IMPERIAL VALLEY CONFERENCE July 21, SOLICITATION RENEWABLES PORTFOLIO STANDARD

Agenda  Introduction  CPUC Decision Approving Sunrise  Sunrise Powerlink Transmission Project  Imperial Valley Renewable Resources  SDG&E’s Commitments to Imperial Valley Resources  Q & A 11

Decision 2

Decision – Key Elements  The Sunrise decision approves SDG&E’s 12/14/05 application to construct the Sunrise Powerlink Transmission Project using the Environmentally Superior Southern Route in order to accomplish three objectives:  to maintain reliability in the delivery of power to the San Diego region;  to reduce the cost of energy in the region;  to accommodate the delivery of renewable energy to meet state and federal renewable energy goals from geothermal and solar resources in the Imperial Valley and wind and other sources in San Diego County.  As required by CPUC §§ 1001, 1002(a), the CPUC selected Sunrise based on its evaluation of the following 5 factors: 1. Whether there is a need for the proposed project 2. The project’s effect on the environment 3. The project’s effect on recreational and park areas 4. The project’s effect on historical and aesthetic values 5. The project’s effect on community values  The Sunrise Powerlink was selected because it was the more environmentally sensitive of two transmission lines, either of which is essential to interconnect certain solar, geothermal, and substation developments that SDG&E had planned. It will facilitate the achievement of 33% RPS levels within a reasonable period of time with the greatest economic benefits at the lowest environmental cost.  Approval of the Sunrise Powerlink is only the first step toward fully developing renewable energy in the Imperial Valley region. 3

Decision – Key Elements (continued)  The Commission has adopted multiple strategies to address concerns that Sunrise will be used to support development of new fossil-fired generation.  The Commission to enforce two key rules when reviewing the utilities’ planning and procurement of both conventional and renewable generation -- Loading order preference for renewables over fossil-fuel generation Limits on the long-term procurement of baseload generation with excessive carbon emissions  SDG&E to follow through with its voluntary commitment to promote the development of solar, wind and geothermal resources in the Imperial Valley.  All three major utilities to hold Bidders’ Conferences to increase the likelihood that renewable developers will propose viable, competitively priced projects in the Imperial Valley in all three utilities’ upcoming 2009 RPS solicitations.  Energy Division to monitor Imperial Valley proposals submitted in each IOU’s 2009 RPS solicitation. 4

Project Details & Status 5

Size  123 miles of transmission lines, comprised of a 500 kV transmission line for approximately 90 miles and then double circuit 230 kV for approximately 30 miles  Sunrise has thermal transfer capability of over 2,000 MW and allows an additional 1,350 MW to be imported into the San Diego area under normal operating conditions 6

Route  Final Environmentally Superior Southern Route  Imperial Valley Substation to the east of SDG&E’s service area to Sycamore Canyon Substation in the center of SDG&E's service area of SDG&E’s service area  500kV for 92.5 miles then converts to 230kV for 30.3 miles from the new Modified Route D substation to the Sycamore Canyon substation  East to West  Follows I-8 and Southwest Powerlink route for approx. 36 miles  Loops north of I-8 for 17 miles  Parallels the Southwest Powerlink route for 13 miles near Hauser Wilderness Area  Cuts north near Barrett Substation and travels underground Alpine Boulevard to the west  Returns overhead adjacent to I-8 and terminates at Sycamore Canyon Substation 7

Route Source: 8

Sunrise Status  Approximate in service date of June 2012  Source: SECOND QUARTERLY PROJECT STATUS REPORT OF SAN DIEGO GAS & ELECTRIC COMPANY Q (Filed July 15, 2009)  8 questions 9

Sunrise Status  1. Comprehensive project development schedule, including estimated project in-service date  No changes 10

Sunrise Status  2. Any changes in project scope and schedule, including the reasons for such changes; No changes  3. Specifically address the need for the Encina transformer, the cost of undergrounding in Alpine Boulevard, and the amount of undergrounding contemplated; CAISO confirmed need for transformer Status of undergrounding not changed, Two alternatives  4. Any engineering difficulties encountered in constructing the project; No changes  5. Total estimated project costs; $1.883 billion; unchanged  6. Actual spending to date; $156 million through 6/30/09 11

Sunrise Status  7. Any and all filings submitted to FERC for ultimate cost recovery through transmission rates; and None  8. Any additional information SDG&E believes relevant and necessary to accurately convey the status of the Sunrise project. SDG&E-Citizens Energy agreement Import Limitation at Miguel Substation Procurement activities Community outreach and environmental mitigation 12

Renewables 13

Renewable Projects in Imperial Valley  SDG&E Commitments (D p. 265) (1) refrain from contracting, for any length of term, with conventional coal generators that deliver power via Sunrise, (2) replace any currently approved renewable energy contract deliverable via Sunrise that fails with a viable contract with a renewable generator located in Imperial Valley, and (3) voluntarily raise SDG&E’s RPS goal to 33 percent by  1,900 MW Incremental Renewable Generation CAISO assumes that if Sunrise is developed 900 MW of solar thermal and1,000 MW of geothermal resources will come on line by 2015, which would result in an additional 9,900 GWh of renewable generation from the Imperial Valley.CAISO assumes that absent Sunrise, this incremental 1,900 MW of renewable generation will not come online in the Imperial Valley.(D p. 66.)  PG&E encourages offers from projects located within the Imperial Valley and projects that may create significant flows on Sunrise. (D p. 14.) 14

Resources for Sunrise Powerlink and Transmission  SDG&E website   CPUC website  For specific information related to the Sunrise Powerlink, please visit:  Proceeding number is A , changed from A  To find information on transmission projects in California, visit the CPUC website:  Or for FAQs related to Sunrise: E5155E4711AD/0/SunriseQA doc E5155E4711AD/0/SunriseQA doc 15

Q&A 16