Common use of IE ACTIVITIES Clause in Contracts

IE ACTIVITIES. To fulfill the role of evaluating the proposed DG Fairhaven contract amendment, several tasks were undertaken. Xxxxxx Seco had performed several of these tasks within its work scope of serving as IE for PG&E’s 2008 and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation of the DG Fairhaven contract amendment. 2 The contract amendment in question is arguably not an amendment to an existing RPS contract in form but rather an amendment to a Standard Offer Qualifying Facilities contract. 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 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 evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, and RPS goals. • Interviewed members of PG&E’s evaluation committee and sub-committees regarding 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 contracts. • Reviewed in detail various data inputs and parameters used in PG&E’s LCBF market valuation methodology. • Spot-checked contract-specific data inputs to PG&E’s valuation model. • Spot-checked the assignment of individual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Built an independent valuation model and using it to value proposed 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 LCBF methodology. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. Its main value was to provide an independent check on the ranking of contracts 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. • Developed an independent project viability score, using the ED’s version of the Project Viability Calculator. • Reviewed PG&E’s evaluation on criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of contracts. • Attended meetings of PG&E’s Procurement Review Group (PRG). • Directly observed (telephonically) negotiation sessions between PG&E and DG Fairhaven. • Reviewed documents that passed between the two parties during the negotiation, including draft contracts.

IE ACTIVITIES. To fulfill the role of evaluating the proposed DG Fairhaven HLP contract amendment, several tasks were undertaken. Xxxxxx Seco had performed several of these tasks within its work scope of serving as IE for PG&E’s 2008 and 2009 2011 RPS competitive solicitationssolicitation; these prior activities were directly relevant to the evaluation of the DG Fairhaven HLP contract amendment. 2 The contract amendment in question is arguably not an amendment to an existing RPS contract in form but rather an amendment to a Standard Offer Qualifying Facilities contract. 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 2009 2011 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 evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, and RPS goals. ; • Interviewed members of PG&E’s evaluation committee and sub-committees regarding 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 contracts. ; • Reviewed in detail various data inputs and parameters used in PG&E’s LCBF market valuation methodology. • Spot-checked contract-specific data inputs to PG&E’s valuation model. • Spot-checked the assignment of individual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). ; • Built an independent valuation model and using used it to value proposed 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 LCBF methodology. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. Its main value was to provide an independent check on the ranking of contracts 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. • Developed an independent project viability score, using the ED’s 2011 version of the Project Viability Calculator. ; • Reviewed PG&E’s evaluation on criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of contracts. ; • Attended meetings of PG&E’s Procurement Review Group (PRG). ) in which the utility updated the PRG on negotiations with biomass-fueled QFs; • Directly observed (telephonicallytelephonically and in person) negotiation sessions between PG&E and DG Fairhaven. Xxxxxxxxx Power; • Reviewed documents that passed between the two parties during the negotiation, including draft term sheets, draft contracts, and supporting documentation.

IE ACTIVITIES. To fulfill the role of evaluating the proposed DG Fairhaven contract amendmentPG&E’s 2011 solicitation, 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 within its work scope of serving as IE for to assess PG&E’s 2008 methodology for evaluating Offers: • Reviewed the solicitation and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation its attachments including PG&E’s 2011 Form Agreements and description of the DG Fairhaven contract amendment. 2 The contract amendment in question is arguably not an amendment 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 an existing RPS contract in form but rather an amendment evaluate the information provided to a Standard Offer Qualifying Facilities contract. 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 2009 RPS RFO Solicitation Protocol posting of questions and its various attachments including answers from the Forms of Power Purchase Agreement (PPA) and Bidders’ Conference on PG&E’s detailed description of its LCBF bid evaluation and selection process and criteriapublic website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. • Examined the utilityPG&E’s nonpublic protocols detailing how PG&E evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, 2011 RFO master contact list; performed an analysis of contacts with respect to industry and RPS goalstechnology representation. • Interviewed members of PG&E’s evaluation committee regarding details of the 2011 version of the utility’s LCBF methodology and sub-committees regarding its inputs. During the processperiod between Offer Opening and PG&E’s development of a final short list for submittal to the CPUC, data inputs Xxxxxx’x activities included: • Participating in opening Offers. Xxxxxx observed the opening of each Offer and parameters, background industry and utility information, quantitative modelsobserved the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and other considerations taken into account in evaluating contracts against non-quantitative criteria and in performing market valuation of contractsindependently built a database for tracking Offers. • Reviewed 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 various data inputs and parameters used in PG&E’s LCBF market valuation methodologydetail. • Spot-checked contract-specific data inputs to PG&E’s valuation model. • Spot-checked the assignment of individual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Built Building an independent valuation model and using it to value proposed contractsOffers. 