, then they have more units of water to uh to spread that cost around, and it softens the upward pressure on rates.

So bringing it all together, um the proposed wholesale rate is six dollars and twenty-three cents per CCF.

This reflects a 7.4 percent increase from our current rates.

Again, there's three main drivers that are that are pushing this.

Um the current year, fiscal year 26 wholesale usage projections are about 3.2 percent lower than last year, and they make up about 4.2 percent of this 7.4 percent increase.

So water usage has really been like the the chief driver here.

The second factor is the increase in the balancing account owed to SFPUC, where previously there was money owed to Bosca.

This again is driven by reduced water usage uh from when we set our rates for this year.

Uh lastly is the just the baked-in growth in operating and debt service spending.

Uh this chart here shows the historic and projected wholesale rates.

And we show we show it uh two different ways.

The the blue line reflects the adopted rates and our projected rates.

And the purple dash line is really just there for information and shows the value of our balancing account.

This shows what rates would have been if we had not used the balancing account at all, and you can see how how erratic rates would have been.

Um but moving from left to right, you can see that there was a period of rate stability uh before 2023.

This is why we are repaying that large balancing account that was owed to wholesale customers.

We manage that by holding rates flat and under collecting for a number of years.

Once we collect it, once we uh uh zeroed out the balancing account in 2023, there was uh reduced usage due to the drought and also increased capital spending, which started an upward trend in rates, which continued through uh fiscal year 27, and we anticipate will continue through fiscal year 28, after which we're projecting more inflationary rate increases for for wholesale customers.

That concludes my presentation.

Thanks so much for your patience.

Thank you, Mr.

Freiberg.

Questions from the Commission.

Vice President LeBroni.

Miss the your one part of your presentation.

But the uh rates that we use uh each year is you you get to change them up or down, whatever.

But the um prediction that you are using or your budgeting, is it based on the actual of what was used the year before with maybe uh amount of increase of not of the rates, but of the usage.

Okay, so every year we're re-evaluating where we think wholesale customer usage is going to be.

We don't have a crystal ball, we really have no idea what's going to happen.

We don't know if there's going to be a drought, if there's going to be concert if there is going to be an uptick in usage, there can be a number of drivers.

We also serve 26 different member agencies that each of them have their own different customers that have their own usage characteristics.

Um what we do do is every month we are looking at uh the our our retail customer usage and our wholesale customer usage, and we're in embedding those assumptions or those actual values into our financial models, and we're continuing to update it uh our own live version internally and looking at how water use trends are uh are shaping out for the fiscal year.

And then we use the last year uh the previous year's actuals and our projections to inform all future years.

So in our model, we have a number of different considerations in uh our volumetric forecast.

Uh but ultimately if you boil them all together, you have a percent increase that we're assuming for each year, and that's directly influenced by the prior year.

So if we we see a decrease this year, it's gonna influence our projections into the future.

Thank you.

Other comments, Commissioners.

Seeing none, can we please take public comment?

Thank you, Mr.

Fiber.

Thank you.

Remote callers, please raise your hand if you wish to provide comment on item 11.

Has Mr.

Johnny Shinoni returned.

Moderator, are there any callers who have their hand raised?

Ms.

Lanier, there's one caller that we should be recognized.

Thank you.

Caller, I'm in mute your line.

You have two minutes.

Thank you.

Peter Druckmeyer, Yosemite Rivers Alliance.

Uh slide seven showed projected water sales.

And once again, they're way lower than what the water enterprise puts in the urban water management plan.

Uh you know, we had a small victory back in 2022 that resulted in a report on July 5th, 2022, the compared water enterprise, the Finance Bureau projections.

Both have historically overprojected finance was much closer.

There's never been any discussion at the Commission about that.

And meanwhile, the water enterprise numbers, the urban water management plan numbers were the basis of the alternative water supply plan.

Now a lot of that's been reduced this year.

I think staff acknowledges that we really don't need a lot of alternative water supply.

But still in the 10-year capital plan and still on the books is the pure water peninsula pure water.

And that's a 747 million dollar project to pre MGD.

And as you know, the alternative water supply plan projects that we might need 92 to 122 MGD.

So it's just a small fraction of that.

747 million dollars.

Isn't it worthwhile having a conversation about that?

Do we really need it?

Are demands way inflated?

And is the design direct drought making things even more challenging?

In November 2021, the SFP declared a water shortage emergency and encouraged everyone to conserve water, uh, put on a drought surcharge.

And then I do not understand it at all.

Assumed that that drought surcharge would last into 2023, that huge water year when the SFPUC was entitled to 2.7 million acre feet.

So you encourage people to use less water, and as you know, using less water has big budget impact.

Let's have a workshop and discuss these things.

It's negligent notes.

Thank you, caller for your comments.

Your time has expired.

Ms.

Linier, there are no more callers that we should be recognized.

Thank you.

All right.

Thank you all.

We have before us item 11.

Can we get a motion to approve?

So moved.

Motion by Commissioner Jamdar.

Second.

Second by Vice President Leveroni.

President Arce?

Aye.

Vice President Leverone.

Aye.

Commissioner Jamdar?

Aye.

Commissioner Stacy is excused.

Commissioner Thurlow.

Aye.

Item 11 passes.

Item 12.

Approve an increase of $2 million to the cost contingency and 700 calendar days to the duration contingency for contract number WD 2893, Sanoa Valley Cloramination Facility Improvements with Anvil Builders Incorporated.

Hi, good afternoon, Commissioners.

President Arcee, my name is Alicia Reinhardt, and I'm the project manager for the item before you.

