Senate Hearings on RPS

James Avery

San Diego Gas & Electric Company

February 1, 2011

SDG&E RPS Position

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SDG&E RPS Portfolio by Technology

2009 2015

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Biopower (Biomass and Landfill Gas) WindConduit Hydro Solar

Distributed Generation

Program Cap on Program MW Delivered

Renewable Feed-In Tariff Program: designed to facilitate renewable projects 1.5 MW or smaller 20 MW 4.5 MW

Combined Heat & Power/Qualified Facility Mandatory Purchase Obligation**: designed to facilitate any size CHP project and QF renewable projects under 20 MW

211 MW new CHP; no cap on QF renewable projects

~250 MW QF

California Solar Initiative*: designed to facilitate the one million solar roof initiative 5 MW, with funding for first MW ~93 MW operating

Net Energy Metering*: designed to facilitate solar and wind projects 1 MW or smaller Less than 5% of peak, ~230 MW MW delivered as noted above under CSI

Net Energy Metering-Fuel Cell and Net Energy Metering-Biogas*: designed to facilitate fuel cell and dairy digester projects 1 MW or smaller

Fuel Cell: 22.5 MW

Biogas: Closed on 12/31/2009

3.5 MW Fuel Cell

130 kW Biogas

Self-Generation Incentive Program*: designed to facilitate wind, renewable fuel cells, and advanced storage projects  as large as 5MW, with funding for up to the first 3 MW

~$150 million for SDG&E since program inception (>$1B statewide)

38.7 MW installed; 10.8 MW in process

Virtual Net Metering for Affordable Housing*: designed to allow owners of multi-unit affordable housing to install a single solar photovoltaic system and assign the Net Energy Metering credits to tenants

Less than 5% of peak, ~230 MW 215 kW

Renewable Energy System-Bill Credit Transfer Program*: designed to allow renewable-generating local governments and schools to credit commodity-only credits to accounts located elsewhere within the service territory

~20 MW No participants in SDG&E service territory to date

Programs Up & Running

*Program does not apply toward RPS goals**CHP programs that are not renewable-based do not apply toward RPS goals

Total MW Delivered ~390 MW

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Program Cap on Program MW Delivered

Renewable Auction Mechanism: designed to facilitate renewable projects under 20 MW 80.7 MW Under Development

SDG&E Solar Energy Project: 100 MW total Under Development

Solar Power Purchase Agreement with Developers: designed to facilitate solar projects of 1 MW to 5 MW 74 MW Under Development

Solar Utility Owned Generation Program: designed to facilitate solar projects of .5 MW to 5 MW 26 MW Under Development

Renewable Feed-In Tariff Program Expansion: designed to facilitate renewable projects above 1.5 MW to include renewable projects 3 MW or smaller (SB 32)

TBD by CPUC, projected to be ~60 MW

Under Development

Increased efficiency combined heat and power program (AB 1613)**: designed to facilitate development of new Combined Heat & Power projects under 20 MW in existence 2008 or later with at least 60% total efficiency

No Cap Under Development

Surplus Net Metering Program*: designed to facilitate utility compensation of net metered customers for excess power delivered to the grid after the customer’s anniversary date for solar and wind projects 1 MW or smaller

Less than 5% of peak, ~230 MW

Under Development

Programs Under Development

Distributed Generation

*Program does not apply toward RPS goals**CHP programs that are not renewable-based do not apply toward RPS goals

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SDG&E’s Above-Market Funds (AMF)

2/20/2009Resolution E-4199

4/13/2009CPUC letter 5/28/2009

Current

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Maximum AB Voltage and A Current

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Summary

•  SDG&E is contracting for a large number of renewable generation projects which, if the developers are successful, will enable us to meet the 33% renewable energy target before 2020

• Recent contracts for new renewable projects have exceeded the Market Price Referent (MPR)

• Flexible compliance mechanisms will enable retail sellers to comply with the 33% standard at a lower cost to ratepayers

• There are a large number of existing programs that support new distributed generation

• To achieve the state’s environmental policies, set clear and realistic renewable energy goals and allow flexibility on meeting the goals at the least cost to customers