CPUC Public Agenda 3301 Thursday, September 27, 2012, 9:00 a.m. San Francisco, CA Commissioners: Michael R. Peevey Timothy Alan Simon Michel Peter Florio Catherine J.K. Sandoval Mark J. Ferron

Safety and Emergency Information The restrooms are located at the far end of the lobby outside of the security screening area. In the event of an emergency, please calmly proceed out of the exits. There are four exits total. Two exits are in the rear and two exits are on either side of the public speakers area. In the event of an emergency and the building needs to be evacuated, if you use the back exit, please head out through the courtyard and down the front stairs across McAllister. If you use the side exits you will end up on Golden Gate Ave. Please proceed around the front of the building to Van Ness Ave and continue on down to the assembly point. Our assembly point is between the War Memorial Building and the Opera Building (House) which is on Van Ness Ave, located between McAllister and Grove.

Public Comment Per Resolution ALJ-252, any member of the public who wishes to address the CPUC about matters before the Commission must sign up with the Public Advisor’s Office table before the meeting begins. If an individual has signed up using the electronic system on the Commission’s website, they must check in with the Public Advisor’s Office on the day of the meeting, by the sign-up deadline. Once called, each speaker has up to 3 minutes at the discretion of the Commission President, depending on the number of speakers the time limit may be reduced to 1 minute. A sign will be posted when 1 minute remains. A bell will ring when time has expired. The following items are NOT subject to Public Comment:  Item: 19, 20 & 23  All items on the Closed Session Agenda

Public Comment Per Resolution ALJ-252, any member of the public who wishes to address the CPUC about matters before the Commission must sign up with the Public Advisor’s Office table before the meeting begins. If an individual has signed up using the electronic system on the Commission’s website, they must check in with the Public Advisor’s Office on the day of the meeting, by the sign-up deadline. Once called, each speaker has up to 2 minutes to address the Commission. A sign will be posted when 1 minute remains. A bell will ring when time has expired. The following items are NOT subject to Public Comment:  Item: 19, 20 & 23  All items on the Closed Session Agenda

Public Comment Per Resolution ALJ-252, any member of the public who wishes to address the CPUC about matters before the Commission must sign up with the Public Advisor’s Office table before the meeting begins. If an individual has signed up using the electronic system on the Commission’s website, they must check in with the Public Advisor’s Office on the day of the meeting, by the sign-up deadline. Once called, each speaker has up to 1 minute to address the Commission. A bell will ring when time has expired. The following items are NOT subject to Public Comment:  Item: 19, 20 & 23  All items on the Closed Session Agenda

Agenda Changes Items shown on the Consent Agenda will be taken up and voted on as a group in one of the first items of business of each CPUC meeting. Items on Today’s Consent Agenda are: 1, 4, 7, 8, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20, 22 & 23 Any Commissioner, with consent of the other Commissioners, may request an item from the Regular Agenda be moved to the Consent Agenda prior to the meeting. Item: 25 from the Regular Agenda has been added to the Consent Agenda. Any Commissioner may request an item be removed from the Consent Agenda for discussion on the Regular Agenda prior to the meeting. Item: None have been moved to the Regular Agenda. Item: 24 has been withdrawn. The following items have been held to future Commission Meetings: Held to 10/11/12: 2, 3, 5, 6, 9, 11 & 21 Held to 10/25/12: 27 & 27a

Regular Agenda Each item on the Regular Agenda (and its alternate if any) will be introduced by the assigned Commissioner or CPUC staff and discussed before it is moved for a vote. For each agenda item, a summary of the proposed action is included on the agenda; the CPUC’s decision may, however, differ from that proposed. The complete text of every Proposed Decision or Draft Resolution is available for download on the CPUC’s website: Late changes to agenda items are available on the Escutia Table.

Regular Agenda – Energy Resolutions and Written Reports Item #26 [11534] Pacific Gas and Electric Company's Amended and Restated Power Purchase Agreement With Bottle Rock Power LLC - OPTION A Res E-4521, Advice Letter 4048-E filed on May 25, Related matters PROPOSED OUTCOME: Denies cost recovery for the amended and restated power purchase agreement between Pacific Gas and Electric Company and Bottle Rock Power LLC, owned by private investment companies. ESTIMATED COST: Actual costs are confidential at this time.

Regular Agenda – Energy Resolutions and Written Reports Item #26a [11535] OPTION B Res E-4521, Advice Letter 4048-E filed on May 25, Related matters PROPOSED OUTCOME: Approves cost recovery for the amended and restated power purchase agreement between Pacific Gas and Electric Company and Bottle Rock Power LLC, owned by private investment companies. ESTIMATED COST: Actual costs are confidential at this time.

Resolution E-4521 (Agenda Item #26 and #26a) Pacific Gas and Electric Company’s (PG&E) Power Purchase Agreement with Bottle Rock Power, LLC.

Summary Began operation in 1985 by DWR which suspended operations in 1990 due to lower generation. Sold facility to current owners in 2005 which executed Original PPA in 2006 which was approved by the CPUC in October 2006 (14.5MW/10 year) Performance issues resulted in 1 st A&R PPA in 2007 which was approved by the CPUC in December 2007 Decreased min. capacity to 10MW and set performance milestones to achieve ~16MW by 2008 and pushed out COD Further performance issues resulted in 2 nd A&R PPA in 2010 which was approved by the CPUC in January 2011 Increased contract price for deliveries above the min. requirement, lowered the min. contract capacity, increased term from 10 to 15 years.