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 LCBF methodology’s. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. Its main value However, the independent valuation was to provide an independent check on useful for testing the PG&E team’s ranking of contracts provided by Offers using alternate assumptions. • Attending PG&E’s valuation model and to scan for data input errors and differences in treatment evaluation team discussions 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 pricingOffers, inappropriate exclusion or inclusion of Resource Adequacy (RA) valuecriteria, or inaccurate assignment of Transmission Ranking Cost Report (TRCR) addersissues, etc. • Developed an independent project viability scoreScoring 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. • Reviewed Reviewing PG&E’s evaluation on scoring of Offers for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of contractsprojects. • Attended 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. • Directly observed 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 Liberty V Biofuels Power, Xxxxxx pursued project-specific activities: • Observed (telephonically) several negotiation sessions between PG&E utility staff and DG Fairhaven. Liberty V’s commercial team; • Reviewed draft term sheets, draft contracts, and other documents that passed between the two parties during parties; • Performed an independent valuation of the negotiation, including draft contracts.Liberty V Biofuels Power contract and evaluation of the project viability of the 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 Liberty V contract to peer groups consisting of alternative competing proposals available to PG&E.

IE ACTIVITIES. To fulfill the role of evaluating the proposed DG Fairhaven contract amendmentPG&E’s 2011 solicitation, 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 within its work scope of serving as IE for to assess PG&E’s 2008 methodology for evaluating Offers: • Reviewed the solicitation and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation its attachments including PG&E’s 2011 Form Agreements and description of the DG Fairhaven contract amendment. 2 The contract amendment in question is arguably not an amendment 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 an existing RPS contract in form but rather an amendment evaluate the information provided to a Standard Offer Qualifying Facilities contract. 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 2009 RPS RFO Solicitation Protocol posting of questions and its various attachments including answers from the Forms of Power Purchase Agreement (PPA) and Bidders’ Conference on PG&E’s detailed description of its LCBF bid evaluation and selection process and criteriapublic website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. • Examined the utilityPG&E’s nonpublic protocols detailing how PG&E evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, 2011 RFO master contact list; performed an analysis of contacts with respect to industry and RPS goalstechnology representation. • Interviewed members of PG&E’s evaluation committee regarding details of the 2011 version of the utility’s LCBF methodology and sub-committees regarding its inputs. During the processperiod between Offer Opening and PG&E’s development of a final short list for submittal to the CPUC, data inputs Xxxxxx’x activities included: • Participating in opening Offers. Xxxxxx observed the opening of each Offer and parameters, background industry and utility information, quantitative modelsobserved the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and other considerations taken into account in evaluating contracts against non-quantitative criteria and in performing market valuation of contractsindependently built a database for tracking Offers. • Reviewed 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 various data inputs and parameters used in PG&E’s LCBF market valuation methodologydetail. • Spot-checked contract-specific data inputs to PG&E’s valuation model. • Spot-checked the assignment of individual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Built Building an independent valuation model and using it to value proposed contractsOffers. 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 LCBF methodology’s. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. Its main value However, the independent valuation was to provide an independent check on useful for testing the PG&E team’s ranking of contracts provided by Offers using alternate assumptions. • Attending PG&E’s valuation model and to scan for data input errors and differences in treatment evaluation team discussions 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 pricingOffers, inappropriate exclusion or inclusion of Resource Adequacy (RA) valuecriteria, or inaccurate assignment of Transmission Ranking Cost Report (TRCR) addersissues, etc. • Developed an independent project viability scoreScoring 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. • Reviewed Reviewing PG&E’s evaluation on scoring of Offers for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of contractsprojects. • Attended 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. • Directly observed 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 PG&E utility staff and DG Fairhaven. SPI’s commercial team; • Reviewed draft term sheets, draft contracts, and other documents that passed between the two parties during parties; • Performed an independent valuation of the negotiation, including draft contracts.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 the proposed DG Fairhaven contract amendmentPG&E’s 2011 solicitation, 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 within its work scope of serving as IE for to assess PG&E’s 2008 methodology for evaluating Offers:  Reviewed the solicitation and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation its attachments including PG&E’s 2011 Form Agreements and description of the DG Fairhaven contract amendment. 