1. Kilarc-Cow Creek Hydroelectric Project Decommissioning FERC Project No. 606 Shasta County Board of Supervisors March 4, 2008

2. 2 Project Features Kilarc-Cow Creek Hydroelectric Project – approximately 30 miles east of Redding near the Community of Whitmore Cow Creek Development 1.8 MW Kilarc Development 3.2 MW Operated by PG&E, under license from the Federal Energy Regulatory Commission (FERC)

3. 3 Background PG&E initially sought to renew the operating license and filed a Notice of Intent (NOI) with FERC in 2002. In 2004, 2 years into the relicensing process, after environmental studies, and consultation with resource agencies and NGOs, PG&E decided not to relicense the project. PG&E developed a Project Agreement with resource agencies and NGOs to define parameters of decommissioning, if no other entity relicensed the Project Decision Not to Relicense Based On: –Project economics –Anticipated new license conditions –Environmental benefits of decommissioning

4. 4 FERC Regulatory Process When an existing licensee decides not to relicense a project, FERC regulations provide an opportunity for other entities to apply for the project license. On April 7, 2005, FERC issued a public notice soliciting applicants, pursuant to 18 CFR §16.25. Synergics Energy Services filed an NOI, but did not file a license application by FERC’s December 2006 deadline FERC then ordered PG&E to develop a decommissioning plan and file a License Surrender Application by March 2009. Federal Power Act prohibits PG&E from obtaining a new license to operate the project

5. 5 Decommissioning the Project PG&E is required by FERC to file a Surrender Application by March 2009 To solicit public input, PG&E held several public meetings and conducted a site visit In response to requests from the public, on January 24, 2008 FERC held public meetings to discuss the decommissioning process and answer questions FERC will conduct an environmental assessment on PG&E's proposed decommissioning plan and then will issue an order for PG&E to remove the project facilities. Once PG&E’s decommissioning work is completed and FERC’s order becomes final, other entities can file Notices of Intent for proposed projects at the site (18 CFR § 5).

6. 6 Potential Future Recreation and/or Public Uses Kilarc Forebay – PG&E has prepared a paper that outlines, to the best of our knowledge, what would be required for another entity to operate the Forebay as a recreation facility Kilarc Powerhouse – PG&E is in the process of completing a paper outlining requirements and opportunities for future public use, recreational or historical in nature. Entities with interest in these facilities will need to develop a preliminary plan for PG&E’s approval to submit with the Surrender Application by March 2009 PG&E will issue a solicitation of interest form for Kilarc Forebay and Kilarc Powerhouse to interested parties for PG&E’s initial assessment of qualifications.

7. 7 FERC Processing of PG&E’s License Surrender Application 1. PG&E Files Application With FERC (3/2009) 4. FERC issues order for PG&E to develop engineering removal and site restoration plans 2. FERC requests additional information (if needed ) 3. FERC Staff Prepares NEPA Document (1 to 2 years, 2009-2011) 5. PG&E files plans (6-12 months) 7. PG&E Decommissions Project (2010 to 2013) 9. FERC issues final approval 6. FERC Orders PG&E to discontinue generation and remove Project facilities 8. Follow-up Monitoring (2012 to 2015)

8. 8 Contact Information Stacy Evans, Project Manager Pacific Gas and Electric Company 415- 973-4731 Janet Walther, Governmental Relations Pacific Gas and Electric Company 530-518-6790