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6.G. - Page 51 of 238 <br />Wholesale Customers for use in excess of their Interim Supply Allocations established by the <br />Commission pursuant to Section 4.02. <br />Environmental Enhancement Surcharges related to the Retail Customers' <br />use in excess of their 81 MGD Retail Customer Allocation will be paid by the SFPUC, and no <br />portion of such surcharges may be allocated to Wholesale Customers. The method of <br />recovering the Environmental Enhancement Surcharges imposed upon Retail Customers shall <br />be within the sole discretion of the SFPUC. <br />2. Environmental Enhancement Surcharges related to the individual <br />Wholesale Customers' use in excess of their respective Interim Supply Allocations will be paid <br />to the SFPUC by individual Wholesale Customers. <br />C. Collection of Environmental Enhancement Surcharge. Notwithstanding the <br />budget -coordinated rate setting process contemplated in Article 6 of this Agreement, the <br />Environmental Enhancement Surcharge for any given year will be determined retrospectively <br />based on actual annual usage during the fiscal year in excess of the Interim Supply Allocation <br />and paid in equal monthly installments over the remainder of the immediately following fiscal <br />year. <br />D. Establishment of Fund for Environmental Enhancement Surcharge <br />Proceeds. Environmental Enhancement Surcharges paid by the SFPUC and by Wholesale <br />Customers will be placed into a restricted reserve fund. The SFPUC will request the San <br />Francisco Board of Supervisors to establish this fund by ordinance and, if adopted, the fund will <br />be subject to the following restrictions: <br />1. Interest earnings will stay in the reserve fund. <br />2. The reserve fund shall (a) be subject to automatic appropriation; (b) <br />require unexpended and unencumbered fund balances to be carried <br />forward from year to year; and (c) not be transferred to the San Francisco <br />General Fund. <br />3. The reserve fund may be used only for specific environmental restoration <br />and enhancement measures for the Sierra and local watersheds, such as <br />those included in the Watershed Environmental Improvement Program. <br />4. Environmental Enhancement Surcharge proceeds shall be expended in <br />an expeditious manner. Any Environmental Enhancement Surcharge <br />33 <br />15118728.1 <br />382 <br />