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<br />1. It completes any necessary environmental review under CEQA of the <br />proposed hew wholesale water service obligations as provided in Section 4.07; <br /> <br />2. It concurrently completes any necessary environmental review under <br />CEQA as provided in Section 4.07 and commits to make both San Jose and Santa Clara <br />permanent customers with Individual Supply Guarantees equal to at least 9 MGD; <br /> <br />3. Doing so increases the reliability of the Regional Water System; and <br /> <br />4. This Agreement is concurrently amended (a) to reflect that .increased <br />reliability by means of an increased commitment by San Francisco to deliver water during <br />Droughts and (b) to address the effects, if any, of the new customer(s) on water supply, water <br />quality and cost to existing customers of the Regional Water System. <br /> <br />C. New Retail Customers. San Francisco may enter into new retail water service <br />obligations outside of the City and County of San Francisco: <br />1. Only in Alameda, San Mateo, Santa Clara, San Joaquin and Tuolumne <br /> <br />Counties; <br /> <br />2. That are within or immediately adjacent to areas in which it currently <br />serves other Retail Customers; and <br /> <br />3. Until the aggregate additional demand represented by the new retail <br />customers reaches 0.5 MGD. <br /> <br />The limitations on serving new Retail Customers described in this subsection do not <br />apply to historical obligations to supply water that may be contained in prior agreements <br />between the SFPUC or its predecessor the Spring Valley Water Company, and individual users <br />or property owners located adjacent to Regional Water System transmission pipelines. <br /> <br />D. Water ExchanQes and Cost SharinQ AQreements with Other Water <br />Suppliers. Subject to completion of necessary environmental review under CEQA, San <br />Francisco may at any time enter into water exchanges or cost sharing agreements with other <br />water suppliers to enhance dry year or normal year water deliveries, provided that San <br />Francisco cannot incur new water service obligations to such other water suppliers unless the <br />requirements for taking on new wholesale customers in subsections A and B above are met. <br /> <br />-20- <br /> <br />1840795.8 <br />