This item is a request to increase the construction costs and duration contingencies for contract WD 2893, the Snow Valley Chemical Facilities Improvements Project with Anvil Builders.

As some background, the Snow Valley Chloramination Facility is located in Alameda County and is a treatment facility for the Hedgehogie water supply that comes into the Bay Area.

It serves as the primary point to adjust water quality before being distributed to customers customers across the San Francisco Bay.

The main objective of this construction project is to replace the chemical metering pumps, upgrade the instrumentation and control equipment, and overall system integration at the facility to provide reliability and reduce the rising maintenance costs of the existing equipment.

We are asking the commission to approve an increase of $2 million to the cost contingency and an increase of 700 calendar days to the duration contingency.

The requested increase in contract duration is a result of an unforeseen operational event that has occurred during the Hedgehogi system shutdown this past winter.

During typical HC system shutdown, there are two regional treatment plants available to meet the customer water usage.

One of those treatment plants experienced some performance issues that reduced its reliability.

Operating the system with only one fully reliable treatment plant while Hatch Hetchy was offline created an operational risk.

As a result, the enterprise determined that the Hedgehogi supply needed to be brought back into service four weeks earlier than planned, which caused the Snall Valley chloramination facility to be brought online into service with it.

This prevented the completion of critical shutdown related construction work for the project.

The additional cost contingency is requested to extend the contract until the next available outage of this facility when the remaining work can be safely completed.

This extension will require the contractor to demobilize later this year.

And after and after all non-shutdown related work has been finished, maintain equipment that has already been procured and perform additional testing upon remobilization.

For those reasons, we respectfully request your approval.

Thank you for your time.

I can answer any questions.

Thank you very much for the presentation.

Any questions from the Commission?

Vice President Leveroni.

Would it have been possible to foresee the breakdown of the equipment or the fact of what happened?

Was there any or just when you ended up having to do the shutdown?

It was like, okay, things happen that are out of our control.

Yeah, this was completely unforeseen.

Um it was an operations event that happened, so the contractor in this case just tried to get everything back into operation so that we could support um the Hutchie facility.

And was that the additional cost?

I mean, was an additional cost to do that?

That's what we're doing.

Yeah, yes.

There is some additional cost to do that for the contractor to work and put everything back in place, and then they are gonna have to come back.

So there is some additional costs to there's no other questions.

May we please take public comment, Ms.

Lanier?

Remote callers, please raise your hand if you wish to provide public comment on item twelve.

Are there any members of the public president who wish to comment?

Has Mr.

Johnny Shinoni returned.

Moderator, are there any callers who have their hand raised?

Ms.

Lanier, there are no callers that wish to be recognized.

Thank you.

Colleagues, can we get a motion to approve item 12 with a second?

I move to approve item 12.

Motion by Commissioner Thurlow.

Second.

Second from Vice President Leveroni.

President Arcee?

Aye.

Vice President Leverone?

Aye.

Commissioner Jamdar.

Aye.

Commissioner Stacy.

Is excused.

Commissioner Thurlow.

Aye.

Item 12 passes.

Item 13.

Approve an increase of 2,800,000 to the existing cost contingency and 243 calendar days to the existing duration contingency for contract number WW 723R, Channel Force Main Intertie with Anvil Builders Incorporated.

Good afternoon, Commissioners.

President RC.

My name is Carmen Luke, and I'm the project manager for this Commission agenda item and contract.

This commission item is to request for an increase in construction costs and duration contingency, which is at uh located at Cesar's Abbas between Indiana and Pennsylvania Street.

This project is to construct a Channel Force Main inter tie, and it consists of an underground pipeline connection and control valves between two existing sewer facilities, the Channel Force Main and the Ace Less Creek Transport Storage Box.

This was completed throughout the dry weather season of 2025 between the months of June and September.

This con cost contingency increase would be for the additional pipe modification that was completed, including the pipe materials that was installed, and to support ongoing construction activities such as continuous dewatering.

As for the time extension, due to the pipe modification needed, which used up the dry weather season of 2025.

All right.

Thank you for the presentation.

I see Vice President Leverone has a question.

Thank you.

This is a cost contingency increase.

So is um are we planning that we're going to be using all of that?

I mean the the cost of the contract has increased exponentially, but um I understand the reasons why, but is it is a contingency something that we're seeing that is most probably going to be used?

So the contingency provides the PUC authority to approve any and modify any contract time and duration.

But the contractor still needs to um submit the proper documentation for us to approve any change orders and any work on the contract.

So yes, it will we will still need to provide additional information to approve anything.

Thank you.

Thank you.

Okay.

Any other questions?

Then we can take public comment, please, Ms.

Lanier.

Remote callers, please raise your hand if you wish to provide comment on item 13.

Are there any members present who wish to comment?

Last call for Mr.

Johnny Shannoni Moderator, are there any call are there any callers who have their hand raised for item 13?

Ms.

Lanier, there are no callers that we should be recognized.

Thank you.

Okay.

This is our last action item of the day.

So please feel free, colleagues, to make a motion to approve it.

Motion to approve item 13.

Motion by Commissioner Jamdar.

Second.

Second from Commissioner Thurlow.

President Arcee.

Aye.

Vice President Leveroni.

Aye.

Commissioner Jamdar.

Commissioner Stacy's excuse.

Commissioner Thurlow.

Aye.

Item 13 passes.

Item 14 is communications.

The Commission takes note of the communications that we received.

Item 15.

Items initiated by Commissioners.

Commissioners, are there any items to initiate for future discussion?

No.

Okay.

There are none.

Item 16, adjournment.

This meeting is adjourned at 404 p.m.

Thank you, everyone.