Common use of IE ACTIVITIES Clause in Contracts

IE ACTIVITIES. To fulfill the role of evaluating PG&E’s 2011 solicitation, several tasks were undertaken, both prior to Offer Opening and subsequently. Prior to Offer Opening on June 22, 2011, Xxxxxx performed several tasks to assess PG&E’s methodology for evaluating Offers: • Reviewed the solicitation and its attachments including PG&E’s 2011 Form Agreements and description of the LCBF methodology and criteria. • Examined the utility’s nonpublic protocols detailing how PG&E would evaluate Offers against various criteria. • Attended PG&E’s Bidders’ Conference on May 19, 2011 to evaluate the information provided to potential Participants, and how that information was distributed. • Reviewed the list of registered attendees of the Bidders’ Conference against PG&E’s master list of RFO contacts (used for outreach to potential Participants). 3 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 46. • Reviewed the posting of questions and answers from the Bidders’ Conference on PG&E’s public website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. • Examined PG&E’s 2011 RFO master contact list; performed an analysis of contacts with respect to industry and technology representation. • Interviewed members of PG&E’s evaluation committee regarding details of the 2011 version of the utility’s LCBF methodology and its inputs. During the period between Offer Opening and PG&E’s development of a final short list for submittal to the CPUC, Xxxxxx’x activities included: • Participating in opening Offers. Xxxxxx observed the opening of each Offer and observed the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and independently built a database for tracking Offers. • Reading portions of each Offer. Xxxxxx particularly scrutinized Offers for utility purchase. For PPA Offers, Xxxxxx focused on pricing, collateral, interconnection, permitting, technology, resource assessment, site control, and development and ownership experience descriptions in detail. • Building an independent valuation model and using it to value Offers. This served as a cross-check against PG&E’s LCBF model. The IE model used independent inputs and a different methodology than PG&E’s. It was much simpler and lacked detail and granularity used in the PG&E model. However, the independent valuation was useful for testing the PG&E team’s ranking of Offers using alternate assumptions. • Attending PG&E’s evaluation team discussions of Offers, criteria, issues, etc. • Scoring Offers independently for viability, using the ED’s 2011 version of the Project Viability Calculator. The independently developed Offer valuations and viability scores provided part of the basis for developing an independent view of the relative merit of Offers that the PG&E team selected or rejected. • Reviewing PG&E’s scoring of Offers for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of projects. • Attending meetings of PG&E’s steering committee, as it made decisions about the logic for selecting a short list and approved proposed selections for the short list. • Attending meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the solicitation and the Offers, and presenting an independent commentary and observations about the RFO. • Offering PG&E’s evaluation team and steering committee commentary based on independent opinion. In a few cases Xxxxxx provided specific suggestions on particular topics such as the feasibility of specific out-of-state transmission proposals. Additionally, in order to prepare this report on the contract with Sierra Pacific Industries, Xxxxxx pursued project-specific activities: • Observed (telephonically) several negotiation sessions between utility staff and SPI’s commercial team; • Reviewed draft term sheets, draft contracts, and other documents passed between the parties; • Performed an independent valuation of the SPI contract and evaluation of the project viability of the Xxxxxxxx II facility; • Compared the net value and pricing of the SPI contract to peer groups consisting of alternative proposals available to PG&E.

IE ACTIVITIES. To fulfill the role of evaluating PG&E’s 2011 solicitationthe proposed SGS-1 contract, several tasks were undertaken, both prior to Offer Opening and subsequently. Prior to Offer Opening on June 22, 2011, Xxxxxx Seco had performed several of these tasks to assess within its work scope of serving as IE for PG&E’s methodology for evaluating Offers: 2008 and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation of the SGS-1 contract. • Reviewed the solicitation 2009 RPS RFO Solicitation Protocol and its various attachments including the Forms of Power Purchase Agreement (PPA) and PG&E’s 2011 Form Agreements and detailed description of the its LCBF methodology bid evaluation and selection process and criteria. • Examined the utility’s nonpublic protocols detailing how PG&E would evaluate Offers evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, and RPS goals. • Attended Examined PG&E’s Bidders’ Conference on May 19, 2011 2009 RFO master contact list; performed a detailed analysis of contacts with respect to evaluate the information provided to potential Participants, industry and how that information was distributedtechnology representation. • Reviewed the list of registered attendees of the Bidders’ Conference against PG&E’s master list of RFO contacts (used for outreach to potential Participants). 3 1 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 46. • Reviewed the posting of questions and answers from the Bidders’ Conference on PG&E’s public website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. • Examined PG&E’s 2011 RFO master contact list; performed an analysis of contacts with respect to industry and technology representation. 