1. 1 PG&E’s 2006-2008 Portfolio Performance December 11, 2006 Duane Larson Senior Manager Customer Energy Efficiency Pacific Gas and Electric Company DFL2@pge.com

2. 2 Today’s Update  Portfolio Performance – Are we on track?  2006 Additional Measures

3. 3 Megawatts Paid

4. 4 Gigawatt-hours Paid

5. 5 Million Therms Paid

6. 6 Megawatts Committed

7. 7 Gigawatt-hours Committed

8. 8 Million Therms Committed

9. 9 Summary  Achieved 2006 MW and GWH goals  Achieving Therm goal is going to be close at year end  All delivery channels are now producing savings  Increasing numbers of paid calculated savings projects  Program staff are analyzing 2006 performance and developing forecasts and goals for 2007

10. 10 Targeted Markets Core Greydon H. Hicks Manager Targeted Markets Pacific Gas and Electric Company GHH1@pge.com

11. 11 Megawatts Paid TM contribution to 11/30/06 YTD Core Mass Market Paid Accomplishments: 25.71 MW or 22% of total

12. 12 Gigawatt-hours Paid TM contribution to 11/30/06 YTD Core Mass Market Paid Accomplishments: 705 GWH or 13% of total

13. 13 Million Therms Paid The TM contribution to 11/30/06 YTD Core Mass Market Paid Accomplishments: 1.63 MM Thm or 21% of total

14. 14 Megawatts Committed

15. 15 Gigawatt-hours Committed

16. 16 Million Therms Committed

17. 17 What’s new in Targeted Markets?  Server Farm Virtualization Software and High Efficiency Servers – High Tech  Pumping Efficiency Program – Ag/Food  Wine tartrate removal using electrodialysis -Ag/Food  PG&E Core Retro-Commissioning Offering – Retail, Medical, Large Office, Private Colleges  Building Commissioning - Retail, Medical, Large Office, Private Colleges  LED case lighting demonstration– Retail, Hospitality  California Solar Initiative Coordination – All segments  Federal Tax Credits Coordination – All Segments

18. 18 What is working in Targeted Markets?  High Tech  Ag and Food Processing  Industrial/Fabrication  Retail  Large Office Building

19. 19 Challenges in Targeted Markets  Schools - Emphasis on deemed measures and streamlining new construction  Hospitality – focus on deemed for dispersed smaller motels, and concentrate TM resources on greater Bay Area larger hotels  Medical – emphasis on deemed measures, new construction for pipeline development and retro-commissioning  BioTech – develop new construction for long-term pipeline

20. 20 Targeted Markets Questions/Comments/Suggestions

21. 21 PG&E Core - Mass Markets Keith Reed Manager Mass Markets Pacific Gas and Electric Company KNR3@pge.com

22. 22 Megawatts Paid

23. 23 Gigawatt-hours Paid

24. 24 Million Therms Paid

25. 25 Incentives Paid

26. 26 Core MM Channel MW Comparison

27. 27 Core MM Channel GWH Comparison

28. 28 Core MM Channel MM Therm Comparison

29. 29 Mass Market: What’s New?  LED Refrigerator Case Demo Report  Regional Vendor Meetings  Trade Professionals Newsletter  Direct Mail Campaigns  Water Agencies  Steam Traps  Advertising (Appliances/Summer)  Cool Roofs

30. 30 Mass Market: What’s working?  Upstream Channel  Midstream Channel  Refrigerant Charge & Airflow  Duct Test & Seal  Increased interest from upstream distributors/manufacturers –(Lighting, Appliances, etc)

31. 31 Mass Market: Challenges  Therm Savings  Vendor Participation  Downstream participation slow statewide  Commercial Pool System expansion  Double Dipping monitoring  SBEE (Small Business Energy Edge)

32. 32 Mass Market: Program Design Changes  Revamp evaporative cooler delivery  E-rebate to allow vendors to submit electronically  Bundled Building Performance Incentive –HVAC installation/design, lighting, windows, insulation, etc.  Midstream HVAC Distributors Delivery –Out

33. 33 Questions/Comments/Suggestions Mass Market:

34. 34 Third Party Program Update Misti Bruceri / Mona Yew Supervisors Third Party Programs Pacific Gas and Electric Company M1BT@pge.com / MxY9@pge.com

35. 35 Third Party Program Status  All 32 RFP I programs are underway –Audits and marketing in progress for nearly all programs –21 programs are accepting applications and/or conducting direct implementation activities –Savings through October: 1.0 MW, 6.01 GWh, 0.18 MTherms

36. 36 Third Party Program – RFP II  RFP II completed –17 programs selected –12 contracts signed to-date 21.8 MW 83.9 GWh 4.37 MTherms –5 contracts in final stages of completion

37. 37 Third Party Programs – RFP II  Ag and Food Processing –Light Exchange Program (Richard Heath and Associates)  Fabrication, Process and Heaving Manufacturing –AIM Compressed Air Efficiency (Air Power USA) –Value Energy Stream Mapping Advantage Plus (California Manufacturing Technology Consulting) –Compressed Air Program (Ecos Consulting)

38. 38 Third Party Program – RFP II  High Technology –Laboratory Airflow Control Systems Re-Commissioning Program (Newmatic Engineering)  Large Commercial –Energy Efficiency Partnership Program for California State-Leased Facilities (Enovity) –Boiler Energy Efficiency Program (Enovity) –Retrocommissioning Program (Portland Energy Conservation Inc.)

