1. Pasadena Water and Power 2009 Power Integrated Resource Plan Update August 16, 2010

2. Pasadena Water and Power IRP Balanced Key Objectives Balanced Objectives

3. Pasadena Water and Power 2009 IRP Progress Report Summary Table – Part I Recommendations Target Quantity Target Date Status Coal Power Displacement35 MW2016 Negotiations in process Local Gas-Fired Generation:  Replace Broadway Unit 3 with a similarly-sized CC  Upgrade controls and equipment on GT-1 and GT-2 65 MW (approx.)2014 Timely decisions will keep project on track Scope of work may be expanded due to GT-1 failure Energy Efficiency: Cumulative annual energy savings from Fiscal Year 2007 45.5 GWh/yr 124.0 GWh/yr 211.5 GWh/yr - FY10 - FY15 - FY20 On track Cumulative savings estimated at 53 GWh/yr as of FY2010 Peak Load Savings: Reduce peak load by 10% below expected levels 33 MW2012 Unlikely 11 MW (3.4%) as of FY2010 Demand Response: Incentives to reduce or curtail electric use during peak load 5 MW2012 Delayed. To be developed in conjunction with smart grid

4. Pasadena Water and Power 2009 IRP Progress Report Summary Table – Part II Recommendations Target Quantity Target Date Status Renewable Portfolio Standard (energy used for PWP’s retail electric customers) 15% (187 GWh) 33% (381 GWh) 40% (460 GWh) 2010 2015 2020 On Track 8% for CY 2009 15% for CY 2010 17% for CY 2011 Solar photovoltaic installations in Pasadena (SB-1 goal is 14 MW by 2017) 3 MW 10 MW 15 MW 19 MW 2010 2015 2020 2024 On track 1 MW Completed 4.6 MW Pending Feed-In Tariff for Local Renewable Resources 8 MW 10 MW 2020 2023 In development GHG Emissions Reductions (base year 2008 emissions = 905,000 tonne) 5% (45,250 tonne) 25% (226,250 tonne) 40% (362,000 tonne) 2010 2015 2020 On Track 5% reduction in CY 2010

5. Pasadena Water and Power Gas Turbine 1 (GT-1)  GT-1 Fire on May 4, 2010  Initial Repair Estimate = $8,017,552  Repair Has Been Ruled Out - Lack of Parts  Insurance Company:  Authorized replacement study…expected by August 25th  Offered partial payment = $6,314,041  Whole loss and damage …to be determined (Replacement cost and lost revenues)

6. Pasadena Water and Power PWP Portfolio Energy Mix Actual to 2009; 2010-2011 Projected

7. Pasadena Water and Power Estimated Portfolio Mix For Retail Sales – Calendar Year 2010 25% GHG-Free

8. Pasadena Water and Power Rate Impacts Rate Component Approx. Avg. Rate Rate Pressures PBC0.58¢  Solar and Energy Efficiency Programs Energy8.53¢  Renewable Resource Acquisition  Feed-in Tariff  Fuel and Spot Market Energy Costs  GHG Mitigation, Credits/Tax Transmission0.82¢  CAISO Transmission Rate Distribution4.28¢  Infrastructure Replacement  Smart Grid Total14.21¢

9. Pasadena Water and Power Monthly Residential Bill As of June 2010  SCE has tiered rates  Pasadena has flat rates with no subsidies between rate classes

10. Pasadena Water and Power Rate Challenges  Evolving Legislative and Regulatory Mandates > Federal and State climate initiatives, EPA, CEC, CARB  Shortage of Renewable Energy… Higher prices  Operational Constraints … transmission  Compounded Rate Impact  Buy high price renewable power  Sell excess existing energy at discount  Future Staff Requests for MSC/Council Approval  Resolution authorizing PWP GM to trade RECs and other environmental attributes  Renewable energy contracts