46 • Interviewed members of PG&E’s evaluation committee and sub-committees regarding details the process, data inputs and parameters, background industry and utility information, quantitative models, and other considerations taken into account in evaluating contracts against non-quantitative criteria and in performing market valuation of the 2011 version of the utilitycontracts. • Reviewed in detail various data inputs and parameters used in PG&E’s LCBF methodology and its inputsmarket valuation methodology. During the period between Offer Opening and • Spot-checked contract-specific data inputs to PG&E’s development of a final short list for submittal to the CPUC, Xxxxxx’x activities included: • Participating in opening Offers. Xxxxxx observed the opening of each Offer and observed the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and independently built a database for tracking Offersvaluation model. • Reading portions Spot-checked the assignment of each Offer. Xxxxxx particularly scrutinized Offers for utility purchase. For PPA Offers, Xxxxxx focused on pricing, collateral, interconnection, permitting, technology, resource assessment, site control, and development and ownership experience descriptions in detailindividual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Building Built an independent valuation model and using it to value Offersproposed contracts. This served as a cross-check against PG&E’s LCBF market valuation model. The IE model used independent inputs and a different methodology than PG&E’s’s LCBF methodology. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. However, Its main value was to provide an independent check on the independent valuation was useful for testing the PG&E team’s ranking of Offers using alternate assumptionscontracts provided by PG&E’s valuation model and to scan for data input errors and differences in treatment of contracts between PG&E and the IE. Where variances in the ranking of contracts between the two models were large (and there were very few such situations) the cross-comparison was helpful in identifying errors such as incorrect energy pricing, inappropriate exclusion or inclusion of Resource Adequacy (RA) value, or inaccurate assignment of Transmission Ranking Cost Report (TRCR) adders. • Attending PG&E’s evaluation team discussions of Offers, criteria, issues, etc. • Scoring Offers independently Developed independent project viability scores for viabilityeach contract, using the ED’s 2011 version of the Project Viability Calculator. The independently developed Offer valuations This served as a cross-comparison to check on the PG&E evaluation team’s scoring, and viability scores provided part of helped to surface ambiguities in the basis for developing an independent view of the relative merit of Offers Calculator’s scoring criteria that could lead reasonable individuals to score contracts differently. It facilitated discussions that led both the PG&E team selected or rejectedand the IE to revise their preliminary scores upon review and cross-check. • Reviewing Reviewed PG&E’s scoring evaluation of Offers for each contract on the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of projectscontracts. • Attending meetings of PG&E’s steering committee, as it made decisions about the logic for selecting a short list and approved proposed selections for the short list. • Attending Attended meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the solicitation independent review and presenting a commentary on the Offersselection process the utility proposed to use to construct a short list. Members of the PRG followed up with more specific questions about contracts, valuations, and presenting an independent commentary and observations about the RFOproject viability scores, to which Xxxxxx responded with more detail. • Offering PG&E’s evaluation team and steering committee commentary based on independent opinion. In a few cases Xxxxxx provided specific suggestions on particular topics such as the feasibility of specific out-of-state transmission proposals. Additionally, in order to prepare this report on the contract with Sierra Pacific Industries, Xxxxxx pursued project-specific activities: • Observed (telephonically) several negotiation sessions between utility staff and SPI’s commercial team; • Reviewed draft term sheets, draft contracts, and other documents that passed between the parties; • Performed an independent valuation of two parties during the SPI contract and evaluation of the project viability of the Xxxxxxxx II facility; • Compared the net value and pricing of the SPI contract to peer groups consisting of alternative proposals available to PG&E.negotiation, including draft contracts.

IE ACTIVITIES. To fulfill the role of evaluating PG&E’s 2011 solicitationthe proposed North Sky River contract, several tasks were undertaken, both prior to Offer Opening and subsequently. Prior to Offer Opening on June 22, 2011, Xxxxxx Seco had performed several of these tasks to assess within its work scope of serving as IE for PG&E’s methodology for evaluating Offers: 2008 and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation of the NSR contract. • Reviewed the solicitation 2009 RPS RFO Solicitation Protocol and its various attachments including the Forms of Power Purchase Agreement (PPA) and PG&E’s 2011 Form Agreements and detailed description of the its LCBF methodology bid evaluation and selection process and criteria. • Examined the utility’s nonpublic protocols detailing how PG&E would evaluate Offers evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, and RPS goals. • Attended Examined PG&E’s Bidders’ Conference on May 19, 2011 2009 RFO master contact list; performed a detailed analysis of contacts with respect to evaluate the information provided to potential Participants, industry and how that information was distributedtechnology representation. • Reviewed the list of registered attendees of the Bidders’ Conference against PG&E’s master list of RFO contacts (used for outreach to potential Participants). 3 1 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 46. • Reviewed the posting of questions and answers from the Bidders’ Conference on PG&E’s public website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. • Examined PG&E’s 2011 RFO master contact list; performed an analysis of contacts with respect to industry and technology representation. 