SDG&E Summer Preparedness July 2012 Update © 2012 San Diego Gas & Electric Company. All copyright and trademark rights reserved. 1

The SONGS units have experienced some accelerated wear in the steam generator tubes, resulting in the units being temporarily taken out of service. For a scenario in which both SONGS units remain off- line, the CAISO, SDG&E and SCE will face a unique, difficult summer situation. Return-to-Service of one or both units during summer is not expected. Must be prepared for the possibility that neither SONGS unit will be available during summer, or that they operate at reduced capacity. 2 Status of San Onofre Nuclear Generating Station (SONGS)

Statewide Outlook Projected peak demand of 46,352 MW Projected 48,091 MW of instate generation available (w/o SONGS) 2,296 MW of statewide demand response available Statewide water runoff forecasts well below average for all basins, impacting hydroelectricity capacity – Could run 1,137 MW less than years with normal snow pack Import levels under high peak demand is projected to vary from 8,600 MW to 11,400 MW, totaling about ¼ of demand 3

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Contingency Planning The loss of SONGS negatively impacts the Southern California electric power system – Risk of load shedding increases – Operational studies ongoing between CAISO, SCE, and SDG&E to quantify and plan for these risks Sunrise is in service – Increases SDG&E import capability – Reduces loading on natural gas system Huntington Beach Units 3 & 4 returned to service – Adds resource in Orange County – Mitigation of voltage collapse in Orange County – Assists import capability to San Diego SCE Barre-Ellis Upgrade Project completed 5

San Diego Resources to Serve Load Under Different Operating Scenarios without San Onofre Units 6 Current Status With Huntington Beach 3 & 4 With Sunrise Powerlink 4882 MW (90/10) 4438 MW (50/50) Note: does not include demand response

High Risk Days Historically, the peak electric demand in San Diego occurs in late August to early September. – However, heat spells can roll through any time during the summer months San Diego normally gets 2-3 three heat spells each summer, each lasting about 3-4 days. – So calls for conservation could be made 6 – 12 days due to weather variability. Operations issues, such as the loss of a major plant or transmission line, or statewide issues, could trigger the need for conservation at any time 7

Reduce Your Use Day Rewards Launching to all Residential customers on June 1, 2012 Proposal to add small business customers (<20kW) for additional response: Customer Reference Level (CRL) calculated Average on-peak usage (11am to 6pm) Launch June 1, 2012 Year-round program No “opt-in” or “opt out” option Customer receives bill credit for usage reduction Compares usage using smart meter All residential customers Includes Summer Saver participants Proposed: 100,000 small commercial “A” rate customers with smart meters WhoWhat HowWhen 8

Conservation and Communications 9 Conservation outreach Energy conservation messages in statewide and local Flex Alert campaigns Customer communications campaign Coordinated communications throughout all programs Tiered messaging strategy Base summer preparedness Non-critical need for conservation Critical need for conservation A variety of paid and non-paid channels will be used including ethnic media and community-based organizations

SDG&E is Disaster and Fire Ready 10 SDG&E maintains 24x7 Emergency Operations Center To date, the utility has invested about $200 million to replace more than 1,650 transmission wood poles with steel. Over the next five years, SDG&E plans to invest more than $900 million to harden all transmission lines currently on wood poles in the Fire Threat Zone. Aggressive Award-Winning Vegetation Management - maintains clearance for more than 400,000 trees, nearly 100,000 of these trees are located in the Highest Fire Risk Area (HRFA). Unveiled Mobile Field Command Trailers and Satellite Phone Booths

SDG&E is Disaster and Fire Ready 11 SDG&E owns and operates the third-largest weather network in the United States, monitoring fire risks such as wind speed. A Utility Wildfire Prevention Team will join our crews during high fire risk times of the year. Industrial Fire Brigade with new flammable liquid firefighting trailers will coordinate with first responders at SDG&E facilities to improve fire risk reduction capabilities. Please visit our emergency preparedness web pages sdge.com/safety/outages/outage- weather-conditions