CASA Energy Workgroup Regulatory Update

1. CASA Energy WorkgroupRegulatory Update SCAP Energy Management Committee May 30, 2013

2. CASA Energy Workgroup • Newly formed group, had kickoff meeting in March • Response to growing importance of energy issues for POTWs • Rising energy costs • Climate change a central issue instate politics • New opportunities for renewable generation and energy efficiency • Number and complexity of state programs has grown • CWCCG was in transition, CASA stepped in to take on this direct role

3. Role of Energy Workgroup • Advocacy for California POTWs on state-level energy legislation and regulation • Review bills and make recommendations to CASA Legislative Committee • Engage in relevant regulatory proceedings at CPUC and CEC • Inform state policymaking and advocate for POTWs

4. Current Issues • Feed-in Tariffs • Pipeline Biomethane • Water-Energy Nexus • Funding Programs – EE Incentives, SGIP, CSI, EPIC • Proposed Legislation • Low Carbon Fuels Standards

5. Feed-in Tariff • Changes legislated in 2011 • Project sized increased to 3 MW • Market-based price • Three categories: baseload, peaking, as-available • Carries over 750 MW cap • Final decision passed by CPUC last Thursday

6. Feed-in Tariff Results • Re-MAT pricing mechanism • Limited remaining capacity • Little flexibility to change contract capacity • Guaranteed Energy Production • Difficult for POTWs to participate under these conditions

7. Feed-in Tariff Final Decision The City of San Diego contends that in an excess sales situation, it is unreasonable to require the Seller to predict Contract Quantity because the site load is often unpredictable. We find predictability in Contract Quantity to be a fundamental element of the standard contract and that the proposed provision, only permitting a one-time change, is a reasonable means of providing the buyer and seller with the ability to plan accordingly. Regarding the concerns raised by the City of San Diego, we will monitor the impact of the contract provision in the context of excess sales.

8. SB 1122 250 MW Feed-in Tariff carve-out for bioenergy projects • 110 MW for wastewater treatment, municipal organic waste diversion,food processing, and co-digestion • 90 MW for dairy and agriculture • 50 MW for forestry

9. Pipeline Biomethane • Mandates open access to common carrier natural gas pipelines for biomethane based on standards to be adopted by the CPUC • Set concentrations of COCs to protect public health and ensure pipeline integrity and safety • Establish requirements for monitoring, testing, reporting, and recordkeeping • Health protective standards to be based on recommendations of ARBand OEHHA which were released on May 15

10. POTW Biomethane Health Protective Standards

11. AB 1900 Provisions • The CPUC shall: • Hold public hearings to identify impediments that limit procurement of biomethane in California • Adopt policies and programs that promote the in-state production and distribution of biomethane • Costs addressed after standards established, may consider subsidies

12. SoCalGas Proposed Biomethane Tariffs • Biogas Conditioning/Upgrading Tariff Service • SoCalGasto design, install, own, operate & maintain biogas conditioning/upgrading equipment • Need about 1000 scfm of biogas for project to be economical • Settlement agreement issued May 3

13. SoCalGas Proposed Biomethane Tariffs • Proposed “Sustainable SoCal Program” • For Small to mid size wastewater treatment plants (200 to 600 scfm) • SoCalGas to design, install, own, operate & maintain biogas conditioning/upgrading equipment • SoCalGas to own biomethane • Part of general rate case

14. Water-Energy Nexus • Governor’s Workshops • SCE Water-Energy Program Advisory Group • CPUC Water and Energy Programs • 2013-2104 EE program cycle to expand water-energy nexus efficiency program • Staff proposal for a Cost Effectiveness framework for Water-Energy • Water Energy Project Coordination Group being formed

15. Questions or Comments?