1. Solar Metering and Performance Monitoring Exposition June 4, 2007

2. 2 The PG&E SmartMeter program: ► will deploy a system for automated meter reading – hourly meter reads for electric, and daily meter reads for gas ► includes two separate systems: a power line carrier system for electric and a radio frequency system for gas ► involves an upgrade to both gas and electric meters – approximately 10 Million meters will be upgraded ► will be deployed over a five year period. An initial, paced deployment began in Bakersfield in November, 2006. Deployment efforts are scheduled to conclude in late 2011 ► will introduce additional capabilities over time, including outage management and remote connect/disconnect (for a subset of electric customers) ► will enable the introduction of demand-response rates for residential and small business customers

3. 3  Customers ► Receive usage information to better understand and manage their bills, and be able to participate in energy efficiency and demand response programs ► Experience less inconvenience and intrusion by no longer needing to unlock gates and tie up dogs for monthly meter reads ► Reduction in the causes of delayed, inaccurate and estimated bills ► Experience faster outage detection and restoration times ► Opportunity to turn service on and off remotely Overview: Benefits ► Experiences reduced operating costs ► Improved billing efficiency through reduced exceptions processing ► Experiences improved customer satisfaction ► Accomplishes goal of lower procurement costs ► Achieves reduced energy theft ► Provides improved outage management  PG&E ► Supports the CPUC’s price-responsive tariff requirements  CPUC/State

4. 4 ISTS O&M $191M Field Deployment $1,299M ISTS Deployment $189M Meter Reading Operations Costs Meters Networks Installations IT Systems System Integration Project Management O&M Demand Response Benefits (100%) ► The SmartMeter program has a positive business case: Projected benefits exceed projected costs by 4% ► Operational efficiencies (including meter reading savings) account for approximately 86% of benefits ► Demand response (i.e. reduction in procurement costs) accounts for about 14% of benefits, and promises to provide an additional positive return on our investment SmartMeter Program - Business Case Remote turn on / off Outage detection Service restoration Avoided dispatches / truck rolls Call volume reductions Records exception reductions Complex billing Capacity planning 4% delta 40% 46% 14%

5. 5 SmartMeter Dual-Network Architecture CONSUMER PUBLIC WIRELESS NETWORK PUBLIC WIRELESS NETWORK Customer Information System PLC System Controller Web Server AMI Interface System RF Network System Controller Substation Communication Equipment PG&E Substation Electric powerline carrier network Data Collector Unit Fixed Wireless Network System Meter Data Management & Storage

6. 6 Substation Communication Equipment (SCE) Modulation Transformer Unit (MTU) Outbound Modulation Unit (OMU) Control and Receiving Unit (CRU)

7. 7 SmartMeter electric module “under the glass” Standard electromechanical meter SmartMeter Electric Module (Remote Communication Equipment – RCE) Completed Retrofit The SmartMeter enabled electric meter will look much like standard electromechanical meter, but will include a SmartMeter electric module (i.e. remote communications equipment, or RCE)

8. 8 The SmartMeter Radio Frequency (RF) network for gas Network Control Cluster Gas meter with meter Transmission Unit (MTU) i.e. SmartMeter gas module WACS MTU Sends Reading Messages DCU Sends Data Data Collector Unit (DCU)

9. 9 RF network is designed for redundancy ► On average, each gas meter will be read by at least 3 data collector units (DCUs) ► The DCU reception range is approximately 1 mile ► A single DCU can handle up to 50,000 meters

10. 10 Deployment volumes for SmartMeter gas and electric meters will ramp to a peak of over 12,000 meters per day Includes gas and electric meters Deployment Month

11. 11 Deployment volumes of SmartMeter gas and electric meters – annual view 10.3 Million meters will be upgraded by the end of deployment in 2011

12. 12 Support for solar requirements ► Current SmartMeter technology supports net metering only ► A separate measure of generation would require a second meter ► PG&E continues to monitor and evaluate advances in automated metering technologies ► The CPUC asked PG&E to evaluate new technologies on an ongoing basis ► We evaluate against the solar requirement for a separate measure of generation ► Some new technologies provide this capability and we are looking at these carefully