2 The contract amendment in question is arguably not an amendment 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 an existing RPS contract in form but rather an amendment evaluate the information provided to a Standard Offer Qualifying Facilities contract. potential Participants, and how that information was distributed. 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 2009 RPS RFO Solicitation Protocol and its various attachments including list of registered attendees of the Forms of Power Purchase Agreement (PPA) and Bidders’ Conference against PG&E’s detailed description master list of its LCBF bid evaluation RFO contacts (used for outreach to potential Participants).  Reviewed the posting of questions and selection process 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 criteriatechnology representation. • Examined the utility’s nonpublic protocols detailing how PG&E evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, and RPS goals. •  Interviewed members of PG&E’s evaluation committee regarding details of the 2011 version of the utility’s LCBF methodology and sub-committees regarding its inputs. During the processperiod between Offer Opening and PG&E’s development of a final short list for submittal to the CPUC, data inputs Xxxxxx’x activities included:  Participating in opening Offers. Xxxxxx observed the opening of each Offer and parameters, background industry and utility information, quantitative modelsobserved the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and other considerations taken into account 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 evaluating contracts against non-quantitative criteria and in performing market valuation of contractsdetail. • Reviewed in detail various data inputs and parameters used in PG&E’s LCBF market valuation methodology. • Spot-checked contract-specific data inputs to PG&E’s valuation model. • Spot-checked the assignment of individual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Built  Building an independent valuation model and using it to value proposed contractsOffers. 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 LCBF methodology’s. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. Its main value However, the independent valuation was to provide an independent check on useful for testing the PG&E team’s ranking of contracts provided by Offers using alternate assumptions.  Attending PG&E’s valuation model and to scan evaluation team discussions of Offers, criteria, issues, etc.  Scoring Offers independently 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. • Developed an independent project viability scoreviability, using the ED’s 2011 version of the Project Viability Calculator. • Reviewed 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 evaluation on scoring of Offers for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of contractsprojects. • Attended  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. • Directly observed  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 Parrey LLC, Xxxxxx pursued project-specific activities:  Observed (telephonically) several negotiation sessions between PG&E the utility’s commercial team and DG Fairhaven. • SunPower’s commercial team;  Reviewed draft term sheets, draft contracts, and other documents that passed between the two parties during parties;  Performed an independent valuation of the negotiation, including draft contracts.Parrey contract and evaluation of the project viability of the Xxxxxxxxx Xxxxx facility;  Compared the net value and pricing of the 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 the proposed DG Fairhaven contract amendmentNorth Sky River contract, several tasks were undertaken. Xxxxxx Seco had performed several of these tasks within its work scope of serving as IE for PG&E’s 2008 and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation of the DG Fairhaven contract amendment. 2 The contract amendment in question is arguably not an amendment to an existing RPS contract in form but rather an amendment to a Standard Offer Qualifying Facilities NSR contract. 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 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 evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, and RPS goals. • Examined PG&E’s 2009 RFO master contact list; performed a detailed analysis of contacts with respect to industry and technology representation. 1 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 46 • Interviewed members of PG&E’s evaluation committee and sub-committees regarding 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 contracts. • Reviewed in detail various data inputs and parameters used in PG&E’s LCBF market valuation methodology. • Spot-checked contract-specific data inputs to PG&E’s valuation model. • Spot-checked the assignment of individual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Built an independent valuation model and using it to value proposed 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 LCBF methodology. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. Its main value was to provide an independent check on the ranking of contracts 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. • Developed an independent project viability scorescores for each contract, using the ED’s version of the Project Viability Calculator. This served as a cross-comparison to check on the PG&E evaluation team’s scoring, and helped to surface ambiguities in the Calculator’s scoring criteria that could lead reasonable individuals to score contracts differently. It facilitated discussions that led both the PG&E team and the IE to revise their preliminary scores upon review and cross-check. • Reviewed PG&E’s evaluation of each contract on the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of contracts. • Attended meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the independent review and presenting a commentary on the selection process the utility proposed to use to construct a short list. • Directly observed (telephonically) negotiation sessions between PG&E Members of the PRG followed up with more specific questions about contracts, valuations, and DG Fairhavenproject viability scores, to which Xxxxxx responded with more detail. • Reviewed documents that passed between the two parties during the negotiation, including draft contracts.

