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Page 4 of 19 <br />21418818.2 <br />Purchases (up to its ISG or proxy). This establishes the upper limit of each Wholesale <br />Customer’s potential final allocation. The Minimum Cutback, expressed as a percentage, is <br />equal to 1/3 times the Overall Average Wholesale Customer Reduction, but no less than 5%. <br />Maximum Cutback: The Maximum Cutback establishes the lower limit of each Wholesale <br />Customer’s potential final allocation. The Maximum Cutback, expressed as a percentage, is <br />equal to 1.5 times the Overall Average Wholesale Customer Reduction. The Maximum Cutback <br />is calculated from each Wholesale Customer’s Base Period SFPUC Purchases (up to its ISG, or <br />proxy). <br />Step 1 Override Exception: If a Wholesale Customer’s allocation in Step 1 exceeds the upper <br />limit established by the Minimum Cutback at 1/3 times the Overall Average Wholesale Customer <br />Reduction, the Wholesale Customer’s Minimum Cutback will be reduced, but the Minimum <br />Cutback will be no less than 5%. <br />Calculations and an example of the Step 1 Override Exception are provided in Attachment B. <br />Step 1: Efficient Residential Allocation <br />Step 1 allocates water on a residential per capita basis, based on the State Indoor Water Use <br />Efficiency Standard1 and the portion of each Wholesale Customer’s water demand met by the <br />RWS. <br />The per capita efficient residential volume, in gallons, will align with the State Residential Indoor <br />Water Use Efficiency Standard, established as 47 gallons per capita per day (GPCD) through <br />2029 and 42 GPCD beginning in 2030. This step multiplies the per-capita volume by each <br />Wholesale Customer’s Population and Base Period SFPUC Reliance to determine the total <br />amount of supply allocated to each Wholesale Customer in this step. <br />Step 2: Non-Residential Base Allocation <br />Step 2 allocates water based on each Wholesale Customer’s estimated non-residential <br />indoor/base demand. <br />To calculate non-residential indoor/base demand, each Wholesale Customer’s Base Period <br />SFPUC Purchases are multiplied by: <br />•Base Period Percent Indoor Demand <br />•Base Period Percent Non-Residential Demand <br />•Non-Residential Base Allocation Factor – this is equal to one minus 50% of the Overall <br />Average Wholesale Customer Reduction. <br />o For example, in a 20% Overall Average Wholesale Customer Reduction, the <br />Non-Residential Base Allocation Factor will be 90% (1 – (20% ÷ 2)) of each <br />Wholesale Customer’s non-residential indoor/base demand. <br />1 SB 1157, signed into law in September 2022, established the standard for efficient indoor residential <br />water use be 47 gallons per capita per day (“GPCD”), lowering to 42 GPCD in 2030. <br />ATTY/RESO.0092/CC RESO APPROVING TIER 2 DROUGHT RESPONSE IMPLEMENTATION PLAN (WATER SUPPLY AGREEMENT) - EXHIBIT A <br />REV: 08-18-25 MI <br /> <br />Page 6 of 21