Update that well provide you in march. With that, im happy to take any questions. I have a question. How are we going to absorb the 27 reduction in revenues . The programme has sufficient reserves to cover this. And as i mentioned, it is about 137,000 on an annualized basis so our programme reserves will be sufficient for that. Like i said, well when we adjust rates for the upcoming fiscal year, well make sure to look at both green rates and super green rates to see if they need to be adjusted based on the rate proposal from pg e. Ok. Something that comes to me, i can see this spiral going that we have to always stay competitive to pg e. But theyre larger and bigger and i just would like to have your feelings in terms of the future and how we can withstand these reductions. Yeah. I think that this will be something that well need to take a look at as were working on the next set of rated adjustments for basic green power. We need to make sure that it will be very competitive. We continue to see competitive pricing in terms of our bids that were getting. And i can assure you that whatever we present will not only tie with the budget that were going to be talking to you in more detail on thursday, but also as it relates to the rates that were going to propose to you. Everything will be in sync. I cant speak to exactly how that will look as of right now, but we will work through those details. Maybe you want to get up and talk to this, but we were very mindful. Were trying to be competitive that pg e have the ability to maybe subsidize the rates because they have a larger rate base. And so were very concerned about that. And were robert can talk about all the efforts that were doing to make sure that that doesnt happen. But we will try to be as competitive as possible. However, if it gets to a point where their price is lower, then we would probably have a more expensive product versus going in the poor house. And i would add that this is a programme thats providing better value to customers, that value comes in the form of rates but also comes in the form of product and responsiveness and the ability to know that what you are spending on your electric bill is reinvested in San Francisco by San Francisco. So, it is more than you know, were actually talking about this clean power s. F. Programme as more than just a rates value. Right . Its important for us to be affordable and conscious of that. But youre right. Were not were not designing this programme to chase pg es rates. The rate changes that deputy c. F. O. Pearl described to you are just to the supergreen component of our rates, not to the green Customer Base. Remember that 4. 1 of our customers are in supergreen. So, when you reflected back, 27 , that sounds big. Thats a 27 reduction on a very small portion of our Customer Base. Just keep that in context as well. Ok . But if were successful with the Supergreen Products and programme, obviously this would be a growing pentserage. Absolutely. As we grow and become a more robust organization, well have a reserve and weather the ups and downs of whats going on where pg es rates. As i just described, pg e has proposed generation rate increases in march. Theyve also proposed pcia changes as well. It is a sort of roller coaster of rate changes and effects that flow through to our programme and the competitive view of our programme. At the end of the day, customers pay bills, not rates. So, what is going to matter is the bottom line on that bill. And were very conscience of that. As we procure more energy to grow our programme, were paying very close attention to the cost profile and running the proforma to make sure that all costs are covered by the rates we are charging. So that we are meeting ours revenue requirement from this Customer Base with no subsidies from our other electric rate payers. So, is there any other other downside, besides this potential future guessing game at this point, i guess. Or like from an optics perspective that is there a downsides in setting these rates, reducing these rates . We dont see a down psi. You know, we are staying competitive, which i think is important for continuing to market the supergreen component of this programme. The object civ to grow that component of our programme. I think staying competitive is attractive and thats part of what is accomplished with the reductions that were just described. But, again, were still covering our costs so i think were overall good and have the right balance. The other thing i would add is with the green product, its optout. But for supergreen, you have to optin. And if there is a solar choice that pg e is offering that is cheaper, then when you start looking at your options, you may choose to go with pg e options. So, i think that is why we really want to be competitive so that we can have both and supergreen customers. And then, of course, were staying active at the cpuc to make sure that the rates that pg e is charging are cost compensatory and theyre not subsidizing across rate groups that. Was the regulatory item i mentioned in the clean power s. F. Update. Were seing their current supergreen rate dos not account for all the costs to provide that sorry, im saying is supergreen. Solar choice service. And thats problematic. So we are advocating at the cpuc to make sure that all the costs of the solar Choice Programme are being borne by solar choice customers. Ms. Hale, can you comment on other c. C. A. S, how theyre dealing with their rates and pg e . Mmhmm. So im seeing as i work with the other c. C. A. Directors, im seeing that all of them are talking about rates and their programmes as being competitive. Recognizing that through the course of a year, they are not always going to be charging a rate that results in a bill