11. Pasadena Water and Power 2009 Power Integrated Resource Plan Update - End

12. Pasadena Water and Power IRP RPS Goals vs. Proposed Regulatory Requirements

13. Pasadena Water and Power ProjectResourceCalendar Year 2010Calendar Year 2011 TypeMWh% of LoadMWh% of Load Long-Term Contracts Azusa HydroSmall Hydro 00.0%0 Solano High WindsWind 16,1761.3%16,1761.3% Covina/Tulare LandfillLandfill Gas 66,0475.3%75,7296.3% Ormat-Heber SouthGeothermal 18,3531.5%17,4761.4% Chiquita LandfillLandfill Gas 14,0541.1%55,7574.6% Milford Wind I (Utah)Wind 8,9160.7%11,8261.0% SubtotalLong-Term 123,54610.0%176,96414.6% Short-Term Contracts Glendale Landfill GasLandfill Gas 35,0402.8%35,0402.9% Iberdrola RenewablesWind 31,0602.5%-0.0% SubtotalShort-Term66,1005.3%35,0402.9% Total Renewables 189,64615.3%212,00417.6% Expected Renewable Energy Resources

14. Pasadena Water and Power Pasadena Solar Initiative Progress Towards 14 MW Goal

15. Pasadena Water and Power Energy Efficiency Progress

16. Pasadena Water and Power Market and Regulatory Update  Rising renewable energy cost  Softened natural gas prices (near to short term)  Reduced electricity demand (near to short term)  Inadequate supply of deliverable renewable energy  Wind/Solar deliverability  CAISO restrictions on import of intermittent resources  Regulatory uncertainty:  RECs for RES/RPS compliance? CARB…no limits; SB722…10%?  Proposition 23 / Next Governor?  GHG emission calculation methodology?  Cap and Trade program?  Federal regulations… pre-emption?

17. Pasadena Water and Power PWP Power Content Label ENERGY RESOURCES 2005 PWP 2006 PWP 2007 PWP 2008 PWP 2009 PWP 2008 CA Pwr Mix (actual) (for comparison) Eligible Renewable 2% 8% 5% -- Biomass & waste 0%<1%5%6% 5% <1% -- Geothermal 0%1% 4% -- Small hydroelectric 0%<1%0%1% 0% <1% -- Solar 0%<1%0% <1% -- Wind 1% <1% Coal 70%67%65%60% 29% Large Hydroelectric 7%10%7%6% 31% Natural Gas 15%16%15%20% 35% Nuclear 6%5% 6% <1% Other 0% TOTAL 100% Purchased From Specific Resources 84%78%89%91%92% --

18. Pasadena Water and Power Renewable Energy Contract Status  Milford Phase I, UT - wind (5 MW)  Delivery started late April 2010  Ameresco Chiquita Canyon, CA - landfill gas (6.67 MW)  Delivery expected from 10/2010  Ameresco Skunk Creek, AZ - landfill gas (4 MW)  Developer not proceeding due to cost escalation  IID, CA - MOU for exploration of geothermal energy (~6 MW)  On hold due to differences in major participant  Milford Phase II, UT - wind (10 MW)  Withdrawn due to:  CAISO prohibition on wind/solar imports  Uncertainty of alternative transmission  Prepayment contractual obligation for future power

19. Pasadena Water and Power PWP Initiatives  Renewable Energy Contracts Under Negotiation  Geothermal…….. 5-10 MW  Solar/Wind……… 20 MW  Landfill to energy…8 MW  Bio gas ………… 6 - 8 MW  Transmission  Enhanced Import/Export right at TM Goodrich..336 MW  Southern Transmission System upgrade by 26 MW  Outreach:  RFPs issued by PWP and SCPPA

20. Pasadena Water and Power Strategies to Meet IRP Goals  Procure Renewable Resources That:  Are cost effective  Can deliver energy to Pasadena  Preferably located in California  Procure RECs to Meet Regulatory RPS Short Falls  Proactive Legislative / Regulatory Involvement  Keep MSC and the City Council Informed  Future Staff Requests for MSC/ City Council Approval  Resolution authorizing PWP GM to trade RECs and other environmental attributes.  Renewable energy contracts