39. 39 Third Party Program – RFP II  Mass Market –Heatwise (Energy Solutions) –Fan Time Delay Relay Program (Proctor Engineering Group)  Retail –Big Box Cool and Light (Energy Solutions)  Schools, Colleges and Universities –California Preschool Energy Efficiency Program (Low Income Investment Fund)

40. 40 PG&E Residential New Construction Cece Barros CEE Solar Integration Coordinator CABE1@pge.com Shagun Boughen Supervisor/Program Manager Residential New Construction SXBQ@pge.com

41. 41 Background  CSI – March 2, 2006 CPUC opened a proceeding to develop rules and procedures for the California Solar Initiative (CSI)  SB 1 - August 21, 2006, Governor signed Senate Bill 1, which directs the Commission and the CEC to implement the CSI program  NSHP - CEC manages a $350 million program to encourage solar installations in new home construction through its NSHP

42. 42 Challenges in RNC  ENERGY STAR  Market Slow down  Homes not selling  Solar new and costly Purpose:  To align with NSHP to encourage solar in residential new construction  Encourages builders to exceed minimum EE requirements when installing solar by offering increased incentives

43. 43 What’s new in RNC Existing:  ES New Homes –15% better than T-24 –QII/TBC Mandatory –$400 Coastal –$500 Inland  Prescriptive - measure based Proposed:  ES New Homes –15% better than T-24 –QII/TBC Mandatory –$400 Coastal –$500 Inland  Prescriptive - measure based  NSHP Tier II: 35% better than T-24 40% cooling reduction ES Appliances $2,000 Solar Only  NSHP Tier I: 15% better than T-24 ES Appliances $400 or $500 Solar Qualified

44. 44 RNC continued  Cost Effectiveness Existing TRC:.83 PAC: 1.54 Proposed TRC:.88 PAC: 1.40  Energy Savings: 15% = 375kWh; 137Therms – 2006 Program 35% = 699kWh; 225Therms  Energy Calculations: State approved software for Res Energy Standards and Tax credits – Micropas Includes distribution of housing stock by CZ Weighted average for PG&E for Tier II

45. 45 Residential New Construction Questions/Comments/Suggestions

46. 46 PG&E’s 2006-2008 Water-Embedded Energy Pilot December 11, 2006 Bill Miller Principal Regulatory Analyst Customer Energy Efficiency Pacific Gas and Electric Company WCM2@pge.com

47. 47 The Water-Embedded Energy Pilot  CPUC announced consider of W-E energy in R. 06-04-010  Summer 2006: Workshop and Comments  ACR Ruling directing an Application for a W-E Energy Pilot be filed January 15, 2006

48. 48 ACR Issues in the W-E Pilot Ruling  Issues raised in the Pilot Ruling –Will counting embedded energy savings related to water conservation now produce real new benefits or simply give credit for savings that would have occurred anyway –“Another matter of considerable discussion is that the amount of energy needed to produce, convey, and treat water differs dramatically form place-to place” –Pumped water often moves through more than one service territory –Reducing water usage may produce benefits in the service territory of a water-upstream electric utility

49. 49 ACR Directive on W-E Pilot  To be filed January 15, 2006  One-year pilot programs to begin by July 1, 2007  Partner with one (or more) large water provider to jointly fund programs  Funding separate from 2006-2008; suggest limit to total of $10 million  No credit for savings toward 2006-2008 risk/reward; count to better understand program benefits  Encouraged to be innovative!  Workshop in 2007 2 nd quarter to prepare for full incorporation for water-related programs for 2009-2011  Workshop also addresses: savings determination methods; EM&V; procedural guidelines; outreach; training

50. 50 What Can the Pilot Accomplish  What actually needs to be resolved to introduce W-E energy saving programs into 2009-2011 programs?

51. 51 Pilot Design  Demonstrate how to calculate embedded water-energy intensity (kWh/gallon) for specific program activity  Demonstrate how to calculate net embedded water-energy savings (kWh)  Identify the sources contributing to the embedded water-energy for specific program activity  Demonstrate the potential for future embedded water-energy savings programs  Work toward sample EM&V protocol (work with ED)

52. 52 How will PG&E achieve objectives?  Partner with strategic water utilities  Focus on measurement and verification  Target market segment that will best accommodate objectives

53. 53 Current Thinking: Partner with strategic water utilities  Work with: –East Bay Municipal Utilities District (EBMUD) –Santa Clara Valley Water District (SCVWD) –Sonoma County Water Agency (SCWA)  Because each: –Have good baseline embedded water-energy data –Have significant experience with water conservation programs, coupled with budget and staff –Have strong relationship with PG&E

54. 54 Focus on M&V  Data exists on: –Water conservation programs & potential –Programs that save water and onsite energy –EM&V protocol for water savings, and for energy savings  But what we don’t know: –What is the embedded water-energy intensity for a specific region? –How do you measure embedded water-energy? –Who’s energy is it? –What is this energy worth? –What is suitable embedded energy protocol?

55. 55 Target market segments:  CI&I –Water districts identify as opportunity for water savings –PG&E has good contacts within segment –Significant potential water savings, coupled with better ability to meter water & energy, will provide best set of data/experience for EM&V development  Multi-region –Will have set of diverse embedded water-energy intensity data –Will have set of diverse embedded energy supply source data

56. 56 CI&I Market Opportunities  Schools  Food Processing  Food Service  Laundries  Biotech  Health Services

57. 57 Detailed Example: Water Savings In Schools  Boiler blow down & condensate return  Process lines  Food steamers  Evaporative coolers  Cooling towers  Ice machines  Dishwashers  Fixtures

58. 58 Detailed Example: Food Processing  Rinse / wash process lines  Scalding / cooking processes  Recycling process water  Boiler blow down & condensate return

59. 59 Detailed Example: Food Service  Food steamers  Evaporative coolers  Ice machines  Dishwashers  Process lines  Cooling towers

60. 60 Discussion The Water-Embedded Energy Pilot