IE ACTIVITIES. To fulfill the role of evaluating the proposed DG Fairhaven contract amendmentPG&E’s 2011 solicitation, 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 within its work scope of serving as IE for to assess PG&E’s 2008 methodology for evaluating Offers: • Reviewed the solicitation and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation its attachments including PG&E’s 2011 Form Agreements and description of the DG Fairhaven contract amendment. 2 The contract amendment in question is arguably not an amendment 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 an existing RPS contract in form but rather an amendment evaluate the information provided to a Standard Offer Qualifying Facilities contract. 3 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). 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 2009 RPS RFO Solicitation Protocol posting of questions and its various attachments including answers from the Forms of Power Purchase Agreement (PPA) and Bidders’ Conference on PG&E’s detailed description of its LCBF bid evaluation and selection process and criteriapublic website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. • Examined the utilityPG&E’s nonpublic protocols detailing how PG&E evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, 2011 RFO master contact list; performed an analysis of contacts with respect to industry and RPS goalstechnology representation. • Interviewed members of PG&E’s evaluation committee regarding details of the 2011 version of the utility’s LCBF methodology and sub-committees regarding its inputs. During the processperiod between Offer Opening and PG&E’s development of a final short list for submittal to the CPUC, data inputs Xxxxxx’x activities included: • Participating in opening Offers. Xxxxxx observed the opening of each Offer and parameters, background industry and utility information, quantitative modelsobserved the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and other considerations taken into account in evaluating contracts against non-quantitative criteria and in performing market valuation of contractsindependently built a database for tracking Offers. • Reviewed 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 various data inputs and parameters used in PG&E’s LCBF market valuation methodologydetail. • Spot-checked contract-specific data inputs to PG&E’s valuation model. • Spot-checked the assignment of individual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Built Building an independent valuation model and using it to value proposed contractsOffers. 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 LCBF methodology’s. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. Its main value However, the independent valuation was to provide an independent check on useful for testing the PG&E team’s ranking of contracts provided by Offers using alternate assumptions. • Attending PG&E’s valuation model and to scan for data input errors and differences in treatment evaluation team discussions 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 pricingOffers, inappropriate exclusion or inclusion of Resource Adequacy (RA) valuecriteria, or inaccurate assignment of Transmission Ranking Cost Report (TRCR) addersissues, etc. • Developed an independent project viability scoreScoring 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. • Reviewed Reviewing PG&E’s evaluation on scoring of Offers for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of contractsprojects. • Attended 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. • Directly observed 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 RE Kansas, Xxxxxx pursued project-specific activities: • Observed (telephonically) several negotiation sessions between PG&E utility staff and DG Fairhaven. Recurrent Energy’s commercial team; • Reviewed draft term sheets, draft contracts, and other documents that passed between the two parties during parties; • Performed an independent valuation of the negotiation, including draft contracts.RE Kansas contract and evaluation of the project viability of the facility; • Compared the net value and pricing of the RE Kansas contract to peer groups consisting of alternative competing proposals available to PG&E.