Summary Continued Bottle Rock has failed to satisfy the minimum capacity requirements of the 2 nd A&R PPA and has therefore not been able to receive higher payment for deliveries above the minimum capacity established in the PPA. PG&E is seeking approval of a 3 rd A&R PPA in 2012 Increase contract price over 50% from the 2007 PPA 1 Extend term from 15 years to 20 years Maximum contract capacity reduced from 55MW to 25MW Waive non-performance damages 1 The 2007 PPA contains different contract prices for different years of the contract. This price difference assumes PG&E would have exercised its option to extend the 2007 PPA term from 10 years to 15 years. It also reflects the inability of Bottle Rock to receive a higher PPA price upon the achievement of exceeding minimum capacity guarantees.

Option A (#26) Resolution E-4521 (OPTION A) rejects the 3 rd Amended and Restated (A&R) PPA for the existing geothermal facility

Bottle Rock (owned by a private equity group) states it will shut down the facility if it does not receive the A&R PPA The A&R PPA is highly uncompetitive based on price and value compared to other “existing”, “in-state” geothermal projects offered to PG&E that provide the same qualitative benefits, such as job preservation, local system reliability and no network upgrades. The A&R PPA is also high uncompetitive to almost all executed contracts approved by the CPUC in 2011 PG&E has no need for the project which is anticipated to come online upon CPUC-approval of the PPA Option A (#26)

Option B (#26a) Resolution E-4521 (OPTION B) approves the 3 rd Amended and Restated (A&R) PPA for the existing geothermal facility The Bottle Rock project is a currently operating facility that will provide PG&E with Category 1 bundled energy and RECs to meet its portfolio need in the third compliance period The project requires no transmission network upgrades, is a base load resource and provides local resource adequacy benefits

Compared to the PPA currently in effect, the A&R PPA increases the contract price but provides stronger guarantees that Bottle Rock will invest the capital necessary to boost production at the facility. Under the A&R PPA, PG&E has the right to terminate the PPA in 2018 if the facility cannot reliably generate at least 15 MW of capacity by that time. While the A&R PPA does waive significant performance damages that have accrued since 2007, it establishes new performance penalties that are triggered if Bottle Rock fails to invest stipulated amounts in measures to increase production at the facility. Option B (#26a)

Regular Agenda – Energy Resolutions and Written Reports Item #26 [11534] Pacific Gas and Electric Company's Amended and Restated Power Purchase Agreement With Bottle Rock Power LLC - OPTION A Res E-4521, Advice Letter 4048-E filed on May 25, Related matters PROPOSED OUTCOME: Denies cost recovery for the amended and restated power purchase agreement between Pacific Gas and Electric Company and Bottle Rock Power LLC, owned by private investment companies. ESTIMATED COST: Actual costs are confidential at this time.

Regular Agenda – Energy Resolutions and Written Reports Item #26a [11535] OPTION B Res E-4521, Advice Letter 4048-E filed on May 25, Related matters PROPOSED OUTCOME: Approves cost recovery for the amended and restated power purchase agreement between Pacific Gas and Electric Company and Bottle Rock Power LLC, owned by private investment companies. ESTIMATED COST: Actual costs are confidential at this time.

Regular Agenda – Commissioner Reports Item #28 [11566] Commissioner Simon's Discussion and Action to the Low Income Oversight Board Proposed Appointment to the Low Income Oversight Board.

Commissioners’ Reports

Management Reports

Regular Agenda – Management Reports and Resolutions Item #29 [11579] Report and Discussion by Consumer Protection and Safety Division on Recent Safety Program Activities

BART Insulator Failure on September 16, 2012 Steve Artus Program and Project Supervisor California Public Utilities Commission September 27, 2012

Presentation Overview Description of recent insulator failure at the BART Civic Center Station. Description of the events. Evacuation, investigation responses. Current status.

Insulator Failure Occurred at 1:40 p.m. on Sunday 9/16. Civic Center Station. Ten-car eastbound train. Passengers reported a loud noise followed by heavy smoke coming from the trailing end of the train.

Insulator Failure Passengers from the train and in the station were evacuated. BART police, SFFD, and SFPD responded to the scene. Third-rail power was removed from the affected track. Ventilation fans activated due to heavy smoke.

BART DERAILMENT Occurred at 9:20 AM on Sunday, 3/13 8 th and 9 th cars of a 10 car westbound train Happened just west of the Concord Station 65 passengers were evacuated 3 passengers later complained of minor back pain BART police and Contra Costa fire department were on the scene

Response Action SFFD, SFPD, BART Police and Maintenance inspected the track and platform. Arc-flash evidence was visible on the concrete between the running rail and the energized rail. One person was treated at the scene by EMS for smoke inhalation and released at the scene.

New insulator and evidence of arc flash

Current Status Service was restored approximately one hour after the event, about 2:40 p.m. Insulator and energized rail covers have been replaced. Investigation still ongoing – not certain of the insulator failure cause.

Regular Agenda – Management Reports and Resolutions Item #29 [11579] Report and Discussion by Consumer Protection and Safety Division on Recent Safety Program Activities

Management Reports

The CPUC Thanks You For Attending Today’s Meeting The Public Meeting is adjourned. The next Public Meeting will be: October 11, 2012, at 9:00 a.m. in San Francisco, CA