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STEP THREE: <br />Determine Wholesale Customer's adjusted Supply Guarantee by subtracting the result of Step <br />Two from the Wholesale Customer's Supply Guarantee: <br />12 MGD - 0.22 MGD = 11.78 MGD <br />********** <br />Adjustments will be made at intervals comprised of distinct three-year periods of use by <br />Hayward in excess of 22.1 MGD rather than overlapping periods. For example, assuming that the <br />first adjustment were to occur in FY 2014-15 (based on use during FY 2011-12, FY 2012-13 and FY <br />2013-14), a second adjustment will not occur earlier than three full fiscal years thereafter (Le., <br />FY 2017-18, based on use by Hayward in FY 2014-15, FY 2015-16 and FY 2016-17). The figures <br />used in the second and subsequent adjustments will reflect previous adjustments. For example, a <br />second adjustment will use 158.9 MGD as the total of individual Supply Guarantees (161.6 MGD - <br />2.7 MGD = 158.9 MGD). <br />For purposes of simplicity, the volumetric units used in the foregoing example are MGD. For <br />actual adjustment calculations, the unit employed will be hundreds of cubic feet ("ccf'), the unit by <br />which the SFPUC measures water deliveries for billing purposes. <br />The procedure described and illustrated above is <br />independent of and unrelated to the establishment <br />by the SFPUC of Interim Supply Limitations <br />described in Article 4. <br />ATTACHMENT D Page 2 <br />1866408.4