IE ACTIVITIES. To fulfill the role of evaluating the proposed DG Fairhaven contract amendmentPG&E’s 2011 solicitation, 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 within its work scope of serving as IE for to assess PG&E’s 2008 methodology for evaluating Offers: • Reviewed the solicitation and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation its attachments including PG&E’s 2011 Form Agreements and description of the DG Fairhaven contract amendment. 2 The contract amendment in question is arguably not an amendment 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 an existing RPS contract in form but rather an amendment evaluate the information provided to a Standard Offer Qualifying Facilities contract. potential Participants, and how that information was distributed. 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 2009 RPS RFO Solicitation Protocol and its various attachments including list of registered attendees of the Forms of Power Purchase Agreement (PPA) and Bidders’ Conference against PG&E’s detailed description master list of its LCBF bid evaluation RFO contacts (used for outreach to potential Participants). • Reviewed the posting of questions and selection process and criteriaanswers 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 the utilityPG&E’s nonpublic protocols detailing how PG&E evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, 2011 RFO master contact list; performed an analysis of contacts with respect to industry and RPS goalstechnology representation. • Interviewed members of PG&E’s evaluation committee regarding details of the 2011 version of the utility’s LCBF methodology and sub-committees regarding its inputs. During the processperiod between Offer Opening and PG&E’s development of a final short list for submittal to the CPUC, data inputs Xxxxxx’x activities included: • Participating in opening Offers. Xxxxxx observed the opening of each Offer and parameters, background industry and utility information, quantitative modelsobserved the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and other considerations taken into account in evaluating contracts against non-quantitative criteria and in performing market valuation of contractsindependently built a database for tracking Offers. • Reviewed 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 various data inputs and parameters used in PG&E’s LCBF market valuation methodologydetail. • Spot-checked contract-specific data inputs to PG&E’s valuation model. • Spot-checked the assignment of individual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Built Building an independent valuation model and using it to value proposed contractsOffers. 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 LCBF methodology’s. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. Its main value However, the independent valuation was to provide an independent check on useful for testing the PG&E team’s ranking of contracts provided by Offers using alternate assumptions. • Attending PG&E’s valuation model and to scan for data input errors and differences in treatment evaluation team discussions 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 pricingOffers, inappropriate exclusion or inclusion of Resource Adequacy (RA) valuecriteria, or inaccurate assignment of Transmission Ranking Cost Report (TRCR) addersissues, etc. • Developed an independent project viability scoreScoring 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. • Reviewed Reviewing PG&E’s evaluation on scoring of Offers for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of contractsprojects. • Attended 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. • Directly observed 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 Parrey LLC, Xxxxxx pursued project-specific activities: • Observed (telephonically) several negotiation sessions between PG&E the utility’s commercial team and DG Fairhaven. SunPower’s commercial team; • Reviewed draft term sheets, draft contracts, and other documents that passed between the two parties during parties; • Performed an independent valuation of the negotiation, including draft contracts.Parrey contract and evaluation of the project viability of the Xxxxxxxxx Solar facility; • Compared the net value and pricing of the 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 the proposed DG Fairhaven contract amendmentSGS-1 contract, several tasks were undertaken. Xxxxxx Seco had performed several of these tasks within its work scope of serving as IE for PG&E’s 2008 and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation of the DG Fairhaven contract amendment. 2 The contract amendment in question is arguably not an amendment to an existing RPS contract in form but rather an amendment to a Standard Offer Qualifying Facilities SGS-1 contract. 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 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 evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, and RPS goals. • Examined PG&E’s 2009 RFO master contact list; performed a detailed analysis of contacts with respect to industry and technology representation. 1 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 46 • Interviewed members of PG&E’s evaluation committee and sub-committees regarding 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 contracts. • Reviewed in detail various data inputs and parameters used in PG&E’s LCBF market valuation methodology. • Spot-checked contract-specific data inputs to PG&E’s valuation model. • Spot-checked the assignment of individual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Built an independent valuation model and using it to value proposed 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 LCBF methodology. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. Its main value was to provide an independent check on the ranking of contracts 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. • Developed an independent project viability scorescores for each contract, using the ED’s version of the Project Viability Calculator. This served as a cross-comparison to check on the PG&E evaluation team’s scoring, and helped to surface ambiguities in the Calculator’s scoring criteria that could lead reasonable individuals to score contracts differently. It facilitated discussions that led both the PG&E team and the IE to revise their preliminary scores upon review and cross-check. • Reviewed PG&E’s evaluation of each contract on the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of contracts. • Attended meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the independent review and presenting a commentary on the selection process the utility proposed to use to construct a short list. • Directly observed (telephonically) negotiation sessions between PG&E Members of the PRG followed up with more specific questions about contracts, valuations, and DG Fairhavenproject viability scores, to which Xxxxxx responded with more detail. • Reviewed documents that passed between the two parties during the negotiation, including draft contracts.

