Q1 UPDATE Local Energy Cooperative Formation {Ambassador} | {Phone Number}

Key Events To Date CCA Law (SB 790 & AB 117). Marin County CCA up and running, cash flow positive, light green content hit 50% renewable in Jan, San Francisco CCA launches in 2012; Sonoma in formation. Many CCAs up and running nationally. Navigant prepared a CCA Study for the County of San Diego, Chula Vista and San Marcos took steps towards formation of CCAs subsequent to this study. SDED Foundation formed in late 2011 as 501(c)3. Kick-off event in Solana Beach, 26-Jan. In depth article, Business Section, NC Times, 29-Jan. AD-HOC Committees in formation in SD.

The People Elect Supervisors and Council Members Of Participating Jurisdictions (Cities & County) Board of Directors (1 Per Jurisdiction) Appoint Citizen Advisory Board (2 Per Jurisdiction) San Diego Energy District General Manager, Legal, QA, Ops Oversight Energy Resource s Customers SAN DIEGO ENERGY COOPERATIVE

The People Elect Supervisors and Council Members Of Participating Jurisdictions (Cities & County) Board of Directors (1 Per Jurisdiction) Appoint Citizen Advisory Board (2 Per Jurisdiction) San Diego Energy District General Manager, Legal, QA, Ops Oversight Energy Resource s Customers SB 375 AND AB 117 empower the People of California to form a local energy cooperative.

The People Elect Supervisors and Council Members Of Participating Jurisdictions (Cities & County) Board of Directors (1 Per Jurisdiction) Appoint Citizen Advisory Board (2 Per Jurisdiction) San Diego Energy District General Manager, Legal, QA, Ops Oversight Energy Resource s Customers One or more county agencies elect to form a CCA directed by the People.

The People Elect Supervisors and Council Members Of Participating Jurisdictions (Cities & County) Board of Directors (1 Per Jurisdiction) Appoint Citizen Advisory Board (2 Per Jurisdiction) San Diego Energy District General Manager, Legal, QA, Ops Oversight Energy Resource s Customers The Agencies appoint oversight: a Board of Directors & Community Experts.

The People Elect Supervisors and Council Members Of Participating Jurisdictions (Cities & County) Board of Directors (1 Per Jurisdiction) Appoint Citizen Advisory Board (2 Per Jurisdiction) San Diego Energy District General Manager, Legal, QA, Ops Oversight Energy Resource s Customers The Energy Cooperative procures and sells energy to customers.

Present Concerns What if San Diego Gas & Electric pulls off a full court press within or outside the protection of State Law and intimidates jurisdictions from CCA formation? What if SDG&E wears out the resources of the people during CCA formation. What charges for Distribution and Transmission can SDG&E obtain from the PUC and will those make the District’s rates uncompetitive with SDG&E? Is San Diego too conservative to push for a second utility?

Formation Rights {COOPERATION, CODE OF CONDUCT} “...Existing law requires an electrical corporation to cooperate fully with any community choice aggregator that investigates, pursues, or implements community choice aggregation programs, including providing appropriate billing and electrical load data.... (d)The Public Utilities Commission has found that conduct by electrical corporations to oppose community choice aggregation programs has had the effect of causing community choice aggregation programs to be abandoned.” SB 790 {FORMING ENTITIES} “SEC. 2.Section is added to the Public Utilities Code, to read: For purposes of this chapter, ‘‘community choice aggregator’’ means any of the following entities, if that entity is not within the jurisdiction of a local publicly owned electric utility that provided electrical service as of January 1, 2003: (a) Any city, county,or city and county whose governing board elects to combine the loads of its residents, businesses, and municipal facilities in a community wide electricity buyers’ program. (b) Any group of cities, counties, or cities and counties whose governing boards have elected to combine the loads of their programs, through the formation of a joint powers agency established under Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code.” AB 117

Key Legal Conditions {IMPLEMENTATION} (A) An organizational structure of the program, its operations, and its funding. (B) Ratesetting and other costs to participants. (C) Provisions for disclosure and due process in setting rates and allocating costs among participants. (D) The methods for entering and terminating agreements with other entities. (E) The rights and responsibilities of program participants, including, but not limited to, consumer protection procedures, credit issues, and shutoff procedures. (F) Termination of the program. (G) A description of the third parties that will be supplying electricity under the program, including, but not limited to, information about financial, technical, and operational capabilities. {AUTO OPT-IN} (2) Under community choice aggregation, customer participation may not require a positive written declaration, but all customers shall be informed of their right to opt out of the community choice aggregation program. If no negative declaration is made by a customer, that customer shall be served through the community choice aggregation program.... {SDG&E CUSTOMER SERVICES INTACT} Electrical corporations shall continue to provide all metering, billing, collection, and customer service to retail customers that participate in community choice aggregation programs. Bills sent by the electrical corporation to retail customers shall identify the community choice aggregator as providing the electrical energy component of the bill. The commission shall determine the terms and conditions under which the electrical corporation provides services to community choice aggregators and retail customers.

Further Benefits No expectant parent (Sempra) or shareholders to answer to. Legal rights to administer conservation, efficiency funds and public goods funds; rights to protect ratepayers and the solar industry within San Diego County. Ability to borrow at low rates to finance expansion, conservation, forwards, contracts, efficiency, and PACE. Ability to join Universities and Local Companies in the pursuit of innovation in the areas of storage and wireless delivery of power. Ability to protect and promote the right to interconnect fairly and profitably for the purpose of selling energy to the District. Choice fosters healthy competition... a sorely lacking feature for the customer in San Diego. Competitive rates with guarantees of more renewable and local energy content. Platform for further independence from SDG&E.

THANK YOU Founders: Lane Sharman & Bill Powers