46 • Interviewed members of PG&E’s evaluation committee and sub-committees regarding details the process, data inputs and parameters, background industry and utility information, quantitative models, and other considerations taken into account in evaluating contracts against non-quantitative criteria and in performing market valuation of the 2011 version of the utilitycontracts. • Reviewed in detail various data inputs and parameters used in PG&E’s LCBF methodology and its inputsmarket valuation methodology. During the period between Offer Opening and • Spot-checked contract-specific data inputs to PG&E’s development of a final short list for submittal to the CPUC, Xxxxxx’x activities included: • Participating in opening Offers. Xxxxxx observed the opening of each Offer and observed the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and independently built a database for tracking Offersvaluation model. • Reading portions Spot-checked the assignment of each Offer. Xxxxxx particularly scrutinized Offers for utility purchase. For PPA Offers, Xxxxxx focused on pricing, collateral, interconnection, permitting, technology, resource assessment, site control, and development and ownership experience descriptions in detailindividual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Building Built an independent valuation model and using it to value Offersproposed contracts. This served as a cross-check against PG&E’s LCBF market valuation model. The IE model used independent inputs and a different methodology than PG&E’s’s LCBF methodology. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. However, Its main value was to provide an independent check on the independent valuation was useful for testing the PG&E team’s ranking of Offers using alternate assumptionscontracts provided by PG&E’s valuation model and to scan for data input errors and differences in treatment of contracts between PG&E and the IE. Where variances in the ranking of contracts between the two models were large (and there were very few such situations) the cross-comparison was helpful in identifying errors such as incorrect energy pricing, inappropriate exclusion or inclusion of Resource Adequacy (RA) value, or inaccurate assignment of Transmission Ranking Cost Report (TRCR) adders. • Attending PG&E’s evaluation team discussions of Offers, criteria, issues, etc. • Scoring Offers independently Developed independent project viability scores for viabilityeach contract, using the ED’s 2011 version of the Project Viability Calculator. The independently developed Offer valuations This served as a cross-comparison to check on the PG&E evaluation team’s scoring, and viability scores provided part of helped to surface ambiguities in the basis for developing an independent view of the relative merit of Offers Calculator’s scoring criteria that could lead reasonable individuals to score contracts differently. It facilitated discussions that led both the PG&E team selected or rejectedand the IE to revise their preliminary scores upon review and cross-check. • Reviewing Reviewed PG&E’s scoring evaluation of Offers for each contract on the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of projectscontracts. • Attending meetings of PG&E’s steering committee, as it made decisions about the logic for selecting a short list and approved proposed selections for the short list. • Attending Attended meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the solicitation independent review and presenting a commentary on the Offersselection process the utility proposed to use to construct a short list. Members of the PRG followed up with more specific questions about contracts, valuations, and presenting an independent commentary and observations about the RFOproject viability scores, to which Xxxxxx responded with more detail. • Offering PG&E’s evaluation team and steering committee commentary based on independent opinion. In a few cases Xxxxxx provided specific suggestions on particular topics such as the feasibility of specific out-of-state transmission proposals. Additionally, in order to prepare this report on the contract with Sierra Pacific Industries, Xxxxxx pursued project-specific activities: • Observed (telephonically) several negotiation sessions between utility staff and SPI’s commercial team; • Reviewed draft term sheets, draft contracts, and other documents that passed between the parties; • Performed an independent valuation of two parties during the SPI contract and evaluation of the project viability of the Xxxxxxxx II facility; • Compared the net value and pricing of the SPI contract to peer groups consisting of alternative proposals available to PG&E.negotiation, including draft contracts.

IE ACTIVITIES. To fulfill the role of evaluating PG&E’s 2011 solicitation, several tasks were undertaken, both prior to Offer Opening and subsequently. Prior to Offer Opening on June 22, 2011, Xxxxxx performed several tasks to assess PG&E’s methodology for evaluating Offers: •  Reviewed the solicitation and its attachments including PG&E’s 2011 Form Agreements and description of the LCBF methodology and criteria. •  Examined the utility’s nonpublic protocols detailing how PG&E would evaluate Offers against various criteria. •  Attended PG&E’s Bidders’ Conference on May 19, 2011 to evaluate the information provided to potential Participants, and how that information was distributed. • Reviewed the list of registered attendees of the Bidders’ Conference against PG&E’s master list of RFO contacts (used for outreach to potential Participants). 3 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 46. •  Reviewed the list of registered attendees of the Bidders’ Conference against PG&E’s master list of RFO contacts (used for outreach to potential Participants).  Reviewed the posting of questions and answers from the Bidders’ Conference on PG&E’s public website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. •  Examined PG&E’s 2011 RFO master contact list; performed an analysis of contacts with respect to industry and technology representation. •  Interviewed members of PG&E’s evaluation committee regarding details of the 2011 version of the utility’s LCBF methodology and its inputs. During the period between Offer Opening and PG&E’s development of a final short list for submittal to the CPUC, Xxxxxx’x activities included: •  Participating in opening Offers. Xxxxxx observed the opening of each Offer and observed the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and independently built a database for tracking Offers. •  Reading portions of each Offer. Xxxxxx particularly scrutinized Offers for utility purchase. For PPA Offers, Xxxxxx focused on pricing, collateral, interconnection, permitting, technology, resource assessment, site control, and development and ownership experience descriptions in detail. •  Building an independent valuation model and using it to value Offers. This served as