LAFCO delays approval of MOU with SFPUC after debate over scope, funding and hydrogen study

Chair Supervisor Connie Chan and LAFCO commissioners spent substantial time discussing a proposed memorandum of understanding (MOU) that would formalize LAFCO’s monitoring and advisory role for Clean Power SF and fund special studies. Executive Officer Jeremy Pollock told commissioners the draft MOU would run roughly 3½ years and proposed an initial funding cap of $800,000 from Clean Power SF ratepayer funds to support a set of strategic studies and LAFCO monitoring.

Why it matters: The MOU would direct LAFCO to perform independent studies on technical and policy challenges related to the city’s decarbonization plans, creating an outside analytic layer to advise both the SFPUC and the Board of Supervisors. Commissioners said the studies could shape how the city phases out fossil‑fuel infrastructure, positions batteries and vehicle charging in dense urban areas, and plans financing for a renewable portfolio.

Pollock summarized the MOU’s proposed scope: monitoring Clean Power SF’s operations and conducting several special studies, including (1) decarbonization and decommissioning of natural‑gas infrastructure in buildings, (2) battery‑storage siting and policy, (3) transportation electrification in a dense urban setting, and (4) lower‑priority surveys of emerging technologies such as green hydrogen. Pollock said the SFPUC’s latest proposal sets a funding limit “not to exceed $800,000” and anticipates some flexibility in refining study details by mutual agreement of staff.

Notable exchanges and concerns: Several commissioners urged a stronger emphasis on financing. Commissioner Marr highlighted a recent UC Berkeley report estimating the citywide cost of implementing the Climate Action Plan and said financing strategy should be a priority study area. Vice Chair Jackie Fielder pressed for broader topic categories rather than narrowly prescriptive studies and expressed strong skepticism about hydrogen as an urban solution: “I’m highly skeptical of hydrogen,” she said, stressing risks and the influence of incumbent fossil‑fuel interests in hydrogen research.

Director Mike Himes, representing SFPUC’s Clean Power SF, defended the $800,000 starting amount as the agency’s available budget for the work and said the SFPUC expects to show initial results that could justify additional investment later. Himes said some topics identified in the draft are more appropriate for SFPUC to lead operationally, while policy and cross‑departmental issues could benefit from an independent LAFCO study.

Outcome and next steps: Chair Chan moved to continue the MOU item to the call of the chair to allow staff to circulate a cleaned draft and to consider scheduling a special December meeting; Commissioner Marr seconded and the motion passed unanimously. Pollock and Himes said they will continue negotiations and prepare a revised draft for commissioners, and the SFPUC indicated it would aim to consider the MOU in early January if LAFCO acted promptly.

What remains unresolved: Commissioners disagreed about whether to include four narrowly defined studies in the MOU or to leave study topics general to retain flexibility; they also debated whether the initial $800,000 ceiling should be raised toward the $1.2 million LAFCO had earlier requested. The MOU was continued for further refinement rather than approved.

Context: The discussion follows several months of work to define a partnership between LAFCO and SFPUC after Clean Power SF’s launch. The MOU is intended to align LAFCO’s independent oversight role with SFPUC’s operational priorities as the city accelerates building decarbonization and vehicle electrification.

Next actions: Staff will post a cleaned draft for commissioner review, and LAFCO will attempt to schedule a special meeting in December to finalize the item before seeking SFPUC commission approval in January.