1. © 2005 San Diego Gas and Electric Company and Southern California Gas Company. All copyright and trademark rights reserved Water Energy Nexus Calculator 2.0 Workshop Athena Besa San Diego Gas & Electric Company Carlo Gavina Southern California Gas Company

2. Presentation Objectives Summarize March 1, 2016 Joint Utilities comments Overview of action items to continue progress on the WEN project development: Default natural gas intensity values for WEN CE Water measure analysis Progress on ex ante WEN assumption Next Steps 2

3. Summary of March 1, 2016 Comments Barriers to Implementation of CE Calculator Lack of default of established natural gas intensity values in the WEN calculator. Uncertainty with ex ante process to approve embedded energy savings values for water measures. SDG&E and SoCalGas are taking actions to address these barriers Priorities to Ensure Implementation of WEN Programs Integration with new Energy Efficiency CE tool Current Partnerships Metropolitan Water District-SoCalGas San Diego County Water Authority-SDG&E 3

4. Development of Default Natural Gas Energy Intensity Values Collaborate with Commission Staff and water agencies to develop framework for gas intensity values similar to the electric energy intensity values. Develop scope of work for consultant services to implement framework and estimate gas energy intensity values for use in the WEN CE calculator. Solicit public input on gas values. Present final values to Commission for adoption and implementation in the WEN CE. Aspire for WEN CE implementation in 2017. 4

5. 5 Metropolitan Water District of Southern California

6. Water Measure Analysis SDG&E and SoCalGas are analyzing water measures currently offered by the member water agencies of Metropolitan Water District to ultimately determine cost effectiveness for inclusion in the EE portfolios. Exemplary Residential Measures: 6

7. Exemplary Commercial Measures 7

8. Working Through the Ex Ante Process Proposal: Create a workpaper that captures the embedded energy associated with water savings. Water savings values are based on established MWD water savings. Energy savings will be determined by hydrological zones included in the WEN Calculator. Workpaper will be for incremental savings, over and above any already approved measure which already saves energy but does not consider embedded energy for water (focus on cold water savings). No modifications to existing workpapers or READI/DEER are required if we use the incremental embedded energy workpaper approach. Claims will need to identify the incremental savings and associate this savings with the normally claimed ex-ante values, if a project has a dual source of savings (energy efficiency and embedded savings). 8

9. Challenges with Ex Ante Assumptions MWD water savings were determined using a different baseline than ex- ante values. The Joint Utilities propose that these values be adopted for use in estimating savings. Calculator is based on hydrological zones and does not use building type or climate zones. Cost effectiveness has not been determined and will need to be evaluated moving forward. Measure costs have not been identified and will weigh into the equation for cost effectiveness. The level of analyses on measure cost has yet to be determined. It is not expected that embedded energy savings for water measures will be High Impact Measure (HIM) at this time. 9

10. Current Status and Next Steps MWD water savings values have been forwarded to the Commission Staff. The approach of this type of workpaper has been discussed with Commission Staff but needs follow-up for more detailed discussion. Awaiting feedback from Commission Staff as to whether the proposed direction and values is acceptable. Continue progress on framework and estimation of natural gas energy intensity values. 10