a cross-check against PG&E’s LCBF model. The IE model used independent inputs and a different methodology than PG&E’s. It was much simpler and lacked detail and granularity used in the PG&E model. However, the independent valuation was useful for testing the PG&E team’s ranking of Offers using alternate assumptions. •  Attending PG&E’s evaluation team discussions of Offers, criteria, issues, etc. •  Scoring Offers independently for viability, using the ED’s 2011 version of the Project Viability Calculator. The independently developed Offer valuations and viability scores provided part of the basis for developing an independent view of the relative merit of Offers that the PG&E team selected or rejected. •  Reviewing PG&E’s scoring of Offers for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of projects. •  Attending meetings of PG&E’s steering committee, as it made decisions about the logic for selecting a short list and approved proposed selections for the short list. •  Attending meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the solicitation and the Offers, and presenting an independent commentary and observations about the RFO. •  Offering PG&E’s evaluation team and steering committee commentary based on independent opinion. In a few cases Xxxxxx provided specific suggestions on particular topics such as the feasibility of specific out-of-state transmission proposals. Additionally, in order to prepare this report on the contract with Sierra Pacific IndustriesParrey LLC, Xxxxxx pursued project-specific activities: •  Observed (telephonically) several negotiation sessions between utility staff the utility’s commercial team and SPISunPower’s commercial team; •  Reviewed draft term sheets, draft contracts, and other documents passed between the parties; •  Performed an independent valuation of the SPI Parrey contract and evaluation of the project viability of the Xxxxxxxx II Xxxxxxxxx Xxxxx facility; •  Compared the net value and pricing of the SPI Parrey contract to peer groups consisting of alternative competing proposals currently or recently available to PG&E.

IE ACTIVITIES. To fulfill the role of evaluating PG&E’s 2011 solicitation, several tasks were undertaken, both prior to Offer Opening and subsequently. Prior to Offer Opening on June 22, 2011, Xxxxxx performed several tasks to assess PG&E’s methodology for evaluating Offers: • Reviewed the solicitation and its attachments including PG&E’s 2011 Form Agreements and description of the LCBF methodology and criteria. • Examined the utility’s nonpublic protocols detailing how PG&E would evaluate Offers against various criteria. • Attended PG&E’s Bidders’ Conference on May 19, 2011 to evaluate the information provided to potential Participants, and how that information was distributed. • Reviewed the list of registered attendees of the Bidders’ Conference against PG&E’s master list of RFO contacts (used for outreach to potential Participants). 3 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 46. • Reviewed the posting of questions and answers from the Bidders’ Conference on PG&E’s public website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. • Examined PG&E’s 2011 RFO master contact list; performed an analysis of contacts with respect to industry and technology representation. • Interviewed members of PG&E’s evaluation committee regarding details of the 2011 version of the utility’s LCBF methodology and its inputs. During the period between Offer Opening and PG&E’s development of a final short list for submittal to the CPUC, Xxxxxx’x activities included: • Participating in opening Offers. Xxxxxx observed the opening of each Offer and observed the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and independently built a database for tracking Offers. • Reading portions of each Offer. Xxxxxx particularly scrutinized Offers for utility purchase. For PPA Offers, Xxxxxx focused on pricing, collateral, interconnection, permitting, technology, resource assessment, site control, and development and ownership experience descriptions in detail. • Building an independent valuation model and using it to value Offers. This served as a cross-check against PG&E’s LCBF model. The IE model used independent inputs and a different methodology than PG&E’s. It was much simpler and lacked detail and granularity used in the PG&E model. However, the independent valuation was useful for testing the PG&E team’s ranking of Offers using alternate assumptions. • Attending PG&E’s evaluation team discussions of Offers, criteria, issues, etc. • Scoring Offers independently for viability, using the ED’s 2011 version of the Project Viability Calculator. The independently developed Offer valuations and viability scores provided part of the basis for developing an independent view of the relative merit of Offers that the PG&E team selected or rejected. • Reviewing PG&E’s scoring of Offers for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of projects. • Attending meetings of PG&E’s steering committee, as it made decisions about the logic for selecting a short list and approved proposed selections for the short list. • Attending meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the solicitation and the Offers, and presenting an independent commentary and observations about the RFO. • Offering PG&E’s evaluation team and steering committee commentary based on independent opinion. In a few cases Xxxxxx provided specific suggestions on particular topics such as the feasibility of specific out-of-state transmission proposals. Additionally, in order to prepare this report on the bilateral negotiations to amend the contract with Sierra Pacific IndustriesLiberty V Biofuels Power, Xxxxxx pursued project-specific activities: • Observed (telephonically) several negotiation sessions between utility staff and SPILiberty V’s commercial team; • Reviewed draft term sheets, draft contracts, and other documents passed between the parties; • Performed an independent valuation of the SPI Liberty V Biofuels Power contract and evaluation of the project viability of the Xxxxxxxx II facility; • Reviewed information provided by Liberty Energy Resources’ staff about the economics of the project and its financing plans; • Compared the net value and pricing of the SPI Liberty V contract to peer groups consisting of alternative competing proposals available to PG&E.

