May 2, 2016 Advice Letter: 3704-G/4826-E

STATE OF CALIFORNIA EDMUND G. BROWN JR., Governor PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE SAN FRANCISCO, CA 94102-3298 May 2, 2016 Advice Letter: 3704-G/4826-E Attn: Erik Jacobson, Director, Regulatory Relations Senior Director, Regulatory Relations 77 Beale Street, Mail Code B10C San Francisco, CA 94177 SUBJECT: Request Authority to Increase Incentive Funds Available to the San Francisco Bay Area Regional Energy Network s Single Family Home Upgrade Energy Efficiency Program Dear Mr. Jacobson: Advice Letter 3704-G/4826-E is effective as of April 29, 2016. Sincerely, Edward Randolph Director, Energy Division

Erik Jacobson Director Regulatory Relations 77 Beale St., Mail Code B10C San Francisco, CA 94177 Fax: 415-973-7226 April 19, 2016 Advice 3704-G/4826-E ( ID U 39 M) Public Utilities Commission of the State of California Subject: Request Authority to Increase Incentive Funds Available to the San Francisco Bay Area Regional Energy Network s Single Family Home Upgrade Energy Efficiency Program Purpose (PG&E) requests authority to increase the funds available to the San Francisco Bay Area Regional Energy Network (BayREN) Single Family Home Upgrade Program. PG&E seeks to use $3,700,000 of unspent funds in PG&E s 2013-2014 energy efficiency (EE) balancing account as incentives for participation in the Home Upgrade Program to cover higher than expected 2016 participation. These incentives will be paid for projects that BayREN completes and installs by December 31, 2016, as described below. This is a Tier 2 advice letter filing, as it is based on the California Public Utility Commission s (CPUC or Commission) direction that utilities should offset their EE program revenue requirements with unspent EE balancing account funds. 1 Background 1. The BayREN Program Decision (D.) 12-11-015 directed PG&E to contract with the Association of Bay Area Governments (ABAG), acting on behalf of BayREN, to fund single-family and multifamily upgrade programs as part of PG&E s 2013-2014 EE program. The CPUC stated that the utilities should serve as the fiscal managers for contracts with RENs, that the RENs should be independently responsible to the Commission for delivering the results of their programs, that RENs should be subject to the applicable requirements of the 1 D.12-11-015, p. 93.

Advice 3704-G/4826-E - 2 - April 19, 2016 Energy Efficiency Policy Manual, and that EE programs implemented by the RENs should be evaluated by the Commission in a similar manner as for utility programs. 2 2. Approved BayREN Budget Decision 14-10-046 retained the BayREN program in PG&E s 2015 EE program and provided a $4.47 million Maximum Contract Amount for BayREN s single family program. The Home Upgrade incentive budget of $2 million is included within the Maximum Contract Amount. As stated in D.14-10-046, at p. 32, the RENs are authorized use of a Maximum Contract Amount for each year after 2015 at 2015 funding levels, through 2025 unless and until [the Commission] make a change. PG&E has examined BayREN s request to determine whether there is need for additional funding. BayREN s Home Upgrade incentive budget for 2015 consisted of $2 million, rollover funds from 2014, a re-designation of BayREN funds from other categories to incentives, and additional funds from PG&E, for a total of $4,256,550. Most of those funds have been paid out or are committed as defined by Commission decision. 3 In accordance with the Commission s 2015 EE Program decision, BayREN s 2016 Home Upgrade incentive budget is $2,000,000. As of early 2016, according to BayREN, many contractors have completed its Home Upgrade training, are active participants in Home Upgrade and are adopting their business models to include EE. BayREN states that as of February 2016, it has paid $826,115 in 2016 Home Upgrade program incentives, which leaves $1,173,885 available for the remainder of 2016. Based on these figures, BayREN believes that, based on the current project commitment rate, this amount will likely be reserved by the end of April, 2016. The rate of contractor participation in the Home Upgrade program appears to call for the amount of additional incentives requested by BayREN for the 2016 program. PG&E s Request PG&E requests authority to transfer up to $3,700,000 from PG&E s unspent 2013-2014 EE balancing account funds to BayREN to increase the 2016 Home Upgrade incentive budget to $5,700,000. This budget increase is limited to activities conducted pursuant to the Home Upgrade agreement between BayREN and PG&E for the 2016 program year. The funding will be used by BayREN for customer incentives for projects that are completed and installed by December 31, 2016. 2 D.12-11-015, conclusions of law (COL) 4, 6, 9, and 16. 3 All activities carried out under a contract and/or a customer obligation during a specific program cycle need not be completed and funds need not be spent during that particular program cycle so long as there is an expectation that the activities will be completed., those funds are considered committed and/or encumbered and thus are not considered unspent funds. D.12-11-015, p. 95.

