Common use of REVIEWING PG&E’ S ADMINISTRATION OF ITS EVALUATION AND SELECTION PROCESS Clause in Contracts

REVIEWING PG&E’ S ADMINISTRATION OF ITS EVALUATION AND SELECTION PROCESS. PG&E provided ▇▇▇▇▇▇ Seco Consulting with many detailed inputs to its valuation model and with results of market valuation at several steps during the evaluation process, including detailed information about transmission adders applied to contracts. ▇▇▇▇▇▇ also had copies of all proposals and of correspondence between PG&E and counterparties during this period, and was able to make independent judgments about the strengths and weakness of individual proposals against the evaluation criteria laid out in PG&E’s protocols. ▇▇▇▇▇▇ was present at evaluation committee and steering committee meetings in which draft proposals for the short list were developed, reviewed, questioned, modified, argued, and finalized. The logic and priorities underlying why specific proposals were rejected and accepted to the short list were made evident in these sessions. ▇▇▇▇▇▇ had access to members of the evaluation committee responsible for scoring the proposals against each of the evaluation criteria. ▇▇▇▇▇▇ was able to perform the role of questioning decisions that appeared unfair or inconsistent from an independent perspective. Additional elements of ▇▇▇▇▇▇’▇ approach for evaluating the fairness of the evaluation and selection process include: • Building an independent valuation model that directly used detailed contract information, to construct an independent ranking of Offers by net market value;

REVIEWING PG&E’ S ADMINISTRATION OF ITS EVALUATION AND SELECTION PROCESS. PG&E provided ▇▇▇▇▇▇ Seco Consulting with many detailed inputs to its valuation model and with results of market valuation at several steps during the evaluation process, including detailed information about transmission adders applied to contractsOffers. ▇▇▇▇▇▇ also had copies of all proposals Offers and of correspondence between PG&E and counterparties Participants during this period, and was able to make independent judgments about the strengths and weakness of individual proposals Offers against the evaluation criteria laid out in PG&E’s protocols. ▇▇▇▇▇▇ was present at evaluation committee and steering committee meetings in which draft proposals for the short list of Offers were developed, reviewed, questioned, modified, argued, and finalized. The logic and priorities underlying why specific proposals Offers were rejected and accepted to the short list were made evident in these sessions. ▇▇▇▇▇▇ had access to members of the evaluation committee responsible for scoring the proposals Offers against each of the evaluation criteria. ▇▇▇▇▇▇ was able to perform the role of questioning decisions that appeared unfair or inconsistent from an independent perspective. Additional elements of ▇▇▇▇▇▇’▇ approach for evaluating the fairness of the evaluation and selection process include: • Building an independent valuation model that directly used detailed contract Offer information, to construct an independent ranking of Offers by net market value;

REVIEWING PG&E’ S ADMINISTRATION OF ITS EVALUATION AND SELECTION PROCESS. PG&E provided ▇▇▇▇▇▇ Seco Consulting with many detailed inputs to its valuation model and with results of market valuation at several steps during the evaluation process, including detailed information about transmission adders applied to contractsOffers. ▇▇▇▇▇▇ also had copies of all proposals Offers and of correspondence between PG&E and counterparties Participants during this period, and was able to make independent judgments opinions about the strengths and weakness of individual proposals Offers against the evaluation criteria laid out in PG&E’s protocols. ▇▇▇▇▇▇ was present at evaluation committee team and steering committee meetings in which draft proposals for the short list of Offers were developed, reviewed, questioned, modified, argued, and finalized. The logic and priorities underlying why specific proposals Offers were rejected and accepted to the short list were made evident in these sessions. ▇▇▇▇▇▇ had access to members of the evaluation committee team responsible for scoring the proposals Offers against each of the evaluation criteria. ▇▇▇▇▇▇ was able to perform the role of questioning question decisions that appeared unfair or inconsistent from an independent perspective. Additional elements of ▇▇▇▇▇▇’▇ approach for evaluating the fairness of the evaluation and selection process include: • Building an independent valuation model that directly used detailed contract Offer information, to construct an independent ranking of Offers by net market value; • Independently scoring Offers using the 2011 Project Viability Calculator; • Developing a separate and independent point of view about which Offers most merited selection for a short list;