1. Bryan Warren 4/28/15 SoCalGas To-Code Pilot Status Update: Development of Concept 1

2. Background »In D.14-10-046 the CPUC directs the IOUs to develop a pilot that:  Accelerates below code equipment replacement over existing program framework  Assesses viability of future program offerings  Is authorized with $1M budget per utility  Is made up of a control group and treatment group  Extends one calendar year  Includes program implementation and evaluation 2

3. SoCalGas Pilot Objectives »Address a hard-to-reach market segment »Accelerate replacement of typically below-code gas-fired equipment and evaluate measured results »Test customer willingness to perform above code levels of EE and appropriate incentive level to influence action at time of repair/replacement »Develop scalable program design to provide gateway for future EE activity 3 Draft proposal subject to change

4. Preliminary Pilot Program Design EE boilers in small to medium commercial buildings 1 Geographically in Los Angeles Area 2 Deemed midstream approach 3 Documenting site specific conditions and baseline energy use information 4 Claim above and through-code savings 5 Timeline: Q2 2015 – Q2 2016 * 6 4 Draft proposal subject to change * Subject to receiving CPUC approval to conduct pilot in contemplated time frame.

5. Technology »Deemed Energy Efficient Boilers  Commercial Hot Water Boilers  Space Heating Boilers (Steam and Hot Water) 5 Boiler TypeCode EE Rebate Level Small Water0.82 AFUE ≥ 0.84 EF Med Water0.80 TE Large Water0.82 CE≥ 0.86 CE Small Steam0.80 AFUE≥ 0.82 AFUE Med/Large Steam 0.77-0.79 TE ≥ 0.81 TE AFUE = Annual fuel utilization efficiency EF = Energy factor CE = Combustion efficiency TE = Thermal efficiency Draft proposal subject to change

6. Market To Address »Small Commercial  Typical industries  Owner or tenant »~11k total boilers in market »SoCalGas incented 296 boilers in 2013- 2014  $690k incentive dollars 6 Draft proposal subject to change

7. Delivery Approach »Midstream deemed »Leveraging trade professionals that have equipment distribution within SoCalGas service territory »Have service contracts for existing and EE equipment 7 Draft proposal subject to change

8. Measurement & Savings »Random Control Trial (RCT) pilot  Control Group receives “above-code” incentives  Treatment Group receives “through-code” incentives  Commission staff will recommend the minimum sample sizes using Power Analysis based on customers’ information * »SoCalGas performs on-site inspection/engineering audits to assess existing conditions »Conducts surveys to understand customer motivations »Study analyzes pre- and post-monthly bill consumption to quantify savings 8 Draft proposal subject to change * Subject to $1M budget restriction