1. 1 Water Department FY 2014 Sources and Uses FY 2014 Sources Retail Sales$54,788,834 Wholesale Sales646,250 Other Operating Revenues145,000 Non-Operating Revenues7,467,376 Total FY 2014 Sources$63,047,460 FY 2014 Uses Personnel*$14,081,066 Services/Supplies27,437,386 Equipment*444,400 IS Charges*3,140,845 General Fund and Hahamongna Transfers3,812,631 Interest, Depreciation, and Other Misc.9,308,858 New Year’s Day Fund4,434 Total FY 2014 Uses$58,229,620 * Note: The following includes capital components: 1. Personnel - $5,121,118 2. Equipment - $444,400 3. IS Charges (Cost Allocation Plan) - $213,121

2. 2 Water Department Budget History Major Budget Area FY 2012 Actual FY 2013 Revised FY 2014 Recommended Water General Manager$ 1,362,7251,653,2761,754,354 Finance and Admin.11,384,82712,289,01811,398,950 Water Delivery37,229,96436,282,60339,293,243 Water Capital*3,470,4995,155,8245,778,639 Total Water53,448,01555,380,72158,225,186 New Year’s Day Fund04,2504,434 Total$53,448,01555,384,97158,229,620 FTEs125124123 * Note: Includes only Personnel, Equipment and Cost Allocation Plan expenses

3. 3 Water Department Assumptions  4% increase in water sales (billing units) Compared to fiscal year 2013 budget  Increase in Purchased Water Adjustment Charge (“PWAC”) effective October 2013  General Fund Transfer of 6%  No new proposed FTEs in FY 2014  JPL parking lot lease agreement month-to-month Impacts $540,000 transfer to Hahamonga  JPL reimbursement of about $4.8 million Operation of Monk Hill Treatment Plant Major Programs  Commitment to reliable delivery of quality water  Maintain water distribution system  Increase water supply reliability, well production capacity and water quality  Promote effective water conservation  Pursue funding for clean-up of Sunset wells contamination  Development of rate components to support water IRP  Improve customer communication for service interruptions  Implement electronic bill presentment and payment system FY 2014 Assumptions and Major Programs

4. 4 Water Department Increase in purchased water costs from Metropolitan Water District – approximately $2.0 million annually 1 Utility Service Planner transferred to Power Department to consolidate services Purchase of new and/or replacement vehicles and equipment of approximately $400,000 Interest expense reduction of about $1.0 million from savings from refunding of revenue bonds Significant Changes From FY 2013 Budget

5. 5 Power Department FY 2014 Sources and Uses FY 2014 Sources Retail Sales$173,188,189 Wholesale Sales5,632,519 Other Operating Revenues20,427,358 Non-Operating Revenues8,159,014 Total FY 2014 Sources$207,407,080 FY 2014 Uses Personnel*$ 41,676,422 Services/Supplies131,993,315 Equipment*667,200 IS Charges*6,225,977 General Fund Transfer15,046,926 Interest, Depreciation, and Other Misc.26,373,486 New Year’s Day Fund16,629 Total FY 2014 Uses$221,999,955 * Note: The following includes capital components: 1. Personnel - $11,530,328 2. Equipment - $667,200 3. IS Charges (Cost Allocation Plan) - $346,102

6. 6 Power Department Budget History Major Budget Area FY 2012 Actual FY 2013 Revised FY 2014 Recommended Power General Manager$ 2,453,5542,383,7192,358,230 Public Benefits7,092,0286,808,5517,680,331 Finance and Admin.29,136,10327,665,47230,462,363 Power Supply118,256,362144,074,494133,384,679 Power Delivery32,313,68936,422,72735,554,093 Power Capital*8,900,70711,515,32712,543,630 Total Power198,152,443228,870,290221,983,326 New Year’s Day Fund11,18319,58416,629 Total$198,163,626228,889,874221,999,955 FTEs298 303 * Includes only Personnel, Equipment and Cost Allocation Plan expenses

7. 7 Assumptions  1% increase in power sales (kWh) Compared to fiscal year 2013 budget  Proposed increase to Public Benefit Charge  Complete Electric Cost-of-Service  Net decrease of about $9.0 million in purchased power, gas and fuel, and transmission Decrease of about $13.0 million in purchased power Offset by increases in Gas and Fuel costs and purchased transmission costs ($4.0 million)  General Fund Transfer of 9%  Anticipated issuance of Electric Revenue/Refunding Bonds Major Programs  New contracts and projects for renewable resources to meet RPS goals  Comply with California Air Resources Board (“CARB”) GHG reporting requirements  Comply with legislative and regulatory requirements  Develop rates to support changes taking place in the electric utility industry (Distributed Generation, Demand Reduction, Feed-In-Tariff, Electric Vehicles)  Implement Electronic Bill Presentation and Payment system  Improve PWP’s web presence and content  Kick off process to upgrade/replace Customer Information System Power Department FY 2014 Assumptions and Major Programs

8. 8 Power Department Increase 5 FTEs  1 Utility Service Planner transferred from Water Department  1 FTE in Power Supply for energy-related legislative and regulatory affairs  Two FTEs in Power Delivery for system automations and NERC compliance  One FTE in Finance and Administration for OMS technical support Purchase new and/or replacement vehicles and equipment of approximately $500,000 Significant reduction of about $5 million in Cap and Trade costs resulting from recent favorable FERC ruling Increase in property insurance by about $900,000  GT-1 and GT-2 incidents Interest expense reduction of about $800,000 from savings from refunding of revenue bonds Significant Changes From FY 2013 Budget