IE ACTIVITIES. To fulfill the role of evaluating PG&E’s 2011 solicitationthe proposed CMS2 contract, several tasks were undertaken, both prior to Offer Opening and subsequently. Prior to Offer Opening on June 22, 2011, Xxxxxx Seco had performed several of these tasks to assess within its work scope of serving as IE for PG&E’s methodology for evaluating Offers: 2008 and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation of the CMS2 contract. • Reviewed the solicitation 2009 RPS RFO Solicitation Protocol and its various attachments including the Forms of Power Purchase Agreement (PPA) and PG&E’s 2011 Form Agreements and detailed description of the its LCBF methodology bid evaluation and selection process and criteria. • Examined the utility’s nonpublic protocols detailing how PG&E would evaluate Offers evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, and RPS goals. • Attended Examined PG&E’s Bidders’ Conference on May 19, 2011 2009 RFO master contact list; performed a detailed analysis of contacts with respect to evaluate the information provided to potential Participants, industry and how that information was distributedtechnology representation. • Reviewed the list of registered attendees of the Bidders’ Conference against PG&E’s master list of RFO contacts (used for outreach to potential Participants). 3 1 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 46. • Reviewed the posting of questions and answers from the Bidders’ Conference on PG&E’s public website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. • Examined PG&E’s 2011 RFO master contact list; performed an analysis of contacts with respect to industry and technology representation. 46 • Interviewed members of PG&E’s evaluation committee and sub-committees regarding details the process, data inputs and parameters, background industry and utility information, quantitative models, and other considerations taken into account in evaluating contracts against non-quantitative criteria and in performing market valuation of the 2011 version of the utilitycontracts. • Reviewed in detail various data inputs and parameters used in PG&E’s LCBF methodology and its inputsmarket valuation methodology. During the period between Offer Opening and • Spot-checked contract-specific data inputs to PG&E’s development of a final short list for submittal to the CPUC, Xxxxxx’x activities included: • Participating in opening Offers. Xxxxxx observed the opening of each Offer and observed the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and independently built a database for tracking Offersvaluation model. • Reading portions Spot-checked the assignment of each Offer. Xxxxxx particularly scrutinized Offers for utility purchase. For PPA Offers, Xxxxxx focused on pricing, collateral, interconnection, permitting, technology, resource assessment, site control, and development and ownership experience descriptions in detailindividual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Building Built an independent valuation model and using it to value Offersproposed contracts. This served as a cross-check against PG&E’s LCBF market valuation model. The IE model used independent inputs and a different methodology than PG&E’s’s LCBF methodology. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. However, Its main value was to provide an independent check on the independent valuation was useful for testing the PG&E team’s ranking of Offers using alternate assumptionscontracts provided by PG&E’s valuation model and to scan for data input errors and differences in treatment of contracts between PG&E and the IE. Where variances in the ranking of contracts between the two models were large (and there were very few such situations) the cross-comparison was helpful in identifying errors such as incorrect energy pricing, inappropriate exclusion or inclusion of Resource Adequacy (RA) value, or inaccurate assignment of Transmission Ranking Cost Report (TRCR) adders. • Attending PG&E’s evaluation team discussions of Offers, criteria, issues, etc. • Scoring Offers independently Developed independent project viability scores for viabilityeach contract, using the ED’s 2011 version of the Project Viability Calculator. The independently developed Offer valuations This served as a cross-comparison to check on the PG&E evaluation team’s scoring, and viability scores provided part of helped to surface ambiguities in the basis for developing an independent view of the relative merit of Offers Calculator’s scoring criteria that could lead reasonable individuals to score contracts differently. It facilitated discussions that led both the PG&E team selected or rejectedand the IE to revise their preliminary scores upon review and cross-check. • Reviewing Reviewed PG&E’s scoring evaluation of Offers for each contract on the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of projectscontracts. • Attending meetings of PG&E’s steering committee, as it made decisions about the logic for selecting a short list and approved proposed selections for the short list. • Attending Attended meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the solicitation independent review and presenting a commentary on the Offersselection process the utility proposed to use to construct a short list. Members of the PRG followed up with more specific questions about contracts, valuations, and presenting an independent commentary and observations about the RFOproject viability scores, to which Xxxxxx responded with more detail. • Offering PG&E’s evaluation team and steering committee commentary based on independent opinion. In a few cases Xxxxxx provided specific suggestions on particular topics such as the feasibility of specific out-of-state transmission proposals. Additionally, in order to prepare this report on the contract with Sierra Pacific Industries, Xxxxxx pursued project-specific activities: • Observed (telephonically) several negotiation sessions between utility staff and SPI’s commercial team; • Reviewed draft term sheets, draft contracts, and other documents that passed between the parties; • Performed an independent valuation of two parties during the SPI contract and evaluation of the project viability of the Xxxxxxxx II facility; • Compared the net value and pricing of the SPI contract to peer groups consisting of alternative proposals available to PG&E.negotiation, including draft contracts.