IE ACTIVITIES. To fulfill the role of evaluating the proposed DG Fairhaven contract amendmentCMS2 contract, several tasks were undertaken. Xxxxxx Seco had performed several of these tasks within its work scope of serving as IE for PG&E’s 2008 and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation of the DG Fairhaven contract amendment. 2 The contract amendment in question is arguably not an amendment to an existing RPS contract in form but rather an amendment to a Standard Offer Qualifying Facilities CMS2 contract. 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 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 evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, and RPS goals. • Examined PG&E’s 2009 RFO master contact list; performed a detailed analysis of contacts with respect to industry and technology representation. 1 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 46 • Interviewed members of PG&E’s evaluation committee and sub-committees regarding 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 contracts. • Reviewed in detail various data inputs and parameters used in PG&E’s LCBF market valuation methodology. • Spot-checked contract-specific data inputs to PG&E’s valuation model. • Spot-checked the assignment of individual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Built an independent valuation model and using it to value proposed 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 LCBF methodology. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. Its main value was to provide an independent check on the ranking of contracts 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. • Developed an independent project viability scorescores for each contract, using the ED’s version of the Project Viability Calculator. This served as a cross-comparison to check on the PG&E evaluation team’s scoring, and helped to surface ambiguities in the Calculator’s scoring criteria that could lead reasonable individuals to score contracts differently. It facilitated discussions that led both the PG&E team and the IE to revise their preliminary scores upon review and cross-check. • Reviewed PG&E’s evaluation of each contract on the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of contracts. • Attended meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the independent review and presenting a commentary on the selection process the utility proposed to use to construct a short list. • Directly observed (telephonically) negotiation sessions between PG&E Members of the PRG followed up with more specific questions about contracts, valuations, and DG Fairhavenproject viability scores, to which Xxxxxx responded with more detail. • Reviewed documents that passed between the two parties during the negotiation, including draft contracts.

IE ACTIVITIES. To fulfill the role of evaluating the proposed DG Fairhaven contract amendmentPG&E’s 2009 RPS RFO procurement process, several tasks were undertaken, both prior to Offer Opening and subsequently. Xxxxxx Seco had Prior to Offer Opening, the IE performed several of these tasks within its work scope of serving as IE for to assess PG&E’s 2008 and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation of the DG Fairhaven contract amendment. methodology for evaluating Offers: 2 The contract amendment in question is arguably not an amendment to an existing RPS contract in form but rather an amendment to a Standard Offer Qualifying Facilities contract. 3 CPUC Decision 06-05-039, May 25, 2006, “Opinion Conditionally Approving Procurement Plans for 2006 RPS Solicitations, Addressing XXX Benchmarking Methodology”, page 46. 46 • 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 evaluates proposed contracts 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 website to check whether information that was made available 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 2009 RFO master contact list; performed a detailed analysis of contacts with respect to industry and technology representation. • Interviewed members of PG&E’s evaluation committee and sub-committees regarding the process, data inputs and parameters, background industry and utility information, quantitative models, and other considerations taken into account in evaluating contracts Offers against non-quantitative criteria and in performing market valuation of contractsOffers. • Reviewed in detail various data inputs and parameters used in PG&E’s LCBF market 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. The IE was present during the opening of each Offer, and observed the PG&E team’s initial review and process of recording and documenting basic information from each Offer. The IE took an electronic copy (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 the Offers in detail. Xxxxxx particularly scrutinized Offers for utility purchase and those which provided options for utility buyout. • Observing PG&E evaluation committee discussions about which Offers to disqualify for nonconformance with the requirements of the Solicitation Protocol, and why. • Spot-checked contractchecking Offer-specific data inputs to PG&E’s valuation model. • Spot-checked checking the assignment of individual projects Offers to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Built Building an independent valuation model and using it to value proposed contractsthe 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 LCBF methodology. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. Its main value was to provide an independent check on the ranking of contracts Offers provided by PG&E’s valuation model and to scan for data input errors and differences in treatment of contracts Offers between PG&E and the IE. Where variances in the ranking of contracts 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. • Developed Attending and participating in team discussions of PG&E’s evaluation 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 what 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, fairness, and reasonableness of how PG&E assessed Offers on these criteria and preferences. • Developing independent project viability scorescores for each Offer, using the ED’s version of the Project Viability Calculator. This served as a cross-comparison to check on the PG&E evaluation team’s scoring, and helped to surface ambiguities in the Calculator’s scoring criteria that could lead reasonable individuals to score Offers differently. It facilitated discussions that led both the PG&E team and the IE to revise their preliminary scores upon review and cross-check. • Reviewed Reviewing PG&E’s evaluation on scoring of each Offer for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of contractsprojects. • Attended 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 and participating in discussions of PG&E’s steering committee for the 2009 RPS RFO, as that leadership group made decisions about the logic for selecting a short list and approved proposed decisions for the short list. • Attending meetings of PG&E’s Procurement Review Group (PRG), including answering questions about the 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 project viability scores, to which Xxxxxx responded with more detail. • Directly observed (telephonically) Offering PG&E’s evaluation committee and steering committee commentary based on independent opinion. In a few cases Xxxxxx provided specific suggestions on topics such as treatment of Offers interconnecting outside the CAISO or interpretation of guidelines for the Project Viability Calculator. Following PG&E’s preliminary selection of Offers for a short list, Xxxxxx’x activities focused on the project-specific discussions that ensued: • 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 PG&E transactors and DG Fairhaven. • Reviewed documents that passed between short-listed developers, and reviewing draft term sheets and contracts for an analysis of concessions granted and variances from PG&E’s Form Agreement to assess the two parties during fairness of the negotiation, including draft contractsnegotiations.

