1. FINANCE PILOT ROLLOUT SCHEDULE Frank Spasaro, SoCalGas Saul Gomez, CAEATFA CPUC Workshop: August 16, 2013

2. CAEATFA B ACKGROUND Board Members: Bill Lockyer, State Treasurer and Chair John Chiang, State Controller Ana J. Matosantos, Department of Finance Michael R. Peevey, California Public Utilities Commission Dr. Robert B. Weisenmiller, California Energy Commission Phone: (916) 651-8157 Email: caeatfa@treasurer.ca.govcaeatfa@treasurer.ca.gov Website: http://treasurer.ca.gov/caeatfa/http://treasurer.ca.gov/caeatfa/

3. A PPROACH U SED TO D EVELOP P ILOT R OLL -O UT S CHEDULE 3  We developed the schedule based on the following approach.  Identify the requirements laid out in the PD and in CAEATFA policies and procedures to implement finance pilots.  Identify mechanisms to speed up as much as possible the pilot roll-out, given inter-dependencies.  Overlay the first two steps with operational requirements for a successful pilot roll-out.

4. P ROPOSED D ECISION R EQUIREMENTS 4  The PD required a series of 9 Advice Letters as follows: Draft RFPs (Master Servicer, Technical Consultant & Lease Pilot) Start-Up EEFE Final EEFEProgram Plan InterAgency AgreementIT Budgets On-Bill FinancingOBR Tariff Incremental Savings Filing  The PD also referenced filings related to a marketing plan and revisions to the Emerging Technologies program, which may be filed through an advice letter.

5. A GREEMENTS CAEATFA B UDGETARY AND C ONTRACTING R EQUIREMENTS Agreement TypeRFP required? CAEATFA Board approval required? DGS approval required? Interagency Agreement with CPUC NoYesNo Contracts with IOUsNoYes Contracts with Master Servicer, Trustee, etc. Yes Lender Service Agreements Process and approvals will depend on content of LSA  Budgetary Authority  CAEATFA must obtain to serve as EEFE  Joint Legislative Budget Committee decision expected within 45 days of CPUC Final Decision

6. R EGULATIONS CAEATFA R ULEMAKING P ROCESS  Development  Includes public workshops and public comment opportunities  CAEATFA Board approval  Emergency rulemaking  Submitted to Office Administrative Law (OAL); approval 15 days after submission  Effective for 180 days; plus two 90 day readoptions  Regular rulemaking  Submitted and approved by OAL  Must be completed prior to expiration of emergency regulations

7. M ECHANISMS TO S PEED U P F INANCE P ILOT R OLL -O UT (1) 7  We identified several mechanisms that will speed roll-out of the Pilots, while considering interdependencies among many process steps.  Avoid process duplication o One procurement process should take place for all contracts required to roll out pilots. A single procurement implies that SCG not serve as a Start- Up EEFE, but instead act in a consultative role to CAEATFA. o CAEATFA is not allowed to assume a contract that has been entered in to by another party. o This mechanism assumes that CAEATFA receives all approvals necessary to become the final EEFE.

8. M ECHANISMS TO S PEED U P F INANCE P ILOT R OLL -O UT (2) 8  Adopt a phased approach to the pilots.  A phased roll-out enables some pilots to launch more quickly than others, recognizing that some pilots are more complex than others.  The phased approach enables early roll-out of pilots that do not require: o High volume on-bill capabilities. o A Master Servicer  We recommended bundling the pilots in three phases: 1.Pre-Development Pilots a.Multi-Family Pilot with no ratepayer funded credit enhancement b.Energy Financing Line Item Charge 2.Fast-Track Pilots a.Single Family pilot b.Off-utility bill lease pilot [Not approved in PD] 3.Regular Track Pilots a.Remaining On-Bill Repayment Pilots

9. M ECHANISMS TO S PEED U P F INANCE P ILOT R OLL -O UT (3) 9  Minimize and Speed Up Approval Processes  Minimize Approvals required by allocating roles and responsibilities in a way that leverages existing authority. For example: o Place marketing and outreach capacity with IOUs because CAEATFA, by statute, cannot conduct direct public outreach o Place contractor approvals with IOUs to leverage existing IOU contractor relationships and management capacity.  Speed up approvals by preparing all relevant parties (CAEATFA board, DoF) to receive approval requests.

10. M ECHANISMS TO S PEED U P F INANCE P ILOT R OLL -O UT (4) 10  Reduce number of required advice letters and/or PIPs  Some advice letters may not be necessary or required, and others may be able to be combined.  Eliminating or combining advice letters will reduce time required to approve and then release RFPs or other program elements.  We have suggested: Draft RFPs (Master Servicer, Technical Consultant & Lease Pilot) Suggest Eliminating Start-Up EEFE Suggest Eliminating Final EEFE Program Plan Suggest Combining & Split Program Plan Bwtn Fast/Regular Track Plans InterAgency Agreement No Change IT Budgets On-Bill Financing No Change OBR Tariff No Change Incremental Savings Filing No Change In addition, Qualifying Measures may be Posted Earlier than Required in PD

11. O PERATIONAL R EQUIREMENTS FOR P ILOT R OLL -O UT 11  Operational requirements include:  Master servicer: o Establish all data and cash interface with financial product originators and utilities. o Establish data collection mechanisms pursuant to CPUC/CAEATFA guidance.  Develop all required IT system build-out (after selection of Master Servicer)  Develop financial institution qualification requirements  Develop credit enhancement protocols  Develop and begin marketing, education and outreach program.  Develop contractor qualification process.