SFPUC Power Business Plan POWER ENTERPRISE BUSINESS PLAN 2016 | Page 4

Six Priority Strategies
Foremost, we must secure and maintain affordable
access to PG&E’s distribution grid. This strategy is
fundamental to our success. Given our geographical
overlay with PG&E’s distribution assets, affordability
relies on using PG&E’s distribution grid and paying
our fair share for usage of the PG&E grid, rather than
building our own duplicative facilities. This will ensure
we can continue to serve our existing customers and
to pave the way for growth. Our long-term agreement,
established in 1987, dictates the cost and conditions
for our usage of PG&E’s distribution system, but this
agreement expired July 1, 2015. PG&E has proposed new
terms that will result in new costs that are higher than
what we believe is allowed by law. We have placed our
concerns before Federal regulators to work things out
with PG&E through a settlement process.

Our success will avoid unprecedented rate increases,
cost cutting, and reductions in service in the short term.
In the long term, we will invest strategically to build up
the Power Enterprise’s distribution assets, but this will
be discussed in further detail in the fifth strategy.
Second, we must sell service to more customers and
stabilize revenues. This will achieve maximum Hetch
Hetchy value for San Francisco since our current supply
exceeds demand. Not all customers are alike. As the
Power services vary across four types of customers,
so do the earned revenues and the incurred costs. The
highest value segment, and the core of our current
business, is our Full Pay Full Service customers (see
Fig. 1), where we provide 100% of our customers’
electricity needs.

Dis ܙ][ۘ\