1. © 2006 San Diego Gas & Electric Company. All copyright and trademark rights reserved. SDG&E’s Sustainable Communities Program and Support for our Solar Customers NARUC Annual Meeting- November 14, 2007 Joe Velasquez Director, Commercial & Industrial Services

2. Topics Sustainable Communities Program* Goals & Description Customer Incentives Clean Energy Systems Benefits Samples of Completed Projects Solar Incentive Rate Proposal for Commercial Customers Current Commercial Rate Structure Proposal Benefits to Solar Customers SDG&E’s Support for Solar Customers *This presentation is intended to be for general information purposes. Consult the detailed program rules to confirm eligibility requirements prior to submitting an application.

3. Sustainable Communities Program Goal Encourage sustainable building practices in the San Diego area while advancing SDG&E’s electric delivery system Description Provides cash incentives for sustainable building projects Integrate utility-owned clean generation systems Creates local showcases that serve as models for other projects Energy Efficiency Demand Response Renewable Generation Green Building Design

4. Type of Customers & Incentives Building Types Non-residential new construction or major renovations Large-scale multi-family residential Pursue LEED® certification Support and Incentives for Building Owners and Design Team Design assistance with energy efficiency measures Information on green building and sustainable designs Possible LEED® credits and CHPS points Energy Efficiency Incentives Clean Energy System

5. Clean Energy Systems Photovoltaic systems and/or Fuel Cells Integrate utility-owned clean generation systems within sustainable buildings Systems strategically located throughout SDG&E’s service territory Interconnected on utility side of the meter Installed, owned, maintained & operated by SDG&E Participants “host” generation systems by leasing space to SDG&E Customer utility bills not impacted

6. Program Benefits for the Utility Evaluate potential grid benefits, e.g., peak reduction, capital improvement deferrals, reliability, and safety Gain experience with incorporating small scale, renewable, resources into procurement plan Showcase to educate and inform utility customers

7. Program Projects SDG&E’s Service Territory 80 buildings registered for LEED ® 9 LEED ® Certified buildings SCP Projects  X’nth (formerly TKG Consulting) - LEED® Gold Sun Harbor Marina – LEED® Certified San Ysidro DMV – LEED® Gold Del Sur Ranch House – LEED® Platinum Solara – multifamily project in Poway Nobel Drive Library & Recreation Center – LEED® Silver(pending)  Ladera Ranch - 999 Corporate Drive  Reuben H. Fleet Science Center - LEED® EB (in progress)  Incorporates SDG&E owned clean generation resource

8. X’nth Office Building ©2004 Ted Walton Photography Photos: ©2005 Ted Walton Photography Commissioned July 2004 First LEED TM Gold Certified project in San Diego 30% better than 2001 Energy Efficiency Standards 40 kW SDG&E Solar PV

9. Reuben H. Fleet Science Center Commissioned February 2007 Children’s science center located in a historic building in Balboa Park Building owned by the City of San Diego Committed to LEED® EB certification and energy efficiency improvements

10. PV Array on RH Fleet Building ©2007 Ted Walton Photography SDG&E 100kW PV System

11. SDG&E’s Solar Incentive Rate Proposal for Commercial Customers

12. Today’s Large Commercial Rate* Commodity Costs Recovered through Volumetric/Energy “kWh” Charge 13¢/kWh to 5¢/kWh depending on TOU Distribution, Transmission and Surcharges Recovered primarily through Demand “kW” Charge Non-coincident Demand Charge - $11/kW w/50%, 12-month ratchet On-Peak Demand Charge - $5/kW to $4/kW (summer/winter) Energy kWh Charge ~ 1¢/kWh Net Energy Metering (NEM) is applied only to Energy/kWh Charges *Approximation of primary charges shown only, other charges apply.

13. Illustrative Example

14. Proposed Solar Incentive Rate Pending commission approval Commodity costs will continue to be volumetric (i.e., kWh) Sets Non-Coincident Demand Charges (NCDC) at 50% of otherwise applicable C&I rate No ratchet applies to distribution NCDC No On-Peak Demand Charge Redesign distribution energy kWh charge Retained cost shifts within C&I class Who qualifies? Customer accounts less 2MWs 10% of load is provided by PV, fuel cell or other renewable DG

15. SDG&E’s Support to Solar Customers Help customers make informed investment decisions Make customers aware of the California Solar Initiative (CSI) and tax incentives Provide customers with load information Accurate rate information to estimate bill impacts w/solar Streamline interconnection and implementation of program Information and application available on the web Quick feedback on missing information or incomplete information SDG&E typically field verifies and authorizes interconnection 7 days after receiving electrical clearance from local jurisdiction Support implementation of performance based incentives w/utility metering and billing

16. More Information SDGE.COM Joe Velasquez jvelasquez@semprautilities.com Office – 858-636-5541 Cell – 858-335-6054