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12/06/2010 <br />EXHIBIT A <br />TIER 2 DROUGHT IMPLEMENTATION PLAN <br />AMONG WHOLESALE CUSTOMERS <br />This Tier 2 Drought Implementation (Plan) describes the method, for allocating the <br />water made available by the San Francisco Public Utilities Commission (SFPUC) among <br />the Wholesale Customers during shortages caused by drought. This Plan is adopted <br />pursuant to Section 3.11,C of the July 2009 Water Supply Agreement between the City <br />and County of San Francisco and the Wholesale Customers (Agreement). <br />SECTION 1. APPLICABILITY AND INTEGRATION <br />Section '1.1 Applicability This Plan applies when, and only when, the SFPUC <br />determines that a system -wide water shortage of 20 percent or less exists, as set forth in <br />a declaration of water shortage emergency adopted by the SFPUC pursuant to <br />California Water Code Sections 350 et seq. This Plan applies only to water acquired and <br />distributed b the SFPUC to the Wholesale Customers and has no effect on water <br />obtained by a Wholesale Customer from any source other than the SFPUC. <br />Section 1.2 Integration with Tier 1 Water Shortage Allocation Plan The Agreement <br />contains, in Attachment H, a Water Shortage Allocation Plan which, among other <br />things, (a); provides for the allocation by the SFPUC of water between Direct City Water <br />Users (e.g., retail water customers within the City and County of San Francisco) and the <br />Wholesale Customers collectively during system -wide water shortages of 20 percent or <br />less, (b) contemplates the adoption by the Wholesale Customers of this Plan for <br />allocation of the water made available to Wholesale Customers collectively among the <br />26 individual Wholesale Customers, (c) commits the SFPUC to implement this Plan, and <br />(d) provides for the transfer of both banked water and shortage allocations between and <br />among the Wholesale Customers and commits the SFPUC to implement such transfers. <br />That plan is referred to as the Tier 1 Plan. <br />The Tier 1 Plan also provides the methodology for determining the Overall Average <br />Wholesale Customer Reduction, expressed as a percentage cutback from prior year's <br />normal SFPUC purchases, and Overall Wholesale Customer Allocation, in million <br />gallons per day, both of which are used in determining the Final Allocation Factor for <br />each Wholesale Customer. The Overall Average Wholesale Customer Reduction is <br />determined by dividing the volume of water available to the Wholesale Customers (the <br />Overall Wholesale Customer Allocation), shown as a share of available water in Section <br />2 of the Tier 1 Plan, by the prior year's normal total Wholesale Customers SFPUC , <br />purchases and subtracting that value from one. <br />This Plan is referred to in the Agreement as the Tier 2 Plan. It is intended to be <br />integrated with the Tier 1 Plan described in the preceding paragraph. Terms used in <br />this Plan are intended to have the same meaning as such terms have in the Tier 1 Plan. <br />#15067 <br />MUFF # 802 <br />