IE ACTIVITIES. To fulfill the role of evaluating PG&E’s 2011 solicitation, several tasks were undertaken, both prior to Offer Opening and subsequently. Prior to Offer Opening on June 22, 2011, Xxxxxx performed several tasks to assess PG&E’s methodology for evaluating Offers: • Reviewed the solicitation and its attachments including PG&E’s 2011 Form Agreements and description of the LCBF methodology and criteria. • Examined the utility’s nonpublic protocols detailing how PG&E would evaluate Offers against various criteria. • Attended PG&E’s Bidders’ Conference on May 19, 2011 to evaluate the information provided to potential Participants, and how that information was distributed. • Reviewed the list of registered attendees of the Bidders’ Conference against PG&E’s master list of RFO contacts (used for outreach to potential Participants). 3 4 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 46. • Reviewed the posting of questions and answers from the Bidders’ Conference on PG&E’s public website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. • Examined PG&E’s 2011 RFO master contact list; performed an analysis of contacts with respect to industry and technology representation. • Interviewed members of PG&E’s evaluation committee regarding details of the 2011 version of the utility’s LCBF methodology and its inputs. During the period between Offer Opening and PG&E’s development of a final short list for submittal to the CPUC, Xxxxxx’x activities included: • Participating in opening Offers. Xxxxxx observed the opening of each Offer and observed the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and independently built a database for tracking Offers. • Reading portions of each Offer. Xxxxxx particularly scrutinized Offers for utility purchase. For PPA Offers, Xxxxxx focused on pricing, collateral, interconnection, permitting, technology, resource assessment, site control, and development and ownership experience descriptions in detail. • Building an independent valuation model and using it to value Offers. This served as a cross-check against PG&E’s LCBF model. The IE model used independent inputs and a different methodology than PG&E’s. It was much simpler and lacked detail and granularity used in the PG&E model. However, the independent valuation was useful for testing the PG&E team’s ranking of Offers using alternate assumptions. • Attending PG&E’s evaluation team discussions of Offers, criteria, issues, etc. • Scoring Offers independently for viability, using the ED’s 2011 version of the Project Viability Calculator. The independently developed Offer valuations and viability scores provided part of the basis for developing an independent view of the relative merit of Offers that the PG&E team selected or rejected. • Reviewing PG&E’s scoring of Offers for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of projects. • Attending meetings of PG&E’s steering committee, as it made decisions about the logic for selecting a short list and approved proposed selections for the short list. • Attending meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the solicitation and the Offers, and presenting an independent commentary and observations about the RFO. • Offering PG&E’s evaluation team and steering committee commentary based on independent opinion. In a few cases Xxxxxx provided specific suggestions on particular topics such as the feasibility of specific out-of-state transmission proposals. Additionally, in order to prepare this report on the contract with Sierra Pacific IndustriesRE Kansas, Xxxxxx pursued project-specific activities: • Observed (telephonically) several negotiation sessions between utility staff and SPIRecurrent Energy’s commercial team; • Reviewed draft term sheets, draft contracts, and other documents passed between the parties; • Performed an independent valuation of the SPI RE Kansas contract and evaluation of the project viability of the Xxxxxxxx II facility; • Compared the net value and pricing of the SPI RE Kansas contract to peer groups consisting of alternative competing proposals available to PG&E.

IE ACTIVITIES. To fulfill the role of evaluating PG&E’s 2011 solicitation, several tasks were undertaken, both prior to Offer Opening and subsequently. Prior to Offer Opening on June 22, 2011, Xxxxxx performed several tasks to assess PG&E’s methodology for evaluating Offers: • Reviewed the solicitation and its attachments including PG&E’s 2011 Form Agreements and description of the LCBF methodology and criteria. • Examined the utility’s nonpublic protocols detailing how PG&E would evaluate Offers against various criteria. • Attended PG&E’s Bidders’ Conference on May 19, 2011 to evaluate the information provided to potential Participants, and how that information was distributed. • Reviewed the list of registered attendees of the Bidders’ Conference against PG&E’s master list of RFO contacts (used for outreach to potential Participants). 3 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 46. • Reviewed the posting of questions and answers from the Bidders’ Conference on PG&E’s public website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. • Examined PG&E’s 2011 RFO master contact list; performed an analysis of contacts with respect to industry and technology representation. • Interviewed members of PG&E’s evaluation committee regarding details of the 2011 version of the utility’s LCBF methodology and its inputs. During the period between Offer Opening and PG&E’s development of a final short list for submittal to the CPUC, Xxxxxx’x activities included: • Participating in opening Offers. Xxxxxx observed the opening of each Offer and observed the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and independently built a database for tracking Offers. • Reading portions of each Offer. Xxxxxx particularly scrutinized Offers for utility purchase. For PPA Offers, Xxxxxx focused on pricing, collateral, interconnection, permitting, technology, resource assessment, site control, and development and ownership experience descriptions in detail. • Building an independent valuation model and using it to value Offers. This served as a cross-check against PG&E’s LCBF model. The IE model used independent inputs and a different methodology than PG&E’s. It was much simpler and lacked detail and granularity used in the PG&E model. However, the independent valuation was useful for testing the PG&E team’s ranking of Offers using alternate assumptions. • Attending PG&E’s evaluation team discussions of Offers, criteria, issues, etc. • Scoring Offers independently for viability, using the ED’s 2011 version of the Project Viability Calculator. The independently developed Offer valuations and viability scores provided part of the basis for developing an independent view of the relative merit of Offers that the PG&E team selected or rejected. • Reviewing PG&E’s scoring of Offers for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of projects. • Attending meetings of PG&E’s steering committee, as it made decisions about the logic for selecting a short list and approved proposed selections for the short list. • Attending meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the solicitation and the Offers, and presenting an independent commentary and observations about the RFO. • Offering PG&E’s evaluation team and steering committee commentary based on independent opinion. In a few cases Xxxxxx provided specific suggestions on particular topics such as the feasibility of specific out-of-state transmission proposals. Additionally, in order to prepare this report on the contract with Sierra Pacific IndustriesXxxxxxxxx Solar, Cuyama Solar, and Lost Hills Solar, Xxxxxx pursued project-specific activities: • Observed (telephonically) several negotiation sessions between utility staff and SPIFirst Solar’s commercial team; • Reviewed draft term sheets, draft contracts, and other documents passed between the parties; • Performed an independent valuation of the SPI contract three contracts and evaluation of the project viability of the Xxxxxxxx II facilityfacilities; • Compared the net value and pricing of the SPI contract three contracts to peer groups consisting of alternative competing proposals available to PG&E.