that is lower than if a customer had stayed with pg e. There is a general recognition, i think, within this growing second is to of the industry that the growing proposition offer a customer is more than just that bill component. It really comes down to broader services as well and responsiveness to customer needs, that local investment is key for all the other c. C. A. S as well. The other c. C. A. S dont have as high a Participation Rate in their 100 offering. So they arent as active in a debate were engaged in on the solar choice offering that pg e has. Interesting. I would also mention that the im talking a lot about when you are asking me about the other c. C. A. S, im mentioning primarily pg e with respect to the solar choice. Edison, Southern California edison and San Diego Gas and electric have both requested authority to close their 100 offering programmes in their service territories. They have such low participation, theyre saying it is not worthwhile for them to continue their programmes. Thank you. Commissioners, anything else . Move the item. Second. Any other discussion . Any Public Comment . Thank you, president kwon and commissioners. Happy new year. 350 bay area. We definitely support this and i support everything that ms. Hale said. I wasnt planning on speaking, but to commissioner caens point, about the spiral, i think it does bear, you know, just elaborating a little bit more. Were in a bit of a unique situation because a lot of the other c. C. A. s roll in their whole Service Territory within six monthings or a year and so there is kind of this critical period where folks are us us is susceptible, if you will, to the choice and opting out of pg millimetre e which is a pretty beefy choice which is whats in front of them. Were in a situation where, for multiple years, people kind of think of clean power s. F. As an optsin programme because that is how it is for folks, except in certain neighbourhoods right now. Until the remaining traunches of folks are rolled in citywide, it leaves us susceptible to pg e marketing and their plans. As people look to go 100 renewable and google that, if they dont know about this programme, theyll hopefully find two choices if not just theirs through Search Engine optimizization and then theyll have a choice to make. We dont want them to make that choice. We want them to be in something that makes them happy and is local and puts money back into the community instead of shareholder dividends and executive compensation. We really need to get the rollin happening as quickly as possible and i just wanted to say this is why one of the reasons why weve been advocating that all along. Very supportive of the p. U. C. And cal c. C. A. , you know, fighting at the california p. U. C. And at the legislature, but ultimately as long as the utilities are able to set the ground rules that we have to play on, in my opinion, at the California PublicUtilities Commission and through certain legislative offices, were going to continue to face this reactive roller coaster, spiral like you are suggesting. And i think anything that we can do to increase political pressure and bring kind of the full weight of the city and county to bear on the california p. U. C. And the legislature, we have a much larger hefts than any of the other operating c. C. A. S. L. A. County will obviously dwarf us. But as of now, i feel like we in Alameda County have a big voice. Lastly, you know, reducing our exposure to the market where we need to buy energy to spend money and create costs for the programme. That is really the other way off of this hamster wheel and that is why were advocating for sklerltsd local bill. Once we have products Generating Energy and we can sell that to folks and dont have those extra costs we wont be subject to market change. Thank you. Thank you. Next item, please. We need a vote. Oh, we need a vote. Lets vote. All in favour. [laughter] aye. All opposed . Next item. Item 11. Approve the form of a Credit Agreement and associated Fee Agreement with j. P. Morgan chase bank a nottoexceed commitment amount of 15 million and term up to six years to provide clean credit support of the s. F. Power programme and execute the Credit Agreement and associated Fee Agreement subject to board of supervisors approval. May i have the slides, please . Commissioners, eric sandler, c. F. O. Of the p. U. C. Im here to talk about a proposed Credit Agreement supporting citiwide roll out of clean power s. F. I wanted to spend a few minutes what i wanted to talk about today is first our initial launch Financial Strategy, talk about the growth plans and our Financial Strategy for growing this programme and then get into some of the specific terms of the agreement. So, you may remember that september 2015, we were trying to organize clean power s. F. As a separate entity with its own sets of revenues, expenses, assets and liabilitieses. In order to with a separate net revenue pledge from the power enterprise in order to establish a ratable credit Going Forward. And what this meant was, as i mentioned, separate accounts as well as an endenture that, for the power enterprise that excluded can clean power revenues and expenses. When we were talking to banks and we went out with an r. F. P. , no banks were willing to extend credit to clean power on its own. And so it required limited Financial Support of the power enterprise. And that support came in the form of an 8 million loan as well as a very subordinate backup security pledge for letter of credit that was issued by j. P. Morgan on behalf of the power contrapartis that we signed contracts with in order to provide launch power for the programme. On may 9, 2017, you approved a citywide plan to roll out service to the entire city. Over a