1. SDG&E Procurement Perspective IEPA 35th Annual Meeting September 21st, 2016
Dan Skopec
Vice President, Regulatory Affairs
Sempra Energy Utilities

2. SDG&E’s RPS Position Aug 2015
SDG&E announced it was the first utility in California to have delivered 33% renewable power to its customers over the previous year
Source: As filed in SDG&E’s 2016 RPS Plan. Numbers pending review from the CPUC as part of SDG&E’s RPS Compliance Report. 2

3. SDG&E’s Service Area Peak Load Forecast
Mid Case Energy Efficiency
SB 350 Energy Efficiency
Source: CEC 2015 IEPR data and CPUC 2016 LTPP Planning Assumptions 3

4. Current Siloed Energy Supply Mandates
In addition to RPS, carve-outs require ~800 MW of preferred resources
Though small relative to the size of the total portfolio, carve-out costs are material
Program pricing exhibits premiums to current solar market pricing of ~$40/MWh and RA pricing of ~$40/kW-year
Program
Target (MW)
Contracted (MW)
Resource Pricing Notes
RAM
165 63
~$75/MWh(1)
BioRAM 22
5 year contract; reverts to ReMAT price if high hazard fuel target isn’t met
ReMAT/FIT 49 17
$105/MWh(2)
BioMAT 25
$127-$170/MWh(2)
CHP
211
134
~$200/kW-year(3)
DRAM
40(4) 7
~$100/kW-year(5)
Track IV
38.5
Includes all preferred. Average renewable price in SDG&E portfolio is $102/MWh(1)
Based on SDG&E’s 2015 Padilla Report.
Based on market adjusting tariffs adjusted by factors such as TOD rates and production profile.
Based on E Three’s latest cost avoidance model for turbine technology.
Based on California IOU filings regarding 2017 DRAM contract megawatts procured and amount of budgets utilized.
Estimated based on maximizing the annual budget for the 3-year pilot, new proposed decision would increase the maximum annual procurement limit to 200 MW. 4

5. Net Energy Metering Cost Shift5

6. Leveraging the IRP
IRP could and should move us from a siloed to a holistic planning approach
Better for determining “resource need” with all-source RFO determining “optimal mix”
Better for accommodating differences in service areas and customers
Better for considering reality of decreasing sales and peaks
IRP could and should focus planning on achieving goals of SB 350
IRP should provide guidance on resource needs and characteristics and provide a cost- effectiveness benchmark based on economy-wide cost of carbon
GHG targets, cost and reliability are inputs and individual resource targets are outputs
Siloed resource goals exclude analysis of relative resource values or what combination of resources is best
IRP includes principle for cost-shifting protection and equity between LSEs
IRP must consider impacts of large load departure and long-term risks associated with procurement portfolio obligations 6

7. CA GHG Progress Toward Goals
Source:
Note: Char t shows that from 2008 to 2020, statewide emissions decline by 50% and electric sector emissions decline by 44%.