IE ACTIVITIES. To fulfill the role of evaluating PG&E’s 2011 solicitation2009 RPS RFO procurement process, several tasks were undertaken, both prior to Offer Opening and subsequently. Prior to Offer Opening on June 22Opening, 2011, Xxxxxx the IE performed several tasks to assess PG&E’s methodology for evaluating Offers: • Reviewed the solicitation and its attachments including PG&E’s 2011 Form Agreements and description of the LCBF methodology and criteria. • Examined the utility’s nonpublic protocols detailing how PG&E would evaluate Offers against various criteria. • Attended PG&E’s Bidders’ Conference on May 19, 2011 to evaluate the information provided to potential Participants, and how that information was distributed. • Reviewed the list of registered attendees of the Bidders’ Conference against PG&E’s master list of RFO contacts (used for outreach to potential Participants). 3 2 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 4646 • Reviewed the 2009 RPS RFO Solicitation Protocol and its various attachments including the Forms of Power Purchase Agreement (PPA) and PG&E’s detailed description of its LCBF bid evaluation and selection process and criteria. • Examined the utility’s nonpublic protocols detailing how PG&E proposed to evaluate Offers against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, and RPS goals. Also, Xxxxxx reviewed the nonpublic protocols regarding sites for development and ownership eligibility, which detail the treatment of these special cases in which developers offer land or the transfer of a completed generation project to utility ownership. These nonpublic internal protocols were evaluated to test whether they were consistent with the approved public Solicitation Protocol and whether the procedures, inputs, parameters, and standards were fair and reasonable. • Attended PG&E’s RPS Bidders’ Conference on July 21, 2009 to evaluate the information provided to potential Participants, and reviewed its list of registered attendees against PG&E’s master list of RFO contacts (used for outreach to potential Participants) and the list of parties providing a Notice of Intent to bid. • Reviewed the posting of questions and answers from the Bidders’ Conference on PG&E’s public website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. • Attended the RFO Bidders’ Workshop on August 3, 2009 to gauge to degree to which the utility sought to clarify the requirements for conforming Offer packages, and reviewed the website-posted question and answer transcript from that workshop to test whether the information was made available to all potential Participants. • Examined PG&E’s 2011 2009 RFO master contact list; performed an a detailed analysis of contacts with respect to industry and technology representation. • Interviewed members of PG&E’s evaluation committee and sub-committees regarding details the process, data inputs and parameters, background industry and utility information, quantitative models, and other considerations taken into account in evaluating Offers against non-quantitative criteria and in performing market valuation of the 2011 version of the utilityOffers. • Reviewed in detail various data inputs and parameters used in PG&E’s LCBF methodology and its inputsmarket valuation methodology. During the period between Offer Opening and PG&E’s development of a final short list for submittal to the CPUC, Xxxxxx’x activities included: • Participating in opening the Offers. Xxxxxx observed The IE was present during the opening of each Offer Offer, and observed the PG&E team logging in team’s initial review and process of recording and documenting basic information from each Offer. The IE took an electronic copy of (where present) from each Offer package, and independently built a database for tracking the Offers. • Observing discussions of the PG&E evaluation committee regarding what additional information should be requested immediately from individual Participants to address material deficiencies (e.g. missing or unreadable electronic versions, missing Attachment D offer forms, clarification of ambiguous or apparently erroneous information) in an effort to ensure that each Offer included sufficient information to complete an evaluation and to minimize the number of Offers disqualified as non-conforming. • Reviewing the outbound correspondence (“deficiency letters”) from PG&E to Participants identifying issues with the completeness of the Offers and requesting clarification or additional information. Xxxxxx monitored other communications between PG&E and Participants to check for fairness in how non-public information was released. • Reading portions of each Offerthe Offers in detail. Xxxxxx particularly scrutinized Offers for utility purchasepurchase and those which provided options for utility buyout. For PPA Offers, Xxxxxx focused on pricing, collateral, interconnection, permitting, technology, resource assessment, site control• Observing PG&E evaluation committee discussions about which Offers to disqualify for nonconformance with the requirements of the Solicitation Protocol, and development and ownership experience descriptions in detailwhy. • Spot-checking Offer-specific data inputs to PG&E’s valuation model. • Spot-checking the assignment of individual Offers to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Building an independent valuation model and using it to value the Offers. This served as a cross-check against PG&E’s LCBF market valuation model. The IE model used independent inputs and a different methodology than PG&E’s’s LCBF methodology. