IMPERIAL VALLEY CONFERENCE

July 21, 2009

2009 SOLICITATION

RENEWABLESPORTFOLIOSTANDARD                                                 

Agenda

Introduction CPUC Decision Approving Sunrise Sunrise Powerlink Transmission

Project Imperial Valley Renewable Resources SDG&E’s Commitments to Imperial

Valley Resources Q & A

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Decision

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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 project2. The project’s effect on the environment3. The project’s effect on recreational and park areas4. The project’s effect on historical and aesthetic values5. 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.

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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.

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Project Details & Status

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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

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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

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Route Source: http://www.sdge.com/sunrisepowerlink/maps.html

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Sunrise Status

Approximate in service date of June 2012

Source: SECOND QUARTERLY PROJECT STATUS REPORT OF SAN DIEGO GAS & ELECTRIC COMPANY Q2 2009 (Filed July 15, 2009) 8 questions

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Sunrise Status 1. Comprehensive project development schedule, including

estimated project in-service date No changes

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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

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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

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Renewables

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Renewable Projects in Imperial Valley

SDG&E Commitments (D.08-12-058 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 2020.

1,900 MW Incremental Renewable GenerationCAISO 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.08-12-058 p. 66.)

PG&E encourages offers from projects located within the Imperial

Valley and projects that may create significant flows on Sunrise. (D.09-06-018 p. 14.)

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Resources for Sunrise Powerlink and Transmission SDG&E website

http://www.sdge.com/sunrisepowerlink/

CPUC website For specific information related to the Sunrise Powerlink, please visit:

http://docs.cpuc.ca.gov/published/proceedings/A0608010.htm http://www.cpuc.ca.gov/PUC/energy/Transmission/A0512014.htm

Proceeding number is A0608010, changed from A0512014. To find information on transmission projects in California, visit the CPUC

website: http://www.cpuc.ca.gov/PUC/energy/transmission.htm

Or for FAQs related to Sunrise: http://www.cpuc.ca.gov/NR/rdonlyres/C8A101A4-8C4E-4E5B-A010-E

5155E4711AD/0/SunriseQA103108.doc

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Q&A

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