Advice 3704-G/4826-E - 3 - April 19, 2016 This advice letter does not request authorization to continue the resulting 2016 Home Upgrade incentive level in the future. PG&E's request to increase BayREN's budget in 2016 with funds from its EE Program budget is based on the unanticipated growth of the Home Upgrade program. If approved, this advice letter should not be considered as establishing a procedure for increasing the funds for incentive payments under any EE program. PG&E proposes that if this advice letter is approved: PG&E will debit $3,700,000 from its unspent 2013-2014 EE balancing account and credit $3,700,000 to its 2016 BayREN Home Update incentive account. PG&E will document this transfer of funds in its quarterly accounting report pursuant to the Energy Efficiency Policy Manual V. 5., p.65, note 1. PG&E and ABAG, on behalf of BayREN, will revise their program agreement to reflect this increase to the Home Update incentive budget. The energy savings achieved through this increase in BayREN s Home Upgrade program budget will count towards PG&E s service area energy savings goals consistent with D.12-11-015 (p.14). Protests This Advice Letter is being filed as a Tier 2 advice letter. PG&E is requesting a shortened protest period of 10 days, instead of 20 days, after service of the advice letter on Energy Division as provided by G.O. 96-B, Rule 7.4.1. The shortened protest period is warranted by the reasonableness of PG&E s request to transfer funds, the imminent reservation of all Home Upgrade incentives provided by D. 14-10-046, and the potential loss of end-user participation in the Home Upgrade program if additional incentives are not made available in time. Anyone wishing to protest this filing may do so by letter sent via U.S. mail, facsimile or E-mail, any of which must be received no later than April 29, 2016, which is 10 days after the date of the original advice letter. Protests must be submitted to: CPUC Energy Division ED Tariff Unit 505 Van Ness Avenue, 4th Floor San Francisco, California 94102 Facsimile: (415) 703-2200 E-mail: EDTariffUnit@cpuc.ca.gov Copies of protests also should be mailed to the attention of the Director, Energy Division, Room 4004, at the address shown above.

Advice 3704-G/4826-E - 4 - April 19, 2016 The protest shall also be sent to PG&E either via E-mail or U.S. mail (and by facsimile, if possible) at the address shown below on the same date it is mailed or delivered to the Commission: Erik Jacobson Director, Regulatory Relations c/o Megan Lawson 77 Beale Street, Mail Code B10C San Francisco, California 94177 Facsimile: (415) 973-7226 E-mail: PGETariffs@pge.com Any person (including individuals, groups, or organizations) may protest or respond to an advice letter (General Order 96-B, Rule 7.4.). The protest shall contain the following information: specification of the advice letter protested; grounds for the protest; supporting factual information or legal argument; name, telephone number, postal address, and (where appropriate) e-mail address of the protestant; and statement that the protest was sent to the utility no later than the day on which the protest was submitted to the reviewing Industry Division (General Order 96-B, Rule 3.11). Effective Date PG&E requests that this Tier 2 advice filing become effective on 10 days notice, April 29, 2016, which is 10 calendar days from the date of this filing. Notice In accordance with General Order 96-B, Section IV, a copy of this advice letter is being sent electronically and via U.S. mail to parties shown on the attached list and the parties on the service list for R.13-11-005. Address changes to the General Order 96-B service list should be directed to PG&E at email address PGETariffs@pge.com. For changes to any other service list, please contact the Commission s Process Office at (415) 703-2021 or at Process_Office@cpuc.ca.gov. Send all electronic approvals to PGETariffs@pge.com. Advice letter filings can also be accessed electronically at: http://www.pge.com/tariffs/. /S/ Erik Jacobson Director, Regulatory Relations cc: Service List R.13-11-005

