By Tim Kingston

San Francisco came one step closer June 10 to implementing a modest public power plan that encourages municipal solar power, after some determined diplomacy by Sup. Ross Mirkarimi.

After a four-and-a-half-hour Local Agency Formation Commission meeting, Mirkarimi appeared to have broken a logjam between public power advocate Paul Fenn – author of a community-choice aggregation proposal – and SF Public Utilities Commission staff about how to implement CCA.

The idea of CCA is to allow the city to buy electric power in bulk to undercut Pacific Gas and Electric Co., while at the same time encouraging the use of alternative energy sources like solar, wind, and tidal power. But Fenn (an expert in the field) and the SFPUC had very different visions for implementing the program (see "Co-op Power," 5/11/05).

"For months there has been a need for a melding of the [Fenn and SFPUC] plans," declared Cathleen Sullivan, of the Sierra Club's San Francisco chapter, after the LAFCo meeting. "The outstanding issues were dealt with.... The discussion was substantial, and it was a huge step to resolving the differences."

Mirkarimi took elements from both plans, resulting in a proposed CCA agency that would sign long-term energy contracts that could be altered by the Board of Supervisors in the event of major fluctuations in the energy market.

The SFPUC wanted routine review of the CCA contracts, and Fenn argued that once the contracts are signed, they shouldn't be altered.

The distinctions are complicated, but in essence, Fenn's vision of CCA would involve the city locking in 7- to 14-year energy-supply contracts. Fenn thinks that's important to demonstrate to Wall Street investors that the city has a stable business model – which will help the city sell the bonds it is preparing to float for new solar-power facilities.

Barbara Hale, the SFPUC's assistant general manager for power, suggested that the city's Rate Fairness Board, which oversees water rates, should be able to periodically review the rates set by the CCA agency. That would keep the city from losing money in the event of energy-market fluctuations. Hale and other SFPUC officials also seemed to feel the contracts proposed by Fenn might be too lengthy, proposing that a five-year contract would be better for the city.

Mirkarimi and other LAFCo members seemed to be leaning toward creating or using the preexisting SFPUC advisory body to make recommendations in the event of massive market fluctuations, but ensuring that the Board of Supervisors would retain the ultimate authority to make any rate changes. Mirkarmi said, "Fenn's plan was aggressive, and the PUC was too tame. Either one unto itself lacked the technical wherewithal to get us where we needed to go."

There will be a final LAFCo meeting June 17 to wrap up and merge the Fenn and SFPUC visions of CCA.

P.S. Sup. Tom Ammiano is sponsoring a draft resolution from LAFCo on renegotiating the PG&E franchise fee, a move that – if successful – could net the city millions of dollars. The LAFCo resolution will be drafted June 17 and be forwarded to the Board of Supervisors for consideration and action.