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. However, Its main value was to provide an independent check on the independent valuation was useful for testing the PG&E team’s ranking of Offers using alternate assumptionsprovided by PG&E’s valuation model and to scan for data input errors and differences in treatment of Offers between PG&E and the IE. Where variances in the ranking of Offers between the two models were large (and there were very few such situations) the cross-comparison was helpful in identifying such errors such as incorrect energy pricing, the inappropriate exclusion or inclusion of Resource Adequacy (RA) value, or inaccurate assignment of Transmission Ranking Cost Report (TRCR) adders. • Attending and participating in team discussions of PG&E’s evaluation team committee for the 2009 RPS RFO as the conforming Offers were evaluated. This included discussing what scores were assigned to each Offer for the various non-valuation criteria, and why. It also included the discussions of Offerswhat Offers should not be selected for specific reasons not directly related to valuation or project viability but related to other evaluation criteria or preferences. Participation provided an opportunity to test the objectivity, criteriafairness, issues, etcand reasonableness of how PG&E assessed Offers on these criteria and preferences. • Scoring Offers independently Developing independent project viability scores for viabilityeach Offer, using the ED’s 2011 version of the Project Viability Calculator. The independently developed Offer valuations This served as a cross-comparison to check on the PG&E evaluation team’s scoring, and viability scores provided part of helped to surface ambiguities in the basis for developing an independent view of the relative merit of Calculator’s scoring criteria that could lead reasonable individuals to score Offers differently. It facilitated discussions that led both the PG&E team selected or rejectedand the IE to revise their preliminary scores upon review and cross-check. • Reviewing PG&E’s scoring of Offers each Offer for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of projects. • Investigating in detail the second ranking of Offers incorporating transmission cost adders. PG&E’s Solicitation Protocol takes into account proxies for transmission network upgrade costs (both those in PG&E’s service territory and elsewhere) that may be required to incorporate increments of renewable generation likely to incur congestion. The protocol also provides for PG&E to consider “alternative commercial arrangements”, such as remarketing power, executing swaps, or buying non-firm transmission, to avoid transmission network upgrade costs. The data inputs for this analysis are complex and the analysis itself is time-consuming, but the second iteration of valuation that includes these adders has a significant impact on the value ranking of Offers. • Attending meetings and participating in discussions of PG&E’s steering committeecommittee for the 2009 RPS RFO, as it that leadership group made decisions about the logic for selecting a short list and approved proposed selections decisions for the short list. • Attending meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the solicitation independent review and presenting a commentary on the selection process the utility proposed to use to construct a short list. Members of the PRG followed up with more specific questions about Offers, valuations, and presenting an independent commentary and observations about the RFOproject viability scores, to which Xxxxxx responded with more detail. • Offering PG&E’s evaluation team committee and steering committee commentary based on independent opinion. In a few cases Xxxxxx provided specific suggestions on particular topics such as treatment of Offers interconnecting outside the feasibility CAISO or interpretation of specific out-of-state transmission proposalsguidelines for the Project Viability Calculator. AdditionallyFollowing PG&E’s preliminary selection of Offers for a short list, in order to prepare this report Xxxxxx’x activities focused on the contract with Sierra Pacific Industries, Xxxxxx pursued project-specific activitiesdiscussions that ensued: • Observed (telephonically) several Monitoring communications with shortlisted and non-shortlisted Participants, including discussions in which the utility offered the latter an opportunity to be debriefed on the reasons why their Offers failed to be selected and to give feedback on the overall RFO process; • Discussing with the PG&E team the choices and decisions that were posed by shortlisted parties who sought changes in project selection or size; and • Providing independent counsel and suggestions to the PG&E team regarding decisions about the process, such as whether to provide time extensions to shortlisted Participants obligated to place deposits because other IOUs were late in their notifications about their short lists. • Observing negotiation sessions between utility staff PG&E transactors and SPI’s commercial team; • Reviewed short-listed developers, and reviewing draft term sheets, draft contracts, sheets and other documents passed between contracts for an analysis of concessions granted and variances from PG&E’s Form Agreement to assess the parties; • Performed an independent valuation fairness of the SPI contract and evaluation of the project viability of the Xxxxxxxx II facility; • Compared the net value and pricing of the SPI contract to peer groups consisting of alternative proposals available to PG&E.negotiations.