CALIFORNIA PUBLIC UTILITIES COMMISSION ADVICE LETTER FILING SUMMARY ENERGY UTILITY MUST BE COMPLETED BY UTILITY (Attach additional pages as needed) Company name/cpuc Utility No. (ID U39 M) Utility type: Contact Person: Jennifer Wirowek ELC GAS Phone #: (415) 973-1419 PLC HEAT WATER E-mail: J6WS@pge.com and PGETariffs@pge.com EXPLANATION OF UTILITY TYPE ELC = Electric GAS = Gas PLC = Pipeline HEAT = Heat WATER = Water (Date Filed/ Received Stamp by CPUC) Advice Letter (AL) #: 3704-G/4826-E Tier: 2 Subject of AL: Request Authority to Increase Incentive Funds Available to the San Francisco Bay Area Regional Energy Network s Single Family Home Upgrade Energy Efficiency Program Keywords (choose from CPUC listing): Agreement, Energy Efficiency AL filing type: Monthly Quarterly Annual One-Time Other If AL filed in compliance with a Commission order, indicate relevant Decision/Resolution #: N/A Does AL replace a withdrawn or rejected AL? If so, identify the prior AL: No Summarize differences between the AL and the prior withdrawn or rejected AL: Is AL requesting confidential treatment? If so, what information is the utility seeking confidential treatment for: No Confidential information will be made available to those who have executed a nondisclosure agreement: N/A Name(s) and contact information of the person(s) who will provide the nondisclosure agreement and access to the confidential information: Resolution Required? Yes No Requested effective date: April 29, 2016 Estimated system annual revenue effect (%): N/A Estimated system average rate effect (%): N/A No. of tariff sheets: N/A When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting). Tariff schedules affected: N/A Service affected and changes proposed: N/A Pending advice letters that revise the same tariff sheets: N/A Protests, dispositions, and all other correspondence regarding this AL are due no later than 10 days after the date of this filing, unless otherwise authorized by the Commission, and shall be sent to: California Public Utilities Commission Energy Division ED Tariff Unit 505 Van Ness Ave., 4 th Flr. San Francisco, CA 94102 E-mail: EDTariffUnit@cpuc.ca.gov Attn: Erik Jacobson Director, Regulatory Relations c/o Megan Lawson 77 Beale Street, Mail Code B10C San Francisco, CA 94177 E-mail: PGETariffs@pge.com

PG&E Gas and Electric Advice Filing List General Order 96-B, Section IV AT&T Division of Ratepayer Advocates Office of Ratepayer Advocates Albion Power Company Don Pickett & Associates, Inc. OnGrid Solar Alcantar & Kahl LLP Douglass & Liddell Anderson & Poole Downey & Brand Praxair Atlas ReFuel Ellison Schneider & Harris LLP Regulatory & Cogeneration Service, Inc. BART Evaluation + Strategy for Social SCD Energy Solutions Innovation Barkovich & Yap, Inc. G. A. Krause & Assoc. SCE Bartle Wells Associates GenOn Energy Inc. SDG&E and SoCalGas Braun Blaising McLaughlin & Smith, P.C. GenOn Energy, Inc. SPURR Braun Blaising McLaughlin, P.C. Goodin, MacBride, Squeri, Schlotz & San Francisco Water Power and Sewer Ritchie CPUC Green Charge Networks Seattle City Light California Cotton Ginners & Growers Assn Green Power Institute Sempra Energy (Socal Gas) California Energy Commission Hanna & Morton Sempra Utilities California Public Utilities Commission International Power Technology SoCalGas California State Association of Counties Intestate Gas Services, Inc. Southern California Edison Company Calpine Kelly Group Spark Energy Casner, Steve Ken Bohn Consulting Sun Light & Power Cenergy Power Leviton Manufacturing Co., Inc. Sunshine Design Center for Biological Diversity Linde Tecogen, Inc. City of Palo Alto Los Angeles County Integrated Waste Tiger Natural Gas, Inc. Management Task Force City of San Jose Los Angeles Dept of Water & Power TransCanada Clean Power MRW & Associates Troutman Sanders LLP Clean Power Research Manatt Phelps Phillips Utility Cost Management Coast Economic Consulting Marin Energy Authority Utility Power Solutions Commercial Energy McKenna Long & Aldridge LLP Utility Specialists Cool Earth Solar, Inc. McKenzie & Associates Verizon County of Tehama - Department of Public Modesto Irrigation District Water and Energy Consulting Works Crossborder Energy Morgan Stanley Wellhead Electric Company Davis Wright Tremaine LLP NLine Energy, Inc. Western Manufactured Housing Communities Association (WMA) Day Carter Murphy NRG Solar YEP Energy Defense Energy Support Center Nexant, Inc. Dept of General Services ORA