Security Amount for Estimated Tax Liability. Pursuant to Article 5.17.4 of the GIA, the Interconnection Customer’s estimated tax liability is as follows: Current Tax Rate x (Gross Income Amount – Present Value of Tax Depreciation)/(1 – Current Tax Rate) = 35% Estimated tax liability for new Distribution Provider’s Interconnection Facilities = 35% x (Customer-Financed Interconnection Facilities Cost for new facilities) = 35% x ($168,000) = $58,800 Estimated tax liability assumes the following costs: Customer-Financed Interconnection Facilities Cost for new facilities = $168,000 Based upon the total estimated tax liability, the Interconnection Customer shall provide the Distribution Provider cash or a letter of credit in the amount of $58,800, pursuant to Article 5.17.3 and Appendix B of the GIA. Upon notification of the Annual Tax Security Reassessment, the Interconnection Customer shall modify its Tax Security accordingly. If the Annual Tax Security Reassessment results in a deficiency in the Tax Security amount, the Interconnection Customer will be required to increase its Tax Security amount within 30 days after receipt of the deficiency notification. If the Annual Tax Security Reassessment results in a reduction of the Tax Security amount, the Interconnection Customer may choose to reduce its Tax Security amount or maintain the Tax Security in the current amount for the following year. The Annual Tax Security Reassessment will be calculated utilizing the following methodology:

Security Amount for Estimated Tax Liability. The Interconnection Customer’s estimated tax liability is as follows:

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Security Amount for Estimated Tax Liability. The Interconnection Customer’s estimated tax liability is as follows: Sole-Use Interconnection Facilities: Current Tax Rate x (Gross Income Amount – Present Value of Tax Depreciation)/(1 – Current Tax Rate) = 35% Shared Interconnection Facilities: Current Tax Rate x (Gross Income Amount – Present Value of Tax Depreciation)/(1 – Current Tax Rate) = 22% Distribution Upgrades: Current Tax Rate x (Gross Income Amount – Present Value of Tax Depreciation)/(1 – Current Tax Rate) = 35% Estimated tax liability for Distribution Upgrades = 35% x (Distribution Upgrades Cost) = 35% x ($0.00) = $0.00 Estimated tax liability for Distribution Provider’s Sole-Use Interconnection Facilities = 35% x (Interconnection Facilities Cost) = 35% x ($135,000.00) = $47,250.00 Estimated tax liability for Distribution Provider’s Shared Interconnection Facilities = 22% x (Interconnection Facilities Cost) = 22% x ($1,057,227.00) = $232,590.00 Estimated tax liability assumes the following costs: Sole-Use Interconnection Facilities Cost = $135,000.00 Shared Interconnection Facilities Cost = $1,057,227.00 Distribution Upgrades Cost = $0.00 Based upon the total estimated tax liability, the Interconnection Customer shall provide the Distribution Provider cash or a letter of credit in the amount of $279,840.00, pursuant to Attachment 4 of the SGIA. The form of the letter of credit or cash shall meet the following requirements: 1) if the security provided by the Interconnection Customer for the estimated tax liability is cash, it shall be in the form of a cash deposit standing to the credit of the Distribution Provider and in an interest-bearing escrow account maintained at a bank or financial institution that is reasonably acceptable to the Distribution Provider, or such other form acceptable to the Distribution Provider; or 2) if the security provided by the Interconnection Customer for the estimated tax liability is a letter of credit, it shall be an irrevocable and unconditional letter of credit issued by a bank or financial institution that has a credit rating of A or better by Standard and Poor’s or A2 or better by Xxxxx’x. Upon notification of the Annual Tax Security Reassessment, the Interconnection Customer shall modify its Tax Security accordingly. If the Annual Tax Security Reassessment results in a deficiency in the Tax Security amount, the Interconnection Customer will be required to increase its Tax Security amount within 30 calendar days after receipt of the deficiency notificati...

Security Amount for Estimated Tax Liability. The Interconnection Customer’s estimated tax liability is as follows: Current Tax Rate x (Gross Income Amount – Present Value of Tax Depreciation)/(1 – Current Tax Rate) = 35% Estimated tax liability for Distribution Upgrades = 35% x (Distribution Upgrades Cost) = 35% x $0 = $0 Estimated tax liability for Distribution Provider’s Interconnection Facilities = 35% x (Interconnection Facilities Cost) = 35% x ($190,200) = $66,570 Estimated tax liability assumes the following costs: Interconnection Facilities Cost = $190,200 Distribution Upgrades Cost = $0 Based upon the total estimated tax liability, the Interconnection Customer shall provide the Distribution Provider cash or a letter of credit in the amount of $66,570.00, pursuant to Attachment 4 of the GIA. The letter of credit or cash shall meet the requirements of Section

