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12/06/2010 SECTION 2. ALLOCATION OF WATER AMONG WHOLESALE CUSTOMERS Section 2.1 Annual Allocations Among the Wholesale Customers The annual water supply allocated b the SFPUC to the Wholesale Customers collectively during system- wide shortages of 20 percent or Iess shall be apportioned among them based on the methodology described in this Section. Section 2.2 Methodology for Allocating Water Among Wholesale Customers The water made available to the Wholesale Customers collectively will be allocated among them in proportion to each Wholesale Customer's Allocation Factor, adjusted as described in the following subsections below. The Wholesale Customer Allocation Factors will only be calculated at the onset of a drought and will remain the same until such time as the SFPUC declares the shortage condition over. The Wholesale Customer Allocation Factors will be recalculated during subsequent shortage periods for use during those specific periods. Section 2.2.1 Step One: Determination of Base /Seasonal Purchase Cutback For Each Wholesale Customer The first step requires calculating the Wholesale Customer's Base /Seasonal Purchase Cutback. This calculation has seven parts. An example of Steps 1b -1f is presented in Table 2. Step 1g is shown in columns 3 -6 in Table 3. For steps lb-1g, the calculation uses average monthly production values for the three years preceding the drought for all potable supply sources, expressed as a monthly value in hundred cubic feet: Step la: Each agency's total annual purchases from the SFPUC will be compared to its Individual Supply Guarantee (ISG), with any annual purchases above its ISG subtracted from that agency's total annual SFPUC purchases by subtracting the amount on a monthly basis in proportion to the agency's monthly SFPUC purchase pattern, - Step 1b: Calculate Average Monthly and Total Production for the three fiscal years immediately preceding the drought, excluding years during which shortage allocations were in effect, based` on monthly production data from the SFPUC and Wholesale Customers, - Step 1c: Calculate Base Component which is equal to the Average Monthly Production during the base months of December, January, February and March, multiplied by 12, - Step 1d: Calculate Seasonal Component as the difference between Total Production and Base Component, - Step 1e: Calculate an agency's Base /Seasonal Allocation, expressed in hundred cubic feet, by multiplying the Base Component by one minus the Base Reduction Percentage, or 90 %, and the Seasonal Component by the percentage needed (Seasonal Reduction Percentage) to achieve the required Overall Average Wholesale Customer Reduction, which is expressed as a percentage, -2- 2WO44,1 #15067 MUFF # 802