multiyear period. Wi are continuing to build a plane and strategy in support of that. That growth plan that identified the need for letters of credit to provide collateral to power contra parties like the like during the launch as well as a potential need for working capital. And so we went out with an r. F. P. To banks again for this type of credit facility. And the goal was to try to have these agreements be nonrecourse to the power enterprise and only clean power s. F. Revenues and where as in 2015 we were not successful and no bank was willing to loan clean power s. F. Money, there time around there were several banks willing to offer credit on a nonrecourse basis and j. P. Morgan offered the best terms sorry. Why was that . Why do we think that they were why did it change . Because revenue was starting to come in or i think it was multiple thing. One was a track record. We had year track record of history for clean power s. F. And theres been a lot of growth in the c. C. A. World. And there were a couple of banks that really wanted to jump into the market opportunity. So, there were many more banks unwilling to do it than there were willing to do it. In 2016. This year. This year. So, what we have before you is a Credit Agreement that is nonrecoursed to the power enterprise so its recoursed solely to clean power s. F. Revenues. It is for an amount up to 150 million total. It is a term of three five years, sorry. Credit capacity can be used for multiple purposes. To issue letters of credit to provide power contracting, security obligations and then also as i mentioned to provide working capital. It is recourse only to clean power s. F. Revenues and the cost depends on particular a particular use that we require of the facility and that also the Debt Service Coverage ratio of clean power at the time. So there is an undrawn fee for the total amount of the facility which is 50 basis points. There is a feeze for any letter of credit that is issue on behalf of power contracting, counterparties which ranges depending on Debt Service Coverage of the enterprise and then there is a charge for revolving credit which is based on one month libor, plus a spread. This agreement is not unlike many of the other Credit Agreements that we have for the water and waste water enterprise. It contains a number of covenants and commitments that we make, that the commission makes to counterparty. And the covenants that weve made are consistent with the clean power business practice policies as well as the commissions reserve policies that its established. I wanted to highlight three of the covenants. Youre familiar with debt service covenants and waste water and set rates and charges to meet Debt Service Coverage level of 1. 25 and the Commission Policy is 1. 35 . This particular covenant in this agreement is to set rates and charge for a target of 1. 1. And then if the Debt Service Coverage target goes below 1. 05, that is considered an event of default. If there is a required minimum debt Service Level in other words to initiate l. L. O. C. S and extend credit and that is at 120 and then at a level of 150 we start to benefit from reduced pricing. Now ill just mention that the, you know, when we look at the base case performa for clean power s. F. And even when we look at sensitivities, were seeing debt coverage raich ratios of 150 to 30. The next series of covenants relates to reserves. The agreement builds on the business practice policies of clean power s. F. Which are an operating reserve of 90 days expenses and sa Rate Stabilization reserve of 15 of revenues. The ko f nanlts requires that any excess revenues or 80 of excess revenues be dedicated towards those reserves to meeting those targets. And then there is a test in your 2021 and 2122 that we need to meet 50 of the proforma or 80 of the performa in 2022. And we have done Sensitivity Analysis and in downside scenarios were meeting those targets. But it is important to mention that this Credit Agreement doesnt do away with the risks, the underlying risks in the c. C. A. Business in clean power s. F. As we discussed, the business is still exposed to market and Regulatory Risk and we have the mitigations that we deploy ands a. G. M. Hill talked about those when you had your initial launch for clean power and well be talk about those again next month, february 13. Looking at how we manage the various risks of the programme. And weve run a number of sensitivity analyses with a Third Party Financial consultant to make sure that we meet these tests that were covenanting to under a range of scenarios. So what happens if we dont meet the financial targets . Well, a failure of covenant results in a suspension event which means theres no more credit extended beyond what has already been extended. There are not meeting the reserve targets which i talked about. Which is 50 and 80 of our proforma levels or dropping below 1. 05 Debt Service Coverage. Considered an event of default. In that case, we would meet and confer with j. P. Morgan, reestablish a baseline and renegotiate the terms of the agreement. What is important to note, that in all cases, this is not recourse to the power enterprise. The rest is its own inspects financial operation. So the forms of the document before you are one, the form of the Credit Agreement and it takes sets forth the terms of the agreement including repayment terms and includes the form of an irrevocable letter of credit issued to central power. Power sales, counterparties. It also contains the Fee Agreement and the terms of which are i specified a little earlier. So the requested Commission Action is to approve the form of the Credit Agreement with j. P. Morgan for not to exceed amount of 150 million. And to authorize the general manager to nego