Introducing Alternate Fuel Vehicles Into Your Fleet

1. Introducing Alternate Fuel Vehicles Into Your Fleet Dave Meisel Director – Transportation Services Pacific Gas & Electric Company October 19, 2010

2. About PG&E Who we are Gas & electric utility 20,000 employees Service area stretches over 70,000 sq. miles 15 million customers served $42.7B in assets as of December 31, 2009, and revenues of approximately $13.4B Generation PG&E produces more than 4,000 megawatts of electricity through hydroelectric, fossil & renewable generating facilities Diablo Canyon Nuclear Power Plant produces over 2,000 megawatts of electricity Transmission and distribution More than 139,000 circuit miles of electric lines More than 45,800 miles of natural gas pipelines

3. PG&E’s Vision & Values • PG&E’s Green Supply Chain Program is built on tight collaboration with suppliers to: • Adopt more environmentally sustainable business practices across the Supply Chain • Reduce the adverse environmental impact of PG&E’s purchasing decisions • Electrification of fleet • Electrification of worksite The leading utility in the United States OUR VISION DelightedCustomers Energized Employees Rewarded Shareholders OUR GOALS Environmental Leadership Operational Excellence Transformation OUR STRATEGIES • We act with integrity and communicate honestly and openly • We are passionate about meeting our customers’ needs and delivering for our shareholders • We are accountable for all of our own actions: these include safety, protecting the environment, and supporting our communities • We work together as a team and are committed to excellence and innovation • We respect each other and celebrate our diversity OUR VALUES

4. Thoughts & Challenges • What we believe in: • Being Green, being Strategic and being Diverse • Our sustainability commitment is a winning strategy • A green fleet mix – one size does not fit all • The challenge: • Develop a green supply chain program with an embedded green fleet strategy • Build effective utility-supplier partnerships - a true win-win

5. Strong leadership commitment to green the fleet Nearly 12,000 assets Operate the largest alternative fueled and high efficiency vehicle utility fleet in the nation, with more than 2,600 vehicles Natural gas (CNG or LNG) 1,100 Bio-Diesel (B-20) 900 Electric (on- and off-road) 112 Hybrid (HEV and PHEV) 490 PG&E’s Green Fleet

6. PG&E’s Green Fleet: A Techno Mix • Actively involved in the development, demonstration and application of natural gas and electric-drive technologies • Believe no one fuel or technology is the single answer to our fuel dependency and greenhouse gas issues. • Looking at a blended technology portfolio where each application is matched with the appropriate technology that best meets the application needs - especially with the changing technology landscape. Natural Gas Vehicles, Hybrids, Plug-In Hybrids, Electric Vehicles, High Efficiency Technology, Fuel Cell Vehicles, E-PTO’s

7. PG&E Support of Alternate Fuel Technology International / Eaton 4300 Hybrid Bucket Truck 4x4 Peterbilt-Eaton 335 Hybrid PHEV Toyota Prius Retrofit PHEV Ford Escape Retrofit

8. PG&E Support of Alternate Fuel Technology Chevy Volt EBox Daimler Fuel Cell Mitsubishi iMiEV

9. PG&E Support of Alternate Fuel Technology Heavy Gas Crew Truck Warehouse Tractors Hybrid Pickup Hybrid SUV

10. US GHG Emissions Estimates by Sector, 2008 Transportation is responsible for 27.1% of US GHG emissions Remains direct combustion and petroleum-based, contributing 32% of total CO2 emissions from fossil fuel combustion MHD and HHD contribute nearly half of vehicle emissions VMT reductions and alternative propulsion are not the only avenues worth exploring Regulations largely ignore idling emissions Why worry about transportation emissions? Transportation, 27.1 Source: 2010 U.S. Greenhouse Gas Inventory Report www.epa.gov/climatechange/emissions/usinventoryreport.html

11. 78 Why electric vehicles? Energy independence Gas: Single source and largely imported Electricity: Diverse sources and abundant in the U.S.

12. 20% efficiency 90% efficiency Why electric vehicles? Savings - Fuel Combustion engine Electric motor MPG >100 (PHEV) $/gallon* <$1 * Gas equivalent

13. Why electric vehicles? Savings - Maintenance Electric motor system Internal combustion engine system ~1,400 parts ~200 parts * http://online.wsj.com/article/SB123172034731572313.html

14. Projected Electric Vehicle Growth High (845) Average (532) Thousands of EVs HEV Historical Low (219) Cumulative PG&E Service Territory PEV Market Adoption Scenarios * Shifted 10 years forward

15. Technology Choices “There are no silver bullets, only silver buckshot.” • PG&E will be looking at a blended technology portfolio where each application is matched with the appropriate technology that best meets the application needs - especially with the changing technology landscape. • As of yet, no single fuel or technology seems to provide the answer to the diverse business needs of the transportation sector of the utility industry.

16. Hybrids and Plug-In Hybrids • Fuel savings opportunities • Very duty-cycle dependant • PG&E has low mileage, but high PTO usage • One size (or type) of hybrid does not fit all • Looking at “unbundled” hybrid systems • Highest “value proposition” hybrid elements • PTO usage savings • Cab conditioning • Auxiliary lighting • Plug-in hybrids allow displacement of diesel with clean electricity

17. High Efficiency Technologies • Battery powered Power-Take-Off (PTO) • Called E-PTO • Powers boom and tool circuit • Climate Control • Vehicle auxiliaries • Charging by plugging in and/or by engine alternator power • Offers “silent” work location opportunities • Substantial reduction in fuel usage

18. The Challenges • Employee Challenges • Familiarity - With the operation and nuances of the equipment • Flexibility - Rotation of untrained operators into unfamiliar equipment • Availability of qualified technicians (internal and external) • Equipment Challenges • Price / Return on investment (some are better than others) • Price and volume are not always connected (sometimes additional regulations and increasing sophisticated systems drive price up, not down • Performance varies significantly based on make, model and manufacturer even among like technologies • Parts availability • Technical issues • Fiber optics and transceivers • Batteries – what is the right size and chemical composition • Charging system – what is the best way to charge the batteries • Range limitations • Raising the technical skills of present employees

19. The Challenges • Infrastructure Challenges • Consistency of equipment (plugs, plug locations, speed of charge, etc) • Infrastructure investment (limited or non-existent on-site & public charging stations) • Regulatory Challenges • Technology is moving so fast that some of the regulators are behind, especially on incentives. • Sorting through the marketing material • Understand the technology • Understand the full cost / benefit analysis • Electric vehicle research center

20. Alternate Fuel Rollout Plan • Development of comprehensive rollout plan • Technology identification • Matching technology to current business needs • “Engineering” vehicles • Identifying potential placement locations – “rifle approach” • Constructing “flexible, expandable” infrastructure • Provide a systematic rollout to clients and garages • Provide over-all communications to all stakeholders on project • Continue to seek outside funding for vehicles and infrastructure

21. PG&E Invests in Alternative Vehicle Technologies From CNG and flex-fuel… …to fully electric …to custom hybrids

22. Questions