1 Bret Lane, Chief Operating Officer, SoCalGas LOCAL ENERGY RELIABILITY IN SUMMER 2016 SOCALGAS ® ACTIONS April 8, 2016

SOCALGAS SYSTEM MAP with SDG&E

Record of Proactive Steps to Manage Reliability 3

Reliability History: DateType February 2, 2011Curtailment December 6-11, 2013Curtailment February 6, 2014Curtailment February 25, 2014Curtailment Watch June 30-July 1, 2015Curtailment Watch / Curtailment July 29, 2015Curtailment Watch December 28, 2015Curtailment Watch 4

Aliso Canyon Withdrawal 5 »December 10, 2015 – DOGGR orders maximum withdrawal from Aliso Canyon:  “Maximize the rate of withdrawal from the reservoir to reduce reservoir pressure to aid in the control and plugging of SS 25.” »January 6, 2016 – Governor Brown issues Aliso Canyon Emergency Order:  “The California Public Utilities Commission and the California Energy Commission shall take all actions necessary to ensure that Southern California Gas Company maximizes daily withdrawals of natural gas from the Aliso Canyon Storage Facility for use or storage elsewhere.” »January 8, 2016 – SoCalGas Response to CPUC on Aliso Inventory Level Recommendation  “SoCalGas is currently required to maximize the rate of withdrawal from Aliso and is prohibited from injecting supplies into Aliso. If SoCalGas were not subject to these requirements, I would direct Gas Operations to discontinue maximum withdrawals once inventory at Aliso is reduced to 15 billion cubic feet (BCF)—not taking into account the unknown amount of leaked gas—and to thereafter operate Aliso in a more conservative manner, with additional withdrawals focused on the wells surrounding the leaking well. The minimum level of inventory could be reduced to 10 BCF throughout February and 5 BCF throughout March because the risk of extremely cold days in these months is lower.”  “These directions assume that the leak is continuing and our ultimate obligation as a prudent operator in this situation is to preserve core reliability for natural gas consumers only. These Aliso inventory levels would take us below the 1- in-10 reliability level that we plan for, in recognition of the extraordinary circumstances we are now facing. They will not preserve our usual levels of reliability for electric generators, gasoline refineries, and other noncore customers. Maximum withdrawals over the past several weeks have helped reduce emissions from the leaking well, but we are also mindful of reliability concerns. We think the proposed inventory levels—which would be adequate to provide uninterrupted service to core customers during a 1-in-35 peak day event—would strike a prudent balance between these competing concerns.” »January 21, 2016 – CPUC orders SoCalGas to maintain 15 bcf of natural gas in the Aliso Canyon field:  “SoCalGas is ordered to take all reasonable steps to reduce the level of working gas at the Aliso Canyon Storage facility down to 15 billion bcf of actual working gas, until further notice.”

The Role of Storage in Reliability 6

Actions Underway to Safely Restore Aliso 7

Summary 8 We strive to provide safe and reliable service at reasonable rates to all customers including large commercial and industrial customers such as electric generators and refineries Our primary obligation, as directed by the CPUC, is to core customers. We prioritize to meet core demand with special consideration towards reliability during winter months o Core customers include residential customers, small businesses and providers of fuel for natural gas vehicles.