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41 <br />2021 Amended and Restated WSA 17162043.1 <br />Article 5. Wholesale Revenue Requirement <br />5.01. Scope of Agreement <br />This Article shall be applicable only to the water rates charged by San Francisco to the <br />Wholesale Customers. Nothing contained in this Agreement shall limit, constrain, or in any way <br />affect the rates which San Francisco may charge for water sold to Retail Customers or the <br />methodology by which such rates are determined. <br />5.02. General Principles <br />This Article sets forth the method by which the Wholesale Customers’ collective share of <br />expenses incurred by the SFPUC in delivering water to them will be determined. This collective <br />share is defined as the “Wholesale Revenue Requirement.” <br />A. The SFPUC currently operates several enterprises, including the Water <br />Enterprise, the Wastewater Enterprise, and the Hetch Hetchy Enterprise. <br />B. The Wastewater Enterprise is responsible for treating sewage within San <br />Francisco and provides no benefit to the Wholesale Customers. <br />C. The Hetch Hetchy Enterprise is responsible for storing and transmitting water to <br />the Water Enterprise, generating hydroelectric power and transmitting it to San Francisco, <br />generating electric power within San Francisco, and distributing electricity and steam heat within <br />San Francisco. Its water supply operations provide benefits to the Wholesale Customers. <br />D. The Water Enterprise delivers water to both Retail Customers, which are located <br />both within and outside San Francisco, and to the Wholesale Customers, all of which are <br />located outside San Francisco. <br />E. This Article implements two general principles as follows: (1) the Wholesale <br />Customers should not pay for expenses of SFPUC operations from which they receive no <br />benefit and (2) the Wholesale Customers should pay their share of expenses incurred by the <br />SFPUC in delivering water to them on the basis of Proportional Annual Use unless otherwise <br />explicitly provided in this Agreement. <br />F. To implement these general principles, the Wholesale Revenue Requirement will <br />consist of, and be limited to, the Wholesale Customers’ shares of the following categories of <br />expense: