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6.G. - Page 72 of 238 <br />3. The SFPUC will continue to charge Wholesale Customers for assets <br />acquired or constructed with proceeds of Indebtedness on which Wholesale Customers paid <br />Debt Service during the Term of this Agreement on the "cash" basis (as opposed to the "utility" <br />basis) after the expiration or earlier termination of this Agreement. The undertaking in this <br />Section 5.10.D.3 will survive the expiration or earlier termination of this Agreement. <br />5.11. Classification of Existing System Assets. <br />Existing System Assets of the Regional Water System include the water storage, <br />transmission, and treatment systems owned and operated by San Francisco in Tuolumne, <br />Stanislaus, San Joaquin, Alameda, Santa Clara, San Mateo and San Francisco Counties. <br />These assets are managed by either the Water Enterprise or the Hetch Hetchy Enterprise and <br />the assets have been classified for purposes of cost allocation. <br />A. Water Enterprise Assets. Water Enterprise assets are currently managed, <br />operated, and maintained by the Water Enterprise and are generally located west of Alameda <br />East Portal, in addition to the treatment facilities located at Tesla and the Thomas Shaft <br />Emergency Disinfection Facility. These assets are classified as Direct Retail, Direct Wholesale, <br />or Regional. <br />B. Hetch Hetchy Enterprise Assets. Hetch Hetchy Enterprise assets are currently <br />managed, operated and maintained by the Hetch Hetchy Enterprise and are generally located <br />east of the Alameda East Portal of the Coast Range Tunnel in Sunol Valley, Alameda County. <br />These assets are classified as Power -Only, Water -Only, or Joint, in accordance with Sections <br />5.08 and 5.09. Through the Wholesale Revenue Requirement, the Wholesale Customers pay <br />Existing System Asset capital costs and operating expenses in accordance with Section 5.02.F <br />and do not pay capital costs or operating expenses associated with assets classified as Direct <br />Retail, Power -Only, and the Power -Related portion of Joint assets. <br />C. Attachment R Documents Classifications. To facilitate WSA administration, <br />Attachment R documents the classification of major Existing System Assets operated by the <br />Hetch Hetchy Enterprise. Attachment R consists of three documents: R-1 Introduction, R-2 <br />Special Classification of Discrete Projects for 2018 Amendment Purposes, and R-3 Major Hetch <br />Hetchy Enterprise Existing System Assets. Attachment R may be modified as specified in <br />Section 5.11.D and in the manner set forth in Section 2.03.C. <br />54 <br />15118728.1 <br />403 <br />