Frequently Asked Questions: PG&E RAM Program for Small Renewable Generation DRAFT VERSION

1. What is the Renewable Auction Mechanism (“RAM”) program?

The RAM program is a streamlined process by which the utilities will procure energy from small new renewable generator projects up to 20 MW in size through a non-negotiable standard contract where the price is set through a competitive solicitation. This program was established on December 17, 2010 by the CPUC in Decision 10-12-048.

You can view the Decision here: http://docs.cpuc.ca.gov/word_pdf/FINAL_DECISION/128432.pdf

2. What is the status of the program and solicitation schedule?

The CPUC decision adopted key parameters for the RAM, but implementation details are still in development. The utilities will file solicitation protocols and form contracts for CPUC review on February 15th. The schedule for the first RAM RFO will be determined upon CPUC approval of the Advice Letter filing.

3. How much renewable generation will be procured?

The CPUC decision sets a goal of 1000 MW, of which 420.9 MW is allocated to PG&E. PG&E is expected to procure 420.9 MW over a two year period, via competitive solicitations to be held every six months.

The CPUC decision adopted directed the utilities to propose how much capacity would be procured from specific product types. Under PG&E’s proposal, PG&E would procure 35 MW of each of the following product categories in each solicitation (105 MW per solicitation):

 Baseload  As-available peak  As-available non-peak

Quantities not filled in a particular solicitation are to be carried forward to the next solicitation.

4. How do I know if I am eligible to participate? The decision requires the seller to be located in PG&E, SCE or SDG&E service territory. In addition, the seller must have obtained project site control, and have a valid interconnection queue position.

To participate in this solicitation, you must have an Eligible Renewable Resource (“ERR”) that is no more than 20 MW in size; and you must be able to come on line within 18 months of CPUC approval of an executed contract. PG&E’s February 15th proposal further clarifies that sellers should be at least 1 MW. Aggregation of facilities to meet the minimum 1 MW size requirement is allowed as long as each aggregated facility and the project comprising the aggregated facilities interconnects within a single PNode and is owned by a single Participant.

5. How will you select winning bidders?

The RAM solicitation is a competitive process. PG&E will select eligible offers based on levelized product price and if PG&E’s proposal is adopted, supplier diversity. An applicant must be willing to sign the power purchase agreement that will be issued in the RFO without modification.

6. What is an Eligible Renewable Resource?

The CEC is responsible for certifying that you have an Emerging Renewable Resource (ERR) and verifying your project’s compliance with the Renewable Portfolio Standard program. The CEC has published Guidebooks to explain its criteria for RPS eligibility. The internet link to these Guidebooks, is http://www.energy.ca.gov/renewables/documents/

PG&E encourages each Participant to begin the process of establishing pre- certification prior to bids being submitted.

7. What price is PG&E willing to pay for Product?

As noted above, RAM is a competitive process. There is no pre-determined contract price. Offers will be selected and be paid based on their offer price, in $/MWh adjusted by the Time of Delivery (“TOD”) schedule shown below. The TOD factors might change before the solicitation is issued. DRAFT TOD FACTORS FOR EACH TOD PERIOD Period 1 Super-Peak 2Shoulder 3Night

A. June – September 2.20490 1.12237 0.68988 B. Oct - Dec, Jan & Feb 1.05783 0.93477 0.76384 C. Mar – May 1.14588 0.84634 0.64235

8. How does the RAM program differ from the PV PPA and AB1969 Feed-in Tariffs program?

FIT Program: The existing feed-in-tariffs program is available for projects up to 1.5 MW and offers are selected on a first come first serve basis up to a XXMW program limit. Generators are paid the PG&E market price referent (MPR). Sellers sign a form contract and there is no negotiation. PG&E expects the CPUC to increase the 1.5 MW maximum project size to 3.0 MW as a result of recent legislation. Sellers must interconnect to PG&E’s distribution system or transmission system, depending on the size of the generator and the existing service at the site of the generator.

RAM Program: Under the RAM program, generators that deliver 1 to 20 MW can participate in this program. This program is similar to the FIT program in the sense that there is a non-negotiable PPA, but there is no pre-determined price. Sellers submit bids with their best pricing taking into account all benefits and all costs. After all offers are received, PG&E will rank and select offers based on least cost offers.

PV PPA Program: The Solar PV program allows generators that deliver 1 MW to 20 MW of primarily ground-mounted and roof top systems to participate in this program. Like the FIT program, the Solar PV program is a non-negotiable PPA but there is a pre-time of delivery adjusted price cap of $246/$MWh. As described in D.10-04-052 the projects must be located within PG&E’s service territory.

9. Can I participate in other Procurement Programs?

Yes. You may bid into any other program but if your project has been selected you must withdraw from the RFO.

1 Super-Peak (5x8) = hours ending 13-20 (Pacific Prevailing Time (PPT)) Monday - Friday (except NERC Holidays) in the applicable Monthly Period. 2 Shoulder = hours ending 7 - 12, 21 and 22 PPT Monday - Friday (except NERC Holidays); and hours ending 7-22 PPT Saturday, Sunday and all NERC Holidays in the applicable Monthly Period. 3 Night (7x8) = hours ending 1-6,23 and 24 PPT all days (including NERC Holidays) in the applicable Monthly Period. 10. Can I sell power “as a QF” under these tariffs if I am a QF?

No. These power purchase agreements do not meet this requirement.

11. Is participation limited to new projects only or can existing ones participate?

This program is for new projects only.

12. If I am smaller than 20 MW and want to negotiate changes to my contract, how can I participate in PG&E’s RPS solicitations?

You can’t.

13. Are there any steps I should take now to improve my chances of success?

Yes. We encourage all sellers who have not already applied for an interconnection application to start their interconnection process and submit their application before the cluster window closes on March 31, 2011. If Participants are not in this transmission cluster window by the March 31, 2011 date then the next opportunity to be in the cluster window is not until March 2012. More information on the interconnection process is available at http://www.pge.com/mybusiness/customerservice/nonpgeutility/generateownpower/ wholesalegeneratorinterconnection/#thesmallgeneratorinterconnectionproceduresfortr ansmissionsysteminterconnectionstransmissionsgip Sellers may also contact the Generation Interconnection Services at [email protected].

Sellers should also look at the map for information regarding the electric distribution system. Because of the distribution network systems, in downtown San Francisco or downtown Oakland, sellers contemplating interconnecting in these areas should make sure to contact PG&E’s Generation Interconnection [email protected] before purchasing any equipment.

14. How do I participate in this program?

To register to receive updates on this and other PG&E wholesale power solicitations, go to:

http://www.pge.com/b2b/energysupply/wholesaleelectricsuppliersolicitation/joinli st.shtml