SFPUC Power Business Plan POWER ENTERPRISE BUSINESS PLAN 2016 | Page 12

Distribution Investment Opportunities Financial Results (Ten Years) The service growth strategy will grow the core services to better match sales with supplies, bringing more Hetchy supplies to San Francisco and increasing the Target Area: Redevelopment areas and high customer concentrations strongest service offerings while decreasing the weakest service offerings. This growth strategy will both increase and stabilize revenues significantly, bringing even more in qualitative long-term benefits such as greater customer stability and affordability, growing the reach of service within San Francisco, and investing locally in Power’s distribution network. This value translates into increased revenues, reduced unfunded cost exposures, and long-term financial stability (see Table 2). Existing Customer Interconnection Points (small - medium - large) Existing CAISO Interconnections (PG&E owned) CURRENT $3.5 $3.5 Other Unfunded Costs $3.0 Shortfall Sixth and finally, we must focus on achieving operational excellence so we can act with commercial speed and PROJECTED $1 Billion $2.5 Potential Distribution Access Costs $3.0 Debt Financing $2.5 CCA Market Sales MID/TID efficiency to execute all of these strategies successfully. We have several agency and City-wide constraints that burden our abilities to implement our strategies. While $2.0 City Programs Debt Financing $2.0 General Fund $1.5 $1.5 Additional Full Pay Full Service Sales Additionally, Power’s role as the City’s electric service provider is not well known or understood. The Power Enterprise, and the SFPUC more broadly, is working to Transmission General Fund $0.5 City Programs Distribution Transmission $1.0 $1.0 improve or, in some cases, overhaul operating practices and procedures to ensure we can reduce or eliminate such Market Sales MID/TID Distribution Access Commercial Speed Distribution most operating platforms are scalable, our customerfacing programs are tailored to our current customer base. Available for Other Costs Full Pay Full Service Supply $0.5 Full Pay Full Service Supply threats as these to commercial speed and responsiveness. $0.0 $0.0 As an integrated plan, these six strategies will result in Figure 7: This map shows distribution investment opportunities, emphasizing the redevelopment areas and high customer concentrations. 10 SFPUC Power Business Plan 2016 tangible, measurable improvements to Power’s financial strength and success in achieving business goals (see Fig 8). Revenues Costs Revenues Costs Figure 8: Illustration of the financial benefits of implementing these six recommended strategies. SFPUC Power Business Plan 2016 11