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In early 2010, Zone 7, in conjunction with the water retailers, developed an extensive list of potential water supply options to create a diverse set of water supply portfolios. Zone 7's 2011 Water Supply Evaluation (WSE) considered water supply, facility needs, salt balance, and delivered water quality while resulting in the "Current Plan", the In-Valley Portfolio and the Intertie Portfolio detailed below. • Current Plan o Continuing participation in any studies and other efforts potentially leading toward increased reliability of the SWP and sustainability of the Delta. Also known as the "Delta Fix". • In-Valley Portfolio o Refining potential water quality assumptions as part of the GWMP/SMP update, o Identifying or linking feasible potable demand reduction using recycled water irrigation, and o Identifying feasible recycled water storage options — both local and non- local. • Intertie Portfolio o Identifying feasible options for a new intertie with another water agency, o Continuing to participate in studies for the Bay Area Regional Desalination Project, and o Confirming available water supplies. In July 2011, Zone 7 completed the 2011 WSE and recommended a series of "no regret" actions that will help minimize near-term risks of water supply shortages, and several additional studies necessary to confirm key assumptions made for both the In-Valley and Intertie Portfolios. Several of these actions involve the retailers. All of the following "No Regret" Actions are lowest-cost alternatives and within local control (i.e., either Zone 7 or the retailers): • Reducing Unaccounted-for Water, • Minimizing demineralization brine losses, • Confirming available supply under existing contract with BBID, • Enhancing existing in-lieu recharge program, • Continued support of the Water Conservation Act of 2009, • Working with retailers to develop a water conservation tracking methodology, and • Continuing to implement the Well Master Plan and Chain of Lakes projects. Page 4 of 10