IE ACTIVITIES. To fulfill the role of evaluating the proposed DG Fairhaven contract amendmentPG&E’s 2011 solicitation, 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 within its work scope of serving as IE for to assess PG&E’s 2008 methodology for evaluating Offers: • Reviewed the solicitation and 2009 RPS competitive solicitations; these prior activities were directly relevant to the evaluation its attachments including PG&E’s 2011 Form Agreements and description of the DG Fairhaven contract amendment. 2 The contract amendment in question is arguably not an amendment 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 an existing RPS contract in form but rather an amendment evaluate the information provided to a Standard Offer Qualifying Facilities contract. 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 2009 RPS RFO Solicitation Protocol posting of questions and its various attachments including answers from the Forms of Power Purchase Agreement (PPA) and Bidders’ Conference on PG&E’s detailed description of its LCBF bid evaluation and selection process and criteriapublic website to check whether information that was made available in- person to conference attendees was also provided to other potential Participants. • Examined the utilityPG&E’s nonpublic protocols detailing how PG&E evaluates proposed contracts against various criteria, including market valuation, portfolio fit, transmission adders, credit, project viability, 2011 RFO master contact list; performed an analysis of contacts with respect to industry and RPS goalstechnology representation. • Interviewed members of PG&E’s evaluation committee regarding details of the 2011 version of the utility’s LCBF methodology and sub-committees regarding its inputs. During the processperiod between Offer Opening and PG&E’s development of a final short list for submittal to the CPUC, data inputs Xxxxxx’x activities included: • Participating in opening Offers. Xxxxxx observed the opening of each Offer and parameters, background industry and utility information, quantitative modelsobserved the PG&E team logging in each Offer. The IE took an electronic copy of each Offer package, and other considerations taken into account in evaluating contracts against non-quantitative criteria and in performing market valuation of contractsindependently built a database for tracking Offers. • Reviewed 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 various data inputs and parameters used in PG&E’s LCBF market valuation methodologydetail. • Spot-checked contract-specific data inputs to PG&E’s valuation model. • Spot-checked the assignment of individual projects to transmission clusters or to local zones within the system controlled by the California Independent System Operator (CAISO). • Built Building an independent valuation model and using it to value proposed contractsOffers. 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 LCBF methodology’s. It was much simpler and lacked detail and granularity used in aspects of the PG&E model. Its main value However, the independent valuation was to provide an independent check on useful for testing the PG&E team’s ranking of contracts provided by Offers using alternate assumptions. • Attending PG&E’s valuation model and to scan for data input errors and differences in treatment evaluation team discussions 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 pricingOffers, inappropriate exclusion or inclusion of Resource Adequacy (RA) valuecriteria, or inaccurate assignment of Transmission Ranking Cost Report (TRCR) addersissues, etc. • Developed an independent project viability scoreScoring 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. • Reviewed Reviewing PG&E’s evaluation on scoring of Offers for the criteria other than market valuation and project viability, testing for consistency and fairness in the treatment of contractsprojects. • Attended 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. • Directly observed 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 Xxxxxxxxx Solar, Cuyama Solar, and Lost Hills Solar, Xxxxxx pursued project-specific activities: • Observed (telephonically) several negotiation sessions between PG&E utility staff and DG Fairhaven. First Solar’s commercial team; • Reviewed draft term sheets, draft contracts, and other documents that passed between the two parties during parties; • Performed an independent valuation of the negotiation, including draft contracts.three contracts and evaluation of the project viability of the facilities; • Compared the net value and pricing of the three contracts to peer groups consisting of alternative competing proposals available to PG&E.