Security Amount for Estimated Tax Liability. The Interconnection Customer is not subject to Income Tax Component of Contribution (“ITCC”). ITCC is exempt for wholesale generators that meet the IRS Safe Harbor Provisions. PG&E currently does not require the Interconnection Customer to provide security to cover the potential tax liability on the Interconnection Facilities, Distribution Upgrades, and Network Upgrades per the IRS Safe Harbor Provisions (IRS Notice 88-129); however, PG&E reserves the right, on a nondiscriminatory basis, to require the Interconnection Customer to provide such security, in a form reasonably acceptable to PG&E as indicated in Article 5.17 of the LGIA, in an amount up to the cost consequences of any current tax liability. Upon request and within sixty (60) Calendar Days’ notice, the Interconnection Customer shall provide PG&E such ITCC security or ITCC payment in the event that Safe Harbor Provisions have not been met, in the form requested by PG&E.

Security Amount for Estimated Tax Liability. The Interconnection Customer shall provide the Credit Support for the estimated tax liability associated with the Customer-Financed Interconnection Facilities as follows: (Current Tax Rate x (Gross Income Amount – Present Value of Tax Depreciation))/(1 – Current Tax Rate) = 35% Customer-Financed Interconnection Facilities Cost = $0.00 Estimated Tax Liability = 35% x (Customer-Financed Interconnection Facilities Cost) = (0.35 x $0.00) = $0.00 Based on the Estimated Tax Liability, Interconnection Customer shall provide the Distribution Provider cash or a letter of credit in the amount of $0.00. Upon notification of the Annual Tax Security Reassessment, the Interconnection Customer shall modify its Tax Security accordingly. If the Annual Tax Security Reassessment results in a deficiency in the Tax Security amount, the Interconnection Customer will be required to increase its Tax Security Amount within 30 days after receipt of the deficiency notification. If the Annual Tax Security Reassessment results in a reduction of the Tax Security amount, the Interconnection Customer may choose to reduce its Tax Security amount or maintain the Tax Security in the current amount for the following year. The Annual Tax Security Reassessment will be calculated utilizing the following methodology:

Security Amount for Estimated Tax Liability the Interconnection Customer’s estimated tax liability is as follows: Estimated tax liability for Distribution Provider’s Interconnection Facilities = The sum of the product of (i) the applicable ITCC rate for the year payments are anticipated to be received, and (ii) the total of the payments anticipated to be received for the Interconnection Facilities Cost for that year. Year(s) payments anticipated to be received Applicable ITCC rate Total anticipated payments received for Interconnection Facilities Cost ITCC for Distribution Provider’s Interconnection Facilities 2016 & 2017 See Section 4.4 of Attachment J to the Tariff* $37,363.50 $8,219.97 Total $37,363.50 $8,219.97 * The estimated tax liability is based on the applicable ITCC rate in Attachment J to the Tariff as of the Effective Date and is available at the following link: xxxxx://xxx.xxx.xxx/openaccess Estimated tax liability for Distribution Upgrades = The sum of the product of (i) the applicable ITCC rate for the year payments are anticipated to be received, and (ii) the total of the payments anticipated to be received for the Distribution Upgrades Cost for that year. Year(s) payments anticipated to be received Applicable ITCC rate Total of anticipated payments received for Distribution Upgrades Cost ITCC for Distribution Upgrades 2016 & 2017 See Section 4.4 of Attachment J to the Tariff* $87,181.50 $19,179.93 Total $87,181.50 $19,179.93 * The estimated tax liability is based on the applicable ITCC rate in Attachment J to the Tariff as of the Effective Date and is available at the following link: xxxxx://xxx.xxx.xxx/openaccess Based upon the total estimated tax liability, the Interconnection Customer shall provide to the Distribution Provider a Security Instrument in the form of a letter of credit totaling

Security Amount for Estimated Tax Liability. Pursuant to Article 5.17.4 of the LGIA, the Interconnection Customer’s estimated tax liability is as follows: (Current Tax Rate x (Gross Income Amount – Present Value of Tax Depreciation))/(1 – Current Tax Rate) = 35% Estimated tax liability for Distribution Upgrades = 35% * Distribution Upgrades Cost = 35% * ($0) = $0 Estimated tax liability for Participating TO’s Interconnection Facilities = 35% * Interconnection Facilities Cost = 35% * ($5,973,000) = $2,090,550 Participating TO’s Interconnection Facilities Cost = $5,973,000 Distribution Upgrades Cost = $0 The Interconnection Customer shall provide the Participating TO a letter of credit (or any other collateral instrument) in a form reasonably acceptable to the Participating TO pursuant to Article 5.17.3 and Appendix B of the LGIA. The letter of credit (or other collateral security) shall be increased by the amount and by the date indicated in the Payment Schedule (Appendix A, Section 17) under the column heading “ITCC Posting Requirement”.

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